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World Bank Document Document of The World Bank Public Disclosure Authorized FOR OFFICIAL USE ONLY Report No: 42393-CN PROJECT APPRAISAL DOCUMENT Public Disclosure Authorized ON A PROPOSED LOAN IN THE AMOUNT OF US$19 1 MILLION TO THE PEOPLE’S REPUBLIC OF CHINA FOR A LIAONING THIRD MEDIUM CITIES INFRASTRUCTURE PROJECT Public Disclosure Authorized April 21, 2008 Transport, Energy and Mining Sector Unit Sustainable Development Department East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective October 15, 2007) RMB7.5 = IUS$ Currency Unit = RMB RMB 7.5 = US$l FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank GEF Global Environment Facility APL Adaptable Program Loan GJ Gigajoule (109joules) ASTAE Asia Sustainable and Alternative Energy GQHC Gongchangling District Qinglong Heating Co. Program GTZ German Technical Assistance Corporation BHZC Benxi Hengze Heating Development Company HOB Heat-only Boiler BSGHC Benxi Steel (Group) Heating Company, Ltd. HRBEE Heat Reform and Building Energy Efficiency HUCIC Haicheng Urban Construction Investment Co. CBE Cash break-even HYHC Haicheng Hengye Heating Supply Company CHP Combined Heat and Power Ltd. CLG City Leading Group CNAO China National Audit Office IBRD International Bank for Reconstruction and co2 Carbon dioxide Development CPIC China Power Investment Company ICB International Competitive Bidding CQ Selection Based on Consultant Qualifications IDC Interest during construction CY Current Year i.e. that is IF1 international financial institution DA Designated Account DH District Heating kg Kilogram DSCR Debt Service Credit Ration km Kilometer kWh Kilo-Watt hour EA Environmental Assessment ECA Europe and Central Asia Region LDRC Liaoning Provincial Development and Reform EDZ Economic Development Zone Commission EIA Environmental Impact Assessment LEPB Liaoning Provincial Environmental Protection EIRR Economic Internal Rate of Return Bureau EMP Environmental Management Plan LIBOR London inter-bank offered rate ESMAP Energy Sector Management Assistance LMC1 Liaoning Medium Cities Infrastructure Project Programme (Urban Transport) LMC2 Second Liaoning Medium Cities Infrastructure FGD Flue Gas Desulfurization Project (Urban Environment) FFEM Fonds Franpais de L’Environnement Mondial LMC3 Liaoning Third Medium Cities Infrastructure FFUPO Foreign Funds Utilization Project Office Project (Urban Energy) FIRR Financial Internal Rate of Return LPCD Liaoning Provincial Construction Department FM Financial Management LPCG Liaoning Provincial Coordinating Group FMS Financial Management Specialist LPDF Liaoning Provincial Department of Finance FTPPC Fushun Thermal Power Plant Company LPG Liquefied Petroleum Gas FOR OFFICIAL USE ONLY ltr Liter RFP Resettlement Framework Policy RMB Renmimbi (Yuan) m2 Square meter RRR Resettlement retroactive review m3 Cubic meter MBD Chinese Model Bidding Document SA Social Assessment MFB Municipal Finance Bureau SBD Standard Bidding Document MOC Ministry of Construction SCADA supervisory control and data acquisition MOF Ministry of Finance SEPA State Environmental ProtectiOn Administration MPMO municipal project management office SLA Subsidiary loan agreement MWe Megawatt-electric so2 Sulfur Dioxide MWth Mega-watt thermal (1O6 watts) SOE State-owned enterprise NCB National Competitive Bidding TCE Tons of Standard Coal Equivalent NDRC National Development and Reform TSP Total suspended particulates Commission NPV Net Present Value UCIC Urban Construction and Investment Company UNDP United Nations Development Programme O&M Operation and Maintenance OPBP Operational PolicyBank Procedure VAT Value-added Tax PAD Project Appraisal Document YETDZ Yangjiazhangzi Economic & Technical PAP Project-affectedPerson Development Zone PCN Project Concept Note YDHC YETDZ District Mudu Heating Company PFM Public Financial Management (Yangjiazhangzi) PIU Project ImplementationUnit YEDZHC Yingkou Economic Development Zone Huayuan PMO Project Management Office Heating Company Ltd. YHC Yingkou Heating Company QBS Quality Based Consultant Selection YGC Yingkou Gas Company QCBS Quality and Cost Based Consultant Selection Y Yuan RAP Resettlement Action Plan ENERGY UNIT CONVERSION 1 TCE = 7.0 GCal = 29.3 1 GJ = 8.3 14 MWh 1 GCal=1.15MWh=4.186GJ Vice President: James W. Adams, EAPVP Country Director: David Dollar, EACCF Sector Manager: Junhui Wu, EASTE Task Team Leader: Gailius J. Draugelis, EASTE This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization. CHINA Liaoning Third Medium Cities Infrastructure Project CONTENTS Page PAD Data Sheet .............................................................................................................................. i A . STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 1. Country and sector issues.................................................................................................... 1 2 . Rationale for Bank involvement ......................................................................................... 4 3 . Higher level objectives to which the project contributes .................................................... 4 B. PROJECT DESCRIPTION ................................................................................................. 5 1. Lending instrument ............................................................................................................. 5 2 . Project development objective and key indicators.............................................................. 5 3 . Project components ............................................................................................................. 5 4 . Lessons learned and reflected in the project design............................................................ 7 5. Alternatives considered and reasons for rejection .............................................................. 8 C . IMPLEMENTATION .......................................................................................................... 8 1. Partnership arrangements (if applicable) ............................................................................ 8 2 . Institutional and implementation arrangements .................................................................. 9 3 . Monitoring and evaluation of outcomes/results................................................................ 10 4 . Sustainability..................................................................................................................... 10 5 . Critical risks and possible controversial aspects ............................................................... 11 6 . Loadcredit conditions and covenants............................................................................... 11 D. APPRAISAL SUMMARY ................................................................................................. 12 1. Economic and financial analyses ...................................................................................... 12 2 . Technical ........................................................................................................................... 15 3 . Fiduciary ........................................................................................................................... 16 4 . Social ................................................................................................................................. 17 5 . Environment ...................................................................................................................... 18 6 . Safeguard Policies ............................................................................................................. 19 7 . Policy Exceptions and Readiness...................................................................................... 19 Annex 1: Country and Sector or Program Background ......................................................... 21 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies .................26 Annex 3: Results Framework and Monitoring ........................................................................ 27 Annex 4: Detailed Project Description...................................................................................... 35 Annex 5: Project Costs ............................................................................................................... 43 Annex 6: Implementation Arrangements................................................................................. 44 Annex 7: Financial Management and Disbursement Arrangements..................................... 48 Annex 8: Procurement Arrangements...................................................................................... 57 Annex 9: Economic and Financial Analysis ............................................................................. 68 Annex 10: Safeguard Policy Issues ............................................................................................ 84 Annex 11: Project Preparation and Supervision ................................................................... 100 Annex 12: Documents in the Project File ..............................................................................
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