T echnical Assistance Final Report
Project Number: 42016 October 2009
People's Republic of China: Preparing the Qinghai Rural Water Resources Management Project
Prepared by:
SOGREAH Consultants, France
For the Qinghai Department of Water Resources
This report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.)
PEOPLE REPUBLIC OF CHINA
ASIAN DEVELOPMENT BANK QINGHAI WATER RESOURCES BUREAU
QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT
PPTA 7103-PRC
FINAL REPORT
V1: MAIN REPORT
SEPTEMBER 2009 1300300.R4
PEOPLES REPUBLIC OF CHINA ASIAN DEVELOPMENT BANK
QINGHAI WATER RESOURCES BUREAU
QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT
FINAL REPORT
IDENTIFICATION N° : 1300030.R4 DATE : SEPTEMBER.25, 2009
This document has been produced by SOGREAH Consultants as part of the ADB TA Grant to Chinese Government (QDOWR). This document has been prepared by the project team under the supervision of the Project Director following Quality Assurance Procedures of SOGREAH in compliance with ISO9001.
APPROVED BY
INDEX DATE AUTHOR CHECKED BY (PROJECT PURPOSE OF MODIFICATION DIRECTOR) Project A First Issue 25/09/09 CWS GDM Team
INDEX CONTACT ADDRESS DISTRIBUTION LIST
The Asia Development Bank [email protected]; 1 (Mr Zhou Yaozhou, Mr K.Kannan) [email protected] Qinghai Department of Water 2 Resources [email protected] 3 SOGREAH (Head Office) [email protected] ,
PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT
TABLE OF CONTENTS
LIST OF TABLES ...... II LIST OF FIGURES...... III ABBREVIATIONS, ACRONYMS AND UNITS...... IV 1. INTRODUCTION ...... 1 1.1. BACKGROUND ...... 1 1.2. SCOPE OF THE ASSIGNMENT...... 1 1.3. PROJECT DELIVERABLES ...... 3 1.4. CONSULTANTS WORKPLAN AND STAFFING SCHEDULE...... 3 1.5. SCOPE AND LAYOUT OF THIS REPORT ...... 3 2. RATIONALE: SECTOR PERFORMANCE, PROBLEMS AND OPPORTUNITIES...... 6 2.1. PERFORMANCE INDICATORS AND ANALYSIS...... 6 2.2. ANALYSIS OF KEY PROBLEMS AND OPPORTUNITIES...... 12 3. THE PROPOSED PROJECT...... 19 3.1. IMPACT AND OUTCOME...... 19 3.2. OUTPUTS...... 19 3.3. PROJECT DESCRIPTION...... 20 3.4. SPECIAL FEATURES ...... 24 3.5. PROJECT INVESTMENT PLAN ...... 25 3.6. FINANCING PLAN ...... 27 3.7. IMPLEMENTATION ARRANGEMENTS...... 28 4. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS AND RISKS ...... 35 4.1. BENEFITS AND IMPACTS ...... 35 4.2. SUSTAINABILITY ANALYSIS...... 35 4.3. ECONOMIC AND FINANCIAL BENEFITS...... 38 4.4. ENVIRONMENTAL IMPACT ...... 45 4.5. SOCIAL BENEFITS AND POVERTY...... 48 4.6. ETHINIC MINORITY...... 52 4.7. RESETTLEMENT ...... 57 4.8. RISK ANALYSIS AND MITIGATION MEASURES ...... 64 5. CONCLUSIONS AND ASSURANCES ...... 67
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APPENDIXES
1. Project Design and Monitoring Framework
2. Problem Tree Analysis
3. Sector Analysis
4. External Assis tance and Lessons Learned
5. Cost Estimates
6. Procurement Plan
7. Implementation Schedule
8. Financial Management Assessment
9. Financial and Economic Analyses
10. Summary Intitial Environmental Examination
11. Environmental Management Plan
12. Summary Poverty Reduction and Social Strategy
13. Summary Ethnic Minorities Development Plans
14. Summary Resettlement Plans
15. Bibliography
SUPPLEMENTARY APPENDIXES
A. Social Assessment Survey
B. Detailed Poverty and Social Analysis
C. Subproject Feasibility Study Reports
D. Participatory Irrigation Management
E. Irrigation Agriculture Strategy
F. Detailed Cost Estimates
G. Environmental Impact Assessment
H. Ethnic Minorities Development Plan
I. Resettlement Plan for Lijiaxia Irrigation Area
J. Resettlement Plan for Gongboxia Irrigation Area
K. Financial Management Assessment Questionnaires
L. Procurement Capacity Assessment Questionnaires
M. Detailed Project Implementation Schedule
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LIST OF TABLES
TABLE 1-1: LIST OF REPORTS...... 3
TABLE 2-1: AVERAGE CROP YIELDS FOR THE PROJECT AREA BY COUNTY...... 9
TABLE 2-2: CHANGE IN PROJECT WATER REQUIREMENTS...... 13
TABLE 2-3: RELEVANT EXTERNAL ASSISTANCE...... 15
TABLE 2-4: LESSONS LEARNED AND ADDRESSED IN THE PROJECT DESIGN ...... 16
TABLE 2-5: CONSTRAINTS, OPPORTUNITIES AND ALTERNATIVES ...... 17
TABLE 3-1: JOINT WDO – WUA SYSTEM MANAGEMENT LOGISTICS...... 21
TABLE 3-2: MAJOR ACTIVITIES ON PIM AND AGRICULTURAL SUPPORT...... 22
TABLE 3-3: TENTATIVE PROJECT INVESTMENT PLAN...... 26
TABLE 3-4: TENTATIVE PROJECT INVESTMENT PLAN BY COUNTY...... 26
TABLE 3-5: TENTATIVE FINANCING PLAN...... 27
TABLE 3-6: LOAN ALLOCATION, DISTRIBUTION BY COUNTY AND FINANCING PERCENTAGES...... 27
TABLE 3-7: PERFORMANCE MONITORING AND EVALUATION TARGETS/INDICATORS ...... 34
TABLE 4-1: FISCAL CAPACITY IN PROJECT AREA: QINGHAI PROVINCE AND THREE COUNTIES ...... 36
TABLE 4-2: PRESENT WRB AND FUTURE WDO STAFFING ...... 38
TABLE 4-3: SUMMARY OF FINANCIAL INVESTMENT COSTS BY YEAR ...... 42
TABLE 4-4: ESTIMATED BENEFITTING AREA BY TYPE OF LAND BY CANAL ...... 42
TABLE 4-5: SUMMARY OF ECONOMIC INDICATORS BY CANAL AND FOR OVERALL PROJECT...... 43
TABLE 4-6: SENSITIVITY TESTS OF ECONOMIC ANALYSES BY CANAL AND FOR OVERALL PROJECT ...... 44
TABLE 4-7: BENEFICIARIES ESTIMATED OF THE SUBPROJECTS...... 49
TABLE 4-8: POVERTY SITUATION OF QINGHAI AND PROJECT COUNTIES（2007） ...... 50
TABLE 4-9: ETHNIC COMPOSITION OF POPULATION OF QINGHAI PROVINCE, COUNTIES AND AREAS (UNIT: 10,000 PEOPLE, %) ...... 53
TABLE 4-10: PRELIMINARY SCOPE OF LAND ACQUISITION AND RESETTLEMENT ...... 62
TABLE 4-11: COMPENSATION STANDARDS ...... 63
TABLE 4-12: ESTIMATED RESETTLEMENT COST...... 64
TABLE 4-13: OPERATIONAL PHASE ORGANIZATIONAL ROLES AND RESPONSIBILITIES TO ENSURE SUSTAINABILITY ...... 66
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LIST OF FIGURES
FIGURE 1-1: LOCATION OF PROJECT COMPONENTS ...... 2
FIGURE 1-2: OVERVIEW OF CONSULTANT WORKPLAN...... 4
FIGURE 1-3: CONSULTANTS STAFFING SCHEDULE ...... 5
FIGURE 3-1: NEW GRAVITY IRRIGATION SYSTEM IMPROVEMENT...... 20
FIGURE 3-2: FUND FLOW AND LENDING ARRANGEMENT CHART ...... 29
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LIST OF ABBREVIATIONS, ACRONYMS AND UNITS
ADB - Asian Development Bank BCM - billion cubic metres BOQ - bill of quantities DI - Design Institute DRC - Development Reform Committee EA - Executing Agency EIA - Environmental Impact Assessment EIRR - economic internal rate of return EMDP - Ethnic Minority Development Plan EMP - Environment Management Plan FGD - Focus Group Discussion FPA - Farmers Professional Association FSR - Feasibility Study Report G5 MUV - Group of 5 – Manufacturing Unit Value GDP - gross domestic product GIS - Geographical Information System GWP - Global Water Partnership HH - Household IA - Implementing Agency IADB - Irrigation District Administration Bureau IAS - Irrigated Agriculture Strategy IAS - irrigated agriculture strategy IDC - Interest During Construction IEE - Initial Environmental Examination IFC - International Finance Corporation IMC - irrigation management committee IRBM - Integrated river basin management ISF - irrigation service fee IWRM - Integrated Water Resources Management LBD - learning-by-doing LG - Leading group LIBOR - London Interbank Offer Rate MAF - mean annual flow MoF - Ministry of Finance MRM - Management Review Meeting MWR - Ministry of Water Resources N - nitrogen NDRC - National Development and Reform Commission NGO - Nongovernment organization O&M - Operation and Management OJT - on-the-job training OM - Operations Manual P - Phosphorus PIM - Participatory Irrigation Management PMO - Project Management Office PPTA - Project preparation technical assistance PRC - People’s Republic of China QDOWR - Qinghai Department of Water Resources RP - Resettlement Plan
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SA - Social Assessment SEIA - Summary Environmental Impact Assessment SIDD - Self-financing Irrigation and Drainage Districts SPA - social and poverty assessment SPRSS - Summary of Poverty Reduction and Social Strategy TA - Technical Assistance WB - World Bank WBI - World Bank Institute WFP - World Food Programme WTP - willingness to pay WUA - Water Users Association YRB - Yellow River Basin YRCC - Yellow River Conservancy Commission
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1. INTRODUCTION
1.1. BACKGROUND
The province is situated on the Qinghai-Tibet Plateau in north western China. Though covering a large area the population totals only about 5.4 million and the province is very sparsely inhabited. Of these people, over 40% are of minority racial or cultural groups, especially Tibetans, Mongolians and Moslems. The Ethnic Minority Development Plans (Appendix 13) indicate 96% of the direct project beneficiaries are ethnic minorities. Qinghai Province is one of the poorest in China, due to its remote location, away from most mainstream economic developments in the country, and mountainous environment and cold, dry climate, which do not favour sedentary farming operations. Only about 0.8% of the total land area is under cultivation. However, in much of the province animal husbandry is a major activity. Sheep and yaks are grazed on high pastures, and sheep and cattle in lower areas. Average per capita income in Qinghai is among the lowest in China.
Despite the low rainfall, there are many water resources in Qinghai. Approx. 266 natural lakes and 277 rivers give a total surface area of more than 1.5 million ha. The 4,500-km2 Qinghai Lake is the largest inland water body in China, and three of the great rivers of Asia, the Yangtze, Mekong and Yellow River, have their sources in this province. In addition there are more than 120 man-made reservoirs and dams, bringing the total water area in the province to around 1.8 million ha.
1.2. SCOPE OF THE ASSIGNMENT
The purpose of the TA is to prepare a project that will finance rehabilitated and newly constructed key water resources infrastructure in the three participating counties of Qinghai Province. The TA outcome will be a project design that will (i) enhance productivity and sustainability of existing irrigation systems with increased provincial revenues; and (ii) strengthen institutions, including QDOWR in delivering accountable irrigation services, WUAs in fulfilling specified O&M tasks, and other agencies in providing sound support services. The TA will have three specific outputs for the project area: (i) an irrigated agriculture strategy and action plan, (ii) an institutional development strategy for PIM and IWRM with a program of capacity building and project management, and (iii) an investment proposal that meets ADB’s safeguards and other requirements
The proposed Qinghai Rural Water Resource Management Project is located in the valley area of main stream of Yellow River. Infrastructure improvements (Figure 1-1) include construction of four main canals,1 on the north and south banks downstream of the existing Lijiaxia and Gongboxia hydropower reservoirs, construction of new branch canals and rehabilitation of lower-level canals. To improve water use efficiency all canals will be lined with concrete. The project will cover Hualong, Jianza and Xunhua poverty counties, which are situated in north - eastern Qinghai.
Based on the available data2 the tentative project investment cost is estimated at $ 227.7 million including taxes and duties, physical and price contingencies and interest and other charges during implementation. The proposed ADB loan is $ 40 million representing 17.6% of the total investment. The Provincial Land Resources Department will contribute 33.9%, the Provincial Government and Provincial Water Resources Department will together contribute 46.8%, and the three project counties will contribute a total of 1.8% for interest during construction.
1 Lijiaxia north and south main canals are 31.790 and 17.013 km long and Gongboxia north and south are 30.576 and 27.308 km respectively. 2 Component 1 based on updated files from the DI received by email on 27 July 2009. These are in the process of being updated in Costabs. Components 2-4 are unchanged from the Interim Report.
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FIGURE 1-1: LOCATION OF PROJECT COMPONENTS
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1.3. PROJECT DELIVERABLES
Standard reports, as required by the ADB, are summarised in Table 1-1 below together with submission dates. The submission dates have been slightly advanced in relation to the contract to permit a more rapid processing of the project as requested by the ADB and the EA.
TABLE 1-1: LIST OF REPORTS
Report Comments Submission Date
R1: Inception Submitted 3 April 2009 Report
R2a: Interim Report Submitted: This report included the draft problem tree analysis 29 May 2009 (PTA) and draft design and monitoring framework (DMF) together with initial project documents (such as initial FM, initial economic/financial analysis, RP, SA, EMDP and SEIA)
R2b: Revised Submitted: Presents the rationale, including sector performance, 30 June 2009 Interim Report problems and opportunities, as well as the previous sections.
R3. Draft Final Submitted: Includes documentation for the review and appraisal of 14 August Report 3 project components based on the information available at 31 July 2009 2009. Will be developed to facilitate preparation of the RRP.
R4. Final Report This Report: Revised DFR to address ADB and PPMO comments. 25 September 2009
1.4. CONSULTANTS WORKPLAN AND STAFFING SCHEDULE
The Consultants Revised Workplan and staffing schedule summarised in the Figure 1-2 and Figure 1-3. In addition to the tasks as indicated in the Consultant’s Terms of References the consultant has completed a preliminary “Least Cost Analysis of Project Options” to compare different project options on a techno-economic basis. This replaces the task “Subproject Selection Criteria” which, given the advancement of project identification, no longer appears relevant.
1.5. SCOPE AND LAYOUT OF THIS REPORT
The rationale, including an assessment of the sector performance, problems and opportunities, is presented in Chapter 2. The proposed project is summarized in Chapter 3 and justified in Chapter 4 in terms of the expected benefits, impacts, assumptions and risks.
3 Certain chapters and appendices were furnished on 7 August 2009 to facilitate ADB processing.
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FIGURE 1-2: OVERVIEW OF CONSULTANT WORKPLAN
TASK NAME March 09 April 09 May 09 June 09 July 09 August 09 sept-09 W5 W9 W1 W2 W3 W4 W6 W7 W8 W22 W27 W14 W18 W10 W11 W12 W13 W15 W16 W17 W19 W20 W21 W23 W24 W25 W26 W28 W29 W30 W31 REPORTING Inception Report (R1) Inception Report (R1) Interim Report (R2) Interim Report (R2) Draft Final Report (R3) Draft Final Report (R3) Final Report (R4) Workshops Final Report (R4) ACTIVITY SCHEDULE PHASE 1 - REVIEW PLANNING STRATEGIES AND PRE-FEASIBILITY STUDIES Undertake baseline socioeconomic surveys Assess ongoing and proposed water resources development and restoration activities Review the existing water resources development plan and relevant regulations and policies Carry out an institutional analysis of relevant institutions at provincial, municipal, and county levels PHASE 2. INTERIM PHASE - SUBCOMPONENT PROPOSAL DEVELOPMENT. Undertake Economic Analysis of Project Options Develop an irrigated agricultural development strategy Analyze relevant findings and lessons learned Prepare stakeholder analysis, problem and objective analysis, and preliminary project design framework Undertake institutional and other relevant analysis Prepare project components PHASE 3 FINAL PHASE - DEVELOPMENT OF AN INVESTMENT PROPOSAL Prepare project financial and economic analyses, plus financial management assessments Prepare social and gender impact assessments, ethnic minority development plan, and resettlement plans Prepare summary environmental impact assessment Prepare participatory and capacity building plans for local stakeholders Develop project monitoring and evaluation system
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FIGURE 1-3: CONSULTANTS STAFFING SCHEDULE
2009 MONTHS INPUT NAME AND POSITION FIRM MAR APR MAY JUN JUL AUG SEP HOME FIELD TOTAL 1 2 3 4 5 6 7
INTERNATIONAL Colin STELEY SGH 0.50 5.50 6.00 Irrigation/Water Resources Management Specialist/Team Leader John WICKS SGH 0.50 3.50 4.00 Agricultural Economist Gary MOYS/Bernard YON SGH 0.50 1.50 2.00 Environment Specialist CHEN Shaojun SGH 1.50 1.50 3.00 Social and Community Specialist SUB-TOTAL 3.00 12.00 15.00 DOMESTIC ZENG Guanglue SGH 5.50 5.50 Irrigation Engineer/Deputy Team Leader KONG Li SGH 0.50 5.00 5.50 Agricultural Economist ZHOU Wei SGH 1.00 2.00 3.00 Social and Resettlement Specialist ZHANG Xi SGH 1.00 2.00 3.00 Enviroment Specialist ZHU Xiujie SGH 0.50 2.50 3.00 Institutional and Community Development Specialist NIE Fengying SGH 0.50 2.50 3.00 Agricultural Extension Specialist MA Weisheng SGH 3.00 3.00 Enthnic Minority Development Specialist SUB-TOTAL 3.50 22.50 26.00 TOTAL 6.50 34.50 41.00 Legend Field: Full Home: Full
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2. RATIONALE: SECTOR PERFORMANCE, PROBLEMS AND OPPORTUNITIES
This section assesses the economic efficiency, social equity and environmental sustainability (the 3Es) performance of the water resources and agricultural sectors and shared irrigation subsector, at the national, provincial and project levels. Section 2.1 briefly updates sector indicators, analyzes performance and establishes causes of significant changes. Section 2.2 reviews government and ADB sector strategies, relevant external assistance and lessons learned and provides alternative approaches to addressing identified problems/constraints and the rationale for the project.
2.1. PERFORMANCE INDICATORS AND ANALYSIS
2.1.1. POVERTY ALLEVIATION
China’s poverty reduction performance is enviable (ADB 2004). Measured by the new international poverty standard ($ 1.25 per person per day using 2005 Purchasing Power Parity) the national poverty rate fell, from 85% in 1981 to 27% in 2004, while the absolute number of poor declined by nearly half a billion people. However China still has the second largest number of poor in the world (after India) and 254 million people were still consuming less than $ 1.25 per day in 2005 (World Bank 2009a). Chinese poverty is predominantly rural. In 2005 the poverty rates were 17.9% and 0.3% in rural and urban areas respectively and 72.5% of the population, and 99.4% of the poor, live in rural areas. Rural – urban inequality is also increasing. After adjusting for cost of living differentials the Gini index, of income inequality, increased from 32.9% in 1990 to 44.3% in 2005.
Qinghai is located in the Northwest, which is the poorest of the five regions of China. In 2003 the poverty rate (Yuan 888 per person per year at rural prices) was 28.6% (the national average was 13.1%) and 20% of poor Chinese lived in the Northwest. In 2006 Qinghai had the highest provincial poverty incidence (12% by the national poverty line) although its share of agriculture in rural employment (70%) was only the ninth highest (OECD 2009). A State Council Leading Group Office of Poverty Alleviation and Development (LGOP) study, supported by ADB, led to official approval of a broader definition of poverty similar to the UNDP Human Develop Index (HDI). In 2006 Qinghai had the fifth lowest HDI of 31 Chinese provinces (UNDP 2008). Within Qinghai Province the proposed Project will serve the official poverty Counties of Jianzha, Xunhua and Hualong.
2.1.2. WATER RESOURCES
There is a broad consensus that China’s water resource management priorities are pollution and associated water scarcity (World Bank 2009b and Wang Yi et al 2007). However pollution is not a particular issue in Qinghai, which generally meets water quality standards (World Bank 2009b). When renewable water supply falls below 1,700, 1,000 or 500 m3 per person per annum (m3 p-1 y-1) countries suffer water stress, scarcity or absolute scarcity respectively (Rijsberman 2006). Another indicator relates water demand to supply. Countries suffer (severe) physical water scarcity when more than 75% of the available supplies are withdrawn, diverted or extracted (CAWMA 2007).
China’s total annual renewable water resources are about 2,830 billion cubic metres (BCM) of which 578.9 BCM were extracted in 2007.4 Water supply was 2,258 m3 per person per annum (in 2000) and demand (extraction) was only 20% of the available water resources (in 2007). Therefore China as a whole does not suffer from water stress. However China’s water resources are unequally distributed. The south, where average demand = 13.8% of the supply of 3,630 m3 p-1 y-1, suffers little water scarcity while the north, where average demand = 61.4% of the supply of only 780 m3 p-1 y-1, suffers both physical and economic water shortages.
4 National water resources data are from MWR 2007, World Bank 2009b and http://www.fao.org/NR/WATER/AQUASTAT/main/index.stm. Surface water supplied 81% of extraction and industrial, including agriculture, domestic and environmental flows used 90%, 8% and 2% respectively.
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On the supply side the mean annual flow (MAF) of the Yellow River is 20.94 BCM, or an average of 664 cumec (m3 sec-1), at Lijiaxia, and 22.13 BCM, or 720 cumec, at Gongboxia (DI 2009). Present project area demand (extraction) is reportedly only 150.8 MCM for irrigated agriculture, 42.1 MCM for industry, 4.1 MCM for domestic and 0.9 MCM for livestock uses.5 Therefore the total present extraction of 197.9 MCM represents less than one percent (1%) of MAF available at Gongboxia.
However the project is located in the upper Yellow River Basin (YRB). This suffers similar water scarcity to the rest of northern China, with demand = 51.3% of the average supply of 750 m3 p-1 y-1 (World Bank 2009).6 In 2007 Qinghai extracted 3.11 BCM of which only 2.05 BCM (66%) was used for agriculture (NBSC 2008). Present irrigation efficiency is reportedly 35% indicating YRB irrigation consumption of only 0.72 BCM. 7 The Yellow River Conservancy Commission (YRCC) water allocation to Qinghai is 1.41 BCM of consumption. 8 Therefore Qinghai would only exceed its allocation in the unlikely event that the other sectors are achieving an efficiency of more than 65%. The future water balance impacts of the proposed project are considered in Section 2.2.2 below.
2.1.3. IRRIGATION
By the end of 2007 the total national effective irrigation area reached 57.8 million hectares (mha) of which: (i) 148 systems, larger than 500,000 mu, served a total of 11.3 mha, (ii) 286 systems, from 300,000 to 500,000 mu, served 5.2 mha and (iii) 5,435 systems, from 10,000 to 300,000 mu, served 11.8 mha. Water-saving irrigation served 23.5 mha, representing 41% of the total area, of which 10.1 mha had lined canals, 5.6 mha low-pressure pipe and 3.9 mha sprinkler or drip irrigation. The coefficient of effective utilization of irrigation water (efficiency) was 47% for water- saving irrigation (MWR 2007). For all national irrigation systems FAO report total 2000 agricultural water withdrawals of 426.9 BCM, irrigation requirements (crop evapotranspiration or consumption) of 153.9 BCM and overall water use efficiency of only 36% vs 47% for water-saving irrigation.
The DI provided separate Project area data on 116 existing irrigation systems serving about 90% of the present irrigated area of 11,230 ha. Of these: (i) 24 newer pumping stations, in good condition, serve 1,900 ha (19% of irrigable area), (ii) 55 older pumping stations, in variable condition, serve 6,028 ha (60%) and (iii) 37 gravity systems serve 2,189 ha (21%). The 79 pumped systems involve averages of two lifts per system (range one to four) and 53 metres per lift (range 11 to 157 metres).
The average design capacity, of the older pumping stations, is 1.30 lps/ha compared with the FSRs which indicate a pumping requirement of 1.36 lps/ha based on the present WUE of 35% and peak crop water requirement of about 0.48 lps/ha at the field level. However this design capacity does not appear to be adequate as the newer pumping stations have an average installed capacity of 2.14 lps/ha. This indicates the older stations may have only 60% of the required design capacity.
Furthermore many existing pumped systems are more than twenty years old and are deteriorating. For example only two and three out of four pumps are working in the two pumping stations visited by the PPTA Team. Therefore the present actual capacity is much less than the original design capacity and the existing systems are short of water. This indicates that the old pumping systems may have only 40% of the capacity they require and the present irrigated area has only about 55%. These water shortages are reflected in the less-than-potential present wheat yields (Section 2.1.4).
5 DI (2009) revised Feasibility Study Reports (FSRs) for Gongboxia and Lijiaxia submitted in Chinese on 13 and 14 August 2009 respectively. The figures overestimate present water use because: (i) they are based on extraction not consumption, (ii) they are based on irrigation demand not actual use (71.9 vs 54.4 MCM for Gongboxia but not estimated for Lijiaxia) and (iii) industrial extraction seems very high indicating a low efficiency. 6 Other sources indicate even more severe YRB water scarcity – for example FAO (footnote 1), CAWMA 2007 and the YRB fact sheet available at www.iwmi.cgiar.org/Assessment/Research_Projects/River_Basin_Development_and_Management/Projects_Locations/yellow_river_china.htm 7 It is expected that most local irrigation “losses” (extraction – consumption) return to the fresh groundwater and eventually to the Yellow River 8 YRCC (undated) Yellow River Water Rights available as special subject 11 at http://www.mwr.gov.cn/english1/search.wct?ChannelID=9010
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Present average operation (electricity) fees are reportedly $ 198, $ 264 and $ 374/ha/annum for the first, second and third lifts respectively. Farmers consistently report they can’t afford such fees and they no longer farm much of the higher areas. As the existing systems are pumping about 7,500 m3 ha-1 the present maintenance fee of about $ 26/ha is equivalent to only $ 0.0035 m-3. This is less than 20% of the national average ($ 0.021 m-3) for O&M of mainly gravity irrigation systems (MWR 2007). However a recent study estimated: (i) a gravity irrigation service fee (ISF) of $ 0.015 m-3, for full O&M cost recovery plus amortization, and (ii) the farmer’s ability to pay (ATP) of only $ 0.012 m-3 (Mott MacDonald 2007). Nevertheless it appears the present maintenance fee is too low and is contributing to the deterioration of the existing systems together with the high operating costs.
The PMO report only about 50% of existing main canals, and few lower-level canals, are lined. These unlined canals, in porous loam soils on moderate slopes, are likely to be the major source of seepage losses and the present low water use efficiency which is reportedly only 35%. While this is similar to the national average, reported above, it increases pumping duties and electricity costs. The above discussion indicates that water is the present limiting resource due to its limited delivery capacity and/or high delivery cost. This provides the main rationale for replacing existing pumped irrigation systems with new gravity systems supplied from the existing hydropower reservoirs.
Water User Associations (WUAs): Nationally there were 8,000 water user associations (WUAs) established in 2007 with more than 7 million members representing averages of about 40 ha and 160 households per WUA. The total number of WUAS reached 40,000 of which 9,000 are in 481 large irrigation districts where WUAs now manage 22.7% of the effective irrigation area.
Qinghai introduced irrigation reform in 2006 and formed 276 WUAs, covering 17.5% of provincial irrigated area, by the end of 2008. However the PPMO reports provincial officials lack experience, in WUA establishment and capacity development, and recently formed WUAS are not effective. Volumetric water delivery, measurement and payment are yet to be introduced in Qinghai province.
There are only five existing WUAs in the project area. In Jianzha County two farmer associations reconstituted themselves and registered in 2008 and two more WUAs were subsequently formed. There is one existing WUA in Xunhua County and none in Hualong County. The Xunhua County WUA is a dependency of the local WRB and doesn’t meet the five principles of WUA establishment and operation in China (CIDDC 2004).9 Jianzha County WUAs reportedly: (i) elected their leaders (but many are village officials) and (ii) are based on hydraulic boundaries. However the existing pumped irrigation systems are generally based on administrative boundaries and existing WUAs will require reorganization to manage their secondary units in the new gravity irrigation systems. Qinghai province requests ADB support for WUA formation and organizational capacity building.
2.1.4. AGRICUTURE
Basic Situation: Agriculture, including forestry, livestock and fisheries, remains an important sector in the Qinghai provincial economy. Between 2000 and 2007 the contribution of the sector to provincial Gross Domestic Product (GDP) increased from CNY4.01 billion to CNY8.34 billion while overall GDP increased from CNY26.37 billion to CNY78.36 billion. As a result the contribution to provincial GDP declined from 15.2% to 10.6%. Over the same period, the number of employed persons in the sector has declined from 1.58 million to 1.38 million, a reduction from 55.8% to 44.3% of the provincial total employed persons. Rural labour in Qinghai in 2007 accounted for 65.0% of the provincial total, of which agricultural labour comprised 63.25%. Average arable land is 2.46mu/hh, which is lower than the national average of 2.51 mu/hh.
9 WUAs: (i) are farmers’ own organizations, with democratically elected leaders, (ii) formed on hydraulic, rather than administrative, boundaries, (iii) measure and (iv) pay for volumetric water deliveries and (v) have an adequate and reliable water supply system.
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Agricultural productivity in Qinghai is low and development is below the national average. While arable land accounted for 0.45% of national arable land, grain production amounted to just 0.21% of national grain production in 2007, suggesting that the provincial grain yield was less than 50% of the national average yield. The average grain yield between 2005 and 2007 in Qinghai was 238 kg/mu, which was only 76% of the national average. At county level, average grain yields between 2005 and 2007 were 287, 329 and 162 kg/mu respectively in Jiangzha, Xunhua and Hualong, respectively, equivalent to 91 %, 105 % and 52% of the national average. Between 1998 and 2007, the annual average increase in wheat yields, one of the main crops in Qinghai and the project area, was just 0.6% in Qinghai compared to the national average of 2.5%.
Staple crops (grains and potatoes) account for the major part of cropping in both Qinghai and the project area: 58.4% of total sown area in Qinghai and 57.6% in the project counties. In Lijiaxia Irrigation System staple crops accounted for 50 % of the total sown area, while cash crops and tree crops (including economic trees such as walnuts, apples, pears and apricots, and ecological trees) accounted for 25% and 20% respectively in 2007. The portions of staple, cash, and tree crops in Gongboxia Irrigation System in 2007 were 60:19: 21.10 Average yields for the major crops, based on the data provided by the County Agricultural Bureaus, are shown in Table 2-1. However, field experience and data collected during the crop budget survey for the economic analysis suggests that actual yields achieved by farmers are significantly lower, particularly for grain crops.
TABLE 2-1: AVERAGE CROP YIELDS FOR THE PROJECT AREA BY COUNTY
(t/ha) Crop Hualong Jianzha Xunhua Winter Wheat 7.3 6.1 6.8 Spring Wheat 5.8 4.5 4.0 Rapeseed 1.6 1.9 1.4 Potatoes 8.9 25.3 18.9 Vegetables 29.9 43.0 25.2 Chillies n.a. n.a. 20.9 Apples, pears, apricots n.a. 10.7 1.1 Source: Derived from County Agricultural Bureau data
The national average use of chemical fertilizer in 2007 was 33.3 kg/mu compared to only 14.6 kg/mu in Qinghai, less than 50% of the national average. Since the effective irrigated area to total sown area was 37% in China and 34 % in Qinghai, the average fertilizer use in irrigated agriculture in Qinghai is concluded to also be less than half of the national average. Results of the social survey indicated that about 87% of farmers in the project area use chemical fertilizer while only about 8% use organic fertilizer.
The household survey indicates that farmland per household in the project area is about 5.7 mu, equivalent to 0.95mu/household member (average household size is about 6 persons). The average area of arable land per household is 4.4 mu (68% of the total), garden area 0.05 mu (0.96%), orchard area 0.21 mu (3.17%), and ecological trees 0.23 mu (4.12%). Due to lack of irrigation water, 3,292 mu (4.5%) of arable land in Lijiaxia project area was reported as abandoned in 2007 and 21% of farmland was abandoned in projected counties. About 730 farmers (84%) plan to grow more cash crops if irrigation conditions are improved while only 10% plan not to increase.
10 Data for individual townships were obtained from the County Agricultural Bureaus and have been checked with the agencies to correct errors.
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Provincial grain production cannot meet provincial demand although per capita arable land in Qinghai is higher than the national average (1.47 mu vs. 1.38 mu in 2007). Due to low yields the provincial deficit in production was more 248,000 t in 2008. The quantity of produce marketed in the project area is extremely limited. About 82% of social survey respondents do not sell any surplus agricultural production, 11% sell and the remainder did not know. Between the respondents reporting selling crops 18 different products were recorded, including chillies, wheat, vegetables and walnuts. The high proportion of respondents reporting not selling surplus production suggests a prevalence of subsistence agriculture. Of those farmers selling agricultural produce, 53% sell in the local town, 28% in their villages, and only 19% in the county towns.
Farmers purchase agricultural inputs from shops in their local town (85.7%), village (3.3%) or county town (6.4%). Farmers obtain loans from relatives and friends (70%) and small credit organizations (5%) or are unable to access credit (25%). Clearly farmers are heavily reliant on the informal sector, which most likely severely limits their agricultural production potential.
Wheat Yields: A field survey of farmers in all townships in the project area, undertaken with the assistance of the County Agricultural Bureaus, indicated that present winter and spring wheat yields are 5.8 T/ha and 4.7 t/ha in an average year, and 7.2 t/ha and 5.8 t/ha in a good year with adequate rainfall. The DI estimates potential crop evapotranspiration (ETc) is 517.5 and 367.5 mm for winter and spring wheat respectively. Based on an international study (CAWMA 2007), the reported average wheat yields correspond to actual ETc of only about 330 mm (64% of potential ETc) and 270 mm (74%). This supports the present water shortages reported in Section 2.1.3. The same study also indicates that potential with Project yields, without water shortages, are 8.8 t/ha and 6.2 t/ha in winter and spring respectively. These are consistent with the yields in a “good” year.
Extension: Counties have a multi-level, multi-form agriculture technology extension system that includes public extension institutions and stations, universities and research institutions, Farmers’ Professional Associations (FPAs) and food processing enterprises. Public extension stations are established in each of the counties and include the county agricultural extension station, qualified seed station, agro-machinery station and livestock breeding station. These are all under the control of the County Agricultural Bureau. The County Science and Technology Bureaus and County Poverty Alleviation Bureaus provide additional agricultural extension services.
The public extension institutions organize visits to the demonstration stations and provide training courses. In 2008 the agricultural extension station in Hualong County held three field station visits - for winter wheat, rapeseed and common agricultural technology - and three training courses - for aquaculture, horticulture and new machinery technology. The public grass-root agricultural institutions also provide public services such as training in cultivation technology for fruit trees and winter wheat in Yashiga, Qunke and Gandu Townships (9 times in 2008).
Several factors impact on the effectiveness of the public extension services. In Hualong County, the most significant factor affecting extension services is a lack of experts and technicians. Based on the survey data, there were 17 townships, 366 villages, 43,551 farm households, 243,545 population and 219,134 rural residents in Hualong in 2007, but only five staff who graduated from university in the whole public extension system, including the county extension station and county seed extension station. The second related factor is the lack of extension funds: the Hualong County agricultural extension station had funds of only CNY180,000 in 2007 of which 67 % was used for staff salaries and 33 % for extension purposes. The third factor is lack of staff access modern extension technology; and fourth is the low education level of the staff.
The demand of farmers for extension services is large and the current availability from the public sector is insufficient. Based on the findings of the household survey, only 38.6% of households received technology information from government extension agencies. A few farmers received technology information from farmers’ associations and private sector but these systems are not well developed. As regards their view of the agricultural technology extension system, 48.8% of households were not satisfied with current extension system, 10.3% were very satisfied and 20.2% considered it satisfactory.
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Farmer Professional Associations (FPAs): According to official data there are 516 FPAs in Qinghai Province with 115,000 members who benefit 175,000 households. This amounts to about 21% of the province’s total households. Jianzha County has established a vegetable association with 760 households (2100 members), which are mainly located in villages along the Huang River in Kanbula Town and Kangyang Town. The vegetable association provides training in high quality vegetable production and integrated pest management. There are 9 registered FPAs in the project towns of Hualong County, including FPAs for Sichuan pepper, vegetables, walnuts and chillies. Santao fruits association in Hualong County is a production base promoted association with walnut as the leading industry, which provides technology extension, contracts 416 households in neighbouring villages, and invites technicians to provide technical services to farmers.
By contrast the findings of the household survey indicate that most of farmers (93.6%) are not members of an FPA. Only 1.4%reported being members while the remaining 5.0% did not answer. The farmers belonging to FPAs all belonged to commodity-specific ones, particularly for wheat, Sichuan pepper and walnuts. Benefits of belonging to the FPAs were reported as availability of seed, technology demonstration and training and improved marketing. The reasons for low participation are the lack of FPAs in the vicinity (79.0% of non-members), the belief that FPAs are not very useful (4.4%) and unwillingness to join FPAs (4.0%). The Focus Group Meeting in Gandu Town, Hualong County, reported the FPAs exist for walnut, winter wheat and vegetables. However they were considered to be poorly run and to lack of adequate management experience.
Agro-processing Enterprises: There are a limited number of agro-processing enterprises in the project area. In Xunhua County the Tianxiang and Xianhong companies manufacturer pepper sauces. They are successful in promoting commercial agriculture including providing extension services and training courses to their contract farmers. They guide farmers in how to use seed, fertilizer and pest control and farmers benefit through high yields and a better-than-market prices for “long red pepper”. These companies pay the local public extension agents o undertake field visits. This is considered a success example of the “Company – Household” approach. Agro- processing enterprises are less successful in the other two counties, there being only one soft drink company and no food enterprises in Jianzha, and no enterprises in Hualong.
Training: Only a limited number of farmers have participated in training courses. The social survey results indicate that most farmers (82.8%) haven’t received any training in recent years. Of the 16.2% of households whose family members have received some training, 48.5% received skills training for migrating to cities and towns, 34.1 % received training in cash crop production, 14.5 % received technical training on grain crops, and 5.1 % received training on poultry and livestock husbandry. In addition, six households received other training, such as cooking, driving, medical training, etc. Most training was provided by government agencies (91.5% of respondents) with only a limited provision from other services as such vocational schools (5.0%) and other agencies such as agriculture association, driver training school, factory, fund, etc. (5.67%).
Most farmers are interested in participating in training: 67.8% of the surveyed households indicated a willingness to participate. The overwhelming majority of farmers want to receive training in cash crop production (70%), with training in poultry and livestock husbandry a distant second (17.3%), and training in grain crop production a low priority (5.1%). In terms of the preferred type of training, most households requested training on production technology (89.6%), while marketing (4.58%) and food processing (3.40%) were not considered important. In spite of their historical performance farmers continue to expect that government agencies will be able to provide the required training.
The overwhelming majority of households (95.4%) expect that training will provide by government agencies. Vocational schools were ranked second but only preferred by 1.5% of respondents, while universities and research institutions, farmers' associations and factories were ranked lower.
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2.2. ANALYSIS OF KEY PROBLEMS AND OPPORTUNITIES
2.2.1. THE MAIN DEVELOPMENT PROBLEM AND ITS EFFECTS
The above sector performance indicators and analysis were discussed with county stakeholders at a Project Design Workshop on 22 May 2009. These resulted in the agreed Problem Tree Analysis presented as Appendix 2. The main development problem was defined as low agricultural productivity including water use efficiency (WUE). The main effects were defined as: (i) reduced agricultural production, (ii) low farm household incomes and (iii) the high incidence of rural poverty remaining in the project area. To develop and demonstrate the proposed project rationale the following sections present reviews of: (i) relevant Government and ADB policies and strategies (Section 2.2.2), (ii) external assistance and lessons learned (Section 2.2.3) and (ii) causes of low agricultural productivity and WUE and improvement opportunities and alternatives (Section 2.2.4).
2.2.2. GOVERNMENT AND ADB POLICIES AND STRATEGIES
Rural Development and Poverty Alleviation: The current official guiding socio-economic ideology of the Communist Party of China is the Scientific Development Concept promoting sustainable development, social welfare, a people-centred society, increased democracy and, ultimately, the creation of a Harmonious Society. This marks a shift in the official agenda from the previous focus on pure economic growth towards more balanced development (the 3Es) to address the growing inequalities between the western/rural areas and eastern/urban areas.
Accordingly the government’s 11th Five Year Plan (FYP) calls for “construction of a new socialist countryside” as the foremost task facing China in the 2006 – 2010 five-year period. The eight “rural reconstruction” policy priorities promote: (i) balanced socio-economic development, (ii) modern agriculture, (iii) sustained increases in farm incomes, (iv) construction of infrastructure, (v) development of public services, (vi) comprehensive reform to protect rural people, (vii) improved democracy and (viii) enhanced leadership and motivation of party members and participation of civil society.11 The proposed project supports all eight 11th FYP policy priorities to a greater or lesser extent. Similarly the PRC Poverty Alleviation Programme (2001-2010) aims to improve, mainly rural, production, living conditions, quality of life and the ecological environment (the 3Es). To further address growing social inequalities the government’s China Western Development policy focuses on one municipality, five autonomous regions and six western provinces including Qinghai.
The ADB PRC Country Partnership Strategy (CPS) for 2008-2010 supports the 11th FYP. The CPS recognizes that the economy of the interior needs special attention and identifies four priority sectors including agriculture and natural resources (ANR). The ANR Road Map focuses on three strategic areas: (i) rural productivity and inclusive growth, (ii) sustainable natural resource use and conservation and (iii) strengthening the local enabling environment and capacity for decentralized, participatory rural investments. The relevant CPS output is projects that catalyze and pilot efficient resource allocation, sustainable land and water management and improved productivity.
To overcome present agricultural market (and extension) constraints the CPS envisages promoting new enterprise-farmer association-producer relationships. These are intended to improve input supply, distribute financing and technical information and provide futures contracts to reduce farm price risk and spur increased production. There are many examples of profitable private agro- enterprises (the so-called “dragons heads”) that have successfully reached domestic and export markets and are creating non-farm rural employment. However these three-way relationships are untried and the CPS goes on to warn that ADBs previous loan projects in the ANR sector have had a somewhat lacklustre track record. Delays in processing and implementation have resulted from excessive project complexity as they have attempted to address the multiple constraints. The Qinghai 11th FYP from 2003 to 2010 seeks to strengthen infrastructure construction, including rural water conservancy, promote structural adjustment and raise the living standards of the poor. Lijiaxia and Gongboxia irrigation systems are included in the Qinghai 11th Water Resources FYP.
11 Policies on Building a “New Socialist Countryside” Issued – available from www.china.org.cn
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Integrated Water Resources Management (IWRM): China’s water policy aims to transform the previous development pattern from project construction to integrated water resources management (IWRM) to promote people-centred development that balances the interests of social welfare, economic efficiency and sustainability of vital aquatic ecosystems (the 3Es). This involves specific policies to address: (i) water scarcity, (ii) flooding, (iii) water pollution and (iv) land erosion.12
To promote water-saving China is developing water rights, or allocations, between provinces and the environment within river basins. In 1987 the YRB was the first river basin in China to allocate water. The ten provinces were allocated a total annual consumption of 27 BCM representing 47% of the mean annual flow (MAF) of 58 BCM (footnote 4). In 1999 the Unified Water Regulation Policy (UWRP) gave impetus to implementation of water rights in the YRB. From 1999 to 2004: (i) surface water consumption reduced by 1.9 BCM per year, and 0.5 BCM per dry season, compared with 1988 to 1998,13 (ii) GDP increased by an additional 2.5% per annum and (iii) flow cut-off (zero outflow) was avoided although the river had run dry each year from 1972 to 1998 (Zhao et al 2009).
Water allocation is also a policy instrument for managing the inevitable trade-offs between the 3Es. Economic efficiency favours allocation of scarce YRB water: (i) from subsistence to commercial crops, (ii) from agriculture to industry and, therefore, (iii) from upstream to downstream provinces. However equity considerations require that some water is allocated to upstream provinces where it is likely to be used for subsistence agriculture. To achieve balanced development the government has allocated Qinghai consumption of 1.41 BCM, which is about half the YRB provincial average. This is consistent with its western rural development and poverty alleviation policy priorities to address the growing inequalities between the western/rural areas and eastern/urban areas.
The Qinghai Comprehensive Water Resources Plan (CWRP) from 2008 to 2030 envisages that the national south – north water transfer project will become operational in 2020. In the meantime Qinghai will pursue a combination of water supply and demand management.14 The irrigation WUE is envisaged to increase from 35%, in 2000, to 46%, 53% and 57% in 2010, 2020 and 2030. However increased WUE only results in real water savings under the particular circumstances where local “losses” (diversion minus consumption) are discharged to “sinks”, such as saline groundwater, where they become either unavailable or unsuitable for re-use further downstream. However local project “losses” are expected to return to the Yellow River via underlying fresh groundwater. Expected changes in project water requirements are presented in Table 2-2.
TABLE 2-2: CHANGE IN PROJECT WATER REQUIREMENTS Parameter Unit Without With Area ha 11,23013,903 CWR mm 470 460 Efficiency % 35 56 Consumption MCM 52.8 64.0 Return Flow MCM 98.0 50.6 Diversion MCM 150.8 114.6 Sources: Area from EIA report of Gansu EIA Institute and CWR (ETc) and efficiency from draft FSR of Design Institute
Table 2-2 indicates that: (i) consumption will increase by 11.2 MCM (21%), because of increased crop area, but (ii) diversion will decrease by 36.2 MCM (24%) because of increased water use efficiency. The project will only increase present YRB irrigation consumption (0.72 BCM) by 1.6%. However climate change is expected to reduce river flows. By 2020 Qinghai’s YRB allocation is expected decrease to 1.316 BCM and diversion demand increase to 2.244 BCM. If the proportion of irrigation extractions remains the same (66%), and the 2020 target WUE (53%) is attained, Qinghai would only exceed its allocation if other sectors achieved an unlikely efficiency of > 70%.
12 MWR (2005) China’s Water Policy and Practice, address by H E Dr Jiao Yong, available at http://www.mwr.gov.cn/english1/20051129/61540.asp 13 MWR (undated) Preliminary Assessment of the Impacts of UWRP an the YR at www.mwr.gov.cn/english1/.../20060110104326MDXBUU.pdf 14 Involving new development, including inter-basin transfers and increased extraction of groundwater, and adoption of “water-saving” technology
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The Qinghai CWRP envisages that the whole province will increase its irrigation WUE from 35% to 57% by 2030. However the present project is to be designed for a WUE of 56%. This indicates that Qinghai views the project as an important pilot in achieving its WRCP target. This is ambitious but realistic and achievable. China’s national water policy indicates participatory irrigation management (PIM) is the most appropriate form of local-level IWRM to improve irrigation performance including agricultural productivity, WUE, O&M efficiency and cost recovery. This presents ADB with an opportunity to help the Provincial Government of Qinghai (PGQ) introduce successful PIM reforms and add value to them by operationalizing the CWRP. The governments PIM policies are discussed below and opportunities and alternatives to operationalize the Qinghai CWRP in Section 2.2.4.
Participatory Irrigation Management (PIM): There is no specific national policy on irrigation management reform.15 The 11th Qinghai Five-Year Water Conservancy Plan (WCP) incorporates “significant change in thinking” regarding water governance. The Provincial PMO advises that this means that the proposed project will promote the innovative PIM reforms, that have proven successful in other parts of China, involving joint management of the irrigation systems by new: (i) county-level Water Delivery Organizations (WDOs) and (ii) Water User Organizations (WUOs). The WDOs are to be responsible for managing the four main canals and the WUAs for secondary units (SUs) including the new branch canals as well as the lower-level tertiary and quaternary canals.
The Qinghai Water Conservancy Management Regulation and Policy Manual (WCM) provides a summary of relevant national legislation and regulations. Subject to farmer capacity to pay (CTP), ISF fees are to be set to recover the full WDO O&M service delivery cost excluding WDO staff costs and overheads. Volumetric ISFs are to provide WUAs an incentive to improve WUE. National Document 502 (2005) presents recommendations on developing WUAs. The four guiding principles are: (i) rights and responsibilities should be transferred to WUAs that are formed (ii) based on the local situation and (iii) voluntarily and democratically to (iv) ensure successful management reform.
WUAs have the right to own their irrigation and drainage infrastructure. Elected board members are responsible, to their WUA members, for organizing infrastructure improvement, operation and maintenance, contracting with the WDO (for water delivery), resolving disputes, collecting ISFs from water users, paying the WDO, according to the contract, and providing WUA members with high quality and efficient services to improve agricultural productivity, WUE and farm incomes. The WUA establishment procedure involves: (i) awareness and training, (ii) defining WUA management scope, (iii) making regulations and (iv) registration. WUA operation and capacity development is based on: (v) collective management, or contracting with a person or team, and (vi) training.
Agriculture and Extension: 11th FYP priorities include (i) adapting to competition from imports foods, (ii) addressing land degradation and water shortages, and (iii) improving environmental, food safety and quality, in ‘green’/organic agricultural production and processing. Striking the correct balance between environmental sustainability and rural economic growth remains and intractable. From 1990 to 1994 farmers’ agricultural production incentives deteriorated and grain production decreased. In 1995 China had to import 20 million tonnes of grain. New policies, introduced since 1995, have succeeded in increasing food production. China shifted from net taxation to net subsidization of agriculture. Although there is still a strong focus on grain output for food security agriculture is becoming increasingly commercialized based on market incentives.
The 2009 No 1 Central Document warned that the lingering global financial crises and slowdown of the world economy have exerted an increasingly negative impact on the Chinese economy and 2009 could be the “toughest Year” for farm policies. Thus it gave special significance to the development of agriculture and rural areas. This is the sixth year in a row that the No 1 Central Document focused on rural problems. Previous key phrases were consolidating the foundation of agriculture (2008), developing modern agriculture (2007), promoting the “new countryside” scheme (2006), improving agricultural production capacity (2005) and increasing farmers’ incomes (2004).16
15 http://www.inpim.org/leftlinks/Newsletters/N7/n7a6/view.htm downloaded 28 June 2009. 16 China warns 2009 could be “toughest year” for farm policies (available at http://www.seeddaily.com/reports/) and No 1 Central Document focuses on rural issues (http://news.xinhuanet.com/english/2008-01/30/content_7529372.htm).
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These national policy documents give clear priority to agriculture and rural development. However neither the ADB CPS Road Map for ANR nor the World Bank’s Rural Sector Strategy for China refer to specific rural development and/or agricultural sector policies or strategies. For example, to enable primary producers to increase and diversify their incomes, ADB is working with the Ministry of Agriculture to develop national strategies to: (i) support on-farm production and productivity and (ii) promote integrated ecosystem management and innovation by “dragon head” enterprises. The World Bank also recommends promulgation of appropriate policies and regulations for the support and development of effective Farmers Professional Associations (FPAs) (World Bank 2006). In the meantime there are only a few externally funded agriculture development projects (Section 2.2.3).
The County Extension Offices in the project area plan to promote the production of commercial agricultural crops, in particular walnuts, chilies and other high value crops. Proposed production models include large-scale farms, village-level cooperative enterprises and individual small farmers. The crops that are being promoted generally require some post-harvest processing that can be undertaken by local agro-industries, and these are being simultaneously promoted.
2.2.3. EXTERNAL ASSISTANCE AND LESSONS LEARNED
Relevant external assistance projects are listed in Table 2-3. The main lessons learned, and incorporated into the project design, are summarized in Table 2-4 and presented in Appendix 4.
TABLE 2-3: RELEVANT EXTERNAL ASSISTANCE Status Amount Donor No Project Title ($ million) ADB 1 Henan Sustainable Agriculture & Productivity Improvement Project 1 RRP 2007 135.6 2 Guiyang Integrated Water Resources Management (Sector) Project 2 RRP 2009 439.2 3 Operational Capacity Building and Value Addition 3 TAR 2007 1.0 4 Qingdao Water Resources and Wetland Protection Project RRP 2008 105.8 ADB/GEF 5 Partnership on Land Degradation in Dryland Ecosystems Program 4 Various AusAID 6 Qinghai Forestry Resource Management Project 2002 - 2008 19.1 WB 5 7 Yangtze Basin Water Resources Project 1995 - 2005 551.9 8 Irrigation Agriculture Intensification Project II 1998 - 2005 849.3 9 Guanzhong Irrigation Improvement Project 1999 - 2006 200.0 10 Water Conservation Project 2000 - 2006 185.7 11 Jiangxi Integrated Agricultural Modernization Project PAD 2003 154.0 12 Irrigation Agriculture Intensification Project III PAD 2008 456.2 DFID/WB 13 Pro-Poor Rural Water Resources Reform Project 6 2004 - 2008 12.5 IFAD 14 Integrated Agricultural Development Project 1999 - 2003 15.8 Notes 1. HSAPIP is facilitating increased farm and agro-enterprise productivity and incomes in the fruit sub-sector 2. GIWRMP is supporting implementation of the Municipal IWRM Plan by financing priority IWRM and irrigation structural and non-structural investments to achieve balanced and sustainable water supply and demand. 3. OCBVA is strengthening capacity of EAs and IAs to manage the implementation of ADB-financed projects 4. Related projects include: (i) Fujian Soil Conservation and Rural Development Project Phase II (TAR 2000), (ii) Capacity Building to Combat land Degradation Project (TAR 2004), (iii) Implementation of the National Strategy for Soil and Water Conservation (TAR 2004), (iv) Henan Sustainable Agriculture and Productivity Improvement Project (RRP 2007) and (v) Dryland Sustainable Agriculture Development Project (RRP 2008). 5. These projects included support for Self-Managed Irrigation and Drainage Districts SIDDs) involving joint SDO – WUA system management, PIM and the establishment and development of WUAs. Implementation Completion and Results Reports are available for the first four of these World Bank financed PIM projects. 6. PPRWRP promoted further development of WUAs, to be high quality, sustainable and beneficial to farmers and the disadvantaged, and to help establish a permanent support system for such WUA development in China.
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TABLE 2-4: LESSONS LEARNED AND ADDRESSED IN THE PROJECT DESIGN Projects Lessons Learned Project Design 1 to 4 Infrastructure Improvements: PRC water projects No special provisions necessary. The project will: (i) are generally well planned and implemented construct four main canals and (ii) 93 branch canals and (iii) rehabilitate/build lower-level canals 14 Project and Financial Management Capacity: Support to help the PPMO and 3 CPMOs develop PPMO and three new CPMOs have limited capacity their project and financial management capacity 7 to 12 Joint WDO – WUA Participatory Irrigation The project includes these three components plus Management (PIM): Projects with complementary (iv) organizational capacity development for: (a) the components for: (i) infrastructure improvements, (ii) PPMO and 3 new CPMOs, (b) 4 new County WDOs PIM and (iii) agricultural support are effective and (c) demonstration and extension WUAs 7 to 12 O&M Cost Recovery: Full recovery is premature WDOs will be branches of the County WRBs which and may undermine PIM reforms and innovations will meet all WDO staff costs and overheads 10, 12, Water User Associations: The demonstration – Adapt the standard CIDDC WUA establishment and 13 extension WUA model, with a ratio of one to 10, is operation model (9 demonstration and 84 extension efficient and effective in building democratic WUAs WUAs). Add PIM and IAS activities to: (i) increase but: (i) not all farmers participate and (ii) extension participation and (ii) build extension WUA capacity WUAs are not as effective as demonstration WUAs 12 Dual Purpose WUAs: Dual irrigation – agriculture Promote dual-purpose irrigation – agriculture WUAs purpose WUAs proved both efficient and effective 10, 12 Water-Saving and Agricultural Productivity: PIM interventions aim to achieve the design WUE of Irrigation “losses” (diversion – consumption) are not 56%. Along with IAS interventions they also aim to necessarily “savings”. Agricultural productivity, of improve the agricultural productivity of water and, land or water ($ or T per m3 or ha) is more useful when WUE is achieved, land ($ or T per m3 or ha) 12 WUA Sub-Grants: Proved efficient and effective Provides sub-grants for both: (i) WUA formation and catalysts for WUA formation and capacity building development and (ii) model WUA field trials. 1 to 4 Irrigated Agricultural Support (IAS): Considerable IAS component focused on simple interventions, to scope to increase beneficiary participation. ADB increase agricultural productivity, that complement ANR projects have a lackluster record because of PIM activities and maximize participation of WUA excessive complexity especially for diversification to members and model WUA capacity development commercial crops involving agro-enterprises. GOV agricultural production support policy being updated. 5 and 6 Soil and Water Conservation: SWC interventions Conservation agriculture practices incorporated into decrease erosion and most also conserve water design of PIM and IAS field trials/demonstrations
2.2.4. CONSTRAINTS, OPPORTUNITIES AND ALTERNATIVES
Table 2-5 summarizes the: (i) current situation in the Project area, highlighting the major issues and constraints identified by the sector review, (ii) current Government programs, (ii) alternatives considered and the reasons for their rejection in favour of (iv) the proposed QRWRDP design offering the best opportunities for ADB participation. Appendix 4 presents these in more detail.
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TABLE 2-5: CONSTRAINTS, OPPORTUNITIES AND ALTERNATIVES Current Situation in Project Area Current Government Programs QRWRDP Design Alternative Considered and (Major Issues and Constraints) Reasons for Rejection Infrastructure Improvements: Existing Improved gravity irrigation systems, Improved gravity irrigation systems, supplied Rehabilitate the existing pumped irrigation pumped irrigation systems are: (i) too supplied by two existing hydropower by existing hydropower reservoirs, involving: systems. Would also solve the present water expensive to operate, especially for the reservoirs, are included in the Qinghai (i) four new main and 93 new branch canals supply constraint but is: (i) not cost effective higher lifts, and are (ii) short of water due Comprehensive Water Resources Plan and (ii) rehabilitated or new lower-level and (ii) doesn’t reduce high operating costs to system deterioration. (CWRP) 2008 to 2030 canals. Water Use Efficiency (WUE): Existing Qinghai CWRP requires agricultural Extensive canal lining will virtually eliminate: If the ambitious, but realistic, design WUE of pumped systems are achieving a WUE of WUE to increase from 35% in 2008 to (i) physical losses. PIM activities will reduce: 56% cannot be achieved water will be only 35% 57% in 2030 (ii) operational losses, in main canals (WDOs) limiting, the full area won’t be irrigated and/or and secondary units (WUAs), and (iii) field the projected crop yields will not be achieved level application losses (individual farmers) Participatory Irrigation Management Qinghai DWR policy is to introduce and Joint PIM of the: (i) new main canals by new Improved gravity irrigation systems require (PIM): Township/Village Water Bureaus promote joint PIM of: (i) main canals by WDOs and (ii) new secondary units by new new: (i) management (O&M) arrangements presently manage (O&M) existing new WDOs and (ii) secondary units by WUAs formed along hydraulic boundaries and (ii) new O&M functions. The alternative of pumped irrigation systems assisted in a new WUAs joint PIM of: (i) new main and branch canals few cases by only four dependent Water by new WDOs and (ii) new tertiary units by User Associations (WUAs) new WUAs is contrary to Qinghai DWR policy New Water Delivery Organizations QRWRDP stakeholders have agreed to The new WDOs will: (i) manage (O&M) main New WDOs will: (i) manage (O&M) main (WDOs): Little practical experience with follow the joint PIM and WUA programs canals, (ii) enter into volumetric water delivery canals and (ii) enter into volumetric water joint PIM, establishment and operation of that have proved successful elsewhere and payment contracts with WUAs and (iii) delivery and payment contracts with WUAs. WUAs etc. in China form and develop the capacity of new WUAs However this doesn’t develop WDO capacity (under direction of County Leading Groups) to facilitate WUA development for joint PIM. Water User Associations (WUAs): Only QRWRDP stakeholders agreed to follow Sub-grants will provide farmer incentives to Sub-grants will provide farmer incentives to four existing dependent WUAs but Manual on Establishment and Operation establish and operate WUAs. QRWRDP will establish and operate WUAs without improved gravity irrigation systems will of WUAs prepared by China Irrigation & also add value to the IDDC process as WUAs additional functional activities. This runs the involve 93 branch canals and secondary Drainage Development Center (IDDC). will be supported to: (i) manage secondary risks of: (i) not achieving sufficient farmer units. Experience elsewhere in China Defines WUA functions but not how to: units, (ii) enter into volumetric water delivery participation in WUA activities & (ii) not indicates limited farmer participation in (i) perform them or (ii) develop capacity and payment contracts with WDOs and (iii) developing sufficient WUA capacity for joint standard WUA activities. support their members with OFWM field trials PIM of gravity systems. Model and Extension WUAs: Presently Present best practice in China involves Form nine (9) Model WUAs for 93 secondary Form nine (9) Model WUAs without FFDs. there is no Qinghai experience with the the formation of one Model WUA for units. Conduct farmer field days, for farmers This runs the risk of not developing Extension IDDC model involving Demonstration and about every 10 secondary units where from other SUs, to facilitate formation and WUAS with same capacities as Model WUAs. Extension WUAs. China experience other farmers are expected to form capacity development of Extension WUAs. indicates Extension WUAs don’t achieve Extension WUAs as a result of the the same capacity as Model WUAs. demonstration effect of Model WUAs.
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PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Current Situation in Project Area Current Government Programs QRWRDP Design Alternative Considered and (Major Issues and Constraints) Reasons for Rejection Agricultural Productivity: To improve GOC and GOQ policy is evolving from Will add value to the evolving IWRM policy by Separate PIM and IAS components would WUA (consumption/diversion) Qinghai WUE through real water (consumption) improving both WUE and the productivity of improve WUE and agricultural production CWRP promotes “water saving”. savings towards productivity of water or water and land (before and after the design respectively but not explore the potential “more crop per drop” (T m-3 or $ m-3) WUE of 56% is achieved) through integrated synergies between the two to improve the and complementary PIM and IAS activities. agricultural productivity of both land & water. On Farm Water Management (OFWM): GOC and GOQ are promoting “water Will add value to evolving policy by improving Improved irrigation methods are unlikely to be Present wild flooding is inefficient and saving”, including traditional OFWM both irrigation methods and scheduling to fully effective unless irrigation scheduling is irrigation applications are too infrequent. technologies, but doesn’t appear to improve the productivity of both land & water. also improved. In China traditional OFWM technologies support improved irrigation scheduling (field levelling, border & furrow irrigation) at the field level. prove most effective in terms of farmer adoption and agricultural productivity. Irrigated Agricultural Support: The GOC is reformulating its policies to Integrated complementary PIM and IAS Support of GOQ plans, by local agricultural Conservative local farmers are risk increase crop production and promote activities, implemented by WUAs and WDOs, extension services (AESs), is likely to prove aversive and will continue to grow diversification into commercial crops. will first improve the productivity of wheat as ineffective due to: (i) lack of farmer demand, subsistence wheat. Local agricultural The GOQ agricultural development a prerequisite of farmer diversification into complexity and high risks of diversification extension services are chronically plans, involving extensive diversification more commercial crops particularly walnuts. into commercial crops and/or (ii) lack of AES understaffed and underfunded. China into commercial crops, are unrealistic PIM IAS capacity and resources. projects have had only very limited “wish lists” that are not based on farmer Secondary unit water Secondary unit success in diversification into commercial demand and do not include practical delivery schedules cropping systems Furthermore these alternative arrangements crops which is complex and risky. implementation arrangements. OFWM field trials in Crop production and may not exploit the potential synergies Model WUA SUs fertilizer field trials between PIM and IAS to improve the Farmer field days Farmer field days agricultural productivity of both land & water. Organizational Capacity Development: The China IDDC WUA OCD process is The above ISI, PIM and IAS activities are all The alternative is to rely entirely on formal The existing PPMO has limited project based mainly on formal didactic training. structured as OJT & LBD activities, so staff didactic staff training that has consistently and financial management capacity. The However ADB define capacity as the members can develop the skills necessary to proven less effective as a sole OCD method. Project also requires three new CPMOs, ability to manage affairs successfully.17 perform new organizational roles & functions, three new County WDOs and new WUAs, Thus effective OCD is based mainly on complemented by formal didactic training. to manage 93 secondary units. on-the-job training and learning-by- doing the organizations key functions. Consulting Support for OCD: PPMO International experience indicates initial 60 pm and 198 pm of international & national Four pm and 20 pm of international & national has suggested that consulting support consulting support is essential for OCD consulting OCD support services has been consulting services is considered inadequate should be reduced to about 10% of the in new innovative roles/responsibilities estimated as the minimum requirement for for effective OCD to achieve the ambitious minimum proposed for effective OCD. effective OCD of new Project organizations. and innovative Project outcomes/outputs.
17 ADB (2008) Practical Guide to Capacity Development in a Sector Context – Working Draft
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3. THE PROPOSED PROJECT
3.1. IMPACT AND OUTCOME
The project impact will be sustained increases in agricultural production and farmer income with a corresponding reduction in the incidence of poverty in east Qinghai. The project outcome will be a sustained increase in agricultural productivity and water use efficiency. As well as contributing to the project impact this will also: (i) contribute to operationalizing the Qinghai Comprehensive Water Resources Plan to 2030 and (ii) add value to the national governments evolving IWRM policy, promoting development and adoption of water saving technology, to address severe water scarcity.
The project area is located in the upper Yellow River Valley downstream of the existing Lijiaxia and Gongboxia hydropower reservoirs in east Qinghai Province, on the Qinghai-Tibet Plateau, in the poor western region of China. The project areas have a continental semi-arid climate with long winters and short mild summers. In Lijiaxia mean annual rainfall is 331 mm, with 70% occurring in summer (June to September), and mean annual pan evaporation is 1,881 mm. In Gonboxia these figures are 256 mm, 78% and 1,454 mm. Irrigation is required for crop production.
3.2. OUTPUTS
Project outputs will be: (i) newly constructed and rehabilitated infrastructure, to convert irrigation systems from pumped to gravity supply from two existing hydropower reservoirs, (ii) participatory irrigation management (PIM) jointly by new County Water Delivery Organizations (WDOs) and new Water User Associations (WUAs): (a) introduced and demonstrated in nine model WUAs and (b) adopted by 84 extension WUAs, (iii) introduction and demonstration in model WUAs, and adoption by extension WUAs, of improved cropping systems and agronomic practices, for both subsistence and commercial crops, and (iv) efficient and effective capacity developed for (a) the Provincial and three new County PMOs (PPMO and CPMOs), in project and financial management, (b) three new County Water Delivery Organizations (WDOs), in main system management and support of WUAs, and (c) eight model WUAs in management of their secondary units and support of WUA members.
Irrigation System Improvement (ISI) Component activities will be the various construction contracts for the: (i) Gongboxia North, (ii) Gongboxia South, (iii) Lijiaxia North and (iv) Lijiaxia South irrigation systems. The required inputs are the PPMO and three CPMO project and financial management capacity outputs of Component 4, described below, and the project investment financing presented in Sections 3.5 and 3.6. The secondary branch canals, lower level canals and land development for expansion areas will all be packaged together with separate packages for the new main canals. However coordinated scheduling, of main and branch canal contracts, will ensure areas are brought into operation and production as soon as possible working from upstream to downstream.
Participatory Irrigation Management (PIM) activities will be: (i) main system management, by new County WDOs, (ii) secondary unit (SU) management by new WUAs, (iii) volumetric water delivery and ISF payment agreements, between WDOs and WUAs, (iv) on-farm water management field trials and demonstrations, by model WUAs, and (v) field days for farmers (FFDs) in other WUA areas. Required inputs are the Component 4 WDO and model WUA capacity outputs (see below) model WUA sub-grants, to conduct on-farm water management field trials and demonstrations, and the budget for the development and delivery of FFDs for farmers from other WUA areas.
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Irrigated Agriculture Support (IAS) activities will be: (i) improved SU cropping systems, involving commercial and subsistence crops (mainly wheat), (ii) field trials and demonstrations, of improved agronomic practices, and (iii) activities to support diversification into commercial crops. Activities (i) to (iii) will be undertaken by model WUAs. These activities will support: (iv) FFDs for farmers from the 85 extension WUA areas. Required inputs are the Component 4 model WUA capacity outputs, WUA sub-grants to conduct on-farm field trials and demonstrations and the budget for FFDs.
Organizational Capacity Development (OCD) Component activities will comprise strengthening of the PPMO and formation and support of the: (i) three new CPMOs, (ii) three new County WDOs, (iii) eight new model WUAs and (iv) farmers from the 85 other SUs and later their extension WUAs. Consulting services, to facilitate development and implementation of capacity development plans and activities, is the main OCD input to be complemented by limited equipment and formal training.
To achieve the project outcomes and outputs the PPMO and three CPMOs will be responsible for overall project management and contract and financial management under the ISI Component. The WDOs will be responsible for main system management, forming model WUAs, providing them with effective capacity development support and delivery of FFDs for farmers from other WUA areas. Model WUAs will be responsible for irrigation system management, within their secondary units (SUs), and participatory development and implementation of improved SU cropping systems and water delivery schedules as well as irrigation and agronomic field trials and demonstrations.
3.3. PROJECT DESCRIPTION
3.3.1. IRRIGATION SYSTEM IMPROVEMENT
As illustrated in Figure 3-1 the new gravity system will comprise: (i) new main canals, running down the valley from the existing hydropower reservoirs, (ii) new secondary branch canals, running down the slope towards the river, (iii) tertiary branch canals and, in some cases, (iv) quaternary canals. All new and rehabilitated canals will be lined to minimize seepage and other physical water losses.
Once the systems are fully operational, and the design efficiency of 56% has been achieved, the existing pumping stations and main canals, running up the slope in several lifts, can be abandoned. Wherever possible the new gravity system will utilize the existing lower level canals. Existing secondary and tertiary canals will become tertiary laterals and quaternary canals in the new gravity system. In any case the expansion area, between the new main canal and existing pumped service area, will require new lower level canals as well as land development to facilitate efficient irrigation.
FIGURE 3-1: NEW GRAVITY IRRIGATION SYSTEM IMPROVEMENT
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In practice the existing lower level systems are much more variable than indicated in Figure 3-1. At the present feasibility stage only a 5% representative sample of lower level canals was designed to provide the basis for the design of all secondary branch and main canals. The PPMO advise construction contracts will require contractors to rectify teething problems occurring during the 12 months following initial system commissioning. However, especially if existing canals are to be utilized, teething problems would be minimized if farmers were involved in the detailed design. Detailed design will also include an initial study to determine the optimum combination of the types of: (i) cross-regulator, (ii) offtake and (iii) flow measurement structures to facilitate operation.18
The four main canals will serve a total of 13,903 ha of which: (i) 11,230 (81%) is in the existing pumped irrigation service area and is presently cropped, (ii) 1,217 ha (9%) is in the existing area but is presently left fallow, because of high third-lift pumping costs, and (iii) 1,456 ha (10%) is new land, requiring development, most of which (93%) is located in Gongboxia service area. The total service area (13,903 ha) will be supplied by 93 branch canals: 76, serving 12,416 ha (89%), will be supplied by gravity and 17, serving 1,487 ha (11%), will be supplied by pumping stations.
The new Gongboxia North Main Canal (GNMC) will be 30.576 km long and serve 3,819.8 ha, 16 new branch canals (total length 15.731 km) and 737 new and rehabilitated tertiary lateral canals (total length 427.264 km). The GSMC will be 27.308 km long and serve 3,442.3 ha, 14 gravity and three pumped branch canals (23.507 km) and 604 lateral canals (379.405 km). The LNMC will be 31.790 km long and serve 4,089.6 ha, 25 gravity and 10 pumped branch canals (15.932 km) and 405 lateral canals (268.380 km). The LSMC will be 17.013 km long and serve 2,551.3 ha, 21 gravity and four pumped branch canals (18.847 km) and 266 lateral canals (176.576 km).
3.3.2. PARTICIPATORY IRRIGATION MANAGEMENT
The Jianzha County WDO will manage the Lijiaxia south main canal (MC), Hualong County WDO the Lijiaxia north MC and upstream section of the Gongboxia north MC and Xunhua County WDO the downstream section of the Gongboxia north MC and entire Gongboxia south MC. WUAs will manage secondary units (branch and lower level canals) and provide on-farm water management (OFWM) support to their members. Model WUAs will also conduct OFWM field trials. 19 The proposed PIM activities are described following a summary of PIM logistics presented in Table 3-1.
TABLE 3-1: JOINT WDO – WUA SYSTEM MANAGEMENT LOGISTICS System/County Length WUAs 1 Villages Area Member Average WUA Size (km) (No) (No) (ha) (hh) Villages Area Member Jianzha County 17.0 25 20 2,551 2,806 0.8 102 112 Lijiaxia North 31.8 35 42 4,090 6,140 1.2 117 175 Gongboxia North US 19.8 9 23 2,702 4,719 2.6 300 524 Hualong County 51.6 44 65 6,792 10,859 1.5 154 247 Gongboxia North DS 10.8 7 9 1,118 717 1.3 160 102 Gongboxia South 27.3 17 49 3,442 7,175 2.9 202 422 Xunhua County 158.3 24 58 20,695 7,892 2.4 190 329 Total Project 106.7 93 143 13,903 21,557 1.5 149 232 Note 1: Number of WUAs = branch canals plus new pumping stations serving areas higher than the new main canal
18 The feasibility-level designs, of the new gravity irrigation systems, reportedly involve gated cross-regulators and gated offtakes from both branch canals to laterals and from secondary laterals to tertiary canals. However this combination, of double-gated regulators and offtakes, is inherently unstable. The inevitable small flow perturbations require regular readjustment of gate settings to maintain water delivery schedules and minimize operational losses to achieve WUE targets (FAO 2007). The new secondary branch canals will run down the grade whereas laterals will often run along the contour and will be relatively flat. Therefore the flow from secondary branch, to tertiary lateral canals, is likely to be drowned. 19 Four model WUAs, located the upstream sections of each of the four main canals, will be formed in Project year one and four more model WUAs, located in middle main canal sections will be formed in Project year three. An additional model WUA will be located in Hualong County. As additional functions are involved, one model WUA in each county should manage an upstream pumped branch canal serving a secondary unit that is located higher than the new main canal. WUAs required for the GSMC, and the upstream section of the GNMC, are particularly large requiring formation of lower-level water user groups (WUGs) prior to federation of WUAs.
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WDO Main Canal Management will involve the development and implementation of realistic O&M plans. The operation plan will balance: (i) the system diversion capacity, WUE and equitable distribution, between all WUAs, in proportion to their service areas (supply) and (ii) each WUAs preferred cropping system and water delivery schedule (demand). The optimum maintenance plan will ensure physical sustainability of infrastructure (Skutsch 1998, Svendsen and Huppert 2003). WDOs will develop and implement annual main canal O&M plans from Project years two to five.
WUA Secondary Unit Management: The SU operation plan will balance: (i) members preferred cropping system, and its required water delivery schedule, (demand) with (ii) diversion capacity and WUE (supply). Delivery schedules will be based on crop water requirements estimated using reliable local climate data. Optimum maintenance plans will ensure the physical sustainability of infrastructure (Skutsch 1998, Svendsen and Huppert 2003). The WDOs will support model WUAs to develop, implement, monitor and evaluate annual SU O&M plans in years two to five inclusive, for the first four model WUAs, and years four and five for the second group of five model WUAs.
WDO – WUA Service Agreements: The above MC and SU O&M plans will provide a basis for the negotiation, implementation, monitoring and evaluation of annual joint WDO – WUA volumetric water delivery (WDO) and ISF payment (WUA) agreements (Cornish 2004, Mott MacDonald 2007). Service agreements will be developed and implemented each year from years two to five inclusive.
On-Farm Water Management (OFWM): Model WUAs will also be supported to plan and use small sub-grants to conduct, monitor, evaluate and refine OFWM field trials over several annual cycles. Field trials are expected to evaluate the impact of improved field irrigation scheduling and methods (levelling and furrow irrigation etc) on field application efficiency and the productivity of wheat and other crops. Field trials will also act as demonstrations for FFDs for farmers from other WUA areas. Each model WUA will develop and implement two OFWM field trials per year, eg for winter and spring wheat (therefore eight trials each, in years two and three, and 18 in years four and five).
OFWM Farmer Field Days (FFDs): To extend the demonstration effect and results of model WUA field trials the WDOs will plan and deliver FFDs for farmers, and later extension WUA members, from the other 84 SUs. Each FFD is expected to involve about 15 farmers (at least five female). There will be about 42, 84, 126 and 168 FFDs in years two, three, four and five respectively.
3.3.3. IRRIGATED AGRICULTURE SUPPORT
Table 3-2 summarizes the complementarities between the proposed IAS and PIM activities. These have been integrated as a result of the sector constraints and opportunities analysis (Section 2).
TABLE 3-2: MAJOR ACTIVITIES ON PIM AND AGRICULTURAL SUPPORT Participatory Irrigation Management Irrigated Agricultural Support Support model WUAs in developing and implementing Support model WUAs in developing and implementing water delivery schedules to supply preferred cropping their preferred cropping systems and patterns preferably systems and patterns over the entire secondary unit (SU) involving commercial as well as subsistence crops Provide model WUAs with sub-grants to develop and Provide model WUAs with sub-grants to develop and implement field trials and demonstrations of improved implement field trials and demonstrations of improved on-farm water management and irrigation practices agronomic practices including fertilizer application Support farmers from other WUA areas by designing and Support farmers from other WUA areas by designing and delivering effective farmer field days (FFDs) concerning: delivering effective farmer field days (FFDs) concerning: • WUA formation and capacity building etc • WUA formation and capacity building etc • SU irrigation scheduling and management • Secondary unit cropping systems and patterns • Improved on-farm water management practices • Improved agronomic and fertilizer practices
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The WDOs will support: (i) model WDOs, to develop and implement field trials on agronomic and fertilizer application practices, and (ii) farmers, and later extension WUA members, from other SUs by conducting FFDs to assess demonstrations and promote adaptation of improved agricultural practices. The WUAs will function as dual-purpose irrigation management and farmer professional associations responsible for facilitating consensus regarding their members preferred cropping systems and providing them with crop production extension and other agricultural support.
SU Cropping Systems: WUAs are expected to balance production of subsistence and commercial crops. Model WUAs will be supported to develop, implement, monitor and evaluate their cropping systems and progressively increase the proportion of commercial crops over several annual cycles. The WDOs will support model WUAs to develop, implement, monitor and evaluate annual SU cropping system plans in years two to five inclusive, for the first four model WUAs, and in years four and five for the second group of five model WUAs.
Agronomic Practices: Model WUAs will be supported to plan and use small sub-grants to conduct, monitor, evaluate and refine agronomic field trials over several annual cycles. Field trials are expected to evaluate the impact of improved agronomic and fertilizer application practices, on the productivity of wheat and other crops, and act as demonstrations for farmers from other areas. Each model WUA will develop and implement one agronomy field trial per year. This will require a total of four trials per year, in years two and three, and 18 trials per year in years four and five.
Crop Diversification: Model WUAs will be supported to prioritize the constraints to diversification and to formulate and implement activities to alleviate them. These will to differ between model WUAs depending on: (i) their preferred commercial crops (walnuts, thread chillies or Sichuan pepper etc), (ii) the nature of the limiting constraint/s (production, inputs or marketing etc) and their preferred extension service provider (WDOs, local extension service or agro-enterprises etc). Each model WUA will develop and implement one diversification/commercialization activity per year. This requires four activities per year, in years two and three, and 18 per year in years four and five.
Agricultural FFDs: WDOs will plan and deliver annual FFDs (one agronomy + one diversification) for farmers, and later extension WUA members, from the other 84 SUs. Each FFD is expected to involve about 15 farmers (at least five female). There will be about 42, 84, 126 and 168 FFDs in years two, three, four and five respectively.
3.3.4. ORGANIZATIONAL CAPACITY DEVELOPMENT
Organizational capacity development will involve Consulting support to strengthen the PPMO and form and support: (i) three new CPMOs, (ii) three new County WDOs, (iii) nine new model WUAs and (iv) farmers or extension WUA members from the other 84 SUs. This support will facilitate the development and implementation of OCD plans. These will be developed in Project year one, for the PPMO, CPMOs, WDOs and first four model WUAs, and in year three for the remaining five model WUAs. Implementation will be assessed and reorientated in years three and five.
The PPMO and Three CPMOs: To achieve the project outcomes and outputs the PPMO and three CPMOs will be responsible for overall project management and contract and financial management under the ISI Component. The PPMO will be strengthened by the addition of a fourth section responsible for overall project monitoring and evaluation (M&E). The existing County Foreign Fund Project Offices for Water Resource Development will establish CPMOs following loan negotiations.
Consulting capacity building support will be informed by the outputs of a current ADB TA in the PRC to strengthen the capacity of EAs and IAs to plan, design, implement, manage, monitor and operate ADB-financed projects.20 The TA will help streamline project implementation procedures and disseminate, selectively transfer, share and take up knowledge, technology, best practices and/or reform initiatives achieved through successful implementation of ADB-financed projects.
20 ADB (2007) People’s Republic of China: Operational Capacity Building and Value Addition.
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Water Delivery Organizations: WDOs will be responsible for main system management, forming model WUAs, providing them with effective capacity development support and delivery of FFDs for farmers from other areas. WDOs Will be formed prior to loan effectiveness and receive consulting support to plan, implement, monitor and evaluate their Project activities and other functions.
Model WUAs: The WDOs will review, adapt and implement the established China IDDC principles and process for forming democratic and representative model WUAs.21 Up to a maximum of Yuan 100,000 farmers or model WUA members will be enabled to make informed inclusive decisions between: an office (about Y 5,000), registration fee (Y 5,000), vehicle (Y 10,000), general assembly (Y 20,000), training material (Y 50,000), training (Y 50,000) or study tour (Y 35,000).22
The capacities of model WUAs will then be developed through: (i) the established China IDDC incentives and formal training courses combined with: (ii) innovative on-the-job training and learning-by-doing (developing and implementing) PIM and IAS functions and activities described above. The WDOs will develop simple guidelines, for field trial sub-grants, provide WUAs with appropriate technical advice and facilitate informed inclusive decision-making by members.
Extension WUAs: WDOs will develop and deliver two annual FFDs for: (i) farmers from other SUs, in WUA formation principles and processes, (ii) extension WUAs, in WUA organizational development and financial management etc, and (iii) Administrative Village Committees where farmers do not form extension WUAs. WDOs will also monitor and evaluate extension WUA formation and capacity. Each FFD is expected to involve about 15 farmers (at least five female). There will be about 42, 84, 126 and 168 FFDs in years two, three, four and five respectively.
3.4. SPECIAL FEATURES
The project supports the government’s 11th FYP, for “construction of a new socialist countryside”, balanced development (the 3Es of economic efficiency, social equity and environmental sustainability) and, particularly, the China Western Development policy to address the growing inequalities between the poorer western and rural and the wealthier eastern and urban areas. The project is also consistent with the Road Map for the priority ANR sector in the ADB PRC PCS. Both the project and Road Map focus on three strategic areas: (i) rural productivity and inclusive growth, (ii) sustainable natural resource use and conservation and (iii) strengthening the local enabling environment and capacity development for decentralized, participatory rural investments.
Ethnic Minorities: The project will benefit mainly ethnic minorities comprising the Hui (48.0% of direct beneficiaries), Salar (39.4%) and Tibetan (8.3%) with a small minority of Han Chinese (4.3%).
Integrated Water Resources Management (IWRM): The Qinghai Provincial Comprehensive Water Resources Plan (CWRP) from 2008 to 2030 envisages that the whole province will increase its irrigation WUE from 35% to 57% by 2030. However the present project is to be designed for a WUE of 56%. This indicates that Qinghai views the project as an important pilot in achieving its WRCP target. This is ambitious but realistic and achievable. China’s national water policy indicates participatory irrigation management (PIM) is the most appropriate form of local-level IWRM to improve irrigation performance including agricultural productivity, WUE, O&M and cost recovery. This presents ADB with an opportunity to help the Provincial Government of Qinghai (PGQ) introduce successful PIM reforms and add value to them by operationalizing the CWRP.
21 The China IDDC WUA formation process involves: (i) awareness campaign, (ii) delineate secondary unit WUAs, at branch canal-level, (iii) appoint WUA preparation groups, (iv) prepare WUA charter, (v) delineate water user groups (WUGs), at lateral canal-level, (vi) elect WUG leaders as WUA representatives, (vii) elect WUA leaders, (viii) organize water users congress to establish WUA and (ix) register the WUA. 22 Separate financial provisions have been made, under the other components, for flow measurement facilities and other capacity building activities.
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Participatory Irrigation Management (PIM): The 11th Qinghai Five-Year Water Conservancy Plan (WCP) incorporates a “significant change in thinking” regarding water governance. Accordingly the project will promote the innovative PIM reforms that have proven successful in other parts of China. These involve the joint management of irrigation systems by new: (i) county-level Water Delivery Organizations (WDOs) and (ii) Water User Organizations (WUOs). WDOs are to be responsible for managing the four main canals and the WUAs for secondary units (SUs) and new branch canals.
The project will adapt the WUA procedures and practices, that have been developed and proven successful elsewhere in China, involving: (i) support for the establishment and operation of model WUAs and (ii) the self-formation of other WUAs based on the demonstration effect of model WUAs. However the project will also add value to these innovations by complementing them with three activities to simultaneously build WDO and WUA capacity and operationalize the Qinghai CWRP.
For the model WUAs these are: (i) joint irrigation system management, by WDOs and WUAs, to minimize operational losses and increase WUE and (ii) on-farm water management (OFWM) to increase field application efficiency and WUE. For farmers from other areas: (iii) farmer field days (FFDs) to actively promote formation of WUAs and their adoption of improved practices (i) and (ii).
The project will also add value to the current IWRM and PIM policy debate, regarding “water saving” technology, by introducing the more general modern concept of agricultural productivity often known as “more crop (value) per drop”. This seeks to optimize agricultural production, and/or its net value, per unit of water actually consumed (T m-3 or $ m-3). The productivity of water can be increased by: (i) reducing the evaporation (E) part of crop evapotranspiration (ETc) or more readily by (ii) increasing application efficiency, by improved OFWM where water is limiting at the project level, (iii) increasing crop yields (T ha-1) or (iv) diversification into higher value commercial crops.
Irrigated Agriculture Support (IAS): Section 2 indicates: (i) local agricultural extension, credit and marketing services are weak, (iii) there are few externally funded agricultural development projects, (iv) ADBs previous ANR projects, particularly involving agro-enterprises, tend not to be successful, (v) excessive project complexity, to address the multiple constraints, causes delays and (vi) donors are now helping develop new sector policies and strategies regarding commercial agriculture, agro- enterprises and Farmer Professional Associations (FPAs). However the modern concept of agricultural productivity provides a logical link between PIM, OFWM and agricultural production.
Therefore the project will: (i) form dual-purpose WUAs, for irrigation management and agricultural development, and (ii) focus on practical achievable agricultural activities to increase the productivity of both water and land respectively before and after the design WUE of 57% is achieved. For the model WUAs these activities involve the development and implementation of: (i) cropping systems, involving a balance of subsistence and commercial crops, and (ii) agronomic field trials to improve the productivity of their selected crops. For farmers from other areas: (iii) FFDs to actively promote formation of dual-purpose WUAs and their adoption of improved practices (i) and (ii).
Rather than attempt to build the capacity of the understaffed and underfinanced local agricultural extension services, model WUAs will be responsible for both the similar IAS and PIM field trials, using project sub-grants, and WDOs will be responsible for conducting both PIM and IAS field days for farmers from other secondary units and extension WUAS. This arrangement offers advantages in terms of both activity efficiency and the effectiveness of WDO and WUA capacity development.
3.5. PROJECT INVESTMENT PLAN
A project investment plan was developed based on the data provided by the DI for Component 1 of the Project inputs agreed between the PPMO and the Consultants for Components 2-4. The project investment cost is estimated at $227.9 million, including taxes and duties ($7.8 million). The costs include physical and price contingencies, of $24.5 million, and interest and other charges during implementation of $4.0 million. The tentative project investment plan is summarized in Table 3-3. Project investment plans by component for each of the counties are shown in Table 3-4.
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TABLE 3-3: TENTATIVE PROJECT INVESTMENT PLAN Item Amount ($M) a A. Base Costs b 1. Improved Irrigation Systems 194.2 a. Gongboxia Irrigation System 93.9 b. Lijiaxia Irrigation System 100.3 2. Participatory Irrigation Management 1.1 3. Irrigated Agriculture Strategy 1.0 4. Strengthened Project Management 3.3 Subtotal (A) 199.3 B. Contingencies 1. Physical Contingencies c 19.9 2. Price Contingencies d 4.6 Subtotal (B) 24.5 C. Financing Charges During Implementation e 4.0 Total (A+B+C) 227.9 Notes: a Includes taxes and duties of $7.8 million. b In mid-2009 prices. c Physical contingencies computed at 10% for all project costs. d Price contingencies computed at 1.0% for 2010, 0.0% for 2011, 0.3% for 2012 and 0.5% thereafter on foreign exchange costs and 1.0% for 2010, 1.5% for 2011, and 2.0% thereafter on local currency costs; e Includes interest and commitment charges. Interest during construction has been computed at the 5-year forward London interbank offered rate as of 14 August 2009 (3.00%) plus a spread of 0.2%. Commitment charges have been computed at 0.15% per annum on 100% of the undisbursed loan amount.
TABLE 3-4: TENTATIVE PROJECT INVESTMENT PLAN BY COUNTY Item Amount ($M) a Hualong Jianzha Xunhua A. Base Costs b 1. Improved Irrigation Systems 101.7 32.8 59.7 a. Gongboxia Irrigation System 34.2 - 59.7 b. Lijiaxia Irrigation System 67.5 32.8 - 2. Participatory Irrigation Management 0.4 0.3 0.3 3. Irrigated Agriculture Strategy 0.4 0.3 0.3 4. Strengthened Project Management 1.0 1.0 1.0 Subtotal (A) 103.6 34.3 61.4 B. Contingencies 1. Physical Contingencies c 10.4 3.4 6.1 2. Price Contingencies d 2.1 0.8 1.8 Subtotal (B) 12.5 4.2 7.9 C. Financing Charges During Implementatione 2.3 0.7 1.1 Total (A+B+C)f 118.2 39.2 70.4 Notes: a Includes taxes and duties of $7.8 million. Component 4 costs and related contingencies and financing charges incurred by the PMO have been allocated equally between the three counties. b In mid-2009 prices. c Physical contingencies computed at 10% for all project costs. d Price contingencies computed at 1.0% for 2010, 0.0% for 2011, 0.3% for 2012 and 0.5% thereafter on foreign exchange costs and 1.0% for 2010, 1.5% for 2011, and 2.0% thereafter on local currency costs; e Includes interest and commitment charges. Interest during construction has been computed at the 5-year forward London interbank offered rate as of 14 August 2009 (3.00%) plus a spread of 0.2%. Commitment charges have been computed at 0.15% per annum on 100% of the undisbursed loan amount. f Totals of the 3 counties may not add up to the project total due to rounding errors.
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3.6. FINANCING PLAN
3.6.1. FINANCING PLAN
A financing plan has been developed based on understandings from discussions with the PPMO. The essential characteristics of it are that (i) ADB loan funds will be used to finance part of the cost of main canal development, including metal equipment, as well as for the costs of the PIM, IAS and project management; (ii) the Qinghai Provincial Land Resources Department will finance all costs of branch canal and lower level development including electromechanical and metal equipment; (iii) the project counties will only finance the IDC on their portions of the ADB loan, including a share of the project management costs; and (iv) the funds from the Qinghai Provincial Finance and Qinghai Water Resources Department will be pooled into a single counterpart funding to finance the remainder of the costs. This is shown in the financing plan as the Government contribution.
The PRC Government has requested a loan of $40 million from ADB’s ordinary capital resources to help finance the Project. The loan will have a 25-year term, including a grace period of 5 years, an interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per annum, and such other terms and conditions set forth in the draft loan and project agreements. The financing plan is summarised in Table 3.5 and detailed in Appendix 5.
TABLE 3-5: TENTATIVE FINANCING PLAN Source Total ($ million) % Asian Development Bank 40.0 17.6 Qinghai Provincial Land Resources Department 82.3 36.1 Project Counties (3) a 4.0 1.8 Government b 101.6 44.6 Total 227.9 100.00 a Beneficiary counties will finance financing charges on their portions of the loan b Combined contribution of the Qinghai Provincial Government and Qinghai Water Resources Bureau.
The loan is proposed to finance 39% of the cost of civil works for the main canals including metal equipment, 80% of office equipment, 85% of vehicles, 80% of office equipment, 70% of training and workshops, and 100% of international training/study tours and consulting services. The three project counties will finance the interest during construction for their individual parts of the ADB loan and the cost of strengthened project management. The Qinghai Provincial Land Resources Department will finance 100% of the cost of developing branch canals, lower level structures - including electro-mechanical and metal equipment - and land development. The Qinghai Provincial Government and Provincial Water Resources Department will finance the remainder of the cost of these items as well as 100% of the cost of land acquisition and resettlement, environmental management and monitoring, survey, design and supervision, and commitment charges. Overall loan allocation, distribution by county, and financing percentages are detailed in Table 3-6.
TABLE 3-6: LOAN ALLOCATION, DISTRIBUTION BY COUNTY AND FINANCING PERCENTAGES Category Amount to be Financed ($000s) Financing Overall Hualong Jianzha Xunhua Provincial rule a 1. Civil Works etc 35,660 Ct 18,814 Ct 5,101 Ct 11,388 PMO - 39% 2. Office equipment 187 58 57 57 15 80% 3. Vehicles 139 35 35 35 35 85% 4. Consulting Services 2,350 - - - 2,350 100% 5. Training & WSs 1,436 567 353 420 96 70% 6. Intl study tours 228 - - - 228 100% a All financing percentages are quoted as a percentage of the total including taxes
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3.6.2. LOAN FUNDS FLOW
The Consultant has held discussions with the PMO to clarify the on-lending and relending of loan proceeds, establishment and operation of a Project Imprest Account and potential procurement methods.23 the immediate borrower will be the Government, which will onlend the funds to the Qinghai Provincial Government under the same terms and conditions as the ADB loan. The Qinghai Provincial Government will relend the funds to the Prefectural Governments, through their Finance Bureaus, who will then relend to the three counties. All relending will be under the same terms and conditions as the loan from the ADB The ultimate borrowers of ADB loan funds will be the three participating counties (Hualong, Jianzha, and Xunhua), who will be responsible repayment of their portions of the loan amount as well as for the foreign exchange risk. Consequently, the financial capacity of the counties will be closely evaluated.
The Provincial Finance Bureau will establish an Imprest Account to be operated in accordance with standard rules and procedures. Processing of withdrawal applications from the imprest account will follow a simplified procedure. Prefecture finance bureaus will not review withdrawal applications during the submission and funds release process but be informed of withdrawal application and loan release status. The withdrawal applications will be prepared and submitted by CPMO and approved by county finance bureau, and PPMO will verify and consolidate the withdrawal applications of all CPMOs and submit to QPFD for final review before sending to ADB for disbursement processing. The proposed fund flow and On-lending /Relending Arrangements are shown in Table 3-2.
3.7. IMPLEMENTATION ARRANGEMENTS
3.7.1. PROJECT MANAGEMENT
Qinghai Water Resource Bureau is the Executing Agency (EA) of the Qinghai Rural Water Resources Management Project (the Project). Qinghai Provincial Foreign Fund Project Office for Water Resources Development is delegated by the EA as the Provincial Project Management Office (PPMO) with responsibility to prepare and implement the Project. The established PPMO has three Technical, Financial and Comprehensive Sections with a total staff of 20 persons. Major duties are responsibility for project application, unified management of project first-stage preparation and project implementation or execution; for technical guidance, supervision and review for/of project work at prefecture, city and county levels; and for review of project annual work plans and budgets and coordination of availability of provincial counterpart fund.
The Leading Group of Qinghai Provincial Foreign Fund Project for Water Conservancy Development is well established and will be responsible for providing overall guidance for the Project, particularly in policy issues. The Leading Group is headed by the vice governor in charge of agriculture and group members are leaders from functional departments concerned, in particular the Provincial Development and Reform Commission, Provincial Finance Bureau, Provincial Agriculture and Livestock Bureau, Provincial Environment Protection Agency, Provincial Foreign Affairs Office and Provincial Water Resources Bureau, and leaders in charge from Haidong Prefecture Administrative Commission, Xining Municipal Government and Huangnan Prefecture Government.
The county level Foreign Fund Project Offices for Water Resource Development are designated as the Implementation Agencies (IAs) and will establish the County-Level PMOs (CPMOs) within their offices. These CPMOs are still to be formally established and staffed but are expected to be responsible for project management and construction. Each CPMO is proposed to have a staff of 10-16 persons but formal establishment is proposed to be delayed until loan negotiations.
23 The project fund management proposed in the draft FSR (Chapter 8.1.2) has been reviewed and discussed with the PMO. The proposed arrangements were based on earlier experience with a World Food Programme (WFP) project and therefore followed the procedures for a WFP grant project rather than those of an ADB loan project.
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FIGURE 3-2: FUND FLOW AND LENDING ARRANGEMENT CHART
Loan Agreement Lender Borrower Asian Development Bank Ministry of Finance (PRC)
On-Lending Agreement (Same terms & conditions as ADB loan)
Borrower Qinghai Provincial Government (Imprest Account)
Re-lending Agreement (Same terms & conditions as ADB loan)
Borrower Prefecture Governments (Finance Bureaus)
Re-lending Agreement (Same terms & conditions as ADB loan)
Loan Proceeds disbursement Borrower Hualong, Jianzha, Xunhua County Gov. Loan Repayment
Submission of Withdrawal Applications
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County-level Project Leading Groups will be established by each of the project counties. Each Leading Group will be headed by a county magistrate as the group leader, and the vice county magistrate in charge of agriculture as the acting group leader. The group members will be leaders from departments concerned from its County Development and Reform Commission, County Finance Bureau, County Water Affairs Bureau, County Agriculture Bureau, County Environment Protection Agency, County Statistics Bureau and County Audit Bureau.
Effective financial management is critical to successful project implementation. Irrespective of how well the Project is designed, the capacity of the EA and IAs to effectively implement the Project and manage the resources will affect the achievement of benefits and project sustainability. The EA/IAs’ financial management arrangements should be capable of recording all transactions and balances, supporting preparation of regular and reliable financial statements, safeguarding the entity’s assets, and subject to audit. In order to assess the capacity of the EA and IAs a Financial Management Assessment (FMA) has been conducted under the TA to assess (i) the legal status of the implementation agency; (ii) the proposed funds flow arrangements; (iii) staff qualifications; (iv) current accounting policies and procedures; (v) reporting and implementation monitoring; (vi) internal and external auditing; (vii) information systems; and (vii) documentation management.
A Financial Management Assessment Questionnaire (FMAQ) was prepared through review and adjustment to the specific requirements of the Project of the ADB FMAQ24 and the questionnaire was translated to Chinese. The questionnaires were provided to each EA/IA with the support of the PPMO and under the guidance of the Consultant. The completed questionnaires have been reviewed and clarified as required and translated into English, and are included as attached as Supplementary Appendix K. Diagnosis of the financial management arrangements has been conducted and appropriate risk mitigation measures recommended as part of project implementation arrangements.
Preliminary assessment shows that the existing financial staff for both the EA and IAs are experienced and qualified for the existing financial management requirements. However, additional training is required for them to implement the proposed ADB project, particularly in the areas of project management, foreign currency risk management and comprehensive financial management. Critical aspects for training on ADB procedures include loan disbursement and repayment, procurement, etc. With the loan approval, financial covenants on accounting and financial management as well as internal control might be set in the Loan Agreement, Project Agreement and other official loan documents. EA/IA staff have to learn how to satisfy these requirements.
The EA/IAs follow the relevant accounting standards and policies issued by MOF, which are in common nation-wide use. The current accounting records and statements are adequate to meet the national standards although the accrual basis method is not yet adopted. They are able to provide related financial information and statements in a timely manner, monthly, quarterly and yearly. Annual statements are available within three months after year end and audited by governmental organs. Document management is based on the PRC Accounting and Archives Law.
The EA/IAs have no internal audits, but the internal control system exists within the water resource bureaus at their respective level. The “disciplinary and monitoring department” within the bureaus are responsible for the ethics and controls.
To implement the project more successfully, financial and non-financial staff are required to receive additional training on project management, especially with respect to ADB procedures.
24 www.adb.org/Documents/Others/FM-toolkit/fmaq.doc
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3.7.2. IMPLEMENTATION PERIOD
The Project is proposed to be implemented over a period of 5 years from 2010 to 2015. Discussions were held with the PPMO and DI to determine the proposed implementation schedule for construction of the four main canals ,related branch canals and lower level structures, and the DI presented a detailed implementation schedule, which has been converted to Microsoft Project format (Supplementary Appendix M). Construction of the first sections of the main canals and the first branch canals is expected to start at the beginning of April 2010 but this will depend on the capacity of the PPMO and CPMOs to award the initial contracts. The implementation schedule for Components 2-4 has been formulated based on the implementation of Component 1 The project implementation schedule will be provided as Appendix 7.
3.7.3. PROCUREMENT
ADB-financed civil works, equipment, materials, and goods and services will be procured in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time). Major contracts for equipment and materials valued at $1 million equivalent or more will be awarded through ADB’s international competitive bidding (ICB) procedure. Smaller packages for equipment and materials valued at less than $1 million equivalent will be procured following the national competitive bidding (NCB) procedure in accordance with the PRC's Tendering and Bidding Law, subject to modifications agreed upon with ADB. Civil works contracts estimated to cost $10 million equivalent or more will be carried out using ICB procedure, while those costing less than $10 million equivalent will be carried out using NCB procedure. Shopping will be allowed for contracts valued at $100,000 equivalent or less. The relevant sections of ADB's Anticorruption Policy (1998, as amended to date) will be included in all procurement documents and contracts.
Given the remoteness of the project area, the relatively short construction season that will result in construction being broken down into packages that can be completed in a relatively short time period, and the spread of construction over four main canals with the involvement of three county- level CPMOs, it is considered unlikely that the civil works will be attractive to any international bidder. Similarly the quantities of equipment and material required are relatively small and the types relatively diverse. It is therefore considered unlikely that the equipment and materials can be arranged in packages of sufficient size to be suitable for ICB procedures.
As a result most of the packages will be procured using NCB. Further refinement of the procurement plan is required to ensure optimum. A key requirement in procurement to ensure timely project implementation is the preparation and tendering of four key civil works packages, one for each canal, that require prior approval from ADB, by the beginning of April 2010. Based on expectations of the time required for this process, procurement activities must start by early October 2009. Similarly an early start must be made on the procurement of consulting services package A detailed procurement plan has been prepared and is presented in Appendix 6.
The PPMO will be responsible for all procurement to be financed from the ADB loan and will ensure that a representative of each CPMO is included in the procurement committee to ensure that their interests are fully considered. Procurement of branch canal packages that do not include an ADB loan contribution will be undertaken by the Provincial Land Resources Development Department in accordance with their own procedures.
3.7.4. CONSULTING SERVICES
The Project will require a total of 60 person-months of international consulting services and 198 person-months of national consulting services predominantly during the first 4 years of project implementation to support project implementation and provide capacity development of the PPMO and CPMOs, to support the CPMOs and the WUAs in the implementation of PIM, and to support the CPMOs and WUAs/FPAs in the implementation of the IAS.
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An international consulting firm will be recruited in accordance with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to time) using the quality- and cost-based selection method (80:20) with a full technical proposal to carry out the consulting services. Detailed design, engineering and construction supervision, financed by the Government counterpart funds, will be carried out by qualified local design institutes recruited by the EA.
3.7.5. DISBURSEMENT ARRANGEMENTS
The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook. Direct payment, reimbursement and commitment procedures may be used to withdraw funds from the loan account. To expedite the flow of funds, and simplify document processing, the statement of expenditure (SOE) procedure may be used for any individual payment not exceeding $200,000. Payments exceeding this ceiling will be reimbursed based on the full documentation process.
After loan effectiveness Qinghai Provincial Finance Department (QPFD) will establish an imprest account25 in a commercial bank acceptable to ADB. The initial amount deposited into the imprest account shall not exceed 10% of the total loan amount, or estimated expenditures to be financed from imprest account for the first 6 months of implementation, whichever is lower. QPFD will be responsible for management, monitoring, maintenance, and reconciliation of the imprest account.
SOEs will be used only at QPFD level to request withdrawals from ADB. Disbursements from the imprest account will be supported by withdrawal applications and related documentation. Such documentations will demonstrate, among other things, that the goods/services: (i) were produced in and procured from ADB members, and (ii) are eligible for ADB financing.
To ensure that adequate loan proceeds are available on a timely basis, the County Finance Bureaus will maintain close coordination with QPFD. Measures to be taken to accelerate internal review and verification for withdrawal applications include (i) QPFD will have at least two authorized representatives to sign withdrawal applications; (ii) the County Finance Bureaus, PPMO and CPMOs will establish written procedures with specified timeframes for review and verification of withdrawal applications; and (iii) QPFD, and the County finance Bureaus will release project funds immediately after receiving them to avoid delay in implementation.
3.7.6. ACCOUNTING, AUDITING AND REPORTING
The PPMO, on behalf of Qinghai Water Resource Bureau, will prepare consolidated quarterly progress reports indicating progress made, problems encountered during the review period, steps taken or proposed to remedy the problems, proposed program of activities, and progress expected for the following quarter. The PMO will ensure that these reports are submitted to ADB in a timely manner and will submit a completion report within 6 months of the Project's physical completion.
The PPMO and each IA will maintain records and accounts that identify the goods and services financed from the loan proceeds, financing resources received, expenditures incurred for the Project, and use of local funds. The accounts will be established and maintained in accordance with sound accounting principles and internationally-accepted accounting standards. The annual project accounts of the EA and the IAs will be audited by auditors acceptable to ADB. Audit coverage will include a special audit of project accounts, including separate opinions on: (i) utilization of funds deposited in the Project's imprest account; (ii) the use of the statement of expenditures procedure, including whether the amount claimed is duly supported and verified; (iii) whether the EA is operating the imprest account in accordance with ADB procedures; and (iv) compliance with financial covenants specified in the loan and project agreements. The audit reports, management letter, and related financial statements will be submitted to ADB not later than 6 months after the end of the fiscal year to which they relate, or the project closing date if earlier.
25 Bank charges will be financed from the loan resources.
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The PPMO is proposed to be responsible for consolidating the financing plans and financial statements complying with the requirement and timetables of Ministry of Finance (MoF) and ADB after each project implementation agency provided the separate plans and statements.
As neither the PMO nor IAs have ADB project experience, training on the detailed requirement of the MoF and ADB concerning the financial reporting format and timetables might be needed for efficient project implementation. Training needs will be further assessed following discussion with provincial PMO and individual implementing agencies, and the Consultant might provide training subject to the availability of resources and capacity.
3.7.7. PROJECT PERFORMANCE MONITORING AND EVALUATION Project performance and monitoring and evaluation (PPME) indicators, based on the project design and monitoring framework (Appendix 1) are presented in Table 3-7. At the beginning of project implementation the PPMO and three CPMOs, with the assistance of consultants, will develop comprehensive Project Performance and Monitoring System (PPMS) procedures to systematically generate data on project outcomes and activity outputs and inputs. The PPMO and CPMOs will refine the PPMS framework, confirm achievable targets, firm up monitoring and recording arrangements and establish systems and procedures no later than 6 months after project inception.
Under the PPMS framework, baseline and progress data will be reported at the requisite time intervals by the PPMO and CPMOs, including annual reporting on the environmental management plan (EMP). The PMO will be responsible for analyzing and consolidating the data through its management information system. The PPMS will be designed to permit adequate flexibility to adopt remedial action regarding project design, schedules, activities, and development impacts. The PMO, with assistance from the consultants, will monitor and assess activities, and report to ADB quarterly on the physical implementation and financial aspects of the Project to ensure that impacts are monitored and reported in line with ADB requirements.
3.7.8. PROJECT REVIEW
It is envisaged that ADB review missions will be undertaken twice per year, for the first 2 years and once a year thereafter. ADB and the Government will undertake a midterm review 3 years after project implementation begins. This review will include a detailed evaluation of the scope, implementation arrangements, resettlement, achievement of scheduled targets, and progress with capacity development measures. Feedback from the PPMS activities will be analyzed.
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TABLE 3-7: PERFORMANCE MONITORING AND EVALUATION TARGETS/INDICATORS Impact: Increased and sustained net value of agricultural production, increased farmer income, and reduced poverty in east Qinghai. From 2008 to 2020: • NVP increased by 88% from $M12.0 to $M22.5 • Average income up from $206.3 to $288.6 per person • Direct beneficiary poverty incidence reduced from 39.4% to 24.6% Outcome: Increased agricultural productivity and water use efficiency. From 2008 to 2015 • Average winter wheat yield increased from 5.8 T/ha to 8.0 T/ha; • Average spring wheat yield increased from 4.7 T/ha to 6.0 T/ha; • Diverse high value crops on an additional 1,600 ha; • Irrigation water efficiency increased from 35% to 56%. Output 1. Rehabilitated and newly constructed infrastructure to convert irrigation systems from pumped to gravity supply from the two existing reservoirs. Within 5 years: • 4 new main and 93 branch canals operational; • 13,903 ha served by rehabilitated or newly constructed lower-level canals; • Flow regulating and measurement structures at all branch and lateral canal off-takes Output 2. Participatory irrigation management (PIM) and empowerment of WUAs: (i) introduced and demonstrated in nine model WUAs and (ii) adopted by extension WUAs for 84 SUs: • Three WDOs develop & implement annual O&M plans, for four main canals, in years 2 to 5; • Model WUAs develop and implement annual secondary unit (SU) O&M plans: o Four annual model WUA O&M plans in years 2 and 3 and o Nine annual model WUA O&M plans in years 4 and 5; • WDOs and WUAs enter into annual agreements for equitable water delivery schedules and irrigation service fee (ISF) payments from years 2 to 5 inclusive; • Model WUAs plan & conduct OFWM field trials: in years 2 & 3 (8 each) & years 4 & 5 (18); • WDOs conduct two OFWM farmer field days (FFDs) per year for 15 farmers from each extension SU: 42 FFDs in year two, 84 in year three, 126 in year four and 168 in year five. Output 3. Support for irrigated agriculture to improve: (i) cropping systems, (ii) agronomic practices and productivity of subsistence crops and (iii) adoption of commercial agriculture. • Model WUAs develop and implement annual SU cropping system plans: o Four annual WUA O&M plans in years 2 and 3 and o Nine annual WUA O&M plans in years 4 and 5; • Model WUAs plan & conduct agronomy field trials: in years 2 & 3 (4 each) & years 4 & 5 (9); • Model WUAs plan & conduct diversification activities: in years 2 & 3 (4/yr) & years 4 & 5 (9); • WDOs conduct one agronomy and one diversification FFD per year for 15 farmers from each extension SU: 42 FFDs in year 2, 84 in year 3, 126 in year 4 and 168 in year 5. Output 4. Organizational capacity for efficient effective project management developed: (i) Provincial and three new county PMOs develop capacity for project & financial management: • New county PMOs formed and staffed before loan effective • PMOs develop CD strategy at 6 months • Self assessments and reorientation at 3 yrs (ii) County WDOs develop capacity for efficient and sustainable joint PIM with WUAs: • Three new county WDOs formed and staffed before loan effective • WDO and Leading Group trained and develop joint PIM strategy during year 1 • Self assessments and reorientation at 3 yrs (iii) WUAs develop capacity to manage their secondary units and provide effective OFWM and agricultural support to their members. • Four model WUAs formed in year 1 and five more in year 3; • Model WUAs develop & implement annual CD strategies in years 2 & 3 (4/yr) & yrs 4 & 5 (9) • WDOs conduct two OCD farmer field days (FFDs) per year for 15 farmers from each extension SU: 42 FFDs in year two, 84 in year three, 126 in year four and 168 in year five. • 21 extension WUAs formed per year from years 2 to 5 inclusive.
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4. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS AND RISKS
4.1. BENEFITS AND IMPACTS
The Project is expected to benefit about 129,300 persons in about 21,000 households of which about 50,900 (39.4%) are poor and almost 96% belong to ethnic minorities. During the construction period the project will provide about 13,100 jobs, of which about 60% are expected to be for unskilled workers.
The Project will improve the irrigation system in the existing irrigated area of 11,230 ha (168,455mu) and provide new irrigation to a further area of 2,673 ha (40,090 mu), of which 1,217 ha is currently abandoned and 1,456 ha will be newly developed. Total incremental production at full project development is estimated at 4,500 t of spring wheat, 26,800 t of winter wheat, 3,800 t of rapeseed, 12,800 t of long chillies, 200 t of dried chillies, 11,000 t of potatoes, 40,600 t of vegetables, 200 t of maize and legumes, and about 300 t of walnuts. At full project development, the incremental net value of the annual crops is estimated at about CNY106 million and of walnuts at about CNY162.6 million.
As a result of this incremental production net farm incomes from annual crops over the whole project area are expected to increase from CNY538/mu to CNY893/mu, an average increase of CNY355/mu for farmers who do not receive any additional land. Based on an average farm size of about 5.7 mu, as reported in the social analysis survey, the annual increment is about CNY2,000. Farm households who are allocated additional land will clearly benefit even more.
4.2. SUSTAINABILITY ANALYSIS
4.2.1. FISCAL IMPACT
Due to the remote location and distance from most mainstream economic developments in China, Qinghai is one of the poorest provinces in China. As the guarantor of the loans to the three counties, the provincial government will take the final responsibility to service the loan in case the counties have insufficient funds. The three project counties (Hualong, Jianzha and Xunhua) will be the ultimate borrowers of the proposed ADB loan and will be responsible for payment of interest during construction during the project implementation period (see as well as payment of interest and capital during loan repayment.
The fiscal revenue of province and the three national poverty counties comes from two sources: self generated (budgetary) and transferred from the upper level government (transfer).
Based on the provincial statistical year book 2008, the sources of revenue of Qinghai Province are mainly from the upper level government and its own budgetary fiscal revenue occupies less than 20% of its total each year. Its fiscal expenditure is just keeping pace with fiscal revenue: the small surplus or deficit is within acceptable levels. The proposed ADB project will not directly impact the provincial level government as it will not take any of the loan. The amount to be guaranteed represents a minor part of the provincial budget. If the provincial government takes the final responsibility of the loan and provides the counterpart funds, each year, the counterpart fund provision accounts for less than 1% of the total provincial expenditure, and the ADB loan service is even less (0.04% in 2015, which has the largest interest payment and is the first year for repaying principal). This indicates that the ADB loan will not be a fiscal burden for the provincial government and is well within its fiscal capacity (Table 4-1: Fiscal Capacity in Project Area: Qinghai Province and three counties).
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TABLE 4-1: FISCAL CAPACITY IN PROJECT AREA: QINGHAI PROVINCE AND THREE COUNTIES
(CNY millions) Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2018 Qinghai Province Annual Growth Rate of Revenue 22% 28% 15% 7% 7% 7% 7% 7% 7% 7% 7% Revenue 26,694.0 34,110.0 39,226.5 41,972.4 44,910.4 48,054.2 51,418.0 55,017.2 58,868.4 62,989.2 77,164.5 Budgetary 4,224.4 5,670.8 6,521.5 6,978.0 7,466.4 7,989.1 8,548.3 9,146.7 9,786.9 10,472.0 12,828.7 % of budgetary in total fiscal revenue 16% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% Transfer from upper level government 22,469.6 28,439.2 32,705.1 34,994.4 37,444.0 40,065.1 42,869.7 45,870.5 49,081.5 52,517.2 64,335.8 Others Total Revenue 26,694.0 34,110.0 39,226.5 41,972.4 44,910.4 48,054.2 51,418.0 55,017.2 58,868.4 62,989.2 77,164.5 Total Expenditure 21,466.3 28,219.9 32,452.9 34,724.6 37,155.3 39,756.2 42,539.2 45,516.9 48,703.1 52,112.3 63,839.8 of which: capital investment 6,439.9 8,466.0 9,735.9 10,417.4 11,146.6 11,926.9 12,761.7 13,655.1 14,610.9 15,633.7 19,151.9
Project:ADB Counterpart Fund Provision 375.0 216.4 230.2 257.8 8.7 % of total expenditure 1.01% 0.54% 0.54% 0.57% 0.02% Disbursement of ADB loan 109.3 58.9 55.5 41.7 7.9 % of total expenditure 0.29% 0.15% 0.13% 0.09% 0.02% ADB Loan service 1.2 4.2 6.0 7.6 8.6 22.0 20.7 % of total expenditure 0.00% 0.01% 0.01% 0.02% 0.02% 0.04% 0.03% Hualong County Annual Growth Rate of Revenue 33% 33% 31% 7% 7% 7% 7% 7% 7% 7% 7% Revenue 329.4 438.9 576.2 616.5 659.7 705.9 755.3 808.1 864.7 925.2 1,133.5 Budgetary 37.8 42.9 50.7 54.2 58.0 62.1 66.4 71.1 76.0 81.4 99.7 % of budgetary in total fiscal revenue 11% 10% 9% 9% 9% 9% 9% 9% 9% 9% 9% Transfer from upper level government 209.6 271.0 327.6 350.5 375.0 401.3 429.4 459.4 491.6 526.0 644.4 Others 82.0 125.1 198.0 211.8 226.6 242.5 259.5 277.6 297.1 317.9 389.4 Total Revenue 329.4 438.9 576.2 616.5 659.7 705.9 755.3 808.1 864.7 925.2 1,133.5 Total Expenditure 329.4 450.8 565.9 605.5 647.9 693.2 741.7 793.7 849.2 908.7 1,113.2 Annual Growth rate of expenditure 36% 37% 26% 7% 7% 7% 7% 7% 7% 7% 7%
Project:ADB Counterpart Fund Provision 232.5 102.5 143.4 68.6 1.3 % of total expenditure 36% 15% 19% 9% 0% Disbursement of ADB loan 69.9 28.0 32.8 7.2 1.4 % of total expenditure 10.8% 4.0% 4.4% 0.9% 0.2% ADB Loan service 0.7 2.6 3.4 4.3 4.4 11.1 10.4 % of total expenditure 0.11% 0.37% 0.46% 0.54% 0.52% 1.22% 0.94% Jianzha County Annual Growth Rate of Revenue 28% 41% 15% 7% 7% 7% 7% 7% 7% 7% 7% Revenue 155.9 219.7 252.7 270.4 289.3 309.5 331.2 354.4 379.2 405.7 497.1 Budgetary 42.7 44.7 51.4 55.0 58.8 62.9 67.3 72.0 77.1 82.5 101.0 % of budgetary in total fiscal revenue 27% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% Transfer from upper level government 121.4 175.1 201.3 215.4 230.5 246.6 263.9 282.4 302.1 323.3 396.0 Others Total Revenue 164.1 219.7 252.7 270.4 289.3 309.5 331.2 354.4 379.2 405.7 497.1 Total Expenditure 172.3 217.7 250.4 267.9 286.7 306.7 328.2 351.2 375.7 402.1 492.5 Annual Growth rate of expenditure 25% 26% 15% 7% 7% 7% 7% 7% 7% 7% 7%
Project:ADB Counterpart Fund Provision 55.4 49.7 34.4 48.1 0.3 % of total expenditure 19% 16% 10% 14% 0% Disbursement of ADB loan 16.7 9.8 10.0 9.0 1.0 % of total expenditure 5.84% 3.19% 3.06% 2.56% 0.25% ADB Loan service 0.2 0.7 1.0 1.3 1.5 3.7 3.4 % of total expenditure 0.07% 0.21% 0.29% 0.36% 0.39% 0.91% 0.70% Xunhua County Annual Growth Rate of Revenue 33% 71% 29% 7% 7% 7% 7% 7% 7% 7% 7% Revenue 197.2 336.8 433.8 464.2 496.7 531.4 568.6 608.4 651.0 696.6 853.4 Budgetary 33.1 37.5 42.4 45.4 48.6 52.0 55.6 59.5 63.6 68.1 83.4 % of budgetary in total fiscal revenue 17% 11% 10% 10% 10% 10% 10% 10% 10% 10% 10% Transfer from upper level government 130.0 181.6 229.0 245.1 262.2 280.6 300.2 321.2 343.7 367.8 450.6 Others 34.1 117.8 162.4 173.7 185.9 198.9 212.8 227.7 243.7 260.7 319.4 Total Revenue 197.2 336.8 433.8 464.2 496.7 531.4 568.6 608.4 651.0 696.6 853.4 Total Expenditure 210.5 344.1 440.8 471.6 504.6 540.0 577.8 618.2 661.5 707.8 867.1 Annual Growth rate of expenditure 25% 63% 28% 7% 7% 7% 7% 7% 7% 7% 7%
Project:ADB Counterpart Fund Provision 87.1 64.2 52.4 121.0 7.2 % of total expenditure 17% 12% 9% 20% 1% Disbursement of ADB loan 22.7 21.1 12.7 25.5 5.5 % of total expenditure 4.49% 3.91% 2.20% 4.13% 0.83% ADB Loan service 0.3 1.0 1.6 2.0 2.7 6.6 6.2 % of total expenditure 0.06% 0.18% 0.27% 0.33% 0.40% 0.93% 0.71%
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The three project counties depend on fiscal transfer (their own budgetary fiscal revenue represents only 9%, 20% and 10% for Hualong, Jianzha and Xunhua, respectively). According to national fiscal accounting regulations, it is not allowed to have fiscal deficit at the year end, which means either the fiscal revenue and expenditure are balanced or a small surplus is allowed. As poverty counties, it is common to find a deficit for the historic years (even in some years there is surplus, but very small), and the deficit must be kept within an acceptable level with reliable reasons.
The project counties have provided historical fiscal data for 2005-2008 and based on this, reasonable assumptions are made on the economic growth after 2008 (only 7% from year 2010 and after due to global economic recession) although the annual growth in historical years was always above 15% and the highest year for Xunhua (2006) reached 71%, the proposed project funds provision and loan service are compared with its annual expenditure. The annual loan service provisions for each county will be a maximum of 1.22% for Hualong, 0.91% for Jianzha and 0.93% for Xunhua, all in 2015, the first year of capital repayment. These levels are considered acceptable and affordable. The local counterpart fund provision is high compared to the county income, a maximum in any one year of 36% for Hualong county, 19% for Jianzha, and 17% for Xunhua. However, this is not an issue since the provincial government will be directly responsible for counterpart funding during the construction period and the three counties will be responsible for financial charges during construction and loan service during the operation period.
4.2.2. OPERATION AND MAINTENANCE
The PPTA consultants assisted the DI estimate realistic recurrent costs for the future sustained operation and maintenance (O&M) of the improved Gongboxia and Lijiaxia gravity irrigation systems.26 Present pumped O&M costs do not provide a sound basis for estimating future gravity costs. Firstly the present pumped operation costs are very high and their reduction provides the main rationale for providing improved gravity systems supplied from the existing hydropower reservoirs. Secondly the present maintenance fee, of about $ 26/ha may, may be inadequate. Therefore future Gongboxia and Lijiaxia gravity irrigation O&M costs were estimated based on recent Qinghai experience in managing the existing Daxia irrigation system in Le Du County.
The Daxia system was built in 1948, rehabilitated in 1969/70 and 40% was rehabilitated in 2006/08. The maximum economic life of an irrigation system is generally considered to be about 40 years. Thus the current level of Daxia O&M expenditure appears adequate to ensure its sustainability. The Daxia system is also very similar to the Gongboxia and Lijiaxia main canals. It serves 3,000 ha (Gongboxia and Lijiaxia main canals serve 2551.3 to 4,089.6 ha) and 9,269 households (2,806 to 7,175 hh) and comprises: (i) a diversion weir (storage dams), (ii) a 57 km lined main canal (17.0 to 30.6 km), 129 unlined branch canals with a average length of 1.32 km (16 to 35 and 0.46 to 1.38 km) and 208 unlined laterals with an average length of 0.64 km (266 to 737 and 0.58 to 0.66 km).
The Daxia O&M cost data and analysis, based on unit costs of: (i) main and (ii) lower-level canals, are presented in Supplementary Annex D. The results indicate the average total O&M costs are $36/ha ($30/ha for Jianzha, $35/ha for Hualong and $41/ha for Xunhua). This is much lower than Daxia ($69/ha) as Gonboxia and Lijiaxia will serve an average of 130ha/km of main canal whereas Daxia only serves 53ha/km (41%). Both projects serve about 10ha/km of branch and lateral canals. The O&M cost of $36/ha, is equivalent to 0.5 cents m-3. These results are consistent with a national study that indicates 2009 gravity main canal O&M costs of about 0.55 cents m-3 (Mott MacDonald 2007). They are also consistent with two international studies that indicate 2009 costs, for main and secondary canals, of 0.4 to 0.65 cents m-3 (Perry 2001) and $ 10 to 40 ha-1 (Skutsch 1998).
GSMC pumping station number 5 will have a capacity of 150 lps and a lift of 94 m to serve 189 ha. This will be the largest SU served by any of the 17 future pumping stations. The annual electricity costs, for pump operation, will be about $28,200 or $149/ha. This is in addition to the gravity O&M costs estimated above. Therefore the total O&M cost of the 17 pumped SUs will range between $ 36/ha and $185/ha or 0.5 and 2.5 cents m-3.
26 As Jianzha, Hualong and Xunhua are official poverty counties Qinghai Provincial Government policy is not to charge for depreciation etc.
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WDO Staffing: County and Township WRBs are presently responsible for managing 33 existing pumped systems to be replaced by four gravity main canals. Based on Daxia experience (one WDO staff member/2.5km of main canal) Table 4-2 indicates that the three Hualong Township and the Jianzha County WRBs are presently overstaffed and some staff will need to be redeployed.
TABLE 4-2: PRESENT WRB AND FUTURE WDO STAFFING Present WRB Staff Future WDO County Permanent Contract Requirements Hualong 34 155 21 Jianzha 12 0 7 Xunhua 6 0 15 Total 52 155 43 Sources: DI for present Gongboxia and Lijiaxia and Daxia WDO (one staff member/2.5km)
Irrigation Service Fees: The PPMO prefers that the WDOs will be branches of the County WRBs with: (i) WDO staff costs and overheads met by the WRBs and (ii) all other O&M costs met by the WUAs. International experience indicates O&M costs are about equally split between materials and labour. Therefore gravity WUAs will need to charge their members an average ISF of 0.3 cents m-3 ($22.5/ha), to cover WDO main canal management and WUA materials costs, and 0.4 cents m-3 ($30/ha) to also cover WUA labour costs and overheads. Out of these ISFs WUAs will need to pay the WDOs an average of about 0.2 cents m-3 ($15/ha) to cover their non-staff O&M costs.
4.2.3. WILLINGNESS TO PAY
The project will improve farmer’s capacity to pay by increasing both the net value of agricultural production and by reducing the future gravity and pumped O&M costs. Present average pumped O&M costs are reportedly $224, $290 and $400/ha for the first, second and higher lift areas respectively. While many higher lift areas have been abandoned most farmers are presently paying the average second lift cost of about $290/ha. Therefore the estimated gravity cost of $36/ha represents a substantial benefit to the majority of farmer’s in gravity service areas.
However the maximum future pumped O&M cost of $185/ha still offers savings. In the GSMC pumping station number 5 SU the present total lift of about 150m will be replaced by a single lift of 94m. Therefore electricity costs, for pump operation, will be reduced from about $413/ha to only $149/ha. The substantial reduction of $264/ha is attributable to the expected improvement in efficiency (41%), reduced pumping lift (34%) and the interaction between the two (25%).
The present Daxia WDO ISF collection efficiency is 90% from 1,200 ha of 3,000 ha. Thus they are collecting only 36% or an average of $25/ha. However this is still greater than the average of $15/ha required to cover the estimated Gongboxia and Lijiaxia WDOs non-staff O&M costs. The Social Assessment Survey indicated nearly 90% of farmers are willing to pay $110 per hectare.
4.3. ECONOMIC AND FINANCIAL BENEFITS
Financial and economic analysis was undertaken using with- and without-project scenarios in accordance with the relevant ADB guidelines.27 Crop and farm budget data were collected through a survey of purposefully selected households in each of the townships in the Project area. Prior to the survey data on the area, production and yield of annual and perennial crops in each project county were collected from County Statistical Bureaus (CSBs), the County Project Management Offices (CPMOs) and the Design Institute (DI). These provided an indication of the relative importance of each crop and facilitated preliminary selection of the major crops for inclusion in the survey. Discussions were held in each of the project counties to verify or modify the selection.
27 EDRC, 1997. Guidelines for the Economic Analysis of Projects, ADB, Manila.
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The main annual crops finally identified were winter and spring wheat, rapeseed, long chillies (thread pepper), maize, potatoes, peas, and broad beans. Of these crops only wheat and rapeseed are generally grown throughout the project area, although most farmers grow vegetables for their own consumption. The main perennial (orchard) crops identified were apples, pears, apricots, and walnuts although walnuts were unanimously considered to be the only crop with a commercial future. As a result apples, pears and apricots were excluded from the analysis.
Due to the limited experience with walnut production – most trees are currently less than 8 years and have not reached full bearing - the field survey was limited to annual crops and focussed on the price and yields of primary and secondary outputs, and costs of production, including seed, fertilizer, pesticides, plastic film for chillies, machinery, and labour. Since almost all labour is provided by the households or on a reciprocal basis with neighbours, labour costs were excluded from the financial crop budgets but included as an economic cost. Yields were collected for the previous year, a normal season, good year (1 in 10), and bad year (1 in 10) to check on the rationality of the respondent’s answers and provide an indication of yield variability. Average crop yields were estimated assuming a triangular distribution. Without- and with-project cropped, abandoned, and new areas were obtained by township from the DI data. With-project benefits were based on maps of the project area including canal systems overlaid by the township boundaries and the detailed project implementation schedule (Supplementary Appendix M).
Without- and with-project crop budgets for walnuts were based on discussions with experienced growers in the project area as well as with the agriculture staff. Benefits from the reduced use of electricity for pumped irrigation were obtained from the DI’s feasibility study.
Project costs were estimated using Costabs and were and were separated by main irrigation canal The costs of capacity building for the PPMO were divided equally between all canals Operation and maintenance (O&M) costs for the with-project scenario – an average of $36/ha - were derived from the Consultant’s estimates (Supplementary Appendix D). About 1,400 ha will continue to be pumped irrigated and O&M for this will be higher. However, these costs were considered to be offset by the O&M costs avoided and no further adjustments were made.
Economic analyses were conducted separately for the four subproject areas as well as for the overall Project. Sensitivity tests were conducted for all of the analyses and the poverty impact ratio (PIR) estimated for the overall Project. The results are summarised below and a detailed description is provided in Appendix 9.
4.3.1. DEMAND ANALYSIS
The three project counties are predominantly agriculture-based and it seems unlikely that the local communities will be able to absorb all incremental output, particularly for non-staple crops. Farmers will need to expand existing markets as well as develop new ones. In the case of staple crops - wheat, rapeseed and potatoes - field investigations indicate that most farmers are subsistence- orientated and have little if any marketable surplus. Incremental production from the project is likely to be consumed within the local households and, if there are significant yield increases, farmers will switch to cash crop production at least to a limited extent. A large-scale cattle fattening enterprise is under development in the Gongboxia South sub-project area with a capacity to stock 2,000 cattle. This is already contracting grain production on 800 mu in Chahandusi township and expansion of demand is anticipated. The farm will also require substantial amounts of maize stover or fodder and could also purchase wheat straw. Thus the demand for wheat and maize at current prices is considered to be strong.
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Field investigations confirmed a strong demand for long chillies (thread pepper), which is processed by a local agro-enterprise and sold mainly in China with limited exports. With an existing capacity of 18,000 t/year and an annual throughput of only 9,000 t, there is capacity to purchase and process considerable incremental production. The enterprise confirms that there is sufficient demand for current output and does not anticipate problems in marketing incremental production up to the full factory capacity. Other farmers produce chillies for selling fresh or dried in the local township, the county, or the prefecture centers. They report strong demand and a good price particularly if they are able to transport produce to the markets. Sale at the farmgate results in considerably lower prices, the differential being greater than the transportation cost.
Most farmers currently grow sufficient vegetables to satisfy their own needs while a few farmers produce commercial quantities for sale in the local markets. With-project it is anticipated that there will be increased production of vegetable crops for sale. The local assessment is that all incremental production will satisfy the local demand in the project counties, which are currently supplied by vegetable production from outside of the counties and often from other provinces. Overall, the project counties should benefit from a better range and quality of vegetables.
Walnut production, which is strongly supported by the three county agricultural bureaus and the county governments is still in its infancy and output is expected to increase dramatically over the next 5-10 years. The county officials and larger producers all anticipate that most of this production can be sold in Qinghai or surrounding provinces. Qinghai Province produced only 3,431 t of walnuts in 2007, just 0.5% of national production. Hence it is unlikely that incremental production from the project will impact on marketing or price.
4.3.2. ECONOMIC RATIONALE
The proposed Project covers three national poverty counties an the project area has a poverty incidence of 39.39%. The two irrigation systems, Gongboxia and Lijiaxia, are the major sources of economic activity in the project area, providing the staple and non-staple food for the majority of the population, either from self-consumption or through purchases. The irrigation systems also provide the opportunity for the local farmers to increase incomes to a limited extend through production of commercial crops that can be locally processed, generating further income. However, the existing systems are old and deteriorating, and rely on electricity. As poor farmers from ethnic minorities, many of the farmers can neither afford to pay for the electricity nor finance the level of investment that would be required to rehabilitate the irrigation systems.
The proposed project is a social investment through which the Government will use public sector resources to support poverty alleviation and the development of ethnic minorities at the same time as reducing the demand for electricity that is currently being used in a relatively low benefit agricultural activity. By supporting the Project the Government will be able to encourage the use of the saved electricity in more economically productive activities.
4.3.3. PROJECT ALTERNATIVES AND LEAST COST ANALYSIS
The proposed Project will replace the existing pumped-irrigation systems with four main canals obtaining water directly from the dams and distributing it predominantly by gravity systems that will be able to access a larger area. A key issue is as to whether the Government’s preferred option represents the least-cost approach to problem. A preliminary review of alternatives indicated that rehabilitation of the existing system should be considered as an alternative option. The DI provided data on system and pump rehabilitation costs as well as estimated O&M costs and a least cost analysis was undertaken to compare the cost of the alternatives on a per hectare basis, taking into account the different areas that would be irrigated and the more frequent replacement of equipment in the rehabilitation option. Due to limited data availability, least cost analysis was only conducted for the Gongboxia system. However, similar results would be expected for the Lijiaxia system.
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Since all investments are to be made by the Government, the least cost analysis is conducted in both financial and economic terms. Financial values for investment and O&M costs are converted to economic values on the basis of the World Price Level Numeraire and using the same assumptions as set out for the economic analysis. The results indicate that the rehabilitation option is marginally less expensive from a financial perspective ($75.5/ha vs $77.8/ha) but substantially more expensive from an economic perspective ($79.5 vs $71.3). Since the proposed option will extend cropping to a substantial area of newly irrigated land, which will have higher unit net benefits, it is concluded that the project should adopt the proposed.
4.3.4. ANALYSIS OF BENEFITS AND COSTS
Assumptions. The economic analysis is undertaken based on the difference between with- and without-project scenarios, the without-project one reflecting the expected situation in the project area if no investment is made in irrigation system improvement. Hence farmers would continue to depend on the existing system with its gradual deterioration. The main assumptions include: • Financial costs and revenues are based on mid-2009 prices and are expressed in constant 2009 values. • Project costs are expressed predominantly in local currency and an exchange rates of CNY6.832 = $1.00 is used where applicable. • Without the project land is assumed to be abandoned at an annual rate of 1% reflecting the deterioration of the system. • A project life of 40 years following completion of the infrastructure construction is assumed. The residual value of infrastructure at the end of the project life is assumed to be zero. • O&M costs are assumed to commence in the year following completion of the section of the system. • Economic costs and benefits are expressed in constant 2009 terms and are valued in local currency using the world price level numeraire. • Taxes and subsidies are excluded in the economic evaluation of the subproject. • Physical contingencies have been included in the cost estimates as a Government contribution but are not considered in the financial or economic analysis since they are highly unlikely to be used. • Economic prices for the major traded crops – wheat and maize – and inputs – di-amonium phosphate and urea – were estimated by adjusting world market prices by transportation and processing costs to obtain the market price in the project area. • Economic costs and benefits for non-tradable inputs and outputs were derived by adjusting their values by a standard conversion factor (SCF) of 0.93,28 which is consistent with the SCF used in recent Asian Development Bank (ADB) projects for the People’s Republic of China (PRC).29 • The opportunity cost of surplus labor (OCSL) is estimated as 0.80 of the prevailing wage rate and the opportunity cost of scarce labor (OCSCL) for skilled labor is estimated as 1.0. These are adjusted by the SCF to obtain the conversion factors. • The opportunity cost of capital used in the analysis is 12% per annum, which represents the opportunity cost of capital (OCC) for the PRC.
Costs. Project financial investment costs are estimated using Costabs. For system construction, PIM and IAS the costs are allocated to the individual canals. All other costs, which are relatively minor, are divided equally between each canal. Costs by year are summarised in Table 4-3.
28 A SCF of 0.93 implies that the Shadow Exchange Rate Factor (SERF) is 1.075, the inverse of the SCF. 29 ADB, December 2008, Draft RRP: Qingdao Water Resources and Wetland Protection Project. ADB. September 2006. Report and Recommendation of the President to the Board of Directors. Proposed Loan People’s Republic of China: Inner Mongolia Autonomous Region Environment Improvement Project. Project Number: 39019 and 2007. Report and Recommendation of the President to the Board of Directors. Proposed Loan People’s Republic of China: Integrated Ecosystem and Water Resources Management in the Baiyangdian Basin Project.
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TABLE 4-3: SUMMARY OF FINANCIAL INVESTMENT COSTS BY YEAR Canal Cost by Year (CNY000s) 2010 2011 2012 2013 2014 Gongboxia North 100,485 53,661 81,321 96,949 807 Gongboxia South 102,073 85,453 56,535 59,504 11,292 Lijiaxia North 200,678 76470 100,285 72,546 - Lijiaxia South 70,870 57,310 42,666 56,148 - Unallocated costs 7,205 9,086 8,087 6,481 4,129 Source: Consultant’s estimates
The O&M costs are estimated based on experience with similar systems in Qinghai Province and internationally (Supplementary Appendix D) to cover the cost of operation of the county-level water distribution office (WDO), O&M costs of the main system and O&M costs of lower-level systems, the latter being the responsibility of the WUAs. O&M costs are estimated to range between $30/ha for Lijiaxia South and $44/ha for Gongboxia North (Xunhua County section) and to average $36/ha.
Benefits. The project is expected to have three major benefits; (i) increased production of annual crops, increased production of perennial crops, mainly walnuts and savings in the use of electricity. The areas of each land category for each of the canals is summarised in Table 4-4.
TABLE 4-4: ESTIMATED BENEFITTING AREA BY TYPE OF LAND BY CANAL
Canal/Township Cropped Area (mu) Existing Abandoned New Total Gongboxia North 39,472 5,601 12,224 57,297 Gongboxia South 39,365 4,228 8,042 51,635 Lijiaxia North 58,160 3,184 0 61,344 Lijiaxia South 31,458 5,242 1,568 38,268 Source: Design Institute, Feasibility Study Report
Under the without-project scenario the existing cropped area is expected to decline by 1% per year whereas with-project this decline is expected to halt as farmers anticipate the new work. The proportion of land shifting from without-project to with-project status by year is assessed by township based on the detailed implementation schedule (Supplementary Appendix M).
Benefits from increased annual crop production are assessed from crop budget survey data. These data are aggregated wherever possible for each canal to reflect local differences. Where data are limited a single crop budget is used for the whole project. Gross margins for annual crops without- and with-project are detailed in Appendix 9. The difference between the without and with-project scenarios is that yields are expected to increase from the average-year to good-year values due to the assured availability of irrigation water. The with-project scenario includes the additional labour required for harvest and post-harvest activities and marketing. This is considered to provide a good indication of the potential gain as well as the variation in gains across the different irrigation canals. The incremental yields thus estimated are reasonable consistent with the estimates proposed by the DI and with information from the counties. Moreover, the estimated incremental wheat yields are consistent with estimated potential yields, which indicate that good farmers could achieve a yield of 8.8 t/ha (587 kg/mu) for winter wheat and 6.2 t/ha (413 kg/mu) for spring wheat.
Crop gross margins are then weighted, by the proportions of the crop in each township, to obtain a value for a typical cropping system. These values were adjusted to reflect estimated cropping intensities of 110% and 125% without- and with-project. Applying gross margins to the benefitting and non-benefitting areas under the without- and with-project scenarios produces an estimate of the total gross margin for each township in each year under the planned implementation schedule.
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Benefits from expanded perennial (orchard) crop production are limited to walnuts The estimated area of the crop within the project area is about 24,800 mu (1,650 ha) of which 4,700 mu are in Gongboxia North, 2,500 mu in Gongboxia South, 17,400 mu in Lijiaxia North, and 228 mu in Lijiaxia South. All of these trees are well below full crop potential and many are only just starting to bear a crop. Full development is estimated to be on average about 6-7 years away. Each county plans to continue planting walnuts over the next few years. The analysis uses the DI estimates of the newly cropped economic tree area as the incremental area that will be planted in the near an incremental area is 15,200 mu to be planted in the near future, by full project development. Planting is assumed to occur over 5 years starting in 2011. Because of the existence of these county plans, the expansion is expected to occur irrespective of project implementation. Therefore the benefits from the project relate solely to the incremental crop production due to improved irrigation. Based on discussions in the project area with knowledgeable farmers an increase of 10% over the without-project full-development yield of 750 kg/mu has been assumed.
Savings in electricity based on the current level of use less the amount required for the area that will continue to use pumped irrigation. Data from the DI indicates that the annual financial savings at full project development amount CNY8.172 million for Gonboxia and CNY9.166 million for Lijiaxia. These savings are distributed between the canals and townships based on the currently cropped areas and the implementation schedule. Since this is a non-revenue generating analysis no financial net present value (FNPV) or financial internal rate of return is presented although FNPVs are estimated for the purpose of the poverty analysis.
4.3.5. ECONOMIC ANALYSIS
Financial costs and benefits are converted from financial to economic values using the world price level numeraire and the analysis is repeated for individual canals and the overall Project. For project costs including O&M costs, the economic value is estimated by deducting all taxes, duties and transfer costs and multiplying the local currency cost by the SCF.
All crops, other than wheat and maize, are considered to be non-traded commodities within the context of the Project. Their financial values have thus been adjusted to economic values by applying the SCF. For wheat and maize prices, reference is made to the world market price as indicated in the World Bank’s commodity prices. Estimated border prices are adjusted by shipping and transportation costs to obtain their economic values in the local markets in the project area. All inputs other than the fertilizers di-ammonium phosphate and urea are treated as non-traded inputs. Economic prices of di-ammonium phosphate and urea are estimated based on the world market prices adjusted for transportation and marketing costs in order to estimated their economic value in the project area. Economic crop budgets are estimated for each of the major crops included in the analysis and the gross margins have been aggregated for the without- and with-project scenarios.
The financial value of saved electricity is converted to its economic value by adjusting the price to reflect more accurately the price it can receive in non-agricultural uses. A conversion factor of 1.9 has been applied. Economic analysis indicates that the overall Project is economically viable with an economic internal rate of return (EIRR) of 13.9% and an economic net present value (ENPV) of CNY208.2 million (Table 4-5). The EIRRs of individual main canals ranges from 13.1% for Lijiaxia North to 14.3% for Lijiaxia South, as would be expected given the formers high investment cost.
TABLE 4-5: SUMMARY OF ECONOMIC INDICATORS BY CANAL AND FOR OVERALL PROJECT Subproject/Project EIRR (%) ENPV (CNY000s) Gongboxia North 14.1 55,466 Gongboxia South 14.0 47,648 Lijiaxia North 13.1 41,716 Lijiaxia South 14.3 47,337 Overall Project 13.9 208,212 Source: Consultant’s estimates
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4.3.6. FINANCIAL AND INSTITUTIONAL SUSTAINABILITY
By full project development 208,545 mu (13,903 ha) will benefit from the newly developed gravity irrigated system. Of this area, about 1,456 ha will be pump irrigated but at a much lower cost than previously as water will be pumped from the new main canal rather than the river. The new facilities will benefit both the existing cropped area of 168,455 mu (11,230 ha) and a new and abandoned area of 2,673 ha. Incremental production, at full project development, is estimated for wheat at about 31,300 t (4,500 t and 26,800t of spring and winter wheat), rapeseed 3,800 t, long chillies 12,800 t, dried chillies 200 t, potatoes 11,000 t, vegetables 40,700 t and maize and legumes 200 t. Net farm incomes from annual crops are expected to increase from CNY538/mu to CNY893/mu, an average increase of CNY355/mu for farmers who do not receive any additional land. Based on an average farm size of about 5.7 mu, the annual incremental income is about CNY2,000.
4.3.7. DISTRIBUTION ANALYSIS
Due to the high poverty incidence in the project area - all three counties are designated as national poverty counties – it is critical that the proposed Project has a significant poverty impact. This can be derived either directly, through the project benefits being received by poor farmers or obtaining employment opportunities during implementation, or indirectly through incremental benefits to the Government being distributed to the poor in the overall community. The poverty impact is quantified through a distributional analysis conducted in accordance with ADB guidelines.
The poverty analysis identifies the difference between financial and economic benefits and costs over the project life (40 years from completion) and distributes the difference (subsidies/taxes) between the different groups of beneficiaries. The net benefits/costs accruing to the Government are assumed to be redistributed back to the poor in proportion their number in the community. The poverty impact analysis indicates that the incremental net benefit of CNY102.8 million is distributed between CNY98.5 to the project area and CNY4.3 million to the province. Based on poverty incidences of 39% and 24% respectively, the poverty impact ratio is estimated at 0.39.
4.3.8. SENSITIVITY AND RISK ANALYSIS
Key risks that could affect the economic viability are incorporated into standard sensitivity tests including a 10% cost increase, a 10% benefit decrease, a 10% cost increase combined with a 10% benefit decrease, and a 1-year benefit lag. In addition some specific sensitivity tests relating to the rate of decline in land area, increase in cropping intensity, and benefits from walnuts are included. The results are summarised in Table 4-6. Overall the Project appears to be sufficiently robust with the EIRR declining to 12.9% with a 10% cost increase and to 12.7% with a 10% benefit decrease. Combining both changes will reduce the EIRR to 11.8%, marginally non-viable. The switching values indicate that a 21.5% cost increase or a 15.4% benefit decrease would be required to make affect its viability. A one-year benefit lag will reduce the EIRR to 12.5%, which is still acceptable. The sensitivity of the individual canals is also tested and found to be acceptable (Appendix 9)
TABLE 4-6: SENSITIVITY TESTS OF ECONOMIC ANALYSES BY CANAL AND FOR OVERALL PROJECT Canal/Sensitivity Test EIRR ENPV SV SI (%) (CNY000s) (%) 10% cost increase 12.9 111,295 21.5 4.7 10% benefit decrease 12.7 73,325 15.4 6.5 10% cost increase + 10% benefit decrease 11.8 -23,592 1-year benefit lag 12.5 63,285 EIRR = Economic Internal rate of return; ENFV = Economic Net Present Value; SV = Switching Value; SI = Sensitivity Index.
For specific items, sensitivity tests indicate that the rate of decline in area of cropped land has no significant impact of the EIRR or ENPV, a 10% reduction in the increase in the cropping intensity in the with-project scenario reduces the FIRR to 13.5% and the EIRR to 13.8%, and a 10% reduction in the incremental yield of walnuts will reduce the FIRR to 13.1% and the EIRR to 13.5%.
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4.4. ENVIRONMENTAL IMPACT
4.4.1. SUMMARY INITIAL ENVIRONMENTAL EXAMINATION (SIEE)
A full Environmental Impact Assessment was carried out by the Gansu Provincial Environment Science Design and Research Institute, a Class-A EIA certified organization, for both irrigation schemes of Lijiaxia and Gongboxia. The Project has been classified as Category B for Environmental Assessment. In compliance with ADB Environmental Policy, (i) a Summary Initial Environmental Examination (SIEE) has been prepared from this documentation (Appendix 10 to the present Report) and two rounds of public Consultation were performed during the EA process.
Existing environmental conditions in the project areas are considered satisfactory. Surface water quality, noise and air quality are reasonably good, while groundwater shows evident contamination by coliform, resulting from insufficient sanitation facilities. Soil quality is also good in the irrigated area, and does not reveal any traces of pesticides residues nor signs of salinization. The irrigation areas are both extensively cultivated and urbanized, without any significant biodiversity observed. The Project areas and their immediate surroundings do not shelter any wetland or protected area. no terrestrial wildlife of interest was reported by the villagers nor observed during EIA surveys.
Through lined channels and better on-farm application practices the Project will raise irrigation efficiency from 35% up to 55.8%. As a consequence the Project, with 54,600 mu (3,640 ha) of newly irrigated land (presently abandoned land plus new developed areas), will increase its total water consumption by only 9.4 Mm3, which results in water savings (diversion) of 27.19 Million m3 per year if compared to an equivalent project area without improving the irrigation efficiency ratio. Soil percolation is good, the underground water level is several meters deep and the irrigation water is good, with low TDS. Soil waterlogging and salinization is not expected to become an issue.
Flooding is unlikely to occur, as the Lijiaxia and Gongboxia are the most downstream dams in a cascade of seven (soon 8), the most upstream of which (Longjiangxia) regulates the catchment inflow with a total storage capacity of 24.7 billion m3, larger than the MAF in Qinghai Province.
The excavation of several km of tunnels will generate large volume of spoil (about 2.8 millions m3) which will constitute one of the major impact of the Project during construction. Twelve appropriate sites have already been identified, generally near the exits of the tunnel sections. None of these sites is presently under development and none will involve land acquisition or resettlement. Concerned areas are topographically suitable, located either in natural ditch or along smooth slope. Concerned contractors will be required to prepare for each site a spoil disposal management plan in order to secure the future disposal and integrate as much as possible the site into the landscape.
A review of the Lijiaxia and the Gongboxia safety status has been also performed within the context of the Environmental Assessment. Both dams satisfy the safety standards required for their design and construction, and have both performed successfully independent safety reviews in compliance with the Chinese dam safety regulations.
Climate changes will have a long-term impact on the Project. Review of the literature leads to the following anticipation for conditions in the Project areas by the end of this century: • Increase of temperature by about 6°c; • Increase of precipitations in the Project area by 25 to 30%; • Increase of temperature on the Qinghai-Tibet Plateau will accelerate the smelting of the glacier and will reduce the period of accumulation of snow. Yellow River flow during autumn should increase (as the below zero temperature will be reached later and storage of precipitation as snow will also start later) and spring flow should be reduced; • Taking due consideration of potential carbon fertilization, forecasts established on the basis of the Mendelsohn-Schlesinger (MS) cross-section Ricardian model, come to the conclusion of a potential long term 30% increase in agricultural production capacity in the Project areas.
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As a conclusion to the EIA studies, the Project is expected to result in favourable environmental and social impacts through improved water management and resulting water savings, reduced input of pesticide and fertilizers and development of tree plantations creating additional terrestrial habitat for wildlife. Long term improvement of living standard and economic development of the area will result in secondary environmental improvements as, for example, the development of appropriate wastewater treatment systems which will reduce the pollution load to the underground water and to the Yellow river. The Project is not anticipated to result in major detrimental impacts, particularly during its construction stage, if the detailed measures presented in the EMP are efficiently implemented.
4.4.2. ENVIRONMENTAL MANAGEMENT PLAN
A separate EMP has been prepared for the present Project and edited as Appendix 11 to the Main Report. The EMP is addressing the pre-construction, construction and operation activities anticipated to be carried out in relation to the Project implementation. A major part of the EMP is dedicated to the mitigation measures to be implemented during the construction stage of the Project, involving all concerned parties including Construction Contractor companies. In order to provide a credible and homogenous reference for all parties involved in environmental management, the EMP has been structured in compliance with the recommendations of the ADB, complemented by additional information deemed necessary for operational implementation, particularly during the construction phase.
The EMP details the environmental obligations imposed by the PMOs to the Construction Contractors and their sub-Contractors during the construction of the QRWRMP, to safeguard the environment and to minimise nuisance for the population. The EMP provides the framework to ensure that construction works are carried out in the strict respect of Chinese and internationally accepted environmental best practices in order to eliminate any significant or unacceptable long- term impacts on the environment.
The EMP is developed in a way which ensures its compliance with the environmental laws, regulations and standards of the PRC and with the principles of the International Standard for Environmental Management System (ISO 14001), which will facilitate eventually its use or up- dating during the construction stage.
The EMP is sub-divided into 2 parts: • The first part (PART A), provides the institutional arrangement for the EMP, the organization and the operational control procedures: distribution of roles and responsibilities, procedures for communication, reporting, document control and management, training and capacity building, procedures for the detection and the resolution of non-compliances, audit and inspection procedures and monitoring plan; this section of the document intends to follow as closely as possible the principles recommended by the ISO 14001. • The second part (PART B), the Implementation Manual, more technical, provides the structural and non-structural measures to be implemented mainly by the Contractors during the construction period. The document provides a series of 15 Generic Environmental Control Plans as a basis for Good Environmental Management Practices in construction activities, complemented by a set of templates to be used for environmental management and site inspections during the Project construction.
The organization for environmental management will follow the general organization set up for project construction: • Provincial PMO (P-PMO) will appoint one Environmental Director (ED) in charge of (i) coordinating environmental activities carried out by the 3 County-PMOs (C-PMOs) and the Construction Supervision Companies (CSC), (ii) coordinating with other Provincial Agencies and the ADB for all environment relevant matters, (iii) supervising environmental monitoring under P-PMO responsibility; ED will be assisted by one environmental engineer;
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• C-PMOs will establish in each of them, a light structure, the Environment Management Office (EMO), responsible for controlling the work of the Supervision Company related to environmental matters, reporting to P-PMO-ED and coordinating with county agencies and local authorities; One environmental Engineer and one technician will be appointed in each C-PMO. • Each of the 2 Construction Supervising Companies (CSC) appointed by the P-PMO will implement a structure, the Environmental Management Unit (EMU), which will provide all supervision services related to environmental management on the construction sites, routine sites inspections and compliance monitoring supervision. The CSC-EMU will be the key operational structure for EMP implementation during the construction stage of the Project. One environmental engineer, two technicians and 2 field inspectors will be appointed. • The Contractors will be responsible for implementing the best environmental practices applicable to construction activities as presented in the EMP on each construction, storage or camp site under their control, and to organize environmental compliance monitoring of their sites under the control of the CSC-EMU. • External Provincial Agencies or Institutes will be appointed by the PMOs for specific monitoring activities.
The second part (PART B) more technical, provides the structural and non-structural measures to be implemented mainly by the Contractors during the construction period. The document provides a series of 15 Generic Environmental Control Plans as a basis for Good Environmental Management Practices in construction activities. The 15 GP are the following: 1) Erosion and Sedimentation Control Plan 2) Spoil Disposal Planning and Management Plan 3) Quarries and Borrow Areas management Plan 4) Water Quality Monitoring Plan 5) Hazardous Materials & Waste Management Plan 6) Emergency Plan for Hazardous Materials & Waste 7) Emissions & Dust Control Plan 8) Noise Control Plan 9) Physical Cultural Resources Management Plan 10) Vegetation Clearing Plan 11) Waste Management Plan 12) Environmental Training for Workers & Staff 13) On & off Site Traffic and Access Management Plan 14) Construction Worker Camps Management Plan 15) Worker Health Management Plan
The global budget for environmental activities during the 4 years of construction and the 5 years after commissioning is estimated at 28.24 Millions CNY (4.15 Millions USD), including: • Soil conservation Plan: 13.03 Millions CNY • Environmental protection Measures: 7.86 Millions CNY • Environmental management: 7.35 Millions CNY, including 2.17 Millions CNY for monitoring activities.
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4.5. SOCIAL BENEFITS AND POVERTY
Irrigation and water management is essential to sustainable agriculture throughout the year in most regions of the PRC. Meeting irrigation needs has become one of the major issues within the water sector. The proposed project area is in eastern Qinghai and is served by two main irrigation schemes in the valley of the Yellow River. The Lijiaxia and Gongboxia irrigation schemes collectively cover the project counties of Hualong, Jianza, and Xunhua ,all of which are all state- identified poverty counties.
The investment project will improve irrigated agriculture development and water resources efficiency in the benefit areas including 3 county, 9 towns/ townships, Lijiaxia committee and Gongboxia committee, 143 village committees with 129,335 beneficiaries, where ethnic minority population accounts for 95.7% of the total population (Hui, Salar and Tibetan) and approximately 50% are women , 39% are the poor . The Project will contribute to poverty reduction by reducing the farming irrigation cost, enhance agricultural productivity, promote agricultural restructuring, increase cropping intensity and diversity through improved water management, providing employment opportunities and farmer capacity building though a series of training program .
The Project is consistent with ADB’s policy that people must have access to safe and reliable water supplies and it will help the PRC achieve the Millennium Development Goal of environmental sustainability (MDG Goal 1).Meanwhile, the proposed Project adheres to the China 11th Five-Year Plan and the Qinghai 11 Five-Year Plan, also to ADB’s Country Partnership Strategy in the PRC to provide a safe and assured water supply for irrigation purposes..
4.5.1. PROJECT BENEFIT AND AREAS
The Direct Project Area (DPA) corresponds to Qunke town,.Yashiga town, Gandu town, Lijiaxia and Gongboxia management committees, and 65 village committees of Hualong county; Kanbula town, Kangyang town and Cuozhou township, and 20 administrative villages of Jianzha county; and Jiezi town, Chahandusi township and Jishi town, and 58 administrative villages of Xunhua county. There are 9 town/township and 143 administrative villages which will benefit from the two subprojects, with service coverage of 155.56km2 .The people living in these villages will get access to improved irrigation. It is estimated that about 129,335 people will benefit directly from the Project, of which, Gongboxia and Lijiaxia beneficiaries are 53,671 and 75,664 respectively, Approximately half of project beneficiaries of the irrigation improvement will be women, 39% are the poor, and 95.7% are ethnic minority groups of Hui , Salar and Tibetan, See Table 4-7 for detail.
The Indirect Project Area (IPA) is defined as the whole counties of Hualong,Jianzha and Xunhua. The IPA will benefit to the extent that agriculture structure adjustment and environment improvement under the Project will promote local economic development and help create employment opportunities. The service coverage is 6554 km2. There are approximately 433,688 indirect beneficiaries. Approximately half of project beneficiaries of the irrigation and environment improvements will be women and 55% are the poor.
Implementation of Gongboxia and Lijiaxia Irrigation Subprojects will generate direct and indirect benefits. It is estimated that the direct benefits of the project are embodied in the following aspects: • Improvement of quality of life. Turn 7,061.6 hectares of irrigated land in affected areas of Hualong, Jianzha and Xunhua Counties from lift irrigation to gravity irrigation, and reduce electricity charges, thereby reducing agricultural production expenses, and the burden on farming households, especially poor households, enhance agricultural productivity; promote agricultural restructuring, increase cropping intensity and diversity. This not only helps increase the economic income of the local residents in ethnic minority areas, but also has great significance in protecting and tapping the agricultural tradition of the ethnic minorities, enriching and improving their dietary structure. • Job Creation. Based on the FSRs, consultants estimated that there will be approximately 13,100 job positions over the construction period. About 60% of the construction jobs are assumed to be unskilled jobs and are likely to be filled by currently unemployed persons.
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The associated wages for workers translate to CNY 257 million that will return to the local economy. Additional, the subproject will provide 40% employment opportunities for the poor and women, though the assurance item of the project for providing the training and job opportunities to vulnerable people (women and the poor) as a priority. • Improvement of ecological environment. With the improvement of the irrigation conditions, and the increase of the vegetation coverage of barren hills and slopes in the affected areas and the surrounding areas, the area of water loss and soil erosion will be reduced, and the ecological environment will be improved. • Promote the social cohesion. The improvement of the irrigation conditions will promote agricultural and product restructuring in the affected areas, expand the scale of cultivation of cash crops, and reducing human-land conflict and local socio-economic development, on the other hand, the current tight water supply will be relieved thoroughly after the project construction, obviously, the water disputes will be alleviated or even eliminated.
TABLE 4-7: BENEFICIARIES ESTIMATED OF THE SUBPROJECTS
Lijiaxia Subproject Gongboxia Subproject Item Time DPA IPA DPA IPA Area (KM2) 82.94 4454 72.62 4840 Beneficiaries 53,671 306,458 75,664 380,819 Poor (people) 22,827 170,084 28,116 221,851 Poor (%) 42.5 55.5 37.16 58.26 Female poor 27372 159358 37075 201834 2007 base-line Female poor (%) 51.00 52.00 49.00 53.00 Sub-Total 57204 326629 80644 405885 Beneficiaries
2015 Of which, Poor 24329 181279 29967 236453 Female 29174 169847 39516 215119 Source: consultant’s calculation based on data from Qinghai Province Statistics Year Book and local PMOs. Assume (i) 0.5% population annual growth rate be used; (ii) the poverty incidence ratio keep the same despite the rapid development; Coverage: Lijiaxia DPA: Qunke Town, Yashenga Town and management committee of Lijiaxia of Hualong County; Kanbula Town, Kangyang Town and Cuozhou Township of Jianzha County; 62 administration villages in total. Lijiaxia IPA: 28 town/townships, two management committees of Xunhua and Jianzha County , 447 administration villages in total, Gongboxia DPA: 81 villages, Gandu town and Gongboxia Management committee of Hualong county; Jishi town, Jiezi town and Chahadusi township of Xunhua county. Gongboxia IPA: 28 Townships, 520 villages of Hualong and Xunhua Counties.
4.5.2. POVERTY ANALYSIS
A poverty and social analysis was undertaken in line with ADB guidelines to collect detailed social information necessary by 872 sampling HH survey, 25 FGDs, 10 stakeholders workshops and qualitative assessment to inform project design, identify poverty reduction and social development objectives, outcomes and indicators. The poverty and social analysis identified vulnerable groups, opportunities for pro-poor interventions and recommended social action measures, participation and mitigation plans to achieve positive social benefits.
Qinghai is located in the Upper Yangtze and Yellow River valleys in the northeastern part of the Qinghai-Tibetan Plateau. It is classified as a food deficit province, importing about 350,000 tons of grain annually. Qinghai province’s relatively small population of 5.22 million is distributed over a large area covering 722,000 square kilometers, of which 20% is urban and 80% is rural. The bulk of the rural population is concentrated in farming areas in the eastern region, which makes up only 5% of the province’s total land area but feeds about 75% of its total population. Of the total population in the project area, 46.3% comprise 18 ethnic minority groups, mainly Tibetan, Hui, Sala and Mongolian. The per capita net income and consumption expenditure of farmers in Qinghai in 2007 has been about two thirds of the national average.
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Qinghai is classified as the second poorest province in the PRC, 15 of 37 counties/county level cities are defined as National Impoverished Counties, while 10 additional counties/county level cities are defined as Provincial Impoverished Counties30. Around 2,453 of its villages are defined as poverty villages, accounting for about 60% of all the villages in Qinghai. The percentage of its population in poverty (i.e., those with a per capita annual income of The three counties in project areas were identified as state-level poor counties in 1986, and key counties for national poverty alleviation development in 2002. In 2007, the poor population of the farming and pastoral areas of the 3 counties was 236,935, accounting for 39.4% of rural population, it ‘s much higher than that of Qinghai. Considering the new national poverty criteria in 2009 (i.e. those with a per capita annual income of TABLE 4-8: POVERTY SITUATION OF QINGHAI AND PROJECT COUNTIES（2007） Population Incidence Region Villages (10000) （%） Qinghai 2453 96.81 24.15 Project Hualong 32 26266 40 Jianzha 12 11023 65 Xunhua 14 13654 28.84 In total 58 50943 39.39 Source: Qinghai Poverty Alleviation Programme (2003 – 2010), Statistics Yearbooks (2008), Local PMO Hualong County:The North Canal of Gongboxia and the North Canal of the Lijiaxia involve 3town/townships, 2 management committees and 65 administrative villages of Hualong county, including 32 poor villages, accounting for 49.23% of the total number of administrative villages. In the affected areas, there is a poor population of 26,266, with a poverty incidence of 40% (annual per capita income less than 800yuan). According to the new national poverty criteria of 2009 (annual per capita income less than 1,196yuan), the number of poor villages is increased to 48, accounting for 74% of the total number of administrative villages in the affected areas; the poor population is increased to 44,104, with a poverty incidence of 68%. Jianzha County:The South Canal of the Lijiaxia involves 3 town/townships and 20 administrative villages of Jianzha county, including 12 poor villages, accounting for 60% of the total number of administrative villages. In the affected areas of Jianzha county, there is a poor population of 11,023, with a poverty incidence of 65%. According to the new national poverty criteria of 2009, the number of poor villages is increased to 15, accounting for 75% of the total number of administrative villages in the affected areas; the poor population is increased to 12,611, with a poverty incidence of 75%. Xunhua County:The South Canal of the Gongboxia and the North Canal of the Gongboxia involve 3 town/townships and 58 administrative villages of Xunhua county, including 14 poor villages. In the affected areas of Xunhua county, the poor population is 13,654, with a poverty incidence of 28.84%. According to the new national poverty criteria of 2009, the number of poor villages is increased to 37, and the poor population is increased to 34,085, with a poverty incidence of 72%. 30 In 2002, The national and provincial level poverty county is identified by the calculation results of three indexes of per capita annual net income (weight 6), per capita GDP (weight 3) and per capita fiscal income(weight 1) . SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 50 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The socioeconomic survey and FGDs indicate that the main causes of poverty are harsh natural environment, irrigation water shortage, frequent natural disasters, simple agriculture structure, and low level of market awareness. The primary role of the Project with respect to poverty reduction will be: (i) its direct and indirect stimulation of local economic development and farmer’s income generation; (ii) the consequences of ensuring that a supply of low cost irrigation water; (iii) its ensuring generation of a large number of unskilled job opportunities include the poor, and (iv), the consequence of benefiting from water management and training . The detailed social and poverty analysis (SPA) is presented in the Supplementary Appendix B SPA. 4.5.3. GENDER ANALYSIS After 1949, Chinese women were granted legal rights with men in all aspects of life including political, economic, social, cultural and family life by China’s constitution and national laws. In 1992 China issued the Law on Protection of Rights and Interests of Women, the first basic law about women’s rights and interests. In 1995 the central government launched the 1995-2000 Chinese Women Development Outline, an important landmark of history in Chinese women development. As the same as those in other region, women living in Qinghai province are in the face of a greatly improved gender environment since the Founding of New China. Women living in Qinghai province are in the face of a greatly improved social gender environment since the Founding of New China. In 2007, sex ratio at overall population in Qinghai was 102.72:100, including a male population of 2,795,000 which accounting for 50.67% and a female population of 2,721,000 which accounting for 49.33%, which shows the sex ratio at total population is balance. However, the sex ratio at birth was 109:100, which was lower than 120.22 of China but higher than the normal standard (102 to 107) acknowledged by international society. Education: The social-economic survey indicates that the education of both men and women in the affected areas is not optimistic, but the educational level of women is much lower than men. For example, the proportion of men having received primary school education (33%) is higher than that of women (13.8%) by 19.2 percentage points; the proportion of women having received junior high school education (3.4%) is lower than that of men by 10.9 percentage points. The proportion of women having received no education (79.3%) is much higher than that of men (48%). By ethnic group, the educational level of Han women is higher than the ethnic minorities. The proportions of Hui, Salar and Tibetan women having received primary school education are similar, those of Hui (4.6%) and Tibetan women having received junior high school education (2.8%) are higher than that of Salar women (1.1%), while that of Tibetan women having received senior high school education (6.9%) is much higher than those of Hui (0.9%) and Salar women (1.1%). The education level of women is the lowest. The proportion of Tibetan women having received no education (76.4%) is lower than those of Hui (81.5%) and Salar women (82.1%). The differences in men’s education among different ethnic groups are similar to those of women. However, it is a general situation that men have received more education than women in each ethnic group. Experience of Outside Employment: In project areas, the proportion of men working outside (59.3%) is higher than women (26.5%). The proportion of women working outside differs between ethnic groups. The proportion of Tibetan women working outside is the highest (47.2%), that of Han women 33.3%, that of Hui women 22.2%, and that of Salar women is the lowest (14.7%). It is also learned from FGDs that Salar and Hui women seldom work outside before marriage, and would usually work outside with the consent of their husbands and families. Even if they work outside, they would work at a nearby place or together with their husbands. Of women working outside the social-economic survey indicates that 85.3% of Tibetan women do odd jobs on construction sites, while this proportion is 47.8% and 41.7% for Hui and Salar women respectively. 39.1% and 33.3% of Hui and Salar women elect to be a waitress at restaurants (hand- drawn noodle restaurants mainly), while this proportion is 5.9% only among Tibetan women. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 51 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Labour Division of Gender: In the affected areas, the couple doing agricultural labor jointly is the main pattern, but this proportion varies from ethnic group to ethnic group. Among the Han people, about 64.3% of agricultural labor is done by the couple jointly, while this proportion is 32.7%, 37.1% and 21.7% among the Hui people, Tibetans and Salar people respectively. About in 32.6% of Salar households, wives are responsible solely for agricultural labor. FGDs indicate that in households where husbands are working outside, all agricultural labor is done by women. There is also a division of labor between the genders in agricultural production activities, where men often deal with sowing, plowing and harvesting, while women not only participate in sowing and harvesting, but also deal with weeding, fertilization and irrigation mainly. The social-economic survey indicates that in Hui, Tibetan, Salar and Han households, about 85.9%, 83.1%, 90.2% and 86.7% of housework is done by women, while in 13.3% of Han households, the couple does housework jointly, much higher than the other ethnic groups. Participation in Public Affairs: The social-economic survey and FGDs indicate that a low proportion of women in the affected areas participate in village public affairs, and they would attend village meetings when their husbands are absent. If their husbands are at home, over 80% of women think their husbands should be present. Even if they were present, they would seldom express their ideas. Only 9.4% of men think their wives should join the water users association. Speaking Putonghua: The social-economic survey indicates that more men can speak Putonghua than women. 62%, 34.7% and 42.6% of Hui, Tibetan and Salar women can speak Putonghua, while the proportions of men speaking Putonghua are 77.4%, 47.3% and 79% respectively. The gender difference in speaking Putonghua in the affected areas is mainly because of the following: (1) Men have received more and longer regular school education than women; and (2) Men have more and longer experience of working outside than women, and have improved their Putonghua proficiency during outside employment. The social and economic survey indicates that 25% of men think the inability to speak Putonghua has no adverse impact on them, 31.9% of women think this has no adverse impact on them. 24.8% and 39.7% of the female and male respondents think the inability to speak Putonghua is adverse to working outside; 16.7% and 6.4% of men and women think this affects doing business; 14.9% and 7.1% of men think this is adverse to communication with the outside. 19% of women and 19.2% of men think it necessary to train them on Putonghua. 69.7% of women and 73.4% of men think it necessary to receive training on Putonghua. Based on the discussions between the consultants and the PMOs of the subprojects, the Putonghua training can be combined with the agro-technical and labour skills training to be conducted in the affected areas. FGDs indicate that the respondents think this training mode is acceptable, and it is unnecessary and time-consuming to conduct training on Putonghua only. Since the project services areas are ethnic minority areas and 95.6 % of the beneficiaries are ethnic minority, the social impacts analysis, gender impacts analysis and related social action plan are incorporated into the ethnic minority analysis of Section 4.6. 4.6. ETHINIC MINORITY The Project is to supply water for the two sides of the Yellow River crop cultivation areas and the ecological environment of barren hills and slopes and the agricultural development in ecological management areas by using the conditions of Lijiaxia reservoirs, the reservoir elevation Gongboxia, water-rich resources of Yellow River. Projects involve the local ethnic minorities such as Tibetan, Hui and Salar. In order to ensure the potential vulnerability of indigenous peoples have opportunities to participate in and benefit equitably from the interventions during the development process, four ethnic minority plans have been prepared in accordance with the ADB's "indigenous peoples” policy (OMF3) and Safeguard Policy Statement (2009). SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 52 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT During EMDP preparation, the ethnic minority groups have been informed about the key elements of the Project design management through consultation and distribution of resettlement information, and on various occasions during meetings, interviews, focus group discussions, public consultation workshops, and community consultation meetings. The consultants conducted a series of participatory activities during April 19-May 4 and June 16-19, 2009 in conjunction with the socioeconomic survey team. A total of 872 questionnaires interviews were made, representing the collected basic information related to 5,743 peoples; 24 FGDs were held to discuss topics related to the project, involving 274 participants in total, including women and poor representatives from different ethnic groups; 26 village-level and province-level key informer interviews were made; and 24 stakeholders’ discussions meeting were held with different provincial, county and town authorities on potential impacts of the project, measures to reduce risks, and proposed actions. 4.6.1 ETHNIC MINORITY IN PROJECT AREAS Qinghai Province is the third largest ethnic minority population in China with an ethnic minority population of 46.3% of total population. The indigenous ethnic minorities include Tibetan, Hui, Tu, Salar and Mongolian.In Qinghai Province, the area of regional ethnic autonomy accounts for 98% of the province’s total area with 6 ethnic autonomous prefectures, 7 ethnic autonomous counties and 28 ethnic autonomous Xiangs. In Jianzha County, where the Lijiaxia south trunk canal is located, ethnic minority population accounts for 88.7% of total population; in Hualong County, where the Lijiaxia and Gongboxia north trunk canals are located, this percentage is 79.6%; in Xunhua County, where the Gongboxia south trunk canal is located, this percentage is 94.2%. Many ethnic minorities are observed in project areas, mainly Hui, Salar and Tibetan. Among the total population of 129,332 in the irrigated areas, ethnic minority population accounts for 95.7%, including 63,831 Hui people (49.34%), 49,349 Salar people (38.32%)and 10,343 Tibetans(8.05%).. See Table 4-9 for the total population and its ethnic composition of each trunk canal. TABLE 4-9: ETHNIC COMPOSITION OF POPULATION OF QINGHAI PROVINCE, COUNTIES AND AREAS (UNIT: 10,000 PEOPLE, %) Region Total Tibetan Hui Salar Han Other popu. Popu. % Popu. % Popu. % Popu. % Popu. % Qinghai Province 521.81 121.13 21.96 87.76 15.91 12.14 2.2 266.31 53.68 34.48 6.61 Jianzha County 5.29 3.36 63.60 1.34 25.40 0.01 0.26 0.60 11.30 0.02 0.46 Hualong 25.36 5.22 20.60 13.71 54.08 1.24 4.88 5.17 20.40 0.05 0.20 Xunhua County 12.72 2.84 23.3 1.02 8.37 7.57 62.1 0.72 5.94 0.02 0.16 ffected county Subtotal 43.37 11.42 26.33 16.07 37.05 8.82 20.34 6.49 14.96 0.09 2.08 A Project areas 12.93 1.035 8.05 6.38 49.34 4.93 38.23 0.548 4.3 - - Source: Qinghai Statistical Yearbook (2008); statistics of Jianzha, Hualong and Xunhua Counties (2008) The Project areas present the best conditions for agricultural production and are the most densely populated areas of Qinghai Province. Agriculture is a basic industry there. However, due to the present irrigation constraints with high irrigation costs, the local farmers mainly grow food crops, with a low proportion of cash crop cultivation and multiple cropping, and with low agricultural efficiency. Due to the small per capita arable area, the non agricultural income of the farmers accounts for over 50% of household income. While dealing with agriculture, many Hui and Salar people are working or doing business throughout the country. Relatively less Tibetans work outside. Hualong, Xunhua and Jianzha Counties, which are affected by the project, are state-level key counties for poverty reduction and development. The per capita net income of the affected farmers is less than 50% of national average, only 75% of Qinghai’s average and alsobelow the average of the affected counties. The affected areas cover 169 administrative villages, including 73 poor villages (43.2%). There is a total population of 132,000 in the irrigated areas, in which poor population is nearly 60,000, accounting for 45.38% of total population. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 53 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The poverty profile in the affected areas is highly ethnic group specific. The population in 60 out of 73 poor villages, which accounts for 82.2% is exclusively composed of ethnic minorities,. There are 68 poor villages whose population is composed by more than 90% of ethnic minorities. In the poor population of 50,464, 98.1% or 49,492 fall into ethnic minorities31. Boosting the development of ethnic minority areas is one of the strategic priorities of the State. The government support program includes (i)The State Council issued the Circular on Several Polices and Measures Concerning the Development of Western Regions in October 2000; (ii) In 2005, the State Council formulated and promulgated the Development Plan for Supporting Small Ethnic Minorities (2005-2010), The affected Salar fall under this policy; (iii) In 2008, the State Council formulated "Some Opinions of the State Council on Supporting the Economic and Social Development of Tibetan Areas in Qinghai Province", aimed to strengthen ecological protection and construction in Tibetan areas in Qinghai. All the affected ethnic groups fall under this policy, with project funds totaling over CNY 10 millions per year. In addition, the regular construction projects being implemented by the national and local governments in the affected areas also include: technological built-up capacity, poverty relief, supply of safe drinking water, , basic farmland water conservancy facilities, planting technique training and large-scale planting training projects. 4.6.2 CULTURAL AND RELIGIOUS FEATURES The Hui people in the Project areas originates from two locations: One is Xining City, Huangzhong and Datong Counties, and the surrounding provinces and regions, where the Hui have come here for missionary work or business, and settled here gradually; the other is some Tibetans, Han and people of other ethnic minorities, who have converted to Islam for marital, religious and other social reasons in history, and followed the Hui customs; they still speak Tibetan and keep some Tibetan customs today, known as “Tibetan Hui”. The Hui follow the principles of Islam, do not have their own spoken and written language but use Chinese. The “Tibetan-Hui” in the Lijiaxia north trunk canal speak mainly Tibetan. The affected Hui do not differ significantly in economy, but those affected by the Gongboxia south and north trunk canals grow more cash crops, and have the tradition of working outside and doing business; many of those affected by the Lijiaxia north trunk canal are “Tibetan Hui people”, and are significantly influenced by the Tibetan culture; those affected by the Lijiaxia south trunk canal work outside less frequently and rely more on agriculture, and agricultural income is a higher proportion of their total household income. The Salar people are muslims. Their ancestors migrated from Samarqand, Central Asia in the Yuan dynasty, and the Salar have settled in Xunhua County for nearly 800 years. Jiezi Town is a cradle of the Salar. The Salar language belongs to the Uygkus group, west Hunnish branch, Turki sub-family, Altai family. Since the Salar have been in long-term contact with the Han people and the Tibetans, they have absorbed many Chinese and Tibetan words, and many Salar can speak Chinese and Tibetan. They don’t have any written language, and usually use Chinese. The Salar are Qinghai’s only ethnic minority listed as a small ethnic minority of China, and 45% of its population is found around the Gongboxia south trunk canal. The Salar are famous for growing red pepper, prickly ash (Sichuan Pepper) and walnut. Despite the feature of being good at doing business and the tradition of working outside, they seldom give up farming. The Salar have a strong tradition of using garden areas to crop and have developed distinctive characteristics. However, with the intensification of the competition for land and the increasing shortage of water resources, the current garden economy of the Salar has been severely weakened. Believing in Tibetan Buddhism, the Tibetans are the oldest and largest ethnic minority in the Qinghai-Tibet Plateau. The Tibetans in Qinghai mostly live in pastoral areas, and lead a nomadic life. They are unrestrained and straightforward in character, and eat tsampa, ghee, beef and mutton mainly. Tibetan belongs to the Tibetan branch, Tibetan-Burmese sub-family, Chinese- Tibetan family, divided into the 3 dialects of Tibet, Kang and Anduo. The Tibetans in Qinghai mostly speak the An dialect, and generally speak Tibetan. 31 Poverty line: per capita net income less than 800 yuan SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 54 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT In the Project areas, the local Tibetans still maintain this ethnic character. However, due to different natural environments, they become very similar to the nearby Han and Hui people in lifestyle. In terms of production, the local Tibetans deal mainly with agriculture and engage in cultivation, farmland management, harvesting and grinding in the same way as the Han and Hui do, but Tibetan farmers attach greater importance to grain production, are better at stockbreeding and are relatively inactive in planting restructuring and cash crop cultivation. In terms of living customs, the local Tibetans, influenced by the Han and Hui people, no longer rely on tsampa and ghee only, but eat also fried dishes, pancakes, sheet noodles and noodles. The local Tibetans have higher ability to speak Chinese than Tibetans in pastoral areas. The affected Han people account for 4.4% only of the total beneficiary population. Except Dongjie Village(Jishi Town affected by the Gongboxia south trunk canal) and Dong’er Village (Gandu Town affected by the Gongboxia north trunk canal), which population is exclusively Han, the other local Han live together with the local Hui, Tibetans and Salar. Since they live in ethnic minority areas, their living habits are essentially identical with those of the local primary ethnic minorities. Many Han can speak Tibetan and Salar languages. The local Han deal mainly with agriculture, usually do not have any religious belief and are better educated than the other minorities. The ethnic groups in the affected areas live in harmony from ancient times. Most of the Salar ancestors who migrated from Central Asia to Xunhua County were men, many of them intermarried with local Tibetans and accepted many Tibetan customs and traditions. Both the Hui and Salar are Muslims. Under the Islamic thought that “all Muslims in the world are brothers”, they intermarry with each other, share mosques, participate in religious activities together, and have been in close and harmonious contact. Some local Hui have been converted from Tibetans. The local Han respect the cultures and religious of ethnic minorities, and harmonize with them. Thanks to special ethnic relationship and long-term contact, the different ethnic groups in the Project areas understand and respect each other’s ethnic customs and religious belief, have much intercourse on ceremonies and festivals, and expressed fiendship for many generations. 4.6.3 POLICY AND LEGAL FRAMEWORK EMDPs have been developed in compliance with the applicable policies and legal framework. These include the Constitution of the PRC, Laws on Regional Ethnic Autonomy and Organization of Villager Committee and Regulations on the Administrative Work of Ethnic Minority Communities and the Eleventh Five-year Plan for Ethnic Minority Programs. Qinghai provincial documents include the Outline of the Eleventh Five-year Plan of National Economic and Social Development, the Water Conservancy Poverty-relief Plan 2001-2010, the Tenth Five-year Water Conservancy Development Plan, the Outlines of the Eleventh Five-year Plan of National Economic and Social Development of the affected counties, and the ADB policy for ethnic minorities (OMF3). Main policies include the applicable laws and regulations of China, the applicable regulations of Qinghai Province, state supporting policies, the regional development plans of Qinghai Province and Hualong County, and ADB policy. The policies and regulations of China on ethnic minorities are in line with ADB’s concerns about ethnic minorities, i.e., to pay attention to the equality and development of ethnic minorities, and pay special attention to their economic, social and cultural programs in order to maintain their rights and interests, and improve their socioeconomic status. Based on consultations with EA, PMOs, local governments and affected persons, and general practices in the project counties/cities, a set of ethnic minority development principles is agreed to be adopted by the PMOs. These include: • consistent with the needs and aspirations of affected indigenous peoples; • compatible in substance and structure with affected indigenous peoples' cultures and social and economic institutions; • conceived, planned and implemented with informed participation of affected communities; • equitable in terms of development efforts and impacts; and • not impose the negative effects of development on indigenous peoples, but, if such effects are unavoidable, to ensure appropriate and acceptable compensation. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 55 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT 4.6.4 IMPACTS ON ETHINIC MINORITY GROUPS The affected ethnic minorities live mainly on agriculture, so a project that promotes agricultural development will promote the interests of the ethnic minorities. The project will improve the development of the local ethnic minorities in the following ways: 1) There will be additional irrigation area (40,090 mu ,recovered abandoned land 18,255 mu), improvement of existing irrigation area (168,455 mu), which will contribute to alleviate the human-land conflict in the affected areas effectively, to reduce abandoned land because of high irrigation costs and water shortage, and to increase output and agricultural income; 2) After pumping irrigation is turned into gravity irrigation, there will be an average reduction of CNY 157.2 in electricity costs per mu-year; if the reduction in water costs is also taken into account, there will be a cost saving of CNY 225 per capita-year for the existing population in the irrigated areas, which will provide a significant contribution to agricultural costs reduction, irrigation coverage extension, agricultural efficiency improvement, and ethnic minorities poverty relief; 3) During the construction and after the completion of the Project, a number of unskilled job opportunities will be created by canal construction and maintenance, providing in the short term more non agricultural job opportunities to the population in the affected areas, 40% of which shall be first made available to women and the poor; 4) Training during construction and operation of the Project on irrigation management and cropping practices, awareness education on water conservation, marketing and risk, will improve the status of knowledge and professional capabilities of ethnic minority farmers. However, some impacts may be anticipated during construction or operation stages of the Project that may affect ethnic minorities: 1) After the project is commissioned, water and management charges collected are insufficient to finance canal maintenance and management; 2) Obviously, the Project safeguards the agricultural stability of the project area by providing stable water supply and increasing the irrigated land area. After the grain production enough to feed themselves, more and more farmers anticipate to grow cash crops to increase their income, with need for support in agricultural techniques, market information and planting restructuring funding, etc., additional, with the risk the corresponding mechanisms and capabilities are absent in the project areas; 3) Land acquisition and house demolition: the Project will affect 58 villages of 9 townships/townships in 3 counties. A total of 6877 persons (including 5947 ethnic minorities’ persons) will be affected directly by LAR. 4) Some existing irrigation pumping stations will be decommissioned, and the short-term income of about 200 staff of these stations will be questionable. 5) Public safety issues may occur during construction, particularly linked to road traffic. 4.6.5 IMPACTS ON ETHNIC MINORITY WOMEN The socioeconomic survey shows that the educational level of both men and women in the affected areas is low, but that of women is much lower than men. In an ethnic minority family, the “wife” has no power to decide major family affairs, and is subordinate to the family. The main type of labor division in a household is the sharing between man and woman of the farming work. In households where the husband is working outside, a frequent situation due to high farming costs, and low per capita arable area, all farm work is done by women. Women play an important role in agricultural production, and assume a heavy farming burden. However, such contribution in production is not regarded as a kind of household income. Provided the low crop yield, farm produce has not been turned into commodities to realize economic value, so the labour of women is not recognized. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 56 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT However, since men are in charge of external affairs, and women of domestic affairs, women have a low level of involvement in public affairs. Whatever the ethnic group, women are particularly absent from participating in public affairs. Except the Hui people who can speak Chinese, Salar and Tibetan women have a more limited capability to communicate in Chinese than men. It is a Project obligation that 40% of unskilled job opportunities be first allocated to vulnerable groups inclusive of women and the poor. The Project will also, on the longer-term increase the agricultural revenue of the household, including that of the woman's contribution. However, the lack of education of most women in the Project areas may limit their access to the best job opportunities offered by the Project implementation. 4.6.6 ACTION PLAN On the premise of adequate communication of the stakeholders, the PMO has developed a feasible action plan to promote positive impacts and alleviate negative ones under the direction of the consultants in ethnic minorities and social development. This plan has proposed specific actions, implementing agencies, implementation schedule, and sources of funds and monitoring indicators from the perspective of promoting positive impacts and mitigating negative ones. See Appendix 13 summary ethnic minority development plan. The funds required for the implementation of this EMDP will come mainly from the following 3 sources: (i) Project budgets; (ii) funds for projects implemented by the central government to support the development of small ethnic minorities, and the socioeconomic development of Tibetan areas in Qinghai and other regions; and (iii) counterpart funds from local governments and competent authorities (bureau of agriculture, ethnic and religious affairs bureau, women’s association, etc.), and funds for regular projects, such as technological popularization, poverty relief, human drinking water safety and basic farmland water conservancy facilities, etc. The draft EMDPs will be disclosed in each county, townships and villages prior to Management Review Meeting (MRM). In accordance with ADB’s Public Communications Policy, the draft EMDPs will be posted on the ADB website prior to appraisal and the final EMDPs upon finalization prior to board approval. The PMO will set up project ethnic minority management agencies to supervise implementation, continue the public consultations, monitor progress, and deal with grievances. Internal and external ethnic minority development monitoring mechanism are agreed to be established during the project implementation. A TOR for monitoring and evaluation has been drafted and attached to each EMDPs. Internal ethnic minority progress supervision and monitoring will be done by each PMO to ensure compliance with the provisions of this EMDP. Independent agency will be entrusted to conduct annual monitoring and evaluation of overall project EMDP activity until the completion of project implementation. Twice per year for internal and once per year for external monitoring reports are arranged for the project ethnic minority monitoring. 4.7. RESETTLEMENT According to the resettlement impacts survey, the two subprojects will necessitate land acquisition and resettlement. Two Resettlement Plans (RPs) have been prepared based on ADB procedures. The RPs have been prepared on the basis of the detailed measurement surveys (DMS)32, and also were disclosed to affected persons (APs). The resettlement planning and implementation is designed to ensure that the APs will be better-off or at least not worse-off as a result of the Project. In addition, the land use pre-examination for the Project are in processing and expected to be final approved by Qinghai Land and Resources Department by the end of September, 2009. 32The Gongboxia land acquisition impacts are measured by DMS, while the Lijiaxia resettlement impacts are estimated by FS. The two RPs may need to be updated if any significant changes. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 57 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The head works of Gongboxia and Lijiaxia irrigation subprojects are Gongboxia and Lijiaxia Hydroelectric Power Plant respectively.Due diligence review has been conducted on the resettlement impacts, compensation policies and rehabilitation plans for the linked Gongboxia and Lijiaxia Dams, which have been covered in each RP. To sum up, the Dams resettlement activities have been well implemented in line with the resettlement documents and policies approved by PRC. The APs and affected villages (AVs) have received the compensations and post-support annual subsidies as their entitlements in the timely manner. With the implementation of livelihood restoration measures, the livelihoods of affected households have been restored and even increased as compared with that before resettlement. 4.7.1 SCOPE OF RESETTLEMENT IMPACT In order to avoid or minimize land acquisition and resettlement, consultations with local officials, village committees and APs have been conducted during the RP preparation stage. On the basis of the optimization FSR, the Project will affect 58 villages of 9 townships/towns in 3 counties. A total of 6877 persons (including 5947 ethnic minorities’ persons)who are all ethnic minorities will be affected directly by LAR. The Project will permanently acquire 2097.83 mu of land (including 1207.57mu acquired by main canal and 890.26 mu by branch canal33, of which 520.66mu (24.8%) are classified as cultivated land, 378.35mu of land will be occupied temporarily during the construction phase, all of them are the non-cultivated land and no person will be affected. 2082.61 ㎡ of rural housing will be demolished with 16HHs and 101 persons to be affected.The detailed resettlement impacts of the Projects are summarized in Table 4-10. 4.7.2 POLICY AND LEGAL FRAMEWORK For people unavoidably affected, the resettlement objective is to achieve equal, or better, income and living standards in line with not only the Chinese laws and regulations, but also ADB’s Resettlement Policies including Involuntary Resettlement (1995) and Resettlement Operations Manual (OM Section F2), etc. Key PRC laws and regulations include the Land Administrative Law of the P.R.C (2004), the Decision on Reinforcing Reform in Land Administration by the State Council (State Council [2004] No.28), Ministry of Land Resources (MLR) Guidelines on Improving Land Acquisition and Relocation Regulations (MLR Document No. 238). Meanwhile, Qinghai Province also issued related documents. All these documents have provided essential guidelines for RP preparation. All persons affected by the Project will be eligible for compensation and assistance. The cut-off date for eligibility for compensation and assistance is the date of each subproject approval by local government, which will be announced immediately to all APs. Based on consultations with EA, PMOs, local governments and affected persons, and general practices in the project counties, a set of resettlement principles is agreed to be adopted by the Project implementing agencies (IAs). These include: avoid or minimize resettlement, wherever feasible; the compensation and titles gained by the APs shall at least enable them to maintain the same living standards as “without project” or even better; affected persons should derive some direct benefits from the Project; all affected people regardless of the legal titles shall be entitled to get compensation and demolition assistance; the resettlement compensation shall ensure all APs to at least maintain the living standards as before; if the remaining land after land acquisition fails to safeguard the livelihood of the APs, compensation in forms of cash or land replacement, plus other necessary profit-earning activities shall be provided for the APs; 33 On the basis of the Current Land Use classification (GB/T21010-2007); if the width of canal is less than 2 m, land can be used as collective land SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 58 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The ethnic minorities are encouraged to participate into the resettlement planning and implementing, the folk custom of ethnic minorities shall be integrated into the house rehabilitation and income restoration. the APs shall have good understanding of the qualification, means and standards of compensation, livelihood and restoration plan as well as project construction arrangement etc., and participate in the implementation of the resettlement plan; no land acquisition shall be proceeded with before the APs are satisfied with schemes for compensation and resettlement; the compensation and resettlement operations shall be monitored by the EA and an independent organization; preference is given to land-based resettlement strategies for ethnic minority groups that are compatible with their cultural preferences and are prepared in consultation with them; vulnerable groups (incl. women) shall receive special assistance and treatment so that they can live better; and The resettlement budget shall be enough to cover all aspects that are caused by the project construction and operation. 4.7.3 COMPENSATION ENTITLEMENTS AND STANDARD Based on the above principles an entitlement matrix has been formulated for the Project that also has been consulted and disclosed to related stakeholders. The compensation standard of the Project is mainly on the basis of The temporary standard on the compensation for the land acquisition of the upstream large and medium-sized hydropower projects of Yellow River in Qinghai province(Qinghai Government Office [2007] 46). For land acquisition by main canal, compensation fees include a land compensation fee, a resettlement subsidy and young crops compensation fee. The land compensation will be paid to the affected village or APs, while the resettlement subsidy and young crops compensation fee will be paid to the APs. The land acquisition compensation is based on the comprehensive average annual output value (AAOV) of the land. For land use by branch canal, it will be designed and rebuilt along the original alignments as possible, If the collective land occupation cannot be avoided, the APs will also be compensated as the land acquired by main canal, although the land won’t be converted to construction land if the width of canal is less than 2m according to the criterion of the Current Land Use classification (GB/T21010-2007). For house demolition, compensation will be paid to owners based on replacement cost without depreciation, plus relocation and transition expenses. Compensation for young crops, trees, other facilities and temporary impacts will be paid directly to APs. Income losses resulting from reduced production/sales and wages caused by the Project will also be assessed and compensated. In addition, both women and man are entitled to sign the land acquisition and house demolition contract and obtain the payments. The compensation standard is shown in Table 4-11. 4.7.4 RESETTLEMENT COST AND FUND MANAGEMENT The initial cost estimate for land acquisition and resettlement of the two subprojects is CNY 20.41 million in 2008 prices including contingencies and land taxes; and equivalent to $3.0million 34 (accounting for 1.0% of the total project cost The land acquisition and resettlement costs are included as part of total project cost and will be funded by Qinghai Municipal Government (QMG). The resettlement cost is estimated in Table 4-12. 34 The exchange rate is based on CNY 6.8 per US Dollar. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 59 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT According to compensation policies and standards defined in the resettlement plans, the payment and usage of compensation funds will be supervised by the internal monitoring agencies, with regular audit review and with regular review by the external monitoring agency. During the resettlement implementation, the compensation contracts will be negotiated and signed with village committees and households, etc. On this basis, the final costs might be adjusted. 4.7.5 RESETTLEMENT AND REHABILITATION The degree of farmland losses on affected villages and on households were carefully assessed and then rehabilitation plans were consulted with APs, the findings and results have been incorporated into each RP. In general, the measures for economic rehabilitation for main canal include: (i) use compensation for changing the agriculture structure, and development of more economical crops. (ii) provision of employment opportunities during the project construction and operational phases; (iii) provision of the same amount of reclaimed land if possible; (iv) promotion and development of new enterprises and self-employed secondary and tertiary businesses (i.e. running a noodle store, community services, transportation, working at a cap factory, small-scale supermarkets); and (v) provision of free technical training to the APs to increase their skills. As for the measures of branch canal land use restoration, the branch canal will be rebuilt in the original alignments as much as possible. If collective land occupation cannot be avoided by branch canal, they will be compensated as those acquired by main canal. The measures for income restoration are similar as above. Regarding rural housing demolition, the affected households will receive compensation at replacement cost for the lost structures and attachments without any depreciation. The affected households can rebuild their houses by themselves with free house plot provided according to their wills. To salvage the structural materials will not be prohibited and moving subsidy will also be provided. Ethnic minority groups will be entitled to build their houses on the basis of their culture and religion. For non-residential housing and structures, the affected owners will be compensated with cash at replacement cost for the lost structure. In addition, the vulnerable groups have been carefully identified with the help of village community, and the special attention and policies have been formulated and consulted with related stakeholders. 4.7.6 IMPLEMENTATION ARRANGEMENTS QWRD (the executing agency) assumes the overall responsibility for the resettlement management and supervision. A social, environment & resettlement office within QWRD has been established and coordinates the planning, implementation, financing and reporting of land acquisition and resettlement. The local PMOs, Jianzha, Hualong and Xunhua County’s Water Resources Bureau take the primary responsibility for the resettlement consultation, implementation and delivery of entitlements in time. In order to ensure that the respective PMOs and village committees can properly and smoothly handle the LAR, the training programs in each RP have been formulated for the PMOs resettlement staff. The resettlement implementation schedule for the subprojects has been prepared based on the preparation and construction timetable. No land acquisition or demolition shall start until RPs are approved by ADB. It is anticipated that land acquisition and house demolition will be started in Jan of 2010 and be completed by July of 2013. 4.7.7 PUBLIC PARTICIPATION AND CONSULTATION During the RPs preparation, affected villages and APs have been informed about the key elements of land acquisition and resettlement through consultation during the planning stage and distribution of resettlement information. On various occasions, during meetings, interviews, focus group discussions, public consultation workshops and community consultations, local representatives have participated in the planning and their concerns have been integrated into the RPs. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 60 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The draft RPs will be distributed or disclosed to the affected counties, townships, villages, APs prior to Management Review Meeting (MRM) and resettlement information booklets (RIB) will be disseminated to the APs by the end of Sept, 2009. This booklet will confirm the project affected areas, the implementation schedule and framework, the compensation standards for land acquisition and other assets, relocation assistance, livelihood rehabilitation strategy, and dispute resolution procedures. In accordance with ADB’s Public Communications Policy, the draft RPs will be posted on the ADB website prior to appraisal and the final RPs upon finalization prior to board approval. The grievance redress procedures have been well established and explained in the RPs. In addition, the PMO will set up project resettlement agencies to supervise implementation, continue the public consultations, monitor progress, and deal with grievances. 4.7.8 MONITORING AND EVALUATION Internal and external resettlement monitoring mechanism are agreed to be established during the project implementation. A TOR for monitoring and evaluation including monitoring methodologies has been drafted and attached to each RP. Internal resettlement progress supervision and monitoring will be done by each PMO to ensure compliance with the provisions of the RP; the internal report will be submitted to ADB every half a year. Independent agency will be entrusted to conduct semi-annual monitoring and annual evaluation of overall project LAR activity until 2 years after the completion of LAR. External monitoring reports will be forwarded directly to both the PMOs and ADB. In addition, the PMOs have agreed to a set of supervision milestones with ADB to ensure timely and effective implementation of the resettlement activities. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 61 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 4-10: PRELIMINARY SCOPE OF LAND ACQUISITION AND RESETTLEMENT Gongboxia irrigation channel Lijiaxia irrigation Channel Total Subproject name South channel North channel subtotal South channel North channel subtotal / County/city Xunhua county Hualong county / Jianzha county Hualong county / 3 Townships/towns 3 2 5 2 2 4 9 Villages 18 18 36 13 19 32 68 Total 230.26 441.24 671.5 174.73 361.34 536.07 1207.57 Where: cultivated permanent land acquisition by 50.91 102.65 62.92 165.57 216.48 land and garden 28.84 22.07 Main canal (mu) Non-cultivated 201.42 419.17 620.59 72.08 298.42 370.5 991.09 land Total 64.95 90.81 155.76 276.9 457.6 734.5 890.26 Where: cultivated permanent land acquisition by 32.37 21.61 53.98 92.7 157.5 250.2 304.18 land and garden Branch canal (mu) Non-cultivated 32.58 69.2 101.78 184.2 300.1 484.3 586.08 land Temporary land occupation (mu) 44.24 47.73 91.97 116.4 169.98 286.38 378.35 Demolition of rural houses (㎡) 815.61 0 815.61 150 1117 1267 2082.61 Land Households 82 72 154 241 248 489 643 acquisition 35 Population 756 1148 1099 2247 3003 only 410 346 House Households 3 0 3 12 1 13 16 demolition Directly affected Population 27 69 5 74 101 only 27 0 Persons by Main Both land Households 0 0 0 0 000 canal acquisition and house Population 0 0 000 demolition 00 Households 85 72 157 253 249 502 659 subtotal Population 437 346 783 1217 1104 2321 3104 directly affected Land Households 134 93 227 189 327 516 743 Persons by acquisition Population 590 528 1118 994 1661 2655 3773 Branch canal only Households 219 165 384 442 576 1018 1402 Total of APs Population 1027 874 1901 2211 2765 4976 6877 35 it means that these households will lose the cultivated land only, which might contributes to their incomes SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 62 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 4-11: COMPENSATION STANDARDS Type Compensation standards remark standards Unit (Yuan/unit) cultivated land (paddy field and mu 10,400 orchard) forestry land mu 3,120 Land wasteland and flood compensation mu 520 land housing plot mu 10,400 other constructive mu 1,040 land cultivated land (paddy field and mu 10,400 orchard) forestry land mu 3,120 Resettlement wasteland and flood subsidy mu 520 land housing plot mu 10,400 other constructive mu 1,040 land land acquisition cultivated land (paddy field and mu 1040 orchard) forestry land mu 1040 Crop wasteland and flood compensation mu 0 land housing plot mu 0 other constructive mu 0 land cultivated land (paddy field and mu 21,840 orchard) forestry land mu 7,280 Subtotal wasteland and flood mu 1,040 land housing plot mu 20,800 other constructive mu 2,080 land acquisition. as main canals land compensated canals are branch The land use by cultivated land (paddy field and mu per year 1,040 orchard) and forestry land Land wasteland and flood land mu per year 110 occupied housing plot mu per year 1,040 temporarily other constructive land mu per year 1,040 land reclaimed fee mu 2,600 Actual duration of the land use yrs) 2 (usually steel reinforced ㎡ concrete 676 concrete and House ㎡ housing compensation brick 487 demolition brick and timber ㎡ 416 timber and earth ㎡ 392 Other Moving subsidy household 1500 compensation transitional fee household 800 SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 63 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 4-12: ESTIMATED RESETTLEMENT COST (CNY 10,000) Gongboxia Irrigation Lijiaxia Irrigation Channel Channel No. Item Total South North South North subtotal subtotal channel channel channel channel Permanent Collective 1 Land Acquisition by 65.2 73 138.2 229.4 165 394.3 532.5 main canal Land Occupation by 2 73.9 55.8 129.7 161.7 238.8 400.5 530.2 Branch Canal Temporary Land 3 1 1.1 2 2.6 3.7 6.3 8.3 Occupation rural housing 4 33.1 0 33.1 51.2 6.4 54.6 87.7 demolition 5 ground attachment 4.5 1.5 6.1 5.7 8.5 14.2 20.3 total of 1~5 177.8 131.4 309.2 447.8 422.2 869.9 1179.1 6 other fees 35.6 26.3 61.8 89.54 84.44 173.98 235.78 total of 1~6 213.3 157.7 371 537.2 506.6 1043.9 1414.9 7 Contingencies 21.3 15.2 36.6 53.7 50.7 104.4 141 total of 1~7 234.7 172.9 407.6 590.9 557.3 1148.3 1555.9 tax and fee of land 8 54 50.4 104.4 194.6 186.4 381 485.4 acquisition total 288.6 223.3 512 785.51 743.7 1529.2 2041.2 4.8. RISK ANALYSIS AND MITIGATION MEASURES The capacities of the new WDOs and WUAs, for joint PIM, represent the main risks to achievement of expected Project outcomes (Appendix 1). To mitigate these risks the proposed project design incorporates dual-purpose activities that are intended to both: (i) progressively develop capacities of organizations to (ii) achieve the expected outcomes of increased: (a) water use efficiency (WUE), which will determine the actual irrigated area, (b) yields of commercial and subsistence crops, particularly wheat, and (c) diversification into commercial crops especially walnuts. Organizational roles and responsibilities, proposed to ensure sustainability, are summarized in Table 4-8 together with organizational incentives, risks and the mitigation measures incorporated in the design. Water Use Efficiency (WUE): The ambitious, but realistic and achievable, target is to increase WUE from 35% to 56%. This will also improve the productivity of water ($ m-3 or T m-3 of water diverted or extracted). The WUE is affected by system physical and operational losses and field application losses. Extensive canal lining will minimize present physical losses. Development and implementation of: (i) WDO main canal O&M plans, (ii) WUA secondary unit O&M plans and (iii) joint WDO – WUA volumetric water delivery and ISF payment agreements will minimize system operation losses. On-farm water management field trials will develop improved field-level irrigation practices to minimize losses and improve field application efficiency and the productivity of water. PIM and Sustainability: Participation by farmer organizations is the key to achieving sustainability especially for operation and maintenance (O&M). Water users have a strong incentive to participate in management, as farmers' livelihoods are directly dependent on irrigation system performance. Cost recovery, organizational arrangements and capacities for joint PIM, water tariff and farmers' affordability are key aspects incorporated into the Project design. Participation of WUAs will (i) foster a sense of ownership and reinforce the responsibility to maintain the irrigation system, and (ii) build the capacity of WUAs to operate and maintain the systems effectively. The main risks, to effective PIM and sustainability, are: (i) the demonstration effect of the model WUAs will not prove sufficient incentive for farmers from other secondary units to form extension WUAs and (ii) not all farmer-members will participate in either model or extension WUA activities. To mitigate these risks the project design incorporates specific PIM and IAS activities in addition to SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 64 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT the standard WUA establishment and operation activities that are considered successful elsewhere in China. These additional PIM and IAS activities are intended to provide incentives for farmers to form WUAs and participate in routine WUAs activities and decision-making. Crop Yields and Productivity: Quantified targets are to increase winter and spring wheat yields, or productivity of land, from 5.8 T/ha to 8.0 T/ha and from 4.8 T/ha to 6.0 T/ha respectively. The present limiting constraint is the lack of adequate water at the field level (Section 2.1.3). Project area wheat yields presently average 5.8 T/ha and 4.7 T/ha but reach 8.0 T/ha and 6.0 T/ha in winter and spring of “good” years when, presumably, rainfall is adequate and water is not limiting. This interpretation and potential yield increases are supported by international research (Section 2.1.3). The proposed project will alleviate this constraint by providing an improved gravity irrigation system with adequate capacity to supply the area once the design efficiency of 56% is achieved. The project will support field trials and demonstrations of improved: (i) OFWM to increase WUE and crop yields, and (ii) agronomic practices, including fertilizer application, to increase crop yields. Integrated Agricultural Development: A vital project objective is to increase the productivity of irrigated agriculture. The Project explicitly recognizes that improved water management and agricultural support are critical to facilitate crop adjustment and optimize increases in productivity. These activities are an integral part of the project design and will help achieve benefits that would not be possible with infrastructure works alone. In addition to irrigation management, WUAs will be piloted to provide agricultural technologies and extension services at farm level. Unfortunately County Agricultural Extension Services (AESs) are understaffed and underfinanced, rely heavily on formal didactic training, rather than more effective on-the-job training and learning- by doing, and have little experience and capacity to facilitate farmer participation or support integrated irrigated agriculture involving OFWM as well as conventional agricultural extension. To mitigate these significant constraints, and promote efficiency and effectiveness, simple doable agricultural support activities, closely linked to similar PIM activities, are proposed. These involve sub-grants to model WUAs, to design and conduct their own field trials and crop diversification activities, and conduct of field days, for farmers from other secondary units, by WDOs. During Loan Fact Finding the PPMO questioned the proposed dual-purpose functions of WUAs and associated integrated irrigated agricultural strategy. However dual-purpose WUAs are more efficient as they avoid duplication in the very demanding mobilization, formation and capacity development of similar community based organizations (CBOs). Nor does it seem necessary to formally register WUAs as Farmer Professional Associations (FPAs). Finally the proposed IAS is more effective as it contributes to developing the capacity of new WDOs and WUAs without diluting the considerable capacity development challenge by adding three weak County AESs to the inexperienced PPMO, three new CPMOs, three new WDOs and 93 new WUAs. If conventional agricultural extension activities are required, they should be in addition to proposed IAS activities. Consulting Services: During Loan Fact Finding the PPMO questioned the proposed 60 person- months of international consulting services and 198 person-months of national consulting services. However this is considered the minimum requirement to effectively support the innovative and challenging PIM, IAS and Organizational Capacity Development (OCD) Components. Ethnic Minority Development: The Project will benefit mainly the ethnic groups living in the project area, including Hui, Salar, and Tibetan (around 95% of the total beneficiaries). The Project, therefore, pays particular attention at integrating equitable access to all ethnic groups. Particular attention will be paid to cultural and ethnic diversities, including linguistic and cultural identities. The relevant activities and actions have been incorporated into the project design and will be closely monitored during implementation. Four ethnic minority development plans (EMDPs) were prepared. During the preparation of these plans, extensive consultations with beneficiaries from all ethnic groups and other project stakeholders were held to ensure broad ownership of the planning documents. In addition to ethnic minority development, the EMDPs also include (i) targeted poverty reduction measures, (ii) inclusive social development, and (iii) gender development. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 65 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 4-13: OPERATIONAL PHASE ORGANIZATIONAL ROLES AND RESPONSIBILITIES TO ENSURE SUSTAINABILITY Organization - Roles and Responsibilities Incentives Risk Factors Mitigation Measures Qinghai Provincial Government and Related Departments (Water The Project will have a significant Insignificant – the loan repayment None Necessary Resources and Land Development) As intermediate borrower, the Provincial impact on rural income in three represents only x% of the existing Government will guarantee loan repayment by the counties. poverty counties. Provincial GOV commitments County Governments and Related Bureaus (Water Resources and Land Improved farmer income from Incremental income will offset Provincial Government will Development) As final borrowers of the ADB loan responsible for repayment increased crop production and future State and Provincial ultimately provide any additional according to schedule (Poverty counties rely on substantial State and multiplier effect on rural economy budgetary support. subsidies required to guarantee Provincial budgetary support to finance their current expenditures). will generate significant income for repayments county governments County Water Delivery Organizations (WDOs) Income and cost recovery depend New WDOs do not develop the Consultants will support on-the-job • Operation of the four main canals (MCs) to achieve: (i) the MC design on efficient main canal operation capacities for efficient operation, training and learning-by-doing for efficiency of 90% and (ii) equitable delivery of water to 93 branch canals; and equitable water delivery to all sustained maintenance and effective capacity development • Negotiation with WUAs and implementation of equitable agreements for: 93 WUA managed branch canals effective WUA support (i) water delivery to branch canals and (ii) irrigation service fee payments for full main canal O&M cost recovery less WDO staff costs & overheads; Long term efficient main canal • Sustained maintenance of all main irrigation canal infrastructure; operation depends on sustained • Provision of effective WUA establishment and capacity building support. maintenance of key infrastructure Water User Associations (WUAs) 1 Reliable equitable water deliveries Farmers in non-model WUA areas Administrative Village Committees • Function as dual purpose irrigation and agricultural farmer associations; Improved agricultural productivity do not form extension WUAs will manage SUs • Operation of secondary units (SUs) to achieve: (i) SU design efficiencies of 0.9x0.9x0.9 = 73% and (ii) equitable delivery of water to farmers to Long term efficient secondary unit New WUAs do not develop Consultants will support on-the-job meet the water requirements of their preferred SU cropping system plans; operation depends on sustained capacities for efficient SU training for capacity development • Negotiation with WDOs and implementation of equitable agreements for: maintenance of key infrastructure operation and sustained WDOs will support FFDs for WUA (i) water delivery to branch canals and (ii) irrigation service fee payments; maintenance capacity development • Sustained maintenance of all secondary unit infrastructure; • Provision of effective OFWM and agronomic support to farmer members. Farmers (WUA Members) Reliable gravity water deliveries at Farmers do not use increased WUAs will promote participation of • Improve field irrigation and agricultural practices to achieve the design about a third of the present cost of income to pay reduced ISFs all farmers, improved application application efficiency of 85% and improve agricultural productivity; pumped deliveries to first lift areas. efficiencies and increased • Pay agreed ISFs in return for the specified water delivery service. Increased household incomes agricultural productivity Extension Service Providers Service payments to be specified Depends on commercial crop/s Model WUAs activities will address • Provide services if/as specified in model WUA sub-grant agreements. under WUA sub-grant agreements. and their limiting constraints? and alleviate main constraints • Support expansion of commercial crop production SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 66 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT 5. CONCLUSIONS AND ASSURANCES The ADB following possible assurances, discussed with the PPMO, are required for the successful implementation of the Project and achievement of intended project impact, outcome, and outputs. Counterpart Financing: QPG and the local governments will ensure that: (a) the counterpart financing necessary for the Project is provided in time to enable completion of project activities, and (b) additional counterpart funding will be provided for any shortfall of funds, or cost overruns. Formation of Three County WDOs: Before loan effectiveness Water Delivery Organizations (WDOs) will be established in each of the three Project counties. These will be suitably staffed to perform the following functions: (i) management (O&M) of the four main canals, (ii) negotiation and implementation of volumetric water delivery and ISF payment agreements with WUAs and (iii) provision of support for effective formation and capacity building of Model and Extension WUAs. Irrigation Service Fees (ISFs): ISFs will be set following principles of (i) being adequate to ensure sustained maintenance of irrigation infrastructure and facilities established under the Project and minimizing government subsidies; (ii) being affordable by irrigation users; (iii) being volumetric to encourage farmers to adopt water conservative farming practices; and (iv) following transparent and participatory procedures. For the short-term operation period, the ISF will cover non-staff O&M cost of main canal, and O&M cost of branch and lateral canal under the irrigation schemes to be established under the Project. For long-term operation, with improved affordability of farmers, government subsidies will phase out and the ISF will evolve to cover full O&M. The EA shall submit to ADB an approved proposal on ISF to be applied in the project area 6 months prior to operation of the Project irrigation infrastructure and facilities. Project Performance Monitoring: PPMO and CPMOs will monitor and evaluate project outputs and outcomes through a project performance monitoring system (PPMS) to ensure that project facilities are constructed and managed efficiently, and economic and social benefits are maximized. PPMO and CPMOs will (i) collect the necessary information, including data disaggregated by gender and ethnic group wherever possible, on project performance before project implementation, at completion of the Project, and 3 years thereafter, and (ii) submit to ADB the reports summarizing the key findings of monitoring. Resettlement: QPG, though PPMO and CPMOs, will ensure that (i) the RPs for the Lijiaxia and Gongboxia irrigation subprojects be implemented in accordance with their terms, (ii) all land and rights–of–way required by the Project be made available in a timely manner, (iii) the provisions of the RPs, including compensation and entitlements for affected persons (APs), be implemented in accordance with all the Borrower’s applicable laws and regulations and ADB’s Policy on Involuntary Resettlement (1995), (iv) compensation and resettlement assistance be given to the APs prior to dispossession and displacement, (v) the timely provision of counterpart funds be made for land acquisition and resettlement activities, (vi) any obligations in excess of the two RP budget estimates be met, and (vii) APs be at least as well off as they would have been in the absence of the Project. PPMO and CPMOs will (i) update the two RPs upon the completion of detailed designs and detailed measurement surveys, and (ii) revise the RPs as necessary to reflect any significant material changes in the Project scope or other causes, and submit any such changes to ADB for its concurrence. PPMO and CPMOs will (i) ensure that civil works contractor specifications include requirements to comply with the RPs and entitlements for permanent and temporary impacts to APs, and (ii) supervise the contractors to ensure compliance with requirements of the RPs. PPMO and CPMOs will ensure that (i) adequate staff and resources be committed to supervising and internally monitoring the implementation of the RPs and provide ADB with key information in the Quarterly Progress Reports during resettlement implementation, and a resettlement completion report; and (ii) an independent institute acceptable to ADB be contracted to carry out monitoring and evaluation, and forward reports to ADB as specified in the RPs. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 67 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Ethnic Minorities Development: PPMO and CPMOs will ensure that (i) the four EMDPs be implemented in accordance with their terms, (ii) targeted ethnic minorities benefit from the Project at least equitably and in accordance with ADB's Policy on Indigenous Peoples (1998), and (iii) civil works contractor specifications include requirements to comply with the EMDPs and as a priority to provide employment to ethnic minority people. PPMO and CPMOs will ensure that (i) adequate staff and resources are committed to supervising and monitoring the implementation of the EMDPs and report progress to ADB quarterly, (ii) an independent agency acceptable to ADB is engaged to carry out investigations to monitor and evaluate progress annually, and forward reports to ADB annually until the completion of the Project, and (iii) and monitoring reports include (a) data disaggregated by ethnic group, (b) data disaggregated by gender, and (c) assessment of gender impacts. Poverty Reduction: PPMO and CPMOs will ensure that (i) the Project provide targeted benefits to the poor in an equitable manner, (ii) the poor receive an equal share of agricultural training provided under the Project, and (iii) project contractors maximize the employment of local poor people. PPMO and CPMOs monitor the Project impact on poverty in accordance with indicators in the Project Performance Management System (PPMS). Gender and Development: The PPMO and CPMOs will follow ADB’s Policy on Gender and Development during Project implementation and take necessary steps to encourage women living in the Project area to participate in planning, construction, operation and maintenance the irrigation subproject. PPMO and CPMOs will ensure that gender enhancement measures, as set out in the EMDP, will be implemented, and state policies on minimum quotas for the participation of women will be respected in the formation of associations and other organizations. PPMO and CPMOs will monitor, as set out in the EMDPs, the effects of the Project on women during project implementation. Labour Standards: PPMO and CPMOs will ensure and monitor that the construction contractors (i) provide timely payment of wages and safe working conditions to all workers; (ii) provide women’s employment, where appropriate, and pay equal wages to the women and male employees for equivalent labour; and (iii) not employ child labour as required by the relevant laws and regulations of the Borrower. PPMO and CPMOs will cause the contractors involved in the Project implementation to maximize the employment of local poor people who meet the job and efficiency requirements for construction and maintenance of the project irrigation systems. Such workers shall be provided with adequate on-the-job training. Environmental Safeguards: QPG, through the PPMO and CPMOs, will ensure that the implementation procedures agreed upon with ADB are followed, including environmental safeguard requirements in the domestic EIA report. The PPMO and CPMOs will ensure that civil works contractor specifications include (a) provisions relating to the environment including, obligating contractors to carry out the mitigating and monitoring measures specified in the domestic EIA report, and (b) requirement for contractors to estimate costs for all such mitigating and monitoring measures. The PPMO and CPMOs will cause the WDOs and WUAs to operate, maintain, and monitor all project facilities in strict conformity with: (a) all applicable laws and regulations, including national and local regulations and standards for environmental protection, health, labour, and occupational safety; (b) ADB’s Environment Policy (2002); and (c) the environmental mitigating and monitoring measures detailed in the applicable government reports. Grievances: PPMO and CPMOs will ensure that complaint and problem management mechanisms and procedures are established and functioning effectively to (i) review and document complaints of project stakeholders, (ii) proactively address grievances, (iii) provide the stakeholders with notice of the chosen mechanism/action/decision, and (iv) prepare periodic reports to summarize the final outcomes and make these available to ADB upon request. Eligible complaints include those related to the Project, any of the service providers, or any person responsible for carrying out the Project. SOGREAH -CWS- REPORT N° 1300030.R4 PAGE 68 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 1 PROJECT DESIGN AND MONITORING FRAMEWORK SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A1. PROJECT DESIGN AND MONITORING FRAMEWORK Design Performance Data Sources and Assumptions and Risks Summary Targets/Indicators Reporting Impact From 2008 to 2020: Provincial and county Assumptions Increased and sustained • NVP increased by 88% economic and poverty • Government continues to net value of agricultural from $M12.0 to $M22.5 records and statistics promote sustainable production, increased • Av income up from $206.3 development farmer income, and to $288.6 per person • Provincial and county reduced poverty in east • Direct beneficiary poverty governments maintain Qinghai reduced from 39.4% to commitment to introduce PIM 24.6% & joint system mngt Outcome From 2008 to 2015: Provincial and county Assumptions Increased agricultural • Av winter wheat yield up economic and poverty • Effective inter-agency productivity and water use from 5.8 T/ha to 8.0 T/ha; records and statistics coordination efficiency • Av spring wheat yield up • Farmers willingness to adopt from 4.7 T/ha to 6.0 T/ha; Project performance high value crops monitoring and reports • Diverse high value crops by the Project • Counterpart funds are on additional 1,600 ha; Management Office available on time • Irrigation water use (PMO) Risks efficiency increased from • Model WUAs not replicated 35% to 56% WUA M&E records in other secondary units • Joint PIM ineffective Outputs Within five years: Assumptions 1. Rehabilitated and • 4 new main canals and 93 Project progress • Provincial and new county newly constructed branch canals operational report PMOs develop project and infrastructure to convert • 13,903 ha served by rehab financial management irrigation systems from or newly constructed Contractual payment capacity pumped to gravity supply lower-level canals records and system from the two existing • Flow regulating and commissioning reports reservoirs measurement structures at all branch and lateral canal ADB review missions off-takes 2. Participatory irrigation Within five years: WDO – WUA water • New county SDOs management (PIM) and • Water equitably distributed delivery agreements. develop the capacity for empowerment of WUAs: between 93 branch canals joint PIM with WUAs (i) introduced and • ISF collections > 90% Flow measurement, • Model WUAs develop demonstrated in model • Water equitably distributed ISF payment and system management and WUAs and (ii) adopted by within nine model WUAs O&M M&E records field irrigation capacities other WUAs. and > 20 extension WUAs • Other SUs/extension • Improved OFWM practices WUA field trial plans WUAs adapt improved (irrigation methods and and evaluations management practices schedules) developed in 9 and irrigation technology model WUAs and adapted by > 6,000 households SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT 3. Support for irrigated Within five years: Assumptions agriculture to improve: (i) • Annual cropping plans & Model WUA plans • Model WUAs improve cropping systems, (ii) more commercial crops (cropping systems) agricultural productivity agronomic practices and adopted by 9 model and • Other secondary units productivity of subsistence > 20 extension WUAs WUA field trial plans adapt improved crops and (iii) adoption of • Improved agronomic and assessments agricultural technology commercial agriculture practices developed by 9 model WUAs & adapted FFD records by > 6,000 households. 4. Organizational capacity • New county PMOs PMO establishment Assumptions for efficient effective project formed and staffed documents, staffing • Province and counties management developed for: before loan effective schedules, CD maintain dedicated PMO (i) Provincial and three new • PMOs develop CD strategies and self staff at required levels & county PMOs develop the strategy in year one assessments etc qualifications capacity for effective project • Self assessments & and financial management reorientation yrs 3 & 5 (ii) County water delivery • New county WDOs Assumptions organizations develop the formed and staffed WDO establishment • Counties maintain capacity for efficient and before loan effective documents, staffing dedicated WDO staff at sustainable joint system • WDOs develop joint PIM schedules, PIM required levels and management with WUAs strategy in year one strategy and self qualifications • Self assessments & assessments etc reorientation yrs 3 & 5 (iii) WUAs develop capacity • Four model WUAs WUA establishment & Assumptions to manage their secondary formed in year one and registration docs; • Farmers from all 93 units and provide effective five more in year three; secondary units form new OFWM and agricultural • Model WUAs develop FFD records democratic WUAs support to their members. and implement CD • All 93 WUAs develop strategies in years 2 & 4; PIM & IAS outputs organizational capacity • WDOs conduct FFDs for farmers from other secondary units/WUAs • 84 extension WUAs formed by end year 5. SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Activities with Milestones: Inputs 1. Design in detail, tender, construct and commission improved irrigation infrastructure to • ADB be completed by end 2015; • Government 1.1 Commission Gongboxia North Main Canal (30.576 km) serving 3,819.8 ha, 16 gravity • Cofinancing branch canals (15.731 km) and 737 lateral canals (427.264 km); • Beneficiaries 1.2 Commission Gongboxia South Main Canal (27.308 km) serving 3,442.3 ha, 14 gravity • Private sector and three pumped branch canals (23.507 km) and 604 lateral canals (379.405 km); • Others 1.3 Commission Lijiaxia North Main Canal (31.790 km) serving 4,089.6 ha, 25 gravity and 10 pumped branch canals (15.932 km) and 405 lateral canals (268.380 km); 1.4 Commission Lijiaxia South Main Canal (17.013 km), serving 2,551.3 ha, 21 gravity and four pumped branch canals (18.847 km) and 266 lateral canals (176.576 km). 2. Introduce and consolidate joint PIM by three new County Water Delivery Organizations (WDOs) and 93 new Water User Associations (WUAs) from 2011 to 2015: 2.1 Develop and implement annual WDO operation and maintenance (O&M) plans, for efficient and sustained management of four main canals, in years 2 to 5 inclusive; 2.2 Develop and implement annual model WUA O&M plans for efficient and sustained management of secondary units – four plans in years 2 and 3 and nine in years 4 and 5; 2.3 Develop and implement annual WDO – WUA agreements, for equitable volumetric water deliveries and farmer irrigation service fee (ISF) payments, in years 2 to 5 inclusive; 2.4 Develop and implement model WUA on-farm water management (OFWM) field trials, using sub-grants provided for this purpose, eight in years 2 & 3 and 18 in years 4 & 5; 2.5 WDOs plan and conduct PIM field days for farmers or extension WUA members from the other 84 secondary units not managed by model WUAs – 42 FFDs in year two, 84 in year three, 126 in year four and 168 in year five. 3. Provide effective irrigated agricultural support (IAS) to model WUAs (WDOs) and WUA members (WUAs) from 2011 to 2015: 3.1 Develop and implement model WUA secondary unit cropping system plans, involving both subsistence and commercial crops, four plans in years 2 & 3 + nine in years 4 & 5; 3.2 Develop and implement model WUA agronomic field trials/demonstrations, using sub- grants provided for this purpose, four in years 2 & 3 and nine in years 4 & 5; 3.3 Develop and implement model WUA activities, to support members diversification into the commercial crops of their choice, four in years 2 & 3 and nine in years 4 & 5; 3.4 WDOs plan and conduct one agronomy and one diversification FFD, for farmers or extension WUA members, – 42, 84, 126 and 168 FFDs in years two, three, four and five. 4. Provide effective organizational capacity development (OCD) support, involving mainly on-the-job training and learning-by-doing with some formal training: 4.1 The PPMO and three new CPMOs in project and financial management; 4.2 The three County WDOs in: (i) main canal operation and maintenance and (ii) support of model WUAs PIM and IAS activities and (ii) conduct of FFDs and 4.3 The nine model WUAs in: (i) secondary unit cropping system and O&M planning and (ii) planning and conduct of OFWM and agronomic field trials. 4.4 Planning and conduct by WDOs of OCD field days for farmers or extension WUA members from the other 84 secondary units not managed by model WUAs. Milestones: • Three CPMOs formed and staffed before loan effective; • Three County WDOs formed and staffed before the loan is effective; • Four model WUAs formed in 2011 and five more in 2013; • 84 extension WUAs formed progressively from 2011 to 2015 inclusive; • CPMOs and WDOs develop their OCB strategies in 2011 • Four model WDOs develop their OCB strategies in 2011 and five more in 2013 • All organizations self assess and reorientate strategies in 2013 and 2015 SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 2 PROBLEM TREE ANALYSIS SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A2. PROBLEM TREE ANALYSIS SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 3 SECTOR ANALYSIS SOGREAH –CWS- REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A3. SECTOR ANALYSIS This appendix assesses the economic efficiency, social equity and environmental sustainability (the 3Es) performance of the water resources and agricultural sectors and shared irrigation subsector, at the national, provincial and project levels. SectionA3.1 briefly updates sector indicators, analyzes performance and establishes causes of significant changes. SectionA3.2 reviews government and ADB sector strategies, relevant external assistance and lessons learned and provides alternative approaches to addressing identified problems/constraints and the rationale for the project. A3.1 PERFORMANCE INDICATORS AND ANALYSIS A3.1.1 POVERTY ALLEVIATION China’s poverty reduction performance is enviable (ADB 2004). Measured by the new international poverty standard ($ 1.25 per person per day using 2005 Purchasing Power Parity) the national poverty rate fell, from 85% in 1981 to 27% in 2004, while the absolute number of poor declined by nearly half a billion people. However China still has the second largest number of poor in the world (after India) and 254 million people were still consuming less than $ 1.25 per day in 2005 (World Bank 2009a). Chinese poverty is predominantly rural. In 2005 the poverty rates were 17.9% and 0.3% in rural and urban areas respectively and 72.5% of the population, and 99.4% of the poor, live in rural areas. Rural – urban inequality is also increasing. After adjusting for cost of living differentials the Gini index, of income inequality, increased from 32.9% in 1990 to 44.3% in 2005. Qinghai is located in the Northwest, which is the poorest of the five regions of China. In 2003 the poverty rate (Yuan 888 per person per year at rural prices) was 28.6% (the national average was 13.1%) and 20% of poor Chinese lived in the Northwest. In 2006 Qinghai had the highest provincial poverty incidence (12% by the national poverty line) although its share of agriculture in rural employment (70%) was only the ninth highest (OECD 2009). A State Council Leading Group Office of Poverty Alleviation and Development (LGOP) study, supported by ADB, led to official approval of a broader definition of poverty similar to the UNDP Human Develop Index (HDI). In 2006 Qinghai had the fifth lowest HDI of 31 Chinese provinces (UNDP 2008). Within Qinghai Province the proposed Project will serve the official poverty Counties of Jianzha, Xunhua and Hualong. A3.1.2 WATER RESOURCES There is a broad consensus that China’s water resource management priorities are pollution and associated water scarcity (World Bank 2009b and Wang Yi et al 2007). However pollution is not a particular issue in Qinghai, which generally meets water quality standards (World Bank 2009b). When renewable water supply falls below 1,700, 1,000 or 500 m3 per person per annum (m3 p-1 y-1) countries suffer water stress, scarcity or absolute scarcity respectively (Rijsberman 2006). Another indicator relates water demand to supply. Countries suffer (severe) physical water scarcity when more than 75% of the available supplies are withdrawn, diverted or extracted (CAWMA 2007). China’s total annual renewable water resources are about 2,830 billion cubic metres (BCM) of which 578.9 BCM were extracted in 2007.1 Water supply was 2,258 m3 per person per annum (in 2000) and demand (extraction) was only 20% of the available water resources (in 2007). Therefore China as a whole does not suffer from water stress. However China’s water resources are unequally distributed. The south, where average demand = 13.8% of the supply of 3,630 m3 p-1 y-1, suffers little water scarcity while the north, where average demand = 61.4% of the supply of only 780 m3 p-1 y-1, suffers both physical and economic water shortages. 1 National water resources data are from MWR 2007, World Bank 2009b and http://www.fao.org/NR/WATER/AQUASTAT/main/index.stm. Surface water supplied 81% of extraction and industrial, including agriculture, domestic and environmental flows used 90%, 8% and 2% respectively. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The project is located in the upper reaches of the Yellow River Basin (YRB). This suffers similar water scarcity to the rest of northern China, with demand = 51.3% of the average supply of 750 m3 p-1 y-1 (World Bank 2009).2 In 2007 Qinghai extracted 3.11 BCM of which only 2.05 BCM (66%) was used for agriculture (NBSC 2008). Present irrigation efficiency is reportedly 35% indicating YRB irrigation consumption of only 0.72 BCM.3 The Yellow River Conservancy Commission (YRCC) water allocation to Qinghai is 1.41 BCM of consumption.4 Therefore Qinghai would only exceed its allocation in the unlikely event that the other sectors are achieving an efficiency of more than 65%. A3.1.3 IRRIGATION By the end of 2007 the total national effective irrigation area reached 57.8 million hectares (mha) of which: (i) 148 systems, larger than 500,000 mu, served a total of 11.3 mha, (ii) 286 systems, from 300,000 to 500,000 mu, served 5.2 mha and (iii) 5,435 systems, from 10,000 to 300,000 mu, served 11.8 mha. Water-saving irrigation served 23.5 mha, representing 41% of the total area, of which 10.1 mha had lined canals, 5.6 mha low-pressure pipe and 3.9 mha sprinkler or drip irrigation. The coefficient of effective utilization of irrigation water (efficiency) was 47% for water- saving irrigation (MWR 2007). For all national irrigation systems FAO report total 2000 agricultural water withdrawals of 426.9 BCM, irrigation requirements (crop evapotranspiration or consumption) of 153.9 BCM and overall water use efficiency of only 36% vs 47% for water-saving irrigation. The two Projects areas are presently supplied by existing pumped irrigation systems involving two or more lifts of up to 50 m each. Present average operation (electricity) fees are reportedly $ 198, $ 264 and $ 374/ha/annum for the first, second and third lifts respectively. Farmers consistently report they can’t afford such fees and they no longer farm much of the higher areas. Many existing pumped systems are more than twenty years old and are deteriorating. For example only two and three out of four pumps are working in the two pumping stations visited by the PPTA Team. As the existing systems are pumping about 7,500 m3 ha-1 the present maintenance fee of about $ 26/ha is equivalent to only $ 0.0035 m-3. This is less than 20% of the national average ($ 0.021 m-3) for O&M of mainly gravity irrigation systems (MWR 2007). However a recent study estimated: (i) a gravity irrigation service fee (ISF) of $ 0.015 m-3, for full O&M cost recovery plus amortization, and (ii) the farmer’s ability to pay (ATP) of only $ 0.012 m-3 (Mott MacDonald 2007). Nevertheless it appears the present maintenance fee is too low and this, together with the high operating costs and natural infrastructure aging, is likely to be contributing to the deterioration of the existing systems. The PMO report only about 50% of existing main canals, and few lower-level canals, are lined. These unlined canals, in porous loam soils on moderate slopes, are likely to be the major source of seepage losses and the present low water use efficiency which is reportedly only 35%. While this is similar to the national average, reported above, it increases pumping duties and electricity costs. The above discussion indicates that water is the present limiting resource due to its limited delivery capacity and/or high delivery cost. This provides the main rationale for replacing existing pumped irrigation systems with new gravity systems supplied from the existing hydropower reservoirs. Water User Associations (WUAs): Nationally there were 8,000 water user associations (WUAs) established in 2007 with more than 7 million members representing averages of about 40 ha and 160 households per WUA. The total number of WUAS reached 40,000 of which 9,000 are in 481 large irrigation districts where WUAs now manage 22.7% of the effective irrigation area. Qinghai introduced irrigation reform in 2006 and formed 276 WUAs, covering 17.5% of provincial irrigated area, by the end of 2008. However the PPMO reports provincial officials lack experience, in WUA establishment and capacity development, and recently formed WUAS are not effective. Volumetric water delivery, measurement and payment are yet to be introduced in Qinghai province. 2 Other sources indicate even more severe YRB water scarcity – for example FAO (footnote 1), CAWMA 2007 and the YRB fact sheet available at www.iwmi.cgiar.org/Assessment/Research_Projects/River_Basin_Development_and_Management/Projects_Locations/yellow_river_china.htm 3 It is expected that most local irrigation “losses” (extraction – consumption) return to the fresh groundwater and eventually to the Yellow River 4 YRCC (undated) Yellow River Water Rights available as special subject 11 at http://www.mwr.gov.cn/english1/search.wct?ChannelID=9010 SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT There are only five existing WUAs in the project area. In Jianzha County two farmer associations reconstituted themselves and registered in 2008 and two more WUAs were subsequently formed. There is one existing WUA in Xunhua County and none in Hualong County. The Xunhua County WUA is a dependency of the local WRB and doesn’t meet the five principles of WUA establishment and operation in China (CIDDC 2004).5 Jianzha County WUAs reportedly: (i) elected their leaders (but many are village officials) and (ii) are based on hydraulic boundaries. However the existing pumped irrigation systems are generally based on administrative boundaries and existing WUAs will require reorganization to manage their secondary units in the new gravity irrigation systems. Qinghai province requests ADB support for WUA formation and organizational capacity building. A3.1.4 AGRICULTURE National Situation: Of the total national cropped area of 121.7 million hectares (ha) in 2007 about 56.5 million ha or 46.4% were irrigated.6 Due to substantial Government investment, the irrigated area has been growing steadily from 53.8 million ha in 2000 to its current level, an increase of about 5%. Nationally, the total sown area of crops in 2007 was 153.5 million ha, implying a national average cropping intensity of 126%. However, the sown area has declined marginally since 2000, when it stood at 156.3 million ha. The major cause of this decline has been a reduction in the area of wheat from 26.7 million ha to 23.7 million ha although this has been more than compensated by an increase in the area of corn from 23.1 million ha to 29.5 million ha. At the same time there has been an increase in the area of vegetables from 15.2 million ha to 17.3 million ha as well as increases in the areas of other high value crops, including orchards. These trends are in line with the changing pattern of consumption habits and the increasing international demand for biofuels. In spite of the rapid structural changes, the steady growth in the gross value of crop production (averaging about 4% per annum since 2000), the increases in the level of mechanization7 and the rapid increase in the use of chemical fertilizer, from 41.5 million tons in 2000 to 51.1 million tons in 2007 (3% pa), Chinese agriculture remains predominantly small scale and household oriented. At the national level the average area of land managed by rural households is 6.43 mu/capita (0.43 ha/capita) comprising 2.16 mu of cultivated land, 0.32 mu of hilly land, 0.10 mu of garden plot and 3.85 mu of grassland. However, such national averages mask the provincial variation with, for example, most of the grasslands concentrated in three provinces/autonomous regions – Inner Mongolia, Qinghai and Xingiang. Nationally of the 769.9 million employed persons in 2007, 314.4 million or 40.8% were employed in the primary sector. Given the focus of this sector in rural areas it is clear that the proportion of rural persons employed in the sector is even higher. Provincial Situation: Qinghai provincial crop production is relatively unimportant within the whole- of-China context. While the province accounts for about 7.5% of China’s land area and 4.2% of the population, the cultivated area of 542,000 ha represents only about 0.45% of the national total. With a total 2007 sown area of 516,700 ha the implied cropping intensity is only 95.3%, well below the national average. However, this is no doubt due to the relative importance of irrigated agriculture and the greater reliance of cropping on rainfed conditions in a low rainfall province. According to provincial data the irrigated area in Qinghai Province in 2007 was just 176,600 ha, equivalent to 32.6% of the cultivated area, well below the national average (46.4%). In spite of these differences the cultivated area per household is only slightly less than the national average (2.09 mu vs 2.16 mu) a fact that is most likely explained by the larger household size in Qinghai. In terms of area the two most important crops in Qinghai Province are wheat (winter and spring combined) with an area of 154,000 ha in 2007 and rapeseed with an area of 148,500 ha. Other important crops are beans, including soybeans and peas, (44,800 ha), tubers, mainly potatoes, (35,500 ha) and vegetables (30,100 ha) while the area of orchards amounted to only 4,300 ha. 5 WUAs: (i) are farmers’ own organizations, with democratically elected leaders, (ii) formed on hydraulic, rather than administrative, boundaries, (iii) measure and (iv) pay for volumetric water deliveries and (v) have an adequate and reliable water supply system. 6 National and Provincial Statistics quoted here are from the China Statistical Yearbook 2008 as reported on www.stats.gov.com 7 From 2000 to 2007 total power increased from 525.7 to 765.9 million kilowatts (mkw) while small tractors increased from 12.6 to 16.2 million. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Based on official area and production data the provincial average wheat yield in was only 3.99 t/ha in 2007, well below the national average of 4.61 t/ha. The provincial average yield of rapeseed was 1.87 t/ha, the same as the national average. For beans and tubers the provincial averages of 2.67 t/ha and 4.04 t/ha were well above the respective national averages of 1.46 t/ha and 3.47 t/ha.8 No information is available concerning the yield of vegetables while the average yield for all fruits was just 7.7 t/ha compared to a national average of 17.7 t/ha, which is likely due to a high proportion of young trees as much as poor yields. A recent study by Zhai Heng et al indicates that the average apple yield in China is about 11 t/ha,9 suggesting that Qinghai’s yields are on the low side. While walnuts are frequently quoted as a (potentially) important crop in Qinghai, provincial output in 2007 amounted to just 3,430 tons, or only 0.5% of national production. Based on the national statistics fertilizer use in Qinghai Province in 2007 was 76,000 tons of active ingredients (nitrogen, phosphorous and potassium), equivalent to 140 kg/ha of cultivated area or 147 kg/ha of sown area.10 These fertilizer inputs are less than 50% of the national average use of 420 kg/ha of cultivated area and 327 kg/ha of sown area, implying that the fertilizer is probably used more efficiently. Fertilizer application on irrigated land is likely more than the average. By comparison the provincial statistics quote fertilizer use as 197,800 tons in 2007, which although not defined is likely the total weight. By type of fertilizer, nitrogenous fertilizers are most commonly used amounting to 32,000 t (43% of the total fertilizer use), followed by compound fertilizer 26,000 t (32%), phosphate 15,000 t (20%), and potash 3,000 t (4%). Compared to the national values compound and phosphate fertilizers are more commonly used while potash is less common. Nitrogenous is about the same as the national average. With respect to farm machinery small tractors are most common, amounting to about 245,000 units and accounting for 66% of total agricultural machinery power. However, farm machinery amounts to only about 0.75 units per tractor, suggesting that many tractors are also used for other purposes. The main products sold by farmers in Qinghai Province are grain (wheat, barley and potatoes), vegetables, oilseeds (mainly rapeseed), and fruit, with quantities amounting to 73.0, 40.4, 30.0, and 10.9 kg/capita respectively. All of these values with the exception of oilseeds are less than 25% of the national average, suggesting that farmers are largely subsistence oriented. Project Situation: The project area, in Haidong and Huangnan prefectures, has about 51,500 ha of effectively irrigated land (29% of the provincial area). The project area currently accounts for less than 20% of the prefecture total. These two prefectures have a total cultivated area of about 221,000 ha (40.7% of the provincial total), while the sown area amounts to about 210,000 ha. Implied cropping intensity is thus about 95%, the same as the provincial average. The main crops grown are wheat (38,900 ha), tuber crops (predominantly potatoes) (56,700 ha), oilseeds (68,800 ha) vegetables (16,300 ha), and minor cereals (19,600 ha). With output of 143,200 t, 211,400 t, 121,600 t for wheat tuber crops and oilseeds, yields are 3.68, 3.72, 1.75 t/ha.11 Total fertilizer use in the two prefectures is estimated at 70,600 t, 35.7% of provincial consumption and equivalent to 320 kg/ha of cultivated area and 335 kg/ha of sown area, both substantially lower than the provincial average (365 and 383 kg/ha respectively). 8 Tuber yields are quoted in grain equivalents (fresh yield is divided by 5) which implies that the average tuber yield in Qinghai was about 20.2 t/ha. 9 Zhai Heng, Guo Ling, Yao Yuxin, Shu Huairui, 2006), Review of the Chinese Apple Industry, ISHS Acta Horticulturae 772: XXVII International Horticultural Congress: International Symposium on Enhancing Economic and Environmental Sustainability of Fruit Production in a Global Economy 10 Fertilizer use is quoted in the national statistics in terms of active ingredients not the total fertilizer weight. 11 Output of tuber crops appears to be quoted in grain equivalent, implying a fresh weight of about 18.6 t/ha. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Based on data collected from the statistical agencies of three project counties – Hualong, Jianzha, and Xunhua – the total cultivated area in the counties is 725,138mu (48,343 ha) while the sown area in 2007 was 781,250 mu (781,250 ha), implying a cropping intensity of 108%. While the aggregate values for the townships in the project area by county and overall are summarized in Table A3-1. These indicate that the total cultivated area in the townships included in the project area is about 120,000 mu (8,000 ha) while the sown area is about 166,000 mu (11,100 ha), implying a cropping intensity of about 139%. The data on cultivated area excludes land used for orchards and other perennial crops, which accounts for the lower estimate. TABLE A3-1: AGRICULTURE DATA BY TOWNSHIP AND FOR PROJECT AREA Item Unit Township Project Area Jianzha Hualong Xunhua Cultivated area mu 16,100 52,987 50,429 119,516 ha 1,073 3,532 3,362 7,968 Sown Area mu 19,602 69,487 77,070 166,159 ha 1,307 4,632 5,138 11,077 Cropping intensity % 122 131 153 139 Crop Areas Winter wheat mu 7,004 31,890 27,127 66,021 ha 467 2,126 1,808 4,401 Spring wheat mu 6,041 2,314 4,829 13,184 ha 403 154 322 879 Potatoes mu 1,602 6,161 3,560 11,323 ha 107 411 237 755 Rapeseed mu 571 11,331 10,604 22,506 ha 38 755 707 1,500 Vegetables mu 2,485 12,853 26,906 42,244 ha 166 857 1,794 2,816 Crop Yields kg/mu Winter wheat 405 486 455 465 Spring wheat 300 385 268 303 a Potatoes 1,686 601 n.a. 825 Rapeseed 124 107 96 102 Vegetables 2,864 1,996 1,680 1,846 n.a. = not available a Average excludes information for Xunhua Source: Consultant’s estimate based on data from county statistical offices. The average winter wheat yield is estimated at 465 kg/mu (6.97 t/ha), spring wheat 303 kg/mu (4.55 t/ha), potatoes 825 kg/mu (12.38 t/ha) rapeseed 102 kg/mu (1.53 t/ha) and vegetables 1,846 kg/mu (27.69 t/ha). These yields appear to be reasonable and generally above the provincial averages. However, some concern must be expressed about the potential for improvements. Based on the results of field trips and the social survey the present situation in the project area is assessed as predominantly subsistence agriculture with over 80% of farmers producing mainly wheat for their own consumption and with limited sales of surplus wheat and other crops. This is generally consistent with available statistics that suggest a low per capita level of crop sales. However, there is an apparent trend for some farmers to produce commercial crops for sale in the fresh market and also to a limited number of processing industries that are beginning to evolve. These crops include long chillies, traditional red chillies, and other vegetables. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Extension: Counties have a multi-level, multi-form agriculture technology extension system that includes public extension institutions and stations, universities and research institutions, Farmers’ Professional Associations (FPAs) and food processing enterprises. Public extension stations are established in each of the counties and include the county agricultural extension station, qualified seed station, agro-machinery station and livestock breeding station. These are all under the control of the County Agricultural Bureau. The County Science and Technology Bureaus and County Poverty Alleviation Bureaus provide additional agricultural extension services. The public extension institutions organize visits to the demonstration stations and provide training courses. In 2008 the agricultural extension station in Hualong County held three field station visits - for winter wheat, rapeseed and common agricultural technology - and three training courses - for aquaculture, horticulture and new machinery technology. The public grass-root agricultural institutions also provide public services such as training in cultivation technology for fruit trees and winter wheat in Yashiga, Qunke and Gandu Townships (9 times in 2008). Several factors impact on the effectiveness of the public extension services. In Hualong County, the most significant factor affecting extension services is a lack of experts and technicians. Based on the survey data, there were 17 townships, 366 villages, 43,551 farm households, 243,545 population and 219,134 rural residents in Hualong in 2007, but only five staff who graduated from university in the whole public extension system, including the county extension station and county seed extension station. The second related factor is the lack of extension funds: the Hualong County agricultural extension station had funds of only CNY180,000 in 2007 of which 67 % was used for staff salaries and 33 % for extension purposes. The third factor is lack of staff access modern extension technology; and fourth is the low education level of the staff. The demand of farmers for extension services is large and the current availability from the public sector is insufficient. Based on the findings of the household survey, only 38.6% of households received technology information from government extension agencies. A few farmers received technology information from farmers’ associations and private sector but these systems are not well developed. As regards their view of the agricultural technology extension system, 48.8% of households were not satisfied with current extension system, 10.3% were very satisfied and 20.2% considered it satisfactory. Farmer Professional Associations (FPAs): According to official data there are 516 FPAs in Qinghai Province with 115,000 members who benefit 175,000 households. This amounts to about 21% of the province’s total households. Jianzha County has established a vegetable association with 760 households (2100 members), which are mainly located in villages along the Huang River in Kanbula Town and Kangyang Town. The vegetable association provides training in high quality vegetable production and integrated pest management. There are 9 registered FPAs in the project towns of Hualong County, including FPAs for Sichuan pepper, vegetables, walnuts and chillies. Santao fruits association in Hualong County is a production base promoted association with walnut as the leading industry, which provides technology extension, contracts 416 households in neighbouring villages, and invites technicians to provide technical services to farmers. By contrast the findings of the household survey indicate that most of farmers (93.6%) are not members of an FPA. Only 1.4%reported being members while the remaining 5.0% did not answer. The farmers belonging to FPAs all belonged to commodity-specific ones, particularly for wheat, Sichuan pepper and walnuts. Benefits of belonging to the FPAs were reported as availability of seed, technology demonstration and training and improved marketing. The reasons for low participation are the lack of FPAs in the vicinity (79.0% of non-members), the belief that FPAs are not very useful (4.4%) and unwillingness to join FPAs (4.0%). The Focus Group Meeting in Gandu Town, Hualong County, reported the FPAs exist for walnut, winter wheat and vegetables. However they were considered to be poorly run and to lack of adequate management experience. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 6 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Agro-processing Enterprises: There are a limited number of agro-processing enterprises in the project area. In Xunhua County the Tianxiang and Xianhong companies manufacturer pepper sauces. They are successful in promoting commercial agriculture including providing extension services and training courses to their contract farmers. They guide farmers in how to use seed, fertilizer and pest control and farmers benefit through high yields and a better-than-market prices for “long red pepper”. These companies pay the local public extension agents o undertake field visits. This is considered a success example of the “Company – Household” approach. Agro- processing enterprises are less successful in the other two counties, there being only one soft drink company and no food enterprises in Jianzha, and no enterprises in Hualong. Training: Only a limited number of farmers have participated in training courses. The social survey results indicate that most farmers (82.8%) haven’t received any training in recent years. Of the 16.2% of households whose family members have received some training, 48.5% received skills training for migrating to cities and towns, 34.1 % received training in cash crop production, 14.5 % received technical training on grain crops, and 5.1 % received training on poultry and livestock husbandry. In addition, six households received other training, such as cooking, driving, medical training, etc. Most training was provided by government agencies (91.5% of respondents) with only a limited provision from other services as such vocational schools (5.0%) and other agencies such as agriculture association, driver training school, factory, fund, etc. (5.67%). Most farmers are interested in participating in training: 67.8% of the surveyed households indicated a willingness to participate. The overwhelming majority of farmers want to receive training in cash crop production (70%), with training in poultry and livestock husbandry a distant second (17.3%), and training in grain crop production a low priority (5.1%). In terms of the preferred type of training, most households requested training on production technology (89.6%), while marketing (4.58%) and food processing (3.40%) were not considered important. In spite of their historical performance farmers continue to expect that government agencies will be able to provide the required training. The overwhelming majority of households (95.4%) expect that training will provide by government agencies. Vocational schools were ranked second but only preferred by 1.5% of respondents, while universities and research institutions, farmers' associations and factories were ranked lower. A3.2 GOVERNMENT AND ADB POLICIES AND STRATEGIES Rural Development and Poverty Alleviation: The current official guiding socio-economic ideology of the Communist Party of China is the Scientific Development Concept promoting sustainable development, social welfare, a people-centred society, increased democracy and, ultimately, the creation of a Harmonious Society. This marks a shift in the official agenda from the previous focus on pure economic growth towards more balanced development (the 3Es) to address the growing inequalities between the western/rural areas and eastern/urban areas. Accordingly the government’s 11th Five Year Plan (FYP) calls for “construction of a new socialist countryside” as the foremost task facing China in the 2006 – 2010 five-year period. The eight “rural reconstruction” policy priorities promote: (i) balanced socio-economic development, (ii) modern agriculture, (iii) sustained increases in farm incomes, (iv) construction of infrastructure, (v) development of public services, (vi) comprehensive reform to protect rural people, (vii) improved democracy and (viii) enhanced leadership and motivation of party members and participation of civil society.12 The proposed project supports all eight 11th FYP policy priorities to a greater or lesser extent. Similarly the PRC Poverty Alleviation Programme (2001-2010) aims to improve, mainly rural, production, living conditions, quality of life and the ecological environment (the 3Es). To further address growing social inequalities the government’s China Western Development policy focuses on one municipality, five autonomous regions and six western provinces including Qinghai. 12 Policies on Building a “New Socialist Countryside” Issued – available from www.china.org.cn SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 7 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The ADB PRC Country Partnership Strategy (CPS) for 2008-2010 supports the 11th FYP. The CPS recognizes that the economy of the interior needs special attention and identifies four priority sectors including agriculture and natural resources (ANR). The ANR Road Map focuses on three strategic areas: (i) rural productivity and inclusive growth, (ii) sustainable natural resource use and conservation and (iii) strengthening the local enabling environment and capacity for decentralized, participatory rural investments. The relevant CPS output is projects that catalyze and pilot efficient resource allocation, sustainable land and water management and improved productivity. To overcome present agricultural market (and extension) constraints the CPS envisages promoting new enterprise-farmer association-producer relationships. These are intended to improve input supply, distribute financing and technical information and provide futures contracts to reduce farm price risk and spur increased production. There are many examples of profitable private agro- enterprises (the so-called “dragons heads”) that have successfully reached domestic and export markets and are creating non-farm rural employment. However these three-way relationships are untried and the CPS goes on to warn that ADBs previous loan projects in the ANR sector have had a somewhat lacklustre track record. Delays in processing and implementation have resulted from excessive project complexity as they have attempted to address the multiple constraints. The Qinghai 11th FYP from 2003 to 2010 seeks to strengthen infrastructure construction, including rural water conservancy, promote structural adjustment and raise the living standards of the poor. Lijiaxia and Gongboxia irrigation systems are included in the Qinghai 11th Water Resources FYP. Integrated Water Resources Management (IWRM): In line with both the Scientific Development Concept and the 11th national FYP, China’s water policy aims to transform the previous pattern of development from project construction to sustainable (integrated) water resources management (IWRM) to promote people-centred development that balances the interests of social welfare, economic efficiency and sustainability of vital aquatic ecosystems (the 3Es). This involves specific policies to address: (i) water scarcity, (ii) flooding, (iii) water pollution and (iv) land erosion.13 To promote water-saving China is developing water rights, or allocations, between provinces and the environment within river basins. In 1987 the YRB was the first river basin in China to allocate water. The ten provinces were allocated a total annual consumption of 27 BCM representing 47% of the mean annual flow (MAF) of 58 BCM (footnote 4). In 1999 the Unified Water Regulation Policy (UWRP) gave impetus to implementation of water rights in the YRB. From 1999 to 2004: (i) surface water consumption reduced by 1.9 BCM per year, and 0.5 BCM per dry season, compared with 1988 to 1998,14 (ii) GDP increased by an additional 2.5% per annum and (iii) flow cut-off (zero outflow) was avoided although the river had run dry each year from 1972 to 1998 (Zhao et al 2009). Water allocation is also a policy instrument for managing the inevitable trade-offs between the 3Es. Economic efficiency favours allocation of scarce YRB water: (i) from subsistence to commercial crops, (ii) from agriculture to industry and, therefore, (iii) from upstream to downstream provinces. However equity considerations require that some water is allocated to upstream provinces where it is likely to be used for subsistence agriculture. To achieve balanced development the government has allocated Qinghai consumption of 1.41 BCM, which is about half the YRB provincial average. This is consistent with its western rural development and poverty alleviation policy priorities to address the growing inequalities between the western/rural areas and eastern/urban areas. The Qinghai Comprehensive Water Resources Plan (CWRP) from 2008 to 2030 envisages that the national south – north water transfer project will become operational in 2020. In the meantime Qinghai will pursue a combination of water supply and demand management involving new water development, including inter-basin transfers and increased extraction of groundwater, and adoption of “water-saving” technology. The (irrigation) water application coefficient (water use efficiency or WUE) is envisaged to increase from 35%, in 2000, to 46%, 53% and 57% in 2010, 2020 and 2030. 13 MWR (2005) China’s Water Policy and Practice, address by H E Dr Jiao Yong, available at http://www.mwr.gov.cn/english1/20051129/61540.asp 14 MWR (undated) Preliminary Assessment of the Impacts of UWRP an the YR at www.mwr.gov.cn/english1/.../20060110104326MDXBUU.pdf SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 8 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Increased WUE efficiency only results in real water savings under the particular circumstances where local “losses” (diversion minus consumption) are discharged to “sinks”, such as saline groundwater, where they become either unavailable or unsuitable for re-use further downstream. However local project “losses” are expected to return to the Yellow River via the underlying fresh groundwater. The expected changes in project water requirements are presented in Table A3-2. TABLE A3-2: CHANGE IN PROJECT WATER REQUIREMENTS Parameter Unit Without With Area ha 11,23013,903 CWR mm 470 460 Efficiency % 35 56 Consumption MCM 52.8 64.0 Return Flow MCM 98.0 50.6 Diversion MCM 150.8 114.6 Sources: Area from EIA report of Gansu EIA Institute and CWR (ETc) and efficiency from draft FSR of Design Institute Table A3-2 indicates: (i) consumption will increase by 11.2 MCM (21%), because of the increased crop area, but (ii) diversion will decrease by 36.2 MCM (24%) because of the expected increase in efficiency. The project will only increase present YRB irrigation consumption (0.72 BCM) by 1.6%. However the CWRP envisages that by 2020 Qinghai’s YRB allocation will decrease to 1.316 BCM while diversion demand will increase to 2.244 BCM. If the proportion of irrigation extractions remains the same (66%), and the 2020 target irrigation efficiency (53%) is attained, Qinghai would only exceed its allocation if the other sectors achieved an unlikely efficiency of more than 70%. The Qinghai CWRP envisages that the whole province will increase its irrigation WUE from 35% to 57% by 2030. However the present project is to be designed for a WUE of 56%. This indicates that Qinghai views the project as an important pilot in achieving its WRCP target. This is ambitious but realistic and achievable. China’s national water policy indicates participatory irrigation management (PIM) is the most appropriate form of local-level IWRM to improve irrigation performance including agricultural productivity, WUE, O&M efficiency and cost recovery. This presents ADB with an opportunity to help the Provincial Government of Qinghai (PGQ) introduce successful PIM reforms and add value to them by operationalizing the CWRP. The governments PIM policies are discussed below and opportunities and alternatives to operationalize the Qinghai CWRP in Section 2.2.4. Participatory Irrigation Management (PIM): There is no specific national policy on irrigation management reform.15 The 11th Qinghai Five-Year Water Conservancy Plan (WCP) incorporates “significant change in thinking” regarding water governance. The Provincial PMO advises that this means that the proposed project will promote the innovative PIM reforms, that have proven successful in other parts of China, involving joint management of the irrigation systems by new: (i) county-level Water Delivery Organizations (WDOs) and (ii) Water User Organizations (WUOs). The WDOs are to be responsible for managing the four main canals and the WUAs for secondary units (SUs) including the new branch canals as well as the lower-level tertiary and quaternary canals. The Qinghai Water Conservancy Management Regulation and Policy Manual (WCM) provides a summary of relevant national legislation and regulations. Subject to farmer capacity to pay (CTP), ISF fees are to be set to recover the full WDO O&M service delivery cost excluding WDO staff costs and overheads. Volumetric ISFs are to provide WUAs an incentive to improve WUE. National Document 502 (2005) presents recommendations on developing WUAs. The four guiding principles are: (i) rights and responsibilities should be transferred to WUAs that are formed (ii) based on the local situation and (iii) voluntarily and democratically to (iv) ensure successful management reform. 15 http://www.inpim.org/leftlinks/Newsletters/N7/n7a6/view.htm downloaded 28 June 2009. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 9 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT WUAs have the right to own their irrigation and drainage infrastructure. Elected board members are responsible, to their WUA members, for organizing infrastructure improvement, operation and maintenance, contracting with the WDO (for water delivery), resolving disputes, collecting ISFs from water users, paying the WDO, according to the contract, and providing WUA members with high quality and efficient services to improve agricultural productivity, WUE and farm incomes. The WUA establishment procedure involves: (i) awareness and training, (ii) defining WUA management scope, (iii) making regulations and (iv) registration. WUA operation and capacity development is based on: (v) collective management, or contracting with a person or team, and (vi) training. Agriculture and Extension: The 11th FYP rural development priorities include (i) adapting to competition from imports foods, (ii) addressing environmental degradation, including land and soil degradation and water shortages, and (iii) improving environmental, food safety and quality, in ‘green’/organic agricultural production and processing. Striking the correct balance between environmental sustainability and rural economic growth remains an intractable issue. From 1990 to 1994 farmers’ agricultural production incentives deteriorated and grain production decreased. In 1995 China had to import 20 million tonnes of grain. New policies, introduced since 1995, have succeeded in increasing food production. China shifted from net taxation to net subsidization of agriculture. Although there is still a strong focus on grain output for food security agriculture is becoming increasingly commercialized based on market incentives. The 2009 No 1 Central Document, issued by the Central Committee of the Communist Party of China and the State Council, warned that the lingering global financial crises and slowdown of the world economy have exerted an increasingly negative impact on the Chinese economy and 2009 could be the “toughest Year” for farm policies. Thus it gave special significance to the development of agriculture and rural areas. This is the sixth year in a row that the No 1 Central Document focused on rural problems. Previous key phrases were consolidating the foundation of agriculture (2008), developing modern agriculture (2007), promoting the “new countryside” scheme (2006), improving agricultural production capacity (2005) and increasing farmers’ incomes (2004).16 These national policy documents give clear priority to agriculture and rural development. However neither the ADB CPS Road Map for ANR nor the World Bank’s Rural Sector Strategy for China refer to specific rural development and/or agricultural sector policies or strategies. For example, to enable primary producers to increase and diversify their incomes, ADB is working with the Ministry of Agriculture to develop national strategies to: (i) support on-farm production and productivity and (ii) promote integrated ecosystem management and innovation by “dragon head” enterprises. The World Bank also recommends promulgation of appropriate policies and regulations for the support and development of effective Farmers Professional Associations (FPAs) (World Bank 2006). In the meantime there are only a few externally funded agriculture development projects. 16 China warns 2009 could be “toughest year” for farm policies (available at http://www.seeddaily.com/reports/) and No 1 Central Document focuses on rural issues (http://news.xinhuanet.com/english/2008-01/30/content_7529372.htm). SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 10 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 4 EXTERNAL ASSISTANCE AND LESSONS LEARNED SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A4. EXTERNAL ASSISTANCE AND LESSONS LEARNED A4.1 EXTERNAL ASSISTANCE Relevant external assistance projects are listed in Table A4-1 and described below. TABLE A4-1: RELEVANT EXTERNAL ASSISTANCE Donor Project Title Status Amount ($ million) ADB Henan Sustainable Agriculture and Productivity Improvement Project 1 RRP 2007 135.6 Guiyang Integrated Water Resources Management (Sector) Project 2 RRP 2009 439.2 Operational Capacity Building and Value Addition 3 TAR 2007 1.0 Qingdao Water Resources and Wetland Protection Project RRP 2008 105.8 ADB/GEF Partnership on Land Degradation in Dryland Ecosystems Program 4 Various AusAID Qinghai Forestry Resource Management Project 2002 - 2008 19.1 World Bank 5 Yangtze Basin Water Resources Project 1995 - 2005 551.9 Irrigation Agriculture Intensification Project II 1998 - 2005 849.3 Guanzhong Irrigation Improvement Project 1999 - 2006 200.0 Water Conservation Project 2000 - 2006 185.7 Jiangxi Integrated Agricultural Modernization Project PAD 2003 154.0 Irrigation Agriculture Intensification Project III PAD 2008 456.2 DFID/WB Pro-Poor Rural Water Resources Reform Project 6 2004 - 2008 12.5 IFAD/WFP Integrated Agricultural Development Project 1999 - 2003 15.8 Notes 1. HSAPIP is facilitating increased farm and agro-enterprise productivity and incomes in the fruit sub-sector 2. GIWRMP is supporting implementation of the Municipal IWRM Plan by financing priority IWRM and irrigation structural and non-structural investments to achieve balanced and sustainable water supply and demand. 3. OCBVA is strengthening capacity of EAs and IAs to manage the implementation of ADB-financed projects 4. Related projects include: (i) Fujian Soil Conservation and Rural Development Project Phase II (TAR 2000), (ii) Capacity Building to Combat land Degradation Project (TAR 2004), (iii) Implementation of the National Strategy for Soil and Water Conservation (TAR 2004), (iv) Henan Sustainable Agriculture and Productivity Improvement Project (RRP 2007) and (v) Dryland Sustainable Agriculture Development Project (RRP 2008). 5. These projects included support for Self-Managed Irrigation and Drainage Districts SIDDs) involving joint SDO – WUA system management, PIM and the establishment and development of WUAs. Implementation Completion and Results Reports are available for the first four of these World Bank financed PIM projects. 6. PPRWRP promoted further development of WUAs, to be high quality, sustainable and beneficial to farmers and the disadvantaged, and to help establish a permanent support system for such WUA development in China. Project and Financial Management Capacity: Xunhua and Haidong, but not Jianzha, counties implemented the IFAD/WFP Integrated Agricultural Development Project completed in 2003. However this was for agricultural development, including small-scale irrigation, in the uplands and did not include large-scale infrastructure contracts. The IADP CPMOs performed well but are no longer functional. Lesson: The PPMO and three CPMOs have requested considerable support that will be required to develop their capacity for project and financial management. Joint WDO – WUA Participatory Irrigation Management (PIM): The four completed World Bank projects were rated either satisfactory or highly satisfactory. The Self-Financing Irrigation and Drainage Districts (SIDDs), introduced as pilot projects, were largely successful but scaling-up needs careful groundwork and the support of the local governments and farmers. The priority for future development and expansion was appropriate incentives to encourage WUA establishment and ensure their sustainable operation and management. There was also a perceived need to follow up on the established WDOs and WUAs as to their continued effectiveness and long-term sustainability. Lesson: Projects with complementary components for: (i) irrigation infrastructure improvement, (ii) PIM and (ii) irrigated agricultural support (IAS) are particularly effective. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT O&M Cost Recovery: SIDD originally stood for Self-Financing Irrigation and Drainage Districts. In practice, however, it was found that “self-financing” is more suitable as a long-run target. Therefore the initial objective of the transfer process was changed from “self-financing” to “self-managing”. SIDD now stands for Self-Managing Irrigation and Drainage District (Lin 2002). Lesson: Full O&M cost recovery appears premature and may undermine other PIM reforms and innovations. Water User Associations (WUAs): The innovative Water Conservation Project (WCP) found the success of WUAs stems, in part, from the clear establishment principles adopted: democratic self- organized WUAs, based on hydraulic boundaries, measuring and charging for water on a volumetric basis. Other factors in success were: (i) flexibility in approach and adaptation to local social, economic and political conditions; (ii) the inclusion of farmers from the very start in sub- project design, so that the WUAs grew as the project developed; (iii) the transfer to the WUAs of real control and responsibility over water structures; (iv) the incentive framework, with farmers in WUAs seeing their incomes rise significantly faster; and (v) the commitment and enthusiasm of both the Ministry of Water Resources (MWR) and local government. Central government has now adopted WUA development as national policy, and WUAs are being promoted on a broad scale. The Irrigated Agriculture Intensification Project III (IAIP–III) found: (i) effective inter-agency coordination and active support and participation of leaders at all levels are essential, (ii) irrigation system management should be based on hydraulic units and not administrative boundaries, (iii) the expansion of the largely successful SIDD concept and WUAs depends on local government and farmer support, (iv) project design should support the “user pays” principle, (v) user/farmer participation should be explicitly built into project implementation and operation and (vi) project design should include strengthening the capacity of provincial and local Water Resources Bureaus. The purpose of the DFID Pro-Poor Rural Water Reform Project (PPRWRP), executed by the World Bank, was to promote management reforms, sustainability and equity for small-scale (lower-level) irrigation facilities. MWR, with overall responsibility for the water sector, and State Office for Comprehensive Agricultural Development (SOCAD) implemented the PPRWRP. SOCAD is charged with integrating irrigation improvements into agriculture including large investments in on- farm irrigation facilities. PPRWRP outputs were: (i) WUA establishment and development guidelines (discussed in Section 2.2.4), (ii) WUA capacity building process, (iii) documentation of lessons learned and best practice and (iv) participatory monitoring and evaluation (M&E) system. A key constraint to WUA development was found to be in implementing a bottom-up participatory form of management where the traditional institutionalized approach is top-down and there is weak local capacity in terms of techniques and skills in mobilizing and motivating farmers. Capacity building and practical training, based on learning-by-doing, was envisaged to enlarge and spread the human resource capabilities needed to develop and support WUAs and extend them to wider areas. WUAs were to be established in parallel with irrigation and on-farm works development to ensure farmers participation in design and implementation (as part of WUA capacity building). Lessons: The three new County WDOs will need considerable support to develop their capacity to facilitate and support democratic WUA formation and capacity building. Both the WDOs and new WUAs will need support to develop their capacities for joint PIM of new gravity irrigation systems. PPRWRP developed 73 demonstration WUAs as models for 414 extension WUAs. A recent impact study found that: (i) “demonstration before extension and extension driven by demonstration” is an effective approach to promote WUA development and (ii) the objective of “disseminating and promoting the best practice of WUA and develop clustered WUAs for extension” was realized (CAAS 2009). In other words the strategy for scaling-up model WUAs was successful. However a maximum of only 20% of demonstration members participated in WUA management and this fell to only 12% for extension members. Lessons: (i) adopt the PPRWRP demonstration and extension WUA model, (ii) with a similar ratio of 9 model to 84 extension WUAs, but incorporate measures to: improve (iii) farmer participation generally and (iv) extension WUA capacity specifically. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Farmer Incentives and Benefits: WCP found (i) a comprehensive approach, giving priority to farmer incentives, increased farmer incomes and reduce water consumption, (ii) a flexible, decentralized approach facilitated WUA development and (iii) targeting reduction in consumptive water use (ETc) can be a powerful instrument for water management where water is scarce. Through a comprehensive approach involving, not only, engineering works but also agricultural investments, husbandry and cropping pattern improvements and improved irrigation management, WCP raised farmer incomes whilst reducing water consumption and helping groundwater levels to recover. The lesson is that approaches to water saving in agriculture are more likely to succeed if they give priority to farmer incentives to change water use and water management behavior. Experience with WUAs, under IAIP-II and other projects, clearly indicates a number of benefits of PIM and farmer-managed WUAs compared to traditional management by local government offices and staff. Benefits of WUAs depend on local conditions but generally: (i) crop production increases, (ii) water diversions decline by 10 – 20%, (iii) farmers pay less for water, because of volumetric ISFs, (iv) ISF collection rates increase, typically from 50% to about 95%, (v) irrigation labor inputs are reduced, because there are less disputes, and (vi) disadvantaged groups frequently benefit. Water-Saving and Agricultural Productivity: The WCP targeted a reduction in consumptive use rather than increases in irrigation efficiency.1 While canal lining improves irrigation efficiency it also reduces groundwater recharge and the availability of water downstream. In this case only a reduction in actual water consumption represents a real water saving. Therefore the WCP objective was a reduction in consumptive use of water. Crop evapotranspiration (ETc) – that is, water lost to the hydraulic system through evaporation from the soil surface or through the leaves of plants – was used as the performance indicator. The project was to reduce ET and to increase the value- added per unit of ET (the productivity of water). This involved a comprehensive approach to water saving integrating, not only, physical improvements but also a broad range of agronomic measures together with improved water management to optimize the soil moisture available to the crop. The subsequent IAIP–III was based on the following lessons. Water that is extracted for irrigation use is either consumed, by crop evapotranspiration (ETc), or returned to the local groundwater or surface water. Improvements in irrigation system efficiency often have the effect of increasing the portion of the water that is consumed and reducing the amount that is recycled. This has the overall effect of increasing the depletion of water resources. “Real” water savings come from reducing the amount of water that is consumed, by crop evapotranspiration (ETc). There are many measures that can be implemented that will result in less consumptive: use of micro-irrigation technologies, improved irrigation scheduling and soil moisture management, use of plastic and organic mulch, use of plastic tunnels and green houses and conversion to crops that consume less water. Lesson: The PIM and IAS components should concentrate on improving productivity ($ or T per m3 or ha). WUA Sub-grants: IAIP-III financed the establishment of WUAs through Sub-grants from the World Bank loan. Sub-grants covered the cost of establishing each WUA, including local staff and farmer training, repair or construction of a small building for the WUA office, office furniture and equipment for WUA office, etc but not irrigation infrastructure improvements. IAIP-III also promoted WUAs as multi-purpose irrigation and agricultural development associations. Lessons: Dual-purpose WUAs should receive sub-grants for on-farm water management and agricultural field trials, to improve agricultural productivity, as well as incentives for WUA establishment and capacity building. 1 Targeting reduction in consumptive water use and adopting measurement and management based on ET was highly contentious and was included in WCP only following long and arduous dialogue. After successful demonstration during implementation they have now been scaled-up to river basin level (in the Hai Basin Project), where they are being used for overall river basin management and for allocation of water rights and quotas at all levels from sub-basins down to individual farmers. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Irrigated Agriculture Support (IAS): ADB’s experience in the PRC indicates water sector projects are generally well planned and implemented but there is considerable scope to increase beneficiary participation. However the CPS notes that other ANR projects have had a lacklustre track record. Delays have resulted from excessive project complexity as projects have attempted to address the multiple constraints. ADB’s recent PRC country assistance program evaluation (CAPE)2 identified constraints including: (i) on-lending failures of financial institutions has required the use of agro- enterprises but (ii) commercial activities, such as agro-industrial and agro-processing, tend not to be successful as they (iii) have had to rely on the capacity of untested private enterprises. The design of the Henan Sustainable Agriculture and Productivity Improvement Project (HSAPIP) provides the following lessons regarding the challenges of improving agricultural productivity. Existing public sector extension services, provided through local government agriculture bureaus, have limited outreach and do not deliver adequate technical advice appropriate to farmers' needs. They have limited up-to-date research and extension information and lack resources to deliver effective extension services. In townships the ratio of technicians to farmers is around 1:2,100. Farm management advice, provided by the extension services, has little emphasis on marketing. Local authorities supply driven strategies to support the private sector are made without consulting producers about product quality, quantity, seasonal supply, delivery arrangements or price. Marketing initiatives are diffuse and designed to benefit individual companies rather than the entire province. While some of these initiatives have been well developed (trade marking of vegetables and long term contracting of seed supply) the experience and benefits have not been shared. Lending by financial institutions is concentrated on urban and non-agricultural sectors. Farmers and small businesses are disadvantaged in terms of access to formal credit. In addition, it is estimated that around one-third of the lending designated for agriculture did not actually reach farmers. Farmers’ savings finance most farm expenditure and loans are obtained from informal sources. Only a third of rural households have access to formal sources of credit. The failure of the financial sector, to effectively support agriculture, means potential market opportunities and the introduction of more economically and environmentally sustainable agricultural production is being impeded. Acknowledging the strategic importance of agricultural production, to the country’s food security and economic development, the Government is committed to modernizing agriculture by improving the policy environment and steadily increasing expenditure. The agricultural law was amended in 2002 and ADB is supporting policy reform.3 Lesson: While agricultural policy is being revised the IAS component should focus on simple doable interventions, to increase agricultural productivity. Conservation Agriculture: The Partnership on Land Degradation in Dryland Ecosystems, and related projects, are promoting soil and water conservation (SWC). A recent study found SWC investments, from 1989 to 2005, had a significant negative impact on the extent and severity of erosion (Heerink 2009). Land degradation is worst in rangeland and other dryland ecosystems. However interventions that conserve soil generally conserve water and visa versa (McGarry 2005). HSAPIP experience indicates that fertilizer application, based on the results of soil analysis, can reduce fertilizer use by up to 30% while increasing its efficacy by 5–10%. The use of organic fertilizer can reduce the use of chemical fertilizer by 30–50%, with a beneficial environmental effect. Lesson: Incorporate conservation agricultural practices into the design of PIM and IAS field trials. A4.2 SYNTHESIS LESSONS LEARNED Infrastructure Improvements: The first alternatives to be considered concern whether to: (i) rehabilitate the existing pumped irrigation systems or (ii) develop four new gravity irrigation systems involving: (a) utilization of the existing Lijiaxia and Gongboxia reservoirs, (b) construction of new main and secondary canals and (c) utilization of lower-level canals wherever they exist? Section 4.3 demonstrates that improved gravity irrigation systems offer the economic least-cost option. 2 ADB (2007) People’s Republic of China: Success Drives Demand for More Innovative and Responsive Services 3 ADB (2009) TAR for a PATA on People’s Republic of China: Policy Study on Government Public Expenditure in Agricultural Production. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Another significant benefit, of the preferred gravity improvement option, is that it does not involve the present high operation costs associated with the consumption of electricity for pumping. Experience has shown that farmers will not meet the higher costs associated with the higher lifts. Therefore rehabilitation of existing pumped irrigation systems would require subsidy of operation costs. However this is against government and ADB policies. On the other hand efficient operation of extensive gravity systems is more demanding than for smaller pumped systems (see below). Both Qinghai Province and the existing pumped irrigation systems are presently achieving water use efficiencies (WUEs) of only 35%. However the design efficiency, of the new gravity systems, is 56% and the project will act as a model to help Qinghai achieve its ambitious 2030 WRCP target. WUE is a function of: (i) physical losses, (ii) operational losses and (iii) on-farm application losses. Only 50% of the existing main canals and few of the lower-level canals are lined. Thus physical canal seepage losses are likely to make a significant contribution to the present WUE of only 35%. Therefore the new gravity irrigation system will be lined throughout to minimize physical losses. System operation and on-farm application losses are discussed in the following PIM sub-section. However the provision of adequate flow regulation and measurement structures is a necessary, but insufficient, condition of effective gravity irrigation system operation to minimize operational losses. The feasibility-level designs, of the new gravity irrigation systems, reportedly involve gated cross- regulators and gated offtakes from both branch canals to laterals and from secondary laterals to tertiary canals. However this combination, of double-gated regulators and offtakes, is inherently unstable. The inevitable small flow perturbations require regular readjustment of gate settings to maintain water delivery schedules and minimize operational losses to achieve WUE targets (FAO 2007). The new secondary branch canals will run down the grade whereas laterals will often run along the contour and will be relatively flat. Therefore the flow from secondary branch, to tertiary lateral canals, is likely to be drowned. This requires careful design of flow measurement structures. The feasibility-level designs are scheduled for urgent completion by the end of July 2009. However the final design should be preceded by a study of alternative: (i) flow measurement and (ii) stable combinations of regulator and offtake structures to minimize system operational requirements. Participatory Irrigation Management (PIM): Township and Village Water Bureaus presently operate and maintain the existing pumping stations and canals. To assist them manage the higher lift systems the they have often appointed villagers or, in a few cases, formed dependent WUAs and appointed their officers. However the new gravity irrigation system will require different management arrangements and operation and maintenance (O&M) functions. New county-level Water Delivery Organizations (WDOs) will manage, operate and maintain (O&M) the four new inter-township main canals.4 The WDOs will also facilitate establishment and capacity development (CD) of independent WUAs. The WUAs will manage secondary units (SUs) including their branch canals and associated lower-level canal systems. WUAs will also manage the several minor pumped systems serving small areas that are higher than the main canals. The offtakes, between the main and branch canals, will be the interface between WDO and WUA management. WDOs and WUAs are expected to enter into volumetric water delivery contracts as equal parties. The Manual on Establishment and Operation of WUAs (IDDC 2004) envisages that a Leading Group (LG), chaired by the deputy county chief responsible for agriculture, will facilitate WUA establishment. However the WUA E&O Manual does not specify how the LG is enabled to perform this function? In Qinghai the PPMO envisages that the LG will delegate operational responsibility, for forming and developing (capacity building) democratic representative WUAs, to the three SDOs. 4 Lijiaxia north and south canals are in Hualong and Jianzha counties respectively, Gonboxia north canal upstream and downstream are in Hualong and Xunhua counties respectively and Gonboxia south canal is entirely within Xunhua County. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Chapter 2 of the WUA E&O Manual presents the procedure for preparation and establishment of WUAs. This involves: (i) awareness campaign, (ii) delineate secondary unit WUAs, at branch canal- level, (iii) appoint WUA preparation groups, (iv) prepare WUA charter, (v) delinate water user groups (WUGs), at lateral canal-level, (vi) elect WUG leaders as WUA representatives, (vii) elect WUA leaders, (viii) organize water users congress to establish WUA and (ix) register the WUA. Chapter 3 of the WUA E&O Manual concerns the management of WUAs and defines what their functions are. It also links the institutional development of WUAs with development of their Charter, operation and management manual and executive rules and provides examples of the latter. However the WUA E&O Manual does not provide practical guidance on either: (i) how to perform the new WUA functions or (ii) how to develop WUA capacity to perform these functions effectively? This provides ADB with an opportunity to add value to existing WUA capacity building programs. A recent study compared villages with: (i) model WUAs, formed and developed with support from World Bank financed projects, (ii) other WUAs, in or within 10 km of World Bank project areas, and (iii) collective-management without WUAs (Wang 2009). In model WUA villages the productivity of wheat was about 0.8 kg m-3 of water applied at the field level. However, in both other WUA villages and villages without WUAs, it was only about 0.6 kg m-3. This implies that self-organized WUAs require more extension support to develop their capacity and become as effective as model WUAs. The WUA E&O Manual stipulates subject matter training of WUA officers, in the principles of WUA development, using formal didactic methods. However process training, in how to perform WUA functions, using on-the-job training and learning-by-doing methods is usually much more effective. Therefore WUA capacity building should facilitate participatory development and implementation of practical plans to perform the WUA functions of: (i) water scheduling and delivery, (ii) maintenance of infrastructure and (iii) support to help members improve on-farm water management. Main System Management: In small pumped irrigation systems the high cost of pumping usually provides an incentive to minimize operational losses. However the operation of larger gravity systems is more challenging. In the future, with the project, water will be the limiting resource, until the design efficiency of 56% is achieved, when irrigable land will be limiting. If the design efficiency cannot be achieved, in practice, the planned crop area, of more than 13,903 ha, will be reduced.5 However, while the design efficiency of 56% is ambitious, it is also realistic and achievable. To do so the SDOs and all their WUAs will need to jointly develop, agree and implement water delivery schedules that balance: (i) the available water supply, and its equitable distribution between WUAs, and (ii) the water demand requirements of each WUAs preferred cropping system and pattern. The WUAs and WUGs will similarly distribute water between lateral canals within their secondary units. On-Farm Water Management and Agricultural Productivity: Present programs promote farmer adoption of “water-saving” technology to improve WUE (consumption/diversion). However this only saves water if the “losses” (diversion – consumption) are unavailable for reuse further downstream. Recent World Bank projects, described above, introduced the concept of real water-savings. This recognizes that crops only use the transpiration (T) part of crop evapotranspiration (ETc) and the evaporation (E) part is “wasted”. However water is most scarce in the summer dry season when most crops are at the full development stage, there is little difference between T and ETc and E is minimal. Under these circumstances the practical water-saving benefits are fairly marginal. Productivity of water is the broader modern concept often known as “more crop (value) per drop” (CAWMA 2007 and Perry 2007). This seeks to maximise agricultural production, and/or its net value, per unit of water actually consumed (T m-3 or $ m-3). The previous methods concentrate on reducing consumption (ETc or E) but the productivity of water can often be increased more readily by increasing crop yields (T ha-1) or by diversification into higher value commercial crops. Therefore the project should aim to improve the productivity of water and add value the IWRM policy debate. 5 An even higher efficiency will have to be achieved if the Qinghai provincial standards underestimate potential evapotranspiration (ET0). Even though the mean monthly temperature is reportedly below 200 C the relative humidity is only about 50% and the maximum mean monthly potential evapotranspiration (ET0) of 4.5 mm/day in June sounds low but cannot be checked for lack of monthly climate data presented in the FSR. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 6 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A recent study compared (i) traditional, (ii) household and (iii) communal water saving technology in China (Blanke 2007). With the exception of sprinkler irrigation their effects in reducing: (i) field application losses, (ii) evaporation and (iii) system physical losses could be used to reclassify these technologies. The traditional on-farm water management technologies, of field levelling, border and furrow irrigation, were found to be most effective in terms of farmer adoption and improved WUE. Project farmers presently irrigate their wheat crops by wild flooding of bays that may be too long for efficient irrigation? This means that water takes too long to travel to the bottom end and, in the meantime, too much water infiltrates at the top end. Farmers presently irrigate only every 30 to 40 days whereas preliminary calculations indicate they need to double the number of irrigations. This means the crop is increasingly short of water about half of the time and for two to three weeks between each irrigation. Farmers often over irrigate in the mistaken belief that it compensates for irrigating too infrequently. The result of these farmer practices is a combination of low application efficiency and low agricultural productivity of land or water ($ ha-1 or $ m-3 whichever is limiting). Over the project area the present average wheat yields are 5.8 T/ha in winter and 4.7 T/ha in spring. Practical potential wheat yields have been estimated in two ways. First in a good year, when water is not limiting, present wheat yields are 7.2 T/ha and 5.9 T/ha respectively. Second the DI estimate crop evapotranspiration (ETc) of 517.5 mm and 367.5 mm for wheat. An international study (Figure A4-1) indicates that, under these conditions, good farmers elsewhere achieve yields of 8.8 T/ha and 6.2 T/ha in winter and spring respectively. This indicates there is considerable potential to increase the productivity of wheat in the project area. The Project area is outside the area of greatest potential (Figure A4-2) where agronomic practices, particularly fertilizer management, are usually limiting, and have to be alleviated, before improved water management becomes effective. However in 2007 Qinghai consumed only 0.43 T of chemical fertilizer per hectare of irrigated area. This was the second lowest provincial value and less than half the national average. Therefore agronomic practices and fertilizer management may be worthy of further consideration? In any case there appears to be considerable potential to increase field application efficiency and agricultural productivity by improving famer practices. Irrigated Agriculture: The project proposes to support farmers in both their present subsistence cropping, mainly of wheat, and gradual diversification into commercial crops. In view of the lack of clear policy directions and successful models of comprehensive agricultural support (see above) the project also proposes to focus on agricultural productivity linked to PIM as illustrated below. TABLE A4-2: Major Activity on PIM and Agricultural Support PIM Agricultural Support Support model WUAs in developing and implementing Support model WUAs in developing and implementing water delivery schedules to supply preferred cropping their preferred cropping systems and patterns preferably systems and patterns over the entire secondary unit (SU) involving commercial as well as subsistence crops Provide model WUAs with sub-grants to develop and Provide model WUAs with sub-grants to develop and implement field trials and demonstrations of improved implement field trials and demonstrations of improved on-farm water management and irrigation practices agronomic practices including fertilizer application Support farmers from other WUA areas by designing and Support farmers from other WUA areas by designing and delivering effective farmer field days (FFDs) concerning: delivering effective farmer field days (FFDs) concerning: • WUA formation and capacity building etc • WUA formation and capacity building etc • SU irrigation scheduling and management • Secondary unit cropping systems and patterns • Improved on-farm water management practices • Improved agronomic and fertilizer practices SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 7 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R3: DRAFT FINAL REPORT FIGURE A4-1: THERE ARE LARGE VARIATIONS BETWEEN YIELD AND EVAPOTRANSPIRATION FOR WHEAT FIGURE A4-2: WATER PRODUCTIVITY RISES FASTER AT LOWER YIELDS AND LEVELS OFF AT HIGHER YIELDS Source: IWMI (2007) water use and productivity in Water for Food Water for Life: Comprehensive Assessment of Water Management in Agriculture. SOGREAH –CWS- REPORT N° 1300030.R4 PAGE 8 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 5 DETAILED COST ESTIMATES SOGREAH - REPORT N° 1300030.R4 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT DETAILED COST ESTIMATES Table A5.1: Detailed Cost Estimates by Expenditure Categorya ($million) % % Total (US$ Million) Foreign Base Local Foreign Total Exchange Costs I. Investment Costs b A. Civil Works 1. Civil Works - Main Canals 62.5 26.8 89.3 30 45 2. Civil Works - Branch Canals 48.1 20.6 68.8 30 35 Subtotal 110.6 47.4 158.0 30 79 B. Equipment 1. Equipment - Main Canals Metal Structures 0.9 1.3 2.2 60 1 Subtotal 0.9 1.3 2.2 60 1 2. Equipment - Branch Canals Electro-mechanical Equipment 0.7 1.0 1.7 60 1 Metal Structures 1.0 1.4 2.4 60 1 Subtotal 1.6 2.4 4.1 60 2 3. Office Equipment 0.2 - 0.2 - - Subtotal 2.7 3.7 6.5 58 3 C. Vehicles 0.0 0.1 0.2 80 - D. Consulting Services International Consultants - 1.3 1.3 100 1 National Consultants 1.0 - 1.0 - - Support Services 0.0 - 0.0 - - Subtotal 1.0 1.3 2.4 56 1 E. Capacity Building Training & Workshops 1.5 0.5 2.1 25 1 International Study Tours 0.0 0.2 0.2 80 - Subtotal 1.6 0.7 2.3 31 1 F. Land Acquisition & Resettlement 3.2 - 3.2 - 2 G. Environment 2.5 - 2.5 - 1 H. Survey, Design & Supervision 24.3 - 24.3 - 12 Total BASELINE COSTS 146.0 53.3 199.3 27 100 Physical Contingencies c 5.3 14.6 19.9 27 10 Price Contingencies c 0.6 4.0 4.6 27 10 Total PROJECT COSTS 151.9 71.9 223.8 27 120 Interest During Implementation d 3.9 - 3.9 - 2 Commitment Charges e 0.1 - 0.1 - - Total Costs to be Financed 155.9 71.9 227.9 26 122 a In mid-2009 prices. b Includes taxes and duties of $7.8 million. c Contingencies will be financed by the Government. Physical contingencies were computed at 10% of base costs. Price contingencies were computed using foreign escalation factors of1.0% for 2010, 0.0% for 2011, 0.3% for 2012 and 0.5% thereafter, and a local escalation factor of 1.0% for 2010, 1.5% for 2011, and 2.0% thereafter. d Includes interest during construction computed at the five-year forward London interbank offered rate (LIBOR), with a spread of 0.2% for the ADB loan. e Commitment charge of 0.15% per year on the undisbursed amount of the ADB loan Source: Consultant estimates. SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Table A5.2: Detailed Cost Estimates by Financier ($ million) Qinghai Provincial Land Qinghai Resources Provincial Local ADB Department Government a Total For. (Excl. Duties & Amount % Amount % Amount % Amount % Exch. Taxes) Taxes I. Investment Costs A. Civil Works 1. Civil Works - Main Canals 34.8 39.0 - - 54.5 61.0 89.3 39.2 26.8 59.4 3.1 2. Civil Works - Branch Canals - - 68.8 100.0 0.0 - 68.8 30.2 20.6 45.8 2.4 Subtotal 34.8 22.0 68.8 43.5 54.5 34.5 158.0 69.4 47.4 105.2 5.4 B. Equipment - 1. Equipment - Main Canals - Metal Structures 0.8 39.0 - - 1.3 61.0 2.2 1.0 1.3 0.8 0.1 Subtotal 0.8 39.0 - - 1.3 61.0 2.2 1.0 1.3 0.8 0.1 2. Equipment - Branch Canals - Electro-mechanical Equipment - - 1.7 100.0 0.0 - 1.7 0.7 1.0 0.6 0.1 Metal Structures - - 2.4 100.0 0.0 - 2.4 1.1 1.4 0.9 0.1 Subtotal - - 4.1 100.0 0.0 - 4.1 1.8 2.4 1.5 0.1 3. Office Equipment 0.2 80.0 - - 0.0 20.0 0.2 0.1 - 0.2 0.0 Subtotal 1.0 16.0 4.1 62.7 1.4 21.2 6.5 2.8 3.7 2.5 0.2 C. Vehicles 0.1 85.0 - - 0.0 15.0 0.2 0.1 0.1 0.0 0.0 D. Consulting Services - International Consultants 1.3 100.0 - - - - 1.3 0.6 1.3 - - National Consultants 1.0 100.0 - - - - 1.0 0.4 - 1.0 - Support Services 0.0 100.0 - - - - 0.0 0.0 - 0.0 - Subtotal 2.4 100.0 - - - - 2.4 1.0 1.3 1.0 - E. Capacity Building - Training & Workshops 1.4 70.0 - - 0.6 30.0 2.1 0.9 0.5 1.5 0.1 International Study Tours 0.2 100.0 - - 0.0 - 0.2 0.1 0.2 0.0 0.0 Subtotal 1.7 73.0 - - 0.6 27.0 2.3 1.0 0.7 1.5 0.1 F. Land Acquisition & Resettlement - - - - 3.2 100.0 3.2 1.4 - 2.0 1.2 G. Environment - - - - 2.5 100.0 2.5 1.1 - 2.4 0.1 H. Survey, Design & Supervision - - - - 24.3 100.0 24.3 10.7 - 23.5 0.8 Total PROJECT COSTS 40.0 20.1 72.8 36.5 86.4 43.4 199.3 87.5 53.3 138.1 7.8 Contingencies 9.4 38.4 15.1 61.6 24.6 10.8 - - - Interest During Implementation - - - - 3.9 100.0 3.9 1.7 - - - Commitment Charges - - - - 0.1 100.0 0.1 0.1 - - - Total Disbursement 40.0 17.6 82.3 36.1 105.6 46.3 227.9 100.0 53.3 138.1 7.8 a Includes $4.0 million of financial charges to be financed by the project counties, $2.3 million by Hualong County, $0.7 million by Jianzha County and $1.1 million by Xunhua County. Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 6 PROCUREMENT PLAN SOGREAH - REPORT N° 1300030.R4 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT PROCUREMENT PLAN Project Name: Qinghai Rural Water Resources Loan (grant) Number: Project Loan Amount: US$40 million Executing Agency: Qinghai Water Resources Department Date of first Procurement Plan: Date of this Procurement Plan: A. Process Thresholds, Review, and 18-Month Procurement Plan 1. Project Procurement Thresholds Procurement Method To be used above/below (Value $) ICB Works > $10,000,000 ICB Goods > $1,000,000 NCB Works $200,000 NCB Goods $100,000 Shopping (SP) Works 2. ADB Prior or Post Review Procurement of Goods and Works Procurement Method Prior or Post Comments ICB Works Prior ICB Goods Prior NCB Works Post ADB’s prior review and NCB Goods Post approval is required for the first NCB bidding documents for goods and for works. SP for Works Post SP for Goods Post CP and/or FA Post Recruitment of Consulting Services QCBS Prior Consultant Qualification Selection Prior SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT 3. Goods and Works Contracts Estimated to Cost More Than $1 Million During the First 18 Months Contract Expected Date Ref Value Procurement of Prior Contract Description ($'000)a Method Advertisement Review Comments 1. Gongboxia North 1.1 Civil Works b Hualong CPMO 1.1.1 Main canal pkg 1 8,329 NCB Jan 2010 Yes 1.1.2 Main canal pkg 2 7,112 NCB Jan 2010 No 1.1.3 Branch canal pkg 1 4,508 n.a. Jan 2010 n.a. PLRD 1.1.4 Branch canal pkg 2 5,550 n.a. Dec 2010 n.a. financed Xunhua CPMO 1.1.5 Main canal pkg 3 6,722 NCB Dec 2011 No 2. Gongboxia South 2.1 Civil Works b Xunhua CPMO 2.1.1 Main canal pkg 1 8,622 NCB Jan 2010 Yes 2.1.2 Main canal pkg 2 8,267 NCB Jan 2010 No 2.1.3 Main canal pkg 3 5,553 NCB Jan 2010 No PLRD 2.1.4 Branch canal pkg 1 6,641 n.a. Jan 2010 n.a. financed 3. Lijiaxia North 3.1 Civil Works b Hualong CPMO 3.1.1 Main canal pkg 1 7,389 NCB Jan 2010 No 3.1.2 Main canal pkg 2 6,260 NCB Jan 2010 No 3.1.3 Main canal pkg 3 7,289 NCB Jan 2010 No 3.1.4 Main canal pkg 4 5,778 NCB Jan 2010 No 3.1.5 Main canal pkg 5 1,192 NCB Dec 2010 No 3.1.6 Main canal pkg 6 3,373 NCB Dec 2011 No 3.1.7 Branch canal pkg 1 10,225 n.a. Jan 2010 n.a. PLRD 3.1.8 Branch canal pkg 2 8,557 n.a. Jan 2011 n.a. financed 4. Lijiaxia South 4.1 Civil Works b Jianzha CPMO 4.1.1 Main canal pkg 1 7,286 NCB Jan 2010 Yes 4.1.2 Main canal pkg 2 5,090 NCB Dec 2011 No 4.1.3 Branch canal pkg 1 6,122 n.a. Jan 2010 n.a. PLRD 4.1.4 Branch canal pkg 2 7,305 n.a. Dec 2011 n.a. financed a $1 = CNY6.832, same in below tables. b All civil works packages include supply and installation of related electro-mechanical and metal equipment, same in tables below 4. Consulting Services Contracts Estimated to Cost More Than $100,000 During the First 18 Months Contract International Ref Recruitment Advertisement Description Value or National Comments Contract Method Date ($'000)a assignment A team of Project QCBS (full international 1. Implementation 2,350 proposal, January 2010 and national Consultants 80:20) experts SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT 5. Goods and Works Contracts Estimated to Cost Less Than $1 Million and Consulting Services Less Than $100,000 During the First 18 Months Contract Expected Date Ref Procurement Prior Description Value of Comments Contract Method Review ($'000)a Advertisement A. Goods 5. Provincial 5.1 Goods Various small 5.1.1 Office equipment 233 SP Apr 2010 No packages 1 package for 5.1.2 Vehicles 164 NCB Apr 2010 No PMO & CPMOs International study Various small 5.1.3 228 SP Apr 2010 No tours packages 1 package per 5.1.4 Support for WUAs 1,464 DC Apr 2011 No supported WUA Various small 5.1.5 Training 587 LCS Apr 2020 No packages B. Indicative List of Packages Beyond 18 Months No Name of Subproject Location General Est. Value Est Value Est. No. of Procure- Comments Description (CNY'000) ($'000) Contracts ment Method A. Civil Works 1. Gongboxia North Xunhua Branch canal 52,202 7,641 1 NCB PWRD County pkg 3 financed 2. Gongboxia South Xunhua Branch canal 59,680 8,735 1 NCB PWRD County pkg 2 financed 3. Lijiaxia North Hualong Main canal pkg 7 3,844 563 1 NCB County 4. Lijiaxia North Hualong Branch canal 32,107 4,699 1 NCB PWRD County pkg 3 financed ADB = Asian Development Bank, PLRD = Provincial Land Resources Department, NCB = national competitive bidding, QCBS = quality- and cost-based selection, SP = shopping, DC = Direct Contracting, LCS = Least Cost Source, pkg = package, n.a. = not applicable. C. National Competitive Bidding The Borrower’s Law of Tendering and Bidding of the People’s Republic of China promulgated by Order No. 21 of the President of the People’s Republic of China on August 30, 1999, are subject to the following clarifications required for compliance with the Guidelines: i. All invitations to prequalify or to bid shall be advertised in the national press, or official gazette, or a free and open access website in the Borrower’s country. Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum preparation period of thirty (30) days shall be given. The preparation period shall count (a) from the date of advertisement, or (b) when the documents are available for issue, whichever date is later. The advertisement and the prequalification and bidding documents shall specify the deadline for such submission. ii. Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents, and in the prequalification documents if the bidding is preceded by a prequalification process. SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT iii. If bidding is preceded by a prequalification process, all bidders that meet the qualification criteria set out in the prequalification document shall be allowed to bid and there shall be no limit on the number of pre-qualified bidders. iv. All bidders shall be required to provide a performance security in an amount sufficient to protect the Borrower/Project Executing Agency in case of breach of contract by the contractor, and the bidding documents shall specify the required form and amount of such performance security. v. Bidders shall be allowed to submit bids by mail or by hand. vi. All bids shall be opened in public; all bidders shall be afforded an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at the bid opening. vii. All bid evaluation criteria shall be disclosed in the bidding documents and quantified in monetary terns or expressed in the form of pass/fail requirements. viii. No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin or bracket of average bids established by the Borrower/Project Executing Agency. ix. Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined (a) to be substantially responsive to the bidding documents and (b) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted. x. Each contract financed with the proceeds of the Loan shall provide that the suppliers and contractors shall permit ADB, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by ADB. xi. Government owned enterprises in the Borrower’s country may be permitted to bid if they can establish that they (a) are legally and financially autonomous, (b) operate under commercial law and (c) are not a dependent agency of the Borrower/Project Executing Agency. xii. Re-bidding shall not be allowed solely because the number of bids is less than three (3). . SOGREAH - REPORT N° 1300030.R4 PAGE 4 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 7 IMPLEMENTATION SCHEDULE SOGREAH - REPORT N° 1300030.R4 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 8 FINANCIAL MANAGEMENT ASSESSMENT SOGREAH - REPORT N° 1300030.R4 2009SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A8. FINANCIAL MANAGEMENT ASSESSMENT A8.1 INTRODUCTION AND APPROACH Qinghai Provincial Government (QPG) is the Executing Agency (EA) of the Qinghai Rural Water Resources Management Project (QRWMP). The Qinghai Provincial Foreign Fund Project Office for Water Resources Development within the Qinghai Provincial Water Resources Department (QPWRD) is delegated by the EA as the Provincial Project Management Office (PPMO) with responsibilities to prepare and implement QRWMP The Foreign Fund Project Offices for Water Resource Development at county level in Hualong, Jianzha and Xunhua have been assigned as the Implementing Agencies (IAs) through County- Level PMOs (CPMOs) that will be established within these offices and will report to the PPMO. Effective financial management is a critical factor for project success and sustainability. No matter how well a project is designed, if the EA/IA lacks the capacity for effectively implementing the project and managing the resources, the benefits of the project are unlikely to be achieved or sustainable. The EA/IAs’ financial management arrangements should be capable of, and adequate for, recording all transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the entity’s assets, and subject to audit Financial Management Assessment (FMA), as required in the TOR, were conducted under the TA to assess: i) the legal status of the implementation agency; ii) funds flow arrangements; iii) staff qualifications; iv) accounting policies and procedures; v) reporting and implementation monitoring; vi) internal and external auditing; vii) information systems; and viii) documentation management. The Financial Management Assessment Questionnaire (FMAQ), initially proposed and prepared by ADB, 1 was modified where necessary to fit the requirements of the Project. FMAQs were completed by the EA (represented by the PPMO) and the IAs (represented by the CPMOs), with the support of the PPMO and under the guidance of the Consultant. Completed questionnaires were translated into English and are attached (Supplementary Appendix K). Diagnosis of the financial management arrangements have conducted and recommendations made on appropriate risk mitigation measures required as part of project implementation arrangements. The remainder of this appendix provides: i) briefing on PRC Accounting Standards for enterprises and Accounting Regulations for Projects financed by World Bank and other international financial institutions (including Asian Development Bank); ii) briefing on PRC Auditing Standards; and 1 www.adb.org/Documents/Others/FM-toolkit/fmaq.doc SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT iii) Financial Management Assessment of each EA/IA A8.2 BRIEFING ON PRC ACCOUNTING STANDARDS The current accounting standards for enterprises, as published by the Ministry of Finance (MOF), are valid since February 2006. The new standards include 39 accounting standards and 48 auditing standards. They have been implemented since 1 January, 2007 with the objective of achieving convergence with international accounting standards (IASs) which will be globally accepted using “common languages” with other economies in the world For governmental agencies, the prevailing accounting system is “Governmental Agency and Institution Accounting System” adopting cash basis, published in July 1997 by MOF. The above enterprises accounting standards adopt the accrual basis. For the state owned assets construction, there is a unique accounting system named “State Construction Unit Accounting System” published in 1995 by MOF to record the activities during the construction period. For projects financed by international financial institutions and foreign governments during the construction period, a special accounting regulation “Accounting Method for Projects Financed by World Bank” (hereinafter named “the Regulation), issued in January 2000 by MOF, is applicable to any internationally financed project (including ADB), although in the title only the World Bank is mentioned. All cost and expenses incurred and eligible during the period should be capitalized. After the project is completed, the asset should be operated and managed as the existing asset. According to the regulation, the IA should set up a separate account for the project and provide to the bank a complete set of financial statements semi-annually: i) Balance Sheet; ii) Summary of Sources and Uses of Funds by Project Components; iii) Statement of Implementation of Loan Agreements; and iv) Special Account Statement. A8.3 BRIEFING ON PRC AUDITING STANDARDS The current auditing system of P.R. China was established in 1982 and China CPA system was recovered in 1981 while the CPA exam system restarted in 1991. Forty-three standards including the China’s Independent Auditing Standards, General Standard on Professional Ethics, General Standards on Quality Control and General Standard on Continuing Professional Education, after approval by the MOF, were issued by the Chinese Institute of Certified Public Accountants (CICPA) from 1994 to 2003. According to the standards, the enterprise’s financial statements must be audited with the objectives of eligibility and fairness. The overall objective of a general purpose audit in the PRC is to express an opinion as to whether the financial statements are presented fairly in all material respects, in conformity with PRC accounting standards and regulations, and applied on a basis consistent with that of the preceding year. Independent Auditing Practice Pronouncements issued by the accounting firms are mainly dealing with special purpose audit or services (review or examination, etc.). In Feb.2006, new accounting standards including 48 CPA auditing standards were published in order to improve the reliability of the financial information and convergence with the international standards. SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT CPA audit (independent audit), government audit and internal audit are the three types in China. As the CPA audit system has been development for only a short time, compared with the other countries, the independence and ethics of the audit firm and audit quality is sometimes not assured. More measures and regulations need to be worked out. Governmental audit standards are the same as CPA auditing standards, the only difference is that the governmental audit is conducted by the governmental audit agencies while the CPA audit is performed by independant auditing/accounting firms with CPAs. The advantage of governmental audit is that it can be executed more purposely and efficiently with the governmental authority and can get all data required by the auditors more easily from the audited entities, but it can't keep the independence comparing with the CPA auditing. Also, the performance audit in China is just started and it is almost blank at present which makes difficult for the ADB or WB financed projects' audit whose performance audit is the main content for the interim review and post-appraisal of the project.2 The audit system of China is still in a transition period, with the reform of the marketization of the economy, the CPA audit system still has the following issues: i) The close relationship with the CPA audit firms and the audited entities diluted the independence and objectivity of the audit report; ii) The business scope of CPA firms was not clearly mixed with auditing and non-auditing business which caused the firm is the examiner and examinee at the same time and the audit quality can't be ensured; iii) Penalty and supervision on CPA ethics is not clearly stated and executed. There should be a social association independent of CPA association to regulate and supervise CPA's behaviour. The CPA can only be the association for CPAs' interest protection, not supervisor simultaneously A8.4 FINANCIAL MANAGEMENT ASSESSMENT ON THE EA/IAS The existing accounting procedures and internal control system of the EA/IA have been reviewed and the common findings are: EA/IA’s working experience with internationally financed projects. The EA/IAs have experience of working with externally financed projects such as World Food Programme (WFP) except Jianzha CPMO. However, none have experience of ADB-financed project management. Hence, training should be provided on ADB loan procedures relating to procurement and disbursement, risks management, and internal control systems, etc. Accounting procedures. Both the EA and IAs are governmental agencies and compliance with PRC national accounting standards is required to ensure accurate and timely interpretation of financial performance, and to ensure that the project’s costs and expenditures are used for the purposes stated in any loan agreement economically and efficiently. Although for the EA/IA, as governmental agencies, the accounting standards for the “Governmental Agencies and Institutions” are applicable, specifically during the construction period (i.e. during implementation of the Project), the “State Unit Accounting System” is applicable. In future, during the implementation period, the accounting system will be set up according to the Regulations issued in January 2000 by MoF, which means the existing accounting system for the State Construction Unit (if applicable) will be revised accordingly or a new system established. The financial reporting requirement needs to be in compliance with the regulation. 2 Source:http://www.cicpa.org.cn SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Preliminary assessment shows that each EA/IA has a separate and complete set of accounting procedures for the projects implemented apart from the Government Agencies and Institutions System. It is sufficient for recording and processing transactions, which will also be used for the Project. The existing accounting procedures are established based on the regulations and policies issued by MOF. Separation between functions for authorization, transaction, recording and asset management is well established under the existing accounting procedures. As the common weakness of the Governmental Agencies and Institution and the Construction Unit, the accounting system has the inborn flaw that the cash basis is adopted, instead of accrual basis for the enterprises. It is understood that the reform takes time, but in order to avoid the disadvantages of cash-based accounting, the EA/IAs are required to pay close attention to the accruals especially accounts payables to keep the same pace with the physical progress. Auditing. As governmental agencies, government audit is applicable for all EA/IAs. Annual audits have been regularly and properly conducted and arranged, and no problems are raised in the auditors’ reports. The Project’s financial statements will be audited by a special auditing agency designated by MOF annually according to the Regulation of 2000. There is no internal auditor in the EA/IAs which is common according to the organizational structure designed for the governmental agencies but they have a “Disciplinary and Monitoring Division” with the authority to regulate and monitor the ethics of the staff. Information System. The EA/IAs have not computerized the financial management system and routine account recording is undertaken manually. At reporting date, the information is extracted from the hard copy, keyed into the table designed for the agency and reported to the related authorities. As to the project-based financial statements required by Regulation of 2000, with special templates to be filled up, the figures for relevant items could be easily generated by the software. The EA/IAs expect the system to be computerized with the implementation of the Project, improving the quality and efficiency of financial information A8.4.1 QINGHAI PROVINCIAL FOREIGN FUND PROJECT OFFICE FOR WATER RESOURCES DEVELOPMENT (PPMO, EA) The PPMO, was set up under Qinghai Provincial Water Resource Department (QPWRD) in 1984 representing the EA to prepare, implement and manage the WFP-financed project No.2708. Ever since, the PPMO has continuously participated and implemented WFP3557, WFP5717/IFAD424 as well as other domestic projects in water resource development in Qinghai Province. The PPMO is responsible for preparation of the project, monitoring, coordination and guidance of the implementation of the internationally financed project as well as counterpart fund management. From the data in the FMAQ, the PPMO has experience of working with the international financial institutions and foreign exchange risk management. The PPMO has rich experience in implementing domestic projects in water resources development but this is the first time for it to implement an ADB-financed project. Training on ADB procedures needs to be conducted before the Project implementation starts. The PPMO has established a sound accounting system and internal control procedures with qualified financial staff holding more than 20 years’ experience. With the guidance and monitoring of the QPWRD, they could upgrade the accounting and internal control system to the required standard. The accounting system for State Construction Unit is applicable. The system has not been computerized yet, but under the control the Bureau as a whole, the PPMO is audited each year. SOGREAH - REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A8.4.2 JIANZHA COUNTY FOREIGN FUND PROJECT OFFICE FOR WATER RESOURCES DEVELOPMENT (JIANZHA CPMO, IA) Jianzhao CPMO was established for preparation of the proposed Project as a standing office under Jianzha Water Resource Bureau. To date, 5 permanent staff are assigned by the County Government from different government agencies (water resource bureau, agriculture bureau, land bureau etc.). Financial staff in the water resource bureau are now working part-time for project preparation. Jianzha county PMO has no internationally financed project experience, but the assigned staff and the financial staff have adequate domestic water resources project experience. Compared to the PPMO and the other two CPMOs, Jianzha needs more training on project management, especially for ADB financial procedures. A thorough understanding and training on ADB and national management requirements, as well as on integrated and unified form of project management in accounting, financial management, procurement and disbursement are strongly recommended before the start of the project. Working rules and procedures should be gradually established and specified in a project management manual. The financial staff are at present in charge of two separate accounting systems, the system for the Governmental Agencies and Institutions for the Water Resource Bureau proper, and the system for the State Construction Unit for the project related activities. The two systems are not consolidated for reporting purposes. Before the proposed Project is implemented, the reporting requirement set by the Regulation of MOF, the existing State Construction Unit system needs to be updated and revised so that the financial statements could be worked automatically, or alternatively, with the unchanged accounting system more time spent on financial statement preparation complying with the Regulation as different accounting items extrapolation. The accounting system is not yet computerized but financial staff showed interest in introducing the accounting software during project implementation to improve work efficiency and effectiveness. A8.4.3 HUALONG COUNTY FOREIGN FUND PROJECT OFFICE FOR WATER RESOURCES DEVELOPMENT (HUALONG CPMO, IA) Hualong CPMO was set up in 1996 for the preparation of the WFP5717 project as a standing office under Jianzha Water Resource Bureau with 12 personnel from different government agencies assigned by the county government. With the project completed, 6 permanent staff are left for preparing the proposed Project. Financial staff in the water resources bureau are now working part- time for project preparation. With the progress of project preparation and implementation, additional more staff will be assigned as required. Hualong CPMO has internationally-financed project experience with WFP, and the assigned staff and the financial staff have adequate domestic water resources project experience, but nobody has experienceof an ADB-financed project. Therefore, staff need to be trained in ADB procedures. A thorough understanding and training on ADB and national management requirements, as well as an integrated and unified form of project management in accounting, financial management, procurement and disbursement is strongly recommended before implementation of the Project. Working rules and procedures should be established and specified in a project management manual. Financial staff are at present in charge of two separate accounting systems: the system for the Governmental Agencies and Institutions for the Water Resource Bureau proper, and the system for the State Construction Unit for project related activities. The two systems are not consolidated for the reporting purpose. When the proposed Project is implemented, to meet the reporting requirement set by the Regulation of MOF, the existing State Construction Unit system needs to be updated and revised so that the financial statements can be worked automatically, or alternatively, with the unchanged accounting system more time spent on financial statement preparation complying with the Regulation as different accounting items extrapolation. SOGREAH - REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The accounting system is not yet computerized but the financial staff showed interest in introducing accounting software once the Project starts in order to improve work efficiency and effectiveness. A8.4.4 XUNHUA COUNTY FOREIGN FUND PROJECT OFFICE FOR WATER RESOURCES DEVELOPMENT (XUNHUA CPMO, IA) Xunhua CPMO was set up in 1996 for preparation of the WFP5717 project as a standing office under Xunhua Water Resource Bureau with 12 personnel from different government agencies assigned by the county government. With the project completed, 6 permanent staff are left, including 2 financial staff, for preparing the proposed Project. Financial staff are working full-time on project preparation and the remaining work of WFP5717 as well as other projects, if required. Xunhua CPMO has internationally financed project experience with WFP, and the assigned staff and the financial staff have adequate domestic water resources project experience, but nobody has experience of an ADB-financed project. Therefore, staff need to be trained in ADB procedures. A thorough understanding and training on ADB and national management requirements, as well as an integrated and unified form of project management in accounting, financial management, procurement and disbursement is strongly recommended before implementation of the Project. Working rules and procedures should be established and specified in a project management manual. Financial staff are at present in charge of only accounting systems for the State Construction Unit for projects. After the proposed ADB project is implemented, to meet the reporting requirement set by the Regulation of MOF, the existing State Construction Unit system needs to be updated and revised so that the financial statements could be worked automatically, or alternatively, with the unchanged accounting system more time spent on financial statement preparation complying with the Regulation as different accounting items extrapolation. The accounting system is not computerized yet but the financial staff showed interest in introducing accounting software once the Project starts in order to improve work efficiency and effectiveness. A8.5 FINANCIAL MANAGEMENT ASSESSMENT CONCLUSIONS While the financial staff of both EA and IAs are experienced and qualified for the existing financial management requirement, more training is needed to implement the proposed ADB project, particularly on project management, foreign currency risks management and the comprehensive financial management. Critical areas for training on ADB procedures include loan disbursement and repayment, procurement etc. With the loan approval, financial covenants on accounting and financial management as well as internal control will be set out in the Loan Agreement, Project Agreement or other official loan documents. Financial staff have to understand how to take actions to meet the requirements. The EA/IAs follow the relevant accounting standards and policies issued by MOF, which are commonly used nation-wide. The current accounting records and statements are adequate to meet the national standards although the accrual basis is not adopted yet. They are able to provide related financial information and statements in a timely manner, monthly, quarterly and yearly. Annual statements are available within three months after year end after being audited by governmental organs. Document management is based on the PRC Accounting Law and Archives Law. The EA/IAs have no internal audit, but the internal control system exists within the water resource bureaus at their respective level. The “disciplinary and monitoring department” within the bureaus are responsible for the ethics and controls. SOGREAH - REPORT N° 1300030.R4 PAGE 6 2009 SEPTEMBER PRC –ADB/QINGHAI PROVINCIAL WATER RESOURCE BUREAU QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A8.6 FINANCIAL MANAGEMENT ASSESSMENT RECOMMENDATIONS The existing financial staffing structure and accounting system is appropriate to implement the proposed project. For those staff in Hualong and Jianzha who work part-time, it is recommended that with the progress of project preparation, they should be assigned as full-time staff, or at least, a regime needs to be set up to assure their working time and working progress for the future. Once the staff are equipped in place, the existing accounting system needs to be updated to meet the requirement of the relevant regulations of MoF and ADB. Prior to project implementation, it is required that the following financial or non-financial staff be appointed for each EA/IA: i) financial staff: at least two staff (one accountant, one cashier; if necessary, one financial director is plus for better financial reporting and projection); ii) engineering staff: civil works, irrigation; iii) procurement: procurement, contract management; iv) project management: Project progress report, archive management; As none of the EA/IAs have experience of ADB-financed projects, more ADB loan related training is required for both financial and non-financial staff before the implementation, in particular in the areas of: i) procurement procedures for both civil works and machinery/equipment; ii) disbursement and repayment procedures on ADB loan; iii) financial reporting regulations; iv) foreign currency risks management; and v) financial management especially on project financing plan and financial projections might be strengthened to meet the probable financial covenants. SOGREAH - REPORT N° 1300030.R4 PAGE 7 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 9 FINANCIAL AND ECONOMIC ANALYSIS SOGREAH - REPORT N° 1300030.R4 2009SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A9. FINANCIAL AND ECONOMIC ANALYSIS A9.1 INTRODUCTION Financial and economic analysis of the Project has been undertaken using with- and without- project scenarios in accordance with the relevant ADB guidelines.1 To obtain the required data, a survey was conducted of purposefully selected households in each of the townships in the Project area. During the preparatory phase data on the area, production and yield of annual and perennial crops in each of the project counties were collected from the County Statistical Bureaus (CSBs), the County Project Management Offices (CPMOs) and the Design Institute (DI). Analysis of these data provided an initial indication of the relative importance of each crop and enabled a preliminary selection of the major crops for which crop data were to be gathered. Prior to field data collection discussions were held in each of the project counties to assess the relative accuracy of the published data and to agree the major crops that would be included in the study. The main annual crops identified as a result of these discussions were winter and spring wheat, rapeseed, long chillies (thread pepper), maize, potatoes, peas, and broad beans. However, many of these crops are specific to certain townships and only wheat and rapeseed are generally grown throughout. The main perennial (orchard) crops identified were apples, pears, apricots, and walnuts. However, the unanimous view throughout the project area was that while apples, pears, and apricots will continue to be grown, they are mature to ageing plantings that do not have a long-term future. As a result it was decided that these crops should be excluded from further consideration. By contrast all counties consider walnuts as the perennial crop of the future and are actively promoting expanded production. Data collection and discussion on perennial crops therefore focussed solely on walnuts. The field survey of annual crops covered both income (price and yields) for primary and secondary outputs, where applicable, and costs of production, including seed, fertilizer, pesticides, plastic film for chillies, machinery, and labor. Since labor is almost exclusively provided by the households or on a sharing basis with reciprocal provision, labor costs were excluded from the financial crop budgets: however, since labor has an economic cost it was included in the economic crop budgets. For crop yields respondents were asked for the previous season’s yield as well as the yield in a normal season, good year (1 in 10), and bad year (1 in 10). These four yields allowed an assessment of the rationality of the respondent’s answers. Assuming that crop yields follow distribution, the average yield was estimated and used for the without-project scenario. The with- project scenario was then determined to include the good year yield and an adjustment for the incremental labor required to harvest and process the additional output. Comparison of the wheat yields with potential wheat yields estimated from other data confirmed that these good-year yields are potentially achievable. Where sufficient data were available, in particular for wheat and rapeseed, crop budgets were estimated for each subproject area,2 while for the other crops a single budget was used for the project area. For each township crop gross margins were estimated for the without- and with-project scenarios based on the proportion of area covered by each crop. An adjustment was then made for the without- and with-project cropping intensities (estimated at 110% and 125% respectively). 1 EDRC, 1997. Guidelines for the Economic Analysis of Projects, ADB, Manila. 2 For the economic analysis the project was divided into four subproject area -: Gongboxia North, Gongboxia South, Lijiaxia North, and Lijiaxia South – each being separable for an investment decision. SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Without- and with-project cropped, abandoned, and new areas were obtained from the DI data for each township within each subproject area. Scheduling of benefits for each township was then assessed based on maps of the project area including canal systems overlaid by the township boundaries and the detailed project implementation schedule agreed with the DI (Supplementary Appendix M). While the methodology is approximate it is considered to provide the best possible distribution of benefits. The third benefit to be obtained from the Project is in the reduced amount of electricity used for pumping water, data for which was obtained from the DI’s feasibility study. Project costs were obtained from the Costabs file for each of the subproject areas defined in Component 1 as well as overall costs (Components 2 – 4). Overall costs were allocated equally between each of the subproject areas. Operation and maintenance (O&M) costs for the with-project system were obtained from the Consultant’s estimates (Supplementary Appendix D) and range from $30 – 44/ha with an average value of $36/ha. A limited area will still require pumped irrigation and O&M for these is estimated to be significantly higher. However, these costs were considered to be approximately equal to the O&M costs avoided, excluding electricity saved, and no adjustments were made. Financial and economic analyses were conducted separately for the four subproject areas as well as for the overall Project. Sensitivity tests were conducted for all of the analyses and the poverty impact ration (PIR) was estimated for the overall Project. The following sections of this appendix describe the analysis and results in detail. A9.2 DEMAND ANALYSIS Since the three project counties are predominantly agricultural it seems unlikely that the local communities will be able to absorb all of the incremental output, particularly for non-staple crops, and they will need to expand existing markets as well as develop new ones. The demand analysis therefore involved (i) identifying the markets for the incremental output, (ii) confirming that the market supply will be incremental rather than substituting for existing suppliers, and (iii) identifying the impact that the incremental output will have on the market price. In the case of the staple crops of wheat, rapeseed and potatoes, field investigations indicate that the majority of farmers are subsistence-orientated and have little if any marketable surplus. Incremental production from the project is likely to be consumed within the local households and if there is a significant yield increase farmers will likely to switch to cash crop production. In addition a large-scale cattle fattening enterprise is under development in the Gongboxia South sub-project area with a current stock of 200 cattle but for capacity to stock 2,000. According to the enterprise management they will have a requirement of 4 kg of grain (wheat or maize) per animal per day - 8 t of grain per day at full capacity. According to the enterprise they are already contracting grain production on 800 mu in Chahandusi township and anticipate that this arrangement will expand since the alternative is to purchase grain in Gansu Province. In addition the farm requires substantial amounts of maize stover or fodder and could also purchase wheat straw. Overall the demand for wheat and maize at current prices is considered to be strong. Field investigations also confirmed a strong demand for long chillies (thread pepper), which is processed by a local agro-enterprise and sold both in China (97% of production) and internationally (3%).3 With an existing capacity of 18,000 t/year and an annual throughput of only 9,000 t, there is sufficient capacity to purchase and process all incremental farmer production. The enterprise confirms that there is sufficient demand for all current output and does not anticipate any problems in marketing incremental production up to the full factory capacity. Given the level of demand further expansion can be anticipated. 3 These products are reported to be in high demand in Muslim communities both in China and internationally. SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Other farmers in the project area produce chillies for marketing either fresh or dried and sell either in the local township or in the county and prefecture centers. According to the farmers there is strong demand and a good price if they are able to transport their produce to the markets. Where they rely on sales at the farmgate, prices are lower with the differential being greater than the transportation cost. With respect to vegetables most farmers currently grow sufficient, particularly after the winter wheat crop, to satisfy their own needs with a few farmers producing commercial quantities for sale in the local markets. With-project it is anticipated that there will be an expansion of vegetable crops but this is unlikely to be at the expense of achieving security in the production of staple crops. Local assessment is that all incremental vegetables, and potatoes, will satisfy the local demand in the three project counties, which are currently supplied by vegetable production from outside of the counties and often from other provinces. Given the transport savings and reduced losses due to shorter transportation, vegetables from the project area will be able to compete with imported produce and the relocation of existing supplies is of a relatively small quantity and should not have a negative effect. Overall, the residents of the three project counties should benefit from a better range and quality of vegetables. Walnut production is currently being strongly supported by the three county agricultural bureaus and the county governments. Expanded production is a high priority. Three production models are being actively supported by the counties and the benefitting villages: (i) production by large-scale enterprises owned by a single private-sector entrepreneur who rents the land from numerous small farmers and may hire workers; (ii) production by a group of villagers (typically all farmers in the village) on an area of recently developed village land that has been allocated to walnut production; and (iii) production by individual farmers on their allocated crop land. In all cases the farmers have been provided with the walnut trees free of charge and most of the crops are seven-years old or less. A few older large walnut trees are understood to be growing in the area but none have been observed. A large-scale production enterprise in Xunhua County (Gongboxia South canal area) has recently established a walnut processing factory and has its own brand. The enterprise will process its own production and also plans to accept output from other farmers. Walnut production in the project area is still in its infancy and output is expected to increase dramatically over the next 5-10 years. The county officials and larger producers all anticipate that most of this production can be sold in Qinghai Province or surrounding provinces. According to the most recent information, Qinghai Province produced only 3,431 t of walnuts in 2007, just 0.5% of national production. Hence it is extremely unlikely that any additional production from the project, which represents only a part of the area in Qinghai, will experience marketing difficulties or have an impact on prices. A9.3 ECONOMIC RATIONALE The proposed Project covers three national poverty counties in Qinghai Province. The project area has a poverty incidence of 39.39% and the rate for the overall counties is even higher. The two irrigation systems, Gongboxia and Lijiaxia, are the major sources of economic activity in the project area, providing the staple and non-staple food for the majority of the population, either by self consumption or through purchases. The irrigation systems also provide the opportunity for the local farmers to increase incomes to a limited extend through production of commercial crops that can be locally processed, generating further income. However, the existing systems are old and deteriorating as well as relying on expensive electricity. As poor farmers from ethnic minorities, the project area farmers cannot afford in many cases to pay for the electricity and certainly cannot afford the level of investment that would be required to rehabilitate the irrigation systems. The proposed project is justified on the basis that it is a social project through which the Government will make a public sector investment to support poverty alleviation and the development of ethnic minorities at the same time as it will be able to reduce the demand for electricity that is being used in a relatively non-productive agricultural activity that requires subsidies. By implementing this Project the Government will be able to encourage the use of the saved electricity in more economically productive activities. SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A9.4 PROJECT ALTERNATIVES AND LEAST COST ANALYSIS The proposed Project involves a significant investment in irrigation structures in two areas, much of which is currently or has previously been irrigated by pumped irrigation systems. The obtain water directly from the river and rely on electricity generated by the nearby hydro-power dams. Although electricity is subsidized the costs to the farmers are substantial and have discouraged them from crop production, particularly in the higher fields. In many cases, the pumps and irrigation systems are old and in poor condition, which further increases the O&M costs that must be borne by farmers, increasing their production costs. The proposed Project will replace the existing pumped-irrigation systems with four main canals obtaining water directly from the dams and distributing it predominantly by gravity systems that will be able to access a larger area. About 1,900 mu of land at higher elevation than the main canal will continue to require pumped irrigation but the lift will be greatly reduced. A key issue with the proposed Project is as to whether the preferred option presented in the Government’s feasibility study represents the least-cost approach to problem. Assessment of alternatives indicated rehabilitation of the existing system that should be considered as an alternative option. The DI was requested to provide the required data on system and pump rehabilitation costs as well as estimated O&M costs. A least cost analysis was proposed to compare the cost of the alternatives on a per hectare basis, taking into account the different areas that would be irrigated and the more frequent replacement of equipment in the rehabilitation option. Due to limited data availability, the least cost analysis was conducted only for the Gongboxia system: however, the Lijiaxia system would be expected to yield similar results. The least cost analysis is conducted in both financial and economic terms (Annex 1, Tables A1.1 - A1.4). Financial values for investment and O&M costs are converted to their economic values in terms of the World Price Level Numeraire by deducting taxes and applying a Standard Conversion Factor (SCF) of 0.93, opportunity cost of scarce labor (OCSCL) of 1.0 and opportunity cost of surplus labor (OCSL) of 0.8.4 The results of the analysis (Table A9.1) indicate that in financial terms the rehabilitation option is marginally cheaper per unit of benefitting area that the proposed Project. 5 However, when considered in economic terms, the proposed Project is significantly cheaper per unit of area benefitting. Since the proposed option will extend cropping to a substantial area of newly irrigated land, which will have higher unit net benefits, it is clear that the project should follow the proposed option (Table A9-1). TABLE A9-1: LEAST COST ANALYSIS FOR REHABILITATION COMPARED TO PROPOSED PROJECT Financial Net Present Economic Net Present Alternative Value (CNY000s/ha) Value (CNY000s/ha) Rehabilitation 75.5 79.5 Proposed Project 77.8 71.3 Source: Consultant’s estimates 4 The selected SCF is consistent with the value used in other recent ADB projects while the OCSCL and OCSL are believed to reflect the situation for labor in the project area. 5 The analysis was completed for a project life of 25, 40 and 50 years following completion of construction. The results for 40 years are reported for consistency with the DI analyses. However, the project life does not affect the conclusion. SOGREAH - REPORT N° 1300030.R4 PAGE 4 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A9.5 ANALYSIS OF BENEFITS AND COSTS A9.5.1 ASSUMPTIONS The financial and economic analysis is undertaken based on the difference between with- and without-project scenarios, the without-project one reflecting the expected situation in the project area if no investment is made in irrigation system improvement. Hence farmers have to continue to depend on the existing system with its gradual deterioration. The assumptions include: • Financial costs and revenues are based on mid-2009 prices and are expressed in constant 2009 values. • Project costs are expressed predominantly in local currency and an exchange rates of CNY6.832 = $1.00 is used where applicable. • Without the project land is assumed to be abandoned at an annual rate of 1% reflecting the deterioration of the system. • The project life is assumed to be 40 years following completion of the infrastructure construction which appears to be reasonable when compared to similar systems in the province. The residual value of infrastructure at the end of the project life is assumed to be zero. • O&M costs are assumed to be similar to those of other equivalent systems in Qinghai Province and internationally (Supplementary Appendix D) and to commence in the year following completion of the section of the system. • Economic costs and benefits are expressed in constant 2009 terms and are valued in local currency using the world price level numeraire. • Taxes and subsidies are excluded in the economic evaluation of the subproject. • Physical contingencies have been included in the cost estimates as a Government contribution but are not considered in the financial or economic analysis since they are highly unlikely to be used. However, the sensitivity tests provide an indication of the impact of including physical contingencies. • Economic prices for the major traded crops – wheat and maize – and inputs – di-amonium phosphate and urea – were estimated by adjusting world market prices by transportation and processing costs to obtain the market price in the project area. • Economic costs and benefits for non-tradable inputs and outputs were derived by adjusting their values by a standard conversion factor (SCF) of 0.93,6 which is consistent with the SCF used in recent Asian Development Bank (ADB) projects for the People’s Republic of China (PRC).7 • The opportunity cost of surplus labor (OCSL) is estimated as 0.80 of the prevailing wage rate and the opportunity cost of scarce labor (OCSCL) for skilled labor is estimated as 1.0. These are adjusted by the SCF to obtain the conversion factors. 6 A SCF of 0.93 implies that the Shadow Exchange Rate Factor (SERF) is 1.075, the inverse of the SCF. 7 ADB, December 2008, Draft RRP: Qingdao Water Resources and Wetland Protection Project. ADB. September 2006. Report and Recommendation of the President to the Board of Directors. Proposed Loan People’s Republic of China: Inner Mongolia Autonomous Region Environment Improvement Project. Project Number: 39019 and 2007. Report and Recommendation of the President to the Board of Directors. Proposed Loan People’s Republic of China: Integrated Ecosystem and Water Resources Management in the Baiyangdian Basin Project. SOGREAH - REPORT N° 1300030.R4 PAGE 5 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT • The opportunity cost of capital used in the analysis is 12% per annum, which represents the opportunity cost of capital (OCC) for the PRC. A9.5.2 COSTS Project financial investment costs are estimated using Costabs and are consistent with the costs agreed with the DI and PMO for the construction works, support for participatory irrigation management, irrigated agriculture support, and capacity building. Where possible the costs are allocated to the individual canals. All other costs, which are relatively minor, are allocated equally between each canal. Investment costs by year are summarised in Table A9.2. TABLE A9.2: SUMMARY OF FINANCIAL INVESTMENT COSTS BY YEAR (CNY000s) Canal Year 2010 2011 2012 2013 2014 Gongboxia North 100,485 53,661 81,321 96,949 807 Gongboxia South 102,073 85,453 56,535 59,504 11,292 Lijiaxia North 200,678 76470 100,285 72,546 - Lijiaxia South 70,870 57,310 42,666 56,148 - Unallocated costs 7,205 9,086 8,087 6,481 4,129 Source: Consultant’s estimates O&M costs are estimated based on experience with similar systems in Qinghai Province and internationally (Supplementary Appendix D) to cover the cost of operation of the county-level water distribution office (WDO), O&M costs of the main system and O&M costs of lower-level systems, the latter being the responsibility of the water users associations. Average O&M cost per hectare is estimated at $36 and costs per hectare for individual canals (canal sections) are Gongboxia North (Hualong County) $38, Gongboxia North (Xunhua County) $44, Gongboxia South $40, Lijiaxia North $32, and Lijiaxia South $30. Current payments for O&M, excluding electricity, have not been considered as an avoided cost nor have the additional O&M costs of the with-project pump irrigated area. This is not considered to have a significant impact on the overall analysis. A9.5.3 BENEFITS The project is expected to have three major groups of benefits; (i) increased production of annual crops, both staple and commercial; increased production of perennial crops, mainly walnuts; and savings in the use of electricity. Annual and perennial crop benefits will accrue to existing cropped land, abandoned land that will be brought back into production, and new land. The areas of each land category by township and for the overall canals, as provided by DI, are detailed in Table A9.3. Under the without-project scenarios the existing cropped area is expected to decline by 1% per year whereas with-project this decline is expected to halt as farmers anticipate the new work. The proportion of land shifting from without-project to with-project status by year is assessed by township based on the implementation schedule provided by the DI (Supplementary Appendix M). Benefits from increased annual crop production are assessed on the basis of a survey of crop budget data for the major crops in each of the project townships. These data are summarized wherever possible for each canal in order to reflect the differences that were observed in crop production. In case of insufficient data a single crop budget was used for the whole project. Crop budgets are set out in Annex 2 (without project) and Annex 3 (with project). The difference between the without- and with-project scenarios is that the yields are expected to increase from the average year yields to good year yields due to the assured availability of irrigation water. The additional labor required for harvest and post-harvest activities, as well as for marketing, is included in the SOGREAH - REPORT N° 1300030.R4 PAGE 6 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT with-project scenario. The gross margins for annual crops without- and with-project, as well as the incremental values are summarized in Table A9.4. TABLE A9.3: ESTIMATED BENEFITTING AREA BY TYPE OF LAND BY CANAL Canal/Township Cropped Area (mu) Existing Abandoned New Total Gongboxia North 39,472 5,601 12,224 57,297 Gandu 29,779 3,376 7,368 40,524 Jishi 9,693 2,225 4,856 16,774 Gongboxia South 39,365 4,228 8,042 51,635 Chahandusi 21,046 3,315 6,306 30,667 Jiezi 8,807 805 1,532 11,144 Jishi 9,512 108 204 9,824 Lijiaxia North 58,160 3,184 0 61,344 Yashiga 16,540 2,717 0 19,257 Qunke 41,620 467 0 42,087 Lijiaxia South 31,458 5,242 1,568 38,268 Kanbula 16,572 4,285 1,282 22,139 Kangyang 12,915 957 286 14,159 Cuozhou 1,970 0 0 1,970 Source: Design Institute, Feasibility Study Report TABLE A9.4: SUMMARY OF FINANCIAL GROSS MARGINS WITHOUT- AND WITH- PROJECT, AND INCREMENTAL INCOMES (CNY/mu) Gongboxia Gongboxia Lijiaxia Lijiaxia Crop Scenario North South North South Spring Wheat Without 85 85 245 162 With 207 207 356 289 Incremental 122 122 111 127 Winter Wheat Without 345 247 254 233 With 548 433 369 374 Incremental 204 186 115 140 Rapeseed Without 284 36 361 156 With 405 177 564 413 Incremental 122 141 203 258 Fresh long Chilly Without 2,079 2,079 2,079 With 2,661 2,661 2,661 Incremental 582 582 582 Dried Chilly Without 5,611 (Jieza) With 9,240 Incremental 3,629 Potatoes Without 292 292 292 292 With 475 475 475 475 Incremental 183 183 183 183 Vegetables Without 1,251 1,251 1,251 1,251 With 1,648 1,648 1,648 1,648 Incremental 398 398 398 398 Maize Without 129 With 250 Incremental 122 Legumes Without 503 With 694 Incremental 191 Source: Consultant’s estimates based on field survey data SOGREAH - REPORT N° 1300030.R4 PAGE 7 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT The use of incremental outputs based on the difference between average and good yields as reported by farmers is suggested to provide a good indication of the potential gain as well as the variation in gains across the different irrigation canals. Comparing the yields and incremental output generated by this method with the estimates presented by the DI in their feasibility study report (FSR) and the county-level agricultural statistics indicates that these estimates tend to be generally on the conservative side. In particular, the DI’s FSR estimates incremental wheat yield (spring and summer combined) at 100 kg/mu while the average from the farmers’ data is 75 kg/mu for spring wheat and 93 kg/mu for winter wheat. Unfortunately the DI FSR presents no indication of either without- or with-project yields. It does, however, present an estimates wheat yield for the incremental area, which at 350 kg/mu (5.25 t/ha) seems low as compared to current yields reported by the provincial agricultural bureaus. Moreover the without-project wheat yields used in the current analysis are reasonably consistent with the county data. With-project wheat yields can also be compared with the estimated potential yields (Appendix 4), which suggest that good farmers could achieve a yield of 8.8 t/ha (587 kg/mu) for winter wheat and 6.2 t/ha (413 kg/mu) for spring wheat. The with-project yields of 385 kg/mu and 481 kg/mu for spring and winter wheat, respectively, used in this analysis are consistent with these estimates of potential yield. For the other non-wheat crops comparison of the yield increments and of the yields in the incremental area compared to the with-project yields indicates, with the exception of rapeseed, a reasonable level of comparability. In most cases the increment proposed for the current analysis is marginally less that estimated in the DI FSR. The one notable exception is rape seed, where the DI feasibility report indicates an incremental area yield of 450 kg/mu (6.75 t/ha) and an incremental yield of 150 kg/mu in the improved irrigation area. By contrast the farmers reported an average yield in the existing area (without-project) of only 165 kg/mu (2.5 t/ha) and an increment of 61 kg/mu with project. These farmers’ data are consistent with the average yields reported in the county agriculture data and have therefore been adopted for the analysis. Crop gross margins are then weighted by the proportions of the crop in each township, values estimated from a combination of the available agricultural statistics and discussions with the relevant county officials, in order to obtain an estimated gross margin per hectare for a typical cropping pattern in the township under the without- and with-project scenarios, and for incremental values (Table A9.5). These values are considered to reasonably reflect the actual situation as observed during field visits. Finally the gross margins are adjusted to reflect the estimated cropping intensities of 110% and 125% without- and with-project. TABLE A9.5: OVERALL GROSS MARGINS WITHOUT- AND WITH-PROJECT AND INCREMENTAL VALUES FOR EACH TOWNSHIP Gross Margin of Crop Mix (CNY/mu) Canal/Township Without Project With Project Incremental Gongboxia North Gandu 326.2 513.6 187.3 Jishi 908.4 1,226.3 317.8 Gongboxia South Chahandusi 784.9 1,081.6 296.7 Jiezi 745.6 1,160.7 415.1 Jishi 840.9 1,153.9 313.0 Lijiaxia North Yashiga 335.2 537.0 201.8 Qunke 384.5 562.6 177.7 Lijiaxia South Kanbula 342.0 520.2 178.2 Kangyang 407.4 559.1 191.7 Cuozhou 172.3 304.8 132.5 Source: Consultant’s estimates Applying the crop gross margins to the benefitting and non-benefitting areas under the without- and with-project scenarios produces an estimate of the total gross margin for each township in each year under the planned implementation schedule. The gross margin is further adjusted to reflect SOGREAH - REPORT N° 1300030.R4 PAGE 8 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT the fact that full benefits cannot be immediately achieve but since, in the case of the existing cropped area, the benefits are mainly due to the assured water supply, they have been assumed to be achieved over two years. For the new and abandoned land, where actual expansion of cropping may take some time, the build up has been assumed to occur equally over three years. Crop benefits from expanded perennial (orchard) crop production have been limited to walnuts since there is perceived to be little future in the traditional apple, pear, and apricot crops. The three counties have been actively promoting walnuts during recent years and the current estimated area of the crop within the project area is about 24,800 mu (1,650 ha) of which 4,700 mu are in Gongboxia North, 2,500 mu in Gongboxia South, 17,400 mu in Lijiaxia North, and 228 mu in Lijiaxia South. All of these trees are well below full crop potential and many are only just starting to bear a crop. Full development is estimated to be on average about 6-7 years away. Each county has a plan to continue planting walnuts over the next few years but there are physical limits to the area that can be planted. The analysis therefore uses the DI estimates of the newly cropped economic tree area as the incremental area that will be planted in the near future. The total incremental area is 15,200 mu, which divided between canals amounts to 3,200 mu in Gongboxia North, 1,500 mu in Gongboxia South, 5,500 Mu in Lijiaxia North and 5,000 mu in Lijiaxia South. All planting is assumed to occur over 5 years starting in 2011. Because of the existence of these county plans and their emphasis on walnuts the expansion in planting is expected to occur irrespective of project implementation. Therefore the benefits from the project relate solely to the incremental crop production due to improved irrigation. The financial price of walnuts is estimated at CNY25/mu and the without-project yield is 725 kg/mu. For this analysis incremental production due to improved irrigation is assumed to be 10% and approximate multi-year crop budgets have been compiled based on the results of field discussions. While the absolute values in these budgets may be of limited accuracy due to the lack of data in the project area, the incremental values are considered sufficiently reliable. As with annual crop production, benefits from walnuts are computed based on the implementation schedule. Savings in electricity based on the current level of use less the amount required for the area that will continue to use pumped irrigation. Data from the DI indicates that the annual financial savings at full project development amount CNY8.172 million for Gonboxia and CNY9.166 million for Lijiaxia. These savings are distributed between the canals and townships based on the currently cropped areas and the build-up of benefits is estimated based on the implementation schedule. A9.5.4 FINANCIAL ANALYSIS The financial cost and benefit data are estimated by year for each of the four canals separately, with the project life of 40 years from project completion, and for the overall Project. The estimated financial rates of return (FIRRs) and financial net present values (FNPVs) are summarised in Table A9.6, details for individual canals are shown in Tables A9.7– A9.10, and details for the overall Project are shown in Table A9.11. These indicate that the Project has an overall FIRR of 13.6%, with individual canals ranging between 13.5% and 14.0%. The overall FNPV is CNY193.9 million. Since the Project is non-revenue generating with the costs being paid by the Government and the benefits received by the farmers, the financial analysis provides no measure of the financial acceptability of the Project. However, it is important for estimation of the poverty impact. SOGREAH - REPORT N° 1300030.R4 PAGE 9 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.6: SUMMARY OF FINANCIAL INDICATORS BY CANAL AND FOR OVERALL PROJECT Subproject/Project FIRR (%) FNPV (CNY000s) Gongboxia North 13.7 50,389 Gongboxia South 14.0 52,851 Lijiaxia North 13.4 61,541 Lijiaxia South 13.5 34,878 Overall Project 13.6 193,941 Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 10 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 9.7: FINANCIAL ANALYSIS OF GONGBOXIA NORTH CANAL Costs (CNY000s) Benefits (CNY000s) Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow - 2010 102,286 0 102,286 0 0 0 0 102,286 2011 55,933 0 55,933 202 1,058 0 1,259 -54,673 2012 83,343 140 83,483 1,709 1,058 617 3,383 -79,959 2013 98,567 280 98,848 4,521 1,763 1,235 7,518 -91,049 2014 2,011 1,037 3,048 16,645 2,708 4,092 23,444 21,433 2015 1,037 1,037 27,460 6,008 4,092 37,560 37,560 2016 1,037 1,037 32,737 8,490 4,092 45,319 45,319 2017 1,037 1,037 32,927 11,453 4,092 48,471 48,471 2018 1,037 1,037 33,115 13,133 4,092 50,339 50,339 2019 1,037 1,037 33,301 16,493 4,092 53,885 53,885 2020 1,037 1,037 33,485 20,813 4,092 58,389 58,389 2021 1,037 1,037 33,668 26,093 4,092 63,852 63,852 2022 1,037 1,037 33,848 30,893 4,092 68,832 68,832 2023 1,037 1,037 34,027 35,213 4,092 73,331 73,331 2024 1,037 1,037 34,204 37,613 4,092 75,908 75,908 2025 1,037 1,037 34,379 38,813 4,092 77,283 77,283 2026 1,037 1,037 34,553 38,813 4,092 77,457 77,457 2027 1,037 1,037 34,724 38,813 4,092 77,628 77,628 2028 1,037 1,037 34,894 38,813 4,092 77,798 77,798 2029 1,037 1,037 35,063 38,813 4,092 77,967 77,967 2030 1,037 1,037 35,229 38,813 4,092 78,133 78,133 2031 1,037 1,037 35,394 38,813 4,092 78,298 78,298 2032 1,037 1,037 35,558 38,813 4,092 78,462 78,462 2033 1,037 1,037 35,719 38,813 4,092 78,623 78,623 2034 1,037 1,037 35,879 38,813 4,092 78,783 78,783 2035 1,037 1,037 36,038 38,813 4,092 78,942 78,942 2036 1,037 1,037 36,195 38,813 4,092 79,099 79,099 2037 1,037 1,037 36,350 38,813 4,092 79,254 79,254 2038 1,037 1,037 36,504 38,813 4,092 79,408 79,408 2039 1,037 1,037 36,656 38,813 4,092 79,560 79,560 2040 1,037 1,037 36,807 38,813 4,092 79,711 79,711 2041 1,037 1,037 36,956 38,813 4,092 79,860 79,860 2042 1,037 1,037 37,103 38,813 4,092 80,007 80,007 2043 1,037 1,037 37,250 38,813 4,092 80,154 80,154 2044 1,037 1,037 37,394 38,813 4,092 80,298 80,298 2045 1,037 1,037 37,538 38,813 4,092 80,442 80,442 2046 1,037 1,037 37,680 38,813 4,092 80,584 80,584 2047 1,037 1,037 37,820 38,813 4,092 80,724 80,724 2048 1,037 1,037 37,959 38,813 4,092 80,863 80,863 2049 1,037 1,037 38,097 38,813 4,092 81,001 81,001 2050 1,037 1,037 38,233 38,813 4,092 81,137 81,137 2051 1,037 1,037 38,368 38,813 4,092 81,272 81,272 2052 1,037 1,037 38,501 38,813 4,092 81,406 81,406 2053 1,037 1,037 38,634 38,813 4,092 81,538 81,538 2054 1,037 1,037 38,765 38,813 4,092 81,669 81,669 FNPV 259,020 5,718 264,738 169,961 116,763 22,685 309,409 50,389 FIRR 13.7% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 11 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 9.8: FINANCIAL ANALYSIS OF GONGBOXIA SOUTH CANAL Costs (CNY000s) Benefits (CNY(000s) Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 103,874 0 103,874 0 0 0 0 -103,874 2011 87,724 140 87,864 1,931 563 545 3,038 -84,826 2012 58,556 503 59,059 11,240 563 1,963 13,766 -45,293 2013 61,124 531 61,655 19,659 938 2,072 22,669 -38,986 2014 12,495 531 13,025 23,366 1,425 2,072 26,864 13,838 2015 940 940 33,433 3,150 4,080 40,664 39,723 2016 940 940 38,340 4,425 4,080 46,845 45,905 2017 940 940 40,249 5,925 4,080 50,254 49,314 2018 940 940 40,564 6,713 4,080 51,357 50,417 2019 940 940 40,877 8,288 4,080 53,245 52,304 2020 940 940 41,186 10,313 4,080 55,579 54,638 2021 940 940 41,492 12,788 4,080 58,360 57,420 2022 940 940 41,795 15,038 4,080 60,913 59,973 2023 940 940 42,095 17,063 4,080 63,238 62,298 2024 940 940 42,392 18,188 4,080 64,660 63,720 2025 940 940 42,686 18,750 4,080 65,517 64,576 2026 940 940 42,977 18,750 4,080 65,808 64,867 2027 940 940 43,266 18,750 4,080 66,096 65,156 2028 940 940 43,551 18,750 4,080 66,381 65,441 2029 940 940 43,833 18,750 4,080 66,664 65,723 2030 940 940 44,113 18,750 4,080 66,944 66,003 2031 940 940 44,390 18,750 4,080 67,220 66,280 2032 940 940 44,664 18,750 4,080 67,495 66,554 2033 940 940 44,935 18,750 4,080 67,766 66,825 2034 940 940 45,204 18,750 4,080 68,035 67,094 2035 940 940 45,470 18,750 4,080 68,300 67,360 2036 940 940 45,733 18,750 4,080 68,564 67,623 2037 940 940 45,994 18,750 4,080 68,824 67,884 2038 940 940 46,252 18,750 4,080 69,083 68,142 2039 940 940 46,508 18,750 4,080 69,338 68,398 2040 940 940 46,760 18,750 4,080 69,591 68,650 2041 940 940 47,011 18,750 4,080 69,841 68,901 2042 940 940 47,259 18,750 4,080 70,089 69,149 2043 940 940 47,504 18,750 4,080 70,335 69,394 2044 940 940 47,747 18,750 4,080 70,578 69,637 2045 940 940 47,988 18,750 4,080 70,818 69,878 2046 940 940 48,226 18,750 4,080 71,056 70,116 2047 940 940 48,461 18,750 4,080 71,292 70,352 2048 940 940 48,695 18,750 4,080 71,525 70,585 2049 940 940 48,926 18,750 4,080 71,756 70,816 2050 940 940 49,155 18,750 4,080 71,985 71,045 2051 940 940 49,381 18,750 4,080 72,212 71,271 2052 940 940 49,605 18,750 4,080 72,436 71,495 2053 940 940 49,827 18,750 4,080 72,658 71,717 2054 940 940 50,047 18,750 4,080 72,877 71,937 FNPV 250,293 5,507 255,799 227,804 57,433 23,413 308,650 52,851 FIRR 14.0% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 12 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 9.9: FINANCIAL ANALYSIS OF LIJIAXIA NORTH CANAL Costs Benefits Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 202,479 0 202,479 0 0 0 0 -202,479 2011 78,742 0 78,742 235 3,915 0 4,150 -74,592 2012 102,306 0 102,306 467 3,915 0 4,382 -97,924 2013 74,166 140 74,307 2,258 6,525 846 9,629 -64,678 2014 1,203 894 2,097 11,785 9,548 5,949 27,281 25,184 2015 894 894 20,072 20,813 5,949 46,833 45,939 2016 894 894 21,031 28,575 5,949 55,555 54,661 2017 894 894 21,252 37,163 5,949 64,363 63,470 2018 894 894 21,471 40,050 5,949 67,470 66,576 2019 894 894 21,687 45,825 5,949 73,461 72,567 2020 894 894 21,902 53,250 5,949 81,100 80,207 2021 894 894 22,114 62,325 5,949 90,388 89,494 2022 894 894 22,324 70,575 5,949 98,848 97,954 2023 894 894 22,532 78,000 5,949 106,481 105,587 2024 894 894 22,738 82,125 5,949 110,812 109,918 2025 894 894 22,942 84,188 5,949 113,078 112,184 2026 894 894 23,143 84,188 5,949 113,280 112,386 2027 894 894 23,343 84,188 5,949 113,480 112,586 2028 894 894 23,541 84,188 5,949 113,677 112,784 2029 894 894 23,737 84,188 5,949 113,873 112,979 2030 894 894 23,931 84,188 5,949 114,067 113,173 2031 894 894 24,123 84,188 5,949 114,259 113,365 2032 894 894 24,313 84,188 5,949 114,449 113,555 2033 894 894 24,501 84,188 5,949 114,637 113,743 2034 894 894 24,687 84,188 5,949 114,823 113,929 2035 894 894 24,871 84,188 5,949 115,008 114,114 2036 894 894 25,054 84,188 5,949 115,190 114,296 2037 894 894 25,234 84,188 5,949 115,371 114,477 2038 894 894 25,413 84,188 5,949 115,550 114,656 2039 894 894 25,590 84,188 5,949 115,727 114,833 2040 894 894 25,766 84,188 5,949 115,902 115,008 2041 894 894 25,939 84,188 5,949 116,076 115,182 2042 894 894 26,111 84,188 5,949 116,248 115,354 2043 894 894 26,281 84,188 5,949 116,418 115,524 2044 894 894 26,450 84,188 5,949 116,586 115,692 2045 894 894 26,616 84,188 5,949 116,753 115,859 2046 894 894 26,781 84,188 5,949 116,918 116,024 2047 894 894 26,945 84,188 5,949 117,081 116,187 2048 894 894 27,107 84,188 5,949 117,243 116,349 2049 894 894 27,267 84,188 5,949 117,403 116,509 2050 894 894 27,425 84,188 5,949 117,562 116,668 2051 894 894 27,582 84,188 5,949 117,719 116,825 2052 894 894 27,738 84,188 5,949 117,874 116,980 2053 894 894 27,892 84,188 5,949 118,028 117,134 2054 894 894 28,044 84,188 5,949 118,180 117,286 FNPV 364,194 4,777 368,971 113,285 285,487 31,740 430,512 61,541 FIRR 13.4% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 13 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 9.10: FINANCIAL ANALYSIS OF LIJIAXIA SOUTH CANAL Costs Benefits Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 72,671 0 72,671 0 0 0 0 -72,671 2011 59,582 0 59,582 123 51 0 174 -59,408 2012 44,687 227 44,914 3,305 51 1,271 4,627 -40,287 2013 57,768 366 58,134 6,823 86 2,131 9,039 -49,095 2014 1,203 523 1,726 10,941 495 3,218 14,653 12,927 2015 523 523 13,847 1,382 3,218 18,446 17,924 2016 523 523 14,196 2,592 3,218 20,006 19,483 2017 523 523 14,312 4,553 3,218 22,082 21,559 2018 523 523 14,426 7,178 3,218 24,821 24,298 2019 523 523 14,539 12,428 3,218 30,184 29,662 2020 523 523 14,651 19,178 3,218 37,046 36,524 2021 523 523 14,762 27,428 3,218 45,407 44,885 2022 523 523 14,872 34,928 3,218 53,017 52,494 2023 523 523 14,981 41,678 3,218 59,876 59,353 2024 523 523 15,089 45,428 3,218 63,734 63,211 2025 523 523 15,195 47,303 3,218 65,715 65,193 2026 523 523 15,301 47,303 3,218 65,821 65,298 2027 523 523 15,405 47,303 3,218 65,925 65,403 2028 523 523 15,509 47,303 3,218 66,029 65,506 2029 523 523 15,611 47,303 3,218 66,131 65,608 2030 523 523 15,712 47,303 3,218 66,233 65,710 2031 523 523 15,813 47,303 3,218 66,333 65,810 2032 523 523 15,912 47,303 3,218 66,432 65,910 2033 523 523 16,011 47,303 3,218 66,531 66,008 2034 523 523 16,108 47,303 3,218 66,628 66,105 2035 523 523 16,204 47,303 3,218 66,725 66,202 2036 523 523 16,300 47,303 3,218 66,820 66,297 2037 523 523 16,394 47,303 3,218 66,914 66,392 2038 523 523 16,488 47,303 3,218 67,008 66,485 2039 523 523 16,581 47,303 3,218 67,101 66,578 2040 523 523 16,672 47,303 3,218 67,192 66,670 2041 523 523 16,763 47,303 3,218 67,283 66,760 2042 523 523 16,853 47,303 3,218 67,373 66,850 2043 523 523 16,942 47,303 3,218 67,462 66,939 2044 523 523 17,030 47,303 3,218 67,550 67,027 2045 523 523 17,117 47,303 3,218 67,637 67,114 2046 523 523 17,203 47,303 3,218 67,724 67,201 2047 523 523 17,289 47,303 3,218 67,809 67,286 2048 523 523 17,374 47,303 3,218 67,894 67,371 2049 523 523 17,457 47,303 3,218 67,977 67,455 2050 523 523 17,540 47,303 3,218 68,060 67,538 2051 523 523 17,622 47,303 3,218 68,142 67,620 2052 523 523 17,704 47,303 3,218 68,224 67,701 2053 523 523 17,784 47,303 3,218 68,304 67,781 2054 523 523 17,864 47,303 3,218 68,384 67,861 FNPV 181,586 3,136 184,722 82,754 117,711 19,136 219,601 34,878 FIRR 13.5% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 14 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 9.11: FINANCIAL ANALYSIS OF OVERALL PROJECT Costs Benefits Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 481,310 0 481,310 0 0 0 0 -481,310 2011 281,980 140 282,120 2,490 5,586 545 8,621 -273,499 2012 288,893 870 289,762 16,720 5,586 3,852 26,158 -263,604 2013 291,626 1,318 292,944 33,260 9,311 6,284 48,855 -244,089 2014 16,912 2,984 19,896 62,737 14,175 15,331 92,242 72,346 2015 3,394 3,394 94,812 31,352 17,339 143,502 140,108 2016 3,394 3,394 106,304 44,082 17,339 167,725 164,331 2017 3,394 3,394 108,739 59,093 17,339 185,170 181,776 2018 3,394 3,394 109,576 67,073 17,339 193,987 190,593 2019 3,394 3,394 110,404 83,033 17,339 210,775 207,381 2020 3,394 3,394 111,224 103,553 17,339 232,115 228,721 2021 3,394 3,394 112,036 128,633 17,339 258,007 254,613 2022 3,394 3,394 112,839 151,433 17,339 281,610 278,216 2023 3,394 3,394 113,635 171,953 17,339 302,926 299,532 2024 3,394 3,394 114,423 183,353 17,339 315,114 311,719 2025 3,394 3,394 115,202 189,053 17,339 321,593 318,199 2026 3,394 3,394 115,974 189,053 17,339 322,365 318,971 2027 3,394 3,394 116,739 189,053 17,339 323,130 319,735 2028 3,394 3,394 117,495 189,053 17,339 323,886 320,492 2029 3,394 3,394 118,244 189,053 17,339 324,635 321,241 2030 3,394 3,394 118,986 189,053 17,339 325,377 321,982 2031 3,394 3,394 119,720 189,053 17,339 326,111 322,717 2032 3,394 3,394 120,447 189,053 17,339 326,838 323,443 2033 3,394 3,394 121,166 189,053 17,339 327,557 324,163 2034 3,394 3,394 121,878 189,053 17,339 328,269 324,875 2035 3,394 3,394 122,583 189,053 17,339 328,974 325,580 2036 3,394 3,394 123,282 189,053 17,339 329,673 326,278 2037 3,394 3,394 123,973 189,053 17,339 330,364 326,970 2038 3,394 3,394 124,657 189,053 17,339 331,048 327,654 2039 3,394 3,394 125,334 189,053 17,339 331,725 328,331 2040 3,394 3,394 126,005 189,053 17,339 332,396 329,002 2041 3,394 3,394 126,669 189,053 17,339 333,060 329,666 2042 3,394 3,394 127,326 189,053 17,339 333,717 330,323 2043 3,394 3,394 127,977 189,053 17,339 334,368 330,974 2044 3,394 3,394 128,621 189,053 17,339 335,012 331,618 2045 3,394 3,394 129,259 189,053 17,339 335,650 332,256 2046 3,394 3,394 129,890 189,053 17,339 336,281 332,887 2047 3,394 3,394 130,515 189,053 17,339 336,906 333,512 2048 3,394 3,394 131,134 189,053 17,339 337,525 334,131 2049 3,394 3,394 131,747 189,053 17,339 338,138 334,744 2050 3,394 3,394 132,353 189,053 17,339 338,744 335,350 2051 3,394 3,394 132,954 189,053 17,339 339,345 335,950 2052 3,394 3,394 133,548 189,053 17,339 339,939 336,545 2053 3,394 3,394 134,137 189,053 17,339 340,528 337,133 2054 3,394 3,394 134,719 189,053 17,339 341,110 337,716 FNPV 1,055,092 19,139 1,074,231 593,804 577,394 96,974 1,268,172 193,941 FIRR 13.6% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 15 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A9.5.5 ECONOMIC ANALYSIS Financial costs and benefits are converted from financial to economic values using the world price level numeraire and the analysis is repeated for individual canals and the overall Project. For project costs, including O&M costs, the economic value is estimated by deducting all taxes, duties and transfer costs and multiplying the local currency cost by the SCF. The resultant economic investment costs are summarised in Table A9.12. TABLE A9.12: SUMMARY OF ECONOMIC INVESTMENT COSTS BY YEAR (CNY000s) Canal Year 2010 2011 2012 2013 2014 Gongboxia North 91,663 49,308 74,787 89,181 727 Gongboxia South 93,212 78,594 51,967 54,696 10,400 Lijiaxia North 184,198 70,313 92,265 66,718 - Lijiaxia South 64,883 52,735 39,215 51,671 - Unallocated costs 6,816 8,661 7,719 6,043 4,465 Source: Consultant’s estimates Other than wheat and maize, all annual crops and walnuts are considered to be non-traded commodities within the context of the Project. Their financial values have thus been adjusted to economic values by applying the SCF. For wheat and maize prices, reference is made to the world market price as indicated in the World Bank’s commodity prices. An analysis of trends in monthly wheat and maize prices since November 2006 is shown in Figure A9.1. This clearly demonstrates that grain prices peaked around February – March 2008 and have since decline to a level slightly above their previous trend. Thus it appears appropriate to use an average of the monthly price for 2009 as the basis for estimating the economic price of wheat and maize. In the case of wheat the value adopted is the average of the two US wheat grades. These values are then adjusted by shipping and transportation costs to obtain their economic values in the local markets in the project area. For crop inputs all inputs other than the fertilizers di-ammonium phosphate and urea are treated as non-traded inputs. Non-labor inputs are therefore converted using the SCF and labor inputs are converted using the conversion factor determined from the SCF and OCSL. The market price of labor used for estimating ite economic value is CNY20/day for Gongboxia and CNY15/day for Lijiaxia, which are considered to accurately reflect the value of existing farm household labor. As with wheat and maize, the economic prices of di-ammonium phosphate and urea are estimated based on the world market prices. Price trends for major fertilizers since November 2006 are shown in Figure A9.2. From these it is again evident that prices peaked in mid 2008 and have since declined to a similar level as in late 2006. This is of particular significance since it suggests that farmers may have been paying, and thus reporting, an unusually high price during the last cropping season. The world market prices have again been adjusted for transportation and marketing costs in order to estimate their economic value in the project area. Economic crop budgets have been estimated for each of the major crops included in the analysis and the gross margins have been aggregated for the without- and with-project scenarios based on the cropping patterns (Table A9.13). The financial value of saved electricity is converted to its economic value by adjusting the price to reflect more accurately the price it can receive in non-agricultural uses. Consequently a conversion factor of 1.9 has been applied. SOGREAH - REPORT N° 1300030.R4 PAGE 16 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT FIGURE A9.1: RECENT TRENDS IN PRICES OF MAJOR GRAINS Source: World Bank pink sheets (various issues) FIGURE A9.2: RECENT TRENDS IN PRICES OF MAJOR FERTILIZERS Source: World Bank pink sheets (various issues) SOGREAH - REPORT N° 1300030.R4 PAGE 17 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.13: OVERALL GROSS MARGINS WITHOUT- AND WITH-PROJECT AND INCREMENTAL VALUES FOR EACH TOWNSHIP Gross Margin of Crop Mix (CNY/mu) Canal/Township Without Project With Project Incremental Gongboxia North Gandu 343.3 553.6 210.3 Jishi 732.3 1,025.9 293.6 Gongboxia South Chahandusi 631.9 911.3 279.4 Jiezi 553.0 899.8 346.7 Jishi 653.9 948.4 294.4 Lijiaxia North Yashiga 290.9 509.3 218.3 Qunke 228.5 407.4 179.0 Lijiaxia South Kanbula 385.5 581.1 195.6 Kangyang 397.8 599.0 201.2 Cuozhou 352.3 528.9 176.6 Source: Consultant’s estimates These adjusted prices are applied to the without- and with-project scenarios for each of the four canal separately and for the overall project. The results of the analysis are summarized in Table A9.14 and set out for the four canals in Tables A9.15 to A9.18, and for the overall project in Table A9.19. The analysis indicates that the Project is economically viable overall with an economic internal rate of return (EIRR) of 13.9% and an economic net present value (ENPV) of CNY208.2 million. The EIRRs of individual subprojects range from 13.1% for Lijiaxia North to 14.3% for Lijiaxia North, as would be expected given the high investment cost for Lijiaxia North. TABLE A9.14: SUMMARY OF ECONOMIC INDICATORS BY CANAL AND FOR OVERALL PROJECT Subproject/Project EIRR (%) ENPV (CNY000s) Gongboxia North 14.1 55,466 Gongboxia South 14.0 47,648 Lijiaxia North 13.1 41,716 Lijiaxia South 14.3 47,337 Overall Project 13.9 208,212 Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 18 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.15: ECONOMIC ANALYSIS OF GONGBOXIA NORTH CANAL Costs Benefits Net Investment Recurrent Total Annual Orchard Electricity Net Cash Year Costs Costs Costs Crops Crops Savings Benefits Flow 2010 93,367 0 93,367 0 0 0 0 -93,367 2011 51,012 0 51,012 189 809 0 997 -50,015 2012 76,716 126 76,842 1,812 809 1,192 3,812 -73,030 2013 90,692 251 90,943 4,869 1,333 2,383 8,585 -82,358 2014 1,843 929 2,772 16,662 2,081 7,897 26,639 23,867 2015 929 929 27,016 4,580 7,897 39,493 38,564 2016 929 929 31,792 6,464 7,897 46,152 45,223 2017 929 929 31,970 8,704 7,897 48,571 47,641 2018 929 929 32,146 9,969 7,897 50,011 49,082 2019 929 929 32,320 12,469 7,897 52,685 51,756 2020 929 929 32,492 15,743 7,897 56,131 55,202 2021 929 929 32,663 19,730 7,897 60,290 59,360 2022 929 929 32,831 23,361 7,897 64,089 63,160 2023 929 929 32,999 26,635 7,897 67,530 66,601 2024 929 929 33,164 28,450 7,897 69,511 68,582 2025 929 929 33,328 29,358 7,897 70,582 69,653 2026 929 929 33,490 29,358 7,897 70,745 69,815 2027 929 929 33,651 29,358 7,897 70,905 69,976 2028 929 929 33,810 29,358 7,897 71,064 70,135 2029 929 929 33,967 29,358 7,897 71,222 70,292 2030 929 929 34,123 29,358 7,897 71,378 70,448 2031 929 929 34,277 29,358 7,897 71,532 70,602 2032 929 929 34,430 29,358 7,897 71,685 70,755 2033 929 929 34,581 29,358 7,897 71,836 70,906 2034 929 929 34,731 29,358 7,897 71,985 71,056 2035 929 929 34,879 29,358 7,897 72,134 71,204 2036 929 929 35,026 29,358 7,897 72,280 71,351 2037 929 929 35,171 29,358 7,897 72,426 71,496 2038 929 929 35,315 29,358 7,897 72,569 71,640 2039 929 929 35,457 29,358 7,897 72,712 71,782 2040 929 929 35,598 29,358 7,897 72,853 71,923 2041 929 929 35,738 29,358 7,897 72,992 72,063 2042 929 929 35,876 29,358 7,897 73,130 72,201 2043 929 929 36,013 29,358 7,897 73,267 72,338 2044 929 929 36,148 29,358 7,897 73,403 72,473 2045 929 929 36,282 29,358 7,897 73,537 72,607 2046 929 929 36,415 29,358 7,897 73,669 72,740 2047 929 929 36,546 29,358 7,897 73,801 72,871 2048 929 929 36,676 29,358 7,897 73,931 73,001 2049 929 929 36,805 29,358 7,897 74,059 73,130 2050 929 929 36,932 29,358 7,897 74,187 73,258 2051 929 929 37,059 29,358 7,897 74,313 73,384 2052 929 929 37,184 29,358 7,897 74,438 73,509 2053 929 929 37,307 29,358 7,897 74,562 73,632 2054 929 929 37,430 29,358 7,897 74,684 73,755 ENPV 237,317 5,124 242,441 165,712 88,413 43,782 297,907 55,466 EIRR 14.1% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 19 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.16: ECONOMIC ANALYSIS OF GONGBOXIA SOUTH CANAL Costs Benefits Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 94,916 0 94,916 0 0 0 0 -94,916 2011 80,759 125 80,884 773 430 1,053 2,256 -78,629 2012 53,896 450 54,347 9,372 430 3,789 13,592 -40,755 2013 56,207 475 56,683 17,050 709 4,000 21,759 -34,923 2014 11,516 475 11,992 20,197 1,093 4,000 25,290 13,298 2015 843 843 29,079 2,399 7,875 39,353 38,511 2016 843 843 32,850 3,367 7,875 44,092 43,249 2017 843 843 34,357 4,501 7,875 46,733 45,890 2018 843 843 34,604 5,094 7,875 47,574 46,731 2019 843 843 34,849 6,266 7,875 48,990 48,148 2020 843 843 35,092 7,800 7,875 50,768 49,925 2021 843 843 35,332 9,670 7,875 52,877 52,034 2022 843 843 35,570 11,372 7,875 54,817 53,974 2023 843 843 35,805 12,906 7,875 56,587 55,744 2024 843 843 36,039 13,757 7,875 57,671 56,828 2025 843 843 36,269 14,183 7,875 58,327 57,484 2026 843 843 36,498 14,183 7,875 58,555 57,713 2027 843 843 36,724 14,183 7,875 58,782 57,939 2028 843 843 36,948 14,183 7,875 59,006 58,163 2029 843 843 37,169 14,183 7,875 59,227 58,385 2030 843 843 37,389 14,183 7,875 59,447 58,604 2031 843 843 37,606 14,183 7,875 59,664 58,821 2032 843 843 37,821 14,183 7,875 59,879 59,036 2033 843 843 38,034 14,183 7,875 60,092 59,249 2034 843 843 38,245 14,183 7,875 60,303 59,460 2035 843 843 38,454 14,183 7,875 60,511 59,669 2036 843 843 38,660 14,183 7,875 60,718 59,875 2037 843 843 38,865 14,183 7,875 60,922 60,080 2038 843 843 39,067 14,183 7,875 61,125 60,282 2039 843 843 39,268 14,183 7,875 61,325 60,483 2040 843 843 39,466 14,183 7,875 61,524 60,681 2041 843 843 39,663 14,183 7,875 61,720 60,878 2042 843 843 39,857 14,183 7,875 61,915 61,072 2043 843 843 40,050 14,183 7,875 62,107 61,265 2044 843 843 40,240 14,183 7,875 62,298 61,455 2045 843 843 40,429 14,183 7,875 62,487 61,644 2046 843 843 40,616 14,183 7,875 62,674 61,831 2047 843 843 40,801 14,183 7,875 62,859 62,016 2048 843 843 40,984 14,183 7,875 63,042 62,199 2049 843 843 41,165 14,183 7,875 63,223 62,380 2050 843 843 41,345 14,183 7,875 63,403 62,560 2051 843 843 41,522 14,183 7,875 63,580 62,738 2052 843 843 41,698 14,183 7,875 63,756 62,914 2053 843 843 41,873 14,183 7,875 63,930 63,088 2054 843 843 42,045 14,183 7,875 64,103 63,260 ENPV 229,745 4,934 234,679 193,653 43,487 45,186 282,326 47,648 EIRR 14.0% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 20 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.17: ECONOMIC ANALYSIS OF LIJIAXIA NORTH CANAL Net Year Investment Recurrent Total Annual OrchardElectricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 185,902 0 185,902 0 0 0 0 -185,902 2011 72,017 0 72,017 156 2,994 0 3,150 -68,867 2012 94,195 0 94,195 310 2,994 0 3,304 -90,891 2013 68,229 126 68,355 2,065 4,936 1,633 8,633 -59,722 2014 1,116 801 1,917 11,034 7,261 11,481 29,777 27,859 2015 801 801 18,706 15,804 11,481 45,991 45,190 2016 801 801 19,460 21,686 11,481 52,627 51,826 2017 801 801 19,607 28,181 11,481 59,270 58,469 2018 801 801 19,752 30,355 11,481 61,589 60,788 2019 801 801 19,896 34,652 11,481 66,029 65,228 2020 801 801 20,039 40,278 11,481 71,798 70,997 2021 801 801 20,180 47,132 11,481 78,793 77,993 2022 801 801 20,319 53,373 11,481 85,173 84,373 2023 801 801 20,458 58,999 11,481 90,938 90,137 2024 801 801 20,594 62,119 11,481 94,195 93,394 2025 801 801 20,730 63,679 11,481 95,891 95,090 2026 801 801 20,864 63,679 11,481 96,025 95,224 2027 801 801 20,997 63,679 11,481 96,158 95,357 2028 801 801 21,128 63,679 11,481 96,289 95,488 2029 801 801 21,259 63,679 11,481 96,419 95,618 2030 801 801 21,387 63,679 11,481 96,548 95,747 2031 801 801 21,515 63,679 11,481 96,676 95,875 2032 801 801 21,641 63,679 11,481 96,802 96,001 2033 801 801 21,766 63,679 11,481 96,927 96,126 2034 801 801 21,890 63,679 11,481 97,051 96,250 2035 801 801 22,013 63,679 11,481 97,173 96,372 2036 801 801 22,134 63,679 11,481 97,295 96,494 2037 801 801 22,254 63,679 11,481 97,415 96,614 2038 801 801 22,373 63,679 11,481 97,534 96,733 2039 801 801 22,491 63,679 11,481 97,651 96,850 2040 801 801 22,607 63,679 11,481 97,768 96,967 2041 801 801 22,722 63,679 11,481 97,883 97,082 2042 801 801 22,837 63,679 11,481 97,997 97,197 2043 801 801 22,950 63,679 11,481 98,110 97,310 2044 801 801 23,062 63,679 11,481 98,222 97,422 2045 801 801 23,173 63,679 11,481 98,333 97,532 2046 801 801 23,282 63,679 11,481 98,443 97,642 2047 801 801 23,391 63,679 11,481 98,552 97,751 2048 801 801 23,498 63,679 11,481 98,659 97,858 2049 801 801 23,605 63,679 11,481 98,766 97,965 2050 801 801 23,710 63,679 11,481 98,871 98,070 2051 801 801 23,815 63,679 11,481 98,975 98,174 2052 801 801 23,918 63,679 11,481 99,079 98,278 2053 801 801 24,020 63,679 11,481 99,181 98,380 2054 801 801 24,121 63,679 11,481 99,282 98,481 ENPV 334,436 4,281 338,716 103,054 216,119 61,259 380,432 41,716 EIRR 13.1% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 21 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.18: ECONOMIC ANALYSIS OF LIJIAXIA SOUTH CANAL Costs Benefits Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 66,587 0 66,587 0 0 0 0 -66,587 2011 54,439 0 54,439 133 39 0 172 -54,266 2012 41,144 203 41,348 3,249 39 2,454 5,742 -35,606 2013 53,182 328 53,510 7,856 65 4,113 12,033 -41,477 2014 1,116 468 1,58512,789 439 6,210 19,438 17,854 2015 468 468 15,095 1,101 6,210 22,406 21,937 2016 468 468 15,455 2,026 6,210 23,691 23,223 2017 468 468 15,581 3,509 6,210 25,299 24,831 2018 468 468 15,705 5,485 6,210 27,400 26,931 2019 468 468 15,828 9,391 6,210 31,428 30,960 2020 468 468 15,949 14,506 6,210 36,665 36,197 2021 468 468 16,069 20,737 6,210 43,016 42,548 2022 468 468 16,189 26,410 6,210 48,809 48,340 2023 468 468 16,307 31,525 6,210 54,041 53,573 2024 468 468 16,423 34,361 6,210 56,995 56,526 2025 468 468 16,539 35,780 6,210 58,529 58,060 2026 468 468 16,653 35,780 6,210 58,643 58,175 2027 468 468 16,767 35,780 6,210 58,756 58,288 2028 468 468 16,879 35,780 6,210 58,869 58,400 2029 468 468 16,990 35,780 6,210 58,980 58,511 2030 468 468 17,100 35,780 6,210 59,090 58,621 2031 468 468 17,209 35,780 6,210 59,198 58,730 2032 468 468 17,317 35,780 6,210 59,306 58,838 2033 468 468 17,423 35,780 6,210 59,413 58,945 2034 468 468 17,529 35,780 6,210 59,519 59,050 2035 468 468 17,633 35,780 6,210 59,623 59,155 2036 468 468 17,737 35,780 6,210 59,727 59,258 2037 468 468 17,839 35,780 6,210 59,829 59,361 2038 468 468 17,941 35,780 6,210 59,931 59,462 2039 468 468 18,041 35,780 6,210 60,031 59,563 2040 468 468 18,141 35,780 6,210 60,130 59,662 2041 468 468 18,239 35,780 6,210 60,229 59,760 2042 468 468 18,337 35,780 6,210 60,326 59,858 2043 468 468 18,433 35,780 6,210 60,423 59,954 2044 468 468 18,529 35,780 6,210 60,518 60,050 2045 468 468 18,623 35,780 6,210 60,613 60,145 2046 468 468 18,717 35,780 6,210 60,707 60,238 2047 468 468 18,810 35,780 6,210 60,799 60,331 2048 468 468 18,901 35,780 6,210 60,891 60,423 2049 468 468 18,992 35,780 6,210 60,982 60,513 2050 468 468 19,082 35,780 6,210 61,072 60,603 2051 468 468 19,171 35,780 6,210 61,161 60,692 2052 468 468 19,259 35,780 6,210 61,249 60,781 2053 468 468 19,347 35,780 6,210 61,336 60,868 2054 468 468 19,433 35,780 6,210 61,423 60,954 ENPV 166,568 2,810 169,378 90,612 89,171 36,933 216,715 47,337 EIRR 14.3% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 22 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE A9.19: ECONOMIC ANALYSIS OF OVERALL PROJECT Costs Benefits Net Year Investment Recurrent Total Annual Orchard Electricity Net Cash Costs Costs Costs Crops Crops Savings Benefits Flow 2010 440,772 0 440,772 0 0 0 0 -440,772 2011 259,611 125 259,736 1,251 4,272 1,053 6,575 -253,036 2012 265,952 779 266,731 14,744 4,272 7,435 26,450 -239,502 2013 268,311 1,181 269,491 31,839 7,042 12,128 51,010 -217,300 2014 15,592 2,674 18,266 60,683 10,873 29,588 101,144 85,552 2015 3,041 3,041 89,896 23,884 33,463 147,243 147,243 2016 3,041 3,041 99,557 33,542 33,463 166,562 166,562 2017 3,041 3,041 101,514 44,895 33,463 179,873 179,873 2018 3,041 3,041 102,207 50,903 33,463 186,573 186,573 2019 3,041 3,041 102,893 62,778 33,463 199,133 199,133 2020 3,041 3,041 103,572 78,327 33,463 215,362 215,362 2021 3,041 3,041 104,244 97,269 33,463 234,977 234,977 2022 3,041 3,041 104,909 114,515 33,463 252,888 252,888 2023 3,041 3,041 105,568 130,065 33,463 269,096 269,096 2024 3,041 3,041 106,220 138,688 33,463 278,372 278,372 2025 3,041 3,041 106,866 142,999 33,463 283,329 283,329 2026 3,041 3,041 107,506 142,999 33,463 283,968 283,968 2027 3,041 3,041 108,138 142,999 33,463 284,601 284,601 2028 3,041 3,041 108,765 142,999 33,463 285,228 285,228 2029 3,041 3,041 109,385 142,999 33,463 285,848 285,848 2030 3,041 3,041 109,999 142,999 33,463 286,462 286,462 2031 3,041 3,041 110,607 142,999 33,463 287,070 287,070 2032 3,041 3,041 111,209 142,999 33,463 287,672 287,672 2033 3,041 3,041 111,805 142,999 33,463 288,268 288,268 2034 3,041 3,041 112,395 142,999 33,463 288,857 288,857 2035 3,041 3,041 112,979 142,999 33,463 289,441 289,441 2036 3,041 3,041 113,557 142,999 33,463 290,020 290,020 2037 3,041 3,041 114,129 142,999 33,463 290,592 290,592 2038 3,041 3,041 114,696 142,999 33,463 291,159 291,159 2039 3,041 3,041 115,257 142,999 33,463 291,720 291,720 2040 3,041 3,041 115,812 142,999 33,463 292,275 292,275 2041 3,041 3,041 116,362 142,999 33,463 292,825 292,825 2042 3,041 3,041 116,906 142,999 33,463 293,369 293,369 2043 3,041 3,041 117,445 142,999 33,463 293,908 293,908 2044 3,041 3,041 117,979 142,999 33,463 294,441 294,441 2045 3,041 3,041 118,507 142,999 33,463 294,970 294,970 2046 3,041 3,041 119,030 142,999 33,463 295,492 295,492 2047 3,041 3,041 119,548 142,999 33,463 296,010 296,010 2048 3,041 3,041 120,060 142,999 33,463 296,523 296,523 2049 3,041 3,041 120,567 142,999 33,463 297,030 297,030 2050 3,041 3,041 121,070 142,999 33,463 297,532 297,532 2051 3,041 3,041 121,567 142,999 33,463 298,029 298,029 2052 3,041 3,041 122,059 142,999 33,463 298,522 298,522 2053 3,041 3,041 122,546 142,999 33,463 299,009 299,009 2054 3,041 3,041 123,029 142,999 33,463 299,492 299,492 ENPV 969,169 17,148 986,318 553,030 437,190 187,160 1,177,381 208,212 EIRR 13.9% Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 23 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A9.6 FINANCIAL AND INSTITUTIONAL SUSTAINABILITY By full project development 208,545 mu (13,903 ha) of currently irrigated and abandoned or new land will benefit from the newly developed gravity irrigated system. Of this area, about 1,456 ha will be pump irrigated but at a much lower cost than previously as water will be pumped from the new main canal rather than the river. The irrigation facilities will benefit both the existing cropped area of 168,455 mu (11,230 ha) and a new and abandoned area of 2,673 ha. Incremental production, at full project development, is estimated by township from the crop budgets and cropping patterns used in the economic analysis. The data, aggregated to the level of main canal and overall Project, are shown for the main crops in Table A9.20. TABLE A9.20: ESTIMATED INCREMENTAL OUTPUT OF ANNUAL CROPS BY SOURCE Crop Subproject Overall Gongboxia Gongboxia Lijiaxia Lijiaxia North South North South Total Incremental Production on Existing Land (tons) Spring Wheat 79 477 562 1,420 2,537 Winter Wheat 5,439 2,968 3,638 1,894 13,939 Rapeseed 370 359 1,820 132 2,682 Long Chilly 1,677 3,212 913 - 5,801 Dried Chilly - 126 - - 126 Potatoes 1,115 1,139 3,902 1,281 7,436 Vegetables 3,166 9,166 1,409 6,388 20,128 Maize & legumes - - - 161 161 Total Incremental Production on New and Abandoned Land (tons) Spring Wheat 98 708 35 1,115 1,955 Winter Wheat 7,330 3,136 1,056 1,375 12,897 Rapeseed 579 260 218 72 1,129 Long Chilly 3,259 3,680 36 - 6974 Dried Chilly - - 76 - 76 Potatoes 1,377 1,095 365 733 3,570 Vegetables 7,402 8,041 741 4,307 20,490 Maize & legumes - - - 65 65 Total Incremental Production (tons) Spring Wheat 176 1,185 597 2,534 4,493 Winter Wheat 12,770 6,104 4,694 3,269 26,836 Rapeseed 949 620 2,038 204 3,811 Long Chilly 4,935 6,892 949 - 12,775 Dried Chilly - 202 - - 202 Potatoes 2,492 2,234 4,267 2,014 11,006 Vegetables 10,567 17,202 2,150 10,694 40,694 Maize & legumes - - - 216 216 Source: Consultant’s estimates According to these estimates, which are considered to be relatively conservative since they do not consider any change in cropping pattern, incremental production of wheat is estimated at about 31,300 t (4,500 t of spring wheat and 26,800t of winter wheat, rapeseed 3,800 t, long chillies 12,800 t, dried chillies 200 t, potatoes 11,000 t, vegetables 40,700 t and maize and legumes 200 t. SOGREAH - REPORT N° 1300030.R4 PAGE 24 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT As a result of this incremental production net farm incomes from annual crops over the whole project area are expected to increase from CNY538/mu to CNY893/mu, an average increase of CNY355/mu for farmers who do not receive any additional land. Based on an average farm size of about 5.7 mu, as reported in the social analysis survey, the annual increment is about CNY2,000. Farm households who are allocated additional land will clearly benefit even more. Other aspects of sustainability are discussed elsewhere A9.7 DISTRIBUTION ANALYSIS Due to the high poverty incidence in the project area - all three counties are designated as national poverty counties – it is critical that the proposed Project has a significant poverty impact. Since this can be derived either directly through the project benefits being received by poor farmers or through the poorer sectors of the community obtaining employment opportunities during project implementation, or indirectly through the incremental benefits to the Government being distributed to the poor in the overall community, the poverty impact is quantified through a distributional analysis conducted in accordance with ADB guidelines. The poverty analysis identifies the difference between the financial and economic benefits and costs of the Project over the entire project life (40 years from completion of the investment) and distributes the difference (subsidies/taxes) between the different groups of beneficiaries. The net benefits/costs accruing to the Government are assumed to be redistributed back to the poor in proportion their number in the community. The results of the poverty impact analysis is shown in Table A9.21. Based on a total incremental net benefit of CNY183.25 million distributed between CNY179.0 to the project area and 4.26 million to the province, and poverty incidences of 39% and 24% respectively, the poverty impact ratio is estimated at 0.39 TABLE A9.21: ESTIMATED POVERTY IMPACT RATIO Distribution of Financial Economic Benefits/Costs Net Net Present Value (@12%) Present Present Difference Project Province Total (in million CNY, 2008 Price) Value Value Area (1) (2) (1) -(2) Incremental Benefits From1 1,268.17 1,177.38 90.79 180.98 90.19 271.16 Annual crop production 593.80 553.03 40.77 40.77 40.77 Orchard crop production 577.39 437.19 140.20 140.20 140.20 Electricity savings 96.97 187.16 (90.19) 90.19 90.19 Incremental Costs 1,074.23 986.32 87.91 1.99 85.92 87.91 Project investment cost 1,055.09 969.17 85.92 85.92 85.92 Project O&M cost 19.14 17.15 1.99 1.99 - 1.99 Net Benefits 193.94 191.06 2.88 178.99 4.26 183.25 Proportion of Poor2 39% 24% Net Benefits to the Poor 70.50 1.03 71.53 Poverty Impact Ratio 0.39 a Based on net present value (at 12% discount rate) of incremental net benefits generated from investments under the Project. b Proportion of poor is based on Table 4-3. Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 25 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A9.8 SENSITIVITY AND RISK ANALYSIS Key risks that could affect the economic viability of the proposed Project are incorporated into standard into sensitivity tests including a 10% cost increase, a 10% benefit decrease, a 10% cost increase combined with a 10% benefit decrease, and a 1-year benefit lag. In addition some specific sensitivity tests relating to the rate of decline in land area, increase in cropping intensity, and benefits from walnuts are included. The results of the standard sensitivity tests are summarised in Table A9.22. Overall the Project appears to be sufficiently robust with the EIRR declining to 12.9% with a 10% cost increase and to 12.7% with a 10% benefit decrease. Combining both of these changes will reduce the EIRR to 11.8%, marginally non-viable. The switching values indicate that it will require a 21.5% cost increase or a 15.4% benefit decrease to make the overall Project non-viable. A one-year benefit lag will reduce the EIRR to 12.5%, which is still economically viable. The results of the sensitivity tests of the individual canals indicate that the situation is generally acceptable but that Lijiaxia North is the most sensitive and either a 10% cost increase or a 10% benefit decrease will result in the subproject becoming marginally viable. TABLE A9.22: SENSITIVITY TESTS OF ECONOMIC ANALYSES BY CANAL AND FOR OVERALL PROJECT Canal/Sensitivity Test EIRR ENPV SV SI (%) (CNY000s) (%) Gongboxia North 10% cost increase 13.1 31,735 23.4 4.3 10% benefit decrease 13.0 25,676 18.6 5.4 10% cost increase + 10% benefit decrease 12.1 1,944 1-year benefit lag 12.8 23,141 Gongboxia South 10% cost increase 13.0 24,673 20.1 4.8 10% benefit decrease 12.8 19,415 16.9 5.9 10% cost increase + 10% benefit decrease 11.9 -3,559 1-year benefit lag 12.7 17,049 Lijiaxia North 10% cost increase 12.2 8,272 12.5 8.0 10% benefit decrease 12.1 3,673 11.0 9.1 10% cost increase + 10% benefit decrease 11.3 -29,771 1-year benefit lag 12.0 415 Lijiaxia South 10% cost increase 13.4 30,680 28.4 3.5 10% benefit decrease 13.3 25,665 21.8 4.6 10% cost increase + 10% benefit decrease 12.4 9,008 1-year benefit lag 13.1 23,783 Overall Project 10% cost increase 12.9 111,295 21.5 4.7 10% benefit decrease 12.7 73,325 15.4 6.5 10% cost increase + 10% benefit decrease 11.8 -23,592 1-year benefit lag 12.5 63,285 EIRR = Economic Internal rate of return; ENFV = Economic Net Present Value; SV = Switching Value; SI = Sensitivity Index. Source: Consultant’s estimates Sensitivity tests on the rate of decline in area of cropped land indicate that this has no significant impact of the FIRR or FNPV. A 10% reduction in the increase in the cropping intensity in the with- project scenario reduces the FIRR to 13.5% and the EIRR to 13.8% while a 10% reduction in the incremental yield of walnuts will reduce the FIRR to 13.1% and the EIRR to 13.5%. These results confirm that the analysis is generally robust but also highlight the importance of the walnut crop. SOGREAH - REPORT N° 1300030.R4 PAGE 26 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT ANNEX 1 Details of Least Cost Analysis SOGREAH - REPORT N° 1300030.R4 PAGE 27 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Table A1.1: Gonboxia Subproject: Estimated Financial and Economic Investment and Operating Costs for Proposed Option Financial Cost Economic Cost Item Civil Works Equipment Others Total Civil Works Equipment Others Total North Main Canal Civil Works 245,964 - - 245,964 225,685 - - 225,685 Electro-mechanical equipment and installation - 550 - 550 - 518 - 518 Metal structures & equipment 6,232 826 - 7,058 5,653 778 - 6,431 Temporary works 13,832 - - 13,832 12,692 - - 12,692 Ot hers - - 31,708 31,708 - - 28,539 28,539 Sub-total 266,027 1,376 31,708 299,112 244,029 1,297 28,539 273,865 South Main Canal Civil Works 241,577 - - 241,577 221,660 - - 221,660 Electro-mechanical equipment and installation 341 1,253 - 1,593 309 1,180 - 1,489 Metal structures & equipment 8,630 527 - 9,157 7,828 496 - 8,325 Temporary works 13,049 - - 13,049 11,973 - - 11,973 Ot hers - - 31,889 31,889 - - 28,702 28,702 Sub-total 263,597 1,779 31,889 297,265 241,770 1,676 28,702 272,148 Gongboxia Subproject Civil Works 487,540 - - 487,540 447,345 - - 447,345 Electro-mechanical equipment and installation 341 1,803 - 2,143 309 1,698 - 2,007 Metal structures & equipment 14,862 1,353 - 16,215 13,481 1,275 - 14,756 Temporary works 26,881 - - 26,881 24,664 - - 24,664 Ot hers - - 63,598 63,598 - - 57,241 57,241 Total Base Costs 529,624 3,156 63,598 596,377 485,799 2,973 57,241 546,013 Price Contingencies (10%) 52,962 316 6,360 59,638 48,580 297 5,724 54,601 Subtotal System Development 582,586 3,471 69,958 656,015 534,379 3,270 62,966 600,614 Resettlement & environment Land requisition 6,869 6,869 6,182 - - 6,182 Water and soil conservancy 4,507 4,507 4,057 - - 4,057 Environmental protection 1,514 1,514 1,363 - - 1,363 Sub-total Resettlement & Environment 12,890 12,890 11,602 - - 11,602 Total Investment 595,476 3,471 69,958 668,905 545,980 3,270 62,966 612,216 Operation and Maintenance Costs Item Total Total Salary & welfare 479 401 Rep ai r 5,248 4,834 Fuel & pow er 150 290 Ot her 859 799 Total Operation & Maintenance Costs 6,736 6,323 Source: Consultant’s estimates based on DI data SOGREAH - REPORT N° 1300030.R4 PAGE 28 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Table A1.2: Gonboxia Subproject: Estimated Financial and Economic Investment and Operating Costs for Rehabilitation Option Financial Cost Economic Cost Item Civil Works Equipment Others Total Civil Works Equipment Others Total Gongboxia Subproject Civil Works 216,453 - - 216,453 198,607 - - 198,607 Electro-mechanical equipment and installation 21,044 15,822 - 36,866 19,088 14,905 - 33,993 Metal structures & equipment 50,940 - - 50,940 46,205 - - 46,205 Temporary works 15,376 - - 15,376 14,108 - - 14,108 Ot hers - - 37,409 37,409 - - 33,670 33,670 Total Base Costs 303,813 15,822 37,409 357,044 278,009 14,905 33,670 326,584 Price Contingencies (10%) 30,381 1,582 3,741 35,704 27,801 1,490 3,367 32,658 Subtotal System Development 334,194 17,404 41,150 392,748 305,810 16,395 37,037 359,243 Resettlement & environment Land requisition 6,869 - - 6,869 6,182 6,470 - 12,653 Water and soil conservancy 4,507 - - 4,507 4,057 - - 4,057 Environmental protection 1,514 - - 1,514 1,363 - - 1,363 Sub-total Resettlement & Environment 12,890 - - 12,890 11,602 6,470 - 18,072 Total Investment 347,084 17,404 41,150 405,638 317,412 22,866 37,037 377,315 Operation and Maintenance Costs Item Total Total Salary & welfare 479 431 Rep ai r 2,607 2,401 Fuel & pow er 8,400 16,212 Ot her 463 430 Total Operation & Maintenance Costs 11,949 19,475 Source: Consultant’s estimates based on DI data SOGREAH - REPORT N° 1300030.R4 PAGE 29 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Table A1.3: Gongboxia Subproject: Least Cost Financial Analysis for Proposed and Rehabilitation Options Proposed Option Rehabilition Option Total Financial Investment 668,905 CNY 0 0 0 s 405,638 CNY 000s Operation & Maintenance 6,736 CNY 000s 11,949 CNY 000s Benefitting area 6,933 ha 5,425 ha Year Investment O&M Total Completion Year Investment O&M Total 1 100,336 0 100,336 15% 1 60,846 0 60,846 2 200,671 1,010 201,682 30% 2 121,691 1,792 123,484 3 200,671 3,031 203,703 30% 3 121,691 5,377 127,069 4 167,226 5,052 172,278 25% 4 101,410 8,962 110,371 5 6,736 6,736 5 11,949 11,949 6 6,736 6,736 6 11,949 11,949 7 6,736 6,736 7 11,949 11,949 8 6,736 6,736 8 11,949 11,949 9 6,736 6,736 9 11,949 11,949 10 6,736 6,736 10 11,949 11,949 11 6,736 6,736 11 11,949 11,949 12 6,736 6,736 12 11,949 11,949 13 6,736 6,736 13 11,949 11,949 14 6,736 6,736 14 11,949 11,949 15 6,736 6,736 15 11,949 11,949 16 6,736 6,736 16 11,949 11,949 17 6,736 6,736 17 11,949 11,949 18 6,736 6,736 18 11,949 11,949 19 6,736 6,736 19 11,949 11,949 20 6,736 6,736 20 60,846 11,949 72,795 21 6,736 6,736 21 121,691 11,949 133,640 22 6,736 6,736 22 121,691 11,949 133,640 23 6,736 6,736 23 101,410 11,949 113,359 24 6,736 6,736 24 11,949 11,949 25-35 6,736 6,736 25-35 11,949 11,949 36 6,736 6,736 36 11,949 11,949 37 6,736 6,736 37 11,949 11,949 38 6,736 6,736 38 11,949 11,949 39 6,736 6,736 39 11,949 11,949 40 6,736 6,736 40 60,846 11,949 72,795 41 6,736 6,736 41 121,691 11,949 133,640 42 6,736 6,736 42 121,691 11,949 133,640 43 6,736 6,736 43 101,410 11,949 113,359 44-56 6,736 6,736 44-56 11,949 11,949 25 yr NPV (12%) CNY 498,669 CNY 39,748 CNY 538,417 NPV (12%) CNY 494,586 CNY 70,511 CNY 408,025 NPV/ ha CNY 71.93 CNY 5.73 CNY 77.66 NPV/ ha CNY 91.17 CNY 13.00 CNY 75.21 30 yr NPV (12%) CNY 498,669 CNY 40,656 CNY 539,325 NPV (12%) CNY 494,586 CNY 72,121 CNY 409,636 NPV/ ha CNY 71.93 CNY 5.86 CNY 77.79 NPV/ ha CNY 91.17 CNY 13.29 CNY 75.51 50 yr NPV (12%) CNY 498,669 CNY 41,723 CNY 540,392 NPV (12%) CNY 616,722 CNY 74,014 CNY 415,169 NPV/ ha CNY 71.93 CNY 6.02 CNY 77.95 NPV/ ha CNY 113.69 CNY 13.64 CNY 76.53 Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 30 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Table A1.4: Gongboxia Subproject: Least Cost Economic Analysis for Proposed and Rehabilitation Options Proposed Option Rehabilition Option Total Economic Investment 612,216 CNY 000s 377,315 CNY 000s Operation 6,323 CNY 000s 19,475 CNY 000s Benefitting area 6,933 ha 5,425 ha Year Investment O&M Total Completion Year Investment O&M Total 1 91,832 0 91,832 15% 1 56,597 0 56,597 2183,665 948 184,613 30% 2 113,194 2,921 116,116 3183,665 2,845 186,510 30% 3 113,194 8,764 121,958 4 153,054 4,742 157,796 25% 4 94,329 14,606 108,935 5 6,323 6,323 5 19,475 19,475 6 6,323 6,323 6 19,475 19,475 7 6,323 6,323 7 19,475 19,475 8 6,323 6,323 8 19,475 19,475 9 6,323 6,323 9 19,475 19,475 10 6,323 6,323 10 19,475 19,475 11 6,323 6,323 11 19,475 19,475 12 6,323 6,323 12 19,475 19,475 13 6,323 6,323 13 19,475 19,475 14 6,323 6,323 14 19,475 19,475 15 6,323 6,323 15 19,475 19,475 16 6,323 6,323 16 19,475 19,475 17 6,323 6,323 17 19,475 19,475 18 6,323 6,323 18 19,475 19,475 19 6,323 6,323 19 19,475 19,475 20 6,323 6,323 20 56,597 19,475 76,072 21 6,323 6,323 21 113,194 19,475 132,669 22 6,323 6,323 22 113,194 19,475 132,669 23 6,323 6,323 23 94,329 19,475 113,804 24 6,323 6,323 24 19,475 19,475 25-35 6,323 6,323 25-35 19,475 19,475 36 6,323 6,323 36 19,475 19,475 37 6,323 6,323 37 19,475 19,475 38 6,323 6,323 38 19,475 19,475 39 6,323 6,323 39 19,475 19,475 40 6,323 6,323 40 56,597 19,475 76,072 41 6,323 6,323 41 113,194 19,475 132,669 42 6,323 6,323 42 113,194 19,475 132,669 43 6,323 6,323 43 94,329 19,475 113,804 44-56 6,323 6,323 44-56 19,475 19,475 25 yr NPV (12%) CNY 456,407 CNY 37,311 CNY 493,718 NPV (12%) CNY 460,052 CNY 114,921 CNY 428,869 NPV/ ha CNY 65.83 CNY 5.38 CNY 71.21 NPV/ ha CNY 84.81 CNY 21.18 CNY 79.06 30 yr NPV (12%) CNY 456,407 CNY 38,163 CNY 494,571 NPV (12%) CNY 460,052 CNY 117,545 CNY 431,493 NPV/ ha CNY 65.83 CNY 5.50 CNY 71.34 NPV/ ha CNY 84.81 CNY 21.67 CNY 79.54 50 yr NPV (12%) CNY 456,407 CNY 39,165 CNY 495,572 NPV (12%) CNY 573,660 CNY 120,631 CNY 437,964 NPV/ ha CNY 65.83 CNY 5.65 CNY 71.48 NPV/ ha CNY 105.75 CNY 22.24 CNY 80.73 Source: Consultant’s estimates SOGREAH - REPORT N° 1300030.R4 PAGE 31 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT ANNEX 2 Financial Crop Budgets by Irrigation Canal Without Project SOGREAH - REPORT N° 1300030.R4 PAGE 32 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Gongboxia North Gongboxia South Item Unit Unit price Amount Value Item Unit Unit price Amount Value Spring Wheat Spring Wheat Outputs Outputs Grain kg 1.72 292 502.24 Grain kg 1.72 292 502.24 Straw CNY 0 0 Straw CNY 0 0 Subtotal Outputs 502.24 Subtotal Outputs 502.24 Inputs Inputs Seed kg 2.53 38.8 98.16 Seed kg 2.53 38.8 98.16 Fertilizer Fertilizer DAP kg 4.78 31.30 149.61 DAP kg 4.78 31.30 149.61 Urea kg 2.05 16.30 33.42 Urea kg 2.05 16.30 33.42 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 14.00 1.40 19.60 Manure m3 14.00 1.40 19.60 Pesticides CNY 31.50 31.50 Pesticides CNY 31.50 31.50 Machinery CNY 85.00 85.00 Machinery CNY 85.00 85.00 Labor 0 Labor 0 Irrigation md 2.28 - Irrigation md 2.28 - Land preparation md 0.95 - Land preparation md 0.95 - Sowing/planting md 0.70 - Sowing/planting md 0.70 - Crop care md 2.31 - Crop care md 2.31 - Harvesting md 3.51 - Harvesting md 3.51 - Post-harvest md 2.41 - Post-harvest md 2.41 - Subtotal Inputs 417.29 Subtotal Inputs 417.29 Gross Margin - Spring Wheat 84.95 Gross Margin - Spring Wheat 84.95 Winter Wheat Winter Wheat Outputs Outputs Grain kg 1.77 420 743.40 Grain kg 1.71 427 730.17 Straw CNY 0 0 Straw CNY 0 0 Subtotal Outputs 743.40 Subtotal Outputs 730.17 Inputs Inputs Seed kg 2.88 37.2 107.14 Seed kg 2.62 32.6 85.41 Fertilizer Fertilizer DAP kg 4.80 26.40 126.72 DAP kg 4.85 32.10 155.69 Urea kg 2.08 15.90 33.07 Urea kg 2.14 12.00 25.68 Oilseed residue kg 1.00 13.40 13.40 Oilseed residue kg 0.95 5.00 4.75 Manure m3 17.50 1.70 29.75 Manure m3 58.33 1.80 104.99 Pesticides CNY 18.87 18.87 Pesticides CNY 17.36 17.36 Machinery CNY 69.58 69.58 Machinery CNY 89.67 89.67 Labor 0 Labor 0 Irrigation md 0.90 - Irrigation md 1.51 - Land preparation md 1.44 - Land preparation md 1.91 - Sowing/planting md 2.30 - Sowing/planting md 1.80 - Crop care md 1.90 - Crop care md 3.34 - Harvesting md 2.39 - Harvesting md 3.06 - Post-harvest md 1.87 - Post-harvest md 2.42 - Subtotal Inputs 398.53 Subtotal Inputs 483.55 Gross Margin - Winter Wheat 344.87 Gross Margin - Winter Wheat 246.62 Rapeseed Rapeseed Outputs Outputs Seed kg 2.48 201 498.48 Seed kg 3.00 184 552.00 Subtotal Outputs 498.48 Subtotal Outputs 552.00 Inputs Inputs Seed kg 14.00 0.7 9.80 Seed kg 18.80 1.8 33.84 Fertilizer Fertilizer DAP kg 4.84 25.00 121.00 DAP kg 4.81 29.40 141.41 Urea kg 2.00 14.60 29.20 Urea kg 2.05 14.00 28.70 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - - - Manure m3 70.00 2.70 189.00 Pesticides CNY 12.80 12.80 Pesticides CNY 29.65 29.65 Machinery CNY 42.00 42.00 Machinery CNY 93.13 93.13 Labor 0 Labor 0 Irrigation md 0.86 - Irrigation md 4.73 - Land preparation md 2.80 - Land preparation md 3.59 - Sowing/planting md 1.82 - Sowing/planting md 1.59 - Crop care md 2.48 - Crop care md 3.38 - Harvesting md 2.54 - Harvesting md 3.82 - Post-harvest md 2.18 - Post-harvest md 4.38 - Subtotal Inputs 214.80 Subtotal Inputs 515.73 Gross Margin - Rapeseed 283.68 Gross Margin - Rapeseed 36.27 Long Chilly Long Chilly Outputs Outputs Fresh Chillies kg 2.51 991 2,487.41 Fresh Chillies kg 2.51 991 2,487.41 Subtotal Outputs 2,487.41 Subtotal Outputs 2,487.41 Inputs Inputs Seed kg 30.00 1.2 36.00 Seed kg 30.00 1.2 36.00 Fertilizer Fertilizer DAP kg 4.81 42.90 206.35 DAP kg 4.81 42.90 206.35 Urea kg 2.02 21.80 44.04 Urea kg 2.02 21.80 44.04 Oilseed residue kg 1.46 27.50 40.15 Oilseed residue kg 1.46 27.50 40.15 Manure m3 - - - Manure m3 - - - Pesticides CNY 31.06 31.06 Pesticides CNY 31.06 31.06 Plastic film CNY 13.75 13.75 Plastic film CNY 13.75 13.75 Machinery CNY 37.50 37.50 Machinery CNY 37.50 37.50 Labor 0 Labor 0 Irrigation md 2.39 - Irrigation md 2.39 - Land preparation md 2.39 - Land preparation md 2.39 - Sowing/planting md 4.79 - Sowing/planting md 4.79 - Crop care md 6.24 - Crop care md 6.24 - Harvesting md 10.45 - Harvesting md 10.45 - Post-harvest md 4.04 - Post-harvest md 4.04 - Marketing md 2.83 - Marketing md 2.83 - Subtotal Inputs 408.85 Subtotal Inputs 408.85 Gross Margin - Long Chilly 2,078.57 Gross Margin - Long Chilly 2,078.57 SOGREAH - REPORT N° 1300030.R4 PAGE 33 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Gongboxia North Gongboxia South Dried Chilly (Jieza Township) Outputs Dried Chillies kg 21.10 301 6,351.10 Subtotal Outputs 6,351.10 Inputs Seed kg 25.00 1.2 30.00 Fertilizer DAP kg 5.10 67.50 344.25 Urea kg 2.11 26.30 55.49 Oilseed residue kg - - - Manure m3 70.00 3.00 210.00 Pesticides CNY 45.75 45.75 Plastic film CNY 37.50 37.50 Machinery CNY 17.50 17.50 Labor 0 Irrigation md 2.00 - Land preparation md 10.75 - Sowing/planting md 6.50 - Crop care md 7.19 - Harvesting md 16.88 - Post-harvest md 8.50 - Marketing md 1.88 - Subtotal Inputs 740.49 Gross Margin - Dried 5,610.61 Potatoes Potatoes Outputs Outputs Tubers kg 0.69 799 551.31 Tubers kg 0.69 799 551.31 Subtotal Outputs 551.31 Subtotal Outputs 551.31 Inputs Inputs Seed potatoes kg 2.04 82.3 167.89 Seed potatoes kg 2.04 82.3 167.89 Fertilizer Fertilizer DAP kg 2.58 9.00 23.22 DAP kg 2.58 9.00 23.22 Urea kg 1.85 13.70 25.35 Urea kg 1.85 13.70 25.35 Oilseed residue kg 0.15 1.90 0.29 Oilseed residue kg 0.15 1.90 0.29 Manure m3 26.92 0.60 16.15 Manure m3 26.92 0.60 16.15 Pesticides CNY 6.86 6.86 Pesticides CNY 6.86 6.86 Machinery CNY 19.23 19.23 Machinery CNY 19.23 19.23 Labor 0 Labor 0 Irrigation md 2.84 - Irrigation md 2.84 - Land preparation md 5.63 - Land preparation md 5.63 - Sowing/planting md 4.54 - Sowing/planting md 4.54 - Crop care md 7.29 - Crop care md 7.29 - Harvesting md 7.65 - Harvesting md 7.65 - Post-harvest md 1.21 - Post-harvest md 1.21 - Subtotal Inputs 258.98 Subtotal Inputs 258.98 Gross Margin - Potatoes 292.33 Gross Margin - Potatoes 292.33 Vegetables Vegetables Outputs Outputs Vegetables kg 0.50 2841 1,420.50 Vegetables kg 0.50 2841 1,420.50 Subtotal Outputs 1,420.50 Subtotal Outputs 1,420.50 Inputs Inputs Seed kg 90.00 0.3 22.50 Seed kg 90.00 0.3 22.50 Fertilizer Fertilizer DAP kg 4.70 10.00 47.00 DAP kg 4.70 10.00 47.00 Urea kg 2.10 25.00 52.50 Urea kg 2.10 25.00 52.50 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - - - Manure m3 - - - Pesticides CNY 23.00 23.00 Pesticides CNY 23.00 23.00 Machinery CNY 25.00 25.00 Machinery CNY 25.00 25.00 Labor 0 Labor 0 Irrigation md 1.50 - Irrigation md 1.50 - Land preparation md - - Land preparation md - - Sowing/planting md 2.00 - Sowing/planting md 2.00 - Crop care md 2.00 - Crop care md 2.00 - Harvesting md 2.00 - Harvesting md 2.00 - Post-harvest md 4.00 - Post-harvest md 4.00 - Subtotal Inputs 170.00 Subtotal Inputs 170.00 Gross Margin - Vegetables 1,250.50 Gross Margin - Vegetables 1,250.50 SOGREAH - REPORT N° 1300030.R4 PAGE 34 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Lijiaxia North Lijiaxia South Item Unit Unit price Amount Value Item Unit Unit price Amount Value Spring Wheat Spring Wheat Outputs Outputs Grain kg 1.48 333 492.84 Grain kg 1.57 325 510.25 Straw CNY 0.00 0 Straw CNY 22.22 0 Subtotal Outputs 492.84 Subtotal Outputs 510.25 Inputs Inputs Seed kg 2.22 21.5 47.73 Seed kg 2.19 26.1 57.16 Fertilizer Fertilizer DAP kg 4.36 12.50 54.50 DAP kg 4.08 22.90 93.43 Urea kg 2.13 14.60 31.10 Urea kg 2.09 15.50 32.40 Oilseed residue kg - - Oilseed residue kg - - - Manure m3 - 1.00 - Manure m3 31.11 0.40 12.44 Pesticides CNY 23.19 23.19 Pesticides CNY 13.25 13.25 Machinery CNY 91.67 91.67 Machinery CNY 140.00 140.00 Labor 0 Labor 0 Irrigation md 1.90 - Irrigation md 0.73 - Land preparation md 1.28 - Land preparation md 0.73 - Sowing/planting md 2.16 - Sowing/planting md 0.73 - Crop care md 2.35 - Crop care md 0.73 - Harvesting md 2.31 - Harvesting md 0.73 - Post-harvest md 2.18 - Post-harvest md 0.73 - Subtotal Inputs 248.19 Subtotal Inputs 348.68 Gross Margin - Spring Wheat 244.65 Gross Margin - Spring Wheat 161.57 Winter Wheat Winter Wheat Outputs Outputs Grain kg 1.72 375 645.00 Grain kg 1.71 330 564.30 Straw CNY 0 0 Straw CNY 0 0 Subtotal Outputs 645.00 Subtotal Outputs 564.30 Inputs Inputs Seed kg 2.50 45.0 112.50 Seed kg 2.25 28.8 64.80 Fertilizer Fertilizer DAP kg 4.47 27.10 121.14 DAP kg 3.74 23.30 87.14 Urea kg 2.28 17.70 40.36 Urea kg 2.14 12.90 27.61 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - 0.30 - Manure m3 35.00 0.70 24.50 Pesticides CNY 13.58 13.58 Pesticides CNY 10.15 10.15 Machinery CNY 103.50 103.50 Machinery CNY 116.61 116.61 Labor 0 Labor 0 Irrigation md 2.68 - Irrigation md 0.69 - Land preparation md 5.16 - Land preparation md 1.50 - Sowing/planting md 2.07 - Sowing/planting md 0.71 - Crop care md 4.14 - Crop care md 2.47 - Harvesting md 4.50 - Harvesting md 1.74 - Post-harvest md 2.86 - Post-harvest md 1.65 - Subtotal Inputs 391.07 Subtotal Inputs 330.81 Gross Margin - Winter Wheat 253.93 Gross Margin - Winter Wheat 233.49 Rapeseed Rapeseed Outputs Outputs Seed kg 2.99 167 499.33 Seed kg 3.18 108 343.44 Subtotal Outputs 499.33 Subtotal Outputs 343.44 Inputs Inputs Seed kg 12.08 2.3 27.78 Seed kg 13.00 0.9 11.70 Fertilizer Fertilizer DAP kg 4.07 5.60 22.79 DAP kg 3.53 26.30 92.84 Urea kg 2.15 16.90 36.34 Urea kg 2.04 19.40 39.58 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - 0.50 - Manure m3 - - - Pesticides CNY 11.88 11.88 Pesticides CNY 9.88 9.88 Machinery CNY 39.38 39.38 Machinery CNY 33.75 33.75 Labor 0 Labor 0 Irrigation md 4.76 - Irrigation md 1.75 - Land preparation md 3.03 - Land preparation md 2.25 - Sowing/planting md 3.81 - Sowing/planting md 1.88 - Crop care md 5.87 - Crop care md 5.25 - Harvesting md 3.17 - Harvesting md 3.50 - Post-harvest md 3.57 - Post-harvest md 5.00 - Subtotal Inputs 138.17 Subtotal Inputs 187.75 Gross Margin - Rapeseed 361.16 Gross Margin - Rapeseed 155.70 Long Chilly Outputs Fresh Chillies kg 2.51 991 2,487.41 Subtotal Outputs 2,487.41 Inputs Seed kg 30.00 1.2 36.00 Fertilizer DAP kg 4.81 42.90 206.35 Urea kg 2.02 21.80 44.04 Oilseed residue kg 1.46 27.50 40.15 Manure m3 - - - Pesticides CNY 31.06 31.06 Plastic film CNY 13.75 13.75 Machinery CNY 37.50 37.50 Labor 0 Irrigation md 2.39 - Land preparation md 2.39 - Sowing/planting md 4.79 - Crop care md 6.24 - Harvesting md 10.45 - Post-harvest md 4.04 - Marketing md 2.83 - Subtotal Inputs 408.85 Gross Margin - Long Chilly 2,078.57 SOGREAH - REPORT N° 1300030.R4 PAGE 35 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Lijiaxia North Lijiaxia South Potatoes Potatoes Outputs Outputs Tubers kg 0.69 799 551.31 Tubers kg 0.69 799 551.31 Subtotal Outputs 551.31 Subtotal Outputs 551.31 Inputs Inputs Seed potatoes kg 2.04 82.3 167.89 Seed potatoes kg 2.04 82.3 167.89 Fertilizer Fertilizer DAP kg 2.58 9.00 23.22 DAP kg 2.58 9.00 23.22 Urea kg 1.85 13.70 25.35 Urea kg 1.85 13.70 25.35 Oilseed residue kg 0.15 1.90 0.29 Oilseed residue kg 0.15 1.90 0.29 Manure m3 26.92 0.60 16.15 Manure m3 26.92 0.60 16.15 Pesticides CNY 6.86 6.86 Pesticides CNY 6.86 6.86 Machinery CNY 19.23 19.23 Machinery CNY 19.23 19.23 Labor 0 Labor 0 Irrigation md 2.84 - Irrigation md 2.84 - Land preparation md 5.63 - Land preparation md 5.63 - Sowing/planting md 4.54 - Sowing/planting md 4.54 - Crop care md 7.29 - Crop care md 7.29 - Harvesting md 7.65 - Harvesting md 7.65 - Post-harvest md 1.21 - Post-harvest md 1.21 - Subtotal Inputs 258.98 Subtotal Inputs 258.98 Gross Margin - Potatoes 292.33 Gross Margin - Potatoes 292.33 Vegetables Vegetables Outputs Outputs Vegetables kg 0.50 2841 1,420.50 Vegetables kg 0.50 2841 1,420.50 Subtotal Outputs 1,420.50 Subtotal Outputs 1,420.50 Inputs Inputs Seed kg 90.00 0.3 22.50 Seed kg 90.00 0.3 22.50 Fertilizer Fertilizer DAP kg 4.70 10.00 47.00 DAP kg 4.70 10.00 47.00 Urea kg 2.10 25.00 52.50 Urea kg 2.10 25.00 52.50 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - - - Manure m3 - - - Pesticides CNY 23.00 23.00 Pesticides CNY 23.00 23.00 Machinery CNY 25.00 25.00 Machinery CNY 25.00 25.00 Labor 0 Labor 0 Irrigation md 1.50 - Irrigation md 1.50 - Land preparation md - - Land preparation md - - Sowing/planting md 2.00 - Sowing/planting md 2.00 - Crop care md 2.00 - Crop care md 2.00 - Harvesting md 2.00 - Harvesting md 2.00 - Post-harvest md 4.00 - Post-harvest md 4.00 - Subtotal Inputs 170.00 Subtotal Inputs 170.00 Gross Margin - Vegetables 1,250.50 Gross Margin - Vegetables 1,250.50 Maize Outputs Grain kg 1.40 288 403.20 Straw Subtotal Outputs 403.20 Inputs Seed kg 11.10 3.8 42.18 Fertilizer DAP kg 3.22 25.00 80.50 Urea kg 2.20 15.00 33.00 Oilseed residue kg - - - Manure m3 70.00 0.80 56.00 Pesticides CNY 28.00 28.00 Machinery CNY 35.00 35.00 Labor 0 Irrigation md 2.25 - Land preparation md 2.42 - Sowing/planting md 2.42 - Crop care md 2.67 - Harvesting md 3.25 - Post-harvest md 5.25 - Subtotal Inputs 274.68 Gross Margin - Maize 128.52 SOGREAH - REPORT N° 1300030.R4 PAGE 36 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Lijiaxia South Maize Outputs Grain kg 1.40 288 403.20 Straw Subtotal Outputs 403.20 Inputs Seed kg 11.10 3.8 42.18 Fertilizer DAP kg 3.22 25.00 80.50 Urea kg 2.20 15.00 33.00 Oilseed residue kg - - - Manure m3 70.00 0.80 56.00 Pesticides CNY 28.00 28.00 Machinery CNY 35.00 35.00 Labor 0 Irrigation md 2.25 - Land preparation md 2.42 - Sowing/planting md 2.42 - Crop care md 2.67 - Harvesting md 3.25 - Post-harvest md 5.25 - Subtotal Inputs 274.68 Gross Margin - Maize 128.52 Legumes (broad beans & peas) Outputs Broad beans Peas Legumes kg 2.30 313 2.40 225 629.38 Subtotal Outputs 629.38 Inputs Seed kg 2.00 15.0 2.40 15 33.00 Fertilizer DAP kg 3.20 11.90 0 0 19.04 Urea kg 2.05 9.40 2.70 8.80 21.52 Oilseed residue kg - - 0 0 - Manure m3 70.00 0.50 70 1 52.50 Pesticides CNY - 0 - Machinery CNY - 0 - Labor 0 0 Irrigation md 1.50 1.00 - Land preparation md 3.00 2.00 - Sowing/planting md 5.00 2.00 - Crop care md 4.00 2.00 - Harvesting md 3.00 2.00 - Post-harvest md 2.00 4.00 - Subtotal Inputs 126.06 Gross Margin - Legumes 503.32 SOGREAH - REPORT N° 1300030.R4 PAGE 37 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT ANNEX 3 Financial Crop Budgets by Irrigation Canal With Project SOGREAH - REPORT N° 1300030.R4 PAGE 38 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Gongboxia North Gongboxia South Item Unit Unit price Amount ValueItem Unit Unit price Amount Value Spring Wheat Spring Wheat Outputs Outputs Grain kg 1.72 363 624.36 Grain kg 1.72 363 624.36 Straw CNY 0 0 Straw CNY 0 0 Subtotal Outputs 624.36 Subtotal Outputs 624.36 Inputs Inputs Seed kg 2.53 38.8 98.16 Seed kg 2.53 38.8 98.16 Fertilizer Fertilizer DAP kg 4.78 31.30 149.61 DAP kg 4.78 31.30 149.61 Urea kg 2.05 16.30 33.42 Urea kg 2.05 16.30 33.42 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 14.00 1.40 19.60 Manure m3 14.00 1.40 19.60 Pesticides CNY - 31.50 31.50 Pesticides CNY 31.50 31.50 Machinery CNY - 85.00 85.00 Machinery CNY 85.00 85.00 Labor 0 Labor 0 Irrigation md 2.28 - Irrigation md 2.28 - Land preparation md 0.95 - Land preparation md 0.95 - Sowing/planting md 0.70 - Sowing/planting md 0.70 - Crop care md 2.31 - Crop care md 2.31 - Harvesting md 4.36 - Harvesting md 4.36 - Post-harvest md 3.00 - Post-harvest md 3.00 - Subtotal Inputs 417.29 Subtotal Inputs 417.29 Gross Margin - Spring Wheat 207.07 Gross Margin - Spring Wheat 207.07 Winter Wheat Winter Wheat Outputs Outputs Grain kg 1.77 535 946.95 Grain kg 1.71 536 916.56 Straw CNY 0 0 Straw CNY 0 0 Subtotal Outputs 946.95 Subtotal Outputs 916.56 Inputs Inputs Seed kg 2.88 37.2 107.14 Seed kg 2.62 32.60 85.41 Fertilizer Fertilizer DAP kg 4.80 26.40 126.72 DAP kg 4.85 32.1 155.69 Urea kg 2.08 15.90 33.07 Urea kg 2.14 12.00 25.68 Oilseed residue kg 1.00 13.40 13.40 Oilseed residue kg 0.95 5.00 4.75 Manure m3 17.50 1.70 29.75 Manure m3 58.33 1.80 104.99 Pesticides CNY 18.87 18.87 Pesticides CNY 17.36 17.36 Machinery CNY 69.58 69.58 Machinery CNY 89.67 89.67 Labor 0 Labor 0 Irrigation md 0.90 - Irrigation md 1.51 - Land preparation md 1.44 - Land preparation md 1.91 - Sowing/planting md 2.30 - Sowing/planting md 1.80 - Crop care md 1.90 - Crop care md 3.34 - Harvesting md 3.04 - Harvesting md 3.84 - Post-harvest md 2.38 - Post-harvest md 3.04 - Subtotal Inputs 398.53 Subtotal Inputs 483.55 Gross Margin - Winter Wheat 548.42 Gross Margin - Winter Wheat 433.01 Rapeseed Rapeseed Outputs Outputs Seed kg 2.48 250 620.00 Seed kg 3.00 231 693.00 Subtotal Outputs 620.00 Subtotal Outputs 693.00 Inputs Inputs Seed kg 14.00 0.7 9.80 Seed kg 18.80 1.8 33.84 Fertilizer Fertilizer DAP kg 4.84 25.00 121.00 DAP kg 4.81 29.40 141.41 Urea kg 2.00 14.60 29.20 Urea kg 2.05 14.00 28.70 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - - - Manure m3 70.00 2.70 189.00 Pesticides CNY 12.80 12.80 Pesticides CNY 29.65 29.65 Machinery CNY 42.00 42.00 Machinery CNY 93.13 93.13 Labor 0 Labor 0 Irrigation md 0.86 - Irrigation md 4.73 - Land preparation md 2.80 - Land preparation md 3.59 - Sowing/planting md 1.82 - Sowing/planting md 1.59 - Crop care md 2.48 - Crop care md 3.38 - Harvesting md 3.16 - Harvesting md 4.80 - Post-harvest md 2.71 - Post-harvest md 4.38 - Subtotal Inputs 214.80 Subtotal Inputs 515.73 Gross Margin - Rapeseed 405.20 Gross Margin - Rapeseed 177.27 Long Chilly Long Chilly Outputs Outputs Fresh Chillies kg 2.51 1223 3,069.73 Fresh Chillies kg 2.51 1223 3,069.73 Subtotal Outputs 3,069.73 Subtotal Outputs 3,069.73 Inputs Inputs Seed kg 30.00 1.2 36.00 Seed kg 30.00 1.2 36.00 Fertilizer Fertilizer DAP kg 4.81 42.90 206.35 DAP kg 4.81 42.90 206.35 Urea kg 2.02 21.80 44.04 Urea kg 2.02 21.80 44.04 Oilseed residue kg 1.46 27.50 40.15 Oilseed residue kg 1.46 27.50 40.15 Manure m3 - - - Manure m3 - - - Pesticides CNY 31.06 31.06 Pesticides CNY 31.06 31.06 Plastic film CNY 13.75 13.75 Plastic film CNY 13.75 13.75 Machinery CNY 37.50 37.50 Machinery CNY 37.50 37.50 Labor 0 Labor 0 Irrigation md 2.39 - Irrigation md 2.39 - Land preparation md 2.39 - Land preparation md 2.39 - Sowing/planting md 4.79 - Sowing/planting md 4.79 - Crop care md 6.24 - Crop care md 6.24 - Harvesting md 12.90 - Harvesting md 12.90 - Post-harvest md 4.99 - Post-harvest md 4.99 - Marketing md 3.49 - Marketing md 3.49 - Subtotal Inputs 408.85 Subtotal Inputs 408.85 Gross Margin - Long Chilly 2,660.89 Gross Margin - Long Chilly 2,660.89 SOGREAH - REPORT N° 1300030.R4 PAGE 39 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Gongboxia North Gongboxia South Dried Chilly (Jieza Township) Outputs Dried Chillies kg 21.10 473 9,980.30 Subtotal Outputs 9,980.30 Inputs Seed kg 25.00 1.2 30.00 Fertilizer DAP kg 5.10 67.50 344.25 Urea kg 2.11 26.30 55.49 Oilseed residue kg - - - Manure m3 70.00 3.00 210.00 Pesticides CNY 45.75 45.75 Plastic film CNY 37.50 37.50 Machinery CNY 17.50 17.50 Labor 0 Irrigation md 2.00 - Land preparation md 10.75 - Sowing/planting md 6.50 - Crop care md 7.19 - Harvesting md 26.53 - Post-harvest md 13.36 - Marketing md 2.95 - Subtotal Inputs 740.49 Gross Margin - Dried 9,239.81 Potatoes Potatoes Outputs Outputs Tubers kg 0.69 1064 734.16 Tubers kg 0.69 1064 734.16 Subtotal Outputs 734.16 Subtotal Outputs 734.16 Inputs Inputs Seed potatoes kg 2.04 82.3 167.89 Seed potatoes kg 2.04 82.3 167.89 Fertilizer Fertilizer DAP kg 2.58 9.00 23.22 DAP kg 2.58 9.00 23.22 Urea kg 1.85 13.70 25.35 Urea kg 1.85 13.70 25.35 Oilseed residue kg 0.15 1.90 0.29 Oilseed residue kg 0.15 1.90 0.29 Manure m3 26.92 0.60 16.15 Manure m3 26.92 0.60 16.15 Pesticides CNY 6.86 6.86 Pesticides CNY 6.86 6.86 Machinery CNY 19.23 19.23 Machinery CNY 19.23 19.23 Labor 0 Labor 0 Irrigation md 2.84 - Irrigation md 2.84 - Land preparation md 5.63 - Land preparation md 5.63 - Sowing/planting md 4.54 - Sowing/planting md 4.54 - Crop care md 7.29 - Crop care md 7.29 - Harvesting md 10.19 - Harvesting md 10.19 - Post-harvest md 1.61 - Post-harvest md 1.61 - Subtotal Inputs 258.98 Subtotal Inputs 258.98 Gross Margin - Potatoes 475.18 Gross Margin - Potatoes 475.18 Vegetables Vegetables Outputs Outputs Vegetables kg 0.50 3636 1,818.00 Vegetables kg 0.50 3636 1,818.00 Subtotal Outputs 1,818.00 Subtotal Outputs 1,818.00 Inputs Inputs Seed kg 90.00 0.25 22.50 Seed kg 90.00 0.25 22.50 Fertilizer Fertilizer DAP kg 4.70 10.00 47.00 DAP kg 4.70 10.00 47.00 Urea kg 2.10 25.00 52.50 Urea kg 2.10 25.00 52.50 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - - - Manure m3 - - - Pesticides CNY 23.00 23.00 Pesticides CNY 23.00 23.00 Machinery CNY 25.00 25.00 Machinery CNY 25.00 25.00 Labor 0 Labor 0 Irrigation md 1.50 - Irrigation md 1.50 - Land preparation md - - Land preparation md - - Sowing/planting md 2.00 - Sowing/planting md 2.00 - Crop care md 2.00 - Crop care md 2.00 - Harvesting md 2.56 - Harvesting md 2.56 - Post-harvest md 5.12 - Post-harvest md 5.12 - Subtotal Inputs 170.00 Subtotal Inputs 170.00 Gross Margin - Vegetables 1,648.00 Gross Margin - Vegetables 1,648.00 SOGREAH - REPORT N° 1300030.R4 PAGE 40 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Lijiaxia North Lijiaxia South Item Unit Unit price Amount Value Item Unit Unit price Amount Value Spring Wheat Spring Wheat Outputs Outputs Grain kg 1.48 408 603.84 Grain kg 1.57 406 637.42 Straw CNY 0.00 0 Straw CNY 22.22 0 Subtotal Outputs 603.84 Subtotal Outputs 637.42 Inputs Inputs Seed kg 2.22 21.5 47.73 Seed kg 2.19 26.1 57.16 Fertilizer Fertilizer DAP kg 4.36 12.50 54.50 DAP kg 4.08 22.90 93.43 Urea kg 2.13 14.60 31.10 Urea kg 2.09 15.50 32.40 Oilseed residue kg - - Oilseed residue kg - - - Manure m3 - 1.00 - Manure m3 31.11 0.40 12.44 Pesticides CNY 23.19 23.19 Pesticides CNY 13.25 13.25 Machinery CNY 91.67 91.67 Machinery CNY 140.00 140.00 Labor 0 Labor 0 Irrigation md 1.90 - Irrigation md 0.73 - Land preparation md 1.28 - Land preparation md 0.73 - Sowing/planting md 2.16 - Sowing/planting md 0.73 - Crop care md 2.35 - Crop care md 0.73 - Harvesting md 2.31 - Harvesting md 0.91 - Post-harvest md 2.18 - Post-harvest md 0.91 - Subtotal Inputs 248.19 Subtotal Inputs 348.68 Gross Margin - Spring Wheat 355.65 Gross Margin - Spring Wheat 288.74 Winter Wheat Winter Wheat Outputs Outputs Grain kg 1.72 442 760.24 Grain kg 1.71 412 704.52 Straw CNY 0 0 Straw CNY 0 0 Subtotal Outputs 760.24 Subtotal Outputs 704.52 Inputs Inputs Seed kg 2.50 45.0 112.50 Seed kg 2.25 28.8 64.80 Fertilizer Fertilizer DAP kg 4.47 27.10 121.14 DAP kg 3.74 23.30 87.14 Urea kg 2.28 17.70 40.36 Urea kg 2.14 12.90 27.61 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - 0.30 - Manure m3 35.00 0.70 24.50 Pesticides CNY 13.58 13.58 Pesticides CNY 10.15 10.15 Machinery CNY 103.50 103.50 Machinery CNY 116.61 116.61 Labor 0 Labor 0 Irrigation md 2.68 - Irrigation md 0.69 - Land preparation md 5.16 - Land preparation md 1.50 - Sowing/planting md 2.07 - Sowing/planting md 0.71 - Crop care md 4.14 - Crop care md 2.47 - Harvesting md 5.30 - Harvesting md 2.17 - Post-harvest md 3.37 - Post-harvest md 2.06 - Subtotal Inputs 391.07 Subtotal Inputs 330.81 Gross Margin - Winter Wheat 369.17 Gross Margin - Winter Wheat 373.71 Rapeseed Rapeseed Outputs Outputs Seed kg 2.99 235 702.65 Seed kg 3.18 189 601.02 Subtotal Outputs 702.65 Subtotal Outputs 601.02 Inputs Inputs Seed kg 12.08 2.3 27.78 Seed kg 13.00 0.9 11.70 Fertilizer Fertilizer DAP kg 4.07 5.60 22.79 DAP kg 3.53 26.30 92.84 Urea kg 2.15 16.90 36.34 Urea kg 2.04 19.40 39.58 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - 0.50 - Manure m3 - - - Pesticides CNY 11.88 11.88 Pesticides CNY 9.88 9.88 Machinery CNY 39.38 39.38 Machinery CNY 33.75 33.75 Labor 0 Labor 0 Irrigation md 4.76 - Irrigation md 1.75 - Land preparation md 3.03 - Land preparation md 2.25 - Sowing/planting md 3.81 - Sowing/planting md 1.88 - Crop care md 5.87 - Crop care md 5.25 - Harvesting md 4.46 - Harvesting md 6.13 - Post-harvest md 5.02 - Post-harvest md 8.75 - Subtotal Inputs 138.17 Subtotal Inputs 187.75 Gross Margin - Rapeseed 564.48 Gross Margin - Rapeseed 413.28 Long Chilly Outputs Fresh Chillies kg 2.51 1223 3,069.73 Subtotal Outputs 3,069.73 Inputs Seed kg 30.00 1.20 36.00 Fertilizer DAP kg 4.81 42.90 206.35 Urea kg 2.02 21.80 44.04 Oilseed residue kg 1.46 27.50 40.15 Manure m3 - - - Pesticides CNY 31.06 31.06 Plastic film CNY 13.75 13.75 Machinery CNY 37.50 37.50 Labor 0 Irrigation md 2.39 - Land preparation md 2.39 - Sowing/planting md 4.79 - Crop care md 6.24 - Harvesting md 12.90 - Post-harvest md 4.99 - Marketing md 3.49 - Subtotal Inputs 408.85 Gross Margin - Long Chilly 2,660.89 SOGREAH - REPORT N° 1300030.R4 PAGE 41 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Lijiaxia North Lijiaxia South Potatoes Potatoes Outputs Outputs Tubers kg 0.69 1064 734.16 Tubers kg 0.69 1064 734.16 Subtotal Outputs 734.16 Subtotal Outputs 734.16 Inputs Inputs Seed potatoes kg 2.04 82.3 167.89 Seed potatoes kg 2.04 82.3 167.89 Fertilizer Fertilizer DAP kg 2.58 9.00 23.22 DAP kg 2.58 9.00 23.22 Urea kg 1.85 13.70 25.35 Urea kg 1.85 13.70 25.35 Oilseed residue kg 0.15 1.90 0.29 Oilseed residue kg 0.15 1.90 0.29 Manure m3 26.92 0.60 16.15 Manure m3 26.92 0.60 16.15 Pesticides CNY 6.86 6.86 Pesticides CNY 6.86 6.86 Machinery CNY 19.23 19.23 Machinery CNY 19.23 19.23 Labor 0 Labor 0 Irrigation md 2.84 - Irrigation md 2.84 - Land preparation md 5.63 - Land preparation md 5.63 - Sowing/planting md 4.54 - Sowing/planting md 4.54 - Crop care md 7.29 - Crop care md 7.29 - Harvesting md 10.19 - Harvesting md 10.19 - Post-harvest md 1.61 - Post-harvest md 1.61 - Subtotal Inputs 258.98 Subtotal Inputs 258.98 Gross Margin - Potatoes 475.18 Gross Margin - Potatoes 475.18 Vegetables Vegetables Outputs Outputs Vegetables kg 0.50 3636 1,818.00 Vegetables kg 0.50 3636 1,818.00 Subtotal Outputs 1,818.00 Subtotal Outputs 1,818.00 Inputs Inputs Seed kg 90.00 0.25 22.50 Seed kg 90.00 0.25 22.50 Fertilizer Fertilizer DAP kg 4.70 10.00 47.00 DAP kg 4.70 10.00 47.00 Urea kg 2.10 25.00 52.50 Urea kg 2.10 25.00 52.50 Oilseed residue kg - - - Oilseed residue kg - - - Manure m3 - - - Manure m3 - - - Pesticides CNY 23.00 23.00 Pesticides CNY 23.00 23.00 Machinery CNY 25.00 25.00 Machinery CNY 25.00 25.00 Labor 0 Labor 0 Irrigation md 1.50 - Irrigation md 1.50 - Land preparation md - - Land preparation md - - Sowing/planting md 2.00 - Sowing/planting md 2.00 - Crop care md 2.00 - Crop care md 2.00 - Harvesting md 2.56 - Harvesting md 2.56 - Post-harvest md 5.12 - Post-harvest md 5.12 - Subtotal Inputs 170.00 Subtotal Inputs 170.00 Gross Margin - Vegetables 1,648.00 Gross Margin - Vegetables 1,648.00 Maize Outputs Grain kg 1.40 375 525.00 Straw Subtotal Outputs 525.00 Inputs Seed kg 11.10 3.8 42.18 Fertilizer DAP kg 3.22 25.00 80.50 Urea kg 2.20 15.00 33.00 Oilseed residue kg - - - Manure m3 70.00 0.80 56.00 Pesticides CNY 28.00 28.00 Machinery CNY 35.00 35.00 Labor 0 Irrigation md 2.25 - Land preparation md 2.42 - Sowing/planting md 2.42 - Crop care md 2.67 - Harvesting md 4.23 - Post-harvest md 6.84 - Subtotal Inputs 274.68 Gross Margin - Maize 250.32 SOGREAH - REPORT N° 1300030.R4 PAGE 42 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Lijiaxia South Legumes (broad beans & peas) Outputs Broad beans Peas Legumes kg 2.30 400 2.40 300 820.00 Subtotal Outputs 820.00 Inputs Seed kg 2.00 15.0 2.40 15.0 33.00 Fertilizer DAP kg 3.20 11.90 - - 19.04 Urea kg 2.05 9.40 2.70 8.80 21.52 Oilseed residue kg - - - - - Manure m3 70.00 0.50 70.00 1.00 52.50 Pesticides CNY - - - Machinery CNY - - - Labor 0 0 Irrigation md 1.50 1.00 - Land preparation md 3.00 2.00 - Sowing/planting md 5.00 2.00 - Crop care md 4.00 2.00 - Harvesting md 3.84 2.67 - Post-harvest md 2.56 5.33 - Subtotal Inputs 126.06 Gross Margin - Legumes 693.94 SOGREAH - REPORT N° 1300030.R4 PAGE 43 2009 AUGUST PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 10 SIEE SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER Environmental Assessment Report Summary Initial Environmental Examination Project Number: 42016 September 2009 People’s Republic of China: Qinghai Rural Water Resources Management Project Prepared by Qinghai Provincial Government for the Asian Development Bank (ADB). The summary initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. CURRENCY EQUIVALENTS (As of 1 September 2009) Currency Unit -- Yuan (CNY) CNY 1.00 = $0.1464 $1.00 = CNY 6.83 ABBREVIATIONS ADB Asian Development Bank BOD5 Biochemical Oxygen Demand (5 days) CC Construction Contractor CC-EC Construction Contractor Environmental Coordinator CEMP-IM Construction EMP-Implementation Manual (Part B of EMP Document) COD Chemical Oxygen Demand C-PMO County PMO C-PMO-ED Environmental Director of the County PMO CSC Construction Supervising Company CSC-EMU CSC Environmental Management Unit CSC-PM Project manager of the Construction Supervision Company dB(A) A-weighted Decibel EC Environmental Coordinator (PPMO) EE Environmental Engineer (from EMU, CC, PMO) EIA Environmental Impact Assessment EMP Environmental Management Plan EMS Project Management Office - Environmental Management Staff EMU-EM EMU Environmental Manager (of CSC) EO Environmental Officer (from EMU, CC) FS Feasibility Study GP Generic Environmental Management Plan IEE Initial Environmental Examination MEP Ministry of Environmental Protection MM Mitigation Measures NC Non-compliance NCR Non-compliance Report OH&S Occupational Health and Safety O&M Operation & Maintenance PMO Project Management Office of the Water Resources Bureau P-PMO Provincial PMO PPTA project preparation technical assistance PRC People’s Republic of China QEPB Qinghai Provincial Environmental Protection Bureau QSC Quality Supervision Company RAP Resettlement Action Plan SIEE Summary Initial Environmental Examination SON Site Observation Notice WRB Water Resources Bureau NOTE In the report, “$” refers to US dollars, and CNY refers to Chinese yuan MEASUREMENT UNITS g = gram ha = hectare kg = kilogram m = meter m3 = cubic meter mg = milligram mu = area unit, 1 mu = 1/15 ha g/kg = gram per kilogram kg/ha = kilogram per hectare m3/a = cubic meters per annum mg/l = milligram per liter ppm = part per million TABLE OF CONTENTS LOCATION MAPS 1 INTRODUCTION ...... 1 2 DESCRIPTION OF THE PROJECT ...... 1 2.1 PROJECT RATIONALE AND OBJECTIVES...... 1 2.2 MAJOR PROJECT COMPONENTS...... 2 2.3 PROJECT COST AND IMPLEMENTATION SCHEDULE ...... 3 3 DESCRIPTION OF THE ENVIRONMENT...... 4 3.1 PHYSICAL AND ECOLOGICAL RESOURCES...... 4 3.2 HUMAN AND ECONOMIC DEVELOPMENT...... 7 4 FORECASTING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES...... 8 4.1 ANALYSIS OF ALTERNATIVES...... 8 4.2 ENVIRONMENTAL BENEFITS OF THE PROJECT ...... 10 4.3 SCREENING OF POTENTIAL IMPACTS AND MITIGATION MEASURES ...... 11 4.4 IMPACTS AND RISKS DURING OPERATION PHASE OF THE PROJECT ...... 20 5 INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN ...... 24 5.1 CONTENT OF THE EMP ...... 24 5.2 TRAINING AND AWARENESS...... 25 5.3 ENVIRONMENTAL MONITORING AND SUPERVISION...... 26 5.4 REPORTING AND PROCEDURES ...... 29 5.5 TOTAL ENVIRONMENTAL BUDGET FOR THE QRWRMP...... 29 6 PUBLIC CONSULTATION & DISCLOSURE...... 30 7 FINDINGS & RECOMMENDATIONS...... 31 8 CONCLUSIONS...... 32 i LIST OF APPENDIXES Appendix 1. Major Physical Characteristics of Project Sub-Components Appendix 2. Applicable Environmental Laws & Regulations Appendix 3. Applicable Environmental Standards Appendix 4. Results from Environmental Surveys Appendix 5. Summary of Dam Safety Aspects Appendix 6. Potential Impacts from Climate Change Appendix 7. Pesticides & Integrated Pest Management LIST OF SUPPLEMENTARY APPENDIXES A. EIA Report, August 2009 (prepared by the Gansu Provincial Environment Science Design and Research Institute (GPESDRI) B. Environmental Management Plan C. Environmental Management Training Manual D. Water resources availability report E. Soil and water conservation report F. Geological risk report ii Map 1:Location of Project Components iii Map 2: Lijiaxia Project Area iv Map 3: Gongboxia Project Area v 1 INTRODUCTION 1 The Qinghai Rural Water Resources Management Project (the Project) in the People’s Republic of China (PRC) covers two areas located in the upper reaches of the Yellow River Basin, the Lijiaxia and the Gongboxia irrigation areas, both situated downstream the existing dams of the same names built along the Yellow River (Map 1). The Project aims to (i) improve the irrigation system in both areas by the construction of 4 new main canals and secondary branches (see Appendix 1), which will substitute expensive pumping irrigation system by gravity supply system, (ii) develop a Participatory Irrigation Management system through Water Delivery Associations, Water User Associations (WUA), Water Bureaus, with development of model WUA, capacity building of WUA, water delivery control and payment arrangements and on-farm management, and (iii) provide Irrigated Agriculture Support on cropping systems, agronomic practices and crop diversification systems. 2 The QRWRM Project has been classified as a Category B sensitive project for EA requirements by the ADB. In May 2008, Gansu Provincial Environment Science Design and Research Institute (GPESDRI), a Class-A EIA certified organization, carried out the Environmental Assessment for the Project, commissioned by the Foreign Fund Utilization Office of Qinghai Provincial Water Resource Department. GPESDRI started with a series of site visits and data collection in July 2008, submitted a draft EIA report in February 2009, with further updating from March to June 2009 (Supplementary Appendix A). The EIA has been prepared in compliance with the PRC regulatory framework and follows ADB's Environmental Policy (2002) and Environmental Assessment Guidelines (2003). 3 The present SIEE summarizes the key issues identified from the EIA report. for the proposed Project. It highlights the positive and negative environmental impacts, proposed mitigation measures, justifies the project viability from the environmental point of view and provides recommendations for further works in the next phases. The SIEE is complemented with a more detailed Environmental Management Plan (Supplementary Appendix B) and an Environmental Management Training Manual (Supplementary Appendix C) 4 Before the start of the EIA studies, the EIA Gansu Institute received approval from the Provincial EPB of the environmental standards applicable to the Project. A wide range of Environmental Laws and Regulations (Appendix 2) and Standards (Appendix 3) are applicable to the Project. At the end of the EIA study, the EIA report is submitted to Provincial EPB for approval. However, prior to approval the following reports need to be prepared, approved and included in the EIA prior to approval of the EIA report: i) a water resources report, ii) a soil and water conservation report, and (iii) a geological risk report (Supplementary Appendices D, E, and F). 2 DESCRIPTION OF THE PROJECT 2.1 PROJECT RATIONALE AND OBJECTIVES 5 Located in the mainstream areas of the Yellow River, the Project covers three Counties - Xunhua, Hualong and Jianzha, all of which are State-identified poverty counties (Map 1). The three counties in the Eastern part of Qinghai Province have agriculture as the major basic industry with arable lands mainly distributed on both banks of the Yellow River. Because annual rainfall is only about 300 mm, agriculture relies on irrigation. The present system relies on lift irrigation from 1 pumping stations distributed along the Yellow river. Because either defection in the water lifting system or overburdened electric bills for the farmer in regard to poor crop yields, a very significant part of the irrigable land is not irrigated and cropped despite abundant water resource in the Yellow river. Although the “Eighth Seven-Year Priority Poverty Alleviation Program” has been implemented, farmers continue to experience difficulties in permanently avoiding poverty. In order to make full use of the land resources, to save irrigation water, to take advantage of the available water-head from the Yellow River hydroelectric dams, to resolve the problem of adequate food and to promote the development of an harmonious society, the irrigation schemes of Lijiaxia Dam and Gongboxia Dam have been included into the Qinghai Provincial Eleventh-Five-Year Water Resources Project Portfolio as key water conservancy projects. 6 The proposed project comprises irrigation schemes of Lijiaxia Dam and Gongboxia Dam. The irrigation scheme of Lijiaxia Dam lies on valley terraced lands and hilly slope lands of the northern and southern banks of the Yellow River mainstream, which flows through the territories of Hualong County and Jianzha County in Qinghai Province. The irrigation scheme of Gongboxia Dam is located on terraced lands on either bank of the Yellow River of Xunhua County and Hualong County. Each of the two schemes, which take advantage of the high storage water levels of the two dams and natural condition for the Yellow River source, comprise a southern and a northern main canal from pre-designed agricultural irrigation outlets on the left and right dam shoulders, construction of irrigation facilities in the command areas, and provision of irrigation for crop cultivation areas of terraced lands and hilly slope lands on both banks of the Yellow River, converting lift irrigation into gravity irrigation. 2.2 MAJOR PROJECT COMPONENTS 7 The project will rehabilitate and newly construct key water resources infrastructure in the three participating counties, Hualong county, Jianza county and Xunhua county. The project will (i) enhance productivity and sustainability of existing irrigation systems with increased provincial revenues; and (ii) strengthen institutions, including i) Qinghai Department of Water Resources (QDOWR) in delivering accountable irrigation services, ii) Water Users Association (WUAs) in fulfilling specified O&M tasks, and iii) other agencies in providing sound support services. The QRWRM Project includes 4 components presented below: 1. Irrigation system improvement (ISI): The new gravity systems will comprise: (i) new main canals, running down the valley from the existing hydropower reservoirs, (ii) new secondary branch canals, running down the slope towards the river, (iii) tertiary branch canals and, in some cases, (iv) quaternary canals. All new and rehabilitated canals will be lined to minimize seepage and other physical water losses. Once the systems are fully operational, and the design efficiency of 57% should be achieved and the existing old pumping stations and main canals, running up the slope in several lifts, can be abandoned. Wherever possible the new gravity system will utilize the existing lower level canals. Irrigation works for Lijiaxia reservoir include the construction of two main canals from reservoir, north and south of the Yellow river. The total length of two trunks is 56.71 km, of which south trunk is 22.53 km and north trunk is 34.18 km. Irrigation works for Gongboxia reservoir include also two main trunks in north and south of the reservoir. The total length of two trunks is 57.88 km, of which south trunk is 27.308 km and north trunk is 30.57 km. The key physical characteristics of Lijiaxia and Gongboxia irrigation schemes are provided in Appendix 1. 2. Participatory irrigation management (PIM): Participatory Irrigation Management (PIM) activities will be: (i) main system management, by the new County Water Delivery Organizations (WDOs), (ii) volumetric water delivery and ISF payment agreements, between WDOs and model Water Users Associations (WUAs), (iii) secondary unit system management and (iv) on-farm water management field trials and demonstrations, by model WUAs, and (v) field days for farmers in other WUA areas. 2 3. Irrigated agriculture support (IAS): The key Irrigated Agriculture Support activities will include (i) improved cropping systems, (ii) agronomic field trials and demonstrations and (iii) other agricultural support activities, developed and implemented by model WUAs, and (iv) field days for farmers from other WUA areas. 4. Organizational capacity development (OCD): OCD Component activities will comprise strengthening of the PPMO and formation and support of the: (i) three new CPMOs, (ii) three new County WDOs, (iii) eight new model WUAs and (iv) farmers from about 60 other WUA areas and later their WUAs. Consulting services, to facilitate development and implementation of capacity development plans and activities, is the main OCD input to be complemented by limited equipment and formal training. 2.3 PROJECT COST AND IMPLEMENTATION SCHEDULE 8 To achieve the project outcomes and outputs, the Provincial Project Management Office (PPMO) and three County Project Management Office (CPMOs) will be responsible for overall project management and contract and financial management under the ISI Component. The WDOs will be responsible for main system management, forming model WUAs, providing them with effective capacity development support and delivery of farmer field days for farmers from other WUA areas. Model WUAs will be responsible for irrigation system management, within their secondary units, and participatory development and implementation of improved SU cropping systems and water delivery schedules as well as irrigation and agronomic field trials and demonstrations. 9 Tentative Project Investment Plan is provided in the Table 1. The Project will be implemented over 5 years, the total duration resulting mainly from the construction of the tunnels under Component 1. Following the construction progress, the most upstream branches will be progressively commissioned during the 5 years of implementation. Components 2, 3 and 4 (PIM, IAS, OCD) will be also implemented over the 5 years period of construction. TABLE 1: TENTATIVE PROJECT INVESTMENT PLAN (US$ MILLION) A ITEM AMOUNT A. Base Costs b 1. Improved Irrigation Systems 193.8 a. Gongboxia Irrigation System 94.8 b. Lijiaxia Irrigation System 99.9 2. Participatory Irrigation Management 1.1 3. Irrigated Agriculture Strategy 1.0 4. Strengthened Project Management 3.3 Subtotal (A) 199.2 B. Contingencies 1. Physical Contingencies c 19.9 2. Price Contingencies d 4.6 Subtotal (B) 223.7 C. Financing Charges During Implementation e 4.0 Total (A+B+C) 227.7 3 Notes: a Includes taxes and duties of $7.8 million. b In mid-2009 prices. c Physical contingencies computed at 10% for all project costs. d Price contingencies computed at 1.0% for 2010, 0.0% for 2011, 0.3% for 2012 and 0.5% thereafter on foreign exchange costs and 1.0% for 2010, 1.5% for 2011, and 2.0% thereafter on local currency costs; e Includes interest and commitment charges. Interest during construction has been computed at the 5-year forward London interbank offered rate as of 14 August 2009 (3.00%) plus a spread of 0.2%. Commitment charges have been computed at 0.15% per annum on 100% of the undisbursed loan amount. 3 DESCRIPTION OF THE ENVIRONMENT 3.1 PHYSICAL AND ECOLOGICAL RESOURCES 10 Climate. The project areas belong to temperate semi-arid climate and plateau continental climate; typical characteristics are low precipitation, strong wind, and wide temperature variation from night to noon. Average annual temperature in both Project areas is 7.8°c, with average maximum and minimum temperatures of 15.1-1.8°c (Lijiaxia) and 15.7-2.3°c (Gongboxia). Annual rainfall is low, with only 331 mm for Lijiaxia and 259 mm for Gongboxia, making irrigation compulsory for agriculture production. Because of the frequent wind occurrence, evaporation is high, 2881 mm for Lijiaxia and 2206 mm for Gongboxia. 11 Water Resources. Water resources are abundant in Qinghai Province with about 266 lakes and 277 river streams. The 4,500 km² Qinghai Lake is the largest water body in PRC, and three of the major rivers of Asia, the Yangtze, the Mekong and the Yellow River, have their sources in this province. 12 Total water resources of Yellow River Basin within the territory of Qinghai Province is estimated 24.22 billion m3. The Central Government through the Yellow River Basin Commission allocates to Qinghai Province an annual water right from the Yellow River Basin of 1.41 billion m3 (Yellow River Conservancy Notification No. 19, 2006). This allocation is distributed amongst various geographic areas as detailed in Table 2. 4 TABLE 2: WATER RIGHTS ALLOCATION FOR QINGHAI PROVINCE (MILLIONS M3) WATER ALLOCATION FROM WATER ALLOCATION FROM AREA SUBTOTAL MAIN YELLOW RIVER STREAM YELLOW RIVER MAIN TRIBUTARIES Datong River 238 Xining 0 479 Xining River 241 Datong River 2 East Qinghai 152 521 Xining River 367 Datong River 48 North Qinghai 0 68 Xining River 20 South Qinghai 242 - - 242 Huangnan County 78 - - 78 Guoluo County 21 - - 21 Yushu County 1 - - 1 Datong River 288 Total 494 1,410 Xining River 628 13 According to the statistical data of Qinghai Province, between 1995 and 2006, the annual average of the Province water abstraction was only 1.096 billion m3, 78% of, or 314 Mm3 below its water quota from the Yellow River Basin. 14 Annual inflow to Lijiaxia and Gongboxia is reasonably stable. Indeed, the upper Yellow River has been developed as a cascade of dams for hydropower production. From upstream down to Gongboxia, there is a succession of 7 dams: Longjiangxia, Laxiwa, Nina, Lijiaxia, Zhiganglaka, Kang Yang and Gongboxia. 15 The annual runoff from the upper catchment is regulated by Longjiangxia which has a huge storage capacity of 24.7 billion m3 (larger than the annual runoff of Yellow River Basin within Qinghai Province) , from which 19.35 billion m3 is active storage. All the other reservoirs have a much modest storage capacity, and most have a very small active storage capacity, which is understandable as the runoff is regulated from upstream. 16 Annual inflows to Lijiaxia reservoir (and consequently also to Gongboxia reservoir) are presently the followings: a normal year: 22,705 Mm3 or 720 m3/s; a dry year (50%): 21,949 Mm3 or 696 m3/s, Dry Year (75%): 18,795 Mm3 or 596 m3/s, and a Dry Year (95%): 15,515 Mm3 or 492 m3/s. Whatever the climate situation, the inflows to the Project reservoirs is always 15 to 10 times higher than the water right of 1.41 billion m3/year allocated to Qinghai Province. 17 Groundwater in the Project areas belongs to various hydrogeological systems, mainly mountain bedrock fissure aquifer and alluvial aquifer in the bottom part of the valleys in the quaternary deposits. Bedrock fissure ground water is mainly replenished by atmospheric precipitation and is released by springs located at the foot of slope or in the valley bottom. According to the results of the water quality survey, groundwater in the project areas has a low mineralization of < 1 g/L, perfectly suitable for concrete preparation. Alluvial underground water has a thickness ranging from 5 to 30 m, fed by rainfall, bedrock fissure water and by infiltration water from the Yellow river. The water is abundant and has an equivalent quality to that of bedrock fissure water. 18 Environmental Quality. In July 2008, Qinghai Provincial Environment Monitoring Station was commissioned to carry out within the Project's areas field surveys including (i) surface water quality (2 samples in the Yellow river at the entrance and exit of each irrigation schemes), (ii) groundwater quality (2 samples in each schemes), (iii) air quality (one sampling station in each irrigation scheme), (iv) noise, and (v) soil quality. The sampling analysis results (Appendix 4) 5 confirmed that surface water quality is good. All parameters of surface water meet requirements of Class III of “Environmental Quality Standard for Surface Water” (GB3838-2002). The quality also met “Hygienic Regulation for Domestic Drinkable Water-2001” and “Hygienic Standard for Domestic Drinkable Water” (GB 5749-2006). Groundwater is contaminated by bacteria and coliform as a result of the infiltration of untreated domestic effluents in the urbanized areas. Total bacteria and total coliform concentrations in groundwater are worse than Class V standard of “Ground Water Quality Standard” (GB/T 14848-9). Air quality is good. TSP and SO2 meet standards of Class II of “Air Environmental Quality” Standard (GB3095-1996). Acoustic environment is also good, in line with Class O to I of “Standard of Noise of Urban Environment” (GB 3096-93). Soil quality is good and does not reveal particular concentrations of metals resulting from pesticides or excessive values for nitrogen or phosphorus which could reveal excessive application of fertilizers. Soil quality ranges from Class II to Class III of “Environment Quality Standard for Soils” (GB15618-1995). 19 Geology and Soils. Both Project areas are located in a mountainous area with a marked relief and steep slopes. Most of the areas are composed of quaternary deposits, highly sensitive to erosion, with in particular loess and tertiary red formations of the transitional belts from Loess Plateau to Tibet Plateau. Soil erosion intensity varies from 2,500 to 5,000 t/km²/year. As a result; the geology of the areas where the main canal routes are located are significantly affected by slope instability and various severe erosion forms: deep gullies, several km long with 30-50% steep slopes, old landslides mainly affecting loess formations, gravels layers and the red strata of the tertiary formations, river bank scouring with collapses. As a result of these instabilities, sediment transport to the natural streams and the Yellow River is high. Due to cold climate conditions in the Project areas, frozen soil conditions are also observed, with a maximum soil depth of 1.48 m (according to the Chart for Seasonal Frozen Land Criteria in PRC), which contribute also to the fragility of the upper soil layer. 20 Biodiversity and Conservation. The Project areas are almost totally developed for agriculture. Natural habitats have been already replaced by artificial habitats mainly covered by grassland, fallow land and tree plantations. Around the Project areas, natural plant communities are mainly dominated by xeric species of grass (Stipa harmine), herbaceous species and xeric shrubs as Caragana splendens. Tree plantation species include Chinese Pine, Birch, Aspen, Elm, etc. 21 Due to the extent of development in the project areas and the absence of significant natural vegetation cover around, no particular wildlife is reported from the area and its surroundings by the villagers. There are no natural reserves, wetlands, or other critical natural habitats within the construction area or in its immediate vicinity. According to documents review and experts consultation, there is no rare or endangered terrestrial fauna, or nationally protected species within or nearby the project areas. 22 Fishes observed in the Yellow river at present are mainly species which have adapted and developed in the Lijiaxia and Gongboxia reservoirs. Most typical genus or species include: Yellow River carp, Triplophysa sp., Schizothorax sp., Leuciscus sp., Gobiocypris sp., Gymnocypris sp. and Lanzhou meridionalis. None of these species are registered as protected or threatened either nationally or internationally. 6 1 3.2 HUMAN AND ECONOMIC DEVELOPMENT 23 Population. Qinghai Province has a land area of 722,000 km², and a present resident population of 5,218,135, distributed into 1,445,497 households 2. Population density is low, 7.2 persons per km². Ethnic minorities account for 46.3% of the total population, and 80% of which is rural. Qinghai is classified as the second poorest province in the PRC with a gross domestic product (GDP) of CNY 78.36 billion. Qinghai province includes eight Prefectures, in particular the Huangnan Tibetan Autonomous Prefecture and the Haidong Prefecture where the Project Areas are located. 24 The Project counties Xunhua and Hualong located in the Haidong Prefecture; Jianza county is located in Huangnan Prefecture. The Irrigation Scheme of Lijiaxia will mainly affect Hualong County and Jianzha County while the Irrigation Scheme of Gongboxia will mainly affect Hualong county and Xunhua county. The three benefiting counties are all identified as ethnic minority and poverty counties. 25 Ethnic Minorities. Historically, Qinghai is a cross area of multi-ethnic settlements, where few of the 54 ethnic-based groups of PRC are significantly represented: Tibetan, Hui, Salar, Mongolia and other minor groups. By the end of 2008, ethnic minority population accounts for 46.31% of the total Province population (5,543,000 peoples). 26 Among the total population of 132,000 in the irrigated areas, ethnic minority population accounts for 95.6%, including 63,238 Hui (47.88%), 51,949 Salar (39.39%) and 10,943 Tibetans (8.33%). The remaining percentage of 4.4% is related to Han population (5,800 peoples). Distribution of groups varies according to the sub-project considered: Hui (82%) and Tibetan (16%) in Lijiaxia, Hui (25%), Salar (67%) and Tibetan (3%) in Gongboxia. As a result of this situation, it may be considered that the ethnic minority concern is not an issue for this particular Project, as it is almost exclusively designed for the minority groups. However, as mentioned previously, Ethnic Minority Development Plans (EMDPs) have been prepared for each of the two sub-projects. 27 Economic Profile and Poverty. Qinghai Province is one of the poorest in PRC, due to its remote location, away from most mainstream economic developments in the country, and located in a mountainous environment with a cold and dry climate which does not favor sedentary farming operations. Only about 0.8% of the total land area is under cultivation while in much of the Province animal husbandry is a major activity. The gross domestic product (GDP) of Qinghai province grew to CNY 78,361 million for a 12.5% increase in the last years. In terms of per capita income, the urban average wages of staff and workers was CNY 26,166, which was higher than the national average CNY 24,932, rural per capita net income was only CNY 2,684, much lower than the national average CNY 4140. According to the official 2008 Statistical Book, except Jianzha county, the per capita GDP of Hualong county and Xunhua county are lower than the average of Qinghai Province. 1 This section provides only a rapid overview of the social and socio-economic baseline of the Project areas as these aspects are dealt with in the following Appendixes of the PPTA report: 12 (Summary Poverty Reduction and Social strategy), 13 (Summary Ethnic Minorities development Plans), 14 (Summary Resettlement Plans) as well as in Supplementary Appendixes A (Social Assessment Survey), B (Detailed Poverty & Social Analysis), H (Ethnic Minorities Development Plan), I (RAP for Lijiaxia Irrigation Area), J (RAP for Gongboxia Irrigation Area). 2 Qinghai 2008 Statistical Yearbook 7 TABLE 3: GDP AND INCOME (2007) QINGHAI ITEM UNITS NATION HUALONG JIANZHA XUNHUA VALUE RANK IN PRC Per capita GDP CNY 18,934 14,257 23 6145 21618 6068 Urban average wage of staff and workers CNY 24,932 26,166 9 40631 26107 27886 Rural per capita net income CNY 4,140 2,684 27 2510 1940 2730 Source: Qinghai Statistics Yearbook (2008), Local PMOs 28 In 2007, 24.15% of the total population in Qinghai lived on incomes below the official poverty line (i.e., those with a per capita annual income less than CNY 800 in agriculture area and CNY 1,000 in pastoral area), compared with 2.5% at the national level. Poverty percentage of the population reaches 55.3% in Hualong County, 45.0% in Xunhua County and 54.5% in Jianzha County where the Project areas are located. 29 Based on the new National Poverty Line (2009), raised to per capita annual income less than 1,196 CNY, the poor villages and population in the Project areas have reached a population of 44,100 (48 villages) in Hualong County, 12,600 (15 villages) in Jianzha County and 34,100 (37 villages) in Xunhua County. Thus, the incidence of poverty in these 3 counties on the population reaches respectively 68%, 75% and 72%. These figures provide an evident justification for the implementation of the QRWRM project. 30 Education level reflects also the poverty situation in Qinghai. Education is still globally low in the Province, particularly for women: if 33% of men have received primary school education, only 13.8% women reach this education level. Almost 79.3% of women received no education against 48% for the men. 31 Gender and Development. In 2007, sex ratio in Qinghai was balanced, with 50.67% male for 49.33% female. Education, as mentioned above is still a major gender issue in Qinghai. Only 26,5% of women have experience of outside employment (against almost 60% for the men), and Tibetan women are those which have the highest percentage (47.2%) when compared with women from Hui and Salar groups. This is probably the result of different customs between Tibetan and Muslims. Agricultural work is generally done jointly by the couple, but in 32.6% of the households in the Salar group, women are the only responsible for agricultural works. Only a low proportion of women is involved in public affairs as, for example, WUAs. 4 FORECASTING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 4.1 ANALYSIS OF ALTERNATIVES 32 Alternative on “with and without” project is considered from the perspective of environmental protection and regional socio-economic development (Table 4). The project necessity for rapid economic development of the areas and for optimized use of the of the water resources is an evidence when compared to the present situation and the near future evolution without project. 8 TABLE 4: WITH & WITHOUT PROJECT SCENARIOS CATEGORY ALTERNATIVE I: WITHOUT PROJECT ALTERNATIVE 2: WITH PROJECT (PREFERRED) In line with Qinghai Water Resource “Eleven Five-Year Plan” through the optimization in the use of water resources; Land occupation and ownership remain Reduction of agriculture production costs; unchanged. Rationalize the use of fertilizers; ADVANTAGE There is no impact to local environment Strengthen regional capacity on resistance to disaster during construction phase. occurrence (drought); Satisfaction of water requirements of local communities; Improve economic development and subsequently local environment. High electricity cost put on agricultural production; Increasing areas of abandoned cultivable DISADVANTAGE land leading to soil degradation and erosion; Adverse impacts during construction phase. Poor water supply conditions remains unchanged and limit yields; Slow economic development. Alternative 2 "with project" has obvious environmental and social benefits which justify Project CONCLUSION implementation 41. Selected development alternatives (Table 5) for the 2 irrigation areas have also been reviewed and compared in terms of construction costs, benefits, and engineering risks. The Lijiaxia, the proposed alternatives are (i) add 9 inverted-siphons, 3 aqueducts, 3 tunnels and project channel goes through Maketang Town and Angla Village with longer length, and (ii) project channel has shorter length, does not go through Kangyang landslide mass. For Gongboxia, the alternatives include: (i) project channel goes through Qingshui village of Xunhua county, longer distance; and (ii) project channel does not go througn Nanshangen and Maerpo of Xunhua County, shorter distance. In both cases, the initial option has been considered for main canal extension to additional communities along the Yellow River valley. 33 In both cases, the routes followed by the main canals did not offer much alternatives except the technically feasible one. The only alternatives considered concerned the extension of the canals further downstream to service additional communities. As the routes of the main canals did not create major environmental impacts, the selection of the best alternative was only based on the engineering risk and investment level criteria. No environmental criteria were deemed critical enough to be considered as key criteria for decision making. 9 TABLE 5: ALTERNATIVE COMPARISON FOR LIJIAXIA & GONGBOXIA IRRIGATION PROJECTS CATEGORY ALTERNATIVE I ALTERNATIVE 2 More engineering safety. Extended irrigation area, covering in particular ADVANTAGE Less investment. two additional towns in Jianzha County. Less construction and operation risks. Instable geological conditions with frequent land slides and erosion activities. Engineering design and construction is more difficult as it needs more tunnels, aqueducts and DISADVANTAGE Less irrigation area than with alternative 1 IJIAXIA invert-siphons. L More investment and higher construction costs with relatively limited economic benefits. Alternative 2 is selected. For the two towns which cannot be covered with Alternative 2, rehabilitation CONCLUSION of existing irrigation facilities will be implemented (outside the Project) and may be connected to the Project in the future after additional geological investigations. More irrigation area, especially with one More engineering safety. ADVANTAGE additional village in Xunhua County. Less investment. Complex geological conditions. Engineering design and construction more difficult. DISADVANTAGE Need more tunnels, aqueducts and invert- Less irrigation area. siphons. ONGBOXIA More investment and higher cost with relative G low economic benefits. Alternative 2 is selected. For the village which can not be covered with Alternative 2, rehabilitation of CONCLUSION existing irrigation facilities and full utilization of the water resource from the local Qingshui river has been considered. 4.2 ENVIRONMENTAL BENEFITS OF THE PROJECT 34 The planned environmental benefits associated with the Project are significant. There will be significant positive impacts on both the environment of the project area through increases in vegetation coverage, improvements in water resource management, restoration of degraded soils, and reduction in energy consumption. The Project will achieve (i) efficient and reasonable use of land, water and labor resources; (ii) timely and reasonable adjustment of agricultural practices, resulting in increased productivity, improved efficiency in water use, increased income for both farmers, improved living conditions for people within and surrounding the project area; and (iii) rapidly improving production and quality of life through project development. 35 On the long term, the Project will contribute indirectly to environmental improvement in the Lijiaxia and Gongboxia areas, as the expected economic development of the region and the improvement of the living standard of the population should eventually result in better environmental protection, as it is well known that environmental conservation is more efficiently performed in wealthy communities than in poor ones. 36 Soil Restoration. The total serviced irrigation area of the Project will eventually be 124,070 mu (8,270 ha) for Lijiaxia and 108,900 mu (7,260 ha) for Gongboxia, or a grand total of 233,000 mu (15,530 ha) including existing irrigated area, abandoned areas and new extension areas. The last 2 categories of land consist of dry soils, with limited or no vegetation cover, exposed to erosion. The project, through extending irrigation to these presently unproductive areas will restore the soils quality and protect the soils against erosion. On the basis of site observations and surveys made early 2009, the total of abandoned land to be restored represents 8,900 mu (590 ha)for Lijiaxia and 9,800 mu (650 ha) for Gongboxia. Associated with the newly irrigated 10 areas, the areas restored by the Project and eventually protected against erosion represent 24,500 mu (1,630 ha) for Lijiaxia and 30,100 mu (2,010 ha) for Gongboxia, or a grand total of 54,600 mu (3640 ha) for the Project. 37 Re-vegetation. Irrigation schemes improvement and extension will not concern only crop production but will dedicate a significant part of the future irrigation area to tree & shrubs plantation. In Lijiaxia, it is anticipated that the new irrigated land will include 12,600 mu (840 ha) of tree plantation, of which 9.400 mu (620 ha) are dedicated to economic forest plantation (as fruit trees or wood production) and 3,200 mu (210 ha) to protection forest particularly along irrigation channels. In Gongboxia, new irrigated land dedicated to tree plantation will represent 10,800 mu (720 ha) distributed between 2,600 mu (170 ha) of economic tree plantation and 8,200 mu (550 ha) of protection forest. Considering also the changes from crop to tree plantation to be done within the presently irrigated areas, for Lijiaxia and Gongboxia it is anticipated that the tree plantation increases from current 35,600 mu (2,370 ha) to 74,800 mu (4,980 ha) thanks to Project implementation. 38 Additionally to tree development within the irrigated areas, the Project will promote re- vegetation for erosion control of the slopes crossed by the 4 main canals and the sites disturbed by the construction activities (including spoil disposal areas), as described in the "Soil Conservation Report" prepared in 2008 by the Gansu EIA Institute. Revegetation will rely on fast growing species: Populus simonii, P. cathavana (Poplar) for the tree, Hippophae rhamnoides, Tamarix ramosissima for shrubs and Elymus dahuricus, Stipa capillata, Achnatherum splendens for the grasses. 39 Energy Savings. Transferring water distribution from electrical pumping system to gravity system will result in an annual energy saving of 26.19 millions kWh for Lijiaxia and of 23.22 millions kWh for Gongboxia, or a total energy saving of about 50 millions kWh per year. This will involve a very positive economic impact both for the farmers but also for Qinghai (which is still an energy- deficit Province), estimated about CYN 100 millions per year. 40 Water Savings. Both irrigation schemes have a currently low irrigation efficiency of 35%. The Project, through lined channels and better on-farm application practices intends to raise irrigation efficiency up to 55.8%. As a consequence of this improvement, the Project, with 54,600 mu (3,640 ha) of newly irrigated land, will increase its total water consumption by only 9.4 Mm3 , which results in water savings of 27.19 Mm3 per year if compared to an equivalent project area without improving the irrigation efficiency ratio. 41 Other Environmental Benefits. The Project will improve the efficiency in the use of fertilizer and pesticides particularly through the Irrigated Agriculture Support (IAS); a Pest Integrated Management Plan will be proposed in the field trials within the Agronomic Practices component. 4.3 SCREENING OF POTENTIAL IMPACTS AND MITIGATION MEASURES 42 Table 6 summarizes the potential impacts identified during the EIA studies resulting from Project construction and operation, and provides related mitigation measures. Significant impacts are discussed in following sections of this SIEE. 11 TABLE 6: SUMMARY OF POTENTIAL IMPACTS AND MITIGATION MEASURES DURING PROJECT CONSTRUCTION AND OPERATION RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY 1 –ISSUES ASSOCIATED WITH THE CONSTRUCTION STAGE Impacts on land The proposed project will: Refer to Resettlement Action Plans for land Ensure activities are carried out in pre- C-PMO P-PMO use, land • temporarily occupy a total of 25.22 ha acquisition, compensation and resettlement. construction period in order to cope with project acquisition and (19.09 ha in Lijiaxia Reservoir Irrigation Ensure procedures follow PRC regulations construction schedule. resettlement Area and 6.13 ha in Gongboxia and ADB policies. Compensation fees (greater than loss) are Reservoir Irrigation Area); and already planned. All the involved persons should • permanently occupy a total of 139.86 ha accept proposed compensations. (84.70 ha in Lijiaxia Reservoir Irrigation Any need for temporary land outside project sites Area and 55.16 ha in Gongboxia will involve a procedure of approval prior to land Reservoir Irrigation Area). occupation. General Potential environmental disturbances and Setting up of a strong organization for Creation of the Environmental Division (ED) Contractor C-PMO, P- impacts from nuisances resulting from the several types environmental supervision and monitoring of inside project’s PMO and of the Environmental PMO, EPB construction of construction activities works, with staff and clear operational Management Unit (EMU) inside the Construction activities procedures for rapid and effective treatment of Supervision Engineer organization. non-compliance. Description of organization, Environmental Field Inspectors provide routine roles, responsibilities and operational monitoring of activity. procedures provided in the EMP. EMP to be attached to the Tender Refer to Part B of EMP- Matrix which lists Documentation and as a Covenant to the loan construction activities/potential impacts and contract suggested mitigation measures. Spoils Large volumes of spoil will result from Refer to CEMP-IM Spoil Management Plan Environmental Method statement to be submitted Contractor C-PMO, P- earthworks, particularly from tunnel Contractor will be required to submit, prior to by Contractor to Supervising Agency for PMO, EPB excavations, which will require transport the start of the works, detailed spoil comments and non-objection and disposal. management plans, including phasing of works, proposal for transport routes, description of proposed disposal sites, intended management of disposal sites and eventual rehabilitation. 12 RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY 12 potential sites have been identified as suitable by the EIA, located close to tunnel works, thus reducing transport and associated road risks. Earthworks Sediment discharge to Yellow River may Appropriate management of earthworks in Most of technical measures are described in the Contractor C-PMO, P- occur during rainy events from uncovered accordance with the environmental good PRC Regulation “Temporary regulation on PMO, EPB and unconsolidated soil materials during practice specifications: piling and compacting construction and environmental management of earthworks activities. spoil while waiting evacuation or reuse; Rapid construction sites” and recommendations All along the year, the drainage water from Revegetation of bare grounds & spoil slopes; provided in the Water and Soil Conservation tunnel excavation may discharge high Run-off from disturbed areas to be drained in Reports from Qinghai Provincial Water sediment loads to rivers sediment traps or ponds; Conservancy and Hydropower Survey and Design Institute dated February 2009. Drainage from tunnel works to be drained and treated if necessary with flocculent before settlement in a sedimentation pond Transport of material as earth fill, earth Washing wheel station for trucks leaving Monitoring on public roads to be done in close Contractor C-PMO, P- spoil, sand and gravel to or from site may construction sites to limit mud transport to city coordination with traffic police of the concerned PMO, EPB affect urban areas crossed by the trucks if roads, strict obligations regarding size of counties appropriate measures are not trucks, of load, necessary load cover, routes implemented, resulting in serious impacts and timing will be imposed to concerned on road traffic, public safety, air quality and contractor. noise. Air quality & Dust from cleared and excavated areas Refer to CEMP-IM, Dust & Emission Control Compliance with applicable PRC standards Contractor C-PMO, P- noise during dry periods: reduced visibility, Plan, PMO, EPB impact on health Regular watering of unsealed access, of construction sites Fumes and exhaust gas from trucks and Refer to CEMP-IM, Dust & Emission Control Compliance monitoring to be performed by Contractor C-PMO, P- heavy machinery on construction sites may Plan Contractors, with random controls from EPB. PMO, EPB affect air quality, as well as dust from Specifications regarding operation and material transport by trucks and maintenance of construction equipment and earthworks. transport of materials by truck. maintenance of equipment (engines), aeration of underground sites (tunnels) 13 RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY Noise: trucks, heavy machinery, tunnel Refer to CEMP-IM, Noise Control Plan Compliance monitoring to be performed by Contractor C-PMO, P- excavation. Enforcement of existing noise standards Contractors, with random controls of EPB. PMO, EPB related to machinery and working period. Forbidding the use of certain works during nigh-time when construction activities in resident areas. Water quality Domestic sewage from construction camps MMs described in CEMP-IM, Hazardous Compliance monitoring to be performed by Contractor C-PMO, P- is source of potential pollution impact of Material & Waste Management Plan, Contractors, with random controls of Supervising PMO, EPB Yellow River and underground water Emergency Plan for Hazardous Material, Agencies and EPB. bodies. Water Quality management Plan, Construction Accidental spill of hazardous products Worker Camps Management Plan, Waste caused by heavy operating machinery, Management Plan. storage of potential pollutants, such as Worker camps and construction sites will be petrol or engine oils, concrete production, equipped with appropriate wastewater from drainage of earth stock piles, treatment facilities, and wastewater discharge inappropriate disposal of used engine oils applicable standards respected. and locally generated waste (workshops, No discharge of wastewater, even treated will labor camps). be allowed in the reservoirs. Discharges of The risk applies to all construction sites, treated sewage in river will respect the but is obviously more significant for works location of existing river pumping facilities and activities located close to reservoirs Strict contractor environmental specifications (intakes) and river streams. regarding the handling, storage or disposal of hazardous products and of waste produced on the construction sites. Compliance monitoring of drainage water quality from sites and enforcement of effluent standards. Management measures at work site oriented towards prevention of pollution or accidental spill. Monitoring of river quality upstream and downstream construction sites. Impacts on Limited impacts as the area is extensively Monitoring of construction sites. None Contractor C-PMO, P- 14 RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY wildlife and developed for agriculture and urbanization; Reforestation program already part of the PMO, EPB habitats potential loss of planted trees during project development construction of network branches Physical None identified within the project area. Procedure in case of finding, in order to halt None Contractor C-PMO, P- Cultural Possible discovery during excavation works and preserve the cultural resources. PMO, EPB Resources works with potential destruction of valuable sites or artifacts. Impacts on If inappropriately managed, workforce may Awareness training of all workers on Carry out awareness training of workers on Contractor C-PMO, P- public health & create relational problems with surrounding environmental & social issues. environmental basics and justification of PMO, EPB Safety residents. Strict obligations imposed to the contractor for mitigation measures. If inappropriately managed, labor camps the organization and the management of labor Contractor requested to implement measures may become the site of epidemic burst out force and camps. such as recruitment medical check for each among workers and spread to surrounding worker, and medical visit once a year. Availability population. of medicine will be requested at workers camps (dormitory or canteens). Traffic Higher risks of traffic accident on public Training of drivers, maintenance of vehicles, Use of local radio & TV channels and poster Contractor C-PMO, P- roads linked to material & equipment speed control, improvement of road signs, campaigns to inform population on exceptional PMO transport particularly in residential areas dedicated parking areas. increase of traffic and on safety measures. Public information and coordination with traffic Police during particular periods or events of heavy traffic Safety Response procedure in case of accident off-site On-site Occupational health and accident issues, Contractor to prepare Occupational Health & Monitoring of construction sites. Occupational Contractor C-PMO, P- occupational resulting in serious wounds or death of Safety (OH&S) Plan and submit for Non- safety is not under the EMP, but monitoring can PMO, EPB health & safety workers. objection by Supervising Agency. In this plan, be coordinated with environmental monitoring on contractor will clearly define the safety sites. procedures in case of accident on site, ensure that minimum first aid equipment is available on all sites and ensure availability and enforcement to wear PPE (personal protective equipment). 15 RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY 2 –ISSUES ASSOCIATED WITH THE OPERATION STAGE Quality of life Project will improve the irrigation water Beneficial impact. No mitigation required. With the Project, Gongboxia Irrigation area will IA WRB supply situation, reduce operation costs be increased by more than 35,000 Mu and (electricity) for farmers and allow extension Lijiaxia by more than 28,000 Mu. of current irrigated areas (abandoned land & extensions) Surface water Project should not affect significantly the Monitor inflow and discharge to and from An annual water quota of 1.41 billion m3 has IA WRB availability of water resource in the Yellow irrigation area to optimize water application & been allocated to Qinghai Province from Yellow River downstream the project area. The reduce total water use River Basin resources. Present annual water Project will increase the water consumption of the Province is still 0.314 billion consumption by only 5.82 Mm3 in m3 below allocation. By 2015, annual water Gongboxia (10% of present consumption) consumption of Qinghai Province from Yellow and by only 1.95 Mm3 in Lijiaxia (2.9% of River Basin is anticipated to be 1.267 billion m3 , present consumption. including QRWRMP, so still 0.143 billion m3 below the allocation Returned irrigation water from the project Improvement of irrigation efficiency to reduce Aspects considered in the conceptual design of IA WRB,EPB area may potentially affect the water water consumption and back water flow the Project quality of Yellow River through excessive Implement Integrated Pest Management (IPM) discharge of pesticides residues and as a component of the agricultural extension fertilizers. services Potential for livestock intensive farms EIA for any industrial farm to be developed to - IA WRB, EPB development based on irrigated forage focus on waste production & treatment production may affect, through untreated including recycling options as biogas effluent discharge the quality of surface production and safe organic fertilizer water (& underground water) production after digestion. 16 RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY Groundwater Potential groundwater level raise within the Aquifer several meters deep in the lower areas - IA WRB, EPB irrigation schemes resulting in soil so waterlogging risk is unlikely. waterlogging & salinization Yellow River water is of good quality for Implement Integrated Pest Management (IPM) Long term monitoring of water quality. IA WRB, EPB irrigation with low TDS. Sodium Absorption as a component of Irrigation Agriculture Ratio is good. Significant salinization of Support groundwater is unlikely. Promote sewage system in densely urbanized Risk of contamination by pesticides and areas and individual sanitation systems for low fertilizers. density habitat to reduce domestic pollution Existing high level of contamination by load to aquifer and to the Yellow River. Coliforms in groundwater, worse than Class V standard of “Ground Water Quality Standard” (GB/T 14848-9). Impact results from high density of residential areas releasing untreated wastewater in the ground. Impact is not directly linked to the agricultural activities. Salinization of According to what precedes and to the Monitoring of soils salinity in areas identified - IA WRB, EPB Soils quality of the soil (permeability is good) as potentially sensitive to salinization, for salinization is unlikely to occur. Very few appropriate measures (soil leaching for ex.) and limited areas, in the lowest levels of to mitigate the risk. the schemes, show possibly higher potential for salinization than the rest of the schemes Soil erosion Soil erosion may result from improperly Respect of the prevention measures listed in The Soil Conservation program developed for IA WRB, EPB decommissioned construction sites, “Water and Soil Conservation Report” from this Project should provide the appropriate improperly protected and stabilized spoil Qinghai Provincial Water Conservancy and answer to the risk of canal collapse because of areas and mainly on the slopes crossed Hydropower Survey and Design Institute long term soil erosion or slope instability by the canal structures. On the irrigated dated February 2009. area, the project should reduce erosion (wind erosion), through reduction of currently non-irrigated (bare grounds) areas. 17 RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS MPLEMENTEDSUPERVISED BY BY Fish habitats The water intake inlets are located at the No particular mitigation to consider. - IA WRB, EPB level of Lijiaxia and Gongboxia dams, and no significant impact is anticipated on fish population. Some fish may pass the water intake an be trapped in the irrigation network where they will be fished by farmers Note: C-PMO = County Project Management Office; P-PMO = Provincial Project Management Office, IA = Implementing Agency, EPB =Environmental Protection Bureau, WRB = Water Resource Bureau. 18 43 Land Occupation. The proposed project should temporarily occupy a total of 25.22 ha (19.09 ha in Lijiaxia Reservoir Irrigation Area and 6.13 ha in Gongboxia Reservoir Irrigation Area); and permanently occupy a total of 139.86 ha (84.70 ha in Lijiaxia Reservoir Irrigation Area and 55.16 ha in Gongboxia Reservoir Irrigation Area). Thus land acquisition and resettlement will result from this land occupation. One independent Resettlement Action Plan for each irrigation scheme has been prepared and all necessary mitigation measures have been identified and designed in compliance with the applicable PRC standards and regulations, and with the applicable International Good Practices including the ADB Social Safeguards. Total resettlement will concern 74 peoples (13 households) in Lijiaxia and 27 peoples (3 households) in Gongboxia. 44 General Impacts Related to Construction Activities. All these impacts generally associated to large infrastructure construction activities have been identified and their mitigation measures detailed through 15 Generic Plans presented in the Environmental Management Training Manual (Supplementary Appendix C). The implementation of an efficient environmental management organization is also detailed in the EMP with attached procedures for non- compliance detection and resolution. If the measures proposed in the EMP are effectively implemented by the concerned parties, most potential impacts from construction activities should be avoided. 45 Tunneling and Spoil Management. The critical impact may be the safety during the construction of the tunnels. This risk has been mitigated by (i) conducting a special geological risk study, (ii) requesting construction companies to conduct a local geological survey, and (iii) ensuring that specialized companies will be recruited with adequate certification. The latter has been achieved through developing specific tunneling procurement packages, that will attract specialized and capable companies. Another important issue during the construction phase will be the management of spoil material resulting from excavation works and particularly from the tunneling activities. Indeed, most of the spoil from channel excavation will be re-used through cut & fill procedure during the works. However, most of the spoil from tunnel excavation will not be reusable for filling purpose and will have to be stored safely with minimum impacts for the environment. The Project Design anticipates a volume of residual spoil of 1.371 Mm3 for the Lijiaxia sub-project and 1.410 Mm3 for the Gongboxia sub-project. 46 During the FSR and EIA studies, 12 sites have been identified together with Design Institute and PMOs as being potentially suitable for long term spoil disposal (Maps 2 and 3). All the sites are either slight depressions (for most of them) or areas showing slight slopes. Maximum thickness of spoil has been limited to 5.5 m for Lijiaxia and 3 m for Gongboxia. All the sites are located in non-developed areas, close to the exit (or entrance) of the various tunnel sections to be created. This option of several small sites against few larger ones has been preferred to limit transportation costs and impacts. 47 At the start of the construction, it will be requested from the concerned Contractors to prepare a Spoil Disposal Management Plan, in accordance with the requirements of the EMP (ref. Spoil Management Disposal Plan) and of the Soil Conservation Report, to be submitted to the Supervision Company for non-objection prior to start the works. Particular attention will be given to the spoil stability, erosion and sediment control measures, respect of natural drainage of the surrounding land, landscape integration and site re-vegetation. 48 As presented in Table 7, 3 sites are proposed along each main canal in Gongboxia, as tunnel works along each canal are rather equivalent. In Lijiaxia, only one small site is required along the south canal as tunnel works and canal length here are limited, while 5 sites will be necessary along the 5 tunnel sections of north canal. 19 TABLE 7: INFORMATION ON IDENTIFIED POTENTIAL SPOIL DISPOSAL AREAS SPOIL SPOIL MAX. CONCERNED SPOIL DISPOSAL AREA IRRIGATION SCHEME LOCATION TOPOGRAPHY VOLUME THICKNESS CANAL SITE 3 3 (HA) (10 M ) (M) South Canal Exit 1-south main Spoil 1 ditch 50 5.5 0.9 tunnel North Canal Exit 1-north main slight Spoil 1 200 5.5 3.7 tunnel slope Exit 4-north main slight Spoil 2 351 5.5 6.8 tunnel slope Lijiaxia Exit 5-north main Spoil 3 ditch 320 5.5 8.1 Reservoir tunnel Exit 9-north main Spoil 4 ditch 130 5.5 2.5 tunnel Exit 11-north main Spoil 5 ditch 320 5.5 8.0 tunnel Subtotal 1,371 - 30.0 South Canal Exit 1-south main slight Spoil 1 70 3.0 2.3 tunnel slope Exit 5-south main Spoil 2 ditch 195 3.0 6.5 tunnel Entrance 7-south Spoil 3 ditch 436 3.0 14.5 main tunnel Gongboxia North Canal Exit 5-north main slight Spoil 1 362 3.0 12.1 Reservoir tunnel slope Exit 10-north main Spoil 2 ditch 171 3.0 5.7 tunnel Exit 12- north main slight Spoil 3 176 3.0 5.9 tunnel slope Subtotal 1,410 - 47.0 Total 2,781 77.0 4.4 IMPACTS AND RISKS DURING OPERATION PHASE OF THE PROJECT 49 Impacts on Downstream Hydrology. The Irrigation System Improvement, the Participatory Irrigation Management and the Irrigated Agriculture Support are 3 Project Components which will eventually promote water-savings through the reduction of losses along the distribution system (main channels will be fully concreted) and through a more effective water management at farm level. For both irrigation schemes, the present irrigation efficiency of 35% is targeted to be raised to 55.8%. In Lijiaxia, the current annual water consumption of 66.76 Mm3 is anticipated to raise to 68.71 Mm3 only by 2015. This limited increase of 1.95 Mm3 only despite the significant increase of irrigated land, can only be achieved because of the improvement of the irrigation efficiency thanks to the Project. Should the present low irrigation efficiency of 35% only be maintained in the future, it is an additional volume of 14.5 Mm3 which would be necessary to irrigate the future scheme. The same applies to Gongboxia, where the increase of water consumption will reach only 7.47 Mm3 by 2015, reflecting a total water saving, compared to the present irrigation efficiency of 35%, of 12.7 Mm3. 50 As a result of the improvement of the irrigation efficiency, it is anticipated that the increased water consumption by the Lijiaxia and Gongboxia schemes will be limited to 9.4 Mm3 after Project implementation, which will not have significant impact when compared to the total inflow from the Yellow River basin at Project level, which is 22.7 billions m3. Furthermore, at the level of Qinghai 20 Province, it is anticipated that the Provincial water consumption from the Yellow River Basin, which is presently 314 Mm3 below its annual water allocation quota of 1.41 billions m3, will increase by only 171 Mm3 by 2015, to reach 1.267 billions m3 or still 143 Mm3 below its current allocated quota. 51 Flooding Risks. Project areas are both located just downstream a dam, and the issue of potential flooding of the both areas is questionable in terms of risk. The situation in the upper Yellow River is rather different from what is observed with an isolated dam, as the basin has been developed as a cascade of dams for hydropower production. From upstream down to Gongboxia, there is a succession of 7 dams: Longjiangxia, Laxiwa, Nina, Lijiaxia, Zhiganglaka, Kang Yang and Gongboxia. 52 The annual runoff from the catchment is regulated by Longjiangxia which has an enormous storage capacity of 24.7 billion m3, from which 19.35 billion m3 is active storage. All the other reservoirs have a much modest storage capacity, and most have a very small active storage capacity, understandable as the runoff is regulated from upstream. This explains the very limited draw down of the reservoir levels in Lijiaxia and Gongboxia, avoiding seasonal release of deep anoxic water downstream. The important size of the dams is to provide head for energy production, not storage. At Lijiaxia, the cumulated storage capacity of the dams is 27.38 billion m3, and at Gongboxia level the cumulated storage is 27.97 billion m3. 53 With an upstream storage capacity higher than the annual runoff of the catchment, the regulation of the flow is guaranteed and the occurrence of a catastrophic flooding in Lijiaxia and Gongboxia irrigation schemes most unlikely to happen. Table 8 summarizes characteristics of the dam cascade. TABLE 8: MAIN CHARACTERISTICS OF DAM CASCADE UPSTREAM OF GONGBOXIA PROJECT AREA 9 3 9 3 NAME DAM HEIGHT (M) RESERVOIR AREA (KM²) TOTAL STORAGE (10 M ) ACTIVE STORAGE (10 M ) Longjiangxia 178 383.0 24.7 19.35 Laxiwa 250 13.0 1.01 0.15 Nina 48.7 2.55 0.026 0.009 Shanping (planned) 45.7 - 0.124 0.006 Lijiaxia 165 41.5 1.648 0.058 Zhiganglaka 42.5 7.35 0.015 0.003 KangYang 45.5 14.38 0.029 0.005 Gongboxia 139 48.0 0.55 0.075 54 Dam Safety. Within the context of the PPTA a review of documentation on EIA procedures and Dam Safety related to Lijiaxia and Gongboxia has been carried out. The status of EIA for both dams is presented in Table 9. EIA studies have been performed, approved and at the end of the construction of each dam, SEPA has delivered the Environmental Completion certificate. That means measures proposed in the studies and related to construction have been implemented. Among the measures, it is an evidence, when visiting the sites, that extensive re-vegetation works, either by tree plantation or Hydroseeding of grass along the steep slopes of the access roads, have been successfully carried out. 21 TABLE 9: STATUS OF EIA REPORTS FOR LIJIAXIA AND GONGBOXIA EIA STATUS DATE INSTITUTE/AGENCY IN CHARGE LIJIAXIA HYDROPOWER PROJECT HYDROCHINA XIBEI Engineering Completion of EIA reports December 13th 1986 Corporation Approval of EIA reports December 26th 1986 Qinghai Provincial EPB Environmental Completion Acceptance May 2002 SEPA (now MEP) GONGBOXIA HYDROPOWER PROJECT March 1988 HYDROCHINA XIBEI Engineering Completion of EIA reports March 2000(revised) Corporation Approval of EIA reports March 5th 2001 SEPA (now MEP) Environmental Completion Acceptance January 31st 2008 SEPA (now MEP) 55 Regarding dam safety, the Design Institute has produced a document reviewing in detail the safety condition of both dams. Key information collected about dam safety report is summarized in Appendix 5. Both dams have been designed in accordance with the stricter standards applicable in PRC. They both conform strictly to the safety regulations, in particular the need to carry out a safety review by an accredited panel of experts every 6-10 years after completion of the construction. Gongboxia, commissioned in 2000, carried out the Safety Review in November 2006. Lijiaxia, commissioned more recently, carried only the compulsory Work Completion Safety Review in November 2008. 56 The reviews concluded that the dam do not present any major structural or management weakness which could jeopardize their safety. Both have been designed in compliance with the highest applicable standards in PRC, particularly regarding the design flood and the return period (1000 years). Routine inspections cover safety aspects as structural integrity, landslide signs, leakage or seepage. Observations are compared to applicable PRC standards to which they comply with. Both dams have operating monitoring instrumentation related to rainfall, reservoir level, ground movement. Both also have flood warning and emergency communication systems. They also both have an emergency preparedness plan including description of responsibilities, description of areas at risk, flood warning system, evacuation procedures and plan of mobilization of forces. 57 Climate Change. An analysis of potential impacts from Climate Change (CC, Appendix 6) concluded that on the long term (end of the century), the Project area may expect a maximum increase of its annual average temperature of about 6°C, considering the present trend in global warming (business as usual). In case efficient policies are implemented worldwide to reduce GHG emissions, the annual average temperature increase may be limited to about 3.5°C. Due to the low average temperature in the Project area, this increase should be favorable for higher vegetal production. The forecasts used, which rely on integrated results from several general circulation models, anticipate a precipitation increase in the range of 20 to 35% respectively for the Northwest region and the Tibetan Plateau, which could result for the Project area in a precipitation increase in the range of 25 to 30% of its present annual average. Considering the location and altitude of the Project area, a reduction of precipitation during summer (rainy) season and an increase during winter and spring may be anticipated. 58 These changes may affect the present flows of the Yellow River in several ways: (i) higher precipitations on the Tibetan Plateau may possibly increase the runoff and the river flow, (ii) increase of temperature on the plateau will accelerate the smelting of the glacier and will reduce the period of accumulation of snow. Flow during autumn could be increased (as the below zero 22 temperature should be reached later and storage of precipitation as snow should also start later) and spring flow should be reduced (reduced snow volume stored), and (iii) increase of temperature should increase the evaporation from the reservoir surfaces distributed along the Yellow River course, thus limit the impact of potential increased runoff. 59 Taking due consideration of potential carbon fertilization, forecasts established on the basis of the Mendelsohn-Schlesinger (MS) cross-section Ricardian model come to the conclusion of a potential long term 30% increase in agricultural production capacity resulting from climate change in the PRC Northwest Region, which should be applicable to the Project area. 60 Impacts from Pesticide Usage. In the 3 Counties concerned by the Gongboxia and Lijiaxia Irrigation schemes, pesticides are distributed through private shops certified by and registered with the Department of Agriculture. Products, for their majority are sold in liquid solution, in glass or plastic bottles with a content ranging from 100 to 500 ml. Appendix 7 provides the list of the products distributed in the Project area. During observations made on the sites none of the 5 insecticides banned in PRC since 2007 were identified on the local market. Some organophosphates, known for their high toxicity for human and environment are still used in the area, as Phorate and Dimethoate. No Organochlorine pesticides have been identified on the local market. All products sold were correctly labeled, with all safety signs, even if the size of the label makes it, most of the time, difficult to read. Shopkeepers seemed well informed about the application rates but actual application in the field is difficult to assess in terms of quantity (actual dilution and frequency of application) and quality (appropriate growing period). 61 There are no available statistics regarding the use of pesticides in the Project areas, but according to shopkeepers and farmers interviewed, the consumption is low in the region. Indeed, the long and cold winter, which froze easily the first 50 cm of soil, preserve against the development of pest larvae and strongly limits the prevalence of pests. The dry climate is also favorable to the containment of pest development. Soil sampled and analyzed during the EIA studies did not reveal any contamination related to pesticides. 62 It may be concluded that pesticide usage is not presently an environmental issue in the area. In order to prevent it becomes one in the future, training activities to promote Integrated Pest Management (IPM) has been included under Component 3 of the Project. 63 Groundwater. As mentioned soil drainage is good in both perimeters and irrigation water has low TDS content and is of a general good quality. Implementation of Integrated Pest Management should reduce the transfer of contaminants towards the aquifer. Also, the increase in income and living standard will promote in the long term better sanitation facilities in the urban areas, reducing the presently observed coliform contamination of the groundwater. 64 Soil Salinization. With good quality irrigation water, good drainage conditions and improvement of irrigation practices, no salinization is expected to develop in the project area, as it is not observed at present. Lowest areas may require some preventive monitoring in case the water level near the river changes and creates localized waterlogging (not observed at present). 65 Irrigation Water Returns. They will flow back to the Yellow River. They carry presently nutrients and mainly coliform from the residential areas. This situation is not critical at present and should not deteriorate in the future, if the IPM program is efficiently implemented. Indeed, the intensification and extension of the irrigated area should not result in major increase of fertilizer and pesticides with appropriate green agriculture production system. 66 Livestock Farms. The Project does not cover livestock development, but development of irrigated forage may promote the creation of intensive livestock farms. In this case, following the PRC environmental regulatory framework, each unit will be subject to EIA and should be equipped with appropriate treatment facilities for the waste water prior to discharge in the Yellow River. 23 5 INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN 5.1 CONTENT OF THE EMP 67 A separate EMP has been prepared for the present Project (Supplementary Appendix B) addressing the pre-construction, construction and operation activities anticipated to be carried out in relation to the Project implementation. A major part of the EMP is dedicated to the mitigation measures to be implemented during the construction stage of the Project, involving all concerned parties including Construction Contractor (CC) companies. In order to provide a credible and homogenous reference for all parties involved in environmental management, the EMP has been structured in compliance with the recommendations of the ADB, complemented by additional information deemed necessary for operational implementation, particularly during the construction phase. 68 The EMP details the environmental obligations imposed by the PMOs to the Construction Contractors and their sub-Contractors during the construction of the QRWRMP, to safeguard the environment and to minimise nuisance for the population. The EMP provides the framework to ensure that construction works are carried out in the strict respect of PRC and internationally accepted environmental best practices in order to eliminate any significant or unacceptable long- term impacts on the environment. 69 The EMP is developed to ensure the Projects compliance with the environmental laws, regulations and standards of the PRC and with the principles of the International Standard for Environmental Management System (ISO 14001). It provides the institutional arrangement for the EMP, the organization and the operational control procedures: distribution of roles and responsibilities, procedures for communication, reporting, document control and management, training and capacity building, procedures for the detection and the resolution of non-compliances, audit and inspection procedures and monitoring plan; this section of the document intends to follow as closely as possible the principles recommended by the ISO 14001. 70 An environmental management training manual (Supplementary Appendix C) describes the structural and non-structural measures to be implemented mainly by the Contractors during the construction period. The document provides a series of 15 Generic Environmental Control Plans as a basis for Good Environmental Management Practices in construction activities, complemented by a set of templates to be used for environmental management and site inspections during the Project construction. The manual will be used during the environmental management training of P- PMO, C-PMO, CSC, and CC staff. 71 Following Figure 4 depicts the main organizational structure proposed for the Project Environmental Management during the construction phase. The Provincial PMO (P-PMO) will appoint one Environmental Coordinator in charge of (i) coordinating environmental activities carried out by the 3 County-PMOs (C-PMOs) and the Construction Supervision Companies (CSC), (ii) coordinating with other Provincial Agencies and the ADB for all environment relevant matters, (iii) supervising environmental monitoring under P-PMO responsibility. The three C-PMOs will each appoint one Environmental Officer (EO) responsible for controlling the work of the Supervision Company related to environmental matters, reporting to P-PMO-EC and coordinating with county agencies and local authorities. 72 Each of the 2 CSCs appointed by the P-PMO will implement a structure, the Environmental Management Unit (EMU), which will provide all supervision services related to environmental management on the construction sites, routine sites inspections and compliance monitoring supervision. The CSC-EMU will be the key operational structure for EMP implementation during the construction stage of the Project. One environmental engineer, two technicians and 2 field inspectors will be appointed. The Construction Companies/Contractors (CC) will be responsible for implementing the best environmental practices applicable to construction activities as presented in 24 the EMP on each construction, storage or camp site under their control, and to organize environmental compliance monitoring of their sites under the control of the CSC-EMU. External Provincial Agencies or Institutes will be appointed by the PMOs for specific monitoring activities, if considered necessary or requested by ADB. FIGURE 4: OVERALL ORGANIZATION FOR EMP IMPLEMENTATION Qinghai Provincial Leading Group ADB Qinghai Provincial PMO Provincial Environmental Monitoring P-PMO Government Agencies Consultants Environmental Office T N E M T IN O Jianzha County PMO P P A Xunhua County PMO C-PMO C-PMO Hualong County PMO Environmental Office C-PMO Construction Supervision (Organization is similar to that of Company-Environment Xunhua County) Management Unit CSC-EMU Construction Contractor Construction Contractor Environmental Coordinator COORDINATION Construction Teams CC-EC SUPERVISION EMP Measures REPORTING Enforcement 5.2 TRAINING AND AWARENESS 73 Each CC and the CSC will ensure that their employees are adequately informed and trained in the requirements of the EMP, in terms of environmental and legal obligations. All employees will have an induction presentation on environmental awareness, to be conducted by the CC-EC for the CC staff and by the EMU for the CSC staff. The Construction Contractor is responsible for completing and filing training attendance records that include the date, name of trainer, name of the attendees and their signatures. 74 Four levels of training will be implemented: (i) General Environmental Awareness Program to all workers employed by the Construction Contractor or its Sub-contractors, concerning general environmental management issues; (ii) Health and Safety Awareness Program, to be implemented among the staff of the Construction Contractors; (iii) Job Specific Environmental Training of workers affected to particularly sensitive environmental activities (management of fuel, of 25 hazardous materials); and (iv) CSC-EMU and CC-Environmental Management Staff will receive training on EMP purpose, content and implementation. 5.3 ENVIRONMENTAL MONITORING AND SUPERVISION 75 An environmental monitoring program has been prepared to ensure compliance with the EMP (Table 10). This program considers the scope of monitoring, environmental parameters and frequency, implementing and supervising agencies. The monitoring will follow the methodology provided in the national standard methods for monitoring pollutants. Other associated standards that will apply may include the national environmental quality standards and pollutant discharge/emission standards (Appendixes 2 and 3). 76 During the construction, P-PMO and C-PMOs will recruit construction supervision company (CSC) for conducting internal environmental monitoring and inspections to ensure that environmental mitigation measures are properly implemented. Inspections or audits will mainly cover construction activities, but these will also review the affected environment. The inspections or audit activities will be conducted periodically. Inspections or audit activities and observations will be well-documented, and the contractors and PMOs will be informed of the outcomes. 77 External monitoring and inspection will be conducted by local environmental monitoring centres (EMC) under local environmental protection bureaus (EPB/EPB). They will be responsible to undertake regular and random environmental monitoring and inspection activities before, during, and after construction, as well as in the event of emergencies. 78 Within 3 months after each sub-project completion, or no later than 1 year with permissions from environmental authorities environmental acceptance monitoring and audit reports of the subproject completions will be prepared by a qualified environmental institute in accordance with the PRC regulation on Environmental Check-and-Acceptance of Project Completion (SEPA, 2001). These reports will be reviewed for approval by environmental authorities who has given the approval to the same individual EIA, and (iii) finally reported to ADB. 79 The monitoring results will be used to evaluate the (i) extent and severity of environmental impacts compared with the predicted impacts, (ii) performance of the environmental protection measures or compliance with related rules and regulations, (iii) trends of impacts, and (iv) overall effectiveness of the project EMP. Effectiveness of mitigation measures and monitoring plans will be evaluated through a feedback reporting system. Modification of measures required by the EMP will be performed, if necessary. 26 TABLE 10: ENVIRONMENTAL MONITORING PROGRAM Category Monitoring Monitoring Monitoring Monitoring Stage Frequency Monitored Supervised Financed Estimated Contents Objective Parameters Location by by by cost (1,000 CNY, 4 years) Environmental Terrestrial Monitor the Biodiversity, Along the 4 Construction Once per Construction C-PMO/ C-PMO 40 Quality Vegetation(Ecology impacts from bio- main Phase year (in July Supervision P-PMO Monitoring Monitoring) construction population channels, 2 in or August, Company activities to plants density each channel when plant and other ecology (total 8). In 12 is flourishing environment spoil sites, 1 growing.) in each (total 12). Water and Soil Monitoring the Water and main Construction Once per Construction C-PMO/ C-PMO 50 Conservation implementation of soil loss, channel, Phase week Supervision P-PMO water/soil landslide, material site, Company conservation collapse spoil site measures. Survey the slop stability of main channels, if there is landslide risks; check if the conservation measures have been taken for spoil sites. Water Monitor water pH, T°, DO, 10 meters Construction One per six Environment C-PMO/ C-PMO 200 Quality(Aquatic quality of Yellow BOD, Oil, downstream Phase month Labs with P-PMO Environment) River, and assess Nutrition (P- of outlet certification the construction PO4, N- construction impacts to water NH3, TP, site environment TN) Air Quality Monitor the air TSP, PM10, within project Construction One per six Environment C-PMO/ C-PMO 200 27 (atmosphere quality of the malodor area, nearby Phase month Labs with P-PMO environment) project site project site certification Pollutant Wastewater Monitor the BOD, COD, wastewater Construction One per six Environment C-PMO/ C-PMO 200 Discharge Discharge wastewater Oil, Heavy discharge Phase month Labs with P-PMO Monitoring discharge from Metal point certification construction activity Gas Pollutant Monitor the waste TSP, PM10, boundary of Construction One per six Environment C-PMO/ C-PMO 200 Discharge gas discharge from malodor construction Phase month Labs with P-PMO construction site certification activity Noise Monitor the noise dB(A) boundary of Construction Once per Construction C-PMO/ C-PMO 80 discharge from construction Phase week Supervision P-PMO construction site Company activity Total 970 28 5.4 REPORTING AND PROCEDURES 80. Internal Monitoring Reports: During construction period, results from the internal monitoring by CSCs contracted by EA will be reflected in the weekly construction reports. The reports will summarize (i) environmental issues during construction; (ii) mitigation measures taken, if any; and (iii) consequences of the impacts on the environment and/or surrounding communities. 81. The contractors will be trained to take immediate actions to remedy unexpected adverse impacts or ineffective or inefficient mitigation measures, as required by the EMP. The EA will also respond to these reports in order to ensure that contractors have taken appropriate and timely action. Additional measures may be taken, if needed, to ensure that all issues raised by the reports are appropriately addressed. 82. Results from the detailed internal environmental monitoring program and mitigation actions for the construction phase will be submitted monthly to PMO. 83. External Monitoring Reports: Environment Monitoring Center(EMC) authorized by EPB will be responsible for external monitoring and inspection of the compliance of PRC environmental regulations during construction and operation. The compliance monitoring reports will include (i) project background, (ii) construction and operation activities, (iii) environmental conditions, (iv) measurement or sampling taken during auditing and their locations, (v) analytical results, (vi) interpretation and implication of the monitoring results, (vii) determination of the compliance status with regard to applicable regulations and standards, and (viii) recommendations for improvement. These reports will be submitted to EPB by EMC with a copy to PMO. EPB may request that further environmental mitigation actions be taken if necessary. 84. Environmental Acceptance Monitoring and Audit Report of the Completion of Each Sub-project. Environmental acceptance report of the completion of each subproject will be prepared in accordance with the PRC regulation on Environmental Check-and-Acceptance of Project Completion (SEPA, 2001) within 3 months after each subproject completion. The report will focus on the project compliance of environmental performance when it is put into the operation. The report will be sent to environmental authorities for review and approval. If non-compliance is found, the project will be asked to improved to the requirements before the official commence of the operation. 85. Reports to ADB. The PMOs with the assistance of project consultants will monitor and assess overall project activities under the project design and monitoring framework (PDMF), including environmental targets. PMO will submit to ADB the EMP progress reports and information on project implementation and the environmental performance of the contactors and IAs. These reports will include (i) semi-annual environmental reports on EMP implementation, and (ii) environmental compliance monitoring and audit report of the completion of each sub-project. Progress reports will emphasize (i) implementation of mitigation measures, (ii) environmental compliance, (iii) training, and (iv) capacity building progress. ADB may request that further environmental mitigation actions be taken, as they deem necessary, and may determine further mitigation measures for different stages, if necessary. 5.5 TOTAL ENVIRONMENTAL BUDGET FOR THE QRWRMP 86 The total budget for the environmental management activities related to project construction and operation has been estimated together with the Gansu EIA Institute on the basis of applicable cost standards used in PRC. Three main categories are distinguished: (i) soil and water conservation cost; (ii) environmental protection measures; and (iii) environmental training and monitoring. 87 The soil and water conservation measures identified in the Soil & Water Conservation Report, excluding routine measures related to construction activities and to be included into the Contractors environmental budget; it covers permanent and temporary engineering measures 29 against erosion: leveling, plantation and re-grassing. The total costs are estimated at CNY 11.5 million (Gongboxia: CNY 4.5 million; Lijiaxia: CNY 7.0 million). These costs are incorporated into the overall construction cost. 88 The cost of environmental engineering measures implemented by the contractors during the construction phase: routine sediment control, waste water management, noise and air quality management, solid waste, camps maintenance and worker health management are estimated at CNY 4.9 million. (Gongboxia: CNY 2.45 million; Lijiaxia: CNY 2.45 million). These costs are incorporated into the overall construction cost. 89 The cost for environmental management training has been estimated at CNY 0.21 million. It includes all training activities for the staff of the P-PMO, C-PMOs, CSC, and CC. The total costs for monitoring and consulting costs subcontracted to external agencies by P-PMO and C-PMOs are estimated at CNY 0.97 million for the entire duration of the Project, as derived from the Environmental Monitoring Plan (Table 10). 6 PUBLIC CONSULTATION & DISCLOSURE 90 Public Consultation. Three forms of public consultation have been used for the Project, including (i) public consultation meeting, (ii) affected people’s site visit and (iii) questionnaire survey. Two rounds of Public Consultation were carried out by the EA team. The first round was performed separately in Hualong County, Xunhua County and Jianzha County from 23 to 30 July 2008. Participants included representatives from Water Resource Bureau, Water Affair Bureau, Environment Protection Bureau, Forest Bureau, Cultural Relic Bureau, Land Bureau, Sanitation Bureau of Hualong County, Xunhua County and Jianzha County, local communities, inhabitants, and experts. Consultation methods included questionnaires, random interviews, group discussion, and expert consultation. 300 questionnaires were distributed, 285 ones returned. According to the statistics, 88% were not satisfied with existing irrigation facilities; 100% interviewed supported with the proposed project; 92% considered the project can improve local ecology and agriculture environment; and 98% considered the project can promote the development of local economy. 91 A second round of consultations was performed from 28 to 30 November 2008, again separately in Hualong County, Xunhua County and Jianzha County. Participants included representatives from Water Affair Bureau of Hualong County, Xunhua County and Jianzha County, local communities, inhabitants, and experts. Consultation methods included group discussion and expert consultation. From group discussion and expert consultation, the main issues raised were that the proposed project should enhance construction management, reduce water and soil loss and control temporary land occupation. 92 During the consultations Government representatives provides further clarification regarding the objectives and requirements for the Project. These include: (i) after project implementation, water conservation in irrigation districts will be improved, and replacement of pumping by gravity supply will seriously reduce the water supply cost, lighten the public’s burden in the irrigation districts, speed up the development of agriculture in the valley along the Yellow River. It is necessary to implement the project as soon as possible (Water Resources Bureau); (ii) environmental management should be enhanced during construction, all the environmental protection measures specified in the EIA report should strictly be implemented, discharge of domestic and industrial effluents into the surface water bodies during construction will be strictly forbidden without appropriate treatment (Environmental Protection Authorities); (iii) attention should be paid during construction to avoid vegetation destruction as well as water and soil erosion; implementation of measures for water and soil conservation should be enhanced, and soil rehabilitation should be carried out in the affected areas on a timely basis (Forest Department); (iv) it suggests that permanent land acquisition should be minimized and rehabilitation of temporary land acquisition should be carried out as soon as possible (Land Administration Authorities); (v) the project implementation will reduce the production cost of agriculture, increase farmers’ earnings 30 and improve the agricultural productivity. The few impacts resulting from land acquisition are acceptable (Agriculture Department); (vi) The project implementation can increase water supply in the proposed project areas, improve the living conditions of local people. It is suggested that potential impacts of ground destruction and irrigation backflow should be lessened during construction and operation (National Expert on Water Conservation); and (vii) it was suggested that management during construction should be enhanced, environmental protection measures should be implemented to avoid vegetation destruction and water and soil erosion. It was also advised that the soil excavation should be consistent with the local development planning to help the development of local economy (National Environmental Expert). 93 Disclosure. The Disclosure Policy of the ADB requires to make the Environmental Assessment reports accessible to interested parties and to the general public. From November to December 2008, the project reports were disclosed on the website of Qinghai Water Resource Department www.qhsl.gov.cn. On 12 November 2008, the report on Overview of QRWRMP was disclosed. On 5 December 2008, the EIA report on QRWRMP was disclosed. The present SIEE will be disclosed n the ADB website for worldwide consultation. The full EIA report will also made available to interested parties upon request. ADB’s “120 day rule” requires that the SIEE is made available to the general public at least 120 days3 before Board consideration of the loan, or in relevant cases, before approval of significant changes in project scope. 7 FINDINGS & RECOMMENDATIONS 94 The proposed Project constitutes one component related to the construction of irrigation infrastructures and 3 components related to capacity building, organization and improvement of irrigation and agronomic practices. The Project has been the subject of a full EIA carried out by the Gansu EIA Institute and has been classified as a 'Category B sensitive' Project by the ADB. The main potential impacts may result from the construction activities, which can be efficiently mitigated through the implementation and monitoring of the EMP. During the environmental assessment selected alternative options were examined. Mainly a possible extension of the canal system were considered, but abandoned for technical and financial reasons. 95 The Project is expected to have overall significant environmental benefits. The better availability of water will allow irrigation of presently abandoned lands and of new areas not yet developed. In these areas, the Project will restore the soils which are presently under degradation, without vegetation cover and exposed to erosion. The improvement of water management in the distribution system and at farm level will raise the present poor irrigation efficiency of only 35% up to 56%, thus resulting in significant water savings for the Yellow River. 96 Because of the long and vigorous winter period, the Project area is not significantly affected by pest. Pesticide use, which concerns only authorized products, is reported as limited at present. To mitigate the risk in the future of pesticide use increase because of the more intensive agricultural production, a plan for Pest Integrated Management has been included into the Agronomic Practices sub-component of the Project Irrigated Agricultural Support Component. 97 Potential more significant adverse impacts are mostly associated with the construction of the tunnels and main canals and of the distribution system. The most significant impact is related to safety risks during tunnel construction and disposal of spoils, which large volume needs to be disposed safely. These impacts have been identified and appropriate mitigations measures have been developed in the EMP. Mechanisms have been integrated into the Project design to ensure that only the most qualified construction companies are recruited. Twelve potential sites, avoiding 3 The 120 day rule applies to all public and private sector category A and selected category B projects deemed to be environmentally sensitive. 31 instable areas as well as developed areas have been identified during the EIA works, and minimize the transport of the spoil. 98 The environmental assessment also reviewed the natural risks for the Project, e.g. a flooding risk and the climate change impact. The two concerned dams of Lijiaxia and Gongboxia are the two most downstream dams of a cascade of eight installed along the Yellow River for hydroelectricity production. Runoff from the related basin is totally controlled and regulated by the most upstream dam, Longjiangxia which offers a huge storage capacity, larger than the annual runoff. Water supply to the Project irrigated areas is thus guaranteed, perfectly regulated and flooding is unlikely to represent a threat. Furthermore a due-diligence review confirmed that the two concerned dams are relatively recently constructed, have been built in compliance with the PRC highest applicable standards and have received dam safety reviews which confirmed the safety of the infrastructures. 99 A review of climate change impacts indicate that by the end of the century it is expected that (i) the annual average precipitation will increase by about 25% on the Tibetan plateau, where most of the Yellow River basin is located, and (ii) the monthly average temperatures will increase by 5 to 6°c. These changes will not adversely affect agricultural production in the Project area, and may even bring positive impacts through an extension of the growing period. 8 CONCLUSIONS 100 The proposed Project is expected to have significant positive environmental benefits in the project area, including increase in vegetation coverage, improvement in water resource management, restoration of degraded soils and reduction in energy resources, and, improve livelihoods of local people in the two project sites in the Qinghai Province. Based on the results of the SIEE, the Project will not generate significant negative environmental impacts, provided the mitigation measures are implemented appropriately. 32 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX LIST OF APPENDIXES ANNEX 1 MAJOR PHYSICAL CHARACTERISTICS OF PROJECT SUB-COMPONENTS ...... 2 ANNEX 2 APPLICABLE ENVIRONMENTAL LAWS & REGULATIONS ...... 5 ANNEX 3 APPLICABLE ENVIRONMENTAL STANDARDS ...... 8 ANNEX 4 RESULTS FROM ENVIRONMENTAL SURVEYS ...... 11 ANNEX 5 SUMMARY OF DAM SAFETY ASPECTS ...... 17 ANNEX 6 POTENTIAL IMPACTS FROM CLIMATE CHANGE...... 20 ANNEX 7 PESTICIDES & INTEGRATED PEST MANAGEMENT ...... 28 oOo PAGE 1 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 1 MAJOR PHYSICAL CHARACTERISTICS OF PROJECT SUB-COMPONENTS PAGE 2 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX MAJOR PHYSICAL CHARACTERISTICS OF GONGBOXIA & LIJIAXIA SCHEMES QUANTITIES FOR LIJIAXIA QUANTITIES FOR GONGBOXIA ITEMS UNITS SOUTH MAIN NORTH MAIN SOUTH MAIN NORTH MAIN CANAL CANAL CANAL CANAL Length of penstocks m 1050 312 1604.38 970 Diameter of penstocks m 1.8 1.6 1.3 1.3 Design water level of penstock outlets m 2168.99 2177.07 1986.24 1984.14 Total length of main canal km 22.53 34.18 27.308 30.576 Gradient of main canal - 1/3000 1/3000 1/1000 1/2000 Design water flow of main canal m3/s 2.55-0.10 5.00-0.25 2.90-0.33 3.34-0.38 KEY STRUCTURES OF MAIN CANAL Siphons Design flow m3/s 2.55-0.7 5.0-1.55 3.77-0.39 4.34-1.27 Design pipe diameter m 1.40-0.75 1.7-0.8 130-30 130-75 Siphons no. 6 7 6 3 Total length of siphons km 3.94 4.49 1.825 1.598 Aqueducts Design flow m3/s 2.55-0.5 5.0-0.35 3.77-0.39 4.34-0.5 Aqueducts no. 29 16 20 18 Total length of aqueducts km 3.96 2.63 2.096 2.531 Tunnels Conveyance tunnels no. 1 12 8 14 Design flow m3/s 2.55 5.0-3.1 3.77-0.39 4.34-0.5 Maximum length of single tunnel km 0.35 1.25 7.046 2.132 Total length of convey tunnels km 0.35 7.39 11.508 10.868 Vehicular access bridges Width of bridge m 3.5-4.0 3.5-4.0 3.5 3.5 Vehicular access bridges no. 11 7 7 7 PUMPING STATIONS FOR MAIN CANALS Pumping stations no. 4 6 7 5 Design discharge capacity m3/s 0.05-0.08 0.04-0.1 0.01-0.15 0.01-0.05 STRUCTURES ALONG BRANCH CANALS Aqueducts no. 1 6 Head fall/abrupt slopes no. 307 800 Vehicular access bridges no. 12 58 Flood discharging culverts no. 10 4 Siphons no. 0 1 Diversion tunnel no. 20 43 IRRIGATION BENEFITS PAGE 3 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX QUANTITIES FOR LIJIAXIA QUANTITIES FOR GONGBOXIA ITEMS UNITS SOUTH MAIN NORTH MAIN SOUTH MAIN NORTH MAIN CANAL CANAL CANAL CANAL 104 3.9365 3.9472 Improved irrigated area 2.94 6.65 mu 104 2.8416 2.3298 Expanded irrigated area 1.18 1.68 mu 104 Planned irrigated area 4.12 8.32 5.1635 5.7297 mu MATERIALS AND LABOR Rock/earth excavation and filling 104m3 223.81 441.21 159.22 193 Concrete and reinforced concrete 104m3 15.31 29.6 17.04 25.17 Lining stones 104m3 0.2 0.55 0.13 0.102 Steels t 991 3814 4990 4832 Cement t 37979 73773 68920 72447 104 268 233 Workdays 57 175 wd LAND ACQUISITION FOR CONSTRUCTION Permanent Land Acquisition mu 913 1601 919 1182 Temporary Land Acquisition mu 116 170 337 441 Source: FSR, 2009 PAGE 4 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 2 APPLICABLE ENVIRONMENTAL LAWS & REGULATIONS PAGE 5 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX NO. DOCUMENT PRC – ENVIRONMENT RELATED LAWS & REGULATIONS 1 Environment Protection Law of the People's Republic of China (1989-12-26) 2 Environmental Impact Assessment Law of the PRC (2003-9-1) 3 Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution (2000-04) 4 Water Law of the People's Republic of China (2002-10-1) 5 Law of the People's Republic of China on Prevention and Control of Water Pollution (2008-07) 6 Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste (2005-04-01) 7 Law of the People's Republic of China on Prevention and Control of Pollution From Environmental Noise (1997-04) 8 Law of the People's Republic of China on Water and Soil Conservation(1991-06-29) 9 Land Administration Law of the People's Republic of China (1998-06-25) 10 City Planning Law of the People's Republic of China (1998-12-26) 11 Regulations on the Protection of Basic Farmland (1998) 12 Ordinance on Environmental Protection Management of Construction Projects (State Council No. 253, 1998) 13 Management Catalog of Classified Environmental Protection of Construction Project (State Environmental Protection Administration No. 14) 14 Ordinance on Land Requisition Compensation and Resettlement for Large and Medium-sized Water Conservancy and Hydropower Projects (State Council, 1991-2-15) 15 Notice on Enhanced Management of Environmental Impact Assessment of Construction Projects Financed by International Financial Organizations (State Environmental Protection Administration No. 324, 1993) PRC – ENVIRONMENT RELATED PROVINCIAL REGULATIONS 1 Management of Key Water Conservancy Projects at Early Time in Qinghai Province (2003-11- 18) 2 Ordinance on Prevention and Control of Water Pollution in Huangshui Basin of Qinghai Province (1998-5-29) 3 Implementation of ‘Environmental Protection Law of the People's Republic of China’ in Qinghai Province (2001-3-31) 4 Implementation of ‘Law of the People's Republic of China on the Prevention and Control of Air Pollution’ in Qinghai Province (2001-3-31) 5 Names of Key Aquatic and Wild Animals (Qinghai Provincial Government No. 47, 2003-08-14) PRC – ENVIRONMENT RELATED TECHNICAL STANDARDS 1 Technical Guidelines for Environmental Impact Assessment – Non-pollution Ecological Impact (HJ/T19-1997) 2 Technical Guidelines for Environmental Impact Assessment - Atmospheric Environment Surface Water Environment HJ/T2.1-2.3-93) 3 Technical Guidelines for Environmental Impact Assessment - Acoustic Environment (HJ/T2.4- 1995) 4 Technical Guidelines for Environmental Impact Assessment – Water Conservancy & Hydroelectricity Projects (HJ/T88-2003) PAGE 6 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX NO. DOCUMENT 5 Technical Guidelines for Environmental Risk Assessment of Construction Projects (HJ/T169- 2004) 6 Technical Standard for Water and Soil Preservation in Construction Project (Water Conservancy Administration, 1998) 7 Technical Criteria for Environmental Monitoring (SEPA，1986) 8 Technical Criteria for Monitoring Surface Water and Sewage (SEPA, 2002) 9 Environmental Quality Standard for Surface Water(GB3838-2002) 10 Quality Standard for Ground Water(GB/T14848-93) 11 Environmental Quality Standard for Noise(GB3096-2008) 12 Ambient Air Quality Standard(GB3095-1996) 13 Integrated Emission Standard of Air Pollutants(GB16297-1996) 14 Environmental Quality Standard for Soils(GB15618-1995) 15 Standards for irrigation water purity (GB5084-1992) 16 Hygienic Standard for Domestic Drinking Water (GB5749-2006) 17 Noise Limits for Construction Site (GB12523-90) 18 Control Standards for Pollutants in Sludge From Agricultural Use (GB4284－84) o0o PAGE 7 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 3 APPLICABLE ENVIRONMENTAL STANDARDS PAGE 8 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ENVIRONMENTAL CRITERION STANDARDS POLLUTANTS IELD F UNITS VALUE PH pH unit 6-9 DO mg/l ≥5 BOD mg/l ≤4 COD mg/l ≤20 NH3-N mg/l ≤1.0 Grade III AR-OH mg/l ≤0.005 Environmental Surface Water Quality Standard for cyanide mg/l ≤0.2 Surface Water As mg/l ≤0.05 (GB3838-2002) Hg mg/l ≤0.0001 Cr(+6) mg/l ≤0.05 Pb mg/l ≤0.05 Cd mg/l ≤0.005 Oil type mg/l ≤0.05 PH pH unit 6.5-8.5 Total dissolved solids mg/l ≤1000 NH3-N mg/l ≤0.2 Grade III total hardness mg/l ≤450 Environmental Permanganate Index mg/l ≤3.0 Groundwater Quality Standard for Groundwater Zn mg/l ≤1.0 (GB/T14848-93) Fe mg/l ≤0.3 Anionic Surfactant mg/l ≤0.3 Total coliform Per l ≤3.0 Total bacterial count Per ml ≤100 Annual mean mg/m3 0.20 TSP Daily mean mg/m3 0.30 Annual mean mg/m3 0.08 Grade II 3 NO2 Daily mean mg/m 0.12 Ambient Air Ambient Air Quality Standard (GB3095- Hourly average mg/m3 0.24 1996) Annual mean mg/m3 0.06 3 SO2 Daily mean mg/m 0.15 Hourly average mg/m3 0.50 Grade II Daytime dB(A) ≤60 Acoustic Acoustic Quality LAeq Environment Standard (GB3096- 2008) Night dB(A) ≤50 Note: underground water Grade III by reference to Underground Water Quality Standard (GB/T14848-93) PAGE 9 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX POLLUTANTS DISCHARGE & EMISSION STANDARDS VALUES POLLUTION TYPE STANDARDS POLLUTANTS UNITS VALUES PH 6-9 Grade I CODcr mg/l ≤100 Integrated BOD5 mg/l ≤20 Waste water Wastewater Discharge Standard NH3-N mg/l ≤15 (GB8978-1996) Oil type mg/l ≤5 SS mg/l ≤70 3 Grade II SO2 0.4 mg/m Integrated Emission Levels of fugitive Air pollutants NO 0.12 mg/m3 Standard of Air x emissions Pollutants (GB16297-1996) Particles 1.0 mg/m3 Daytime 75 Earthworks Night 55 Daytime 85 Transport Noise Limits for Equivalent Night No construction Noise Construction Site sound (GB12523-1990) level dB(A) Structure Daytime 70 Construction Night 55 Daytime 65 Installation Night 55 o0o PAGE 10 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 4 RESULTS FROM ENVIRONMENTAL SURVEYS PAGE 11 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX SURFACE WATER SURVEY RESULTS (UNIT: MG/L) COLIFORM LOCATION DATE PH COD TDS TN TP AS HG CR6+ CD PB (NUMBER/LITRE) 1. Lijiaxia Reservoir 2008.7.09 8.11 5L 186 0.99 0.016 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 2.31×10-3 <20 2008.7.10 8.12 5L 193 1.00 0.01L 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 2.94×10-3 <20 2008.7.11 8.11 5L 175 1.00 0.01L 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 3.24×10-3 <20 2008.7.10 8.01 7 242 1.32 0.01L 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.65×10-3 2.3×102 2. 2 km downstream of urban WW discharge point of Jianzha County, 2008.7.11 8.02 7 251 1.32 0.01L 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.35×10-3 2.3×102 Yellow River 2008.7.12 8.10 6 236 1.32 0.024 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.25×10-3 2.3×102 2008.7.09 8.10 5L 252 1.11 0.01L 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.60×10-3 <20 3. Lijiaxia Reservoir 2008.7.10 8.00 5L 257 1.11 0.01 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 4.76×10-3 <20 2008.7.11 8.04 5L 249 1.11 0.01L 6.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 3.50×10-3 <20 2008.7.09 8.19 7 272 1.20 0.014 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 2.61×10-3 3.3×102 4. 2 km downstream of urban WW discharge point of Xunhua County, 2008.7.10 8.15 7 265 1.20 0.016 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 2.38×10-3 3.3×102 Yellow River 2008.7.11 8.11 6 259 1.20 0.010 5.0×10-4 1.0×10-5L 0.004L 1.0×10-4L 2.26×10-3 2.3×102 Note: “L” means the detected value is below the limitation. The number before “L” is the limitation value. PAGE 12 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX GROUNDWATER SURVEY RESULTS (UNIT: MG/L) Coliform tal bacteria Total salt Total Location Date pH nitrate NH3-N As Hg Cr6+ Cd Pb (number/ (number/ content hardness liter) mg) 2008.7.09 7.21 1.52×103 6.66×102 3.90 0.108 5.0×10-4L 1.0×10-5L 0.005 1.0×10-4L 4.60×10-3 <3 5 1.Gashiya, Kangyang 2008.7.10 7.22 1.46×103 6.59×102 3.87 0.133 5.0×10-4L 1.0×10-5L 0.005 1.0×10-4L 4.14×10-3 <3 4 village 2008.7.11 7.28 1.49×103 6.82×102 3.90 0.095 5.0×10-4L 1.0×10-5L 0.005 1.0×10-4L 4.15×10-3 <3 5 2008.7.09 7.48 1.47×103 7.53×102 5.81 0.076 5.0×10-4L 1.0×10-5L 0.005 1.0×10-4L 3.87×10-3 >230 4.1×102 2. Qunke, Qunke 2008.7.10 7.42 1.49×103 7.67×102 5.84 0.079 5.0×10-4L 1.0×10-5L 0.005 1.0×10-4L 3.54×10-3 >230 4.8×102 village 2008.7.11 7.36 1.40×103 7.67×102 5.80 0.083 5.0×10-4L 1.0×10-5L 0.006 1.0×10-4L 3.48×10-3 >230 4.1×102 2008.7.10 7.01 2.02×103 1.13×103 6.96 0.114 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 4.40×10-3 52 5 3. Ganducaotanba 2008.7.11 7.04 1.94×103 1.18×103 6.94 0.127 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 4.27×10-3 70 8 Village 2008.7.12 7.02 1.90×103 1.16×103 6.98 0.124 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 3.87×10-3 52 4 2008.7.10 6.95 1.70×103 1.07×103 12.9 0.067 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.51×10-3 >230 7.8×102 4. Mujiang tan, Jishi town, South of Yellow 2008.7.11 6.98 1.71×103 1.06×103 12.9 0.089 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.97×10-3 >230 8.0×102 River 2008.7.12 6.91 1.60×103 1.07×103 12.6 0.098 5.0×10-4L 1.0×10-5L 0.004L 1.0×10-4L 2.49×10-3 >230 7.8×102 Note: “L” means the detected value is below the limitation. The number before “L” is the limitation value. PAGE 13 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX AIR QUALITY SURVEY RESULTS 3 RESULTS (UNIT: MG/M ) LOCATION DATE TSP SO2 2008.7.09 0.178 0.003L 2008.7.10 0.107 0.005 Urban district of Xunhua 2008.7.11 0.112 0.003L county 2008.7.12 0.131 0.003L 2008.7.13 0.116 0.004 2008.7.09 0.078 0.003L 2008.7.10 0.072 0.003 Urban district of Jianzha 2008.7.11 0.059 0.003L county 2008.7.12 0.040 0.003L 2008.7.13 0.031 0.003L Note: “L” means the detected value is below the limitation. The number before “L” is the limitation value. PAGE 14 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX NOISE SURVEY RESULTS (UNIT: DBA) DAY TIME NIGHT TIME LOCATION 2008.7.18 2008.7. 19 2008.7.18 2008.7. 19 Downstream of Lijiaxia Reservoir Maishijian 38.5 39.5 35.2 36.2 Yama 35.5 36.4 33.8 32.8 Zhongtan 54.7 52.5 42.5 48.6 Zhiganglaka 38.0 39.1 35.1 35.3 Gulangshi Temple 48.2 45.6 39.6 38.7 Lijiaxia 38.1 37.5 33.4 31.2 Yashiga 45.8 42.3 40.6 38.6 Qunke 42.1 44.6 39.7 36.3 Yishatan 49.6 42.8 40.5 39.5 Shajiatai 48.3 41.7 40.2 36.8 Downstream of Gongboxia Reservoir Horticultural field 43.6 42.7 38.2 38.6 Shuiche Village 43.5 44.2 37.5 39.5 Ga Village 41.2 42.3 36.4 38.2 Gandu Town 42.6 43.6 39.2 37.5 Wutubei 43.4 45.2 37.8 38.1 Jishi Town 42.5 47.6 34.2 41.5 Tuobaqidui 40.6 43.2 36.9 38.4 Bolangtan 42.7 42.6 37.4 39.1 Qingshui Village 43.9 45.4 36.5 37.5 Mengda Village 44.8 43.8 32.1 36.5 PAGE 15 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX SOIL QUALITY SURVEY RESULTS OUTCOME (UNIT: MG/KG), DATE: 2008.7.12 LOCATION TOTAL SALT PH HG AS PB CD CR N P K CONTENT 1 Gashiya, 7.94 1.26 21.3 27.5 0.070 0.009 0.181 0.021 0.755 0.140 Kangyang village 2 Qunke, Qunke 8.42 0.016 15.8 22.3 0.052 0.009 0.224 0.026 0.817 0.080 village 3 Dry land, 8.21 0.004 13.2 20.7 0.038 0.009 0.138 0.023 0.782 0.100 Guansha Village 4 Caotanba village, Ganducaotanba 7.57 0.003 18.1 21.6 0.055 0.209 0.156 0.017 0.782 0.540 Village 5 Mujiangtan, Jishi Town, South of 8.23 0.006 16.8 23.2 0.130 0.218 0.220 0.069 0.814 0.060 Yellow River 6 Dry land, Guohela Village, 8.28 0.006 13.3 20.9 0.047 0.009 0.081 0.018 0.831 0.100 South of Yellow River PAGE 16 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 5 SUMMARY OF DAM SAFETY ASPECTS PAGE 17 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX SUMMARY OF SAFETY ASPECTS FOR LIJIAXIA & GONGBOXIA ITEM GONGBOXIA LIJIAXIA COMMENT / APPLICABLE STANDARD Design Flood (m3/s) 5530 4940 Return Period (Year) 1000 1000 GB5021-94 Spillway Maximum Flood (m3/s) 7455 6300 Major O&M and Safety Issues addressed routinely Structural Stability Yes Yes SDJ336-89 & SL60-94 Slope Erosion/Stabilization Yes Yes Leakage / seepage Yes Yes Mechanical Yes Yes SL101-94 Safety Inspections Frequency Annual Report Annual Report SLJ702-81 Date of Last Inspection Dec. 2008 Dec. 2008 Monitoring Instrumentation Available Staff gauges/ Reservoir level gauges Yes Yes Rainfall recorder Yes Yes Flood warning system Yes Yes Emergency Communication System Yes Yes Movement recording (theodolite, levels) Yes Yes Safety Review Date Last Safety Review Nov. 2006 Nov. 2008 China Hydropower Organization in Charge Engineering LDSSC & SERC Consulting Group Co. Nb. of Members of Expert Panel 22 10 Key Conclusions of Safety Review Dam flood Design Criteria No.1 No.1 SDJ12-78 & SL252-2000 Seismic Design Criteria VIII VIII SL203-97 SL228-98 & SDJ21-78 & Quality of Structures (Design) Ok Ok SD145-85 Quality of Structures (Current) Ok Ok SDJ249-90 Stability of Structures Ok Ok Seepage Ok Ok Organizational Structure Ok Ok Staffing Ok Ok Technical Expertise Ok Ok O&M Procedures & safety Inspections Ok Ok PAGE 18 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ITEM GONGBOXIA LIJIAXIA COMMENT / APPLICABLE STANDARD Emergency Preparedness Plan Available Available Responsibility Described Described Flood Maps & Threatened Assets Available Available Flood Warning System Available Available Evacuation Procedures Available Available Mobilization of Emergency Forces Available Available PAGE 19 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 6 POTENTIAL IMPACTS FROM CLIMATE CHANGE PAGE 20 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX CONTENTS 1. INTRODUCTION ...... 22 2. ASSESSMENT OF CLIMATE CHANGE...... 22 2.1. COUNTRY WIDE ASSESSMENTS OF GLOBAL WARMING...... 22 2.1.1. MAJOR SOURCES OF INFORMATION...... 22 2.1.2. COUNTRY AND REGIONAL LEVEL CLIMATE PROJECTIONS ...... 23 2.1.3. LOCAL-LEVEL CLIMATE PROJECTIONS ...... 24 2.2. CONCLUSIONS APPLICABLE TO THE PROJECT AREA...... 25 3. POTENTIAL IMPACTS ON YELLOW RIVER FLOWS ...... 25 4. POTENTIAL IMPACTS FROM CC ON AGRICULTURE ...... 25 4.1. KEY CRITERIA CONSIDERED FOR ASSESSING CC IMPACTS ON AGRICULTURE...... 25 4.1.1. CARBON FERTILIZATION...... 26 4.1.2. IRRIGATION...... 26 4.1.3. INTERNATIONAL TRADE...... 26 4.2. COUNTRY-LEVEL AGRICULTURAL IMPACT ESTIMATES ...... 26 5. CONCLUSIONS...... 27 PAGE 21 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX 1. INTRODUCTION Climate change will, on the long term, alter local weather conditions, including rainfall and temperature, and lead to changes in the frequency and severity of climate hazards, such as droughts. As a consequence, water resources annual and inter-annual distribution and flood magnitude and occurrence may be modified, as well as water availability for human activities, among which agriculture is a major consumer through irrigation. In the long list of potential damages from global warming, the risk to world agriculture stands out as among the most important. Some level of climate change is now inevitable and human communities will need to adapt to the changes which will occur, either to mitigate potential negative impacts or to take better advantage of new opportunities. The purpose of this section is to identify the potential impacts the climate change may have on the Lijiaxia and Gongboxia irrigation schemes, and which mitigation measures may be proposed if deemed necessary. The section includes 3 steps in the assessment: • Assessment of climate changes in the Project area • Impacts anticipated on agriculture • Proposed mitigation measures if justified. 2. ASSESSMENT OF CLIMATE CHANGE 2.1. COUNTRY WIDE ASSESSMENTS OF GLOBAL WARMING 2.1.1. MAJOR SOURCES OF INFORMATION Country and region wide assessment of CC presented here refer principally to a recent comprehensive study1 in which the author carries out a careful review of existing CC forecasting models and uses agricultural impact models of two separate types, the "Ricardian" statistical economic models and the process-based agronomic models, combined with leading climate model projections to develop comprehensive estimates for agricultural effects in over 100 countries. The study develops a "consensus" set of geographically detailed estimates for changes in temperature and precipitations by the 2080s and applies these changes to the agricultural impact models. The study reaches two fundamental conclusions: the first is that by late in this century unabated global warming would have at least a modest negative impact on global agriculture in the aggregate, and the second is that the composition of agricultural effects is likely to be seriously unfavorable to developing countries, with the most severe losses occurring in Africa, Latin America and India. More local investigations on CC and its impact on agriculture have been already performed, and the present analysis will also refer to a study carried out since 2006 in Ningxia2. This study will be referred to in order to compare the consistency of its results with those of the Cline's study. 1 Cline W.R.; 2007. Global Warming and Agriculture, Impact Estimates by Country. Centre for Global Development, Peterson Institute for International Economics. 2 Impacts of Climate Change on Chinese Agriculture – Phase II: Adaptation Framework and Strategy; Part 2: Application of the Adaptation Framework: A Case Study of Ningxia, Northwest China. October 2008. UK Department of Energy and Climate Change (DECC). PAGE 22 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX 2.1.2. COUNTRY AND REGIONAL LEVEL CLIMATE PROJECTIONS The results presented below are based on what may be viewed as consensus general circulation model (GCM) climate projections for business as usual warming by the 2080s. China, due to its size, has been subdivided into 6 regions, for which separate estimates have been computed: Beijing Northeast, China Central, Hong Kong Southeast, China Northwest, China South Central, Tibetan Plateau and Yellow sea. Due to the location of the Project area, we will refer to two sets of results, those for the Northwest and those for the Tibetan Plateau. Indeed, the project area because of its location at the eastern boundary of Qinghai Province and of its altitude, is better represented by the situation of the Northwest, while the water resources of the Yellow river are better represented by the climate change on the Tibetan Plateau. Anticipated annual changes in temperature and precipitations are presented in the table below. Table 1. PRESENT AND FUTURE AVERAGE TEMPERATURE AND PRECIPITATION (°C AND MM/DAY, ANNUAL AVERAGES) TEMPERATURE PRECIPITATION REGION OF CHINA PRESENT 1961-90 FUTURE 2070-99 PRESENT 1961-90 FUTURE 2070-99 Northwest* 6.06 12.08 0.37 0.44 Tibetan Plateau* -1.45 4.15 1.13 1.53 Lijiaxia** 7.8 13.8 (?) 0.91 1.18 (?) Gongboxia** 8.7 14.7 (?) 0.70 0.88 (?) Sources: * Cline, 2007; **Feasibility Study Report for present situation By the end of the century, the anticipated temperature increase in this two Chinese regions will range from 5.6°c on the Tibetan Plateau to 6.02°c in the Northwest region. Considering the present annual average temperatures of Lijiaxia and Gongboxia, closer to the situation of the Northwest region, the increase of temperature by the end of the century in the Project area should be of about 6°c. Concerning precipitations, they are expected to increase by about 19% in the Northwest region and by 35% on the Tibetan Plateau. Extrapolating the increase as a proportion of the present average precipitation, the anticipated increase of precipitation in Lijiaxia and Gongboxia could be in the range of 30 and 25 % increase respectively. Monthly average temperature and precipitation changes have also been forecasted using the same model. Results are presented in the following tables. Table 2. PRESENT AND FUTURE AVERAGE MONTHLY TEMPERATURES (°C) JANUARY FEBRUARY MARCH APRIL MAY JUNE REGION T0 T1 T0 T1 T0 T1 T0 T1 T0 T1 T0 T1 Northwest* -11.77 -5.92 -8.26 -2.53 0.09 6.05 8.65 14.89 14.89 21.12 19.04 25.09 Tibetan Plateau* -12.90 -7.03 -10.70 -4.93 -6.23 -0.74 -1.24 4.29 3.05 9.07 7.13 12.86 JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER REGION T0 T1 T0 T1 T0 T1 T0 T1 T0 T1 T0 T1 Northwest* 21.14 27.13 19.97 26.38 14.38 20.42 6.67 11.86 -2.42 3.74 -9.64 -3.30 Tibetan Plateau* 9.32 14.58 8.74 13.76 5.49 10.47 -0.89 4.45 -7.63 -1.43 -11.50 -5.59 T0: Temperature for 1961-90 T1: Temperature for 2070-99 PAGE 23 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX Monthly temperature changes are rather uniform approximately equivalent to the change of annual average temperatures presented in the precedent table: an increase of about 5.6°C on the Tibetan Plateau and about 6°C in the Northwest region. Table 3. PRESENT AND FUTURE AVERAGE MONTHLY PRECIPITATION (MM/DAY) JANUARY FEBRUARY MARCH APRIL MAY JUNE REGION P0 P1 P0 P1 P0 P1 P0 P1 P0 P1 P0 P1 Northwest* 0.08 0.26 0.09 0.25 0.19 0.36 0.32 0.76 0.45 0.78 0.64 0.65 Tibetan Plateau* 0.22 0.38 0.32 0.46 0.49 0.52 0.67 0.80 0.97 1.32 2.38 3.32 JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER REGION P0 P1 P0 P1 P0 P1 P0 P1 P0 P1 P0 P1 Northwest* 0.90 0.62 0.79 0.64 0.43 0.33 0.26 0.25 0.17 0.19 0.10 0.24 Tibetan Plateau* 3.04 4.40 2.81 3.75 1.69 2.12 0.58 0.72 0.22 0.27 0.20 0.25 P0: Precipitation for 1961-90 P1: Precipitation for 2070-99 Precipitation change is not distributed uniformly over the months and depending the region considered. In the Northwest region, precipitations in January and February are increased by a factor of about 300%, reduced to about 200% for March and April. The precipitation increase is only in the range of 70% in May and almost nil in June. In July, August and September, period of the highest rainfall, precipitations are reduced by about 20 to 30%. Change in October and November is almost nil and then an increase of about 100% is expected in December. In brief, monthly precipitation will increase during the dry season (winter) and will decrease during the wet season, being almost unchanged during the transition months. More snow may be expected in winter. On the Tibetan plateau, the situation is rather different with an increase of the precipitation every month of the year but in different proportions. Highest increase is observed in January (70%), February (43%) and July (45%). With the exception of March showing only 6% increase, all the other month increases range from 22 to 39%. 2.1.3. LOCAL-LEVEL CLIMATE PROJECTIONS The results from the UK DECC study mentioned above concern the Ningxia Autonomous Province. The Province includes 3 main geographical areas, the southern mountainous area, the Central arid area and the Northern area, each representative of the main agricultural production systems in China (the reason why this Province was selected for the study). The Central arid area is a mix of irrigation with some rainfed and extensive grazing. Average annual rainfall ranges between 250 to 400 mm. The dry conditions only allow corn, spring wheat, potato, and some cattle and sheep husbandry. This area seems to be the most representative of Lijiaxia and Gongboxia areas in terms of rainfall range and agriculture irrigation. The forecast of temperature and precipitation changes in Ningxia are provided in the following table and have been computed with the regional climate model PRECIS. Data come from 23 meteorological stations in Ningxia and cover the period from 1950. Table 4. CHANGES OF TEMPERATURE AND PRECIPITATION FORECASTED FOR NINGXIA PROVINCE T MAX (°C) TMIN (°C) PRECIPITATION (%) PERIOD OF TIME B2 A2 B2 A2 B2 A2 2011-2040 1.6 1.8 1.6 1.8 +3 +5 2041-2070 2.6 3.6 2.7 3.7 +4 +8 2071-2100 3.5 6.0 3.7 6.4 +6 +12 PAGE 24 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX Notes: Changes are relative to the average values during the baseline period 1961-1990. A23: Scenario where no specific measures to reduce global warming are implemented. Business as usual B2: Scenario where clean and efficient technologies are implemented to reduce global warming. When compared with the precedent global forecast, the latest period (2071-2100) of temperature forecast under A2 conditions is rather consistent with an increase of temperature around 6 to 6.4 °c. The two approaches are less consistent regarding the anticipated increase of rainfall, as the long term increase presented here (12%) is significantly lower than the increase forecasted for the Northwest region in previous section (19%). 2.2. CONCLUSIONS APPLICABLE TO THE PROJECT AREA On the long term (end of the century), the Project area may expect a maximum increase of its annual average temperature of about 6°C, considering the present trend in global warming (business as usual). In case voluntarist and efficient policies are implemented worldwide to reduce GHG emissions, the annual average temperature increase may be limited to about 3.5°C. The Cline report, which forecasts rely on integrated results from several general circulation models, anticipates a precipitation increase in the range of 20 to 35% respectively for the Northwest region and the Tibetan Plateau, which could result for the Project area in a precipitation increase in the range of 25 to 30%. Considering the location and altitude of the Project area, we may anticipate a reduction of precipitation during the summer (rainy) season and an increase during winter and spring. 3. POTENTIAL IMPACTS ON YELLOW RIVER FLOWS The changes in temperature and precipitation resulting for the global warming will affect the present flows of the YR in several ways: • Increase of precipitations on the Tibetan Plateau will increase the runoff and the river flow, • Increase of temperature on the plateau will accelerate the smelting of the glacier and will reduce the period of accumulation of snow. Flow during autumn should be increased (as the below zero temperature will be reached later and storage of precipitation as snow will also start later) and spring flow should be reduced (as the snow volume stored), • Increase of temperature will increase the evaporation from the reservoir surface distributed along the YR course. 4. POTENTIAL IMPACTS FROM CC ON AGRICULTURE 4.1. KEY CRITERIA CONSIDERED FOR ASSESSING CC IMPACTS ON AGRICULTURE Before going to the results of the Cline study regarding impacts of CC on agriculture, it is important to highlight three major issues which are 1) carbon fertilization, 2) irrigation and 3) international trade. 3 Special Report on Emission Scenarios –SRES- from the Intergovernmental Panel on Climate Change –IPCC, which fixes the atmospheric CO2 at 735 ppm by 2085. PAGE 25 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX 4.1.1. CARBON FERTILIZATION Carbon dioxide (CO2)is an input in photosynthesis, which uses solar energy to combine water and carbon dioxide and produces carbohydrates with oxygen as a waste product. In addition, higher atmospheric concentrations of CO2 reduces plant's pores (stomates) opening and hence the loss of water to respiration. The actual benefit for the plants of higher atmospheric CO2 depends on the plant group: C3 crops, which include rice, wheat, soybeans, fine grains, legumes and most trees, benefit substantially from additional atmospheric carbon dioxide. C4 crops, which include maize, millet, sorghum, sugarcane show benefits much more limited. Initial assessments of these benefits have been done through laboratory experiments within chambers at small scale. Recent research based on experiments with free air concentration enrichment method (FACE) suggest that past laboratory estimates of the carbon fertilization effect 4 have been substantially overstated. In recent studies , it was found that with CO2 elevated from 550 ppm to 575 ppm, the FACE experiment shows a yield increase of 11% for the C3 crops and 7% for all 5 major food crops, which is only one third or one quarter of the direct effect of CO2 modeled in the early 2000s for Europe and the USA by Darwin & Kennedy. In 2006 FACE experiments, at 550 ppm CO2, yields increase by 13% for wheat and 14% for soybean in contrast to respectively 31% and 32% in previous laboratory studies (Long & Al., 2006). 4.1.2. IRRIGATION Additional irrigation will be required under global warming situation depending on the balance between temperature increase and precipitation increase or decrease. The Ricardian models used in the Cline study consider the increase of irrigation in the yield forecast. 4.1.3. INTERNATIONAL TRADE The question was raised about integrating or not the induced effects operating through international trade when examining the effects of CC on agriculture. To avoid any confusion in his central diagnosis of prospective effects of unmitigated global warming on world agriculture, Cline did not include the induced effects based on a trade model. 4.2. COUNTRY-LEVEL AGRICULTURAL IMPACT ESTIMATES The country level agricultural impact estimates presented below are based on an analysis considering carbon fertilization with an unmitigated global warming resulting in an atmospheric CO2 concentration of 735 ppm by 2085, in accordance with the SRES-IPCC. On this basis, the central estimate of the carbon fertilization effect by the 2080s is set at 15% increase in yield, a considerably more conservative and smaller figure than results from past laboratory studies. Optimal agricultural production has been identified at an average temperature of 11.7°C and 2.5 mm precipitation per day. At higher temperatures more precipitation is required to keep productive potential positive. This is the reason why developing countries, located generally in low latitudes with already an average temperature higher than this optimum will be more seriously affected by global warming than industrialized countries. Indeed, the latest are located at higher latitude, with an average lower temperature which global warming will raise closer to the optimum, improving thus the production potential of the crops. The forecasts presented below have been established on the basis of the Mendelsohn-Schlesinger (MS) cross-section Ricardian model. 4 Long Stephen P. & Al., 2005; Global Food Insecurity: Treatment of major food crops with elevated carbon dioxide or ozone under large-scale fully open air conditions suggest recent models may have overestimated future yields. Philosophical Transactions of the Royal Society B 360: 2011-20. PAGE 26 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX Table 5. IMPACT OF CC BY 2070-99 ON AGRICULTURE MODEL-PREDICTED LAND RENTAL EQUIVALENT PERCENT CHANGE IN REGION OF CHINA (2003 US$/HA) AGRICULTURAL CAPACITY BASE WITHOUT CF WITH CF WITHOUT CF WITH CF Northwest* 11 22 30 17.2 29.8 Tibetan Plateau* -22 4 12 39.9 52.3 Sources: Cline, 2007; CF= Carbon Fertilization; The forecast concludes to a potential long term 30% increase in agricultural production capacity resulting from climate change, which should be applicable to the present Project area. However, this forecast has to be put into perspective as other major factors and criteria will also impact in the long range agricultural production: uncertainty regarding the actual fertilization effect level, effects of extreme climatic events on crop growth, effects of agricultural technology improvements. 5. CONCLUSIONS The forecast of changes induced on temperature, precipitation and eventually on agricultural production from the climate modification by the last part of the century leads to the following conclusions applicable to the Gongboxia and Lijiaxia project areas: • Monthly average temperatures may increase by 5 to 6°c; • Annual average precipitation may increase by about 25%, with an irregular distribution over the year: monthly averages of the driest months (December to April) are increased by about 2 to 3 times while the wettest months (July to September) monthly average precipitations are decreased by 20 to 30%. • The temperature increase will extend the crop growing period and increase crop evapotranspiration, which may result in higher water demand than presently. This may have secondary effects on pest development: the natural control of pest resulting from the freezing period may be reduced as the cold period will be shortened. • Taking due consideration of carbon fertilization resulting from GHGs, the potential agricultural productivity of the region may be increased by about 30%. oOo PAGE 27 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ANNEX 7 PESTICIDES & INTEGRATED PEST MANAGEMENT PAGE 28 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX PESTICIDES & INTEGRATED PEST MANAGEMENT BACKGROUND ON PESTICIDES USED IN PROJECT AREAS In the 3 Counties concerned by the Gongboxia and Lijiaxia Irrigation schemes, pesticides are distributed through private shops certified by and registered with the Department of Agriculture. Products, for their majority are sold in liquid solution, in glass or plastic bottles with a content ranging from 100 to 500 ml. The following table provides the list of the products distributed in the Project area. NO. PESTICIDE NAME CHEMICAL CLASS COMMENTS INSECTICIDE, ACARICIDE & NEMATICIDE Highly toxic to birds, and to man through oral, dermal and inhalation routes. Half-life in soil ranges from 2-173 days. Long 1 Phorate Organophosphate persistence under freezing conditions. Up to 28 days persistence in plant residues. EPA Toxicity Class 1 (High Toxicity) High exposure risk if used as dust formulation; moderately toxic under liquid 2 Dimethoate Organophosphate formulation. Half-life in soil is 4-16 days. EPA Toxicity Class 2 (Moderate Toxicity) Highly toxic to insects 3 DDVP-dichlorophos Organophosphate Toxicity to humans and to aquatic life. 4 Chlorfenapyr Pyrazole Half-life hydrolysis: 30 days Highly toxic synthetic pyrethroid to fight particularly mosquitoes; medium toxicity to 5 Beta-cypermethrin Pyrethroid Ester mammals but significant to aquatic ecosystems Moderate toxicity to mammals and humans. Widely used in the world for 6 Deltamethrin Pyrethroid Ester house pest and malaria control. Banned since 22 December 2007 for use on crops in the European Union. 7 Phoxim Organophosphate Classified with medium acute toxicity. HERBICIDE, FUNGICIDE Residues with no harmful effects for man 8 2,4-D Butylparaben Synthetic Auxin & animals Broad-spectrum systemic herbicide, one of the most sold around the world. Low toxicity compared to organo-phosphorus 9 Glyphosate Amino-phosphoric pesticides. 12 to 60 days persistence observed in Canada PAGE 29 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX NO. PESTICIDE NAME CHEMICAL CLASS COMMENTS Slightly toxic to humans by ingestion and to birds. Highly toxic to fish and aquatic 10 Triallate Thiocarbamate organisms. Long soil half life (82 days) but doesn't migrate much in soil. Fungicide. Almost non toxic (US EPA Ethylenbis- class 4). ,. Almost insoluble in water, no 11 70%-Mancozeb, dithiocarbamate risk for aquifer. Ethylenbis- Same as above 12 Oxadixy-Mancozeb dithiocarbamate Broad spectrum fungicide. Main risk is inhalation. Very toxic to aquatic organisms. Unlikely to present acute hazard in normal use (WHO). Possible effect due to its suspected hormone 13 50% Carbendazim Benzimidazole disrupting effect. Strong adsorption in the soil, with effects on worm population. Half- life 6-12 months (bare soil) and 3-6 months on turf. Frequently detected in food. Toxic to aquatic organisms. Used for foliar application of fruit trees, vegetables, sugar Ethylenbis- 14 Dithane M-45 beet, ginseng, etc. Similar molecule to dithiocarbamate Mancozeb. Selective, pre-sowing or pre-emergence herbicide. Unlikely to present acute 15 Trifuralyn Dinitroalanine hazard in normal use (WHO). Very toxic to aquatic organisms. According to this table, none of the 5 insecticides banned in China since 2007 were identified on the local market. Some organophosphates, known for their high toxicity for human and environment are still used in the area, as Phorate and Dimethoate. No Organochlorine pesticides have been identified on the local market. All products sold were correctly labeled, with all safety signs, even if the size of the label makes it, most of the time, difficult to read. Shopkeepers seemed well informed about the application rates but actual application in the field is difficult to assess in terms of quantity (actual dilution and frequency of application) and quality (appropriate growing period). RATIONALE FOR A PEST MANAGEMENT PLAN The development of the irrigated schemes of Lijiaxia and Gongboxia should contribute to the national trend towards a reduction in the use of pesticides and the promotion of substitute methods for crop protection against pests. China is the world’s biggest user, producer, and exporter of pesticides. The growing use of pesticides and chemical fertilizers over the past twenty years has helped promote larger crop yields, but at an increasingly major cost to the environment and to the public health and safety. With nearly one-fifth of the world population but only seven percent of the world arable land, agricultural production intensification has for long been the priority of the Government, relying particularly on the promotion of fertilizer and pesticide use to increase yields. According to Xinhua State News Agency (2006), annual pesticide use in China is about 1.2 million tons over about 300 millions hectares of farmland and forest. China produces about 300 types of pesticides and an additional 800 types of pesticide mixtures. In 2005, China produced slightly over 1 million tons of PAGE 30 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX pesticides and exported 428,000 tons5. About 30 percent of the total pesticides consumed in China are highly toxic. Environmental Impact: It is estimated that over 7% of China's cropland has been polluted due to improper use of pesticides and fertilizers, exacerbating the loss of agricultural land6. Agricultural runoff is becoming a major source of river and coastal areas pollutants. Public Health Issue: According to State Environmental Protection Administration (SEPA) statistics, about 12 million tons of crops are polluted with heavy metal residues every year. The Pesticide Action Network North America has estimated approximately 49 percent of fruits and vegetables in China contain pesticide residues exceeding China’s standards for banned organophosphate and carbamate pesticides7. China Watch recently reported that vegetables in southern China have a very high level of nitrate (about 70 percent higher than the national standard)8. Much more recently (May 2009) Japan threatened to ban import of vegetables from China because of their pesticides residues content higher than applicable standards. Public Safety Issue: The Chinese government figures show that 53,300 to 123,000 people are poisoned by pesticides each year9. Many Chinese farmers are not willing, or able, to invest in protective clothing and equipment for safe pesticide use, which has greatly increased the risk of pesticide poisoning. Thus, 300 to 500 farmers die each year due to improper use of pesticides, and many others suffer health problems due to pesticide poisoning. Trends on pesticide control: In 2004, China began to reduce the use of five highly toxic pesticides—methamidophos, parathion, methyl parathion, monocrotophos and dimecron—and their use was eventually banned on 1st January 2007. The use of these five pesticides accounted for about 25 percent of China’s total pesticide application. Furthermore, some cities in southern and eastern China also have already phased out other highly toxic pesticides as omethoate, isocarbophos, and phorate. The Chinese government also has mandated the reduction of additional highly toxic pesticides between 2008 and 2010. The Ministry of Agriculture has recommended fifteen pesticides as substitutes for the five highly toxic pesticides. To help decrease the use of other harmful pesticides the National Development and Reform Commission (NDRC) will invest 5 billion Yuan in low-interest loans for research into substitutes for highly toxic pesticides. The 2006 law on Agricultural Product Quality and Safety included a new standard for pesticide residue limits on food items in China, which if properly enforced, could help solve the pesticide overuse problem. Keys to promoting this law are 200 new farm schools, created in 2006 to educate farmers to more safely apply new pesticide products. Promotion of safe food: China has three kinds of agriculture product certifications: organic food, green food, and pollution-free food. The only one truly pesticide free is organic food, which the government and business sectors began promoting in 1990 to enhance the competitiveness of Chinese agriculture products on the international food market. In 2003, the Ministry of Agriculture began to certify organic food and in the same year the Certification and Accreditation Administration issued Provisions on Organic Food Certification Management. Green food refers to the food grown with limited amount of pesticide and chemical fertilizer. In order to improve food quality, The Ministry of Agriculture established a China Green Food Development Center in 1990s. Since then, green food has built a reputation as high-quality and safe food in China. Facing the strict food products standards applied on the international market and its severe environmental situation, China needs to further develop organic food, without the use of pesticide and chemical fertilizer. China Environment and Sustainable Development Reference and Research Center (CESDRRC) launched a new monthly newsletter “organic trends” to help improve public awareness on China’s expanding organic sector. 5 Production Monthly News. (July 7, 2006). Shanxi Petroleum and Chemistry Industry Office. 6 Xinhua News Agency. (November 2004). “China to establish alarm system for soil environment safety.” 7 Jessica Hamburger. (2001). “Sea of pesticides surrounds China’s organic farms. Global Pesticide Campaigner, Vol. 11. 8 Li Zijun. (2006). “Soil Quality Deteriorating in China, Threatening Public Health and Ecosystems.(www.worldwatch.org/node/4419) 9 Pesticide Residues, a Major Threat to China’s Ag Exports” (2003) (www.organicconsumers.org/toxic/chinapesticides012103.cfm) PAGE 31 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX ACTION PLAN FOR A PEST MANAGEMENT PROGRAM (PMP) Objectives of PMP Lijiaxia and Gongboxia irrigation schemes should follow these trends to optimize safe agricultural production and maximize economic return from agriculture. For that purpose, and to comply with the international good practice and environmental safeguards regarding the use of pesticides, (in particular the WB Safeguard 4.09 - Pest Management) the implementation of a Pest Management Program (PMP) reflecting the IMP approach, is proposed. The PMP will be a mitigation measure to the potential impact of increased pesticide utilization and will be implemented as a component of the Agriculture Extension Services to be provided to the farmers under the present Project. The following Action Plan provides the steps to be carried out for the preparation and the implementation of the PMP. The PMP intends to manage existing and potential pest problems that may develop in the two Project areas and help ensure that the use of all pesticides, herbicides, fertilizer and other synthetic chemicals associated with the Project will be handled properly and in accordance with international good practice, particularly with WB OP 4.09, Pest Management. The PMP should be based on the Integrated Pest Management (IPM) approach, which promotes good agricultural practice through the use of responsible and sustainable activities that will result in a reduction in pesticide use. In the context of this Guideline, a pest may be defined as any organism whose presence causes economic loss or otherwise detracts from human welfare. The term covers a broad range of organisms (plants, animals and micro-organisms) that reduce the productivity of agriculture, destroy goods or render them unfit for human use, or transmit diseases and debilitating conditions. IPM based Pest ManagementProgram is a mix of farmer-driven, ecologically based pest control practices that seeks to reduce reliance on synthetic chemical pesticides. It involves: i) managing pests (keeping them below economically damaging levels) rather than seeking to eradicate them; ii) relying, to the extent possible, on non-chemical measures to keep pest populations low; and iii) selecting and applying pesticides, when they have to be used, in a way that minimizes adverse effects on beneficial organisms, humans, and the environment. Content of the PMP Action Plan The PMP will be prepared and implemented within the framework of the Agricultural Extension Services which are a component of the present Project. The Action Plan includes two major phases, each consisting of several activities: Phase 1: Baseline situation regarding pesticides and fertilizers management: • Review of latest recommendations formulated by International Organizations as the FAO and the WHO; • Review of applicable National Laws, Regulations and policies related to pesticide management; • Identification of latest policies and decisions related to pesticides promotion, restriction and ban at National, Provincial and local levels; • Identification of current pests prevailing in the Project area and level of severity, particularly those affecting wheat, vegetables and fruit trees; • Identification of the present situation regarding pesticide management in the two project areas, and more generally in the 3 Counties concerned by the Project. This activity will focus particularly on the following aspects: – Types and quantities of pesticides used in the area, recent trends and evaluation of environmental and public health risks ; – Present awareness of the farmers regarding pesticides hazards for public health; PAGE 32 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) SIEE – APPENDIX – Present storage, handling and application procedures followed by the farmers; – Present level of efficiency in the use of pesticides in the Project area and opportunities for improvement; – Present levels of pesticides residues observed in vegetable/fruit/grain samples and comparison with applicable food standards in China and with guidelines applicable on the food international trade market • Identification of activities and programs in the fields of IPM and fertilizer management already carried out or on-going in the Qinghai Province and particularly in the 3 Counties concerned by the present Project: – Current or past IPM program description; – National, Provincial or Local organizations involved in the IPM program, including assistance from international organizations and NGOs; – Achievements regarding Training of Trainers courses, number of Farmer Field Schools (FFS) implemented and number of farmers trained; – Field Studies about IPM and crop production carried out within the programs. Phase 2: Elaboration and implementation of a PMP including the following major activities: • Strengthening of the Provincial and Local institutional framework related to IPM; • Preparation of training modules and training manuals for Training of Trainers and Training of Farmers; these modules will address the typical issues of IPM including: – Safe storage and handling of pesticides (safety issues related to pesticides, personal protective equipment for farmers, management of empty containers); – Selection of most appropriate pesticides; – Alternative Pest Management methods. – Pesticide application procedures depending on crops; • Re-activate or implement FFS within the two irrigated schemes and organize training of farmers; • Monitoring and Evaluation of the PMP: – Identify criteria to assess progress and achievements of the PMP and institutions in charge of monitoring the various criteria; – Carry out water quality monitoring of the drainage and underground water to identify beneficial impacts of PMP on river pollution; this aspect will be carried out within the framework of the Environmental Management Plan (EMP). Budget Costs related to the preparation and the implementation of the PMP in Gongboxia and Lijiaxia irrigation schemes will be part of the Irrigated Agriculture Support component. Costs related to water quality monitoring are presented in the EMP budget related to the Operation Phase of the Project. PAGE 33 PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 11 EMP SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLE’S REPUBLIC OF CHINA ASIAN DEVELOPMENT BANK QINGHAI WATER RESOURCE DEPARTMENT QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT ENVIRONMENTAL MANAGEMENT PLAN SEPTEMBER 2009 TA NO. 7103-PRC PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN CONTENTS 1. INTRODUCTION...... 2 2. PURPOSE AND OBJECTIVES OF THE EMP ...... 2 3. SCOPE AND STRUCTURE OF THE EMP ...... 3 4. PLANNING...... 5 4.1. SUMMARY OF EIA CONCLUSIONS...... 5 4.1.1. PRESENT ENVIRONMENTAL QUALITY OF THE PROJECT AREA ...... 5 4.1.2. POTENTIAL IMPACTS & MITIGATION MEASURES...... 5 4.2. REGULATORY FRAMEWORK ...... 13 4.2.1. REGISTER OF ENVIRONMENTAL LEGISLATION ...... 13 4.2.2. INTERNATIONAL BEST ENVIRONMENTAL & SOCIAL PRACTICE...... 13 4.2.3. ENVIRONMENTAL ZONING & APPLICABLE QUALITY STANDARDS...... 13 4.3. EMP OBJECTIVES, TARGETS AND COMPLIANCE INDICATORS...... 13 5. IMPLEMENTATION AND OPERATION...... 14 5.1. ORGANIZATION, ROLES AND RESPONSIBILITIES...... 14 5.1.1. OVERALL ORGANIZATION...... 14 5.1.2. PROVINCIAL PMO (P-PMO-EMO)...... 15 5.1.3. COUNTY PMO (C-PMO-EMO)...... 16 5.1.4. THE CONSTRUCTION SUPERVISION COMPANY (CSC) ...... 16 5.1.5. CONSTRUCTION CONTRACTOR ...... 17 5.1.6. ALL PERSONNEL ON SITE ...... 17 5.2. TRAINING AND AWARENESS ...... 18 5.2.1. ENVIRONMENTAL AWARENESS PROGRAM ...... 18 5.2.2. HEALTH & SAFETY AWARENESS PROGRAM...... 18 5.2.3. TRAINING PROGRAM FOR JOB SPECIFIC CONTRACTOR STAFF...... 19 5.2.4. TRAINING PROGRAM FOR CSC-EMU AND CC ENVIRONMENTAL MANAGEMENT STAFF.... 19 5.3. COMMUNICATION ...... 19 5.3.1. INTERNAL COMMUNICATION ...... 19 5.3.2. EXTERNAL COMMUNICATION...... 19 5.3.3. EMERGENCY COMMUNICATION ...... 19 PAGE A PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 5.3.4. REPORTING...... 19 5.4. DOCUMENTATION AND DOCUMENT CONTROL...... 20 5.4.1. DOCUMENTATION SYSTEM...... 20 5.4.2. DOCUMENT CONTROL ...... 20 5.4.3. FORMS AND MODEL SHEETS...... 21 5.4.4. MONTHLY ENVIRONMENTAL REPORT...... 21 5.5. OPERATIONAL CONTROL...... 21 5.6. EMERGENCY PREPAREDNESS AND RESPONSE ...... 21 6. CONTROL AND CORRECTIVE ACTION ...... 22 6.1. COMPLIANCE MONITORING AND INSPECTIONS ...... 22 6.2. NON COMPLIANCE DETECTION, CORRECTION AND PREVENTION...... 22 6.2.1. HIERARCHY OF NON-COMPLIANCE LEVELS & COMMUNICATIONS...... 22 6.2.2. NON COMPLIANCE PROCEDURES ...... 23 6.3. ENVIRONMENTAL RECORDS ...... 25 6.4. INTERNAL ENVIRONMENTAL AUDITING...... 25 6.4.1. FIRST LEVEL AUDITING ...... 25 6.4.2. SECOND LEVEL AUDITING ...... 25 6.5. EXTERNAL AUDITING ...... 25 6.6. ENVIRONMENTAL CONSTRUCTION COMPLETION REPORT ...... 25 7. SENIOR MANAGEMENT REVIEW (SMR)...... 25 8. ENVIRONMENTAL MONITORING PLAN...... 26 8.1. COMPLIANCE MONITORING ...... 26 8.2. ENVIRONMENTAL MONITORING...... 26 9. TOTAL ENVIRONMENTAL BUDGET FOR QRWRMP ...... 26 LIST OF TABLES TABLE 1. SUMMARY OF ANTICIPATED IMPACTS AND PROPOSED MITIGATION MEASURES ...... 6 6 6 TABLE 2. TOTAL ENVIRONMENTAL BUDGET FOR THE QRWRMP (10 CNY & 10 USD) ...... 26 LIST OF FIGURES FIGURE 1. PRESENTATION OF THE QRWRMP AREA...... 4 PAGE B PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN FIGURE 2. OVERALL ORGANIZATION FOR QRWRMP EMP IMPLEMENTATION...... 15 FIGURE 3. NON-COMPLIANCE REPORTING AND RESOLUTION PROCEDURE ...... 24 LIST OF ANNEXES ANNEX 1 REGISTER OF ENVIRONMENTAL LAWS & REGULATIONS ...... 33 ANNEX 2 ENVIRONMENTAL QUALITY STANDARDS ...... 36 ANNEX 3 KEY ENVIRONMENTAL PERFORMANCE INDICATORS ...... 39 ANNEX 4 REPORTING...... 41 PAGE C PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ABBREVIATIONS & ACRONYMS ADB ASIAN DEVELOPMENT BANK BOD5 BIOCHEMICAL OXYGEN DEMAND (5DAYS) CC CONSTRUCTION CONTRACTOR CC-EC CONSTRUCTION CONTRACTOR ENVIRONMENTAL COORDINATOR CEMP-IM CONSTRUCTION EMP-IMPLEMENTATION MANUAL (PART B OF EMP DOCUMENT) COD CHEMICAL OXYGEN DEMAND C-PMO COUNTY PMO C-PMO-ED ENVIRONMENTAL DIRECTOR OF THE COUNTY PMO CSC CONSTRUCTION SUPERVISING COMPANY CSC-EMU CSC ENVIRONMENTAL MANAGEMENT UNIT CSC-PM PROJECT MANAGER OF THE CONSTRUCTION SUPERVISION COMPANY DB(A) A-WEIGHTED DECIBEL EE ENVIRONMENTAL ENGINEER (FROM EMU, CC, PMO) EIA ENVIRONMENTAL IMPACT ASSESSMENT EMP ENVIRONMENTAL MANAGEMENT PLAN EMS PROJECT MANAGEMENT OFFICE - ENVIRONMENTAL MANAGEMENT STAFF EMU-EM EMU ENVIRONMENTAL MANAGER (OF CSC) EO ENVIRONMENTAL OFFICER (FROM EMU, CC) FS FEASIBILITY STUDY GP GENERIC ENVIRONMENTAL MANAGEMENT PLAN IEE INITIAL ENVIRONMENTAL EXAMINATION MM MITIGATION MEASURES NC NON-COMPLIANCE NCR NON-COMPLIANCE REPORT OH&S OCCUPATIONAL HEALTH AND SAFETY O&M OPERATION & MAINTENANCE PMO PROJECT MANAGEMENT OFFICE OF THE WATER RESOURCES BUREAU P-PMO PROVINCIAL PMO P-PMO-ED ENVIRONMENTAL DIRECTOR OF THE PROVINCIAL PMO PPTA PROJECT PREPARATION TECHNICAL ASSISTANCE PRC PEOPLE’S REPUBLIC OF CHINA QEPB QINGHAI PROVINCIAL ENVIRONMENTAL PROTECTION BUREAU QSC QUALITY SUPERVISION COMPANY RAP RESETTLEMENT ACTION PLAN SIEE SUMMARY INITIAL ENVIRONMENTAL EXAMINATION SON SITE OBSERVATION NOTICE WRB WATER RESOURCES BUREAU WWTP WASTEWATER TREATMENT PLANT PAGE D PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ENVIRONMENTAL MANAGEMENT PLAN PAGE 1 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 1. INTRODUCTION The Qinghai Rural Water Resources Management Project (QRWRMP) was proposed by the National Development and Reform Commission (NDRC) as a Project to be considered in the ADB Loan Project Portfolios in China (2008-2010). This request was approved in February 2008 by the State Council. ADB sent a mission in Qinghai in March 2008, and finalized the Technical Assistance Report in July 2008. Gansu Provincial Environmental Science and Research Institute (GPESRI) was commissioned by the Foreign Fund Utilization Office of Qinghai Provincial Water Resources Department to carry out the Environmental Impact Assessment of the Project. The present Environmental Management Plan (EMP) has been developed based on the conclusions and recommendations of the EIA, and complemented by general principles of good environmental practices in construction activities. This EMP is a document attached to the Main Contractors Contract Documentation and is a covenant to the Loan Contract signed with the ADB. The QRWRM Project has been ranked Category B for environmental assessment by the ADB. 2. PURPOSE AND OBJECTIVES OF THE EMP The EMP is addressing the pre-construction, construction and operation activities anticipated to be carried out in relation to the QRWRMP implementation. A major part of the EMP is dedicated to the mitigation measures to be implemented during the construction stage of the Project, involving all concerned parties including Construction Contractor companies. In order to provide a credible and homogenous reference for all parties involved in environmental management, the present EMP is structured in compliance with the recommendations of the ADB, complemented by additional information deemed necessary to facilitate the operational implementation of the EMP, particularly during the construction phase. This EMP details the environmental obligations imposed by the PMOs to the Construction Contractors and their sub-Contractors during the construction of the QRWRMP, to safeguard the environment and to minimize nuisance for the population. The EMP provides the framework to ensure that construction works are carried out in the strict respect of Chinese and internationally accepted environmental best practices in order to eliminate any significant or unacceptable long-term impacts on the environment. This EMP is developed in a way which ensures its compliance with the environmental laws, regulations and standards of the PRC and with the principles of the International Standard for Environmental Management System (ISO 14001), which will facilitate eventually its up-dating during the construction stage. The EMP aims to: • Ensure compliance with Chinese Laws and Regulations, with international standards and guidelines which may be triggered by the QRWRMP implementation; • Define roles and responsibilities of parties for all aspects related to environmental management during construction activities; • Ensure that environmental control measures are effectively and efficiently implemented; • Ensure EMP effectiveness is monitored with implementation of appropriate corrective measures when required; • Maintain a high level of environmental awareness amongst the Project parties through induction and specialized environmental training; PAGE 2 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 3. SCOPE AND STRUCTURE OF THE EMP The EMP describes measures that will be implemented by the concerned parties during the pre- construction, construction and operational activities of the QRWRMP, in order to eliminate or reduce to acceptable levels any biophysical, social or health impacts which may potentially result from the construction activities. The EMP provides a summary of the main impacts identified during the IEE with the related mitigation measures to be implemented as well as the operational organization to set up for implementation and monitoring. In accordance with the ISO 14001 principles, the EMP provides also a selection of key performance indicators to assist the Supervising Agencies and the PMOs to appreciate objectively the environmental performance achieved during construction and operation of the project. In order to facilitate its utilization, the EMP document provides the institutional context of the EMP, the organization and the operational control procedures to be implemented during the construction stage of the Project; this section of the document intends to follow as closely as possible the principles recommended by the ISO 14001. It also provides the monitoring activities to be implemented by PMOs or other concerned parties during the pre-construction and operation periods of the Project. In assistance for EMP implementation, Consultants also prepared an Implementation Training Manual, a more technical document which provides good practices for the structural and non- structural measures to be implemented mainly by the Contractors during the construction period, through a set of Generic Environmental Control Plans. Additionally, the Manual provides a set of templates intended to assist the PMOs and their Supervision Companies in the implementation of the construction EMP. PAGE 3 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Figure 1. PRESENTATION OF THE QRWRMP AREA PAGE 4 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 4. PLANNING 4.1. SUMMARY OF EIA CONCLUSIONS 4.1.1. PRESENT ENVIRONMENTAL QUALITY OF THE PROJECT AREA The region is predominantly rural with a number of villages and small localities distributed around the irrigated areas. There are no natural reserves or other ecologically sensitive areas as wetland within or next to the Project areas. Irrigation is a current practice in the areas, but no major detrimental environmental effects have been identified: Water pumped from the Yellow River is of good quality (all parameters comply with Grade III quality level) with particularly low salinity, which, associated with good draining capacities of the soils and low aquifer do not result in significant phenomenon of soil salinization. Nutrient load (nitrogen and phosphorus) in the river water downstream the irrigated areas reveals a limited increase but considered to be more the consequence from sanitary wastewater from settlements rather than from excess fertilizer use on the irrigated areas. This may be also supported by the high coliform contamination observed in the underground water. Pesticides used in the areas are all authorized types (pyrethroids, organophosphates, carbamates). No quantitative information on consumption is available, but it is believed that, due to the cold and long winter which helps cleaning the fields from pests, pesticide use is moderate in the project areas. Soil analysis performed did not reveal any traces of contamination (all soils comply with Grade II and III of the related Standard). Air quality is good, with parameters complying with Grade II of the Standard. Erosion and soil instability on the slopes surrounding the irrigated areas constitute the most serious environmental constraints to the Project, as main canals on both sides of the Yellow River will cross some critical areas affected by landslides. Technical adaptation of the structural design and a solid soil conservation program will help addressing the constraints. 4.1.2. POTENTIAL IMPACTS & MITIGATION MEASURES The following Table summarizes the potential impacts identified during the EIA studies as resulting from the Project implementation. The impacts resulting in particular from construction activities are further detailed in the Construction EMP Implementation Manual (Part B of the EMP). The Implementation Manual provides an Activity/Impact/Mitigation Measures matrix each typical construction activity is connected to its most probable potential impacts and associated typical mitigation measures. The matrix provides also a link to the 15 Generic Plans where Mitigation Measures are detailed in accordance with the international good practice. PAGE 5 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Table 1. SUMMARY OF ANTICIPATED IMPACTS AND PROPOSED MITIGATION MEASURES RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY 1 –ISSUES ASSOCIATED WITH THE CONSTRUCTION STAGE Impacts on land The proposed project will: Refer to Resettlement Action Plans for land Ensure activities are carried out in pre- C-PMO P-PMO use, land • temporarily occupy a total of 25.22 ha acquisition, compensation and resettlement. construction period in order to cope with project acquisition and (19.09 ha in Lijiaxia Reservoir Ensure procedures follow PRC regulations and construction schedule. resettlement Irrigation Area and 6.13 ha in ADB policies. Compensation fees (greater than loss) are Gongboxia Reservoir Irrigation Area); already planned. All the involved persons should and accept proposed compensations. • permanently occupy a total of 139.86 Any need for temporary land outside project sites ha (84.70 ha in Lijiaxia Reservoir will involve a procedure of approval prior to land Irrigation Area and 55.16 ha in occupation. Gongboxia Reservoir Irrigation Area). General impactsPotential environmental disturbances and Setting up of a strong organization for Creation of the Environmental Division (ED) Contractor C-PMO, P- from nuisances resulting from the several environmental supervision and monitoring of inside project’s PMO and of the Environmental PMO, EPB construction types of construction activities works, with staff and clear operational Management Unit (EMU) inside the Construction activities procedures for rapid and effective treatment of Supervision Engineer organization. non-compliance. Description of organization, Environmental Field Inspectors provide routine roles, responsibilities and operational monitoring of activity. procedures provided in the EMP. EMP to be attached to the Tender Documentation Refer to Part B of EMP- Matrix which lists and as a Covenant to the loan contract construction activities/potential impacts and suggested mitigation measures. Spoils Large volumes of spoil will result from Refer to CEMP-IM Spoil Management Plan Environmental Method statement to be submitted Contractor C-PMO, P- earthworks, particularly from tunnel Contractor will be required to submit, prior to by Contractor to Supervising Agency for PMO, EPB excavations, which will require transport the start of the works, detailed spoil comments and non-objection and disposal. management plans, including phasing of works, proposal for transport routes, description of proposed disposal sites, intended management of disposal sites and eventual rehabilitation. 12 potential sites have been identified as suitable by the EIA, located close to tunnel works, thus reducing transport and associated PAGE 6 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY road risks. Earthworks Sediment discharge to Yellow River may Appropriate management of earthworks in Most of technical measures are described in the Contractor C-PMO, P- occur during rainy events from uncovered accordance with the environmental good PRC Regulation “Temporary regulation on PMO, EPB and unconsolidated soil materials during practice specifications: piling and compacting construction and environmental management of earthworks activities. spoil while waiting evacuation or reuse; Rapid construction sites” and recommendations All along the year, the drainage water Revegetation of bare grounds & spoil slopes; provided in the Water and Soil Conservation from tunnel excavation may discharge Run-off from disturbed areas to be drained in Reports from Qinghai Provincial Water high sediment loads to rivers sediment traps or ponds; Conservancy and Hydropower Survey and Design Institute dated February 2009. Drainage from tunnel works to be drained and treated if necessary with flocculent before settlement in a sedimentation pond Transport of material as earth fill, earth Washing wheel station for trucks leaving Monitoring on public roads to be done in close Contractor C-PMO, P- spoil, sand and gravel to or from site may construction sites to limit mud transport to city coordination with traffic police of the concerned PMO, EPB affect urban areas crossed by the trucks roads, strict obligations regarding size of counties if appropriate measures are not trucks, of load, necessary load cover, routes implemented, resulting in serious impacts and timing will be imposed to concerned on road traffic, public safety, air quality contractor. and noise. Air quality & Dust from cleared and excavated areas Refer to CEMP-IM, Dust & Emission Control Compliance with applicable PRC standards Contractor C-PMO, P- noise during dry periods: reduced visibility, Plan, PMO, EPB impact on health Regular watering of unsealed access, of construction sites Fumes and exhaust gas from trucks and Refer to CEMP-IM, Dust & Emission Control Compliance monitoring to be performed by Contractor C-PMO, P- heavy machinery on construction sites Plan Contractors, with random controls from EPB. PMO, EPB may affect air quality, as well as dust Specifications regarding operation and from material transport by trucks and maintenance of construction equipment and earthworks. transport of materials by truck. maintenance of equipment (engines), aeration of underground sites (tunnels) Noise: trucks, heavy machinery, tunnel Refer to CEMP-IM, Noise Control Plan Compliance monitoring to be performed by Contractor C-PMO, P- excavation. Enforcement of existing noise standards Contractors, with random controls of EPB. PMO, EPB related to machinery and working period. Forbidding the use of certain works during PAGE 7 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY nigh-time when construction activities in resident areas. Water quality Domestic sewage from construction MMs described in CEMP-IM, Hazardous Compliance monitoring to be performed by Contractor C-PMO, P- camps is source of potential pollution Material & Waste Management Plan, Contractors, with random controls of Supervising PMO, EPB impact of Yellow River and underground Emergency Plan for Hazardous Material, Agencies and EPB. water bodies. Water Quality management Plan, Construction Accidental spill of hazardous products Worker Camps Management Plan, Waste caused by heavy operating machinery, Management Plan. storage of potential pollutants, such as Worker camps and construction sites will be petrol or engine oils, concrete production, equipped with appropriate wastewater from drainage of earth stock piles, treatment facilities, and wastewater discharge inappropriate disposal of used engine oils applicable standards respected. and locally generated waste (workshops, No discharge of wastewater, even treated will labor camps). be allowed in the reservoirs. Discharges of The risk applies to all construction sites, treated sewage in river will respect the location but is obviously more significant for works of existing river pumping facilities and activities located close to reservoirs Strict contractor environmental specifications (intakes) and river streams. regarding the handling, storage or disposal of hazardous products and of waste produced on the construction sites. Compliance monitoring of drainage water quality from sites and enforcement of effluent standards. Management measures at work site oriented towards prevention of pollution or accidental spill. Monitoring of river quality upstream and downstream construction sites. Impacts on Limited impacts as the area is extensively Monitoring of construction sites. None Contractor C-PMO, P- wildlife and developed for agriculture and Reforestation program already part of the PMO, EPB habitats urbanization; potential loss of planted project development trees during construction of network branches Physical None identified within the project area. Procedure in case of finding, in order to halt None Contractor C-PMO, P- Cultural Possible discovery during excavation works and preserve the cultural resources. PMO, EPB PAGE 8 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY Resources works with potential destruction of valuable sites or artifacts. Impacts on If inappropriately managed, workforce Awareness training of all workers on Carry out awareness training of workers on Contractor C-PMO, P- public health & may create relational problems with environmental & social issues. environmental basics and justification of PMO, EPB Safety surrounding residents. Strict obligations imposed to the contractor for mitigation measures. If inappropriately managed, labor camps the organization and the management of labor Contractor requested to implement measures may become the site of epidemic burst force and camps. such as recruitment medical check for each out among workers and spread to worker, and medical visit once a year. Availability surrounding population. of medicine will be requested at workers camps (dormitory or canteens). Traffic Higher risks of traffic accident on public Training of drivers, maintenance of vehicles, Use of local radio & TV channels and poster Contractor C-PMO, P- roads linked to material & equipment speed control, improvement of road signs, campaigns to inform population on exceptional PMO transport particularly in residential areas dedicated parking areas. increase of traffic and on safety measures. Public information and coordination with traffic Police during particular periods or events of heavy traffic Safety Response procedure in case of accident off-site On-site Occupational health and accident issues, Contractor to prepare Occupational Health & Monitoring of construction sites. Occupational Contractor C-PMO, P- occupational resulting in serious wounds or death of Safety (OH&S) Plan and submit for Non- safety is not under the EMP, but monitoring can PMO, EPB health & safety workers. objection by Supervising Agency. In this plan, be coordinated with environmental monitoring on contractor will clearly define the safety sites. procedures in case of accident on site, ensure that minimum first aid equipment is available on all sites and ensure availability and enforcement to wear PPE (personal protective equipment). 2 –ISSUES ASSOCIATED WITH THE OPERATION STAGE Quality of life Project will improve the irrigation water Beneficial impact. No mitigation required. With the Project, Gongboxia Irrigation area will be IA WRB supply situation, reduce operation costs increased by more than 35,000 Mu and Lijiaxia (electricity) for farmers and allow by more than 28,000 Mu. extension of current irrigated areas (abandoned land & extensions) PAGE 9 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY Surface water Project should not affect significantly the Monitor inflow and discharge to and from An annual water quota of 1.41 billion m3 has been IA WRB availability of water resource in the irrigation area to optimize water application & allocated to Qinghai Province from Yellow River Yellow River downstream the project reduce total water use Basin resources. Present annual water area. The Project will increase the water consumption of the Province is still 0.314 billion consumption by only 5.82 Mm3 in m3 below allocation. By 2015, annual water Gongboxia (10% of present consumption) consumption of Qinghai Province from Yellow and by only 1.95 Mm3 in Lijiaxia (2.9% of River Basin is anticipated to be 1.267 billion m3 , present consumption. including QRWRMP, so still 0.143 billion m3 below the allocation Returned irrigation water from the project Improvement of irrigation efficiency to reduce Aspects considered in the conceptual design of IA WRB,EPB area may potentially affect the water water consumption and back water flow the Project quality of Yellow River through excessive Implement Integrated Pest Management (IPM) discharge of pesticides residues and as a component of the agricultural extension fertilizers. services Potential for livestock intensive farms EIA for any industrial farm to be developed to - IA WRB, EPB development based on irrigated forage focus on waste production & treatment production may affect, through untreated including recycling options as biogas effluent discharge the quality of surface production and safe organic fertilizer water (& underground water) production after digestion. PAGE 10 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY Groundwater Potential groundwater level raise within Aquifer several meters deep in the lower areas - IA WRB, EPB the irrigation schemes resulting in soil so waterlogging risk is unlikely. waterlogging & salinization Yellow River water is of good quality for Implement Integrated Pest Management (IPM) Long term monitoring of water quality. IA WRB, EPB irrigation with low TDS. Sodium as a component of Irrigation Agriculture Suppor Absorption Ratio is good. Significant Promote sewage system in densely urbanized salinization of groundwater is unlikely. areas and individual sanitation systems for low Risk of contamination by pesticides and density habitat to reduce domestic pollution fertilizers. load to aquifer and to the Yellow River. Existing high level of contamination by Coliforms in groundwater, worse than Class V standard of “Ground Water Quality Standard” (GB/T 14848-9). Impact results from high density of residential areas releasing untreated wastewater in the ground. Impact is not directly linked to the agricultural activities. Salinization of According to what precedes and to the Monitoring of soils salinity in areas identified as - IA WRB, EPB Soils quality of the soil (permeability is good) potentially sensitive to salinization, for salinization is unlikely to occur. Very few appropriate measures (soil leaching for ex.) to and limited areas, in the lowest levels of mitigate the risk. the schemes, show possibly higher potential for salinization than the rest of the schemes Soil erosion Soil erosion may result from improperly Respect of the prevention measures listed in The Soil Conservation program developed for this IA WRB, EPB decommissioned construction sites, “Water and Soil Conservation Report” from Project should provide the appropriate answer to improperly protected and stabilized spoil Qinghai Provincial Water Conservancy and the risk of canal collapse because of long term soi areas and mainly on the slopes crossed Hydropower Survey and Design Institute dated erosion or slope instability by the canal structures. On the irrigated February 2009. area, the project should reduce erosion (wind erosion), through reduction of currently non-irrigated (bare grounds) areas. Fish habitats The water intake inlets are located at the No particular mitigation to consider. - IA WRB, EPB PAGE 11 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN RESPONSIBILITY FIELD POTENTIAL IMPACTS MITIGATION MEASURES COMMENTS IMPLEMENTED SUPERVISED BY BY level of Lijiaxia and Gongboxia dams, and no significant impact is anticipated on fish population. Some fish may pass the water intake an be trapped in the irrigation network where they will be fished by farmers C-PMO = County Project Management Office, P-PMO = Provincial Project Management Office, IA = Implementing Agency, EPB =Environmental Protection Bureau, WRB = Water Resource Bureau. PAGE 12 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 4.2. REGULATORY FRAMEWORK 4.2.1. REGISTER OF ENVIRONMENTAL LEGISLATION A Register of Environmental Legislation has been developed for the QRWRM Project. This Register is provided in Annex 1. An identification, up-dating of any relevant law or regulation or guideline newly enacted by the PRC Central or Provincial Government or by a recognized international organization, which may concern environmental management guidelines or standards applicable to QRWRMP activities, will be performed regularly by the Provincial PMO, and any new regulation or standard will be recorded in the Register of Environmental Regulation and applied where and when necessary to construction or operation activities related to QRWRMP. 4.2.2. INTERNATIONAL BEST ENVIRONMENTAL & SOCIAL PRACTICE The appointed Contractors and their sub-Contractors involved in QRWRMP activities will comply with the applicable Environmental and Social Safeguards of the Asian Development Bank. 4.2.3. ENVIRONMENTAL ZONING & APPLICABLE QUALITY STANDARDS In accordance with the PRC environmental quality standards listed in Annex 1, the Project area is classified as follows in the Provincial Environmental Zoning: • Water Quality: Section between Lijiaxia and Gongboxia is classified as water quality Grade III by reference to Environmental Quality Standard for Surface Water (GB3838-2002). • Air Quality: Hualong County, Jianzha County, and Xunhua County, are classified as air quality Grade II by reference to Ambient Air Quality Standard (GB3095-1996). • Noise in Construction areas is classified as acoustic quality Grade II by reference to Acoustical Environmental Quality (GB3096-2008). Applicable Pollutant emissions and discharge standards Grades applicable to the Project areas are as follows: • Wastewater discharge: Grade 1 of Integrated Wastewater Discharge Standard (GB8978- 1996); • Air pollutants: Grade II of Integrated Emission Standard of Air Pollutants (GB16297-1996); • Noise: Applicable Noise Limits for Construction Site (GB12523-90). Applicable Environmental Quality standards Pollutant emissions resulting from this classification are provided in Annex 2. 4.3. EMP OBJECTIVES, TARGETS AND COMPLIANCE INDICATORS The environmental objectives and targets for the QRWRMP have been set giving regard to the following: • Standards set in relevant Laws and Regulations; • Contractual Requirements; • PMO Management Procedures; • Construction Environmental Best Practice. PAGE 13 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN The targets allow for the demonstration of environmental protection, prevention of pollution and continual performance improvement. The Environmental Objectives and Targets relevant to construction period are incorporated into the 15 Generic Environmental Management Plans (GP) of the attached Construction EMP Implementation Manual. Key Performance Indicators (KPI) are strategic indicators required for reporting on a monthly basis the level of environmental compliance and performance achievement. These KPI are listed in Annex 3 of this EMP. 5. IMPLEMENTATION AND OPERATION All environmental obligations detailed in this EMP apply to the Project Management Offices (PMO) of the Water Resource Bureau (WRB), to the Supervising Companies (SC), to the Construction Contractors (CC) and their Sub-Contractors. It is the responsibility of the SC and the CC to provide adequate resources to ensure effective implementation and control of the EMP within their own organization. Construction Contractors and their Sub-Contractors will also ensure that all project staff are trained and environmental procedures are understood and followed. Environmental staff in both SC and CC is intended to be independent of construction staff. Environmental staff will work alongside and in close coordination with construction staff, however they will report through separate management up to the SA-Project Director for the SA and to the executive management level for each CC. This section of the EMP provides the operational basis for ensuring that environmental objectives are achieved during the construction stage of QRWRMP. 5.1. ORGANIZATION, ROLES AND RESPONSIBILITIES 5.1.1. OVERALL ORGANIZATION Overall organization for the implementation of the EMP follows closely the organization set-up for the construction stage, simply adding, at the required level, the environmental management capacity deemed necessary. Three levels of responsibilities are committed for the implementation of the EMP: 1) Water Resource Bureau represented by its multi-level PMOs; 2) Construction Supervision Company (CSC), 3) Construction Contractors (CC). At the various levels of the decision process (Provincial, Prefecture and County level) PMO is the main body responsible for following the environmental issues related to the QRWRMP. The PMO structures, particularly the County PMOs (C-PMO) and the Provincial PMO (P-PMO) take the overall responsibility of environmental concerns related to the QRWRMP construction. The P-PMO provides coordination with WRB Management, with other Chinese Government Agencies and with the ADB for all aspects related to environment. C-PMO follows closely the progress of the EMP implementation on site and report to P-PMO. C-PMOs are the key structures for EMP implementation. The C-PMOs will each nominate dedicated, trained, and qualified staff and create an Environmental Management Office (EMO) to undertake environmental management activities. The EMO will have the responsibility to coordinate and supervise monitoring activities during construction, in order to ensure the effective implementation of the mitigation measures decided in the EMP. The EMS may be a regular member of the staff of the PMO but with proved environmental capability. PAGE 14 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN An operational structure, the Environmental Management Unit (EMU) will be implemented under each of the 2 CSCs with responsibility to deal on site and on a day to day basis with all environmental matters related to QRWRMP construction activities. Each EMU Manager and its staff (environmental engineers, field inspectors) will be appointed by the CSC. Each main CC will be requested to provide an environmental coordinator (CC-EC) supported by engineers and field inspectors. The overall organization is depicted in the following Figure 2. Figure 2. OVERALL ORGANIZATION FOR QRWRMP EMP IMPLEMENTATION Qinghai Provincial Leading Group ADB Qinghai Provincial PMO Provincial Environmental Monitoring P-PMO Government Agencies Consultants Environmental Office T N E M T IN O Jianzha County PMO P P A Xunhua County PMO C-PMO C-PMO Hualong County PMO Environmental Office C-PMO Construction Supervision (Organization is similar to that of Company-Environment Xunhua County) Management Unit CSC-EMU Construction Contractor Construction Contractor Environmental Coordinator COORDINATION Construction Teams CC-EC SUPERVISION EMP Measures REPORTING Enforcement 5.1.2. PROVINCIAL PMO (P-PMO-EMO) With overall responsibility for the Project Development and Management, P-PMO-EMO will: • Provide approval of this EMP prior to its implementation; • Coordinate with the Bidding Company to ensure i) the EMP is attached to the tender documents, ii) the technical specifications make clear reference to the EMP and iii) the EMP is eventually part of the Contractual documentation; • Appoint or nominate at P-PMO level an Environmental Director (PMO-ED) for the QRWRMP with an Environmental Engineer; PAGE 15 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN • Coordinate and manage communication with relevant Chinese Agencies; • Coordinate and manage communication with the ADB on environmental issues; • Review and comment the monthly environmental progress report from C-EMO-EMS and prepare monthly consolidated environmental report; • Participate in a formal EMP review every year, in line with ISO14001 principles. • Organize every 2 months a coordination meeting between the 3 C-PMO-EMS to promote exchange of experience regarding environmental problems and solutions. The purpose is to avoid differences in EMP implementation efficiency between the various contracts managed by the 3 C-PMOs. • Supervise the preparation of training programs and materials for CC and CSC staff by a specialized company. 5.1.3. COUNTY PMO (C-PMO-EMO) With geographical responsibility for the Project Development and Management, C-PMO-EMO will: • Coordinate, through the CSC-EMU the efficient implementation of the EMP on the construction sites; • Ensure non-compliances detected by the CSC-EMU are expeditiously resolved by the concerned CC; • Carry-out weekly construction site inspection and participate to the weekly construction meeting; • Coordinate and manage communication with relevant County organizations and public; • Coordinate activities with County-EPB; • Review and comment the monthly environmental progress report from CSC-EMU • Prepare monthly report for the P-PMO-EMO. 5.1.4. THE CONSTRUCTION SUPERVISION COMPANY (CSC) Each of the 2 CSC appointed by the P-PMO will: • Implement an Environmental Management Unit (EMU) • Appoint an EMU Manager under the authority of the CSC Project Manager Through its EMU, the CSC will: • Supervise construction activities and ensure that the EMP is adhered to at all times and taking action if the specifications are not followed; • Carry out routine inspections of construction sites and report non-compliance detected as detailed in the EMP; • Review weekly and monthly environmental reports submitted by the CCs; • Ensure non-compliance detected are quickly corrected by the CCs; • Participate to the weekly construction meeting; • Prepare weekly and monthly reports submitted to C-PMO-EMO; • Ensure communication with and diffusion of environmental guidelines including this EMP to all CCs; PAGE 16 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN • Coordinate awareness training with the CCs and report training status to C-PMO-EMO through the Training Register; • Perform environmental awareness training to PMO-EMO staff; • Review when justified CC method statements and specific environmental control procedures and ensure this documentation complies with all requirements of the EMP; • Ensure that CC develop specific environmental controls deemed necessary even if not addressed in the EMP; • Contribute to the yearly Management Review of this EMP; • Follow up the grievance register and provide expeditious answer to any environmental complaints registered; • Manage documentation and establish environmental data base in accordance with the requirements of the EMP; • Facilitate when required site inspections by PRC Government representatives upon request from P-PMO or C-PMO. 5.1.5. CONSTRUCTION CONTRACTOR Each Construction Contractor to be involved in the QRWRMP implementation works will be required to assign an Environmental Coordinator (CC-EC) supported by environmental engineers and field inspectors. Through his Environmental Coordinator, the CC will be responsible for: • Ensuring this EMP objectives and requirements are met; • Ensuring all environmental procedures and best practices detailed in this EMP are adhered to at all times; • Developing specific method statements and environmental plans to be reviewed by CSC- EMU for non-objection; • Ensuring all CC and sub-contractor staff understand their environmental responsibilities related to the requirements of the EMP; • Preparing environmental awareness training programs to be reviewed by EMU and performing training of the CC staff and of its sub-contractors; • Ensuring all staff on site have completed environmental induction training and that staff with specialized jobs (environment sensitive activities) have received appropriate training; • Identifying any additional activities or impacts not anticipated in this EMP and developing related specific environmental procedures and method statements; • Performing daily inspections of construction activities in order to correct expeditiously any non-compliance observed; • Ensuring the non-compliance detected and reported by CSC-EMU are expeditiously corrected; • Preparing the weekly and monthly reports to be submitted to CSC-EMU; • Managing environmental documentation and data base during the whole duration of the project construction; 5.1.6. ALL PERSONNEL ON SITE All staff on site will have to attend inductions presenting the environmental obligations detailed in this EMP. All site staff are required to report any environmental incident to their supervisor. PAGE 17 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 5.2. TRAINING AND AWARENESS Each CC and the CSC will ensure that their employees are adequately trained in the requirements of the EMP, in terms of environmental and legal obligations. All employees will have an induction presentation on environmental awareness, to be conducted by the CC-EC for the CC staff and by the EMU for the CSC staff. The Construction Contractor is responsible for completing and filing training attendance records that include the date, name of trainer, name of the attendees and their signatures. Four levels of training will be implemented: • General Environmental Awareness Program to all workers employed by the Construction Contractor or its Sub-contractors, concerning general environmental management issues; • Health and Safety Awareness Program, to be implemented among the staff of the Construction Contractors; • Job Specific Environmental Training of workers affected to particularly sensitive environmental activities; • CSC-EMU and CC-Environmental Management Staff will receive training on EMP purpose, content and implementation. Further details about training and awareness programs requirements are presented in the “Environmental Training Plan for Workers” presented in the EMP Implementation Manual. To avoid discrepancies in the training content and materials between construction contractors and between the CSC, the training program and the training material will be prepared by a specialized consultant under the supervision of the P-PMO. 5.2.1. ENVIRONMENTAL AWARENESS PROGRAM This induction program concerns all construction workers at the commencement of their work, and relates to worker’s obligations regarding basic environmental and social protection measures: • General measures to follow throughout the construction period, such as the wildlife protection and conservation, waste management, water quality protection and conservation, social behavior in camps, cultural resources protection; • Housecleaning and waste management in worker camps, in construction sites, along roads, nearby villages; • Pollution control during construction activities such as chemical spillage and leakage prevention; • Disciplinary consequences for violation of the measures presented as part of the Environmental Awareness Program; • Respect of Best Environmental Management Practices (BEMP). 5.2.2. HEALTH & SAFETY AWARENESS PROGRAM General Occupational Health and Safety issues will be addressed under the implementation of the Occupational Health & Safety (OH&S) Plan. The issues addressed under this awareness program will complement those in the OH&S Plan and will focus particularly on basic hygiene practices, vector and transmissible diseases control. PAGE 18 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 5.2.3. TRAINING PROGRAM FOR JOB SPECIFIC CONTRACTOR STAFF For supervisors and foremen, as well as staff working on environmentally critical activities, additional specific environmental training will be provided. Training activities will be organized as workshops (also called Tool Box Meetings), focusing on the presentation, content and application of specific procedures and measures included in the EMP. Training may be supplemented using posters and signs in the workplace depicting the various steps of relevant procedures (re-fuelling, spill response, hazardous waste management, etc). 5.2.4. TRAINING PROGRAM FOR CSC-EMU AND CC ENVIRONMENTAL MANAGEMENT STAFF Environmental staff from CSC-EMU and CC-EMS will receive training related to ISO 14001 principles, content of EMP and related obligations, major construction activities and related potential impacts, organization and practice of construction site monitoring. 5.3. COMMUNICATION 5.3.1. INTERNAL COMMUNICATION Communication among the CSC-EMU, the CC-EMS and various construction management personnel will include routine daily and weekly communications, formal monthly reporting and review requirements, and urgent communications when needed to address issues that present an immediate threat to the environment. Internal communication procedures that present the communication responsibilities of individual members of the CC-EMS, CSC-EMU and of the C- PMO-EMOs. will be established under the responsibility of the P-PMO at the start of construction. 5.3.2. EXTERNAL COMMUNICATION External communication from CSC-EMU to C-PMO on environmental issues will primarily be done through the CSC-EMU Environmental Manager (EMU-EM) and recorded in the Monthly Progress Report. A monthly coordination meeting on major environmental issues observed or anticipated between the EMU-EM and the C-PMO Environmental Director (possibly involving also the C-PMO Director and the CSC-Director) will complement the formal communication. External communication on environmental matters with third parties (Chinese Government Ministries and Agencies, International Organizations, ADB, NGOs) will be handled only through the P-PMO. All external complaints relating to environmental nuisances or defective performance on the Project sites will be directed to EMU-EM who will coordinate the response with the C-PMO-EMO. All grievance resolution will be triggered within 48 hours. 5.3.3. EMERGENCY COMMUNICATION Radio system or mobile telephone network will be available at any construction site, allowing for immediate communication between interested parties. An updated list of key telephone numbers is available to all senior staff and is posted in critical sites (hazardous material storages, explosive storages, fuel storages, etc). 5.3.4. REPORTING Routine reporting from CC-EC is presented in Annex 4. Results of field observations, either documenting compliance with environmental requirements or identifying non-compliance with those requirements, is reported on standard forms that is also included in a data logbook. The use of standard forms helps ensure that compliance-related observations are recorded in a consistent PAGE 19 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN manner and in a standard format. As such, the information can be entered into the computer database used to track the status of non-compliance situations and allow for their analysis. The P- PMO-ED will ensure the same standard forms are used by all CC-EC and all ESC-EM. 5.4. DOCUMENTATION AND DOCUMENT CONTROL 5.4.1. DOCUMENTATION SYSTEM 5.4.1.1. SYSTEM ORGANIZATION To effectively manage the environmental performance of the Project, CSC-EMU and the CCs will set up a process to document and track environment related compliance and non-compliance observations, results of critical decisions, corrective actions taken, and the observed results of those corrective actions. CSC-EMU will use a computer database to store, track and allow analysis of this information. The organization of the documentation will follow the requirements of the Project Quality Control Plan implemented by the P-PMO. Up-dating of the EMP is the responsibility of P-PMO with the support of external resources when deemed necessary. All documentation regarding environmental management of construction activities and derived from the procedures described in the EMP will be classified and stored in appropriate files and registers mainly in the CSC office data room and partly in CC offices. Mail related to environmental issues from/to P-PMO, C-PMO, CSC or CC, minutes of meetings, completed forms and sheets from routine and non-routine monitoring and inspection activities, non- compliance notifications, corrective action form, technical studies, maps, drawings, photos, etc. are registered in the CSC data base for practical aspects and archived in safe conditions in the QA/QC data room of the Project, and the registration numbering of any document will follow the registration system defined in the Project Quality Plan. P-PMO and C-PMO will ensure a compatible Documentation System is implemented among all Contractors, CSC and PMO offices. 5.4.1.2. PHOTOGRAPHIC RECORDS Photographic records of progress on site and of all incidents or events on site are kept in compliance with the QA/QC Procedures of the Project. These records can be used, where applicable, in case of disputes regarding environmental matters, and for the review process after completion of construction. Photos will be taken with digital equipment and systematically stored as electronic files in the data base. 5.4.1.3. DOCUMENTATION SYSTEM OF THE MAIN CONSTRUCTION CONTRACTORS Each Construction Contractor’s keeps a record of all activities relating to environmental matters on site, including mail, meetings attended and minutes, method statements issued, structural measures implemented, results from operation monitoring, issues arising on site including cases of non-compliance with the EMP together with corrective action taken. 5.4.2. DOCUMENT CONTROL The CSC-EMU Environmental Manager is responsible for the establishment of the EMP documentation and for the maintenance and disposal of EMP documents. An Environmental Document Control Register will be established and maintained by the EMU-EM who will record: PAGE 20 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN • Document title and Registration Number; • Version number; • Date of issue; • Date of review; • Location of Hard Copy (if justified) When any documents are reviewed and revised, any changes will be tracked electronically to enable readers to understand the changes. Distribution of any EMP documentation by electronic file will be done only using Adobe PDF encrypted standard in order to avoid uncontrolled changes in the document. 5.4.3. FORMS AND MODEL SHEETS Forms and model sheets are listed in the Standard Forms Register presented in the EMP Implementation Manual with several template examples. 5.4.4. MONTHLY ENVIRONMENTAL REPORT In parallel with the reporting of project construction activities progress by the CSC-PM, the EMU- EM will prepare a Monthly Progress Report related to the progress of the environmental activities and the main environmental issues raised or addressed during the past month. The Monthly Environmental Report (MER) is the main formal environmental information vector from CSC towards the C-PMO. Main issues raised in the MER are further discussed during the Monthly Environmental Meeting. 5.5. OPERATIONAL CONTROL The construction activities potentially associated with significant environmental impacts are controlled through Mitigation Measures (MMs). These impacts and their related mitigation measures have been identified during the EIA preparation and have been reminded in section 4.1.2 of the present EMP. Technical principles and procedures for application of MMs related to routine construction activities are detailed in the Generic Environmental Management Plans (Part C of this EMP). MM will be reviewed annually for their applicability and efficiency, and following any changes to construction activities where new or revised MMs may be required. The EMU-EM is responsible for the identification of those MMs which show difficult implementation or limited results and for proposing appropriate improvements or changes which are submitted for approval during the Annual Management Environmental Review. The EMU-EM is responsible for the updating of construction activities and aspects that are associated with significant environmental impacts, for the development and maintenance of MMs to ensure that adverse environmental impacts are efficiently minimized. 5.6. EMERGENCY PREPAREDNESS AND RESPONSE Potential health and safety emergency situations and incidents, with their associated environmental impacts, are identified as part of the Project Occupational Health and Safety Plan (OH&S Plan). The EMP covers emergency response procedures limited to events such as explosions, toxic release, release or spill of hazardous materials. PAGE 21 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Procedures have been developed to identify, manage and coordinate potential emergency incidents and responses in the EMP Implementation Manual, ("Emergency Plan for Hazardous Materials") which includes measures regarding: • Response organization, • Staff training and mobilization, • Response equipment and products, and • Reporting procedure (for non-compliance Level 2 or 3). Incidents mobilizing Emergency Response are categorized as Non-Compliance levels 2 or 3 depending the type and quantity of hazardous material concerned and the location of the incident (within or outside a sensitive area), in accordance with the Non-Compliance levels presented in EMP Section 6.2. 6. CONTROL AND CORRECTIVE ACTION 6.1. COMPLIANCE MONITORING AND INSPECTIONS The objective of construction environmental monitoring activities is to ensure that mitigation measures listed in the EMP are implemented and are effective in minimizing or preventing environmental impacts. At CC level, monitoring objective is to ensure on a day to day basis that mitigation measures are fully implemented with construction activities, and that results observed comply with the contractual obligations and national laws and regulations. At CSC-EMU level, routine inspections and monitoring are performed to ensure that monitoring results provided by the Construction Contractors are true and correct, to provide the necessary environmental coordination and interface between the CCs, and to provide the CSC and C-PMO with a comprehensive picture of the current environmental situation and efforts at site level. Beside routine compliance monitoring, environmental monitoring activities are presented in Section 8 of this EMP. 6.2. NON COMPLIANCE DETECTION, CORRECTION AND PREVENTION 6.2.1. HIERARCHY OF NON-COMPLIANCE LEVELS & COMMUNICATIONS An important element of CSC and CC internal communication process is the organized relay of non-compliance information. To prioritize Senior Management attention on the most important issues, non-compliance observations are separated into three levels on the basis of importance, and communications requirements for the observations are commensurate with the severity of the non-compliance situation. However, prior to enter the non-compliance situation for minor environmental issues, and in compliance with the Project Quality Plan, a Site Observation Notice (SON) is issued by any CSC-EMU staff (Environmental Engineer or Environmental Officer), for immediate application. Repeated SON concerns may become Non-Compliance Level I if left unattended. The three levels of non-compliance situations are: PAGE 22 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Non-Compliance Level l Definition: A non-compliance situation not consistent with EMP requirements, but not believed to represent an immediate or severe threat to man or to the environment. Repeated Level I concerns may become Level II concerns if left unattended. Disposition: Level I situations will typically be addressed on site with construction personnel by normal coordination and routine communications (e.g. discussion with the Contractor's site construction supervisor). Corrective action should be agreed to and implemented as expeditiously as practical. Formal communications will typically be limited to routine daily and weekly reports directed to the EMU-EM. Non Compliance Level II Definition: A non-compliance situation that has not yet resulted in clearly identified damage or irreversible impact, but which potential significance requires expeditious corrective action and site- specific attention to prevent severe effects. Repeated Level II concerns may become Level III concerns if left unattended. Disposition: Level II events are to be reported to the EMU-EM the same day as identified. The EMU-EM will notify the CSC-PM within three days, as practical, with suggested corrective action. Corrective action should be agreed to and initiated as expeditiously as practical, typically within the week following initial identification of the issue requiring attention. Special follow-up of corrective measures is required from the environmental staff concerned (environmental inspectors from CSC- EMU and Environmental Management Staff from the CC). Non Compliance Level III Definition: A critical non-compliance situation, typically including observed significant damage on the environment or a reasonable expectation of very severe impending damage. Intentional disregard of specific prohibitions is also classified as a Level III concern. Disposition: Level III concerns are to be reported to the EMU-EM and by the EMU-EM to the CSC- PM the same day they are identified. The CSC-PM will notify the C-PMO-ED of all Level III concerns the same day he is notified. Corrective action should be agreed to and initiated within one day of original observation unless special circumstances require a longer period. Although a specific decision/response time frame may not be achievable in all instances, the general intent will be to define and initiate action to minimize adverse effects and/or curtail adverse effects as expeditiously as practical. An adequate response to a Level III concern will include the diligent involvement of the CSC-PM. If necessary, the CSC-PM or his delegate will request the concerned Contractor Manager to halt specific activities in order to protect resources while corrective actions are implemented. 6.2.2. NON COMPLIANCE PROCEDURES The process to implement the tiered approach described above is illustrated in the following Figure. In this Figure, the general flow of communications, notification, and incident resolution decision making process is depicted with solid arrows, while the documentation and reporting processes are depicted with dashed arrows. PAGE 23 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Figure 3. NON-COMPLIANCE REPORTING AND RESOLUTION PROCEDURE Non-Compliance (NC) detected by observer from CSC-EMU or third party Observer determines incident severity level (Level I, II or III) & notifies to appropriate person: CC Site Manager, CC-EC or EMU-EM. If justified, may recommend work stoppage to EMU-EM or CSC-PM. EMU environmental staff follows up corrective action by Construction Contractor CC takes (or has taken) immediate and appropriate corrective action Yes consistent with EMP? No Level I Level II Level III Routine notification by Immediate notification by Urgent EMU-EM notification Observer to CC Site Observer to EMU-EM. (same day as observation) to Manager, and CC-EC Same day as observation, CC Manager, CC Site notification by EMU-EM to CC Manager Manager, CC Site Manager Corrective action developed EMU-EM notifies CSC-PM of by CC-Site Manager EMU-EM notifies CSC-PM of non compliance same day. non compliance within 3 days CSC-PM notifies C-PMO-ED of non compliance same day Corrective action developed by CC-Site Manager & CC Corrective action developed Technical Division under CC Director leadership CSC-EMU Staff follows-up implementation of corrective measures. No(+) Is situation satisfactorily resolved? Yes As appropriate, carry out incident investigation to determine if changes in processes are needed to prevent future recurrences. Is/was this a Level III incident? No Yes Documentation in routine weekly report Documentation in special report from from EMU staff to EMU-EM EMU-EM to CSC-PM and C-PMO-ED Documentation in routine monthly report from EMU-EM to CSC-PM and from CSC-PM to C-PMO-ED, and stored in EMU-EM record system Note: No(+) means that a NC may be raised to the superior NC level if left unattended PAGE 24 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN 6.3. ENVIRONMENTAL RECORDS The EMU-EM is responsible for the identification and collection of all environmental documentation to be recorded in the system. The environmental documentation to be recorded is presented in previous Section 5.4. "Documentation & Document Control" of this EMP. 6.4. INTERNAL ENVIRONMENTAL AUDITING 6.4.1. FIRST LEVEL AUDITING Routine site inspections (construction site monitoring) by the CC-EC or his environmental field inspectors, fortnightly site visits by CSC-EMU-EM or his environmental staff, will provide the first level of environmental auditing regarding the implementation status of environmental measures and the level of compliance with the obligations of the EMP Environmental Generic Plans. 6.4.2. SECOND LEVEL AUDITING Routine site inspections by C-PMO-ED or representatives from his environmental staff will be performed at least on a monthly basis. Non-conformances or observations identified during audits are subject to the provisions of corrective action. Audit findings of EMU internal audits are reported to the CSC-PM and evaluated with CCs at the monthly EMU/CC Environmental Management Review. 6.5. EXTERNAL AUDITING External auditing is initially performed by the independent Quality Supervision Company (QSC) which will ensure EMP obligations are respected by all parties involved in the construction process, and will ensure their environmental management systems and the construction activities comply with their contractual and regulatory obligations. P-PMO or C-PMO may appoint any independent environmental auditor or consultant to perform audit of CSC and of the Construction Contractors on particular subjects which may not be covered by the QSC. The EMU-EM and CC-EC will make available environmental staff, information and data as requested by the qualified auditor. Notification of CSC and CC of an external audit will be done at least one month prior to the starting date of the audit. Reporting from the audit will be submitted to C-PMO, then discussed with CSC and CC for expeditious implementation of recommendations or correction of non-compliance detected. 6.6. ENVIRONMENTAL CONSTRUCTION COMPLETION REPORT Environmental acceptance report at the completion of each construction package will be prepared in accordance with PRC regulation on Environmental Check-and-Acceptance of Project Completion (SEPA, 2001) within 3 months after completion date. The report will focus on the project environmental performance at commissioning time and particularly on construction site decommissioning and rehabilitation. The report will be sent to environmental authorities for review and approval. In case of major non-compliance, the project commissioning is suspended until improvement required is satisfied. 7. SENIOR MANAGEMENT REVIEW (SMR) As requested by the ISO14001, a SMR will be organized once a year involving Senior Management from P-PMO, Senior Management from the 3 C-PMOs and any other national or PAGE 25 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN international high level experts to address i) the need for changes regarding the EMP objectives, targets or programs and ii) the identification of improvements required regarding environmental management, operational control or measures in accordance with the results of internal and external audits. 8. ENVIRONMENTAL MONITORING PLAN As presented in the previous sections of the EMP, monitoring activities will cover compliance monitoring and environmental monitoring. 8.1. COMPLIANCE MONITORING Compliance Monitoring is directly related to construction activities and aims at ensuring the Contractors comply with the applicable standards related to effluent discharge, water and air quality, noise. This monitoring is imposed to the Contractors and is under his responsibility. The CSC-ES will only carry out (or subcontract to a laboratory as the County EPB or another monitoring institute) random controls to ensure the results provided by the Contractor are true and correct. 8.2. ENVIRONMENTAL MONITORING Environmental monitoring embraces a wider perspective, which is to assess the global impact of project construction or operation on the receiving environment. The contractor is generally no more concerned by this aspect. During construction, P-PMO will be responsible for implementing environmental monitoring. During operation, the Provincial Water Resource Bureau will take the responsibility. The following Table 3 describes the various monitoring activities during construction and during first few years of operation. Most of the routine Compliance Monitoring activities are carried out by the Contractors' Environmental Staffs or through the routine site inspections of the 2 Construction Supervision Companies Environmental Management Units (CSC-EMU). Environmental Monitoring during construction will be performed under the supervision of the P- PMO through appointed certified laboratories (Provincial EPB or certified monitoring Institutes). 9. TOTAL ENVIRONMENTAL BUDGET FOR QRWRMP The Total Budget for the Environmental Activities related to Project construction and operation is summarized below. It has been estimated together with the Gansu EIA Institute on the basis of applicable cost standards used in China. It includes the following main components: 1 Soil & Water Conservation Cost 2 Environmental Protection Measures 3 Environmental Training 4 Environmental Monitoring 6 6 Table 2. TOTAL ENVIRONMENTAL BUDGET FOR THE QRWRMP (10 CNY & 10 USD) Estimated Cost No. Item Gongboxia Lijiaxia sub-total 6 6 （10 CNY） （10 CNY） 106 CNY 106 USD 1 Soil & Water Conservation Cost 4.507 7.009 11.52 2 Environmental Protection 2.463 2.463 4.93 PAGE 26 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Measures 3 Environmental Training 0.105 0.105 0.21 4 Environmental Monitoring 0.485 0.485 0.97 Total 7.561 10.062 17.62 2.58 note: 1 $ = CNY 6.832 4 years cost for Environmental Protection Measures and Environmental Monitoring Indicative plan, to be detailed in later phase. The breakdown of the above table is: 1, Soil & Water Conservation Cost Water and Soil Conservation No. Item Cost(10,000 CNY) 1 Gongboxia Component 450.74 2 Lijiaxia Component 700.86 3 Total 1151.6 Note: Indicative plan, to be detailed in later phase. 2, Environmental Protection Measures on Construction Sites Gongboxia Component Lijiaxia Component Sub-total Sub-total Environment Protection Unit No. (10,000 Unit price (10,000 Measures number price number CNY, 4 (CNY) CNY, 4 (CNY) years) years) 1 Water Quality 29.8 29.8 1.1 Washing wastewater grit chamber 60 1200 7.2 60 1200 7.2 Sediment tanks for Concrete Mixing 1.2 60 1200 7.2 60 1200 7.2 Wastewater Sediment tanks for Construction 1.3 50 1000 5 50 1000 5 Basin Wastewater Chemical Doses for construcion 1.4 4 4 wastewater Collection and Treatment for 1.5 16 4000 6.4 16 4000 6.4 domestic wastewater 2 Waste gas and dust treatment 22 22 Dust prevention(dust covers, water 2.1 10 10 spill) 2.2 water spill vehicles 4 10000 4 4 10000 4 operation cost for water spill 2.3 4 20000 8 4 20000 8 vehicles 3 Noise control 31.2 31.2 temporary noise control 3.1 equipments(dampings,buffers,abso 12 12 rbers) 3.2 Noise insulation facility 200 240 4.8 200 240 4.8 3.3 Noise enclosure screens 1200 (m2) 120 14.4 1200 (m2) 120 14.4 4 Solid waste treatment 110.32 110.32 cleansing cost of construction solid 4.1 40 40 waste PAGE 27 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Gongboxia Component Lijiaxia Component Sub-total Sub-total Environment Protection Unit No. (10,000 Unit price (10,000 Measures number price number CNY, 4 (CNY) CNY, 4 (CNY) years) years) collection and treatment cost for 4.2 2580 (ton) 40 10.32 2580 (ton) 40 10.32 domestic solid waste spoil transportation and spoil site 4.3 6 100000 60 6 100000 60 management 5 Health and safety 53 53 Cleaning and disinfection for in and 15000 15000 5.1 2 3 2 3 out construction site (m2) (m2) 5.2 Wipe out mouse and insects 180 300 5.4 180 300 5.4 5.3 Healthy check of construcion staff 1500 200 30 1500 200 30 First-aid station and medical drugs 5.4 12 8000 9.6 12 8000 9.6 on site 5.5 Safety indication board 250 200 5 250 200 5 Subtotal of Subtotal of Lijiaxia Gongboxia 246.32 246.32 Component Component Total 492.64 Note: Indicative plan, to be detailed in later phase. 3, Environment Training Total Period Cost(C Number costs Time NY/ Training Attendees Contents of (CNY s person/ (days) persons 10,00 day 0) ADB The PMOs, (i) Environmental laws and 1 1 50 600 3 environmental Contractors regulations, (ii) Environmental policy and policies and plans, relevant China (iii) Basic Environmental environmental management, laws, regulations (iv) Environmental emergency and standards response EMP The PMOs, (i) Responsibility and duties for 1 1 50 600 3 implementation Contractors the project construction, management and environmental protection. (ii) Task of environmental protection in the project construction. (iii) Key environmental protection contents etc. in project construction, (iv)Various environmental reporting, (v)mitigation measures that requiring contractors' involvements (vi) EMP improvement and corrective actions cultural relic The PMOs, (i) identify method of the cultural 1 1 50 600 3 chance find contractors relic,(ii) handling procedures, (iii) handling and reporting procedures procedures PAGE 28 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Total Period Cost(C Number costs Time NY/ Training Attendees Contents of (CNY s person/ (days) persons 10,00 day 0) Safety during The PMOs, (i) safety construction 1 1 50 600 3 construction contractors (ii)identify method of typical diseases, (iii) self-recovery methods, (iv)handling and reporting methods Environmental The PMOs (i)Engineering technologies, 1 1 50 600 3 technologies and and pollution control equipment equipment contractors selection and procurement, (ii) Operation and maintenance of environmental installations, (iii) Safety operation regulations, (iv) Risk management and emergency response procedures Environmental The PMOs Monitoring and inspection 1 1 50 600 3 inspection and and methods, data collection and reporting contractors processing, interpretation of data, reporting system Troubleshooting The PMOs (i) setting up troubeshooting 1 1 50 600 3 and emmergency and unit, handling contractors (ii) crisis handling methods Total 21 Note: Indicative plan, to be detailed in later phase. ADB = Asian Development Bank, EPB = Environmental Protection Bureau, PMO = Project Management Office, EMP = Environmental Management Plan, 4, Environmental Monitoring during construction phase PAGE 29 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Estimate d cost Monitoring Monitoring Monitoring Monitored Supervise Finance Category Monitoring Objective Stage Frequency (10,000 Contents Parameters Location by d by d by CNY, 4 years) once per along the 4 main Monitor the impacts from year(in July Terrestrial Biodiversity, channels, 2 in each Construction construction activities to Construction or August, C-PMO/P- Vegetation(Ecolo bio-population channel(total 8). In Supervision C-PMO 4 plants and other ecology Phase when plant PMO gy Monitoring) density 12 spoil sites, 1 in Company environment is flourishing each(total 12). growing.) Monitoring the implementation of water/soil conservation measures. Survey the water and soil main channel, Construction Water and Soil slop stability of main Construction Once per C-PMO/P- loss, landslide, material site, spoil Supervision C-PMO 5 Environment Conservation channels, if there is Phase week PMO collapse site Company al Quality landslide risks; check if Monitoring the conservation measures have been taken for spoil sites. pH, T°, DO, Monitor water quality of 10 meters Water BOD, Environment Yellow River, and assess downstream of Construction One per six C-PMO/P- Quality(Aquatic Oil,Nutrition (P- Labs with C-PMO 20 the construction impacts outlet construction Phase month PMO Environment) PO4, N-NH3, certification to water environment site TP, TN) Air Environment Quality(atomosp Monitor the air quality of TSP,PM10,mal within prject area, Construction One per six C-PMO/P- Labs with C-PMO 20 here the project site odor nearby project site Phase month PMO certification environment) Monitor the wastewater BOD, Environment Wastewater wastewater Construction One per six C-PMO/P- discharge from COD,Oil,Heavy Labs with C-PMO 20 Discharge discharge point Phase month PMO construction activity Metal certification Monitor the waste gas Environment Pollutant Gas Pollutant TSP,PM10,mal boundary of Construction One per six C-PMO/P- discharge from Labs with C-PMO 20 Discharge Discharge odor construction site Phase month PMO Monitoring construction activity certification Monitor the noise Construction boundary of Construction Once per C-PMO/P- Noise discharge from dB(A) Supervision C-PMO 8 construction site Phase week PMO construction activity Company Total 97 PAGE 30 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN Note: Indicative plan, to be detailed in later phase. C-PMO =County Project Management Office, P-PMO = Provincial Project Management Office oOo PAGE 31 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ANNEXES TO EMP PART A PAGE 32 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ANNEX 1 REGISTER OF ENVIRONMENTAL LAWS & REGULATIONS PAGE 33 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN REGISTER OF ENVIRONMENTAL LAWS & REGULATIONS NO. DOCUMENT PRC – ENVIRONMENT RELATED LAWS & REGULATIONS 1 Environment Protection Law of the People's Republic of China (1989-12-26) 2 Environmental Impact Assessment Law of the PRC (2003-9-1) 3 Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution (2000-04) 4 Water Law of the People's Republic of China (2002-10-1) 5 Law of the People's Republic of China on Prevention and Control of Water Pollution (2008-07) 6 Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste (2005-04-01) 7 Law of the People's Republic of China on Prevention and Control of Pollution From Environmental Noise (1997-04) 8 Law of the People's Republic of China on Water and Soil Conservation(1991-06-29) 9 Land Administration Law of the People's Republic of China (1998-06-25) 10 City Planning Law of the People's Republic of China (1998-12-26) 11 Regulations on the Protection of Basic Farmland (1998) 12 Ordinance on Environmental Protection Management of Construction Projects (State Council No. 253, 1998) 13 Management Catalog of Classified Environmental Protection of Construction Project (State Environmental Protection Administration No. 14) 14 Ordinance on Land Requisition Compensation and Resettlement for Large and Medium-sized Water Conservancy and Hydropower Projects (State Council, 1991-2-15) 15 Notice on Enhanced Management of Environmental Impact Assessment of Construction Projects Financed by International Financial Organizations (State Environmental Protection Administration No. 324, 1993) PRC – ENVIRONMENT RELATED PROVINCIAL REGULATIONS 1 Management of Key Water Conservancy Projects at Early Time in Qinghai Province (2003-11-18) 2 Ordinance on Prevention and Control of Water Pollution in Huangshui Basin of Qinghai Province (1998-5-29) 3 Implementation of ‘Environmental Protection Law of the People's Republic of China’ in Qinghai Province (2001-3-31) 4 Implementation of ‘Law of the People's Republic of China on the Prevention and Control of Air Pollution’ in Qinghai Province (2001-3-31) 5 Names of Key Aquatic and Wild Animals (Qinghai Provincial Government No. 47, 2003-08-14) PRC – ENVIRONMENT RELATED TECHNICAL STANDARDS 1 Technical Guidelines for Environmental Impact Assessment – Non-pollution Ecological Impact (HJ/T19-1997) 2 Technical Guidelines for Environmental Impact Assessment - Atmospheric Environment Surface Water Environment HJ/T2.1-2.3-93) 3 Technical Guidelines for Environmental Impact Assessment - Acoustic Environment (HJ/T2.4- 1995) 4 Technical Guidelines for Environmental Impact Assessment – Water Conservancy & Hydroelectricity Projects (HJ/T88-2003) PAGE 34 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN NO. DOCUMENT 5 Technical Guidelines for Environmental Risk Assessment of Construction Projects (HJ/T169-2004) 6 Technical Standard for Water and Soil Preservation in Construction Project (Water Conservancy Administration, 1998) 7 Technical Criteria for Environmental Monitoring (SEPA，1986) 8 Technical Criteria for Monitoring Surface Water and Sewage (SEPA, 2002) 9 Environmental Quality Standard for Surface Water(GB3838-2002) 10 Quality Standard for Ground Water(GB/T14848-93) 11 Environmental Quality Standard for Noise(GB3096-2008) 12 Ambient Air Quality Standard(GB3095-1996) 13 Integrated Emission Standard of Air Pollutants(GB16297-1996) 14 Environmental Quality Standard for Soils(GB15618-1995) 15 Standards for irrigation water purity (GB5084-1992) 16 Hygienic Standard for Domestic Drinking Water (GB5749-2006) 17 Noise Limits for Construction Site (GB12523-90) 18 Control Standards for Pollutants in Sludge From Agricultural Use (GB4284－84) o0o PAGE 35 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ANNEX 2 ENVIRONMENTAL QUALITY STANDARDS PAGE 36 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ENVIRONMENTAL QUALITY STANDARDS ENVIRONMENTAL CRITERION STANDARDS POLLUTANTS IELD F UNITS VALUE PH pH unit 6-9 DO mg/l ≥5 BOD mg/l ≤4 COD mg/l ≤20 NH3-N mg/l ≤1.0 Grade III AR-OH mg/l ≤0.005 Surface Water Environmental Quality cyanide mg/l ≤0.2 Standard for Surface Water (GB3838-2002) As mg/l ≤0.05 Hg mg/l ≤0.0001 Cr(+6) mg/l ≤0.05 Pb mg/l ≤0.05 Cd mg/l ≤0.005 Oil type mg/l ≤0.05 PH pH unit 6.5-8.5 Total dissolved solids mg/l ≤1000 NH3-N mg/l ≤0.2 Grade III total hardness mg/l ≤450 Environmental Quality Permanganate Index mg/l ≤3.0 Groundwater Standard for Groundwater Zn mg/l ≤1.0 (GB/T14848-93) Fe mg/l ≤0.3 Anionic Surfactant mg/l ≤0.3 Total coliform Per l ≤3.0 Total bacterial count Per ml ≤100 Annual mean mg/m3 0.20 TSP Daily mean mg/m3 0.30 Annual mean mg/m3 0.08 Grade II 3 NO2 Daily mean mg/m 0.12 Ambient Air Ambient Air Quality Standard (GB3095- Hourly average mg/m3 0.24 1996) Annual mean mg/m3 0.06 3 SO2 Daily mean mg/m 0.15 Hourly average mg/m3 0.50 Grade II Daytime dB(A) ≤60 Acoustic Acoustic Quality LAeq Environment Standard (GB3096- 2008) Night dB(A) ≤50 Note: underground water Grade III by reference to Underground Water Quality Standard (GB/T14848-93) PAGE 37 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN POLLUTANTS DISCHARGE & EMISSION STANDARDS VALUES POLLUTION TYPE STANDARDS POLLUTANTS UNITS VALUES PH 6-9 CODcr mg/l ≤100 Grade I BOD5 mg/l ≤20 Waste water Integrated Wastewater Discharge Standard NH3-N mg/l ≤15 (GB8978-1996) Oil type mg/l ≤5 SS mg/l ≤70 3 Grade II SO2 0.4 mg/m Integrated Emission Levels of fugitive Air pollutants NO 0.12 mg/m3 Standard of Air x emissions Pollutants (GB16297-1996) Particles 1.0 mg/m3 Daytime 75 Earthworks Night 55 Daytime 85 Transport Noise Limits for Equivalent Night No construction Noise Construction Site sound level (GB12523-1990) dB(A) Structure Daytime 70 Construction Night 55 Daytime 65 Installation Night 55 o0o PAGE 38 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ANNEX 3 KEY ENVIRONMENTAL PERFORMANCE INDICATORS PAGE 39 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN KEY ENVIRONMENTAL PERFORMANCE INDICATORS INDICATOR MEASURE Legal and others % of Laws reviewed, summarized and available on site requirements Training Number of Staff (PMO, CSC) and Contractor Workers trained and Number of Training hours Number of complaints related to construction activities received during the reporting period Communication Number of complaints resolved during the reporting period Number of complaints outstanding or unresolved at the end of the reporting period. Monitoring and Number of site inspections performed during the reporting period; measurement Number of samples analyzed during the reporting period (water, air, soil, etc) Number of Non-Compliance notifications (Level 1) and formal warning letters issued during the reporting period. Number of NC notifications (Levels 2 and 3) issued during the reporting period. Compliance Number of non-compliances/non-conformances satisfactorily resolved and number outstanding. Average number of days between NC notification and resolution Audits % of compliance with standard (cumulative and during the reporting period) Management % of recommended actions completed (cumulative and during the reporting period) Review o0o PAGE 40 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ANNEX 4 REPORTING PAGE 41 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN ROUTINE REPORTING NO. NAME OF DOCUMENT PREPARED BY SUBMITTED TO FREQUENCY TYPE OF REPORT 1 EMU-EMS Daily Report EMU-EMS - Daily Routine Inspection Sheet registration in a log book 2 CC-EMS Daily Report CC-EMS - Daily Routine inspection report 3 CC-EMS Weekly Report CC-EMS CC EC Weekly Summary of daily reports & site inspection sheets prepared during the week 4 CC-EC Monthly Report CC EC EMU-EM Monthly Summary of results from CC monitoring Environmental activities performed Public complaints registered Prevision of major activities for next month 5 CSC-EMU-EM Monthly EMU-EM CSC-PM Monthly Activity report including results of Report CC & SE Monitoring, list of Non- Compliance detected & corrective actions 6 Construction CSC-PM P-PMO Monthly Same as 5, after review and Environmental Activities copy to approval by SE PD. Monthly Report C-PMO To be included in the monthly report 7 Construction C-PMO-EMO P-PMO-ED Monthly Activity Report of C-PMO-EMO Environmental Activities regarding major issues addressed, Monthly Report results of control monitoring carried out by EMO, objectives for next month 8 Management EMU-EM CSC-PM Monthly Presents findings, Environmental Review CC-EC CC-PM recommendations and decisions Report made at the Senior Management Environmental Review. o0o PAGE 42 PEOPLE’S REPUBLIC OF CHINA ASIAN DEVELOPMENT BANK QINGHAI WATER RESOURCE DEPARTMENT QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT ENVIRONMENTAL MANAGEMENT PLAN IMPLEMENTATION TRAINING MANUAL SEPTEMBER 2009 TA NO. 7103-PRC PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL CONTENTS 1 PURPOSE & CONTENT OF THE IMPLEMENTATION TRAINING MANUAL ...... 1 2 ACTIVITY-IMPACT-MITIGATION MATRIX ...... 3 3 GENERIC PLANS...... 11 GP1 EROSION AND SEDIMENT CONTROL MANAGEMENT...... 13 GP2 SPOIL DISPOSAL AND MANAGEMENT ...... 16 GP3 QUARRY AND BORROW AREAS MANAGEMENT ...... 18 GP4 WATER QUALITY MONITORING ...... 20 GP5 HAZARDOUS MATERIALS & WASTE MANAGEMENT PLAN...... 22 GP6 EMERGENCY RESPONSE PLAN FOR HAZARDOUS MATERIALS ...... 26 GP7 EMISSIONS & DUST CONTROL ...... 33 GP8 NOISE CONTROL ...... 35 GP9 PHYSICAL CULTURAL RESOURCES ...... 38 GP10 VEGETATION CLEARING...... 40 GP11 WASTE MANAGEMENT ...... 41 GP12 ENVIRONMENTAL TRAINING FOR CONSTRUCTION WORKERS ...... 47 GP13 ON-SITE TRAFFIC AND ACCESS MANAGEMENT ...... 54 GP14 CONSTRUCTION WORKER CAMPS ...... 57 GP15 WORKER HEALTH MANAGEMENT...... 60 4 STANDARD FORM REGISTERS & MODEL SHEETS ...... 61 oOo PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 1. PURPOSE & CONTENT OF THE IMPLEMENTATION TRAINING MANUAL PAGE 1 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Part A of the EMP defines the organization set-up for Project implementation, with definition of roles, responsibilities and operational procedures. This Part B provides more technical information intended to assist the PMOs, the CSCs and the Contractors to anticipate on potential impacts from construction activities and to identify the most appropriate measures to avoid impact event. It provides also background material for information management and routine site inspection. The Implementation Training Manual consists of 3 types of implementation materials: • An Activity – Impact Matrix, which provides for each anticipated type of construction activity the most probable environmental impact to be expected and the most appropriate measure for avoiding or mitigating the impact. In addition, the matrix provides a link between each of the typical mitigation measure and one or several generic plans where more related information is provided. • The 15 Generic plans, which provide for each major environmental field of concern during large construction works, the Best Environmental Construction Practices applicable. Despite the diversity of subjects addressed, these Generic Plans have the common objectives (i) to address in a comprehensive manner the environmental issues which may arise during the construction stage of the project, (ii) to present feasible and effective mitigation measures applicable in the geographical and social context of the QRWRM Project and (iii) to develop mitigation measures applicable and adaptable in a variety of sites and activities. These Plans reflect also the Environmental Requirements applicable to the Contractors, and as such, must be part of the Bidding documentation through the whole EMP.. • A set of templates to assist PMOs, the CSCs and the Contractors to implement quickly and efficiently environmental data management, training management and site inspections. Each Generic Plan has been developed in accordance with the following structure: 1) Purpose of the Sub-Plan; 2) Level of environmental risk anticipated if appropriate measures are not implemented; 3) Action Plan: Presentation of the most currently observed risks or impacts related to the field of concern of the Generic Plan, and description of the mitigation measures recommended; 4) Annexes to the Plan; The list of the 15 Generic Plans attached is the following: 1) GP1 Erosion and Sediment Control Management 2) GP2 Spoil Disposal and Management 3) GP3 Quarry and Borrow Areas Management 4) GP4 Water Quality Monitoring 5) GP5 Hazardous Materials & Waste Management Plan 6) GP6 Emergency Response Plan for Hazardous Materials 7) GP7 Emissions & Dust Control 8) GP8 Noise Control 9) GP9 Physical Cultural Resources 10) GP10 Vegetation Clearing 11) GP11 Waste Management 12) GP12 Environmental Training For Construction Workers 13) GP13 On-site Traffic and Access Management 14) GP14 Construction Worker Camps 15) GP15 Worker Health Management oOo PAGE 2 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 2. ACTIVITY - IMPACT - MITIGATION MATRIX PAGE 3 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Aggregate Sediment discharged in surface water Implementation of Sedimentation Pond Construction washing Blasting Noise Impact Adjust operating hours where required Procedure Provide PPE and enforce use Training Occupational & Public Safety Blasting alert procedure Procedure Control access to sites Procedure Explosives storage & handling procedure Procedure Borrowing Transport of materials Refer to Activity "Operation of trucks" - Stockpiling of materials Refer to Activity "Stockpiling of Materials"" - Camps water Water treatment system in compliance with Unsuitable drinking water quality Construction supply WHO standards Monitor water quality Control Protect source of water from pollution Construction Vegetation Coordinate with villagers for wood collection Loss of valuable wood resource Design Clearing or charcoal production Concrete Health impacts for workers Provide PPE and enforce use Training batching Sedimentation Pond for effluents & pH Pollution of streams by effluents Construction adjustment Monitoring of pond outlet Monitoring PAGE 4 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Earthworks & Impeded local drainage Respect or rehabilitate natural drainage Design Spoil disposal Erosion of spoil Erosion prevention & control measures Construction Monitoring of stormwater leaving CA Monitoring Dust emission from works Regular watering of area Construction Appropriate stockpiling of topsoil for eventual Construction site restoration Earthworks & Instability of slopes Engineering good practices Contractual Excavation Slopes erosion & sediment transport Erosion prevention & control Design Stabilization of slopes Construction Monitoring of erosion control efficiency Monitoring Restoration Plan including revegetation Long term impact on landscape Construction option HazMat storage Explosion hazard Safe storage and handling for Explosive Construction & Use Pollution by Hazmat Prevention & detection of spill & leakages Procedure Registration of HazMat types & Movements Procedure Selection, handling & application of Hazmat Procedure PAGE 5 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 HazMat Accident Accidental spill to water bodies Spill response procedure Procedure Management Spill response equipment kit Equipment Spill response training of concerned workers Training Risk of accident with inflammable products Fire fighting equipment Equipment Training of workers Training Traffic accident during HazMat transport Procedure for safe transport of HazMat Procedure HazMat Waste Procedure for HazMat chemical waste Pollution of soil & water bodies Procedure Disposal management Procedure for Hospital waste management Procedure Training of concerned workers Training Land Occupation Loss of cultural objects Appropriate procedure for preservation Procedure & Preparation Awareness program for workers Training Ensure all built up assets effectively Loss of public or private built-up properties Ref. to RAP compensated by Owner Procedure for non-compensated asset Ref. to RAP PAGE 6 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Operation of Heavy Pollution during refueling operation Refer to Activity "Operation of Trucks" Procedure Machinery Pollution by used oils & hydraulic liquids Equipment for collection of waste products Equipment during maintenance Registration and appropriate storage of used oils, identification of available treatment Procedure process (substitute fuel, recycling) Operation of Pollution during refueling operation Procedure for refueling Procedure Trucks Spill Response kits Equipment Control Truck Load (weight, security for bulk Traffic accident Hazard Control load) Regular maintenance of truck brakes & tires Control Enforce road signs & speed limit Control Speed humps in risk areas (villages, schools, Construction busy crossings) Training of drivers/sub-contractors at Training recruitment Exhaust gas emission Regular maintenance of truck engine Control Regular dry season watering of roads in Dust production Equipment sensitive areas Bulk load cover for material generating dust Equipment (cement, soil) PAGE 7 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Material Instability of slopes Engineering good practices Construction stockpiling Slopes erosion & sediment transport Erosion prevention & control Design Dust emission Watering in dry season Procedure Residential Pollution by domestic wastewater Sewage collection system & treatment Construction areas Monitoring of treated effluent quality Monitoring Pollution by Garbage Refer to Activity "Solid Waste Production" Procedure Infestation by insect vectors Vector control by pesticides Procedure Drainage of area Construction Road Regular watering of area during dry season Rehabilitation & Dust emission from leveling operation Construction in residential areas Improvement Minimize duration or provide alternative Trafic interruption Construction transport Solid Waste Pollution by garbage (workers camps, Disposal equipment & regular collection of Equipment Production Residential Area) garbage Creation & management of safe waste Construction disposal site Identification and management of safe Pollution by construction waste Construction disposal sites Develop re-use and recycling strategy Procedure Pollution by flooded villages waste Remove waste before reservoir filling Construction PAGE 8 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Stone crushing Noise Impact Adjust operating hours where required Procedure Provide PPE and enforce use Training Site location to minimize downwind impact Dust production Design on villages & camps Use dust reduction equipment & operational Equipment practices Temporary small Pollution by domestic wastewater Portable or appropriate sanitation system Construction worker camps Monitoring of equipment use and efficiency Monitoring Pollution by Garbage Refer to Activity "Solid Waste Production" Infestation by insect vectors Protective equipment, mosquito nets Equipment Sediment transport from tunnel water Tunneling Sediment treatment and pond at tunnel exit Construction drainage Spoil disposal Refer to Activity "Earthworks/spoil disposal" Inappropriate tunnel safety Enforcement of safety procedures Control Impact from noise Refer to "Occupational Health & Safety Plan" Contractual Risk of fire Strict procedure for refueling machinery Procedure Air quality management with ventilation Unsafe atmosphere in tunnel Contractual system PAGE 9 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL Measure detailed in the Measure referred only in the EMP GENERIC ENVIRONMENTAL MANAGEMENT-PLANS corresponding Generic Plan corresponding Generic Plan ACTIVITIES POTENTIAL RISK/IMPACT MITIGATION MEASURE TYPE Erosion & Sediment Spoil Disposal Quarry Management WQ Monitoring Hazardous Material & Waste Emergency plan for Hazmat Emission & Dust Noise control Cultural objects Vegetation clearing Waste Management Environmental training & traffic access On-site Construction camps & SS Worker Health Management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Worker Camps Pollution by domestic wastewater Sewage treatment system Construction Monitoring of treated effluent quality Monitoring Pollution by Garbage Refer to Activity "Solid Waste Production" Procedure Infestation by insect vectors Vector control by pesticides Procedure Drainage of area Construction Inappropriate application of hygiene Awareness program for workers Training measures Recruitment medical check-up and annual Risk of epidemic burst Procedure medical visit Uncontrolled development of spontaneous Appropriate recruitment procedure & control Procedure population Strict control of access to sites Construction Workshops & Registration and management of Hazmat Pollution by HazMat Procedure garages handling & storage Pollution by petrol & used oil Collection & disposal of used oils Design Drainage equipped with oil retention basins Construction or pits Note: The column “Type” details the type of mitigation measure considered: Construction activity, Procedure, training activity, control activity, Equipment, Design (measure to be included in the design of structures) and Contract (measure covered by the Terms of the Contract Documentation) PAGE 10 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 3. GENERIC PLANS LIST OF GENERIC PLANS CODE TITLE GP1 Erosion and Sediment Control Management GP2 Spoil Disposal and Management GP3 Quarry and Borrow Areas Management GP4 Water Quality Monitoring GP5 Hazardous Materials & Waste Management Plan GP6 Emergency Response Plan for Hazardous Materials GP7 Emissions & Dust Control GP8 Noise Control GP9 Physical Cultural Resources GP10 Vegetation Clearing GP11 Waste Management GP12 Environmental Training For Construction Workers GP13 On-site Traffic and Access Management GP14 Construction Worker Camps GP15 Worker Health Management PAGE 11 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP1 : EROSION & SEDIMENT CONTROL The purpose of this Generic Plan is to document the Good Practices in the implementation of PURPOSE measures to manage erosion and sedimentation caused as a result of the construction activities in QRWRMP. One of the main risks to water quality during construction arises from the erosion of soils and the RISKS resulting effects of sediment-laden pollutants entering the Atbara or Setit rivers, which are used by population and livestock as drinking water sources. A number of elements of the construction activities have the potential to cause erosion and generate sediment that can adversely affect the surrounding environment in terms of water quality and, to a lesser extent, dust generation. However, the implementation of a range of commonly used erosion and sediment control measures can be effective in reducing the risk of any impacts to an acceptable level. The principles that have guided the development of management measures relating to erosion and sedimentation are as follows: • Avoid erosion and therefore, generation of sediment-laden runoff, through appropriate sitting of works and minimisation of exposed areas. • Ensure clean runoff is diverted around the construction site where possible. • Treat sediment-laden runoff generated by construction activities prior to it entering the rivers. • Regularly monitor operation and effectiveness of mitigation measures. ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Design and implementation of erosion and sediment controls GP1.01 Erosion and Sediment Control Design Plans will be prepared by the concerned Contractor prior Review of to the commencement of works which will contain details of the following: documentation by i. Conceptual design of erosion and sediment controls to be implemented on-site in EMU-EM and SE-EM accordance with the requirements of this GP. ii. Water quality monitoring points in accordance with the requirements of GP5 – Water Quality Monitoring Plan (as required). GP1.02 When feasible, the erosion and sediment works will be implemented prior to the CC-EC to verify commencement of any other construction works on the site, and particularly prior to the start of implementation of the rainy season. required erosion and sediment works prior to the commencement of construction Measures to minimize erosion GP1.03 The extent of areas to be disturbed at the same time will be minimised as far as practical. Visual observation during site inspection GP1.04 Sensitive erosion areas are defined as areas within 50 m of a river stream or steep slopes - draining towards the river stream and subject to earthworks. Works in sensitive erosion areas will be minimised as much as feasible PAGE 12 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Stockpile management measures GP1.05 Where topsoil is available, temporary topsoil stockpiles will be developed in accordance with Visual observation the following: during site inspection i. Stockpiles will be constructed with smooth slopes and free draining patterns ii. Stockpiles will be located at least 50m from any river bank or major drainage line iii. Stockpiles will be located on flat land (gradient < 10%) iv. Stockpile height should not exceed 3m and batter slopes will not exceed 1.5:1 v. In windy conditions, watering of stockpiles will be carried out if excessive dust generation is evident vi. Diversion banks will be constructed uphill of stockpiles where there is a potential for run-off to erode the base of the stockpile vii. Silt fences or vegetative fences will be constructed downstream of stockpiles to control runoff where necessary GP1.06 Topsoil removed from the site will be stockpiled and saved for use in future site restoration Visual observation activities. during site inspection GP1.07 Long term spoil placement sites will be managed in accordance with the requirements of - GP3 Spoil Disposal and Management Plan Design specifications for erosion and sediment control measures GP1.08 All erosion and sediment controls will be designed to cater for a minimum of a 2 year ARI flow - event GP1.09 Control method will be proposed on a case by case basis by the CC for non-objection by the - EMU-EM prior to the start of any erosion control works. Typical methods are suggested in appendices to this GP. Maintenance and inspection of erosion and sediment controls GP1.10 All erosion and sediment controls will be visually inspected at least once a month prior and Visual monitoring during the rainy season, to ensure their ongoing effectiveness. Any required remediative or during site inspection replacement works will be undertaken within 24 hours of detection. GP1.11 If construction works are temporarily stopped in an exposed area (for longer than 4 weeks), Visual observation temporary stabilisation of exposed surfaces will be undertaken. during site inspection In-stream works GP1.12 In-stream work will be performed using methods providing acceptable sediment control. Visual monitoring during site inspection Drainage Water from tunneling works GP1.13 Wastewater generated during excavations or tunnelling works either from rain infiltration or Visual monitoring groundwater seepage will be collected in a sediment basin prior to discharge. during site inspection PAGE 13 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP1-1 GUIDE TO SELECTION OF EROSION AND SEDIMENT CONTROL DEVICES DEVICE PURPOSE CHECK DAM To be used to minimise water velocity in flow corridors and channels to reduce erosive action. Typically constructed of clean rock fill, manufactured silt fence or straw bales. CONTOUR To be used to collect and convey water from a slope to a suitable outlet DITCHES point. CULVERT To be used to prevent scour erosion at the inlet and outlet of culverts. PROTECTION Typically constructed of clean rock/rip-rap. DIVERSION To be used to divert clean runoff away from the construction site or divert DIKE runoff around sensitive areas (eroded or bare soils, steep slopes etc.). INTERCEPTOR To be used to intercept and divert clean runoff away from the construction DRAINS site or intercept and divert runoff around sensitive areas (eroded or bare soils, steep slopes etc.). PERIMETER To be used to divert clean runoff away from construction areas. BANK OR TEMPORARY BERM SEDIMENT To be used as a medium to long-term sediment trapping and storage BASIN facility. Located off-line of waterway. Must include an emergency spillway, dry and wet storage capacity and anchored riser pipe. Can be used for a large area than sediment traps. SEDIMENT To be used as a short-term sediment trapping and storage facility. Typically TRAP to be used for discharge from areas less than 2 hectares. Can be constructed by excavation alone or with embankment. SEDIMENT/SILT To be used to reduce water velocities, divert flows and direct/divert runoff FENCE to sediment traps. Should be used in areas of sheet flow. SLOPE DRAINS To be used to transport collected water down slopes during construction or prior to installation of permanent collection facilities. Typically constructed of stone, plastic or fibre mats. STRAW BALE To be used as a temporary diversion structure or as an alternative to a silt SEDIMENT fence for short periods (< 1 month). FILTER TEMPORARY To be used to temporarily stabilise exposed surfaces, including stock-piles, REVEGETATION prior to establishment of full vegetative cover, re-use of stockpiled materials or commencement of construction activities on exposed area. VEGETATED To be used as a filter between runoff discharge point and drainage BUFFER STRIP / channel. VEGETATIVE FENCE PAGE 14 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP2 : SPOIL DISPOSAL & MANAGEMENT PLAN PURPOSE The purpose of this sub-plan is to document the Good Practices in the implementation of measures to manage spoil generated by the construction of the QRWRMP. Note that this sub-plan only applies to the management of spoil generated by the construction activities component of the works. Management measures to be implemented during the spoil generation activities are addressed in other sub-plans. RISKS To be defined in accordance with the selected locations of spoil disposal areas. In general, risks refer to unstable spoil slopes, to drainage, erosion and sedimentation impacts, to dust nuisance and to impact on agricultural land if not appropriately located. ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Principles for spoil placement activities GP2.01 The spoil placement area will be developed in accordance with the following requirements: Visual observation i. Located in a dedicated area, for which a non-objection from EMU and from C-PMO during site inspection has been issued ii. Constructed with smooth slopes and free draining patterns iii. Stockpiles will be located at least 50 m from any water body iv. Located on land with a gradient of < 10% v. Height will not exceed 6m and a 2m berm will be provided at a height of approximately 3m, and batter slopes will not exceed 1.5:1 or as verified by engineering design and calculation. vi. In windy conditions, watering of stockpiles will be carried out if excessive dust generation is evident vii. Diversion banks will be constructed uphill of stockpiles where there is a potential for run-off to erode the base of the stockpile viii. Silt fences will be constructed downstream of stockpiles to control runoff Design of spoil disposal area and establishment activities GP2.02 All spoil will be placed in within the boundaries of the spoil disposal area identified in the plans CSC-EMU to issue submitted to CSC-EMU. Spoil placement in other areas will not be permitted. non-objection to spoil design plan submitted GP2.03 Prior to any placement of spoil, the detailed engineering design of the spoil disposal area will by CC be completed. The design will provide details of the staged development of the spoil disposal area and will include details on the final landform to be achieved. The design will incorporate the following principles: i. Spoil placement activities will be contained within designated boundaries ii. Spoil placement activities will be staged with progressive stabilisation iii. Natural drainage patterns will be avoided where possible iv. Where natural drainage lines are affected, they will be reinstated following completion of the spoil placement v. The final landform will be stable, adequately drained and suitable for long term use GP2.04 Prior to the placement of any spoil, a detailed Erosion and Sediment Design Plan will be EMU to review Erosion prepared for the spoil disposal area. The Erosion and Sediment Design Plan will be prepared & Sedimentation Plan in accordance with the requirements of GP1 – Erosion and Sediment Control. submitted by CC GP2.05 Prior to any placement of spoil, the boundaries of the spoil disposal area will be marked with Inspection temporary fencing or similar and compensation of possible affected assets must be completed. PAGE 15 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING GP2.06 Topsoil from the spoil disposal area will be cleared prior to the commencement of spoil Visual observation disposal activities and stored for subsequent rehabilitation activities on site. during site inspection Transport of spoil GP2.07 Vehicles transporting spoil to the spoil disposal area will abide by the management Visual observation measurements identified in GP7 – Emissions and Dust Control Plan and GP14 – On-site during site inspection Traffic and Access Management. Dust control GP2.08 Dust control measures will be implemented as identified in GP7 –Emissions and Dust Control. Visual observation during site inspection Water Quality Monitoring GP2.09 Water quality monitoring from the spoil placement area will be carried out, in accordance with Water sampling and the requirements of GP4 – Water Quality Monitoring Plan. analysis PAGE 16 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP3 : QUARRY & BORROW AREAS MANAGEMENT PURPOSE The purpose of this GP is to document the approach in the implementation of measures to manage the effects of the quarrying activities to be carried out as part of the construction phase of the QRWRMP RISKS Inappropriate management of quarrying and borrowing activities may result in detrimental impacts regarding landscape, erosion and sedimentation, public safety and environmental nuisances (noise, dust) ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Detailed Site Layout Plan GP3.01 Prior to the commencement of any construction works, detailed site layout plans will be CSC-EMU to issue prepared for each site and submitted to CSC-EMU & C-PMO for non objection. The site layout non-objection to plans will include details of the areas of disturbance for the activities and all infrastructure and design plan submitted equipment required for the activities, including erosion and sediment controls, and will be by CC based on the following principles: i. Clearing of vegetation will be minimized and the use of existing cleared areas will be maximized ii. The separation distance between dust generating activities and villages, construction camps will be maximized as far as practical to reduce noise and dust impacts iii. No components will be located within 30 m of a watercourse (as measured from the nearest bank), and all construction work within 100 m of a watercourse will be minimized iv. All infrastructure and equipment will be sited to maximize screening from public vantage points v. Quarry and borrow areas shall be located within the reservoir area whenever feasible Topsoil management and erosion and sediment control GP3.02 Topsoil from the sites will be cleared and stockpiled for use in the ultimate site rehabilitation Visual observation activities. during site inspection GP3.03 Erosion and sediment controls will be designed and implemented for the sites in accordance Visual observation with the requirements of GP1 – Erosion and Sediment Control Plan. during site inspection GP3.04 Notwithstanding the requirements of GP1 – Erosion and Sediment Control, sediment basins of Visual observation adequate size to cater for all contaminated runoff from the site will be implemented at each of during site inspection the sites as practical. Quarry face stability GP3.05 The risk of quarry face instability and failure shall be minimized using appropriate methods Visual observation such as: during site inspection i. Implementation of slope drainage measures ii. Benching of slopes iii. De-scaling of excess material The proposed measures will be detailed in the site layout plan for the quarry. PAGE 17 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Air Quality Management GP3.06 Dust suppression measures will be implemented on exposed areas during windy conditions, or Visual inspection, dust when visual inspection indicates excessive dust generation. Dust suppression measures will be monitoring implemented in accordance with the requirements of GP7 – Emissions and Dust Control Plan and will include: i. Watering of exposed surfaces and crusher operation ii. Covering of stockpiles GP3.07 All construction vehicles and equipment will be maintained in accordance with the Visual observation requirements of GP13 – Traffic and Access Plan. during site inspection GP3.08 Access to and from and within the sites will be along designated routes as required by GP14 – Visual observation On-Site Traffic and Access Management. during site inspection Waste Management GP3.09 Waste from the sites will be managed in accordance with the requirements of GP11 – Waste Visual observation Management Plan. during site inspection GP3.10 An adequate number of toilets will be provided at the sites for the use of construction personnel Visual observation (minimum of 1 toilet for every 20 people). Waste from the toilets will be treated in accordance during site inspection with the requirements of GP11 – Waste Management Plan. Noise and blasting controls GP3.11 Noise generated by activities at the sites will be managed in accordance with the requirements Noise monitoring and of GP8 – Noise Control Plan. inspections GP3.12 General construction works (excluding blasting) within a distance of 1 km from villages, Visual observation construction camps, will be carried out between 06.00 and 18.00. Construction in all other during site inspection areas may be undertaken 24 hours a day subject to suitable safety and lighting measures being implemented. GP3.13 Blasting activities within a distance of 2 km from villages, construction camps, will be carried Visual observation out between 06.00 and 18.00. Blasting in all other areas may be undertaken 24 hours a day during site inspection subject to suitable safety and lighting measures being implemented. GP3.14 All construction personnel working in the vicinity of noisy construction activities (defined as Visual observation those activities generating noise levels greater than 80 dB(A)), or any construction personnel during site inspection who requests hearing protection, will be provided with hearing protection. Training will be provided to personnel in relation to the need for hearing protection to be used. Water Quality Management GP3.15 Prior to release, effluent discharged from the crushing plant will be monitored in accordance Water sampling and with the requirements of GP4 – Water Quality Monitoring. analysis GP3.16 Effluent from the sediment basins will be regularly monitored in accordance with the Water sampling and requirements of GP4 – Water Quality Monitoring. Discharge will be immediately stopped if the analysis quality is not conforming to the requirements. Sub-camp Construction GP3.17 The design of the construction work sub-camps will be carried out in accordance with the Visual observation requirements of GP14 – Construction Worker Camps Plan during site inspection Protection of Potential Cultural Heritage GP3.18 In case of discovery of potential cultural heritage during works at the quarries or at the borrow areas, the finding procedure from GP9 – Physical Cultural Resource Plan, will be immediately implemented. PAGE 18 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP4 : WATER QUALITY MONITORING PLAN The purpose of this sub-plan is to document the principles to apply in the implementation of PURPOSE measures to monitor the effects of the construction activities on water quality. The GP will provide an effective tool to coordinate the monitoring and reporting of water quality issues associated with the construction activities Potential impacts on the Yellow River and on the aquifer water quality if strict monitoring is not RISKS implemented. ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Water quality monitoring locations GP4.01 At every discharge point from any construction site, water analysis will be performed from - samples collected 1) from the effluent discharged before it mixes with the receiving water body, 2) from a point located in the receiving water body upstream the discharge (when practicable) and 3) from a point located in the receiving water body downstream the discharge point (when practicable) Sampled points will concern: • Drainage discharge from all construction sites, • Run off from construction work camps or from outlet of sanitation facilities • Run off from waste disposal areas and construction work areas • Effluent from crushing plant • Effluent from batching Plant • Potable water supplied in the camps GP4.02 Sampling and analysis will be carried out under the responsibility of the concerned Contractors - under the supervision and the control of CSC-EMU. Parameters to Analyze (Minimum) GP4.03 The minimum parameters to monitor include: - 1) If stormwater discharge outlets at all construction sites: T°, SS, pH, DO, Grease/Oils 2) If outlet from worker camps: T°, SS, pH, DO, Grease/Oils, BOD, Faecal Coliforms 3)If outlet from workshop/vehicle maintenance area: T°, SS, pH, Grease/Oils 4) If outlet from an area where waste is temporary disposed: T°, SS, pH, Grease/Oils, COD, Faecal Coliforms 5) If outlet from a sediment basin: T°, SS, pH, discharge Any other parameter of specific interest may be proposed by CC-EC or requested by CSC- EMU to complement the minimum parameters to monitor. Water quality monitoring schedule GP4.04 Unless otherwise specified, the Construction Contractor will be requested to carry out sampling - and analysis from all sites under its responsibility on a weekly basis. This will apply to active discharges only: effluents from camps and working sites will be monitored year long while discharge related to storm water will be monitored during the rainy periods only GP4.05 Sampling points in the Yellow River will be monitored on a monthly basis by the CSC-EMU PAGE 19 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Notification of risks to humans or environment GP4.06 Based on the results of water quality monitoring, the non-compliance procedures as mentioned - in Part A of EMP will be followed. Reporting requirements GP4.07 The results of water quality monitoring will be reported monthly from CC to CSC-EMU. - Monitoring will include comparison of monitoring results against the standards criteria provided by the existing or applicable regulations. Groundwater monitoring GP4.08 The presence of any groundwater wells or tube wells downstream of temporary waste disposal - areas will be identified for monthly monitoring and reported in accordance with the above requirements. PAGE 20 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP5 : HAZARDOUS MATERIAL & WASTE MANAGEMENT PLAN PURPOSE The purpose of this GP is to outline the approach for the handling, storage, use and disposal of chemicals on site during the construction phase RISKS The level of anticipated risk is a function of the types and quantities of chemicals being stored, the sensitivity of the environment at site and the ability to prevent a spill from occurring. The possible chemicals to be stored are described in this GP. The quantities of each chemical stored on site should be limited, though the potential exists for harm to be caused to the environment if that chemical were to escape. The Good Practices for storage facilities for chemicals are also described. The ability of the chemical storage facility itself to prevent a spill or a leak is high, on account of the protection of the chemicals and the installation of a bund around the container perimeter. A number of measures shall be taken to minimise the risk of a spill causing damage to the environment. The utilisation of bunds around the chemical storage container, coupled with appropriate handling procedures is the most effective method of minimising the risk of a chemical spill escaping to the environment. ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING List of typical chemicals covered by this GP GP5.01 The following products are considered as Hazardous Materials (HazMat) and are subject, for - handling and storage, to the application of the measures described into this GP5. The products include the new material as well as their residues and waste; 9 Explosives 9 Fuel 9 Engine oil, lubricating oils 9 Hydraulic oil 9 Paints & Solvents 9 Acids 9 Coagulants, Flocculants 9 Cleaning chemicals 9 Oils in electrical transformers 9 Shotcrete and concrete admixtures 9 Chemical resin 9 Bentonite and drilling fluids Prevention of Pollution by HazMat GP5.02 Selection of safer chemical types and minimization of chemical use. Review of CC HazMat register by EMU Chemicals to be stored and use on construction site will be selected as much as possible in accordance with general good practices recommendations for environmental conservation. A list of recognized unsafe products for man and environment and possible less harmful replacement products is presented in Annex 1 to this GP. GP5.03 Storage of HazMat Visual observation during site inspection HazMat shall be stored in a storage area protected by bunding (Refer to GP5-Appendix 2 "Typical Bund Storage"). The volume of the bund is in excess of 110% of the volume of the largest single container within the bund. Diesel is stored in a 20,000 l maximum storage tank within the container. Waste oil within the container is stored in a 1,000 l tank. Bunding to be PAGE 21 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING designed and constructed as per good practice guidelines. Storage area will be protected from direct sun and rainfall by a roof. All areas concerned by the storage or the use of HazMat (Workshops, Garages & storage areas) have their stormwater drained and collected in hydrocarbon separator basins/pits before discharge. Acids, coagulants and flocculants are all stored within a separate container that may comprise the water treatment facility. A similar bund is constructed around the perimeter to contain a spill if it were to take place. Acids are also stored at batching plant sites where they may be required for buffering plant effluents before discharged to site drainage and sediment basin. Shotcrete accelerators, chemical resins and cement grouts will be stored together and will be protected from the weather. The storage location will be within a safe area of the sites, as such any spill would be easily contained and out of flooding occurrence. Waste oil and other liquid HazMat waste will be collected and will be disposed of at a safe temporary disposal area for Hazardous Waste, as described in GP11 - Waste Management. GP5.04 Registration of HazMat Status of Register provided in monthly All chemicals and waste considered as potentially Hazardous Materials will be registered in Environmental Report order to follow up type, quantities stored, quantities used or generated. Movements from storage and to waste disposal site will be registered. Information will be available from a register, open in each HazMat storage area. Register will be prepared detailing the following: i. Identification of all hazardous materials used on-site ii. Amount of each hazardous material stored on-site iii. Nature of each hazardous material (solid, liquid, gas) iv. Hazardous characteristics of each material (e.g. ignitable, corrosive, toxic, reactive) v. Main dangers posed by each material (poison; burning; danger for eyes, skin, lungs; environmental pollution) vi. Detailed emergency response procedure to be implemented based on the requirements of this sub-plan A register of fuel dispensed will be kept, along with the records of fuel deliveries to reconcile the quantities used. GP5.05 Labelling of HazMat Visual observation during site inspection Containers of hazardous chemical or waste must be labelled with: i. the words “Hazardous Waste” ii. name of the CC user or generator iii. the date of storage of chemical or initial date that waste accumulation began in the container iv. the name of the material and its physical state (solid or liquid) v. the hazard characteristics of the waste (ignitable, corrosive, toxic, reactive) main danger for user (poison, burning, dangerous for eyes, skin, lungs, etc) GP5.06 Handling Safety Procedures and Personal Protective Equipment Visual observation during site inspection Safety procedures applicable to the handling and use of HazMat will be established and become a part of the training program. Safety rules will be translated in English and Arabic languages and printed on posters to be posted on the walls of the dedicated buildings where HazMat are to be used; Personal Protective Equipment will be provided to concerned workers and their use will be enforced GP5.07 Refuelling procedures Visual observation during site inspection Fuel will be stored in a secure area in a steel tank supplied and maintained by the fuel suppliers. An adequate bund wall (110% volume) will provided for fuel and diesel areas to accommodate any spillage or overflow of these substances. Drainage water is collected and oil/petrol collected in oil trap before storm water released to site drainage and sediment basin. Fuel tanks are protected from accidental dislodgement by plant vehicles or natural causes. PAGE 22 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Tanks and tankers to be fitted with a screw fitting connection. Tanker to be equipped with auto shut off valve to prevent overfilling. Appropriate service vehicles are dedicated to the refuelling of heavy equipment and machinery. Refuelling of machineries by service vehicles outside the service areas shall be conducted with measures preventing oil spillage during refuelling including placement of buckets drip trays under refuelling nozzles. Tanker driver to be made aware of the need to take precautions to prevent harm of the environment. Issue is covered in GP12 - Environmental Training for Construction Workers. Safety procedures regarding fire and accidental spill management are posted on site. Non smoking label & posters posted in each place where fuel is handled or stored. GP5.08 Spill Response Kits Visual observation during site inspection Spill response kits will be used to contain any spills to ground that may occur as a result of Review of the Training servicing or through other means. The spill response kits will be located at the workshop where Attendance Register the servicing will take place and also at the refuelling point. All personnel involved with refuelling and with the servicing of equipment will be familiar with the use of the spill response kits and will be trained in the emergency procedures as described in GP6 Emergency Response for Hazardous Materials. GP5.09 Spill Response Procedure - Spill Response Procedure is detailed in GP6 GP5.10 Spill Prevention from Generators Visual observation during site inspection All generators will be located within a permanent bunded area (ref. GP6.03), or, in case of a temporary operation, generators will be located in a metal drip tray which size and sides heights answers requirements of Hazmat bunded storage (capacity is 110% of generator tank volume) PAGE 23 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP6-1 LIST OF SUBSTANCES TO AVOID OR WITH RESTRICTED USE ON CONSTRUCTION SITES SUBSTANCE TO AVOID OR REASON FOR RESTRICTION ALTERNATIVES RESTRICT USAGE Polychlorinated Human carcinogen, Silicones, esters, cast resin. Biphenyls(PCBs) bioaccumulative. Friable asbestos Inhalation of fibers causes lung Alternatives are readily available damage. Regarded by World for Insulation and roofing uses. Bank as hazardous substance, There are no clearly superior use to be avoided. alternatives for some uses such as brake pads for trucks. Pentachlorophenol (PCP) and Human carcinogens, eco-toxins. Glutaraldehyde, isothiazolin (or formaldehyde (biocides) May meet World Bank definition other low toxicity biocide). of hazardous waste when discarded. Leaded paints Toxic at relatively low levels, Unleaded paints. Also, water bio-accumulative. May meet based or low volatility solvent World Bank definition of formulations can reduce hazardous waste when potential health effects of oil discarded. based paints. Chlorinated solvents (e.g., May have toxic effects (vary Non-chlorinated hydrocarbon- carbon tetrachloride, depending on the compounds). based solvents, steam cleaning. trichloroethylene), Heavy metals (reverse emulsion Various adverse effects. May Polymer (non-latex) based breakers) meet World Bank definition of formulations. hazardous waste when discarded. Mercury (in pressure-measuring Neurotoxic effects. May meet Differential pressure devices and instrumentation) World Bank definition of cells/transmitters, pneumatic or hazardous waste when electric instrumentation. discarded. Lead naphthenate (lubricant) Neurotoxic effects. May meet Lead-free lubricants. World Bank definition of hazardous waste when discarded. Leaded thread compound Toxic at relatively low levels, Lead-free thread compounds bioaccumulative. May meet such as Bestolife 2000 (for World Bank definition of tubing and casing). hazardous waste when discarded. Chromate corrosion inhibitors Hexavalent form of chromium is Sulfite or organic phosphate toxic to humans and many corrosion inhibitors, especially animals. those with reduced toxicity amine function. PAGE 24 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP6-2 TYPICAL BUNDED STORAGE FOR HAZMAT PAGE 25 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP6-3 EXAMPLE OF HAZMAT CONTAINER LABEL PAGE 26 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP6 : EMERGENCY PLAN FOR HAZARDOUS MATERIAL PURPOSE The purpose of this sub-plan is to document the Good Practices in the implementation of measures in the event of spills or accidental releases of hazardous materials. Refer to GP5 for other procedures relating to the management of hazardous materials. The CC OH&S Plan must cover other emergency situations. RISKS The impacts of a spill or accidental release of a hazardous material can be severe if appropriate response measures are not in place. All emergency events have the potential to cause loss of life and environmental pollution (air, water, soil). Thus the key to successful risk management lies in: 1. Emergency planning 2. Emergency response procedures 3. Emergency training The implementation of the above approach will greatly reduce the risk of a spill occurring. If a spill does occur, then the procedures outlined in this GP will ensure that the potential impacts are minimised. ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Spill response procedures GP6.01 Summary of a General Spill Response Procedure is as follows: 1-STOP THE FLOW 9 Shut down equipment 9 Close valves and pumps 9 Plug hoses 2-REMOVE IGNITION SOURCES 9 Shut off vehicle. 9 Do not allow tiger torches, vehicles, smoking or other sources of ignition near the area. 9 Keep a fire extinguisher on hand but keep it a safe distance away from the potential ignition source ( if a fire starts you must be able to access the extinguisher). 3-CONTAIN THE SPILL 9 Dike around the spill to contain the material. 9 Spread absorbent or place a spill blanket on the spill. 9 Enlist the help of personnel on site. 9 Notify the Supervisor as soon as possible. If the supervisor is not available contact the Emergency Response Coordinator for your area. 4-NOTIFICATION 9 Personnel in charge of refuelling notifies event in the log book. 9 CC notifies EMU-EM if spill > 50 l or if it has reach surface water body 9 EMU-EM notifies C-PMO-PD if spill is > 100 l (NC level 2) 5-CLEANUP AND DISPOSAL The CC-EC will ensure that a proper cleanup and disposal method is determined and immediately implemented. 6-REPORTING The CC-EC will document the event and submit reports to EMU-EM PAGE 27 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING GP6.02 In the event of a spill of any hazardous material, work will be ceased in the immediate vicinity Visual observation and the area will be cleared of all construction personnel except those involved in the clean-up activities. The detailed emergency response procedures specific to each product contained in the Hazardous Materials Register will be implemented. GP6.03 In the event of a spill of any hazardous material, the procedures as shown in GP6.01 and the - following response hierarchy will apply and will be used in the development of the detailed emergency response procedures: i. First priority is to seek medical attention for any injured personnel ii. Second priority is to prevent further injury to personnel iii. Third priority is to prevent environmental damage iv. Fourth priority is to clean-up spill v. Fifth priority is to remediate area of spill vi. Sixth priority is to complete reporting requirements GP6.04 For spills of solid materials, emergency response procedures will be developed in accordance - with the guidelines contained in the Material Safety data Sheet (MSDS) and the following principles: i. The need to temporarily cover the spill to avoid dust generation will be considered ii. Containment barriers will be installed as required to stop the spilt material spreading iii. Suitable equipment will be used to pick-up the spilt material and place it in a suitable receptacle which conforms to the requirements of GP5 – Hazmat Plan and GP11 – Waste Management iv. Waste material to be disposed of in accordance with the requirements of GP11 – Waste Management v. Potential for contamination of the spill area to have occurred and the need for site remediation (e.g. removal of topsoil, capping of area) will be determined GP6.05 For spills of liquid materials, emergency response procedures will be developed in accordance - with the guidelines contained in the MSDS, procedures in Appendix 06-6 of GP6 and the following principles: i. Containment barriers will be installed as required to stop the spill spreading, particularly in the vicinity of watercourses or drainage channels ii. In the case of a small or shallowly spread spill, absorbent materials, such as sawdust or clean rags, will be used to soak as much of the spill as possible iii. In the case of larger or deep spills, pumping equipment will be used to collect the spilt liquid iv. Materials to buffer acidic or alkaline spills will be added as required v. Sodden absorbent materials or pumped liquid waste will be disposed of in accordance with the requirements of GP11 – Waste Management vi. Potential for contamination of the spill area to have occurred and the need for site remediation (e.g. removal of topsoil, treatment of watercourses) will be determined GP6.06 For accidental releases of gaseous materials, emergency response procedures will be - developed in accordance with the guidelines contained in the MSDS and the following principles: i. The extent of any evacuations required will be determined ii. The need for ventilation equipment to be used to disperse the release will be considered GP6.07 Spill response kits will be available in each construction sites where hazardous materials are Monthly inspection by used and will be relevant for the materials used on that site and the appropriate emergency CC-EC & EMU response procedures. Spill response kits will contain appropriate PPE and spill response equipment. The condition and availability of the spill response kits will be checked on a monthly basis. GP6.08 Portable spill response kits will be available throughout the construction area for use in the Monthly inspection by event of a release from a vehicle or other source not located at a construction site. CC-EC & EMU Emergency contact details GP6.09 At each main construction site, information on emergency response procedures, emergency Visual observation contact numbers and communication and reporting procedures to be implemented in case of during site inspection an emergency situation will be clearly displayed. PAGE 28 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Training of personnel GP6.10 At each construction site where hazardous materials are used, and there is a potential for a Review of Training spill, there will be at least two employees on-site at all times who are trained in appropriate Attendance Register emergency response procedures and communication and reporting procedures to be implemented in case of an incident Emergency incident communication processes GP6.11 In the event of an accidental release or spill of a hazardous material, the communication - processes according to Part A of EMP will be implemented Communication will initially be verbal, with written communication using the form presented in GP6-Appendix 1 as soon as practical. GP6.12 The communication processes will include the following information in relation to accidental - releases or spills: vii. Location viii. Nature of material spilt ix. Amount of material spilt x. Clean-up processes to be implemented xi. Any injuries to personnel xii. Need for emergency or external assistant xiii. Any safety/evacuation requirements to be implemented on the construction site GP6.13 Within 48 hours of the completion of a spill clean-up, a report will be submitted to DIU-ED. The - content of the required will be in line with the format contained in Appendix GP6-2. The report will be used to identify any required corrective pr preventive actions and emergency response procedures and training programs will be modified accordingly. PAGE 29 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP6-1 SPILL NOTIFICATION FORM Spill location: Spill date: Spill time: Material spilt: Estimated volume/quantity spilled (litre or kg) Description of circumstances of spill: Clean-up processes being implemented: Immediate consequences of damage caused by the spill [Note: if an injury has occurred, also complete Personnel Accident Report form in compliance with H&S Manual]: Safety/evacuation procedures to be implemented: Emergency/external assistance required: Spill reported by: (Name) (Signature) PAGE 30 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP6-2 FORMAT FOR POST SPILL CLEAN-UP REPORT Section 1. Location of spill/release Section 2. Material spilt/released Section 3. Amount of spill/release Section 4. Cause of spill/release Section 5. Short term damage to people and environment Section 6. Short term response and clean-up procedures implemented Section 7. Predicted long term damage to people and environment Section 8. Long term response required Section 9. Preventive and corrective actions required to prevent recurrence Section 10. Recommended modifications to EMP or emergency response procedures required Section 11. Verified by CC-EC Section 12. Comments/Recommendations and/or No-objection by EMU Section 13. Verification by CC-EC that recommended actions implemented PAGE 31 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP7 : DUST & EMISSIONS CONTROL PLAN The purpose of this sub-plan is to document the good practices in the implementation of measures to PURPOSE control gaseous emissions and dust resulting from the construction activities, including quarry sites, crushing plants, haulage of materials and establishment of construction work camps Dust generated from site disturbance, emissions from vehicles and equipment, emissions from RISKS burning of waste may have the potential to negatively affect air quality in the vicinity of the construction sites, which are located next to urban development. The management principles to follow to control efficiently these potential impacts to an acceptable level will be to firstly avoid the impacts, secondly to reduce the extent of the impacts and thirdly to mitigate any residual impacts. With the identified mitigation measures in place, the level of risk associated with air quality impacts is considered to be low ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Minimization of dust generation GP7.01 Exposed areas will be minimised as far as practical and progressive stabilization of disturbed Visual observation areas will be carried out where justified. during site inspection GP7.02 All vehicle movements will be confined to designated access routes and haul roads. Visual observation Dump trucks with load will be covered when travelling through urban areas and when load may during site inspection generate dust. GP7.03 Management of short term and long term materials stockpiles will be carried out in accordance Visual observation with the requirements of GP1 – Erosion and Sediment Control. during site inspection Dust suppression measures GP7.04 Watering of exposed surfaces will be implemented in the following situations: Visual observation i. During windy conditions during site inspection ii. When visual inspection indicates excessive dust generation iii. When dust generating activities are being carried out within 100m of a residential area or a construction camp iv. During period of heavy traffic use on unsealed sections of haul roads v. In response to complaints by external parties GP7.05 Water sprayers or other applicable dust suppression methods will be installed at crushing plant Visual observation and along transport belts. during site inspection Vehicle maintenance GP7.06 A maintenance program for the construction vehicle fleet will be implemented which will include Visual observation consideration of the following issues: during site inspection vi. General condition and safety of vehicles vii. Check of vehicle brakes and tyres viii. Vehicle exhaust emissions (no visible fumes for > 10 seconds) ix. Vehicle noise emissions Each construction vehicle in the fleet will be inspected at least every 6 months and a written certificate provided by a qualified mechanic as to its fitness for service (refer GP13 – Traffic and Access Management). Burning of waste GP7.07 The burning of waste materials will only be authorized, when necessary, on remote sites Visual observation (quarries, borrow areas, storage areas) and under the following conditions: during site inspection PAGE 32 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING x. Only those materials identified as Group A1 waste (combustible solid waste) in GP11 – Waste Management will be burnt. xi. Burning will only be undertaken in the presence of a trained fire protection officer. xii. Prior to any burning, the CC-EC will be notified. xiii. Burning will not be undertaken during severe wind conditions xiv. Appropriate fire protection equipment will be available on-site during the burn. xv. Burning will be undertaken at a safe distance from vegetated areas. xvi. Burning will not be undertaken within 5 km of a village. Following completion of the burn, the trained fire protection officer will inspect and certify that the fire has been extinguished Odor control GP7.08 Measures to reduce odour from the temporary waste disposal area next to the canteen Observation during facilities will be implemented in accordance with the requirements of GP11 – Waste site inspection Management Plan. PAGE 33 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP8 : NOISE CONTROL PLAN The purpose of this sub-plan is to document the principles in the implementation of measures to PURPOSE minimise and manage the impacts of noise generated by the construction activities A number of elements of the construction activities have the potential to cause noise impacts. The RISKS health effects of noise range from annoyance to hearing impairment and can impact both construction workers and nearby villagers. The management measures in this GP have been developed to minimise potential health impacts by incorporating the following principles: 1. Minimisation of noise generation at source 2. Reduction of the transmission of noise from the source to sensitive receivers including nearby residential zones and construction workers on the construction site 3. Control of time periods when noise generating activities occur 4. Provide response mechanism for noise-related complaints With the mitigation measures described in this sub-plan in place, the risk of impacts form exposure to noise is expected to be low ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Minimize noise generation at source GP8.01 For any particular construction activity, the quietest vehicles and/or equipment, which are Visual observation suitable for use for the construction activity, will be selected for use. during site inspection GP8.02 All equipment and vehicles will be maintained in good mechanical condition and will be fitted Visual observation with appropriate silencers, mufflers or acoustic covers. during site inspection GP8.03 Construction equipment and vehicles will be subject to regular inspections to check noise Ad Hoc control by CC- emissions and noise control equipment in accordance with the requirements of GP13 – Traffic EC and Access Plan Reduce transmission of noise to receivers GP8.04 Stationary noise sources will be sited as far as possible from urban areas and construction Visual observation camps. during site inspection GP8.05 Where possible, topographic features or existing buildings on site will be used to provide Visual observation shielding between stationary noise sources and urban areas or construction camps. during site inspection GP8.06 All construction personnel working in the vicinity of noisy construction activities (defined as Visual observation those activities generating noise levels greater than 80 dB(A)), or any construction personnel during site inspection who requests hearing protection, will be provided with hearing protection. Training will be Check Training provided to personnel in relation to the need for hearing protection to be used. Attendance Register GP8.07 No construction worker will be exposed to noise levels of 80 dB(A) or above for more than 8 Ad hoc control using a hours within any 24 hour period. noise recorder by the CC-EC Construction hours GP8.08 General construction works within a distance of 1 km from residential zones or construction Visual observation camps, will be carried out between 06.00 and 18.00. Construction in all other areas may be during site inspection undertaken 24 hours a day subject to administrative authorization and suitable safety and lighting measures being implemented. PAGE 34 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING GP8.09 The movement of vehicles to and from the construction site and within the construction site will Visual observation only take place subject to the restrictions identified in SP7. during site inspection Response to complaints about noise generation GP8.10 If complaints are received about excessive noise levels in the vicinity of residential zones, the CC-EC and/or his staff will consult with the complainant to identify appropriate additional mitigation measures (e.g. additional shielding, change of equipment type, restriction of construction hours in particular area) to be implemented. The form contained in Appendix GP8- 01 shall be used to record the outcomes of this process. GP8.11 Monthly Environmental Report will be prepared identifying any complaints received in relation - to construction noise and documenting the actions that were undertaken to resolve such complaints. PAGE 35 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP8-1 RECORD OF MANAGEMENT OF NOISE RELATED TO COMMUNITY COMPLAINTS DATE OF MEETING RESPONSIBLE FROM CC NAME OF COMPLAINANT LOCATION OF RESIDENCE NATURE OF COMPLAINT (NOISE SOURCE, DURATION, TYPE ETC.) ACTIONS PROPOSED TO RESOLVE COMPLAINT CC-EC/ ENVIRONMENTAL FIELD INSPECTORS VERIFY ACTIONS IMPLEMENTED (DATE AND SIGNATURE) DETAILS OF FOLLOW-UP CONSULTATION WITH COMPLAINANT IF REQUIRED PAGE 36 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP9 : PHYSICAL CULTURAL RESOURCES PLAN The purpose of this GP is to document the Good practice to managing any physical cultural PURPOSE resources that are encountered during the construction works The sub-plan specifies measures that will be implemented if sites of potential significance are RISKS encountered during the works. These measures include training of personnel, communication and reporting mechanisms to CSC-EMU to allow direction on appropriate management measures to be implemented. It is considered that the risk to discover any valuable resource except in sites already identified is reasonably low in the QRWRMP according to existing information available. ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Training of construction workers GP9.01 Construction workers will be trained to identify potential sites or items of cultural significance. Review Training Construction workers will be trained in the appropriate reporting and communication Attendance Register procedures to be followed if they identify any potential items and the importance of implementing these procedures. Steps to be implemented if sites identified GP9.02 The following steps will be implemented to protect any previously unidentified site/item of - potential cultural significance: i. If a construction worker identifies a potential site/item of cultural significance, he/she will immediately notify the construction supervisor on-site. ii. The construction supervisor will determine whether the site/item has potential significance iii. If the site/item is considered to have potential significance, the construction supervisor will immediately cease work within a 50 m distance from site boundaries iv. The construction supervisor will immediately notify the CC-EC v. The CC-EC will follow communication process and inform EMU-EM who will inform CSC-PM and C-PMO. The reporting form contained in Appendix GP9-1 will be completed within 24 hours of a potential site being identified. GP9.03 Temporary fencing or similar will be used to mark a 50m radius from the site. Inspection Directions from DIU GP9.04 No work will be carried out within a 50m radius of a potential site until directed by EMU. Visual observation during site inspection GP9.05 Notification to CSC-EMU will be made 15 days prior to intended construction in the vicinity of Inspection identified objects or sites. Any directions or requirements from CSC-EMU in relation to measures to protect the site will be recorded and communicated by the CC-EC and its field inspectors to the construction workforce. All such requirements will be strictly adhered to. PAGE 37 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP9-1 POTENTIAL SITE NOTIFICATION FORM PART 1 – SITE IDENTIFICATION Date of Site Identification Description of Site Location (include name of construction area) Site Type General Description of Site Site identified by Time and date of ceasing work Time and date of notifying CC-EC Time and date of notifying EMU-EM Form completed by Form verified by PART 2: DIRECTION FROM EMU Date of receipt of EMU requirements Summary of requirements from EMU (refer to attachment if required) Date of training of workers Verification of implementation of EMU requirements (Signature & date) PAGE 38 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP10 : VEGETATION CLEARING MANAGEMENT PLAN The purpose of this sub-plan is to document the approach to vegetation clearing activities undertaken PURPOSE as part of the construction works. The impacts of the vegetation clearing activities will be minimised by ensuring that areas to be RISKS cleared are identified, appropriate clearing method are used and that protective measures are implemented in the vicinity of sensitive areas as village zones. The level of risk associated with clearing activities is expected to be low due to the limited areas to clear along the river streams ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Identification of vegetation to be cleared GP10.01 A plan will be prepared which will include: Review Training i. Mapped boundaries of vegetation to be cleared. Attendance Register ii. Any areas of sensitive vegetation for which mitigation measures may be required iii. Any required temporary timber storage sites for placing prior to its removal from site. GP10.02 No clearing of vegetation outside of those areas identified in the plans will take place GP10.03 No construction works, storage of materials/equipment or access by construction personnel will be permitted in ‘sensitive vegetation’ areas not affected by flooding and not intended for clearing. Clearing methods GP10.04 Vegetation clearing will be undertaken by a combination of manual and mechanical methods in Inspection order to maximize the volume of wood to be collected for construction or firewood use. GP10.05 Burning will not be used as a clearing method and burning of waste vegetation will only take Inspection place in accordance with the requirements of GP7 Dust and Emissions Control. Storage and disposal of timber products GP10.06 Any required temporary timber storage sites will be designed to ensure that they are stable and Visual observation protected from the risk of fire. during site inspection GP10.07 Timber stored will not be removed from storage area until EMU-EM instruction. GP10.08 Timber products that are not to be removed from site will be disposed for burning in Inspection accordance with the requirements of GP7 Dust and Emissions Control. PAGE 39 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP11 : WASTE MANAGEMENT PLAN The purpose of this sub-plan is to document the Good Practices in the implementation of measures PURPOSE for the management of wastes produced during the QRWRMP construction activities A number of elements of the construction activities have the potential to generate waste that can RISKS have adverse effects on the surrounding environment in terms of water quality, soil quality, air quality (odour and pollutants) and human health ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING General requirement GP11.01 The key waste management principle that is applied in this GP is based on the following - hierarchy of waste management approaches (from Highest Priority to Lowest Priority): 1. Avoid waste generation 2. Minimise waste generation 3. Reuse as much waste as practical 4. Recycle as much waste as practical 5. Dispose of any remaining waste in an environmentally suitable manner Implementation of this hierarchy, together with the use of appropriate collection, segregation, storage, disposal and education/training methods will ensure an environmentally safe management of waste GP11.02 Non-Hazardous waste from worker camps will be collected on a daily basis and transported to Visual observation a Landfill during site inspection GP11.03 Non-Hazardous waste from construction activities will be segregated and temporarily stored in Visual observation dedicated areas on the construction sites during site inspection GP11.04 Hazardous waste will be temporarily stored in dedicated storages areas developed in Visual observation compliance with specifications detailed in GP5 – Hazardous Materials & Waste Management during site inspection Location and design of waste facilities GP11.05 Prior to the commencement of any construction works, a hazardous waste temporary storage Review of documents area plan will be prepared by the CC. The plan will contain details on: by EMU-EM i. Site boundaries and layout ii. Construction details including bunding and provision of smooth, hard, non-porous floors with no cracks or spaces that might allow spilled wastes to fall into inaccessible areas iii. Emergency protection equipment to be provided Plan will be prepared by concerned contractor and submitted to EMU-EM for review. GP11.06 Similarly a temporary storage plan for domestic waste produced by the worker camps and the Review of documents canteen facilities will be prepared. by EMU-EM Plan will be prepared by concerned contractor and submitted to EMU-EM for review. Implementation of waste management hierarchy GP11.07 All construction activities will be undertaken in a manner that minimises the generation of - waste as far as practical. This concept will be incorporated into all construction site planning and activities. PAGE 40 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING GP11.08 Opportunities to maximise the reuse and recycling of waste products will be identified and - maximised as part of all construction activities. Waste separation and provision of facilities GP11.09 Solid waste will be separated into the waste streams identified in Appendix GP11.1. Visual observation during site inspection GP11.10 Workers will be trained in the requirements for waste separation as documented in GP12 – Check Training Environmental Training for Construction Workers. Attendance Register GP11.11 At each construction site, the following facilities will be provided: Visual observation during site inspection i. Bin(s) for general domestic litter and rubbish ii. Storage area for combustible solid waste iii. Storage area for non-combustible, non-putrescible solid waste iv. Storage area for non-combustible, putrescible solid waste v. Temporary storage area for hazardous wastes The size of the storage will be calculated based on the nature of construction activities and the number of construction workers. All storage areas will be constructed with impermeable bases and bunding to divert runoff from the storage area. Where feasible, bins or waste receptacle will be used in preference to storage areas on the ground. The storage areas will be protected from the weather to minimise ingress of rain during the rainy season. At each camp, adequate number of rubbish bins will be provided at locations suitable for waste collection. Provision of waste collection curb, where waste from different areas is temporary stored from collection will be made as practicable. All storage areas/receptacles will be clearly marked in English and Arabic. Schedule of waste removal GP11.12 A schedule of waste removal for Group A2, Group A3 and Group B1 waste from construction Visual observation sites will be developed. The schedule will be based on the likely amount of waste generation at during site inspection each construction site. This schedule will include daily removal of Group A3 wastes from construction camps. Group A1 Waste GP11.13 Only Group A1 – Combustible Solid Waste, as defined in Appendix 11.1, produced in quarry Visual observation and borrow areas sites may be burnt in compliance with GP7 during site inspection If the conditions for burning contained in GP7 – Emissions and Dust Control cannot be met, the waste will be treated as Group A2 – Non-combustible, Non-Putrescible Waste. Group A2 and Group A3 wastes GP11.14 Group A2 and Group A3 waste will be removed from construction sites and transferred to the Visual observation nearest waste landfill. during site inspection GP11.15 The form contained in Appendix GP11.-2 will be used to record the amount of Group A2 and Check related Waste A3 waste removed from construction sites. Register- Group B1 waste GP11.16 The composition of Group B1 waste at each construction site will be recorded prior to its Check related Waste transfer to the Hazardous Waste Disposal using the form contained in Appendix SP11-4. Register- GP11.17 Group B1 waste will be transported in covered vehicles to dedicated HazMat Storage Areas. Visual observation No HazMat will be removed from these areas before appropriate decision on final disposal is during site inspection taken by the CSC-EMU and the C-PMO. PAGE 41 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING GP11.18 The form contained in Appendix GP11.3 will be used to record all hazardous waste removed Check related Waste from the temporary HazMat storages on sites. Register- GP11.19 The following requirements will be met for hazardous waste disposed in the Hazmat Storage Visual observation areas: during site inspection i. There will be no sources of ignition permitted within 50m of the perimeter of the storage area (such as heat, sparks, flames). ii. Within the storage area, liquid wastes will be stored in leak proof, securely sealed containers. iii. Solid wastes will be stored in covered receptacles or bins or in plastic bags. iv. Wastes will be separated to allow easier disposal, e.g., keep oils and solvents separate. v. Storage containers will be checked periodically for signs of leakage or damage. vi. Containers will be adequately and legibly labelled “Hazardous” (also see GP5). vii. All waste chemical movements to the storage site will be recorded on the Hazardous Waste Register (refer Appendix GP11.3) in order to track and reconcile quantities (refer GP5 –Hazardous Material Management Plan. viii. All waste chemicals stored in the storage area will be accompanied by their material safety data sheet (MSDS) where one exists ix. Unused commercial products containing a hazardous substance will not be discarded and all reasonable effort should be made to use them until their container is completely empty; x. Spill kits will be located at the storage location in case of a spill. Refer to GP6: Emergency Management Sub-Plan GP11.20 During the construction works, and in close cooperation with EMU-EM and C-PMO, - investigations will be undertaken to identify the most suitable hazardous waste treatment facility for disposal and treatment of hazardous waste generated by the project. GP11.21 Prior to a decision on the hazardous waste treatment facility to be used by the project, no Visual observation hazardous waste will be transported off the sites. during site inspection Check Registers Medical waste GP11.22 Medical waste produced on site by the first aid station will be disposed in plastic bags of a Visual observation specific colour and will be delivered on a weekly basis to the nearest hospital equipped with an during site inspection incinerator for the incineration of hospital waste. Training of workers GP11.23 All workers responsible for handling hazardous waste will receive appropriate training in Check Training accordance with GP12 – Environmental Training for Construction Workers Attendance Register Wastewater treatment GP11.24 Waste water from construction camps (black and grey waters) will be treated on site - GP11.25 If treated on site, a sanitation Plan will be prepared by the concerned CC, reviewed by EMU- - EM and submitted to C-PMO for non-objection. The treatment proposed will be able to achieve compliance with the treated effluent standards applicable GP11.26 Pit latrine toilets (1 for every maximum of 20 workers) will be installed at each construction site in accordance with the requirements contained in GP14 – Construction Worker Camps. GP11.27 Monitoring of the effluent quality from the wastewater treatment systems developed on-site will be undertaken in accordance with the requirements of GP4 – Water Quality Monitoring PAGE 42 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP11-1 WASTE SEGREGATION GUIDELINES A : NON-HAZARDOUS WASTE B : HAZARDOUS WASTE GROUP A1: Combustible Solid Waste GROUP B1: Hazardous Waste Cardboard Acids and acid waste Pallets Acid and caustic cleaners Clean paper Alkalis (caustics) and caustic waste Wood waste Batteries Catalysts and waste GROUP A2: Non-combustible, Chemicals Non-Putrescible Waste Empty containers which held: chemicals, paint, oil, Metal solvents Glass Fuel drums, oil drums, and cans Machinery parts First aid and clinical waste Rubber waste Filters Tires Hydraulic fluid Concrete Insulation material Other construction debris Medical Waste Paint and paint waste Group A3: Non-Combustible, Putrescible Plastic Waste Oily rags Food waste Solvents Vegetation unable to be burnt (i.e. if too wet) Spill clean-up waste Other biological waste (e.g. pests removed Used oil from pest traps) Waste from grease traps Waste from septic tanks Other waste when its composition is unknown Note: When any waste in this column (A) gets Note: Waste in this column (B) is to be labelled mixed with waste from the other column (B), HAZARDOUS and by name, source and components all of the waste is to be classified as hazardous waste. PAGE 43 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP11-2 RECORD OF WASTE REMOVAL FROM CONSTRUCTION SITES CONSTRUCTION SITE DATE 1 WASTE TRANSFER NUMBER TRANSFER TO RESPONSIBILITY FOR TRANSFER DESCRIPTION OF WASTE TYPES GROUP A2 WASTE – NON-COMBUSTIBLE, NON-PUTRESCIBLE WASTE WASTE TYPE KILOGRAMS Glass Machinery parts Rubber waste Scrap metal Tires Concrete Other construction debris Other Group A2 waste TOTAL GROUP A2 WASTE GROUP A3 WASTE – NON-COMBUSTIBLE, PUTRESCIBLE WASTE WASTE TYPE KILOGRAMS Food waste Vegetation unable to be burnt Other biological waste Other Group A3 waste TOTAL GROUP A3 WASTE TOTAL GROUP A2 + A3 WASTE PAGE 44 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP11-3 RECORD OF HAZARDOUS WASTE REMOVAL FROM CONSTRUCTION SITES CONSTRUCTION SITE DATE 1 WASTE TRANSFER NUMBER TRANSFER TO RESPONSIBILITY FOR TRANSFER DESCRIPTION OF WASTE TYPES GROUP B1 WASTE – HAZARDOUS WASTE WASTE TYPE KILOGRAMS Acids and acid waste Acid and caustic cleaners Alkalis (caustics) and caustic waste Batteries Catalysts and waste Chemicals Empty containers which held: chemicals, paint, oil, solvents Fuel drums, oil drums, and cans Medical and clinical waste Filters Hydraulic fluid Insulation material Paint and paint waste Plastic Oily rags Solvents Spill clean-up waste Used oil Waste from grease traps Other waste when its composition is unknown Other hazardous waste TOTAL GROUP B1 WASTE PAGE 45 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP12 : ENVIRONMENTAL TRAINING FOR WORKERS PURPOSE The purpose of this GP is to document the required approach in the implementation of a training program for construction workers in relation to environmental issues RISK & The implementation of the EMP will require the involvement of all construction personnel. Personnel at all levels have a degree of responsibility in relation to environmental issues RATIONALE and the implementation of measures contained in the EMP. As such, training for all personnel in relation to environmental issues and the implementation of the EMP will be critical to ensuring the effectiveness of the EMP. The objective of the training program is to raise the awareness and enhance the skills of the construction workforce in relation to the three following issues: • General environmental awareness, including rules and regulations to be followed on the construction site and in the construction camps • General health and safety awareness, • Job-specific training for workers with responsibility for activities that could have adverse impacts on the environment or humans Action Plan NO. DESCRIPTION OF MEASURES MONITORING GP12.01 All workers will complete the training programs contained in Appendices GP13.1 and GP13.2 Monthly checking of training registers GP12.02 Participants in job-specific training will be identified as required in Appendix GP13.3 on the - basis of their skills and capacity to undertake the training. GP12.03 All training sessions will be conducted in English or Arabic. All written materials will be provided - in English and Arabic languages, and other languages as appropriate (depending the nationality of the Contractors). GP12.04 Depending on the subject, training sessions can be organized in different ways as formal - session or tool box sessions GP12.05 A training register will be maintained that will contain details of the following: - i. Name of training session ii. Date of training session iii. List of attendees and signatures iv. Name of trainer A sample format for the training register is contained in Appendix GP13.4. GP12.06 At completion of each relevant training course, each participant will be issued with a certificate - of successful completion. A copy of the certificate will also be placed on each participant’s employment file. GP12.07 During audits of the construction areas, workers knowledge of environmental, health and safety issues will be examined. GP12.08 Workers who have undergone job-specific training will be examined every 6 months in relation Monthly checking of to their knowledge and skills and subject to re-training as required. Records of examination training registers results and any re-training will be kept as part of the training register (refer Appendix SP13-4). GP12.09 All new employees will complete relevant training (in accordance with Appendices GP13.1, Control during site GP13.2 and GP13.3) prior to commencement of any activities on the construction site. inspections GP12.10 The key messages from the training sessions will be produced in poster and leaflet form in Visual observation English and Arabic languages. Posters will be displayed prominently in construction work during site inspection PAGE 46 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING camps and construction areas and leaflets will be distributed to staff on a regular basis. PAGE 47 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP12-1 MODULE 1: GENERAL ENVIRONMENTAL AWARENESS TRAINING FOR CONSTRUCTION WORKERS BASELINE LIST OF TRAINING TOPICS  Introduction to environmental impacts related to construction activities and the need to protect the environment  Areas/issues of particular environmental sensitivity in or in the vicinity of the construction area  Description of EMP and obligations/responsibilities of individual workers in terms of general environmental protection  Roles and responsibilities of CC-EC, his field staff and construction supervisors, and lines of reporting in relation to environmental issues  Waste management practices in camps and on construction sites  Pollution control measures on construction sites  Cultural property issues (procedures to be followed is any previously unidentified sites are located)  Potential relational issues between workers living in the camp and the neighbouring communities  Penalties for violation of rules and regulations PAGE 48 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP12-2 MODULE 2: GENERAL OCCUPATIONAL HEALTH & SAFETY AWARENESS TRAINING BASELINE LIST OF TRAINING TOPICS  Introduction to health and safety issues in construction camps and on construction sites including main areas of risk to workers and others  Education on basic hygiene practices to minimise spread of typical diseases  Prohibition of drugs and alcohol on construction sites  Procedures for seeking medical assistance in emergency or non-emergency situations  OH&S awareness including basic procedures for : 9 Traffic and road safety 9 Electricity hazards 9 Explosives hazards (if justified) 9 Fire and fire protection 9 Chemical use 9 Hazardous materials management  Use of Personal Protection Equipment (PPE) and processes for obtaining relevant PPE  Penalties for violation of rules and regulations PAGE 49 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP12-3 SCHEDULE OF JOB-SPECIFIC TRAINING REQUIREMENTS ESTIMATE ISSUES TRAINING TOPICS PARTICIPANTS D DURATION Emergency 9 Knowledge of hazardous materials located on-site 2 personnel at each 1 day Response 9 Potential for spills and releases major construction site Teams 9 Environmental and human effects of spills/releases 9 Emergency response procedures including priorities of responses 9 Location and use of spill response equipment 9 Communication and reporting procedures Fire protection 9 Causes of fire 1 Fire Protection 1 day 9 Fire prevention measures Officer for each 50 9 Fire fighting equipment use and maintenance workers (extinguishers) 9 Fire fighting procedures and emergency response procedures 9 Emergency assistance contacts 9 Methods to train other workers in fire protection methods First Aid 9 First Aid training in accordance with international At least one First Aid 1 day accreditation Officer for each construction site and camp Hazardous 9 Correct handling and storage procedures including All workers responsible ½ day materials & procedures in storage areas in terms of registering of for handling or waste materials transporting hazardous management 9 Correct use procedures including refuelling procedures materials & waste and ensuring effective equipment operation 9 Management of used storage containers 9 Hazardous waste storage procedures 9 Non-hazardous waste management 9 Medical issues associated with exposure to substances 9 Emergency response procedures Traffic safety • Traffic rules and regulations All drivers of ½ day • Safe driving practices construction vehicles • Vehicle maintenance procedures or equipment. • Refueling procedures • Emergency response procedures EMP • Principles of ISO 14001 and EMP content; All environmental staff 2 days. Implementation • EMP obligations for CC; from SE and CC • Roles and responsibility of staff; • Monitoring of construction sites; • Reporting and communication. PAGE 50 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP12-4 SAMPLE TRAINING REGISTER FORMS TRAINING ATTENDANCE REGISTER FORM TRAINING COURSE NAME TRAINING COURSE DATE TRAINING INSTRUCTOR LOCATION ATTENDEES Name Signature Course Opening Course Closing 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Signature of Training Instructor PAGE 51 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL TRAINING REVIEW REGISTER FORM FOR JOB-SPECIFIC TRAINING SKILLS JOB-SPECIFIC TRAINING COMPONENT DATE OF TRAINING REVIEW TRAINING REVIEWER PERSONNEL DATE OF LAST RESULTS OF REVIEW NAME RECOMMENDED REVIEW SATISFACTORY UNSATISFACTORY ACTION* 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Signature of Training Reviewer Recommended Action Key NA: No action required UT: Refresher training course required RT: Re-training required RR: Relieve personnel of responsibility PAGE 52 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP13 : ON-SITE TRAFFIC & ACCESS MANAGEMENT PLAN PURPOSE The purpose of this GP is to document the good practices in the implementation of measures to manage traffic and access on the construction site during the construction works RISKS Public safety and environmental nuisances (noise, dust) if good practices are not efficiently implemented ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Road signage and speed limits GP13.01 All roads within the construction area will be signposted with the following information Visual observation compliant with the Sudanese road signs: during site inspection i. Speed limit ii. Any applicable load limit iii. Identification of road iv. Direction to special construction areas (refuelling post, HazMat storage, Offices, etc.) Maintenance of construction vehicles GP13.02 A maintenance program for the construction vehicle fleet will be implemented which will include Checking of consideration of the following issues: Maintenance forms i. General condition and safety of vehicles ii. Check of vehicle brakes and tyres iii. Vehicle exhaust emissions iv. Vehicle noise emissions and noise control measures Each construction vehicle in the fleet will be inspected at least every 6 months for its fitness for service. Inspection will be performed by an appointed garage and a form as presented in Appendix GP14.1 will be filled. Random check of vehicles to be conducted on monthly basis by the CC-EC staff. Traffic movements on internal roads GP13.03 Visual inspection of traffic movements within the construction area will be carried out. If traffic Visual observation congestion is found to be occurring, appropriate management measures will be implemented. during site inspection GP13.04 Movement of construction vehicles and traffic on-site will be confined to the designated access Visual observation road network. No movement of vehicles outside the designated access road network will be during site inspection permitted. Parking areas GP13.05 Off-road parking areas will be provided at each construction site. Parking areas will be marked Visual observation with temporary fencing or the like. Parking areas will be located within the designated during site inspection construction area. No on-road parking will be permitted. PAGE 53 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Traffic movements on public roads GP13.06 Prior to the movement of special loads on public roads, including hazardous materials or large - items of construction equipment, the CC-EC will be notified. All reasonable and practical measures required by the CC-EC, in conjunction with the traffic police will be implemented to ensure that the risk of harm to the community and environment is minimised during transportation of special loads. GP13.07 Construction activities on public and internal roads should be marked by safety fencing and Visual observation appropriate warning signs in English and Arabic. during site inspection GP13.08 Wheel washing facility will be provided for trucks leaving site or facilities located adjacent to Visual observation paved public road. during site inspection Site access GP13.09 Access to the construction site will be controlled by a closed gate 24h/day, with security staff Visual observation and registration of any movement of vehicle or persons. during site inspection Training GP13.10 Traffic safety issues and site access and traffic regulations will be included in the training plan - for construction personnel (refer GP13 – Environmental Training for Workers). PAGE 54 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP13-1 SAMPLE CONSTRUCTION VEHICLE MAINTENANCE FORM DATE VEHICLE REGISTRATION TYPE OF VEHICLE MECHANIC DATE OF LAST INSPECTION NEXT SCHEDULED INSPECTION (6 MONTHS FROM TODAY) ACTION REQUIRED (details ISSUE SATISFACTORY UNSATISFACTORY below) General condition of vehicle Brakes test Tyre wear and pressure test Vehicle exhaust visible less than 10 seconds Vehicle muffler, silencer or acoustic cover fitted and in operational condition Vehicle noise emissions not excessive Lights in working order Comments/Recommendations Vehicle certified fit for service? YES NO PAGE 55 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP14 : CONSTRUCTION WORKER CAMPS MANAGEMENT The purpose of this sub-plan is to document the good practices in the implementation of measures to PURPOSE manage the development of those construction work camps being undertaken as part of the project Issues associated with the development of the camps and sub-camps relate both to the potential RISKS environmental impacts of the camps, and the need to suitably plan camps to maximise worker health, safety and amenity ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Use of camps GP14.01 All workers who are not permanent resident in nearby villages will be accommodated in a worker camp to be implemented within the project area. Construction work camp design principles GP14.02 The sewage treatment plant for the future Operator Village will be designed with adequate - capacity to treat wastewater from the ultimate operational workforce; It is recommended to consider, during the main construction works, that waste from the septic tank systems that need emptying at all the worker camp sites will be transferred to the STP at the Operator Village for treatment. GP14.03 i. All construction work camps will include the following components ii. Residential accommodation for workers comprising one bed and 0.5m3 of personal storage space per person iii. Canteen and kitchen iv. Recreational area v. Medical facilities vi. Potable water supply vii. Appropriate sanitation facilities viii. Waste collection and management facilities (refer GP11 – Waste Management Plan) ix. Suitable lighting for security and amenity x. Internal surfaced roads of at least 4m width xi. Emergency protection equipment including fire protection (extinguishers and fire hydrants) Temporary erosion and sediment controls during construction and efficient stormwater drainage Preparation of site layout plans GP14.04 A camp site layout plan will be prepared prior to the commencement of construction of the Review of construction camp. The plan will include information on the location of the components and will documentation be based on the following principles: i. The use of an area with potential quietness ii. Provision of suitable drainage, water supply and sewage disposal methods iii. No components will be located within 10 m of a watercourse, and all construction work within 30m of a watercourse will be minimised iv. Residential and medical facilities shall be located a suitable distance from waste management and sanitary facilities v. Buildings shall be sited within the project zone to maximise screening of the camps from public vantage points Disease control, health and safety issues GP14.05 Buildings in worker camps and offices will be made mosquito-proof as far as possible through Visual observation PAGE 56 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING ensuring adequate sealing of doors and windows, provision of suitable ventilation and as during site inspection necessary, installing mosquito-nets. GP14.06 Medical, sanitary and disease prevention measures for each camp will be implemented in Review of accordance with the requirements of GP16 – Project Staff Health Plan. documentation GP14.07 Waste generated at the construction camp will be managed in accordance with the Visual observation requirements of GP11 – Waste Management Plan. during site inspection GP14.08 The camp sites and surrounds will be kept in a tidy and clean manner. Inspections of the camp Visual observation sites will be carried out weekly and the results recorded on the form contained in Appendix during site inspection GP15.1 GP14.09 Construction workers will be trained in health and safety issues relating to the camps in Training attendance accordance with the requirements of GP13 – Environmental Training for Construction Workers register checking Camp access GP14.10 Access to construction camps will be controlled by a gate 24h/day if access is not located Inspection of site within the premises of the construction site. In general, access to the camps will be restricted to access register construction workers and visitors with an authorised access pass. The worker camp will be fenced to avoid any intrusion from outside the construction area. Potable water supply GP14.11 Water supplied on site will be monitored on a weekly basis for the detection of faecal coliform Data provided in in compliance with GP4 – Water Quality Monitoring Monthly Environmental Report Camp rules and regulations GP14.12 A set of rules and regulations applicable to camps and sub-camps will be developed. The rules Visual observation and regulations will include (but not limited to): during site inspection i. Prohibitions on possessing firearms and fishing equipment ii. Access restrictions for non-construction personnel iii. Housecleaning and waste management requirements iv. Prohibitions v. Measures of hygiene for preserving health and the dissemination of vectors and transmissible diseases GP14.13 Residents of the camps shall be provided with written information and training on camp rules Visual observation and regulations. Camp rules and regulations will be prominently displayed in the camp areas. during site inspection PAGE 57 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL APPENDIX GP14-1 RECORD OF CONSTRUCTION CAMP AND SUB-CAMP SITE INSPECTION DATE CAMP/SUB-CAMP NAME INSPECTOR DATE OF LAST INSPECTION NEXT SCHEDULED INSPECTION (1 WEEK FROM TODAY) SATISFACTORY ISSUE ACTION REQUIRED (details below) YES NO General cleanliness – residential accommodation areas General cleanliness – canteen / kitchen General cleanliness – medical facilities General cleanliness – showers and toilets General cleanliness – other internal areas General cleanliness - external Condition of mosquito protection measures Waste management practices Sanitation System condition Potable water supply condition Display of camp rules Pest management measures in place Comments/Recommendations PAGE 58 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL GP15 : WORKER HEALTH MANAGEMENT The purpose of this sub-plan is to document the good practices in the implementation of measures PURPOSE required to manage the potential for workers to be affected by diseases associated with the camp living conditions during the execution of the works. This Generic Plan complements some health issues which may not be covered by the Occupational Health and Safety Plan (OH&S Plan) Burst of epidemic diseases or infections if some basic hygiene and health measures are not RISKS implemented ACTION PLAN NO. DESCRIPTION OF MEASURES MONITORING Housekeeping program for camps and construction sites GP15.01 Housekeeping staff awareness training, posters in the toilets and at the entrance of each building regarding personal hygiene measures and particularly housekeeping in sanitary facilities (showers, toilets) Catering GP15.02 Canteen staff awareness training regarding the transportation, handling, storage and preparation of food, with consequences on infections and health. GP15.03 Food handlers will receive specialized training including i. Personal hygiene ii. Kitchen cleaning and disinfection iii. Food storage and preparation iv. Garbage collection, segregation and disposal GP15.04 All personnel recruited as canteen staff will be subject to pre-employment salmonella stool culture test. Only personnel with negative test will be appointed for a post with direct contact with food GP15.05 All canteen staff will wear PPE including aprons, hair nets, disposable gloves GP15.06 Kitchen and cafeteria will be inspected monthly Water Supply GP15.07 The drinkable water to be supplied will comply with the WHO guidelines for drinking water; i. Storage will be provided either centrally or at the level of each camp in order to substitute possible cut off in the pumping system ii. A comprehensive chemical and bacteriological of the raw water will be performed before supply, in order to ensure suitability of the source; Should the water distributed in the camps being polluted by coliform, a chlorination system will be implemented on the networks. GP15.08 Chlorine level and faecal coliform in the water supply network will be monitored weekly in the camp in accordance with GP4 – Water Quality Monitoring PAGE 59 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL NO. DESCRIPTION OF MEASURES MONITORING Medical Facilities GP15.09 A First Aid Station will be implemented on site, staffed with emergency trained nurse 24h a day. Station will be equipped with the minimum equipment required in case of accident on site and to provide first treatment to patient before transportation to Emergency Unit Facility: oxygen bottles, basic airway management devices, stretchers and splints. The First Aid Station will provide routine assistance to workers for health incidents occurring on the construction site. Staff and equipment will be sized in accordance with the worker population on site oOo PAGE 60 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 4. STANDARD FORM REGISTERS & MODEL SHEETS PAGE 61 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL STANDARD FORMS REGISTER Form No. Title Users 01 Training Register – Training Request EMU-EM CC-EC 02 Training Register – Training Attendance EMU-EM CC-EC 03 Document Control Register EMU-EM CC-EC 04 Non-Compliance Report Register EMU-EM CC-EC 05 Non-Compliance Notification Sheet EMU-EM CC-EC 06 Non Compliance Report EMU-EM CC-EC 07 Routine Site Inspection Sheet EMU-EM CC-EC Note: Only few model sheets are presented in this table. More are attached as Appendices to their relevant Generic Plan PAGE 62 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 1-ENVIRONMENTAL TRAINING REQUEST REGISTER TRAINING REQUIRED POSITION(S) 2-ENVIRONMENTAL TRAINING ATTENDANCE RECORD COURSE : DATE : DURATION : PRESENTER : ATTENDEE NAME SIGNATURE PAGE 63 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 3-DOCUMENT CONTROL REGISTER REGISTRATION No. & VERSION No. ISSUE DATE WITHDRAWAL LOCATION (Hard Copy) TITLE DATE 4-NON COMPLIANCE REPORT REGISTER DATE NCR NCR TYPE SITE No. & AUTHOR CORRECTIVE CA DATE NCR DATE REPORTED No. LOCATION OF NCR ACTION TYPE COMPLETED CLOSURE NCR: Non-compliance Report PAGE 64 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 5-NOTIFICATION FOR NON-COMPLIANCE Recipient Contractor Site concerned Registration No. Location Date of first observation / / Observer Name Position Non-Compliance Severity Level 1 2 3 We hereby notify a Non-Compliance of Severity Level ___ observed on a site under (Name of Contractor) responsibility. The above Contractor is requested to provide sufficient personnel, equipment, supplies and incidentals to implement within O 24 hours, O 72 hours, O 5 days, the necessary corrective action in accordance with the attached Non-Compliance Report No. ______ Submitted by EMU-EM on (date, time) Received by Contractor on (date, time) Signature Signature Name & Position Corrective action taken (to be filled in by the Contractor, attach additional sheets if necessary). Completed by Contractor on (date, time) Approved by EMU on (date, time) Signature Signature Name & Position: Name & Position: PAGE 65 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 6-NON-COMPLIANCE AND CORRECTIVE ACTION REPORT RETURN TO EMU-EM NCR No. NC REPORTED BY: NAME: POSITION: DATE OF FIRST OBSERVATION / / TIME: AM/PM SITE CONCERNED SITE REGISTRATION No. SITE LOCATION NC LOCATION WITHIN SITE GPS POINTS (IF ANY REQUIRED) PROPOSED COMPLIANCE LEVEL 1 2 3 SECTION 1: NON-COMPLIANCE NON-COMPLIANCE DETAILS Describe clearly Non-Compliance observed Attach referenced pictures to NCR Referenced Photographs No.: Other attached documentation: PAGE 66 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL CAUSE OF NON-COMPLIANCE Describe clearly the circumstances leading to the non-compliance. As far as possible, verify the facts recorded and identify witnesses if justified IMMEDIATE ACTION TAKEN (IF ANY) OFFICER RESPONSIBLE FOR ACTION Date / / Is further Corrective Action required? YES / NO If YES, complete the Corrective or Preventive Action Section 2 below If NO, close this NCR in the Non-Compliance and Corrective Action Register PAGE 67 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL SECTION 2: CORRECTIVE AND/OR PREVENTIVE ACTION Required Action Describe clearly Corrective and/or Preventive Action required Officer responsible for Action Date / / Are changes required to EMP Procedures & Documents ? YES / NO SECTION 3 – VERIFICATION & CLOSURE EMU-EM to Review Effectiveness of Action by Date / / Is Effectiveness Satisfactory ? YES / NO EMU-EM Signature Date / / If YES, close this NCR in the Non-Compliance and Corrective Action Register If NO, further Action is detailed in NCR No. NCR Closure Date Date / / PAGE 68 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 7-ROUTINE SITE INSPECTION REPORT INSPECTOR NAME SITE REGISTRATION NUMBER DATE OF VISIT DATE OF LAST VISIT TYPE OF SITE PERMANENT TEMPORARY ACTIVITIES ON SITE ACCOMMODATION OF WORKERS QUARRYING OR TUNNELING STORAGE OF HAZMAT SOLID WASTE LANDFILL WORKSHOPS & GARAGES VEHICLE TRAFFIC REFUELING POST MEDICAL ASSISTANCE ACTIVITY SPOIL DISPOSAL GENERAL CONSTRUCTION ACTIVITY CONCRETE BATCHING OTHER CONCLUSIONS ON SITE VISIT REQUESTS FROM PREVIOUS COMMENTS & CONCLUSIONS FROM SCORE & RECOMMENDATIONS INSPECTION THIS INSPECTION (1 TO 5) 1. General satisfaction level for implementation of previous recommendations 2. General Cleanliness of Site 3. Hazardous Substances Management 4. Occupational Health & Safety 5. Solid Waste & Sanitation 6. Drainage and Water Quality Control 7. Erosion Control 8. General Conclusions of Visit PAGE 69 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL ITEMS Y/N COMMENTS SCORE SITE ACCESS Site fenced and fence is in good condition Access locked or controlled by barrier Watchman 24 hrs/day Site access with safety road signs & speed limitation WORKER ACCOMMODATION & CAMPS DORMITORIES Bed, mattress and mosquito net for each worker Fire extinguisher in sufficient quantity & controlled Regular spraying of insecticide for vector control No stagnant water in camps Good cleanliness of dormitories SANITATION OF TEMPORARY CAMPS 1 toilet unit per max. 20 workers Flushing facility operational Toilet maintained and clean Absence of flies & mosquitoes concentration 1 shower for max. 10 workers Showers maintained and clean Septic tanks without overflow Septic tanks regularly maintained (Date last emptying) : Oil trap available for Grey water from kitchen Oil trap regularly cleaned & oil collected for disposal No stagnant used water around facilities SEWERAGE PLANT (IF ANY) Treatment Plant maintained and clean Sludge and grid products regularly removed No concentration of flies or rodents Effluent clear and without significant odors Effluent quality monitoring conforms to specifications Infiltration field without stagnant waters WORKSHOPS AND GARAGES GENERAL CONDITIONS Area well organized and clean Chemicals stored in safe & labeled containers Chemical storage area provides for spill contention Safety Posters and signs posted within premises HAZARDOUS WASTE MANAGEMENT PAGE 70 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL ITEMS Y/N COMMENTS SCORE Used oils collected in safe & labeled containers Movements of used oils detailed in up-dated register Availability of spill response kits DRAINAGE Storm water of the area drained in pond Oil trap well maintained FUEL STORAGE Storage located at more than 50 m from labor camps Metallic containers without corrosion No leakages observed Storage area fully bunded and comply with standards Refueling equipment without leakages observed Safety signs and posters posted and visible Staff trained for refueling & spill response Refueling procedure enforced Presence of spill response kits Fire fighting equipment available & maintained Movements of fuel detailed in up-dated register HAZMAT MAIN STORAGES STORAGE FACILITY Fully bunded with capacity >110% biggest container Closed storage protected from rainfall Access restricted with fence and lock Restricted access signs outside facility CONTAINERS Containers leak-proof and in good condition Container chemically compatible with material stored Container closed unless material added or used LABELS Display of labels with words “Hazardous product/waste” Label describe content Label describe hazards for users For waste, label provide initial accumulation date SAFETY Procedures for handling posted within premises PPE available on site Staff trained for HazMat handling & spill response PAGE 71 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL ITEMS Y/N COMMENTS SCORE Spill response kits available Drainage water quality monitoring shows no pollution Firefighting equipment available and controled SOLID WASTE MANAGEMENT GARBAGE General cleanliness of workers camps is good Garbage bins in sufficient number Garbage bins in good condition with cover Garbage bins regularly emptied and cleaned CONSTRUCTION WASTE Temporary disposal on site is appropriate Recyclable waste is separated and re-use Regularly collected from site for eventual disposal HAZARDOUS SOLID WASTE Type generated on site (describe with quantities) Waste production systematically registered Temporary storage is safe TRAFFIC SAFETY Road hazards signaled by appropriate road signs Speed limitation signs before villages & sensitive areas Dust prone areas regularly watered Vehicle wheel cleaning facility Truck & Driving safety (refer to special inspection form) SEDIMENT & EROSION CONTROL EROSION Erosion Control Measures follow specifications Sediment fences & silt traps well maintained Sediment pond appropriately sized Sediment volume in pond less than 70% of total volume Sediment from pond disposed adequately Release from pond satisfactory (check monitoring results) Natural drainage respected BATCHING PLANT POND Sediment pond appropriately sized Sediment volume in pond less than 70% of total volume Sediment from pond disposed safely Effluent from pond has pH 6.5 to 8.5 PAGE 72 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL ITEMS Y/N COMMENTS SCORE TOP SOIL Top soil preserved and stock piled according specifications Top soil disposal shows no erosion traces OTHER ISSUES PAGE 73 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL 8- SITE REGISTER FOR HAZARDOUS MATERIAL/WASTE CONSTRUCTION SITE NAME DATE OF REGISTER UPDATE RESPONSIBILITY FOR PREPARATION DETAILED MAXIMUM MAIN EMERGENCY NATURE OF HAZARDOUS MSDS MATERIAL NAME AMOUNT DANGERS RESPONSE MATERIAL CHARACTERISTICS ATTACHED STORED ON-SITE POSED PROCEDURES ATTACHED KEY Nature of Material S = Solid L = Liquid G = Gas Hazardous characteristics C = Corrosive T = Toxic R = Reactive Main dangers posed B = Burning D = Danger to skin, eyes, lungs E = Environmental pollution PAGE 74 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL TITLE OF PLATE P Photographic Plate 2 Photographic Plate 4 Photographic Plate 7 Photographic Plate 9 Photographic Plate 12 Photographic Plate 14 Photographic Plate 17 Photographic Plate 19 Photographic Plate 22 Photographic Plate 24 Photographic Plate 27 Photographic Plate 29 Photographic Plate 32 Photographic Plate 1 PAGE 75 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT (QRWRMP) ENVIRONMENTAL MANAGEMENT PLAN – IMPLEMENTATION TRAINING MANUAL oOo PAGE 76 PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 12 SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A.12 SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY Country/Project Title: The Peoples’ Republic of China (PRC) / Qinghai Rural Water Resources Management Project Lending / Department / Financing Project Division: Modality: I. POVERTY ANALYSIS AND STRATEGY A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy Contribution of the sector or subsector to reduce poverty in the People’s Republic of China (PRC): Irrigation and water management is essential to sustainable agriculture throughout the year in most regions of the PRC. Meeting irrigation needs has become one of the major issues within the water sector. The proposed project area is in eastern Qinghai and is served by two main irrigation schemes in the valley of the Yellow River. The Lijiaxia and Gongboxia irrigation schemes collectively cover the project counties of Hualong, Jianza, and Xunhua ,all of which are all state-identified poverty counties. The purpose of the investment project would improve irrigated agriculture development and water resources efficiency in the benefit areas including 3 county, 9 towns/ townships, Lijiaxia committee and Gongboxia committee, 143 village committees with 129,335 beneficiaries, where ethnic minority population accounts for 95.7% of the total population (Hui, Salar and Tibetan) and approximately 50% are women , 39% are the poor . The Project will contribute to poverty reduction by reducing the farming irrigation cost, enhance agricultural productivity, promote agricultural restructuring, increase cropping intensity and diversity through improved water management, providing employment opportunities and farmer capacity building though a series of training program . This not only helps increase the economic income of the local residents, but also has great significance in protecting and tapping the agricultural tradition of the ethnic minorities, enriching and improving their dietary structure, improving their quality of life , ecological environment and multi ethnic minority areas social cohesion . The Project is consistent with the China 11th Five-Year Plan (11FYP, 2006–2010) PRC Poverty Alleviation Programme Outline (2001-2010) , which aim to reduce poverty, strengthen the farmland capital construction and improve the quality of life for the millions of people with low income, and supports the Qinghai 11FYP and Qinghai Poverty Alleviation Programme (2003 – 2010), which call for strengthening infrastructure construction including irrigation and water conservancy in agricultural and pastoral areas, pushing forward the agriculture and pastoral structural adjustment, and ensuring that the poor has basically solved the food and clothing. Meanwhile, the Project is consistent with ADB’s policy that people must have access to safe and reliable water supplies and it will help the PRC achieve the Millennium Development Goal of environmental sustainability (MDG Goal 1), and specifically address MDG Target 1 (to halve the proportion of people with daily life below US$1 by 2015) and Target 2 (to halve the proportion of people with suffering from hunger by 2015). In addition, the proposed Project also adheres to ADB’s Country Partnership Strategy in the PRC to provide a safe and assured water supply for irrigation purposes through (i) supporting environmental improvement, (ii) improving irrigation infrastructure, (iii) promotion an integrated water resources management approach, (iii) increased water using efficiencies, and (iv)encouraging rural development and raising farmer’s income. B. Poverty Analysis Targeting Classification: TI-MDG 1. Key Issues A poverty and social analysis was undertaken in line with ADB guidelines to collect detailed social information necessary by 872 sampling HH survey ,25 FGDs, 10 stakeholders workshops and qualitative assessment to inform project design, identify poverty reduction and social development objectives, outcomes and indicators. The poverty and social analysis identified vulnerable groups, opportunities for pro-poor interventions and recommended social action measures, participation and mitigation plans to achieve positive social benefits. Qinghai is located in the Upper Yangtze and Yellow River valleys in the northeastern part of the Qinghai-Tibetan Plateau. It is classified as a food deficit province, importing about 350,000 tons of grain annually. Qinghai province’s relatively small population of 5.22 million is distributed over a large area covering 722,000 square kilometers, of which 20% is urban and 80% is rural. The bulk of the rural population is concentrated in farming areas in the eastern region, SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT which makes up only 5% of the province’s total land area but feeds about 75% of its total population. Of the total population in the project area, 46.3% comprise 18 ethnic minority groups , mainly Tibetan, Hui, Sala and Mongolian. The per capita net income and consumption expenditure of farmers in Qinghai in 2007 has been about two thirds of the national average. Qinghai is classified as the second poorest province in the PRC, 15 of 37 counties/county level cities are defined as National Impoverished Counties, while 10 additional counties/county level cities are defined as Provincial Impoverished Counties3. Around 2,453 of its villages are defined as poverty villages, accounting for about 60% of all the villages in Qinghai. The percentage of its population in poverty (i.e., those with a per capita annual income of The three counties in project areas were identified as state-level poor counties in 1986, and key counties for national poverty alleviation development in 2002. In 2007, the poor population of the farming and pastoral areas of the 3 counties was 236,935, accounting for 39.4% of rural population , it ‘s much higher than that of Qinghai . Considering the new national poverty criteria in 2009(i.e., those with a per capita annual income of However , compared to original charge, irrigation charges will be reduced greatly since the project implementation. Most households will directly benefit from the irrigation by gravity, and have ability to pay the charges. For the absolutely poor households, especially Wubao households, irrigation water charges are still a considerable expense and cannot be afford. Thus, local government agreed that measures will be needed to ensure affordability of services to poor households. Details are available in Supplementary Appendix A, Poverty and Social Analysis. 2. Design Features The Project design has addresses social dimensions, i.e., poor, participation, gender, ethic minority etc. simultaneity, the design has attempted to reduce impacts on land acquisition and resettlement. For unavoidable resettlement, resettlement plans for Lijiaxia and Gongboxia subprojects are prepared to ensure the APs could be better off. Project assurances call for 40% employment of local labor, especially the poor, ethnic minorities, and women. Water saving and marketing awareness and agriculture technical training program will be conducted to promote irrigated agriculture development and water resources efficiency. The PMO shall cause the IAs to conduct information, education, and consultation communication campaigns via appropriate government bureaus and/or approved service provider concerning water saving, market awareness ,with being sensitivity of gender, poor, and ethnic minority in the project implementation and operation stage. II. SOCIAL ANALYSIS AND STRATEGY A. Findings of Social Analysis The socioeconomic survey and FGDs indicate that the existing Gongboxia and Lijiaxia irrigation schemes were designed to operate through lift irrigation, however, rising electricity, water, and agricultural input costs have been a major constraint on increased agricultural production. Many fertile upland agricultural lands lay fallow due to the rising costs of lift irrigation. The pumping stations have fallen into disrepair as a result of limited usage, and farmers are forced to find alternative sources of income (such as daily manual labor in the construction industry). Farming under these conditions is no longer economically-feasible. The proposed project will turn pumping irrigation into the gravity irrigation within the 3 county, 9 towns/ townships, 143 village committees and 129,335 beneficiaries. Positive impacts analysis indicates that the project will : (i) increase additional irrigation area (40,090 mu ,recovered abandoned land 18,255 mu) and improve existing irrigation area (168,455 mu);(ii)reduce an average of CNY 157.2 in electricity costs per mu-year; if the reduction in water costs is also taken into account, there will be a cost saving of CNY 225 per capita-year for the existing population in the irrigated areas, which will provide a significant contribution to agricultural costs reduction, irrigation coverage extension, agricultural efficiency improvement, and ethnic minorities poverty relief; (iii)create a number of unskilled job opportunities by canal construction and maintenance, providing in the 3 In 2002, The national and provincial level poverty county is identified by the calculation results of three indexes of per capita annual net income( weight 6 ),per capita GDP (weight 3) and per capita fiscal income(weight 1) , the 35 lowest are categorized as national poverty county and following 22 counties are provincial level poverty counties . SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT short term more non agricultural job opportunities to the population in the affected areas, 40% of which shall be first made available to women and the poor; (iv) provide training during construction and operation of the Project on irrigation management and cropping practices, awareness education on water conservation, marketing and risk, will improve the status of knowledge of the ethnic minority farmers and their professional capabilities. However, some negative impacts may be anticipated during construction or operation stages of the Project which may affect ethnic minorities: (i) After the project is commissioned, water and management charges collected are insufficient to finance canal maintenance and management; (ii)With the improvement of the irrigation conditions, more and more farmers may grow cash crops, with need for support in agricultural techniques, market information and planting restructuring funding, with the risk the corresponding mechanisms and capabilities are absent in the project areas; (iii) Land acquisition and house demolition: the Project will affect 58 villages of 9 townships in 3 counties. A total of 1333 persons who are all ethnic minorities will be affected directly by LAR. (iv) Some existing irrigation pumping stations will be decommissioned, and the short-term income of about 200 staff of these stations will be questionable; and (v)Public safety issues may occur during the construction stage, particularly linked to road traffic. Based on consultation with the stakeholders, a practical action plan for enhance the positive impacts and mitigate the negative impacts has been proposed. Details are available in Appendix 13, Summary Ethnic Minority Action Plan . B. Consultation and Participation 1. The major stakeholders included were: (i) groups directly affected by the project in a positive or negative way, including men, women, elderly, poor, minority people etc. and related organizations (ii) government organizations such as the EA, IAs, Water Resources Bureau, Civil Affairs Bureau, Poverty Alleviation Office, Women’s Federation, Minority Affairs Office, Finance Bureau, Labor and Social Security Bureau, and Education Bureau. The TA utilized a number of participation processes to solicit the input of a cross section of the project area. A socio-economic survey was undertaken from April 19 to May 25, 2009 at the household level, covering 872 sampling households questionnaires survey . In addition, 25 FGDs were held with both women and men, especially with ethnic minority groups and vulnerable groups in different districts of the project area to discuss in an open ended manner topics related to the project. A number of key informant interviews and stakeholders workshops were also held with various bureaus in province, county, township and village levels to inform of this project design. 2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring? Information sharing Consultation Collaborative decision making Empowerment 3. Was a C&P plan prepared? Yes No Public disclosure of all subproject documents will be made at the PMOs and on the Asian Development Bank website, including the project information document (PID), design and monitoring framework, resettlement plans, summary environmental impact assessment and environmental management plan (EMP), and ethnic minority development plans. A PID has been prepared for the Project. Booklets outlining the resettlement plans and ethnic minority development plans were distributed to affected households and disclosure meetings held. Copies of the booklet are available at the respective project management office, and each affected village office. WUA is proposed to come into existence to manage effectively irrigation and help select project construction Labors, conduct water saving and marketing awareness, maintain the public security of the construction site, coordinate relations of all parties concerned, reflect opinions and advice of villagers, and monitor the ethnic minority action plan implementation. Water saving and marketing awareness and agriculture technical training program will be conducted to promote irrigation water efficiency, adjusting agriculture structure, and fostering awareness of market in the subproject areas. It is expected that the following results will be achieved through the Program: (i) increased participation and consultation of local people in the project implementation and monitoring; (ii) increased awareness of water saving; (iii) stimulated adjust from corn crops to economic crops; (iv) increased the awareness of marketing , and (v) increased participation of beneficiaries including woman, poor, and ethnic minority groups as part of participatory irrigation management program;(vi) increased awareness of safety in the project implementation stage, (vii) increased awareness of personal safety of local children in the project operation stage. Furthermore, stakeholder consultation and disclosure of information on the implementation of resettlement plan and environmental management plan will be conducted during the subproject implementation. C. Gender and Development 1. Key Issues. In the project affected area, females account for almost 50% of the total population and labor force . The socioeconomic survey shows that the educational level of both men and women in the affected areas is low, but that of women is much lower than men. In an ethnic minority family, the “wife” has no power to decide major family affairs, and is subordinate to SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT the family. The main type of labor division in a household is the sharing between man and woman of the farming work. In households where the husband is working outside, a frequent situation due to high farming costs, and low per capita arable area, all farm work is done by women. Women play an important role in agricultural production, and assume a heavy farming burden. However, such contribution in production is not regarded as a kind of household income. Provided the low yield of agriculture, farm produce has not been turned into commodities to realize economic value, so the labor of women is not recognized. However, since men are in charge of external affairs, and women of domestic affairs, women have a low level of involvement in public affairs. Whatever the ethnic group, women are particularly absent from participating in public affairs. Except the Hui people who can speak Chinese, Salar and Tibetan women have a more limited capability to communicate in Chinese than men. 2. Actions The Project may help improving the women's situation. It is an obligation that 40% of unskilled job opportunities be first allocated to vulnerable groups inclusive of women and the poor. Being employed with a salary, concerned women will improve their economic status in their family and be more able to discuss on other work sharing issues. The Project will also, on the longer term increase the agricultural revenue of the household, including that of the woman's contribution. Women’s needs should be well considered during training program implementation , training arrangement should be given in the time and manner acceptable to women, e.g.,. At the same time, a language that they can understand should be used during training. Women should be trained on Putonghua in conjunction with technical and marketing awareness training to improve their ability to communicate with the outside. In addition, Women will be encouraged to join in the Water User Associations (WUAs) and Farm Professional Associations(FPAs) to improve irrigation management and express their needs and aspiration. In general, most of the project benefits accruing in the three counties will benefit men and women equally. However , in view of its role in agriculture activities and the inconveniences associated with irrigation water and management , the Project will have some added benefits for women. III. Social Safeguard Issues and Other Social Risks Issue Significant / Limited Plan or Other Measures Strategy to Address Issue / No Impact Included in Design According to detailed resettlement impacts Full Plan surveys, the Project will affect 68 villages of 9 Short Plan townships in 3 counties. A total of 6877 Resettlement Significant persons who are all ethnic minorities will be Framework Involuntary affected directly by LAR . No Action Resettlement Not significant Due to the significant resettlement impacts , None 2 full RPs have been prepared and endorsed by local governments and will be approved by ADB prior to loan appraisal(see Appendix ??).. The Project areas are the home of several Plan ethnic groups, with a total beneficiary Other Action population of 129,335, where ethnic minority Ethnic People population accounts for 95.6% of the total Development Framework population. The main beneficiary groups of the No Action Significant project are ethnic minorities such as Hui, Salar Indigenous and Tibetan. Not significant Peoples To ensure that these ethnic minorities have equal opportunities to participate in and benefit None from development activities, and to alleviate any adverse impact, 4 full EMDPs have been prepared and endorsed by local governments and will be approved by ADB prior to loan appraisal ( see Appendix ??). Labor There will be approximately 13,100 job Plan Employment positions over the construction period. Follow- Other Action opportunities on multiplier effects are expected to create an No Action Labor Significant additional 55,200 indirect jobs. Project retrenchment assurances will prioritize local labor, especially Core labor Not significant vulnerable groups, in job opportunities, and standards make sure employment will comply with labor None standards, especially core labor standards of the PRC and ADB. Some existing irrigation pumping stations will SOGREAH - REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PEOPLE'S REPUBLIC OF CHINA – ADB / QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT be decommissioned, and the short-term income of about 180 staff of these stations will be questionable. The action plan is integrated into each individual EMDP. Compared to original charge around CNY160 Action per mu on average , irrigation charges will be No Action reduced greatly (around 66.94 yuan/mu in the irrigated areas of the Gongboxia and CNY58.15 per mu in the irrigated areas of the Significant Lijiaxia. Most households will directly benefit from the irrigation by gravity, and have ability Affordability Not significant to pay the charges.. None However , the expense is difficult for the extremely poor groups. It is agreed with local governments that preferential policies or subsidy will be provided to poor group to ensure them benefit from the project. Other Risks Plan and/or WUAs and FPAs will be established to ensure Other Action Vulnerabilities the sustainable irrigation management , in No Action HIV/AIDS Significant addition , technical training , marketing Human awareness and water saving awareness trafficking Not significant training program will be provided to Others beneficiaries in the project areas. None Unsustainable irrigation water management IV. Monitoring and Evaluation Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and / or social impacts during project implementation? Yes No Integrated into each individual EMDP SOGREAH - REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 13 SUMMARY ETHNIC MINORITIES DEVELOPMENT PLAN SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A13. SUMMRY ETHNIC MINORITIES DEVELOPMENT PLANS A13.1 BACKGROUND The objectives of the Qinghai Rural Water Resources Management Project (QRWRMP) is to improve the living conditions and the economic development of the Lijiaxia and Gongboxia areas by (i) substituting gravity irrigation water supply to the present inefficient pumping system in order to return abandoned lands to production and irrigate new areas, (ii) improving organization of water management and distribution through participatory irrigation management, (iii) providing irrigated agriculture support related to cropping systems and agronomic practices and (iv) assisting in organizational capacity building. The project area is located in the upper Yellow River Valley, downstream of the existing Lijiaxia and Gongboxia hydropower reservoirs and expands on both banks of the Yellow River. The Project areas are the home of several ethnic groups, with a total beneficiary population of 129,335, where ethnic minority population accounts for 95.6% of the total population. The main beneficiary groups of the project are ethnic minorities such as Hui, Salar and Tibetan. To ensure that these ethnic minorities have equal opportunities to participate in and benefit from development activities and to alleviate any adverse impact, the Ethnic Minority Development Plan (EMDP) of the QRWRMP has been developed in accordance with the ADB policy for ethnic minorities (OMF3). Since the composition of ethnic minorities varies from place to place, 4 EMDPs have been developed respectively for the Lijiaxia south and north trunk canals, and the Gongboxia south and north trunk canals,. This SEMDP describes the demographic, social, cultural and political features of the ethnic minorities in the affected areas; the needs of these minorities; the impacts of the project on them; and measures required to ensure they enjoy equal benefits and any adverse impact from the project is mitigated. A13.2 ETHNIC MINORITY IN PROJECT AREAS Qinghai Province is the third largest ethnic minority population in China with an ethnic minority population of 46.3% of total population. The indigenous ethnic minorities include Tibetan, Hui, Tu, Salar and Mongolian.In Qinghai Province, the area of regional ethnic autonomy accounts for 98% of the province’s total area with 6 ethnic autonomous prefectures, 7 ethnic autonomous counties and 28 ethnic autonomous Xiangs. In Jianzha County, where the Lijiaxia south trunk canal is located, ethnic minority population accounts for 88.7% of total population; in Hualong County, where the Lijiaxia and Gongboxia north trunk canals are located, this percentage is 79.6%; in Xunhua County, where the Gongboxia south trunk canal is located, this percentage is 94.2%. All the 3 counties are state-level key counties for poverty reduction and development. Many ethnic minorities are observed in the affected counties, mainly Hui, Salar and Tibetan. Among the total population of 129335 in the irrigated areas, ethnic minority population accounts for 95.6%, including 63,238 Hui people (48.88%), 51,949 Salar people (40.22%)and 10,943 Tibetans(8.51%). See Table 1 for the total population and its ethnic composition of each trunk canal. The Project areas present the best conditions for agricultural production and are the most densely populated areas of Qinghai Province. Agriculture is a basic industry there. However, due to the present irrigation constraints with high irrigation costs, the local farmers mainly grow food crops, with a low proportion of cash crop cultivation and multiple cropping, and with low agricultural efficiency. Due to the small per capita arable area, the non agricultural income of the farmers accounts for over 50% of household income. While dealing with agriculture, many Hui and Salar people are working or doing business throughout the country.; Relatively less Tibetans work outside. SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Table 1: Ethnic Composition of Population of the Affected Province, Counties and Areas (Unit: 10,000 people, %) Region Total Tibetan Hui Salar Han Other popula Popu- % Popu- % Popu- % Popu- % Popu- % tion lation lation lation lation lation Qinghai Province 521.81 121.13 21.96 87.76 15.91 12.14 2.2 266.31 53.68 34.48 6.61 Jianzha County 5.29 3.36 63.60 1.34 25.40 0.01 0.26 0.60 11.30 0.02 0.46 Hualong County 25.36 5.22 20.60 13.71 54.08 1.24 4.88 5.17 20.40 0.05 0.20 Xunhua County 12.72 2.84 23.3 1.02 8.37 7.57 62.1 0.72 5.94 0.02 0.16 ffected county Subtotal 43.37 11.42 26.33 16.07 37.05 8.82 20.34 6.49 14.96 0.09 2.08 A Lijiaxia south trunk canal 1.68 0.62 36.90 0.99 58.93 0 0 0.07 4.17 Lijiaxia north trunk canal 3.69 0.22 5.96 3.41 92.41 0 0 0.04 1.09 Gongboxia south trunk canal 4.3 0 0.00 0.63 14.65 3.76 87.44 0.23 5.35 Gongboxia north trunk canal 3.26 0.26 7.98 1.29 39.57 1.44 44.17 0.24 7.36 roject areas Subtotal 12.93 1.1 8.51 6.32 48.88 5.2 40.22 0.58 4.49 - - P Source: Qinghai Statistical Yearbook (2008); statistics of Jianzha, Hualong and Xunhua Counties (2008) A13.3 CULTURAL AND RELIGIOUS FEATURES The Hui people in the Project areasoriginates from two locations: One is Xining City, Huangzhong and Datong Counties, and the surrounding provinces and regions, where the Hui have come here for missionary work or business, and settled here gradually; the other is some Tibetans, Han and people of other ethnic minorities, who have converted to Islam for marital, religious and other social reasons in history, and followed the Hui customs; they still speak Tibetan and keep some Tibetan customs today, known as “Tibetan Hui”. The Hui follow the principles of Islam, do not have their own spoken and written language but use Chinese. The “Tibetan-Hui” in the Lijiaxia north trunk canal speak mainly Tibetan. The affected Hui do not differ significantly in economy, but those affected by the Gongboxia south and north trunk canals grow more cash crops, and have the tradition of working outside and doing business; many of those affected by the Lijiaxia north trunk canal are “Tibetan Hui people”, and are significantly influenced by the Tibetan culture; those affected by the Lijiaxia south trunk canal work outside less frequently and pay more attention to or rely more on agriculture, and agricultural income is a higher proportion of their total household income. The Salar people are muslims. Their ancestors migrated from Samarqand, Central Asia in the Yuan dynasty, and the Salar have settled in Xunhua County for nearly 800 years. Jiezi Town is a cradle of the Salar. The Salar language belongs to the Uygkus group, west Hunnish branch, Turki sub-family, Altai family. Since the Salar have been in long-term contact with the Han people and the Tibetans, they have absorbed many Chinese and Tibetan words, and many Salar can speak Chinese and Tibetan. They don’t have any written language, and usually use Chinese. The Salar are Qinghai’s only ethnic minority listed as a small ethnic minority of China, and 45% of its population is found around the Gongboxia south trunk canal. The Salar are famous for growing red pepper, prickly ash (Sichuan Pepper) and walnut. Despite the feature of being good at doing SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT business and the tradition of working outside, they seldom give up farming. The Salar have a strong tradition of using garden areas to crop and have developed distinctive characteristics. However, with the intensification of the competition for land and the increasing shortage of water resources, the current garden economy of the Salar has been severely weakened. Believing in Tibetan Buddhism, the Tibetans are the oldest and largest ethnic minority in the Qinghai-Tibet Plateau. The Tibetans in Qinghai mostly live in pastoral areas, and lead a nomadic life. They are unrestrained and straightforward in character, and eat tsampa, ghee, beef and mutton mainly. Tibetan belongs to the Tibetan branch, Tibetan-Burmese sub-family, Chinese- Tibetan family, divided into the 3 dialects of Tibet, Kang and Anduo. The Tibetans in Qinghai mostly speak the An dialect, and generally speak Tibetan. In the Project areas, the local Tibetans still maintain this ethnic character. However, due to different natural environments, they become very similar to the nearby Han and Hui people in lifestyle. In terms of production, the local Tibetans deal mainly with agriculture and engage in cultivation, farmland management, harvesting and grinding in the same way as the Han and Hui do, but Tibetan farmers attach greater importance to grain production, are better at stockbreeding and are relatively inactive in planting restructuring and cash crop cultivation. In terms of living customs, the local Tibetans, influenced by the Han and Hui people, no longer rely on tsampa and ghee only, but eat also fried dishes, pancakes, sheet noodles and noodles. The local Tibetans have higher ability to speak Chinese than Tibetans in pastoral areas. The affected Han people account for 4.4% only of the total beneficiary population. Except Dongjie Village(Jishi Town affected by the Gongboxia south trunk canal) and Dong’er Village (Gandu Town affected by the Gongboxia north trunk canal), which population is exclusively Han, the other local Han live together with the local Hui, Tibetans and Salar. Since they live in ethnic minority areas, their living habits are essentially identical with those of the local primary ethnic minorities. Many Han can speak Tibetan and Salar languages. The local Han deal mainly with agriculture, usually do not have any religious belief and are better educated than the other minorities. The ethnic groups in the affected areas live in harmony from ancient times. Most of the Salar ancestors who migrated from Central Asia to Xunhua County were men, many of them intermarried with local Tibetans and accepted many Tibetan customs and traditions. Both Hui and Salar believe in Muslims. Under the Islamic thought that “all Muslims in the world are brothers”, they intermarry with each other, share mosques, participate in religious activities together, and have been in close and harmonious contact. Some local Hui have been converted from Tibetans. The local Han respect the cultures and religious of ethnic minorities, and harmonize with them. Thanks to special ethnic relationship and long-term contact, the different ethnic groups in the Project areas understand and respect each other’s ethnic customs and religious belief, have much intercourse on ceremonies and festivals, and expressed fiendship for many generations. A13.4 POVERTY OF ETHNIC MINORITIES Hualong, Xunhua and Jianzha Counties, which are affected by the project, are state-level key counties for poverty reduction and development. The per capita net income of the affected farmers is less than 50% of national average, only 75% of Qinghai’s average and also below the average of the affected counties. The affected areas cover 143 administrative villages, including 58 poor villages (41%). There is a total population of 129,335 in the irrigated areas, in which poor population is about 39.4% of total population. The poverty profile in the affected areas is highly ethnic group specific. The population in 52 out of 58 poor villages, which accounts for 89.7% is exclusively composed of ethnic minorities. There are 55 poor villages whose population is composed by more than 90% of ethnic minorities. In the poor population of 50,943, 96% or 48,905 fall into ethnic minorities1. 1 Poverty line: per capita net income less than 800 yuan SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A13.5 ONGOING ETHNIC MINORITY PROJECTS Boosting the development of ethnic minority areas is one of the strategic priorities of the State: • The State Council issued the Circular on Several Polices and Measures Concerning the Development of Western Regions in October 2000, with focus on accelerating infrastructure construction, ecological protection, building, industrial restructuring, science, technology and education development in western regions, and driving the socioeconomic development of the western ethnic minority areas; • In 2005, the State Council formulated and promulgated the Development Plan for Supporting Small Ethnic Minorities (2005-2010), stating special policies and measures to support small ethnic minorities with a population of less than 100,000, to strengthen infrastructure building, to improve production and living conditions, to readjust the economic structure, to develop characteristic industries, and to increase the income of the people; to develop technological, educational, health, cultural and other social programs, to promote social progress; strengthen training and improve population quality. The affected Salar fall under this policy; • In 2008, the State Council formulated "Some Opinions of the State Council on Supporting the Economic and Social Development of Tibetan Areas in Qinghai Province", aimed to strengthen ecological protection and construction in Tibetan areas in Qinghai; to strengthen poverty relief and development, to improve the production and living conditions of farming and pastoral areas, to increase the income of farmers and herdsmen; to develop social programs, to improve public service capabilities; to strengthen infrastructure building, to improve the capability to support regional development; to promote the development of the characteristic and advantageous industries, and to develop new points of economic growth. All the affected ethnic groups fall under this policy, with project funds totaling over CNY 10 millions per year. In addition, the regular construction projects being implemented by the national and local governments in the affected areas also include: technological built-up capacity, poverty relief, supply of safe drinking water, basic farmland water conservancy facilities, planting technique training and large-scale planting training projects. A13.6 POLICY AND LEGAL FRAMEWORK This SEMDP has been developed in compliance with the applicable policies and legal framework. the Constitution of the People’s Republic of China, the Law of the People’s Republic of China on Regional Ethnic Autonomy, the Law of Organization of Villager Committee of the People’s Republic of China, the Regulations on the Administrative Work of Ethnic Minority Communities the People’s Republic of China, the Eleventh Five-year Plan for Ethnic Minority Programs, the Outline of the Eleventh Five-year Plan of National Economic and Social Development of Qinghai Province, the Water Conservancy Poverty-relief Plan of Qinghai Province 2001-2010, the Tenth Five-year Water Conservancy Development Plan of Qinghai Province, the Outlines of the Eleventh Five-year Plan of National Economic and Social Development of the affected counties, and the ADB policy for ethnic minorities (OMF3). Main policies include the applicable laws and regulations of China, the applicable regulations of Qinghai Province, the state supporting policies, the regional development plans of Qinghai Province and Hualong County, and the ADB policy. The policies and regulations of China on ethnic minorities are in line with ADB’s concerns about ethnic minorities, i.e., to pay attention to the equality and development of ethnic minorities, and pay special attention to the development of their economic, social and cultural programs in order to maintain their rights and interests, and improve their socioeconomic status. Based on consultations with EA, PMOs, local governments and affected persons, and general practices in the project counties/cities, a set of ethnic minority development principles is agreed to be adopted by the PMOs. These include: SOGREAH - REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT • to be consistent with the needs and aspirations of affected indigenous peoples; • to be compatible in substance and structure with affected indigenous peoples' cultures and social and economic institutions; • to be conceived, planned, and implemented with the informed participation of affected communities; • to be equitable in terms of development efforts and impacts; and • to not impose the negative effects of development on indigenous peoples, but, if such effects are unavoidable, to ensure appropriate and acceptable compensation. A13.7 IMPACTS OF THE PROJECT ON ETHNIC MINORITIES The affected ethnic minorities live mainly on agriculture, so a project that promotes agricultural development will promote the interests of the ethnic minorities. The project will affect the development of the local ethnic minorities in the following ways: 1) There will be additional farmland irrigation area (35,300 mu) and additional forest irrigation area (23,400 mu), improvement of existing farmland irrigation area (132,100 mu)and of existing forest irrigation area (42,500 mu), which will contribute to alleviate the human-land conflict in the affected areas effectively, to reduce abandoned land because of high irrigation costs and water shortage, and to increase output and agricultural income; 2) After pumping irrigation is turned into gravity irrigation, there will be an average reduction of CNY 157.2 in electricity costs per mu-year; if the reduction in water costs is also taken into account, there will be a cost saving of CNY 225 per capita-year for the existing population in the irrigated areas, which will provide a significant contribution to agricultural costs reduction, irrigation coverage extension, agricultural efficiency improvement, and ethnic minorities poverty relief; 3) During the construction and after the completion of the Project, a number of unskilled job opportunities will be created by canal construction and maintenance, providing in the short term more non agricultural job opportunities to the population in the affected areas, 40% of which shall be first made available to women and the poor; 4) Training during construction and operation of the Project on irrigation management and cropping practices, awareness education on water conservation, marketing and risk, will improve the status of knowledge of the ethnic minority farmers and their professional capabilities. However, some impacts may be anticipated during construction or operation stages of the Project which may affect ethnic minorities: 1) After the project is commissioned, water and management charges collected are insufficient to finance canal maintenance and management; 2) Obviously, the Project safeguards the agricultural stability of the project area by providing stable water supply and increasing the irrigated land area, however, after the grain production enough to feed themselves, more and more farmers anticipate to grow cash crops to increase their income, with need for support in agricultural techniques, market information and planting restructuring funding, etc., additional, with the risk the corresponding mechanisms and capabilities are absent in the project areas. 3) Land acquisition and house demolition: the Project will affect 68 villages of 9 townships in 3 counties. A total of 6877 persons (including 5947 ethnic minorities’ persons)who are all ethnic minorities will be affected directly by LAR. 4) Some existing irrigation pumping stations will be decommissioned, and the short-term income of about 200 staff of these stations will be questionable. 5) Public safety issues may occur during the construction stage, particularly linked to road traffic. SOGREAH - REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A13.8 IMPACTS OF THE PROJECT ON ETHNIC MINORITY WOMEN The socioeconomic survey shows that the educational level of both men and women in the affected areas is low, but that of women is much lower than men. In an ethnic minority family, the “wife” has no power to decide major family affairs, and is subordinate to the family. The main type of labor division in an household is the sharing between man and woman of the farming work. . In households where the husband is working outside, a frequent situation due to high farming costs, and low per capita arable area, all farm work is done by women. output Women play an important role in agricultural production, and assume a heavy farming burden. However, such contribution in production is not regarded as a kind of household income. Provided the low yield of agriculture, farm produce has not been turned into commodities to realize economic value, so the labor of women is not recognized. However, since men are in charge of external affairs, and women of domestic affairs, women have a low level of involvement in public affairs. Whatever the ethnic group, women are particularly absent from participating in public affairs. Except the Hui people who can speak Chinese, Salar and Tibetan women have a more limited capability to communicate in Chinese than men. The Project may help improving the women's situation. It is an obligation that 40% of unskilled job opportunities be first allocated to vulnerable groups inclusive of women and the poor. Being employed with a salary, concerned women will improve their economic status in their family and be more able to discuss on other work sharing issues. The Project will also, on the longer term increase the agricultural revenue of the household, including that of the woman's contribution. However, the lack of education of most women in the Project areas may limit their access to the best job opportunities offered by the Project implementation. A13.9 ACTION PLAN Based on consultation with the stakeholders, a practical action plan has been proposed for the above impacts. The positive benefits of the project will be enhanced or materialized through the following measures: (i) Increasing irrigation area and income; (ii) Reducing agricultural investment and farmers’ burden; (iii) Improving population education through various training and awareness programs; and (iv) Increasing job opportunities during the construction and after the completion of the project. The possible adverse impacts of the project will be avoided or alleviated through the following measures: 1) Reducing irrigation sustainability risks by securing operating budget and setting up WUAs; 2) Reducing cropping risks by popularization and education on agricultural techniques, setting up FPAs and providing timely market information; 3) Reducing financial risks of industrial restructuring by extending small-amount loans, supporting farm produce processing enterprises and granting special subsidies for large- scale characteristic agriculture; 4) Reducing impacts from house demolition by providing full-amount compensation to the affected households and houses rebuilding in the architectural styles of the ethnic minority concerned; 5) Restoring income and livelihoods quickly by carrying out resettlement in conjunction with the development activities of the local governments, compensating for the occupied land and ensuring that the additional land is first allocated to the affected people; 6) Employing those formerly working for irrigation pumping stations first during and after the construction of the project, including training on planting techniques and nonagricultural job skills in order to reemploy them and increase their income; 7) Reducing nuisances during construction; 8) Ensuring access to motorized farming vehicles; and SOGREAH - REPORT N° 1300030.R4 PAGE 6 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT 9) Ensuring public safety by covering personal insurance, setting up warning signs and guardrails around villages to warn villagers of the hazards of the canal, and giving education on the sense of safety. The key measures to promote social gender and development include: 1) Promoting the participation of women in the project by encouraging them to join WUAs and ensuring that 40% of unskilled job opportunities are first available to the vulnerable groups inclusive of women at the construction stage; 2) Giving training in the time and manner acceptable to women; 3) Ensuring that women are represented in FPAs, and improving their ability to communicate with the outside; and 4) Strengthening the training of women on the safety and water conservation issues. Refer to the attached Ethnic Minority Development Action Plan of the Qinghai Rural Water Resources Management Project for specific actions, implementing agencies and monitoring indicators. A13.10 BUDGET The funds required for the implementation of this EMDP will come mainly from the following 3 sources: (1) Project budget: Since ethnic minority population accounts for 95.59% of total population in the affected areas, and the project funds set out in the Feasibility Study Report will benefit ethnic minorities mainly, the project budget itself is the principal source of funds for this EMDP; (2) funds for projects implemented by the central government to support the development of small ethnic minorities, and the socioeconomic development of Tibetan areas in Qinghai and other regions; and (3) counterpart funds from local governments and competent authorities (bureau of agriculture, ethnic and religious affairs bureau, women’s association, etc.), and funds for regular projects, such as technological popularization, poverty relief, human drinking water safety and basic farmland water conservancy facilities, etc. A13.11 PUBLIC PARTICIPATION AND CONSULTATION During this EMDP’s preparation, the ethnic minority groups have been informed about the key elements of the Project design management through consultation and distribution of resettlement information, and on various occasions during meetings, interviews, focus group discussions, public consultation workshops, and community consultation meetings. To prepare this EMDP, the consultants conducted a series of participatory activities during April 19-May 4 and June 16-19, 2009 in conjunction with the socioeconomic survey team. A total of 872 door-to-door interviews were made, representing the collected basic information related to 5,743 peoples; 24 FGDs were held to discuss topics related to the project, involving 274 participants in total, including women and poor representatives from different ethnic groups; 26 village-level and province-level key informer interviews were made; and 24 stakeholders’ discussions were held with different provincial, county and town authorities on potential impacts of the project, measures to reduce risks, and proposed actions. The draft EMDPs will be disclosed in each county, townships and villages prior to Management Review Meeting (MRM). In accordance with ADB’s Public Communications Policy, the draft EMDPs will be posted on the ADB website prior to appraisal and the final EMDPs upon finalization prior to board approval. The PMO will set up project ethnic minority management agencies to supervise implementation, continue the public consultations, monitor progress, and deal with grievances. SOGREAH - REPORT N° 1300030.R4 PAGE 7 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A13.12 IMPLEMENTATION ARRANGEMENTS Qinghai Provincial Water Resources Department (QWRD, the executing agency) will cooperate with each local ethnic minority affair committee to improve the project areas’ ethnic minority development. A social, environment & resettlement office within QWRD will coordinate the planning, implementation, financing and reporting of ethnic minority development. The local PMOs, Jianzha, Hualong and Xunhua County’s Water Resources Bureau and related local department will take the primary responsibility for the ethnic minority consultation and implementation. A13.13 MONITORING AND EVALUATION Internal and external ethnic minority development monitoring mechanism are agreed to be established during the project implementation. A TOR for monitoring and evaluation has been drafted and attached to each EMDPs. Internal ethnic minority progress supervision and monitoring will be done by each PMO to ensure compliance with the provisions of this EMDP. Independent agency will be entrusted to conduct annual monitoring and evaluation of overall project EMDP activity until the completion of project implementation. Twice per year for internal and once per year for external monitoring reports system are arranged for the project ethnic minority monitoring. SOGREAH - REPORT N° 1300030.R4 PAGE 8 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT ATTACHMENT ETHNIC MINORITY DEVELOPMENT ACTION PLAN OF THE QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators A. Irrigation System Improvement (including Civil Works) a. Included in project budget a. When the project is put into operation, it is expected that 40090 mu of irrigation area will be b. added, in which, 18260 mu is abandon land ; a. Additional 168460mu will be improved. i) Included in the fund for irrigation area (mu) agriculture 129,335 people in 143 b. b. Proportion of 1. Increasing irrigation a. Water Resources Bureau, popularization administrative villages, 9 and Land and Resources industrial area and income i) Agricultural cultivation structure shall be of project towns and 3 counties will Bureau of each county, PMOs restructuring adjusted and optimized. In the design level year a. The trunk canal will be benefited, in which ii) Included in (2020), the proportions of food crops, cash crops, c. generate an additional 95.59% are ethnic b. Agriculture Bureau, Poverty the special fund irrigation area minorities (Hui people Relief Office of each county, and forests and fruits in the irrigation area have 2010-2015 been adjusted to 39:30:31from 60:19:21 of the for national anti- i) Additional irrigation 48.89% and Tibetans governments of affected poverty and b. Agricultural restructuring 8.46%). In the total towns/Xiangs, present year (2007) area per household finance of beneficiary population, ii) Whole village improvement project Qinghai c. The additional irrigation women account for 49.8% c. Land Resources Bureau of ii) Increased per province area will be allocated to and rural poor people each county, village capita net income of iii) Centralized cultivation supporting project government each household 42.2%. committees the affected farmers, project especially vulnerable c. The Qinghai Provincial Land and Resources groups (including Bureau shall implement the land rehabilitation y iii) Each count women and the poor) project, and village committees shall allocate land government to households. finance c. Fund for land rehabilitation SOGREAH - REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators 129,335 people in 143 a. In Gongboxia project,electricity costs of 8.127 administrative villages, 9 2. Reducing agricultural a. Water Resources Bureau, million yuan will be saved annually, 82.95 yuan towns and 3 county will be per mu on average. In Lijiaxia project, electricity a. Included in a. Irrigation rate per investment and farmers’ Price Bureau of each county burden benefited, in which 95.59% costs of 9.167million yuan will be saved annually, project budget mu are ethnic minorities (Hui b. Civil Affairs Bureau, Poverty 92.03 yuan per mu on average. a. Reduce irrigation 2010–2015 b. Funds of the b. Number of people 48.89% and Relief Office of each county, b. During project implementation, the local local government households received electricity charges Tibetans 8.46%). In the governments of affected total beneficiary population, government shall allocate subsidy to the poor ; the and operation the subsidy and how towns/Xiangs, village b. Irrigation subsidy for the operate manual of WUA shall include preferential fund for WUA much they can get women account for 49.8% committees poor and rural poor people policies for assistance to the poor. 42.2%. 3. Increasing job opportunities a. PMO, construction agency, a. Proportion of Employment Bureau of each affected people in a. During the county, unskilled job implementation of the b. PMOs, construction opportunities project, provide unskilled About 8200, including 3280 a. 8200 unskilled job opportunities shall be a, b. Included in agency, Employment jobs to the local affected falling into vulnerable provided at the construction stage. the budget of b. Number of Bureau, Women’s 2010-2015 people first. groups inclusive of women project vulnerable people in Association, Poverty Relief b. 3280 unskilled job opportunities shall be provided and the poor construction the affected areas Office, Civil Affairs Bureau of to women and the poor. b. Ensure that 40% of (including women each county, governments of unskilled job opportunities and the poor) taking are first available to affected towns/Xiangs, up unskilled jobs vulnerable groups inclusive village committees under the subproject of women and the poor. a. The construction agency shall ensure that the a, b. Included in 4. Protecting personal a. Construction agency a. safeguards construction staff effects life or industrial injury the budget of safety measures taken by b. Water Resources Bureau of insurance. project Children in the affected construction agency a. Personal safety protection county, PMOs, design agency, 2010-2015 construction areas b. It should be ensured that the local villagers and insurance of the b. Measures of safety c. Women Association of each participate in the design, and warning signs or c, d. County construction staff warning county, governments of fencings shall be set up at high-risk canals in the governments SOGREAH - REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators affected towns/Xiangs, village affected villages as required by the villagers. finance b. Set warning signs in the committees c. Mode of safety villages to indicate the c. PMO, the women’s association of each county, publicity, hazard of the canals. d. Education Bureau of each the affected town/Xiang government and the participants and county, school in affected village committee shall give safety education 2-3 men-times c. Strengthen the areas times annually at each affected village. propaganda on safety d. Measures of awareness, especially for d. Safety education shall be given 2-3 times per school safety women who are responsible semester at each primary or high school in the education mainly for taking care of affected areas. their children. d. Give safety education at schools to prevent potential risks. 5.Reducing risks of land acquisition and house a. Design agency , a. The design agency, the PMO and the demolition Resettlement Plan preparing Resettlement Plan preparing agency shall agency a. Minimize land acquisition communicate and revise the project design to and house demolition in b. Water Resources Bureaus reduce land acquisition and house demolition. project design and 1402 AHHs and 6877APs PMOs and Government of b. Houses shall be compensated for at the Included in See the implementation. by land acquisition and each county,, governments of 2010-2015 replacement cost; the land occupied by the trunk resettlement fund and branch canals shall be compensated for as Resettlement Plan b. Provide full-amount resettlement affected towns/Xiangs, village of project committees permanently acquired land. compensation to the affected people. c. Water Resources Bureaus, c. The relocated households shall build houses of PMOs, Ethnic and Religious ethnic architectural styles as they will. c. Preserve the ethnic Affairs Bureaus of each county architectural styles in house reconstruction. 6. Protect the population Residents near the trunk a. Construction agency, Ethnic a. The ethnic and religious affairs bureau shall Included in the a. Records of 2010-2015 in the affected areas canal and Religious Affairs Bureau of give education on ethnic cultural customs to the budget of the disputes between SOGREAH - REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators (including the ethnic each county construction agency before construction. environmental the construction minorities and the Han impact plan agency and the people) from construction b. Design agency, construction b, c, d, e: The construction staff shall be given local people disturbances. agency, Water Resources education and propaganda on environmental Bureau, protection, laws and regulations; the construction b. Noise reduction a. The construction agency sites and roads shall be subject to noise control to techniques and should respect the cultural c, d. Construction agency, reduce the impact of noise on the nearby villagers processes used and living habits of the Environmental Protection and the construction staff; domestic waste and during construction indigenous ethnic minorities. Bureau of each county, feces shall be cleaned up periodically, and shall not be piled up or discharged without control. c. Frequency of b. Adopt construction e Environmental Protection overnight methods and techniques to Bureau and Water Resource construction reduce noise. Bureau of each county d. Noise standard for c. Prohibit overnight construction construction. e. Number of no- d. Observe the noise horning signs standard strictly. e. Set no-horning signs in villages where vehicles would pass. 7. Ensuring the a. At the project design and implementation stages, convenient passage of a. Design agency, Water representatives of the design agency, the a. Frequency of motorized farming Resources Bureau of each construction agency, the PMO, the agencies a, b. Included in public participation vehicles 129,335 people in 143 county, PMOs, governments of concerned, and different groups (by gender, ethnic affected towns/Xiangs, village the budget of administrative villages of 9 2010-2015 group and income) shall attend at least 3 FGDs b. Measures of a. Ensure the project towns in 3 counties. committees (focus group discussion); the key points of the access to farmland communication between the construction design shall be published to the public. for motorized farming design agency and the b. Design agency, construction vehicles employer, and public agency b. 28 vehicle bridges shall be erected as the participation. villagers wish. SOGREAH - REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators b. Adopt engineering methods such as adding a cover board on the farmland canals, and space these canals appropriately in order to set aside a passage for motorized farming vehicles. B. Participatory Irrigation Management a. The costs and day-to-day expenses of the staff of Trunk Canals Administrative Station shall be paid by the County Government, and most of a. Source of 8.Risks of sustainable operating and maintenance costs shall be operation and included in county government budget, the rest irrigation management a. Financial Bureau of each by WUAs (water users association). Government expenses a. Sufficient operation and county finance of each The project affects 129,335 b. The trunk canals shall be managed by the newly management expenses county, operation b. Records of water people in 143 b, c. Ethnic and Religious established county-level water supply 2010-2015 fund of WUAs disputes and b. Reduced water disputes administrative villages of 9 Affairs Bureau of each county, administrative agency, WUAs set up to manage the and participatory handling towns/Xiangs in 3 counties. WUAs, governments of secondary irrigation systems, and members of irrigation c. Representation of different affected towns/Xiangs, village different ethnic groups shall participate in WUAs to management c. Composition of ethnic minorities in WUA committees improve the level of water management and reduce WUA water disputes. c. For any community that involves different ethnic groups, its WUA shall involve representatives of different ethnic groups. 9.Employment and income a. PMO, construction agency a. The former administrative staff of the irrigation a. Included in a. Number of former pumping stations shall be employed first at the project budget restoration measures for 236 former administrative b. Agriculture Bureau, admin personnel 2010-2015 construction stage on a voluntary basis the administrative staff of personnel of irrigation Employment Bureau and b. National anti- of irrigation irrigation pumping pumping stations pumping stations Poverty Relief Office of each b. Rain & Dew Training Program / Sunlight Training poverty fund and stations employed for the county, governments of Project Qinghai funds of SOGREAH - REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators affected towns/Xiangs, village the Rain & Dew implementation a. Employ these people first committees Training Program and management during the implementation, / Sunlight Training of the subproject operation and management Project of the subproject; b. Number of former admin personnel b. Provide planting technique receiving training and nonagricultural on planting employment skills training. technique and nonagricultural skills training 10. Training on the senses a. Personal safety education shall be given once of safety and water or twice annually in each affected village. Fund of a. Frequency of conservation for women a, b Water Resources Bureau, b. participatory training in each PMO, Agriculture Bureau, irrigation a. Give training on personal affected village Women’s Association and i) Training on the sense and method of water management/ safety with respect to the 73,853 women in the Employment Bureau of each 2010-2015 conservation for irrigation shall be given once or training fund of b. Frequency of canal in technical training affected areas county, governments of twice annually in each affected village, and relative agency / training and (see 13). affected towns/Xiangs, village farmers organized to attend two field water fund for Water investigation b. Give training on sense and committees conservation method investigation and learning Conservation method of water activities. Week conservation to women. ii) Water Conservation Week propaganda campaign C. Irrigated Agriculture Support 11.Improving population a. Water Resources Bureau of a. 36 field tests and demonstrations of water a,b,c Included in a. Frequency and quality through training each county management shall be conducted, and 452 fund for participants of participatory and education 129,335 affected people in farmers’ field investigations and the competent irrigation b. Agriculture Bureau of each irrigation the affected areas, 2010–2015 authority of the county government shall give management training a. Training on irrigation county training on irrigation management 143 times. management / including 72,704 labors management popularization b, c. Frequency and c. Agriculture Bureau, Science b. 24 field tests and demonstrations shall be fund of cropping participants of b. Training on crop cultivation and Technology Bureau, conducted for food crops, 78 farmers’ field technique training training on cash crop SOGREAH - REPORT N° 1300030.R4 PAGE 6 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators and management Employment Bureau of each investigations; 24 field tests and demonstrations supported by cultivation techniques county shall be conducted for cash crops, 292 farmers’ National and management c. Education and publicity on field investigations. The competent authority of Agriculture skills the marketing sense d. Water Resources Bureau of the county government shall give training on crop Ministry (including awareness of each county cultivation and management 143 times / d. Methods for Water market operations and risks) implement the cultivation skills training project. d. Fund for Water Conservation Week e. Supply and marketing Conservation propaganda d. Training on the sense of cooperative of each county c. Training on market knowledge shall be given to Week water conservation the staff of farm produce associations (FPAs), propaganda e. Frequency and such as walnut and chili associations, 80 times. participants of e. Training on Putonghua for training on brokers d. Water Conservation Week propaganda Putonghua campaign. e. Funds for farm and livestock e. The supply and marketing cooperative shall products brokers organize Putonghua training for farm produce training brokers annually. 12. Risks of sustainable a. FPAs on walnut and chilly shall be established irrigation a. Agriculture Bureau of each / training shall be given to FPA members and a. Number of training county farmers 16 times. a. Popularization of a, b ,d . Fund for given to FPA capability building agricultural techniques b, d. Agriculture Bureau of b, d.. FPAs shall be given play to in providing members and of FPA / fund for county, governments of market information on farm produce to farmers. farmers b. Specialized FPAs agricultural affected towns/Xiangs, village technique b, d. Type of committees c, e. Improve agricultural benefits and attracting c. Improve the sense of 129,335 people in project popularization/ c, 2010-2015 labor back to villages for business startup by information provided insurance against areas were affected e, f. County c, e.. Science and Technology expanding arable area, reducing irrigation costs agricultural natural government c, e. Proportion of Bureau and Labor Bureau of and adjusting cultivation structure. disasters, and increase the insurance, number of each county finance, fund for proportion of insurance f. Agriculture Bureau, f. The science and technology bureau, the training on pest labor come back agricultural bureau and the forestry bureau, etc. control and other d. Provide timely market Science and Technology f. Number of training Bureau and Forestry Bureau shall provide timely knowledge and training on pest relevant trainings information on pest control of each county control to farmers, and give training 16 times e. Attract labor back to the annually; the science and technology bureau, the SOGREAH - REPORT N° 1300030.R4 PAGE 7 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators village for business startup agricultural bureau and the forestry bureau, etc. shall assign technicians to every affected villages to f. Pest control direct farmers in pest control once a year. Fund for participatory 13.Training on planting irrigation techniques and labor skills a. Training projects shall be implemented on the management / for women basis of a survey of women’s training needs. fund of a, b, c. Women’s Association, Women shall account for not less than 50% of all agricultural a. Give consideration to Employment Bureau, training participants. popularization of a. Number of women women’s needs during Agriculture Bureau, Science project /fund of trained technical training. and Technology Bureau, b. Training shall be scheduled with due respect to 73,853 women in the cropping Ethnic and Religious Affairs 2010-2015 women’s timing requirements, and given in a b. Time and mode of affected areas technique training b. Give training in the time Bureaus of each county, manner more suitable for their literacy, such as training supported by and manner acceptable to governments of affected personal field demonstration. National women. towns/Xiangs, village c. Training language Agriculture committees c. Training shall be given in the Salar language, c. Give training to women a Tibetan and Chinese in ethnic minority areas, or an Ministry / county language that they can interpreter appointed during training. government understand and accept. finance and fund for relative trainings 14. Improving women’s a. Agriculture Bureau of each a. Women shall account for not less than 30% in a. Number of women marketing sense and county, all FPAs. Fund for joining FPAs inguistic abilities participatory b, c, d. Employment Bureau, b. Women shall account for not less than 50% of irrigation b. Measures of a. Ensure that women join Agriculture Bureau, the participants of marketing sense training. management/ sensitivity to social 73,853 women in the FPAs. 2010-2015 finances of all gender in affected areas Science and Technology c. Training shall be scheduled with due respect to levels of marketing sense b. Give consideration to Bureau, Forestry Bureau, and women’s timing requirements, and given in a training women’s needs in the Animal Husbandry Bureau, government and manner more suitable for their literacy and fund for relative marketing sense training. c. Time and mode of Women’s Association, supply linguistic status, such as by demonstration or in trainings an ethnic minority language. training c. Give training in the time and marketing cooperative of SOGREAH - REPORT N° 1300030.R4 PAGE 8 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators and manner acceptable to each county, women. d. Putonghua shall be included in women’s training d. Information on as a subject of training. Putonghua training d. Give training on Putonghua to women in technical and marketing sense training to improve the ability to communicate with the outside. a. Discount- interest loan b. National anti- poverty fund and a. Number of people fund of receiving small- 15.Lack of funds for a. Financial Bureau, Poverty a. Small-grant loans for industrial restructuring industrialized amount loan ndustrial restructuring Relief Office, Women’s shall be provided to poor ethnic minority poverty relief (including ethnic Association of each county, households and poor women by means of project financed minorities and a.Small-amount loan, government interest discount, etc. by Qinghai women) b. Financial Bureau, Economic including for poor ethnic province minority households and and Trade Bureau, Agriculture b. Industrialized poverty relief project b. Number of government women The poor and women in the Bureau, Poverty Relief Office enterprises 2010-2015 c. Agricultural Technique Popularization Project in affected areas of each county and relative c. Fund for supported b. Support to farm product each county / People Enriching and County financial agency agricultural Revitalizing Project, and Science and Technology c. Special subsidy of processing enterprises technique c. Financial Bureau of each Popularization Project supported by the State large-scale planting Popularization c. Special subsidy for large- county, governments of Ministry of Science and Technology / centralized of characteristic Project supported scale planting of affected towns/Xiangs, village cultivation supporting project financially supported agriculture project by the State characteristic agriculture committees by each county government, and number of Ministry of household received Science and the subsidy Technique / Fund for centralized cultivation supporting project SOGREAH - REPORT N° 1300030.R4 PAGE 9 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators 16.Income and livelihood restoration measures a. With the increase of irrigable land, industrial a. Water Resources Bureau, a. Conduct resettlement restructuring will be required. Poverty Relief Office, of each activities in conjunction with county, PMO, design agency, b. The land newly occupied by the branch canals the development activities of shall be compensated as permanently acquired the local governments. b, c. Land and Resources land. Bureau and Water Resources b. Compensate for the land Bureau of each county,, c. Newly reclaimed land of the same amount shall occupied by branch canals. village committees be provided to those affected by land acquisition 2097.83 mu of land will be c. Allocate additional land to where possible. Included in acquired permanently, d. Agriculture Bureau, See the those affected by land 2010-2015 Resettlement including 520.65 mu of Employment Bureau, Science d. The relocated households shall be given Resettlement Plan acquisition first. fund arable land. and Technology Bureaus of priority to in all types of training; special training d. Relevant skills training each county, oriented to the relocated households shall be given twice. e. Special assistance to the e. Civil Affairs Bureau of each vulnerable groups county, PMOs e. A vulnerable group aid fund shall be arranged for the poor, female-headed households and five- f. Ensure that the affected f. Design agency, governments guarantee households. population is involved in of affected towns/Xiangs, detailed design of the village committees f. The Resettlement Handbook shall be handed out subproject to minimize the to every affected person. impacts of resettlement. D. Organizational Capacity Development a, b. Water Resources Bureau, a, b. Included in 17. Established WUA Civil Affairs Bureau of each a. Number of 129,335 people in project a. 9 exemplary WUAs were set up. fund for county,, PMOs, design agency, exemplary WUA a. set up exemplary WUAs areas affected by participatory governments of affected project. b. 84 general WUAs were set up. irrigation towns/Xiangs, village b. Number of WUA b. set up general WUAs management committees SOGREAH - REPORT N° 1300030.R4 PAGE 10 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Monitoring Proposed action Target group Implementing agencies Time Activities (Project/Other) Source of funds indicators 18.Promoting the a, b, c. Design agency, participation of women in Women’s Association of each the subproject county, construction agency, a. Number of a.Give consideration to d. WUAs, Water Resources women’s FGDs at women’s needs and Bureau and Women’s the design stage and suggestions at the design Association of each county specific suggestions stage. a. Women must be consulted for comments and e. Land and Resources Bureau suggestions at the design stage. All meetings b. Number of women b. During the implementation of each county, PMO, shall be represented by women and their a, b. Included in taking up unskilled of the subproject, ensure that governments of affected organizations. project budget jobs under the 40% of unskilled job towns/Xiangs, village c, d. Included in subproject opportunities are first committees b, c. . At least 40% of the 8,200 unskilled job fund for available to the vulnerable 73,853women in the opportunities shall be provided to women and the participatory c. Number of women 2010-2015 groups inclusive of women affected areas poor at the implementation stage. irrigation dealing with tertiary and the poor. management industries at the d. Female members shall account for over 50% in implementation e. Included in c. During the implementation the exemplary WUAs; and not less than 30% in stage of the subproject, encourage the general WUAs. fund for resettlement women to provide catering d. Proportion of and other services to the e. Women shall have the same right of signing for women in WUA construction staff so as to compensation fees as men. create job opportunities. e. Proportions of women and men d. Involve women in WUAs. signing for receipt of compensation fees e. Ensure that women can sign for compensation fees for land acquisition. SOGREAH - REPORT N° 1300030.R4 PAGE 11 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 14 SUMMARY RESETTLEMENT PLAN SOGREAH - REPORT N° 1300030.R4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT A14. SUMMARY RESETTLEMENT PLAN A14.1 BACKGROUND The proposed project comprises two subprojects, named Liujiaxia irrigation subproject and Gongboxia irrigation subproject will use the high water level of Lijiaxia and Gongboxia Reservoir by building two main canals (south main canal and north main canal) for each to meet the irrigation water demand of the local people. According to the resettlement impacts survey, the two subprojects will necessitate land acquisition and resettlement. Two full Resettlement Plans (RPs) have been prepared based on ADB procedures. In addition, the land use pre-examination for the Project are in processing and expected to be final approved by Qinghai Land and Resources Department by the end of September, 2009. The resettlement impacts of Gongboxia have been measured in detail and Lijiaxia were estimated by DI based on FSRs, then RPs were prepared and also were disclosed to affected persons (APs). The resettlement planning and implementation is designed to ensure that the APs will be better-off or at least not worse-off as a result of the Project. The head works of Gongboxia and Lijiaxia irrigation subprojects are Gongboxia and Lijiaxia Hydroelectric Power Plant respectively. Due diligence review has been conducted on the resettlement impacts, compensation policies and rehabilitation plans for these linked Dams, which have been covered in each RP. To sum up, the Dams resettlement activities have been well implemented in line with the resettlement documents and policies approved by PRC. The APs and affected villages (AVs) have received the compensations and post-support annual subsidies as their entitlements in the timely manner. With the implementation of livelihood restoration measures, the livelihoods of affected households have been restored and even increased as compared with that before resettlement. A14.2 SCOPE OF RESETTLEMENT IMPACT In order to avoid or minimize land acquisition and resettlement, consultations with local officials, village committees and APs have been conducted during the RP preparation stage. On the basis of the optimization FSR, the Project will affect 68 villages of 9 townships/towns in 3 counties. A total of 6877 persons (including 5947 ethnic minorities’ persons) will be affected directly by LAR. The Project will permanently acquire 2097.83 mu of land (including 1207.57mu acquired by main canal and 890.26 mu by branch canal1, of which 520.66mu (24.8%) are classified as cultivated land, 378.35mu of land will be occupied temporarily during the construction phase, all of them are the non-cultivated land and no person will be affected. 2082.61 ㎡ of rural housing will be demolished with 16HHs and 101 persons to be affected .The detailed resettlement impacts of the Projects are summarized in Table1. 1 On the basis of the Current Land Use classification(GB/T21010-2007); if the width of canal is less than 2 m , the land can be used as collective land SOGREAH -REPORT N° 1300030.R4 PAGE 1 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 1 SUMMARY OF RESETTLEMENT IMPACTS Temporary Affected Permanent Permanently Subproject Affected Land Households Townships Land use Affected Name Areas Acquisition ( HHs/m2) /Villages (mu) Persons (mu) Xunhua Gongboxia and 5/36 827.26 91.97 3/815.61 1901 Hualong Jianza Lijiaxia and 4/32 1270.57 286.38 13/1267 4976 Hualong Total 9/68 2097.83 378.35 16/2082.61 6877 A14.3 POLICY AND LEGAL FRAMEWORK For people unavoidably affected, the resettlement objective is to achieve equal, or better, income and living standards in line with not only the Chinese laws and regulations, but also ADB’s Resettlement Policies including Involuntary Resettlement (1995) and Resettlement Operations Manual (OM Section F2), etc. Key PRC laws and regulations include the Land Administrative Law of the P.R.C (2004), the Decision on Reinforcing Reform in Land Administration by the State Council (State Council [2004] No.28), Ministry of Land Resources (MLR) Guidelines on Improving Land Acquisition and Relocation Regulations (MLR Document No. 238). Meanwhile, Qinghai Province also issued related documents. All these documents have provided essential guidelines for RP preparation. All persons affected by the Project will be eligible for compensation and assistance. The cut-off date for eligibility for compensation and assistance is the date of each subproject approval by local government, which will be announced immediately to all APs. Based on consultations with EA, PMOs, local governments and affected persons, and general practices in the project counties, a set of resettlement principles is agreed to be adopted by the Project implementing agencies (IAs). These include: avoid or minimize resettlement, wherever feasible; the compensation and titles gained by the APs shall at least enable them to maintain the same living standards as “without project” or even better; affected persons should derive some direct benefits from the Project; all affected people regardless of the legal titles shall be entitled to get compensation and demolition assistance; the resettlement compensation shall ensure all APs to at least maintain the living standards as before; if the remaining land after land acquisition fails to safeguard the livelihood of the APs, compensation in forms of cash or land replacement, plus other necessary profit-earning activities shall be provided for the APs; The ethnic minorities are encouraged to participate into the resettlement planning and implementing, the folk custom of ethnic minorities shall be integrated into the house rehabilitation and income restoration. the APs shall have good understanding of the qualification, means and standards of compensation, livelihood and restoration plan as well as project construction arrangement etc., and participate in the implementation of the resettlement plan; no land acquisition shall be proceeded with before the APs are satisfied with schemes for compensation and resettlement; the compensation and resettlement operations shall be monitored by the EA and an independent organization; preference is given to land-based resettlement strategies for ethnic minority groups that are compatible with their cultural preferences and are prepared in consultation with them; SOGREAH -REPORT N° 1300030.R4 PAGE 2 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT vulnerable groups (incl. women) shall receive special assistance and treatment so that they can live better; and The resettlement budget shall be enough to cover all aspects that are caused by the project construction and operation. A14.4 COMPENSATION ENTITLEMENTS AND STANDARD Based on the above principles an entitlement matrix has been formulated for the Project which also has been consulted and disclosed to related stakeholders. The compensation standard of the Project is mainly on the basis of The temporary standard on the compensation for the land acquisition of the upstream large and medium-sized hydropower projects of Yellow River in Qinghai province(Qinghai Government Office [2007] 46). For land acquisition by main canal, compensation fees include a land compensation fee, a resettlement subsidy and young crops compensation fee. The land compensation will be paid to the affected village or APs, while the resettlement subsidy and young crops compensation fee will be paid to the APs. The land acquisition compensation is based on the comprehensive average annual output value (AAOV) of the land. For land use by branch canal, it will be designed and rebuilt along the original alignments as possible, If the collective land occupation cannot be avoided, the APs will also be compensated as the land acquired by main canal, although the land won’t be converted to construction land if the width of canal is less than 2m according to the criterion of the Current Land Use classification (GB/T21010-2007). For house demolition, compensation will be paid to owners based on replacement cost without depreciation, plus relocation and transition expenses. Compensation for young crops, trees, other facilities and temporary impacts will be paid directly to APs. Income losses resulting from reduced production/sales and wages caused by the Project will also be assessed and compensated. In addition, both women and man are entitled to sign the land acquisition and house demolition contract and obtain the payments. A14.5 RESETTLEMENT COST AND FUND MANAGEMENT The initial cost estimate for land acquisition and resettlement of the two subprojects is CNY 20.41 million in 2008 prices including contingencies and land taxes; and equivalent to $3.0 million2 (1.0% of the total project cost). The land acquisition and resettlement costs are included as part of total project cost and will be funded by Qinghai Municipal Government (QMG). The resettlement cost is estimated in Table 2. 2 The exchange rate is based on CNY 6.8 per US Dollar. SOGREAH -REPORT N° 1300030.R4 PAGE 3 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 2 ESTIMATED RESETTLEMENT COST (CNY 10,000) Gongboxia Irrigation Lijiaxia Irrigation Channel Channel No. Item Total South North South North subtotal subtotal channel channel channel channel Permanent Collective 1 Land Acquisition by 65.2 73 138.2 229.4 165 394.3 532.5 main canal Land Occupation by 2 73.9 55.8 129.7 161.7 238.8 400.5 530.2 Branch Canal Temporary Land 3 1 1.1 2 2.6 3.7 6.3 8.3 Occupation rural housing 4 33.1 0 33.1 51.2 6.4 54.6 87.7 demolition 5 ground attachment 4.5 1.5 6.1 5.7 8.5 14.2 20.3 total of 1~5 177.8 131.4 309.2 447.8 422.2 869.9 1179.1 6 other fees 35.6 26.3 61.8 89.54 84.44 173.98 235.78 total of 1~6 213.3 157.7 371 537.2 506.6 1043.9 1414.9 7 Contingencies 21.3 15.2 36.6 53.7 50.7 104.4 141 total of 1~7 234.7 172.9 407.6 590.9 557.3 1148.3 1555.9 tax and fee of land 8 54 50.4 104.4 194.6 186.4 381 485.4 acquisition total 288.6 223.3 512 785.51 743.7 1529.2 2041.2 According to the compensation policies and standards defined in the resettlement plans, the payment and usage of compensation funds will be carried out under the supervision of the internal monitoring agencies, with regular audit review and with regular review by the external monitoring agency. During the resettlement implementation, the compensation contracts will be negotiated and signed with village committees and households, etc.. On this basis, the final costs might be adjusted. A14.6 RESETTLEMENT AND REHABILITATION The degree of farmland losses on affected villages and on households were carefully assessed and then rehabilitation plans were consulted with APs, the findings and results have been incorporated into each RP. In general, the measures for economic rehabilitation for main canal include: (i) use compensation for changing the agriculture structure, and development of more economical crops. (ii) provision of employment opportunities during the project construction and operational phases; (iii) provision of the same amount of reclaimed land if possible; (iv) promotion and development of new enterprises and self-employed secondary and tertiary businesses (i.e. running a noodle store, community services, transportation, working at a cap factory, small-scale supermarkets); and (v) provision of free technical training to the APs to increase their skills. As for the measures of branch canal land use restoration, the branch canal will be rebuilt in the original alignments as much as possible. If the collective land occupation cannot be avoided by branch canal, they will be compensated as those acquired by main canal. .The measures for income restoration are similar as above. SOGREAH -REPORT N° 1300030.R4 PAGE 4 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT Regarding rural housing demolition, the affected households will receive compensation at replacement cost for the lost structures and attachments without any depreciation. The affected households can rebuild their houses by themselves with free house plot provided according to their wills. To salvage the structural materials will not be prohibited and moving subsidy will also be provided. Ethnic minority groups will be entitled to build their houses on the basis of their culture and religion. For non-residential housing and structures, the affected owners will be compensated with cash at replacement cost for the lost structure. In addition, the vulnerable groups have been carefully identified with the help of village community, and the special attention and policies have been formulated and consulted with related stakeholders. A14.7 IMPLEMENTATION ARRANGEMENTS Qinghai Provincial Water Resources Department (QWRD, the executing agency) assumes the overall responsibility for the resettlement management and supervision. A social, environment & resettlement office within QWRD has been established and coordinates the planning, implementation, financing and reporting of land acquisition and resettlement. The local PMOs, Jianzha, Hualong and Xunhua County’s Water Resources Bureau take the primary responsibility for the resettlement consultation, implementation and delivery of entitlements in time. In order to ensure that the respective PMOs and village committees can properly and smoothly handle the LAR, the training programs in each RP have been formulated for the PMOs resettlement staff. The resettlement implementation schedule for the subprojects has been prepared based on the preparation and construction timetable. No land acquisition or demolition shall start until RPs are approved by ADB. It is anticipated that land acquisition and house demolition will be started in March of 2010 and be completed by December of 2013. A14.8 PUBLIC PARTICIPATION AND CONSULTATION During the RPs preparation, the affected villages and APs have been informed about the key elements of land acquisition and resettlement through consultation during the planning stage and distribution of resettlement information. On various occasions during meetings, interviews, focus group discussions, public consultation workshops, and community consultation meetings, local representatives have participated in the planning and their concerns have been integrated into the RPs. The draft RPs will be distributed or disclosed to the affected counties, townships, villages, APs prior to Management Review Meeting (MRM) and resettlement information booklets (RIB) will be disseminated to the APs by the end of Sept, 2009. This booklet will confirm the project affected areas, the implementation schedule and framework, the compensation standards for land acquisition and other assets, relocation assistance, livelihood rehabilitation strategy, and dispute resolution procedures. In accordance with ADB’s Public Communications Policy, the draft RPs will be posted on the ADB website prior to appraisal and the final RPs upon finalization prior to board approval. The grievance redress procedures have been well established and explained in the RPs. In addition, the PMO will set up project resettlement agencies to supervise implementation, continue the public consultations, monitor progress, and deal with grievances. A14.9 MONITORING AND EVALUATION Internal and external resettlement monitoring mechanism is agreed to be established during the project implementation. A TOR for monitoring and evaluation including monitoring methodologies has been drafted and attached to each RP. Internal resettlement progress supervision and monitoring will be done by each PMO to ensure compliance with the provisions of the RP; the internal report will be submitted to ADB every half a year. Independent agency will be entrusted to conduct semi-annual monitoring and annual evaluation of overall project LAR activity until 2 years after the completion of LAR. External monitoring reports will be forwarded directly to both the PMOs and ADB. In addition, the PMOs have agreed to a set of supervision milestones with ADB to ensure timely and effective implementation of the resettlement activities. SOGREAH -REPORT N° 1300030.R4 PAGE 5 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT TABLE 3 RESETTLEMENT SUPERVISION MILESTONES (As of July Sep 2009) Responsible No. Resettlement Tasks Target Deadline Status Agency 1 Disclosure 1.1 Draft RPs distributed to CPMs 3CPMs 10 Sep. 2009 Completed 1.2 Information booklets Gongboxia subproject 36 AVs PMO and IAs 30 Sep, 2009 Lijiaxia subproject 32 Avs PMO and Ias 30 Sep, 2009 1.2 RPs posted on ADB websites IAs, PMO and ADB Oct, 2009 2 Resettlement Plans & Budgets 2.1 Approval of 2 RPs & budgets (and compensation rates) RMB 4.985.12 Gongboxia subproject QPG and PMO Dec., 2009 million RMB 11.60 Lijiaxia subproject QPG and PMO Dec., 2009 15.29million 3 Compensation Agreements 3.1 Village agreements 68 villages IAs and PMO Mar. 2010 to Mar 2013 3.2 Household agreements 16 AFs IAs and PMO Mar. 2010 to Mar 2013 4 Detailed Measurement Surveys (DMS) 4.1 Main canals of Gongboxia PMO and IAs 30 Jun, 2009 Completed subproject 4.2 Main canals of Lijiaxia PMO and IAs 30 Sep, 2009 ongoing subproject 5 Implementation of Rehabilitation Measures 5.1 Compensation disbursement QPG, PMO, IAs and March, 2010 to Mar, 68 villages and livelihood restoration local government 2013 5.2 Implement Training programs 1402 AFs Labor Offices Apr, 2010 to Apr 2012 6 Housing demolition and rehabilitation 6.1 IAs and local Housing plot selection 16 AFs Feb, 2010 governments 6.2 IAs and local Housing construction 16 AFs Aug, 2010 governments 6.3 IAs and local Move into new housings 16 AFs Oct, 2010 governments 6 Monitoring & Evaluation 6.1 Baseline surveys 2 RPs Monitor Apr, 2010 6.2 Set-up internal supervision As per RP PMO and IAs Mar, 2010 6.3 Contract external monitor One PMO Mar, 2010 6.4 Internal monitoring reports Semi-annual PMO and IAs Start from June, 2010 1stReport 6.5 Jan, 2011 2nd Report External monitoring reports Semi-annual Monitor Jan, 2012 1stReport 6.6 2 Annual Jan, 2013 2nd Report Annual Evaluation reports Monitor Reports Jan, 2014 1stReport 6.7 Resettlement Completion 2 Reports IAs and PMO Jun, 2014 Reports 7 Documentation of Consultation IAs Ongoing 8 Documentation of Grievances IAs Ongoing 9 Flow of Land Compensation and Resettlement Funds 9.1 - To IAs 100% of funds Feb, 2010 9.2 - To villages 100% of funds IAs Dec, 2012 9.3 - To households 100% of funds IAs, villages Dec, 2013 10. Commence Land Acquisition and Civil Works 10.1 Gongboxia subproject IA May, 2010 10.2 Lijiaxia subproject IA May, 2010 AF=affected family; AV=affected village; IAs=Implementing Agencies; PMO=Project Management Office, QPG=Qinghai Provincial Government SOGREAH -REPORT N° 1300030.R4 PAGE 6 2009 SEPTEMBER PEOPLES REPUBLIC OF CHINA –ADB/QWRB QINGHAI RURAL WATER RESOURCES MANAGEMENT PROJECT R4: FINAL REPORT APPENDIX 15 BIBLIOGRAPHY SOGREAH - REPORT. 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