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The World Bank China Wuhan Second Urban Transport (P112838) REPORT NO.: RES27181 Public Disclosure Authorized RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CHINA WUHAN SECOND URBAN TRANSPORT PROJECT For Official UseUse, Only Only APPROVED ON MARCH 30, 2010 TO Public Disclosure Authorized PEOPLE’S REPUBLIC OF CHINA TRANSPORT & ICT EAST ASIA AND PACIFIC Public Disclosure Authorized Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Jose Luis Irigoyen Practice Manager/Manager: Binyam Reja Task Team Leader: Arturo Ardila Gomez Public Disclosure Authorized The World Bank China Wuhan Second Urban Transport (P112838) ABBREVIATIONS AND ACRONYMS 2RR Second Ring Road 3RR Third Ring Road CCTV Closed-circuit Television DO Development Objective INT Integrity Vice Presidency IP Inspection Panel JAE Jiefang Avenue Extension M&E Monitoring and Evaluation MOF Ministry of Finance PDO Project Development Objective PT Public Transport For Official UseUse, Only Only RS Road Safety TDM Travel Demand Management TOD Transit-Oriented Development VMS Variable Message Signs WMG Wuhan Municipal Government WIM Weigh-in-Motion WSUTP Wuhan Second Urban Transport Project The World Bank China Wuhan Second Urban Transport (P112838) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P112838 Specific Investment Loan For Official UseUse, Only Only Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 30-Mar-2010 31-Aug-2017 Organizations Borrower Responsible Agency Wuhan Urban Construction Utilization of Foreign People's Republic of China Investment Project Management Office Project Development Objective (PDO) Original PDO The objective of the Project is to assist the Borrower's Municipality of Wuhan to enhance mobility for passenger trips within and to the central area of Wuhan in an environmentally sustainable, integrated and safe manner. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-78640 30-Mar-2010 11-Jun-2010 07-Sep-2010 31-Aug-2017 100.00 83.65 16.35 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank China Wuhan Second Urban Transport (P112838) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The Wuhan Second Urban Transport Project (WSUTP) became effective on September 7, 2010 with a closing date of December 31, 2015. The Project Development Objective (PDO) is to assist the Municipality of Wuhan in enhancing mobility for passenger trips within and to the central area of Wuhan in an environmentally sustainable, For Official UseUse, Only Only integrated and safe manner. The project comprises five components: (i) Public Transport (PT); (ii) Road Safety (RS); (iii) Road Improvement (RI); (iv) Travel Demand Management (TDM); and (v) Institutional Development and Capacity Building. The updated total project cost is US$926.81 million and total IBRD financing is US$100 million. The project was restructured in June 2015 with a new closing date of August 31, 2017: a 20-month extension. In August 2017, the Ministry of Finance (MOF), on behalf of the Wuhan Municipal Government (WMG), requested a 12-month second extension of the closing date to August 31, 2018. 2. By the end of June 2017, the loan had disbursed US$83.65 million (83.65 percent of the loan), including an advance of US$10 million. Three components—RS, TDM, and Institutional Development and Capacity Building—are completed or nearly completed. Progress toward achieving the PDO and project implementation progress are rated Moderately Satisfactory (MS). The project complies with the Bank’s safeguards and fiduciary policies. There are no integrity (INT) or Inspection Panel (IP) cases related to this project. There are no overdue or outstanding audit issues. 3. Prior to the first restructuring, project implementation—especially the construction of the Jiefang Avenue Extension (JAE) under the RI component—had been delayed by a lack of counterpart funds for land acquisition and resettlement, escalating land-acquisition and resettlement costs, and a significant change in Wuhan’s sectoral strategy which diverted resources to the accelerated expansion of the metro system. The IP and Development Objective (DO) ratings were downgraded to Moderately Unsatisfactory (MU) in October 2013 and November 2014, respectively. 4. At the time of the first restructuring, the Bank was financing the Dibian Road to Pusheng Road segment of the JAE. This restructuring included a set of conditions stipulating that the Bank would finance the next segment of the JAE— Pusheng Road to the Zhujia River—only if the WMG developed a credible and time-bound implementation and financing plan for the completion of the land acquisition, resettlement, and construction of the Huangpi segment within the extended project closing period (August 31, 2017). The Huangpi segment comprises two contracts: (i) the bridge over the Zhujia River, and (ii) the Zhujia River to the 3rd Ring Road (3RR). These were to be financed by counterpart funds. After conducting a due-diligence review, the Bank agreed in February 2016 to finance the Pusheng Road to the Zhujia River contract. Due to cost savings from previous contracts and exchange-rate differences since the first restructuring, in February 2017 Bank management approved the use of the Bank loan (rather than counterpart funds) to finance the The World Bank China Wuhan Second Urban Transport (P112838) construction of the bridge over the Zhujia River. The Zhujia River to the 3RR segment continues to be financed by counterpart funds. B. Factors affecting project implementation 5. Nevertheless, implementation of the JAE has encountered major delays because the pace of resettlement in Huangpi District slowed down. Civil works also experienced unforeseen difficulties after a geological survey in April 2017 found underground dolomite leading to karst formation near the bridge. In addition, land acquisition and resettlement for the Tianshunyuan and Sanjintan PT terminals under the PT component are delayed. First, the Urban Village Renewal Program being implemented in Wuhan has complicated the coordination of agencies. This has delayed negotiation with land owners and made it difficult to obtain various approvals regarding land use and planning. Second, lack of counterpart funds for these terminals has aggravated the situation. The site for the Gangdu Garden terminal has issues For Official UseUse, Only Only regarding land-use regulations. These issues have been difficult to resolve and remain unresolved. Finally, the WMG is now planning a Transit-Oriented Development (TOD) approach to develop the Jinyintan Park & Ride. The structuring of a TOD approach is complex and takes time. The following section expands the discussion by component and explains the proposed changes. C. Implementation Progress and Changes Proposed by Component 6. Component 1. Public Transport (PT). The original design of this component included improvements in four PT priority corridors and the construction of four PT terminals and interchanges. Two corridors (Jiefang Avenue and Xinhua/Youyi Avenues) were dropped under the first restructuring. Of the other two corridors, Heping Avenue has been completed, and 90 percent of Hanyang Avenue’s construction has also been completed with counterpart financing. Progress on PT terminals and interchanges at Tianshunyuan, Sanjintan, Gangdu Garden, and the Jinyintan Park & Ride was stalled due to delays in land acquisition and resettlement and land use regulation issues. The implementation of this component is therefore rated as Moderately Unsatisfactory (MU) in the latest Implementation Status Report (ISR). As discussed above, the recently implemented Urban Village Renewal Program contributed to this delay. These issues are being resolved; land acquisition for the Tianshunyuan and Sanjintan Terminals is expected to be finalized by the end of 2017; and civil works are expected to be completed by July 2018. The WMG allocated the necessary funding earlier in 2017. However, Gangdu Garden and the Jinyintan Park & Ride are unlikely to be completed even within the proposed revised closing date, given the complexities mentioned above, and will be dropped from the project. Because of the changes in scope, the cost of this component has been reduced, as shown in the Components table below. In addition, under the previous restructuring the project description in the legal documents misspelled the name of Hanyang District as Hangyan County; this needs to be corrected. 7. Component 2. Road Safety (RS). This component is fully completed. The original design of this component includes financing for RS interventions in five corridors plus the upgrading of the Hankou Area Traffic Control System, the provision of equipment for two Traffic Command Sub-Centers, and an extensive Road-User Education Program. Three RS corridors were dropped and a new corridor (Baishazhou Avenue) was added under the first restructuring; in addition, the Hanyang Avenue PT Corridor was also designated as an RS Corridor. All RS corridors have been completed. The updated cost estimates indicate that the cost of this component is lower, as shown in
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