Document of The World Bank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized Report No: 54367-CN

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

Public Disclosure Authorized IN THE AMOUNT OF US$150 MILLION

TO

THE PEOPLE'S REPUBLIC OF CHINA

FOR THE

TAIYUAN URBAN TRANSPORT PROJECT

May 13, 2010 Public Disclosure Authorized

China and Mongolia Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region

Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

CURRENCY EQUIVALENTS

(Exchange Rate Effective September 2009) Currency Unit = RMB or Chinese Yuan US$1 = 6.8 RMB

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ATC Area Wide Traffic Control PLG Project Leading Group BRT Bus Rapid Transit PT Public Transport CDD Taiyuan Municipal Urban Construction QBS Quality Based Selection Development Department CQS Consultant Qualifications-based QCBS Quality and Cost Based Selection Selection DA Designated Account RAP Resettlement Action Plan EA Environmental Assessment RI Road infrastructure EIA Environmental Impact Assessment RPF Resettlement Policy Framework EIRR Economic Internal Rate of Return RSC Road Safety Committee EMP Environmental Management Plan SBD Standard bidding documents FM Financial Management SPFB Shanxi Provincial Finance Bureau FMM Financial Management Manual SOE State-owned enterprise GDP Gross Domestic Product SOEx Statement of expenses ICB International Competitive Bidding Sub-PMO Sub-Project Management Office IS Institutional Strengthening Component TA Technical Assistance MBD Model Bidding Documents TR Taihang Road MoF Ministry of Finance TCC Taiyuan Housing, Rural and Urban Construction Commission MV Motorized Vehicles TMDRC Taiyuan Municipal Development and Reform Commission NCB National Competitive Bidding TMFB Taiyuan Municipal Finance Bureau NMT Non Motorized Vehicles TMG Taiyuan Municipal Government NPV Net Present Value TPMO Taiyuan Project Management Office PH Phase TTPB Taiyuan Traffic Police Brigade TPTGC Taiyuan Public Transport Group Co. TS Traffic Safety and Management

Vice President: James W. Adams Country Manager/Director: Klaus Rohland Sector Managers: Ede Ijjasz-Vasquez (EASCS) and Vijay Jagannathan (EASIN) Task Team Leader: Shomik Mehndiratta

CHINA TAIYUAN URBAN TRANSPORT

CONTENTS

Page I. STRATEGIC CONTEXT AND RATIONALE ...... 1 A. Country and Sector Issues ...... 1 B. Rationale for Bank Involvement ...... 2 C. Higher-level Objectives to which the Project Contributes ...... 2 II. PROJECT DESCRIPTION ...... 3 A. Lending Instrument ...... 3 B. Project Development Objective and Key Indicators ...... 3 C. Project Components ...... 3 D. Lessons Learned and Reflected in the Project Design ...... 4 E. Alternatives Considered and Reasons for Rejection ...... 5 III. IMPLEMENTATION ...... 5 A. Institutional and Implementation Arrangements ...... 5 B. Monitoring and Evaluation of Outcomes/Results ...... 6 C. Sustainability...... 7 D. Critical Risks and Possible Controversial Aspects ...... 7 E. Loan Conditions and Covenants ...... 9 IV. APPRAISAL SUMMARY ...... 9 A. Economic and Financial Analyses ...... 9 B. Technical ...... 10 C. Fiduciary ...... 11 D. Social...... 11 E. Environment ...... 12 F. Safeguard Policies ...... 13 G. Policy Exceptions and Readiness...... 14

Annex 1: Country and Sector Background ...... 15

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 27

Annex 3: Results Framework and Monitoring ...... 28 Annex 4: Detailed Project Description ...... 34

Annex 5: Project Costs ...... 45

Annex 6: Implementation Arrangements ...... 48

Annex 7: Financial Management and Disbursement Arrangements ...... 52

Annex 8: Procurement ...... 59

Annex 9: Economic and Financial Analysis ...... 65

Annex 10: Safeguard Policy Issues ...... 72

Annex 11: Project Preparation and Supervision ...... 81

Annex 12: Documents in the Project File ...... 82

Annex 13: Statement of Loans and Credits ...... 83

Annex 14: Country at a Glance ...... 87

Annex 15: Maps (IBRD 36446 and 36447) ...... 89 CHINA

TAIYUAN URBAN TRANSPORT PROJECT

PROJECT APPRAISAL DOCUMENT

EAST ASIA AND PACIFIC

EASCS

Date: May 13, 2010 Team Leader: Shomik Raj Mehndiratta Country Director: Klaus Rohland Sectors: General transportation sector (100%) Sector Manager: Ede Jorge Ijjasz-Vasquez Themes: Other urban development (P) (EASCS) and Vijay Jagannathan (EASIN) Project ID: P081615 Environmental screening category: Full Assessment Lending Instrument: Specific Investment Loan

Project Financing Data [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other:

For Loans/Credits/Others: Total Bank financing (US$m.): 150.00 Proposed terms: US Dollar denominated, commitment linked Variable-Spread Loan, repaid over twenty-five years, including a five year grace period. Financing Plan ($m) Source Local Foreign Total Borrower 180.59 0.00 180.59 International Bank for Reconstruction and 0.00 150.00 150.00 Development Total: 180.59 150.00 330.59

Borrower: People's Republic of China, represented by Ministry of Finance Beijing China

Responsible Agency: Shanxi Finance Bureau No. 345, Yinze Street, Taiyuan Shanxi Province China 030001 Tel: (86-351) 415-2220/21/23Fax: (86-351) 4045332 [email protected]

Estimated disbursements (Bank FY/$m) FY 11 12 13 14 15 16 17 Annual 2.00 10.00 30.00 30.00 30.00 30.00 18.00 Cumulative 2.00 12.00 42.00 72.00 102.00 132.00 150.00 Project implementation period: Start July 15, 2010 End: December 31, 2015 Expected effectiveness date: September 15, 2010 Expected closing date: June 30, 2016

Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Ref. PAD I.C. Does the project require any exceptions from Bank policies? Ref. PAD IV.G. [ ]Yes [X] No Have these been approved by Bank management? [ ]Yes [ ] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated “substantial” or “high”? [ ]Yes [X] No Ref. PAD III.E. Does the project meet the Regional criteria for readiness for implementation? [X]Yes [ ] No Ref. PAD IV.G.

Project development objective Ref. PAD II.C., Technical Annex 3 The project‟s development objective is to improve mobility on selected transport corridors of the city center of Taiyuan Municipality in Shanxi Province of the Borrower in a safe and efficient manner.

To this end, the project will monitor the following on selected main corridors: (a) travel times for road users; (b) quality and use of public transport services; and (c) road fatality rates. The project will also strengthen capacity for project implementation, traffic management and public transport. Project description Ref. PAD II.D., Technical Annex 4 The project has four parts: Part 1: Road Infrastructure. Construction of: (a) the Taihang road, a north-south arterial at the east end of Taiyuan city, including bridges, interchanges and overpasses; and (b) the extension of the Nanzhonghuan road providing access to a proposed railway station in the south.

Part 2: Public Transport. (a) development of a bus priority scheme on Xinjian street of Taiyuan city, including lanes for buses and associated infrastructure; (b) construction of: (i) bus depots in Nanhan and Beiying localities in Taiyuan city; and (ii) bus terminals in Yingxin, Zoo, and Beiyan localities in Taiyuan city; and (c) design and installation of an automated vehicle location and Bus Dispatching System.

Part 3: Traffic Safety and Management. Carrying out of a program on selected main transport corridors in Taiyuan city to improve the safety and efficiency of traffic movement for all road users consisting of: (a) construction of pedestrian facilities; (b) construction of bicycle facilities; (c) carrying out of channelization at selected junctions; (d) installation of traffic signs and markers; (e) acquisition and installation of equipment for traffic management; and (f) carrying out road safety measures, including an integrated performance-based program over a selected portion of Jiefang road.

Part 4: Institutional Development. Carrying out a program for strengthening the capacity of Taiyuan municipality to implement the Project and to undertake additional transport infrastructure investments, including carrying out of studies, formulating appropriate policies, and provision of equipment, training, and technical assistance. Which safeguard policies are triggered, if any? Ref. PAD IV.F., Technical Annex 10 Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP/BP 4.12) Significant, non-standard conditions, if any, for: Ref. PAD III.F. Board presentation: n/a Loan effectiveness: n/a . Covenants applicable to project implementation:  the proceeds of the loan will be on-lent by the Borrower to Shanxi and by Shanxi to Taiyuan municipality on the same terms and conditions as the Bank loan, with the municipality bearing the foreign exchange risk;  Shanxi and Taiyuan Municipality shall maintain an adequate organizational structure for implementing the project;  Shanxi shall cause Taiyuan Municipality to: (a) implement the RPF, RAP and EMP; (b) prepare and implement annual work plans for the project; and (c) engage consultants for carrying out supervision of civil works; and  Shanxi shall cause Taiyuan Municipality to furnish to the Bank: (a) semi-annual project reports to monitor and evaluate progress in project implementation; (b) semi-annual progress reports on the implementation of the EMP, RAP, RFP, measures for improving the living standards of displaced persons, and the actions for protecting cultural heritage sites and relics; and (c) a mid-term progress report for the project by June 30, 2013.

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and Sector Issues Taiyuan – recent economic surge? 1. Taiyuan municipality, with a population of 3.7 million and an urban population of 2.8 million, is the capital city of the central Chinese province of Shanxi. Neither the province nor the municipality benefited proportionally from the first two decades of China‟s post-1978 economic reform process. By 2001, Shanxi‟s gross domestic product (GDP) was only $870 per head, 20th among China‟s 31 provinces, and disposable income among Taiyuan‟s urban residents was $940 per head, 125th among China‟s cities and below the national average.

2. However, since then, and particularly over the last five years, Taiyuan has benefited from faster economic development. Double-digit year-on-year GDP growth since 2001 raised the average disposable income of Taiyuan‟s urban residents to $1,520 by 2005, 67th in the country and equal to the national average. One key factor underlying this improvement has been an increase in the price of coal, a commodity that has long been central to Shanxi‟s economic development and remains a key industry in the province. A three-fold increase in the price of coal from 2000 to the present has significantly enhanced the city‟s economic resource base.

3. Additionally, the whole province has benefited from the Government of China‟s initiative during the 11th Five-Year Plan (2006 – 2010) to support the “Rise of Central China.” In line with this initiative, Shanxi province has formulated its own vision of developing a “Greater Taiyuan Economic Area”.

The infrastructure opportunity

4. Like many other Chinese cities, Taiyuan Municipal Government (TMG) has embarked on a rapid program of infrastructure construction that it considers essential for sustaining and increasing its recent economic success. Transportation is a significant and very visible element of this investment; in 2006 and 2007 the City spent almost $1 billion annually on improving its transport infrastructure.

5. The initial focus of this effort has been on „big‟ primary roads such as airport expressways, river crossings and upgrading of major arterials. While much of this infrastructure is needed and will significantly enhance the mobility of Taiyuan‟s residents, the experience of many other Chinese cities has been that by itself, this approach can leave the city with some critical gaps. In particular, previous World Bank analytical work has found that in many Chinese cities, though a world-class primary road infrastructure has been developed very rapidly, the quality of public transport services and traffic safety has received inadequate attention during this period of road development.

6. However, Taiyuan is undertaking its infrastructure expansion amid an increasing national priority given to „people-centered‟ development, with direct consequences for public transport and traffic safety. The national government has taken several actions in recent years to implement these strategies. The National Road Safety Law, promulgated in 2004 and now under implementation, explicitly values safety over mobility and focuses especially on the most

1 vulnerable road users. Pedestrians and cyclists involved in traffic accidents are now considered, by default, victims needing redress. Similarly, the highest levels of Chinese leadership, the State Council (via Opinion #46 of October 2005) and the Ministry of Construction, in official documents and public announcements, have promoted the provision of priority to public transport in cities.

7. In light of this increasing national priority, and drawing on the experience of other Chinese cities, Taiyuan has the opportunity to develop transport infrastructure that reflects a balance between the need for roadway expansion and the needs of public transport and non- motorized modes that are still the mainstay of a majority of its residents.

B. Rationale for Bank Involvement

8. The World Bank is ideally placed to help Taiyuan take full advantage of this opportunity. The Bank has been China‟s urban development partner for over fifteen years, during which it has lent over $1.5 billion for 11 urban transportation projects, supporting cities with coordinated urban and transport development, public transport improvement and reform, mobility management, people-centered transport development, and improvement of planning, investment and management practices.

9. The Government of China has now asked the World Bank to support urban infrastructure development in Taiyuan as part of its program to support the „Rise of Central China.‟ TMG has explicitly noted that it is looking for the Bank to provide not just financing, but advisory support to strengthen its urban transport planning, operational and management practices.

C. Higher-level Objectives to which the Project Contributes

10. The project is consistent with the 2006-10 Country Partnership Strategy approved by the Board on May 23, 2006, which seeks (among other objectives) to improve the competitiveness of China‟s various regions and the overall investment climate, and to address the needs of disadvantaged groups and underdeveloped areas through financing infrastructure. Specifically, the proposed project supports the objectives of: (a) promoting balanced urbanization; (b) reducing poverty, inequality, and social exclusion; (c) financing sustainable and efficient growth; and (d) improving public and market institutions.

11. Urban infrastructure development has been identified as a priority area for investment by the Chinese government. The Project will support this priority by improving Taiyuan‟s urban transport system. It also supports the implementation of State Council Directive 46 regarding “priority for public transport”, the “people first” principle, and the National Road Safety Law of 2004.

2 II. PROJECT DESCRIPTION

A. Lending Instrument

12. The Bank will finance the project through a specific investment loan. The Borrower has selected a US Dollar denominated, commitment-linked variable spread loan based on six-month LIBOR plus an additional variable spread. It has also selected all available conversion options, level repayments of principal, and a repayment period of 25 years, including a 5 year grace period.

B. Project Development Objective and Key Indicators

13. The project‟s development objective is to improve mobility on selected transport corridors of the city center of Taiyuan Municipality in Shanxi Province of the Borrower in a safe and efficient manner.

14. To this end, the project will monitor the following on selected main corridors: (a) travel times for road users; (b) quality and use of public transport services; and (c) road crash fatality rates. The project will also strengthen capacity for project implementation, traffic management and public transport.

C. Project Components

15. The project has four components as shown in Table 1. A detailed description can be found in Annex 4. Briefly:

 Part 1: Road Infrastructure. Construction of: (a) the Taihang road, a north-south arterial at the east end of Taiyuan city, including bridges, interchanges and overpasses; and (b) the extension of the Nanzhonghuan road providing access to a proposed railway station in the south.  Part 2: Public Transport. (a) development of a bus priority scheme on Xinjian street of Taiyuan city, including lanes for buses and associated infrastructure; (b) construction of: (i) bus depots in Nanhan and Beiying localities in Taiyuan city; and (ii) bus terminals in Yingxin, Zoo, and Beiyan localities in Taiyuan city; and (c) design and installation of an automated vehicle location and Bus Dispatching System.  Part 3: Traffic Safety and Management. Carrying out of a program on selected main transport corridors in Taiyuan city to improve the safety and efficiency of traffic movement for all road users consisting of: (a) construction of pedestrian facilities; (b) construction of bicycle facilities; (c) carrying out of channelization at selected junctions; (d) installation of traffic signs and markers; (e) acquisition and installation of equipment for traffic management; and (f) carrying out road safety measures, including an integrated performance-based program over a selected portion of Jiefang road.  Part 4: Institutional Development. Carrying out a program for strengthening the capacity of Taiyuan municipality to implement the Project and to undertake additional transport infrastructure investments, including carrying out of studies, formulating appropriate policies, and provision of equipment, training, and technical assistance.

3 Table 1: Project Components and Costs Total Cost World Bank Loan Component ($ million) ($ million) Roads 228.97 97.29 Public Transport 70.93 28.56 Traffic Safety 27.30 20.76 Institutional Strengthening 3.01 3.01 Front-end fee 0.375 0.375 Total 330.59 150.00

D. Lessons Learned and Reflected in the Project Design

16. The Bank‟s infrastructure portfolio in China has been the subject of assessments by the Bank‟s Independent Evaluation Group (formerly the Operations Evaluation Department) and the Quality Assurance Group. These assessments have consistently confirmed satisfactory project implementation, outcomes, and project management. Experience from a full range of projects financed by the Bank in the transport and urban sectors points to the importance of Borrower ownership (particularly of institutional development components) and the appropriateness of capital investments, as well as arrangements for proper operations and maintenance. This project has been designed to incorporate these lessons. Specific design decisions based on lessons from past experience include: (a) Defining simple interventions reflecting a comprehensive approach. Experience with previous urban transport interventions in China suggests that one of the primary benefits to a city from World Bank involvement is an integrated focus on all elements of urban transport in the city. Public transport and traffic safety institutions and performance are often particular beneficiaries. However, the Bank‟s first generation of urban transport investments all suffered from long implementation periods and disbursement lags, resulting from the consequent multitude of components. This project has been designed to achieve the benefits of a comprehensive approach with minimal complexity. (b) The benefits of participatory planning processes. Chinese and international experience has shown that inclusion of the views of the public in the selection, planning and design of investments improves the quality of the completed infrastructure. Building on successful pilots in recent Bank interventions in Liaoning and Xi‟an, a public consultation process was successfully adopted by Taiyuan and has provided significant guidance on the detailed planning for the project components. (c) Developing a client-driven institutional agenda. A constant challenge in urban transport projects in China has been to reconcile the need for reform to ensure sustainability with the knowledge that reform is successful only when it is client-driven. The project supports national policies on traffic safety and prioritizing public transport. However, respecting Taiyuan‟s current focus on building its infrastructure, the project‟s support in the form of investment, training and consulting help, is primarily aimed at improving the planning process during project preparation and the quality and performance of the built infrastructure.

4 (d) Appropriate indicators for urban transport projects remain a challenge. Reconciling the Bank‟s internal focus on outcome-based measurement and evaluation directly attributable to the Bank-financed intervention with the client‟s focus on outputs remains a challenge in the urban transport sector. In this project a simplified set of outcome indicators, primarily corridor-specific outcomes, has been selected.

E. Alternatives Considered and Reasons for Rejection

17. Loan product. This is the first Bank project focusing on Taiyuan municipality with a well-defined investment program focusing primarily on built infrastructure. A Specific Investment Loan was adopted as the optimal loan product for such a project.

18. Mix of investments. Taiyuan‟s initial project proposal included investments in wastewater treatment, flood control and transport. Due to resource limitations, during preparation TMG decided to target World Bank financing solely on urban transport. This allowed for more comprehensive involvement in that sector.

19. Design alternatives. A variety of design alternatives were considered for each component. In particular,  In the case of Taihang Road, consideration was given both to downsizing it to four lanes to match short-term demand, as well as upgrading it to an urban expressway to address long-term north-south demand. Ultimately, the chosen alignment, a dual 3-lanes arterial mainly with grade crossings, was adopted as the most appropriate solution.  Initially the public transport component included the development of busways on both Yingze Street and Xinjian Street. However, the city decided to upgrade Yingze Street with its own funds as a priority in the midst of project preparation, and the current project focuses on developing bus priority only on Xinjian Street.

III. IMPLEMENTATION

A. Institutional and Implementation Arrangements

20. Implementation arrangements. Shanxi Province will be the project‟s implementing agency but will delegate most responsibility for project implementation, management and monitoring to Taiyuan municipality (details of the provincial role summarized in Annex 6). Various municipal agencies have been designated as the primary implementing agency for each significant project sub-component. These agencies, in the role of „project employer‟, will lead the procurement, sign contracts, manage the contracts and authorize disbursement. When construction is complete, all of the components will be turned over to an operating agency. (a) The Taiyuan Municipal Urban Construction Development Department (CDD), a project development agency under the Taiyuan Municipal Housing, Rural and Urban Construction Commission (TCC), has been designated the employer for Taihang Road. Once it opens for traffic, the road will be turned over to the TCC for operation and maintenance.

5 (b) The Taiyuan Public Transport Group Company (TPTGC), wholly owned by the city, is the designated employer (implementing agency) and operating agency for all elements of the public transport component, except for those involving urban road developments and modifications, such as busways and busbays, which will be implemented by CDD. The completed roadways will be turned over to TCC. All other elements of the component will be owned and operated by the Public Transport Group Company. (c) For the road and public transport components, TCC will supervise implementation and management on behalf of the city government. (d) The project management office (see below) will be the employer for the Institutional Strengthening component. (e) Project employers (in coordination with TCC in the case of the road and public transport components) will decide on the annual work program. (f) The Traffic Police Brigade of the Taiyuan Public Security Bureau, a government agency, has been designated the employer (implementing agency) and operating agency for the traffic safety component.

21. A Project Management Office (TPMO) established under the Taiyuan Municipal Development and Reform Commission facilitated project preparation. TPMO will continue to be the primary coordinating body responsible for communicating with the World Bank, ensuring that implementation is consistent with all relevant World Bank policies and procedures, and ensuring good coordination between the different implementing entities. Additionally, TMG established a municipal Project Leading Group, responsible for providing policy guidance, and coordination support for the project.

22. Funds flow. The World Bank loan to the People‟s Republic of China will be on-lent to Shanxi Province, which will in turn on-lend the funds to TMG. The designated account will be established and managed by Shanxi Provincial Finance Bureau.

23. Resettlement compensation funds flow. The resettlement fund will flow from the Municipal Finance Bureau with the joint approval of TPMO and TCC to the sub-component implementation units. The latter will open individual bank accounts for each person or household affected by the project and pay compensation to the account directly. TPMO will review applications to the resettlement fund from affected property owners and will arrange an internal audit on the resettlement fund semi-annually.

B. Monitoring and Evaluation of Outcomes/Results

24. Annex 3 lists the main outcome indicators for the project, as well as the principal results indicators for each component. Additional indicators are listed in the various documents in the project files (for example, the Environmental Management Plan). TPMO and the various implementing agencies will regularly collect data required for monitoring and evaluation of outcomes. The Leading Group will review the results on the basis of various progress reports, and take appropriate corrective action.

6 C. Sustainability

25. Past experience suggests that the investment program is likely to be constructed to high- quality standards and completed on schedule. Long-term sustainability of the road assets will, however, depend on effective and timely maintenance. A review of municipal maintenance practices suggests that this is not a significant concern, particularly for major roads such as those to be financed by the project.

26. Public transport services are currently dominated by TPTGC, a state-owned enterprise that receives significant subsidy from TMG. International experience suggests that this is not an ideal arrangement. There is little incentive for the state-owned enterprises to be efficient. Furthermore, public transport service becomes vulnerable to any shifts in municipal priorities supporting public transport. However, TMG has clearly indicated that its current focus vis-à-vis public transport is to improve service and increase ridership under strong government control. Reform in industry structure is not a key priority at present. In the judgment of the Bank, based on a countrywide review, this is not a significant risk in China at present. China‟s central government is strongly promoting urban public transport as a key pillar to building socially and environmentally sustainable cities. In all likelihood the pressure to improve public transport in Chinese cities will only increase, not decrease. If (and when) considerations of financial sustainability arise, it is likely that TMG will consider reform in the public transport industry that will reflect the abundance of Chinese and international experience in this respect.

D. Critical Risks and Possible Controversial Aspects

Potential Risks Proposed Mitigation Measures Risk Rating with Mitigation To Project Objectives Bus services disrupted because (a) 5-year commitment from TCC on bus service M/S of unavailability of subsidy development. (b) engagement with national authorities on industry reform . Benefits of the busway being (a) The traffic safety component complements busway M/S undermined by ineffective design and reinforces it; in particular attention is paid to traffic management and pedestrian safety at crossings. coordination with other (b) Supporting capacity building efforts targeted at transport modes: non- increasing awareness and enforcement of the exclusive motorized transport, feeder bus lane. services and other bus services. Planned urbanization in the The new railway station and high-speed railway are M/S city‟s southeast is delayed, committed anchors that will ensure development in the undermining the economic area. benefits of Taihang Road.

7 Potential Risks Proposed Mitigation Measures Risk Rating with Mitigation The city‟s primary interest will The first phase of the busway is under implementation. S be to facilitate higher motor TMG has provided commitment letters on increase in bus vehicle mobility, service. Agreement has been reached on some principles compromising the other for the traffic safety component. The institutional components and the project‟s strengthening component will support capacity. development objective. To Project Component Results All components Both Taiyuan‟s mayor and the vice-mayor in charge of M/S Change in city leadership may infrastructure have been appointed in the last year and a lead to changes in priorities half and are expected to stay in these roles for the and inconsistent follow-up on foreseeable future. Construction of key components will project-related agreements start in the coming months and written agreements from during implementation. city leadership have been obtained on key policy issues. All components Designation of land (particularly for bus depots and M/S Implementation delays due to parking) and approvals related to land acquisition have been delays in domestic decisions historical sources of delay. Attention has been paid to and approval processes. ensuring that as far as possible land-related approvals are obtained prior to appraisal. Fiduciary risk that project Procurement and financial management assessments have M funds will be misused due to been conducted and training is planned. Enhanced attention corruption, weak internal will be paid to financial management and procurement controls and weak capacity. issues. Risk of delay in ‘associated (a) The World Bank is conducting a due-diligence review M/S projects’. See paragraph 50: 3 of the feasibility study, including the implementation associated projects self- and financing plan for Nonzhonghuan road. financed by TMG need to be (b) TMG is providing the World Bank a formal completed in parallel in order commitment to implement this investment in parallel to realize benefits of Taihang with the project. This commitment will help ensure Road. that progress on the associated investments does not significantly lag that of the project roads. Xinjian Street busway (a) A pilot 4.6-km section of the busway was successfully M/S Impact of busway falters due to implemented with domestic funds in August-October poor traffic management and 2008. uninformed public reaction. (b) Traffic Police are a core partner and beneficiary in the project – including being responsible for an extensive pedestrian safety program that will directly complement the busway. Traffic Safety and Management As with the rest of the project, the annual work program S An extensive and detailed will be used as a critical tool to ensure that the traffic safety program has been developed component remains completely focused on activities that with the traffic safety brigade. optimize traffic safety outcomes. As priorities evolve, the program will likely change.

8 Potential Risks Proposed Mitigation Measures Risk Rating with Mitigation Road component A safety audit will be conducted before finalization of the M Does not deliver the expected road designs for Taihang Road. safety benefits on the urban road network. Overall Risk Rating M/S

E. Loan Conditions and Covenants

27. The legal agreements include the following key covenants and conditions:

 the proceeds of the loan will be on-lent by the Borrower to Shanxi and by Shanxi to Taiyuan municipality on the same terms and conditions as the Bank loan, with the municipality bearing the foreign exchange risk;  Shanxi and Taiyuan Municipality shall maintain an adequate organizational structure for implementing the project;  Shanxi shall cause Taiyuan Municipality to: (a) implement the RPF, RAP and EMP; (b) prepare and implement annual work plans for the project; and (c) engage consultants for carrying out supervision of civil works; and  Shanxi shall cause Taiyuan Municipality to furnish to the Bank: (a) semi-annual project reports to monitor and evaluate progress in project implementation; (b) semi-annual progress reports on the implementation of the EMP, RAP, RFP, measures for improving the living standards of displaced persons, and the actions for protecting cultural heritage sites and relics; and (c) a mid-term progress report for the project by June 30, 2013.

IV. APPRAISAL SUMMARY

A. Economic and Financial Analyses

28. A formal economic evaluation was conducted for the road infrastructure component and the Xinjian Street busway, which together account for about 65 percent of the loan and about 70 percent of total project cost. The principal measured benefits were increased safety, savings in vehicle operating costs, reduced congestion, and time savings for pedestrians, bicycle riders, and bus and auto passengers. The road component is expected to directly benefit auto and bus users of Taihang Road, as well as truck drivers and workers in the industries of the northern and eastern parts of the city. The users of the existing urban road network near the project roads (including cars, buses, bicycles, pedestrians) should also benefit from reduced congestion and risk of accidents. The public transport component will also directly benefit thousands of daily bus passengers on Xinjian Street, mainly by reduced travel times. The estimated overall economic internal rate of return (EIRR) is 13.5 percent for the road component and 18 percent for the Xinjian Street busway. Table 2 summarizes the results of the economic evaluation. See Annex 9 for more details.

9 Table 2: Summary of Economic Evaluation of Road Infrastructure Sub-projects EIRR Net Present Value (discounted at 12%) ($ millions) Taihang Road 13.5% $ 45.7 Xinjian Street busway 18.0% $ 5.4

29. Traffic safety and management components are small investments that past experience indicates provide very significant benefits in increased levels of safety (lower levels of accidents, fatalities and associated economic loss) and savings in travel time. The most vulnerable road users, such as pedestrian and cyclists, will likely benefit the most from the improvements in the city center and the diversion of truck traffic away from city streets to Taihang Road.

30. The rest of the public transport investments comprise mostly low-cost elements, which are either essential operational items (such as dispatching equipment, end-of-route turnarounds, off-street parking, and maintenance facilities), or which enhance quality for the passengers (such as transfer interchanges and bus shelters). Designs for all works have been optimized from a cost-effectiveness perspective. Such investments typically provide high rates of return in terms of increases in the competitiveness of the bus service, and lower operational costs related to higher productivity and lower maintenance costs.

31. Financial analysis. Based on an analysis of Taiyuan‟s municipal finances, it is the Bank‟s judgment that the project is affordable for Taiyuan and the proposed counterpart funding strategy is sound (see Annex 9).

B. Technical

32. Development of the investment program was preceded by preparation of a comprehensive transport strategy study. This study facilitated a considerable capacity building effort during project preparation, including a self-financed study tour for city leaders to visit modern bus systems in Latin America. In all, the preparation has provided a solid foundation for Taiyuan‟s future transport planning efforts.

33. The public transport and traffic safety components were developed based on a further detailed needs assessment. The traffic safety component, in particular, has been designed to integrate with Taiyuan‟s larger traffic management plan for the coming five-year period. The public transport component has been designed to complement the city‟s plans (confirmed by a formal commitment from the Construction Bureau) to increase the city‟s bus fleet by a minimum of 200 buses in the next five years as part of a plan to introduce 40 new routes in this period.

34. All investment components have been prepared by reputable Chinese design institutes. Project designs are technically sound, and are based on sound engineering practice. A key feature of project design has been the use of an extensive public participation process to complement technical analysis. Technical preparation was complemented by an independently supervised three-stage effort - focus groups, open meetings, and questionnaires - to obtain public input into the project design, targeting the needs of vulnerable groups such as the elderly, migrant workers, the mobility impaired, and the poor. Women-only groups were consulted to

10 ensure that needs and issues specific to women were properly identified. The project feasibility studies include a section indicating the manner in which issues raised in the public participation process have been addressed.

35. The project design process has some noteworthy features: (a) As an advance on „standard‟ bus priority practice in China, in the Xinjian Street bus priority scheme an extensive operational planning exercise was conducted as an input into the physical design process. As part of the project, TMG is considering options for a more flexible transfer policy on the bus system to reflect the move towards the hub- and-spoke operational model being adopted on the busway. (b) It has been agreed that the traffic safety component will be regularly reviewed and guided by Taiyuan‟s Traffic Safety Committee set up to implement the National Road Safety Law. The Taiyuan Traffic Police Brigade will report progress of the component to this committee at least semi-annually (the committee has met quarterly) focusing on lessons learnt and outcomes of the Bank-financed components.

C. Fiduciary

36. Financial management. On the basis of guidelines issued by the Financial Management Sector Board on November 3, 2005, the project meets minimum Bank financial management requirements, as stipulated in BP/OP 10.02. Implementing agencies have taken necessary actions to ensure that the project will have in place an adequate financial management system that can provide, with reasonable assurance, accurate and timely information on the status of the project in the reporting format required by the Bank (see Annex 7).

37. Procurement. A procurement capacity assessment of the implementing agencies, carried out prior to appraisal, concluded that the overall risk of the procurement process is average (details in Annex 8). An action plan to strengthen the procurement capacity of the implementing agencies has been agreed with TPMO and employers of various sub-components. The plan calls for the preparation and dissemination of a project-specific procurement manual, training workshops, and measures to avoid excessive cost overruns and improve procurement economy and efficiency. Ways in which the Tendering and Bidding Law of China differs from Bank guidelines were addressed in the assessment, and clarifications have been included in the Project Agreement for the procedures to be followed for Bank-financed procurement by national competitive bidding.

D. Social

38. The project has significant social benefits as it supports the development of public transport, pedestrian, and bicycle facilities; as well as traffic safety measures. These measures are expected to primarily benefit the most vulnerable elements of society. The public participation process undertaken during preparation enables the project to address the transport- related needs of vulnerable groups, indicated above.

39. The project has adverse impacts related to the need for land acquisition and involuntary resettlement; in some cases, however, displaced persons viewed the housing demolition as an

11 opportunity to improve their living conditions significantly. The project will require the acquisition of 45 hectares of village land (including 6.2 hectares of cultivated land). The project would also require the demolition of 157,535m2 of existing structures, including houses, enterprises and private shops. Land acquisition would affect 22 people in 9 households; house demolition would affect 1,074 people in 238 households. In accordance with relevant Chinese laws, and as well as regulations, and World Bank OP 4.12 on Involuntary Resettlement, the Taiyuan Project Office has prepared a RAP. A Resettlement Policy Framework (RPF) was also prepared since the location of some of the housing for the resettled households has not yet been finalized, and there remains the possibility of additional secondary resettlement related to clearing the site for such housing.

40. The RAP describes in detail the overall legal framework, project impacts, strategy and action plans for relocation and livelihood rehabilitation, consultations, grievance redress, implementation schedules, cost and budget as well as institutional and monitoring arrangements. The PMO will assume the overall responsibility for the implementation of the resettlement program. An independent monitor will be engaged. All resettlement costs will be financed domestically from counterpart funds. See Annex 10 for details.

41. The Socio-economic surveys confirmed that there are no ethnic minority communities impacted in the project areas. Based on this finding, it is the Bank‟s assessment Bank OP 4.10 on Indigenous People is not triggered.

E. Environment

42. The project is a classified as Category A, mainly due to its resettlement impact from road construction in an urban context. Two safeguards policies are triggered: (a) OP4.01 Environmental Assessment; and (b) OP4.12 Involuntary Resettlement. The Environmental Impact Assessment (EIA) was prepared by East China Investigation and Design Institute, a Class A environmental impact assessment consultant certified by the Ministry of Environmental Protection. The World Bank reviewed the terms of reference for the EIA and the final version adequately reflected Bank comments. The final environmental assessment (EA) documents submitted to the Bank include: (a) Environmental Impact Assessment Report; (b) Environmental Management Plan for the Road Component; (c) Environmental Management Plan for the Public Transport Component; and (d) EA Executive Summary.

43. The project will improve mobility in Taiyuan‟s main corridors and the quality of public transport service, and will have a net positive impact on the city‟s social and economic development. The negative environmental impacts will be common environmental issues related to construction activities, i.e., land acquisition, construction noise, air-borne dust, loss of surface vegetation, water pollution and soil erosion, solid waste/spoil disposal, and disturbance of traffic and local communities‟ social activities during the construction period. Traffic noise, safety and community severance will be the main issues during operation. These environmental and social impacts are well understood and can be adequately mitigated with known mitigation measures and good construction management practice. Environmental management plans have been developed for both the road and public transport components, which detail the environmental management organization and responsibilities, mitigation measures, capacity training plan,

12 monitoring plan, and budget estimates for their implementation. EMPs will be incorporated into bidding documents and contracts in order to ensure effective implementation. See Annex 10 for details.

44. Public consultation was conducted for project scoping and design, during which six public meetings, 30 group discussions, and 54 individual interviews were held, as well as a survey involving 2,048 questionnaires. The consultation focused on public opinions on public transport, traffic management and road infrastructure in Taiyuan city. Public concerns collected through consultation covered a wide range of aspects: bus routes and stations at certain locations; appropriate ticket price; necessary facilities at bus stations; adequate infrastructure for secondary and small streets, pedestrian crossings and intersections; vehicle parking lots, road lighting green belt, drainage, signaling and signage. These concerns were fully considered in the scoping and design of the proposed project. In addition, two rounds of public consultation were carried out in accordance with Chinese EIA regulations and Bank‟s OP4.01 requirement by means of public meetings and the questionnaire survey, and public feedback was incorporated into the EIA/EMP reports and project design. The commencement of EIA notice was publically disclosed on December 28, 2006 on the Internet and in the Taiyuan Daily. The second round of disclosure was conducted on May 13, 2008, when the draft EIA report was made public on the Internet (Taiyuan Economic Information Center, http://www.tyeic.gov.cn, and the East China Investigation and Design Institute, www.ecidi.com). In accordance with the Bank‟s requirement, the latest EIA report was made public on the Taiyuan Government website (www.taiyuan.gov.cn) with announcements published in the Taiyuan Daily and Taiyuan TV on July 28-30, 2008.

F. Safeguard Policies

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [x] [ ] Natural Habitats (OP/BP 4.04) [ ] [ ] Pest Management (OP 4.09) [ ] [x] Physical Cultural Resources (OP/BP 4.11) [ ] [x] Involuntary Resettlement (OP/BP 4.12) [x] [ ] Indigenous Peoples (OP/BP 4.10) [ ] [x] Forests (OP/BP 4.36) [ ] [x] Safety of Dams (OP/BP 4.37) [ ] [x] Projects in Disputed Areas (OP/BP 7.60) [ ] [x] Projects on International Waterways (OP/BP 7.50) [ ] [x]

45. Over the course of preparing the project, the City has decided to implement some elements using its own funds. One sub-project in particular is considered essential to achieving the project‟s development and social safeguards: the Nanzhonghuan Road, connecting Taihang Road with the new railway station in the South. The southern end of Taihang Road connects with the existing East Xutan Road. A new link is being built to connect the south end of Taihang Road with the new station for the high-speed railway in the fast-developing southeast of the city. This project is being implemented under separate domestic financing.

13 46. In addition, after project appraisal, the city decided to drop some subcomponents, as a result of which one street, Shengli Street connecting Taihang road to the city road network, was considered important for the Bank-financed project. Construction of this road started in 2007 and is mostly complete. Construction of about 300 meters remains and is expected to be complete in summer 2010. A due diligence of the safeguard activities related to this construction found that all safeguard-related activities had been conducted satisfactorily in line with domestic regulations and Bank policies. Detailed assessments are in the project files.

G. Policy Exceptions and Readiness

47. No policy exceptions are sought. In terms of readiness: (a) Road infrastructure component. Consistent with Chinese domestic regulations and practice, domestic appraisal and approval of the feasibility study were completed prior to loan negotiations. Detailed designs for the road components are underway and are expected to be completed by June 1010. The first contracts for works is expected to be let by September 2010. (b) Public transport component. The first phase of the Xinjian busway has been operational since late 2008. Detailed implementation schedule calls for other works to start in July 2010. (c) Traffic safety and management component. The first year‟s work has been appraised and works are expected to start in July 2010.

14 Annex 1: Country and Sector Background CHINA: TAIYUAN URBAN TRANSPORT PROJECT

Urban Transport in China: Key Issues and Trends

1. Urbanization and changes in urban transport patterns. Urbanization is occurring on an unprecedented scale in China. As recently as 1985, China‟s urban population was less than 25 percent of the total. By 1995 it had reached 30 percent and by 2005, 43 percent. The Government expects 20 million people to migrate from the countryside to urban areas each year for the next 20 years1. This urbanization process has been defined by the growth of a large number of major cities, and a restructuring of land-use patterns – both leading to more complex transport patterns that present a formidable development challenge. 2. First, a number of major cities are emerging. In the early 1980s China had only 28 cities with over 1 million people, but by 2005 there were 43 such cities, of which 24 were metropolitan areas with a population of more than 2 million. The number of cities with half a million to one million people had increased to 45. At the same time, population growth has been accompanied by expansion of the urban area and structural changes in land use patterns. The breakdown of joint work-residential location arrangements prevalent under the centrally planned economy has triggered a reduction in gross residential population density at the city centers, increased job density in city centers, and contributed to the general decline of overall population density across urban areas. Other new trends are now emerging, such as residential location choice by income sorting, large-scale residential development in suburban areas for middle- to high- income groups, large informal residential settlements for floating populations in urban fringe areas, and perhaps most importantly, the emergence of cross-jurisdictional metropolitan areas and conglomerations. As a result of these developments, trips have increased in both time and distance, with an unprecedented increase in motorization as mode shares shift from non- motorized transport to more convenient alternatives. 3. Motorization. Urbanization has been accompanied by an unprecedented rate of motorization. At present, national-level private car ownership remains relatively low by the standards of other middle-income countries at about 11 per 1,000 persons, but in the richer cities the level is already 80-100 per 1,000 people. The explosive growth in car ownership and use is expected to continue for the foreseeable future, with a sevenfold increase predicted from the 27 million today (Figure A1.1). 4. Urban road construction. As a response to these trends, Chinese cities have invested massively in building and improving urban street and urban expressway networks in the last decade. Indeed, the levels of investment, by some estimates over about $25 billion annually, are unprecedented and reflect a very impressive implementation effort. This construction has also created considerable capacity in the country to plan, design and successfully implement large complex construction projects of quality.

1 The urbanization rate currently stands at 1.4%, which means that about 20 million farmers become urban residents each year. On the assumption that the urbanization drive maintains a growth of 1% annually, Chinese cities and towns will be absorbing about 300 million people from rural areas in 20 years.

15 Figure A1.1: Projected Growth in Motorized Vehicles in China, 2005-2035

Note: 2-W=motorcycle; 3-W=3-wheeler; HCV=heavy-duty commercial vehicle LCV=light-duty commercial vehicle; SUV=sport utility vehicle. Source: Segment Y Ltd.

5. There is increasing concern that the benefits of this extraordinary effort have accrued disproportionately to a still narrow base of auto-users, are in many cases ephemeral, and are associated with significant and serious publicly borne costs. Undoubtedly, the new urban road systems initially brought substantial mobility benefits to auto users, and also to bus riders. However, with rising motorization and a road system that encourages sprawled urban development, traffic congestion has become a serious problem in the biggest cities and is becoming a concern in many more of the large cities. Car owners are finding their new mobility to be short-lived. At the same time, the last decade has seen a decline in mobility for many classes of city dwellers. Pedestrians and cyclists in particular have suffered from longer trips and lower safety levels, especially at intersections (road crossings) which are designed primarily to maximize car throughput. Public transport users have suffered from inadequate attention, and bus transport users bear a disproportionate cost of traffic congestion. Increasingly, these mobility concerns, amplified by increasing recognition of costs related to financing structures, road safety, local and global emissions, and land consumption have created a sense of urgency at the national level to address the urban transport challenge.

16 6. Despite significant improvements in the last two decades and recent attention from Central government, public transport remains fragile. Buses constitute the majority of public transport service in China and form the backbone of the passenger transport network, even in quite large cities. The bus network is generally extensive, but often it is not well matched with the developing parts of the city and the changing travel and residence patterns. Much of the public transport supply is still provided by state-owned enterprises or joint ventures in which the state has a majority stake. Box 1: Value World Bank Brings to Urban Transport in China

The World Bank has financed eleven stand-alone urban transport projects in China: in Shanghai, Guangzhou, Liaoning, Urumqi, Shijiazhuang (all complete); Liaoning‟s medium cities, Fuzhou, Wuhan, Xian and Guiyang (under implementation). Experience with these investments suggests: (a) Moving from urban roads to urban transport. Bank intervention has helped cities to go beyond current Chinese practice to develop multi-modal integrated strategies based on empirical data to anchor future transport investments and management. (b) Supporting the development of a functional road hierarchy by increasing attention on secondary and tertiary links in the network, complemented by appropriate traffic management measures. (c) Inadequate coordination between various city agencies is a key limitation to effective urban transport in Chinese cities. Comprehensive approaches encouraged by the Bank have often catalyzed more systematic and sustained cooperation between different agencies, in particular between the police and the construction commissions. (d) The Bank‟s appraisal process has resulted in a more pro-active use of economic analysis to appropriately scale and guide project design, and often a more systemic focus on environmental and social safeguard issues. (e) The Bank‟s procurement policies and financial management discipline have repeatedly been described as a significant value-addition by most cities the Bank has worked with, yielding significant cost-savings and efficiencies. (f) The Bank‟s appraisal and supervision process has supported attention to the needs of all road users, with particular focus on the needs of the disabled, pedestrians, cyclists, and buses. (g) The Guangzhou inner ring road financed by the Bank best epitomizes the manner in which Bank interventions can support cities to implement world-class environmental mitigation measures including noise barriers, low-porous asphalt (for lower noise), and the use of double-glazed windows; as well as implementing large-scale resettlement in a manner that results in generally higher living standards and widespread satisfaction. (h) A key feature of Bank intervention is enhanced city-wide traffic management leading to safer facilities for pedestrians and cyclists, including innovations such as mid-block pedestrian signals and innovations in junction channelization, signal phasing and safe cycle-lane barriers. (i) Piloting on-street priority for buses. Bank intervention has also focused the attention of cities on the needs of buses, leading to the allocation of land for Bank-financed depots and terminals essential to facilitate an increased supply of buses. The Bank has also financed operational upgrades to bus services, particularly the adoption of state-of-the-practice technology for dispatching, and passenger information. Finally, the Bank has supported interested cities in considering and implementing institutional and regulatory reform in the urban bus sector, leading in some notable cases to competitively awarded private franchises regulated by the municipal government.

7. Most bus operators achieve adequate financial results to finance bus replacement with loans from local banks. But they generally do not have adequate depot facilities for storing

17 buses overnight off the street, or funds for maintaining them, nor information technology equipment for routine business, maintenance and operations functions. Limited money has been invested in other public transport infrastructure, e.g., interchange terminals and passenger information systems. Bus priority and bus rapid transport have been tried and sustained in only a few places, but are catching on.

Box 2: The Evolution in the Role of the Private Sector in Providing Bus Services Much of the public transport supply across China is currently provided by state-owned enterprises (SOEs). Internal reforms in the nineties ensured relatively low staffing levels, and until recently, bus companies in most cities ran with little or no subsidy. There has been a range of experiments in the use of the private sector. In a few cities, such as Guangzhou, Shenyang and Changsha, operators independent of municipal government (private or an SOE from another region of China) successfully obtained competitively awarded franchises operated under the overall aegis of the municipal government. Some cities have had experience, generally regarded as unsuccessful, with introducing private owner-operators providing service. In two notable cases, in Shanghai and Chongqing, this led to fragmented on-street in- market competition and has since been replaced - by gradual city - encouraged consolidation (in Shanghai) or a return to public sector monopolies (in Chongqing). The most common route for the introduction of private capital in the industry has been the development of joint-ventures, where the SOE still has a majority stake and management control. One consequence of heightened national government priority for urban public transport is renewed support from many municipal governments to the SOE supplying buses. In many cities where public transport is regarded as a priority, economic performance is considered secondary to improving service and ridership, and there is limited interest in market-based institutional reform that assures cost- effectiveness. If international experience is any indicator, this will change over time, particularly once ridership stabilizes, and if SOEs start becoming a significant burden on the public purse.

8. Metro Systems. Up until 1989, China had built only two metro lines totaling 50 km, both in Beijing. The following 15 years saw the construction of 22 metro or light rail lines in 10 cities, with a total of 621 route-km opening in the past decade. The expansion has been led by Shanghai and Guangzhou, which have built up considerable experience in metro construction. Currently, 36 urban rail transport lines with a total length of 1,500 route-km and a total investment of $72 billion are under construction in 15 cities as part of the 11th Five-Year plan (2006-10)2. In the next 10 years these 15 cities will have a total metro length of 1,700 km and investment will reach $90 billion. Despite these impressive accomplishments, expansion of rail construction has been limited primarily to urban cores: suburban rail services for commuters are virtually absent. The high construction costs of metro and light rail, typically $50-100 million per km, limit the extent and speed of development of such systems. 9. The challenge – designing cities for people, not for cars. The critical challenge at present is to create more people-friendly cities that meet the needs of the majority of the urban population. There is great value in understanding the nature of control, regulation and expansion dynamic of successful cities such as Singapore, Curitiba in Brazil, and many Scandinavian cities.

2 The 15 cities which will have metro rail lines are: Beijing, Changchun, Chengdu, Chongqing, Guangzhou, Hangzhou, Harbin, Nanjing, Shanghai, Shenyang, Shenzhen, Suzhou, Tianjin, Wuhan, and Xian. Shenzhen, Wuhan and Nanjing have completed at least one line each and are now starting their next projects. Beijing, Guangzhou, Shanghai and Tianjin already have extensive networks and are planning rapid expansion in the short term, driven by the 2010 World Expo in Shanghai and the 2010 Asian Games in Guangzhou. Currently, 22 lines have been put into operation with a total mileage of 602.3 km. A further 36 lines are under construction.

18 Chinese and international experience in the sector suggests that any successful strategy would need to integrate the following issues, discussed below. 10. Giving priority to public transport. Despite the rapid growth in car ownership, the majority of urban households are car-less and likely to remain so for the next 10-15 years. A large element of the solution to China‟s complex urban transport problems lies in the development of an efficient and affordable public transport system. There is now widespread recognition among Chinese leadership on the value of improving public transport, but more attention is needed to ensure that this understanding translates to changes on the ground. In this respect, currently too much of the attention paid to public transport is focused on urban rail solutions. While urban rail will remain an important element of any public transport solution, especially in China's biggest and most prosperous cities, international experience suggests that buses will remain the backbone of public transport, even in cities where considerable rail networks will be developed. More attention needs to be paid to improving the quality of bus services. In this respect, bus rapid transit systems (BRT) appear promising, combining the advantages of buses - relatively low costs, and flexibility in scheduling and operations - with the advantages of rail: dedicated segregated rights-of-way and fast boarding/alighting. More attention is needed to improving bus services in general, and in cities where this alternative is most appropriate, implementing effective BRT systems.

Box 3: Listening to the laobaixing Participatory planning methods have the potential to help governments design projects that maximize the distribution of benefits and minimize concentration of costs. The experience with a World Bank-financed Urban Transportation Project in northeastern China provides an example of a successful pilot. A series of public meetings, workshops, surveys and interviews significantly influenced project design, and raised city leaders‟ sensitivity to the public‟s needs. The participatory process in part led to a shift in project focus from expansion of major roads to improvement of secondary roads that served the interests of the predominant group of bicycle and pedestrian trips. The process also sensitized local leadership to the priorities of non-auto users, women and other vulnerable urban social groups. This consultation process has now been adopted and replicated in other Bank-financed urban transport projects in China, including this project.

11. Making provisions for non-motorized traffic. In many cities road space for non- motorized traffic, especially cyclists, has been sacrificed to cater for motorized traffic. Though bicycle use has been decreasing in past years, China‟s tradition of walking and bicycling persists and remains the mainstay of the poor. Between 50 and 60 percent of trips in most Chinese cities even today are made on foot and by bicycle. International experience suggests potential for significant gains in addressing congestion (and all the co-benefits associated with lower auto use) if people who have choices can be persuaded to use bicycles and walking as modes of choice, especially for short trips. Achieving this will require a focus on improving facilities for pedestrians and cyclists and inculcating a culture of respect for pedestrians and cyclists, particularly at intersections and crossings.

19 Box 4: Air Quality Management Presently, evidence suggests that mobile emissions are a minor contributor to urban air pollution in urban China. Fine particulate matter (PM2.5 and smaller) is the key transport-related pollutant of concern in Chinese cities3, but is not currently measured systematically anywhere4. Even though emissions from mobile sources have a disproportionate share of such fine particles, available evidence suggests that mobile sources still account for a small share of fine particulates pollution – less than 10 percent in Beijing, according to a 2003 study. This suggests that attention and resources targeting air pollution currently are best spent addressing stationary sources where the gains are likely to be the highest. This is even more so outside of the big eastern cities such as Beijing and Shanghai, where many of the basic steps to address industrial and residential sources of air pollution have not yet been taken. There are many tools to address mobile emissions; key among them are encouraging alternatives to private vehicle movements. The accelerated growth in the in-use vehicle fleet in China has the potential to make vehicle emissions a significant source of urban air pollution, unless a comprehensive and integrated vehicle emissions control strategy is fully implemented. An integrated strategy would have multiple dimensions, including encouraging compact urban growth and alternatives to private automobile use, managing and constraining automobile use, and regulating the public transport market and new vehicle standards, as well as fuel quality and inspection-maintenance of the in-use fleet. There is much that cities can do with their transport system to address mobile source emissions. As discussed above, Chinese cities are expanding spatially and in population, and are characterized by small, new, rapidly growing relatively clean automobile fleets, progressively deteriorating conditions for a still high share of non-motorized (cycle and pedestrian) trips, and significant (but often with potential for material improvement) public transport supply. Improving public transport and making it more attractive, increasing the convenience and safety for pedestrians and cyclists, developing parking policies that rationalize automobile use, and developing strategies that encourage compact growth, are critical high- impact elements of any motor-vehicle emission control strategy. These actions are also consistent with sound transport practice to address congestion, safety and equity issues, as well as sound energy management and planning for climate change mitigation. The tailpipe-end of emissions control is institutionally complicated and Inspection and Maintenance (I&M) is particularly difficult to get right. As fleet sizes increase, I&M systems to ensure compliance of the in-use fleet will become increasingly important. However, I&M is probably one of the most politically and operationally complicated elements of this overall approach. International experience demonstrates that an I&M program is unlikely to be effective, unless it is supported from the highest level and involves great attention to detail. The World Bank‟s assessment suggests that there are some fundamental technical and institutional issues that need to be resolved before a successful IM system can be implemented in China. Technically, national and provincial authorities need to take the lead in resolving outstanding issues related to quality control and assurance, equipment homologation (acceptance testing), computer-controlled test systems, calibration and audit procedures. Institutional responsibilities also need to be clarified. Currently, most of the relevant authority lies with provincial and national authorities, with responsibilities split between the Environmental Protection and the Standards Bureaus.

3 SOx is a major pollutant in Chinese cities, but from non-transport sources 4 Coarser particles (PM10 and total suspended particles, TSP) are measured and regulated; evidence suggests that mobile sources are relatively minor contributors. However, scientific evidence is that finer particles are more dangerous to health.

20 12. Ensuring that private automobile users fully internalize/pay for the costs they impose on cities. International experience has been that the above-mentioned strategies of improving public transport and non-motorized modes have only limited success, unless measures are taken to ensure that private vehicles users do indeed pay for the costs they impose on cities in the form of congestion, traffic accidents, air quality and other environmental impacts. Successful efforts to align auto user incentives with those of cities can come in the form of different kinds of charges, including parking charges, higher vehicle registration charges, fuel taxes, and congestion charges; and restrictions, such as limitations on speed and vehicle entry in designated downtown areas. Care needs to be taken that any restrictions are designed to avoid creating perverse incentives for the use of older, more polluting cars. 13. In the long term, the nature of the demand for private automobile transport will be determined largely by the urban structure and the dynamics of urban expansion. Cities that grow in a compact manner, along well defined corridors with high-density development concentrated about nodes, will support a larger share of public transport than cities that grow in a sprawled manner. There is a need to coordinate urban expansion and detailed urban design with transport plans, and plans for public transport networks. In this respect, the dynamics of expansion dominating China's cities at present, driven inordinately by the revenues obtained by municipal government from converting rural land to urban land, are a significant hurdle. Cities often do not have the incentives to expand in measured, controlled ways that would minimize the need for private transport. Indeed, in some cases, roads are built mainly for the purpose of urbanizing land.

Assessment of Urban Transport Issues in Taiyuan

City Background 14. Taiyuan municipality, with a population of 3.7 million, is the capital city of the central Chinese province of Shanxi, and is the political, economic, cultural, information and transport center of the province. It is also an important heavy-industrial city in China. Metallurgy, machinery, coal and chemical industries are the key industries. The municipality covers an area of 6,988 square kilometers with six districts, and the city proper covers 1,460 square kilometers. In 2005, the central city area covered 212 square kilometers, excluding the construction site of the City Village. The oldest part of the city is located on the east bank of the Fen River, combining residential, commercial, administrative, and financial land uses. 15. Taiyuan exhibits many of the common urban transport issues of China cities. Table A1.1 presents shares for different modes. The following paragraphs identify the general approach to the most critical and relevant issues in Taiyuan, and show how the project components (described further in Annex 4) contribute to these. Table A1.1: Mode Shares (in percent) in 1995 and 2004 Modal Split 1995 2004 Walk 32.7 33.2 Bicycle 54.6 35.1 Bus 5.6 11.0 Motor Car 7.1 20.8

21 16. Integrating transportation development and urban expansion. Taiyuan is divided by the Fen River (running north-south), physically constrained by mountains to the east and west, and constrained by concentrated industrial land use in the north. The strategy study looked at staging options to properly manage urban growth. It recommended allowing development demand in the short term up to the mountains to consolidate the underdeveloped urban periphery, while guiding future demand to a major new development to the south on the east side of the Fen River. The existing road network in these areas is incomplete, and there are no major corridors to the south-eastern development area. Consequently, new road construction is required to support the urban development strategy, with an immediate need to complete the arterial network in the north and east. 17. The project‟s road component directly addresses this need by financing Taihang Road to the east of the central city. 18. Removing constraints to freight transportation. Taiyuan‟s economic base is heavy industry and logistics. Coal mining industries are concentrated in the west, the Taiyuan Iron and Steel Company plant in the north, and a major logistics center is located in the east. Freight currently moved between these three areas is not permitted to cross the central area on traffic and environmental grounds. However, the distribution of activities is such that 70% of freight traffic demand is concentrated in these areas, and freight traffic accounts for 50% of overall traffic on the road network. Congestion on the cross-river bridges, combined with the absence of a major north-south freight route serving the eastern logistics area (TR), has severely affected the efficiency of freight transportation and is constraining the development of Taiyuan‟s core industries. 19. While investment in extra road capacity by itself will not guarantee economic growth, the project‟s road component will help to remove this constraint. 20. Public transport investments to support urban development. Taiyuan‟s public transport (PT) currently attracts only 11 percent of all personal travel, or about 1 million daily trips, which is lower than in similar-sized cities (almost 70 percent of trips are by walking or cycling). Initial analysis suggests that the reasons for this are poor PT coverage, insufficient service on many routes, and low journey speeds. Public transport provision is about 25 percent lower than the national norm of 10-12 buses per 10,000 residents. This under-provision is attributed in part to a lack of depot space; authorized parking spaces exist for only about 1,150 of a fleet of over 2,100 buses. The city has 144 operating lines (139 bus lines and 5 tram lines) with a total line length of 2,375 km, and a line network length of 722 km. The central city line network density is 3.9 km/sq. km and the average route length is 10~15 km. While bus coverage extends to 91 percent in the central area (defined as the area covered by a radius of 300 meters about all bus stops), it falls to 40 percent in the outskirts of the urban area. Headways in the bus system average 11 minutes, and over 30 percent of the lines have peak-hour headways higher than 10 minutes. 21. Bus priority. A pilot median-lane 3.7 km busway is operational on the South Inner Ring Road (Nanneihuan Lu). 17 routes use this section and daily ridership is over 40,000 passengers. Operational speeds on this section reportedly increased from 8 km per hour to 17 km per hour after the implementation of the busway, and the bus company is satisfied with the busway‟s performance. Pedestrian safety, particularly at mid-block stations, needs to be improved, but this busway provides a good base for the proposed Xinjian road busway. Bus priority was also

22 provided on Yingze Street when the street was reconstructed in 2007. The reconstructed street is 12 lanes wide and traffic is currently light. Bus lanes have been provided on the right-hand side lanes. TPTGC reports that side friction from right-turning and local traffic impedes effective use of the bus lanes on this street. 22. Xinjian Road is one of three key public transport corridors in Taiyuan, along with Yingze Street and Jiefang Road. A feasibility study was conducted to review the possibility of implementing bus priority on all three corridors. This study focused on Jiefang Road and Xinjian Street, after the reconstruction of Yingze Street. The analysis estimated that bus priority would yield significant benefits in bus travel times, leading to reduced passenger delays and bus operating costs on both roads. Xinjian Road was chosen because of lower implementation costs, particularly since no land acquisition would be needed. Table A1-2 provides data on current bus travel on this route. Table A1.2: Xinjian Road Current Status Length of road 11.45 km; 20 signalized intersections Peak-hour bus passenger flow 13,000 passengers/hour in both directions in corridor (2,000 passengers/hour in one direction at highest loading point) Peak bus flow per direction 82/hour Total routes using corridor 25 Average bus stop distance 443 meter Bus share of peak traffic volume 9 percent Bus passenger share of total peak hour 44 percent trips Average bus speeds in peak hour a. Shengli Street to Fuxi Street 16.4 km per hour b. Fuxi Street – South Inner Ring 11.8 km per hour c. South Inner Ring – South Outer Ring 14.3 km per hour 23. As part of this project, Taiyuan has committed to increasing the number of buses in service, and the number of bus routes in operation in the urban area. Further, the project will finance depots, terminals, and infrastructure to increase the effectiveness of the bus system. The Xinjian Road bus priority scheme under the project‟s PT component will directly address this objective and improve upon the previous right-side priority scheme that achieved limited success on Yingze Street. The Automatic Vehicle Location (AVL) system will also help to modernize business processes related to scheduling and dispatching, increasing the efficiency of the system. 24. Public transport industry structure. The basis for current administration of public transport is a local law of 1995 that views city public transport as a public good to be provided by public enterprises through state administration. Public transport is focused on the city area, and presently falls under the administration of the Construction Bureau. Both bus and taxi regulation is handled by the Passenger Management Office of the Bureau. Long-distance transport, including that between Taiyuan and the surrounding districts, is the responsibility of the Shanxi Province Communications Bureau. 25. The Taiyuan Public Transport Group Company (TPTGC). TPTGC is an SOE that operates 120 of the 144 public transport routes in the municipal area. These routes account for 1,392 km of the total route length of 2,375 km. The total fleet is 2,135 standard buses, including

23 122 minibuses operated by 6 private sector companies. These minibus operators operate 24 routes, mostly on the outskirts of the urban area (and unaffected by the project). Further: (a) Annual revenues for TPTGC were about $58 million in 2007 and TPTGC received a subsidy of about $5.8 million (some 10%). This subsidy level has remained stable in the last few years, even as revenues have increased from about $18 million in 2000. (b) Fares are 1 yuan ($0.15) for up to 12 kms, and 0.5 yuan ($0.075) for each additional 5 kms. IC cards can be used on all buses in the system and entitle the user to a 10 percent discount. Students with student cards get a 75 percent discount. Disabled citizens do not need to pay any fare. This fare structure and levels are similar to those elsewhere in China (and higher than current fares in Beijing, that are about $0.06 per trip). (c) Staffing shows relatively efficient operations. TPTGC has 8,000 staff and a fleet of 2,025 buses – a ratio of less than 4 staff per bus. The average earning of staff was stated to be RMB 17,000 per year, compared with a local average income of RMB 24,000. (d) Until 1995 all investment was made by the government, but since that time there have been some private investment in the industry in the form of minibuses. The municipal government finances all capital investments for TPTGC. 26. There is support for a well designed public transport component giving priority to buses, but the reform of service delivery and overall reform of SOEs in the city are in very early stages. Separation of “government” functions (policy, planning, regulation, procuring services from operators, and quality management of service delivery) from bus operations is being considered. However, government regulatory and procurement functions need further strengthening to protect the interest of the municipality and the traveling public. There is scope for improving service coverage and operating performance through reform of the Bus Company and private sector participation, but the political priorities in Taiyuan are stable and there is little risk that in the short term the political support for public transport subsidies will reduce or disappear. 27. Given a lack of interest in reform in Taiyuan at this time, a prudent strategy being pursued by the project includes higher-level discussions with the Ministry of Transport while supporting targeted investments in supporting enhancements in the efficiency of TPTGC (with investments in technology and modernization of business processes), bus priority improvements, terminals, and depots. 28. Improving the efficiency and safety of the road network, especially in the central area. As part of project preparation, the City commissioned a detailed assessment of traffic safety and management in the Taiyuan central area. This assessment determined that a combination of limitations in the road network and poor management had resulted in sub-optimal performance of the road system, characterized by serious congestion and frequent accidents that significantly restricted citizen mobility in the Taiyuan urban area. A key indicator is a relatively high and stable number of traffic fatalities in the urban area (shi qu), as shown in Table A1.3. Key weaknesses identified were the lack of a functional road hierarchy, poor intersection management, and inadequate facilities for pedestrians and cyclists, and poor management.

24 Table A1.3: Trends Related to Traffic Accidents in Taiyuan Number of Economic Year Area Fatalities Injuries Accidents Losses ($000) 2005 Municipality 1,687 294 1,916 1,047 Central city (shi qu) 1,169 196 1,266 710 2006 Municipality 1,573 266 1,862 717 Central city (shi qu) 1,208 170 1,421 460 2007 Municipality 1,819 253 2,183 712 Central city (shi qu) 1,529 179 1,866 531

29. Specifically, with respect to facilities the analysis noted that: (a) Pedestrian facilities needed investment and improvements. Sidewalks need to be improved, and in some cases built, along many of the city‟s major arterials. In addition, the study identified unsafe pedestrian crossings to be a significant problem, due to a combination of inadequate facilities and control. (b) Unsafe and inconvenient bicycle facilities. The study determined that the mode share of cycles in the Taiyuan urban area, though high (35 percent), was falling due to a combination of increased trip lengths and increasingly unsafe conditions. The study determined that encouraging cycle trips was desirable for energy and environmental reasons, and identified gaps in physical facilities and intersection management that needed to be addressed to improve bicycle mobility in Taiyuan. (c) Intersection design. Intersection design was identified as a major weakness. Several unchannelized intersections needed channelization. Channelization needed to be improved in many others, in many cases to create a safer environment for cyclists and pedestrians. (d) Intersection management. Only 206 intersections in Taiyuan are signalized, 96 of them by single-spot systems. The study determined that there was an urgent need to expand the scope of a coordinated area traffic control system. It was also determined that in many cases signal plans needed to be updated to reflect the current nature of traffic – such as higher volumes and more turning movements. In addition to changes in traffic patterns, at some intersections there was a need to design plans that would ensure safe passage for pedestrians and cyclists. 30. With respect to education, outreach, and management the study identified: (a) Gaps in the existing structure for education and awareness-raising efforts related to traffic safety. (b) The need for a comprehensive approach to parking and parking management, as a critical element not just of traffic management, but travel demand management. (c) The opportunity offered by the World Bank-financed project to upgrade the skill levels of related officials and their exposure to good practice in China and internationally. 31. An integrated multi-year traffic safety and management plan has been designed in response to the gaps identified in this assessment. It is expected that implementation of this component will help to increase safety levels in Taiyuan, increase the attractiveness of cycling

25 and walking as travel modes, and support smoother traffic flow. These developments are also integral and important elements of a motor-vehicle emission control strategy. 32. Implementing road safety policy measures. The NSRL, adopted in 2004, provides a welcome institutional and comprehensive focus on traffic safety. To implement the law, road safety committees (RSC) are being set up at different levels of government to coordinate safety initiatives. These committees provide an institutional anchor, around which traffic safety strategies have started emerging. 33. The Project has been designed to support RSCs, and to report progress of the project to them semi-annually. This link should help to integrate the Project into TMG‟s overall traffic safety approach, and to institutionalize good practices that emerge during implementation. 34. Transport emissions and air quality. Pollution is a serious concern in Taiyuan – in 1998 Taiyuan was rated as the most polluted city among 46 major cities in China. The key environmental issue is air pollution (mainly sulfur dioxide and Total Suspended Particulates) and the major causes are a reliance on coal and presence of heavy industries5. Taiyuan‟s pollution is dominated by coal smog, especially during the winter season, when a vast amount of coal is needed for heating6. TMG has made great efforts to address air pollution since the Ninth Five- Year Plan period (2000-2005), focusing primarily on industrial pollution, increasing the use of central district heating, cleaner coal, and a replacement of buses and taxis by natural gas (coal- bed methane) fleet. Vehicle emissions are not a major contributor of air pollution in Taiyuan. A study conducted by Taiyuan Environmental Science Institute and Taiyuan Environmental Monitoring Station (2002) concluded that vehicle emissions contributed 5 percent of PM10 in Taiyuan. Since then most of the bus and taxi fleet has been switched to coal-bed methane. 35. From an air quality management perspective, the focus of the project is to encourage alternatives to private automobile use by supporting initiatives and investments to make public transport and non-motorized transport more attractive. This priority reflects the recent experience that suggests that effective tailpipe emission control is often more difficult than other pollution strategies, in light of institutional complexity, and the need for implementing complex systems and aligning numerous incentives.

5 With rapid urban development and city expansion, these industrial enterprises are gradually “moving” into the urban area. Currently, within the 177 km2 urban built-up area, there exist thermal power plants with capacity of 2,217 MW, industrial enterprises with production capacity of 3.45 million tons of coke, 1.62 million tons of cement, 3.1 million tons of steel and 2.8 million tons of iron. It is estimated that the total SO2 emission from these industrial enterprises accounts for 73 percent of the total in Taiyuan in 2004, and their dust accounts for 59 percent. 6 In 2005, only 47 percent of the built-up area was covered by a district heating system. There were still more than 2,000 coal-fired heating boilers in the urban area. In addition, there were about 40 “in-city villages” within the urban area due to its fast expansion over the past few decades. In these villages, cooking and heating still rely heavily on coal, which contributes significantly to the local air pollution.

26 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies CHINA: TAIYUAN URBAN TRANSPORT PROJECT

Sector issue Ongoing projects Latest supervision (ISR) ratings Implementation Development Bank-financed Progress (IP) Objective (DO) Addressing urban transport needs Shanghai Metropolitan in a comprehensive manner: Transport Project I (completed)  Selective road investments to enhance capacity and Shanghai Metropolitan S S relieve bottlenecks. Transport Project II (completed)  Public transport investments and support to Guangzhou City Center S S policy, operations, and Transport Project (completed) planning.  Traffic management safety. Liaoning Urban Transport S MS  Development of a motor Project (completed) vehicle emission control strategy. Urumqi Urban Transport S MS  Road maintenance. Project (completed)  Training and capacity building. Shijiazhuang Urban Transport S MS Project (completed)

Xi‟an Urban Transport Project S S

Liaoning Medium Cities S S Infrastructure Project

Wuhan Urban Transport Project S S

Supporting peri-urban expansion Fuzhou Nantai Island Peri-Urban MS MS and coordination with transport Development Project and urban plans. Other development agencies Japan Bank for International Cooperation

Asian Development Bank

ISR: Implementation Status Report. S: Satisfactory. MS: Moderately Satisfactory.

27 Annex 3: Results Framework and Monitoring CHINA: TAIYUAN URBAN TRANSPORT PROJECT

Results Framework

Project Development Outcome Indicators Use of Outcome Information Objective The project‟s development 1. Reduced travel times for road Evaluating the success of the objective is to improve mobility on users on selected travel routes project in diverting longer-distance selected transport corridors of the 2. Traffic volumes on Taihang trips and heavy vehicles to more city center of Taiyuan Rd. appropriate roads, and reducing the Municipality in Shanxi Province of 3. Reduced travel times on risk to vulnerable road users and the Borrower in a safe and efficient Xinjian Road Busway other traffic in the city center; and manner. 4. Increased bus ridership on increasing attractiveness and Xinjian Road and urban area performance of public transport in 5. Lower fatality rate for urban a demonstration corridor area Intermediate Results Results Indicators for Each Use of Results Monitoring One per Component Component Component One: Component One: Component One: Road Development Component a. Number of km of Taihang Rd Monitor progress completed Component Two: Component Two : Component Two: Public Transport Component a. Number of buses in service Monitor progress b. Number of bus routes in service c. Number of bus off-street parking spaces at depots d. Number of km of segregated busway in city e. Annual subsidy for public transport operations in city Component Three: Component Three: Component Three: Traffic Management and Road a. Km of sidewalks improved Monitor progress Safety Component b. Number of pedestrian signals implemented c. Km of exclusive bicycle lanes improved d. Number of bicycle signals implemented e. Number of ATC intersections implemented (including new and improved signals) f. Number of channelized intersections implemented g. Number of intersections with improved markings implemented

28 Table A3.1: Arrangements for Results Monitoring Target Values Data Collection and Reporting Outcome Indicators Baseline YR1 YR2 YR3 YR4 YR5 (Completion Frequency and Data Responsibility for 2008 Year) Reports Collection Data Collection 6 months 6 months Instruments before after 1. Change in peak hour >38% reduction for Annually and 6 Field trips Taiyuan PMO travel times with Taihang cars, >30% reduction months before and on pre- Road for buses relative to after completion of defined baseline project road routes (i) cars on existing roads 52 (million) (ii) cars on Taihang Road n/a n/a n/a n/a n/a n/a 32 (million) (iii) buses on existing 49 roads (million) (iv) buses on Taihang n/a n/a n/a n/a n/a n/a 34 Road (million) 2. Peak Hour Traffic 6 months and 1 year Traffic Taiyuan PMO Volumes (both directions) after completion of counts project roads (i) Taihang Road n/a n/a n/a n/a n/a 4,420 passenger car (Longbao Rd.-Xuefu Rd.) equivalent units 3. Bus travel times on 49 37 (after Phase 2) At least 6 months and Field trips in Taiyuan PMO Xinjian Busway, 11.45 km (before 1 year after peak hour (minutes) Phase 1) completion 4. Annual bus ridership Annually IC card data Taiyuan PMO and (person-trips) and Public Transport observations Company (i) Xinjian Road (11.45 18.5 mn 10% increase km) (ii) Urban area (Shi Qu) 320 mn n/a 5. Fatality rate in Taiyuan 4.6 15% decrease Annually Fatality data Taiyuan PMO and (urban area fatalities per and MV Traffic Police 10,000 MV) registrations Dept.

29 Results Indicators for Each Baseline YR1 YR2 YR3 YR4 YR5 Frequency Data Responsibility for Component 2008 (Completion and Reports Collection Data Collection Year) Instruments Component 1: Road Progress Taiyuan PMO and Annually Development report Construction Bureau a) Number of km of Taihang Rd n/a 11.05 km completed Component 2: Public Progress Taiyuan PMO and Annually Transport report Public Transport Co a) Number of buses in service Additional 1,865 200 buses b) Number of bus routes in Additional 124 service 20 routes c) Number of bus off-street Additional 1,073 parking spaces at depots 250 spaces d) Number of km of segregated 0 4.6 4.6 4.6 4.6 11.45 busway in city e) Annual subsidy for public RMB For monitoring only- transport operations in city 40mn no targets Component 3: Traffic Progress Taiyuan PMO and Annually Management & Road Safety report Traffic Police Dept a) Km of sidewalks/guardrails n/a 40 improved b) Number of pedestrian signals n/a 350 implemented c) Km of exclusive bicycle n/a 20 lanes improved d) Number of bicycle signals n/a 400 implemented e) Number of ATC inter- n/a sections implemented (incl. new 100 & improved signals) f) Number of channelized n/a 30 intersections implemented g) Number of intersections with n/a improved markings 30 implemented

30 Notes on Indicator Methodology

1. Indicator 1: Changes in travel times a. Methodology: The objective is to monitor travel times on existing parallel routes with project roads and compare these after opening of the project roads to traffic. The completion of project roads will have a differentiated impact on travel times for different modes (cars, trucks, buses) along the North-South corridor based on their function. Taihang Road will mainly serve passenger car traffic and bus transport (including the nearby railway station) along the N-S corridor. Travel routes parallel to the project road are identified for cars, trucks and buses separately, as some roads restrict truck traffic or do not have bus services. A map of the travel routes described below is available in the project files. Travel times for cars and buses on Taihang Road are expected to be at least 38 percent and 30 percent lower than baseline, respectively, on existing travel routes.

b. Travel routes on N-S corridor for cars: Jianshe Road (Shengli Street~ Nanzhonghuan Street) Travel routes on N-S corridor for buses: Jianshe Road (Shengli Street~ Nanzhonghuan Street) including Bus Route 105 with transfer to Bus Route 23 at railway station.

c. Peak hour is defined as 5:30-6:30PM in Taiyuan. Surveys shall be conducted on a Tuesday or Thursday in the month of September, except in adverse weather conditions, e.g. rain.

d. Future data collection. TPMO is responsible for surveying travel times on existing car and truck routes annually (including 6 months before and after the completion of the project roads), and on the project roads at least 6 months and one year after completion. Ongoing monitoring of travel times on existing travel routes will provide a measure of the level of congestion along the corridors described above. In addition, TPMO is responsible for reporting the bus travel time along the pre-defined route.

2. Indicator 2: Peak hour traffic volumes on Taihang Road a. Methodology: Peak hour traffic volumes (both directions) for TR will need to be collected at least 6 months and 1 year after opening to traffic. The road sections identified for Taihang Road represent some of the busiest segments and target values were defined according to traffic forecasts in feasibility study. The traffic survey should be conducted at peak hour on a typical working day as defined above. Traffic volumes should be reported by mode (car, truck, bus) and be converted to passenger car units (PCU) as in the feasibility study for comparison purposes.

b. Future data collection: TPMO is responsible for future data collection.

3. Indicator 3: Bus travel times on Xinjian Busway a. Methodology: The objective is to compare bus travel time before and after the implementation of Xinjian busway priority project. A section of 4.6km of Xinjian Road (Phase 1) has been constructed in October 2008. A baseline value is defined as 49

31 minutes based on current average bus travel speed of 17km/h (before phase 1). A target value is defined as 37 minutes based on forecast busway travel speed of 22km/h after the opening of Phase 2 (11.45 km of busway).

b. Future data collection: Data should be collected at least 6 months and one year after opening of each phase of the busway. TPMO is responsible for data collection.

4. Indicator 4: Change in bus ridership (person trip)7 a. Methodology: Data for ridership on Xinjian Street and urban area are collected from the bus operator‟s annual statistics and IC card data. A 10 percent increase is expected within a year after the opening of Xinjian Road busway (both Phases 1 and 2, or 11.45km). Baseline data was provided by Public Transport Company. Four major bus routes (27, 813, 807, and 13) operating on Xinjian Road were selected to represent the current ridership on the corridor. Future ridership will include all routes (existing and new) operating in the corridor. Urban area is defined as the 6 core districts (Shi Qu) in the city of Taiyuan.

b. Future data collection: Ridership data for Xinjian Road busway and urban area should be provided annually. The Public Transport Company is responsible for future data collection.

5. Indicator 5: Traffic fatalities rate (fatality/10,000 MVs) in municipal area8 a. Methodology: The indicator is defined as fatalities (i.e., traffic deaths within 72 hours of an accident) in the urban area, divided by the number of motor vehicles (including motorcycles) in the municipal area. The number of fatalities in the urban area is separated from the number in the municipal area according to location within the Shi Qu. The number of MV in urban area is not available because registration is done at the municipal level, so the figure for the municipal area is used. With the improvement of road infrastructure and traffic management, a 15% reduction in the fatality rate is expected by the end of the project. Baseline (2007 data) was provided by TPMO.

7 Alternatives considered: The Bank team discussed the possibility of incorporating the results of public consultation (on-board surveys) of Xinjian Road busway users. The TPMO agreed to carry out such a survey in a timely manner with the implementation of Phases 1 and 2 of the busway, but it was agreed that the surveys would not be included in the formal results framework.

8 Alternatives considered: The Bank team discussed the possibility of other indicators for the traffic management and road safety component with Taiyuan authorities. First, fatality rate can also be defined as fatalities per million vehicle-kilometers traveled (VKT). This option was discarded because of difficulties in estimating VKT for the urban area. Second, corridor-level indicators of fatality rates were recommended by the Bank team on Taihang Road and one other key urban corridor with significant road safety investments. This option was deemed to be too difficult to implement, as fatalities on individual corridors are largely random and variance could make the results inconclusive.

32 b. Future data collection: Traffic police department is responsible for future data collection. Data shall be collected annually following the template presented in Table A3.2.

Table A3.2: Outcome Indicator: Traffic Fatalities Rate Number of Traffic Deaths Number of Motor Vehicles Fatality Rate in Municipal Area (urban including Motorcycles in (Fatalities/10,000 MVs) area) Municipal Area 2007 (baseline) 253 (179) 390,000 6.49 (4.59) 2008 255 (183) 459,460 5.55 (3.98) 2009 227 (173) 541,660 4.19 (3.19) 2010 2011 2012 2013 Source: Taiyuan Traffic Police Department

33 Annex 4: Detailed Project Description CHINA: TAIYUAN URBAN TRANSPORT PROJECT

1. The project has four components: road infrastructure, public transport, traffic management and traffic safety, and institutional strengthening. The total cost is $330.6 million, with a World Bank proposed loan of $150.0 million. Table A4.1: Project Components Component Key sub-components Road Infrastructure Taihang Road Phase 1 Public Transport PT1. Xinjian Road Busway Phase 2 PT2. Bus depot PT3. Bus terminals PT4. Automatic vehicle location and dispatching system Traffic Safety and TS1. Pedestrian facility system Management TS2. Bicycle facilities TS3. Channelization at junctions TS4. Traffic signs & markers TS5. Intelligent transport system TS6. Improvement to traffic law enforcement and road safety Institutional IS1. Training and study tours Strengthening IS2. Technical assistance IS3. Equipment

Road Infrastructure (RI)

2. The total cost of the road component is $229.0 million, including an allocation from the Bank loan of $97.3 million. This component addresses the issues of integrating transport development and urban expansion, and removing constraints to freight transport, as described in Annex 1. 3. Taihang Road. Taihang Road is proposed as a 6-lane urban arterial road linking East Xutan Road in the south and Shengli Street in the north. It will be built on a new alignment bisecting 3 major urban roads and with a total length of 11.0 km. It will provide local access and promote development along the east of the urban area. The feasibility study includes two interchanges and four other grade-separated structures. Given several gullies along the alignment, crossing bridges have to be proposed. Specifically, the following interchanges and grade separations are proposed: (a) Changfeng Street: one partial interchange with entry/exit ramps is proposed passing over Changfeng Street. Changfeng Street is an urban arterial road, situated 300m west of Dongshan expressway toll station. Turning movement of traffic into/out of the Changfeng Street will be managed by signal-controlled at-grade junctions.

34 (b) Chaoyang Street. A simple interchange is proposed passing over Chaoyang Street. Chaoyang Street is located at an area of textiles and small merchandise wholesale market, with dense population and busy traffic. An overpass is proposed with at-grade traffic managed by signal control, in order to minimize impact. (c) Haozhuang Xingye Road, Haozhuang Xinzheng Road (east and west part of one road) is an urban branch road, situated on both sides of Nan Shahe gully. An over-bridge is proposed to cross both the road and the gully. (d) Haojiagou Street is an urban branch road, located at the bottom of Haojiagou gully. An over-bridge is proposed to pass over the road and gully. (e) Madaopo Street is located only 60m away from a railway line, and 110m away from Bei Shahe gully. An over-bridge is proposed to cross the street, railway and gully all together. (f) Overpasses are being considered to cross Taihang Road at-grade at Fudong Street and Nanneihuan Road as part of a plan to rationalize access to the DaYun expressway at the city‟s eastern edge. (g) Nanzhonghuan Road, connecting Taihang Road with railway station in the South. The southern end of Taihang Road connects with the existing East Xutan road. A road link is being implemented to connect the south end of Taihang Road with a new station for the high-speed railway line in the fast-developing southeast of the city. This is being implemented under separate domestic financing. (h) Shengli Street connecting Taihang Road in the north. The northern end of Taihang Road will connect with the proposed east extension of Shengli Street. This is being implemented under separate domestic financing.

Public Transport (PT)

4. The total cost of the public transport component is $70.9 million, including an allocation from the Bank loan of $28.6 million. It primarily addresses the issue of public transport investments to support urban development, as described in Annex 1. It also supports the modernization of business processes related to scheduling and dispatching to improve operating efficiencies.

PT1 Xinjian Road Busway 5. Including reconstruction of Xinjian Road. The bus lane, from the South Mid-Ring down to Shenli Street, 11.45 km, has 14 stops altogether, as well as 6 interchanges. Some ordinary buses will continue to ply on Xinjian Street. To facilitate their movements, bus-bays and stops will be set up in the section where there are large numbers of stopped vehicles or heavy passenger flows during rush hour. Phase 1. Phase1 refers to 4.6 km between Yingze Street and Changfeng Street that Taiyuan is implementing using its own funds in the period September – October 2008 based on the feasibility study prepared for the World Bank project and using a detailed design discussed with and agreed with the Bank. The total cost of Phase 1 is estimated at $5.8 million. Phase 1 includes the construction of a 4.6 km bus lane and 17 stations including 6 bus-lane stations, 6 common stops and 5 bus-bays in the general traffic lanes.

35 Phase 2. Phase 2 refers to the remaining section of the busway. Its total cost is estimated at $8.9 million, including $5.6 million from the Bank loan. It includes the construction of a 6.8 km bus lane and 23 stations, including 8 bus-lane stations, 10 common stops and 5 bus-bays for the general traffic lanes. 6. Cross-section. A 50m-wide road section is planned for Xinjian Road. This will include two 3.0-m wide pedestrian lanes, two 3.5-m wide bicycle lanes, four (or six) 3.25-motorized lanes, and two 3.5-m bus lanes in the center. 7. Bus stop characteristics. Table A4.2 summarizes characteristics of key bus stops.

Table A4.2: Proposed Sizes for Platforms on Dedicated Bus Passageway Passenger flows Number Proposed Names of stops （capita/ hour） of Stops Size <1,000 2 South Wangcun Street，North Qinxian Street 65m x 3.5m Fuxi Street, Shuixiguan Street, Kangle Street, West Shuangta Street, South Inner Ring Street, 1,000 - 3,000 8 75m x 3.5m Changfeng Street, Xuefu Street, South Mid- ring Street Shengli Street, North Street, Hanxiguan Street, 100m x 3,000 - 5,000 4 Yingze Street 3.5m

8. Operation Management System. The bus rapid transit system will replace nine current bus routes which have been modified or eliminated. However, 16 routes will still continue to operate in the general traffic lanes. It is planned that operations will begin with one rapid transit route, ultimately increasing to five rapid transit routes as demand matures. Two kinds of services are proposed: the basic service will be supplemented by express service (bus stops only at major stops). TPTGC will operate the service, which will integrate ordinary bus service and rapid transit service. Garage space and management systems will be shared to reduce the cost of land, maintenance and administration. Table A4.3 summarizes the key operational characteristics of the proposed service. Table A4.3: Taiyuan’s Rapid Transit System Operation Mode Xinjian Road Busway Operation mode use 12m ordinary transit bus Bus transport capacity (one way) 5,000-8,000 passengers per hour Design bus speed 22 km/h stop spacing 500-1,600m traffic mode ATC signal control, bus priority

PT2 Bus Depots 9. Two depots are proposed at an estimated total cost of $36.4 million, including $11.7 million from the Bank loan (Table A4.4).

36 Table A4.4: Bus Depots Area Service No. Name Lines (hectares) vehicles Nanhan Public Transport Parking and 1 8.14 16 330 Maintenance Lot Beiying Public Transport Parking and 2 6.84 17 325 Maintenance Lot 10. Nanhan Public Transport Parking and Maintenance Lot. The proposed Nanhan Parking and Maintenance Lot is located north of Xikuang Street. The planned total land area is 8.14 hectares (see Figure A4.1). Once operational, it will be used by 16 in-city bus lines to Duerping, Xiepo, Guandi, Railway Station, Beiying, East of Shengli Bridge, July 1 Machine Works, Luocheng, Chaicun, Yingxi Street, Finance and Economics University, Jiannan Bus Station, Liuxiang, Gymnasium, Songzhuang and East Passenger Transport Station. A total of 330 vehicles will use this depot.

Figure A4.1: Layout for Nanhan Bus Parking and Maintenance Facilities

11. Beiying Public Transport Parking and Maintenance Lot. The Beiying Parking and Maintenance Lot is located east of Taiyu Road and around 3,400 meters away from the planned Beiying Railway Station. The planned total land area is 6.84 hectares (see Figure A4.2). Once operational, it will be used by 17 in-city bus lines to Xiayuan, Railway Station, Xiaodian, East of

37 Shengli Bridge, Economic Development Zone, Xiwenzhuang, Educational Park, Xiayuan Brach Road, Huayu Plaza, No.16 Middle School, Gymnasium, Jiannan Bus Station, Jin Memorial Hall, Yuci Old City, East Passenger Transport Station, Beiying Ring Road and Jiancaoping. In total it will house 325 vehicles.

Figure A4.2: Layout for Beiying Bus Parking and Maintenance Facilities

PT3 Bus Terminals 12. As shown in Table A4.5, 3 terminals are proposed at a total estimated cost of $10.9 million, including $4.5 million from the Bank loan. Table A4.5: Bus Terminals Area No. Name Lines Service vehicles (hectares) 1 Yingxin Bus Terminal 6,000 sq m 4 62 2 Zoo Bus Terminal 1.4 4 75 3 Beiyan Bus Terminal 1.05 4 87

38 13. Yingxin Bus Terminal. The bus terminal on Yingxin Street is located northeast of the junction of No.1 North Yingxin Lane and Datong Road. The planned total land area is 6,000 square meters (see Figure A4.3). The terminal will service six in-city operating lines, i.e., No.1 East of Shengli Bridge Line, No.2 East of Shengli Bridge Line, Railway Station and Qifu Cemetery. A total of 62 vehicles will use the terminal and park there at night.

Figure A4.3: Layout for Yingxin Street Bus Terminals 14. Zoo Bus Terminal. The zoo bus terminal is located on the northern side of Wohu Mountain Park. The planned total land area is 1.4 hectares (see Figure A4.4). The terminal is expected to service four bus lines to Gymnasium, Xiayuan, Changfeng Parking Lot and Hi-tech Development Zone. A total of 75 vehicles will use the facility.

39

Figure A4.4: Layout for Zoo Bus Terminals

15. Beiyan Bus Terminal. The Beiyan Bus Terminal is located on the farmland of Yijing Village north of Xiyu Street. The planned total land area is 1.05 hectares (see Figure A4.6). The terminal will service four in-city bus lines, to No.1 Railway Station Line, No.2 Railway Station Line, East Passenger Transport Station and Jiufeng Road. A total of 87 vehicles will use the facility.

40

Figure A4.5: Layout for Beiyan Bus Terminals

16. PT4 Bus Dispatching and Automated Vehicle Location System. The total cost of this system is estimated to be $9.0 million, including $6.8 million from the Bank loan. TPTGC will implement a dispatch system and plans on three-phase implementation. (a) Phase I: Construction of the dispatch center, with an implementation period of two years; (b) Phase II: Installation of equipment and system software in the dispatch center and the installation of equipment on pilot bus lines. Implementation period of one year; (c) Phase III: Installation of equipment on all buses, and construction of electronic signs at bus stops. Implementation period one year.

Traffic Safety and Management (TS)

17. An integrated multi-year traffic safety and management program has been proposed in response to the detailed needs assessment described in Annex 1. The proposed component has a total cost of $27.3 million, including $20.8 million from the Bank loan. This program reflects a comprehensive approach that combines both: (a) A top-down approach, by which TTPB reports on the progress and impact of component implementation on a semi-annual basis to the Taiyuan Road Safety Committee ( the decision-making body, led by a vice-mayor, set up to implement the National Road Safety Law. As such, the Committee is accountable for traffic safety outcomes and has

41 the authority, including budget authority, to implement activities related to traffic safety); with (b) A bottom-up approach that addresses engineering, education and enforcement gaps in Taiyuan‟s current traffic safety status and practices with a comprehensive and integrated set of actions.

18. The World Bank project will finance seven subcomponents: (a) Pedestrian facilities, including improved guard rails, and improvements in pedestrian crossings, including some grade-separated crossings, pedestrian signal lights and mid- block pedestrian lights. (b) Bicycle facilities, including erection of barriers to secure bicycle lanes, and activities to improve conditions for bicycle movements at intersections, such as special signal phases to accommodate bicycles. (c) Intersection channelization. (d) An extensive program of upgrading traffic signs and markings. (e) Intelligent Transport Systems technologies, including an area traffic control system, enforcement cameras, and the related back-end off-site violation processing system, variable message signs focusing on real-time parking information, and a communications system. (f) A program for training traffic police cadres and increasing public awareness of road safety issues.

19. To focus the planned investments in a demonstrable and measurable manner, the project will adopt the safe corridor model that targets a chosen corridor with a multi-sectoral, evidence- based set of road safety interventions to achieve targeted results. Jiefang Road was chosen as the corridor to test and demonstrate this concept. Jiefang Road is about 12.1 km long, and starts and ends at the North and South parts of the Middle Ring Road with an average daily traffic of about 4,000 vehicles per day. Baseline measurements have been made in that corridor (Table A4.6) before activity is commenced, against which to measure progress. The necessary traffic and crash databases (survey information, health sector monitoring) are presented in Table A4.7.

20. Interventions will comprise the development, implementation and monitoring of a variety of evidence-based, system-wide measures aimed at improving the safety of road infrastructure, road user compliance with key safety rules, vehicle safety, and improvement of the emergency medical system. The range of interventions are well-defined, properly prepared and involve many sectors, as presented in Table A4.8.

42 Table A4.6: Jiefang Road Description Start North Middle Ring Rd Start and End End South Middle Ring rd Length 12.1 km 3+3 Number of Lanes 4+4 Lane Width 3.5 m Arterial road-Express way 2 Number of Arterial road- Arterial road 6 Intersection by Arterial road-Secondary road 9 Type Arterial road-Major branch road 14 Arterial road-Minor branch road 17 Pedestrian Facilities 17 signals & 24 km pedestrian lane Cyclist Facilities 3 signals & 18 km bicycle lane (one direction) ATC Related System Installed 11 Signal Installed not Included in ATC 12 Table A4.7: Baseline Traffic Indicators for Jiefang Road Travel Volume (peak hour) South side of Shengli Street 2003 pcu North side of Fudong Street 3535 pcu South side of Wulongkou Street 4428 pcu South side of South-inner Ring Street 4006 pcu North side of Changfeng Street 3017 pcu Vehicle Operating Speed (section Shengli Street-Fuxi Street 10.7 average speed) (km/h) Fuxi Street-Nanneihuan Street 8.9 Nanneihuan Street-Nanwaihuan Street 13.5 Shengli Street-Fuxi Street 13.8 Fuxi Street-Nanneihuan Street 13.9 Nanneihuan Street-Nanwaihuan Street 20.3 Number of Crashes (only the crash that 2007 71 has fatality and injury) Number of Fatalities 2007 5 Number of Injuries 2007 77

43 Table A4.8: Interventions to be Implemented Number of Traffic Signals to Add 23 Number of Intersections to be Channelized 30 Km of Pedestrian Sidewalks to Build 1.5 km Km of Cyclist Exclusive lanes to Build 6 km Number of Intersections to be Integrated into ATC System 43 Number of Intersections to be Monitored 31

21. Though a detailed plan for each subcomponent has been identified, the expectation is that this program will evolve and adapt over the project implementation period based on the actual situation in Taiyuan and the observed implementation impacts. An annual program of investments within the framework defined by these sub-components will be discussed and agreed upon with the TTPB. The annual program will be implemented based on an agreed implementation framework that includes adherence to World Bank procurement, financial and safeguard policies based on an agreed set of technical standards and design principles. The World Bank team will monitor component outputs and safety outcomes.

Institutional Strengthening (IS)

22. This includes three sub-components. IS1 finances domestic and international training at a cost of $1.6 million. IS2 finances technical assistance at a cost of $1.3 million; and IS3 finances equipment for the project employers and management agencies at a cost of $0.1 million.

23. The technical assistance program includes technical assistance studies proposed by the various project stakeholders in order to strengthen their capacity:

(a) Supporting the Taiyuan Municipal Finance Bureau - The development of a government debt management system and the development of a dynamic financial management system. (b) Supporting the Taiyuan Municipal Development and Reform Commission - The development of a strategy for alternative sources of finance for investments presently financed by the government; (c) Supporting the traffic police (TTPB) - Capacity building and the development of actionable strategies for dealing with non-motorized traffic, decision-support systems for traffic control, accident analysis, and parking strategy. (d) Supporting the Taiyuan Municipal Price Bureau - TCC and bus operators to evaluate alternative bus transfer discount policies and to recommend a policy appropriate for Taiyuan that will lower the inconvenience associated with transfers for riders. (e) Supporting the Planning Bureau with continuing support for parking planning.

44 Annex 5: Project Costs CHINA: TAIYUAN URBAN TRANSPORT PROJECT Table A5.1: Cost Summary by Component Land Serial Financial Total WB Component Civil work Equipment Consulting requisition and Others Contingency No. cost cost financing resettlement I Road Infrastructure 1 Taihan Road 122.61 0.00 10.78 61.04 3.35 19.78 11.41 228.97 97.29 Sub-total 122.61 0.00 10.78 61.04 3.35 19.78 11.41 228.97 97.29 II Public Transport 1 Xinjian Bus lane 3.04 0.00 0.09 0.00 0.11 0.32 3.57 0.00 Road(PH1) Bus stops 0.56 1.34 0.05 0.00 0.08 0.20 2.23 0.00 2 Xinjian Bus lane 4.26 0.00 0.27 0.00 0.33 0.49 0.36 5.71 3.38 Road(PH2) Bus stops 0.60 1.77 0.12 0.00 0.19 0.27 0.23 3.18 2.24 3 Bust Depots 13.27 1.13 0.53 16.01 0.73 3.17 1.52 36.36 11.66 4 Bus terminal 5.48 0.13 0.28 3.23 0.33 0.95 0.53 10.93 4.48 5 ITS 1.39 5.54 0.15 0.00 0.44 0.75 0.68 8.95 6.79 Sub-total 28.60 9.92 1.50 19.24 2.21 6.15 3.32 70.93 28.56 III Road Safety and Management 1 Pedestrian facilities 3.06 2.95 0.31 0.00 0.32 0.66 0.45 7.75 5.68 2 Improvement of bicycle facilities 0.32 1.30 0.08 0.00 0.08 0.18 0.13 2.09 1.63 3 Improvement of channelization 3.10 0.00 0.17 0.00 0.17 0.34 0.21 4.00 2.63 4 Improvement of signs and 0.36 1.28 0.09 0.00 0.09 0.18 0.13 2.14 1.66 markers 5 Improvement of ITC 0.58 7.84 0.20 0.00 0.28 0.89 0.68 10.47 8.50

45 6 Improvement of traffic law 0.03 0.15 0.50 0.00 0.06 0.07 0.05 0.86 0.67 enforcement and road safety Sub-total 7.45 13.50 1.36 0.00 1.01 2.33 1.66 27.30 20.77 IV Institutional strengthening 1 Domestic and overseas study 1.63 1.63 1.63 tours 2 Consultation of related study 1.29 1.29 1.29 3 Equipment and materials 0.09 0.09 0.09 Sub-total 0.09 2.92 3.01 3.01 V Total Component VI Front-end Fee 0.375 0.375 VII Total 330.59 150.00

46

Notes: 1. All costs are in $ million. 2. For Roads component, Bank financing is 79 percent of base civil works. 3. For Public Transport Component, Bank financing is 79 percent of base civil works, and 100 percent of equipment cost. 4. For the Traffic Safety Component, Bank financing is 100 percent of equipment and consulting costs, and 79 percent of base civil works costs. 5. Front-end fee at 0.25 percent is $0.375 million, included in the total cost of $330.59 million. 6. Calculation of contingencies: (a) The design institutes calculated contingencies as per Ministry of Construction contingency regulations, as 10 percent of the base cost. (b) An alternative approach, more consistent with international practice (and consistent with most World Bank financed investments) would be separately estimating physical and price contingency. Physical contingency is generally calculated as 8 percent of the costs of civil works. Price contingency is calculated for each component based on estimates of future inflation (obtained from the World Bank‟s economic outlook for China) and the construction schedule. The total contingency using this alternative methodology was calculated. (c) Both calculations yielded approximately equal levels of contingency. The estimate using Ministry of Construction regulations yielded a slightly but not materially higher estimate. This estimate was used in the final cost table.

47 Annex 6: Implementation Arrangements CHINA: TAIYUAN URBAN TRANSPORT PROJECT

1. This annex provides further details on implementation arrangements to complement the information proceed in Section III of the main text. 2. Shanxi Project Leading Group (PLG). Shanxi Province, through a project leading group, is responsible for providing overall leadership, policy guidance supervision and institutional coordination as required on project preparation and implementation. This group includes representatives of Shanxi Finance Bureau, Shanxi Development and Resource Commission, and Taiyuan Municipality. 3. Taiyuan Municipal Project Leading Group. Taiyuan municipality, through a project leading group, is responsible for providing overall leadership, policy guidance, and institutional coordination as required on project preparation and implementation. The PLG, headed by the Mayor, is composed of leaders and directors of fifteen relevant government line agencies. The members of the leading group include the following municipal representatives:  Mayor  Vice Mayor  Vice Secretary-General of Municipal Government  Representatives of Municipal Development and Reform Commission  Representative of Finance Bureau  Representative of Municipal Housing Rural and Urban Construction Commission  Representative of Municipal State-owned Land Resources Bureau  Representative of Municipal Planning Bureau  Representative of Environmental Protection Bureau  Representative of Municipal Construction Bureau  Representative of Municipal Real estate Bureau  Representative of Jiancaoping District Government  Representative of Xinghualing District Government  Representative of Yingze District Government  Representative of Wanbailin District Government  Representative of Xiaodian District Government  Representative of Jinyuan District Government 4. Leading Group Office of the Taiyuan Municipal World Bank Loan Urban Transport Project Office (TPMO). Under the leadership of Taiyuan Project Leading Group, a project office was established on July 14, 2004 to execute project preparation on behalf of Taiyuan Municipality. Shanxi Province has also delegated to TPMO the day-to-day responsibilities related to project implementation, project management, financial management and procurement. During project implementation, TPMO will assist Taiyuan and Shanxi PLG on policy guidance, institutional coordination, and overall monitoring of project progress and implementation, in accordance with the loan and project agreements. TPMO is part of TMDRC and reports directly

48 to Taiyuan Municipal Government, represented by the project leading group. There are divisions of project management, engineering, resettlement and environment, planning, finance, and general. 5. Sub-Project Management Offices (Sub-PMO). Sub-PMOs are established by project sub-components‟ implementing entities. They are responsible for day-to-day management and coordination of project preparation and implementation. 6. The following schematic Figure A6.1 outlines the relationship among the various agencies responsible for administering and implementing the project in Taiyuan City.

Figure A6.1: Relationship of Agencies Responsible for the Project

Shanxi Provincial Government

Taiyuan Municipal Government

Taiyuan World Bank-Financed Urban Transport间 Project Leading Group

Project Management Office Institutional under PLG Strengthening （Project executive entity） component

Municipal Construction Management Commission

(Project Coordinator)

Sub- Sub- Sub- PMO for PMO for PMO for Taihang PT TS Road

49 7. As stated above, the leading implementing entities are represented by sub-PMOs. TPMO will enter into an agreement with implementing agencies through sub-PMOs for the purposes of coordinating the overall implementation of the project. 8. Taiyuan Municipal Urban Construction Development Department (CDD). Established in October 1985, it is a public entity under the Taiyuan Municipal Housing, Rural and Urban Construction Commission. CDD has implemented major city infrastructure works in Taiyuan. CDD is an independent legal body designated to manage the construction of Taihang Road, bus priority lanes under the public transport component, and road junction channelization under the traffic safety and management component. After completion of construction, the project would be handed over to Taiyuan Municipal Affairs Management Bureau. Table A6.1: Implementing Entities for Each Project Component No. Project Component Component Leading Line Agencies Road Infrastructure 1 1.1 Taihang Road 1.1 Taiyuan Municipal Construction Development Department (CDD) Public Transport 2.1 Xinjian Road Busway 2.1 Taiyuan Municipal Construction Development Department (CDD) 2 2.2 Bus Depots 2.2 Taiyuan Public Transport Group Company 2.3 Bus Terminals 2.3 Taiyuan Public Transport Group Company 2.4 Dispatching and Automated 2.4 Taiyuan Public Transport Group Company Vehicle Location System Taiyuan Traffic Police Brigade (TTPB) of 3 Traffic Safety and Management Component Taiyuan Public Security Bureau Institutional Development 4 4.1 Policy & Study TPMO and all implementing agencies 4.2 Implementation Support 4.3 Training

9. Project Management Office in Taiyuan Municipal Public Transport Group Co. (TPTGC). TPTGC is the designated „employer‟ for the PT component of the project under Taiyuan Urban Construction Assets Operation Co. TPTGC issued a document in 2008 to set up a leading group within TPTGC on April 2008. TPTGC was responsible for preparing the project sub-components and will be responsible for their future operation. It will manage the procurement and construction of bus stops, depot and interchange terminals. TPTGC will also be responsible for technical aspects of bus priority lanes, but construction of the bus priority lanes in Xinjian Road will be managed by CDD.

10. Taiyuan Traffic Police Brigade of Taiyuan Public Security Bureau. The designated „employer‟ for the TM component is the Taiyuan Traffic Police Brigade (TTPB) of the Taiyuan Public Security Bureau. A government agency, TTPB was responsible for preparing the sub- components, is designated to develop them, and will have overall responsibility for their future operation. TTPB is also responsible for traffic and road safety education. 11. There are three sources of funding for the project. (a) World Bank loan; (b) Taiyuan Municipality Budget allocation; and (c) domestic bank loans. Budget allocations are funds

50 sourced by Taiyuan Municipality from its own revenues. Domestic loan funds are raised on behalf of Taiyuan by Taiyuan Urban Construction Company, an urban development investment corporation set up by the city as a financing platform to borrow funds for infrastructure. This company will have not have any involvement with the Bank loan proceeds; no funds will flow through the company and the company will have no role in reviewing or processing disbursement requests related to the project.

12. Taiyuan Municipality‟s budget allocation is provided by Taiyuan Municipal Finance Bureau (TMFB) based on Taiyuan‟s Annual Urban Construction Funding Plan issued by the Urban Construction Committee, TMFB, and the Taiyuan Development and Reform Commission. The annual allocation will be based on an annual work program and financial plan. The Financial Plan specifies the planned use (subcomponents and contracts) of all sources of funds. It also designates a line item on debt service for annual repayment of loan proceeds.

13. The World Bank loan will be signed between the People‟s Republic of China through its Ministry of Finance (MOF), and the World Bank. MOF will on-lend the loan to Taiyuan Municipality through SPFD under an on-lending agreement satisfactory to the Bank, with similar terms and conditions to those of the World Bank loan. Domestic bank loans will be managed by TMFB. 14. Project Reporting. TPMO will establish a project reporting system to monitor physical and financial progress of the project, and to provide progress reports on key indicators to the Bank every six months. The progress reports are to be sent to the Bank within 45 days of the end of the six month reporting period, (i.e., by February 15 and August 15 each year), starting from August 15, 2010. 15. The Mid-Term Review for the Project will be undertaken no later than 36 months after loan effectiveness.

51 Annex 7: Financial Management and Disbursement Arrangements CHINA: TAIYUAN URBAN TRANSPORT PROJECT

1. The Bank has conducted an assessment of the adequacy of the project financial management system underpinning the Taiyuan Urban Transport Project. This assessment was conducted based on guidelines issued by the Financial Management Sector Board on November 3, 2005. It concluded that the project meets minimum Bank financial management requirements, as stipulated in BP/OP 10.02. The project will maintain financial management arrangements that are acceptable to the Bank, and that as part of the overall arrangements that the borrower has in place for implementing the operation, provide reasonable assurance that the proceeds of the loan are used for the purposes for which the loan is granted. Financial management (FM) risk is the risk that World Bank loan will not be used for the purposes intended, and is a combination of country, sector and project specific risk factors. Taking into account the risk mitigation measures proposed under this project, a modest FM risk rating was assigned to the project at the appraisal stage.

2. Funding sources for the project include the Bank loan and counterpart funds. The loan will be signed between the Bank and the People‟s Republic of China, through its Ministry of Finance (MOF). MOF will on-lend the loan to Taiyuan Municipality, through Shanxi Provincial Government, on the same terms. Taiyuan Municipal government is responsible for repaying the on-lent amount to MOF. Bank loan proceeds will flow from the Bank into a project designated account to be set up at, and managed by, Shanxi Provincial Finance Bureau (SPFB), then reimbursed to Taiyuan Municipal Finance Bureau (TMFB), and finally to sub-PMOs and contractors. Counterpart funds comprise appropriations and commercial borrowing from Taiyuan Municipality. TMG will pass all project funds on to project implementing entities in the form of grants, regardless of source (Bank loan or counterpart funds).

3. No outstanding audits or audit issues exist with the implementing agency involved in the proposed project. The Bank requires that project financial statements be audited in accordance with standards acceptable to the Bank. In line with other Bank-financed projects in China, the project will be audited in accordance with International Auditing Standards and the Government Auditing Standards of the People‟s Republic of China. The Shanxi Provincial Audit Office, as the auditor for this project, will issue an audit report annually, and send it to the Bank within six months after the end of each calendar year.

4. Risk Assessment and Mitigation. The following risks, with corresponding mitigating measures, have been identified during assessment:

Risk Risk Incorporated Risk Risk Conditions Rating Mitigating Measures Rating of before after Negotiations, Mitigating Mitigating Board or Measures Measures Effectiveness Inherent Risk  Country Modest Continuous dialogue with related Modest level government entities and technical assistance from the Bank will help the government to improve its public sector financial

52 management. In the short term, annual audit requirements will reduce the risk that project funds are not used for their intended purposes. For those areas where government system can not be used, Bank's specific requirements will be embedded into the project financial management system.  Entity Substantial Even though the four sub-PMOs are all new Modest . Level to Bank projects, the provincial and municipal finance bureaus have experience with Bank-financed projects. Guidance and supervision from the provincial and municipal level can, to some extent, mitigate this weakness. Well designed training sessions will be provided to financial staff of these entities during the launch workshop and project implementation.  Project Substantial The disbursement arrangement used Modest Level (comingling of Bank loan with counterpart funds for each payment) will help project implementation. FM training will be provided to project financial staff to furnish them necessary knowledge and information. The FM manual is required to help standardize financial work, as well as clarify the interagency coordination required in financial management and disbursement. SPFB will supervise and monitor project implementation by managing Bank loan proceeds. Control Risk  Budgeting Substantial Procedures regarding budget preparation Modest and execution have been agreed by the Bank and government. For details refer to paragraphs 17 and 18.  Accounting Modest Accounting policies and regulations for the Modest Bank loan are already in place, and detailed accounting procedures will be documented in the FMM. This should be followed up by regular supervision missions.  Internal Substantial Proper segregation of duties and internal Modest Control approval procedures will be set up at each PMO. A project financial management manual (FMM) was prepared before project negotiation to specify the reporting procedures and detailed FM guidance and supervision policies.

53  Funds Flow Substantial The comingling of Bank loan with Modest counterpart funds will avoid bottlenecks in funds flow and contribute to efficient project implementation. Most project funds will be paid by the municipal finance bureau directly to contractors, thus making it more efficient..  Financial Modest The format and content of financial Modest Reporting statements have been stipulated by MOF. A set of customized interim financial reports have been developed and agreed with government. The project financial management manual will also specify such financial reporting requirements.  Auditing Modest The external auditor, Shanxi Provincial Modest Audit Office, has extensive experience with previous Bank projects.  Overall Substantial Modest

5. The overall FM risk-rating assigned to this project at appraisal is modest, provided the proposed mitigating measures are carried out. The Bank will monitor the effectiveness of the measures and project FM risk during project implementation

6. Funds Flow for the Bank loan will follow Bank and MOF requirements. One designated account (DA) will be established and managed by SPFB. Loan proceeds could be paid from the DA to suppliers and contractors against eligible expenditures, or be reimbursed to TMFB against eligible expenditures. The funds flow is as shown below.

The DA managed Suppliers and World TMFB by SPFB contractors Bank

Sub-PMOs

7. Bank loan proceeds will be disbursed against eligible expenditures as indicated in Table A7.1.

54 Table A7.1: Disbursements by Disbursement Category and Subcomponent Amount of the Loan Percentage of expenditures Category Allocated (USD) to be financed (1) Civil Works 123,035,000 79 (2) Goods, Consultants‟ services and training 26,590,000 100 (including study tours and workshops) (3) Front-end Fee 375,000 (4) Premium on interest rate cap or interest rate 0 collar

8. Since the Bank loan and counterpart funds are all paid by TMFB to contractors or sub- PMOs, it was agreed that TMFB will comingle the Bank loan and counterpart funds when they make payments to related parties. This arrangement will streamline project payment and make project disbursement more efficient.

9. Four disbursement methodsare available to the project: reimbursement, advance, direct payment and special commitment.

10. Supporting Documentation. For expenditures against contract amounts indicated in the table below, Statements of Expenditure will be furnished as supporting documentation to request for reimbursement and reporting eligible expenditures paid from the DA.

Table A7.2: Request for Reimbursement and Reporting Eligible Expenditures and Against Statements of Expenditure Expenditure Category Contracts Less than US$ Equivalent Civil Works 5,000,000 Goods 500,000 Firm Consultant 100,000 Individual Consultant All Training All

11. For contract amounts subject to the Bank‟s prior review indicated in the table below, the list of payments against contracts, and records evidencing eligible expenditures (e.g., copies of receipts, supplier invoices) will be furnished as supporting documentation to request for reimbursement and reporting eligible expenditures paid from the DA.

55 Table A7.3: Requesting Reimbursement and Reporting Eligible Expenditures Against List of Payments to Prior Review Contracts Contracts Equivalent to or More Expenditure Category than US$ Equivalent Civil Works 5,000,000 Goods 500,000 Consulting firm 100,000 Individual consultant NA

12. Designated Account. One segregated designated account (DA) in US dollars will be opened at a commercial bank acceptable to the Bank and will be managed by SPFB. The DA ceiling will be determined and documented in the Disbursement Letter. To ensure proper use of loan proceeds and mitigate risks, Bank loan proceeds will not be further advanced from DA to any other project accounts.

13. SPFB will be directly responsible for the management, monitoring, maintenance and reconciliation of the project DA activities. To be consistent with the on-lending arrangement, and using the government appropriations channel, the flow of withdrawal applications is proposed as follows:

Sub-PMOs Taiyuan PMO TMFB SPFB World Bank

14. Strengths. All the projects funds will be exclusively mobilized and closely monitored by TMFB, whose experience in implementing World Bank financed projects should mitigate the fiduciary risk. Additionally, SPFB has managed Bank loan proceeds for over 20 years covering various sectors. SPFB has accumulated extensive experience in managing Bank projects, which will benefit project implementation.

15. Implementing Entities. For detailed implementation arrangements, refer to Annex 6.

16. Budgeting. It was agreed that the four sub-PMOs will start preparation of their annual plans beginning in October of each previous year from the commencement of project implementation. Since all project funds, including the Bank loan and counterpart funds, are managed by TMFB, the four sub-PMOs only prepare their annual activity plans, without the need to consider the sources of funds. After receiving the annual plan from the sub-PMOs, TMFB will consolidate the plan and add the sources of funds element. The consolidated annual plan should be submitted to the Bank for approval no later than the end of November, and the final annual plan should be approved before the end of each calendar year.

17. The sub-PMOs are required to conduct semi-annual variance analysis and report the results to Taiyuan PMO. The consolidated variance analysis report should be integrated in the project progress report and submitted to the Bank regularly.

56 18. Accounting. The administration, accounting and reporting of the project will be set up in accordance with Circular #13: “Accounting Regulations for World Bank Financed Projects”, issued in January 2000 by MoF. The circular provides in-depth instructions on the accounting treatment of project activities, and covers the following: (a) Chart of accounts; (b) Detailed accounting instructions for each project account; (c) Standard set of project financial statements; and (d) Instructions on the preparation of project financial statements.

19. The project financial reporting package, including the detailed format and content of the project financial statements was agreed to between the Bank and MoF. The project financial reporting package includes the following: (a) Balance Sheet; (b) Summary of Sources and Uses of Funds by Project Component; (c) Uses of Loan by Project Category; (d) Designated Account Activity Statement; and (e) Notes to Financial Statements.

20. Each Sub-PMO will be managing, monitoring and maintaining the project accounting records. They will prepare their own financial reports and submit them to TPMO. TPMO will prepare a consolidated project financial reporting package and submit it to the Bank for review and comment on a regular basis.

21. Adequate project accounting staff, with educational background and work experience commensurate with the work they are expected to perform, is one of the factors critical to successful implementation of project financial management. Based on discussions, observations and review of educational background and work experience of the staff identified for financial and accounting positions, the task team noted that the staff appears qualified and appropriate to do the work they are expected to assume. However, given that most of the project financial staff are new to Bank projects, FM and disbursement training should be provided to all the financial staff before start of implementation.

22. To strengthen financial management capacity and achieve consistent quality of accounting work, a project financial management manual (the FMM) has been prepared. The FMM provides detailed guidelines on financial management, internal controls, accounting procedures, fund and asset management and withdrawal application procedures. The FMM is acceptable to the Bank, has been distributed to all relevant financial staff.

23. The project will use a Management Information System (MIS) which is designed specifically for and is currently used by other Bank projects. The MIS covers annual budget, contract management, disbursement, accounting treatment and financial reporting. The MIS system will be used for the preparation of Interim Financial Reports.

24. Internal Control and Internal Auditing. The project has established internal control procedures and policies, including approval and authorization controls, segregation of duties,

57 clear staff functions, and safeguarding assets. Funds flow will be arranged and monitored through the finance bureau channels, and will include their substantive review.

25. There is no formal independent internal audit department for the project. Three of the four sub-PMOs have their own internal audit units, although their functions are limited. There is a construction review center within TMFB which is responsible for reviewing projects financed by government budget. Additionally, SPFB‟s management, monitoring and annual external audits will serve as the mechanism to ensure that financial management controls are functioning appropriately.

26. Financial Reporting. The project financial reporting package, including detailed format and content of project financial statements, was agreed to between the World Bank and MOF. In line with the updated World Bank Operation Manual, the interim un-audited project financial statements should be submitted as part of the progress report to the Bank on a semi-annual basis (prior to February 15 and August 15). This project financial reporting package includes the following: (a) Balance Sheet (b) Summary of Sources and Uses of Funds by Project Component (c) Uses of Loans by Project Category (d) Designated Account Activity Statement

27. Supervision Plan. The supervision strategy for this project will be based on its FM risk rating, which will be evaluated on a regular basis by Bank staff.

58 Annex 8: Procurement China: TAIYUAN URBAN TRANSPORT PROJECT

A. General

1. Procurement for the proposed project will be carried out in accordance with the World Bank‟s "Guidelines: Procurement under IBRD (International Bank for Reconstruction and Development) Loans and IDA (International Development Association) Credits" dated May 2004; and revised "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and revised October 2006, and the provisions stipulated in the loan agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame have been agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually, or as required, to reflect actual project implementation needs and improvements in institutional capacity. 2. Procurement of Works. Works procured under this project include civil works in the road component; the public transport component; and the traffic safety component. Preliminary designs and detailed designs will be approved by the Bank in advance for all prior review and post review contracts. 3. Procurement of all works will use as appropriate either (a) MoF‟s model bidding documents (MBD) agreed with the Bank for national competitive bidding (NCB) through post- qualification (each contract below $20 million); or (b) the latest Bank‟s standard bidding documents (SBD) for international competitive bidding (ICB) through prequalification (each contract above $20 million)9; or (c) Shopping procedures (each contract less than $200,000). In the case of ICB contracts, post qualification is an alternative to prequalification, as long it is so indicated in the procurement plan and approved by the Bank in advance. Contracts above $5 million will be subject to Bank prior review. 4. Procurement of Goods: Goods procured under this project will include equipment and instruments for the public transport component, and the traffic safety component. 5. All goods will be procured using as appropriate either (a) MoF‟s Model Bidding Documents (MBD), agreed with the Bank for national competitive bidding (NCB) for contracts less than $1,000,000 but more than $100,000; or (b) the latest version of the Bank‟s Standard Bidding Documents (SBD) for ICB (each contract more than $1,000,000)10; or (c) using Shopping procedures (each contract less than $100,000). Contracts above $500,000 are subject to Bank prior review. In addition, the Bank will prior review the first contract procured under each category.

9 The current versions of the SBD relevant to works are “Standard Procurement Document, Prequalification Document for Procurement of Works and User's Guide August 2006, revised May 2007,” and “Standard Bidding Document, Procurement of Works, April 2007.” 10 The current versions of SBD relevant to goods are Procurement of Goods, May 2004, revised May 2005, September 2006 and May 2007, and SBD Plant Design, Supply and Installation, April, 2008.

59 6. Procurement of non-consulting services. Travel service providers may be selected as non-consultant services to provide logistic services for training and study tour. 7. Selection of Consultants. Consultants selected under this project will provide services in the public transport, traffic safety and institutional development components. All contracts over $200,000 in value will be procured using one of two selection methods: Quality and Cost Based Selection (QCBS) or Quality Based Selection (QBS), conforming with Sections 2.8 and 3.2 of the Consultant Guidelines. Contracts less than $200,000 in value may also use the Consultant Qualifications (CQS) method conforming to section V of the Bank‟s consultant guidelines. Individual Consultants will be selected and contracted conforming with section V of the Consultant Guidelines. Consultant services which are estimated to cost less than $200,000 equivalent per contract, may, with the World Bank's prior agreement, be procured in accordance with the provisions of paragraphs 3.9 through 3.13 of the Consultant Guidelines for Single Source Selection. 8. Short lists of consultants for services estimated to cost less than $300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Consultants that are universities and government research institutions will be selected in accordance with the provisions of paragraphs 1.11(c) and 2.8 of the Consultant Guidelines. The Bank‟s latest Standard Request for Proposal will be used11. Contracts above $100,000 for firms, and all Single Source Selection, are subject to Bank prior review. In addition, the Bank will prior review the first contract procured under each category, as well as the terms of reference for all consulting contracts, regardless of value and method of procurement. 9. Operating Costs. Not applicable. 10. Others. The institutional development component will also involve through overseas and domestic training and study tours by staff of the agencies/institutions involved in research, planning, construction, operation and maintenance of urban infrastructure. Such training and study tours will be arranged and contracted with consultants, travel agents, or arranged by PMO/PIU themselves. 11. Procurement procedures and SBDs to be used for each procurement method are presented in the Procurement Manual prepared by TPMO.

B. Assessment of the agency’s capacity to implement procurement

12. The designated Project Employers are the primary implementing agencies for each project component i.e the CDD for the road component and road works activities of the public transport component, the public transport company for the public transport component and the traffic police brigade for the safety component. These entities will lead the procurement, sign contracts, manage the contract, and authorize disbursement. TPMO under TMDRC (which leads project preparation) is responsible for project coordination, administration and liaison with the Bank and TMG during the project implementation stage. For the road and public transport components, TCC will supervise implementation and management on behalf of Taiyuan Government. Procurement will be supervised by SPFB and TMFB in accordance with the

11 The current version is: Standard Request for Proposal, Selection of Consultants, May 2004

60 stipulations in “Procurement Management Methods for Projects financed by International Financial Institutions in Shanxi Province, Document No. 2002-39” issued by SPFB on December 5, 2002. 13. The capacity of TPMO and the Employers to implement procurement actions for the project was assessed in July 2008. The assessment reviewed the organizational structure for implementing the project and the interaction between project staff responsible for procurement activities in TPMO and the employers. The assessment found that government procurement practices for self-financed projects are not completely consistent with the Bank‟s guidelines. This is not in-itself unusual in China; and the project employers have agreed to abide by Bank procurement guidelines for all Bank-financed contracts. This agreement has been formalized in the legal agreements. Additionally, an experienced procurement agent will be hired for ICB procurement. Further, the Bank will provide training on procurement policies, and also conduct prior and post reviews on procurement activities to ensure that the Bank‟s procurement policies and procedures are properly followed for Bank-financed contracts. 14. The key issues and risks concerning procurement for project implementation have been identified and are shown in Table A8.1. (Details are included in the procurement capacity assessment report.) The corrective measures which have been agreed are also shown in Table A8.1. Table A8.1: Procurement Assessment – Risks, Issues and Corrective Measures No Risks and Issues Corrective Measures 1 TPMO and Employers have insufficient TPMO and Employers shall appoint qualified experienced staff dedicated to procurement procurement staff. activities. 2 Hire an agent for procurement of equipment TPMO and SPFB have been selected. through ICB as required by Ministry of CNTIC-ITC has been selected as the procurement agent. Commerce. 3 Lack of a procurement manual describing A procurement manual acceptable to the Bank has been procurement procedures to be followed in prepared and distributed to all procurement staff. World Bank-financed procurement and responsibility of each organization handling procurement. 4 Limited knowledge of World Bank TPMO will organize periodically, or send staff out, for procurement. procurement training, seminars, study tours and workshops. On-the- job training shall be conducted for all staff from time to time to strengthen the agency‟s capacity to implement procurement for the project. 5 Disclosure of procurement under the Publish a General Procurement Notice (GPN), Specific project. Procurement Notice (SPN) and contract evaluation and award information on United Nations Development Business (UNDB) online and dgMarket

15. The overall project risk for procurement is moderate in the case of urban transport projects financed by the World Bank in China.

61 C. Procurement Plan 16. TPMO developed a Procurement Plan for project implementation which was later agreed between TPMO and the Project Team. It will be available in the Project database and in the Bank‟s website. The Procurement Plan will be updated in agreement with the Project Team annually, or as required, to reflect actual project implementation needs and improvements in institutional capacity. Table A8.2 provides details on key proposed ICB contracts.

Table A8.2: ICB Contract Packages in the Procurement Plan

Table A8.2A. Taihang Road (TR)-10.65km Urban Trunk Road Bank Prior No. Contract Contract name, feature review Bidding Contract duration No. or post year (months) review 1. TR1 Xutandongjie- Prior 3rd 24 Changfengdongjie review quarter, Interchange North, 2330 m 2010 2. TR3 Zhaobeifengjie-Fudong Prior 3rd 24 Street 3000 m review quarter, 2010

Table A8.2B. Public Transport Bank Prior No. Contract Contract name, feature review Bidding Contract duration No. or post year (months) review 3. PT2.4c Gas station for Nanhan Prior 2011 12 Depot review 4. PT2.5c Gas station for Beiying Prior 2012 12 Depot review 5. PT3.2a General equipment and Prior 2011 12 software for Bus Automatic review Locating and Dispatching system 6. PT3.2b Special equipment and Prior 2011 12 software for Bus Automatic review Locating and Dispatching system Total PT, 23 packages

62 Table A8.2C. Traffic Safety Bank Prior No. Contract Contract name, feature review Bidding Contract duration No. or post year (months) review TMG12. 1.Pedestrian guardrails (40 Post 2010~ 2010.04-2011.12 1, 2, 3 km), bicycle guardrails review 2012 2011.01-2011.12 1 (3 (33.5 km); Central 2012.01-2012.12 contracts ) guardrails (channelization) (5.5 km); goods, implementation of procurements every year TMG5.1 2.ATC, 112 sets, goods Prior 2010 2010.04-2011.09 2 review TMG5.2 3.CCT V, goods Prior 2010 2010.04-2011.10 3 review TMG5.3 4.Induce plate 40 sets, goods Prior 2010 2010.04-2011.10 4 review Total 16 packages

17. Table A8.3 summarizes the prior review thresholds for the project. In addition, the Bank will prior review the first contract procured under each procurement method. Table A8.3: Prior Review Thresholds Consultant Consultant Civil Works Goods Services Services Firm Individual Above $ 5 million 500,000 100,000 NA

18. Procurement method thresholds for the Project are summarized in Table A8.4. Table A8.4: Procurement Method Thresholds Procurement Civil Goods Consultant Services Method Works ICB ≥$20 m ≥$1,000,000 >$300,000 (short list to contain not more than 2 firms from any NCB advertisement country) in a national ≥$2 mn ≥$300,000 <$300,000 (shortlist may newspaper include only national consultants) NCB advertisement >$200K: QCBS / QBS and in a provincial <$2 mn <$300,000 advertisement in United newspaper Nations Development Business (UNDB) on line and dgMarket Shopping <200,000 <$100,000 <$200,000: CQS/SSS/Individual consultant

63 19. Advertisement. In addition to a national newspaper, all procurement notices for ICB, and consultant contracts above $200,000 for firms, will be advertised in United Nations Development Business (UNDB) on line and dgMarket. The advertisement for Expressions of Interest for selection of consulting firms will be in a national newspaper, regardless of contract value. 20. Bid/proposal evaluation and contract award will be published in accordance with paragraphs 2.60, 3.4 and 3.7 of the Guidelines for works and goods, and 2.28, 3.8 and 3.13 for consultant services.

D. Frequency of Procurement Supervision

21. The Bank will monitor procurement closely through its prior review procedures, regular supervision missions, and procurement post-review missions. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the implementing agency has recommended supervision missions to visit the field to carry out post review of procurement actions every 12 months, if the post-review contracts were procured during the period.

64 Annex 9: Economic and Financial Analysis CHINA: TAIYUAN URBAN TRANSPORT PROJECT

Part I: Economic Analysis 1. Cost-benefit analysis was carried out for the Taihang Road and the Xinjiang Street busway, which together account for over 70 percent of project cost and 65 percent of the loan. The analysis is based on the output of a standard transport planning model for Taiyuan. Both costs and benefits reflect June 2009 prices, and a project life of 20 years is assumed. Financial costs have been converted to economic costs by the elimination of price contingency, taxes, and customs duty on imported materials. 2. The other public transport investments comprise mostly low-cost elements, which are either essential operational items (such as dispatching equipment, end-of-route turnarounds, off- street parking, and maintenance facilities), or which enhance quality for passengers (such as transfer interchanges and bus shelters). Designs for all works have been optimized from a cost- effectiveness perspective. Such investments typically provide high rates of return in terms of increases in the competitiveness of the bus service, and lower operational costs related to higher productivity and lower maintenance costs. 3. The traffic management and road safety component is a set of small investments for which past experience indicates very significant benefits in increased levels of safety (lower levels of accidents, injuries, fatalities and associated economic loss) and savings in travel time.

Key Assumptions 4. Population Growth. In 2005, Taiyuan City proper had a residential population of 2.63 million and a floating or temporary population of 262,000 dispersed within the six urban districts. The density of residential population was 487 persons per square kilometer. The projected residential population is 2.9 million by 2010, including a floating population of about 300,000. By 2020 the projected residential population is 3.4 million, including a floating population of about 400,000. 5. Economic Growth. Taiyuan reached a GDP of $13.0 billion in 2005, 15% higher than the previous year. In 2005, GDP per capita was about $4,925. Though it ranks highest among cities in Shanxi Province in terms of the economic development and per capita income, Taiyuan lags behind cities of similar size elsewhere in China. Economic growth in recent years has been driven by the rising price of coal, a key element of Taiyuan‟s economic resource base. Expectations are for GDP to continue to grow at over 9 percent an annum through 2020. 6. Vehicle Fleet and Motorization. In 2005, the motor vehicle ownership rate of inhabitants in Taiyuan city (shi qu) was 89 per 1,000 persons, representing an increase of 160 percent since 1995. Compared with other cities, the motorization level of Taiyuan is still comparatively low, but is growing rapidly. A high rate of motorization is expected to be maintained in the coming years as incomes rise. The most likely projections of vehicle fleet growth rates in Taiyuan are 15 percent per year from 2005 to 2010, 9 percent per year from 2010 to 2015, and 5 percent per year from 2015 to 2020. 7. Trips and Mode Shares. The mode shares of person trips in Taiyuan City (shi qu) between 1995 and 2004 reflect a large increase in the role of motor vehicles and a marked

65 decline in the role of bicycles (see Table A9.1). A four-step transport model was used to generate and distribute trips by mode on the present road network and future road network scenarios. The daily trip volumes and mode shares for the base case, which assumes the implementation of the near-term transport master plan, are compared with actual 2004 data in Table A9.2. The total number of trips and the average length of trips is expected to increase in all scenarios, as the population grows and incomes rise. Currently, trucks represent as much as 50% of the vehicle volume on some major urban roads. Table A9.1: Mode Shares (in percent) in 1995 and 2004 Modal Split 1995 2004 Walk 32.7 33.2 Bicycle 54.6 35.1 Bus 5.6 11.0 Motor Car 7.1 20.8

Table A9.2: Base Case Daily Trip Volumes and Mode Shares Personal Mode Walk Bicycle Bus Taxi Total Vehicles Daily Trips 1,580 1,670 520 740 250 4,750 Year (1,000) 2004 Mode Share 33.2% 35.1% 11.0% 15.5% 5.2% 100% Daily Trips Base 2,080 2,280 800 1,450 310 6,920 Case (1,000) 2010 Mode Share 30.0% 33.0% 11.5% 21.0% 4.5% 100%

8. Benefits of Road Component. Benefits of the road component were estimated using the outputs of a standard „4-step‟ urban transport model for Taiyuan, which included the urban area road network, and Taihang Road. Benefits are directly related to estimates of future traffic volumes on project roads (see Table A9.3, based on „Taiyuan Traffic Volume Forecast‟) and comprise the three elements described below, together with the salvage value of the investment at the end of 20 years.

Table A9.3: Forecast Peak Hour Flows on Taihang Road Passenger Cars per Peak Hour Road 2011 2020 2030 Taihang Road 4,420 5,760 5,990

9. Vehicle Operating Cost (VOC) Savings. Operating costs of motorized vehicles by road section and vehicle type were estimated using a standard equation including average speed, volume/capacity ratio, and coefficients by vehicle type, according to Chinese standards and local observations. The VOC saving was calculated as the difference between the VOC for the “no- build” and the “build” road scenarios. 10. Travel Time Savings. Travel times by mode and trip purpose were modeled for both the “no-build” and improved road scenarios. Travel times were monetized using values of time

66 based on trip purpose and average hourly wage per capita for users of different modes (see Table A9.7). 11. Costs of Road Component. The cost basis for the economic analysis included the costs of the Bank-financed project as well as the costs of some key associated road projects being financed and implemented by TMG in parallel, which are critical for realizing the benefits of Taihang Road. In particular:

Table A9.4: Estimated Values of Time (RMB/hour) Work and 2011 School Other business Motorcycles 14.04 1.58 3.17 Taxis 17.83 2.01 4.02 Passenger cars 43.21 4.87 9.75 Buses & other large pax vehicles 15.56 1.75 3.51 Trucks 21.59 Work and 2020 School Other business Motorcycles 30.50 3.44 6.88 Taxis 38.72 4.37 8.73 Passenger cars 93.86 10.59 21.17 Buses & other large pax vehicles 33.79 3.81 7.62 Trucks 48.71 Work and 2030 School Other business Motorcycles 68.97 7.78 15.56 Taxis 87.54 9.87 19.75 Passenger cars 212.21 23.93 47.87 Buses & other large pax vehicles 76.40 8.62 17.23 Trucks 110.16

(a) The current cost estimate for Taihang Road, including civil works, equipment, consulting, land acquisition and resettlement, contingency, and financial costs, is approximately $230.5 million. (b) The costs of two other „associated‟ projects are included. Nanzhonghuan Road connects Taihang Road to the new planned high-speed rail station in the southeast, and Shengli Street connects Taihang Road to the Taiyuan road network in the north. (c) The total cost of the road component, including the associated projects is estimated at $255.9 million in 2009 prices, see Table A9.5. Operation and maintenance costs were also estimated from the feasibility study.

67 Table A9.5: Total Cost of Road Component Project Cost (in $ million) Taihang Road (TR) 228.97 Nanzhonghuan connection of TR road with railway 13.65 station in the South Shengli Street connection between TR and Taiyuan road 11.83 network in the north Total 255.92

12. Project Beneficiaries. Beneficiaries of the project will represent a wide range of urban residents and commuters. The road component will directly benefit car users (who tend to have higher incomes), as well as truck drivers and workers in the industries of the northern and eastern parts of the city. Users of the existing urban road network (including cars, buses, bicycles, pedestrians) will also benefit from reduced traffic and reduced risk of accidents. The most vulnerable road users, such as pedestrian and cyclists, will likely benefit the most from the traffic management and road safety improvements in the central city. The public transport component will benefit users of the Xinjiang Road corridor the most, as well as users of the bus services to the terminals and depots included in the project. 13. Economic Indicators of Road Component. The economic rate of return is estimated at 13 percent and the net present value is $42 million.

Sensitivity Analysis of Road Component

14. Sensitivity of the economic indicators with respect to various scenarios developed by Taiyuan was considered. These scenarios included a delay in the development of the new areas to be served by the project, other road investments in the master plan, and a delay of the project roads. An overall cost increase of 20% was also considered. All scenarios, as shown in Table A9.6, yield an acceptable EIRR above 12%. Table A9.6: Economic Indicators for Sensitivity Scenarios NPV ($ million) Scenario Description EIRR discounted @ 12% Base Case Taihang Road 13.5% 45.9 1 delay in the development of the new areas 13.7% 50.9 2 20% cost increase due to 2 years delay 12.2% 7.4 3 20 increase in benefits 14.0% 68.4

Economic Analysis of Public Transport Component (Xinjian Road Busway)

15. The primary benefit of the Xinjiang Road Busway will be reduced travel times for passengers. The feasibility studies estimate that a peak hour bus trip along the 11.45 km corridor will decrease from about 49 minutes to 37 minutes after completion of the Phase 1 and 2 investments. An estimated 5,200 passenger-hours per day will be saved and the value of time for bus passengers was estimated conservatively as RMB 7.3 per hour (or about $1.10 in the base year) based on the feasibility studies. The travel time benefits are conservatively assumed to

68 grow at 5% per year, from both an expected increase in ridership and the value of time of passengers.

16. The cost of Phases 1 and 2 are estimated at $5.7 million and $8.8 million, respectively, including the cost of the busway, stations, and other necessary infrastructure in the corridor. The Public Transport Company will increase services in the corridor from current headways of about 4 to 8 minutes (peak/non-peak) to about 2 to 4 minutes on the busway. This increase in the level of bus service will require additional buses, despite the operating savings from the shorter cycle times. The cost of the additional buses (conservatively estimated as $100,000 per bus) has been included, assuming a 10-year life cycle. The current unit cost per vehicle-kilometer was provided by the Public Transport Company as RMB 3 ($0.40) and assumed to grow at 5 percent per year.

17. The EIRR is estimated at 18 percent, with an NPV of $5.4 million. Sensitivity analysis confirms that the economic indicators of the component are robust, even when construction costs are increased by 20 percent and running time benefits are reduced by 20 percent.

Part II: Financial Analysis

18. Like most other major cities in China, a financial analysis of Taiyuan‟s municipal revenue sources suggests that (i) along with rapid economic development municipal fiscal revenues have been growing rapidly and are expected to continue to grow as such in the foreseeable future; and (ii) extra-budgetary revenues account for a majority of the financial sources for infrastructure development. These two trends together have made possible an unprecedented level of municipal infrastructure development over the last ten years; a situation that is expected to continue in the foreseeable future.

19. As the summary table indicates (Table A9.7), Taiyuan‟s municipal fiscal base as well as the monies available for infrastructure development has been increasing rapidly in recent years. Total „local disposable revenue‟ which is a combination of budgetary revenues, fees, one-time off-budget sources (such as municipal share of land sale revenues) increased 267 percent from a base of $886 million (at current exchange rates) in 2004 to $2.37 billion in 2008. Municipal expenditures on urban infrastructure development – an overwhelming majority of which are new capital investments – have similarly risen 89 percent from $149 million (at current exchange rates) in 2004 to $282 million in 2008.

20. The Finance Bureau, however, spends most its financial planning effort on year-to-year planning and budgeting, and no systematic financial plan is available for a longer period. Moreover, the analysis indicates that a large proportion of the existing (and forecast) revenues are derived from one-time sources, such as taxes on construction, property transactions, and new development, with recurring sources providing a relatively low contribution. Finally, as with other Chinese cities, balance sheets based on internationally accepted accounting principles are not available. A particular complication in this regard are off-budget revenues, expenditures and contingent liabilities associated with state-owned urban development investment companies which are significant but not part of the municipal budgetary process.

69 Table A9.7: Taiyuan Municipal Disposable Revenue and Urban Infrastructure Expenditure ($ million all calculated at $1=6.82 RmB) Indicator Unit 2004 2005 2006 2007 2008 Total Local Municipal Disposable Revenue $ m 886 1,106 1,490 1,794 2,372 Municipal Expenditure on Urban Development Infrastructure $ m 149 197 189 234 282 Total government & non-government Expenditure on Urban Development Infrastructure $ m 266 328 364 668 1,268 Source: TPMO and World Bank team calculations 21. From a counterpart financing perspective, even the 2008 levels of municipal investment in urban infrastructure would be adequate to finance counterpart funding requirements for the project – the peak requirement of $91.5 million in 2011 is just 32 percent of the 2008 municipal expenditure on infrastructure (see Table A9.8). Thus, if the Bank-financed project was the major infrastructure expenditure the city expected to incur in the coming 5 years then current levels of municipal budgetary support would be in itself sufficient.

Table A9.8: Project Fund Requirement and Percentage of Expenditure ($ million) Year 2010 2011 2012 Total Fund Requirement 73.5 176.5 80.6 WB Loan 29.4 85.0 35.6 Counterpart Fund Requirement 44.1 91.5 45.0 Percentage of 2008 Municipal Expenditure on Urban Development Infrastructure 15.63% 32.40% 15.94% Percentage of 2008 Total Expenditure on Urban Development Infrastructure 3.48% 7.21% 3.55% Source: TPMO and World Bank team calculations 22. However, as Table A9.10 also illustrates, actual total expenditures on urban infrastructure development in Wuhan Municipality have been much higher than direct municipal government expenditures. Indeed, in 2008, the total investment of $1.27 billion was over 4 times the municipal government direct expenditure of $282 million. This is likely to also be true in the coming 5 years: Taiyuan has already committed to a significant capital program including a number of roads, bridges and other associated infrastructure. Typical of the state of urban infrastructure finance in Chinese cities today, a majority of financing comes from domestic Banks and from a variety of special-purpose state-owned companies set up to develop infrastructure. Such companies are able to borrow funds (municipal governments themselves are not allowed to borrow and need to balance their budgets annually); are often tasked with developing infrastructure on behalf of the city such as urban roads, urban rail, water and waste- water treatment plants; and are often financed by land-related revenues. In 2008, over 50 percent of the expenditures on urban infrastructure were financed from non-governmental sources, most of it from domestic loans (usually borrowed by such companies) and from „other‟ sources, a vast majority of which was financed through such government-owned investment companies.

23. This magnitude of infrastructure development as well as the financial structure underlying the development is typical of major Chinese cities at present. These data suggest that the demands of the proposed Bank-financed project, although significant in absolute terms, are not particularly large relative to the recent trends in infrastructure investments in Taiyuan. The

70 counterpart financing requirements posed by the project are minor relative to the total infrastructure development that Taiyuan expects to undertake in the coming 5 years. At the same time, the available data also suggest that the city‟s financial planning is based on a fairly aggressive strategy with possible long-term debt implications and an unknown risk associated with contingent liabilities of off-balance sheet state-owned investment companies. However, this is an issue that is much larger than the proposed project or any single city; it is an issue that at some point may need national level attention in order to be addressed systematically.

24. For the project, risks associated with the availability of adequate counterpart funds are mitigated by the following:

 In order to increase their liquidity, the municipality has decided to use domestic bank loans for the counterpart funding. More than half the counterpart funds (54 percent) will come from domestic bank loans, and the rest will come from normal municipal capital investment funds. The domestic bank loans will be borrowed by a special- purpose state-owned infrastructure development company set up for this purpose.  The Shanxi provincial finance bureau has undertaken to be the project implementing entity and thus taken (in the Chinese context) an unusually direct involvement in project implementation. This will ensure provincial attention and support for the project and ease any possibility of counterpart fund shortages.

71 Annex 10: Safeguard Policy Issues CHINA: TAIYUAN URBAN TRANSPORT PROJECT

Part I: Environmental Safeguards

A. Background 1. The project is rated Category A mainly due to its resettlement impact from road construction in an urban context. An EIA was prepared by East China Investigation and Design Institute, a Class A environmental impact assessment consultant certified by Ministry for Environmental Protection (MEP). The terms of reference for the EIA were developed in January 2007 and reviewed by the Bank task team. A draft EIA report was developed and reviewed by the Bank during project preparation, and the final EA documents (in both English and Chinese) were submitted in July 2008, which included the following:  Environmental Impact Assessment Report  Environmental Management Plan for Road Component  Environmental Management Plan for Public Transport Component  EA Executive Summary 2. The preparation of these documents followed relevant national laws, regulations, guidelines and standards applicable to the project, as well as the ten Bank safeguards policies. Based on screening, two safeguards policies are triggered: (a) OP4.01 Environmental Assessment; and (b) OP4.12 Involuntary Resettlement.

B. Baseline Environmental Setting 3. Landscape. The project road and bus terminals/depots are within the Taiyuan urban area characterized by flat land and mild hills. The land occupied is mainly urban residential, industrial enterprises and existing roads, with minor farmland, woodland and unused land. 4. Ecology. Project components are located in urban and peri-urban areas of Taiyuan City. Therefore, most of the impacted area will be urban built-up area: limited surface vegetation impacted by the project is mainly street-side green belt and some agricultural crops in the peri- urban area. 5. Cultural relics. A cultural relics survey conducted by Taiyuan Cultural Property and Archeology Institute concluded that no culturally or scientifically valuable property exists in the project area. 6. Environmental quality. Current noise level along Taihang Road and around the bus terminals/depots generally exceeds applicable standards due to traffic noise from local roads. Air quality of the project area is basically in compliance with standards, except PM10 which is attributed mainly to heavy industries and secondary air-borne dust. Taihang Road will cross the Fen River via the Fen River Bridge. Fen River is a major river flowing through Taiyuan city, and current monitoring data indicate that water quality is in compliance with the relevant standard (Class IV for industrial use and non-contact recreational purposes).

72 7. Sensitive sites. The main environmentally sensitive sites are the residential areas, schools and hospitals along the project alignment in terms of noise impact, and the Fen River in terms of water quality impact. 8. Socio-economic situation. About 536 families will be directly impacted with a population of 2,071 persons.

C. Main Environmental Impacts and Mitigation Measures

9. The project will have significant positive environmental and social impact by improving the road network and promoting public transportation, which in turn will reduce environmental pollution related to vehicle emissions. The negative impacts of the project will be common environmental issues related to construction activities, i.e., land acquisition, construction noise, air-borne dust, loss of surface vegetation, water pollution and soil erosion, solid waste/spoil disposal, disturbance of traffic, and social activities of the local community during the construction period. Traffic noise, safety and community severance will be the main issues during operation. These environmental and social impacts are addressed by the EIA report, and necessary mitigation measures have been developed in the EMP to avoid, minimize, mitigate and compensate the adverse impacts identified. It is concluded that these adverse environmental and social impacts can be adequately mitigated with the good management practices and mitigation measures proposed in the EMP. The main conclusions regarding impacts and mitigation measures are summarized in the following paragraphs.

Prior to Construction

10. Land acquisition and resettlement. Refer to the Social Safeguards section of this Annex for details. 11. Landscape aesthetics. A special designs has been developed for landscape and greening of interchanges and a green belt along roadsides. A total of “greening area” of 228,360 m2 has been designed for Taihang Road. For bus terminals/depots, the “greening area” is required to be at least 25%. 12. Pedestrian crossing and safety. For Taihang Road, there are also 27 crossings designed in consultation with the local community with full consideration for disabled people. The road is designed to keep motor vehicles separate from non-motor vehicles and pedestrians, with adequate signaling and signage.

Construction Stage

13. Social Disturbance. Road construction activities will have an impact on local road traffic and will disturb local people‟s daily life. There are also potential impacts on utility facilities (water, gas, power, communication etc.). These will be mitigated by proper planning of road traffic diversion, coordination with the police department, and prior notice through public media. Public utility facilities will be carefully identified and relocated without interrupting the usual life of the local community. Temporary access roads, with adequate safety measures (temporary bridges, protection nets, night lighting, etc.) will be provided for nearby residents, businesses, schools, etc. to minimize social disturbance. A bulletin board will be established at

73 the construction site giving information about construction activity, timing, and a channel for complaints. 14. Noise. Project construction will have a temporary noise impact on local communities. The main mitigation measures include the use of low-noise equipment and proper maintenance; careful scheduling of construction activities near sensitive sites; installation of temporary noise reduction facilities, if necessary; night-time construction will be restricted; and prior public notice, as well as EPB approval, will be required for activities that need continuous construction over night. 15. Air pollution. Construction activities will cause temporary impact from airborne dust. Mitigation measures to be adopted include: frequent water spraying on construction sites and access roads to suppress dust; covering trucks transporting bulk materials, and timely site clean- up after construction; material or waste hauling will avoid densely populated areas, and for certain sensitive sections such as schools and kindergartens, transportation will be arranged during night time. 16. Ecological environment. As the project components are all located in urban and peri- urban areas of Taiyuan, the ecological impact is limited to a small amount of streetside green belt and some agricultural farmland in the peri-urban areas. Damaged green belt trees will be relocated following the strict requirements of Taiyuan‟s Urban Greening Regulation (which requires relocation or 1 to 15 compensatory plantings in other places), and lost farmland will be compensated as per the Resettlement Action Plan. In addition, a significant amount of additional greening has been designed. In general, the loss of surface vegetation will be fully recovered and enhanced upon completion of the project. 17. Soil waste. Construction waste will be disposed of in a timely fashion in one of two landfills receiving construction waste in Taiyuan. Material and waste transportation vehicles will be properly covered and wheel-washed before leaving the construction site. 18. Surface water. There will be a temporary impact on the water quality of Fen River from bridge foundation construction. This impact will be mitigated with adoption of proper construction techniques (i.e. steel cofferdam), and wastewater will be treated through sedimentation ponds before discharge. 19. Cultural property. Chance find procedures will follow the requirements of national regulations, i.e. excavation will be stopped immediately in the event relics are found, and a report will be made to Taiyuan cultural property authority. Construction will only resume after the relevant authority has completed a survey and necessary protection, and authorizes the resumption.

Operation

20. Noise. During operation, traffic noise from Taihang Road will have an impact on residential buildings, schools and hospitals. To mitigate such impacts, noise barriers will be installed, and special modified asphalt will be used for the road surface in 35 locations and sections. Intensive roadside green belt and tree planting will also contribute to noise reduction. 21. Air quality. Modeling results indicate that air quality along Taihang Road will comply with relevant standards. A total area of 228,360 m2 “greening belt” will be planted that will help

74 reduce traffic air pollution. In addition, Taiyuan Government is strengthening management of in-city bulk material transportation to control air-borne dust, which is a significant contributor to air pollution in Taiyuan. 22. Water Quality. The main water pollution during operation comes from wastewater and sewage from bus terminals. Surface run-off from bridges may also have a potential impact on surface water. These impacts will be adequately mitigated by wastewater treatment facilities in the bus terminals/depots, and treated wastewater will be reused for greening. A minor amount of sewage will be treated with septic tank and aerobic process to achieve the applicable discharge standard. Surface run-off from bridges will be collected to buffer tanks for sedimentation and oil separation without being discharged into the river directly. 23. Solid Waste. Solid waste during operation comes mainly from administration buildings and shops. This will be mitigated by installation of a solid waste collection facility and regular transportation to landfill for final disposal. 24. Safety. Traffic safety will be ensured through a proper traffic management system (signaling, signage) and infrastructure. Concerns about the safety of fuel storage in bus terminals/depots will be addressed by adoption of careful design in accordance with the relevant safety code, enforcement of safety management practice, and routine monitoring.

D. Alternatives Analysis 25. Without-project. The “without-project” scenario was analyzed during the feasibility study and EA preparation. Currently, there is no north-south truck road in the eastern part of Taiyuan, which results in much unnecessary traffic passing through the central area. The public transport system in Taiyuan is also not fully developed, carrying only 11 percent of person trips. Lack of infrastructure and a proper planning/operating system is the bottleneck to public transport development. With the project, that problem will be eased. Additionally, the road network in eastern Taiyuan will be significantly improved, which will regulate overall traffic flow, alleviate traffic pressure in the City center, and improve overall air quality in Taiyuan. 26. Project design stage. During the project feasibility and design stage, alternatives were considered for road alignments and site locations of the bus terminals and bus depots. A comprehensive comparison was conducted for environmental, social, technical and financial factors, and the final selection was based on consideration of the overall optimum results. (a) Taihang Road: Three alignment alternatives were considered, and the final alignment selected was that which required the least land acquisition, and was most consistent with road planning. (b) Bus depots: Three alternative sites were assessed for each of the two bus depots. The final location chosen was that which adhered most closely to the urban master plan, and promised the least environmental and social disturbance. (c) Bus terminals. The four bus terminal stations were each carefully assessed with two to four alternative sites, with the final selection based on the principle of least land acquisition and resettlement, far from residential areas, and compatible with urban plans and traffic management.

75 (d) BRT corridor: Three existing urban roads were evaluated during the feasibility study. The Xinjian Road was selected due to its overall service function to passenger flow, keeping to a minimum civil works and disturbance to the road network.

E. Environmental Management Plan

27. Two stand-alone Environmental Management Plans have been developed, one for the road component, and the other for the public transport component. The two EMPs detail the environmental management organization and responsibilities, mitigation measures, capacity training plan, monitoring plan, and budget estimates of EMP implementation. The EMPs will be incorporated into the bidding documents and contracts in order to ensure effective implementation.

28. Environmental management responsibility will be built into the relevant divisions of the overall project management structure with dedicated management staff. Dedicated environmental staff will also be assigned in the supervising engineers and contractors to ensure effective implementation of the EMP. The training plan will be carried out prior to and during construction to project management staff, supervising engineers, and contractors.

29. A two-tier monitoring program has been developed for this project: daily and regular monitoring to be carried out by contractors and construction supervision companies, and periodic compliance monitoring by professional monitoring stations.

F. Public Consultation and Information Disclosure

30. Public consultation was conducted for both project scoping and EA preparation. During May – July 2007, public consultation was carried out by Liaoning Academy of Social Science as part of a social assessment exercise for project scoping and design, including six public meetings, 30 group discussions, 54 individual interviews and a 2,048-questionnaire survey. Consultation focused on public opinion on public transport, traffic management and road infrastructure in Taiyuan city. Public concerns collected through consultation cover a wide range of aspects from bus routes and stations at certain locations, appropriate ticket price, facilities needed at bus stations, etc., to adequate infrastructure for secondary and small streets, pedestrian crossings and intersections, vehicle parking lots, road lighting, green belt, drainage, signaling and signage, etc. These concerns were fully considered in the scoping and design of the project.

31. Two rounds of public consultation were conducted during EA preparation. The first round was held in November 2006 through field interviews and a questionnaire survey among project-affected people, local village committees, schools and hospitals. The main concerns raised by the public were noise and dust impacts, pedestrian crossings and resettlement compensation. All these concerns were addressed in the RAP and EIA/EMPs. The second round of public consultation was conducted in January 2008 after the draft EIA reports had been prepared. Five public meetings were held in local communities and a total of 1,221 questionnaires were collected. During consultation, the EA consultant explained the key findings of the draft EIA report and proposed mitigation measures, as well as the responses to the questions raised during the first round of consultation. The draft EIA received broad support and satisfaction from the public consulted.

76 32. Disclosure: As required by Chinese EIA regulations, the first round of information disclosure was carried out on December 28, 2006, during which brief project information and the first draft of the EIA was published in Taiyuan Daily. The second round of disclosure was conducted on May 13, 2008, when the draft EIA report was disclosed on the internet (Taiyuan Economic Information Center, http://www.tyeic.gov.cn, and East China Investigation and Design Institute www.ecidi.com). As per the Bank‟s requirement, the latest EIA report was disclosed on the Taiyuan government website (www.taiyuan.gov.cn) with an announcement published in Taiyuan Daily and on Taiyuan TV on July 28-30, 2008.

33. The Chinese EIA has been disclosed in the Project Information Center of the Bank Beijing Office, and the English EIA was disclosed in Infoshop on October 10, 2008.

Part II: Social

34. The project has four components, and two of them involve civil works. They are located in and around Taiyuan City. Project works include both new construction and rehabilitation works that would have resettlement impacts in both in the urban area and in rural settings in the peri-urban area.

35. In accordance with the Chinese laws and regulations and World Bank OP 4.12 on Involuntary Resettlement, the Taiyuan Project Office has prepared a resettlement action plan (RAP). A Resettlement Policy Framework (RPF) was also prepared for Relocation Housing Construction and a new primary school construction, which would reflect the resettlement arrangements for the host communities. The resettlement planning work was carried out by the line agencies under the guidance of Wuhan University. Planning work included project impact inventory surveys, socio-economic surveys and consultations over resettlement and livelihood rehabilitation strategies. The socio-economic surveys also confirmed that there are no ethnic minority communities impacted in the project areas.

36. Major impacts relate to land acquisition and demolition of buildings. The project will require the acquisition of land, relocation of houses, compensation for businesses and relocation of infrastructure. The project will require the acquisition of 51 hectares of village land (including 6.2 hectares of cultivated land). The project would also require the demolition of 157,535m2 of existing structures, including houses, enterprises and private shops. The land acquisition would affect 22 people in 9 households; and house demolition would affect 1074 people in 238 households. Project impacts are detailed in the RAP. Most of the resettlement impacts in rural areas are relatively scattered and marginal, considering the small scale of civil works and the significant share of household income from non-farm activities. 54 enterprises and institutes, 73 small shops and a market will be affected.

77 Table A10.1 Project Social Impacts Entities Affected by Households Land Acquisition/ Land (ha) Households /Persons Businesses Shops Demolition displaced Roads Network component Taihang Road Xinghualing district 10.49 2 67/332 21 39 Yingze district 19.48 2 145/616 30 39 Xiaodian district 3.94 1 26/126 2 0 Public Transport component Xinjian Street Bus lane 6 interchanges 0 0 0 0 0 Street construction 0 0 0 0 0 Bus depots Nanhan 8.1 0 0 1 4 Beiying 6.0 0 0 0 0 Bus terminals Yingxin 0.90 2 0 0 0 Zoo 1.40 0 0 0 0 Beiyan 1.05 2 0 0 0 Resettlement Sites Market 0 0 0 0 0 Schools 0.2 0 0 0 0 Enterprises (54 total) 0 0 0 0 0 Private shops (73 total) 0 0 0 0 0 Linked Roads Dump Sites 5 existing dump sites will be used, there will be no relocation and land acquisition

37. The following were the guiding principles for developing the RAPs: (a) The original living standards of all affected people should be improved or at least be restored;

(b) Resettlement plans, sites of new houses, standards and building areas should be determined after consultation with the affected people;

(c) For all affected buildings, compensation should be calculated on the basis of current replacement cost, without consideration of depreciation;

(d) Compensation rates, location of new residential sites and areas should be formulated after consultation with the affected population;

(e) All compensation funds should be paid before acquisition;

78 (f) Construction units are responsible for restoring temporarily used land to its productive status after the leasing period; and

(g) Special assistance will be provided to vulnerable households identified during the detailed planning and implementation process.

38. Economic rehabilitation. The village rehabilitation approach was developed in consultation with affected farmer groups. As agreed by the affected farmers, the project will follow a rehabilitation strategy of cash compensation. 30% of land compensation fund will be retained by the villages for collective use in accordance with villagers‟ decisions.

39. Relocation of households. Households losing residential houses will be provided the option of self-resettlement with cash payment or replacement houses according. All houses will be paid at replacement cost without depreciation, and without deduction of salvageable materials. Five relocation housing areas were selected along the project alignment for relocation house construction, through consultation with PAPs. It is estimated that the relocation houses could be available for PAPs by the end of 2009 and transition allowance will be paid.

40. Rehabilitation of enterprises and institutes. Among 54 enterprises and institutes that would be affected by the project, one enterprise, one primary school, one market need to be relocated. Cash compensation will be provided based on consultation and negotiation with the enterprise and the institute. The enterprise will be relocated to the Taiyuan Steel Development Zone and the primary school will be reconstructed within the village. The old school will not be demolished unless the new school is available for students and the moving activities will be organized during the vacation period of the school in order to minimize the negative impact on education.

41. Rehabilitation of shops and market. 73 shops and a market will be affected by the project. Cash compensation will be provided for structure demolition. Business operators could also get cash compensation for their business loss. New shops will be developed after road construction and resettlement housing construction. Several new markets have been built near the project affected area and business operators could easily move in.

42. Rehabilitation of infrastructure. Infrastructure affected is power mainly at the reconstruction cost and telecommunications. For these facilities, compensation will be paid to the government departments who are responsible for them. Government departments will be in charge of the reconstruction.

43. Consultation and participation. Resettlement planning followed a participatory process. Affected villagers and various government agencies participated in the socio- economic survey, impact census, inventory and formulation of the compensatory and livelihood rehabilitation plan. Project information, relevant government policies and regulations were broadly disseminated through village meetings in the project areas. The project RAP has also been disclosed. A project Resettlement Information Booklet will be developed and distributed to every affected farmer household.

79 44. Resettlement organization. The PMO will assume overall responsibility for implementation of the resettlement program. The PMO will work with the district and county government offices, on a contract basis, to implement the resettlement programs. These offices will employ competent and experienced staff. Their respective responsibilities and functions are detailed in the RAPs. Training will be provided to project staff on RAP matters.

45. Grievance redress. A mechanism has been established for grievance redress. Grievances can be filed both orally and in writing. Starting at village and neighborhood committee level, grievances can be elevated to county/district, or city level if they are not satisfied with the resolution at the lower level. Affected people can also file their cases in court if they are not happy with the resolution by the project authority. All grievances and their resolution will be recorded. This mechanism has been disclosed to the local population and will be further disseminated through the Resettlement Information Booklet.

46. Monitoring and Evaluation. Both internal and external monitoring is planned for resettlement implementation. Resettlement offices will be responsible for internal monitoring. A team from Wuhan University has been appointed as the external institute to undertake independent monitoring of the resettlement program. The monitoring scope, targets, indicators, procedures, methodology and reporting requirements are described in the RAP.

47. Resettlement Cost. The total resettlement cost is RMB 0.55 billion, equivalent to $80.28 million. This budget includes compensation fund for land, houses and attached structures, infrastructure and trees, various relocation allowances, business loss during transition, special allowances for vulnerable groups, management and monitoring costs, and contingencies. All resettlement costs will be financed by domestic funding.

48. A Resettlement Policy Framework has been developed according to relevant local laws and regulations as well as World Bank OP 4.12 on Involuntary Resettlement for resettlement practices on relocation house construction and new primary school construction. It describes the overall legal framework, planning principles, procedures, approach on rehabilitation , consultation and participatory requirements, grievance redress mechanisms, organization and monitoring arrangements.

80 Annex 11: Project Preparation and Supervision CHINA: TAIYUAN URBAN TRANSPORT

Planned Actual PCN review November 20, 2006 Initial PID to PIC December 7, 2006 Initial ISDS to PIC March 27, 2007 Appraisal September 8, 2008 Negotiations May 2010 April 15, 2010 Board/RVP approval June 2010 Planned date of effectiveness September 15, 2010 Planned date of mid-term review August 2013 Planned closing date June 30, 2016 Key institutions responsible for preparation of the project: 1. Ministry of Finance; 2. National Development and Reform Commission; 3. Taiyuan Municipal Government, Taiyuan Finance Bureau, Taiyuan Construction and Management Commission and other associated organizations; 4. Taiyuan Development and Reform Commission is responsible for preparation of the Project, assisted by the following design institutes and firms: a. Shanghai Municipal Engineering Design General Institute (SMEDI) b. Shanghai City Comprehensive Transportation Planning Institute (SCCTPI) Bank staff and consultants who worked on the project included: Title Unit Name Shomik Mehndiratta Task Team Leader EASCS Syed Ahmed Lead Counsel LEGES Junxue Chu Senior Loan Officer LOAG Pierre Grafteaux Peer Reviewer, Senior Urban Transport Specialist ATFTR Anthony Bliss Peer Reviewer, Lead Road Safety Specialist EWSTR Hubert Nove-Josserond Peer Reviewer, Senior Transport Specialist SASTR Christopher Bennett Former Task Team Leader EASIN Edward Dotson Former Task Team Leader /Consultant EASIN Zong Yan Transport Specialist EASCS John Scales Sr. Transport Specialist EASCS Zhai Xiaoke Transport Specialist EASCS Lu Yan Transport Specialist EASCS Wang Chaogang Sr. Social Scientist EASCS Zeng Jun Social Development Specialist EASCS Wang Peishen Environment Specialist/Consultant EASCS Yang Dawei Procurement Specialist EAPCO Dong Yi Sr. Financial Management Specialist EAPCO Deng Fei Transport Specialist EASIN Teresita Ortega Program Assistant EASIN Jean-Marie Braun Highway Engineer/Consultant EASIN Peng Xuan Team Assistant EACCF

81 Annex 12: Documents in the Project File CHINA: TAIYUAN URBAN TRANSPORT

No. Name Date Issued Reports 1 Taiyuan Social-Economic Development 11th Five Year Plan (Draft) by Taiyuan Mar. 29, 2006 DRC in Chinese 2 Taiyuan Comprehensive Transport Planning-Urban Road Network Plan in Chinese April, 2006 3 Taiyuan Comprehensive Transport Planning-Transport Development in Chinese April, 2006 4 Taiyuan Comprehensive Transport Survey and Analysis Report in Chinese April, 2006 5 Term Of Reference for Taiyuan’s Urban Traffic Strategic Research and World Jul. 10, 2006 Bank’s Traffic Improvement Project Identification in Chinese & English 6 Taiyuan Urban Transport Development Strategy (Draft) (Under Taiyuan Urban Oct. 15, 2006 Transport Project) by Shanghai City Comprehensive Transport Planning Institute in English 7 Traffic Volume Forecast of East Mid-ring and North Mid-ring Road by Shanghai Oct. 15, 2006 City Comprehensive Transport Planning Institute & Shanghai Municipal Engineering Design General Institute in English 8 Adjustment of the Traffic Model for Taiyuan World Bank Project and March, 2007 Comparison and Analysis of the Expressway Schemes for Jianshe Road and Taihang Road by Shanghai City Comprehensive Transportation Planning Institute in Chinese 9 OD Report-Summary in English March, 2007 10 The Analysis of First Round Public Participation for Taiyuan Urban Aug. 20, 2007 Transportation Project Funded By World Bank in English 11 Draft Feasibility Study of Public Transport in Chinese and English May, 2008 12 Draft Feasibility Study of Traffic Management & Road Safety in Chinese and May, 2008 English 13 Draft Traffic Circulation Planning in Chinese & English May, 2008 14 Draft Feasibility Study of Road Infrastructure in Chinese & English May, 2008

Safeguards 1 Outline of Environment Impact Assessment (for approval) by East China Dec, 2006 Investigation and Design Institute under CHECC in Chinese & English 2 Environmental Impact Assessment Report in Chinese & English Sep, 2008 3 Environmental Management Plan for Road Component in Chinese & English Sep, 2008 4 Environmental Management Plan for Public Transport Component in Chinese & Sep, 2008 English 5 EA Executive Summary in Chinese & English Sep, 2008 6 Resettlement Action Plan in Chinese & English Sep, 2008 7 Resettlement Policy Framework in Chinese & English Sep, 2008 Commitments 1 Commitment letter from Taiyuan Municipal Government to implement EMP Sep, 2008 2 Commitment letter from Taiyuan Municipal Government to implement RAP Sep, 2008 3 Commitment letter from Taiyuan Municipal Government commitment to enhance Sep, 2008 quality of public transport in project period 4 Commitment letter from Taiyuan Municipal Government to implement „linked‟ Sep, 2008 projects on similar time-line to World Bank financed investments

82 Annex 13: Statement of Loans and Credits CHINA: TAIYUAN URBAN TRANSPORT

Difference between expected and actual Original Amount in $ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev‟d P085376 2008 CN-Migrant Skills Dev. and Employment 50.00 0.00 0.00 0.00 0.00 50.00 0.00 0.00 P087224 2008 CN-Han River Urban Environment 84.00 0.00 0.00 0.00 0.00 84.00 0.00 0.00 P084874 2008 CN- Energy Efficiency Financing 200.00 0.00 0.00 0.00 0.00 200.00 0.00 0.00 P091949 2008 CN-Gansu Cultural & Natural Heritage 38.40 0.00 0.00 0.00 0.00 38.40 0.00 0.00 P092631 2008 CN-Xi'an Sustainable Urban Transport 150.00 0.00 0.00 0.00 0.00 150.00 0.00 0.00 P093882 2008 CN-Shandong Flue Gas Desulfurization 50.00 0.00 0.00 0.00 0.00 50.00 0.00 0.00 P084437 2008 CN-Rural Health 50.00 0.00 0.00 0.00 0.00 50.00 0.00 0.00 P093963 2008 CN-Guiyang Transport 100.00 0.00 0.00 0.00 0.00 99.75 0.00 0.00 P096925 2008 CN- Bengbu Integrated Environment 100.00 0.00 0.00 0.00 0.00 100.00 0.00 0.00 Improv P099224 2008 CN-Liaoning Med. Cities (LMC) III 191.00 0.00 0.00 0.00 0.00 191.00 0.00 0.00 P099112 2008 CN-Anhui Highway Rehab & 200.00 0.00 0.00 0.00 0.00 200.00 0.00 0.00 Improvement P099062 2008 CN-ShiZheng Railway 300.00 0.00 0.00 0.00 0.00 300.00 0.00 0.00 P075613 2007 CN-Shaanxi Ankang Road Development 300.00 0.00 0.00 0.00 0.00 290.00 28.70 0.00 P077752 2007 CN-SHANDONG ENVMT 2 147.00 0.00 0.00 0.00 0.00 102.53 -34.47 0.00 P088964 2007 CN-Guangxi Integrated Forestry Dev 100.00 0.00 0.00 0.00 0.00 60.10 -34.40 0.00 P086515 2007 CN-3rd National Railway 200.00 0.00 0.00 0.00 0.00 200.00 32.00 0.00 P091020 2007 CN-Fujian Highway Sector Investment 320.00 0.00 0.00 0.00 0.00 245.00 -9.00 0.00 P092618 2007 CN-LIAONING MED CITIES INFRAS 2 173.00 0.00 0.00 0.00 0.00 173.00 5.00 0.00 P081776 2007 CN-GUANGDONG/PRD2 96.00 0.00 0.00 0.00 0.00 96.00 9.00 0.00 P083322 2007 CN-SICHUAN URBAN DEV 180.00 0.00 0.00 0.00 0.00 163.40 46.40 0.00 P095315 2007 CN-W. Region Rural Water & Sanitation 25.00 0.00 0.00 0.00 0.00 25.00 0.50 0.00 P096285 2007 CN-MSE Finance 100.00 0.00 0.00 0.00 0.00 100.00 100.00 0.00 P085124 2006 CN-Ecnomic Reform Implementation 20.00 0.00 0.00 0.00 0.00 17.11 6.11 0.00 P084742 2006 CN-IAIL III 200.00 0.00 0.00 0.00 0.00 53.97 -27.96 0.00 P085333 2006 CN-5th Inland Waterways 100.00 0.00 0.00 0.00 0.00 50.81 25.81 0.00 P086629 2006 CN-Heilongjiang Dairy 100.00 0.00 0.00 0.00 0.00 89.08 27.58 9.58 P093906 2006 CN-3rd Jiangxi Hwy 200.00 0.00 0.00 0.00 0.00 92.79 -42.21 0.00 P096158 2006 CN-Renewable Energy II (CRESP II) 86.33 0.00 0.00 0.00 0.00 71.09 37.48 0.00 P099992 2006 CN-Liaoning Medium Cities 218.00 0.00 0.00 0.00 0.00 169.77 -13.23 0.00 Infrastructure P081348 2006 CN-HENAN TOWNS WATER 150.00 0.00 0.00 0.00 0.00 139.63 27.13 0.00 P081255 2006 CN-Changjiang/Pearl River Watershed 100.00 0.00 0.00 0.00 0.00 90.55 20.55 0.00 Reha P075732 2006 CN-SHANGHAI URBAN APL2 180.00 0.00 0.00 0.00 0.00 144.90 34.90 0.00 P070519 2006 CN-Fuzhou Nantai Island Peri-Urban Dev 100.00 0.00 0.00 0.00 0.00 98.25 28.25 0.00 P071094 2005 CN - Poor Rural Communities 100.00 0.00 0.00 0.00 0.00 59.24 40.54 0.00 Development P069862 2005 CN - Agricultural Technology Transfer 100.00 0.00 0.00 0.00 0.00 68.43 37.73 0.00 P068752 2005 CN-Inner Mongolia Highway & Trade 100.00 0.00 0.00 0.00 0.00 18.18 -21.82 0.00 Corrid

83 P067828 2005 CN-Renewable Energy Scale-up Program 87.00 0.00 0.00 0.00 10.00 0.93 9.93 0.00 P057933 2005 CN-TAI BASIN URBAN ENVMT 61.00 0.00 0.00 0.00 0.00 20.80 12.45 0.00 P081346 2005 CN-LIUZHOU ENVIRONMENT MGMT 100.00 0.00 0.00 0.00 0.00 49.58 0.88 0.00 P075730 2005 CN-HUNAN URBAN DEV 172.00 0.00 0.00 0.00 0.00 149.50 64.50 0.00 P086505 2005 CN-NINGBO WATER & ENVMT 130.00 0.00 0.00 0.00 0.00 69.23 -8.77 0.00 P081161 2005 CN-CHONGQING SMALL CITIES 180.00 0.00 0.00 0.00 0.00 121.70 34.70 0.00 P066955 2004 CN-ZHEJIANG URBAN ENVMT 133.00 0.00 0.00 0.00 0.00 80.52 48.59 0.00 P065463 2004 CN-Jiangxi Integrated Agric. Modern. 100.00 0.00 0.00 0.00 0.00 44.54 30.03 0.00 P069852 2004 CN-Wuhan Urban Transport 200.00 0.00 0.00 0.00 1.00 42.83 43.83 2.61 P065035 2004 CN-Gansu & Xinjiang Pastoral 66.27 0.00 0.00 0.00 0.00 9.14 3.32 0.00 Development P077137 2004 CN-4th Inland Waterways 91.00 0.00 0.00 0.00 0.46 32.02 25.48 24.98 P081749 2004 CN-Hubei Shiman Highway 200.00 0.00 0.00 0.00 1.00 3.69 -5.31 0.00 P073002 2004 CN-Basic Education in Western Areas 100.00 0.00 0.00 0.00 0.00 27.19 25.52 0.00 P075728 2004 CN-GUANGDONG/PRD UR ENVMT 128.00 0.00 0.00 0.00 0.64 68.38 45.62 0.00 P040599 2003 CN-TIANJIN URB DEV II 150.00 0.00 0.00 0.00 0.00 119.29 92.56 5.53 P058847 2003 CN-3rd Xinjiang Hwy Project 150.00 0.00 0.00 0.00 0.00 4.58 4.58 0.00 P076714 2003 CN-2nd Anhui Hwy 250.00 0.00 0.00 0.00 0.00 11.16 11.16 0.00 P070191 2003 CN-SHANGHAI URB ENVMT APL1 200.00 0.00 0.00 0.00 0.00 55.66 37.86 0.00 P068058 2003 CN-Yixing Pumped Storage Project 145.00 0.00 0.00 0.00 0.00 36.19 30.69 0.00 P071147 2002 CN-Tuberculosis Control Project 104.00 0.00 0.00 0.00 0.00 38.61 31.91 0.00 P068049 2002 CN-Hubei Hydropower Dev in Poor Areas 105.00 0.00 0.00 0.00 0.00 7.50 7.80 0.00 P064729 2002 CN-Sustainable Forestry Development 93.90 0.00 0.00 0.00 0.00 6.08 1.08 0.00 P056596 2001 CN-Shijiazhuang Urban Transport 100.00 0.00 0.00 0.00 0.00 26.36 26.36 0.00 P051859 2001 CN-LIAO RIVER BASIN 100.00 0.00 0.00 0.00 0.00 8.48 8.48 0.00 P064730 2000 CN-Yangtze Dike Strengthening 210.00 0.00 0.00 0.00 0.00 41.34 41.34 41.34 P049436 2000 CN-CHONGQING URBAN ENVMT 200.00 0.00 0.00 0.00 29.50 24.40 53.90 -4.91 P042109 2000 CN-BEIJING ENVIRONMENT II 349.00 0.00 0.00 25.00 28.02 81.37 109.39 -21.42 P051856 1999 CN-Accounting Reform & Development 27.40 5.60 0.00 0.00 0.00 5.23 5.02 5.07 P042299 1999 CN-Tec Coop Credit IV 10.00 35.00 0.00 0.00 5.84 8.46 11.56 0.00 P003507 1996 Ertan II Hydroelectric Project 400.00 0.00 0.00 0.00 0.15 33.33 5.78 0.00 Total: 9,251.30 40.60 0.00 25.00 76.61 5,360.07 1,134.83 62.78 Note: IBRD= International Bank for Reconstruction and Development IDA= International Development Association

CHINA STATEMENT OF IFC‟s Held and Disbursed Portfolio In Millions of US Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2002 ASIMCO 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.00 2006 ASIMCO 0.00 0.00 4.12 0.00 0.00 0.00 3.61 0.00 2005 BCCB 0.00 59.21 0.00 0.00 0.00 59.03 0.00 0.00 2003 BCIB 0.00 0.00 12.04 0.00 0.00 0.00 0.00 0.00 2006 BUFH 8.14 0.00 0.00 0.00 8.14 0.00 0.00 0.00

84 2005 Babei 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00 Babei Necktie 11.00 0.00 0.00 6.00 8.94 0.00 0.00 4.88 1999 Bank of Shanghai 0.00 21.76 0.00 0.00 0.00 21.76 0.00 0.00 2000 Bank of Shanghai 0.00 3.84 0.00 0.00 0.00 3.84 0.00 0.00 2002 Bank of Shanghai 0.00 24.67 0.00 0.00 0.00 24.67 0.00 0.00 2005 BioChina 0.00 3.70 0.00 0.00 0.00 3.13 0.00 0.00 2002 CDH China Fund 0.00 2.02 0.00 0.00 0.00 0.00 0.00 0.00 2005 CDH China II 0.00 17.99 0.00 0.00 0.00 11.38 0.00 0.00 2006 CDH Venture 0.00 20.00 0.00 0.00 0.00 0.51 0.00 0.00 2005 CT Holdings 0.00 0.00 40.00 0.00 0.00 0.00 0.00 0.00 2004 CUNA Mutual 0.00 10.53 0.00 0.00 0.00 0.00 0.00 0.00 2006 Capital Today 0.00 25.00 0.00 0.00 0.00 0.32 0.00 0.00 2005 Changyu Group 0.00 18.07 0.00 0.00 0.00 18.07 0.00 0.00 1998 Chengdu Huarong 3.36 3.20 0.00 3.13 3.36 3.20 0.00 3.13 2004 China Green Ener 20.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 2004 China Re Life 0.00 0.27 0.00 0.00 0.00 0.27 0.00 0.00 1994 China Walden Mgt 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 2006 Chinasoft 0.00 0.00 15.00 0.00 0.00 0.00 10.00 0.00 2004 Colony China 0.00 15.31 0.00 0.00 0.00 9.29 0.00 0.00 2004 Colony China GP 0.00 0.84 0.00 0.00 0.00 0.49 0.00 0.00 2006 Conch 81.50 40.93 0.00 0.00 81.50 0.00 0.00 0.00 2006 Dagang NewSpring 25.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002 Darong 10.00 0.24 0.00 8.00 6.67 0.24 0.00 5.33 2006 Deqingyuan 0.00 2.85 0.00 0.00 0.00 2.85 0.00 0.00 1994 Dynamic Fund 0.00 2.21 0.00 0.00 0.00 2.01 0.00 0.00 2007 Epure 0.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 Fenglin 17.64 0.00 6.00 13.47 13.64 0.00 6.00 12.53 2006 Fenglin HJ MDF 0.23 0.00 0.00 3.27 0.00 0.00 0.00 0.00 2005 Five Star 0.00 0.00 7.00 0.00 0.00 0.00 0.00 0.00 2006 GDIH 50.85 0.00 0.00 0.00 50.85 0.00 0.00 0.00 2003 Great Infotech 0.00 1.73 0.00 0.00 0.00 1.03 0.00 0.00 2006 Hangzhou RCB 0.00 10.85 0.00 0.00 0.00 0.00 0.00 0.00 2005 HiSoft Tech 0.00 4.00 0.00 0.00 0.00 3.00 0.00 0.00 2006 HiSoft Tech 0.00 4.34 0.00 0.00 0.00 1.74 0.00 0.00 2004 IB 0.00 52.18 0.00 0.00 0.00 52.18 0.00 0.00 2004 Jiangxi Chenming 40.00 12.90 0.00 18.76 40.00 12.90 0.00 18.76 2006 Launch Tech 0.00 8.35 0.00 0.00 0.00 8.33 0.00 0.00 2001 Maanshan Carbon 5.25 2.00 0.00 0.00 5.25 2.00 0.00 0.00 2005 Maanshan Carbon 11.00 1.00 0.00 0.00 5.00 1.00 0.00 0.00 2005 Minsheng 15.75 0.00 0.00 0.00 7.00 0.00 0.00 0.00 2006 Minsheng & IB 25.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 Minsheng Bank 0.00 23.50 0.00 0.00 0.00 23.50 0.00 0.00 2005 Minsheng Bank 0.00 2.80 0.00 0.00 0.00 2.79 0.00 0.00 2001 NCCB 0.00 8.94 0.00 0.00 0.00 8.82 0.00 0.00 1996 Nanjing Kumho 0.00 3.81 0.00 0.00 0.00 3.81 0.00 0.00 2004 Nanjing Kumho 31.38 2.23 0.00 0.00 31.38 2.23 0.00 0.00 2006 Neophotonics 0.00 0.00 10.00 0.00 0.00 0.00 10.00 0.00 2001 New China Life 0.00 5.83 0.00 0.00 0.00 5.83 0.00 0.00 2005 New Hope 0.00 0.00 45.00 0.00 0.00 0.00 0.00 0.00

85 1995 Newbridge Inv. 0.00 0.22 0.00 0.00 0.00 0.22 0.00 0.00 2005 North Andre 8.00 6.74 0.00 0.00 0.00 4.25 0.00 0.00 2003 PSAM 0.00 2.01 0.00 0.00 0.00 0.00 0.00 0.00 RAK China 13.00 0.00 0.00 0.00 13.00 0.00 0.00 0.00 2006 Renaissance Sec 0.00 0.00 20.04 0.00 0.00 0.00 0.00 0.00 2006 Rongde 0.00 35.00 0.00 0.00 0.00 31.38 0.00 0.00 SAC HK Holding 0.00 1.60 0.00 0.00 0.00 1.00 0.00 0.00 2003 SAIC 12.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 2006 SBCVC 0.00 20.00 0.00 0.00 0.00 2.00 0.00 0.00 2000 SEAF SSIF 0.00 3.74 0.00 0.00 0.00 3.37 0.00 0.00 SH Keji IT 3.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 SHCT 38.18 0.00 0.00 28.64 29.04 0.00 0.00 21.78 2004 SIBFI 0.14 0.07 0.00 0.00 0.00 0.07 0.00 0.00 1998 Shanghai Krupp 19.25 0.00 0.00 36.75 19.25 0.00 0.00 36.75 2006 Shanshui Group 50.00 5.50 2.20 0.00 50.00 5.50 0.00 0.00 1999 Shanxi 12.61 0.00 0.00 0.00 12.61 0.00 0.00 0.00 SinoSpring 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.00 Stora Enso 20.83 0.00 0.00 4.17 11.00 0.00 0.00 0.00 2005 Stora Enso 29.17 0.00 0.00 20.83 0.00 0.00 0.00 0.00 2006 Stora Enso 50.00 0.00 0.00 175.00 0.00 0.00 0.00 0.00 2006 TBK 4.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00 2006 VeriSilicon 0.00 1.00 0.00 0.00 0.00 1.00 0.00 0.00 Wanjie High-Tech 9.89 0.00 0.00 0.00 9.89 0.00 0.00 0.00 2004 Wumart 0.00 1.62 0.00 0.00 0.00 1.62 0.00 0.00 2003 XACB 0.00 17.95 0.00 0.00 0.00 0.64 0.00 0.00 2004 Xinao Gas 25.00 10.00 0.00 0.00 25.00 10.00 0.00 0.00 2006 Zhejiang Glass 50.00 24.96 0.00 18.00 0.00 0.00 0.00 0.00 2003 Zhengye-ADC 10.43 0.00 0.00 4.87 10.43 0.00 0.00 4.87 2002 Zhong Chen 0.00 4.78 0.00 0.00 0.00 4.78 0.00 0.00 2006 Zhongda_Yanjin 21.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total portfolio: 733.58 577.30 181.40 340.89 470.95 371.06 29.61 108.03

Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2002 SML 0.00 0.00 0.00 0.00 2004 NCFL 0.00 0.00 0.02 0.00 2007 Xinao CTC 0.04 0.01 0.00 0.14 2004 China Green 0.00 0.00 0.01 0.00 2006 Launch Tech 0.01 0.00 0.00 0.00 2005 MS Shipping 0.00 0.01 0.00 0.00 2003 Peak Pacific 2 0.00 0.01 0.00 0.00 Total pending commitment: 0.05 0.03 0.03 0.14

86 Annex 14: Country at a Glance CHINA: TAIYUAN URBAN TRANSPORT East Lo wer- POVERTY and SOCIAL A sia & middle- Development diamond* C hina P acific inco me 2006 Population, mid-year (millions) 1,311.8 1,900 2,276 Life expectancy GNI per capita (Atlas method, US$) 2,000 1,863 2,037 GNI (Atlas method, US$ billions) 2,623.6 3,539 4,635 Average annual growth, 2000-06 Population (%) 0.6 0.9 0.9 GNI Gross Labor force (%) 1.0 1.3 1.4 per primary M ost recent estimate (latest year available, 2000-06) capita enrollment Poverty (% of population below national poverty line) ...... Urban population (% of total population) 41 42 47 Life expectancy at birth (years) 72 71 71 Infant mortality (per 1,000 live births) 23 26 31 Child malnutrition (% of children under 5) 8 15 13 Access to improved water source Access to an improved water source (% of population) 77 79 81 Literacy (% of population age 15+) 91 91 89 Gross primary enrollment (% of school-age population) 113 114 113 China M ale 113 115 117 Lower-middle-income group Female 112 113 114

KEY ECONOM IC RATIOS and LONG-TERM TRENDS 1986 1996 2005 2006 Economic ratios* GDP (US$ billions) 295.7 856.1 2,243.9 2,644.7 Gross capital formation/GDP 38.6 40.4 43.9 44.6 Trade Exports of goods and services/GDP 11.8 20.1 37.3 40.1 Gross domestic savings/GDP 35.8 42.5 49.4 52.5 Gross national savings/GDP 35.9 41.3 51.0 54.1 Current account balance/GDP -2.8 0.8 7.2 9.4 Domestic Capital Interest payments/GDP 0.2 0.5 0.1 .. savings formation Total debt/GDP 8.0 15.0 12.6 .. Total debt service/exports 8.2 8.7 3.0 .. Present value of debt/GDP .. .. 12.3 .. Present value of debt/exports .. .. 30.6 .. Indebtedness 1986-96 1996-06 2005 2006 2006-10 (average annual growth) GDP 10.1 9.0 10.4 10.7 10.6 China GDP per capita 8.6 8.2 9.7 10.1 9.9 Lower-middle-income group Exports of goods and services 10.0 21.8 24.3 23.3 17.4

STRUCTURE of the ECONOM Y Gro wth o f capital and GD P (%) 20 1986 1996 2005 2006 Gro wth o f capital and GD P (%) (% of GDP) 15 20 Agriculture 27.1 19.5 12.5 11.7 10 Industry 44.0 47.5 47.5 48.4 155 M anufacturing 35.2 33.5 33.5 .. 100 Services 28.9 33.0 39.9 39.9 5 01 02 03 04 05 06 0 Household final consumption expenditure 49.3 43.5 36.1 33.2 01 02 03 04 05 06 General gov't final consumption expenditure 14.9 14.0 14.5 14.3 GCF GDP Imports of goods and services 14.7 18.0 31.7 32.2

1986-96 1996-06 2005 2006 Growth of exports and imports (%) (average annual growth) Agriculture 4.3 3.5 5.2 5.0 40 Industry 13.5 10.1 11.7 12.5 30 M anufacturing 12.8 10.2 12.1 .. 20 Services 9.4 9.8 10.5 10.3 10 Household final consumption expenditure 10.9 7.8 5.8 6.3 0 General gov't final consumption expenditure 10.4 9.5 11.6 10.9 01 02 03 04 05 06 Gross capital formation 11.9 10.2 11.6 13.2 Exports Imports Imports of goods and services 11.9 18.5 11.4 14.3

Note: 2006 data are preliminary estimates. This table was produced from the Development Economics LDB database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.

87 China

PRICES and GOVERNMENT FINANCE 1986 1996 2005 2006 Inflation (%) Domestic prices (% change) 8 Consumer prices .. 8.3 1.8 1.5 6 Implicit GDP deflator 4.6 6.4 4.2 3.6 4 Government finance 2 (% of GDP, includes current grants) 0 Current revenue 0.0 10.5 17.2 18.4 -2 01 02 03 04 05 06 Current budget balance -17.7 0.2 2.4 3.0 GDP deflator CPI Overall surplus/deficit -24.8 -1.4 -1.3 -0.7

TRADE 1986 1996 2005 2006 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) 30,942 151,048 761,999 969,073 1,250,000 Food 4,448 10,231 22,481 25,722 1,000,000 M ineral fuels, lubricants, and related materials 3,683 5,931 17,621 17,776 M anufactures 19,670 129,123 712,960 916,147 750,000

Total imports (cif) 42,904 138,833 660,118 791,614 500,000 Food 1,625 5,672 9,388 9,997 Fuel and energy 504 6,877 63,957 89,002 250,000 Capital goods 16,781 54,763 290,628 357,107 0 00 01 02 03 04 05 06 Export price index (2000=100) 59 122 104 107 Import price index (2000=100) 76 108 118 124 Exports Imports Terms of trade (2000=100) 77 113 88 87

BALANCE of PAYMENTS 1986 1996 2005 2006 Current account balance to GDP (%) (US$ millions) Exports of goods and services 34,952 171,678 836,888 1,061,681 10 Imports of goods and services 43,453 154,127 712,090 852,769 Resource balance -8,501 17,551 124,798 208,912 Net income -23 -12,437 10,635 11,755 5 Net current transfers 378 2,129 25,385 29,200 Current account balance -8,146 7,243 160,818 249,867

Financing items (net) 6,419 24,462 46,198 -2,842 0 Changes in net reserves 1,727 -31,705 -207,016 -247,025 00 01 02 03 04 05 06 M emo : Reserves including gold (US$ millions) .. 111,717 831,427 1,046,465 Conversion rate (DEC, local/US$) 3.5 8.3 8.2 8.0

EXTERNAL DEBT and RESOURCE FLOWS 1986 1996 2005 2006 Composition of 2005 debt (US$ mill.) (US$ millions) Total debt outstanding and disbursed 23,719 128,817 281,612 .. IBRD 965 7,616 11,140 11,415 A: 11,140 IDA 774 7,579 9,741 9,997 B: 9,741 D: 5,532 Total debt service 2,973 15,756 27,361 .. E: 25,819 IBRD 66 840 1,139 1,443 IDA 8 73 296 316 G: Composition of net resource flows 148,267 Official grants 155 245 332 .. Official creditors 1,165 4,401 844 .. F: 81,113 Private creditors 3,693 6,454 5,144 .. Foreign direct investment (net inflows) 1,875 40,180 79,127 .. Portfolio equity (net inflows) 0 0 20,346 .. World Bank program Commitments 1,120 1,900 1,277 0 A - IBRD E - Bilateral Disbursements 607 2,097 1,131 1,170 B - IDA D - Other multilateral F - Private Principal repayments 0 364 1,004 1,144 C - IM F G - Short-term Net flows 607 1,734 127 27 Interest payments 75 549 430 615 Net transfers 532 1,185 -303 -588

Note: This table was produced from the Development Economics LDB database. 9/28/07

88 Annex 15: Maps CHINA: TAIYUAN URBAN TRANSPORT

In the order shown: 1. IBRD 36446 2. IBRD 36447

89 RUSSIAN FEDERATION

HEILONGJIANG CHINA

MONGOLIA TAIYUAN URBAN TRANSPORT PROJECT JILIN ROAD DEVELOPMENT COMPONENT XINJIANG LIAONING D.P.R. OF NEI MONGOL BEIJING KOREA

BEIJING TIANJIN HEBEI EXISTING FULL INTERCHANGES GANSU Taiyuan REP. OF PROJECT ROADS MAJOR ARTERIALS SHANDONG KOREA SHANXI

NINGXIA EXISTING SEMI-INTERCHANGES QINGHAI PROVINCIAL EXPRESSWAYS MINOR ARTERIALS JIANGSU JAPAN SHAANXI HENAN URBAN EXPRESSWAYS LOCAL ROADS EXISTING GRADE SEPARATED ANHUI SHANGHAI East INTERCHANGES XIZANG HUBEI China QUASI-EXPRESSWAYS RAILROADS SICHUAN ZHEJIANG Sea JIANGXI HUNAN NATIONAL CAPITAL GUIZHOU FUJIAN

PROVINCE TAIWAN YUNNAN BOUNDARIES GUANGXI GUANGDONG PACIFIC OCEAN INTERNATIONALMYANMAR HONG KONG BOUNDARIES VIETNAM MACAO LAO P.D.R. HAINAN PHILIPPINES

0 2.5 5

KILOMETERS (approximate scale)

Fen R. Crossing

Waliu Road Eastern Expressway Connection

Taihang Road

South Railway Station Connection

Jing Yang Lake

WUSU AIRPORT

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. MARCH 2010 IBRD 36446 RUSSIAN FEDERATION

HEILONGJIANG CHINA

MONGOLIA TAIYUAN URBAN TRANSPORT PROJECT JILIN PUBLIC TRANSPORT COMPONENT XINJIANG LIAONING D.P.R. OF NEI MONGOL BEIJING KOREA

BEIJING TIANJIN HEBEI XINJIAN ROAD BUSWAY PROVINCIAL EXPRESSWAYS LOCAL ROADS GANSU Taiyuan REP. OF SHANDONG KOREA SHANXI BUS BAYS, TERMINALS & DEPOTS URBAN EXPRESSWAYS RAILROADS QINGHAI NINGXIA JIANGSU JAPAN SHAANXI HENAN PROPOSED STATIONS QUASI-EXPRESSWAYS

ANHUI SHANGHAI East XIZANG HUBEI MAJOR ARTERIALS China SICHUAN ZHEJIANG Sea JIANGXI MINOR ARTERIALS HUNAN NATIONAL CAPITAL GUIZHOU FUJIAN

PROVINCE TAIWAN YUNNAN BOUNDARIES GUANGXI GUANGDONG PACIFIC OCEAN INTERNATIONALMYANMAR HONG KONG BOUNDARIES VIETNAM MACAO LAO P.D.R. HAINAN PHILIPPINES

YingxinYingxin TerminalTerminal

0 2.5 5

KILOMETERS (approximate scale)

ZooZoo TTerminalerminal

NanhanNanhan DepotDepot Xinjian Road Busway

BeiyanBeiyan TTerminalerminal

BeiyingBeiying DDepotepot Jing Yang Lake

WUSU AIRPORT

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. MARCH 2010 IBRD 36447