INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

I. Basic Information Date prepared/updated: 01/08/2010 Report No.: AC4952 Public Disclosure Authorized 1. Basic Project Data Country: China Project ID: P066955 Project Name: Zhejiang Urban Environment Project Task Team Leader: Axel E. N. Baeumler Estimated Appraisal Date: August 25, 2003 Estimated Board Date: January 29, 2004 Managing Unit: EASCS Lending Instrument: Specific Investment Loan Sector: Sewerage (35%);Roads and highways (25%);Other social services (25%);Solid waste management (10%);Water supply (5%) Theme: Municipal governance and institution building (25%);Pollution management and environmental health (25%);Access to urban services and housing (24%);Infrastructure services for private sector development (13%);Other urban development (13%) Public Disclosure Authorized IBRD Amount (US$m.): 133.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower 201.32 201.32 Environmental Category: A - Full Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) Public Disclosure Authorized 2. Project Objectives The objective of the Zhejiang Urban Environment Project (ZUEP) is to enhance the efficiency and equity of waste management in Ningbo and Hangzhou municipalities and the redevelopment of the historic inner city in Shaoxing and Cicheng, and thereby facilitating the sustainable development of these cities and establishing a model for conservation of cultural heritage in other Chinese cities.

The project will support measures to increase the utilization of waste treatment facilities, increase sewerage services in underserved areas including the fast-growing suburban areas and satellite towns in Ningbo; and to improve waste management institutions and finances through implementation of utility reform measures.

Public Disclosure Authorized Redevelopment of the historic inner-city and conservation of build heritage in Shaoxing and Cicheng is a top priority of the municipal governments and the project will contribute to improving the quality of life of their citizens, sustain their cultural and historic nature through tourism development, upgrade their housing stock and safeguard environmental conditions.

3. Project Description The project in the three municipalities of Ningbo, Shaoxing and Hangzhou consists of a mixture of environmental infrastructure services, urban redevelopment and cultural heritage conservation components, along with associated technical assistance.

Original Project Components: (a) South Jiangdong Sewerage and Treatment Plant (b) Zhenhai Sewerage and Treatment Plant (c) Cicheng Infrastructure Development (d) Dongqian Lake Development (e) Shaoxing Historic City-Center (f) Hangzhou Landfill Expansion (g) Services, Training and Implementation Support

In light of loan savings occurring during project implementation, the following two components were added to the project. Both support the original project development objective: (h) Shaoxing: Yue Kingdom Historical Area Preservation/Rehabilitation (i) Ningbo: Jiangnan Wastewater Treatment Plant and associated sewers

The ISDS is being updated to reflect the addition of the two new project sub- components.

4. Project Location and salient physical characteristics relevant to the safeguard analysis Zhejiang Province (population 39 M) is one of the most important of the eastern coastal provinces in China. It is an integral component of the Yangtze Economic Zone and has a strong industrial sector and prosperous agricultural base.

Hangzhou (urban population 3.7 M) is the provincial capital and has an important geographical location on the N bank of the Qiantang River at the apex of Hangzhou Bay. The city is a major tourist destination, a major attraction being the famous West Lake. Waste generation in the city is increasing rapidly, in part due to improvements in collection, and there is an urgent need for new disposal facilities as the existing landfill is nearing completion. The project proposal is to extend the existing well operated landfill, located in a small valley some 18 km N of the urban center; this option was selected in preference to 8 potential new landfill sites elsewhere on grounds of lower incremental environmental impact.

Ningbo (urban population 1.26 M) is an important port and industrial center located at the estuary of the Yongjiang River. The urban center of Ningbo and the outlying township of Cicheng are traversed by a number of small rivers, which currently receive large wastewater discharges. Dongqian Lake is located about 15 km from the Ningbo urban center and is the only major scenic area for Ningbo. There are proposals to expand tourism in the lake area, but the lake is also an important water source for urban supply and agriculture. Existing and potential further pollution threatens these beneficial uses.

Shaoxing (urban population 0.5M) is in the NE of Zhejiang and is one of the key cities in the Changjiang River delta. The city has a long history and has been the regional political, economic and cultural center since ancient times. Much historical and cultural heritage and many historical street areas are still well preserved, and the old city has a network of canals fed from the moat that surrounds the city. Areas adjacent to these canals in the historic areas of the city house in the order of 30 000 people, but urban services are poor and properties lack basic water, sanitation and energy supply facilities.

The project would directly benefit about one million people through improved water supply, wastewater and solid waste collection and disposal, energy supply services, housing in the historic city centers, roads and transportation, flood control, and recreational facilities. A small number of people will be directly affected by the project because of resettlement and enterprise relocation from crowded inner-city locations and displacement by construction activities.

The project components in Shaoxing and Cicheng are located within culturally sensitive areas but issues are adequately dealt with because of the heritage conservation approach with these components. Dongqian Lake project component is located within an environmentally sensitive area.

5. Environmental and Social Safeguards Specialists Mr Songling Yao (EASCS) Mr Feng Ji (EASCS)

6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Existing Project Components. The environmental impact of the project is expected to be on balance substantially positive in terms of improved water quality in the rivers and canals in the urban areas of Ningbo (and surrounding towns) and Shaoxing and of improved and sustainable wastes management in Hangzhou. There are, however, some significant impacts in Ningbo/Shaoxing and in Hangzhou.

The quantities of sludge requiring disposal will continue to increase as a consequence of population growth, increases in the wastewater treatment rates in Ningbo and the potential future further centralization of wastewater treatment. Accordingly and in light of the limited space of sanitary landfills, Ningbo Municipal Government approved in October 2008 the Ningbo Municipality WWTP Sludge Treatment Master Plan which called for incineration of all WWTP sludge at thermal power plants in the city by tapping surplus heat in thermal power plants to dry dewatered sludge before incineration. In accordance with this Master Plan, South Jiangdong WWTP and Zhenhai WWTP began to send their dewatered sludge to thermal power companies approved by local EPB for incineration. An assessment is ongoing to confirm that the sludge is disposed of in an environmentally sound manner.

In the case of the Tianziling landfill in Hangzhou, although the facility will meet international standards of sanitary landfill, there will be the inevitable potential impacts of leachate and landfill gas generation. Each will occur throughout the lifetime of the site and in the case of gas generation for a considerable period thereafter. The potential impact of leachate in terms of groundwater contamination will be mitigated by means of a comprehensive site liner and collection and treatment of leachate. The impact of gas generation will be mitigated by forced extraction of gas with beneficial use of the gas for power generation.

Rates of waste generation in Hangzhou, and therefore potential deposition at the Tianziling landfill site, will increase due to population growth and increases in the wastes collection service area. Such an increase would reduce the operating lifetime of the site, but at the same time there are proposals to increase the current low recycling rates for waste stream components, which will have the effect of increasing the site life. An increase in waste deposition rates may increase gas generation rates, but the overall period of gas generation at the site should be largely unaltered in view of the fixed capacity of the site.

Compliance with the Environmental Management Plans, Resettlement Action Plans, and Resettlement Policy Framework will be monitored by independent institutions that will be hired under the project management. Compliance during project implementation has been satisfactory throughout.

The participatory approach for the resettlement aspects of the project, particularly those associated with inner-city redevelopment will be dealt with in RAP, following closely the China and Bank procedures and guidelines. Tourism development by its nature requires consultation and participation of the local communities, businesses and civil society institutions at large. The development of the tourism strategies in Shaoxing and Ningbo and the preparation of tourist master plans will be carried in a participatory approach.

New Project Components. As mentioned above, there are two newly added components: Yue Kingdom Historical Area preservation and Jiangnan WWTP. The Yue Kingdom Historical Area Preservation includes: (1) protection of cultural heritages and improvement of infrastructure/ landscaping in Fushan Park; (2) rehabilitation of traditional residential areas; (3) tourism friendly infrastructure e.g. pedestrian roads, central square, parking facilities, greening and landscaping; (4) rehabilitation of business streets. The adverse impact is insignificant, site-specific, and can be readily managed through common good practice. These components are consistent with the PDOs of the project. The EA has been disclosed locally (September 21, 2006) and the English summaries at the Infoshop (January 1, 2007).

A RAP for Yue Kingdom has been prepared and was disclosed locally (February 6, 2007) and at the InfoShop (July 10, 2007). The influence of the project is principally in form of house demolition in Yuecheng district, with 258 households (831 persons), five enterprises and businesses and seven public entities. Houses will be mostly restored by submission of replaced houses with full consultation and participation involving the affected households. The affected enterprises/businesses will be rehabilitated in new places with full compensation according to agreed compensation rates. The public entities are to be restored by their upper authorities, with cash compensation. The total budget is estimated RMB 220 million (equivalent to USD 32 million) which will be fully financed by the city government together with local commercial loan.

The Jiangnan WWTP is located in Beilun District, Ningbo, with a service area of approximately 230km2. The new WWTP includes installation of a 160,000 m3/d A2O activated sludge wastewater treatment plant, 0.3 km DN2700 inlet sewer and an inlet pumping station, 1.6 km DN2600 outlet pipeline and an outlet pumping station, a reclamation water supply facility, and deodorization facilities. The WWTP is proposed to be funded with the Bank#s loans saving, while the supply and installation of 19.4 km of trunk sewer (DN1000#DN2400), 170km of secondary sewers and 9 pumping stations are proposed to be funded by Ningbo using their own funds.The environmental impact of the subproject is on balance substantially positive and the benefits outweigh the negative impacts. The EA has been disclosed locally (April 3, 2009) and the English Summary at the Bank Infoshop (April 22, 2009).

A RAP for Jiangnan WWTP was also prepared and disclosed locally (August 2, 2008). and submitted to the Bank InfoShop (August 13, 2008). The project will result in the permanent acquisition of 404 mu of land and relocation of 35 households with 108 persons. Resettlement management system remains the same as the existing project, including for project monitoring. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area:

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts.

4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The implementation arrangements at the Provincial level are the PPMO, under the Provincial Construction Bureau. PPMO is responsible for project implementation under assistance of three municipal PMOs(Hangzhou, Ningbo, Shaoxin). The PPMO and Municipal PMOs have satisfactorily been implementing the Zhejiang Urban Environment Project. The EIAs/EMPs and RPs/RPF were prepared and approved locally and by WB. Compliance with the Environmental Management Plans and the RPs has been monitored satisfactorily. The PPMO’s and PMOs’ capacity for safeguards compliance during project implementation is deemed adequate.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Extensive consultation with affected people, local governments, enterprise owners was conducted in the preparation and implementation of the RP which was already disclosed locally. The participatory approach for the resettlement aspects of the project, particularly those associated with inner-city redevelopment was addressed in RAP, following closely the China and Bank procedures and guidelines. Tourism development by its nature require consultation and participation of the local communities, businesses and civil society institutions at large. The development of the tourism strategies in Shaoxing and Ningbo and the preparation of tourist master plans will be carried in a participatory approach.

For the newly added components, (1) Yue Kingdom Historical Area Preservation/Rehabilitation. Public consultation was conducted during EA preparation in January-March, April-June and in October 2006 through field visit, interview and questionnaire survey. Totally 16 units (local government and enterprises) and 50 public people were involved in the consultation. The EIA report has been locally disclosed on September 21, 2006. (2) Jiangnan WWTP. Two rounds of public consultation were conducted during EA preparation in early 2008 through field visit, interview, questionnaires survey and workshop. Totally 16 entities and 100 public people were involved in the first round and 31 people from villages, governments, enterprises, and design institutes etc. in the second round. The EIA report was locally disclosed on April 3, 2009.

B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 04/20/2009 Date of "in-country" disclosure 04/03/2009 Date of submission to InfoShop 04/22/2009 For category A projects, date of distributing the Executive

Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 04/20/2009 Date of "in-country" disclosure 04/03/2009 Date of submission to InfoShop 04/22/2009 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: N/A

C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting)

OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes credit/loan? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential Yes adverse impacts on cultural property? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process Yes framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank’s Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents?

D. Approvals

Signed and submitted by: Name Date Task Team Leader: Mr Axel E. N. Baeumler 11/30/2009 Environmental Specialist: Mr Feng Ji 11/26/2009 Social Development Specialist Mr Songling Yao 11/26/2009 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Panneer Selvam Lakshminarayanan 12/10/2009 Comments: Sector Manager: Mr Ede Jorge Ijjasz-Vasquez 12/18/2009 Comments: