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Updated Project Information Document (PID) Report No: AB454 Public Disclosure Authorized Project Name CHINA - Hai Basin Integrated Water and Environment Management Project Region East Asia and Pacific Region Sector General water, sanitation and flood protection sector (50%); Irrigation and drainage (50%) Theme Water resource management (P); Enviromnental policies and institutions (P); Pollution management and environmental health (P) Project P075035 Borrower(s) PEOPLE'S REPUBLIC OF CHINA Implementing Agency(ies) MOF, MWR, SEPA, BEIJING & TIANJIN MUNICIPALITIES & HEBEI PRO Ministry of Water Resources State Environmental Protection Agency Municipalities of Beijing and Tianjin Province of Hebei Address: Ministry of Water Resources, Baiguang Road, Beijing, China Public Disclosure Authorized Contact Person: Mr. Liu Bin - MWR and Ms. Li Pei -SEPA Tel: (8610) 6320-2127 - MWR; (8610) 6615-3366 - SEPA Fax: (8610) 6320-2027 - MWR; (8610) 6615-1932 - SEPA Email: [email protected] Environment Category C (Not Required) Date PID Prepared November 7, 2003 Auth Appr/Negs Date September 10, 2003 Bank Approval Date April 15, 2004 1. Country and Sector Background The Bohai Sea, located in the northwest corner of the Yellow Sea, is one of the world's ecologically imnportant, and stressed, bodies of water. The fishery resources are important to China, Japan, and North and South Korea. More than 40 rivers discharge into the Bohai Sea, of which the Yellow (Huang), Hai, and Liao rivers are the most significant. From an ecological perspective, the Bohai Sea is a large, shallow Public Disclosure Authorized embayment of the Yellow Sea. The Yellow Sea, in turn, is a shallow continental sea of the northwest Pacific Ocean. These relationships are important because of the physical and biological links between these systems. In particular, fish and shellfish stocks in the Yellow Sea are dependent on the Bohai Sea as a reproduction and nursery area. The open water environment in the Bohai Sea supports diverse marine life including invertebrates, fishes, marine mammals and birds. In the past, a major soturce of larvae and juveniles for the East China Seas came from the Bohai Sea, but this fiumction has steadily diminished. Therefore, the ecological condition of the Bohai Sea is critically important for maintaining fishery stocks and biodiversity in northwest Pacific Ocean fisheries. It is generally accepted that over-fishing, pollution, reduction of freshwater inflows and habitat loss have combined to reduce these ecosystem ftunctions. The Bohai Sea is subject to heavy land-based pollution from domestic, industrial, agricultural, and livestock sources. The Bohai Sea is subject to one-third of the wastewater and half of the pollutant loading Public Disclosure Authorized discharged into seas bordering China. This amounts to 3 billion m of wastewater and 700,000 tons of pollutants per year. The areas where pollutant concentrations exceed the national standards in the Bohai Sea, mainly for inorganic nitrogen and phosphorous, has been expanding and in 1997 it covered 43,000 km ,accounting for half of the total sea area. The most seriously affected areas include the estuaries and 2 PID coastal shallows. Pollution has led to mass mortalities of aquaculture species and contributes to an increasing frequency of harnful algal blooms, commonly known as "red tides." In 1989 a "red tide" covering 1,300 km' fonned in the Bohai Sea off the coast of Hebei; an even more massive "red tide" extending over 3,000 kmn appeared in the Liaodung Gulf of the Bohai Sea in 1998. Surface and groundwater quality in China has been seriously degraded due to lack of effective pollution control, combined with rising population and industrial operations. Sixty-eight percent of the total river length in the north China plains is classified as polluted (i.e., unsuitable as raw water sources for drinking water), and large amounts of the groundwater resource is also polluted. Hai River is one of the most polluted river systems with more than 80% of the river reaches classified as polluted. Much of this is at or above Class V (worst pollution category). Hai River discharges into the Bohai Sea and is a major contributor to its pollution loadings. Water resources in China are unevenly distributed. While water resources are quite abundant in the south, water availability in the north is very limited. In the Hai Basin, water availability is only 305 mi per capita which is about 14% of the national average and about 4% of the World average. A 2001 study sponsored by the World Bank, "Agenda for Water Sector Strategy for North China" estimates current economic losses from water shortages of approximately US$7.3 billion per year in the three major river basins in North China: the Hai, Huai, and Huang (Yellow River). Total abstraction of groundwater in the Hai Basin is estimated to be around 26 bcm per year, which is approximately 9 bcm more than the sustainable yield. The Governunent has started to take measures to address water scarcity problems, including improving irrigation efficiency, increasing the price of piped water to encourage conservation and improve the finances of public water utilities, and encouraging wastewater reuse. One of the most ambitious measures is the proposed "South-North Water Transfer Project" (SNWT Project). This project, when completed, will transfer 20 bcm of water from the Yangtze River system to North China, including the Hai Basin, at an estimated cost of around U.S. $10-15 billion. The complex and interrelated nature of water pollution, water scarcity, groundwater overdraft, and flooding in the Hai Basin calls for an integrated approach to water and environmental management. An integrated approach will lead to better umderstanding of important surface/subsurface and water quality interactions, and facilitate new management techniques. However, integrated water and environmental management techniques are problematic because of difficulties in inter-jurisdictional and inter-administrative cooperation along several dimensions. Water and enviromnent management involves many central-level ministries and agencies: Ministry of Water Resources (MWR), SEPA, Ministry of Construction (MOC), Ministry of Agriculture (MOA), and others. MWR has the primary responsibility for overall management of the nation's water resources, and SEPA has overall responsibility for pollution control. There are considerable overlapping jurisdiction problems between these agencies and with other ministries and agencies concerning urban water supply, water pollution control, groundwater management, and irrigated agriculture. Much of this problem has its foundation in Chinese law that applies to water resources (Water Law) and pollution control (Water Pollution and Prevention Control Law --WPPC) in which mandates are not clear, with overlapping responsibilities, and poorly defined planning likages between the two ministries. Laws are traditionally drafted to give ministries power, not to share power. The Project would provide a powerful demonstration effect and an incentive to break through these horizontal institutional barriers. 3 PlO 2. Objectives The overall objective is to catalyze an integrated approach to water resource management and pollution control in the Hai River Basin in order to improve the Bohai Sea enviromnent. Specifically, the Project will (i) improve integrated water and environment planning and management in the Hai Basin, (ii) support institutional aspects related to effective local, municipal/provincial, and basin-wide water and environment planning and management, (iii) enhance capacity building in water and environment knowledge management and implementation, and (iv) reduce wastewater discharges from small cities along the rim of the Bohai Sea. The Project is intended to demonstrate new technologies and management approaches, with the lessons learned applied throughout the Hai Basin and other basins boarding the Bohai and Yellow Seas. The Project will also serve as a complement and link to, water and environmental management issues for two on-going World Bank-financed operations in the Hai Basin: Second Tianjin Urban Environment and Development Project (TUDEP2 - FY03) and the Water Conservation Project (WCP - FY01). 3. Rationale for Bank's Involvement The Hai River discharges into the Bohai Sea which adjoins the Yellow Sea. Both seas contain globally important ecological resources that provide significant fishery benefits to China, North and South Korea and Japan. The Hai River is also a major source of irrigation and drinking water for tens of millions of people who live in its basin. However, the river and its tributaries are severely polluted (most above Class V, the worst category), and the basin's groundwater resources are in some cases polluted and being rapidly depleted. Addressing the river basin's twin problems of water pollution and depletion is critical to the health and well-being of its inhlabitants and to the environmental sustainability of the Bohai and Yellow Seas and the livelihoods of the many people who depend on their natural resources. One of the major barriers to tackling these problems is the lack of sectorally and institutionally integrated actions to address them. The Bank is helping the Chinese Govermunent to develop and implement an integrated cross-sectoral approach to water and environment management. The Project would address an important missing link in efforts to improve water and environment management in the Hai Basin and the Bohai Sea environmnent.
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