Document of The World Bank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized Report No: 45059-CN

PROJECT APPRAISAL DOCUMENT

ON A Public Disclosure Authorized PROPOSED LOAN

IN THE AMOUNT OF US$100 MILLION

TO THE

PEOPLE'S REPUBLIC OF CHINA

FOR THE

ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT Public Disclosure Authorized

April 14, 2010

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 June 2009)

Currency Unit = RMB or Chinese Yuan US$1 = 6.8 RMB

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

APAO Anhui Provincial Audit Office MBD Model bidding documents APFB Anhui Provincial Finance Bureau MFB Municipal finance bureau APMO Anhui Project Management Office MV Motorized vehicles BRT Bus rapid transit NCB National competitive bidding CQS Consultant qualifications selection NGO Non-governmental organization DA Designated account NMV Non-motorized vehicles DO Development objective NPV Net present value EA Environmental assessment OP Operational policy EIA Environmental impact assessment PMO Project management office EIRR Economic internal rate of return PT Public transport EMP Environmental management plan QBS Quality-based selection FM Financial management QCBS Quality- and cost-based selection FSL Fixed-spread loan RAP Resettlement action plan IC Integrated corridor development SBD Standard bidding document ICB International competitive bidding SOE State-owned enterprise I&M Inspection and maintenance TS Traffic safety and management LA Local access and freight UNDB United Nations Development Business LG Leading group VSL Variable-spread loan

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 ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

CONTENTS

Page

I. STRATEGIC CONTEXT AND RATIONALE ...... 1 A. Country and Sector Issues ...... 1 B. Rationale for Bank Involvement ...... 3 C. Higher Level Objectives to Which the Project Contributes...... 3

II. PROJECT DESCRIPTION ...... 3 A. Lending Instrument ...... 3 B. Project Development Objective and Key Indicators ...... 3 C. Project Components ...... 4 D. Lessons Learned and Reflected in the Project Design ...... 4 E. Alternatives Considered and Reasons for Rejection ...... 5

III. IMPLEMENTATION ...... 6 A. Institutional and Implementation Arrangements ...... 6 B. Monitoring and Evaluation of Outcomes/Results ...... 7 C. Sustainability...... 7 D. Critical Risks and Possible Controversial Aspects ...... 8 E. Loan Conditions and Covenants ...... 9 F. Reporting and Monitoring...... 9

IV. APPRAISAL SUMMARY ...... 9 A. Economic and Financial Analyses ...... 9 B. Technical ...... 10 C. Fiduciary ...... 11 D. Social...... 12 E. Environment ...... 13 F. Safeguard Policies ...... 14 G. Policy Exceptions and Readiness...... 15

Annex 1: Country and Sector or Program Background ...... 17

Annex 2: Major Related Projects Financed by the Bank and other Agencies ...... 32

Annex 3: Results Framework and Monitoring ...... 33

Annex 4: Detailed Project Description ...... 40

Annex 5: Project Costs ...... 50

Annex 6: Implementation Arrangements ...... 56

Annex 7: Financial Management and Disbursement Arrangements ...... 60

Annex 8: Procurement Arrangements ...... 69

Annex 9: Economic and Financial Analysis ...... 75

Annex 10: Safeguard Policies ...... 84

Annex 11: Project Preparation and Supervision ...... 91

Annex 12: Documents in the Project File ...... 93

Annex 13: Statement of Loans and Credits ...... 95

Annex 14: Country at a Glance ...... 99

Annex 15: Maps...... 103 CHINA

ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

PROJECT APPRAISAL DOCUMENT

EAST ASIA AND PACIFIC

EASCS

Date: April 14, 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: P111421 Environmental screening category: Partial Assessment Lending Instrument: Specific Investment Loan

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

For Loans/Credits/Others: Total Bank financing (US$m.): 100.00 Proposed terms: Variable-Spread Loan repaid over twenty-five years including a five year grace period. Financing Plan (US$m) Source Local Foreign Total Borrower 201.0 0.0 201.0 International Bank for Reconstruction and 0.0 100.0 100.0 Development Total: 201.0 100.0 301.0

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

Responsible Agency: Anhui Provincial Finance Bureau No. 238 Funanxi Road Hefei, Anhui China Tel: +86 551 5100160 Fax: +86 551 5100162 Postal Code: 230061

Estimated disbursements (Bank FY/$m) FY 10 11 12 13 14 15 16 Annual 2 10 18 15 15 20 20 Cumulative 2 12 30 45 60 80 100 Project implementation period: Start May 15, 2010 End: July 31, 2015 Expected effectiveness date: August 15, 2010 Expected closing date: January 31, 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? [X]Yes [ ] No Ref. PAD IV.G. The project has obtained a waiver from Bank Management with regards to requirement relating to translations of the safeguards reports from Chinese into English. English language consolidated RAPs and EA reports have been prepared, reviewed and disclosed through the Bank's Infoshop. Have these been approved by Bank management? [X]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 development objective of the project is to improve mobility on selected main corridors of the municipalities of Anqing, Huaibei, Lu’an and Wuhu in Anhui Province in a safe and efficient manner. Project description Ref. PAD II.D., Technical Annex 4

The Project consists of the following parts:

Part A: Anqing Municipality 1. Integrated Corridor Development. Improving the capacity, public transport service and traffic safety of the Huxin north-south transport corridor in Anqing Municipality including improvements to Huxin road and construction of sections of Shuangguang and Yangjiang roads. 2. Local and Freight Access. Construction and rehabilitation of Yanyiang Road and traffic safety improvements in Dekuan road. 3. Public Transport. Construction of maintenance facilities, bus terminals, bus depots and stops in Anqing Municipality. 4. Capacity Building. Provision of technical assistance to improve the capacity of Anqing Municipality to implement its activities under the Project through, inter alia, training and study tours.

Part B: Huaibei Municipality 1. Integrated Corridor Development. Improving the capacity, public transport service and traffic safety of the Huaihei-Suixi road transport corridor in Huaibei Municipality including improvements to Huaihai and Suixi roads. 2. Local and Freight Access. Construction and rehabilitation of Tuohe road (4 motor vehicle lanes), and Cuifeng road. 3. Public Transport. Construction of maintenance facilities, bus terminals, bus depots and stops in Huaibei Municipality. 4. Capacity Building. Provision of technical assistance to improve the capacity of Huaibei Municipality to implement its activities under the Project through, inter alia, training and study tours. Part C: Lu'an Municipality 1. Integrated Corridor Development. Improving the capacity, public transport service and traffic safety of the Meishan-Jiefang north-south transport corridor in Lu'an Municipality including improvements to Meishan and Jiefang Roads and construction of Bangongshan road. 2. Local and Freight Access. Construction and rehabilitation of Xicheng, Pihenan and Longhezhong roads. 3. Public Transport. Construction of maintenance facilities, bus terminals, bus depots and stops in Lu'an Municipality. 4. Capacity Building. Provision of technical assistance to improve the capacity of Lu'an Municipality to implement its activities under the Project through, inter alia, training and study tours. Part D: Wuhu Municipality 1. Integrated Corridor Development. Improving the capacity, public transport service and traffic safety of the Jiuhua north south transport corridor in Wuhu Municipality including improvements to Jiuhua and Yijiang roads and construction of a section of the third Ring Road. 2. Capacity Building. Provision of technical assistance to improve the capacity of Wuhu Municipality to implement its activities under the Project through, inter alia, training and study tours. 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: Covenants applicable to project implementation: • the proceeds of the loan will be on-lent by the Borrower to Anhui and by Anhui to Anqing, Huaibei, Lu’an and Wuhu municipalities on the same terms and conditions as the Bank loan, with the municipalities bearing the foreign exchange risk; • Anhui and the Project Cities shall maintain an adequate organizational structure for implementing the project; • Anhui shall cause each Project City to: (a) implement its RAP and EMP; (b) prepare and implement annual work plans for the project; (c) engage consultants for carrying out supervision of civil works; and (d) engage consultants to monitor and evaluate the implementation of the respective EMP and RAP, furnish to the Bank semi-annual reports on the results of such monitoring and evaluation, and implement the recommended measures; and • Anhui shall furnish to the Bank: (a) semi-annual project reports to monitor and evaluate progress in project implementation; and (b) a mid-term progress report for the project by August 15, 2013.

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and Sector Issues

Anhui – not an equal beneficiary in the growth of the last three decades

1. Anhui Province is located in the lower Yangtze delta west of the coastal provinces of Zhejiang and Jiangsu. It has 66.8 million inhabitants, of which 25.8 million live in cities. The province and its 17 municipalities have not benefited proportionately from the first three decades of China’s economic reform process. By 2006, Gross Domestic Product (GDP) per head in Anhui was CNY10,044 ($1,478), less than 65 percent of the national average and 28th in the country (of the 31 provincial-level entities). Similarly, per capita disposable income among urban residents in Anhui was CNY 9,771 ($1,440), less than 85 percent of the national average.

2. As part of a larger program to encourage lagging regions, the Government of China has undertaken an initiative to support the “Rise of Central China” initiative during the 11th Five- Year Plan (2006-2010). The proposed project is consistent with this priority and the Bank’s Country Partnership Strategy, which seeks (among other objectives) to improve the competitiveness of the various regions of China and to address the needs of underdeveloped areas through financing infrastructure. In line with this initiative, Anhui Province has formulated its own vision of “grasping opportunities to strive towards development” based on the twin pillars of urbanization and industrialization. The province has identified the medium-sized cities of Anqing, Huaibei, Lu’an and Wuhu to take part in the Bank-financed project. As elsewhere in China, infrastructure development is a core element of both the provincial development strategy as well as that of the project municipalities.

3. All four project cities are relatively poor. The per capita disposable income of urban residents in all four was below the average for China as a whole in 2006. However, the cities all have strong industrial bases and have seen strong double-digit GDP growth in recent years. The municipalities have identified a substantial program of infrastructure construction that they believe to be essential to sustain and increase their economic development. Transport infrastructure is a significant and very visible element of this investment.

The infrastructure opportunity and urban transport sectoral issues

4. Similar to many other Chinese cities, the project cities have embarked on a rapid program of infrastructure construction that they believe to be essential to sustain and increase recent economic success. As in other Chinese cities, the initial focus of this transport development effort has been on development of ‘big’ primary roads. While much of this infrastructure is needed and will significantly enhance the mobility of the urban residents of the project cities, experience of many other Chinese cities has been that by itself, this cycle of investment 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 and traffic safety has received inadequate attention during this period of road development.

1 5. Anhui’s cities are undertaking their infrastructure expansion amid an increasing national priority on ‘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 vulnerable road users; pedestrians and cyclists involved in traffic accidents are considered, by default, victims needing redress. Similarly, the State Council (via Opinion #46 of October 2005), the Ministry of Construction, as well as the highest levels of Chinese leadership, have promoted the provision of priority to public transport in cities in official documents and public announcements.

6. In light of the experience of other Chinese cities, and an increasing national priority, Anhui’s cities have the opportunity to develop, from the early stages, a transport infrastructure that reflects an adequate 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.

World Bank involvement - The operational challenge

7. Previous World Bank involvement in the sector suggests that supporting cities to effectively improve public transport and traffic safety remains a considerable challenge, particularly as the Bank’s engagement moves from relatively large cities in the south and the coast (cities like Shanghai and Guangzhou with relatively strong human resources capacity) to smaller cities in the central regions and the west. The approach used by the first generation of World Bank projects of financing significant stand-alone public transport and traffic management components would be difficult for two reasons. First, the resulting complicated multi-component projects required a high level of counterpart capacity to implement. This capacity is harder to achieve as cities get smaller and further away from the booming cities of the south and the coast. Second, while the early approach had significant success, it tended to create a host of line agencies (such as the traffic police, public transport bureau) who were independently executing their components in silos. Successful urban transport solutions need integration between public transport, traffic engineering and road capacity providers and that integration has been hard to obtain.

8. In response to these operational challenges, there is a need to design an involvement that: (a) demands and builds coordination across the relevant public transport, construction and traffic management agencies in a city from the preparation stage; and (b) is relatively simple and contained, so as not to test the capacity of the relatively small counterpart municipalities; but (c) still has the possibility for significant impact. The key components of this project reflect a response to these challenges – the primary Bank-financed investment in every city consists of an integrated subproject that coordinates improvements in public transport operations, on-street priority for buses, enhancements to public transport fixed infrastructure, traffic engineering improvements, safety enhancements for pedestrians and cyclists, and road improvements, on a single key corridor in the city.

2 B. Rationale for Bank Involvement

9. The World Bank is ideally placed to support the project cities in Anhui Province to fully take advantage of this opportunity. The Bank has been China’s urban development partner for over 15 years and has provided over $1.5 billion for 11 urban transportation projects, supporting Chinese cities with coordinated urban and transport development, public transport improvement and reform, mobility management, people-centered transport development, and improved planning, investment and management practices.

10. The Government of China has asked the World Bank to support urban infrastructure development in Anhui Province as part of its program to support the ‘Rise of Central China.’ The provincial and municipal governments have explicitly noted that they are looking to the World Bank to provide not just financing, but support to strengthen their urban transport planning, operational and management practices.

C. Higher Level Objectives to Which the Project Contributes

11. 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 the various regions of China and the overall investment climate, and to address the needs of disadvantaged groups and underdeveloped areas through financing infrastructure. Specifically, the 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.

12. Urban infrastructure development has been identified as a priority area for investment by the Government of China. The proposed project will support this priority by improving the urban transport system in four Anhui cities. The project also supports the implementation of State Council Directive 46 regarding “priority for public transport”, the “people first” principle and the National Road Traffic Safety Law of 2004.

II. PROJECT DESCRIPTION

A. Lending Instrument

13. The Bank will finance the project through a specific investment loan. The Borrower has selected the variable-spread loan (VSL) option to be repaid over twenty-five years including a five year grace period.

B. Project Development Objective and Key Indicators

14. The development objective of the project is to improve mobility on selected main corridors of the municipalities of Anqing, Huaibei, Lu’an and Wuhu in Anhui Province in a safe and efficient manner.

15. A key focus will be integrated improvements in public transport services, traffic safety conditions and in some cases road capacity on selected key traffic corridors in the project cities.

3 Accordingly, the project will monitor the following on these selected corridors: (a) travel times for road users; (b) quality and use of public transport services; and (c) road fatality rates.

C. Project Components

16. The legal agreement identifies four parts of the project, one for each project city. In each city the project includes some or all of four components as shown in Table 1. A detailed description can be found in Annex 4. The components are as follows: • Integrated Corridor Development (IC): (total cost $201 million, proposed Bank loan allocation $71.9 million): improving the capacity, public transport service and traffic safety of key corridors in the project cities. • Local Access and Freight (LA) (total cost $79.7 million, loan allocation $19.3 million): construction of selected access roads in the project cities. • Public Transport (PT) (total cost $18.8 million, loan allocation $7.3 million): constructing maintenance facilities, bus terminals, bus depots and stops in the project cities. • Capacity Building (CB) (total cost $1.2 million, loan allocation $1.2 million): international study tours and training as well as technical assistance related to the project components.

Table 1: Project Costs by City ($ million) Anqinq Huaibei Lu’an Wuhu Total Integrated Corridor 26.97 12.12 14.42 147.52 201.03 Development Local Access and Freight 1.31 36.75 41.59 0.00 79.65 Public Transport 6.52 9.19 3.10 0.00 18.81 Capacity Building 0.26 0.22 0.24 0.52 1.24 Front-End Fee 0.05 0.04 0.04 0.13 0.26 Total 35.10 58.32 59.38 148.17 300.97 of which World Bank loan 19.0 14.0 15.0 52.0 100

D. Lessons Learned and Reflected in the Project Design

17. The Independent Evaluation Group (formerly the Operations Evaluation Department) and the Quality Assurance Group assessments of the Bank’s infrastructure portfolio in China have 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 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 activities reflecting a comprehensive approach. Experience with previous urban transport projects in China suggests that one of the primary benefits to a

4 city from a World Bank intervention 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 complex multi-component projects. This project has been designed to achieve the benefits of a comprehensive approach with minimal complexity. A key innovation in this respect has been to focus the Bank-financed intervention on a critical transport corridor in each project city – integrating road capacity, public transport and traffic safety enhancements.

(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 Anhui 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, given the relatively small size and limited capacity of the project cities, the project’s investment support is in the form of a series of study tours and capacity building initiatives built around periodic workshops, which will sometimes be preceded by domestically financed studies needed as part of the project cities’ normal urban management needs.

(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 activities 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, have been selected.

E. Alternatives Considered and Reasons for Rejection

18. Loan Product. The Bank has been involved in some of the project cities in the past but not at present. Furthermore, this is the first Bank involvement in the urban transport sector in Anhui. As such, a specific investment loan was adopted as the most appropriate loan product for this project.

19. Investment Components. Project identification included an intensive pre-screening of individual investment proposals. The final decision on identified investments was made by the project cities in consultation with the Bank based on three criteria:

5 • consistency with the integrated corridor approach, to focus the Bank intervention as far as possible on one critical traffic corridor (which could include multiple roads) and do so in an integrated fashion that coordinated improvements in public transport, road safety and road capacity; • focus on solving existing transport problems as a priority over city expansion schemes; and • preliminary assessment of the economic viability of the proposed scheme.

20. This was followed by an economic analysis in which the entire road infrastructure program in each city was tested against a “no project” scenario. High cost or large scale investments (roads with more than four motorized vehicle lanes), together with investments not related to immediate problems (new development roads), were analyzed individually. For such investments, a significant effort was made to generate the least-cost alternative that preserved the benefits (see Annex 9).

III. IMPLEMENTATION

A. Institutional and Implementation Arrangements

21. Implementation Arrangements. Detailed implementation arrangements are described in Annex 6. Key features are as follows. Overall guidance is being provided by a leading group established at the level of Anhui Province. This group will be supported by a provincial project management office (PMO) attached to the Anhui Provincial Construction Bureau that will monitor and manage this project at provincial level. This Anhui PMO (APMO) is also responsible for preparing the consolidated project financial statements with Anhui Provincial Finance Bureau’s (APFB) assistance. In the four project cities, overall guidance is being provided by municipal level leading groups headed by a vice mayor and including the leadership of all relevant city agencies related to urban transport planning management and operations. In each project city, the Leading Group is supported by a municipal level PMO to provide policy guidance and coordinate the preparation and implementation of various project components at local level. In Huaibei, Lu’an and Wuhu the municipal PMOs are part of the municipal Construction Bureau. In Anqing the PMO is located in the Anqing Urban Development Investment Company. Though these various PMOs do not have prior experience with World Bank-financed projects, they are either permanent agencies under the municipal construction bureau or existing state-owned commercial enterprises (i.e., the municipal investment company of Anqing). Thus they have extensive experience with financial management of construction projects.

22. Funds Flow. The World Bank loan to the People’s Republic of China will be on-lent to Anhui Province, which will in turn on-lend the funds to the participating municipalities. The terms of the on-lending will be identical to those of the IBRD loan. The designated account will be established and managed by APFB.

23. Disbursement. Municipal project management offices will submit withdrawal applications and related invoices to the respective municipal finance bureau for checking, who will forward the invoices to APFB, copying APMO for verification. Upon APMO’s verification,

6 APFB will release funds from the Project designated account to the contractors or to the municipal finance bureaus, to enable them to make payments to the contractors. Consultants will submit invoices to APMO, who will review and forward the invoices to APFB for payment.

24. Resettlement Compensation Funds Flow. The general resettlement cost is estimated to be about $31.4 million, accounting for 10 percent of the entire project costs. The four municipalities will generate the resettlement funds and pay compensation to the affected entities and individuals.

B. Monitoring and Evaluation of Outcomes/Results

25. 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 city-specific Environmental Management Plans, EMPs). The municipal level PMOs will regularly collect the data required for monitoring and evaluation of outcomes. This process will be coordinated by the provincial level APMO, who will compile the data, conduct quality control and provide them to the Bank. The leading group in each project city will review the results on the basis of various progress reports, and take appropriate corrective action.

C. Sustainability

26. As in other Bank-financed projects in China, all the investments have been proposed by the Project cities and prepared under their guidance by domestic design institutes chosen and contracted by the cities. 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 this project.

27. The key concern from a sustainability perspective has to do with the improvements in public transport and safety. Sustainability needs a combination of maintenance for the hardware (such as bus stations and depots) and software (priority arrangements, pedestrian signals).

28. In this respect, the integrated corridor approach adopted in this project will offer each city an opportunity to pilot a sustainable urban transport system on one key transport corridor on a demonstration basis. In each city, city leadership has explicitly committed to following through on the proposals to ensure better public transport operations and enhanced safety and mobility for all road users on these corridors, especially the vulnerable population. It is hoped that the success of this corridor approach will be extended to cover the overall network performance in the project cities.

7 D. Critical Risks and Possible Controversial Aspects Risk Rating Potential Risks Proposed Mitigation Measures with Mitigation To Project Objectives Sustainability: Focusing The project is designed to maximize peer-to-peer learning across M public transport and safety cities through regular workshops and seminars during supervision activities on a demonstration missions – this additional dimension of interaction should support corridor may not adequately public transport and traffic management units to strengthen their roles. strengthen institutions Benefits of the Bank The capacity building component has been designed to foster M involvement will remain continuous engagement with the project cities and to ensure that the limited to the selected lessons learned from the Bank-financed investments are corridors mainstreamed. This is consistent with current Chinese practice of using pilot demonstrations as a learning tool. Congestion caused by Bus priority measures should preserve the mobility of bus passengers. S increasing motorization will Indeed, the project components in each project city have been limit travel time savings designed to reduce bus travel times – reduced bus travel times are a from project investments project performance indicator. To Project Component Results The lack of timely counter- Fiscal capacity was formally assessed during preparation. M part financing could delay implementation Safeguard risks related to RAPs and EMPs satisfactory to the Bank have been prepared and have S resettlement and been officially endorsed by the Project Cities. The Bank will environmental management supervise RAPs and EMPs closely. Fiduciary risks related to Procurement and financial management manuals satisfactory to the M procurement and financial Bank have been prepared. An extensive program of procurement and management controls financial management training commenced prior to Negotiations. Lack of institutional capacity In response to this particular concern relatively simple activities have M in the project cities to been designed, focused primarily on one key corridor in each Project effectively implement the city. Integration across agencies in public transport, traffic World Bank project management and road capacity provision will remain a challenge – but an appropriate institutional challenge for an urban transport project. Experience during preparation suggests that while this challenge will remain in small cities, it is a reasonable challenge to address. At the provincial level, APMO will hire a project management consultant to support coordination and project management efforts. Road Infrastructure and This has been a key focus of the preparation process – both from a M Reconstruction: technical perspective and in terms of the feedback received from the Roads/intersections will be public during the participatory process. If the project is implemented designed without fully as prepared, the new roads will be significantly safer than is currently addressing the needs of the the case in the project cities. vulnerable Traffic Safety: A key feature of the integrated corridors has been a holistic effort at M/S Traffic management, improving safety through better design. Safe crossings have been including safety measures, designed at regular intervals. Sensitive locations – such as schools, will be ineffective at hospitals and major trip attractors – have been mapped and a special curtailing congestion and emphasis has been paid on providing safe crossings at regular promoting safety for non- frequent intervals. motorized users

8 Risk Rating Potential Risks Proposed Mitigation Measures with Mitigation Public Transport: The public transport component is supplemented by commitments M Corridor improvements will from the project cities to increase services and the number of buses on not generate visible the street during the course of the project. Management structure for improvement in the bus public transport will also be a key element of the capacity building network, given its limited component. area of influence Public Transport: A performance-based regime has been agreed upon. If the initial S On-street priority is designs do not deliver targeted benefits in travel time, action plans for ineffective due to poor additional initiatives will be devised. execution, limited enforcement, poor design or limited traffic engineering Overall Risk Rating M

E. Loan Conditions and Covenants

29. The proceeds of the loan will be on-lent by the Borrower to Anhui and by Anhui to Anqing, Huaibei, Lu’an and Wuhu municipalities on the same terms and conditions as the Bank loan, with the municipalities bearing the foreign exchange risk.

30. Anhui and the Project Cities shall maintain an adequate organizational structure for implementing the project.

31. Anhui shall cause each Project City to: (a) implement its RAP and EMP; (b) prepare and implement annual work plans for the project; (c) engage consultants for carrying out supervision of civil works; and (d) engage consultants to monitor and evaluate the implementation of the respective EMP and RAP, furnish to the Bank semi-annual reports on the results of such monitoring and evaluation, and implement the recommended measures.

F. Reporting and Monitoring

32. Anhui shall furnish to the Bank: (a) semi-annual project reports to monitor and evaluate progress in project implementation; and (b) a mid-term progress report for the project by August 15, 2013.

IV. APPRAISAL SUMMARY A. Economic and Financial Analyses

33. A formal economic evaluation was conducted for the integrated corridor development component, and all of the new roads under the local and freight access component; these together account for about 91 percent of the loan and 94 percent of the total project cost. The principal measured benefits are: increased safety, savings in vehicle operating costs, reduced congestion,

9 and time savings for pedestrians, bicycle riders, bus and auto passengers. The estimated overall economic internal rate of return (EIRR) is 17 percent. Table 2 summarizes the results of the economic evaluation for each main component. See Annex 9 for more details.

34. The Public Transport component consists of mostly low-cost elements, which are either essential operational items (maintenance facilities and bus depots), or which enhance quality for the passengers (such as bus stops). 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.

Table 2: Summary of Economic Evaluation NPV City Project EIRR ($ million, (in %) @ 12%) Anqing Overall 18.8 20.1 Huaihai - Suixi Corridor 25.4 15.8 Huaibei Overall 16.0 25.7 Lu’an Overall 15.9 21.9 Third Ring Road 12.8 11.2 Wuhu North - South Corridor 98.5 119.7 Overall 17.7 135.4 4 Cities Project 17.2 203.1

35. Financial Analysis. Based on an analysis of the project cities’ municipal finances, it is the Bank’s judgment that the project is affordable for all four municipalities and the proposed counterpart funding strategy is acceptable. (See Annex 9 for more details.)

B. Technical

36. 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 consisting of focus groups, open meetings, and questionnaires which sought to obtain public input into the project design and to target the needs of vulnerable groups such as the elderly, migrant workers, the mobility impaired, and the poor. Women-only groups were consulted to ensure that needs and issues specific to women were properly identified.

37. This process raised concerns related to the quality of secondary and tertiary roads, the availability of basic infrastructure along major roads (toilets, benches and trees), safety issues particularly at intersections and road crossings, on the quality and coverage of public transport

10 and safety and related infrastructure for bicyclists. Project feasibility studies include a section indicating the manner in which issues raised in the public participation process have been addressed in the feasibility studies and in non-Project investments being undertaken by the project cities. The integrated corridor improvements in each city have been designed in part as a pilot response to many of the concerns raised in the participation process (see below). Additionally, a key response to the concerns raised in the participation process has been a commitment by all the project cities to increase coverage and frequency of bus service city-wide; and the project performance indicators include targets for enhanced coverage as well as an increase in the number of buses in service.

38. A major design innovation in this project was the integrated corridor improvement concept. Preparation of this concept required a fundamentally different way of doing business for the design institutes preparing the project, as well as for the World Bank review and appraisal. The design institutes needed to coordinate more than usual with the public transport operators, the traffic police, the public transport bureau and the construction and transport commissions in order to produce an appropriate integrated set of proposals. In order to streamline and systematize the presentation of the integrated proposals and their evaluation, the feasibility studies of the corridor improvements in each project city summarized the manner in which the proposals enhanced: • Public transport operations (route rationalization, transfer strategy, new routes); • Public transport fixed infrastructure (bus stop location and design, information); • Provision of on-street priority; • Rolling stock (not financed by project - but under discussion with operators); • Traffic engineering for safety and for public transport; • Safety improvement for pedestrians (sidewalk improvements, safe crossings); • Safety improvements for cycles; • Parking management (under discussion); and • Safety management enhancement including more education and enforcement.

C. Fiduciary

39. 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. The project’s 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).

40. Procurement. A procurement capacity assessment of the implementing agencies, carried out prior to appraisal, concluded that the overall risk of the procurement process is moderate (for more details see Annex 8). Procurement will be conducted at the city level. APMO will coordinate and perform a quality control function. To ensure quality and unified procurement agency services for all four cities, APMO will coordinate to select a procurement agent for city PMOs and sign and pay the procurement agency contract on behalf of the PMOs, but the

11 payment will be later allocated to city PMOs according to the awarded contracts. City PMOs will be responsible for managing the procurement process and contract implementation, and APMO will be responsible for coordinating and supervising the procurement process and contract implementation of the whole project. A procurement agent has been selected for all International Competitive Bidding (ICB) and National Competitive Bidding (NCB) procurement to assist the Provincial PMO and line agencies in preparing the commercial part of the bidding documents, publishing the Specific Procurement Notices, hosting the bid opening, participating in bid evaluation, and sending the bidding documents and the Bid Evaluation Reports to the Bank for review, as instructed by the Provincial PMO and line agencies.

D. Social

41. The project has significant social benefits, as it supports the development of public transport, pedestrian, and bicycle facilities and traffic safety measures. The public participation process undertaken during preparation enables the project to address the transport-related needs of vulnerable groups. At the same time, the project has adverse impacts related to the need for land acquisition and involuntary resettlement, although in some cases displaced persons viewed the housing demolition as an opportunity to improve their living conditions significantly.

42. Resettlement and Land Acquisition. The project will affect 15 villages/urban communities in 11 townships/urban community units in the municipalities of Anqing, Huaibei, Lu’an and Wuhu. The project will require the permanent acquisition of 2,060 mu (137 hectares) of land; the breakdown of this land by city and by land use is shown in Table A10.1 (Annex 10). The dominant current land use is growing rice (two-fifths of the area), and the rest is mostly water pools, dry fields and housing in roughly equal shares. Some temporary land use will be required during project implementation by contractors and appropriate mitigation measures will be taken. Municipal resettlement office will supervise the activities. The project will affect 5,480 people in the cities and peri-urban areas, distributed by city as shown in Table 1, in Annex 10.

43. RAPs prepared by the project entities provide details regarding resettlement policy principles and regulations to be followed, compensation rates and budget, measures to restore incomes where necessary and institutional and monitoring arrangements.

44. Indigenous people. A socioeconomic impact survey conducted during project preparation and it found that there are no minority communities in the project area. Hence OP 4.10 on Indigenous Peoples is not triggered.

45. Information dissemination. All affected households and villages have been identified through the census survey. The RAP was advertised in local main newspapers on May 22-28, 2009. Anhui Construction Bureau advertised the RAP in the Anhui provincial governmental website at the same time, and made it available in Anhui Library and the involved municipalities without any charge. The information has also been placed in the municipal public libraries. Relevant project information has been provided to the affected communities through newspaper reports, posters and public meetings. A resettlement information booklet providing details regarding compensation rates, social security policies and other entitlement policies and

12 grievance procedures will be distributed to the displaced people prior to resettlement implementation.

46. Participation strategy. Focus group discussions and key informant interviews were used to consult with potentially displaced persons and obtain views and preferences regarding resettlement impacts and mitigation measures, including land compensation and social security programs. These views and preferences have been taken into account during RAP preparation, and the majority of persons to be displaced agree that the resettlement and rehabilitation measures planned under the RAP will be adequate to address and mitigate any adverse impacts.

47. The affected communities are to play a key role in determining and implementing their livelihood restoration programs. For example, after land compensation amounts are calculated, each community will determine the best way to use land compensation to improve, or at least restore, local income earning potential.

48. The project entities will set up procedures to supervise land compensation use, and local banks in each municipality will participate in resettlement fund monitoring. Both internal and independent monitoring of the resettlement program would be conducted regularly during project implementation.

49. Consultation with NGOs, civil society. The project cities contracted Hehai University to guide a census and inventory survey exercise and a social assessment, focusing on public consultation for the selection of project components, urban traffic management and the needs of urban citizens and communities. This contributed significantly to the preparation of the RAP and the EMP. Communities and farmer groups have also been consulted and participated in the resettlement planning process and the preparation of the project. Their feedback has been incorporated into the RAP and the consultation session concluded that the resettlement and rehabilitation measures planned under the RAP are adequate to address and mitigate any project impacts on land acquisition and house demolition.

50. Institutional arrangements. Hehai University was involved in the early stage of RAP preparation, independent from Anhui Construction Committee and the project office. It will be contracted to serve as the independent monitoring agency of the resettlement program. The project will be monitored and the living standards of the project-affected people will be evaluated over the course of project implementation; the results will be regularlyreported twice a year and, if needed, remedial actions will be devised.

E. Environment

51. The project has been designated as ‘Category B’ with regards to OP4.01, Environmental Assessment (EA), due to its limited but material environmental impact. A separate EA was developed for the project in each city. These were used as a basis for preparing a consolidated EA in English summarizing key issues and findings by experts from a top-level certified EA institute, the Anhui Provincial Academy of Environmental Science. Four city-specific stand- alone environmental management plans (EMPs) were also prepared in Chinese and translated into English in order to facilitate implementation and supervision. Both the Consolidated EA

13 and the four EMPs cover possible adverse impacts, mitigation measures and monitoring, building on the experience of similar projects in China.

52. The project facilitates environmentally desirable planning and physical improvements in the urban transport systems of the four project cities by supporting safety, pedestrian and bicycle ways and public transport. In addition, all project investments have been designed to minimize any adverse impact on the physical environment. None of the components encroaches on any environmentally sensitive terrain.

53. The project includes building, widening and rehabilitating common urban roads, and construction of public transport facilities in the urban context. As a standard urban transport project, environmental impacts will be mostly construction-related, such as noise and dust, construction waste disposal, damage of vegetation, soil erosion, sewage discharge, traffic impact, social disturbance and safety, and indirect impacts caused by resettlement and relocation of industries. Major negative impacts during operation include air pollution, noise, road safety and wastewater from bus depots built by the project.

54. These negative impacts can be readily avoided and mitigated by sound project design and construction management and operation practice. They were analyzed thoroughly in the EA for each city and the EMP was designed for each city detailing comprehensive mitigation measures to address these impacts. The EMPs will be incorporated into the civil works bidding documents and contracts to ensure their implementation.

55. Two rounds of public consultations were carried out for all project components and the feedback was incorporated into EA documents and design alternatives. In total, more than 400 people were consulted, interviewed and surveyed. The individual EA reports were locally disclosed at the office of Construction Bureau/Committee in Anqing and Wuhu, and the government website of Huaibei and Lu’an after public announcements were made in November- December 2008 on the websites of these government bodies and again in late May 2009 in major local newspapers of the four cities.

56. Linked projects. The northern endpoint of the Third Ring Road in Wuhu connects to a proposed bridge under construction over Qingyi River, as well as two nearby dikes. This bridge is being built as a separate project with domestic funding, and for the purposes of OP4.01 and OP4.12 is regarded as a linked project to the Bank-financed Third Ring Road. A copy of the EA for this bridge, as well as an approval letter from Wuhu Environmental Protection Bureau, was provided to the Bank. The Bank verified that the EA complies with OP4.01 and the municipality has confirmed their commitment to implement the EA. Further, all resettlement related to this bridge is covered by the Wuhu RAP.

F. Safeguard Policies

57. Environmental Assessment (OP. 4.01) Following the requirements of Bank’s OP 4.01 EA and relevant domestic regulations, the EA process was conducted for the four project cities by experts from Anhui Provincial Academy of Environmental Science. Based on the four individual EAs, a consolidated EA (CEA) and four stand-alone city-specific EMPs were developed by the same expert team under terms of reference agreed with the Bank. Annex 10

14 summarizes the CEA and EMPs for each city. Each EMP defines institutional arrangements for its implementation and the supervision mechanism, specifies mitigation measures for all potential adverse impacts, and includes an environmental monitoring plan and a training plan, with a budget estimate.

58. Physical Cultural Resources (OP 4.11). In Anqing city a province-level cultural heritage site, Yingjiang Temple, is located on the western side of Huxin Road, separated from it by a green belt of about 5m and a pedestrian sidewalk. The main entrance of the temple is on the other street. Although no widening of the road is needed for this section, the construction activities associated with the rehabilitation (e.g., vibration and noise of vehicles or equipment) may potentially risk affecting the temple due to its close proximity. The Bank’s operational policy on Physical Cultural Properties is thus triggered. The EA team has reviewed the site, assessed the nature and extent of potential impacts on it, consulted with and obtained consent from the responsible authority (Anqing Bureau for Cultural Relics and Religion) and developed necessary protective measures in the EMP.

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [x] [ ] Natural Habitats (OP/BP 4.04) [ ] [ x] 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]

G. Policy Exceptions and Readiness

59. The Safeguard Policy on Resettlement, OP 4.12 and the Safeguard Policy on Environmental Assessment, OP 4.01, require the Borrower to prepare RAPs and EA reports in a form, manner, and language that are understandable to the displaced persons and local NGOs, which in this case would be Chinese. The Chinese language RAPs (390 pages in total) and EA reports (492 pages in total) for the subprojects have been reviewed by the Bank, meet the requirements of OP 4.12 on involuntary resettlement and OP 4.01 on environmental assessment, and have been publicly disclosed (disclosed separately in each city on May 22-28, 2009). An English language consolidated RAPs (88 pages) and an English language consolidated EA report (141 pages) have also been prepared, reviewed and disclosed through the Bank's InfoShop (submitted to the Infoshop on June 16, 2009). Bank experience over the years has established the general practice of requesting the Borrower to provide the Bank also with the entire RAP and EA reports in English. In April 2007 Bank senior management endorsed “Guidelines for the use of English Translation of Summaries of Environmental Assessment Reports and Resettlement Action Plans in China Projects” which allowed the creation of English language comprehensive summaries of RAPs and EA reports for projects that meet certain criteria. The Regional

15 Safeguards Secretariat has confirmed that the proposed project meets the criteria. Accordingly, English language comprehensive summaries of the RAPs and EA reports covering all relevant parts of the Chinese-language EA reports and RAPs were created. Chinese-speaking Bank safeguard specialists have reviewed both the English language comprehensive summaries of the RAPs and EA reports and the Chinese language full-length safeguard documentation approved and adopted by the Project Implementing Agencies and have confirmed the consistency between the English and Chinese documentation, and compliance of the full set of safeguards documents with Bank policy.

60. The project will comply fully with all other Bank policies. The project meets regional readiness criteria for implementation.

16 Annex 1: Country and Sector or Program Background CHINA: ANHUI MEDIUM CITIES 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 years.1 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 one 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, commutes and 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 wealthier cities the level is already 80-100 per 1000 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. 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.

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

17

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. There is increasing concern that the benefits of this extraordinary effort have accrued disproportionately to a still narrow base of auto users, and in many cases the benefits are ephemeral and 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 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.

18 Box 1: The value that the 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). The experience with these investments suggests: (a) Moving from urban roads to urban transport. Bank intervention has helped cities to progress 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 the attention paid to 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 among 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 pedestrians, cyclists, the disabled 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 involvement is enhanced city-wide traffic management, leading to safer facilities for pedestrians and cyclists including innovations such as mid-block pedestrian signals, 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 municipal government.

19 5. Despite significant improvements in the last two decades and recent attention from the 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 (SOEs) or joint ventures in which the state has a majority stake.

6. 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 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 becoming increasingly popular.

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 SOEs. Internal reforms in the 1990s ensured relatively low staffing levels and until recently, bus companies in most cities ran with little or no subsidy. There have 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, Shanghai and Chongqing, this led to fragmented on-street in-market competition and has since been replaced by gradual consolidation encouraged by the city (in Shanghai) or a return to public 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 providing bus supply. 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.

7. 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

20 (2006-10).2 In the next 10 years these 15 cities will have a total metro length of 1,700 km and the 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.

8. 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. The Chinese and international experience in the sector suggests that any successful strategy would need to integrate the following:

9. 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. Though there is now widespread recognition among Chinese leadership of the value of improving public transport, more attention is needed to ensure that this understanding translates into changes on the ground. 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, 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.

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 Exposition in Shanghai and the 2010 Asian Games in Guangzhou. Currently, 22 lines have been put into operation with a total length of 602 km. A further 36 lines are under construction.

21 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 of a World Bank-supported urban transport project in Liaoning in northeastern China provides an example of a successful pilot. The experience of this project, currently under implementation, was that a series of public meetings, workshops, surveys and interviews significantly influenced the 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 the 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.

10. 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. The international experience suggests that there is 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. Box 4: Air Quality Management Presently, evidence suggests that mobile emissions are a minor contributor to urban air pollution in 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 anywhere.4 Even though emissions from mobile sources have a disproportionate share of such fine particles, the available evidence suggests that mobile sources still account for a small share of fine particulates pollution. This suggests that attention and resources targeting air pollution currently are best spent addressing the 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 much can be done to address industrial and residential sources of air pollution. There are many tools to address mobile emissions; key among them are encouraging alternatives to private vehicle movements. The accelerated growth of 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, encouraging alternatives to private automobile use, managing and constraining automobile use, regulating the public transport market, new vehicle standards, fuel quality and inspection-maintenance of the fleet in use.

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

22 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 public transport supply --but often with potential for material improvement. 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 emissions 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 climate change mitigation plans. The tailpipe-end of emissions control is institutionally complicated, and inspection and maintenance (I&M) is particularly difficult. 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 close attention to detail. The World Bank’s assessment suggests that fundamental technical and institutional issues need to be resolved before a successful I&M system can be implemented in China. Technically, national and provincial authorities need to take the lead on resolving outstanding issues related to quality control and assurance, equipment homologation (acceptance testing), computer-controlled testing 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 bureaus for standards and environmental protection.

11. Ensuring that private automobile users fully internalize/pay for the costs they impose on cities. International experience has been that the above strategies of improving public transport and non-motorized modes have only limited success unless measures are taken to ensure that private vehicle users do indeed pay for the costs they impose on cities in the form of congestion, traffic accidents, poor 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.

12. 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, detailed urban design with transport plans and plans for public transport networks. The dynamics of expansion dominating China's cities at present, driven inordinately by the revenues obtained by municipal governments 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 primarily for the purpose of urbanizing land.

23

Assessment of Urban Transport Issues in the Project Cities

City Background

13. All of the project cities are relatively poor: the per capita disposal income of their urban residents was below the average for China as a whole in 2006 (see Table A1.1 and Table A1.2). However, all of the cities have solid industrial bases and have seen strong double-digit GDP growth in recent years. The municipalities have identified a substantial program of infrastructure construction that they believe to be essential to sustain and increase their economic development. Transport infrastructure is a significant and very visible element of this investment.

Table A1.1: Demographic and Economic Characteristics of Project Municipalities (2006) GDP Population GDP per head growth (million) （￥） City Key Industries （2005- Total Urban Total Urban 06） Petrochemicals, textiles, machinery, Anqing 12.6% 6.08 0.74 8,709 22,478 building materials Huaibei Coal, textiles 10.1% 2.12 1.07 11,015 16,704 Lu’an Cereals and oil, textiles, machinery 14.0% 6.87 1.81 5,824 6,374 Wuhu Automobiles, building materials 15.4% 2.29 1.04 21,045 33,734 Iron, steel, coal, copper, automobiles, Anhui 11.7% 61.4 21.7 8,675 N/A agriculture Overview of Transport Conditions 14. Motor vehicle ownership is growing in all of the cities, but the rates of motor vehicles per 1,000 inhabitants (including motorcycles) for the four municipalities remain low (see Table A1.2).

Table A1.2: Project Cities: Motor Vehicle Ownership (motorcycles included) Anqing Huaibei Lu’an Wuhu Total motor vehicles (2007) 86,028 104,000 178,456 150,000 Motor vehicles/1,000 persons n/a 60 49 (2008) 147 Annual motor vehicle 9.6% 17.2% n/a 12.2% growth, 1997-2007 Total growth 1997 -2007 n/a 312% n/a 120% n/a not available

15. Anhui exhibits many of the common urban transport issues in China cities. Table A1.3 shows the shares for different modes. Walking, cycling and bus riding account for more than 70 percent of daily trips in all cities.

24 Table A1.3: Mode Shares (in percent) Anqing Huaibei Lu’an Wuhu Modal Split (2007) (2005) (2007) (2007) Walk 34.2 51.4 40.3 28.6 Bicycle 36.5 19.4 12.5 26.5 Bus and trolley bus 10.2 16.8 16.3 16.7 Motorcycle 10.2 3.7 19.8 Taxi 1.5 2.4 6.1 Passenger car 0.4 1.7 28.2 Company (bus and car) 2.7 3.5 5.0 Other 4.2 1.1

16. In all of the project cities the road network is dominated by some main arterials in which most traffic is concentrated. Branch roads and alleys have little continuity across main streets; they are designed to feed traffic into the arterials. The majority of the non-auto using population is disproportionately affected. The poor condition of the road network, especially the non- arterial network, has an impact on the safety of the cyclists and pedestrians, who depend on this system for last-mile access. A lower level of bus service (due to insufficient stops and depots) also makes public transport less attractive and less competitive. As a result, passengers experience increases in travel times while operators face increased operating costs.

Integrated Corridor Improvement

17. Typical of cities of this size, each project city has a few key transportation corridors which account for the majority of the city traffic, particularly public transport traffic. A few corridors are responsible for more than 30-40 percent of all fatal accidents in the cities. Due to increasing motorization, such key corridors face serious transportation problems. The project focuses on these key corridors and uses integrated methods to improve them in a safe, clean and affordable manner. The status of the key corridors of each city and the corresponding solution are as follows.

Anqing: South-North Corridor

18. The urban area consists of the old city to the south, the economic development area to the north and the chemical industry area to the west. The main commercial areas, business, political and public facilities are concentrated in the old city. The economic development area provides many jobs, generating commutes to and from housing in the old city.

19. Due to the position of Ling Lake, there is little or no arterial road connection between the north and the south. Of the existing roads in the South-North Corridor, Huxin Road most directly connects the old city with the economic development area, attracting a high concentration of trips.

25 • Vehicles in the peak hour reach 2,680 pcu in two directions, which is beyond saturation. Non-motorized vehicles number 2,470 per hour. Six bus routes operate on Huxin Road, carrying on average 1,745 passengers in the peak hour. Bicycle parking is not well managed. • The crosswalk situation is unsafe. There were three fatalities in the area of the 9th School and Renmin Square in 2007. • At the north end of Huxin Road is the Railway Station, with peak hour passenger numbers similar to Huxin Road. Also 5 bus lines use the Railway Station for transfers or as a terminal.

20. The project’s Integrated Corridor Improvement component addresses these needs by financing the improvement of Huxin Road, including increasing bus priority and pedestrian facilities, as well as adding a new north-south link to relieve congestion on Huxin Road via the Shuguang Road and East Yanjiang Road.

Huaibei: Huaihai-Suixi Transport Corridor

21. The Huaibei urban area is made up of three districts, one of which − Xiangshan − contains the old city and most commercial businesses, political administrations, recreational centers and community facilities. The city aims to establish a new development center in Xiangshan. However, the old city seriously constricts traffic flow; the main road serving Xiangshan is relatively narrow and has insufficient capacity.

22. Huaihai Road is a main east-west arterial road of the Xiangshan Area. • Huaihai Road concentrates most of the east-west traffic flow of Huaibei. Peak hour volumes exceed 2,500 pcu in two directions. It is estimated that the peak period traffic flow in 2010 will be 3,000 pcu and by 2020 will exceed 3,500. • Two thirds of the city’s 18 bus routes use Huaihai Road. This high concentration causes the flow of buses in peak periods to reach 137 per hour. Bus operating speeds in Huaihai Road are less than 10 km/hr in the peak hour and otherwise generally 13-16 km/hr.

23. Suixi Road is the main north-south arterial route which links the urban area and Suixi county. It is also the main corridor in Xiangshan Area. Large and medium-sized enterprises as well as residential areas are distributed along this line. • The peak hour traffic flow exceeds 2,000 pcu in two directions, and it is estimated that it will reach 2,400 pcu in 2010 and exceed 2,900 pcu by 2020. • Suixi Road has 7 public transportation routes. At peak hour the bus volume accounts for about 7 percent of the flow of motorized vehicle traffic.

24. The project’s Integrated Corridor Improvement component addresses this need by financing the reconstruction of Huaihai Road, and Suixi Road.

26

Lu’an North-South Corridor in Old City

25. Lu’an is divided by both the Pihe River and Pihe Canal. Pihe River flows to the side of the city, while Pihe Canal runs south to north to the east of the city. Currently the area left of Pihe Canal generates the majority of trips. The old city accounts for 30 percent of Lu’an’s municipal buildings. The type of commuting trip is in accordance with urban land use. Meishan Road and Jiefang Road are the key north-south roads in the old city. • Both Meishan Road and Jiefang Road have low capacity, and lack intersection management as well as bus bays. • According to the passenger flow survey, motorized vehicles consist of 1,730 pcu/hr around the Meishan-Jiegang intersection and 1,890 around the Renmin –Meishan intersection.

26. The project’s Integrated Corridor Improvement component addresses this need by financing the improvement of Jiefang Road and Meishan Road, as well as new construction of Bagongshan Road. Wuhu: North-South Corridor

27. Wuhu municipality is about 40 km from north to south and 30 km from east to west. Trade and business are concentrated in the old town, while the north area is industrial and the south area has a new higher education zone. Each area has a single concentrated land use, which results in lengthy commuting trips between areas. The north to south corridor accounts for most trips. The current bus network accords with urban development in a north-south direction, and hence most routes follow the north-south route, making this the city’s main traffic corridor.

28. The North-South Corridor currently includes few roads, with only Jiuhua Road and Yijiang Road under reconstruction. The traffic pressures frequently result in bottlenecks. • Jiuhua Road has the main concentration of passenger flow, with up to 71,310 people per day. The peak hour sees 2,410 pcu/hr in two directions and the saturation degree reaches 0.75 ~ 0.89. A total of 31 bus routes operate in Jiuhua Road and the bus volume in peak hour periods is up to 65 on a work day, while passenger flows reach 1,800 people per hour. The capacity of Jiuhua Road is very low and, as no priority is given to buses, the operating speed is less than 10 km/hr during peak hours. On average some 26 crashes occur each year, the fatality rate is 8 and injury rate is 8. • Yijiang Road, as the only freight corridor from south to north, is also a very important corridor in Wuhu. There are gardens, markets, transportation hubs as well as some old inhabited regions alongside Yijiang Road. With the urban expansion to the east, transportation conditions are expected to deteriorate.

27 Table A1.4: Corridor Data for the Project Cities

City Anqing Huaibei Lu’an Wuhu West Whole Whole Whole Whole Corridor Name Huxin Dekuan Huaihai Suixi Jiefang Meishan Jiuhua Yijiang Yanjiang city city city city Yinbing Rd Longshan South Suixi Dong Liuqiao Tianmen- Tianmen- Dabieshan - Dabieshan - Origin-Destination - Yanjiang Rd - Linghu Rd --- -gang Rd Line ------shan Rd - shan Rd - --- N..Meishan N. Jiefang Rd Dujiang Rd - Yanjiang Interchange Huaihai Rd Eshan Rd Eshan Rd Length (km) 5.35 3.17 2.01 --- 2.35 4.48 --- 3.5 3.0 --- 10.85 9.16 --- Peak Traffic 1,730 Volume ( pcu/ hr/ 2,681 694 1,274 2,500 2,000 1,837 2,411 2,283

2 directions) Public Transport Number of Routes 6 5 5 20 12 7 25 14 10 20 31 15 58 Daily Bus Passenger Flow 5,681 1,635 3,154 105,024 69,500 51,700 295,479 31,190 18,714 124,758 130,000 80,000 371,068 (passengers/day) Bus Flow in Peak Hour (bus/hr/ 35 40 26 137 98 216 134 65 25 1 direction) Bus Travel Time 20 14 16 13 11 43 27 (min) Road Safety Number of Crashes (2006-08 average) 7 4 1.3 69 11 13 93 4 6 122 26 16 114 Number of Deaths 0 2 1.3 0.3 13 5 10 1 1 24 8 8 44 (2006-08 average)

28 29. The project’s Integrated Corridor Improvement component addresses this need by financing the improvement of Jiuhua Road and Yijiang Road, and the new construction of the Third Ring Road. Providing the new North-South corridor for future freight needs will relieve traffic congestion in the existing north-south corridor.

Local Access and Freight

30. The recent sustained growth in the number of motorized vehicles has resulted in many traffic issues, especially in the old cities. In Anqing, the high road traffic crash rate has resulted in large losses of life and property, as seen in Table A1.5.

Table A1.5: Anqing Road Crashes in Urban Area (shi qu) Economic Year Crashes Deaths Injured Loss (Yuan) 1999 74 2000 102 2001 1,356 62 2003 1,146 48 940 1,180,122 2004 222 58 233 276,770 2005 367 52 408 586,300 2006 248 98 259 351,000

31. Anqing has not provided adequate crosswalks for urban roads, and additional safe crossings are needed. Eight traffic lights, signage and 5.2 km of road marking at West Yanjiang Road and Dekuan Road are being considered in this project to directly address this problem.

32. Huaibei and Lu’an have some bottlenecks that limit urban connectivity and constrain their access to the expressway system. Huaibei has already relocated Xincai Industrial District to the Lieshan Area. Xiangshan District has become a new growth point for employment in Huaibei, which will lead to rapid growth of commuter traffic between Xiangshan District and Xincai Industrial District, as well as significant growth in freight demand. The population of Xincai Industrial District exceeds 100,000. Therefore, the existing Xiangyang Road and Provincial Road 101 will be unable to meet the projected traffic demand in the near future. The project’s road component addresses this need by financing a new construction road, namely Tuohe Road, which will connect Xiangshan Area and Lieshan Area.

33. Huaibei has recently changed the city center/Renmin Road area, along with rapid expansion of the urban land to the south of the railway. Consequently, the urban main road network in the south of Xiangshan District is being reconstructed rapidly. However, since the road network gradation has not been adequately rationalized, the density of secondary roads and feeder roads is low and the network is not properly connected, and access is often difficult. The project’s road component addresses this need by financing the construction and/or improvement of Cuifeng Road, 34. In the Lu’an old city the road network is not well connected. Branch streets and alleys have little continuity across main streets, especially in some high density areas. As a result the

29 overall accessibility is sub-standard. The project’s road component addresses this need by financing Xicheng Road (an inner corridor in the southwest area), Pihenan Road (connecting the southwest area and the north area) and Middle Longhe Road (as an arterial road through the Southern and Eastern areas).

Public Transport

35. Public transport in the project cities is generally basic and requires significant development and improvement (see Table A1.6). Several characteristics are common to all cities. Network density is low, and the routes and the frequency of bus operation are low. The percentage of the city within easy walking distance of bus stops is below recognized norms. The frequency of bus services is low in many cities, even in peak times. This makes public transport less attractive, particularly for journeys requiring transfers.

Table A1.6: Public Transport Characteristics of the Project Cities

City Anqing Huaibei Lu’an Wuhu SERVICES Number of routes 20 25 20 58 Line length (km) 299.5 190.5 n/a 857 Line network (km) n/a 70.2 214 322.5 Network density (km/sq) 1.5 2.8 3.8 % of population within 300 41 49 29 49 meters of a bus stop % of population within 500 63 72 85 77 meters of a bus stop Bus mode share of all city trips 10.2% 16.8% 16.3% 16.7% Operating speed (km/h) n/a n/a n/a 20 OPERATORS Number of buses operated 292 287 296 787 n/a not available

36. Buses do not have a favorable on-street operating environment. There is no bus priority. The poor road condition and poor facilities makes conditions uncomfortable for passengers. Passenger facilities including stops, stop signs, shelters, route termini and depots are not well provided, and in many cases are below basic minimum quality.

37. Anqing. The central city has seven bus terminals, ten dispatching stations, four parking areas and three maintenance yards. There is an urgent need for parking areas and maintenance. In addition there is a lack of central dispatching and depots, especially in the old city. Also, the poor maintenance facility directly results in a low level of bus service.

38. Huaibei. There are seven terminal stations, ten dispatch stations, four parking lots and three maintenance and repair yards in the city proper. Bus stops in the downtown area are in good condition with clear signs on the stop boards. No “harbor-shaped” bus stops with markings have been provided, and in some remote areas like suburbs, official bus stops are seldom provided. Often there are only stop boards with non-standard signs. Except for four parking lots

30 in Zhongbei Public Traffic Company, all other terminal stations have buses parked in the street. In some roads, through traffic, external traffic and city internal traffic is mixed, and as a result traffic safety cannot be guaranteed. Facilities to separate non-motorized vehicles from motorized vehicles in city streets are either absent or poorly respected.

39. Lu’an. The city only has two depots, which are not sufficient to satisfy demand and these have already reached the limit of public transportation development.

40. To address these problems, Tuohe bus maintenance yard, four bus terminals and 97 bus stops are included in the Huaibei subproject, while construction of the Hongguang Depot and Shizishan Depot is included in the Anqing subproject, with construction of another bus maintenance depot in the Lu’an subproject.

31 Annex 2: Major Related Projects Financed by the Bank and other Agencies CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

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

PSR: Project Supervision Report. S: Satisfactory. MS: Moderately Satisfactory.

32 Annex 3: Results Framework and Monitoring CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

Table A3.1: Results Framework

Project Development Objective Outcome Indicators Use of Outcome Information The development objective of the 1. Lower fatality rate on key Evaluating the success of the project is to improve mobility on corridor project in diverting longer-distance selected main corridors of the 2. Increased bus ridership on key trips and heavy vehicles to more municipalities of Anqing, Huaibei, corridor and urban area appropriate roads, and reducing the Lu’an and Wuhu in Anhui risk to vulnerable road users and 3. Lower travel times by bus Province in a safe and efficient other traffic in the central city; and between selected points on key increasing attractiveness and manner. corridor performance of public transport in a demonstration corridor

Intermediate Results Results Indicators for Each 5 Use of Results Monitoring One per Component Component Component One: a. Distance between safe Monitor progress Integrated Corridor Improvement crossings (m) b. Number of safe pedestrian

crossings implemented c. Lower travel times by auto as appropriate between selected points on key corridor

Component Two: a. Number of km of new road Monitor progress Local Access and Freight completed b. Number of km of old road reconstructed

Component Three: a. Coverage population % with Monitor progress Public Transport access to bus stop within 300/500 meters (city proper) b. Number of buses in service in urban area Component Four: a. Number of people completing Monitor progress Capacity Building study tours/training/seminars b. Numbers of plans/strategies adopted utilizing outputs of Capacity Building Component

5 The legal agreement identifies four parts of the project, one for each project municipality. In each city the project includes some or all of four components as shown in this Table:

33 Table A3.2: Key Performance Indicators - Outcomes Data Collection and Reporting Baseline End of Project Data Outcome Indicators Frequency and Responsibility for 2008 Target Values Collection Reports Data Collection Instruments 1. Safety on the corridor Anqing North-South transport Project City PMO 8 5 Annually Police Record corridor (Fatality+Injury) and Traffic Police Huaihai-Suixi Road transport Project City PMO 36 18 Annually Police Record corridor (Fatality+Injury) and Traffic Police Lu’an North-South transport Project City PMO 14 10 Annually Police Record corridor (Fatality+Injury) and Traffic Police Wuhu North-South transport Project City PMO 17 12 Annually Police Record corridor (Fatality) and Traffic Police 2. Increased bus ridership on key corridor and urban area 2a. Daily bus ridership on corridor Anqing North-South IC card data Project City PMO 5,680 increasing 20% Annually transport corridor and Statistics and Bus Company Huaihai-Suixi Road IC card data Project City PMO 120,000 increasing 10% Annually transport corridor and Statistics and Bus Company Lu’an North-South Project City PMO 50,000 increasing 15% Annually Observations transport corridor and Bus Company Wuhu North-South Project City PMO 210,000 increasing 15% Annually Observations transport corridor and Bus Company 2b. Annual bus ridership

(urban area) (thousand) IC card data Project City PMO Anqing 38,300 increasing 30% Annually and Statistics and Bus Company IC card data Project City PMO Huaibei 107,800 increasing 20% Annually and Statistics and Bus Company IC card data Project City PMO Lu’an 44,100 increasing 30% Annually and Statistics and Bus Company IC card data Project City PMO Wuhu 135,400 increasing 20% Annually and Statistics and Bus Company

34 Table A3.2 (continued) 3. Lower travel times by bus Project City PMO between selected points (min) and Bus Company 3 months before Anqing North-South transport and after Project City PMO corridor （from Railway Station 20 19 construction Surveys and Bus Company to Yanjiangsi station） Mid-term and complement 3 months before Huaihai-Suixi Road transport and after Project City PMO corridor （from Dongganglou 30 27 construction Surveys and Bus Company Interchange to Liuqiao Line） Mid-term and complement 3 months before Lu’an North-South Transport and after Project City PMO corridor （from Dabieshan Road 12 9 construction Surveys and Bus Company to North Meishan Road） Mid-term and complement 3 months before Wuhu North-South transport and after Project City PMO corridor （from Tianmen Road 43 31 construction Surveys and Bus Company to Eshan Road） Mid-term and complement

35 Table A3.3: Key Performance Indicators - Results Data Collection and Reporting Baseline Completion Data Results Indicators for Each Component Frequency Responsibility for 2008 Year Collection & Reports Data Collection Instruments Component 1 1a. Distance between safe crossings (m) Anqing North-South Transport Corridor 500 300 Annually Progress report Project City PMO Huaihai-Suixi Road Transport Corridor 900 300 Annually Progress report Project City PMO Lu’an North-South Transport Corridor 810 300 Annually Progress report Project City PMO Wuhu North-South Transport Corridor 800 350 Annually Progress report Project City PMO 1b. Number of safe pedestrian crossings implemented Anqing 0 10 Annually Progress report Project City PMO Huaibei 0 30 Annually Progress report Project City PMO Lu’an 0 15 Annually Progress report Project City PMO Wuhu 0 50 Annually Progress report Project City PMO 1c. Number of bus off-street parking spaces Anqing 0 229 Annually Progress report Project City PMO Huaibei 0 248 Annually Progress report Project City PMO Lu’an 0 120 Annually Progress report Project City PMO Component 2 2a. Number of km of new road completed Anqing (East Yanjiang Rd) 0 1.5 Annually Progress report Project City PMO Huaibei (Tuohe Rd Cuifeng South Rd,) 0 7 Annually Progress report Project City PMO Lu’an (Bagongshan Rd, Xicheng Rd, Pihenan Rd, 0 13 Annually Progress report Project City PMO Longhezhong Rd) Wuhu (Third Ring Rd） 0 7 Annually Progress report Project City PMO

36 2b. Number of km of old road reconstruction Anqing (Huxin Rd, Shuguang Rd) 0 5 Annually Progress report Project City PMO Huaibei (Huaihai Rd, Suixi Rd) 0 7 Annually Progress report Project City PMO Component 3 3a. Coverage % population with access to bus stop within 300/500 meters (city proper) Project City PMO Anqing 41%/63% 50%/90% Annually Progress report and Bus Company Project City PMO Huaibei 49%/72% 50%/90% Annually Progress report and Bus Company Project City PMO Lu’an 29%/85% 50%/90% Annually Progress report and Bus Company Project City PMO Wuhu 49%/77% 50%/90% Annually Progress report and Bus Company 3b. Number of buses in service in urban area Project City PMO Anqing 292 500 Annually Progress report and Bus Company Project City PMO Huaibei 287 500 Annually Progress report and Bus Company Project City PMO Lu’an 260 400 Annually Progress report and Bus Company Project City PMO Wuhu 803 1,000 Annually Progress report and Bus Company Progress APMO & Component 4 Annually report Traffic Police Dept 1. Number of people completing study tours/ 0 40 Annually Progress report Provincial PMO training/ seminars 2. Number of plans/strategies adopted using 0 3 Annually Progress report Provincial PMO outputs of Capacity Building component

37 Table A3.4: Other Indicators that will be Monitored Data Collection and Reporting Baseline Other Results Indicators Frequency, Data Collection Responsibility for 2008 Reports Instruments Data Collection O1. Fatality rate in city proper

(urban area road deaths per 10,000 MV) Fatality data and Project City PMO and Anqing 1.2 Annually MV registrations Traffic Police Dept. Fatality data and Project City PMO and Huaibei 10.0 Annually MV registrations Traffic Police Dept. Fatality data and Project City PMO and Lu’an 5.0 Annually MV registrations Traffic Police Dept. Fatality data and Project City PMO and Wuhu 8.0 Annually MV registrations Traffic Police Dept. O2. Number of km of bus lane implemented Huaibei (Huaihai Rd) 0 Annually Progress report Project City PMO Wuhu (Jiuhua Rd) (Zheshan Rd-Zhongjiang Bridge) 0 Annually Progress report Project City PMO O3. Km of sidewalks improved (one direction) Anqing (Shuguang Rd, Huxin Rd) 0 Annually Progress report Project City PMO Lu’an (Meishan Rd, Jiefang Rd) 0 Annually Progress report Project City PMO O4. Km of bicycle lanes improved Anqing (Shuguang Rd, Huxin rd) 0 Annually Progress report Project City PMO Huaibei (Huaihai Rd, Suixi Rd) 0 Annually Progress report Project City PMO Lu’an (Meishan Rd, Jiefang Rd) 0 Annually Progress report Project City PMO O5. Number of intersection improvements implemented Anqing 0 Annually Progress report Project City PMO Huaibei 0 Annually Progress report Project City PMO Lu’an 0 Annually Progress report Project City PMO Wuhu 0 Annually Progress report Project City PMO

38 Notes on Indicator Methodology

a. Fatalities/Injuries on key corridor The indicator is defined as fatalities (i.e., traffic deaths within 7 days of an accident) and injuries (i.e., injury but no death within 7 days of an accident) on the key corridor.

b. Daily Bus Ridership on corridor Lu’an/Wuhu: The design institutes (Architectural Design and Research Institute of Tongji University & Shanghai Municipal Design Institute Anhui Branch Institute) did detailed surveys in February and April of 2009. They selected one cross-section with the highest bus routes to calculate the bus passenger flow in the peak hour, and then added ridership of bus routes not included in the selected cross-section. They then used the peak hour data to calculate the daily ridership using an expansion factor of 9. The same methodology will be used in the future. Anqing/Huaibei: These data come from the Municipal Bus Company, and are collected from the bus operator’s annual statistics and IC card data.

c. Annual Bus Ridership（100 thousand） The ridership in the urban area includes all riders of urban bus routes. All data from each project city are collected from the bus operator’s annual statistics and IC card data.

d. Travel time by public transport between selected points Anqing: Record the operation time in the evening peak hour (17:00-18:00) on working days from the Railway Station to Yingjiangsi Station. Huaibei: Morning peak hour is 7:00-8:00 and evening peak hour is 16:30-17:30 on working days. Use the average value as the outcome. The survey section is from Dongganglou Interchange to Liuqiao Line. Lu’an: The evening peak hour is 17:00-18:00 on working days. Ride the buses at 17:00, 17:20 and 17:40 to get the operating time from Dabieshan to North Meishan, and use the average value as the data. Wuhu: Data on Jiuhua Road is used (Yijiang Road is under construction). Morning peak hour is 6:30-8:30 and evening peak hour is 16:30-18:30 on working days. Use the average value as the outcome. The survey section is from Tianmenshan Road intersection to Eshan Road intersection.

e. Fatality Rate in city proper (urban fatalities per 10,000 MV) Anqing, Huaibei, Wuhu: The number of MV in city proper (Jian Cheng Qu) is not available because MV registration is done according to administrative area (e.g. district, municipality and province). Instead selected highly urbanized districts are used. For these three cities, the definition of ‘city proper’ includes the following districts: Anqing: Yingjiang District, Daguan District, Yixiu District and Economical Development. Huaibei: Xiangshan District. Wuhu: Yijiang District, Yinghu District and Jiujiang District.

f. Safe Pedestrian Crossing on project corridor A safe pedestrian crossing is a signalized (or otherwise protected) pedestrian crossing.

39 Annex 4: Detailed Project Description CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

1. The Anhui Medium Cities Urban Transport Project covers the medium-sized cities of Anqing, Huaibei, Lu’an and Wuhu. It is a comprehensive urban transport project consisting of four components: • Integrated Corridor Development • Local Access and Freight • Public Transport; and • Capacity Building

2. The key component of the project is Integrated Corridor Development, which consists of an integrated set of activities, coordinating improvements in public transport operations and infrastructure, as well as traffic engineering improvements and safety enhancements for pedestrians and cyclists within a single key corridor in a city. This approach requires more coordination than usual with a range of local entities.

3. The total cost is estimated at $301.0 million, with partial financing from the proposed World Bank loan of $100.0 million. Table A4.1 summarizes the proposed activities:

Table A4.1: Project Components Local Access and Public Transport City Integrated Corridor Development Freight Anqing North-South Transport ALA1. M. Yanjiang APT1. Hongguang Bus Corridor Rd & Dekuan Rd Depot AIC1. Huxin Rd improvement traffic safety APT2. Shizishan Bus Anqing AIC2. Shuguang Rd improvement improvement Depot AIC3. E.Yanjiang Rd APT3. Maintenance Facility Huaibei Huaihai-Suixi Road Transport HLA1. Tuohe Rd HPT1. Tuohe Bus Corridor Maintenance Yard Huaibei HIC1. Huaihai Rd improvement HIC2. Suixi Rd improvement Lu’an North-South Transport Corridor LLA1. Xicheng Rd LPT1. Bus Maintenance LIC1. Jiefang Rd improvement Center Lu’an LIC2. Meishan Rd improvement LLA2. South Pihe Rd LIC3. Bagongshan Rd LLA3. Mid Longhe Rd Wuhu North-South Transport Corridor WIC1. Jiuhua Rd improvement Wuhu WIC2. Yijiang Rd improvement WIC3. Third Ring Rd

4. Integrated Corridor Development (IC) (total cost $201.0 million, including $71.9 million from the proposed World Bank loan). This component addresses the issues of integrating transport development and urban expansion. Each project city has such a component,

40 consisting of some combination of road capacity expansion, improvements in safety and management, and improvements in public transport.

5. Local Access and Freight (LA) (total cost $79.7 million, including $19.3 million from the World Bank loan). This component seeks to remove constraints to freight transport. There will be sub-components in three of the four project cities: Huaibei, Anqing and Lu’an.

6. Public Transport (PT) (total cost $18.8 million, including $7.3 million from the loan). This component primarily addresses the issue of public transport investments to support urban development. It also supports the modernization of business processes related to scheduling and dispatching to improve operating efficiencies. There will be components in three of the project cities: Anqing, Huaibe and Lu’an.

7. Capacity Building (CB) (total cost $1.2 million, including $1.2 million from the loan). This component includes international study tours and training, as well as technical assistance related to the other components. There will be capacity building in all four cities.

ANQING

8. Anqing municipality requests financing for Integrated Corridor Development, Local Access and Freight and Public Transport. The total cost is $35.1 million, including a proposed World Bank subloan of $19.0 million.

9. Integrated Corridor Development: The total cost of this component, which will contribute to improvement of the Anqing North-South Transport Corridor, is $27.0 million. It combines Huxin Road improvement (AIC1), Shuguang Road improvement (AIC2) and construction of East Yanjiang Road (AIC3) (see Table A4.2).

10. Huxin Road improvement (AIC1), involves the establishment of bus stops and bays, as well as the optimization and rationalization of bus services on the 5.4 km between Yibin Road and Yanjiang Road. These measures would improve the organization, speed and quality of bus services.

11. This component will also include traffic calming, pedestrian crossings, pedestrian traffic refuges, barriers, guard rails, widening of sidewalks, as well as channelization and intersection integration improvement and improvements to road infrastructure, especially non- motorized lanes. There will also be inspection and regulation of accident black spots and enhanced education of road users. Increased monitoring of road users will lead to greater enforcement of traffic laws and punishment of violations.

12. Shuguang Road improvement (AIC2) will involve significant re-construction of a 0.6 km section from Huazhong Rd and East Yanjiang Road, as well as the provision of bus stops and bays and the optimization and rationalization of bus services. Two motor vehicle lanes, cycle lanes and sidewalks are planned on a right-of-way of 32 meters.

41 Table A4.2: Summary of Anqing Integrated Improvement of North-South Transport Corridor

No. Improvement Purpose Concrete Measure 1 Bus Speed Bus bays on Huxin Rd, Shuguang Rd & East Yanjiang Rd Service plan on Huxin Rd, Shuguang Rd & East Yanjiang Rd Commitment by bus company to review service plan 2 Bus Service Commitment to consider off-board fare collection at key bus stops Commitment to consider alternative fare strategies (discounted transfers, passes etc.) Commitment to discuss and, as appropriate, modify policy on bus 3 Bus Organization organization, subsidy policy, concession and contractual models Slowing down motorized vehicles on Huxin Rd 5 safe pedestrian crossings including at 3 sensitive locations on Huxin Rd 4 Traffic Safety & East Yanjiang Rd Safety education Intersection Integrated 5 Channelization on Huxin Rd, Shuguang Rd and East Yanjiang Rd Improvement Huxin Road surface reconstruction, lighting, drainage 6 Road Infrastructure Widen sidewalk on Huxin Rd Construct cyclist parking lot on side of Huxin Rd 7 Capacity Reconstruct Shuguang Rd & new construction of East Yanjiang Rd

13. East Yanjiang Road (AIC3): the construction of 0.9 km of East Yanjiang Road from Huxin Road to Shuguang Road will lead to increased traffic capacity, as well as provision of lanes for cyclists and pedestrians. Two motor vehicle lanes as well as cycle lanes and sidewalks are planned on a 25m right-of-way.

14. Local Access and Freight: The total cost of this component is $1.3 million. It consists of improvement of safety management on Yanjiang Middle Road (channelization of Longshan Road and Jianshe Road intersections) and Dekuan Road (pedestrian facilities and intersection improvements at 6 locations) (ALA1) and will feature channelization, pedestrian crossings (especially at sensitive locations such as schools), electronic monitoring facilities and improved traffic markings. All of these measures will increase the level of traffic and pedestrian safety.

15. Public Transport: The total cost of this component is $6.5 million. It involves construction of Hongguang Bus Depot (APT1) and of Shijishan Bus Depot (APT2), and establishment of some road maintenance facilities (APT3).

HUAIBEI

16. Huaibei municipality requests financing for Integrated Corridor Development, Local Access and Freight and Public Transport. The total cost is $58.3 million, including a subloan of $14.0 million.

42 17. Integrated Corridor Development: The total cost of this component, which will contribute to improvement of the Huaihai-Suixi Road Transport Corridor, is $12.1 million. It consists of the Huaihai Road improvement (HIC1), and the Suixi Road improvement (HIC2) (see Table A4.3).

Table A4.3: Summary of Huaibei Integrated Improvement of Huaihai-Suixi Road Transport Corridor

No. Improvement Purpose Concrete Measure Bus priority lane on Huaihai Rd 1 Bus Speed Intersection priority on Huaihai Rd & Suixi Rd Bus bays on Huaihai Rd, and Suixi Rd Bus stop spacing adjustment Commitment by bus company to review service plan 2 Bus Service Commitment to consider off-board fare collection at key bus stops Commitment to consider alternative fare strategies (discounted transfers, passes etc.) Commitment to discuss and, as appropriate, modify policy on bus 3 Bus Organization organization, subsidy policy, concession and contractual models. Median separators on Huaihai Rd & Suixi Rd 12 street crossings on Huaihai Rd, and Suixi Rd 4 Traffic Safety 2 sensitive locations on Huaihai Rd & Suixi Rd Safety separators on Huaihai Rd & Suixi Rd Safety education ‘No Left Turn’ on Huaihai Rd 5 Traffic Management Cancel Side Parking on Huaihai Rd Electronic monitoring on Huaihai Rd Intersection Integrated 6 Channelization on Huaihai Rd, and Suixi Rd Improvement

18. Huaihai Road improvement (HIC1) includes the provision of bus priority lanes, (extended to intersections), bus stops and bays, signaling priority, as well as the rationalization and optimization of bus routes, including improved strategies on fares and transfers on 2.35 km of Huaihai Road between Suixi Road and Dongganglou Interchange. These measures will improve the speed and quality of bus services.

19. This component will also provide median separators, pedestrian crossings, guard rails and traffic calming and monitoring facilities, and channelization. They will lead to enhanced traffic safety and management, as well as intersection integration improvement. Traffic safety features will also be introduced at sensitive sites, such as schools. There will also be inspection and regulation of accident black spots, enhanced education and increased monitoring of road users, leading to greater enforcement of traffic laws and punishment of violations.

43 20. Suixi Road improvement (HIC2) focuses on the 4.5 km section between Liuqiao Line and Huaihai Road and includes features such as the provision of bus priority lanes that will result in improvement in the quality of bus services, as well as median separators and pedestrian crossings which will increase pedestrian and traffic safety and will enhance traffic management. In addition, specific traffic calming and monitoring facilities will be installed at sensitive sites such as schools.

21. Local Access and Freight: The total cost of this component is $36.8 million. It will consist of the construction of 5.9 km of Tuohe Road (HLA1) and of 1.2 km of South Cuifeng Road (HLA2). Tuohe Rd will be developed on 45m right-of-way with two motor vehicle lanes and one cycle lane in each direction. South Cuifeng Road will be developed on 35m right-of- way and also with two motor vehicles and one cycle lane in each direction.

22. Tuohe Road (HLA1) and South Cuifeng Road (HLA2) feature the construction of bus bays, the use of channelization and the provision of pedestrian crossings.

23. Public Transport: The total cost of this component is $9.2 million. It entails construction of the Tuohe bus maintenance yard (HPT1), four bus terminals (HPT2) and 97 bus stops (HPT3).

LU’AN

24. Lu’an municipality requests financing for Integrated Corridor Development, Local Access and Freight and Public Transport. The total cost will be $59.4 million, including a subloan of $15.0 million.

25. Integrated Corridor Development: The total cost of this component, which will contribute to improvement of the Lu’an North-South Transport Corridor, is $14.4 million. This involves improvement of Jiefang Road (LIC1), Meishan Road (LIC2), and construction of Bagongshan Road (LIC3) (see Table A4.4).

26. Jiefang Road improvement (LIC1) includes the provision and establishment of bus bays and the optimization of bus services, especially strategies on fares and transfers. These measures will lead to improvements in the organization, speed and quality of bus services. The project will focus on the 3.5 km section from Dabieshan Road to North Meishan Road. The component will also have pedestrian crossings, especially at sensitive sites, as well as traffic calming, median separators, guard rails, pedestrian refuge islands, channelization, and general intersection integration improvements as well as targeted road safety education.

27. Meishan Road improvement (LIC2) will include enhancement of bus stations and optimization of bus services, especially with regard to fares and transfers. It will also install median separators, median pedestrian blocks and channelization. The project will focus on the 3.0 km section from Dabieshan Road to North Jiefang Road.

44 Table A4.4: Summary of Lu’an Integrated Improvement of North-South Transport Corridor No. Improvement Purpose Concrete Measure 1 Bus Speed Bus bays on Jiefang Rd & Bagongshan Rd Station spacing adjustment on Jiefang Rd & Meishan Rd Commitment to review service plan by bus company 2 Bus Service Commitment to consider off-board fare collection at key bus stops Commitment to consider alternative fare strategies (discounted transfers, passes, etc.) Commitment to discuss and, as appropriate, modify policy on bus 3 Bus Organization organization, subsidy policy, concession and contractual models. 4 Bus Fixed Infrastructure Bus stop improvement on Jiefang Rd & Meishan Rd 5 Road Bicycle parking on Jiefang Rd Slowing down the motorized vehicles on Jiefang Rd & Meishan Rd Green separator

Traffic Safety 35 safe pedestrian crossings on Jiefang Rd & Meishan Rd 6 5 sensitive locations on Jiefang Rd Safety education Entrance management Traffic Management 7 Sidewalk management Intersection Integrated 8 Channelization on Jiefang Rd & Meishan Rd Improvement 9 Capacity New construction of Bagongshan Rd

28. Bagongshan Road (LIC3): Construction of Bagongshan Road, with a total length of 2.2 km, will lead to increased traffic capacity and enhanced traffic management. Two motor-vehicle lanes, as well as cycle lanes and sidewalks, will be provided on the 2.2 km section between Renmin Road and Huashan Road on a 45m right-of-way.

29. Local Access and Freight: The total cost of this component is $41.6 million. It will consist of the construction of Xicheng Road (LLA1), South Pihe Road (LLA2), and Middle Longhe Road (LLA3). It will also feature bus stations and taxi parking areas, pedestrian mid- blocks, street crossings, and facilities for disabled people (see Table A4.5).

Table A4.5: Lu’an Local Access and Freight No of Red Traffic Traffic Road Level Road section Length lanes Line Signal Monitoring S. Pihe Rd - Xicheng Road Secondary 4 30m 3.3km 4 4 Huoshan Rd M. Pihe Rd - Pihenan Road Secondary 2 20m 3.5km 4 2 Xihuan Rd Middle Longhe W. Longhe Rd- Arterial 2 30m 6.5km 9 7 Road E. Longhe Rd

45 30. Public Transport: The total cost of this component is $3.1 million. It entails construction of bus maintenance facilities (LPT1), which will provide service for eight bus routes and approximately 150 buses.

WUHU

31. Wuhu municipality requests financing only for the Integrated Corridor Development, namely the North-South Transport Corridor, which consists of: improvement of Jiuhua Road (WIC1) and of Yijiang Road (WIC2) and construction of the new Third Ring Road (WIC3). Their total cost is $148.2 million, including a subloan of $52.0 million (see Table A4.6).

Table A4.6: Summary of Wuhu Integrated Improvement of North-South Transport Corridor Improvement No. Concrete Measure Purpose Bus priority lane on Jiuhua Rd & Yijiang Rd 1 Bus Speed Intersection priority on Jiuhua Rd Bus bays on Jiuhua Rd, Yijiang Rd & Third Ring Rd Bus network optimization on Jiuhua Rd & Yijiang Rd Off-board fare collection at key bus stops on Jiuhua Rd 2 Bus Service Expand the service time and frequency Commitment by bus company to review service plan Commitment to consider alternative fare strategies (discounted transfers, passes etc.) Commitment to discuss and, as appropriate, modify policy on bus 3 Bus Organization organization, subsidy policy, concession and contractual models. Median separator on Jiuhua Rd Slowing down motorized vehicles on Jiuhua Rd 47 safe pedestrian crossings on Jiuhua Rd, Yijiang Rd & Third Ring Rd 4 Traffic Safety Mid-block pedestrian crossings 2 sensitive locations Safety education 5 Traffic Management Traffic monitoring facilities on Yijiang Rd & Third Ring Rd Intersection Integrated 6 Channelization on Yijiang Rd & Jiuhua Rd Improvement 7 Capacity New construction of Third Ring road

32. Jiuhua Road improvement (WIC1) involves the establishment of bus priority lanes, bus stops and bays, and signaling priority, as well as optimization and rationalization of bus routes, including improved strategies on fares and transfers on the 10.9 km between Tianmenshan Road and Eshan Road. These measures aim to improve the organization, speed and quality of bus services.

46 33. It will provide median separators, pedestrian crossings, traffic calming and monitoring facilities and channelization, as well as intersection integration improvement. These measures will lead to enhanced traffic safety and management. WIC1 will also feature inspection and regulation of accident black spots, enhanced education of road users, and increased monitoring of road traffic users, leading to greater enforcement of traffic laws and punishment of violations.

34. Yijiang Road improvement (WIC2) involves the establishment of bus stations and bus bays as well as the optimization and rationalization of bus routes on the 9.2 km section between Tianmenshan Road and Eshan Road. This component will also provide pedestrian crossings, traffic monitoring facilities and intersection integration improvement. As with the preceding component, this will result in increased pedestrian safety and enhanced traffic management.

35. Third Ring Road (WIC3): construction of 7.3 km of the southern section of the Third Ring Road, connecting in the north to the southern end of the Qingyi Bridge under construction (at the intersection of Limin Road) and to the south at the intersection of Wunan Road. The road is designed on a cross-section of about 53.5 meters and includes 3 motor vehicle lanes in each direction, as well as local access for bicycles.

36. Capacity Building. Across all four project cities, the capacity building component has been designed as a series of structured dialogs on selected topics that would complement the investment components. As Tables A4.7 and A4.8 illustrate, a selection of broad topic areas related to public transport, traffic safety and management, road network planning, municipal financing and environmental management have been identified. On each topic the Bank will support the cities to explore and identify best Chinese and international practice relevant to their actual situations. The cities have committed to exploring available practice and to enhancing their current practice based on their findings. They will conduct study tours and, as appropriate, commission reports, and conduct workshops to discuss their findings. The Bank will finance study tours and support workshops timed to coincide with supervision missions (with appropriate experts). As needed, the Bank will also finance the studies needed to inform the city decision- makers. Additionally, the Bank will finance a limited amount of office equipment (US$36,600 in all).

47 Table A4.7: Proposed Capacity Building Topics and Timing Public Transport (scheduled tentatively for 2010 and 2011) Management Optimization Public Transport Priority Policy Bus Lanes & BRT (network & one demonstration line) Fares / Transfer Traffic Management (scheduled tentatively for 2012) Motorized & NMT Parking Planning Traffic Safety Analysis & planning & management ITS Management (signals, monitoring) Road Network / Land Use (scheduled tentatively for 2011) Travel Demand Characteristics (Modeling and Forecasting) Land Use and Transport – Transit Oriented Development (Macro Perspective & Site Planning) Environment Environmental issues related to transportation Financial Financial Planning for Urban Transport, Public Transport WB Funds Flow, Withdrawals, Charges and Disbursement Infrastructure Construction, Design, Implementation, Management, Maintenance WB Project Guidance and Procedures Policy, Project Management and Institutional Enforcement

48

Table A4.8: Proposed Capacity Building Contracts No. Component Timing 1. Project Management Consulting CB 1.1 Financial elements of project management for APMO 2010.03 CB 1.2 Technical elements of project management for APMO 2. International Tours CB2.1 Urban transportation and financial planning 2010.12 CB2.2 Road maintenance technology/management 2010.09 CB2.3 Road safety management 2012.03 BRT & bus priority & bus reform, optimization/fares & interchange CB2.4 2011.05 strategy 3. National Tours CB 3.1 BRT & bus priority construction and management 2010.09 Identification, project appraisal, implementation and management of CB 3.2 2011.03 WB projects CB 3.3 Bidding, construction and management training (local) 2010.04 4. Research CB 4.1 Traffic models & transportation planning for project cities 2011.07 5. Equipment CB 5.1 Office facilities 2010.05

49 Annex 5: Project Costs CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

Table A5.1: Cost Summary (in $ million) Component Anqinq Huaibei Lu'an Wuhu Integrated Corridor Development 26.97 12.12 14.42 147.52 Local Access and Freight 1.31 36.75 41.59 0.00 Public Transport 6.52 9.19 3.10 0.00 Capacity Building 0.26 0.22 0.24 0.52 Front-End Fee 0.05 0.04 0.04 0.13 Sub-Total 35.10 58.32 59.38 148.17 Total 300.97

Table A5.2: Loan Allocation by Municipality and Category % of Loan Expenditure Category Allocation to be ($ million) Financed (1) Anqing's Part of the Project 19.00 (a) Civil Works 16.43 80% (b) Equipments 2.28 100% (c) Consulting 0.25 100% (d) Front-end Fee 0.05

(2) Huaibei's Part of the Project 14.00 (a) Civil Works 12.56 31% (b) Equipments 1.19 100% (c) Consulting 0.21 100% (d) Front-end Fee 0.04

(3) Lu'an's Part of the Project 15.00 (a) Civil Works 11.80 45% (b) Equipments 2.94 100% (c) Consulting 0.23 100% (d) Front-end Fee 0.04

(4) Wuhu's Part of the Project 52.00 (a) Civil Works 50.43 45% (b) Equipments 0.93 100% (c) Consulting 0.51 100% (d) Front-end Fee 0.13 TOTAL 100.00

50 Table A5.3: Anqing Cost Summary (in $ million) Integrated Corridor Development Total WB China WB Share Civil works 16.15 12.48 3.67 77.2% Equipment 1.35 1.35 0 100.0% Consulting 0.18 0 0.18 Land acquisition & resettlement 4.56 0 4.56 Others 1.84 0 1.84 Contingency 2.44 0 2.44 Financing cost 0.45 0 0.45 Subtotal 26.97 13.83 13.14 51.3% Local Access and Freight Total WB China WB Share Civil works 0.28 0.22 0.06 77.2% Equipment 0.74 0.74 0 100.0% Consulting 0.01 0 0.01 Land acquisition & resettlement 0.00 0 0.00 Others 0.11 0 0.11 Contingency 0.14 0 0.14 Financing cost 0.03 0 0.03 Subtotal 1.31 0.96 0.35 73.2% Public Transport Total WB China WB Share Civil works 4.83 3.73 1.10 77.2% Equipment 0.18 0.18 0 100.0% Consulting 0.05 0 0.05 Land acquisition & resettlement 0.11 0 0.11 Others 0.53 0 0.53 Contingency 0.70 0 0.70 Financing cost 0.13 0 0.13 Subtotal 6.52 3.91 2.61 59.9% Capacity Building Total WB China WB Share Equipment 0.01 0.01 0 100.0% Consulting 0.25 0.25 0 100.0% Subtotal 0.26 0.26 0 100.0% Total Component 35.06 18.95 16.10 54.1% Front-end Fee 0.0475 0.0475 0 100.0% Total 35.10 19.00 16.10 54.1%

51 Table A5.4: Huaibei Cost Summary (in $ million) Integrated Corridor Development Total WB China WB Share Civil works 8.29 2.57 5.72 31% Equipment 0.63 0.50 0.13 100.0% Consulting 0.09 0 0.09 Land acquisition & resettlement 0.65 0 0.65 Others 0.85 0 0.85 Contingency 1.22 0 1.22 Financing cost 0.38 0 0.38 Subtotal 12.11 3.07 9.04 25.3% Local Access and Freight Total WB China WB Share Civil works 25.57 7.92 17.65 31% Equipment 0.38 0.38 0 100.0% Consulting 0.26 0 0.26 Land acquisition & resettlement 3.43 0 3.43 Others 2.46 0 2.46 Contingency 3.54 0 3.54 Financing cost 1.12 0 1.12 Subtotal 36.76 8.3 28.46 22.6% Public Transport Total WB China WB Share Civil works 6.32 1.96 4.36 31% Equipment 0.30 0.30 0 100.0% Consulting 0.07 0 0.07 Land acquisition & resettlement 0.69 0 0.69 Others 0.63 0 0.63 Contingency 0.90 0 0.90 Financing cost 0.28 0 0.28 Subtotal 9.19 2.26 6.93 24.6% Capacity Building Total WB China WB Share Equipment 0.01 0.01 0 100.0% Consulting 0.21 0.21 0 100.0% Subtotal 0.22 0.22 0 100.0% Total Component 58.29 13.97 44.32 24.0% Front-end Fee 0.035 0.035 0 100.0% Total 58.32 14.00 44.32 24.0%

52 Table A5.5: Lu’an Cost Summary (in $ million) Integrated Corridor Development Total WB China WB Share Civil works 5.21 2.23 2.98 42.8% Equipment 1.28 1.28 0 100.0% Consulting 0.97 0 0.97 Land acquisition & resettlement 4.84 0 4.84 Others 0.27 0 0.27 Contingency 1.26 0 1.26 Financing cost 0.60 0 0.60 Subtotal 14.42 3.51 10.91 24.3% Local Access and Freight Total WB China WB Share Civil works 20.55 8.80 11.75 42.8% Equipment 1.25 1.25 0 100.0% Consulting 3.26 0 3.26 Land acquisition & resettlement 10.02 0 10.02 Others 0.90 0 0.90 Contingency 3.61 0 3.61 Financing cost 2.00 0 2.00 Subtotal 41.59 10.05 31.54 24.2% Public Transport Total WB China WB Share Civil works 1.80 0.77 1.03 42.8% Equipment 0.40 0.40 0 100.0% Consulting 0.33 0 0.33 Land acquisition & resettlement 0.00 0 0.00 Others 0.09 0 0.09 Contingency 0.29 0 0.29 Financing cost 0.20 0 0.20 Subtotal 3.10 1.17 1.93 37.7% Capacity Building Total WB China WB Share Equipment 0.01 0.01 0 100% Consulting 0.23 0.23 0 100% Subtotal 0.24 0.24 0 100% Total Component 59.35 14.96 44.38 25.2% Front-end Fee 0.0375 0.0375 0 100% Total 59.38 15.00 44.38 25.3%

53 Table A5.6: Wuhu Cost Summary (in $ million) Integrated Corridor Development Total WB China WB Share Civil works 113.31 50.43 62.88 44.5% Equipment 0.92 0.92 0 100.0% Consulting 1.14 0 1.14 Land acquisition & resettlement 7.07 0 7.07 Others 9.74 0 9.74 Contingency 15.47 0 15.47 Financing cost 3.80 0 3.80 Subtotal 151.44 51.35 96.17 34.8% Local Access and Freight Total WB China WB Share Civil works Equipment Consulting Land acquisition & resettlement Others Contingency Financing cost Subtotal Public Transport Total WB China WB Share Civil works Equipment Consulting Land acquisition & resettlement Others Contingency Financing cost Subtotal Capacity Building Total WB China WB Share Equipment 0.01 0.01 0 100.0% Consulting 0.51 0.51 0 100.0% Subtotal 0.52 0.52 0 100.0% Total Component 148.04 51.87 96.17 35.0% Front-end Fee 0.13 0.13 0 100.0% Total 148.17 52.00 96.17 35.1%

54

Notes: 1. For Integrated Corridor Development, across the four project cities, World Bank financing is a varying share of the base civil works cost. 2. Across the four cities, Bank is financing 100 percent of Equipment and Capacity Building. 3. Front-end Fee at 0.25 percent is $0.25 million. The total cost for these 4 cities includes the front-end fee. 4. Calculation of contingencies: (a) The design institutes calculated contingencies as per the Ministry of Construction’s contingency regulations at 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 cost 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 the Ministry of Construction’s regulations yielded a slightly, but not materially, higher estimate. This estimate has been used in the final cost table.

55 Annex 6: Implementation Arrangements CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

1. This Annex provides further details on implementation arrangements to complement information in Section III of the main text.

2. Anhui Provincial Project Leading Group. Anhui Province, through a project leading group, is responsible for providing overall leadership, policy guidance and institutional coordination as required on project preparation and implementation. The leading group has appointed the deputy governor of Anhui Province to be in charge of construction as the director of the group; the vice secretary general will be appointed to be in charge of construction, and the director of the Anhui Provincial Construction Department as the vice-director.

3. Anhui Provincial Project Management Office (APMO). Anhui Provincial Construction Department established the Foreign Investment Utilization and Key Project Management Office of the Construction Department of Anhui Province (referred to hereafter as Provincial PMO). It approves, supervises and manages the foreign investment utilization projects and key projects of urban and rural construction within the province. A special implementation group has been established with the APMO to manage implementation of this urban transport project.

Provincial Level Implementing Agencies

4. The main province-level implementing agencies includes:

• Anhui Provincial Development and Reform Committee (ADRC) • Anhui Provincial Finance Bureau (APFB) • Anhui Provincial Construction Department (APCD) • Anhui Provincial Environmental Protection Bureau (APEMB) • Anhui Provincial State Land and Resources Department (APSLRD) . City Level Implementing Agencies

5. Following the example of the provincial leading group, each participating city has established a leading group (LG). These groups are responsible for providing policy guidance and delegating project responsibilities to relevant entities. The leading groups are chaired by the vice mayor who oversees urban construction activities. Under their overall direction, the municipal PMOs manage and coordinate day-to-day project preparation and implementation. The main members include:

• Municipal Development and Reform Committee (MDRC) • Municipal Financial Bureau (MFB) • Municipal Environmental Protection Bureau (MEPB) • Municipal Construction Committee (MCC). • Municipal Infrastructure Investment Company (MIIC) • Municipal Traffic Police Department (MTPD)

56 • Municipal Pricing Bureau (MPB) • Municipal State Land and Resource Bureau (MSLRB) • Municipal Resettlement Office (MRO) • Municipal Project Management Offices (MPMO)

6. City Project Management Offices: PMOs are established by the city implementing entities. They are responsible for the day-to-day management and coordination of project preparation and implementation. Figure A6.1 outlines the relationship among the various agencies responsible for administering and implementing the project in Anhui.

Figure A6.1: Reformed Structure of Institutional Set-up

Provincial project leading group

ADRC APFB APCD APEMB APSLRD

World Bank APMO

Urban Construction Construction Construction Investment Department Department Department Company of of Huaibei of Lu’an of Wuhu Anqing Municipality Municipality Municipality

Anqing PMO Huaibei PMO Lu’an PMO Wuhu PMO

57 Implementation Arrangement by Project Component at City Level

7. Under each municipal PMO there will be a number of project implementing units (PIU) responsible for signing contracts and managing day-to-day implementation of particular components (see Table A6.1). Further, APMO will enter into an agreement with these PIUs through the municipal PMOs for the purposes of coordinating the overall implementation of the project.

Table A6.1: Implementing Entities (PIUs) for Each Project Component by Project City City Project Component Component Leading Line Agencies (PIU) AIC1. Huxin Rd improvement Municipal Investment Company AIC2. Shuguang Rd improvement AIC3. E. Yanjiang Rd ALA1. West Yanjiang Rd & Dekuan Anqing Rd traffic safety improvement APT1. Hongguang bus depot APT2. Shizishan bus depot APT3. Maintenance facility HIC1. Huaihai Rd improvement Construction Committee HIC2. Suixi Rd improvement HOI1. Tuohe Rd Huai HOI2. Cuifeng South Rd bei HPT1. Tuohe bus maintenance yard HPT2. Four bus terminals HPT3. 97 bus stops LIC1. Jiefang Rd improvement Municipal Investment Company LIC2. Meishan Rd improvement LIC3. Bagongshan Rd Lu’an LLA1. Xicheng Rd LLA2. S. Pihenan Rd LLA3. Longhezhong Rd LPT1. Bus maintenance center WIC1. Jiuhua Rd improvement Construction Investment Company Wuhu WIC2. Yijiang Rd bus lane WIC3. Third Ring Rd

8. Implementation arrangements for the Capacity Building component. APMO will play a significant role coordinating all capacity building activities and will be responsible for implementing selected activities. In particular, APMO will sign contracts for, and lead the procurement of, all contracts for project management consulting (CB1.1, CB1.2), and international and domestic study tours (CB2, CB3). The city-specific municipal PMOs will manage their own procurement for all city-specific consulting and equipment.

9. Additionally, APMO under the guidance of the provincial leading group will provide overall supervision and coordination to ensure the participation of all relevant government agencies in the component activities. City-specific PMOs, under the guidance of the city LG, will take the lead in ensuring the participation of the appropriate government agencies and officials in each city.

58 10. There are three sources of funding for the project: (a) the World Bank loan; (b) the project cities’ municipal budget allocation; and (c) domestic bank loans. The budget allocations are funds sourced by the municipalities from their own revenues.

11. 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 Bank loan to Anhui Province through APFB under an on-lending agreement satisfactory to the Bank, with similar terms and conditions to those of the Bank loan. The domestic bank loans will be managed by APFB.

12. Project Reporting. APMO will establish a project reporting system to monitor the physical and financial progress of the Project, and to provide semi-annual progress reports to the Bank on key indicators. 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 February 15, 2011.

13. The Mid-Term Review for the Project will be undertaken no later than 36 months after Project Effectiveness.

59 Annex 7: Financial Management and Disbursement Arrangements CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

Summary

1. The World Bank has assessed the adequacy of the Project’s financial management system. The assessment, based on guidelines issued by the Financial Management Sector Board on November 3, 2005, concluded that the project meets minimum Bank financial management requirements, as stipulated in OP/BP 10.02. In the Bank’s judgment, the project will maintain adequate financial management (FM) arrangements acceptable to the Bank and, 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 will be used for the purposes for which the loan is granted. Financial management risk is defined as the risk that the 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 the project, a “moderate” 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 Bank loan proceeds will flow from the Bank to a project designated account (DA) to be set up at and maintained by APFB, and then to the implementing agencies through respective municipal finance bureaus. The Bank loan agreement will be signed between the Bank and the People’s Republic of China through its Ministry of Finance (MOF), and the on-lending agreement will be signed between MOF and the Anhui Provincial Government through its APFB. APFB will further on-lend to the four project city governments (Anqing, Huaibei, Lu’an and Wuhu) through their municipal finance bureaus, who finally on-lend to the respective implementing entities. Counterpart funds are composed of local government appropriations and domestic financing.

3. No outstanding audits or audit issues exist with any of the above implementing agencies involved in the proposed project. However, the task team will continue to be attentive to financial management matters during project supervisions.

Country Issues

4. To date, no Country Financial Accountability Assessment has been carried out by the World Bank for China. The World Bank’s knowledge of the system is however fairly comprehensive, thanks to several studies carried out by the Government and others.6 Based on these studies and material produced by others, our observations of developments in the areas of public expenditures, accounting and auditing, and World Bank experience with China projects for the past several years suggests that substantial achievement in these areas has been made and further improvement is expected in the next few years. This is work in progress and as economic

6 “Financial Management and Governance Issues in China”, Asian Development Bank 2000 Christine Wong, “Public Sector Management Issues in China”, World Bank 2005 Lou Jiwei, “Government Budgeting and Accounting Reforms in China”, 2001 OECD, “Challenges for China’s Public Spending”, Chapter 1 Christine Wong, “China Provincial Public Expenditure Review”, World Bank 2000 World Bank Country Economic Memorandum: “Managing Public Expenditures for Better Results”, 2000

60 reform further unfolds, the Government of China has come to realize the importance of establishing and maintaining an efficient and effective market mechanism to ensure transparency and accountability, and minimize potential for fraud or corruption.

5. Due to a rather unique arrangement by the Government of China, funding of World Bank projects is controlled and monitored by the Ministry of Finance and its extension at sub-national level (i.e., finance bureaus at provincial, municipal/prefecture and county level). However, project activities are usually carried out by implementing entities of a specific industry or sector due to the level and complexity of expertise involved. While this segregation of duties provides added fiduciary assurance, the above arrangement then usually requires more coordination, as the multi-level management of the funding and implementation mechanism sometimes works to the detriment of smooth project implementation.

Summary Project Description

6. The estimated project cost is $301 million and the proposed Bank loan is $100 million. A detailed description is to be found in Annex 4.

Audit Arrangements

7. 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 Anhui Provincial Audit Office (APAO) has been identified as auditor for the project. Annual audit reports will be issued by APAO. The Bank currently accepts audit reports issued by China National Audit Office or provincial/regional audit bureaus/offices for which China National Audit Office is ultimately responsible.

8. The consolidated annual audit report of project financial statements will be due to the Bank within 6 months after the end of each calendar year and will be the responsibility of APMO. In addition, the annual audit report on the financial position and the operational result of the city- level PMOs and PIUs will be due to the Bank within six months after the end of each calendar year. Such audit report and financial statements are not for fiduciary requirements, but rather for sustainability purposes.

Risk Assessment and Mitigation

9. The following risks with corresponding mitigating measures have been identified:

61 Risk Risk Incorporated Risk Risk Rating Mitigating Measures Rating before after Mitigating Mitigating Measures Measures Inherent Risk Country level Modest Continuous dialogue with related government Modest entities and technical assistance from the Bank will help the government to improve its public sector financial 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 the government system cannot be used, the Bank's specific requirements will be embedded into the project financial management system. Entity Level Substantial Though the Anhui Provincial Management Modest Office (APMO) has previous experience working with the Bank, the municipal PMOs and PIUs of the four project cities are inexperienced with Bank- financed projects. However, APFB’s close monitoring and the Bank’s regular supervision, to some extent, can mitigate this risk. In addition, well- designed training sessions will be provided to all project financial staff before and during project implementation. Project Level Substantial Project activities span four cities and will be Modest implemented by a local PIU in each project city. Currently there is no uniform project financial management arrangement in place. Thus a well prepared project financial management manual will be prepared by APMO and finalized before project negotiation. The manual will standardize financial management and disbursement work and provide useful guidance to financial staff at each level. In addition, good practice and knowledge sharing from other Bank projects will strengthen the project implementing agencies’ capacity. Control Risk • Budgeting Modest Procedures regarding budget preparation and Modest execution have been agreed by the Bank and government. The FM team will review their execution status during project implementation and help them to improve any identified weak areas.

62 • Accounting Modest Accounting policies and procedures are Low already in place. Circular #13 has been issued by MOF and adopted for all World Bank- financed projects. This circular will be documented in the project FM manual for all parties to follow. A well-designed training workshop will be provided to all financial staff before project start. • Internal Modest Detailed internal control procedures, Modest Control including segregation of duties, review and approval procedures, and safeguard of assets, are in place within each PIU. The Bank task team will review actual practice during project implementation. • Funds Flow Modest The Bank loan proceeds will be managed and Low monitored through the finance bureau channels and will include their substantive reviews. The funds flow arrangement is straightforward and the approval processes have been streamlined. To avoid delayed disbursement, related requirements and procedures will be documented in the FM manual and which all agencies will be required to follow. • Financial Modest The format and content of financial Modest Reporting statements have been stipulated by MOF. The project FM manual will specify the format, content and timing requirements for such financial reporting. The consolidated project financial statement will be prepared by APMO with the assistance of APFB. • Auditing Low The external auditor, APAO, has extensive Low experience with previous Bank projects. Overall Substantial Modest

10. Therefore, the overall FM risk rating assigned to this project at the appraisal stage 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.

Funds Flow and Disbursement Arrangements

11. Four disbursement methods are available for the project: (a) advance; (b) reimbursement; (c) direct payment; and (d) special commitment. Supporting documents required for Bank disbursements under the different disbursement methods will be documented in the Disbursement Letter issued by the Bank. Applications will be supported as described below.

12. For reporting eligible expenditures paid from the Designated Account (DA) and for requesting for reimbursement:

63

(a) List of payments against contracts, together with records evidencing eligible expenditures (such as copies of receipts, supplier invoices) for the contracts subject to the Bank’s prior review indicated in the table below; and

Expenditure Category Contracts Equal to or More than US$ Equivalent Civil works 5,000,000 Goods 500,000 Consulting firm 200,000 Individual consultant 50,000 Training All

(b) Statement of Expenditure in the form detailed in the Disbursement Letter for all other expenditures and for contracts not subject to the Bank prior review.

13. Requests for Direct Payment will need to be supported by records evidencing eligible expenditures such as copies of receipts and supplier invoices.

14. Bank loan proceeds will be disbursed against eligible expenditures (taxes included) as noted in the following table:

Category description Amount allocated Percentage Anqing Civil Works 16.43 80 Huaibei Civil Works 12.43 35 Lu’an Civil Works 11.80 45 Wuhu Civil Works 50.43 45 Equipment, consulting and training 8.66 100 (including study tours) Front-end Fee 0.25 Premium on Interest Rate Cap or Interest 0 rate Collar Total 100.00

15. Retroactive financing will be applied for this project. March 1, 2010 has been set as the date of eligible expenditures and $5 million set as the amount eligible for retroactive financing.

16. One Designated Account (DA) in US dollars will be opened at a commercial bank acceptable to the Bank and will be managed by APFB. The ceiling of the DA will be determined and documented in the Disbursement Letter.

17. Funds flow for the Bank loan will follow Bank and MOF requirements, as follows:

64 World Bank

APFB

APMO

MFB

MPMO

PIUs

Withdrawal Applications flow Contractor/ Funds Flow Supplier

18. PIUs will need to submit withdrawal applications to the municipal finance bureau (MFB) to apply for disbursement and simultaneously to MPMO for their reference and filing.

Financial Management and Reporting Arrangements

Strengths

19. APFB has extensive experience with managing designated accounts and is familiar with the disbursement requirements and procedures for Bank-financed projects. The funds flow will be arranged and monitored through the finance bureau channels and will include their substantive review. Additionally, most of the financial staff at APMO and each PIU have experience in construction industry and have adopted accounting policies similar to Circular #13, thus their strong accounting background will benefit project financial management.

Weaknesses and Action Plan

20. Besides the FM risks identified in paragraph 10 above, there is no other significant weakness identified.

65 Implementing Entity

21. A provincial PMO (APMO) at the Anhui Provincial Construction Bureau will provide overall monitoring and will manage the project at the provincial level. APMO is also responsible for preparing the consolidated project financial statements with APFB’s assistance. In the four project cities, Anqing, Huaibei, Lu’an and Wuhu, municipal project management offices (MPMO) have been established to provide policy guidance and coordinate the preparation and implementation of the various project components at local level. For Huaibei, the MPMO will also act as implementing agency. For the other three project cities, the project components will be implemented by local companies. None of these implementing units (PIUs) have any experience with Bank-financed projects. However, these units have been established either within permanent agencies under the municipal construction bureau (such as in the case of Huaibei) or existing state-owned commercial enterprises (i.e., the municipal investment company in the case of Lu’an and Anqing or the municipal construction investment in the case of Wuhu). Thus, they have extensive experience with financial management of construction projects.

Budgeting

22. In accordance with the project implementation plan and construction progress, each project implementing company or agency will prepare an annual budget. This will be reviewed and approved by relevant municipal finance bureau and development reform commission. Based on the approved budget and actual construction progress, the municipal finance bureaus will provide government appropriations, and project companies will mobilize domestic loans. For budget variances arising during execution, necessary authorization and close monitoring will be conducted. Timely and accurate information on variances will be used as the basis for mid-term adjustments.

Accounting

23. 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 of accounting treatment of project activities and covers the following: • Chart of account • Detailed accounting instructions for each project account • Standard set of project financial statements • Instructions on the preparation of project financial statements

24. The above standard set of project financial statements has been agreed between the Bank and MOF and applies to all Bank projects appraised after July 1, 1998 and includes the following: • Balance sheet of the project • Statement of sources and uses of fund by project components • Statement of implementation of loan agreement • Statement of designated account • Notes to the financial statements

66 25. Each PIU will be managing, monitoring and maintaining its respective project accounting records for the component it executes. The project consolidated financial statements will be prepared by APMO with assistance from APFB, and will be submitted to the Bank for review and comment on a regular basis.

26. 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, observation and review of educational background and work experience of the staff identified for financial and accounting positions in APMO and each PIU, the task team noted that although they have no experience of Bank-financed projects, most of them have extensive experience in construction project financial management and are qualified appropriately for the work they are expected to assume. Well designed training sessions will be provided to all project financial staff before project implementation to familiarize them with the Bank’s financial management requirements and disbursement procedures. In addition, during implementation, their capacities will be further strengthened through the Bank’s review and supervision of their financial work.

27. To strengthen financial management capacity and achieve consistent quality of accounting work, a project financial management manual has been prepared. The manual provides detailed guidelines on financial management, including internal controls, accounting procedures, fund and asset management, withdrawal application procedures, financial reporting, and auditing arrangements. The manual will be distributed to all the relevant financial staff before project start.

28. ‘User Friend’ (Yong You), a well-established Chinese accounting software package approved by MOF and widely used throughout the country, will be used by APMO and each PIU to account for project activities and prepare financial reports. The task team will monitor the processing of accounting work closely, especially in the initial stages to ensure that complete and accurate financial information will be provided in a timely manner.

Internal Control and Internal Auditing

29. The related accounting policy, procedures and regulations have been issued by MOF and the FM manual will be issued to uniformly align the financial management and disbursement requirements among the PMOs and PIUs.

30. There is an independent internal audit department under the Anhui Provincial Construction Bureau and the Bank-financed project will be included in their scope for review. During project implementation, the Bank will review these internal audit reports and determine whether the Bank can rely on their work. For each PIU, there is no formal independent internal audit department for the project. However, this will not have an impact on the project’s financial management, as the provincial and municipal finance bureaus’ monitoring and management, together with the annual external audit, will serve as the mechanism to ensure that financial management controls are functioning appropriately.

67 Financial Reporting

31. The format and content of project financial reports represents the standard project financial reporting package agreed to between the Bank and MOF. They have been discussed and agreed to with all concerned parties.

32. Each PIU will prepare project financial statements on the components it implements, which will then be used by APMO for preparing the consolidated project financial statements. These will be submitted to the Bank for review and comment on a semi-annual basis. In line with the updated World Bank Operation Manual, the interim unaudited consolidated project financial statements should be prepared and furnished to the Bank as part of progress reports no later than 45 days after the end of each calendar year semester in form and substance satisfactory to the Bank (prior to August 15 and February 15 of the following period).

Financial Covenants

33. No specific financial covenants are applicable to the project, except for standard financial covenants like project audit and interim financial reports.

Supervision Plan

34. The supervision strategy for this project is based on its FM risk rating, which will be re- evaluated on a regular basis by the Bank team.

68 Annex 8: Procurement Arrangements CHINA: ANHUI MEDIUM CITIES 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 International Bank for Reconstruction and Development (IBRD) Loans and International Development Association (IDA) Credits” dated May 2004, revised October 2006; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, revised October 2006, and the provisions stipulated in the loan agreement. The general description of various items under different expenditure categories is described below. For each contract to be financed by the loan, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame have been agreed between the Borrower and the Bank project team 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.

Procurement of Works

2. Works procured under this project will include civil works in three of the project’s four components: (a) integrated corridors to improve mobility; (b) selected public transport and safety facilities; and (c) selected local access and freight facilities. Illustrative civil works include roads, bridges, drainage, bus bay, landscaping, bus parking lots and lighting works.

3. Procurement will be carried out using MOF’s Model Bidding Documents (MBD), agreed with the Bank for all NCB through post qualification (each contract below $20 million), and the latest Bank’s Standard Bidding Documents (SBD) for ICB (each contract equivalent and above $20 million). The current versions of SBD are from the “Standard Procurement Document, Prequalification Document for Procurement of Works and User's Guide” dated August 2006 and revised May 2007, and the “Standard Bidding Document, Procurement of Works, April 2007.” Contracts equivalent and above $5 million are subject to the Bank’s prior review.

Procurement of Goods

4. Goods procured under this project would include equipment and instruments in all four project components. Equipment to be procured includes traffic safety and management equipment (markings, signboard, traffic lights, electronic police, back-stage equipment, safety guardrails), bus station shelters, sanitation and maintenance equipment (water sprinkler, road sweeper, project management vehicles and other maintenance equipment).

5. Procurement will be carried out using MOF’s MBDs agreed with the Bank for NCB (each contract below $1,000,000, and equivalent to and above $100,000), and the latest version of the Bank’s SBDs for ICB (each contract equivalent to and above $1,000,000) and Shopping (each contract below $100,000). The current versions of SBDs are Procurement of Goods, May 2004, revised May 2005, September 2006 and May 2007; and SBDs for Procurement of Plant

69 Design, Supply and Installation & User’s Guide, April 2008. Contracts equivalent to and above $500,000 are subject to the Bank’s prior review.

Procedures for National Competitive Bidding

6. The procedures to be followed for National Competitive Bidding shall be those set forth in the Law on Tendering and Bidding of the People’s Republic of China, promulgated by Order No. 21 of the President of the People’s Republic of China on August 30, 1999, with the following clarifications required for compliance with the Guidelines.

(a) All invitations to pre-qualify or to bid shall be advertised in a newspaper of national circulation in the Borrower’s country, except works contracts that are estimated to cost more than $100,000 equivalent but less than $2 million equivalent each or goods contracts that are estimated to cost less than $300,000 equivalent each, which may be advertised in a provincial daily newspaper. Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum of 30 days shall be given to bidders between the date of advertisement in such newspaper and the deadline for submission of bids, and the advertisement and bidding documents shall specify the deadline for such submission.

(b) Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents.

(c) All bidders that meet the qualification criteria set out in the pre-qualification document shall be allowed to bid and there shall be no limit on the number of pre-qualified bidders.

(d) All bidders shall be required to provide security in an amount sufficient to protect Anhui in case of breach of contract by the contractor, and the bidding documents shall specify the required form and amount of such security. In place of a bid security, the bidding documents may require that a bidder submit with its bid a signed declaration that, if the bidder withdraws its bid during the bid validity period or, if awarded the contract, the bidder fails to sign the contract or submit any required performance security before the deadline required in the bidding documents, the bidder will be suspended for a period of two years from being awarded any contract with the Borrower, Anhui Province, including any of their departments, agencies or administrative units.

(e) Bidders will be allowed to submit bids by mail or by hand. The time for opening of all bids shall be the same as the deadline for receipt of such bids.

(f) All bids shall be opened in public; all bidders shall be afforded an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at bid opening.

(g) All bid evaluation criteria shall be disclosed in the bidding documents and quantified in monetary terms or expressed in the form of pass/fail requirements.

70

(h) No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin or bracket of average bids established by Anhui.

(i) Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined (i) to be substantially responsive to the bidding documents, and (ii) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted.

(j) Each contract financed with the proceeds of the Loan shall provide that the suppliers and contractors shall permit the Bank, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by the Bank.

(k) Government-owned enterprises in the Borrower’s country may be permitted to bid or submit a proposal for goods if they can establish that they (i) are legally and financially autonomous, (ii) operate under commercial law, and (iii) are not a dependent agency of the agency conducting the procurement.

(l) Bids should not be rejected solely because the number of bids is less than three, and rejection of all bids or rebidding shall not take place without the Bank’s prior written concurrence.

(m) The results of bid evaluation and contract award shall be published in the national press or provincial press as provided in (a) above or an official gazette or free and open access website, and shall identify: (i) the name of each bidder who submitted a bid; (ii) bid prices as read out at bid opening; (iii) the name and evaluated price of each evaluated bid; (vi) the name of bidders whose bids were rejected and the reasons for their rejection; and (v) the name and offered price of the winning bidder, as well as the duration and summary scope of the awarded contract.

(n) Anhui Province shall have in place provisions for bidders to protest.

Selection of Consultants

7. Consultants selected under this project will provide services to all four project components. The selection methods will be: Quality and Cost Based Selection (QCBS) or Quality Based Selection (QBS) conforming with sections 2.8 and 3.2 of the Consultant Guidelines for all contracts equivalent to and above $200,000; selection based on Consultants Qualifications (CQS) for all contracts below $200,000; and Individual Consultants in conformity with Section V of the Consultant Guidelines. Chinese universities and design and research institutes as sources of consultants may be included in the shortlist. In such cases, QBS or CQS should be used instead of QCBS. Consultant services estimated to cost less than $200,000 equivalent per contract, may, with the Bank's prior agreement, be procured in accordance with

71 the provisions of paragraphs 3.9 through 3.13 and 5.4 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 Proposals shall be used. The current version is: Standard Request for Proposals, Selection of Consultants May 2004. Contracts equivalent to and above $200,000 for firms, equivalent to and above $50,000 for individual consultants and all Single Source Selection are subject to the Bank’s prior review. In addition, all terms of reference for consultant contracts, regardless of contract value, will be subject to the Bank’s prior review.

9. Others. Overseas and domestic training and study tours by staff of the agencies/institutions involved in research, planning, construction, operation and maintenance of urban infrastructure for institutional development will be arranged and contracted with consultants.

B. Assessment of the Agency’s Capacity to Implement Procurement

10. APMO, which is the implementation office for the Project, is a dialogue window with the Bank and is mainly responsible for coordinating and supervising the implementation of the Project. APMO is staffed with 8 people, including 2 procurement officers. Each city will be mainly responsible for overall implementation of that city’s part of the project (including the procurement activities). Anqing Urban Construction Investment Corporation will play this role in Anqing; it is staffed with 30 people, including 3 procurement officers. The Huaibei PMO is staffed with 10 people, including 2 procurement officers, while the Lu’an PMO is staffed with 11 people, including 3 procurement officers; the Wuhu PMO is staffed with 17 people, including 3 procurement officers.

11. A Procurement Agent has been selected for all ICB and NCB procurement to assist APMO and line agencies. The agent’s tasks will include preparing the commercial part of bidding documents, publishing the Specific Procurement Notices, hosting the bid opening, participating in bid evaluation, and sending the bidding documents and the Bid Evaluation Reports to the Bank for review, as instructed by APMO and line agencies.

12. The World Bank conducted an assessment of the capacity of the APMO and line agencies to implement procurement actions. The assessment reviewed their organizational structures for implementing the project, and the planned interaction between project staff responsible for procurement activities in these agencies and the procurement agent. The assessment found that there are some deviations from the Bank’s guidelines in government procurement practices. The proposed provisions in the legal agreements for NCB procurement, Bank’s prior review, and post review of procurement activities, as well as training on the Bank’s policies and procedures, will address these issues. The Bank’s procurement policies and procedures for Bank-financed contracts will be followed.

72 13. The key issues and risks concerning procurement during project implementation have been identified and are shown below (details are included in the procurement capacity assessment report), along with the agreed corrective measures.

Table A8.1: Procurement Assessment – Risks, Issues and Corrective Measures No Risks and Issues Corrective Measures 1 Lack of a procurement manual describing The APMO has prepared and distributed all the procurement procedures to be procurement manual for all procurement staff in followed in Bank-financed procurement and APMO and line agencies. responsibility of each organization handling procurement 2 Some line agencies are new to Bank- APMO has appointed a procurement agent financed projects experienced with Bank-financed projects, to strengthen APMO and the line agencies’ procurement capacity 3 Limited knowledge of Bank procurement APMO will organize periodically, or send staff to, procurement training events, seminars, study tours and workshops targeting procurement staff and other staff in line agencies. On-the-job training will be conducted for all staff from time to time to strengthen the agency’s capacity to implement procurement for the project. 4 Disclosure of procurement under the project APMO will publish a General Procurement Notice in United Nations Development Business on-line and in dgMarket before any specific procurement notice is issued.

14. The overall project risk for procurement is moderate.

C. Procurement Plan

15. The Borrower, at appraisal, developed a Procurement Plan for project implementation which provides the basis for the procurement methods. The plan will be available at APMO, located at No. 28 Ring City South Road, Hefei City, China. It will also be available in the Project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with the Bank Project Team annually or as required to reflect actual project implementation needs and improvements in institutional capacity.

16. Prior review thresholds for the project will be:

Table A8.2: Prior Review Thresholds Consultant Consultant Civil Works Goods services services Firm Individual Equivalent to 5 million 500,000 200,000 50,000 and above US$

73 17. Procurement method thresholds for the project will be:

Table A8.3: Procurement Method Thresholds Procurement Method Civil Works Goods Consultant Services ICB ≥$20 ≥ ≥$300,000 (short list shall comprise million $1,000,000 six firms, with no more than 2 firms NCB advertisement in a ≥$2 ≥ from any one country and at least national newspaper million $300,000 one firm from a developing country); <$300,000 (short list may comprise entirely of national consultants) NCB advertisement in a <$2 million <$300,000 ≥$200,000: QCBS/ QBS; provincial newspaper <$200,000: CQS; Shopping NA <$100,000 Individual consultant (IC)

18. Advertisement. All Procurement Notices for ICB and consultant contracts equivalent to and above $200,000 for firms will be advertised in UNDB online, dgMarket, and in China Daily, a national newspaper with international circulation. Requests for expressions of interest from selected consulting firms for contracts below $20,000 will be included in advertisements in a national newspaper.

19. Information on bid/proposal evaluation and contract award will be published in accordance with the Guidelines 2.60, 3.4 and 3.7 for works and goods, and 2.28, 3.8 and 3.13 for consultant services.

D. Frequency of Procurement Supervision

20. In addition to the prior review supervision to be carried out from Bank offices, Bank procurement supervision missions will visit the field to carry out post review of procurement actions every 12 months. The post review sampling ratio will be one out of five contracts.

74 Annex 9: Economic and Financial Analysis CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

E CONOMIC A NAL YSIS Overview

1. The integrated corridor approach adopted in this project will enable each city to address the various urban transport issues in a coordinated manner in one corridor. This concept will offer various agencies in the cities a platform to coordinate together to ensure proper implementation of the improvements on the corridors. Each city will improve road capacity and public transport in a major corridor which consists of different combinations of existing and new roads. In some cities, local access for both people and freight is to be improved by construction of feeder roads. • New Roads. All investments in new roads in each city were subject to a rigorous alternatives analysis to ensure that the lowest-cost alternatives meeting the traffic needs were chosen. • Road Safety. Investments that will improve road safety on high-risk roads - e.g., roads where the current 3-year average number of deaths is more than 10 - were subject to a cost-benefit analysis. • Public Transport. Public transport investments comprise mostly low-cost elements, which are either essential operational items (such as maintenance facilities and depots), 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 bus service, and lower operating costs related to higher productivity and lower maintenance costs. Implementation of the bus priority measures will benefit passengers in time savings, while operators will be able to lower operating costs through higher bus productivity.

2. A formal economic evaluation based on an analysis using a transport planning model was conducted for all new roads (9 in the four cities), which account for about 75 percent of the loan and 81 percent of total project cost. Both costs and benefits reflect May 2009 prices, and a project life of 20 years was assumed. Financial costs were converted to economic costs by the elimination of price contingency, taxes, and customs duty on imported materials. In all cities, an overall analysis was undertaken, combining all new roads together.

Screening

3. A pre-screening based on an informal assessment of economic return was an integral part of the project identification process. The following criteria were developed to guide the cities to identify the project components: (a) Focus on investments targeting existing bottlenecks in built-up areas. (b) Priority would be placed on corridors that:

75 • Carry a significant portion of public transport users; • Offer opportunities to increase traffic safety, particularly for vulnerable users (i.e., corridors that included roads with a high number of crashes); and • Carry a high volume of transport users, especially the vulnerable road users population (pedestrians and cyclists). (c) The choices should address the concerns raised during the public participation process.

4. Components included in the project are the result of an extensive screening that yielded urban transport investments that address existing problems with reasonably scaled solutions. The cities are committed to sectoral reforms to complement the investments. Overall investments in each city have then been further screened by APFB from a financial capacity perspective.

Alternatives

5. All significant stand-alone investments – i.e., investments with more than four lanes for motor vehicles - were subject to a rigorous alternatives analysis to ensure that the alternative meeting the traffic needs with the highest benefit relative to cost was chosen. The key features of the alternatives analysis in each city are summarized in the following paragraphs.

Anqing. The initial proposal consisted of building expansion roads to support the city’s development into new urban areas in the east. During the identification process this was replaced by a focus on improving the situation on the North-South Huxin road corridor. The corridor also included improving its capacity by building the East Yanjiang Road. The initial scheme called for an expansion of Huxin road to include a bus lane. This scheme was dropped in favor of the current scheme (which retains the current cross-section) after the data suggested limited benefits from an additional lane (which would have compromised the current facilities for cyclists). Safety improvements to Middle Yanjiang and Dekuan roads were included in the project due to the poor road safety record on these roads compared to others.

Huaibei. The initial proposal focused on a large-scale construction on Tuohe Road both to serve transport services and to support the city’s ambition to make this road the centerpiece of a new urban center. Given the focus of the project on solving existing problems and focusing on public transport and safety issues, a decision was made to support a scaled-down (4-lane) Tuohe Road to provide access to the expressway and the city’s new industrial zones, and to focus more attention on improving the situation on the main Huaihai-Suixi corridor through investment in public transport, road safety, and traffic management.

Lu’an. The initial proposal for Lu’an only included the development of new roads. Bagongshan Road was envisaged as a 6-lane road. Bagongshan Road is finally being built with only four lanes but requiring less resettlement, in response to the results of the preliminary economic analysis. Additionally, to maximize the benefits from building Bagongshan Road, public transport and safety improvements were designed on the existing Meishan and Jiefang Roads in the same corridor.

76 Wuhu. The initial proposal included building the southern section of the 3rd Ring Road and expanding Jiuhua Road. Using the criteria above, the North-South corridor, which consists of Jiuhua and Yijiang Roads, was found a very critical transport corridor in the city, carrying more than half of the public transport passengers in the city and contributing to 35 percent of the city’s traffic deaths. The new proposal included an integrated North-South corridor improvement, together with constructing the south section of the 3rd Ring Road, which will ease congestion in the corridor.

6. Table A9.1 summarizes the construction cost of all new roads to be built under this project.

Table A9.1: Construction Cost of New Roads Construction Length City Road Section Cost (km) ($ million) Anqinq East Yanjiang Dujiang Rd – Shuguang Rd 1.5 3.52 Huaibei Tuohe Xiangshan Rd – Lanhu Rd 5.9 30.86 Cuifeng South Nanli Rd – Lunzhushan Rd 1.2 5.89 Lu’an Bagongshan Nanhai Rd – Renmin Rd 2.2 14.43 Xicheng Xianghongdian Rd – Huoshan Rd 3.3 10.34 Pihenan Xicheng Rd – Xianghongdian Rd 3.5 9.28 Middle Longhe Wan Xi Rd – Pi Wang Rd 6.5 21.99 Wuhu Third Ring Zeshan Rd – Huangshan Rd 7.3 149.47

Methodology

7. New Roads. Transport user benefits, i.e., savings in vehicle operating costs and passenger travel time, were estimated from an urban transport network analysis through the development of a transport model, based on household and motor vehicle surveys, together with traffic counts. Benefit due to reduction in traffic crashes was also estimated. Calibrated models were used to simulate network traffic performance under different scenarios - with and without the project. The simulation results, including travel distance, times, and speeds for each personal or vehicular trip, were used to estimate travel time and cost savings that constitute the transport user benefits. The household survey also generated pedestrian and bicycle origin-destination tables, and both classes of users were explicitly modeled in the evaluation of project benefits. The Bank reviewed the transport models in the project cities and found the results to be adequate and in line with other models in similar Chinese cities. Details can be found in the project files.

8. Existing Roads. Baseline data were collected for the existing roads to be improved under the project. Public transport users’ travel time and crash data were the main indicators considered in evaluating benefits due to improvement of the public transport operations and safety on these roads.

9. Integrated Corridors. The cost and benefit from all roads that form each corridor were combined together to present the overall economic rate of return of the investments in each corridor.

77 Main Assumptions

10. Forecasts of traffic volumes were modeled based on trends for relevant variables, in particular, population. Table A9.2 presents population forecasts for the project cities.

Table A9.2: Population Forecast Annual Growth Population (‘000) (in %) City 2005 2015 2020 2005 - 15 2015 – 20 Anqinq 729 943 1,202 2.9 2.7 Huaibei 680 7907 940 1.6 1.9 Lu’an 940 1,2001 1,690 2.8 4.1 Wuhu 1,160 1,600 1,950 3.8 2.2

11. Forecasts of motor vehicle growth are presented in Table A9.3 and the resulting modal split forecast is presented in Table A9.4. All forecast trends are based on observed growth in recent years, indicating auto ownership rates ranging between 14 percent and 18 percent (including motorcycles) in 2020.

Table A9.3: Annual Motor Vehicle Growth Rates (%) Period Anqing Huaibei Lu’an Wuhu 2000 to 2008 11.8 11.1 9.4 18.1 2008 to 2015 6.2 15.0 7.2 9.1 2015 to 2020 3.8 10.7 5.0 6.6

Table A9.4: Forecast Modal Split (in %) 2008 2020 City Walk Bicycle Bus Car+MC Walk Bicycle Bus Car+MC Anqing 33 36 9 22 27 28 17 28 Huaibei 42 28 17 13 34 20 22 24 Lu’an 34 30 15 21 32 24 21 23 Wuhu 36 24 26 14 31 24 28 17

12. Traffic assignment has been carried out for each city to represent traffic volumes at the end of project implementation and in 2020. Current and forecast motor vehicle flows (pcu/h) during peak hour are presented in Table A9.5. An average conversion rate (dividing the pcu by the conversion factor provides an estimate of vehicle flow) could range from 1.15 to 1.35.

7 Based on 2012 Projection

78 Table A9.5: Current and Forecast Flows Traffic Flow New/ City Road Section (pcu/h in peak hour) Existing 2008 2015 2020 Anqinq East Yanjiang Dujiang Rd – Shuguang Road New -- 1,180 1,460 Huxin S Linglu Rd - W. Huazhong Road Existing 2,450 3,140 3,410 Shuguang W. Huazhong Rd – Renmin Rd Existing 1,044 1,760 1,900 Mid Yanjiang Yicheng Rd – Huxin Rd Existing 670 960 1700 Dekuan Jixian Rd – Renmin Rd Existing 2,010 2,420 2620 Huaibei Tuohe Xiangshan Rd – Lanhu Rd New -- 2,310 2,500 Cuifeng South Nanli Rd – Lunzhushan Rd New -- 320 400 Huaihai Menshan Rd – Xianshan Rd Existing 2,030 2,550 2,620 Suixi Renmin Rd – Nanli Rd Existing 2,270 2,490 2,550 Lu’an Bagongshan Nanhai Rd – Renmin Rd New -- 1,770 2,100 Xicheng Xianghongdian Rd – Huoshan Rd New -- 1,040 1,470 Pihenan Xicheng Rd – Xianghongdian Rd New -- 610 830 Longhezong Wanxi Rd – Piwang Rd New -- 1,490 1,760 Jienfang Renmin Rd – W. Gaocheng Rd Existing 2,300 2,120 2,220 Meishan Renmin Rd – Gaocheng Rd Existing 2,280 2,090 2,280 Wuhu Third Ring Zeshan Rd – Huangshan Rd New -- 9,570 10,700 Jiuhua E. Zeshan Rd – E. Beijing Rd Existing 3,480 4,830 4,590 Yijiang E. Zeshan Rd – Yingping Shan Rd Existing 3,120 7,630 13,640

Economic Internal Rate of Return

13. The overall EIRR for the project is estimated at 17.2 percent, and the NPV (at 12 percent discount rate) is estimated to be $203 million, as summarized in Table A9.6. 45% of travel time savings are expected to accrue to bicyclists and pedestrians; 33 percent to bus users; 10 percent to car users; and the remaining 12 percent to freight traffic.

Table A9.6: Economic Evaluation Summary Present Value NPV EIRR City Project of Total Costs ($million, (in %) ($million, 12%) @12%) Anqing Overall 28.7 18.8 20.1 Huaibei Huaihai-Suixi Corridor 6.4 25.4 15.8 Overall 54.6 16.0 25.7 Lu’an Overall 47.3 15.9 21.9 Wuhu Third Ring Road 200.58 12.8 11.2 North-South Corridor 2.9 98.5 119.7 Overall 203.4 17.7 135.4 4 Cities Project 334.0 17.2 203.1

8 This cost includes all other sections of the 3rd Ring Road that were constructed and are included in the transport model. The Southern Section cost included in this project is $149 million.

79 Sensitivity Analysis

14. The basic evaluation of the project, by stand alone investments and as a whole, shows that the investments are economically viable, and the sensitivity tests (with respect to a two-year delay in project completion, higher cost, lower benefit, lower passenger time savings, zero growth of time value, and lower traffic projection) confirm this result. See Table A9.7 below.

Table A9.7: Results of Sensitivity Analysis

Parameter EIRR (%) NPV (@12%, $million) Anqing Base scenario 18.8 20.1 Alternative population projections 17.7 16.0 Delayed 2 years & 20% cost increase 16.4 14.5 Huaibei Base scenario 14.0 9.9 Alternative population projections 15.1 15.4 Delayed 2 years & 20% cost increase 12.1 0.5 Lu’an Base scenario 15.9 21.9 Alternative population projections 15.5 20.8 Delayed 2 years & 20% cost increase 14.0 12.7 Wuhu Base scenario 12.8 15.6 Alternative population projections 13.5 27.7 Delayed 2 years & 20% cost increase 11.7 -6.9

F INANCIAL A SSESSMENT

15. Like most other cities in China, a financial analysis of the project cities’ municipal revenue sources suggests that (a) 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 (b) land-related 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. 16. As the summary table indicates (Table A9.8), the municipal fiscal base as well as the monies available for infrastructure development in all of the project cities has been increasing rapidly in recent years. Total ‘local fiscal revenue’, which is a combination of budgetary revenues, fees, one-time off-budget sources (such as municipal share of land sale revenues) and subsidies from Provincial and Central government, increased over 200 percent in the 2004-2008 in all four project cities and is forecast to increase at double digit annual rates in all four cities during the next 5 year plan period (2011 to 2015). Municipal expenditures on urban

80 infrastructure development – an overwhelming majority of which are new capital investments – have similarly risen from a minimum of 40 percent in Anqing (from $9.7 million in 2004 to $13.9 million in 2008) to as much as 400 percent in Wuhu (from $13.6 million in 2004 to $55.3 million in 2008). 17. The Finance Bureaus in all four cities, however, spend most of their financial planning efforts on year-to-year planning and budgeting, and no systematic financial plan is available for a longer period. Moreover, the analysis indicates that a large proportion of the existing (and forecast) revenues are derived from one-time sources, such as taxes on construction, property transactions, and new development, with recurring sources providing a relatively low contribution. Finally, as with other Chinese cities, balance sheets based on internationally accepted accounting principles are not available. A particular complication in this regard are off- budget revenues, expenditures and contingent liabilities associated with state-owned urban development investment companies which are significant but not part of the municipal budgetary process. Table A9.8: Project cities: Municipal Disposable Revenue and Urban Infrastructure Expenditure ($ million all calculated at $1=6.8 RmB) Indicator 2004 2005 2006 2007 2008 Anqing Total Local Fiscal Revenue 173.0 243.5 339.4 361.7 482 Municipal Expenditure on Urban Development Infrastructure 9.7 11.6 11.6 12.8 13.9 Huaibei Total Local Fiscal Revenue 130.5 165.7 195.0 230.2 271.3 Municipal Expenditure on Urban Development Infrastructure 209.5 54.3 45.5 54.3 68.9 Lu’An Total Local Fiscal Revenue 124.6 173.5 216.1 318.6 426.8 Municipal Expenditure on Urban Development Infrastructure 29.2 31.4 42.4 47.7 79.8 Huaibei Total Local Fiscal Revenue 183.0 240.0 250.6 699.3 468.5 Municipal Expenditure on Urban Development Infrastructure 13.6 19.1 23.0 41.6 55.3 Source: APMO, project cities and World Bank team calculations

18. 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 in all four project cities – the peak requirement of counterpart funds is at most 95 percent of the 2008 municipal expenditure on infrastructure in Wuhu (see Table A9.9). 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.

81 Table A9.9: Project Fund Requirement and Percentage of Expenditure ($ million) Year Anqing Huaibei Lu’an Wuhu Total Fund Requirement 35.1 55.3 59.4 148.1 Counterpart Fund requirement 14.6 37.3 47.3 104.3 Peak Counterpart Fund Requirement 11.7 14.92 23.65 52.3 Percentage of 2008 Municipal Expenditure on Urban Development Infrastructure 84 22 30 95 Source: APMO, project cities and World Bank team calculations 19. However, actual total expenditures on urban infrastructure development in the project cities are likely to be much higher than direct municipal government expenditures. All of the project cities are committed to a multi-million dollar capital program associated with significant urban expansion 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, water and waste-water treatment plants and associated infrastructure; and are often financed by rights to land. 20. Such an aggressive plan for infrastructure development as well as the financial structure underlying the development is typical of Chinese cities at present. 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 the project cities. The counterpart financing requirements posed by the project are not large relative to the total infrastructure development that the cities expect to undertake in the coming 5 years. At the same time, the available data also suggest that the financial planning in the cities 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. 21. For the project, risks associated with the availability of adequate counterpart funds are mitigated by the project cities deciding to use domestic bank loans for the counterpart funding. A significant portion of the counterpart funds will come from domestic bank loans (see Table A9.10), and the rest will come from normal municipal capital investment funds and from the investment companies implementing the project. In all cases, the domestic bank loans will be borrowed by the investment companies.

82 Table A9.10: Project Fund Sources ($ million, as of June 2009) Investment City Total Government World Bank Local Banks Company Anqing 35.10 16.10 19.00 0 0 Huaibei 55.32 10.88 14.00 18.67 11.77 Lu’an 59.38 21.10 15.00 23.28 0 Wuhu 148.17 67.55 52.00 28.62 0 Total 297.97 115.63 100.00 70.57 11.77 100.0% 38.8% 33.5% 23.7% 3.9% Source: Anhui PMO

83 Annex 10: Safeguard Policies CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

SOCIAL ISSUES

1. The major social impacts of the project stem from land acquisition and residential demolition associated with construction in the four project cities. A resettlement action plan (RAP) has been prepared to mitigate these impacts. It is based on an inventory of affected assets, census of the affected people, and detailed resettlement mitigation measures with municipal government agencies and the displaced persons.

Table A10.1: Land to be Acquired and People Affected Land to be acquired People affected City (mu) % % Anqing 20 1% 348 6% Huaibei 588 29% 1,696 31% Lu’an 363 18% 2,332 43% Wuhu 1,089 53% 1,104 20%

Total 2,060 100% 5,480 100% hectares 137

Table A10.2: Land to be acquired: Land-use and ownership details Land use % of Paddy 814 40% Families Individuals Persons Dry field 320 16% Land acquired 538 1,808 33% Vegetables 53 3% Demolition 640 2,056 37% Garden plots 28 1% Land & demolition 285 1,287 23% Woodland 44 2% Water pools 351 17% Enterprises 11 158 3% Housing 324 16% Public institutions 3 92 2% Other buildings 13 1% Shops 16 85 2% Unused 113 5% Total 5,486 100%

2. The project will affect 15 villages/urban communities in 11 townships/urban community units in the municipalities of Anqing, Huaibei, Lu’an and Wuhu. The project will require the permanent acquisition of 2,060 mu (137 hectares) of land. The breakdown of this land by city and by land use is shown in Tables A10.1 and A10.2. Some temporary land use would be required during project implementation by contractors and mitigation measures will be taken. Municipal resettlement offices will supervise the activities. The project will affect 5,480 people in the cities and peri-urban areas, distributed by city as shown above in the same table.

3. The 5,480 persons to be displaced belong to 1,463 families (average size 3.5 persons). Among these, 5,150 (95 percent) will either lose land, or have their homes demolished, or both.

84 The breakdown by category is also shown above in Table A10.1. Lastly, 11 enterprises, 3 public institutions and 16 shops will be demolished and relocated, affecting 335 employees (5 percent).

4. The RAP provides details regarding resettlement policy principles and regulations to be followed, compensation rates and budget, measures to restore incomes where necessary, and institutional and monitoring arrangements. In general, it sets out proper livelihood restoration and recommends a series of social security programs in the four municipalities involved, to assist farmers and citizens in restoring productive incomes and residential livings.

5. Relatively minor design changes are likely prior to implementation. Typically, final designs result in marginal decreases in land acquisition and structural demolition, as well as changes in proportion among categories of affected land and structures.

6. Indigenous people. Bank missions conducted a screening to determine whether ethnic minority peoples are present in, or have collective attachment to, the project area. Besides site visits, a socioeconomic impact survey was also conducted. The task team concludes that no ethnic minority communities are present in, or have collective attachment, to the project area. It was thus determined that OP 4.10 on Indigenous Peoples is not triggered.

7. Information dissemination. All the affected households and villages have been identified through the census survey. The RAP was made public in the main local newspapers during the period May 22-28, 2009; Anhui Construction Committee placed the RAP on the Anhui provincial governmental website in the week of May 22, 2009; it was also available to read in Anhui Library and the involved municipalities without any charge. The information has also been placed in the municipal public libraries. Relevant project information has been provided to the affected communities through newspaper reports, posters and public meetings. A resettlement information booklet, providing details regarding compensation rates, social security policies and other entitlement policies and grievance procedures will be distributed to the displaced people before resettlement is implemented.

8. Participation strategy. Focus group discussions and key informant interviews have been used to consult persons who could be displaced and obtain their views and preferences regarding resettlement impacts and mitigation measures, including land compensation and social security programs. These views and preferences have been taken into account in revisions to the RAP, and the majority of potentially displaced persons agree that resettlement and rehabilitation measures planned under the RAP will be adequate to address and mitigate any adverse impacts.

9. Affected communities are to play a key role in determining and implementing their livelihood restoration programs. After land compensation amounts are calculated, for example, each community will determine how land compensation can best be used to improve, or at least restore, local income-earning potential.

10. Project entities will set up procedures to supervise land compensation use, and local banks in each municipality will participate in resettlement fund monitoring. Both internal and independent monitoring of the resettlement program will be conducted regularly during project implementation.

85

11. Consultation with civil society and non-governmental organizations. Hehai University was contracted to guide the census and inventory survey exercise and the social assessment, focusing on public consultation for project component selection, urban traffic management, and the needs of the urban citizens and communities. This has contributed significantly to the preparation of the RAP and EMP. Communities and farmer groups were also consulted and participated in the resettlement planning process and the preparation of the project. Their feedback has been incorporated into the RAP and the consultation session concluded that resettlement and rehabilitation measures planned under the RAP are adequate to address and mitigate any project impacts on land acquisition and house demolition.

12. Institutional arrangements. Hehai University which was involved in the early stage of RAP preparation, and is independent from Anhui Construction Committee and the project office, will be contracted to serve as the independent monitoring agency of the resettlement program. The project will be monitored and the living standards of the project-affected persons will be evaluated over the course of project implementation. Monitoring results will be reported twice a year and, if needed, remedial actions will be designed.

ENVIRONMENT - Summary of the Consolidated EA and EMPs

13. Baseline conditions of project cities. The key characteristics of the natural environment in the project area and the prevailing social-economic conditions are summarized in Table A10.3. Given the congestion and associated environmental impacts along main corridors to be targeted by the project, the analysis found the project in line with the urban planning and transport strategy of the four project cities.

Table A10.3: Baseline Conditions of the Project Cities Province Anqing Huaibei Lu’an Wuhu Annual average 1,368 mm 854 mm 1,103 mm 1,196 mm precipitation Wind season Spring Summer, autumn Spring, summer Winter Air quality Partly compliant, Compliant in Compliant in Compliant in main pollutant general except general except general, main PM10 and CO TSP PM10 pollutant PM10 Water quality in Compliant in Compliant except Exceeds standard Compliant in project areas general NH3-N except oil general Noise along project Well in Exceed standard Exceed standard Compliant in roads/ alignment compliance on heavy-traffic on heavy-traffic general roads roads Drainage system in Absent for all new Partly in place Partly in place Absent for new 3rd project roads roads Ring Road Protected area or Yingjiang temple Nanhu wetland None None cultural properties (provincial) park (national) GDP (RMB billion) 70.4 25.9 53.4 76 TSP = total suspended particulates PM10 = particulate matter of 10 micrometers or less CO = carbon monoxide

86 14. Negative impacts analysis and mitigation measures. The proposed project will address the existing and emerging traffic congestion along the main corridors, improve urban life quality and facilitate economic development, resulting in social-economic and environmental benefits. However, there are negative environmental impacts, such as noise and dust, construction waste disposal, damage of vegetation, soil erosion, sewage discharge, traffic impact, social disturbance and safety. Major negative impacts during operation include air pollution, noise, road safety and wastewater from bus depots to be built by the project.

15. Air pollution and dust. Dust is the major air-borne pollution during construction. Major measures typically adopted in similar projects include frequent water spraying on construction sites and access roads, covering trucks and materials on site, and timely clean-up. More attention is warranted near sensitive receptors.

16. The United States Environmental Protection Agency’s MOBILE5 model was used for projection of air emissions during the operation phase. The result shows that although concentration for NOx and CO will meet relevant standards in future, they will rise with the increase of traffic flow after the project roads are in full operation. A review of existing air pollution management in each city reveals that automobile air emissions are mainly controlled through compulsory annual inspection of vehicles and road-side spot check of emissions during major campaigns. Major measures proposed by the consolidated EA are to strengthen road-side spot checks, speed up the phase-out of non-compliant polluting vehicles, tighten vehicle testing and maintenance, improve public transport to divert traffic volumes, and increase tree belts along roads to absorb air emissions.

17. Noise and Vibration. Major measures during construction include careful scheduling of construction activities near sensitive receptors such as schools, hospitals and residential areas. Night time construction will be prohibited as per Chinese regulations. High noise and vibration machines will be avoided whenever possible, particularly at sensitive locations such as the Yingjiang temple in Anqing. Maintenance of equipment will be carried out according to relevant domestic requirements to minimize heavy noise and vibration caused by malfunction. The construction supervision team will use portable noise meters to monitor noise level routinely.

18. Modeling results suggest that the noise level in most project roads will exceed relevant standards within urban planning red-line due to increased traffic flow. To deal with the impact, development along new roads will be carefully planned not to add new sensitive receptors within the red-line. As necessary, based on ex-post assessments, appropriate mitigation measures such as barriers and noise insulation windows will be implemented to protect sensitive receptors.

19. Spoil and Solid Wastes. Earth work balances were established for all project cities according to domestic EA requirements. Sites for disposal of spoil, garbage and demolition wastes have been identified, including details on location, status and capacity. Measures have been proposed to control the potential water and soil erosion caused by borrow and disposal activities.

20. During operation, bus depots will generate solid waste which will be collected separately and disposed of in municipal landfills or facilities for hazardous/oily wastes as appropriate.

87

21. Wastewater. Construction wastewater and that from workers camps will be treated first by on-site septic tank to remove oil and solids before channeling into sewage systems and will be eventually treated by the municipal wastewater treatment plant. Discharge into nearby water bodies will not be allowed as per domestic regulations.

22. During operation, wastewater will be generated mainly by the bus depots’ facilities in Huaibei, Lu’an and Anqing, which will all be connected to their respective municipal sewage system. Effluents will first go through on-site sedimentation tanks to remove solids and septic tanks to remove oil, before being channeled into the wastewater treatment plants for processing.

23. Ecological Impacts. Major impacts will be water and soil erosion caused by temporary land occupation, spoil and borrow, and change of green belt. In addition to measures involving earthworks and dust control, green areas will be enlarged and existing trees will be protected. Although Nanhu urban wetland park in Huaibei is more than 200 meters away from the project road at the closest point, special attention has been paid to reducing any potential impacts during implementation. The relevant authority was consulted and its consent has been obtained.

24. Impacts on Cultural Properties. In Anqing city, a province-level cultural heritage site, the Yingjiang Temple, is located on the western side of Huxin Road, separated from it by a green belt of about 5m and a pedestrian sidewalk. The main entrance of the temple is on another street. Although no widening of the road is needed for this section, construction activities associated with the rehabilitation (e.g., vibration and noise of vehicles or equipment) may potentially affect the temple due to its close proximity. The EA team has reviewed the site, assessed the nature and extent of potential impacts on it, consulted with and obtained consent from the responsible authority (Anqing Bureau for Cultural Relics and Religion) and developed necessary protective measures in the EMP. For the overall project, the standard chance-find procedure has been included in the EA and EMPs.

25. Fuel Facility Risk Management at Bus Depots. The fuel storage and filling facility at all bus depots will be designed and operated according to relevant domestic technical norms and requirements on safety and environment. An emergency response plan and safe operation measures will be in place and training will be provided to staff on implementing the plan and measures.

26. Indirect Environmental Impacts. Resettlement of residence and relocation of industries due to the project might have indirect environmental impacts if not managed properly. The EA provides an inventory detailing the number of people to be resettled and industries to be relocated, potential site contamination, and conditions in receiving areas (e.g., served by the municipal sewage and garbage systems) to ensure that no new pollution will be transferred and induced to other areas as a result of the project.

27. Social Disturbance. Urban road work will have an impact on traffic flow and bus routes, increase difficulty in accessing stores, workplaces, services and business, and will also affect road safety. Most of these negative impacts are temporary in nature and can be mitigated

88 through well planned traffic diversion and by providing prior information of construction schedules to the public. Safety shields will be set up wherever necessary.

28. Public Consultation and Information Disclosure. Consultation with potential beneficiaries and other stakeholders were of crucial importance in the EA process. Following China’s law on EA, methods used included posting public letters in project areas, publishing notices in local newspapers, TV channels and radio stations, placing notices in local government offices and their websites, organizing meetings and interviews with project affected people, and distributing questionnaires.

29. The first round of solicitation of public opinion was announced on the website of each city government during November-December 2008. The second round was during April-May 2009, with Lu’an and Huaibei posting the full EA on the same website and Wuhu and Anqing at the offices of the city construction bureaus. Subsequent public consultation was carried out during the same period in all the project cities.

30. More than 400 people with a wide range of backgrounds were interviewed, surveyed or consulted in the meetings and through questionnaires. The majority was dissatisfied with current traffic conditions, associated noise and air pollution, and thus believed that the project was necessary for improving mobility and the urban environment. The major negative impacts of the project were perceived to be (in descending order) noise, air pollution, solid wastes and water pollution. Despite these concerns, more than 90 percent of those surveyed supported the project and generally concurred with the measures proposed by the EA.

31. Alternatives Analysis. Analysis of different design alternatives was undertaken for all project cities including the ‘without project’ scenario. Annex 9 provides detail. At a design level, comparison was made for different road alignments of the Third Ring Road in Wuhu in terms of resettlement, environmental impacts and engineering aspects. A slightly longer alignment with fewer impacts on green area and resettlement was selected. For the Tuohe Road in Huaibei, an alternative alignment as far as practicable away from the Nanhu urban wetland park was chosen, so as to minimize the impact on the park.

32. Different lane configurations were compared for rehabilitation of Jiefang Road in Lu’an, Huaihai Road in Huaibei, Huxin Road in Anqing and building of the new Third Ring Road in Wuhu. In all cases, alternatives with less land occupation, fewer lanes for automobiles and more green belt were selected.

33. Three types of building material currently available for urban roads in China were compared from an environmental, technical and investment perspective: modified asphalt, concrete, and noise-reducing road surface. The noise-reducing surface was selected for road sections with large numbers of sensitive receptors, so as to reduce negative impacts, and modified asphalt surface for the rest.

34. Environmental Management Plan. To facilitate implementation and supervision, four stand-alone EMPs were developed; one for each project city. These plans are similar in structure, supervision and management mechanism and mitigation measures, but are different in terms of

89 monitoring plans and additional measures to deal with the specific circumstances of each city. The EMP will be incorporated into the bidding documents and subsequently in contracts to make sure that they are implemented.

35. The EMP outlines the institutional arrangement and responsibility of each party in EMP implementation. Overall responsibility for ensuring EMP implementation rests with the provincial PMO and routine operation by the PMO in each city. Therefore each PMO should have at least one staff in charge of EMP implementation, supervision and reporting.

36. The EMP specifies mitigation measures in tabular format for easier reference during implementation and supervision corresponding to the major negative impacts as identified above during design/preparation, construction and operation phases. It also details an environmental monitoring plan for both the construction and the operation phases, including indicators to be monitored, sampling method, location, frequency, requirements and suggestions on monitoring agency and reporting, and budget estimate.

37. To ensure effective EMP implementation, a budgeted training plan has been detailed with information on content and arrangement for all parties involved (PMO staff, owners, contractors and workers, engineering supervision team, external monitoring and supervision agencies). The environmental monitoring and training plan has been integrated and budgeted into the overall implementation plan, the monitoring and evaluation program, and the training plan of the project.

90 Annex 11: Project Preparation and Supervision CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

Planned Actual PCN review September 2008 Initial PID to PIC May 2009 Initial ISDS to PIC May 2009 Appraisal June 2009 Negotiations March 2010 Board/RVP approval May 2010 Planned date of effectiveness August 2010 Planned date of mid-term review August 2013 Planned closing date January 31, 2016

Key institutions responsible for preparation of the project: 1. Ministry of Finance; 2. National Development and Reform Commission; 3. Anhui Provincial Government, Anhui Finance Bureau, Anhui Construction and Management Commission and other associated organizations; and 4. The Municipal Governments of Anqing, Huaibei, Lu’an and Wuhu, supported by the Anhui Construction Bureau, are responsible for preparation of the Project, assisted by the following design institutes and firms: a. Tongji University Design Institute b. Shanghai Municipal Engineering Design General Institute (SMEDI) Anhui Branch Institute

Bank staff and consultants who worked on the project included:

Name Title Unit Shomik Mehndiratta Task Team Leader EASCS Syed Ahmed Lead Counsel LEGES Junxue Chu Senior Loan Officer CTRFC Ajay Kumar Peer Reviewer, AFTTR Lead Urban Transport Specialist Ke Fang Peer Reviewer, EASIN Senior Urban Transport Specialist Peng Xuan Team Assistant EACCF Said Dahdah Road Safety Specialist EASCS Zhai Xiaoke Transport Specialist EASCS Eric Ho Transport Specialist/Consultant EASCS Xiaomei Duan Transport Specialist/Consultant EASCS Wei Li Transport Specialist/Consultant EASCS Karl Fjellstrom Transport Specialist/Consultant EASCS Zhefu Liu Social Development Specialist EASCS

91 Ren Xin Environment Specialist EASCS Wang Peishen Environment Specialist/Consultant EASCS Guoping Yu Procurement Specialist EAPCO Zhang Fang Financial Management Analyst EAPCO George Darido Transport Specialist Graham Smith Transport Specialist/Consultant

92 Annex 12: Documents in the Project File CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

No. Name Date Issued Reports 1 Preliminary Project Proposal including City Specific Annexes (English) April 20, 2008 2 Proposal of Wuhu Project by Architectural Design and Research Institute of June 06, 2008 Tongji University (Chinese & English) 3 Proposal of Anqing Project by Architectural Design and Research Institute June 06, 2008 of Tongji University (Chinese & English) 4 Proposal of Huaibei Project by Architectural Design and Research Institute June 06, 2008 of Tongji University (Chinese & English) 5 Proposal of Lu’an Project by Shanghai Municipal Engineering Design June 06, 2008 General Institute Anhui Branch Institute (Chinese & English) 6 Institutional Arrangement Plan of Lu’an, Huaibei and Wuhu (Chinese) Dec 04, 2008 7 Feasibility Study Report of Wuhu World Bank Loan Project – Transport April 19, 2009 Modeling and Forecasting Report by Architectural Design and Research Institute of Tongji University (English) 8 Huaibei City Transport Model and Traffic Forecasting Report by April 19, 2009 Architectural Design and Research Institute of Tongji University (English) 9 Feasibility Study of Wuhu Project (Chinese) and summary presentation June 30, 2009 (Chinese & English) by Architectural Design and Research Institute of Tongji University 10 Feasibility Study of Anqing Project (Chinese) and summary presentation June 30, 2009 (Chinese & English) by Architectural Design and Research Institute of Tongji University 11 Feasibility Study of Huaibei Project (Chinese) and summary presentation June 30, 2009 (Chinese & English) by Architectural Design and Research Institute of Tongji University 12 Feasibility Study of Lu’an Project (Chinese) and summary presentation June 30, 2009 (Chinese & English) by Shanghai Municipal Engineering Design General Institute Anhui Branch Institute 13 Wuhu Economic Analysis Report (Chinese) and summary presentation June 30, 2009 (Chinese & English) by Architectural Design and Research Institute of Tongji University Safeguards 14 Summary consolidated RAP by Hehai University (English) August, 2009 15 Resettlement Action Plan for Anqing, Lu’an, Huaibei and Wuhu by Hehai May, 2009 University (Chinese) 16 Comprehensive Environment Impact Assessment by Anhui Provincial August 2009 Environmental Protection Institute (Chinese & English) 17 Environmental Impact Assessment Report (Chinese) for Anqing, Lu’an, June 2009 Huaibei and Wuhu 18 Environmental Management Plan (Chinese and English) for Anqing, Lu’an, July 2009 Huaibei and Wuhu

93 Commitments 19 Commitment Letter from Municipal Government of Anqing to implement July 21, 2009 EMP and RAP 20 Commitment Letter from Municipal Government of Huaibei to implement July 15, 2009 EMP and RAP 21 Commitment Letter from Municipal Government of Lu’an to implement July 26, 2009 EMP and RAP 22 Commitment Letter from Municipal Government of Wuhu to implement August 5, 2009 EMP and RAP 23 Letter from Municipal Government of Anqing on commitment to public May 25, 2009 transport improvements in Project implementation period 24 Letter from Municipal Government of Huaibei on commitment to public May 31, 2009 transport improvements in Project implementation period 25 Letter from Municipal Government of Lu’an on commitment to public May 21, 2009 transport improvements in Project implementation period 26 Letter from Municipal Government of Wuhu on commitment to public May 18, 2009 transport improvements in Project implementation period

94

Annex 13: Statement of Loans and Credits CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d P091950 2009 CN-Guizhou Cultural and Natural Heritage 60.00 0.00 0.00 0.00 0.00 59.85 0.00 0.00 P096556 2009 CN-Eco-Farming 120.00 0.00 0.00 0.00 0.00 116.70 7.00 0.00 P096707 2009 CN - GD Tech&Vocational ED and 20.00 0.00 0.00 0.00 0.00 19.95 0.75 0.00 Training P096812 2009 CN-Yunnan Urban Env 90.00 0.00 0.00 0.00 0.00 85.78 -4.00 0.00 P096923 2009 CN-Shanghai APL III 200.00 0.00 0.00 0.00 0.00 199.50 0.00 0.00 P096926 2009 CN-Jiangsu Water and Wastewater Project 130.00 0.00 0.00 0.00 0.00 129.68 0.00 0.00 P100968 2009 CN-Shanxi Coal Bed Methane 80.00 0.00 0.00 0.00 0.00 79.80 0.20 0.00 Development P101258 2009 CN-Hubei Yiba Highway 150.00 0.00 0.00 0.00 0.00 149.63 0.00 0.00 P101829 2009 CN Xining Flood and Watershed Mgmt 100.00 0.00 0.00 0.00 0.00 99.75 4.00 0.00 P101988 2009 CN-Jiangxi Shihutang Navi & 100.00 0.00 0.00 0.00 0.00 83.58 32.17 0.00 Hydropower P114107 2009 CN-Wenchuan Earthquake Recovery 710.00 0.00 0.00 0.00 0.00 648.00 -62.00 0.00 Project P112359 2009 CN-NanGuang Railway 300.00 0.00 0.00 0.00 0.00 299.25 0.00 0.00 P107559 2009 CN-Guizhou-Guangzhou Railway 300.00 0.00 0.00 0.00 0.00 299.25 0.00 0.00 P085376 2008 CN-Migrant Skills Dev. and Employment 50.00 0.00 0.00 0.00 0.00 47.85 0.97 0.00 P091949 2008 CN-Gansu Cultural & Natural Heritage 38.40 0.00 0.00 0.00 0.00 33.24 1.65 0.00 P084874 2008 CN- Energy Efficiency Financing 200.00 0.00 0.00 0.00 0.00 150.07 0.34 0.00 P084437 2008 CN-Rural Health 50.00 0.00 0.00 0.00 0.00 46.18 -2.20 0.00 P092631 2008 CN-Xi'an Sustainable Urban Transport 150.00 0.00 0.00 0.00 0.00 139.63 -10.00 0.00 P093882 2008 CN-Shandong Flue Gas Desulfurization 50.00 0.00 0.00 0.00 0.00 39.92 16.94 0.00 P093963 2008 CN-Guiyang Transport 100.00 0.00 0.00 0.00 0.00 59.28 19.77 0.00 P087224 2008 CN-Han River Urban Environment 84.00 0.00 0.00 0.00 0.00 81.55 21.99 0.00 P099112 2008 CN-Anhui Highway Rehab & 200.00 0.00 0.00 0.00 0.00 121.91 -48.59 0.00 Improvement P099062 2008 CN-ShiZheng Railway 300.00 0.00 0.00 0.00 0.00 299.25 20.00 0.00 P096925 2008 CN- Bengbu Integrated Environment 100.00 0.00 0.00 0.00 0.00 94.54 8.79 0.00 Improv P099224 2008 CN-Liaoning Med. Cities (LMC) III 191.00 0.00 0.00 0.00 0.00 180.52 39.98 0.00 P088964 2007 CN-Guangxi Integrated Forestry Dev 100.00 0.00 0.00 0.00 0.00 23.18 -47.82 0.00 P091020 2007 CN-Fujian Highway Sector Investment 320.00 0.00 0.00 0.00 0.00 75.10 -68.10 0.00 P092618 2007 CN-LIAONING MED CITIES INFRAS 2 173.00 0.00 0.00 0.00 0.00 162.57 31.10 0.00 P095315 2007 CN-W. Region Rural Water & Sanitation 25.00 0.00 0.00 0.00 0.00 19.52 1.08 0.00 P096285 2007 CN-MSE Finance 100.00 0.00 0.00 0.00 0.00 5.00 5.00 0.00 P083322 2007 CN-SICHUAN URBAN DEV 180.00 0.00 0.00 0.00 0.00 124.19 85.19 0.00 P075613 2007 CN-Shaanxi Ankang Road Development 300.00 0.00 0.00 0.00 0.00 124.01 -36.30 0.00 P081776 2007 CN-GUANGDONG/PRD2 96.00 0.00 0.00 0.00 0.00 84.31 17.31 0.00 P086515 2007 CN-3rd National Railway 200.00 0.00 0.00 0.00 0.00 56.46 -36.11 0.00

95 P077752 2007 CN-SHANDONG ENVMT 2 147.00 0.00 0.00 0.00 0.00 81.52 -22.98 0.00 P093906 2006 CN-3rd Jiangxi Hwy 200.00 0.00 0.00 0.00 0.00 10.33 -24.67 0.00 P081348 2006 CN-HENAN TOWNS WATER 150.00 0.00 0.00 0.00 0.00 117.68 50.18 0.00 P096158 2006 CN-Renewable Energy II (CRESP II) 86.33 0.00 0.00 0.00 1.65 37.98 31.36 0.00 P081255 2006 CN-Changjiang/Pearl River Watershed 100.00 0.00 0.00 0.00 0.00 88.57 48.57 0.00 Reha P075732 2006 CN-SHANGHAI URBAN APL2 180.00 0.00 0.00 0.00 0.00 78.09 33.09 0.00 P099992 2006 CN-Liaoning Medium Cities Infrastructure 218.00 0.00 0.00 0.00 0.00 154.73 46.73 0.00 P070519 2006 CN-Fuzhou Nantai Island Peri-Urban Dev 100.00 0.00 0.00 0.00 0.00 72.49 34.99 0.00 P086629 2006 CN-Heilongjiang Dairy 100.00 0.00 0.00 0.00 0.00 74.43 73.93 0.00 P085333 2006 CN-5th Inland Waterways 100.00 0.00 0.00 0.00 0.00 11.82 11.82 0.00 P085124 2006 CN-Ecnomic Reform Implementation 20.00 0.00 0.00 0.00 0.00 16.24 16.24 0.00 P069862 2005 CN - Agricultural Technology Transfer 100.00 0.00 0.00 0.00 0.00 49.17 42.67 0.00 P075730 2005 CN-HUNAN URBAN DEV 172.00 0.00 0.00 0.00 0.00 115.44 81.44 0.00 P057933 2005 CN-TAI BASIN URBAN ENVMT 61.00 0.00 0.00 0.00 0.00 6.96 7.26 0.00 P071094 2005 CN - Poor Rural Communities 100.00 0.00 0.00 0.00 0.00 27.56 25.06 0.00 Development P081161 2005 CN-CHONGQING SMALL CITIES 180.00 0.00 0.00 0.00 0.00 60.37 36.62 0.00 P086505 2005 CN-NINGBO WATER & ENVMT 130.00 0.00 0.00 0.00 0.00 9.34 -13.16 0.00 P081346 2005 CN-LIUZHOU ENVIRONMENT MGMT 100.00 0.00 0.00 0.00 0.00 24.11 10.56 0.00 P066955 2004 CN-ZHEJIANG URBAN ENVMT 133.00 0.00 0.00 0.00 0.00 51.02 51.02 -4.98 P065463 2004 CN-Jiangxi Integrated Agric. Modern. 100.00 0.00 0.00 0.00 0.00 8.60 6.86 0.00 P065035 2004 CN-Gansu & Xinjiang Pastoral 66.27 0.00 0.00 0.00 0.00 0.92 0.44 0.00 Development P077137 2004 CN-4th Inland Waterways 91.00 0.00 0.00 0.00 0.46 7.83 7.29 6.83 P075728 2004 CN-GUANGDONG/PRD UR ENVMT 128.00 0.00 0.00 0.00 0.64 63.91 64.55 0.00 P068058 2003 CN-Yixing Pumped Storage Project 145.00 0.00 0.00 0.00 0.00 32.11 32.11 0.00 P070191 2003 CN-SHANGHAI URB ENVMT APL1 200.00 0.00 0.00 0.00 0.00 35.40 35.40 0.00 P040599 2003 CN-TIANJIN URB DEV II 150.00 0.00 0.00 0.00 0.00 90.82 87.82 32.06 P071147 2002 CN-Tuberculosis Control Project 104.00 0.00 0.00 0.00 2.17 3.55 5.72 0.00 Total: 8,729.00 0.00 0.00 0.00 4.92 5,569.99 780.03 33.91

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 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

96 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 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

97 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

98 Annex 14: Country at a Glance CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

99 100 101

102 Annex 15: Maps CHINA: ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT

CHN37103 CHN37104 CHN37105 CHN37106 CHN37107

103 IBRD 37106 SEPTEMBER 2009 LLA 3 This map was produced by the Bank. Map Design Unit of The World denominations The boundaries, colors, on other information shown and any on the part of this map do not imply, Bank Group, any judgment The World or status of any territory, on the legal any endorsement or acceptance of such boundaries. Jiefang Road Improvement Meishan Road Improvement Bagongshan Road Longhezhong Road-Jiangjun Road Bus Maintenance Center Xicheng Road S. Pihe Road M. Longhe Road Shopping Malls Residences Parks Schools LU’AN INTEGRATED CORRIDOR DEVELOPMENT LU’AN INTEGRATED AND TRAFFIC SAFETY LU’AN PUBLIC TRANSPORT LU’AN LOCAL ACCESS AND FREIGHT No. Name of Road No. Location No. Name of Road LIC 1 LIC 2 LIC 3 LPT 1 LLA 1 LLA 2 LLA 3 LLA 3 LLA 3 Kilometer CHINA LLA 3 01 LIC 3 LIC 3 LU’AN, ANHUI PROVINCE LIC 2 LIC 2 LIC 1

LIC 1 Pi He Pi ANHUI MEDIUM CITIES URBAN TRANSPORT PROJECT ANHUI MEDIUM CITIES URBAN TRANSPORT LLA 2 ZHEJIANG

JIANGSU

MA’ANSHAN

XUANCHENG WUHU

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CHUZHOU

TONGLING

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BENGBU SUZHOU Huaibei HEFEI ANHUI LPT 1

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HUAINAN

HUAIBEI

ANQING

LU’AN BOZHOU Lu’an JIANGXI SHANDONG

LLA 1 FUYANG HUBEI HENAN Sea KOREA East REP. OF REP. China REP. OF KOREA REP. DEM. PEOPLE’S JILIN TAIWAN Sea SHANGHAI PHILIPPINES Yellow ZHEJIANG LIAONING FUJIAN LLA 2 JIANGSU LLA 1 South Beijing ANHUI TIANJIN China Sea HONG KONG SHANDONG JIANGXI MACAO

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YUNNAN MONGOLIA

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URBAN TRANSPORT PROJECT HIC 2 HTS 7 HUAIBEI, ANHUI PROVINCE

HUAIBEI INTEGRATED CORRIDOR DEVELOPMENT

No. Name of Road HIC 1 Huaihai Road Improvement (SH101) HIC 2 Suixi Road Improvement (SV101)

HTS 5 HUAIBEI PUBLIC TRANSPORT AND TRAFFIC SAFETY

HPT 1 Tuohe Bus Maintenance Yard HIC02 HPT 2 (1) Xishan Bus Terminal HPT 2 (2) Huize Bus Terminal HTS 2 HPT 2 (3) Nanhu Bus Terminal HPT 2 (4) S. Cuifeng Bus Terminal HPT 3 97 Bus Stops HPT 1

HUAIBEI LOCAL ACCESS AND FREIGHT HLA 1 No. Name of Road HLA 1 Tuohe Road (SH105) Public Transport Depot HLA 2 S. Cuifeng Road (SV203) Traffic Sensitive Areas Busbays Regular Bus Stops

01

Kilometer

This map was produced by the Map Design Unit of The World Bank. HLA 2 The boundaries, colors, denominations and any other information shown on HPT 2 (4) 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.

APRIL 2010 IBRD 37104 L JILIN SHANDONG MONGOLIA O G LIAONING N DEM. PEOPLE’S O This map was produced by the M BEIJING REP. OF KOREA APT 1 Beijing Huaibei Map Design Unit of The World Bank. E I N TIANJIN HENAN HUAIBEI SUZHOU The boundaries, colors, denominations HEBEI REP. OF JIANGSU KOREA and any other information shown on SHANXI BOZHOU GXIA SHANDONG Yellow BENGBU this map do not imply, on the part of QINGHAI NIN Sea FUYANG The World Bank Group, any judgment GANSU HUAINAN SHAANXI HENAN JIANGSU on the legal status of any territory, or CHUZHOU ANHUI SHANGHAI ANHUI any endorsement or acceptance of HUBEI LU’AN HEFEI such boundaries. East SICHUAN ZHEJIANG HEFEI CHONGQING XIZANG Lu’an China CHAOHU MA’ANSHAN Sea HUNAN JIANGXI Wuhu FUJIAN GUIZHOU WUHU TONGLING TAIWAN YUNNAN HUBEI Anqing XUANCHENG 01 GUANGXI GUANGDONG HONG KONG ANQING CHIZHOU MACAO Kilometer VIETNAM South MYANMAR LAO HUANGSHAN ZHEJIANG PEOPLE’S China Sea HAINAN THAILAND DEM. JIANGXI REP. PHILIPPINES

CHINA Anqing Train Station ANHUI MEDIUM CITIES 1 2 URBAN TRANSPORT PROJECT ANQING, ANHUI PROVINCE 3 4 No. 9 School ANQING INTEGRATED CORRIDOR DEVELOPMENT 5

No. Name of Road AIC 1 AIC 1 Huxin Road Improvement 6 AIC 2 Shuguang Road Improvement AIC 3 E. Yanjiang Road 7 Anqing ANQING PUBLIC TRANSPORT AND TRAFFIC SAFETY Hotel West No. Maintenance Yard Lake 8 APT 1 Hongguang Bus Depot APT 2 Shizishan Bus Depot APT 3 Maintenance Facility (Equipment Purchasing) 9 Large Citizen 10 Square Lake ANQING LOCAL ACCESS AND FREIGHT 11 No. Name of Road 12 Lianhu ALA 1 M. Yanjiang Road Anqing Park ALA 2 Dekuan Road Zoo

21 20 Linhu AIC 1 Park 22 Public Transport Depot No. 2 School 13 23 of Dekuan Rd. Train Station ALA 2 Shanghai APT 2 Residence School 24 14 Jingtai 25 Hotel Hotels No. 1 School of Dekuan Rd. 26 Kangxihe 15 Guanyin Rd. Market Parks 27 Daguanting Residence AIC 2 16 Square 28 17 Market 29 ALA 1 33 AIC 3 Yingjiang 18 32 25 Improvements Temple 30 31 ALA 1 Jianghua Crosswalks 19 Residence

SEPTEMBER 2009 IBRD 37103 CHINA RUSSIAN FEDERATION

ANHUI MEDIUM CITIES KAZAKHSTAN HEILONGJIANG Sea URBAN TRANSPORT PROJECT MONGOLIA JILIN of Japan KYRGYZ ANHUI PROVINCE REP. LIAONING D.P.R. OF XINJIANG BEIJING KOREA Lu’anLu’an PROJECT CITIES SELECTED CITIES AND TOWNS BEIJING NEI MONGOL TIANJIN REP. OF PREFECTURE CAPITALS HEBEI EXPRESSWAYS KOREA SHANDONG JAPAN

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PROVINCE CAPITAL SHANXI EXPRESSWAYS UNDER CONSTRUCTION QINGHAI N GANSU HENAN JIANGSU PREFECTURE BOUNDARIES SHAANXI RAILROADS ANHUI SHANGHAI East PROVINCE BOUNDARIES XIZANG G HUBEI SICHUAN ZHEJIANG China

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Taihu Wuchang CHIZHOU Huangshan Lake Jingde Wangjiang Shitai Susong To C To Jixi h Hangzhou a n Xishui Dongzhi 30° g 30° J Longgun HUANGSHAN ia n Lake g Qimen Yi She ZHEJIANG Xiuning Huangshan To Nanchang Poyang Lake JIANGXI 115° 116° 117° To Jingdezhen 118° To Quzhou 119° SEPTEMBER 2009 L JILIN SHANDONG MONGOLIA O G LIAONING N DEM. PEOPLE’S O M BEIJING REP. OF KOREA Beijing Huaibei E I CHINA N TIANJIN HENAN HUAIBEI SUZHOU HEBEI REP. OF KOREA JIANGSU SHANXI BOZHOU GXIA SHANDONG Yellow BENGBU NIN ANHUI MEDIUM CITIES QINGHAI Sea FUYANG GANSU HUAINAN SHAANXI HENAN JIANGSU CHUZHOU ANHUI SHANGHAI ANHUI URBAN TRANSPORT PROJECT HUBEI LU’AN HEFEI East SICHUAN ZHEJIANG HEFEI CHONGQING WUHU, ANHUI PROVINCE

XIZANG Lu’an China CHAOHU MA’ANSHAN Sea HUNAN JIANGXI Wuhu FUJIAN GUIZHOU WUHU TONGLING TAIWAN YUNNAN HUBEI Anqing XUANCHENG 01 GUANGXI GUANGDONG HONG KONG ANQING CHIZHOU MACAO Kilometer VIETNAM South MYANMAR LAO HUANGSHAN ZHEJIANG PEOPLE’S China Sea HAINAN THAILAND DEM. JIANGXI REP. PHILIPPINES

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WIC 2

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WIC 3 WIC 1

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WUHU INTEGRATED CORRIDOR DEVELOPMENT WIC 1 No. Name of Road WIC 1 Jiuhua Road Improvement (SH101) WIC 2 Yijiang Road Improvement (SV101) WIC 3 Third Ring Road (SH206) WIC 3

Integrated Corridor Development

Local and Freight Access This map was produced by the Map Design Unit of The World Bank. Bus Bay The boundaries, colors, denominations and any other information shown on SEPTEMBER 2009 this map do not imply, on the part of

Regular Bus Stop IBRD 37107 The World Bank Group, any judgment on the legal status of any territory, or Regular Bus Stop any endorsement or acceptance of such boundaries.