Completion Report Project Number: 34174 Loan Number: 2181 June 2014 People’s Republic of China: Central Sichuan Roads Development Project This document is being disclosed to the public in accordance with ADB's Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion (31 August 2005) (6 February 2013) CNY1.00 = $0.1208 $0.1605 $1.00 = CNY8.2770 CNY6.2287 ABBREVIATIONS ADB – Asian Development Bank EIA – environmental impact assessment EIRR – economic internal rate of return FIRR – financial internal rate of return GDP – gross domestic product O&M – operation and maintenance PRC – People’s Republic of China SPTD – Sichuan Provincial Transport Department SYECL – Sichuan Yaxi Expressway Company Limited WACC – weighted average cost of capital WEIGHTS AND MEASURES km – kilometer m2 – square meter mu – Chinese unit of measurement (1 mu = 666.67 m2) NOTE In this report, ―$‖ refers to US dollars, unless otherwise stated. Vice-President S. Groff, Operations 2 Director General A. Konishi, East Asia Department (EARD) Director H. Sharif, Resident Mission in the People’s Republic of China, EARD Team leader W. Zhang, Senior Project Officer, EARD Team members Z. Niu, Senior Project Officer (Environment), EARD F. Wang, Senior Project Officer (Financial Management), EARD H. Xia, Project Analyst, EARD W. Zhu, Senior Project Officer (Resettlement), EARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 5 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Related Technical Assistance 7 I. Consultant Recruitment and Procurement 8 J. Performance of Consultants, Contractors, and Suppliers 8 K. Performance of the Borrower and the Executing Agency 9 L. Performance of the Asian Development Bank 9 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving Outcome 9 C. Efficiency in Achieving Outcome and Outputs 10 D. Preliminary Assessment of Sustainability 11 E. Impact 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 14 C. Recommendations 15 APPENDIXES 1. Design and Monitoring Framework 16 2. Chronology of Major Events 21 3. Project Costs and Financing Plan 23 4. Projected and Actual Contract Awards and Disbursements 24 5. Appraisal and Actual Implementation Schedule 25 6. Organization Charts 26 7. Compliance with Loan Covenants 28 8. Project Contract Details 36 9. Economic Reevaluation 39 10. Financial Reevaluation 43 11. Land Acquisition and Resettlement 47 12. Socioeconomic Impact and Poverty Reduction 52 13. Environmental Impact Analysis 58 BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 2181 3. Project Title Central Sichuan Roads Development Project 4. Borrower People’s Republic of China 5. Executing Agency Sichuan Provincial Communications Department 6. Amount of Loan $600 million 7. Project Completion Report Number PCR: PRC 1448 B. Loan Data 1. Appraisal – Date Started 14 March 2005 – Date Completed 22 March 2005 2. Loan Negotiations – Date Started 16 August 2005 – Date Completed 18 August 2005 3. Date of Board Approval 22 September 2005 4. Date of Loan Agreement 3 April 2006 5. Date of Loan Effectiveness – In Loan Agreement 2 July 2006 – Actual 12 July 2006 – Number of Extensions 1 6. Closing Date – In Loan Agreement 31 March 2012 – Actual 6 February 2013 – Number of Extensions 1 7. Terms of Loan – Interest Rate ADB’s London interbank offered rate (LIBOR) based lending facility – Maturity 26 years – Grace Period 6 years 8. Terms of Onlending – Interest Rate ADB’s LIBOR-based lending facility – Maturity 26 years – Grace Period 6 years – Second-Step Borrower Sichuan Yaxi Expressway Company Limited ii 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 15 September 2006 6 February 2013 76.7 months Effective Date Original Closing Date Time Interval 12 July 2006 31 March 2012 68.4 months b. Amount ($) Original Last Revised Amount Net Amount Amount Category Allocation Allocation Canceled Available Disbursed Expressway civil works and local roads 505,900,000 477,699,669 99,600,000 477,699,669 477,699,669 Public transportation centers 1,000,000 1,000,000 0 1,000,000 1,000,000 Consulting services and training 2,100,000 2,015,331 0 2,015,331 2,015,331 Interest during construction and commitment charge 72,100,000 19,685,000 0 19,685,000 19,685,000 Unallocated 18,900,000 0 0 0 0 Total 600,000,000 500,400,000 99,600,000 500,400,000 500,400,000 Source: Asian Development Bank. C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 931.00 500.40 Local Currency Cost 1,146.00 2,602.23 Total 2,077.00 3,102.63 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 1,402.30 2,411.57 ADB Financed 527.90 480.70 Subtotal 1,930.20 2,892.27 IDC Costs Borrower Financed 74.70 190.67 ADB Financed 72.10 19.70 Subtotal 146.80 210.37 Note: Numbers may not sum precisely because of rounding. ADB = Asian Development Bank, IDC = interest during construction and commitment charge. Source: Asian Development Bank. iii 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual A. Base Cost 1. Expressway civil works 1,255.4 2,494.7 2. Equipment 165.3 91.8 3. Land acquisition and resettlement 95.3 190.4 4. Consulting services and training 82.3 42.0 5. Local roads 68.8 68.4 6. Public transport centers 2.5 4.9 Subtotal (A) 1,669.6 2,892.3 B. Contingencies 1. Physical contingencies 126.0 0.0 2. Price contingencies 134.6 0.0 Subtotal (B) 260.6 0.0 C. Interest during Construction and Commitment Charge 146.8 210.4 Total 2,077.0 3,102.6 Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank. 4. Project Schedule Item Appraisal Estimate Actual Completion of Detailed Design December 2007 Date of Contract with Consultants March 2006 February 2007 Civil Works Contract Date of First Award March 2006 March 2007 Completion of Work September 2011 April 2012 Equipment and Supplies Dates First Procurement January 2009 April 2010 Last Procurement June 2011 August 2011 Start of Operations Full Completion and Operation of Expressway September 2011 April 2012 Sources: Sichuan Provincial Transport Department, Sichuan Yaxi Expressway Company Limited. 5. Project Performance Report Ratings Ratings Development Implementation Implementation Period Objectives Progress From 22 September 2005 to 28 February 2006 Satisfactory Satisfactory From 1 March to 31 March 2006 Satisfactory Unsatisfactorya From 1 April 2006 to 31 May 2007 Satisfactory Satisfactory From 1 June to 31 October 2007 Satisfactory Highly Satisfactory From 1 November 2007 to 31 December 2007 Satisfactory Satisfactory From 1 January 2008 to 31 December 2012 Satisfactory Satisfactory a The unsatisfactory rating was caused by delay of 3 months in loan signing. Source: Asian Development Bank. iv D. Data on Asian Development Bank Missions No. of No. of Specialization of Name of Mission Date Persons Person-Days Membersa Fact-finding 24 January–3 February 2005 9 72 a, b, c, d, e, f, g, h, i Appraisal 14–22 March 2005 4 32 a, b, c, f Inception 17–21 July 2006 2 8 g, n Review 1b 19–24 November 2007 5 25 j, f, h, i, n Review 2 5–11 September 2008 3 18 h, i, n Midterm review 18–25 September 2009 4 28 h, i, m, n Review 3 9–16 August 2010 3 21 h, i, n Review 4 26–30 September 2011 3 12 h, i, n Review 5 24–30 October 2012 2 12 h, n Project completion review 14–22 October 2013 4 29 h, i, m, n a a = project economist, b = counsel, c = financial specialist, d = project specialist (roads), e = social development specialist (environment), f = social development specialist (resettlement), g = transport specialist, h = project officer (transport), i = project officer (resettlement), j = portfolio management specialist, m = project officer (financial management), n = project analyst. b Project administration was transferred to the ADB Resident Mission in the People’s Republic of China on 1 December 2007. Source: Asian Development Bank. I. PROJECT DESCRIPTION 1. The People’s Republic of China (PRC) has achieved rapid economic development and growth in gross domestic product (GDP) exceeding 7.5% annually since the 1980s. Vehicle ownership in the PRC also has expanded rapidly from 1.69 million vehicles in 1980, to 5.54 million vehicles in 1990, 16.09 million vehicles in 2000, and 109.33 million vehicles in 2012. Sustained economic growth and increased vehicle ownership have resulted in an unprecedented escalation in traffic flow between and within provinces. The economy’s changing structure and increasing diversification have altered the pattern of transport demand. Movement of goods and passengers by road, which is more flexible and responsive to market needs than other modes of transport, is expanding rapidly. By 2012, the volume of road freight transport had increased tenfold from 597.3 billion ton-kilometers in 2000 to 5,953.5 billion ton-kilometers and passenger transport by nearly 28 times from 660.0 billion passenger-kilometers in 2000 to 1,846.8 billion passenger-kilometers. To cope with the dramatic growth in traffic demand, the government initiated a long-term strategy in 1988 to implement a 35,000 kilometer (km) national trunk highway system.