Huai River Basin Flood Management and Drainage Improvement Project

Document of The World Bank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized Report No: 45437-CN

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

Public Disclosure Authorized IN THE AMOUNT OF US$200 MILLION

TO THE

PEOPLE’S REPUBLIC OF CHINA

FOR A

HUAI RIVER BASIN FLOOD MANAGEMENT AND DRAINAGE IMPROVEMENT PROJECT

Public Disclosure Authorized

May 26, 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 February 2010)

Currency Unit = Renminbi (RMB) Yuan (Y) Y1.0 = US$0.15 US$1.0 = Y6.827 FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AEP Accelerated Emergency Program CNAO China National Audit Office CPCO Central Project Coordination Office CPLG Central Project Leading Group CPMO Central Project Management Office CPS Country Partnership Strategy DSR Dam Safety Report DUC Dam under Construction EG Expert Group EIA Environmental Impact Assessment EMP Environmental Management Plan FB Finance Bureau FDASS Flood Disaster Assessment and Support System FDIA Farmer Drainage and Irrigation Association HRBC Huai River Basin Commission MWR Ministry of Water Resources NDRC National Development and Reform Commission MIS Management Information System MOF Ministry of Finance O&M Operation and Maintenance PAP Project Affected People PAO Provincial Audit Office PDRC Provincial Development and Reform Commission PFB Provincial Finance Bureau PLG Project Leading Group PIU Project Implementation Unit POE Panel of Expert PPMO Provincial Project Management Office PWRB Provincial Water Resources Bureau RAP Resettlement Action Plan RO Resettlement Office SOCAD State Office for Comprehensive Agricultural Development

Vice President: James W. Adams, EAPVP Country Director: Klaus Rohland, EACCF Sector Director: John Roome Sector Managers: Ede Jorge Ijjasz-Vasquez, EASCS Vijay Jagannathan, EASIN Task Team Leader: Liping Jiang, EASCS CHINA

Huai River Basin Flood Management and Drainage Improvement Project

CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ...... 1

A. Country and Sector Issues ...... 1 B. Rationale for Bank Involvement ...... 2 C. Higher Level Objectives to which the Project Contributes ...... 2 II. PROJECT DESCRIPTION ...... 3 A. Lending Instrument, Financing Arrangements and Other Approaches ...... 3 B. Project Development Objective and Key Indicators ...... 3 C. Project Components ...... 3 D. Lessons Learned and Reflected in the Project Design ...... 4 E. Alternatives Considered and Reasons for Rejection ...... 6 III. IMPLEMENTATION ...... 6 A. Partnership Arrangements ...... 6 B. Institutional and Implementation Arrangements ...... 7 C. Monitoring and Evaluation of Outcomes/Results ...... 8 D. Sustainability and Replicability ...... 8 E. Critical Risks and Possible Controversial Aspects ...... 9 F. Loan/Credit Conditions and Covenants ...... 10 IV. APPRAISAL SUMMARY ...... 10 A. Economic and Financial Analyses ...... 10 B. Technical ...... 12 C. Fiduciary ...... 12 D. Social...... 13 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/or Other Agencies ...... 20

Annex 3: Results Framework and Monitoring ...... 21

Annex 4: Detailed Project Description ...... 27

Annex 5: Project Costs ...... 37

Annex 6: Implementation Arrangements ...... 40

Annex 7: Financial Management and Disbursement Arrangements ...... 46

Annex 8: Procurement ...... 55

Annex 9: Economic and Financial Analysis ...... 60

Annex 10: Safeguard Policy Issues ...... 67

Annex 11: Project Processing ...... 80

Annex 12: Documents in the Project File ...... 81

Annex 13: Statement of Loans and Credits ...... 82

Annex 14: Country at a Glance ...... 86

Annex 15: Maps ...... 89

IBRD_37718_River Systems in the Huai River Basin IBRD_37713_Geographic Position of the Project Areas in the Huai River Basin IBRD_37714_Geographic Position of Project Areas in Henan Province IBRD_37715_Geographic Position of Project Areas in Anhui Province IBRD_37716_Geographic Position of Project Areas in Jiangsu Province IBRD_37717_Geographic Position of Project Areas in Shandong Province

PEOPLE’S REPUBLIC OF CHINA Huai River Basin Flood Management and Drainage Improvement Project

PROJECT APPRAISAL

DOCUMENT

East Asia and Pacific Region EASCS

Date: May 26, 2010 Team Leader: Liping Jiang Country Director: Klaus Rohland Sectors: Flood Protection (70%), Irrigation Sector Director: John Roome and Drainage (30%) Sector Managers: Ede Jorge Ijjasz-Vasquez & Themes: Water resource management (P), Vijay Jagannathan Rural services and infrastructure (S) Project ID: P098078 Environmental screening category: A Lending instrument, financing arrangements and other approaches: Specific Investment Loan Project Financing Data

[X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 200.00 Proposed terms: U.S. Dollar denominated, commitment-linked, variable spread loan, whose interest rate is based on six-month LIBOR plus an additional variable spread, level repayments, and a 25 year term, inclusive of an 8-year grace period, and front-end fee 0.25% of the loan amount. Financing Plan (US$m) Source Local Foreign Total Borrower 397.41 0.00 397.41 IBRD/IDA 173.61 26.39 200.00 Total 571.02 26.39 597.41 Borrower: Ms. Wang Wei, Director IF Division I Ministry of Finance, People's Republic of China San Li He, Beijing, China; 100820 Tel: +86 10 68551174; Fax: +86 10 68551125 Email: [email protected]

Responsible Agency: Mr. Liu Yunian, Deputy Director General Huai River Basin Commission (HRBC) Of Ministry of Water Resources (MWR) Bengbu 233001, Anhui Province, China Tel. 86-552-3093702; Fax: 86-552-3093708; E-mail: [email protected] Water Resources Departments Of Jiangsu, Shandong, Henan and Anhui Provinces Estimated disbursements (Bank FY/US$m) FY 2011 2012 2013 2014 2015 2016 Annual 30 40 50 40 20 20 Cumulative 30 70 120 160 180 200 Project implementation period: Start: September 30, 2010; End: September 30, 2016 Expected effectiveness date: September 30, 2010 Expected closing date: December 31, 2016 Does the Project depart from the CPS in content or other significant [ ] Yes [X] No respects? (Ref. PAD I. C.) Does the Project require any exceptions from Bank policies? (Ref. PAD [X] Yes [ ] No IV. G. ) Translation Waiver: In accordance with the revised guidelines on English translation waiver (March 2008), the Environmental Impact Assessment (EIA), the associated Environmental Management Plan (EMP), and the Resettlement Action Plan (RAP) for each Project Province were developed in the Chinese language. These have been reviewed by Bank staff who are native Chinese speakers, and found acceptable to the Bank. The Consolidated Environmental Assessment (CEA) Report and the Consolidated RAP have been translated into English, and have been reviewed and approved by the Bank. The English language CEA Report and the Consolidated RAP have been disclosed through the Bank's Infoshop, while the Chinese language EIAs, EMPs, and RAPs have been disclosed in China. 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”? [X] Yes [ ] No (Ref. PAD III. E.) Does the Project meet the Regional criteria for readiness for [X] Yes [ ] No implementation? (Ref. PAD IV. G.) Project development objective (Ref. PAD II. B., Technical Annex 3) The Project Development Objective (PDO) is to provide better and more secure protection against floods and water logging, increase farmland productivity, and reduce property losses in predominantly poor rural areas in the Huai River Basin in the provinces of Jiangsu, Shandong, Anhui and Henan. Project description (Ref. PAD II. C., Technical Annex 4)

Component 1: Flood Protection and Drainage Improvement (a) Carrying out of flood protection and drainage improvement works in the Project Area including:(i) strengthening of dikes; (ii) improving waterways through, inter alia, river dredging, drainage channel excavation, and river bank reinforcement and stabilization; and (iii) construction, rehabilitation, replacement and expansion of flood control works, including pumping stations, cross-dike structures, sluice gates and bridges. (b) Enhancing community involvement in flood protection and drainage improvement works through: (i) establishment and expansion of Farmer Drainage and Irrigation Associations in the Project Area; and (ii) carrying out drainage and minor irrigation improvement works in the Project Area. (c) Carrying out of a program for mitigating the adverse environmental impacts and enhancing positive impacts from the implementation of this Component 1 of the Project.

Component 2: Disaster Assessment and Support System (a) Carrying out of a program to enhance disaster assessment and support systems including: (i) upgrading coverage and facilities for information and data collection on river floods and drainage; (ii) improving speed of disaster information and data collection, transmission and processing; (iii) establishing a disaster assessment center in Hefei, Anhui Province to facilitate the participatory decision making process; (iv) improving the level of accuracy of flood and water-logging damage assessment process; and (v) formulating innovative measures on water- logging mitigation. (b) Carrying out of a program for mitigating the adverse environmental impacts and enhancing positive impacts from the implementation of this Component 2 of the Project.

Component 3: Institutional Strengthening (a) Strengthening the capacity of the Project Implementing Entities in critical areas related to the Project including: (i) dike maintenance; (ii) design and construction; (iii) modern construction technologies; (iv) data collection and decision support systems for flood forecasting systems, emergency preparedness plans and river modeling; (v) financial and physical sustainability; and (vi) Project implementation and management of completed works. (b) Strengthening the institutional and physical capacities of the Project Implementing Entities for the efficient operation and maintenance of flood control and drainage improvement facilities in the Project Area.

Component 4: Resettlement Action Plan Implementation Carrying out of a program for the resettlement and rehabilitation of people affected by the implementation of the Project

Component 5: Project Management Strengthening the capacity of the Project Implementing Entities in Project management through, inter alia: (i) provision of consultant services for the production of engineering design, preparation and processing of procurement documents and carrying out construction supervision; (ii) installation and operation of a procurement and financial management information system; (iii) establishment of monitoring and evaluation systems and enhancing capacity for carrying out monitoring and evaluation of the Project; and (iv) carrying out quality assurance measures. Which safeguard policies are triggered if any: (Ref. PAD IV. F.; Technical Annex 10) (a) Environmental Assessment (OP/BP/4.01) (b) Involuntary Resettlement (OP/BP 4.12) (c) Physical Cultural Resources (Op/BP 4.11) (d) Natural Habitats (OP/BP 4.04) (e) Safety of Dams (OP/BP 4.37) Significant, non-standard conditions, if any, for: (Ref. PAD III. F.) Negotiations and Board presentation: None Loan effectiveness: None Disbursement Condition: None Covenants applicable to project implementation: (a) Each project province and HRBC, as relevant, shall implement the Project in accordance with Project Implementation Plan (PIP), EMPs, RAPs, Policy Framework for Resettlement and Land Acquisition; and annual EMP, RAP and Dam Safety action plans. (b) Each project province and HRBC, as relevant, shall carry out external monitoring of RAPs and Policy Framework for Resettlement and Land Acquisition. (c) HRBC shall establish by September 30, 2016 a flood disaster assessment and support system at the basin level of Huai River in the Project Area to provide a timely decision making support during flood season and a detailed post-impact assessments of historical flood disasters. (d) Each project province shall: (i) carry out a pilot program in 2011 comprising rehabilitation of on-farm drainage and irrigation works, and establishment of an FDIA with the objective of securing the participation of the FDIA in the operation and maintenance of said works; and (ii) taking account of the lessons from the implementation of the pilot program, revise as needed the FDIA Extension Plan and implement the Plan. (e) Each project province and HRBC shall install and operationalize for use the Procurement and Financial Management Information System no later than ninety days after the Effective Date, and thereafter apply the system in order to monitor the entire procurement process and financial transactions under the Project. (f) Each project province shall prepare an operation and maintenance plan for irrigation and drainage systems constructed or rehabilitated in the Project Province, at least three months prior to the completion of each such system.

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and Sector Issues

1. China’s rivers and flood plains have been the focus of human settlement since the dawn of civilization. Rivers were the natural transportation routes and the floodplains offered vast tracts of fertile land. Today, the flood plains provide a home to the bulk of the China’s population, most of its industry, and the vast tracts of farmland that feed a population of 1.3 billion. Unfortunately, one of the negative effects of China’s most impressive economic growth over the last 15-20 years is that many of these productive areas are extremely vulnerable to flooding. The 1998 floods in the Northeast and in the Yangtze Basin, as well as the disastrous 2003 flood in the Huai River Basin, caused the government to refocus on flood mitigation measures, especially in the Yangtze and Huai basins.

2. The Huai River Basin is the third largest river basin in China, and covers 270,000 km2 in four provinces (Henan, Anhui, Jiangsu and Shandong) with a population of 165 million. The basin is strategically, important from an economic perspective, producing one sixth of the nation’s food and one fourth of the nation’s cash crops. However, extraordinary flood and water-logging disasters occur every 3-5 years, resulting in big economic losses, as rivers, rivulets and depressions in this Basin have inadequate flood protection levels and poor drainage services. The most recent serious flood and water-logging disaster in 2003 brought great suffering to the cities and large rural areas, resulting in direct economic losses of US$4.5 billion, with thousands of people being made homeless due to inundation and collapse of their houses. Due to inadequate flood protection levels, people living on the flood plains of the Huai River are continuously affected by flooding during the rainy season each year. Inadequate drainage services exacerbate the situation and result in water logging, which greatly reduces agricultural productivity, because of the existence of large number of closed depressions on the flood plain.

3. China’s strategy to address the flood and water-logging problems in the Huai River Basin over the past 5 years has focused on the construction of major infrastructures along rivers. Following the disastrous 2003 floods in the Huai basin, it formulated an Accelerated Emergency Program (AEP) to enhance flood protection and improve drainage systems. This Program is being implemented over the period 2003-2008 at an estimated cost of US$5.5 billion (RMB 44.7 billion) through 19 key sub-programs. It aims to rehabilitate or build main flood control structures along the Huai River and main tributaries, and upgrade the flood control standards from the current once in less than 5-50 years to once in 20-100 years. Three complementary and urgent sub-programs were added in 2005, aimed at improving drainage services for the rivulets and depressions within the Basin, by upgrading the drainage capacity from once in less than 3-5 years to once in 5-20 years.

4. This project will focus on actions taken to accelerate the implementation of these three additional sub-programs as an integral part of AEP. Activities to be supported through this project focus on relatively medium and small size works on the lesser tributaries in the poorer rural areas, spread out over four provinces, while the AEP will concentrate on improvements to the Huai River and its main tributaries.

1 B. Rationale for Bank Involvement

5. The Bank is currently involved in a number of relevant projects, which support both structural and non-structural measures (e.g. the Yangtze Dikes Strengthening Project), as well as provide support to river basin commissions and provincial agencies, and for participatory approaches for integrated water resources planning and management (a recent example is the GEF supported Hai Basin Integrated Water and Environment Management Project). Important lessons drawn from these projects have been incorporated in the design of this project. Bank involvement would allow the use of experience, particularly in development of non-structural measures (e.g. development of flood warning and disaster assessment and decision support systems at the basin level to maximize the benefit of the works constructed under AEP and the Project), as well as introduction of international and national technical assistance, new technology, materials and construction methods. The proposed Project would also ensure that adequate attention is given to sustainability issues during the project preparation and design stages, including institutional reforms and enhanced O&M arrangements (e.g., establishment of Farmer Drainage and Irrigation Associations to participate in the whole process of project design, construction supervision and responsibilities for O&M of the on-farm drainage works to ensure water is drained through well-maintained on-farm works to the main systems). Most importantly, value added by the Bank through this project would improve and strengthen the Government’s AEP and increase its benefits.

C. Higher Level Objectives to which the Project Contributes

6. The Bank’s current Country Partnership Strategy for China (CPS 35435-CN, May 23 2006) and the Country Water Resources Assistance Strategy (CWRAS-2002) identify flood protection and drainage as one of the critical areas for the Bank to support through both structural (infrastructure construction) and non-structural measures (institutional capacity building, river basin management, flood warning and disaster assessment systems, participatory approach, and strengthening O&M). Included under the non-structural measures would be activities aimed at the top-down institutional strengthening needs of the Huai River Basin Commission (HRBC) and provincial and local government institutions, to ensure financial and physical sustainability of the facilities improved under the Project. Bottom-up measures would aim to ensure the active participation of beneficiaries as an integral part of the institutional strengthening component.

7. The proposed project will contribute to environmentally sustainable development through the formulation and adoption of an Environmental Management Plan (EMP), which will detail environmental protection mitigation and enhancement measures. In addition, the Project will develop and adopt Resettlement Action Plans (RAPs) aimed at minimizing disturbances to people to be resettled or affected, and maintaining or improving their income levels and living standards.

2 II. PROJECT DESCRIPTION

A. Lending Instrument, Financing Arrangements and Other Approaches

8. An IBRD Specific Investment Loan (SIL) in the amount of US$200 million would finance the Huai River Basin Flood Management and Drainage Improvement Project. The Bank Loan will be U.S. Dollar denominated, commitment-linked, variable spread loan, whose interest rate is based on six-month LIBOR plus an additional variable spread, level repayments, and a 25- year term, inclusive of an 8-year grace period, and front-end fee 0.25 percent of the loan amount. The above Bank-Loan terms are consistent with the Borrower’s choice of similar Bank financed projects.

B. Project Development Objective and Key Indicators

9. The Project Development Objective (PDO) is to provide better and more secure protection against floods and water logging, to increase farmland productivity, and reduce property losses in predominantly poor rural areas in the Huai River Basin in the provinces of Jiangsu, Shandong, Anhui and Henan.

10. The PDO would be achieved through the provision of improved flood control and drainage works and enhanced technical and institutional arrangements for flood management to effectively reduce the severity and impact of flooding and water logging in the predominantly rural areas. The PDO shall be measured with the following indicators: (a) rural and urban areas protected from flooding or water-logging; (b) number of people protected from flooding or water logging; (c) reduced economic losses in urban and rural areas protected from flooding and water- logging; (d) increased per capita agricultural incomes of farmers with flood protection; and (e) increased navigation benefits with river improvements.

C. Project Components

11. The Project would include the following five project components. Annex 4 provides further details, including the distribution of the project works over the four provinces.

Component 1: Flood Protection and Drainage Improvement (US$307.53 million)

(a) Carrying out of flood protection and drainage improvement works in the Project Area including: (i) strengthening of dikes; (ii) improving waterways through, inter alia, river dredging, drainage channel excavation, and river bank reinforcement and stabilization; and (iii) construction, rehabilitation, replacement and expansion of flood control works, including pumping stations, cross-dike structures, sluice gates and bridges; (b) Enhancing community involvement in flood protection and drainage improvement works through: (i) establishment and expansion of Farmer Drainage and Irrigation Associations in the Project Area; and (ii) carrying out drainage and minor irrigation improvement works in the Project Area; (c) Carrying out of a program for mitigating the adverse environmental impacts and enhancing positive impacts from the implementation of this Component 1 of the Project.

Component 2: Disaster Assessment and Support System (US$26.22 million)

(a) Carrying out of a program to enhance disaster assessment and support systems including: (i) upgrading coverage and facilities for information and data collection on river floods and drainage; (ii) improving speed of disaster information and data collection, transmission and processing; (iii) establishing a disaster assessment center in Hefei, Anhui Province to facilitate the participatory decision making process; (iv) improving the level of accuracy of flood and water-logging damage assessment process; and (v) formulating innovative measures on water-logging mitigation; and (b) Carrying out of a program for mitigating the adverse environmental impacts and enhancing positive impacts from the implementation of this Component 2 of the Project.

Component 3: Institutional Strengthening (US$5.15 million)

(a) Strengthening the capacity of the Project Implementing Entities in critical areas related to the Project including: (i) dike maintenance; (ii) design and construction; (iii) modern construction technologies; (iv) data collection and decision support systems for flood forecasting systems, emergency preparedness plans and river modeling; (v) financial and physical sustainability; and (vi) Project implementation and management of completed works; and (b) Strengthening the institutional and physical capacities of the Project Implementing Entities for the efficient operation and maintenance of flood control and drainage improvement facilities in the Project Area.

Component 4: Resettlement Action Plan Implementation (US$156.74 million)

Carrying out of a program for the resettlement and rehabilitation of people affected by the implementation of the Project

Component 5: Project Management (US$41.76 million)

Strengthening the capacity of the Project Implementing Entities in Project management through, inter alia: (i) provision of consultant services for the production of engineering design, preparation and processing of procurement documents and carrying out construction supervision; (ii) installation and operation of a procurement and financial management information system; (iii) establishment of monitoring and evaluation systems and enhancing capacity for carrying out monitoring and evaluation of the Project; and (iv) carrying out quality assurance measures.

D. Lessons Learned and Reflected in the Project Design

4 12. The Bank has financed over 50 water resources irrigation and drainage projects in China over the past 20 years. These projects have been implemented efficiently, and time and cost overruns have not been excessive despite periods of sharp price escalation. The China Water Resources Assistance Strategy (2002) identified institutional and management issues as fundamental for good performance of water resources projects. Projects with similar elements of this project are listed in Annex 2.

13. The key lessons learned from past projects are listed below under this paragraph. These lessons, together with the key success factors such as strong government commitment and ownership, beneficiary participation, adoption of realistic O&M plans, introduction of cost recovery fees, and financial autonomy of project entities, have been reflected in the design of the proposed Project.

(a) Detailed organizational and staffing arrangements for project coordination, management and implementation, particularly with a strong linkage between PMOs and administrative departments, should be formulated and agreed well before project implementation starts. (b) Counterpart funding should be committed before project implementation starts while minimizing the amount of counterpart funds from poor counties. (c) Water resource management needs to have top-down, bottom-up and vertical and horizontal integration. Top-down activities include establishment of laws, policies, and regulation standards. Bottom-up activities include working with counties and townships, villages and individual water users and beneficiaries in the entire planning and implementation process. Horizontal integration includes cross-sectoral cooperation and coordination of actions, while vertical integration includes direct linking and constant interaction between the central, river basin and local activities. (d) Projects should include institutional development support for strengthening project implementing and management organizations, as well as provincial and local government bureaus, including transfer of know-how and technology from elsewhere. (e) International and national consultants and technical panels can make substantial contributions to improving the designs of works, economic impact assessment, and resettlement planning and design. (f) People affected by a project should be involved from the early stages of project preparation and throughout the implementation period, in order to gain and maintain their support. (g) Procurement for major civil works should start early in the preparation period, so that bid awards will correspond with loan effectiveness. (h) Cost recovery should be sought from the beneficiaries of flood protection to make the Project sustainable.

14. The impact of climate change on attainment of project objectives has been evaluated and reflected in project design, within the proposed adaptive measures being adopted during project implementation. Based on the results of a case study1, global warming would increase average annual air temperature by about 2.1°C, and increase average precipitation in the summer season by 5 percent in the Huai River Basin over the next 50 years. This would result in an increase of

1 The case study was jointly carried out by the Institute of Development Studies, University of Sussex, UK and the Institute of Geographic Science and Natural Resources Research, Chinese Academy of Sciences, China.

5 5percent in water-logged areas and decrease benefits from water-logging improvements by about 10 percent from earlier project designs which did not consider the adverse impact of the climate change.

15. The following three adaptive measures were included in the Project to mitigate the impact of climate change: (a) excavation of additional drainage ditches or small ponds along both sides of the existing main drainage canals to increase drainage capacity; (b) revision of the existing planning and layout for more efficient drainage systems in consultation with farmers through the FDIA established under the project; and (c) establishment of flood warning and disaster assessment system at the river basin level to assist decision making on flood and drainage operations. Implementation of the above three adaptive measures would basically eliminate the adverse impact of climate change, with a benefit-cost ratio of 1.64.

E. Alternatives Considered and Reasons for Rejection

16. The Project focuses on integration of structural measures and non-structural measures. In designing the Project, the following two alternatives were considered but rejected as neither desirable nor feasible:

(a) Provide direct Bank support to MWR’s ongoing Accelerated Emergency Program (AEP) for the Huai Basin, focusing largely on the implementation of major civil works at the basin level. However, Bank support was considered much more relevant if channeled to the poorer, and frequently water logged agricultural areas in the basin. This would not only improve and expand the flood control and drainage infrastructure facilities in those areas at lower levels, but also strengthen institutional arrangements for implementation and O&M of these relatively small works. (b) Finance medium and small works at the lower levels, supplementary to the AEP, without the establishment of flood disaster assessment and support system at the basin level. This alternative was not pursued as flood disaster assessment and support system is an important non-structural measure for flood control and mitigation, which could greatly increase the benefits of both AEP and the medium and small works at lower levels to be financed by the Bank.

III. IMPLEMENTATION

A. Partnership Arrangements

17. The Global Environment Facility (GEF) is likely to provide a grant of US$5 million to finance a stand-alone Huai River Basin Marine Pollution Reduction Project. The project objective of this GEF project is to demonstrate innovative and cost-effective water pollution control practices in Dongying City of Shandong Province that will contribute to reducing nutrient and pollution load to the Bohai Sea, and develop and disseminate a replication strategy for the entire Huai River Basin in order to reduce the pollution load to both the Bohai Sea and the Yellow Sea. The proposed GEF project would have the following components: (a) establishment of Farmer Environment Protection Associations (FEPAs) to control non-point

6 pollution sources; (b) increase in environmental carrying capacity of the rivers, including wetland development and conjunctive operations of the water gates and wetlands; (c) formulation and enforcement of policies and legal regulations for the Guangli small watershed, and preparation of a dissemination plan to other watersheds in the Huai River Basin; and (d) pollution control capacity building and project management. This GEF project is being prepared as a stand-alone project for FY12 GEF and Bank approvals, due to its relatively independent nature.

B. Institutional and Implementation Arrangements

18. The project is a central government undertaking, with Huai River Basin Commission (HRBC) and the four provinces responsible for project management and implementation. The proposed project management structure includes: (a) Central Project Leading Group (CPLG) and Central Project Coordination Office (CPCO) within the Ministry of Water Resources (MWR); (b) Central Project Management Office (CPMO), Central Expert Group (CEG), and PMO (for Component 2) within HRBC; (c) PLGs, PMOs and EGs at Provincial, City and County levels; and (d) Resettlement Offices (ROs) and Project Implementing Units (PIUs) for relevant counties. The organizational framework for project implementation and the detailed responsibilities of various project organizations are given in Annex 6.

19. At the central level, the following organizations shall be maintained throughout the period of implementation of the Project:

(a) CPLG within MWR, for purposes of providing overall policy support and ensuring coordination among all relevant agencies for the implementation of the Project. (b) CPCO within MWR, with composition, powers, functions, funds, staffing and other resources satisfactory to the Bank, and as shall be required to enable the CPCO to liaise and carry out coordination of project implementation among relevant agencies at the central level and among relevant departments within MWR. (c) CPMO within HRBC of MWR, with such composition, powers, functions, funds, staffing and other resources satisfactory to the Bank, and as shall be required to enable the CPMO to coordinate, manage and evaluate the overall implementation of the Project, including providing technical and policy assistance to the Project Implementing Entities. (d) CEG within HRBC of MWR with terms of reference, satisfactory to the Bank, in order to provide technical support to the CPMO.

20. At the project implementing entity level, the following organizations shall be maintained throughout the period of implementation of the project:

7 (c) An Expert Group at the provincial level, and in the case of each Project Province other than Jiangsu, at each city level where activities under the Project will be carried out, in order to, inter alia, provides technical advice to the corresponding PMO in project management and implementation.

21. In addition, a Panel of Experts (POEs) for dam safety review has been set up at the provincial level. PIUs and ROs have also been set up at county level where the project component is relatively small and a PMO is not required.

C. Monitoring and Evaluation of Outcomes/Results

22. CPMO would take the overall responsibility for designing the framework of the M&E system for the entire project, in consultation with the four provincial PMOs, and prepare the consolidated M&E report for the entire project. Each provincial PMO will be responsible for carrying out M&E activities in the field in accordance with the overall design of the M&E system, and for providing the M&E report to the CPMO for preparation of the consolidated M&E report. Twenty-one M&E areas have been selected: three areas in Henan Province; ten in Anhui Province; three in Shandong Province; and five in Jiangsu Province. Key performance indicators would be monitored and evaluated in the above areas. Intermediate outcome and output indicators would be monitored through the MIS established for project management and implementation. The Key Performance Indicators (KPIs) of the Project are shown in Annex 3.

23. Supervision and progress reporting to the Bank would be twice a year. M&E reports would be prepared and submitted to the Bank twice a calendar year as part of the project progress report. The MTR report would be prepared and provided to the Bank around December 31, 2013. The ICR for the whole project would be prepared and consolidated based on the ICRs from implementing entities and submitted to the Bank for review and comments no later than March 31, 2017.

D. Sustainability and Replicability

24. Government has provided: (a) assurances about the high priority of this project; and (b) its commitment to provide all necessary government support needed for successful project implementation, including establishment of institutions at all levels, availability of counterpart funding during project implementation, and financial resources for sustainability beyond the completion of the Project.

25. The project is designed to be sustainable in several ways. It has adopted technologies and methodologies that are cost-effective, replicable, and environmentally sustainable. Factors important for the sustainability of the project are: (a) effective project management and implementation arrangements; (b) sound design and implementation standards; (c) strong interagency coordination at various government levels to ensure adequate funding and efficient use of funds, high quality design, timely procurement and good quality of construction; and (d) efficient operation and maintenance (O&M) procedures and effective arrangements at both government and farmer-association levels to assure adequate funding for O&M after project completion. These factors have been incorporated into the design of the Project.

8 E. Critical Risks and Possible Controversial Aspects

26. The risk assessment of the main issues or events that would result in the Project Development Objectives (PDO) not being fully achieved is summarized below:

Risks Risk Mitigation Measures Risk Rating with Mitigation To project development objective Lack of strong support from various Ensure careful monitoring by the Borrower M levels of government. and Bank of funding and implementation through good MIS and dialogue with government leaders. Ineffective coordination arrangements Design project management arrangements S between MWR and HRBC, between that enhance coordination with strong HRBC and PWRBs, and between local support from MWR and governments at government and communities. various levels. Counterpart funds (CPF) are not Ensure at the design stage that the CPF M allocated in a timely manner, from counties is minimal, and that during particularly from counties. implementation, annual plans include adequate monitoring of commitments and releases of CPF. Failure to adequately fund and Ensure that EMPs, RAPs and O&M plans S implement EMPs and RAPs, O&M, and are well prepared with local ownership. Dam Safety Action Plans (APs). Create Panel of Experts (POEs) to oversee implementation of Dam Safety APs. Technical design and implementation Ensure the national or local design M standards are not followed. standards are followed for project design and implementation. Old and traditional concepts dominate at Bank to plan reviews with MWR and the S local levels, preventing the extension of Provinces to ensure the active participation established pilot FDIAs to the other of beneficiaries for O&M of all the parts of the project area. facilities improved under the Project. Major floods may occur during the Ensure: early warning system; flood M project implementation period. emergency plans; flood fighting materials are in place; and construction schedules are set to minimize risks. Governance. Enforcement of the Bank procedures, S including financial management and procurement guidelines, through established procurement and financial management information system Overall Risk Rating M Risk Rating: H = High risk, S=Substantial risk, M=Modest risk and N=Negligible risk

27. An element of risk exists when it comes to modernizing the design of O&M and the establishment of FDIAs. A potential problem regarding the establishment of FDIAs could come from old and traditional ideas that government officials should manage irrigation and drainage for farmers. They may resist greater community participation and direct management proposed under the Project. To address this problem, the leadership of both county and provincial PMOs

9 should be further strengthened with knowledgeable leaders on FDIA development, and intensive training should be provided to PMO staff and government officials concerned.

28. To reduce the risk of inadequate implementation of EMPs and RAPs, as well as the Dam Safety Action Plans, strong leadership will be required from governments at both central and local levels, and technical assistance from “Class A” institutions familiar with Bank and Central Government implementation requirements, and the procedures of such plans.

F. Loan/Credit Conditions and Covenants

Negotiations and Board presentation: None Loan effectiveness: None Disbursement Condition: None

29. Covenants applicable to project implementation:

(a) Each project province and HRBC, as relevant, shall implement the Project in accordance with Project Implementation Plan (PIP), EMPs, RAPs, Policy Framework for Resettlement and Land Acquisition; and annual EMP, RAP and Dam Safety action plans. (b) Each project province and HRBC, as relevant, shall carry out external monitoring of RAPs and Policy Framework for Resettlement and Land Acquisition. (c) HRBC shall establish by September 30, 2016 a flood disaster assessment and support system at the basin level of Huai River in the Project Area to provide a timely decision making support during flood season and a detailed post-impact assessments of historical flood disasters. (d) Each project province shall: (i) carry out a pilot program in 2011 comprising rehabilitation of on-farm drainage and irrigation works, and establishment of an FDIA with the objective of securing the participation of the FDIA in the operation and maintenance of said works; and (ii) taking account of the lessons from the implementation of the pilot program, revise as needed the FDIA Extension Plan and implement the Plan. (e) Each project province and HRBC shall install and operationalize for use the Procurement and Financial Management Information System no later than ninety days after the Effective Date, and thereafter apply the system in order to monitor the entire procurement process and financial transactions under the Project. (f) Each project province shall prepare an operation and maintenance plan for irrigation and drainage systems constructed or rehabilitated in the Project Province, at least three months prior to the completion of each such system.

IV. APPRAISAL SUMMARY

A. Economic and Financial Analyses

10 Economic Analysis

30. The main quantifiable benefits include: (a) improved rural incomes through increased agricultural production as a result of reduced flooding and water logging, improved drainage, and increased farm land being irrigated; (b) reduced flood damage to infrastructure in rural and urban areas; and (c) significant savings in shipping costs.

31. The core economic analysis of the Project is anchored in an assessment of the expected reduction in the costs of flooding and water logging using a well-proven methodology of damage assessment of historical flood events for which frequency of recurrence can be assessed. The flood frequency and flood loss data were used to calculate the expected areas flooded /waterlogged, and the expected costs of flooding, in the without Project and with Project situations. The difference between without and with project situations provides the expected economic benefit (saved cost) of reduced flooding and water logging due to the Project. In addition, separate analysis is also conducted to gauge the economic viability of the key non- structural intervention of the Project i.e., flood disaster assessment and support system, and on- farm drainage management piloted by FDIAs. The results indicated that the flood disaster assessment and support system would achieve an ERR of 23 percent, and on farm drainage management by FDIAs are viable in all four project provinces (ERRs ranging from 21 percent to 67 percent).

32. Cash flows of benefits and costs for each province (including the pilot on-farm drainage improvement system) and flood disaster assessment and support system were projected over a 25 year period to estimate the base case Net Present Value (NPV) at a discount rate of 12 percent and the Economic Rate of Return (ERR). The provincial sub-projects would generate ERRs ranging from 17 percent to 21 percent, which indicate that each sub-project is economically viable on its own. The provincial cash flows are aggregated, and project ERR is estimated at 20 percent (NPV of RMB 2,130 million Yuan), while the sensitivity analysis indicates that economic returns are robust.

Financial Analysis

33. Crop budget and farm models were formulated for “with” and “without” project situations. A summary of the financial analysis of representative farmers in the FDIA pilot areas indicates that farmer’s incomes and the returns to labor would be noticeably increased (from 15 percent to 37 percent), reflecting the financial attractiveness of the Project to farmers. In addition, farmers’ income will also be considerably enhanced in the expanded irrigation areas in Jiangsu and Shandong Provinces (from 12 percent to 20 percent).

34. These results highlight the improvement expected in net farm income and returns to family labor as a result of: (a) reducing flooding and water logging (comparison between “with” Project minus “without” Project); and (b) introducing new technologies and management practices as a result of the agricultural extension support provided through the Project.

35. Fiscal impact. The Government has made a firm commitment to providing counterpart funding during project implementation, as well as financial resources to cover the increase in

11 recurrent costs after project completion. Furthermore, the Project will introduce participatory and sustainable operation and maintenance (O&M) practices and effective arrangements at both river basin and field levels to assure adequate funding for O&M after project completion.

B. Technical

36. This Project does not adopt the traditional approach, which focuses only on infrastructure construction, and involves only a top-down approach using government institutions for management of O&M. Instead this project will focus on integration of structural and non- structural measures at both river-basin level and local level, and involve greater community participation in the design, construction, maintenance and management of lower-level works.

37. The main structures proposed to be implemented under the Project are needed because many dikes have inadequate height and width, slope failures and sometimes leakages; rivers and drainage channels have silted up badly and lack capacity to discharge flood waters. Many pumping stations, control structures and bridges which were built in the 60s and 70s, are obsolete and in poor operating condition. In addition many structures have poor foundations, and cracks and leakages are common. In general, the poor condition of the majority of existing infrastructure facilities in the selected sub-project areas are largely due to aging, initial low design standards, the use of sub-standard materials and construction methods, and many years of poor maintenance. Designs for all works to be implemented under the Project have been prepared based on the Huai Basin Master Plan and national codes established for such works.

38. The Project will potentially improve drainage not only in large, but also in small or minor drainage systems at farm or village level. Improved drainage will result from the physical, as well as the institutional improvements in the O&M of drainage infrastructure, which will include new and rehabilitated pumps, drainage structures, on-farm drains, and piloting of Farmer Drainage and Irrigation Associations (FDIAs). The Project will demonstrate in 4 FDIA pilot areas (one per province) sustainable and efficient O&M of drainage infrastructure.

C. Fiduciary

39. Financial management assessment was conducted on the adequacy of the financial management (FM) system of the Project. The assessment concluded that the Project meets minimum Bank financial management requirements, as stipulated in BP/OP 10.02. Financial management risk is the risk that loan proceeds 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, the FM risk rating for this Project is modest.

40. Bank loan funds will flow from the Bank into Project designated accounts (DAs) to be set up at, and managed by, MOF and the PFBs of Anhui, Shandong, Henan and Jiangsu provinces. For Project activities to be implemented by HRBC, the Bank loan will flow from the DA to HRBC and from there to the contractors. No outstanding audits or audit issues exist with any of the implementing agencies involved in the proposed Project. However, the task team will continue to be attentive to financial management matters during project supervision. Details are given in Annex 7.

41. In April and August 2006 the Bank carried out an assessment of the capacity of the implementing agency to implement procurement actions for the project. The assessment reviewed the project’s organization structure and functions, past experience, staff skills, quality and adequacy of supporting and control systems, legal and regulatory framework. The overall risk for procurement is average. Details are given in Annex 8.

D. Social

42. Positive Impacts. Fighting floods calls for vast inputs of labor from all sections of society, and has high social costs through disruption of family life, interruption of education, and most of all, diversion of effort from more profitable work. When the dikes are strengthened and drainage channels improved under the project, there will be fewer crisis situations, and less demand for emergency labor inputs. Moreover, farmers are encouraged by the Project to establish FDIAs, which involves the transfer of ownership and O&M of small drainage works to farmers, and hence promotes their participation and empowerment in local water management.

43. Involuntary Resettlement. While improving the flood control and drainage situation in the Huai River Basin as a whole, substantial land acquisition and involuntary resettlement is envisaged under the Project. Impact surveys and repeated rounds of public consultations carried out in all Project areas identified communities, people and assets to be affected by the Project’s resettlement requirements. Overall, more than 17,658 mu (about 1,177 ha.) of farmland will be permanently acquired, and 44,514 mu (about 2,968 ha.) will be temporarily occupied during project implementation. 679 villages in 56 counties in the Basin will be affected, which involves near 60,000 people. Disaggregated information of resettlement impact in the first year was further collected and assessed based on the project’s first year program.

44. After extensive investigations and consultations among the affected village communities and urban institutes, a phased approach to the resettlement component was adopted, through the preparation of a detailed RAP for the Project’s first year implementation program in each province. Adverse impacts and the related risks were assessed, and measures for avoiding or/and mitigating adverse impacts, and opportunities for livelihood rehabilitation, were discussed and set forth in the RAPs. These RAPs and their preparation processes were reviewed and confirmed to be in compliance with the Bank’s social safeguard policies. The final draft RAPs and Policy Framework were disclosed locally in September 2007, i.e., at the Huai River Basin Commission (HRBC) and the public libraries of each project province and city to interested people and groups. They were also disclosed on the external website of the Bank’s Beijing Office on October 10, 2007 and at the World Bank Infoshop in Washington on October 18, 2007. The RAP socio-economic surveys and census confirmed that there were no ethnic minority communities among the affected villages. More detailed information and analysis are given in Annex 10.

E. Environment

45. The Project is classified as a Category A project under OP 4.01 Environmental Assessment, due to the intensive activities of river course dredging, embankment and pump station construction works. The Huai River Water Resource Protection Institute, a Class A-

13 accredited agency for Environmental Impact Assessment (EIAs) in China, prepared a consolidated EA, in accordance with national policies and regulations, as well as the Bank’s safeguard policies.

46. The EIA has identified and assessed Project benefits and impacts to the natural and social environment. The EIA concludes that the Project will bring significant positive impacts to the natural and socio-economic environments of participating cities. Implementation of the Project will greatly enhance the capability to prevent flooding and water logging disasters and effectively reduce the severity and loss due to flooding and water logging in the Project area. The EIA did not identify any serious adverse or irreversible environmental impacts, which cannot be effectively mitigated to acceptable levels. All Project investments have been designed to minimize any adverse impacts on the physical environment. To maximize environmental benefits and minimize potential negative impacts, a stand-alone EMP was prepared. All adverse environmental impacts can be avoided, reduced and minimized, provided the mitigation measures developed in the EMPs are properly implemented (Annex 10).

47. During the preparation of the EIA, local groups were consulted at least twice, either through meetings, public interviews, and surveys using questionnaires. Findings of the consultations were incorporated into the Project design and environmental mitigation measures. The final draft EIAs and EMPs were disclosed locally in September 2007, i.e., at the Huai River Basin Commission (HRBC) and the public libraries of each project province and city to interested people and groups. They were also disclosed on the external website of the Bank’s Beijing Office on October 10, 2007 and the World Bank Infoshop in Washington on October 18, 2007.

F. Safeguard Policies

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]

48. Environmental Assessment. [See Section E on Environment above]

49. Natural Habitats. The EIAs identified 11 critical natural habitats in the vicinity of the Project area. Seven critical natural habitats will have Project works near their boundaries or have a hydrological connection to the Project activity; four have no connection or impact. The EIAs analyzed in detail each of the seven of the critical natural habitats, and concluded that the

* The Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

14 adverse impact during the construction phase would be temporary, limited and insignificant. Concrete actions were included in the EMP to avoid, mitigate or minimize the impacts. The EAs also concluded that the Project would have positive impacts on natural habitats and wetlands during the operation phase.

50. Forests. The project would not support any forest related activities.

51. Pest Management. The Project has no irrigation improvement components and would not finance the procurement or use of any pesticides. The possible irrigation improvements to be fully financed by Government or project agencies during project implementation would strictly follow the Chinese National Integrated Pesticide Management (IPM) Plan. Bank supervision missions would monitor implementation of the Plan in the project areas, and make recommendations for improvements if necessary.

52. Physical Cultural Resources. The EIA outlines the procedures to be followed in the event culturally significant sites are discovered during the implementation of works in the Project area. Appropriate clauses detailing those procedures will be included in all construction contracts.

53. Indigenous Peoples. There are no indigenous people in the project areas.

54. Involuntary Resettlement. Substantial land acquisition and involuntary resettlement is envisaged under the project. Each province has prepared a comprehensive Resettlement Action Plan (RAP) for the first year and a Policy Framework for Resettlement and Land Acquisition is in place, all in accordance with the stipulations of OP 4.12. The Bank found the RAPs satisfactory. An independent organization will be employed by each Province to monitor the implementation of RAPs. The detailed RAPs are available in the project file. The RAPs are summarized in Annex 10.

55. Safety of Dams. A total of 19 dams (including one lake surrounded by dikes) trigger the dam safety policy because they are located upstream of the Project areas. During project implementation, the Bank will, together with the Panel of Experts established in each of the Project provinces, supervise the implementation of the remedial works to ensure that the Project complies with OP4.37. Details are given in Annex 10.

56. Projects on International Waterways. There are no international rivers in this basin. All main rivers (about 40) in this basin originate in China; some rivers end in the Basin, while others flow into the Yellow Sea.

57. Projects in Disputed Areas. The project is not located in any known disputed areas as defined under the policy.

G. Policy Exceptions and Readiness

58. Project appraisal confirmed that the project meets Bank requirements, including readiness for implementation.

59. Translation waiver. The Safeguard Policy on Resettlement, OP 4.12 and the Safeguard Policy on Environment 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 is in Chinese. The Chinese language RAPs and EA reports for the Provinces were found by the Bank to meet the requirements of OP 4.12 on involuntary resettlement and OP 4.01 on environmental assessment, and were publicly disclosed.

60. Bank experience over the years has established the general practice of requesting the Borrower to provide the Bank the entire set of RAP and EA reports in English. In March 2008, Bank senior management endorsed “revised 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, EA reports, and EMP1 for projects that meet certain criteria. The Regional Safeguards Secretariat confirmed that the proposed project meets these criteria. Accordingly, comprehensive summaries in English of the RAPs and the EA reports, covering all relevant parts of the Chinese-language RAPs and EA reports, were prepared in Chinese. Chinese-speaking Bank safeguard specialists reviewed both the English summaries of the RAPs and EA reports, and the Chinese full-length safeguard documentation that were approved and adopted by the Project Implementing Agencies, and confirmed the consistency between the English and Chinese documentation, and compliance of the full set of safeguards documents with Bank policy. The summaries in English were subsequently disclosed through the Bank’s Infoshop.

1 Comprehensive summaries of RAPs, EA reports, and EMP refer to consolidated RAPs, EA reports and EMP for the entire project.

Annex 1: Country and Sector or Program Background

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

Country Background

1. China has made great gains economically and socially in the last 20 years. Since the late 1970s, over 250 million people have been lifted out of poverty. Between 1993 and 2003, annual GDP growth averaged 8.6 per cent. Notwithstanding these achievements, however, China’s geographic and population size bring considerable challenges. More than 30 million people still live below the Chinese government’s rural income poverty level of US$0.67 per day (or RMB 625 per annum), with more than 200 million living on expenditures of less than US$1.00 per day. While living standards for rural areas are on the rise, rural areas are still poor in absolute terms, and indicators show that inequality and income gaps are increasing between urban and rural populations, and between coastal and inland areas, as China continues its transition from a centrally planned to a socialist market-oriented economy. It also faces daunting challenges in maintaining rapid growth; managing the resource demands and environmental consequences of this rapid growth; and addressing the resulting inequities in income and opportunity.

2. There are about 50,000 rivers in China, each with basin area larger than 100 km2. Among them, more than 1,500 rivers are with basin area larger than 1,000 km2. Most rivers are distributed over the eastern and southern parts of China. In the northwestern part of China, due to arid climate and scarcity of precipitation only a few rivers exist, accompanied with some stream-less areas of considerable scope. The total basin area of the rivers flowing into the sea accounts for 2/3 of Chinese territory, and the remaining 1/3 is the inland river basin area. The Yangtze River is the longest in China at to 6,300 km, and is next in length only to the Nile River in Africa (6,648 km) and the Amazon River in South America (6,500 km). The Huai River ranks the 12th in China. In the term of river basin area, the Huai River ranks the 6th in China.

Sector and Program Background

3. The critical importance of flood control and protection in China, both historically and currently, cannot be overemphasized. Direct economic losses from floods have accelerated dramatically in recent years due to rapid economic and population growth. This trend is likely to continue. Emphasis has generally been on dike construction and other flood control works, and huge investments are still needed in the future. Some 450 million people live under constant threat of flood, which is especially severe in the Yangtze, Yellow, Huai and Song-Liao River Basins, and their protection depends heavily on continuation and improvement of flood protection infrastructure.

4. The main cause of floods in China is rainfall. The fact that floods become disasters and get increasingly serious is closely related to socio-economic development. From the high mountain areas in the west to the coastal plains in the east, there exist different types of flood disasters of different extent of damage. The formation and features of flood disasters as well as the extent of influence of flood disasters on the social economy are different in different places

17 because of the different natural conditions, historical backgrounds and production modes. The flood disasters in the principle types of regions include flood disasters in the mountainous and hilly areas; flood disasters in the plain areas; flood disasters in the coastal zones; and flood disasters in mountain foot plain areas due to ice melting and snow.

5. Cause of Flood Disasters in Huai River Basin. In the Huai River Basin, flood control and drainage improvement works are protecting the low-lying polder areas (areas protected by dikes) against floods. The formation of low-lying polders is a unique form of human competition in land occupation against water, in order to expand the living space. During the flood season, areas with ground levels lower than the water levels in rivers and lakes outside the polder areas are protected from flood water by dikes and sluices. When the dikes breach, the entire area will be inundated by flood water. Because the recession of flood water is generally a slow process, the inundation lasts long and generally causes serious disasters. Prior to 1949, many large polders had been created along the Yangtze river banks, including the Dongting lake area, the Poyang lake area, the Taihu lake area, the Lixia lake area, and the Pearl river delta area, totaling about 70,000 km2, including 4,666,700 ha of cultivated land. After 1949, repairs of dikes and sluices, together with the creation of additional polders spread over large areas, was carried out at the same time as the further harnessing of the rivers. In addition, numerous pumped drainage and irrigation facilities were also built. While all those works have greatly increased the flood and water-logging discharge capacity, they are still unable to satisfy the criteria required to allow for securing economic development activities. Especially for those polder areas that are connected to the rivers, such as the Dongting lake area, the Poyang lake area, and some along the main stream of the Yangtze River, water levels in the rivers and lakes outside the polder areas fluctuate greatly in wet and dry seasons, often 3-8 m and in extreme cases more than 10 m. Often the high water flood season levels prevail for four to five months. Some polder areas are designed to function as flood detention areas, causing much instability to all forms of economic activities and to the general livelihood of residents. 6. Focus on nonstructural as well as structural measures. In addition to support for infrastructure investments, there is a need to pay more attention to non-structural measures. The guiding principles for planning non-structural measures for seriously flood affected lowland areas include: (a) providing modern technology for flood forecasting and flood warning systems, including the development of hydrodynamic and decision support models, with flood progression mapping; (b) establishing and enforcing better flood plain management to reduce losses, especially introducing measures to reduce the frequency and intensity of flood plain and lowland use; (c) giving priority to upgrading safety standards for people affected by floods, including buildings, shelters, and evacuation routes; (d) assuring that emergency response plans are effective and are regularly tested; and (e) using community education to raise and maintain awareness of the flood risk and ensure that the people at risk are well prepared, and would respond during flood emergencies. 7. Bank Involvement. The Bank has been providing and continues to provide significant support to projects with flood control and flood management components, both structural and non-structural, including the Xiaolangdi Multipurpose Project, the Taihu Basin Flood Control Project, the Yangtze Basin Water Resources Project, and more recently, the Yangtze Dike Strengthening Project (YDSP). All of these projects include both structural and non-structural

18 measures. Under YDSP the Bank is financing the establishment of a National Flood Disaster Prevention Center to improve information sharing, policy formulation and implementation, and technical assistance for flood management throughout the country. There is a need to continue to provide assistance in flood management through the financing of both structural and non- structural measures.

8. Water User Association (WUA). Since 1993 when the first WUA was established in Hubei Province under the Bank supported Yangtze Basin Water Resources Project, about 20,000 WUAs (with over 60 million farmers) have been established in 30 provinces and municipalities of China, covering about 6.67 million hectare of irrigated agricultural area. WUAs are being piloted, developed and extended under almost all Bank supported irrigated agricultural projects in China. The Pro-Poor Rural Water Reform Project, jointly supported by DFID, the Bank and Chinese Government, has accelerated WUA development in China. WUAs are registered with legal person status, based on hydraulic boundaries, and are responsible for: (a) O&M of on-farm works; (b) introducing and collecting volumetric water charges; and (c) participation in water resources management. Experience to date with WUA development shows that WUAs are the main forces to push forward institutional reforms in managing lower-level irrigation systems. The Chinese Government has recently issued an official document at the national level aimed at expanding the establishment of WUAs in irrigated agricultural areas nationwide.

9. Key Constraints and issues to be addressed. The traditional approach through government funded programs has been to focus only on infrastructure construction, and consequently involved only a top-down approach, using government institutions for management of operations and maintenance (O&M) of the infrastructure works. This Project is designed around a new approach for integrated flood management and drainage improvement. The new approach would focus on integration of structural and non-structural measures, at both river- basin and local governments levels, and involve greater community participation in the design, construction, and management of lower-level works. The non-structural measures would include state of the art decision support systems, flood forecasting, and disaster mitigation systems for better early warning of flood events. The Project has an innovative component that would include greater community involvement in the management of operations and maintenance of lower level works through the creation of Farmer Drainage and Irrigation Associations (FDIAs). These new FDIAs would assume responsibility for all small works such as drainage laterals, control gates, pumping stations, etc. This would involve the transfer of ownership and O&M of these small works to the FDIAs, with Provincial, Municipal and County level Water Resources Bureaus (WRBs) retaining the responsibility for the O&M of larger works on rivers, water courses and drainage channels, including dikes systems and pumping stations.

10. The Project would therefore involve both a top down and a bottom up approach that would, if successful, establish a new paradigm between the government and the communities, who will benefit from flood control and drainage works.

19 Annex 2: Major Related Projects Financed by the Bank and/or Other Agencies

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

Latest Supervision (Form 590) Sector Project Ratings (Bank-financed projects) ICR Ratings IEG Ratings IP and DO IP and DO Bank-financed Rehabilitation and improvement of irrigation Northern Irrigation Project Closed 12/31/1997 and drainage systems ($72.7 million) IP: S NA DO: HS Expansion of irrigation and water systems, Shaanxi Agriculture Closed 06/31/1997 agriculture support and agro-industries Development Project IP: HU NA ($106.0 million) DO: HS Rehabilitation and improvement of irrigation Irrigated Agriculture Closed 06/30/1998 and drainage systems and agriculture services Intensification Project IP: HS NA improvement ($335.0 million) DO: HS Rehabilitation and improvement of irrigation Tarim Basin Project ($125.0 Closed 12/31/1997 and drainage systems and improvements in million) IP: S NA environmental river management OD: S Rehabilitation and improvement of irrigation Henan Agriculture Closed 12/31/1998 and drainage systems and agriculture services Development Project IP: S NA improvement ($110.0 million) DO: S Rehabilitation and improvement of irrigation Hebei Agriculture Closed 06/30/1998 and drainage systems, and expansion of Development Project IP: S NA agriculture services and agro-industries ($149.9 million) OD: S

Rehabilitation and improvement of irrigation Yangtze Basin Water Closed 12/31/2005 and drainage systems, self-managing Resources Project ($210.0 IP: S IP: S irrigation and drainage districts and river basin million) DO: S DO: S management Rehabilitation and improvement of irrigation Irrigated Agricultural Closed 06/30/2005 and drainage systems, self-managing Intensification II Project IP: S IP: HS irrigation and drainage districts and river basin ($300.0 million) DO: S DO: HS management Rehabilitation and improvement of irrigation Tarim Basin II Project Closed 12/31/2005 and drainage systems, self-managing ( Loan $90.0 million, Credit IP: HS IP: HS irrigation and drainage districts and river basin SDR 44.6 million) DO: HS DO: HS management Rehabilitation and improvement of irrigation Water Conservation Project Closed 06/30/2007 and drainage systems, self-managing ($74.0 million) IP: HS IP: HS irrigation and drainage districts and river basin DO: HS DO: HS management Rehabilitation and improvement of irrigation Guanzhong Irrigation Closed 06/30/2006 and drainage systems, self-managing Improvement Project IP: S IP: S irrigation and drainage districts and river basin (Loan $80.0 million, Credit DO: S DO: S management $20.0 million) Integrated River Basin Management, self- Hai Basin Integrated Water IS: S managing irrigation and drainage districts and and Environment DO: S NA river basin management Management Project (GEF USD $17.0 million)

20 Annex 3: Results Framework and Monitoring

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

Table 1: Project Results Framework PDO Project Outcome (PO) Indicators Use of Outcome Information The Project Development PO-1: Targeted rural and urban areas protected Track progress and make Objective (PDO) is to provide from flooding adjustments when better and more secure protection PO-2: Targeted number of people protected from necessary during against floods and water logging, flooding implementation increase farmland productivity PO-3: Targeted economic losses in urban and rural and reduce property losses in areas reduced from flooding predominantly poor rural areas in PO-4: Targeted increase of per capita agricultural the Huai River Basin in the incomes of farmers from flood protection; provinces of Jiangsu, Shandong, PO-5: Targeted increase of navigation benefits Anhui and Henan. from river improvements. Intermediate Results Results Indicators for each Component Use of Intermediate One per Component Outcome (IO) Component 1: IO-1: Targeted length of dike strengthening Track progress and make Flood Protection and Drainage IO-2: Targeted length of river improvements adjustments when Improvement IO-3: Targeted number of structures constructed necessary during including pumping stations, dike structures and implementation flood control gates and bridges IO-4: Targeted number of O&M plans approved and implemented IO-5: Number of functioning FDIAs established as per requirements IO-6: Targeted number of major actions taken as per the EMPs implemented with budget allocated Component 2: IO-7: Percent of targeted investment completed on Track progress and make Flood Disaster Assessment and flood disaster assessment and decision support adjustments when Support System system necessary during IO-8: Percent of targeted investment completed on implementation hydraulic model IO-9: Accuracy of targeted technical criteria reached by the flood disaster assessment and decision support system Component 3: IO-10: Targeted number of government officials Track progress and make Institutional Strengthening understand and help disseminate the project adjustments when innovations necessary during implementation Component 4: IO-11: Targeted number of project-affected people Track progress and make Resettlement Action Plan whose incomes and lives maintained or improved adjustments when Implementation IO-12: Targeted number of resettled people whose necessary during incomes and lives maintained or improved implementation Component 5: IO-13: Targeted number of contracts which strictly Track progress and make Project Management follow the Bank procurement and financial adjustments when management guidelines necessary during implementation

21 Table 2: Measurement of the Indicators

Indicators Name Computation Method and / or Formula Project Outcome Indicators Targeted rural and urban areas protected Measured with the areas protected by the works financed PO-1 from flooding under the project. Targeted number of people protected from Measured with the number of people in the areas PO-2 flooding protected by the works financed under the project. Targeted economic losses in urban and rural Measured with the latest historical economic losses in the PO-3 areas reduced from flooding areas protected by the works financed under the project. Targeted increase of per capita agricultural Measured with the actual increase versus the targeted PO-4 incomes of farmers from flood protection increase of per capita agricultural incomes of farmers Targeted increase of navigation benefits from Measured with the actual navigation benefits versus the PO-5 river improvements targeted benefits from the river improvements Intermediate Outcome Indicators Measured with the actual length of dikes strengthened Targeted length of dike strengthening IO-1 under the project versus the targeted length of dikes

planned to be strengthened Measured with the actual length of rivers improved under IO-2 Targeted length of river improvements the project versus the targeted length of rivers planned to be improved Targeted number of structures constructed Measured with the actual number of the structures IO-3 including pumping stations, dike structures completed versus the number of the structures to be and flood control gates and bridges constructed agreed at project appraisal. Targeted number of O&M plans approved Measured with the actual number of O&M plans IO-4 and implemented prepared and approved versus the total number of the O&M plans agreed to prepare during project appraisal. Number of functioning FDIAs established as Measured with the actual status of the established FDIAs IO-5 per requirements versus the requirements agreed at project appraisal Targeted number of major actions taken as Measured with the actual actions taken as per the EMP IO-6 per the EMPs implemented with budget prepared during implementation with budget allocated allocated Percent of targeted investment completed on Measured with the percent of the actual workload versus IO-7 flood disaster assessment and decision the targeted workload planned for system development support system Percent of targeted investment completed on Measured with the percent of the actual workload versus IO-8 hydraulic model the targeted workload estimated for model construction Measured with the three criteria used to evaluate the Accuracy of targeted technical criteria effectiveness of the system: (i) remote data collection reached by the flood disaster assessment and rate greater than 90 percent; (ii) error between computed IO-9 decision support system and actual inundated area less than 15 percent; and (iii) 90 percent of the error between forecasted and actual flood peak level less than 0.2- 0.3 m Targeted number of government officials Measured with the actual number of government officials IO-10 who understand and help disseminate the who take the lead to test the innovations versus the project innovations targeted number estimated at project appraisal Targeted number of project-affected people Measured with the survey on the actual status of the IO-11 whose incomes and lives maintained or project affected people with and without project. improved Targeted number of resettled people whose Measured with the survey on the actual status of the IO-12 incomes and lives maintained or improved resettled people with and without project. Targeted number of contracts which strictly Measured with the number of contracts qualified versus IO-13 follow the Bank procurement and financial the total number of the contracts to be implemented management guidelines under the project

22 Table 3: Arrangements for Results Monitoring Target Values Data Collection and Reporting Frequency Data Responsibility Indicators of Project PDO/Outcome Baseline Final 2010 2011 2012 2013 2014 2015 and Collection for Data 2008-09 Target Reports Instruments Collection PO-1: Targeted rural and urban areas Water protected from flooding (km2) 0 782.6 3516.3 6031.4 7554.3 8621.2 9576.2 9576.2 Annual Annual report Resources Bureau /PMO PO-2: Targeted number of people protected Water from flooding (million) 0 0.55 1.95 3.73 5.18 5.92 6.64 6.64 Annual Annual report Resources Bureau /PMO PO-3: Targeted economic losses in urban Water and rural areas reduced from flooding (RMB 0 21.58 202.4 322.83 477.4 593 699.5 699.5 Annual Annual report Resources Yuan million) Bureau /PMO PO-4: Targeted increase of per capita Water agricultural incomes of farmers from flood 0 37.75 92.3 136.8 174.5 209.5 233 233 Annual Annual report Resources protection (RMB Yuan / year) Bureau /PMO PO-5: Targeted increase of navigation Water benefits from river improvements (RMB 0 102.6 105.6 108.7 111.8 115.1 118.4 118.4 Annual Annual report Resources Yuan million) Bureau /PMO Water IO-1: Targeted length of dike strengthening 0 53.4 111.2 118.4 61.9 50.0 22.5 417.4 Annual Annual report Resources (km) Bureau /PMO IO-2: Targeted length of river improvements Water resources 0 142.1 364.3 150.4 100.6 980.5 Annual Annual report (km) 185.8 36.9 bureau/PMO IO-3: Targeted number of structures (806) Water constructed including 182 pumping stations, 0 17 142 196 117 314 20 806 Annual Annual report Resources 427 dike structures and flood control gates Bureau/PMO and 197 bridges Water IO-4: Targeted number of O&M plans 0 0 16 40 50 30 10 146 Annual Annual report Resources approved and implemented Bureau/PMO Water IO-5: Targeted number of functioning of 0 0 4 4 4 12 12 36 Annual Annual report Resources established FDIAs as per requirements Bureau/PMO IO-6: Targeted number of major actions Water taken as per the EMPs implemented with 0 4 22 15 10 8 0 59 Annual Annual report Resources budget allocated Bureau /PMO IO-7: Percent of targeted investment Water completed on flood disaster assessment and 0 3% 30% 25% 25% 10% 7% 100% Annual Annual report Resources decision support system Bureau/PMO IO-8: Percent of targeted investment 0 3% 27% 20% 20% 15% 15% 100% Annual Annual report Water

23 completed on hydraulic model Resources Bureau/PMO IO-9: Accuracy of targeted technical criteria reached by the flood disaster assessment and decision support system

(i) Data collection rate from Tele- 0 0 0 0 0 90% 90% 90% metering remote stations

(ii) Error between computed and actual Water inundated area Resources 0 0 0 0 0 15% 15% 15% Annual Annual report (iii) Percent of the errors between Bureau /PMO forecasted and actual flood peak level 0 0 0 0 0 90% 90% 90% less than 0.2- 0.3 m IO-10: Targeted number of government Water officials who understand and help 0 83 117 140 199 245 275 275 Annual Annual report Resources disseminate the project innovations Bureau/PMO IO-11: Targeted number of project-affected Water people whose incomes and lives maintained Annual Annual report Resources or improved (acquired 15,546 mu of land 0 2,075 16,752 27,861 35,355 46,353 57,173 57,173 Bureau/PMO permanently and 43,172 mu temporarily) IO-12: Targeted number of resettled people Water whose incomes and lives maintained or 0 471 1,302 3,410 4,808 5,976 7,044 7,044 Annual Annual report Resources improved Bureau/PMO IO-13: Targeted number of contracts which Water strictly follow the Bank procurement and 0 47 112 76 44 15 17 311 Annual Annual report Resources financial management guidelines Bureau /PMO

24 M&E Organizational Arrangements

CPMO

M&E Institute Expert

Anhui Jiangsu Henan Shandong HRBC PPMO PPMO PPMO PPMO PPMO

M&E M&E Institute M&E Institute M&E Institute M&E Institute Expert Expert Expert Expert Expert

25 M&E Organizational Arrangements

1. The CPMO, assisted by its M&E team, would take overall responsibility for designing the framework of the M&E system for the entire project, in consultation with the four PPMOs supported by their M&E teams, and prepare the consolidated M&E report for the entire project. Each PPMO, assisted by its M&E team, will be responsible for carrying out M&E activities in the field, according to overall design of the M&E system, and for providing the M&E report to CPMO for preparation of the consolidated M&E report. A total of 21 M&E areas have been selected and established in the project areas: three in Henan, ten in Anhui, three in Shandong and five in Jiangsu. The selected M&E areas should be representative of the project areas, but need not be located in all project sites. The selected M&E areas would be representative of urban, urban fringe i.e., semi-urban, and rural areas, respectively. M&E data should also be collected from the pilot FDIAs in the four provinces.

2. A Base Line Survey (BLS) and subsequent M&E activities during project implementation would be carried out in the selected M&E areas. The following outcome indicators would be monitored in the established areas to evaluate whether or not the project achieves its objectives: (a) rural and urban areas protected from flooding or water-logging; (b) number of people protected from flooding or water logging; (c) reduced economic losses in urban and rural areas protected from flooding and water-logging; (d) increased per capita agricultural incomes of farmers with flood protection; and (e) increased navigation benefits with river improvements. It is expected that results of M&E, including the above 5 outcome indicators, plus 13 intermediate outcome indicators, would show the value added of the lower- level infrastructures, plus the improved management and institutional mechanisms established under the project. These 18 indicators are shown in the Project Results Framework.

3. In addition, other project output indicators would also be monitored through the procurement and financial management information system (PROMIS) established for project management and implementation. PROMIS will be applied to the project to closely monitor intermediate results (or project outputs) component by component, and to provide internal controls and reduce risks for this project. PROMIS will be implemented at all levels of PMOs throughout the project implementation period to monitor the entire procurement process and financial transactions, and to crosscheck data for errors and alert authorities in a timely manner when errors are detected. Also, it improves external reviews and auditing: e.g., the system allows users to easily select and review original contracts and other documents.

4. PROMIS would consist of four subsystems: (a) physical progress monitoring; (b) contract-based procurement management; (c) financial management; and (d) special account management. PROMIS developed for this project would be used by all PMOs.

Annex 4: Detailed Project Description

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

1. The traditional approach focuses on infrastructure construction only. Instead, a proposed new approach for integrated flood management and drainage improvement is adopted for this project. The new approach would focus on integration of structural and non-structural measures at both river-basin level and local level, and involve greater community participation in the design, construction and management of the lower-level works.

2. The project is designed to provide considerable value added to China’s ongoing Accelerated Emergency Program (AEP) which focuses on the construction of major flood control and drainage infrastructure along the big rivers in the Huai River basin. The combination of AEP investments with the Project investments on both non-structural measures and structural measures would greatly enhance the benefits of both AEP and the Project, ensure sustainability of the works constructed, and provide a model for the other parts of the Huai River Basin.

3. Specifically, structural measures under the Project include construction of medium and small drainage works at the lower levels, supplementary to the government AEP. Non-structural measures include: (a) strengthening of community involvement through the creation of Farmer Drainage and Irrigation Associations (FDIAs) at the village level; (b) establishment of flood disaster assessment and support system at the river basin level; and (c) introducing a well designed O&M system for both main works and on-farm works to ensure sustainability of the flood control and drainage improvement system established under the Project.

4. The Project would include the following five project components:

Component 1: Flood Protection and Drainage Improvement (US$307.53 million)

Component 2: Disaster Assessment and Support System (US$26.22 million)

(a) Carrying out of a program to enhance disaster assessment and support systems including: (i) upgrading coverage and facilities for information and data collection on river floods

27 and drainage; (ii) improving speed of disaster information and data collection, transmission and processing; (iii) establishing a disaster assessment center in Hefei, Anhui Province to facilitate the participatory decision making process; (iv) improving the level of accuracy of flood and water-logging damage assessment process; and (v) formulating innovative measures on water-logging mitigation; and (b) Carrying out of a program for mitigating the adverse environmental impacts and enhancing positive impacts from the implementation of this Component 2 of the Project.

Component 3: Institutional Strengthening (US$5.15 million)

Component 4: Resettlement Action Plan Implementation (US$156.74 million)

(a) Carrying out of a program for the resettlement and rehabilitation of people affected by the implementation of the Project.

Component 5: Project Management (US$41.76 million)

(a) Strengthening the capacity of the Project Implementing Entities in Project management through, inter alia: (i) provision of consultant services for the production of engineering design, preparation and processing of procurement documents and carrying out construction supervision; (ii) installation and operation of a procurement and financial management information system; (iii) establishment of monitoring and evaluation systems and enhancing capacity for carrying out monitoring and evaluation of the Project; and (iv) carrying out quality assurance measures.

Works Construction and Rehabilitation

5. The project area stretches over about 9,634.23 km2, of which 2,813.43 km2 is located in Henan, 3,361.00 km2 in Anhui, 1,689.90 km2 in Jiangsu and 1,769.90 km2 in Shandong. The distribution of the project works over the four provinces is described in the following paragraphs.

Henan Province

6. Henan province is located in the upstream portion of the Huai River Basin, where flood and water-logging disasters occur frequently, because of narrow and seriously silted up river beds. The three subprojects have been selected for project financing: (a) Xinyang City, low-lying

28 areas along the Huai river; (b) Zhumadian City, the lower reaches of the Xiaohong River; and (c) Zhoukou City, lower reaches of the Jialu and Ying River. The total area includes 6 polders and 14 drainage channels, located in 8 counties and 63 villages with a total population of 1.8 million people. River embankments are below the standards to provide flood protection, and drainage systems are often incomplete. Pumping stations are under sized and outdated, with gates, culverts and other structures often not functioning properly because of aging and lack of repairs. Severe water logging occurs almost every year in these areas, causing much reduced crop yields or no yield at all.

7. Works to be constructed in the 3 sub-project areas include: (a) strengthening of 41.06 km of dikes, (b) excavation and/or dredging of 340.79 km of natural waterways and drainage channels; and (c) the upgrading, expansion or new construction of 20 pumping stations, 148 control structures and 45 bridges. Investments in Henan are relatively small compared to those in Anhui and Jiangsu, and represent about 7.92 percent of the total investment cost for works.

Anhui Province

8. Many river branches in the southern part of the Huai River are located in the northern part of Anhui Province. During flood season, vast agricultural and urban depressions are subject to serious flooding and water-logging because excess water cannot be drained in time from these river branches to the Huai River. The project area includes 11 depressions, namely, Bali-Lake area, Jiaogang-Lake area, Gaoyou-Lake area, Gaotang-Lake area, Zhengan depression, and depressions of the Xifei River, Jia River, Beifei River, Xie River, Tuo River and Tian River. The project area includes 23 cities/counties with a population of about 2.1 million. The following works are planned to be constructed in the 11 depressions: (a) strengthening of 189.18 km of dikes and building of 3.35 km of new dikes; (b) excavation and/or dredging of 336.92 km of natural waterways and drainage channels; (c) upgrading and/or replacement of 32 pumping stations plus one mobile pumping station, 105 culverts and 73 bridges. The estimated cost of the works in Anhui represents about 40 percent of the total investment for the four provinces.

Jiangsu Province

9. The depressions in Jiangsu Province are mainly located in the lower reach of the Huai River. The area to be improved under the Project is located in the depression of the Lixia River, which is narrow and badly silted up. Its embankments and dikes are below the standards to provide flood protection, and most pumping stations and structures were built in the 1960s and 70s and too damaged to function. Drainage by gravity is not possible and all excess water needs to be pumped out. Three polders, namely, the polder of the Taidong River, Yancheng City and Taichou City in the Lixia depression, were selected to be improved under the Project. In addition, Qubei area of the Li canal and Fei Yellow-River depression were also included under project financing. Major works to be constructed include: (a) strengthening of 23 km of embankments or dikes, construction of 67.86 km of dikes, 5.73 km of flood control walls and 183.64 km of protective slopes; (b) excavation and/or dredging of 212.47 km of natural waterways and drainage channels; (c) upgrading and/or replacement of 90 pumping stations, 145 culverts and 73 bridges. The project would also finance the dredging of the Taidong River, which will improve flood protection of Taizhou, Yancheng, Huaian and Xuzhou cities. The

29 estimated investment on works in Jiangsu is about 41 percent of the total investment for the four provinces.

Shandong Province

10. The project areas (about 1,769.9 km2) are located in three depressions (Nansi Lake, Hanzhuang and Tancang). Works to be financed under the project are: (a) strengthening of 80.64 km of dikes and construction of 12.20 km of dikes, and 2.36 km of protective slopes; (b) excavation and/or dredging of 90.34 km of natural waterways and drainage channels; (c) the upgrading, expansion or new construction of 40 pumping stations, 29 culverts and 6 bridges. Investment on these works is relatively small compared to Anhui and Jiangsu, and represents about 7 percent of the total investment of the total investment for the four provinces.

Disaster Assessment and Support System

11. This component will achieve the following objectives: (a) upgrade coverage and facilities for information and data collection on river floods and drainage; (b) improve speed of disaster information and data collection, transmission and processing; (c) establish a disaster assessment center in Hefei, Anhui Province to facilitate the participatory decision making process; (d) improve the level of accuracy of flood and water-logging damage assessment process; and (e) formulate innovative measures on water-logging mitigation.

12. This component includes the following subcomponents:

(a) Development of information and data collection monitoring system, including (i) subsystems of the Huai River, (ii) subsystem for the Yi-Shu-Si Rivers, (iii) subsystem for Xinyang in Henan Province, (iv) Huainan hydrologic monitoring station at Fuyang in Anhui Province, (v) subsystem for Suqian in Jiangsu Province, (vi) subsystem for Zaozhuang in Shandong Province, and (vii) information collection, transmission and network systems. (b) Development of flood disaster assessment and support system, including (i) development of the damage assessment models, (ii) development of a database, (iii) application of Geographic Information System (GIS), and (iv) construction of the operational center in Hefei for flood and water-logging damage assessment. (c) Construction of a physical model for testing of flood protection and drainage operations. (d) Carrying out studies to formulate innovative measures on water-logging mitigation and strategies.

Operation and Maintenance (O&M)

13. The establishment and implementation of adequate Operation and Maintenance (O&M) arrangements are of vital importance for the physical and financial sustainability of project works. An evaluation of the existing arrangements concluded that:

30 (a) In most areas nobody is responsible for O&M of the drainage system at the on-farm level. This results in excess water not being drained to the branch system, and further to a main system. As a result, farm land, villages and schools continue to be subject to flooding, even though new branches and main drainage canals had been constructed nearby. (b) Water stations or water resource bureaus’ are responsible for O&M of branch and main drainage systems, but the allocated funds for O&M are inadequate to cover O&M costs. (c) No fees are charged for drainage and flood control services, only for irrigation supplies. (d) Sustainability is a serious issue for O&M facilities at on-farm, branch and main drainage system levels. (e) There is a tremendous need for training, equipment, and study tours for O&M.

14. Based on the results of the evaluation, the O&M component incorporates the following: (a) integrated management between Main, Branch and Farmer managed systems including water charge analysis for drainage and irrigation; (b) clear assignment of responsibilities for works and functions at each of the above three levels; (c) well organized O&M units; (d) trained staff and the provision of essential O&M equipment; and (e) a commitment to fully fund O&M at all three levels. The O&M component would fund institutional and technical requirements, including the establishment of FDIAs, which will have a direct responsibly for O&M of works constructed under the Project.

15. Future plans should ensure proper O&M of the flood protection and drainage improvement works implemented under the Project. The plan should include financing details for O&M after Project completion, as well as organizational, technical and maintenance equipment requirements. The plan should aim at the long-term self-financing of O&M of all project works. This should include arrangements necessary to set up FDIAs, as well as the establishment and collection of O&M fees. A total of 146 O&M plans (30 for Henan, 59 for Anhui, 16 for Jiangsu, 37 for Shandong, and 4 for HRBC) shall be prepared, reviewed and approved, and implemented during project implementation and thereafter. The detailed list of these plans is included in the PIP.

Farmer Drainage and Irrigation Associations

16. The approach to establish institutions to effectively carry out O&M will involve both a bottom-up and a top-down approach, which would reform existing institutional structures at all levels. This would require clearly defined roles and responsibilities for O&M. Bottom-up measures would be innovative, and will include greater community involvement in O&M through the creation of Farmer Drainage and Irrigation Associations (FDIAs), which will assume responsibilities for O&M of all small works (gates, pumping stations etc.). This requires the transfer of ownership of these small works to the FDIAs. Province, Municipality and County level Water Resources Bureaus (WRBs) would be responsible for O&M of larger works on the rivers, water courses and drainage channels, dike systems and pumping stations. A new responsibility would be to provide oversight and assistance to FDIAs.

31 Development of FDIA Pilots

17. Each FDIA will prepare an O&M plan for the unified system showing: (a) physical maintenance activities to be undertaken; (b) estimated cost of the O&M plan; (c) assignment of responsibilities for O&M tasks; and (d) sources of revenues/funds to match the annual costs. Four FDIA pilots (one in each of the 4 provinces) have been selected and are in the process of being established. This will be followed by expanding FDIAs over the entire project area. Four O&M plans need to be prepared, covering each pilot area and the branch and main systems as appropriate.

18. The basic features of the 4 FDIA pilots are shown in Table 1 below. Each FDIA would be established based on the following five principles to ensure quality standards and sustainability of these new organizations:

(a) FDIAs will be owned and operated by farmers. Members of the FDIA are beneficiary households of the irrigation and drainage area controlled by the FDIA. Members will elect their leaders from among themselves. FDIAs are to be registered with civil affair bureaus to become legal entities. FDIA regulations, and financial and water management aspects shall be transparent and made available to all members. Each FDIA will be financially independent and will have its own bank account. (b) The area controlled by the association shall be based on hydraulic boundaries. The irrigation and drainage area of an FDIA must not be based on, or limited by, administrative (township or village) boundaries, although in some cases the village boundary may coincide with the hydraulic boundary of the FDIA. To facilitate water regulation within the FDIA, several drainage and/or water user groups may be set up along the drainage channels and/or irrigation supply systems. In gravity surface irrigation systems, the irrigation diversion canal inlet, or branch or tertiary canals that distribute water to the field, can all be taken as starting points for FDIA boundaries. These canals will then form a water distribution unit of the FDIA. For FDIAs using groundwater, the boundary or management area will be based on the area served by the wells. Water User Groups (WAG) will consist of members using the same well. (c) FDIA water charges for irrigation shall be based on volumetric measurements of quantities of water received. Water supply systems of an FDIA must be equipped with volumetric measurement devices. FDIA members shall pay a water fee based on the volume of water received. (d) As a legal entity, FDIAs collect water fees from members and pass on payments directly to the water supply and drainage service organizations, in accordance with contracts signed between the parties concerned. Water fees will be based on the amount of water allocated and received, with the price detailed in the contract or set by government. Using this approach will improve (i) members’ participation, (ii) self-management of FDIA, and (iii) strengthen financial independence of the FDIA. (e) FDIAs must have adequate and reliable water supply, well functioning water distribution and drainage facilities, and be able to provide adequate service to its members. To ensure an adequate and reliable supply of water, FDIAs should sign contracts with water suppliers. The contract will define the rights and obligations of both the supplier and the FDIA.

32 19. The Project has prepared preliminary designs of on-farm structures and related cost estimates for the four FDIA pilot areas. These investments are an integral part of the project. Large investments in main and branch infrastructure works will be more cost effective if these are directly linked to investment at the on-farm level. This will ensure the integrated operation of drainage and flood control systems. The main benefit of the project, increased agricultural productivity, will only be realized when an acceptable level of on-farm works are put in place. Detailed guidelines for the selection and development of the FDIA Pilot Areas are given in the Project Implementation Plan (PIP). To maximize benefits from project investments, the construction of on-farm auxiliary structures beyond the four pilot FDIA areas would be actively promoted under the Project. The project will focus on funding and successful establishment and functioning of the four pilot FDIAs, with strong support from local governments, and cooperation from relevant departments. It will utilize funding sources from the Comprehensive Agriculture Development (CAD) Program at national, provincial and county levels.

Expansion of FDIA Pilots

20. Eight FDIAs are to be established in each of the 4 project provinces starting from the 2nd year of project implementation, based on hydraulic boundaries defined by the small-size drainage pumping stations, gates or ditches funded by the project. The four provinces involved in the project have the experience and adequate resources for establishing FDIAs. In addition, the Chinese government has issued preferential policies and given priority to rural water projects with proposed farmers’ associations, which provides an attractive environment for FDIA development. The proposed plan for FDIA expansion is given in Table 2. The plan has been discussed and agreed with the four provinces and is in line with national policies.

Local Governments’ Support for FDIA Development

20. In order to have sustainable operation and maintenance of the engineering structures funded by this project, O&M plans must be prepared taking into account the ownership rights of the structures. Governments of the provinces, cities, and counties involved in the project should make commitments to actively promote and accelerate reform of water management systems, to establish a reliable and stable funding mechanism, and to define funding sources to support O&M activities.

21. Attention should be paid to completion of the on-farm auxiliary structures and establishment of a permanent and effective management system for the on-farm systems. Local governments should strengthen reform of the management systems for the small-sized rural water works and promote development of FDIAs. This will lead to a democratic form of management by the FDIAs and motivate farmers to carry out the management tasks themselves.

22. Farmers within the same area have equal rights for drainage and water use, and shall fully implement the principle of self-managing and maintaining their own affairs and water works. FDIA members shall actively participate in planning, design and construction of water works, as owners of those water works. FDIAs’ acceptance of works with signatures should be obtained prior to completion and transfer of the works. FDIAs shall be responsible for maintenance of the

33 structures, and the water administrative departments at all levels are obligated to provide support and assistance to FDIAs.

23. Water administration departments of the four project provinces should exercise their functions as responsible line-agencies to facilitate pilot FDIA development establishment and expansion under the Project; they must also ensure the sustainability of newly established FDIAs.

Study Tours, Training and Workshops

24. The project includes provisions for domestic and international study tours, training courses, and workshops in support of key project components. Details are provided in the PIP. Study tours and training opportunities must be carefully selected to make sure that they provide good value and are cost effective. This applies in particular to international training. They must comply with the following criteria:

(a) Clear objectives and written terms of reference setting out the issues to be studied that are aligned with the Project Development Objectives (PDOs). (b) Organized by qualified overseas organizers, with a detailed itinerary and budgeted cost plan in line with the standards stipulated by MOF. (c) Include the names of experts and institutions/organizations to be visited, consistent with the objectives and issues relevant for the project. (d) Participants in training courses and/or study tours must be qualified staff, including both leaders and technical staff at the working level, consistent with the objectives and the issues to be studied. (e) Study tours and training courses must be of appropriate duration, in line with the stipulations of MOF. (f) Proposed overseas study tours are subject to prior review by the Bank.

Table 1 to Annex 4 Statistics on FDIA Pilots

Location Planned Name of Cultivated No. Province/ Main On-farm Auxiliary Water Works Investment FDIAs Depression Land County （104 Yuan) (a) Excavation and dredging of branch drainage canals Anhui of 74,572 m3; (b) 54 new bridges over the small or Chenxu 3,600 mu or 1 Xiehe Guzhen medium-size ditches; (c) Repair of 20 irrigation wells, 210.43 Village 240 hectare County construction of 15 new irrigation wells; (d) 1 dam for the planned main drainage ditch; and (e) rural road 4 km (a) Drainage ditches 5.63km; (b) 17 bridges; (c) 16 pipe Henan Xuzhuang Downstream 2,400 mu or culverts; (d) newly build 30 wells; (e) 48 diving pumps 2 Pingyu 181.60 Village Xiaohonghe 160 hectare and houses; (f) berried power transmission line of 2.5 County km; (g) rehabilitation of 12 wells. (a) Repair of 24 bridges, construction of 6 bridges; (b) Jiangsu 1,270 mu or Caoshe Southeast canal ling of 4.5 km using pre-cast reinforced concrete 3 Province 85 hectare 263.35 Village Lixia slabs; (c) one irrigation station (12″); (d) 4.5 km rural Dongtai City road; and (e) 5 culverts. (a) 5 branches and farm ditches 8.76 km; (b) Shandong construction and improvement of 2 main branch-canals 71.00 Li Qiao Binhu 14,000 mu or 4 Provine 2.86km; (c) 125 auxiliary structures, including 24 (285.74 as Village 933 hectare Yutai County bridges, 8 diversion gates, 64 gates on the lateral canals, originally planned) 8 lateral culverts, 21aqueducts and 1 rural road. Total 726.38

Table 2 to Annex 4 FDIA Extension Plan1 (in RMB 104 Yuan)

Total Planned Annual Implementation Plan Year 2 Year 3 Year 4 Year 5

Provincs Investment Extension Extension Extension Extension No. No. Investment2 No. Investment No. Investment No. Investment Shandong 8 80 1 10 1 10 3 30 3 30 Henan 8 80 1 10 1 10 3 30 3 30 Jiangsu 8 80 1 10 1 10 3 30 3 30 Anhui 8 80 1 10 1 10 3 30 3 30 Total 32 320 4 40 4 40 12 120 12 120

1 The budget RMB Yuan 3.2 million for extension of the FDIAs has not been included in the total estimated cost of the project. However, it is agreed that it would come from the savings of project costs with first priority, e.g., through the bidding process for civil works and goods procurement. 2 The budget RMB Yuan 100 thousand for establishing one extension FDIA, including the cost for repairs and maintenance of small structures of the extension FDIA.

Annex 5: Project Costs

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

Table 1: Project Cost Summary

Table 1-1: In US$ million1

Component Local Foreign Total A. Flood Protection and Drainage Improvement 306.03 1.5 307.53 B. Disaster Assessment and Support System 23.60 2.62 26.22 C. Institutional Strengthening 4.64 0.52 5.15 D. Resettlement Action Plan Implementation 156.74 0.00 156.74 E. Project Management 41.35 0.42 41.76 Total Project Base Costs 532.35 5.05 537.40 Physical/Price Contingencies 38.67 4.30 42.97 Total PROJECT COSTS2 571.02 9.35 580.36 Interest During Construction 0.00 16.54 16.54 Frontend Fee 0.00 0.50 0.50 Total FINANCING REQUIRED 571.02 26.39 597.41

Table 1-2: In RMB Yuan million

Component Local Foreign Total A. Flood Protection and Drainage Improvement 2,089.25 10.23 2,099.47 B. Disaster Assessment and Support System 161.10 17.90 178.99 C. Institutional Strengthening 31.66 3.52 35.17 D. Resettlement Action Plan Implementation 1,070.06 0.00 1,070.06 E. Project Management 282.26 2.85 285.11 Total Project Base Costs 3,634.32 34.49 3,668.81 Physical/Price Contingencies 264.00 29.33 293.34 Total PROJECT COSTS 3,898.32 63.83 3,962.15 Interest During Construction 112.93 112.93 Frontend Fee 3.41 3.41 Total FINANCING REQUIRED 3,898.32 180.17 4,078.50

1 Detailed cost tables and financing plan are available on file. 2 Identifiable taxes and duties are US$ m 8.45 (only imposed on the goods and equipment), and the total project cost, net of taxes, is US $m 571.91. Therefore, the share of taxes is 1.5 percent.

Table 2: Project Financing Plan by Component

Table 2-1: In US$ Million

IBRD Government Total Amount % Amount % Amount % A. Flood Protection and Drainage Improvement 186.46 61 121.07 39 307.53 100 B. Disaster Assessment and Support System 9.23 35 16.99 65 26.22 100 C. Institutional Strengthening 2.02 39 3.13 61 5.15 100 D. Resettlement Action Plan Implementation 0.00 0 156.74 100 156.74 100 E. Project Management 1.79 4 39.97 96 41.76 100 Total Project Base Costs 199.50 37 337.90 63 537.40 100 Physical/Price Contingencies 0 42.97 100 42.97 100 Total PROJECT COSTS 199.50 34 380.87 66 580.36 100 Interest During Construction 0 16.54 100 16.54 100 Frontend Fee 0.50 100 0.50 100 Total FINANCING REQUIRED 200.00 33 397.41 67 597.41 100

Table 2-2: In RMB Yuan Million

IBRD Government Total Amount % Amount % Amount % A. Flood Protection and Drainage Improvement 1,272.94 61 826.54 39 2,099.48 100 B. Disaster Assessment and Support System 63.02 36 115.97 64 178.99 100 C. Institutional Strengthening 13.80 39 21.37 61 35.17 100 D. Resettlement Action Plan Implementation 0.00 0 1,070.06 100 1,070.06 100 E. Project Management 12.22 4 272.89 96 285.11 100 Total Project Base Costs 1,361.98 37 2,306.83 63 3,668.81 100 Physical/Price Contingencies 0.00 0 293.34 100 293.34 100 Total PROJECT COSTS 1,361.98 34 2,600.17 66 3,962.15 100 Interest During Construction 0.00 0 112.93 100 112.92 100 Frontend Fee 3.41 0 0.00 100 3.41 100 Total FINANCING REQUIRED 1,365.40 33 2,713.10 67 4,078.50 100

Table 3: Project Financing Plan by Implementing Agencies

Table 3-1: In US$ million

Financing Plan Province Total Cost Counterpart Funding IBRD Sub-total Central Gov. Provincial Gov. City/County Gov. Henan 47.34 15.00 32.34 18.90 9.42 4.02 Anhui 237.54 75.00 162.54 95.06 22.73 44.74 Jiangsu 244.00 90.00 154.00 48.78 47.01 58.21 Shandong 40.31 11.00 29.31 8.06 8.06 13.20 HRBC 28.22 9.00 19.22 19.22 0.00 0.00 Total 597.41 200.00 397.41 190.01 87.22 120.17

Table 3-2: In RMB Yuan 10 thousand

Financing Plan Province Total Cost Counterpart Funding IBRD Sub-total Central Gov. Provincial Gov. City/County Gov. Henan 32,316 10,240.5 22,075.5 12,900 6,430.5 2,745 Anhui 162,167 51,202.5 110,964.5 64,900 15,520 30,544.5 Jiangsu 166,579 61,443 105,136 33,300 32,094 39,742 Shandong 27,521 7,509.7 20,011.3 5,500 5,500 9,011.3 HRBC 19,267 6,144.3 13,122.7 13,122.7 0.0 0.0 Total 407,850 136,540 271,310 129,722.7 59,544.5 82,042.8

Annex 6: Implementation Arrangements

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

1. The project is a central government undertaking, with Huai River Basin Commission (HRBC) and the four provinces responsible for project management and implementation. The proposed Project management structure includes (a) Central Project Leading Group (CPLG) and Central Project Coordination Office (CPCO) within Ministry of Water Resources (MWR); (b) Central Project Management Office (CPMO), Central Expert Group (CEG), and PMO (for Component 2) within HRBC; (c) PLGs, PMOs and EGs at Provincial, City and County levels; and (d) Resettlement Offices (ROs) and Project Implementing Units (PIUs) for relevant counties.

2. At the central level, the following organizations shall be maintained, throughout the period of implementation of the Project:

(a) CPLG within MWR, for purposes of providing overall policy support and ensuring coordination among all relevant agencies for the implementation of the Project; (b) CPCO within MWR, with composition, powers, functions, funds, staffing and other resources satisfactory to the Bank, and as shall be required to enable the CPCO to liaise and carry out coordination of project implementation among relevant agencies at the central level and among relevant departments within MWR; (c) CPMO within HRBC of MWR, with such composition, powers, functions, funds, staffing and other resources satisfactory to the Bank, and as shall be required to enable the CPMO to coordinate, manage and evaluate the overall implementation of the Project, including providing technical and policy assistance to the Project Implementing Entities; (d) CEG within HRBC of MWR with terms of reference, satisfactory to the Bank, in order to provide technical support to the CPMO;

3. At the project implementing entity level, the following organizations shall be maintained throughout the period of implementation of the project:

(a) PLG at the provincial level, and in the case of each Project Province other than Jiangsu, at each city or county level where activities under the Project will be carried out, in order to, inter alia, formulate Project related policies, coordinate among relevant agencies, and provide overall guidance on implementation. (b) PMO at the provincial level, and HRBC, and in the case of each project province other than Jiangsu, at each city or county level where activities under the Project will be carried out, in order to, inter alia, organize, coordinate and implement respective Project activities. (c) An Expert Group at the provincial level, and in the case of each project province other than Jiangsu, at each city level where activities under the Project will be carried out, in order to, inter alia, provides technical advice to the corresponding PMO in project management and implementation.

4. In addition, a Panel of Experts (POEs) for dam safety review has been set up at the provincial level. PIUs and ROs have also been set up at county level where the project component is relatively small and a PMO is not required.

5. There are a total of 145 organizations established for project management and implementation, which include 43 PLGs, 1 PCO, 52 PMOs, 21 EGs, 4 POEs, 17 PIUs and 7 ROs. The detailed information is given in Table 1 to Annex 6.

Detailed Responsibilities of CPCO

6. The Central Project Coordination Office (CPCO) is the executive office of the Central Project Leading Group (CPLG). The major responsibilities of the CPCO are:

(a) Conduct daily coordination for project management and implementation among relevant government agencies at the central level and among relevant departments within MWR; (b) Monitor status of project implementation, and provide guidance and help resolve the key issues at central level during project implementation, and if necessary seek assistance and guidance from CPLG.

Detailed Responsibilities of CPMO

7. CPMO is an executive and coordination agency of the Project with following detailed responsibilities:

(a) Provide daily coordination among PMOs to manage and implement the project in accordance with project legal agreements; (b) Provide coordination among PMOs to take actions in accordance with recommendations made by Bank supervision missions; (c) Consolidate annual investment plans and progress reports in accordance with project legal agreements and provide suggestions to the Bank and Project Provinces; (d) Provide, through its Central Expert Group, technical support to Project Provinces for project management and implementation; (e) Provide liaison between the Bank and Provincial PMOs to ensure smooth project management and implementation; (f) Organize and coordinate development of the MIS and monitor project progress at all levels, and ensure operation and maintenance of the MIS; (g) Provide advice to PMOs at all levels on establishment of relevant management regulations on project management, financial management, bidding, and procurement management, in agreement with the Bank; and (h) Coordinate oversees training and study tours, and organize training and workshops at the Central level.

Detailed Responsibilities of Provincial PLG

8. The Provincial Project Leading Group (PPLG) has been set up to provide coordination and guidance for project management and implementation, with the following detailed responsibilities:

(a) Provide guidance to project management and implementation; (b) Assume responsibility for cross-sector coordination, review and make decisions on key issues for project management and implementation; (c) Coordinate and strengthen cooperation between project cities; (d) Secure adequate counterpart funding; and (e) Make decisions on key issues during project management and implementation.

Detailed Responsibilities of PMOs at the Provincial, City, and County Levels

9. The PMO is the executive agency responsible for day-to-day project management and implementation under the guidance and advice from the respective PLG, with the following detailed responsibilities:

(a) Provide daily project management and implementation under the leadership of PLG in accordance with the legal agreements of the project; (b) Take actions in accordance with recommendations made by Bank supervision missions; (c) Take actions for development of FDIA pilots and extension of the pilots to other parts of the project area in accordance with the legal agreements of the Project; (d) Prepare and consolidate annual investment plans and project progress reports as required during project implementation; (e) Plan and organize training, workshops, and study tours, focusing on aspects of project management and technology transfer; (f) Take actions on resettlement and environmental issues and external monitoring and reporting; (g) Conduct procurement and financial management in accordance with Bank procurement and financial management guidelines with the help of the procurement and financial management information system established; and (h) Report to the PLG on key issues during project implementation in order to solve them in a timely manner.

Detailed Responsibilities of EGs

10. The EG is set up to provide the PMOs with advice and technical support for design, engineering, budget, procurement, financial, economic, dam safety, resettlement and environmental issues during project preparation, management and implementation. The detailed responsibilities of EG are as follows:

(a) Provide technical advice during project management and implementation; (b) Assist the PMOs with technical reviews; (c) Prepare or consolidate project documents, materials, and technical reports to be furnished to higher level organizations and the Bank; (d) Work together with international consultants on technical advisory services and training / workshops; (e) Monitor and evaluate the status on implementation of physical works, and the actions taken on resettlement and environment aspects; and (f) Prepare the Mid-term Review (MTR) and the Implementation Completion Reports (ICR).

Table 1 for Annex 6 Project Implementing Agencies Established

Location PLG PCO PMO EG POE PIU RO Total

Total 43 1 52 21 4 17 7 145 MWR 1 1 2 HRBC CPMO 1 1 2 HRBC PMO 1 1 2 Sub-total 1 1 2 2 6 HENAN PROVINCE 1 1 1 1 4 Zhoukou City 1 1 1 3 Xihua County 1 1 2 Fugou County 1 1 2 Zhumadian City 1 1 1 3 Pingyu County 1 1 2 Xincai County 1 1 2 Runan County 1 1 2 Shangcai County 1 1 2 Xinyang City 1 1 1 3 Huangchuan County 1 1 2 Huaibin County 1 1 2 Sub-total 12 12 4 1 29 ANHUI PROVINCE 1 1 1 1 4 Bengbu City 1 1 1 3 Wuhe County 1 1 Huaiyuan County 1 1 Guzhen County 1 1 2 Huaishang District 1 1 Yuhui District 1 1 Huainan City 1 1 1 3 Fengtai County 1 1 2 Panji District 1 1 Maoji Dictrict 1 1 Dongfenghu Farm 1 1 Bozhou City 1 1 1 3 Lixin County 1 1 Suzhou City 1 1 1 3 Yongqiao County 1 1 Lingbi County 1 1 Shi County 1 1 Hefei City 1 1 1 3 Changfeng County 1 1 Chuzhou City 1 1 1 3 Tianchang City 1 1 Dingyuan County 1 1

Huaibei City 1 1 1 3 Xuxi County 1 1 Liuan City 1 1 1 3 Shou County 1 1 Zhengyang Farm 1 1 Fuyang City 1 1 1 3 Yingdong District 1 1 Yingshang County 1 1 Sub-total 12 14 10 1 17 54 Location PLG PCO PMO EG POE PIU RO Total JIANGSU PROVINCE 1 1 1 1 4 Xuzhou City 1 1 Yunlong District 1 1 Quanshan District 1 1 Tongshan County 1 1 Ecenomic Dev. District 1 1 Yancheng City 1 1 Dongtai City 1 1 Taizhou City 1 1 Jiangyan City 1 1 Agriculture Dev. District 1 1 Xinghua City 1 Huaian City 1 1 Taidong River PMO 1 1 Sub-total 1 7 1 1 7 17 SHANDONG PROVINCE 1 1 1 1 4 Linyi City 1 1 1 3 Tancheng County 1 1 2 Changshan County 1 1 2 Jining City 1 1 1 3 Jiaxiang County 1 1 2 Jinxiang County 1 1 2 wenshang County 1 1 2 Liangshan County 1 1 2 Rencheng District 1 1 2 Weishan County 1 1 2 Yutai County 1 1 2 Zhaozhuang City 1 1 1 3 Tengzhou City 1 1 2 Yicheng District 1 1 2 Xuecheng District 1 1 2 Taierzhuang District 1 1 2 Sub-total 17 17 4 1 39

Table 2 for Annex 6: Management Framework Hui River Basin Flood Management and Drainage Improvement Project

NDRC, MOF, MWR The World Bank

Central Project Leading Group (CPLG)

Central Project Coordination Office

Central Project Management Office (CPMO)

Expert Group of CPMO HRBC PMO HRBC EG

Henan PPLG Henan PPMO Anhui PPLG Anhui PPMO Jiangsu PPMO Jiangsu PPLG Shandong PPMO Shandong PPLG

PPLG Office

Provincial EG Provincial EG Provincial EG Provincial EG

City PMOs City PLGs City PMOs City PLGs City PMOs Taidonghe PMO City PMOs City PLGs City RO CPLG Office

City EGs City EGs City EGs

County PLGs County PMOs County PMOs County PMOs County PMOs County PLGs County PLGs County PIUs County ROs

Notes: HRBC—Huai River Basin Committee; PLG—Project Leading Group; PPLG—Provincial PLG; PMO—Project Management Office; PPMO—Provincial PMO; EG—Expert Group; RO—Resettlement Office; PIU—Project Implementation Unit.

Annex 7: Financial Management and Disbursement Arrangements

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

A. Executive Summary

1. The Financial Management Specialist (FMS) has conducted an assessment of the adequacy of the project financial management system of the Huai River Flood Management and Drainage Improvement Project. The assessment, based on guidelines issued by the Financial Management Sector Board on November 3, 2005, has concluded that the project meets minimum Bank financial management requirements, as stipulated in BP/OP 10.02. In the FMS’ opinion, the project will maintain financial management arrangements that are acceptable to the Bank and that, as part of the overall arrangements that the borrower has in place for implementing the operation, provide reasonable assurance that the proceeds of the loan are used for the purposes for which the loan was granted. Financial management risk is the risk that World Bank loan proceeds 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, the FM risk rating for this project at appraisal is modest.

2. Funding sources for the project include the Bank loan and counterpart funds. Bank loan proceeds will flow from the Bank into project designated accounts (DAs) to be set up at, and managed by, the Ministry of Finance and the PFBs of Anhui, Shandong, Henan and Jiangsu province. For project activities to be implemented by HRBC, the Bank loan will flow from the DA to HRBC, and finally to the contractors. In Shandong and Henan province, the Bank loan will flow from the PFBs managed DAs to the municipal finance bureaus, to the county finance bureaus, to county PMOs, and finally to the contractors. In Anhui and Jiangsu province, the Bank loan will flow from the PFBs managed DAs to the municipal finance bureaus, to municipal PMOs, and finally to the contractors. The Bank loan will be signed between the Bank and the People’s Republic of China, through its MOF. For the part implemented by HRBC, the on- lending agreement will be signed between MOF and MWR. For the parts implemented by provinces, the on-lending agreements will be signed between MOF and the provincial governments, through their provincial finance bureaus; and the provincial finance bureaus will further on-lend to related municipal finance bureaus. In the case of Shandong and Henan provinces, funds will be on-lent to county finance bureaus, In Anhui and Jiangsu provinces, the municipal finance bureaus will on-lend to municipal water resource bureaus. In Shandong and Henan province, the county finance bureaus will on-lend to county water resource bureaus. Counterpart funds comprise contributions from governments at different levels.

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

B. Audit Arrangements

4. 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 Audit Center (AC) of China National Audit Office (CNAO) and the Provincial Audit Offices (PAOs) of Anhui, Shandong, Henan and Jiangsu province have been identified as auditors for related project components. Annual audit reports will be issued by the AC and PAOs.

5. Annual audit reports of project financial statements will be due to the Bank within 6 months after the end of each calendar year. The responsible agency and timing are summarized as follows:

Audit Report Submitted by Due date Consolidated Project financial statements for HRBC component HRBC June 30 Consolidated Project financial statements for Anhui component Anhui PMO June 30 Consolidated Project financial statements for Shandong component Shandong PMO June 30 Consolidated Project financial statements for Henan component Henan PPMO June 30 Consolidated Project financial statements for Jiangsu component Jiangsu PMO June 30

C. Funds Flow and Disbursement Arrangements

6. Funds flow for the Bank loan follows Bank and MOF requirements. Five designated accounts (DAs) will be established and managed by MOF and four provincial finance bureaus respectively. The funds flow is as follows:

HRBC Component

The World DA managed Suppliers and Bank by the MOF contractors

Henan, Anhui and Shandong Components

The World DA managed City FB County FB Suppliers and Bank by PFB contractors

Jiangsu Component

The World DA managed City FB Suppliers and Bank by PFB contractors

7. The Bank loan will be disbursed against the following eligible expenditures and disbursement percentages.

IBRD Financing Amount of the Loan Category Percentage of Expen- Allocated ditures to be financed in USD million A. Henan (1) Works 11.89 54% (2) Goods 2.68 100% (3) Consultant Services/Training 0.39 100% B. Anhui (1) Works 61.62 68% (2) Goods 12.10 100% (3) Consultant Services/Training 1.10 100% C. Jiangsu (1) Works 88.10 81% (2) Goods 1.13 100% (3) Consultant Services/Training 0.55 100% D. Shandong (1) Works 8.92 43% (2) Goods 1.50 100% (3) Consultant Services/training 0.55 100% E. Huai River Basin Commission (1) Works 6.96 91% (2) Goods 1.58 100% (3) Consultant Services/training 0.44 100% F. Front End Fee 0.50 Total 200.00

8. Four disbursement methods are available for the project: reimbursement, advance, direct payment and special commitment. The minimum value of applications for reimbursement, direct payment, and special commitment will be agreed during negotiation.

9. For expenditures against contract amounts indicated in the table below, Statements of Expenditure (SOE) will be furnished as supporting documentation to request reimbursement and reporting eligible expenditures paid from the DAs.

Expenditure Category Contracts Less than US$ Equivalent Civil Works 5 million Goods 500,000 Firm Consultant 100,000 Individual Consultant 50,000

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

Expenditure Category Contracts Equivalent or More than US$ Equivalent Civil Works 5 million Goods 500,000 Consulting firm 100,000 Individual consultant 50,000

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

HRBC Component

HRBC of MWR MOF World Bank

Henan, Anhui and Shandong Components

County County City PMOs Provincial Provincial World Bank PMOs FBs And FBs PMOs FBs

Jiangsu Component

City PMOs City FBs Provincial Provincial World PMOs FBs Bank

12. During project implementation, the Bank will monitor the efficiency and effectiveness of the approval and disbursement procedures closely. If necessary, the Bank will work with related implementing agencies and PMOs to find ways for more effective streamlined processing procedures.

D. Financial Management and Reporting Requirement

Risk Assessment and Mitigation

13. The following risks, and corresponding mitigating measures have been identified during assessment:

Risk Risk Risk Mitigating Measures Incorporated Conditions of Rating into Project Design Negotiations, Board or Effectiveness Inherent Risk  Country level Modest See the following mitigating measures utilized in the project.  Entity Level Modest Legal and institutional framework is acceptable and current PFM systems are functioning reasonably well. As this project will be implemented by various agencies at different levels, monitoring of compliance with PFM and Bank procedures will be important. Involvement of various level PMOs and finance bureaus will mitigate some of these risks. The Bank will work with the project agencies to further strengthen their FM knowledge and capacity.  Project Level Modest The project will involve geographically FM training workshop dispersed implementing agencies, most of was conducted prior to which do not have previous experience negotiation. with World Bank projects. In addition, to mitigate these risks, provincial PMOs with experienced staff will handle part of project implementation, and be responsible for oversight of the county PMOs’ activities. Furthermore, finance bureaus in municipal and county levels will review and manage project funds to ensure appropriate usage. Control Risk  Budgeting Modest The FMS will, through supervision missions or FM training, work with the provincial PMOs and implementing agencies at all levels to improve budget preparation, execution, and budget to actual variation monitoring and evaluation.  Accounting Low Accounting policies and procedures are already in place. Circular #13 has been issued by MOF and adopted for all World Bank financed projects. Proper guidelines for accounting of beneficiary contributions will be documented in the FM manual. Necessary training will be provided to accounting staff to improve their knowledge and qualifications.  Internal Modest Internal control procedures and policies Control will be documented in the FM manual and all project implementing agencies are required to follow them. Refer to para.25 for internal audit function.  Funds Flow Modest Funds flow arrangement will involve multi-

layered approval process and a large number of spending units. Any instance of delayed disbursement will affect project implementation. Related requirements and procedures will be documented in the FM manual. The FMS will check implementation of these requirements and procedures during supervision missions.  Financial Low Financial reporting responsibilities have Reporting been established. The form, content and periodicity of financial reports are well defined by MOF and understood by all implementing agencies and PMOs.  Auditing Low The external auditors, the AC and PAOs, have extensive experience with Bank project audits. The audit will be conducted in accordance with acceptable auditing standards and the audit reports will be due to the Bank every June 30th.

14. The overall FM risk-rating of this project at appraisal stage is modest. The FMS will monitor the project FM risk during project implementation.

Strengths and Weaknesses

14. Strengths. All provincial finance bureaus involved have accumulated extensive experience in Bank project financial management and disbursement procedures and requirements.

15. Weaknesses and Action Plan. Besides the weakness that give rise to risks identified above, the following significant weaknesses and action plan for addressing each weakness have been identified:

Significant weaknesses Actions Responsible Completion Person Date Most financial staff does A well designed FM training PFBs and Completed before not have previous Bank workshop should be provided to all provincial negotiation. project experience. In the project financial staffs. PMOs Shandong and Henan provinces, the quality of some financial staff at the county level will be a challenge for sound project financial management.

Implementing Entities

16. PMOs have been established at all the levels, i.e., provincial, municipal, and county. The PMOs have a key role to play in terms of project management, coordination, planning, implementation, monitoring and reporting.

17. HRBC will implement one component, and will manage related project funds and financial management. Provincial, municipal and county PMOs will manage or implement the remaining components. In Shandong and Henan provinces, the detailed project financial management will be handled by county PMOs. In Anhui and Jiangsu provinces, the municipal PMO will be responsible for detailed project financial management.

Budgeting

18. In accordance with the project implementation plan and construction progress, municipal and county PMOs will prepare annual budget corresponding to the project activities they are responsible for. These budgets will be reviewed and approved by provincial PMOs. For budget variances arising during execution, necessary authorization and close monitoring should be established. Timely and accurate information on variances should be used as the basis for mid- term adjustments. Given the current situation in China on public expenditure management, it takes time for PMOs at different levels to absorb and implement this new approach. The FMS will work with the PMOs to educate them through various measures, e.g., training and supervision missions.

Accounting

19. The administration, accounting and reporting of the project will be set up in accordance with the Circular No.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

20. The project financial reporting package, including detailed format and content of project financial statements, was agreed to between the Bank and MOF. This set of project financial reporting package includes the following:

 Balance Sheet  Summary of Sources and Uses of Funds by Project Component  Statement of Implementation of Loan Agreement  Designated Account (DA) Statement  Notes to Financial Statements

21. County/municipal PMOs will be managing, monitoring, and maintaining their respective project accounting records. County/municipal PMOs will also prepare their financial reporting, and provincial PMOs will consolidate project financial reporting package for their province and submit it to the Bank on a regular basis for review and comments. Supporting documents for project activities will be retained by implementing agencies at different levels. However, a set of complete documentation should be maintained by county/municipal PMOs; HRBC will be managing, monitoring and maintaining accounting records of the component implemented by it.

22. 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 implementing agencies, the task team noted that staff is qualified and appropriate for the work they are expected to assume. However, given most financial staff is new to the Bank projects, FM and disbursement training was provided to all the financial staff before project negotiation.

23. To strengthen financial management capacity and achieve consistent quality of accounting work, the task team has suggested that a project financial management manual (the Manual) be prepared by each project province. The Manual will provide detailed guidelines on financial management, internal controls, accounting procedures, fund and asset management, and withdrawal application procedure, etc. The Manual was finalized after Bank review and distributed to all the relevant financial staff.

24. In Henan and Shandong province, accounting records are maintained manually. In Anhui, Jiangsu and HRBC, accounting transactions are maintained using the accounting software named “Yongyou” and “Kingdee”. The proposed project has decided to use the MIS system, which also includes accounting, to manage and monitor project implementation. This MIS system has been used in several the Bank projects in China, but it will be the first time to integrate accounting into this system. The task team will monitor the processing of accounting work closely, especially in the initial stages, to ensure that complete and accurate financial information is provided in a timely manner.

Internal Control and Internal Auditing

25. The project has established internal control procedures and policies, including approval and authorization controls, segregation of duties, clear staff functions, and safeguarding assets. Funds flow will be arranged and monitored through the finance bureau channels and will be included in their substantive review.

26. The internal audit function is either not established or not sufficiently staffed in all PMOs. Where the internal audit function has been established, they incorporate internal audit in the financial unit, and the internal auditors are required to report to the leader of financial unit. However, the existing practice will not negatively impact project implementation, since detailed reviews conducted by finance bureaus at each level will mitigate such risk.

Financial Reporting

27. The format and content of the project financial statements represents the standard project financial reporting package agreed to between the Bank and MOF, and have been discussed and agreed to with all parties concerned. County/municipal PMOs will prepare financial statements on their components, which will then be used by the related Provincial PMOs for preparing consolidated provincial project financial statements, on a regular basis for review and comment. HRBC will prepare its own financial reports and submit them to the Bank directly.

Conditionality

28. No additional financial covenants are proposed by the FMS, other than the standard financial covenants, (e.g., maintaining project accounts in accordance with sound accounting practices and audit requirement), as described in the legal document.

Supervision Plan

29. The supervision strategy for this project is based on its FM risk rating, which will be evaluated on regular basis by the FMS in consulation with the task team leader.

Annex 8: Procurement

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

A. General

1. Procurement for the proposed project would be carried out in accordance with the World Bank’s “Guidelines: Procurement under BIRD Loans and IDA Credits” (Procurement Guidelines) dated May 2004, and revised in October 2006 and May 2010; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” (Consultant Guidelines) dated May 2004, and revised in October 2006 and May 2010, and the provisions stipulated in the Legal Agreements. The description of various items under different expenditure categories is presented below. For each contract to be financed by the Loan, the different procurement method or consultant selection method, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan.

2. Procurement of Works. A total of US$ 249.78 million of works would be required. Works procured under the project would include: construction of new dikes, widening and raising bank protection of existing dikes required under Dike Strengthening Component, dredging of river courses and excavation of drainage channels required under Waterway Improvement Component, rehabilitation, replacement and expansion of infrastructure works such as pumping stations, cross-dike structures, flood control gates and bridges required under Upgrading and Building New Structures Component, and others works required under other project components. Procurement will be done using the Bank’s Standard Bidding Documents (SBD) for all ICB, and Model Bidding Documents (MBD) for NCB agreed with the Bank.

(a) International Competitive Bidding (ICB). Although not anticipated, any contracts for works estimated to cost US$20 million equivalent or more would be procured under ICB procedures specified in the Procurement Guidelines. (b) National Competitive Bidding (NCB). Any contract for works estimated to cost less than US$20 million equivalent may be awarded under NCB procedures acceptable to the Bank. (c) Shopping. Small works estimated to cost less than US$200,000 equivalent per contract would be awarded through shopping procedures as specified in paragraph 3.5 of the Procurement Guidelines. These works would be suitable for lump sum and fixed-price contracts awarded on the basis of quotations obtained from at least three local contractors.

3. Procurement of Goods. A total of US$ 18.99 million worth of goods would be procured under this project, which would include: pumps, electrical equipment, metal structure equipment, office equipment, observation and laboratory equipment, software and data, vehicle and survey boats. Procurement will be done using the Bank’s SBD for all ICB, and Chinese Model Bidding Documents (MBD) for NCB agreed with the Bank.

(a) International Competitive Bidding (ICB). Any contract for goods estimated to cost US$1 million equivalent or more would be procured under ICB procedures specified in the Procurement Guidelines. (b) National Competitive Bidding (NCB). NCB procedures would be used for procurement of goods costing less than US$1 million equivalent per contract. (c) Shopping. Other goods would be procured through shopping procedures with contracts under US$100,000 equivalent per contract.

4. NCB Procedure. All NCB contracts would be managed by provincial PMOs and may be advertised in a national circulation newspaper. 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 Procurement Guidelines.

(a) All invitations to pre-qualify (or to bid) shall be advertised in a newspaper of national circulation in the Borrower’s country. 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 thirty (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, Shandong, Jiangsu, Henan, and Huai River Basin Commission in case of breach of contract by the contractor, and the bidding documents shall specify the required form and amount of such security. (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 the 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. (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 the Borrower, or the Project Implementing Entities, as the case may be. (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 and civil works, 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) Re-bidding should not be allowed solely because the number of bids is less than three (3), 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 under 3(i) above) or official gazette or a 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. (iv) 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) The Project Implementing Entities shall have in place provisions for bidders to protest.

5. Procurement of Consultants. A total of about US$2.32 million of consultant services would be required under this project. Consulting services would include: project monitoring and evaluation, procurement, financial management, project implementation, dam safety, resettlement, environment management, FDIA establishment, FDIA promotion, research on performance of large engineering works, information collecting system, disaster assessment and decision support systems, physical model, digital hydrology forecast model based on DEM, and other consultant services required under other project components. These services would be provided by consulting firms and by individual consultants. Consulting contracts expected to cost more than US$200,000 equivalent per contract will use the Quality and Cost Based Selection (QCBS) or Quality Based Selection (QBS), in conformity with paragraphs 2.1 through 3.4 of the Guidelines. Most consulting services under this project are estimated to cost under US$200,000 equivalent per contract; selection based on Consultants Qualifications (CQ) would be used for these contracts. Chinese university, design, and research institutes may be included in the shortlist. In such cases, QBS or CQ would be used instead of QCBS. Short lists of consultants for services estimated to cost less than US$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. Under the circumstances described in paragraph 3.10 of the Consultants guidelines, consultants may be selected and awarded on a sole-source basis, subject to the Bank’s prior approval. Individual consultants would be selected and contracts awarded in accordance with the provisions of paragraphs 5.2 through 5.3 of the consultants guidelines. Under the circumstances described in paragraph 5.4 of the Consultants guidelines, individual consultants may be selected and awarded on a sole-source basis, subject to the Bank’s prior approval.

6. Training, workshops and Study Tours. A total of US$0.71 million for training workshops and study tours would be required. The detailed program has been prepared by the CPMO and PPMOs during project preparation and are included in the PIP; they will be included

in the project annual work plan for Bank review during project implementation. Expenditures incurred in accordance with the approved detailed programs will be used as the basis for reimbursement.

7. Non-Bank Financing. A total of about US$265.60 million of other costs would be required for the project. These costs are largely related to resettlement, environment management, project management, and main transmission lines from power stations to project sites (mainly pumping stations), etc. These costs would be financed by counterpart funds.

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

8. Procurement activities will be mainly carried out by Project Management Offices (PMOs) established at HRBC, provincial, city and county levels. HRBC and each province is staffed by about 10 project officers, and about 8-10 project staff in city and county PMOs. An assessment of the capacity of the Implementing Agency to implement procurement actions for the project has been carried out by the Bank in April and August 2006, November 2009 and further reviewed in April 2010. The assessment reviewed the organization structure and functions, past experience, staff skills, quality and adequacy of supporting and control systems, legal and regulatory framework. The overall risk for procurement is considered to be moderate.

C. World Bank Review

9. All contracts would be subject to prior review by the Bank as follows: (a) contracts in excess of US$500,000 for goods and US$5 million for works; (b) the first NCB contract and shopping contract for goods and works procured by each PMO at provincial and city levels regardless of contract value; (c) all contracts for consultant services in excess of US$100,000 for firms and in excess of US$50,000 for individuals; and (d) all contracts awarded under single source selection. All other contracts would be subject to ex-post review by Bank supervision missions; the post review sampling ratio would be about one out of five contracts.

D. Frequency of Procurement Supervision

10. In addition to the prior review supervision to be carried out from Work Bank Office Beijing, at least one supervision mission per year would visit the project provinces to carry out post review of procurement actions.

E. Procurement Plan

11. The Borrower has developed a procurement plan to cover the initial 18 months of project implementation, which provides the basis for determining procurement methods. The finalized plan has been agreed between the Borrower and the Project Team and is available at HRBC PMO, Anhui PMO, Shandong PMO, Jiangsu PMO, and Henan PMO. 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 Project Team at least annually or as required to reflect project implementation needs and improvements in institutional capacity.

Table 1: Procurement Arrangement and Review Thresholds

Expenditure Category Contract Value Procurement Contracts Subject to Prior Threshold (US$) Method Review (US$) 1. Works ≥$20,000,000 ICB All ICB contracts

＜$20,000,000 and NCB ≥$5,000,000 or ≥$200,000 the first NCB contract in each PMO at provincial 1/ and city levels ＜$200,000 Shopping The first shopping contract in each PMO at provincial and city levels 2. Goods ≥$1,000,000 ICB All ICB contracts

＜$1,000,000 and NCB ≥$500,000 or the first NCB ≥$100,000 contract in each PMO at provincial and city levels

＜$100,000 Shopping The first shopping contract in each PMO at provincial and city levels 3. Consultant services ≥$200,000 QCBS, QBS ≥$100,000

<$200,000 CQ ≥$100,000

Individual Consultant ≥$50,000

Single Source All Single Source Selection Selection

Annex 9: Economic and Financial Analysis

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

A. Economic Analysis

Methodology and Main Assumptions

1. Project works will generate a number of benefits, many of which are quantifiable, as well as a number of non-quantifiable benefits. The main quantifiable benefits will be: (a) improved rural incomes through increased agricultural production, as a result of reduced flooding and water logging of farm land, improved drainage, and increased farm land being irrigated; (b) reduced flood damage to infrastructure in rural and urban areas; and (c) significant savings in shipping costs.

2. Quantification for the above benefits is based on the following: (a) areas flooded/water logged in project areas, by frequency of occurrence (estimated from available town and county records); (b) farmer interviews, to assess the impact of floods/ water logging on crop yields; (c) interviews of a representative sample of affected persons in the project sites to assess flood damage to rural and urban infrastructure; (d) an assessment of irrigation benefits based on additional water availability due to project works in Jiangsu and Shandong provinces; and (e) an assessment of navigation benefits from dredging works financed through the project on the lower reaches of the Huai River in Jiangsu Province.

3. The core economic analysis of the project is anchored in an assessment of the expected reduction in the costs of flooding and water logging, using a well-proven methodology of damage assessment of historical flood events for which frequency of recurrence (i.e., probability of occurrence by flood size) can be assessed. Briefly, flood/water logging damage curves, based on an analysis of at least three major historical flood events, were prepared for each province. Existing data on areas flooded were combined with data collected from interviews with affected persons at representative sample locations throughout the project sites. Flood/water logging costs expressed per hectare, were combined with area flooded estimates for different flood frequencies ranging from every year up to 1 in 100 years for two possible future scenarios – “without project” works and “with project” works. These flood frequency and flood loss data were used to estimate the expected areas flooded/waterlogged, and the expected costs of flooding, in the “without project” and “with project” situations. The difference between “with” and “without” project situations provides the expected economic benefit (saved cost) of reduced flooding and water logging due to the project.

4. The analysis treats all past investments in flood control and drainage as sunk costs. The full benefits of improving flood and main drainage infrastructure to the design capacities in the project areas will be attributed to the project.

5. Two supplementary economic analyses have been carried out. Firstly, an assessment of the economic benefits and costs of improving farm drainage. The project will finance farm level drainage works and improvements only in FDIA pilot areas, which in total account for about 1 percent of the total area of the project sites. The bulk of the project sites will be reliant on local government support for financing on-farm drainage works. Secondly, an analysis of the

economic benefits and costs of the proposed flood minimization decision support system (which will be financed through the project) was carried out. The results show that the ERRs for farm drainage range from 29 percent to 87 percent by province, depending on the unit costs for on- farm works investment (from RMB 3150 to RMB 10,800 per ha.), and ERR for flood minimization decision support system is estimated at 23 percent.

6. Cash flows of benefits and costs for each province were projected over a 25 year period to estimate the base case Net Present Value (NPV) at a discount rate of 12 percent and the Economic Rate of Return (ERR). The provincial sub-projects would generate ERRs ranging from 17 percent to 22 percent, which confirm that each sub-project is economically viable on its own. The aggregate project ERR is estimated at 20 percent (NPV of RMB 2,130 million Yuan), while sensitivity analysis indicates that the economic returns are robust.

Quantifiable Benefits

Reduced Flood and Water Logging Damage in Rural and Urban Zones

7. In practice it is difficult to separate the effects of flooding and water logging on agricultural production since both are the consequence of high rainfall events which occur during the summer. Both water logging and flooding reduce agricultural yields, and in extreme flooding events, can result in total destruction of production especially in the case of low water demanding crops such as cotton and maize. Paddy can withstand flooding and water logging for much longer periods. The extent to which crop production is reduced through water logging or flooding is site specific, and depends largely on: (a) the amount of rainfall and the size of a flood; (b) the height and duration of flood water; and (c) the time the flood occurs, the crops in the fields that are flooded, and the stage of maturity of the crops. These factors complicate the assessment of the economic impact of floods and water logging on agricultural production. Reducing the likelihood of flooding and water logging will increase crop yields and may result in a shift in cropping patterns to more profitable crops, when farmers perceive a reduction to acceptable levels of the risk of flood, and/or water logging damage.

8. Reduction in the area flooded/water logged. The expected reductions in flooded/water logged areas on average per year for each of the provinces are shown below. Over the total project area the average annual area affected is estimated to reduce by 70,719 ha, which is a substantial reduction of about 50 percent.

9. Reduced flooding and water logging costs. The flood/water logging damage assessment surveys carried out during project preparation indicate that the total costs of damage incurred are quite significant. The results are summarized below.

10. The economic benefits of reduced flood and water logging damage are estimated to total RMB Yuan 499.54 million per year; the distribution of these benefits by province are: Anhui 55 percent; Jiangsu 20 percent; Henan 13 percent; and Shandong 12 percent.

Province Expected Reduction Expected Cost Benefits in Flooding/Water Savings (RMBYuan million) Logging Area (RMB Y per (Hectares) Hectare) Total Rural Urban Total Henan 19,100 3,510 67.04 67.04 Anhui 34,167 8,055 275.15 275.15 Jiangsu 4,572 13,155 52.01 47.85 99.86 Shandong /a 12,880 4,463 57.49 57.49

Totals 70,719 6,441 499.54 a. Figures refer to 2 project sites

On-farm Drainage Improvement Economic Benefits

11. Areas benefiting from improved drainage. The project will potentially improve drainage. Improved drainage will result from the physical as well as the institutional improvements in the O&M of drainage infrastructure, which will include new and rehabilitated pumps, drainage structures, on-farm drains, and piloting of the formation of Farmer and Drainage & Irrigation Associations (FDIA). On-farm drainage infrastructure (pumps and drains) do not exist in all locations within the project sites, and even where it does exist, it is not properly operated and maintained. The project will demonstrate in 4 FDIA pilot areas (one per province), how drainage infrastructure should be operated and maintained for efficient and sustainable operation. The areas benefiting would be: (a) the FDIA pilot areas estimated at 48,943 ha; (b) FDIA extension areas, for which the project will finance extension activities, but not on-farm works investment; and (c) potential areas where local government initiatives will improve on-farm drainage. The analysis only takes into account benefits from pilot areas, as no on-farm works investments will be made directly from the project for extension.

12. Economic benefits of improved farm drainage. Improving drainage on farms will be important because this is the only way farmers, the provinces and the nation, can fully benefit from the large investment in the main flood protection and improved drainage facilities. Data are not available in the project area relating to changes in agricultural production and farmers incomes to different levels of on-farm drainage improvement. The project will therefore monitor farm production and incomes during project implementation in areas where on-farm drainage is carried out, and in areas where no improvements are made to on-farm drainage. Crop yield and production cost data obtained in the interviews with farmers within project sites will be compared for farmers subject to differing levels of water logging. Farmers were also interviewed in locations close to the project areas where water logging is not limiting agricultural production, to assist in the estimation of the potential that exists, should water logging be eliminated. Costs of farm drainage are based on the estimated detailed drainage costs in the FDIA areas. Results show that the ERRs for farm drainage range from 29 percent to 67 percent by province, depending on the unit costs for on-farm works investment (from RMB210 to RMB720 per mu).

Economic Benefits of the Flood Disaster Assessment and Support System

13. Flood forecasting and warning systems can significantly reduce the costs associated with flooding. However, limited data on flood damage in the project sites and within the Huai River Basin make any assessment of the economic benefits generated by the proposed flood disaster assessment and support system for the Huai River Basin very difficult.

14. In view of the data limitations, an ex-ante economic analysis of the proposed decision support system was undertaken to make a conservative estimate of the economic rate of return likely to be generated from the proposed decision support system. The assessment is based on a probability analysis of the likely reduction in flood damage in the flood retention areas (which are outside of the project sites) used by the Huai River Basin Commission (HRBC) should the support system be installed. During flood events, HRBC can control the release of flood water into designated rural polder areas to reduce river levels downstream, and thereby reduce flooding in urban and other more productive rural areas. The decision support system will provide better information to predict the size of a flood event whilst it is occurring. This will enable timely decisions to be taken, which will effectively reduce the amount of water being released into the polder areas. HRBC specialists have assessed a total of 17 polder areas that would be flooded under two scenarios: without-project and with-project. The analysis indicates that the expected total area flooded will reduce by 8,600 hectares annually. The cost savings per hectare are calculated to average RMB 6,441 per year (See table above). Combining this with the expected reduction in area flooded results in an expected annual benefit, once the system is installed and is fully functional (assumed to be from year 7 onwards). Results indicate that the investment in the system is fully justifiable from an economic perspective, since benefits generated are likely to far exceed costs. The ERR is expected to be at least 23 percent (NPV US$18.6 million, at 12 percent discount rate).

15. Due to data limitations, the analysis does not take account of the additional benefits that will result from a reduction in flood damage within the entire Huai River Basin. These are likely to be much higher than the benefits of reduced flooding quantified for the flood polder areas.

Irrigation Benefits

16. In Jiangsu and Shandong, works financed through the project will generate irrigation benefits. Additional irrigation water will become available as a result of dredging water ways and by the installation of new pumps, which will serve a dual function of drainage and irrigation. During wet periods, pumps will drain excess water out, and when lack of water is limiting crop production in dry periods, the pumps could be reversed to pump river water back into drainage catchment areas to raise water tables. Full details of computing irrigation benefits are provided in the Jiangsu and Shandong Economic and Financial Analysis Reports.

17. In the case of Jiangsu, a probability analysis was carried out of the likely reduction in rice production in the existing “without-project” situation, and what this is likely to be “with project” taking into account the additional quantity of irrigation water available. The expected lost paddy areas were estimated at 68,200 and 12,733 hectares for the “without project” and “with project” situations respectively (a saving of 55,475 hectares). The economic value of the net income for irrigated rice was estimated at RMB Yuan 5,449 per hectare.

18. The Shandong analysis indicates that there would be an additional irrigated area of 8,767 hectares. Crops irrigated include rice, maize and wheat, and the economic value of the additional agricultural output is estimated to rise to RMB Yuan 8.43 million annually at full development.

Navigation Benefits

19. In Jiangsu province, dredging work in the lower reaches of the Huai River will reduce transport distances that ships currently need to take, and allow larger vessels to be used in some of the major waterways. The combined effect will be to reduce the per ton cost of freight transport entering and exiting the province. Details of the analysis are presented in the Jiangsu Economic and Financial Analysis report. The annual reduction in transport costs is estimated at RMB 128.29 million, starting in year 6 after completion of project, increasing to RMB Yuan US$ 177.40 million from year 17, which takes into account a projected 30 percent increase in the quantity of goods transported.

Non-quantifiable Benefits

20. Growth in local and regional economies and reduced poverty. The direct economic benefits of reduced losses from lowering the damage caused from flooding and water logging in the rural and urban areas, which have been quantified and included in the economic analysis, will stimulate additional growth in local and regional economies through multiplier effects. These secondary income impacts of the project are difficult to quantify, but can be expected to add significant additional benefits. For example, the additional agricultural output will increase the incomes of other actors in the supply chain, as the additional produce is either delivered direct to fresh markets or is processed before being consumed. Stimulation of local and rural economies will raise incomes of both rural and urban populations, and increase opportunities for employment. Raising incomes of the poorer segments of rural areas will provide important opportunities for families to better educate their children, which will in turn improve their future income earning potential and standards of living. Both the direct and indirect impacts of the project will significantly reduce poverty, particularly in the poorer rural areas.

21. Environmental and improved health benefits. By reducing flooding and improving drainage, there will be less water in the polders which, particularly in areas close to villages, will reduce mosquitoes and other insects that transmit water borne diseases, and thereby improve the health of people residing in the project area.

Overall Economic Results by Province and for the Whole Project

22. The base level ERRs and NPVs of the entire project and by province are shown in the table below.

Province NPV at 12% ERR RMB Yuan million % Henan/a 173.94 22 Anhui /a 513.47 18 Jiangsu /a 983.69 18 Shandong /a 97.91 17 Disaster Minimization System 126.77 23 Overall project/b 2129.69 20 a) Including benefits arising from on-farm drainage in FDIA pilot. b) The total project NPV/ERR calculated on the basis of the total incremental project costs and benefits.

23. Sensitivity Analysis and Switching Values. Sensitivity test have been conducted, with results as tabled below, which indicate that the economic returns of the project are robust.

ERR (%) Base Scenario 20 Cost increase +10% 18 Cost increase +20% 16 Benefit reduced by 10% 18 Benefit reduced by 20% 15 Cost+10% & Benefit -10% 16 Cost+20% & Benefit -20% 12 Cost+51% 12 Benefit -34% 12

B. Financial Analysis

Methodology and Main Assumptions

24. Crop budgets and farm models were formulated under “with” and “without” project situations to gauge the financial attractiveness to farmers in the project areas. A summary of the financial analysis of representative farmers (on one mu basis) in the FDIA pilot areas is tabled below. Province Item Unit Without With Project Project Existing Improved Technology Technology Shandong Net Farm Revenue RMB/farm 732 922 1,114 % increase in net farm income % 26 52 Return to family labor RMB/p-d 32 37 41 % increase in return to family labor % 15 26 Jiangsu** Net Farm Revenue RMB/farm 1,350 1,406 1,824 % increase in net farm income % 4 35 Return to family labor RMB/p-d 57 59 60 % increase in return to family labor % 4 6 Anhui Net Farm Revenue RMB/farm 823 953 1,052 % increase in net farm income % 16 28 Return to family labor RMB/p-d 42 49 52 % increase in return to family labor % 16 23 Henan Net Farm Revenue RMB/farm 711 898 989 % increase in net farm income % 16 28 Return to family labor RMB/p-d 37 41 43 % increase in return to family labor % 11 17 p-d = person day ** Most of the households would the adopt the improved technology model in Jiangsu Province.

25. Results for each province are the averages of representative farmers in each province. These results highlight the improvement expected in net farm income and returns to family labor as a result of: (a) reducing flooding and water logging (comparison between with project minus without project); and (b) introducing new technologies and management practices (for example, using a new crop variety, or introducing a more profitable farm activity such as vegetable production or fish farming) as a result of agricultural extension support provided through the project.

26. Financial analysis has also been conducted for farmer households in the expanded irrigation areas in Jiangsu and Shandong Provinces. The results show that a representative farmer household’s income will increase by RMB304 Yuan (or about 12 percent) and RMB540 Yuan (or about 20 percent) over the without project situation in Jiangsu and Shandong Provinces respectively.

27. Fiscal impact. The Government of China has made a firm commitment to providing counterpart funding during project implementation, and financial resources to cover the increase in recurrent costs after project completion. The Project will introduce participatory and sustainable operation and maintenance (O&M) practices, and effective arrangements at both river basin and field levels, to assure adequate funding for O&M after project completion. FDIA fees in project areas will be set at a level to cover cash requirements for O&M of on-farm works.

28. Detailed assumptions and calculations (Excel files) for the financial and economic analysis (by province and for the project as a whole) are contained in Annex 12 of the Project Implementation Plan (PIP).

Annex 10: Safeguard Policy Issues

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

A. Environmental Safeguard Policy Issues

1. The project includes four provinces (Henan, Anhui, Jiangsu and Shandong Provinces), 19 cities, and 20 depression areas, with a total improvement area of 9743km2. The project is mainly located in rural areas, except for a few subcomponents crossing urban areas or located in the suburbs.

2. Yellow River Water Resource Protection Institute prepared the EA and the EMP of Anhui and Henan provinces; the Environmental Science & Engineering College of Hehai University prepared the EA and the EMP of Jiangsu province; and Liede Ecological Environmental Science & Technology Service Center of China Environmental Science Academy prepared the EA and the EMP of Shandong province. The Huai River Water Resource Protection Institute prepared the consolidated project-wide EA in accordance with China’s legal and policy framework for pollution control and environmental protection, master plans and environmental plans of the four project provinces, as well as World Bank safeguard policies.

3. Applicable regulatory discharge and environmental standards have been used as the primary reference to determine the extent and level of impacts. The EIA applies methodologies set out in various technical guidelines issued by SEPA. The scope of the project covered by the EIA is based on project feasibility study reports for each of the project components. The EAs were prepared as an independent and parallel exercise to the preparation of subproject feasibility studies and conceptual design. Terms of reference (TORs) and various draft EAs were developed, reviewed, and discussed during project preparation. The draft EA documents were submitted to the Bank on September 15, 2007. The final EA Report, EMP and EA Summary were submitted to the Bank on October 8, 2007, and found to be satisfactory. The EA Reports were disclosed at the Beijing Office website on October 10, 2007 and at the Bank’s Infoshop on October 18, 2007.

4. During the preparation of EA documentation, project-affected residents, communities and local stakeholders were intensively consulted at least twice, and their opinions were reflected in both the project’s design and its environmental mitigation measures, as appropriate. Mitigation measures and monitoring of safeguards are an integral part of the project and are funded by it. Bank missions will supervise environmental aspects of the project. Project progress reports will include content on environmental protection.

Environmental Risks

5. The proposed project mainly includes watercourse and mainstream gully dredging, embankment strengthening, and building of control structure. Taking into consideration the special regional physical geography, and the socio-economic conditions in the project areas, the EA concluded that the main potential environmental risks come from: pollution to aquatic

environment in the lower reaches, caused by downward flows of flooded and drained water during flooding and drainage period; secondary pollution caused by improper disposal of dredged sediments; and destruction of control structures by natural disasters. Mitigation measures proposed to address the risks include regulation and dispatch plan of the culvert sluice gates; periodic monitoring of dredged sediments; and establishment of cooperative relationship with the local hydrology and meteorology departments to ensure that the project can survive flooding.

Environmental Benefits

6. The EA has identified and assessed, quantitatively to the extent possible, the project benefits and impacts to the natural and social environment. The EA concludes that the project will bring significant positive impacts to the natural and socioeconomic environments of participating cities. The project as a whole is substantially positive in environmental terms, with the benefits greatly overweighing the negative impacts. The main positive benefits of the project include: strengthened the regional flood control and drainage capacity; enhanced development of the regional social economy; reduced severity and loss of flooding and water logging in the project area; improved regional ecological environment and livelihoods of the poor, and promoting the harmonious development between people and the environment. The negative impacts of the project mainly include land acquisition and short-term negative impacts on the environment caused by project construction and resettlement. The project will not have significant negative environmental impacts which cannot be effectively mitigated to acceptable levels; all project investments have been designed to minimize any adverse impacts in the physical environment.

Alternative Analysis

7. Alternative project designs for spoil disposal sites, pumping station sites, construction processes, dredging methods and river embankment designs, have been identified, evaluated and compared during the EA, to avoid or otherwise minimize potential adverse environmental and social impacts, and to maximize project benefits. The EA teams worked closely with the project planners/owners and the feasibility study teams, to compare and evaluate alternatives and select optimal solutions, based on avoidance of adverse social and environmental impacts, as well as other economic, technical, and financial considerations for least cost solutions. The “no project” scenario was also considered by each project province. The summary of major alternatives considered is described below.

8. “With” and “Without” project alternative. The “no project” alternative would result in frequent flood disasters remaining unchanged, life and property loss, and adversely affecting the poor. Regional economic development and people’s livelihood would be seriously affected. The EA summarizes the advantages and disadvantages of each alternative in terms of engineering, technology, finance, resettlement, social, economic and environmental considerations; in addition, it included quantitative analysis where data is available.

9. Pump station construction. Alternatives for pump station sites were compared in terms of investment, annual operational cost, economic analysis, technology requirements,

environmental impacts, resettlement and land acquisition. In Henan cost and environmental consideration were the key factors in choosing the final site.

10. Watercourse dredging methods. Options for dredging include hydraulic dredging and mechanical dredging. The two dredging methods were compared by construction conditions, land occupation, re-cultivation of spoil disposal areas, environmental impacts and investment cost. Construction conditions were the priority factor in selecting the dredging method.

11. Sedimentations disposal methods. Alternatives for disposal of sediments that were considered included dumping along river bank, leveling low lying land, backfill the filling area, fertilizing farmland, and landfill. The current monitoring reports showed that dredged sediments in the project area are non-hazardous solid waste. Each subproject selected its own disposal scheme in line with the actual situation, including local geography, suitable construction process, and environmental carrying capacity.

12. Construction diversion technical schemes. Options included the diversion of the watercourse, and diversion through another watercourse. Environmental impacts and construction conditions were the major factors in selecting the final diversion scheme.

Potential Environmental Impacts and Mitigation Measures

13. Project components will potentially cause a variety of short-term construction and long- term operational impacts. A series of mitigation measures have been planned accordingly to reduce the impacts to acceptable levels during construction and operation. Mitigation monitoring procedures have been established and the organizations responsible for monitoring have been designated.

14. Construction phase. Project components would likely cause a variety of short-term impacts during construction, such as land resources, resettlement, solid wastes including dredged sediments, soil erosion, ecological environment, surface water environment, natural habitats, public health and safety, ambient and acoustic environment etc. A series of mitigation measures have been planned to reduce the impacts to acceptable levels, including water and soil conservation plans, restoration of “temporary use” land, borrowing sites, spoil disposal sites, construction diversion plan, selection of suitable construction equipment, construction methods, and construction season etc. All mitigation measures related to contractors will be included in the bid documents and contracts.

15. Operation phase. The main environmental negative impacts are noise and wastewater caused by culvert gates and pumping stations. Mitigation measures, such as normative operation management and operation responsibility mechanism were established, and water and soil conservation monitoring plans were also formulated.

Environmental Management and Monitoring

16. Environmental management organizations involved in project construction and operation and their functions are summarized in the consolidated EIA. The Provincial and Municipal

EPBs in Shandong, Anhui, Henan and Jiangsu are responsible for the enforcement of laws and regulations, implementation of environmental policies/programs, setting up and enforcing discharge standards, providing guidance on environmental matters, reviewing environmental reports and handling environmental emergencies.

17. At the project component level, CPMO, PPMOs and County PMOs will take responsibility for environmental performance and environmental management during construction and operation. Owners of each project component will either have environmental specialists on staff or engage environmental specialists for the supervision, inspection, coordination and management of environmental performance, to ensure implementation of the EMP and compliance with regulatory and project requirements for pollution control and environmental protection. They will work closely with the design institutes, contractors, environmental supervisors, and environmental monitoring units, as necessary, to modify and update mitigation measures needed during construction and implementation. Supervision will include regular monthly meetings and reviews of site environmental reports, diaries and records, and regular site inspections and investigations.

18. Environmental Management Plan (EMP). In order to ensure the maximization of environmental benefits, as well as avoidance, minimization or mitigation of potentially negative environmental impacts, a stand-alone EMP was prepared. Major aspects of the EMP include the integration of appropriate mitigation measures in the engineering design and technical specifications for the project. The EMP provides practical and cost-effective measures necessary to mitigate project-related impacts by incorporating them in the design and by implementing them during the construction and operation phases. The EMP specifies the environmental management and supervision mechanism and institutional arrangements, mitigation measures, environmental monitoring plans, training plans, and estimated budget allocations necessary for implementing mitigation measures, monitoring plans, and ways to strengthen client capacity. Standardized construction management, supervision guidelines and environmental technical specifications appropriate to the types of construction anticipated, as well as consultation and public communication procedures, have been developed for all activities under the project. These standardized guidelines, procedures, and specifications would be incorporated into bidding and contract documents of each subproject to ensure that obligations are clearly communicated to contractors. Bidding documents will also include environmental criteria as part of the basis for selecting contractors. Contractors are required to follow appropriate environmental, health, and safety standards to reduce associated risks during construction and operation. An appropriate clause has also been included in all construction contracts regarding the procedures to be followed in the event of chance find of culturally significant artifacts or sites.

19. Supervision and reporting. The Bank will supervise the project’s environmental aspects twice a year. Semi-annual progress reports from the CPMO will include a section/chapter on the EMP. During the project construction phase, a semi-annual report on the EMP will be furnished to the Bank by March 31 and September 30 of each year, along with any revisions proposed to the EMP.

20. Capacity Building. The EMP includes training programs for professional, managerial and technical personnel from government, project proponents and operational units,

environmental institutions, contractors, and construction supervisors. Mandatory environmental training will be held for contractors and construction supervisors prior to the commencement of construction. The training will cover basic knowledge of environmental protection and pollution control, contents of respective EIAs and the requirements of EMPs, environmental management and monitoring, and reporting requirements.

21. Funding arrangements and implementation schedule. Costs associated with mitigating the effects of construction are included in the cost estimates of project components. Monitoring of air and water quality, noise, dredged sediments, worker health, site safety/ hygiene, and soil erosion will be conducted by local professional monitoring units or consultants, and financed from counterpart funds. The total environmental investment, including environmental management and mitigation measures (including water and soil conservation) is estimated at about RMB 72 million.

22. Monitoring. An environmental monitoring program for the construction and operation phases has been designed as a component of the EMP. The monitoring program covers air, water quality, noise level, sewage, dredged sediments, soil erosion etc., with specifications on parameters, frequencies, time, locations, responsible agencies and estimated costs. The monitoring program also specifies the reporting and response procedures to ensure appropriate actions will be taken based on the findings. Professional monitoring units, using standard methods recognized by regulatory authorities, will be contracted to monitor the parameters specified in the EMP, and will also review overall compliance status. Monitoring reports will be compiled at regular intervals and submitted to the PMO, all relevant agencies, and the Bank.

Public Consultations and Information Disclosure

23. Apart from the consultation conducted to obtain inputs into project design, two rounds of public consultation were conducted in each of the four project provinces during the preparation of the EAs; the first round was conducted in April/July 2005 during the EIA TOR preparation stage, to obtain the public’s views, concerns and comments on the project design, and potential adverse environmental impacts. The second round was conducted in May 2006 during the draft EIA report stage to explain the results of the impact assessment, mitigation measures, and the EMP. Both rounds of public consultation focused primarily on the project-affected people and beneficiaries of different age groups, gender, educational background and occupation; relevant government organizations, and experts from academic or public institutes on various environmental and socio-economic issues were also consulted. The consultation was primarily through questionnaire surveys, public meetings of key affected people and other stakeholders, supplemented by special seminars or interviews. The public received information about the project’s significance and expected benefits, and are aware of its positive effects on the national, regional and local economy, and the environment.

24. The project has strong public support; the public understands that construction will produce noise, dust, acquisition of land etc. Most residents expect the project to be completed quickly and welcome the fact that benefits will be realized in the near future. Main public concerns included adequate compensation for land acquisition, resettlement and relocation, less occupation of forest land and agriculture land, adoption of mitigation measures to minimize

potential adverse environmental impacts, and reasonable arrangement of construction activities to avoid influencing local agriculture production activities etc. Public concerns and opinions expressed are addressed in the EAs and incorporated into the project design and environmental mitigation measures, and where appropriate, have been communicated to the relevant authorities for response and required follow-up actions.

25. The Project’s basic information, major anticipated adverse impacts and mitigation measures have been disclosed to the public through bulletins, posters, as well as local newspapers, TV and radio. Draft final EA reports and EMPs have also been made available at public libraries, PMOs, and on websites in each of the project provinces. Draft English versions of consolidated EA documents were submitted to the Bank in October 2006. The final EA Report, EMP and EA Summary were submitted to the Bank in August 2007 and found to be satisfactory. The EA Reports were disclosed at the Beijing Office website on October 10, 2007 and the Bank Infoshop on October 18, 2007.

26. Natural Habitats. The EAs identified 11 critical natural habitats in the vicinity of the project area. Seven of the critical natural habitats will have project works near the protected area boundary or have a hydrologic connection to the project activity; four of the critical natural habitats will have no connection or impact. The EA reports analyze in detail each of the seven of critical natural habitats, and describe the following issues by use of maps: the content, scale and location of the proposed project; the location, type, and area of the natural habitat (for nature reserve, function zone map); potential impacts on the natural habitat, if any; quantitative estimate by use of hydrologic analysis; key species description; ecological function and its relative importance; development plan; planned mitigation measures, if any; institutional arrangement and capacity analysis, etc. The EAs assess impacts in terms of water quantity, water quality, fish migration, bird habitats, endangered species, ecological function, etc., during the construction and operation phase, and concluded that the adverse impact during the construction phase would not be significant, but would be temporary and very limited. Concrete actions were included in the EMP to avoid, mitigate or minimize the impacts. The EAs also concluded that the project would have positive impacts on the natural habitats and wetlands during the operation phase in terms of ecological environmental protection.

B. Social and Involuntary Resettlement Safeguard Policy Issues

27. Project activities will cause land acquisition and population resettlement. Starting late 2005, the central PMO and provincial PMOs organized resettlement teams in each of the four provinces to initiate project impacts and census surveys for project preparation. Guided and assisted by a consulting team from the Resettlement Research Center, Hehai University, each province compiled an overall RAP for the project. A total of 679 villages in 56 counties will be affected by project resettlement. More than 17,658 mu of farmland will be permanently acquired and 44,514 mu will be temporarily occupied, while more than ten thousand people will be relocated and nearly sixty thousand people will be affected by taking of land. Resettlement will impact both rural areas and some towns.

28. In view of the timing of project activities during a five-year period of project implementation, a phased approach will be adopted to the resettlement component. A detailed

RAP has been prepared for the project’s first year program in each province and a Resettlement Policy Framework has been prepared for rest of the project. Resettlement Offices/Units were established at provincial and city/county levels, and were involved in RAP preparation. They have assumed full ownership and responsibility for implementation of the first year RAPs. Resettlement work will be implemented in compliance with the Bank OP4.12.

Resettlement Impacts

29. .First year project activities will require 6,161 mu of land (of which about 6,116 mu are collective’ land), and will affect more than 30,000 people, of whom about 1,640 need relocation. About 38,940 square meters of rural and 4,156 square meters of urban housing will be demolished, and additional 73 non-resident units affected. In addition, temporary land occupation in the first year will also impact on 12,500 mu of land and affect another 17,155 people. Basic information of resettlement impacts in the first project year is consolidated in Table B-1, and the full details are available in individual provincial RAPs.

Table B-1: Consolidated Information of Resettlement Impacts (First Year) Resettlement impacts Jiangsu Anhui Henan Shandon Total Land Acqui- Village owned（mu） 2860.22 2929 105.76 132.5 6027.48 sition Land Village owned（mu） 4487.3 6975.2 840.78 192.4 12495.68 temporarily occupied State owned（mu） 268.12 — — — 268.12 Households 343 64 21 3 431 Rural Population 1052 104 117 15 1288 area Area（m2） 31695.85 4415.2 2475.6 354 38940.65 House Households 72 — — — 72 Urbanare demolition Population 241 — — — 241 a Area（m2） 4156.55 — — — 4156.55 Non-certificat housing（m2 5956.69 — — 280.5 6237.19 ） No. of factories 56 1 — — 57 Staff (persons) 1461 — — 1461 Industries Removed area（m2） 20575.5 — — — 20575.5 Land requisition (mu） 116.93 — — — 116.93 Numbers 4 2 — — 6 Staff (persons) 352 — — 352 Institutes Removed area（m2） 4442.71 6784 — — 11226.71 Land requisition (mu) 23.86 — — — 23.86 Numbers 10 — — — 10 Shops staff (persons) 19 — — — 19 Removed area（m2） 615.13 — — — 615.13

Resettlement impacts Jiangsu Anhui Henan Shandon Total Affected Households 2962 4380 157 207 7706 5 people Population 10583 18324 661 815 30383 People temporarily affected 9851 4880 1810 797 17338

Compensation and Rehabilitation

30. RAPs set forth a series of measures for livelihood compensation and rehabilitation in consultation with affected local communities and households. All these measures aim to minimize resettlement wherever possible, and where resettlement cannot be avoided, aim to ensure proper relocation and rehabilitation of the affected households so that they are compensated for losses, and their incomes and living standards will be improved or at least restored to pre-project levels. In addition, loss of productive resources (including agricultural and industrial) and public facilities will also be compensated or restored/improved to their current levels. The main features of the RAPs are:

(a) Farmland compensation will be at 16 times the average annual output value of land in the last three years, as determined by the Huai River Basin Commission on the basis of the revised State Decree No. 471 (2006) on the hydro-resettlement. (b) Housing and other fixed assets, including attachments to the land, will be compensated at replacement prices, as agreed by the owners, in both rural and urban areas (housing compensation in the urban area will be based on professional agencies’ assessment, in accordance with municipal/provincial laws). (c) Temporary occupation of farmland will be compensated on the value of green crops for two cultivation seasons per year, with the reclamation being the responsibility of the users after the project. (d) Resettlement sites and the new housing plots will be discussed, agreed and prepared prior to physical relocation, for which affected households will be assisted by the subprojects, as needed. (e) Productive/economic rehabilitation of affected farm households will be on the basis of either land-for-land compensation (such as readjustment of farmland within villages under the Taizhou subproject in Jiangsu Province) or other non-agricultural activities supported by land compensation, depending on the availability of arable land within the village communities and the affected farmers’ willingness. (f) A series of technical training and consultation programs on agricultural and non- agricultural productive skills will be provided under the project for each resettled household. (g) Impact on non-residential units is expected to be temporary and relatively minor for most people. All small-sized private shops and workshops will be provided new sites to resume their new business, with appropriate compensation. (h) Vulnerable households are mainly found under the Jiangsu subproject, and their housing problems will be addressed bythe village communities they belong to, with assistance from

5 The number of affected people includes those affected by land acquisition and house demolition in both rural and urban areas, but does not include staff of industries, institutes and shops.

the project. Their livelihood rehabilitation will be covered by local cities/counties’ allowance policies, and monitored by the resettlement program under the project. (i) All the resettlement compensation and costs have been computed for each item, and have been charged to the related subprojects’ budgets. Table B-2 below shows the overall breakdown of the resettlement budgets for the first year of project activities.

Table B-2 Resettlement Compensation Budgets for the First Year (RMB Yuan million)

Items for No. Jiangsu Anhui Henan Shandong Total Compensation and Investment

Rural Resettlement I. 107.9789 68.5952 5.3314 3.8179 185.7234 Compensation Compensation for land 1 71.0353 62.8475 3.6966 3.222 140.8014 Acquisition & Acquisition Compensation for 2 12.1955 1.6016 0.8141 0.1892 14.8004 Housing/structure 3 Small-sized hydro-power — — 0 Compensation for 4 12.9590 2.8747 — — 15.8337 rural industries Compensation for 5 4.8759 0.3006 0.4575 — 5.634 infrastructure 6 Moving subsidies 0.2969 0.0210 0.0527 — 0.3706 7 Other subsidies 6.4042 0.7024 0.3105 0.4043 7.8214 8 Transition allowance 0.2121 0.2474 0.0024 0.4619 Urban Resettlement II. 32.1111 32.1111 Compensation Compensation for III 24.6210 2.3515 0.0075 — 26.98 Special Items IV Other Fees 13.0538 5.6638 0.3608 0.2672 19.3456 I-IV in total 177.7648 76.6105 254.3753 V Gov’s Basic Preparation Fee 10.2218 7.6613 0.5700 0.4085 18.8616 VI The Relevant Taxes 6.4530 6.0648 0.3044 0.6678 13.49 VII Land Development Fee 6.4530 6.0648 0.3044 0.6678 13.49 The total Investment 194.4395 90.3366 6.5739 5.1615 296.5115

Implementation and Participation

31. Each RAP describes in detail the time-bound steps to be taken to adequately compensate and provide assistance to the affected households and units during resettlement; a consolidated RAP has been prepared by the CPMO. Under CPMO leadership, each subproject PMO at provincial and prefecture/county levels has formed a special unit / personnel in charge of local

resettlement. In order to ensure that the resettlement implementation is in accordance with the RAPs, internal and external monitoring programs have been developed, with both process and impact indicators (such as land acquisition and population relocation complying with relevant requirements, progress in new housing and land reallocation, disbursement of compensation funds before relocation, settlement of grievances, achievements in restoration and rehabilitation of PAP’s livelihoods, etc.). Moreover, as highlighted in the RAPs, a participative mechanism has been established and developed to promote efficiency and effectiveness of resettlement implementation.

32. Project resettlement units and local preparation teams conducted repeated rounds of public consultation and surveys among the affected communities and households during resettlement preparation, supported by the work of the RAP consulting team from Hehai University. Each of the affected villages and the households to be relocated were visited, consulted and measured, and detailed sample socio-economic surveys were conducted among 4,908 people in 1,083 farm households to be affected by land acquisition, accounting for 17 percent of the total affected people under the project. In addition, another sample survey was also carried out among 10 percent of the affected people, to learn their attitudes towards the resettlement program. The basic procedures of public consultation in the project areas in the four provinces are presented in Table B-3 below.

Table B-3: Public Consultation and Participation in Project Provinces

Public consultation process Jiangsu province Anhui province Henan province Shandong province Local census and socio- economic survey and 5-12/2005 5-6/2005 12/2005~1/2006 5-6/2005 resettlement impact inventory Supplementary survey and verification of resettlement 1/2006 11/2005-1/2006 15/1/2006 1/2006 impact inventory Sample surveys of affected communities/households’ social & economic 12/2005-1/2006 11/2005-1/2006 20-25/1/2006 1/2006 situations and public attitudes/views First round of meetings for public participation in RAP 1/2006 1/2006 20-25/1/2006 1/2006 preparation Second round of meetings 2/2006 2/2006 2/2006 2/2006 for public participation Public consultation meetings for resettlement 6-7/2006 7-8/2006 8/2006 9/2006 of the project’s first year program Final consultation and ratification of RAPs by 6/2007 6/2007 6/2007 6/2007 villages/households

33. All resettlement units/offices will involve PAPs and other stakeholders during resettlement implementation. RAPs have been displayed in county/township PMOs or resettlement offices, and disclosed at the Bank Beijing Office website on October 10, 2007 and the Bank Infoshop on October 18, 2007. Six months prior to the start of implementation, resettlement announcements will be posted, and resettlement booklets will be sent to all villages to be affected, and the project resettlement related information including policies, rights, compensation criteria, appeal procedures and the RAPs themselves, will be publicized and disseminated through broad media channels. Three months before resettlement, village meetings will be held again for upfront mobilizing and organizing resettlement implementation.

C. Dam Safety Safeguard Policy Issues

34. In all 19 dams (including a lake surrounded by dikes) trigger the policy because they are located upstream of the project area and their safety would have substantial impact on the project outputs and outcomes. The dam characteristics and safety status are given in Table C-1. Of these dams, 14 are classified as operationally safe, and 5 are classified as Class-C. All the 5 Class-C dams are being remedied, as listed in Table C-2. Guidelines for project implementation on dam safety have been prepared by the Borrower, with assistance from the Bank. The Borrower will ensure that the review of the remedial works and implementation of such works are properly aligned to the progress of construction activities under the project. The Bank, together with the Panel of Experts established in each of the project provinces, will supervise implementation of the Remedial Work Plan and Dam Safety Review Plan to ensure that the project complies with OP4.37.

35. Each of the four project provinces has established independent POEs with experienced and competent professionals to ensure that the Project is in compliance with the Bank’s safeguard policy on dam safety. In addition, each PPMO has employed independent dam experts to help work on dam safety issues. The POEs and independent dam experts will: (a) inspect and evaluate the safety status of existing dams and the dam under construction (DUC), their appurtenances, and performance history; (b) review and evaluate the owner’s operation and maintenance procedures; and (c) provide written reports of findings, and recommendations for any remedial work or safety-related measures necessary to upgrade the existing dams and the DUC to an acceptable standard of safety.

36. Under technical assistance from the Bank, each of the four provinces has prepared the following guidelines relating to dam safety: (a) Regulations on Reservoir Dam Safety; (b) Regulations on Reservoir Dam Safety Review; (c) Guidelines for Dam Safety Review; (d) Guidelines for Emergency Preparedness Plan; and (e) Guidelines for Operation, Maintenance and Surveillance of Dams. Based on the above guidelines and the Bank Safeguard Policy on Dam Safety, POEs in each project province will focus on review of actions taken under the remedial work plan for the 10 class-C dams, and the dam safety review plan for the 4 dams which need to be further reviewed, in addition to monitoring dam safety status during project implementation. Bank supervision missions during project implementation will ensure that the two plans are implemented in a timely manner.

Table C-1: Dam Characteristics and Safety Status

Safety Total Latest Year of Height Type of Type No. Name Location Capacity Review Remedial Plan Action Plan Completion (m) Dam of (m3) in Dam Remedied by 1 Suyahu Henan 1958 16.2 1,656 earth 2007 C Remedial work is undergoing 2012 clay Remedial works completed and Routine 2 Zhaopingtai Henan 1958 35.5 713 2005 B filling accepted O&M Remedial works completed and Routine 3 Baiguishan Henan 1966 23.4 922 earth 2006 B accepted O&M Routine 4 Shimantan Henan 1951 40.5 120 concrete 2005 B O&M earth+ Routine 5 Banqiao Henan 1951 27 675 2008 B concrete O&M Remedied by 6 Boshan Henan 1954 48.41 620 concrete 2004 C Remedial work is undergoing 2010 Remedied by 7 Wuqiao Henan 1972 11.8 11 earth 2007 C Remedial work is undergoing 2010 Remedied by 8 Xianghongdian Anhui 1958 87.5 2,613 concrete 2003 C Remedial work is undergoing 2010. Remedial work finished and Routine 9 Foziling Anhui 1954 75.9 491 concrete 2004 B accepted in 2004 O&M Remedial work finished and Routine 10 Mozitan Anhui 1958 82 347 concrete 2005 B accepted in 2005 O&M Remedial works completed and Routine 11 Zhima Anhui 1972 19 23 earth 2003 B accepted O&M Remedial works completed and Routine 12 Fushan Anhui 1972 18.2 109 earth 2003 B accepted O&M Formal RCC Main structures have been acceptance 13 Bailan'ai Anhui 2009 102 434 2009 B arch dam completed and accepted within 2 years

Remedial work finished and Routine 14 Mahe Shandong 1960 23.8 138 clay core 2005 B accepted O&M Remedied by 15 Huzhu Shandong 1960 16.3 24 clay core 2007 C Remedial work is undergoing 2010. Remedial work finished and Routine 16 Yanma Shandong 1960 27.8 203 clay core 2007 B accepted O&M Remedial work finished and Routine 17 Xiaomazhuang Shandong 1960 23 43 clay core 2007 B accepted O&M Remedial work finished and Routine 18 Changxinqiao Shandong 1960 18.9 25 clay core 2007 B accepted O&M Feasibility Study Report for Routine historical each Class I further large scale O&M and 19 Hongze Lake Jiangsu 8 5,295 earth lake year dike strengthening has been further submitted to the MWR strengthening

Table C-2: Major Actions to be taken In the Remedial Work Plan for the 5 Class-C Dams

Estimated Date Total Safety Construction Total Budget(RMB'000) Height Progress of of Remedial No. Name Location Capacity Type of Period Ower of the Dam (m) Preparation Work Works sub- (m3) Dam (in years) Central Local Completion total Remedial work is under Zhumadian City 1 Suyahu Henan 16.2 1,656 C 1.5 Dec. 2010 200000 100000 100000 going WRB Zhumadian City 2 Boshan Henan 48.41 620 C Concrete 1.75 Dec. 2010 9100 4550 4550 WRB Remedial work is under Xinyang City 3 Wuqiao Henan 11.8 11 C 1 Dec. 2010 26000 13000 13000 going WRB Remedial work is under Anhui Provincial 4 Xianghongdian Anhui 87.5 2,613 C 2 Dec. 2010 190000 95000 95000 going WRB Huzhu Reservoir Remedial work is under 5 Huzhu Shandong 16.3 24 C 1.5 Dec. 2010 70000 35000 35000 Management going Bureau Note: WRB-Water Resources Bureau

Annex 11: Project Processing

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

Planned Actual PCN review 12/10/2005 10/11/2005 Initial PID to PIC 12/31/2005 12/31/2005 Initial ISDS to PIC 13/31/2005 07/18/2006 Appraisal 10/20/2008 11/14/2008 Negotiations 05/17/2010 05/18/2010 Board/RVP approval 06/24/2010 Planned date of effectiveness Planned date of mid-term review Planned closing date

Key institutions responsible for preparation of the project: MWR, HRBC and the Provinces of Henan, Anhui, Jiangsu, and Shandong.

The Bank staff and consultants who worked on the project included:

Name Title Unit Liping Jiang TTL and Sr. Irrigation Specialist EASCS Ximing Zhang Co-TTL and Dam Safety Specialist EASCS Weiguo Zhou Senior Operations Officer EASRE Zong-Cheng Lin Social Development Specialist EASCS Yi Dong Financial Management Specialist EASCS Xiaowei Guo Procurement Specialist EASCS Jianjun Guo Procurement Specialist EASCS Yuan Wang Procurement Specialist EASCS Yiren Feng Environmental Specialist EASCS Xuemei Guo Program Assistant EACCF Xiuzhen Zhang Program Assistant EACCF Syed I. Ahmed Lead Counsel LEGES Xin Chen Senior Program Assistant EACCF Dan Xie Team Assistant EACCF Vellet Fernandes Program Assistant EASIN Geoffery Spencer Senior Irrigation Specialist Consultant Bert L. Kramer Water Resources Specialist Consultant William Sorenson Senior Economist Consultant Xueming Liu Senior Economist FAO Jing Zhu Agricultural Economist Consultant Tsuguo Yashima Flood Management Specialist Consultant Xun Chu Water Logging Specialist Consultant Houbin Liu Farmers Association Specialist Consultant Bingqian Bian Resettlement Specialist Consultant

Annex 12: Documents in the Project File

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

A. Consolidated Project Implementation Plan (PIP) Main Text Annex 1: Cost Estimates Annex 2: Financing Plan and Disbursement Schedule Annex 3: Financial Management System / Manual Annex 4: Procurement Management and Arrangement; Annex 5: Project Management, Research, Training and Study Tours Annex 6: Development of FDIA Pilot Area and Extension Plan Annex 7: Disaster Assessment and Support Systems Annex 8: Dam Safety Report Annex 9: Management Information System (MIS) Annex 10: Result-based Framework (indicators) and M&E System Annex 11: Operation and Maintenance (O&M) Plans Annex 12: Economic and Financial Analysis Annex 13: Environment Impact Assessment Annex 14: Resettlement Annex 15: Retroactive Financing Plan

B. Provincial Project Implementation Plans (4 plans) and their Annexes

C. Overall Environment Impact Assessment (EIA) Overall Environment Impact Assessment Summary Provincial Environment Impact Assessment Overall Environment Management Plan (EMP) Provincial Environment Management Plans (4 plans) Overall Resettlement Action Plan (RAP) Provincial Resettlement Action Plans (4 plans) Overall Resettlement Policy Framework

D. Overall Project Proposal Prepared by MWR Overall Feasibility Study Report and its Annexes Provincial Feasibility Study Reports (4 reports) and their Annexes

E. Bank Staff Assessments Identification, Preparation, Pre-appraisal, and Appraisal – Mission Aide Memoire and their Annexes

Annex 13: Statement of Loans and Credits

CHINA: Huai River Basin Flood Management and Drainage Improvement 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 P101716 2010 CN-Jilin Food Safety 100.00 0.00 0.00 0.00 0.00 100.00 0.00 0.00 P112838 2010 CN-Wuhan Second Urban Transport 100.00 0.00 0.00 0.00 0.00 100.00 0.00 0.00 P112759 2010 Shandong Ecological Afforestation 60.00 0.00 0.00 0.00 0.00 60.00 0.00 0.00 P096920 2010 CN-Ningxia Highway 250.00 0.00 0.00 0.00 0.00 250.00 0.00 0.00 P106956 2010 CN - Ningbo New Countryside 50.00 0.00 0.00 0.00 0.00 50.00 0.00 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 P100968 2009 CN-Shanxi Coal Bed Methane 80.00 0.00 0.00 0.00 0.00 79.80 3.20 0.00 Development P096556 2009 CN-Eco-Farming 120.00 0.00 0.00 0.00 0.00 108.85 4.15 0.00 P096707 2009 CN - GD Tech&Vocational ED and 20.00 0.00 0.00 0.00 0.00 19.25 1.05 0.00 Training P096926 2009 CN-Jiangsu Water and Wastewater Project 130.00 0.00 0.00 0.00 0.00 121.68 9.33 0.00 P096923 2009 CN-Shanghai APL III 200.00 0.00 0.00 0.00 0.00 199.50 0.00 0.00 P096812 2009 CN-Yunnan Urban Env 90.00 0.00 0.00 0.00 0.00 85.78 -4.00 0.00 P101829 2009 CN Xining Flood and Watershed Mgmt 100.00 0.00 0.00 0.00 0.00 89.75 0.67 0.00 P101988 2009 CN-Jiangxi Shihutang Navi & 100.00 0.00 0.00 0.00 0.00 76.92 37.10 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 P091950 2009 CN-Guizhou Cultural and Natural Heritage 60.00 0.00 0.00 0.00 0.00 59.85 1.67 0.00 P107559 2009 CN-Guizhou-Guangzhou Railway 300.00 0.00 0.00 0.00 0.00 299.25 0.00 0.00 P084874 2008 CN- Energy Efficiency Financing 200.00 0.00 0.00 0.00 0.00 150.07 27.01 0.00 P091949 2008 CN-Gansu Cultural & Natural Heritage 38.40 0.00 0.00 0.00 0.00 29.99 0.33 0.00 P085376 2008 CN-Migrant Skills Dev. and Employment 50.00 0.00 0.00 0.00 0.00 47.45 3.24 0.00 P093963 2008 CN-Guiyang Transport 100.00 0.00 0.00 0.00 0.00 50.93 11.41 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 P087224 2008 CN-Han River Urban Environment 84.00 0.00 0.00 0.00 0.00 77.87 26.08 0.00 P093882 2008 CN-Shandong Flue Gas Desulfurization 50.00 0.00 0.00 0.00 0.00 36.02 21.88 0.00 P084437 2008 CN-Rural Health 50.00 0.00 0.00 0.00 0.00 41.85 -5.86 0.00 P099224 2008 CN-Liaoning Med. Cities (LMC) III 191.00 0.00 0.00 0.00 0.00 180.52 53.31 0.00 P099112 2008 CN-Anhui Highway Rehab & 200.00 0.00 0.00 0.00 0.00 93.44 -62.39 0.00 Improvement P099062 2008 CN-ShiZheng Railway 300.00 0.00 0.00 0.00 0.00 267.20 1.29 0.00 P096925 2008 CN- Bengbu Integrated Environment 100.00 0.00 0.00 0.00 0.00 90.93 9.18 0.00 Improv P095315 2007 CN-W. Region Rural Water & Sanitation 25.00 0.00 0.00 0.00 0.00 13.50 -2.27 0.00 P096285 2007 CN-MSE Finance 100.00 0.00 0.00 0.00 0.00 5.00 5.00 0.00 P092618 2007 CN-LIAONING MED CITIES INFRAS 2 173.00 0.00 0.00 0.00 0.00 137.52 18.69 0.00 P091020 2007 CN-Fujian Highway Sector Investment 320.00 0.00 0.00 0.00 0.00 17.10 -100.10 0.00 P083322 2007 CN-SICHUAN URBAN DEV 180.00 0.00 0.00 0.00 0.00 112.32 87.65 0.00

P086515 2007 CN-3rd National Railway 200.00 0.00 0.00 0.00 0.00 54.26 -21.64 0.00 P081776 2007 CN-GUANGDONG/PRD2 96.00 0.00 0.00 0.00 0.00 76.31 17.31 0.00 P077752 2007 CN-SHANDONG ENVMT 2 147.00 0.00 0.00 0.00 0.00 68.63 -27.54 0.00 P088964 2007 CN-Guangxi Integrated Forestry Dev 100.00 0.00 0.00 0.00 0.00 23.18 -40.98 0.00 P075613 2007 CN-Shaanxi Ankang Road Development 300.00 0.00 0.00 0.00 0.00 53.35 -81.09 0.00 P099992 2006 CN-Liaoning Medium Cities Infrastructure 218.00 0.00 0.00 0.00 0.00 126.36 35.02 0.00 P081255 2006 CN-Changjiang/Pearl River Watershed 100.00 0.00 0.00 0.00 0.00 71.49 38.15 0.00 Reha P081348 2006 CN-HENAN TOWNS WATER 150.00 0.00 0.00 0.00 0.00 110.54 53.04 0.00 P075732 2006 CN-SHANGHAI URBAN APL2 180.00 0.00 0.00 0.00 0.00 74.90 39.90 0.00 P070519 2006 CN-Fuzhou Nantai Island Peri-Urban Dev 100.00 0.00 0.00 0.00 0.00 59.59 30.42 -1.58 P085124 2006 CN-Ecnomic Reform Implementation 20.00 0.00 0.00 0.00 0.00 14.18 16.84 0.00 P085333 2006 CN-5th Inland Waterways 100.00 0.00 0.00 0.00 0.00 4.27 4.27 0.00 P096158 2006 CN-Renewable Energy II (CRESP II) 86.33 0.00 0.00 0.00 1.65 38.02 36.92 0.00 P086629 2006 CN-Heilongjiang Dairy 100.00 0.00 0.00 0.00 0.00 62.04 61.54 0.00 P093906 2006 CN-3rd Jiangxi Hwy 200.00 0.00 0.00 0.00 0.00 10.33 -4.67 0.00 P075730 2005 CN-HUNAN URBAN DEV 172.00 0.00 0.00 0.00 0.00 108.39 85.72 0.00 P069862 2005 CN - Agricultural Technology Transfer 100.00 0.00 0.00 0.00 0.00 31.68 28.98 0.00 P071094 2005 CN - Poor Rural Communities 100.00 0.00 0.00 0.00 0.00 18.08 17.28 0.00 Development P081161 2005 CN-CHONGQING SMALL CITIES 180.00 0.00 0.00 0.00 0.00 52.48 33.97 0.00 P081346 2005 CN-LIUZHOU ENVIRONMENT MGMT 100.00 0.00 0.00 0.00 0.00 19.34 11.36 0.00 P086505 2005 CN-NINGBO WATER & ENVMT 130.00 0.00 0.00 0.00 0.00 1.44 -8.73 0.00 P057933 2005 CN-TAI BASIN URBAN ENVMT 61.00 0.00 0.00 0.00 0.00 3.82 4.12 0.86 P066955 2004 CN-ZHEJIANG URBAN ENVMT 133.00 0.00 0.00 0.00 0.00 41.57 41.57 0.58 P065463 2004 CN-Jiangxi Integrated Agric. Modern. 100.00 0.00 0.00 0.00 0.00 3.57 2.99 0.00 P075728 2004 CN-GUANGDONG/PRD UR ENVMT 128.00 0.00 0.00 0.00 0.64 60.65 61.29 7.74 P077137 2004 CN-4th Inland Waterways 91.00 0.00 0.00 0.00 0.46 2.73 2.85 2.40 P068058 2003 CN-Yixing Pumped Storage Project 145.00 0.00 0.00 0.00 10.00 20.28 30.28 0.00 P040599 2003 CN-TIANJIN URB DEV II 150.00 0.00 0.00 0.00 0.00 82.51 81.85 43.75 Total: 8,918.73 0.00 0.00 0.00 12.75 5,582.84 626.64 53.75

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 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 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

Annex 14: Country at a Glance

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

China at a glance 12 / 9 / 0 9

East Lower- POVERTY and SOCIAL Asia & middle- Development diamond* China P acific income 2008 Population, mid-year (millions) 1,324.8 1,931 3,702 Life expectancy GNI per capita (Atlas method, US$) 2,930 2,631 2,078 GNI (Atlas method, US$ billions) 3,888.1 5,081 7,692

Average annual growth, 2002-08 Population (%) 0.6 0.8 1.2 Labor force (%) 0.9 1.2 1.6 GNI Gross per primary M ost recent estimate (latest year available, 2002-08) capita enrollment Poverty (% of population below national poverty line) 3.... Urban population (% of total population) 40 44 41 Life expectancy at birth (years) 73 72 68 Infant mortality (per 1,000 live births) 18 2 2 4 6 Child malnutrition (% of children under 5) 71326 Access to improved water source Access to an improved water source (% of population) 88 87 86 Literacy (% of population age 15+) 93 93 83 Gross primary enrollment (% of school-age population) 112 111 10 9 China M a l e 110 112 112 Lower-middle-income group F e m a l e 114 110 10 6

KEY ECONOM IC RATIOS and LONG-TERM TRENDS 1988 1998 2007 2008 Economic ratios* GDP (US$ billions) 309.5 1,019.5 3,382.3 4,327.0 Gross capital formation/GDP 37.9 37.1 43.1 44.4 Exports of goods and services/GDP 14.8 20.3 39.7 36.6 Trade Gross domestic savings/GDP 36.6 41.4 52.2 52.5 Gross national savings/GDP 36.7 40.2 54.1 53.6

Current account balance/GDP -1.2 3.1 11.0 9.8 Interest payments/GDP 0.7 0.7 0.3 0.2 Domestic Capital savings formation To tal debt/GDP 13.7 14.1 11.1 8.7 Total debt service/exports 8.4 8.5 2.3 2.1 Present value of debt/GDP .. .. 10.8 8.2 Present value of debt/exports .. .. 25.5 21.3 Indebtedness 1988-98 1998-08 2007 2008 2008-12 (average annual growth) GDP 10.5 9.9 13.0 9.0 8.4 China GDP per capita 9.2 9.2 12.4 8.4 7.7 Lower-middle-income group Exports of goods and services 13.4 23.0 19.8 8.4 1.7

STRUCTURE of the ECONOMY 1988 1998 2007 2008 Growth of capital and GDP (%) (% of GDP) 18 Agriculture 25.7 17.6 11.1 11.3 15 Industry 43.8 46.2 48.5 48.6 12 M anufacturing 34.6 31.8 34.0 34.4 9 6 Services 30.5 36.2 40.4 40.1 3 0 Household final consumption expenditure 50.3 44.0 34.1 34.0 03 04 05 06 07 08 General gov't final consumption expenditure 13.1 14.6 13.7 13.5 GCF GDP Imports of goods and services 16.1 16.0 30.6 28.5

1988-98 1998-08 2007 2008 Growth of exports and imports (%) (average annual growth) Agriculture 4.4 3.9 3.7 5.5 40 Industry 14.1 11.1 14.7 9.3 30 M anufacturing 13.1 11.2 16.6 10.5 20 S e r v i c e s 10 . 6 10 . 5 13 . 4 9 . 5 10

Household final consumption expenditure 10.4 4.3 7.1 3.9 0

General gov't final consumption expenditure 10.2 8.8 10.5 8.1 03 04 05 06 07 08 G r o s s c a p i t a l f o r m a t i o n 11. 2 11. 3 11. 4 9 . 5 Exports Imports Imports of goods and services 14.6 18.8 13.9 3.8

Note: 2008 data are preliminary estimates. This table was produced from the Development Economics LDB database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.

China

PRICES and GOVERNMENT FINANCE 1988 1998 2007 2008 Inflation (%) Domestic prices (% change) 8 Consumer prices 4.5 14.7 -0.8 1.2 6 Implicit GDP deflato r 12.1 -0.9 7.4 7.2 4 2 Government finance 0 (% of GDP, includes current grants) Current revenue 0.0 12.1 19.9 20.4 -2 03 04 05 06 07 08 Current budget balance -15.2 0.4 3.7 3.2 GDP deflator CPI Overall surplus/deficit -19.5 -2.8 0.6 -0.4

TRADE 1988 1998 2007 2008 Export and import levels (US$ mill.) (US$ millions)

Total exports (fob) 47,516 183,809 1,218,015 1,428,546 1,500,000 Food 5,890 10,613 30,751 32,764 M ineral fuels, lubricants, and related materials 3,950 5,175 19,944 31,634 1,200,000 M anufactures 33,110 163,220 1,156,468 1,350,698 900,000 Total imports (cif) 55,275 140,237 955,819 1,133,086 600,000 Food 3,476 3,788 11,497 14,050 Fuel and energy 787 6,776 104,826 169,109 300,000 Capital goods 16,697 56,768 412,508 441,917 0 Export price index (2000=100) 7 6 112 113 119 02 03 04 05 06 07 08 Import price index (2000=100) 8 9 10 0 12 7 14 8 Exports Imports Terms of trade (2000=100) 85 112 89 81

BALANCE of PAYMENTS 1988 1998 2007 2008 Current account balance to GDP (%) (US$ millions) Exports of goods and services 45,912 207,425 1,342,206 1,581,713 12 Imports of goods and services 49,973 163,589 1,034,729 1,232,843 Resource balance -4,061 43,836 307,477 348,870 9

Net income -161 -16,644 25,688 31,438 6 Net current transfers 419 4,278 38,668 45,799 Current account balance -3,803 31,471 371,833 426,107 3

Financing items (net) 4,258 -25,045 89,911 -7,129 0 Changes in net reserves -455 -6,426 -461,744 -418,978 02 03 04 05 06 07 08 Memo: Reserves including gold (US$ millions) 23,739 152,831 1,546,365 2,047,629 Conversion rate (DEC, local/US$) 4.9 8.3 7.6 6.9

EXTERNAL DEBT and RESOURCE FLOWS 1988 1998 2007 2008 Composition of 2008 debt (US$ mill.) (US$ millions) Total debt outstanding and disbursed 42,439 143,982 373,773 378,245 A: IBRD 1,831 9,644 11,762 12,464 12,464 B: 9,786 IDA 1,819 8,693 10,151 9,786 D: 8,405 E: Total debt service 4,565 18,435 32,175 34,389 32,473 IBRD 165 941 1,561 1,524 IDA 15 97 349 388 G: Composition of net resource flows 187,188 Official grants 304 340 566 631 Official creditors 1,355 2,288 -10 903 F: Private creditors 5,425 -2,349 15,570 12,142 127,929 Foreign direct investment (net inflows) 3,194 43,751 138,413 147,791 Portfolio equity (net inflows) 0 765 18,510 8,721

World Bank program Commitments 1,463 2,636 1,361 1,713 Disbursements 1,110 2,066 1,208 1,614 A - IBRD E - Bilateral Principal repayments 39 434 1,184 1,281 B - IDA D - Other multilateral F - Private C - IMF G - Short-term Net flows 1,071 1,632 24 333 Interest payments 141 604 727 632 Net transfers 930 1,028 -703 -299

Note: This table was produced from the Development Economics LDB database. 12/9/09

Annex 15: Maps

CHINA: Huai River Basin Flood Management and Drainage Improvement Project

89 Liaocheng Anqiu IBRD 37718 Dong'eDong'e ChengyangChengyang 112° 113° 114° 115°ShenShen 116° 117° 118° 119°JiaozhouJiaozhou 121° 122° XianXian PingyinPingyin LaiwuLaiwu FeichengFeicheng Tai'anTai'an YiyuanYiyuan LaoshanLaoshan 36° 36° AnyangAnyang YangguYanggu GangchengGangcheng HuangdaoHuangdao QingdaoQingdao NanleNanle TaiqianTaiqian LinzhouLinzhou ZhuchengZhucheng CHINA NeihuangNeihuang QingfengQingfeng DongpingDongping ShanchengShancheng JiaonanJiaonan HeshanHeshan TangyinTangyin XintaiXintai FanxianFanxian HUAI RIVER BASIN FLOOD SHANXIS H A N X I YishuiYishui HebiHebi PuyangPuyang LiangshanLiangshan NingyangNingyang WulianWulian MengyinMengyin MANAGEMENT AND DRAINAGE XunxianXunxian PuyangPuyang WenshanWenshan SishuiSishui QixianQixian JuanchengJuancheng YinanYinan JuxianJuxian IMPROVEMENT PROJECT HuaxianHuaxian YunchengYuncheng YanzhouYanzhou SHANDONGS H A N D O N G PingyiPingyi .

R RIVER SYSTEMS IN THE HuixianHuixian JiaxiangJiaxiang a ZouchengZoucheng WeihuiWeihui JinningJinning RizhaoRizhao JuyeJuye mam R. . i HUAI RIVER BASIN DongmingDongming a R i JiaozuoJiaozuo XinxiangXinxiang BaB HezeHeze SiS R. FeiFei XianXian HuojiaHuojia ChangyuanChangyuan JiyuanJiyuan BoaiBoai XiuwuXiuwu YanjinYanjin JunanJunan HUAI RIVER BASIN BOUNDARY QinyangQinyang 35° WuzhiWuzhi YuanyangYuanyang DingtaoDingtao TengzhouTengzhou LinyiLinyi 35° HuangH He FengqiuFengqiu JinxiangJinxiang HedongHedong MAIN CITIES AND TOWNS uan ShantingShanting WenxianWenxian g H NansiN Lake LinyiLinyi e ChengwuChengwu YutaiYutai a LouzhuangLouzhua.ng LinshuiLinshui JiliJili n PROVINCE CAPITALS MengzhouMengzhou s R i L MengjinMengjin HuijiHuiji a ZaozhuangZaozhuang n YimaYima ShangjieShangjie JinshuiJinshui LankaoLankao k a CaoCao XianXian e t GanyuGanyu PROVINCE BOUNDARIES YanshiYanshi XingyangXingyang XuechengXuecheng CangshanCangshan u Xin’anXin’an GongyiGongyi ZHENGZHOUZHENGZHOU KaifengKaifeng ShanShan XianXian YichengYicheng WutanW R. LianyungangLianyungang PeiPei XianXian WeishanWeishan LuoyangLuoyang ZhongmouZhongmou JialuJ R. XinsuX R i KaifengKaifeng in a MinquanMinquan . su l TanchengTancheng R. u TaierTaier R u R LianyungangshiLianyungangshi ZhuangZhuang h YiyangYiyang . AbaAb XinmiXinmi anndoned ShuS R. DonghaiDonghai DengfengDengfeng QixianQixian don . ed anzhuang CanalC R.R YellowY R. YanzhuangY an YichuanYichuan LiangyuanLiangyuan ell al i TongxuTongxu NinglingNingling ow YiY XinzhengXinzheng SuixianSuixian ShangqiuShangqiu R. WeishiWeishi SuiyangSuiyang 020406080100 YuchengYucheng XinyiXinyi PizhouPizhou GuanyunGuanyun GuoG R. ChanggeChangge u XiayiXiayi XuzhouXuzhou KILOMETERS SongxianSongxian RuyangRuyang RuzhouRuzhou o R. R TongshanTongshan inyi XiangshuiXiangshui YuzhouYuzhou . XinyiX R. YanlingYanling HENANH E N A N ShuyangShuyang GuannanGuannan 34° 34° FugouFugou TaikangTaikang ZhechengZhecheng LuomaLuoma d r JiaxianJiaxian LakeLake e e BinhaiBinhai XuchangXuchang JialuJ R. HUAIHUAI RRIVERIVER BBASINASIN n v XuchangXuchang i o i a SuqianSuqian R HuangH u a n g SSeae a BaofengBaofeng l d ShilongShilong u YongchengYongcheng SuiningSuining n a w XiangchengXiangcheng R HuaibeiHuaibei BozhouBozhou b lo . LuyiLuyi ZhonZ l h AbandonedA e FuningFuning LinyingLinying XihuaXihua TuoheTu R. o YellowY River SheyangSheyang PingdingshanPingdingshan ohe AbanA nggy R. b y LianshuiLianshui LushanLushan YellowY a Riveruunn HuaiyangHuaiyang e ndonedd SiyangSiyga R.ng al llo o R n YexianYexian w ne . HuaiyanHuaiyan Ca DanchengDancheng R d n YanchengYancheng SuzhouSuzhou i io LuoheLuohe ZhoukouZhoukou ve HuaiyinHuaiyin at NanzhadNanzhad LingbiLingbi r ig rr ShangshuiShangshui GuoyangGuoyang SiSi XianXian Huai'anHuai'an I JianhuJianhu WuyangWuyang su BeifeiBe R. ng GuoG R. if ia YanchengYancheng XipingXiping XiangchengXiangcheng ShenqiuShenqiu u ei SihongSihong J YiY XifeiX R. o R. th i i r ngng R. f R o WugangWugang R e . GuzhenGuzhen NorthN Jiangsu Irrigation Canal i LongzeLongze FanchengFancheng . JieshouJieshou R MenchengMencheng BaoyingBaoying Area of ShangoaiShangoai . JIANGSUJ I A N G S U DafengDafeng map SuipingSuiping LixinLixin WuheWuhe CHINA ZhenpingZhenping SheqiSheqi 33° 33° LiyunL R. JinhuJinhu i NanyangNanyang RunanRunan y ZhumadianZhumadian XuyiXuyi u PingyuPingyu HuaiHuai R.R. n

XifeiX R. XinghuaXinghua HongH R. HuaiyuanHuaiyuan R FuyangFuyang if BengbuBengbu RuR R. o e . u n i DongtaiDongtai R g R QueshanQueshan . R FengyangFengyang . YingYin R. . GaoyouGaoyou g R. . DengzhouDengzhou TangheTanghe XincaiXincai MingguangMingguang R BiyangBiyang FengtaiFengtai TianchangTianchang g n o YingshangYingshang id XinyeXinye ZhengyangZhengyang FunanFunan a DahonDa HuainanHuainan TaidongT R. Hai'anHai'an hon ShouShou XianXian TaizhouTaizhou JiangyanJiangyan g R.R DingyuanDingyuan HuaiH R. . HuaiHuai R. MohekouMohekou JiangduJiangdu ua HuaibinHuaibin TongbaiTongbai i R. YangzhouYangzhou RugaoRugao XixianXixian ANHUIA N H U I LuheLuhe HuoqiuHuoqiu YizhengYizheng YangzhongYangzhong RudongRudong ChuzhouChuzhou ng LuoshanLuoshan JiangJia ZhenjiangZhenjiang TaixingTaixing GushiGushi XinyangXinyang MingganMinggan HuangchuanHuangchuan QuanjiaoQuanjiao JiangpuJiangpu NantongNantong 32° 32° NANJINGNANJING DanyangDanyang GuangshanGuangshan g JingjiangJingjiang NantongNantong n JiangningJiangning JurongJurong a h JiangyinJiangyin FeidongFeidong ChangC ZhangjiagangZhangjiagang HaimenHaimen ShangchengShangcheng YejiYeji HEFEIHEFEI ChangzhouChangzhou QidongQidong LuanLuan FeixiFeixi Ma'anshanMa'anshan JintanJintan JinzhaiJinzhai LishuiLishui ChangshuChangshu XinxianXinxian ChaohuChaohu WuxiWuxi

TaicangTaicang ShuchengShucheng HuoshanHuoshan HUBEIH U B E I LiyangLiyang CityCity KunshanKunshan ThisThis mmapap wwasas pproducedroduced bbyy tthehe WuhuWuhu GaochunGaochun YixingYixing SuzhouSuzhou MapMap DDesignesign UUnitnit ofof TheThe WorldWorld Bank.Bank. TheThe bboundaries,oundaries, colors,colors, denominationsdenominations andand anyany otherother LujiangLujiang SHANGHAISHANGHAI informationinformation shownshown onon thisthis mapmap dodo notnot imply,imply, onon thethe partpart WujiangWujiang ofof TheThe WorldWorld BankBank Group,Group, anyany judgmentjudgment onon thethe legallegal statusstatus ooff aanyny tterritory,erritory, oror anyany endorsementendorsement oror acceptanceacceptance 31° ofof suchsuch bboundaries.oundaries. TongchengTongcheng SHANGHAISHANGHAI 31° ChangxingChangxing 113° 114° 115° 116° 117° TonglingTongling 118° NanlingNanling XuanzhouXuanzhou 119° 120° 121° 122° YuexiYuexi GuangdeGuangde APRIL 2010 Liaocheng Anqiu IBRD 37713 Dong'eDong'e ChengyangChengyang 112° 113° 114° 115°ShenShen 116° 117° 118° 119°JiaozhouJiaozhou 121° 122° XianXian PingyinPingyin LaiwuLaiwu FeichengFeicheng Tai'anTai'an YiyuanYiyuan LaoshanLaoshan 36° 36° AnyangAnyang YangguYanggu GangchengGangcheng HuangdaoHuangdao QingdaoQingdao NanleNanle TaiqianTaiqian LinzhouLinzhou ZhuchengZhucheng CHINA NeihuangNeihuang QingfengQingfeng DongpingDongping ShanchengShancheng JiaonanJiaonan HeshanHeshan TangyinTangyin XintaiXintai FanxianFanxian HUAI RIVER BASIN FLOOD SHANXIS H A N X I YishuiYishui HebiHebi PuyangPuyang LiangshanLiangshan NingyangNingyang WulianWulian MengyinMengyin MANAGEMENT AND DRAINAGE XunxianXunxian PuyangPuyang WenshanWenshan SishuiSishui QixianQixian JuanchengJuancheng YinanYinan JuxianJuxian IMPROVEMENT PROJECT HuaxianHuaxian YunchengYuncheng YanzhouYanzhou SHANDONGS H A N D O N G PingyiPingyi .

R GEOGRAPHIC POSITION OF THE PROJECT HuixianHuixian JiaxiangJiaxiang a ZouchengZoucheng WeihuiWeihui JinningJinning RizhaoRizhao JuyeJuye mam R. . i AREAS IN THE HUAI RIVER BASIN DongmingDongming a R i JiaozuoJiaozuo XinxiangXinxiang BaB HezeHeze SiS R. FeiFei XianXian TANCANG HuojiaHuojia ChangyuanChangyuan DEPRESSION JiyuanJiyuan BoaiBoai XiuwuXiuwu YanjinYanjin DEPRESSION ON LAKESIDE JunanJunan PROJECT COMPONENTS QinyangQinyang OF NANSI LAKE 35° WuzhiWuzhi YuanyangYuanyang DingtaoDingtao TengzhouTengzhou LinyiLinyi 35° HuangH He FengqiuFengqiu JinxiangJinxiang HedongHedong HUAI RIVER BASIN BOUNDARY uan ShantingShanting WenxianWenxian g H NansiN Lake LinyiLinyi e ChengwuChengwu YutaiYutai a LouzhuangLouzhua.ng LinshuiLinshui JiliJili n MAIN CITIES AND TOWNS MengzhouMengzhou s R i L MengjinMengjin HuijiHuiji a ZaozhuangZaozhuang n YimaYima ShangjieShangjie JinshuiJinshui LankaoLankao k a CaoCao XianXian e t GanyuGanyu PROVINCE CAPITALS YanshiYanshi XingyangXingyang XuechengXuecheng CangshanCangshan u Xin’anXin’an GongyiGongyi ZHENGZHOUZHENGZHOU KaifengKaifeng ShanShan XianXian YichengYicheng WutanW R. LianyungangLianyungang PeiPei XianXian WeishanWeishan PROVINCE BOUNDARIES LuoyangLuoyang ZhongmouZhongmou JialuJ R. XinsuX R i KaifengKaifeng in a MinquanMinquan . su l TanchengTancheng R. u TaierTaier R u R LianyungangshiLianyungangshi ZhuangZhuang h YiyangYiyang . AbaAb XinmiXinmi anndoned ShuS R. DonghaiDonghai DengfengDengfeng QixianQixian don . ed anzhuang CanalC R.R YellowY R. YanzhuangY an YichuanYichuan LiangyuanLiangyuan ell al i TongxuTongxu NinglingNingling ow YiY XinzhengXinzheng SuixianSuixian ShangqiuShangqiu R. WeishiWeishi SuiyangSuiyang 020406080100 YuchengYucheng DEPRESSION ALONG CANAL XinyiXinyi PizhouPizhou GuanyunGuanyun GuoG R. ChanggeChangge u XiayiXiayi XuzhouXuzhou KILOMETERS SongxianSongxian RuyangRuyang RuzhouRuzhou o R. R TongshanTongshan ABANDONED YELLOW RIVER DEPRESSION inyi XiangshuiXiangshui YuzhouYuzhou . XinyiX R. YanlingYanling HENANH E N A N ShuyangShuyang GuannanGuannan 34° 34° FugouFugou TaikangTaikang ZhechengZhecheng LuomaLuoma d r JiaxianJiaxian LakeLake e e BinhaiBinhai XuchangXuchang JialuJ R. HUAIHUAI RRIVERIVER BBASINASIN n v XuchangXuchang i o i a SuqianSuqian R HuangH u a n g SSeae a BaofengBaofeng l d ShilongShilong u YongchengYongcheng SuiningSuining n DEPRESSION IN THE LOWER a w XiangchengXiangcheng R HuaibeiHuaibei BozhouBozhou QUBEI DEPRESSION b lo . LuyiLuyi ZhonZ l REACHES OF JIALU RIVER h AbandonedA e FuningFuning LinyingLinying XihuaXihua TuoheTu R. o OF LIYUN RIVER YellowY River SheyangSheyang PingdingshanPingdingshan AND YINGHE RIVER ohe AbanA nggy R. b y LianshuiLianshui LushanLushan YellowY a Riveruunn HuaiyangHuaiyang e ndonedd SiyangSiyga R.ng al llo o R n YexianYexian w ne . HuaiyanHuaiyan Ca DanchengDancheng TUOHE RIVER DEPRESSION R d n YanchengYancheng SuzhouSuzhou i io LuoheLuohe ZhoukouZhoukou ve HuaiyinHuaiyin at NanzhadNanzhad LingbiLingbi r ig rr ShangshuiShangshui GuoyangGuoyang SiSi XianXian Huai'anHuai'an I JianhuJianhu WuyangWuyang su BeifeiBe R. ng GuoG R. if ia YanchengYancheng XipingXiping XiangchengXiangcheng ShenqiuShenqiu u ei SihongSihong J URBAN AREA OF YANCHENG CITY YiY XifeiX R. o R. th i i r ngng R. f R o WugangWugang R e . GuzhenGuzhen NorthN Jiangsu Irrigation Canal i LongzeLongze FanchengFancheng . JieshouJieshou R MenchengMencheng BaoyingBaoying Area of ShangoaiShangoai . JIANGSUJ I A N G S U XIFEI RIVER map DEPRESSION XIEHE RIVER DafengDafeng SuipingSuiping LixinLixin WuheWuhe CHINA ZhenpingZhenping SheqiSheqi DEPRESSION GAOYOU LAKE 33° 33° DEPRESSION IN THE LOWER LiyunL R. JinhuJinhu i NanyangNanyang RunanRunan DEPRESSION y ZhumadianZhumadian REACHES OF XIAOHONG RIVER BEIFEI RIVER DEPRESSION XuyiXuyi u PingyuPingyu HuaiHuai R.R. n XifeiX R. JIAHE RIVER XinghuaXinghua HongH R. HuaiyuanHuaiyuan R FuyangFuyang if BengbuBengbu RuR R. o e . u n i DEPRESSION DongtaiDongtai R g R QueshanQueshan . R FengyangFengyang TAIDONG RIVER . YingYin R. . GaoyouGaoyou g R. . DengzhouDengzhou TangheTanghe XincaiXincai MingguangMingguang R BiyangBiyang FengtaiFengtai TianchangTianchang g TIANHE RIVER DEPRESSION n BALI RIVER o YingshangYingshang id URBAN AREA OF TAIZHOU XinyeXinye ZhengyangZhengyang FunanFunan a DahonDa DEPRESSION HuainanHuainan GAOTANG LAKE DEPRESSION TaidongT R. Hai'anHai'an hon ShouShou XianXian TaizhouTaizhou JiangyanJiangyan g R.R DingyuanDingyuan HuaiH R. . HuaiHuai R. MohekouMohekou JiangduJiangdu ua HuaibinHuaibin TongbaiTongbai i JIAOGANG LAKE R. YangzhouYangzhou RugaoRugao XixianXixian DEPRESSION LuheLuhe ANHUIA N H U I YizhengYizheng HuoqiuHuoqiu ChuzhouChuzhou g YangzhongYangzhong RudongRudong LuoshanLuoshan ian JiangJ ZhenjiangZhenjiang ZHENGNANWA DEPRESSION TaixingTaixing GushiGushi XinyangXinyang MingganMinggan HuangchuanHuangchuan QuanjiaoQuanjiao JiangpuJiangpu NantongNantong 32° 32° NANJINGNANJING DanyangDanyang GuangshanGuangshan DEPRESSION ALONG g JingjiangJingjiang NantongNantong n JiangningJiangning JurongJurong HUAIHE RIVER a h JiangyinJiangyin FeidongFeidong ChangC ZhangjiagangZhangjiagang HaimenHaimen ShangchengShangcheng YejiYeji HEFEIHEFEI ChangzhouChangzhou QidongQidong LuanLuan FeixiFeixi Ma'anshanMa'anshan JintanJintan JinzhaiJinzhai LishuiLishui ChangshuChangshu XinxianXinxian ChaohuChaohu WuxiWuxi

JIANGSU

. FUJIAN

a H HONG KONG TIANJIN ANHUI SHANDONG JIANGXI MACAO BEIJING N HEBEI

A OL

N GUANGDONG G E HENAN H BEIJING HUBEI

HUNAN

SHANXI

EI MON EI CHINA N

HAINAN NG

PROJECT LOCATIONS HUAI RIVER BASIN BOUNDARY CANALS RAILROADS EXPRESSWAYS UNDER CONSTRUCTION EXPRESSWAYS HIGHWAYS NATIONAL COUNTY CAPITALS PREFECTURE CAPITALS PROVINCE CAPITAL PREFECTURE BOUNDARIES PROVINCE BOUNDARIES

GUANGXI

SHAANXI CHONGQI NINGXIA GUIZHOU VIETNAM GANSU IIIIII IN HENAN PROVINCE This map was produced by the Map Design Unit of The World Bank. This map was produced by the Map Design Unit of The World The boundaries, colors, denominations and any other information Bank on the part of The World shown on this map do not imply, or any Group, any judgment on the legal status of territory, endorsement or acceptance of such boundaries. LAO SICHUAN P.D.R. MONGOLIA YUNNAN IMPROVEMENT PROJECT HUAI RIVER BASIN FLOOD RUSSIAN FEDERATION QINGHAI MANAGEMENT AND DRAINAGE National Capital Province Boundaries International Boundaries XIZANG GEOGRAPHIC POSITION OF PROJECT AREAS XINJIANG MYANMAR

I I I I I I I I I I I I I

S . I

To Lianyungang To

G i

N u U H

I I I I JIANGSU J H I Hefei To I I g

I n e I N N I h c I

I g

l I n o

a I i Yongcheng Y Yongcheng ANHUI A y n S a I I a C i I G Xiayi X d Xiayi n I Nanjing ra I A

G Bengbu, To I N I I I B I I I I I g I O I I I I n II I e I I I I h c

I D u I Bengbu, To Nanjing Yucheng Yucheng Y U R

I u

I i

I i N I h q To Jining To s g E u Q n n

Gushi G Gushi a a

i ) h G q i Shangqiu S Shangqiu

To Jinan To r V H a To Liaocheng To Taiqian Taiqian T e N n To Fuyang To I

a v

SHANDONG S i i

A x g R u

n n

y a

w a g

R H g Fanxian F o Fanxian

l y n

l n i n

e e

e To Yanzhou To i u a

Y SHANGQIU S SHANGQIU

i h h

( y Suiyang Suiyang S c Liangyuan Liangyuan L c

. u e

g I

Luyi Luyi L n

R h i n

Zhecheng Zhecheng Z b a g n g i

h n

a a i

n Shangcheng S Shangcheng l

A u u n a g

g h a Huaibin H Huaibin

c n n u G u i

g e

q f Ningling N Ningling To Hengshui To H n n U N g g i a g To Wuhan To n g u n n i U i Minquan M Minquan A e n n e a Huangchuan H Huangchuan l a Qingfeng Qingfeng Q a a h c Y g y n i c y O HUAI RIVER BASIN H n n a x u i u n i

a i U Nanle N . Puyang Puyang P Xincai X Xincai a u Puyang P Puyang I g y . q K

R i Suixian S

Suixian Dancheng D Dancheng PUYANG P R PUYANG n

i n

a j a

i e i E u k U u h i g o Huaiyang H Huaiyang a Shenqiu Shenqiu S n a n

a H n Taikang Taikang T a n u

B a k O i a

n G a u . n x h a

g H i u

s h a

i R E n y

x H Qixian Q Qixian g Lankao Lankao L

n e i

N g n

n u

d a i

Neihuang Neihuang N n i h n a y

i ZHOUKOU Z ZHOUKOU Xinxian X Xinxian c a x HEBEI J HEBEI H u g i A u h n g n Guangshan G Guangshan Xixian X Xixian i n Changyuan C Changyuan a o

n Anchang

n Pingyu P Pingyu a h

. k a Y i

s To Wuhan, To i

R u

x . g o

i Xiangcheng Xiangcheng X x u

n R o N

e n . u i g a x

u R N Luoshan L Luoshan h u a W u n n u g

E u Xunxian Xunxian X l i y Zhoukou Z Zhoukou R

a h e n i . Huaxian H Huaxian I y g s f J g F o

i R u g n g Tongxu T Tongxu n

I g a a o n e n

g n a u Kaifeng Kaifeng K g XINYANG X o XINYANG a h a n n A h y Tangyin Tangyin T u Beijing H Zhengyang Zhengyang Z i h a e Fugou F Fugou i n i Shangshui S . Shangshui Xihua X Xihua f n KAIFENG K u i a i b Anyang A R u

o a q e Runan R Runan

o n g g Kaifeng K Kaifeng Hebi Hebi H

u a n n n i g j G a e I To Shijiazhuang, To g n h Fengqiu F Fengqiu a n Shangoai S Shangoai i B Yanjin Y Yanjin g i G Minggan M Minggan G n E u i g e l i h N N n i n h n h N HEBI H HEBI g a e a s a o A i i n n A y u Yanling Y Yanling A Weihui Weihui W g u e x I g e n a i o Y Luohe L Luohe n I a n i Weishi Weishi W h h To Wuhan To Qixian Q Qixian m D c u s g y a g X N g i Yuanyang Y Yuanyang n n e n n n n i n A x G a g a a Linying Linying L Heshan Heshan H g a a ANYANG A ANYANG o N h n i n e g h h n i i y h c I s g d M n e Shancheng Shancheng S p N Zhongmou Z Zhongmou u n i Xinxiang Xinxiang X e i g i a h p XINXIANG X XINXIANG Xuchang X Xuchang u c Xiping X Xiping n i u U Xinyang Xinyang X A m n a u Queshan Q Queshan o Suiping S Suiping a h u i h H Yancheng Yancheng Y Changge C Changge z u h H g n h ZHUMADIAN Z ZHUMADIAN Zhumadian Z Zhumadian i s n n Linzhou Linzhou L g g a n C a i i n i n j Jinshui J Jinshui h a g x a i e i i c j n y u h U u o u a z u g Huiji Huiji H Huixian Huixian H u g Xuchang Xuchang X n n i Wuyang W XUCHANG X XUCHANG u Huojia H Huojia e U Xinzheng X Xinzheng h Wugang Wugang W c i O g a i g n H b n a m g u i Z a n n u w Xiangcheng X Xiangcheng i y o o G g u Xinmi X Xinmi g Tongbai T . Tongbai i h n n

N R Xiuwu X Xiuwu z i a

i E g u h y Xingyang X Xingyang i Yuzhou Y Yuzhou

z n

i n H n Biyang B Biyang u

Y a a i n i ZHENGZHOU ZHENGZHOU Z Wuzhi Wuzhi W e x a x i j e g a h N o Yexian Yexian Y i g s n Jiaxian J Jiaxian n u O e g A f a U z n i g o h n i o

U . y n a H Shangjie S Shangjie a O d a g To Wuhan To i e g R i Baofeng B Baofeng

Z f n g x S n Jiaozuo Jiaozuo J i g e H i n o n

i u i n O h q e

r G a Gongyi Gongyi G u c Z e i Pingdingshan Pingdingshan P e o o Wenxian Wenxian W e n A Dengfeng D Dengfeng h Boai N Boai B h B a G Sheqi S Sheqi I z Fancheng F Fancheng I u JIAOZUO J JIAOZUO g N Ruzhou Ruzhou R D n E u a

n g

o y G a

n .

H n h

i R o e

z s l

i i g

h Qinyang Qinyang Q g ZHENGZHOU Z ZHENGZHOU u

n h I To Taiyuan To h

g Lushan L Lushan n

s Shilong S a Shilong g

n e n PINGDINGSHAN P T PINGDINGSHAN n a a Mengzhou Mengzhou M Tanghe T Tanghe a Yanshi Yanshi Y y n

R i i n a Nanyang B Nanyang N Jili Jili J g a n n i u Yahekou Reservoir j a y e N g I i y y n Jiyuan J Jiyuan u A n e i Ruyang Ruyang R n Xinye X Xinye d g Mengjin Mengjin M U a a

n . u h Y a R

z h X G y I c n n n i o a a a JIYUAN J JIYUAN Yichuan Yichuan Y ’ u Nanzhad N Nanzhad H n G Luoyang L Luoyang i N Xin’an Xin’an X g n N g i N A n p a n n y e a i A Y i To Jingmen To h Yiyang Yiyang Y x Zhenping Zhenping Z g a A Y n O m o u i Songxian Songxian S o Yima Y Yima h N z U g

n H

e A ) LUOYANG L LUOYANG

Dengzhou D Dengzhou

r n i

e a

h i

v c NANYANG N NANYANG

i x n

i SHANXI S SHANXI

R a e

g Neixiang N Neixiang

w Mianchi M Mianchi n

i o

l n

l Danjiangkou Reservoir a n

o i

e a . u

u Luoning Luoning L

Y R

h Xixia X Xixia

( c

o I a

. n

i u n

x L a u

R n e

Luanchuan L Luanchuan a

h g m u c i

n h n Xichuan X Xichuan n a C

E a a Sanmexia Sanmexia S i

i u

x X

n H a h Shanxian S Shanxian B A i I h s X u Lushi L Lushi KILOMETERS N U E o a b M g n N i Lingbao L Lingbao A HUBEI H SANMENXIA S SANMENXIA To Yunxi To 0 25 50 75 100 To Ankang To To Xi’an To To Xi’an To To Xi’an To RUSSIAN FEDERATION CHINA HUAI RIVER BASIN FLOOD MANAGEMENT AND DRAINAGE HEILONGJIANG IMPROVEMENT PROJECT MONGOLIA GEOGRAPHIC POSITION OF PROJECT AREAS JILIN IN ANHUI PROVINCE XINJIANG Sea of LIAONING D.P.R. OF Japan PROJECT LOCATIONS RAILROADS NEI MONGOL BEIJING KOREA BEIJING HUAI RIVER BASIN BOUNDARY MAIN CITIES TIANJIN HEBEI llll CANALS PREFECTURE CAPITALS REP. OF SHANXI SHANDONG KOREA EXPRESSWAYS PROVINCE CAPITAL Yellow QINGHAI NINGXIA Sea JAPAN NATIONAL HIGHWAYS PROVINCE BOUNDARIES GANSU HENAN JIANGSU SHAANXI ANHUIANHUI

. R SHANGHAI

n HUBEI a East XIZANG H SHANDONGS H A N D O N G SICHUAN China ZHEJIANG Weishan Sea Lake CHONGQING JIANGXI HUNAN National GUIZHOU FUJIAN Capital TAIWAN PACIFIC YUNNAN Province GUANGXI GUANGDONG Boundaries HONG KONG OCEAN MYANMAR International MACAO Boundaries LAO VIETNAM P.D.R. HAINAN PHILIPPINES

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

BozhouBozhou HuaibeiHuaibei JIANGSUJ I A N G S U HUAIH U A I RRIVERI V E R BBASINA S I N SuzhouSuzhou LingbiLingbi 0255075 GuoyangGuoyang SiSi XXianian KILOMETERS

JieshouJieshou GuzhenGuzhen Hongze MenchengMencheng Lake

LixinLixin r ive R i a u HuaiyuanHuaiyuan BengbuBengbu H Gaoyou FuyangFuyang Lake FengyangFengyang Shaying MingguangMingguang FengtaiFengtai River TianchangTianchang FunanFunan YingshangYingshang HuainanHuainan iver ShouShou XianXian i R DingyuanDingyuan ua H MohekouMohekou

Wabu HuoqiuHuoqiu Lake ChuzhouChuzhou

QuanjiaoQuanjiao NANJINGNANJING I I g n I ia HENANH E N A N I FeidongFeidong J I I g I HEFEIHEFEI n I a I h YejiYeji C Ma'anshanMa'anshan JinzhaiJinzhai LuanLuan FeixiFeixi ChaohuChaohu Chao Boshi ShuchengShucheng Lake Lake HuoshanHuoshan WuhuWuhu

LujiangLujiang g n Nanyi a i Lake J TongchengTongcheng g

n a XuanzhouXuanzhou

C NanlingNanling YuexiYuexi TonglingTongling Caizi GuangdeGuangde Lake GaoheGaohe JingJing XXianian Hualiangting GuichiGuichi Reservoir QingyangQingyang NingguoNingguo HUBEIH U B E I AnqingAnqing LingyangLingyang TaihuTaihu Wuchang Lake JingdeJingde ShitaiShitai Longgun Taiping Lake C Lake h a TangkouTangkou JixiJixi n DongzhiDongzhi g ZHEJIANGZ H E J I A N G

J i a n g YiYi XianXian HuangshanHuangshan IBRD 37715 APRIL 2010 JIANGXIJ I A N G X I IBRD 37716

I SHANDONGS H A N D O N G I

I GanyuGanyu

I CHINA I I GaoyouGaoyou I I LianyungangLianyungang HUAI RIVER BASIN FLOOD I

I I i I I LianyungangshiLianyungangshi MANAGEMENT AND DRAINAGE I I I I I I I I II I i DonghaiDonghai i I East i

I IMPROVEMENT PROJECT LIANYUNGANGSHILIANYUNGANGSHI I I I I I I I I I I I China GEOGRAPHIC POSITION OF PROJECT AREAS I i i I XinyiXinyi I II I I I I i I I I PizhouPI izhou II GuanyunGuanyun IN JIANGSU PROVINCE GaoyouGaoyou Xinyi R. Sea SUININGSUINING I XiangshuiXiangshui I I I ShuyangShuyang

I R. I GuannanGuannan I Luoma BinhaiBinhai Hu I PROJECT LOCATIONS I SuqianSuqian Beiliutang R. SuiningSuining I REGULATION OF ABANDONED YELLOW RIVER Zonqu I I HUAI RIVER BASIN BOUNDARY I I I I I Sheyang I I FuningFuning I LianshuiLianshui SheyangSheyang I HUAI’ANHUAI’AN SUQIANS U Q I A N I SiyangSiyang Tongy I I I MAIN CITIES AND TOWNS I HuaiyanHuaiyan u DRAINAGE IMPROVEMENT OF LI CANAL DEPRESSION I Guangai I I I HuaiyinHuaiyin Chengzi I II I PROVINCE CAPITALS Yunhe I Huai'anHuai'an IIII I JianhuJianhu GRAND CANAL SihongSihong Da YunheI Hu Subei I I YanchengYancheng PROVINCE BOUNDARIES I DRAINAGE IMPROVEMENT OF LIXIA RIVER DEPRESSION IN YANCHENG CITY I HUAIHUAI RRIVERIVER BBASINASIN LongzeLongze I PREFECTURE BOUNDARIES Hongze Hu I I BaoyingBaoying I DafengDafeng I YANCHENGYANCHENG San He I I

I I

XuyiXuyi JinhuJinhu I I

I XinghuaXinghua

I R. I DongtaiDongtai 025 50 75 100 Gaoyou I I GaoyouGaoyou Hu GaoyouGaoyou Dongtai I KILOMETERS I TianchangTianchang REGULATION OF TAIDONG RIVER DRAINAGE IMPROVEMENT OF LIXIAN RIVER DEPRESSION This map was produced by the Map Design Unit of The World Bank. IN TAIZHOU CITY Xintongyang R. Hai'anHai'an The boundaries, colors, denominations and any other information TaizhouTaizhou JiangyanJiangyan shown on this map do not imply, on the part of The World Bank I JiangduJiangdu Group, any judgment on the legal status of any territory, or any I endorsement or acceptance of such boundaries.

YangzhouYangzhou I RugaoRugao

ANHUIA N H U I LuheLuhe I I TAIZHOUTAIZHOU RudongRudong YizhengYizheng

YangzhongYangzhong Jiang ZhenjiangZhenjianI g

I TaixingTaixing NANTONGNANTONG I NantongNantong RUSSIAN FEDERATION NANJINGNANJING ZHENJIANGZHENJIA ING JiangpuJiangpu I I JingjiangJingjiang NantongNantong I DanyangDanyang I I Yu JiangningJiangning I n R. JurongJurong I I HEILONGJIANG Chang I JiangyinJiangyin I HaimenHaimen Da I ZhangjiagangZhangjiagang I HEFEIHEFEI NANJINGNANJING I I Cha QidongQidong I ChangzhouCI hangzhou ng MONGOLIA JintanJintan I I I WUXIWUXI JILIN I I I LishuiLishui I I XINJIANG Sea of I ChangshuChangshu GOL LIAONING CHANGZHOUCHANGZHOU I MON D.P.R. OF Japan IWuxiWuxi Jiang NEI I BEIJING KOREA I SUZHOUSUZHOU BEIJING

TIANJIN TaicangTaicang LiyangLiyang CityCity HEBEI REP. OF SHANXI YixingYixing KunshanKunshan SHANDONG KOREA GaochunGaochun Yellow SuzhouSuzhou QINGHAI NINGXIA Sea I JAPAN GANSU

Tai Hu I SHANGHAISHANGHAI HENAN JIANGSUJIANGSU I SHAANXI

WujiangWujiang I ANHUI I . R SHANGHAI

I n

G HUBEI a East I XIZANG H SICHUAN China I SHANGHAISHANGHAI ZHEJIANG I ONGQIN Sea H I C I JIANGXI

I HUNAN I GUIZHOU FUJIAN Chang Jiang I National I Capital I TAIWAN PACIFIC

I YUNNAN Province GUANGXI GUANGDONG

Boundaries HONG KONG OCEAN MYANMAR International MACAO ZHEJIANGZ H E J I A N G Boundaries LAO VIETNAM P.D.R. HAINAN PHILIPPINES APRIL 2010 APRIL 2010 IBRD 37717 i a h i e Weihai Weihai W KILOMETERS This map was produced by the Map Design Unit of The World Bank. This map was produced by the Map Design Unit of The World The boundaries, colors, denominations and any other information Bank on the part of The World shown on this map do not imply, or any Group, any judgment on the legal status of territory, endorsement or acceptance of such boundaries. Huang Sea 0 20406080 i a t CHINA n

Yantai Yantai Y

a PROJECT PUMPING STATIONS PROJECT DRAINAGE IMPROVEMENTS HUAI RIVER BASIN BOUNDARY EXPRESSWAYS UNDER CONSTRUCTION EXPRESSWAYS HIGHWAYS NATIONAL RAILROADS PREFECTURE CAPITALS PROVINCE CAPITAL PREFECTURE BOUNDARIES PROVINCE BOUNDARIES D IN SHANDONG PROVINCE IMPROVEMENT PROJECT HUAI RIVER BASIN FLOOD MANAGEMENT AND DRAINAGE GEOGRAPHIC POSITION OF PROJECT AREAS o a d g n i Qingdao Qingdao Q

i a l o i J o a Bo Sea h z

Rizhao Rizhao R

e U W S Lai Zhou Bay G

g e n

a H f

i n A

e e

Weifang Weifang W W I JIANGSU J JIANGSU g n i y g n o Dongying D Dongying

e H

Y i y e H n i N Linyi Linyi L

I e H

S g b

i n Zibo Z Zibo e B

u )

e I o

B I H

h w

z I

o g I

l I

i n l

i I

Binzhou B Binzhou e x I

R o

Y I

a ( I I

i I

E I X

I g

I n

u I V I a w i

u I I a I e h Laiwu L Laiwu

z I I

I I a

n I g R I Zaozhuang

e Zaozhuang Z

n I I

w a I

I I

u I

I I

I A I I

e I

U h

a n

HUAI RIVER BASIN H I

i i I j a

N I ' a I

i I I I

w a M A I Tai'an T Tai'an I g

N II n I I

a JINAN J I h I I I I Z I I I I I I I I I I

II I

e I

h I I

n I

u Hu I

I I a

I g I D n Nanyang

I i I

I n I I n I Weishan Hu

I i I I I Jinning J I Jinning I I I I I I I I I I I III I I u I I o

h I

E I I I z I I e I I Dezhou D I

B I I unhe I I I I I Y I I

I Da I E I I I I I I I I

HEBEI H I I I g I I I n I I I I

I e I

h I I

c I I I e

I I o

I a H

i Liaocheng Liaocheng L u I f

I n I a I I I W I I I I I I Sea of JAPAN Japan I I I I I I I OCEAN PACIFIC Sea East China KOREA REP. OF REP. KOREA D.P.R. OF D.P.R. JILIN Sea PHILIPPINES SHANGHAI TAIWAN Yellow HEILONGJIANG LIAONING G ZHEJIANG

N JIANGSU

. FUJIAN R

O e

D a

e z

e H A

HONG KONG TIANJIN ANHUI

H ) Heze Heze H

SHANDONG S JIANGXI

MACAO w BEIJING

HEBEI o

GUANGDONG l l

HENAN

BEIJING e

N HUBEI

HUNAN Y MONGO SHANXI

(

NEI

HAINAN

QING

GUANGXI

SHAANXI CH

n NINGXIA

GUIZHOU a VIETNAM u

N GANSU H N LAO SICHUAN P.D.R. MONGOLIA E YUNNAN A N HENAN H HENAN RUSSIAN FEDERATION E QINGHAI National Capital Province Boundaries International Boundaries HENAN H HENAN XIZANG XINJIANG MYANMAR