INTEGRATED SAFEGUARDS DATA SHEET RESTRUCTURING STAGE Note: This ISDS will be considered effective only upon approval of the project restructuring Report No.: ISDSR15301

Public Disclosure Authorized Date ISDS Prepared/Updated: 05-May-2016 Date ISDS Approved/Disclosed: 16-May-2016 I. BASIC INFORMATION

Public Disclosure Copy 1. Basic Project Data

Country: Project ID: P126611 Project Name: Coastal Economic Zone Urban Infrastructure and Environmental Management Project (P126611) Task Team Da Zhu Leader(s): Estimated 15-Oct-2012 Estimated 28-Mar-2013 Public Disclosure Authorized Appraisal Date: Board Date: Managing Unit: GSU08 Lending Specific Investment Loan Instrument: Sector: Urban Transport (72%), Wastewater Collection and Transportation (13%), Flood protection (7%), Wastewater Treatment and Disposal (7%) , Sub-national government administration (1%) Theme: City-wide Infrastructure and Service Delivery (100%) Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and No Emergencies)?

Public Disclosure Authorized Financing (in USD Million) Total Project Cost: 225.72 Total Bank Financing: 150.00 Financing Gap: 0.00 Financing Source Amount Public Disclosure Copy Borrower 75.72 International Bank for Reconstruction and Development 150.00 Total 225.72 Environmental B - Partial Assessment Category: Is this a No Repeater

Public Disclosure Authorized project?

2. Current Project Development Objectives The proposed Project Development Objective (PDO) is to improve the efficiency of urban transport

Page 1 of 9 and address water scarcity issues in selected cities in Liaoning Province. Proposed New PDO (from Restructuring Paper) The proposed Project Development Objective (PDO) is to improve the efficiency of urban transport and address water scarcity issues in selected cities in Liaoning Province. 3. Project Description The proposed Bank supported project will have three components and seven sub-projects.

Component 1: Improving urban transport. This component will invest a total of US$ 182.36 million,

Public Disclosure Copy of which US$117.1 million is an IBRD loan, in improving public transport systems and fostering transit oriented development along selected public transport corridors by integrating land use and transport planning. The Project will finance new urban roads and rehabilitation of existing roads, and ensure the engineering designs incorporate traffic management and traffic calming features and include facilities that promote cleaner alternative modes of transport, such as bicycling and walking. The designs were also adapted based on the function and typology of streets within the urban area, such as neighborhood streets, local access roads, major urban thoroughfares, public transport corridors, and roads servicing industrial zones. Furthermore, all road designs include necessary underground urban utilities, traffic signs and management systems, landscaping, street furniture, and other ancillary facilities. In , the project will acquire buses and improve bus depots to support the overall improvement of public bus transport services provided by the Panjin Public Transport Company.

The streets and urban roads were selected based on the following criteria: (i) the quality of the infrastructure and importance of the road as major public transport corridor, and current and future traffic demand, (ii) importance as access to major regional transport systems (high speed rails), and (iii) the demonstration opportunity to design and implement streets that create more livable, safe and sustainable neighborhoods. Both transport agencies and traffic management authorities have participated in the selection, design, and preparation of the project. The technical assistance component will complement the infrastructure investments and provide support to the development of comprehensive traffic management plans for each.

In Dongang City, the sub-project investments are focused on the development of new areas that are connected to major regional and urban public transit systems. Designs and land use plans are being adapted to improve access and incentivize the use non-motorized transport and the bus transport

Public Disclosure Copy systems. In Kuandian and City, the sub-projects will support the rehabilitation of critical roads and local streets within the urban transport network and improve pedestrian, biking and public transport facilities.

Specific investments in these four sub-projects include construction, rehabilitation and possible realignment of roads and streets in urban areas; investment in bus lanes, stations and other related facilities; traffic signs and management equipment; sidewalks and other pedestrian amenities; bicycle lanes, parking and other facilities; landscaping and street furniture; and basic urban service pipelines, including drainage, wastewater, communication and electricity infrastructure.

In Panjin City, the sub-project will finance the improvement of the local bus transport system, and investments include the acquisition of new buses, the construction of bus depots, bus maintenance and complementary facilities, and bus operation systems.

Page 2 of 9 Component 2: Improving urban wastewater treatment and reclamation. This component will invest a total of US$ 41.71million, of which US$ 31.25 million is an IBRD loan, in wastewater treatment facilities and water reclamation systems, while also separating sewage and drainage networks in selected cities. The main objective is to rationalize the use of scarce water resources, reduce groundwater abstraction, and reduce the pollution loads on surface water resources. Investments include the construction of new and rehabilitation of existing wastewater plants, separation of sewage and drainage networks, and replacement of groundwater supply systems by water reclamation supply systems. Sub-project investments include: (a) Wastewater treatment and reclamation and drainage in Lingyuan City, including the installation of separate stormwater and municipal sewerage collection pipelines, improvement of the Public Disclosure Copy wastewater treatment plants, and construction of reclaimed wastewater distribution system, which will be connected to the Industrial Park in Lingyuan City;

Component 3: Technical assistance, training and advisory services. This component is closely linked to the infrastructure investments under components 1 and 2 and will help increase impacts and sustainability of investments, as well as build the capacity of the local staff and officials involved in delivering water and urban transport in participating cities. This component will be fully financed by the IBRD Loan, with an allocation of US$ 1.7 million. During project preparation, the team worked closely with Provincial and local authorities and identified technical assistance needs and topics that are common to the project cities and will help increase long-term impacts of the project. The identified and agreed areas of technical assistance support to be financed by the project, include: (a) Building the capacity of local transport management agencies and support them in preparing or revising urban transport investment and management plans, focusing on promoting public transport, pedestrian, bicycles and overall traffic safety; (b) Developing comprehensive capital investment and asset management plans for local implementing agencies to ensure long-term sustainability of project investments; and, (c) Supporting project management and supervision, including consultancy services and training in: technical supervision, procurement and financial management; contract supervision; environmental management plans, and resettlement action plans.

Summary of proposed changes in restructuring:

The proposed changes in this restructuring are: (a) to drop two subprojects due to the lack of counterpart financing and changing local priorities; (b) to increase the disbursement ratio of civil Public Disclosure Copy works category to fully cover the existing appraised project costs; (c) to reallocate the funds from two dropped subprojects to the one consolidated works category; (d) as a result of dropping two subprojects, the Borrower➢❨ s contribution and total project cost reduced; (e) to modify the Project Development Objective (PDO) and Results Framework as a result of cancellation of subprojects.

The project restructuring will not change the project safeguard category (category B), will not trigger any new safeguard policies, and will not introduce new safeguard instruments. As no new subprojects are being added, there are no changes to the safeguard policies. The implementation of the environmental management plan has been adequate to date. The project is in compliance with resettlement policies and action plan, although implementation has been slow, but shows good signs of improvement over the last six months. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known)

Page 3 of 9 The project will be implemented in five small to medium sized cities located in Liaoning Province, northeast of China. The cities are spread along the coastal zone, but most of them are actually located tens of miles inland on flat terrain with a temperate climate and average precipitation ranging from around 700mm to nearly 1000mm per year. 5. Environmental and Social Safeguards Specialists Chongwu Sun (GEN2A) Shuang Zhou (GSU02) Zhefu Liu (GSU02) Public Disclosure Copy 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Yes Assessment OP/BP 4.01 Natural Habitats OP/BP No 4.04 Forests OP/BP 4.36 No Pest Management OP 4.09 No Physical Cultural No Resources OP/BP 4.11 Indigenous Peoples OP/ No BP 4.10 Involuntary Resettlement Yes OP/BP 4.12 Safety of Dams OP/BP No 4.37 Projects on International No Waterways OP/BP 7.50 Projects in Disputed No Areas OP/BP 7.60

II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues Public Disclosure Copy 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts: Social Safeguards

The project has significant environmental and social benefits, as it supports the development of the economic growth along the coastal area of Liaoning province and promotes the development of the infrastructures in those supported small cities for better living environment. The public consultation and participation process undertaken during preparation enables the project to combine the public concerns into the project preparation to minimize the project negative impacts and mitigate the negative impacts on land acquisition and private housing requirement.

Involuntary Resettlement

Page 4 of 9 The Bank Policy OP 4.12 Involuntary Resettlement is triggered. The project will affect 11 townships/residential committees, 18 villages/communities, and one State-owned farming factory in Linyuang City, Donggang City, Panjing City, County and Kuandian County. The project will require the permanent acquisition of 77.93 hectares of collective land, including 22.42 hectares of paddy land, 20.84 hectares of dry land, 14.78 hectares of orchard land, 19.27 hectares of housing lots and o.62 hectares of other land. The dominant current land use is growing rice by paddy land and the rest is mostly growing wheat by dry land and fruits by orchard land. The project will require 49,582 square meters of private houses, including 27,214 square meters of concrete and brick houses, 2,294 square meters of brick houses, 16,973 square meters of brick and wood houses, and 1,106 square meters of simple houses. As the result, the project will impact 7,364 Public Disclosure Copy persons. According to the surveys, a total of 1,662 households with 6,794 persons will be permanently affected, including 1,233 households with 4,666 persons affected by land acquisition, 556 households with 1,997 persons affected by housing demolition, and 204 households with 681persons affected by both land acquisition and housing demolition, 77 businesses and other entities with 812 persons. The Project will affect 175 households with 570 persons temporarily (temporary land occupation).

The RAP prepared by the project entity provides detail regarding resettlement policy principles and regulations to be followed, compensation rates and budget, mitigation measures to restore incomes where necessary and institutional and monitoring arrangements. A resettlement office under Liaoning PMO will be set up to supervise the resettlement implementation. A resettlement office will be established under each PIU and ensure timely implementation of the approved RAP. The project city land and resources bureaus will be responsible for the land acquisition approval. The RAPs should be completed prior to contract signature.

The task team conducted due diligence reviews to the local projects that link to the Bank supported project components. Donggang City and Chaoyang City village-upgraded-programs to be funded by the municipalities during the project implementation supported by the Bank might be carried out. The task team identified that those programs are linked to the Bank supported project components in the cities. A resettlement policy framework was requested to guide the future resettlement activities funded by local funds. A waste water treatment plant funded by Linyuan city in Year 2008 and completed in Year 2010 was identified as a linkage project. The due diligence review confirmed Chinese land law, Liaoning provincial land administrative management regulation and local regulation have been followed. The living conditions of the Public Disclosure Copy resettled people have been restored to the conditions prior to their rehabilitation program in compliance of the substantive aspects of Bank involuntary resettlement.

All the adverse impacts were surveyed and addressed during preparation of the project RAP and the process of due diligence review.

The restructuring in April 2016 will dropped two subprojects: the subproject in under Component 1, Improving Transport Systems, and the subproject in Suizhong County under Component 2 Improving Urban Wastewater Treatment and Reclamation. The disbursement percentage for all civil works categories will be increased to 90%. The restructuring changes will not increase new land acquisition and resettlement, and will not affect the implementation of projects Resettlement Action Plan. The restructuring will not trigger any new social safeguard policy. The ongoing project does not have any significant outstanding social safeguard implementation issues. The update on reduced PAPs will be reflected in regular external

Page 5 of 9 monitoring plan.

Environmental Safeguards

Environmental Assessment

The Bank policy OP 4.01 Environmental Assessment is triggered and the project has been classified as Category B. An Environmental Impact Assessment (EIA) was carried out for each proposed project components in accordance with China➢❨ s national policy and regulations. Based on the EIAs, an environmental management plan (EMP) was prepared to summarize the key Public Disclosure Copy environmental impacts, to determine the mitigation measures and environmental monitoring program and necessary institutional arrangement as well as capacity building development. The documents have been prepared on the basis of Chinese legal and policy framework for environmental protection, master plans and environmental plans as well as applicable Bank safeguard policies and Bank group➢❨ s Environment, Health and Safety Guidelines.

Through preparation of safeguard documentation, there was no any potential large scale, significant and/or irreversible environmental impacts to be found. From proposed components, following benefits are expected: improvement of road network and public transport systems in the project cities/counties, and increase/improvement of wastewater collection and drainage systems. Furthermore, the proposed project will improve water reuse and increase wastewater treatment efficiency.

The project consists of two major categories of engineering: (1) construction, widening and rehabilitation of urban roads and improvement of public transport facilities; and (2) construction and extension of municipal water supply, wastewater collection and drainage, including industrial recycling water works. The proposed construction activities would cause urban road occupation and city traffic disruption, which may bring residents inevitable inconvenience, including potential safety issues. During construction phase, construction machines and transportation vehicles will create emissions, airborne dust and noise problem.

In the PCN stage ISDS, safeguard policies of OP4.11 Physical Cultural Resources were indicated as TBD, though there is no significant cultural relics be found in the proposed project areas. Therefore, it is confirmed that OP 4.11is not triggered because of no any significant cultural relics found in the project areas. In case any relics to be found during construction, "Chance-Find" Public Disclosure Copy procedure and relevant clauses described in the EMP (in the Generic Environmental Codes of Practice) should be included in the contracts. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The proposed project will help improve road network and urban service facilities, thus to improve local people living condition and welfare. The project is in line with the overall master plan of urban sector development in Liaoning Province. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Environmental: Alternative study was considered during the project feasibility study and EIA preparation for more technical details, e.g. site selection analysis, technical options, as well as with and without project option analysis. Comprehensive comparisons were analyzed with consideration of technical, economic, as well as environmental and social factors.

Page 6 of 9 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Social: The PMO contracted experienced institute to guide the social safeguards documentation and set up resettlement implementation offices in the engaged counties and cities under the provincial PMO. The relevant agencies to engage into the project implementation participated into the project preparation. The staffs from the PMO and agencies are getting familiar to the Bank requirement, specific to the safeguards requirement.

A consolidated RAP covering the key resettlement information in those 6 counties/cities was

Public Disclosure Copy approached and the stand-alone RAP for each engaged county/city was prepared. During the project preparation, the social safeguards consulting institute worked with the design institute in charge of project feasibility study on the selections of the subproject locations. The analytical works were undertaken and the project negative impacts were minimized, and the mitigation measures were developed according to the Bank requirement. Public consultations were undertaken by the consulting institute and the project entities in the engaged counties/cities to address the importance of the safeguards policy. The project preparation was a well-done process to disseminate the Bank requirement on social safeguards and combined the people concerns into the RAPs and also important process to provide on-job training courses to each engaged levels of the agencies in the counties/cities and townships and as well as village level.

An experienced monitoring institute, independent to the PMO and the project agencies, will be contracted to monitoring the resettlement activities and the monitoring report will be reviewed by the Bank twice a year as requested.

Environmental: The EA report, prepared by the client and their EA consultants, thoroughly addressed the potential environmental and social impacts envisaged for the project, and developed adequate measures in the EMP to avoid, minimize, mitigate and compensate the potential adverse impacts. The preparation of EA documents followed the relevant national laws/regulations and guidelines, as well as Bank➢❨ s safeguards policies and environmental health and safety (EHS) guidelines.

A stand-alone EMP has been prepared based on the findings of the EIA report. The EMP summarized the key environmental impacts and detailed the environmental management and supervision organizations and responsibilities, mitigation measures, training plan, monitoring plan,

Public Disclosure Copy and budget estimates of EMP implementation. It includes sets of Environmental Codes of Practice (ECOPs) for contractors, which will be incorporated into bidding documents and contracts to ensure effective implementation. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Social: The project will provide significant benefits to the people who are living in the projects and the adjacent areas as Laobaixing strongly requested through people➢❨ s meetings and media. The project stakeholders are the local communities and the people in the engaged counties and cities. The affected people considered the project will give them opportunities to have better living environment and develop their businesses.

During the project preparation process and the stages of the project design, public consultations were conducted and will be continuous by the resettlement offices in the engaged counties and cities and also the independent monitoring agency, and the project information were disseminated

Page 7 of 9 to the displaced families for refining the project design, selections of the subprojects and the locations of the subprojects.

The consolidated RAP, stand-alone RAPs in the engaged counties/cities were disclosed in the municipal libraries from October 2 to 16, 2012 and sent to Infoshop in October 23, 2012.

Environmental: EMP implementation will be managed by each city PMO under supervision of Liaoning Provincial PMO. The contractors and supervision engineers will be required to assign qualified environmental staff to their team to ensure effective implementation of the EMP. During the EA preparation, public consultations were conducted two times in accordance with the World Public Disclosure Copy Bank➢❨ s OP4.01. Main public concerns have been addressed in the EA, and necessary mitigation measures were developed in EMP and the project design. The EA/EMP documents have been locally disclosed prior to disclosure at Bank➢❨ s Infoshop on October 12, 2012. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 28-Sep-2012 Date of submission to InfoShop 10-Oct-2012 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors "In country" Disclosure China 30-Sep-2012 Comments: Resettlement Action Plan/Framework/Policy Process Date of receipt by the Bank 13-Dec-2012 Date of submission to InfoShop 14-Dec-2012 "In country" Disclosure China 16-Oct-2012 Comments: If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/ Audit/or EMP. Public Disclosure Copy If in-country disclosure of any of the above documents is not expected, please explain why:

C. Compliance Monitoring Indicators at the Corporate Level OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) Yes [ ] No [ ] NA [ ] report? If yes, then did the Regional Environment Unit or Practice Yes [ ] No [ ] NA [ ] Manager (PM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ ] in the credit/loan? OP/BP 4.12 - Involuntary Resettlement

Page 8 of 9 Has a resettlement plan/abbreviated plan/policy framework/ Yes [ ] No [ ] NA [ ] process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Yes [ ] No [ ] NA [ ] Practice Manager review the plan? Is physical displacement/relocation expected? Yes [ ] No [ ] TBD [ ]

Provided estimated number of people to be affected Is economic displacement expected? (loss of assets or access to Yes [ ] No [ ] TBD [ ] assets that leads to loss of income sources or other means of Public Disclosure Copy livelihoods)

Provided estimated number of people to be affected The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] place in a form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional Yes [ ] No [ ] NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included Yes [ ] No [ ] NA [ ] in the project cost? Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed Yes [ ] No [ ] NA [ ] with the borrower and the same been adequately reflected in the project legal documents?

III. APPROVALS

Public Disclosure Copy Task Team Leader(s): Name: Da Zhu Approved By Safeguards Advisor: Name: Date: Practice Manager/ Name: Abhas Kumar Jha (PMGR) Date: 16-May-2016 Manager:

Page 9 of 9