PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB4280 Project Name CN - Nanning Urban Environment Region EAST ASIA AND PACIFIC Public Disclosure Authorized Sector General water sanitation and flood protection (55%); Sewerage (45%) Project ID P108627 Borrower(s) GUANGXI PROVINCIAL GOVERNMENT Implementing Agency -Xiangsihu Investment Company Ltd. -Yongjiang Dike Construction and Development Co. Ltd. of Nanning City -Guangxi Green City Water Co. Ltd. Environment Category [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared December 13, 2008 Estimated Date of March 16, 2009 Appraisal Authorization Public Disclosure Authorized Estimated Date of Board October, 2009 Approval 1. Key development issues and rationale for Bank involvement The Guangxi Zhuang Autonomous Region (Guangxi) has historically been one of the poorest areas in China, due in large part to the infertility of the surrounding karst hills, low levels of infrastructure, and restrictions imposed as a result of frontier conflicts with Vietnam lasting from the 1960s through 1990. The last decade, however, has seen substantial growth in Guanxi, driven by investments relating to development of manufacturing centers in neighboring Guangdong Province and growing trade with the ASEAN countries, as well as by the growth of tourism Public Disclosure Authorized industries in renowned scenic areas such as Guilin to the north of the Region. GDP per capita grew from RMB3,304 in 1995 to RMB12,408 in 2007 in the region, as compared to the national average GDP per capita of RMB18,934, with an annual growth rate of 11.7% during the same period. The capital of Guanxi, Nanning, has been benefiting from this growth. Its population increased from 2.7 million in 1995 to 6.8 million in 2007, and is expected to grow to 7.8 million by 2020. Average GDP per capita grew in Nanning from RMB6,331 in 1995 to RMB15,685 in 2007. While receiving international praise for environmentally sensible development of the city, Nanning needs to keep up with environment management challenges including degradation of water bodies. Seventeen of eighteen tributaries to the Yongjiang River, the primary water body flowing through the urban center districts of Nanning, have degraded to below Class V. Only one tributary, which had been rehabilitated under the previous IBRD-financed Guangxi Urban Public Disclosure Authorized Environment Project, remains at Class IV. In the five county-seat towns, capitals of the counties located outside of the central urban districts, their 11th five-year development plans indicate that their populations are expected to increase from about 300,000 in 2006 to over 500,000 by 2015, composed of 130,000 in Wuming County, 130,000 in Binyang County, 139,000 in Heng County, 55,000 in Shanglin County, and 51,000 in Mashan County. Water quality of streams in these county towns is reasonably preserved at Class III for now, but this rapid growth will pose tremendous challenges to waster quality management. The major sources of pollution in the central urban districts of Nanning are urban wastewater (about 51% of the total wastewater volume generated), non-point sources (34%) and industrial pollution (15%). In the county-seat towns, over 90% of wastewater is generated from domestic water use. In these central urban districts, urban wastewater is collected and treated in four systems. One of the largest is the Jiangnan system, which will treat 44% of the total urban wastewater. As the collection system is being expanded to collect 500,000 m3/d by 2011, the daily treatment capacity of the Jiangnan Wastewater Treatment Plan needs to be expanded from the current 240,000 m3/d to 480,000 m3/d, as had been planned under the previous IBRD-financed project. None of the five county-seat towns has any wastewater collection and treatment systems, hence it is critical to develop wastewater treatment systems in these towns. Furthermore, an integrated mini-river basin management approach is required to help develop action plans to take care of non-point sources. It will also help the municipality develop any follow-on actions on industrial pollution, whose control measures had been developed under the previous IBRD-financed project. Rationale for Bank Involvement The Chinese government has recently placed a strong emphasis on Guangxi, largely because of (i) the current focus on the rapid urbanization of mid-size cities; (ii) the strategic location due to the shared border with Vietnam; and (iii) the large minority Zhuang population. The Project addresses one strategic pillar in the Bank’s “China Country Partnership Strategy 2006 to 2010” (Report No.35435): To manage resource scarcity and environment challenges by expanding urban wastewater collection and treatment facilities and solidwaste management services, and piloting innovative approaches to natural resource management, which are also consistent with China’s 11th Five-year Development Plan. The Project is a continuation of the Bank’s engagements with the Guangxi Zhuang Autonomous Region, specifically following on the success of the Guangxi Urban Environment Project. One of the proposed components is an expansion of wastewater treatment capacity of the WB-financed WWTP, as had been planned under the previous WB project. Furthermore, the project would complement three other projects in the region: the Fourth Inland Waterways Project, which upgrades river navigation conditions and generates hydropower in the area; the Liuzhou Environment Management Project, which is improving wastewater treatment, industrial pollution control, municipal sanitation and solid waste services and management in Liuzhou; and the Guangxi Integrated Forestry Development and Conservation Project, which focuses on forest resources and biodiversity conservation in the region. 2. Preliminary Description The total estimated cost is US$245.21 million, with US$100 million in IBRD financing. The PMO and Project Leading Group will supervise the three implementing agencies. Component i: Integrated Urban and County Towns Wastewater Treatment: The project will assist the selected urban district and counties to improve living conditions and promote urban development by reducing pollution loads in the urban environment. The component will consist of two main parts, (i) the establishment or expansion of the wastewater treatment plants and related facilities; and (ii) sewerage network rehabilitation and/or extension; in the Jiangnan Urban District, the project will complete the Phase II of the Jiangnan Waste Water Treatment Plant (WWTP), for which the first phase was financed under the Guangxi Urban Environment Project. This sub-project will enlarge the capacity of the existing treatment facility to 480,000 m3/day to meet the increased wastewater collection rate in Jiangnan catchment area, covering the projected population of approximately 1.2 million by the year 2012, and reducing the discharge of untreated sewage into the Yongjiang River. The treatment process is expected to be the modified Sequencing Batch Reactor process. The project will also introduce wastewater treatment capacity in five county towns that currently discharge untreated wastes in urban watercourses, reducing the flow of contaminants into the rivers. This sub-project includes construction of associated facilities and sewerage systems as well as main collectors for a total capacity of 102,000 m3/day to serve about 70% of the projected total population of some 500,000 in the five county-seat towns in Wuming County, Binyang County, Heng County, Shanglin County, and Mashan County. The implementing agency for all activities in this component is the Guangxi Green City (Nanning) Water Affairs Company Ltd, which implemented construction of the first phase of the Jiangnang WWTP under the Guangxi UEP. Wastewater tariffs were planned to increase from current tariff of RMB0.5 per cubic meter to RMB0.8 in November 2008. The municipality intends to further increase the wastewater tariff when the proposed facilities are commissioned. Component ii. River Rehabilitation: This component would improve the storm-water drainage system, restore ecosystems, and improve water quality along a total of 13.05 km of the Fenghuang, Liangqing and Lengtangchong Rivers. The initial proposals from the client include: stormwater/sewer interceptors; stormwater-discharging canals; water replenishment conveyer; control gates; river course rehabilitation; regulating lakes; weirs and embankment improvement. Implementing agencies for this component are the Xiangsihu Investment Company Ltd., and the Yongjiang Dike Construction and Development Company Ltd. of Nanning City. Component iii: Technical Assistance: The task team is currently discussing a possible third component, introducing technical assistance for integrated mini-river basin management to assure future approaches that would mitigate non-point source pollution and industrial waster pollution, if necessary. 3. Safeguard policies that might apply Environmental Assessment (OP/BP 4.01) Involuntary Resettlement (OP/BP 4.12) Indigenous Peoples (OP 4.10) 4. Tentative financing Source: ($m.) Borrower 145.21 International Bank for Reconstruction and Development 100 Total 245.21 5. Contact point Contact: Takuya Kamata Title: Sr Financial Analyst Tel: (202) 473-2562 Fax: (202) 522-1787 Email: [email protected] .