Completion Report

Project Number: 45023-002 Loan Number: 3014 December 2020

People’s Republic of China: Hubei-Yichang Sustainable Urban Transport Project

This document is being disclosed to the public in accordance with ADB’s Access to Information Policy.

CURRENCY EQUIVALENTS

Currency unit – yuan (CNY)

At Appraisal At Project Completion (10 July 2013) (2 December 2019) CNY1.00 = $0.163145 $0.142195 $1.00 = CNY6.1295 CNY7.0326

ABBREVIATIONS

ADB – Asian Development Bank BRT – bus rapid transit EA – executing agency EIA – environmental impact assessment EIRR – economic internal rate of return EMP – environmental management plan FIRR – financial internal rate of return GAP – gender action plan IA – implementing agency ICB – international competitive bidding LAR – land acquisition and resettlement NMT – nonmotorized transport O&M – operations and maintenance PMO – project management office PRC – People’s Republic of China WACC – weighted average cost of capital YMG – Yichang Municipal Government YMUCID – Yichang Municipal Urban Construction Investment and Development YPMO – Yichang Project Management Office YPTG – Yichang Public Transport Group

GLOSSARY

CO2 – carbon dioxide km – kilometer km/h – kilometer per hour m – meter mu – Chinese unit of measurement equivalent to 666.67 square meters m2 – square meter tCO2e – tons of CO2 equivalent

NOTE

In this report, “$” refers to United States dollars.

Vice-President Ahmed M. Saeed, Operations 2 Director General James P. Lynch, East Asia Department (EARD) Director Sujata Gupta, Sustainable Infrastructure Division (EASI), EARD

Team leader Anders Pettersson, Principal Portfolio Management Specialist, Portfolio, Results, Safeguards and Gender Unit, Central and West Asia Department Team members Czareana Dello, Associate Project Analyst, EASI, EARD Gloria P. Gerilla-Teknomo, Senior Transport Sector Officer, EASI, EARD Mark Allister U. Robis, Senior Financial Management Officer, Office of the Director General, EARD Cristina P. Roldan, Project Analyst, EASI, EARD Jian Zhou, Social Development Specialist (Safeguards), EASI, EARD Yun Zhou, Senior Environment Specialist, EASI, EARD

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA i MAP v

I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 2 A. Project Design and Formulation 2 B. Project Outputs 3 C. Project Costs and Financing 4 D. Disbursements 4 E. Project Schedule 5 F. Implementation Arrangements 5 G. Technical Assistance 5 H. Consultant Recruitment and Procurement 6 I. Gender Equity 6 J. Safeguards 6 K. Monitoring and Reporting 8 III. EVALUATION OF PERFORMANCE 8 A. Relevance 8 B. Effectiveness 9 C. Efficiency 11 D. Sustainability 11 E. Development Impact 12 F. Performance of the Borrower and the Executing Agency 13 G. Performance of the Asian Development Bank 13 H. Overall Assessment 13 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 14 A. Issues and Lessons 14 B. Recommendations 15 C. Follow-Up Actions 15

APPENDIXES

1. Design and Monitoring Framework 16 2. Project Cost at Appraisal and Actual 18 3. Project Cost by Financier 19 4. Disbursement of ADB Loan Proceeds 21 5. Chronology of Main Events 22 6. Implementation Schedule Planned versus Actual 25 7. Organizational Structure 26 8. Contract Awards of ADB Loan Proceeds 27 9. Contracts Financed by the Asian Development Bank 28 10. Gender and Development Analysis of Results 29 11. Detailed Environmental Impact Analysis 38 12. Land Acquisition and Resettlement and Social Impact Analysis 43 13. Status of Compliance with Loan Covenants 45 14. Demonstration Effects of the Project 58 15. Economic Reevaluation 59 16. Financial Reevaluation 62 17. Carbon Dioxide Emissions Reduction 66

BASIC DATA

A. Loan Identification 1. Country People’s Republic of China 2. Loan number and financing source 3014, ordinary capital resources 3. Project title Hubei-Yichang Sustainable Urban Transport Project 4. Borrower People’s Republic of China 5. Executing agency Yichang Municipal Government 6. Amount of loan $150 million 7. Financing modality Project loan

B. Loan Data 1. Appraisal – Date started 5 December 2012 – Date completed 12 December 2012 2. Loan negotiations – Date started 25 June 2013 – Date completed 26 June 2013 3. Date of Board approval 21 August 2013 4. Date of loan agreement 30 October 2013 5. Date of loan effectiveness – In loan agreement 28 January 2014 – Actual 6 January 2014 – Number of extensions 0 6. Project completion date – Appraisal 30 June 2018 – Actual 31 December 2018 7. Loan closing date – In loan agreement 31 December 2018 – Actual 31 December 2018 – Number of extensions 0 8. Financial closing date – Actual 20 January 2020 9. Terms of loan – Interest rate London interbank offered rate + 0.6% − 0.01% – Maturity (number of years) 25 – Grace period (number of years) 5 10. Terms of relending (if any) Not applicable 11. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 10 July 2014 20 December 2018 54 months

Effective Date Actual Closing Date Time Interval 6 January 2014 20 January 2020 73 months

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b. Amount ($ million) Increased Canceled Last Original during during Revised Amount Undisbursed Allocation Implementation Implementation Allocation Disbursed Balancea Category (1) (2) (3) (4=1+2–3) (5) (6 = 4–5) 1. Civil works 131.50 3.62 0.00 135.12 135.12 0.00 1A Dongshan 4th Road 42.50 21.17 0.00 63.67 63.67 0.00 1B BRT and NMT 89.00 (17.55) 0.00 71.45 71.45 0.00 2. Goods and equipment 16.50 (3.14) 0.00 13.36 13.36 0.00 3. Capacity building and 2.00 (0.48) 0.00 1.52 1.45 0.07 quality assurances Total 150.00 0.00 0.00 150.00 150.00 0.07 BRT = bus rapid transit, NMT = nonmotorized transport. Note: Undisbursed balance was cancelled upon financial closing of the loan.

C. Project Data 1. Project cost ($ million) Cost Appraisal Estimate Actual Foreign exchange cost 81.70 18.10 Local currency cost 433.30 343.10 Total 515.10 361.20

2. Financing plan ($ million) Cost Appraisal Estimate Actual Implementation cost Borrower financed 142.30 14.60 ADB financed 150.00 150.00 Other external financing 210.60 161.00 Total implementation cost 502.90 325.60 Interest during construction costs Borrower financed 12.20 0.00 ADB financed 0.00 0.00 Other external financing 0.00 35.60 Total interest during construction cost 12.20 35.60 ADB = Asian Development Bank.

3. Cost breakdown by project component ($ million) Component Appraisal Estimate Actual A. Base Cost 434.40 325.60 1. Civil works 302.70 219.00 2. Goods and equipment 23.60 21.20 3. Land acquisition and resettlement 74.70 73.50 4. Capacity building and quality assurance 2.00 1.50 5. Design, project management, and supervision 31.40 10.40 B. Contingencies 68.50 0.00 C. Financing charges during implementation 12.20 35.60 Total 515.10 361.20

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4. Project schedule Item Appraisal Estimate Actual Date of contract with consultants Sep 2013 Jul 2015 Completion of engineering designs Dec 2013 Q4 2017 Civil works contract Date of award Sep 2016 Apr 2014 Completion of work Jun 2018 Feb 2018 Equipment and supplies Feb 2015 Dates First procurement Feb 2015 Last procurement Feb 2015 Completion of equipment installation Feb 2018 Start of operations Completion of tests and commissioning Feb 2018 Beginning of start-up Feb 2018

5. Project performance report ratings Implementation Period Single Project Rating From 21 August 2013 to 31 March 2014 On track From 1 April 2014 to 30 June 2014 Potential problem From 1 July 2014 to 31 March 2020 On track

D. Data on Asian Development Bank Missions No. of No. of Specialization of Name of Mission Date Persons Person-Days Membersa Fact-finding 5–12 Dec 2012 7 39 a1, a2, b, c1, d, e, f1 Consultation 22–26 Oct 2013 3 7 a3, b, d Loan review 1 2–4 Jul 2014 1 3 a3 Inception 22–24 Sep 2014 4 11 a3, c1, d, f1 Loan review 2 15 Dec 2014 1 1 a3 Loan review 3 15–17 Jul 2015 4 9 a3, c1, f1, g Social safeguards review 4–8 Jul 2016 1 5 h Midterm review 14–15 Nov 2016 4 8 a3, c2, f1, i Loan review 4 14–16 Aug 2017 3 9 a4, f2, j Loan review 5 1–3 Nov 2017 4 14 c2, f2, j, k Loan review 6 17–21 Sep 2018 3 12 f2, i, j Project completion review 25 Nov–2 Dec 2019 4 31 a4, c2, f2, j a a1 = transport specialist and team leader, a2 = senior transport specialist, a3 = senior transport specialist and mission leader, a4 = transport specialist, b = senior transport economist, c1 = environment specialist, c2 = senior environment specialist, d = safeguards specialist, e = counsel, f1 = associate project analyst, f2 = project analyst, g = director, h = gender and transport consultant, i = social development specialist (safeguards), j = unit head, project administration and mission leader, k = railway specialist.

o o 110 00'E 115 00'E Three Gorges o o 33 00'N 33 00'N Dam ( kilometer) HENAN SHAANXI Shiyan

Yiling Xiangfan Suizhou

CHONGQING HHUBEIUBEI Jingmen Yichang Xiaogan PProjectroject AreaArea ANHUI Gezhou Dam Wuhan Huanggang Enshi Ezhou Jingzhou

Yangtze River Yangtze o o 30 00'N Huangshi30 00'N Xianning

HUNAN JIANGXI Xiling o o 110 00'E 115 00'E

Dianjun S

Yichang

YYichangichang EEastast RRailwayailway StationStation ((HighHigh SpeedSpeed RRail)ail) G

Wujiagang

S

HUBEI-YICHANG SUSTAINABLE URBAN S TRANSPORT PROJECT IN THE Yangtze River PEOPLE’S REPUBLIC OF CHINA (as completed) Changjiawan

District Capital S Urban Expressway City/Town Railway S Railway Station Other Road G River

20-0931 AV Project Road Improvement Project BRT Corridor BRT Bus Rapid Transit This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, G Expressway Boundaries are not necessarily authoritative. G and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

I. PROJECT DESCRIPTION

1. Yichang is a prefecture-level city in the People’s Republic of China (PRC) and is the second-largest city in Hubei Province after Wuhan, the provincial capital. Yichang has a total population of 4.1 million, of which 1.4 million is urban. The urbanization rate of about 32% at the end of 2011 was well below the national average of 51.3%. Yichang’s urban population is forecast to increase to 2.8 million by 2030 due to continuing migration. Major investments are needed in urban infrastructure, transport, and related services to accommodate the growing population and support sustainable urbanization and inclusive growth.

2. International best practice indicates that one of the key elements in a sustainable transport system is to improve public transport and make it an attractive option for travelers. In the PRC, bus-based public transport and nonmotorized transport (NMT) have received less attention than has road building. The mode shares of public transport and NMT are well below potential levels, and there is growing dependency on private vehicles. Yichang’s present public transport system will not be able to cope with future travel demand, and the city’s NMT facilities are unable to provide a safe environment for pedestrians and bicycle users. An affordable, efficient public transport system coupled with safe, attractive NMT should be provided. In most medium-sized cities and many large cities, bus rapid transit (BRT) represents the best, most cost-effective, and most flexible option for public transport.1

3. Yichang’s linear form is very well suited for BRT, which can begin by establishing a core BRT corridor connecting the new railway station and provincial bus terminal, and then be extended in phases. As part of ongoing efforts to improve urban planning in Yichang, there is an opportunity to introduce safe, seamless NMT routes for cyclists and pedestrians. Investments in BRT and NMT could well boost the share of public transport and reverse the decline of NMT. There is potential for Yichang to become a model for BRT and NMT development in medium- sized cities in the PRC.

4. Three Gorges Dam is a major element of the Yichang economy, and growth in associated freight transport has challenged Yichang’s transport system. The bidirectional freight volume of the Three Gorges ship lock reached 90 million tons in 2010 and is projected to reach 185 million tons in 2020 and 248 million tons in 2030. Due to limitations in ship lock capacity, the portion of traffic requiring pass-dam transshipment2 could increase from 12.4 million tons in 2010 to 85 million tons in 2020 and 148 million tons in 2030. That means a bypass road is needed to handle this traffic growth without causing congestion and traffic safety problems in the city center area. In addition, it is necessary to reinforce the logistics hub function of Yichang by improving access to the logistics parks and developing manufacturing facilities. More efficient access to logistics facilities and increased pass-dam transshipment capacity will contribute to stronger use of inland waterways, which is the most economical and environmentally friendly mode of freight transport.

5. To address the issues of increasing travel demand, congestion in the city center area, and limited access to logistics facilities, the Asian Development Bank (ADB) approved on 21 August 2013 a loan that should contribute to inclusive growth and environmentally sustainable development in Yichang by improving the efficiency and sustainability of urban transport and promoting more efficient freight logistics. The impact of the project is an efficient, inclusive, and

1 The first line, Guangzhou BRT, was put into operation on 10 February 2010. It handles nearly 1 million passenger trips daily with a peak passenger flow of 29,900 passengers per hour per direction (second only to the TransMilenio BRT system in Bogota, Colombia). 2 Pass-dam transshipment is the shipping of goods or containers by road or rail to an inland waterway port upstream or downstream of a dam to bypass the ship lock or ship-lifting facilities at the dam.

2 sustainable transport system in Yichang, while its outcome is provision of efficient passenger and freight transport.

II. DESIGN AND IMPLEMENTATION

A. Project Design and Formulation

6. The project design was relevant to Yichang’s urban transport development need. The project was aligned with ADB and PRC’s country partnership strategy,3 Strategy 2020,4 and the Yichang City Urban Master Plan (2011–2030). It supported inclusive growth and balanced development by promoting sustainable urbanization and contributed to resource efficiency and environmental sustainability by promoting efficient and sustainable urban transport. The focus on public transport and multimodal integration directly supported ADB’s Sustainable Transport Initiative. Moreover, the project aligned with the development plan of the Three Gorges Modern Logistics Center, a key priority of the National Development and Reform Commission under the PRC’s Twelfth Five-Year Plan.

7. The project design incorporated the key lessons from ADB’s experience in the urban transport sector, specifically from the first ADB-funded BRT project in the PRC, Loan 2601-PRC: Lanzhou Sustainable Urban Transport Project, 5 including solid safeguards, design, and procurement readiness to avoid land acquisition and resettlement (LAR) delays and strengthening of the executing agency’s (EA) project implementation capacity with consulting services for construction supervision, as well as obtaining government and EA assurances to provide adequate funding for operation and maintenance (O&M) of the system. The project design was also aligned with the requirements of Yichang City’s overall masterplan.

8. The project was fully aligned with ADB and government priorities at appraisal and continues so at completion. Its design introduced and adopted innovative technologies, incorporated NMT facilities into the road network design and BRT design, and thus enhanced mobility and safety. The improved travel convenience brought about by the project design features changed the travel behavior and patterns of people in the city. The construction of the bypass road to improve pass-dam transshipment capacity included in the design reinforced Yichang’s logistics hub function and contributed to ADB’s support of more environment-friendly modes. The project provided training on traffic management, road safety, BRT operation, and management that built the capacity of all stakeholders involved in the construction and O&M of the BRT system and road network, thereby enhancing the project’s sustainability.

9. The original project design was sound and adequately formulated. The financing modality was appropriate to deliver the original project outputs. No changes were made in the project design and it is deemed relevant, both at appraisal and completion. The top city leadership’s direct involvement in its implementation made the project more relevant.

3 ADB. 2012. Country Partnership Strategy: People’s Republic of China, 2011–2015. Manila. 4 ADB. 2008. Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank 2008–2020. Manila. 5 ADB. 2009. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Lanzhou Sustainable Urban Transport Project. Manila.

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B. Project Outputs

10. The project aimed to provide an efficient, inclusive, and sustainable transport system in Yichang.

11. Output 1: Bus rapid transit system. A 23.9 kilometer (km) BRT system was built within the median of the main arterial road in Yichang, with services operating from the provincial bus terminal in Yiling District, extending along Yixing Avenue–Yemingzhu Road–Dongshan Avenue– Jucheng Road, and ending at the Yichang East railway station. The route connects the main residential and business districts with the city’s new logistics and industrial park and the high-speed railway station. The BRT,6 which includes dedicated, center-running bus lanes, fully enclosed BRT stations, bus management and information systems, a fare collection system, and parking management along the BRT corridor, was largely completed in 2015, 1 year ahead of schedule. Specifically, the 18 km BRT corridor from Yichang East Railway Station to Gezhouba Grand Turntable was opened for trial operation on 15 July 2015, the BRT corridor of Yiling Section was opened for trial operation on 26 November 2015, and the 2 km BRT line of Yemingzhu Road was completed in February 2018. This output was completed as envisaged at appraisal.

12. Output 2: Nonmotorized transport measures. Pedestrian and bicycle facilities (bicycle lane and bicycle parking) were implemented along the BRT corridor and at key intersections, This helped improve accessibility and safety for bus passengers and other NMT users, greatly reduced congestion along the main urban artery of Yichang, and contributed to reduced carbon dioxide (CO2) emissions and traffic accidents. NMT improvements were provided as planned, including pedestrian and bicycle lanes along the BRT corridor and bicycle-sharing stations built along the BRT corridor by 2017. This output was completed as envisaged at appraisal.

13. Output 3: Road network improvement. This output completed a 23.4 km extension of Dongshan 4th Road to accommodate through-traffic and freight traffic, including pass-dam transshipment. The road comprises (i) improvement of 12.3 km of Fazhan Avenue–Bailinhe Road Section (phase 1) to a road width of 44–70 meters (m); and (ii) improvement of the 11.1 km Bailinhe Road to Xianfeng Road (phase 2) to class 1 highway, with a road width of 24.5 m. The output included 11 bridges and two tunnels, and the full Dongshan 4th Road was completed as planned.

14. Output 4: Capacity building and quality assurance. This output supported project management and implementation to ensure that project outputs were delivered on time, within budget, and in accordance with ADB policies and procedures. It developed and maintained the project performance monitoring system and assisted with procurement and disbursement. It also successfully supported detailed design review and safeguard implementation, monitoring, and reporting; and it built capacity in traffic management, road safety, BRT operation, and management. This output was completed as envisaged at appraisal.

6 Compared with ordinary buses, BRT buses are very convenient and comfortable. BRT uses low floor to facilitate passengers getting on and off, the bus management information system in the station displays the bus position in real time and automatically displays the arriving bus. All BRT platforms are enclosed and have access control. Bus passengers can reach the bus stop via a specific crosswalk, underpass, or pedestrian footbridge. Bus passengers can make free transfers at each BRT station. The BRT stations are equipped with an advanced bus information system to show the arrival time of the next bus. For safety reasons, the automatic door in the station opens only when the bus stops. BRT buses can be parked on both sides of the station, allowing more buses to be accommodated in the station simultaneously to shorten the stopping time and avoid having buses waiting in line during peak hours.

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15. Ten seminars were organized for the project management office (PMO), Yichang Municipal Government (YMG), the Yichang Municipal Urban Construction Investment and Development Co. (YMUCID), supervision firms, contractors and suppliers, and other relevant agencies. Two study tours to the United States and Brazil on BRT and NMT were organized and fielded in 2013 and 2014. On 13 January 2016, the YMUCID also went to the United States to receive the World Sustainable Transport Award.

16. The project was implemented as originally designed. There was no major change in scope or implementation arrangements. The design and monitoring framework at appraisal and at completion is in Appendix 1.

C. Project Costs and Financing

17. The project cost at appraisal was estimated at $515.10 million, including taxes and duties of $16.07 million, while the actual project cost at completion was $361.20 million. The lower cost at completion was due to a well-managed procurement process that obtained favorable prices and proactive project management that saved capital costs while ensuring quality in construction and equipment supply. The cost at appraisal and actual is in Appendix 2.7

18. At appraisal, the $150 million ADB loan was to finance 29.1% of the total project cost, while the budgetary provisions from YMG and China Development Bank (now Industrial and Commercial Bank of China) were to finance the remainder. At completion, ADB’s financing represented 41.5% of the total project costs, while YMG and China Development Bank’s final share was 58.5%. The 11.2 km Bolinhe Road to Xianfeng Road (phase 2) was cancelled from the ADB loan and financed by domestic funds due to cost escalations and contract changes because of underground pipelines unforeseen at appraisal. The financing plan at appraisal and actual is also in Appendix 2. The detailed project cost by financier is in Appendix 3.

19. Originally, ADB was to finance 24.2% of Dongshan 4th Road civil works and 76% of BRT and NMT civil works. On 4 July 2014, ADB approved a loan reallocation and increase of the ADB financing percentage for Dongshan 4th Road to 45% and BRT and NMT civil works to 99%. On 21 November 2018, ADB approved the last reallocation of the loan proceeds from BRT and NMT, goods, and capacity building to Dongshan 4th Road and raised ADB’s financing percentage for category 1A Civil Works – Dongshan 4th Road from 45% to 71% to fully utilize the loan savings.

D. Disbursements

20. By loan closure, $149.93 million of the $150.00 million was disbursed, with loan savings of $67,459.33 cancelled at loan closing and returned to ADB. YMG processed and prepared the withdrawal applications in accordance with ADB’s Loan Disbursement Handbook (2012, as amended from time to time), and the overall disbursement was satisfactory. The project advance account was very useful and excellent support was provided by ADB’s Controller’s Department and the Hubei Provincial Finance Department when the imprest account ceiling was removed in 2017. The first disbursement was made on 10 July 2014 and the final disbursement on 20 December 2018.8 The disbursement of loan proceeds is shown in Appendix 4.

7 The final project costs at completion are subject to internal and external audit validation. 8 The refund of $67,459.33 was value dated 24 December 2019.

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E. Project Schedule

21. The project was carried out from August 2013 to December 2018, which is the physical closing date of the ADB loan. On 26 April 2019, ADB approved extension of the loan winding-up period by 3 months from 30 April 2019 to 31 July 2019. It extended this again to 31 October 2019 due to delays in internal processing of withdrawal applications. The financial closing date was 20 January 2020.

22. ADB conducted 11 review missions during the project’s implementation from 2013 to 2019.9 Between 2013 and 2019, a total of 14 contracts (including 5 for consulting services) were signed and completed. The chronology of main events is in Appendix 5, and the implementation schedule as planned versus actual is in Appendix 6.

F. Implementation Arrangements

23. YMG is the EA responsible for overall project implementation. YMUCID was the implementing agency (IA) responsible for day-to-day project activities and providing coordination support.

24. A key factor in the project’s successful and rapid construction was the institutional arrangement with the top city leadership involved in direct implementation of the project. A leading group was established by YMG, with a deputy mayor in charge of project implementation. The leading group provided implementation guidance and, more importantly, interagency coordination in planning, land use, financial support, and project approval. This was key to moving the project rapidly forward. The Yichang Project Management Office (YPMO) was established under the project leading group to manage implementation. The City Investment and Construction Company was responsible for daily operations and coordinating implementation, and especially coordination and liaison with ADB to ensure the implementation was in accordance with ADB project implementation requirements regarding the likes of procurement; disbursement; and environmental, social, and resettlement safeguards.

25. To further facilitate construction management, a project headquarters was established under direct leadership of the leading group. The headquarters was responsible for daily construction activities, coordination, and management of project implementation units assigned to each component, such as bus company, police, construction bureau, and environmental protection bureau. The project headquarters had more power in managing and controlling all implementation units and was key for efficiently managing project implementation. This institutional setup was unique and very effective. The implementation arrangements were followed as designed at appraisal.

26. Overall, the project’s implementation arrangements were sufficient and effective. The organizational structure is shown in Appendix 7.

G. Technical Assistance

27. On 15 December 2011, ADB approved $900,000 equivalent for project preparatory technical assistance provided on a grant basis from ADB’s Technical Assistance Special Fund to

9 From the loan consultation mission in 2013, inception and review missions from 2014 to 2018, and the project completion review mission in 2019. A social safeguards review mission was fielded in 2016.

6 help the government assess the project’s technical, environmental, financial, economic, social, and institutional feasibility under the Hubei-Yichang Sustainable Urban Transport Project.10 That assistance helped strengthen the soundness of the project design, from both technical feasibility and socioeconomic perspectives, through upfront dialogue with affected communities. The technical assistance was completed in June 2013 and produced the required outcome. Processing of the subsequent loan was based on the findings and recommendations ensuing from that assistance.

H. Consultant Recruitment and Procurement

28. The ADB loan financed two international consulting firms with totals of $1.17 million (main supervision) and $137,000 (BRT) for project management, capacity building, and quality assurance. The first was selected and engaged using quality- and cost-based selection, the second by consultants’ qualifications selection. Three individual consultants were selected and engaged using the individual consultants selection method in accordance with ADB’s Guidelines on the Use of Consultants (2010, as amended from time to time). All ADB-financed procurement followed ADB’s Procurement Guidelines (2010, as amended from time to time). ADB financed six civil works contracts and three equipment contracts using international competitive bidding.

29. The first batch of ADB-financed civil works and equipment contracts were awarded in April 2014, and all contracts were awarded by 2015. Appendix 8 lists the actual contract awards. The contracts financed by ADB are in Appendix 9. Overall, both procurement and consulting services contracts were adequately packaged, and their costs were realistically estimated. No implementation issue was noted regarding any of the contractors, suppliers, or consultants.

I. Gender Equity

30. The project was classified as effective gender mainstreaming. A gender specialist was engaged to support the PMO in implementing the gender action plan (GAP). GAP training was conducted for key EA and IA staff, and 50% of participants in the training and awareness building programs conducted under the project were women. Moreover, 32.51% of participants in the livelihood restoration training for affected people were women. To enhance security and safety for all BRT users, 9 security cameras per BRT bus, 2 cameras per BRT platform, and various types of lights were installed in the buses and platforms. Cameras were also installed at monitoring spots in road sections and underpasses. Priority seating for people with special needs was provided at BRT buses and platforms. Wheelchair-accessible BRT platforms and level boarding were provided for vulnerable pedestrians and passengers. Pinghu Square Station platform installed smart retractable pedals for easier boarding for the handicapped, elderly, and small children. Targets for employing women in administration and operations and construction were also achieved. Women were paid the same rates as men for BRT jobs of equal value. GAP was implemented as planned, with set targets achieved and sex aggregated data collected. The gender and development analysis is in Appendix 10.

J. Safeguards

31. The project was classified as environment and involuntary resettlement category A and as category C for indigenous people.

10 ADB. 2011. Technical Assistance to the People’s Republic of China for the Hubei-Yichang Sustainable Urban Transport Project. Manila.

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32. Environment safeguards. A consolidated environmental impact assessment including an environmental management plan (EMP) was prepared in accordance with ADB’s Safeguard Policy Statement (2009) and disclosed on ADB’s website in June 2013. Relocation of a Hui People’s (Muslim) cemetery was deemed necessary during implementation. A domestic environmental impact assessment registration form for relocation of the cemetery was prepared and approved by Yichang Dianjun District Ecological and Environmental Protection Bureau on 14 July 2016 while following PRC regulations. Detailed information on the relocation was included in the environmental monitoring report disclosed on ADB’s website in September 2016.

33. At the project implementation phase, the IA appointed two staff and engaged an external loan implementation environment consultant to conduct environmental management activities for effective implementation of the EMP. The IA contracted a licensed environmental monitoring company to conduct noise and air quality monitoring monthly during construction, and the monitoring data were included in the semiannual environmental monitoring reports. Contractors also had designated staff responsible for mitigating the potential impacts on water, soil, air quality, and acoustic environment. During operation, the Yichang Ecological and Environmental Protection Bureau conducted regular air quality monitoring along the BRT corridor and Dongshan 4th Road alignment. A range of good engineering practices incorporating environmental protection measures were adopted during construction and operation. No unexpected adverse environmental impacts other than those predicted in the original EMP were identified. The IA confirmed that no environmental safeguard-related complaints had been received during project implementation. Eight environmental monitoring reports were prepared and disclosed on ADB’s website. ADB’s review missions and monitoring results indicated overall implementation of the project’s EMP to be satisfactory. At the time of the project completion review mission, there were no pending environmental safeguard-related noncompliance issues.

34. Baseline environmental monitoring information was collected at appraisal. YMUCID and YPMO conducted independent monitoring and reporting of environmental impacts associated with implementation. YPMO coordinated implementation of the EMPs and the environmental mitigation activities, including to obtain permissions as needed in compliance with national regulations. The project management consultants supervised environmental protection activities at all construction sites. The detailed environmental impact analysis is in Appendix 11.

35. Involuntary resettlement. At appraisal, resettlement impacts were identified, and one resettlement plan was prepared in accordance with the PRC laws and regulations and ADB’s Safeguard Policy Statement (2009) in April 2013. The resettlement plan for the BRT component and western section of Dongshan 4th Road (Fazhan Avenue–Bolinhe Road) was updated by the IA and approved by ADB. It was disclosed to the affected persons and on ADB’s website in March 2014.

36. A grievance redress mechanism was set up and publicized among affected persons. The project’s LAR was in complete compliance with the resettlement plan. It was verified that all affected households have restored their income and all relocated households have improved their houses. Gradually rising income levels of the affected households and improved housing quality and living environments of those affected by house demolition indicate that the affected persons are better off than they were before the project. No complaints, grievances, or other concerns were noted.

37. At the time of the project completion review mission, all affected persons had been compensated according to the resettlement plan. Agricultural, vocational, labor, and business start-up trainings have been provided to 806 participants by the local government. A total of 152

8 affected persons were hired during construction period. All affected households had been relocated to the new houses except 14 affected households in Heihushan village. Although the main structure of Heihushan resettlement community has been completed, the natural gas, pipe water, greening, and parking lots have not been completed as required before building acceptance. The resettlement community is expected to be completed and accepted before July 2021. The detailed LAR and social impact analysis are in Appendix 12.

38. Indigenous peoples. The project was classified as category C for indigenous peoples.

K. Monitoring and Reporting

39. The government and EA complied with all applicable loan covenants. Of 90 specific covenants, 88 were complied with and 2 were not applicable as there was neither change in ownership nor amendment of the IA’s constitutional document. Appendix 13 details the compliance status for loan and project agreement covenants.

40. Annual progress reports were submitted on time, but submission of audited project financial statements for the loan was delayed. All audited project financial statements for FY2014– FY2018 had unqualified auditor’s opinions. Moreover, the safeguard monitoring reports on environment and resettlement were submitted on time and uploaded to ADB’s website.

III. EVALUATION OF PERFORMANCE

A. Relevance

41. The project is rated highly relevant at both appraisal and completion, as it has delivered its intended outcome and outputs to provide an efficient, inclusive, and sustainable transport system in Yichang delivering efficient passenger and freight transport. While citywide bus ridership declined, BRT ridership increased by 149%. The project was fully aligned and consistent with ADB’s Strategy 2020; the PRC Country Partnership Strategy 2012–2016; the government’s development strategy; and the Thirteenth Five-Year Plan for green, low carbon, and livable cities. The project contributed directly to this goal. CO2 reductions totaled 42,480 tons of CO2 equivalent (tCO2e) in 2019 from 5,300 tCO2e in 2011. The socioeconomic impact of the project is positive and is expected to increase further in the future.

42. The project was successfully completed through the joint efforts of all stakeholders. The project can be considered a successful example of BRT and urban infrastructure construction. Yichang City’s outstanding achievements in sustainable transportation reform, such as BRT, public transport-oriented development, bicycle promotion, and full implementation of parking management, won it the “World Sustainable Transport Award” on 13 January 2016.11 In addition, the project was recognized with the “Best Urban Transport Innovation” award in 2019 from the Ministry of Transport and “Advanced Demonstration City for Promoting China BRT” in 2018 by the Ministry of Housing and Construction.

43. Model BRT and demonstration project. In addition, the project had substantial demonstration value for other ADB-funded and non-ADB-funded BRT projects in the PRC and elsewhere. The Yichang BRT project truly exemplifies a successful demonstration project. Not only has it won several international and national awards, but between 2014 and 2019, Yichang

11 The “World Sustainable Transport Award,” which is presented annually, is an important international award intended mainly to recognize sustainable transportation achievements of cities around the world in the past year.

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City also hosted 268 delegations from 91 countries wanting to learn more about this model BRT project. Moreover, the project includes several examples of innovative features adopting new technologies. Appendix 14 lists all delegations that have visited the Yichang BRT.

44. The project has also demonstrated success in the willingness of citizens to change their transportation habits and behaviors. A BRT Impact Assessment Survey in November 2018 shows a 38% change in transport mode from private vehicles and taxis to BRT among current BRT users. 12 This has greatly contributed to CO2 reduction.

45. Innovation. The project features several innovations:

(i) Ninety percent of the base course used recycled concrete in the construction of the Dongshan 4th Road; (ii) A new pavement technology, which uses black steel reinforcement at start/stop point for buses at stations and traffic lights to ensure durability was implemented; (iii) Intelligent information systems for boarding and alighting at BRT buses were installed in Pinghu Square station, this was the first station of its kind; (iv) Using plants and artificial soil for slope protection. Today, these plants have already grown to about 3 m; (v) All 23 stations use split BRT station design which allows the buses to stop simultaneously from both directions while still maintaining a through bus lane; (vi) Two-meter NMT bike lanes all along the BRT corridor provide improved accessibility and reduced carbon emissions; and (vii) While traffic signals at intersections in other areas use the four-way signaling system, traffic management along the BRT corridor intersections was established using a two-way traffic signaling system and banning left turns.

These innovative features have contributed greatly to traffic efficiency, reduced congestion, and improved the city’s image as clean, efficient, and accessible. Emergency response times also improved because ambulances and firefighters can use the BRT lane.

B. Effectiveness

46. The project is rated highly effective, as all outcome and output targets were met. With successful implementation of the BRT system and road network improvements, an efficient passenger and freight transport system has been provided in Yichang.

47. The target to have a 23.9 km BRT system operating by 2017 was achieved. The service covers all six major districts in Yichang with daily operation of 350 buses and daily frequency of 500 buses covering 68,000 km. Daily BRT ridership is 270,000 passengers, which is about 60% of total daily bus ridership in Yichang. Cumulative BRT operation since inauguration is 83 million km and 310 million passengers. Each BRT station is a transfer hub where passengers can enjoy free transfer. Routes increased after 4 years of operations to one trunk corridor and 36 branch feeder corridors (from 360 km to 429 km). As a result, 90% of the inner city can be reached within 30 minutes.13 Priority seating for people with special needs (pregnant women, children, elders, and disabled) were also provided in all BRT buses. A total of 20% of BRT passengers had shifted

12 Institute for Transportation and Development Policy. 2018. Yichang BRT Impact Assessment. Yichang. 13 Yichang Bus Company. See also footnote 12.

10 from private vehicles and taxis to BRT in 2015; in 2018, this number had increased to 38%. This represents a total reduction of 50,000 vehicle trips per day.14

48. A fare collection system was also developed whereby the tariff fare was adjusted to CNY2 (CNY1.60 when using smart card) in July 2015 (footnote 12). Preferential pricing for the elderly and students attracted more passengers. The network’s optimization has taken out repetitive corridors and reduced the need for 70 buses, resulting in reduced CO2 emissions and public transport efficiencies.

49. To improve connectivity, public NMT improvements were provided as planned. Pedestrian and bicycle lanes were provided along the BRT corridor and bicycle-sharing stations were built along the BRT corridor by 2017.

50. Parking management measures for BRT corridor were implemented, and significant results were achieved by 2017. Prior to instituting parking control, there had been approximately 1,000 parking spaces along the corridor from Gezhouba station to East Railway Station, and many illegal parking spaces occupied the sidewalk and bike lane. After the BRT began operating, the traffic police conducted site investigation and coordination, removing approximately 600 parking spaces. All the illegal parking spaces occupying the bicycle lane and sidewalk were eliminated.

51. The GAP was implemented successfully. At project completion, the BRT system employed 123 female drivers out of 609 (20%); 157 female attendants out of 227 working in ticketing and fare collection (69%); and 15 women out of 29 in administrative, technical, and management positions (52%).15 In 2017, 24 unskilled workers were employed in Dongshan 4th Road section, of which, 4 were women (17)%, and 11 were local labors (46%). In 2017, 51 unskilled workers were employed in Yemingzhu Road section (BRT), of which 10 were women (20%). All 51 were employed from the local population. BRT bus drivers and conductors were trained as to the safety needs of women, and the EA and IA staffs were trained on GAP implementation.16

52. Due to the road network improvements, freight travel time between inland ports and logistics centers was reduced by 76.7% in 2018 compared to 2011. Likewise, the pass-dam transshipment freight travel time to logistics centers was reduced from 2 hours in 2011 to 0.47 hour in 2018. The outer ring road was completed by January 2020. Because logistics vehicles have thereby been able to bypass the urban area and reach the port, the logistics efficiency has greatly improved.17

53. Bus traffic speed on Dongshan Avenue increased from baseline 15 kilometer per hour (km/h) in 2011 to 25 km/h by 2018 achieved for non-peak hours. Average peak hour BRT speed reached a high of 19.46 km/h in 2016 and averaged 18.30 km/h in 2019.18 Passenger travel time to bus stop was reduced from 20 minutes in 2011 to 10.73 minutes in 2018.19

54. Training conducted under the loan has strengthened capacities of the relevant institutions involved in project management, BRT systems operation and management, and road network O&M.

14 The survey was done along BRT corridor in 2015 and 2018. The mode share survey consisted of a questionnaire for BRT passengers, with a sample of 1,000 passengers. See also footnote 12. 15 Yichang Bus Company Staff Attendance Report, October 2019. 16 HJI Group Corporation. 2018. Summary of GAP Monitoring. Los Angeles. 17 HJI Group Corporation. 2018. Annual Project Performance Monitoring Report (Phase III). Los Angeles. 18 Yichang Bus Company’s on-bus GPS data. See also footnote 12. 19 HJI bus stop surveys in 2016 and 2018. See footnote 17.

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C. Efficiency

55. The project is rated highly efficient because the project outcome was achieved with efficient use of resources, at a project cost lower than estimated, and the project remained economically viable at completion. The project delivered the envisaged project outcome.

56. Economic efficiency at completion. At completion, the project was evaluated as viable. Its economic internal rate of return was 21.68%, much higher than the 17.8% at appraisal. Sensitivity analysis showed the project to remain economically robust under various unfavorable scenarios. The economic reevaluation updated the project economic analysis with actual implementation costs and benefits at 2018 prices. It was made following ADB’s Guidelines for Economic Analysis of Projects (2017). The economic reevaluation is in Appendix 15.

57. Assessment of process efficiency. The organizational setup, management, and approval processes of YMG, Yichang Project Leading Group, and YPMO were adequate and met the project’s requirements. The process efficiency was as expected, and no significant delays occurred during project implementation. The originally planned outputs were achieved by or before the project schedule dates.

D. Sustainability

58. The project is rated likely sustainable. A financial reevaluation of the project was conducted to determine financial sustainability, including to assess the fiscal capacity of YMG after project completion. The financial reevaluation was conducted in accordance with ADB guidelines20 and due diligence methodology.21 The financial projections are based on updated information from and concerning YMG, BRT operations, subsidy and transfers, ADB loan debt servicing, and projected O&M costs.

59. Overall, the financial reevaluation found that the project is sustainable, showing a financial internal rate of return (FIRR) of 2.53% that exceeds the weighted average cost of capital of 0.69%. YMG’s fiscal budget can finance the debt repayment and the required subsidy to the Yichang Public Transport Group to sustain its yearly O&M budget requirement. The FIRR at appraisal, 4.80%, was higher than at completion mainly due to a passenger traffic forecast at appraisal more optimistic than is actual bus ridership. BRT ridership will potentially decline due to the COVID-19 pandemic. With a 10% decrease in ridership, FIRR will be 0.78% and still higher than the weighted average cost of capital. With a 75% decrease of ridership in 2020 due to the lockdown for about 3 months in Hubei, the FIRR will be about 2.10%. The financial reevaluation is in Appendix 16.

60. Environmental sustainability. No unexpected adverse environmental impacts other than those predicted in the original EMP were identified. Air quality in Yichang has greatly improved after BRT. As an example, particulate matter 2.5 micrometers and smaller (so-called PM2.5) in 2018 was 53 mg/m3, down by 40% from 93 mg/m3 in 2014. The Yichang Ecological and Environmental Protection Bureau performed a source analysis of PM2.5 and found that 25–30% derives from vehicle exhaust. BRT has contributed greatly to PM2.5 emissions reduction, although a change in national emissions standards encouraging use of cleaner-fuels vehicles also has had an impact. Moreover, the project has exceeded expectations by contributing to significant savings of 42,480.17 tCO2e. Appendix 17 provides detailed CO2 calculations.

20 ADB. 2005. Financial Management and Analysis of Projects. Manila. 21 ADB. 2009. Financial Due Diligence-A Methodology Note. Manila.

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61. Institutional sustainability. The trainings and consulting services provided have strengthened the financial management, project management, and performance management capabilities of the various institutions involved, including YMG, Yichang Bus Group, YMUCID, and PMO. The training programs enhanced the staffs’ technical, operational, and managerial capabilities, as well as the gender and environmental consciousness.

E. Development Impact

62. The project’s impact is rated highly satisfactory. The completed 23.9 km BRT and 23.4 km road network improvement not only have provided an efficient, inclusive, and sustainable urban transport system in Yichang but also improved the efficiency of freight logistics.

63. Socioeconomic impact. The project has made significant contributions to improved living conditions, environmental quality, and sustainable economic growth. The improved connectivity has provided better access to markets, employment opportunities and schools, hospitals, and social services. There are 2.4 million beneficiaries from the project, of which 1.1 million are women.

64. Introduction of the BRT and NMT measures, such as dedicated bicycle and pedestrian lanes and parking management along Dongshan Avenue, also have contributed to a sharp decrease in traffic accidents and fatalities. Fatalities due to accidents declined by 85% from 2011 to 2019.22

65. Project operation impact. The project has achieved its intended impact and has contributed to an efficient, inclusive, and sustainable transport system in Yichang.

66. Bus passenger annual ridership in the citywide bus system decreased by 15% from 2015 to 2019. Similar to many Chinese cities, Yichang has experienced a decrease in bus ridership over the past 5 years. Nevertheless, bus ridership on the BRT saw a sharp increase from 38.6 million passengers at launch in 2015 to 96.2 million passengers in 2019. Moreover, pass-dam transshipment freight grew by 30% (130.5 million tons, 2016) compared with 2011.23

67. Design innovations. The Yichang BRT has a unique design with several innovative features. One of the most successful features is the use of split BRT stations. Another design innovation provides that all BRT stations in Yichang are enclosed and access-controlled. Riders must pay the bus fare or use their transport cards to get into the station through BRT pedestrian crossings, pedestrian overpasses, or tunnels. Lessons learned from other BRTs in the PRC showed access control for the BRT bus stations to be quite important for ensuring pedestrian safety. Moreover, the BRT bus system is equipped with an advanced information system whereby the real-time bus operation status is displayed on buses as well as at bus stations so that riders can obtain real-time bus running status and make better decisions on bus transfer or changing route if necessary. The bus control center, as well as the bus drivers, can communicate and make real-time adjustments of schedule, stops, or other changes as needed based on the real-time bus operation situation. Successful use of the information system is further improved by a mobile application that enhances bus operation efficiency.

22 Yichang Municipal Traffic Police data. 23 Footnote 17 based on Sanxia (Three Gorges) Navigation Administration Bureau’s pass-dam transshipment freight data. From 2017, this data is classified and can no longer be obtained.

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F. Performance of the Borrower and the Executing Agency

68. The performance of the Ministry of Finance as the borrower is rated satisfactory. The borrower provided timely guidance and approvals for implementation issues. YMG lent its full support throughout project implementation and its performance as EA is rated satisfactory. The loan and project agreements were signed and became effective as scheduled. The project was implemented as planned, and YMUCID’s performance as IA was also satisfactory. The progress, quality, and project cost were well controlled. Many experienced IA staff worked together to effectively manage the subprojects for which they were responsible. Counterpart funds were also sufficient and provided in a timely manner.

G. Performance of the Asian Development Bank

69. ADB’s performance during project preparation and in project monitoring was satisfactory. The routine and serious project site inspections demonstrated ADB’s efforts in monitoring the project’s progress. Close coordination and frequent communication with the borrower and EA allowed for timely resolution of all implementation issues and facilitated project implementation. ADB approved all relevant procurement packages and processed withdrawal applications promptly for the timely disbursement of funds and reallocation of loan proceeds. YMG, the PMO, and IA expressed their appreciation for the timely action taken by ADB to resolve the issues in project implementation.

H. Overall Assessment

70. Overall, the project is rated highly successful. The project formulation and designs were relevant to both the PRC government and ADB’s development strategies. The intended project outcome has been achieved, and the main infrastructure outputs were delivered effectively. The roads, BRT, and advanced traffic management systems contributed toward improved public transportation in Yichang, where 90% of the city can be reached by the BRT trunk line and feeder roads within 30 minutes. Substantial greening and landscaping, as well as NMT have been carried out, improving urban livability for Yichang’s residents. The success of the long-term impacts of the project, including CO2 emissions reduction, is already being seen and is likely to be fully achieved. The implementation arrangements were effective, including environmental mitigation measures, and the LAR was implemented to the satisfaction of the affected persons. The project facilities are likely to be effectively operated and adequately maintained and, therefore, to be sustainable. The project effectively supported socioeconomic growth in Yichang through significant improvements to the road network, public transport system, intelligent transport systems, and advanced traffic management and environmental monitoring systems.

71. The project has brought substantial socioeconomic impacts in the project areas. The project is rated highly effective in achieving its outcome and highly efficient in achieving its outcome and outputs. The recalculated economic internal rate of return of 21.68% is robust and indicates that the project is economically viable. The project is rated likely sustainable with a significant positive impact on the economy and proper safeguards.

14

Overall Ratings Criteria Rating Relevance Highly relevant Effectiveness Highly effective Efficiency Highly efficient Sustainability Likely sustainable Overall Assessment Highly successful Development impact Highly satisfactory Borrower and executing agency Satisfactory Performance of ADB Satisfactory ADB = Asian Development Bank. Source: Asian Development Bank.

IV. ISSUES, LESSONS, AND RECOMMENDATIONS

A. Issues and Lessons

72. BRT is very well suited to medium-sized cities like Yichang, but long-term sustainability depends on effective O&M and strong management support. This is key to maintaining the project’s status as a model BRT and demonstration project.

73. While the NMT benefits of the project have been significant and contributed to a greener, livable Yichang and an efficient urban transport system in the city, parking management along the BRT corridor needs to be strengthened to maintain initial gains. In the past year, cars are again being parked along the dedicated pedestrian walkways. Better enforcement is needed to reverse this trend.

74. Full support from city government and ADB throughout planning and implementation. There was initial resistance to the BRT concept and also challenges during the construction period. These challenges were overcome through Institute for Transportation and Development Policy and ADB cooperation in showcasing other successful examples of BRT solutions from around the world. A key element of the project’s success is the firm commitment of project advocates. YMG, the PMO, IA, and all relevant parties were committed to achieving the target output. Therefore, the implementation of the project was in line with the project objectives; strictly adhered to ADB’s guidelines and procedures; and proceeded with effective supervision, monitoring, and cost control.

75. Full-scale public involvement program. A full-scale public involvement program was implemented during project construction and the BRT bus trial operation period to gain support from the public and encourage people to use the system. The public participation program included media coverage; a public hearing; education programs; as well as a webpage to provide detailed information on BRT design, construction, and operation. Many volunteers were recruited to assist BRT riders, especially during the early stage of BRT operation. The public involvement program was a key element to ensure successful implementation of the project. Because of this, habits and behaviors (especially of private car owners) have changed, and 38% of current BRT riders have shifted from private cars or taxis to using the BRT. This has contributed to the success in reducing congestion and public transport efficiency but also in improving the environment and the city’s livability.

76. Fast-track construction. Building the BRT project took less than 1 year from the start of construction until opening to the public for trial operation. Such construction typically takes 2 to 3 years even assuming all resettlements and coordination with other agencies had been completed before the building starts. The BRT could be fast-tracked because of close coordination between

15 the city government and the project leading group and proactive project management capabilities of the EA, IA, and the PMO. An advantage of speedy construction is that it has less negative impact on residents and traffic in the project area. This also aids in cost control due to there being fewer changes during construction.

B. Recommendations

77. During project preparation, geological exploration, urban underground pipeline exploration, detailed design, drawing review, bidding document review, and bid evaluation should be carried out carefully and according to the actual situation of the project site in order to minimize project costs and contract changes during the project implementation phase.

C. Follow-Up Actions

78. The needed follow-up actions are (i) accelerate completion of the Heihushan resettlement community’s construction so that the resettlement housing can be handed over to the 14 affected households by July 2021; (ii) strengthen information disclosure of resettlement community construction progress to the affected households; and (iii) monitor the progress of transition subsidy payments to affected households, pay close attention to the living conditions of affected households, and provide support to the affected households if necessary. YMUCID will monitor progress of remaining resettlement for at least 2 years after circulation of the project completion report and will submit semiannual monitoring reports to ADB starting April 2021. It is expected that relocation of the 14 households will be concluded within the next 2 years, and the status will be reported in the semiannual monitoring reports.

79. Timing of the project performance evaluation report. It is recommended that the project performance evaluation report be prepared in 2021, 3 years after project completion.

16 Appendix 1

DESIGN AND MONITORING FRAMEWORK Performance Targets and Design Summary Indicators with Baselines Completion by 2017 Impact Efficient, inclusive, and Bus passenger annual ridership Partly achieved. sustainable transport increased by 30% by 2020 City wide bus ridership dropped by 15% to system in Yichang (Baseline: 179.1 million in 2011) 152 million (2019).

BRT ridership increased by 149% from 38.6 million to 96.2 million (2019). Pass-dam transshipment freight Achieved. Pass-dam transshipment freight increased by 25% by 2020 from in 2016 increased by 30% from 2011. 2011 Average concentration of CO2 in air Achieved. CO2 emission reduction of Yichang will stay at current level achieved was 42,480 tCO2e in 2019. in 2020 (around 5,300 ton in 2011) Outcome Bus traffic speed on Dongshan Achieved. Bus traffic speed increased to 25 Efficient passenger Avenue increased to 25 km/h by kph in 2018 an increase of 67% from 2011 and freight transport 2018 from 15 km/h in 2011 values. Passenger travel time to bus stop Achieved. Passenger travel time to bus reduced to 10 minutes in average stop decreased to 10.73 minutes in 2018. by 2018 from 20 minutes in 2011 Freight travel time between inland Achieved. Freight travel time between ports and logistics centers reduced inland ports and logistics centers reduced by 20% by 2018 from 2011 by 76.7%. Pass-dam transshipment freight Achieved. Pass-dam transshipment freight travel time to logistics centers travel time to logistics centers reduced to. reduced to 1 hour in 2018 from 0.47 hours. 2 hours in 2011 Outputs 1. Bus rapid transit 23.9 km BRT system operating by Achieved. All 23.9 km BRT corridor was put corridor 2017 into operation. Priority seating for people with Achieved. 3 seats and 3 backrests in each special needs (pregnant women, BRT platform and 5 seats in orange red children, elders, and disabled) in all color in each BRT bus provided. BRT buses Parking management measures for Achieved. Provision of parking facilities for BRT corridor provided by 2017 bicycles and vehicles and ban of parking along major thoroughfares along the BRT corridor were some of the measures implemented. Employment targets for women – Achieved. 123 female drivers out of 609 or 20% unskilled construction jobs, 20%; 157 female attendants out of 227 20% BRT drivers, 50% ticketing, ticketing and fare collection works or 69%; fare collection and administrative and 15 women out of 29 administrative, work technical and management staff or 52%.

2. Nonmotorized Pedestrian and bicycle facilities Completed. Dedicated, safe right-of-way” transport measures provided along BRT corridor by with pedestrian and bicycle lanes of 40 km 2017

Appendix 1 17

Performance Targets and Design Summary Indicators with Baselines Completion by 2017 and 30 km respectively along BRT corridor; 14.17 km of green roads or bicycle lane in Canal Park, along the Yangtze River and under Xiling 2nd Road viaduct; pedestrian crossings at 81 location; 28 public bicycle stations with about 700 bicycles, private bicycle parking places at 24 locations with over 400 parking racks, wind and rain corridors of 476 m at 3 BRT stations. Bicycle sharing stations built along Completed. Operating since March 2017. BRT corridor by 2017 3. Road network A total of 23.4 km new urban road Completed. 12.2 km of Fazhan Avenue– improvement constructed by 2017 Bolinhe Road Section (phase 1); (i) improvement of 12.2 km of 11.2 km Bolinhe Road to Xianfeng Road Fazhan Avenue–Bolinhe Road (phase 2) was cancelled from ADB loan Section (phase 1) to a road width of project and was funded by domestic funds. 44–70 m; and (ii) improvement of the 11.2 km Bolinhe Road to Xianfeng Road (phase 2) to Class 1 highway, with road width of 24.5 m. The output includes 11 bridges and two tunnels. Women obtain at least 20% Achieved. 20% women employed in unskilled construction and post- unskilled construction jobs. construction jobs. 4.Capacity building EA and IA on project management Completed in 2015 (96 participants, 24% and quality assurance and implementation are trained by female). 2016 Concerned agencies in Yichang on Completed in 2016 (147 participants, 31% traffic management, road safety women). and BRT operation and management are trained by 2016 BRT bus drivers and conductors Completed in 2015 (3500, 50% women). are trained on safety needs of women by 2016 Key EA/IA staff is trained on GAP Completed in 2015 (6 participants, 17% implementation by 2017 women). BRT = bus rapid transit, CO2 = carbon dioxide, EA = executing agency, GAP = gender action plan, IA = implementing agency, km = kilometer, km/h = kilometer per hour, m = meter, tCO2e = tons of CO2 equivalent. Source: Asian Development Bank.

18 Appendix 2

PROJECT COST AT APPRAISAL AND ACTUAL

Table A2.1: Project Cost at Appraisal and Actual ($ million) Appraisal Estimate Actual Foreign Local Total Foreign Local Total Item Exchange Currency Cost Exchange Currency Cost A. Base Cost 1. Civil Works 55.70 246.90 302.60 0.00 219.00 219.00 a. Dongshan 4th Road 17.50 157.90 175.50 0.00 129.70 129.70 b. Bus Rapid Transit and NMT Improvement 38.10 89.00 127.20 0.00 89.30 89.30 2. Goods and Equipment 11.80 11.80 23.60 0.00 21.20 21.20 3. Land Acquisition and Resettlement 0.00 74.70 74.70 0.00 73.50 73.50 4. Capacity Building and Quality Assurance 2.00 0.00 2.00 1.50 0.00 1.50 5. Design, Project Management, and Supervision 0.00 31.40 31.40 0.00 10.40 10.40 a. Design and Project Management 0.00 26.50 26.50 0.00 6.70 6.70 b. Consulting Service on Project Supervision 0.00 4.90 4.90 0.00 3.70 3.70 Subtotal (A) 69.50 364.80 434.40 1.50 324.10 325.60 B. Contingencies 0.00 68.50 68.50 0.00 0.00 0.00 C. Financing Charges During Implementation 1. Interest Charges During Implementation 11.90 0.00 11.90 16.30 19.00 35.30 2. Commitment Charges 0.30 0.00 0.30 0.30 0.00 0.30 Subtotal I 12.20 0.00 12.20 16.60 19.00 35.60 Total (A+B+C) 81.70 433.30 515.10 18.10 343.10 361.20 NMT = nonmotorized transport. Source: Asian Development Bank estimates.

Table A2.2: Financing Plan at Appraisal and Actual ($ million) At Appraisal At Completion Source Amount ($) % Amount ($) % Asian Development Bank 150.00 29.12 150.00 41.53 Domestic Bank (ICBC) 210.60 40.89 196.60 54.43 Yichang Municipal Government 154.50 29.99 14.60 4.04 Total 515.10 100.00 361.20 100.00 Sources: Asian Development Bank and Yichang Municipal Government.

Appendix 3 19

PROJECT COST BY FINANCIER

Table A3.1: Project Cost at Appraisal by Financier ($ million) ADB YMG Local Bank Loan % of % of Cost Cost % of Cost Total Amount Category Amount Category Amount Category Costa Item {A} {A/D} {B} {B/D} {C} {C/D} {D} a A. Base Cost 1. Civil Works 131.5 43.4 69.6 23.0 101.6 33.6 302.6 a. Dongshan 4th Road 42.4 24.2 53.9 30.7 79.2 45.1 175.5 b. Bus Rapid Transit and NMT Improvement 89.0 76.0 15.7 12.0 22.4 18.0 127.2 2. Goods and Equipment 16.5 70.0 2.8 12.0 4.3 18.0 23.6 3. Land Acquisition and Resettlement 0.0 0.0 29.9 40.0 44.8 60.0 74.7 4. Capacity Building and Quality Assurance 2.0 100.0 0.0 0.0 0.0 0.0 2.0 5. Design, Project Management, and Supervision 0.0 0.0 12.6 40.0 18.8 60.0 31.4 a. Design and Project Management 0.0 0.0 10.6 40.0 15.9 60.0 26.5 b. Consulting Services on Project Supervision 0.0 0.0 2.0 40.0 2.9 60.0 4.9 Subtotal (A) 150.0 34.5 114.9 26.4 169.5 39.0 434.4 B. Contingencies Subtotal (B) 0.0 0.0 27.4 40.0 41.1 60.0 68.5 C. Financial Charges During Implementation 1. Interest During Implementation 0.0 0.0 11.9 100.0 0.0 0.0 11.9 2. Commitment Charges 0.0 0.0 0.3 100.0 0.0 0.0 0.3 Subtotal I 0.0 0.0 12.2 100.0 0.0 0.0 12.2 Total Project Cost (A+B+C+D) 150.0 154.5 210.6 515.1 % Total Project Cost 29.1 30.0 40.9 100.0 ADB = Asian Development Bank, NMT = nonmotorized transport, YMG = Yichang Municipal Government. Source: Asian Development Bank.

20 Appendix 3

Table A3.2: Project Cost at Completion by Financier ($ million) ADB YMG Local Bank Loan % of % of Cost Cost % of Cost Total Amount Category Amount Category Amount Category Cost Item {A} {A/D} {B} {B/D} {C} {C/D} {D} a A. Base Cost 1. Civil Works 135.1 61.7 0.0 0.0 83.9 38.3 219.0 a. Dongshan 4th Road 63.7 49.1 0.0 0.0 66.0 50.9 129.7 b. Bus Rapid Transit and NMT Improvement 71.4 80.0 0.0 0.0 17.9 20.0 89.3 2. Goods and Equipment 13.4 63.2 0.0 0.0 7.8 36.8 21.2 3. Land Acquisition and Resettlement 0.0 0.0 14.6 19.9 58.9 80.1 73.5 4. Capacity Building and Quality Assurance 1.5 100.0 0.0 0.0 0.0 0.0 1.5 5. Design, Project Management, and Supervision 0.0 0.0 0.0 0.0 10.4 100.0 10.4 a. Design and Project Management 0.0 0.0 0.0 0.0 6.7 100.0 6.7 b. Consulting Services on Project Supervision 0.0 0.0 0.0 0.0 3.7 100.0 3.7 Subtotal (A) 150.0 46.1 14.6 4.5 161.0 49.4 325.6 B. Contingencies Subtotal (B) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 C. Financial Charges During Implementation 1. Interest During Implementation 0.0 0.0 0.0 0.0 35.3 100.0 35.3 2. Commitment Charges 0.0 0.0 0.0 0.0 0.3 100.0 0.3 Subtotal I 0.0 0.0 0.0 0.0 35.6 100.0 35.6 Total Project Cost (A+B+C+D) 150.0 14.6 196.6 361.2 % Total Project Cost 41.5 4.0 54.4 100.0 ADB = Asian Development Bank, NMT = nonmotorized transport, YMG = Yichang Municipal Government. Source: Asian Development Bank.

Appendix 4 21

DISBURSEMENT OF ADB LOAN PROCEEDS

Table A4: Annual and Cumulative Disbursement of ADB Loan Proceeds ($ million) Annual Disbursement Cumulative Disbursement Amount Amount Year ($ million) % of Total ($ million) % of Total 2014 40.99 27.34 40.99 27.34 2015 58.35 38.92 99.34 66.26 2016 22.87 15.26 122.21 81.51 2017 20.00 13.34 142.21 94.85 2018 7.79 5.19 150.00 99.95 2019 (0.07)a (0.04) 149.93 100.00 Total 149.93 100.00 149.93 100.04 ADB = Asian Development Bank. a Amount refunded. Source: Asian Development Bank.

Figure A4: Projected and Actual Disbursement of ADB Loan Proceeds ($ million)

160.00

140.00

120.00

100.00

80.00

60.00

40.00

20.00

0.00 2013 2014 2015 2016 2017 2018 2019

Disbursement Projection Cumulative Disbursement

22 Appendix 5

CHRONOLOGY OF MAIN EVENTS

DATE EVENTS A. GENERAL 2012 5–12 Dec Loan fact-finding mission fielded 2013 16 Apr Management review meeting held

25–26 Jun Loan negotiations 17 Jul Advance contracting and retroactive financing approved 21 Aug Loan approved

22–26 Oct Loan consultation mission fielded 30 Oct Loan signing

19 Nov ADB approval of US study tour comprising senior officials of the YMG to visit NMT and BRT facilities from 20 November to 29 November 2013 2014 6 Jan Loan effectiveness 2–4 Jul First loan review mission fielded 4 Jul First loan reallocation and increase of ADB financing percentages for works approved 22–24 Sep Loan inception mission fielded 15 Dec Second loan review mission fielded 2015 19 Jan ADB approval of US study tour comprising senior officials of the YMG to visit NMT and BRT facilities from 22 March to 31 March 2015 15–17 Jul Third loan review mission fielded 2016 4–8 Jul Social safeguards review mission fielded 14–15 Nov Midterm loan review mission fielded 2017 14–16 Aug Fourth loan review mission fielded 1–3 Nov Fifth loan review mission fielded 16 Nov Minor change memo to remove the imprest account ceiling of 10% approved 20 Nov ADB no objection to the YCJT request for removal of the imprest account ceiling provided 23 Nov ADB approval of contract variations for three BRT contracts per YCJT request received on 25 October 1 Dec Request for approval to remove project imprest account ceiling and $20 million withdrawal application for contract variations sent to Hubei Provincial Finance Department 2018 17–21 Sep Sixth loan review mission fielded 12 Nov MOF request of 9 November 2018 for reallocation of loan proceeds and increase of ADB disbursement percentage received 21 Nov Reallocation of loan proceeds and increase of ADB disbursement percentage approved 31 Dec Loan closing 2019 25 Apr Yichang PMO request for extension of the loan winding-up period by 3 months received 26 Apr Extension of loan winding-up period from 30 April 2019 to 31 July 2019 approved 25 Nov–2 Dec Project completion review mission fielded 2020 20 Jan Financial closing of loan account

Appendix 5 23

DATE EVENTS

B. PROCUREMENT H1-A-C01: Xiduan I Bridge Construction Phase 1, H1-A-C02: Xiduan I Bridge Construction Phase 2, H2-A-C02, H2-B- C01: Jiangjun Rock–Xilinger Road, and H2-B-C03: Gangyao Road–East Railway Station using ICB 2013 10 Dec Draft BD submitted to ADB 18 Dec Draft BD circulated to OSFMD and OGC for comments 2014 7 Jan ADB comments (first) on draft BD sent 16 Jan Revised draft BD submitted to ADB 28 Jan ADB final comments (second) and conditional approval of the revised BD sent 30 Jan IFB advertised in www.chinabidding.com and ADB website 4 Apr PC paper on draft TBER circulated to OSFMD and OGC for comments 11 Apr OGC comments on draft TBER received 27 Mar Draft BER submitted to ADB 2 Apr Revised BER submitted to ADB 15 May Revised PBER submitted to ADB 6 Jun ADB approved contract awards 19 Jun Contracts signed 7 Jul Signed contracts received by ADB H1-A-C03: Xiduan I Tunnel Works and H2-B-C02: Xilinger–Gangyao BRT Corridor Road Reconstruction 2013 23 Sep Draft BD submitted to ADB 2 Oct Draft BD circulated to OSFMD and OGC for comments 11 Oct OGC comments on draft BD received 29 Oct Revised draft BD submitted to ADB 31 Oct ADB comments on revised BD sent 4 Nov Revised draft BD submitted to ADB 5 Nov ADB final comments (second) and conditional approval of the revised BD sent 7 Nov IFB advertised in www.chinabidding.com and ADB website 2014 9 Jan Draft TBER submitted to ADB 20 Jan PC paper on draft TBER circulated to OSFMD and OGC for comments 11 Feb Revised TBER submitted to ADB 17 Feb ADB approved the revised TBERs 21 Feb ADB received the draft PBER for H1-A-C03 and H2-B-C02 28 Feb PC paper on draft PBER circulated to OSFMD and OGC for comments 25 Mar Circulation of draft price bid evaluation reports for H1-A-C03 and H2-B-C02 (ICB, Single Stage Two Envelope) and B02 (NCB, Single Stage One Envelope) and comments received from OGC and PPFD 1 Apr ADB approved contract awards for H1-A-C03 and H2-B-C02 18 Apr Contracts signed for H1-A-C03, H2-B-C02 11 Jun Signed contracts for H1-A-C03, H2-B-C02 received by ADB

24 Appendix 5

DATE EVENTS H2-B-C05A: Traffic Engineering and Police Monitoring; H2-B-C05B: ITS Controlling Engineering; and H2-B-E06: 3 Operation System, Control Center and Electromechanical Engineering 2014 19 Sep Draft BD submitted to ADB 22 Sep Draft BD circulated to OSFMD and OGC for comments 6 Oct ADB comments (first) on draft BD sent 4 Nov Revised BD submitted to ADB 6 Nov ADB final comments and conditional approval of the revised BD sent 2015 16 Feb Revised BER submitted to ADB 17 Feb ADB approved contract awards for the three goods packages 18 Mar Contracts signed for H2-B-C05a and H2-B-C05b 26 May Signed contracts for H2-B-C05a and H2-B-C05b received by ADB 29 Jun Signed contract for H2-B-E06 received by ADB H1-A-C04 2015 20 Jul ADB comments on draft BD for H1-A-C04 provided 18 Sep ADB approved BD for H1-A-C04 23 Sep IFB advertisement for H1-A-C04 30 Oct ADB approved addendum to the BD for H1-A-C04 2016 7 Jan ADB approved contract award for H1-A-C04 (changed from ADB financing to government financing due to significant cost overrun under the equipment category) CS01-B Resettlement and Social, CS03 External Environment Monitoring, and CS04 External Resettlement and Social Monitoring 2014 9 Oct ADB approved contract awards for consulting services CS01-B Jianjun Yin, CS03 Mingtao Nie, CS04 Ming Dong 22 Oct Contracts signed for CS01-B, CS03, CS04 19 Dec Signed contracts for CS01-B, CS03, CS04 received by ADB CS01-C Project Management, Capacity Building, and Quality Assurance-BRT 2015 24 Jul ADB approved contract award for consulting services CS01-C Institute for Transportation and Development 28 Jul Contract signed for CS01-C 29 Jul Signed contract for CS01-C received by ADB CS01-A Project Management, Capacity Building, and Quality Assurance-Main 2015 28 Jul ADB approved contract award for consulting services CS01-A HJI Group Corporation 29 Jul Contract signed for CS01-A 30 Jul Signed contract for CS01-A received by ADB ADB = Asian Development Bank; BD = bidding document; BER = bid evaluation report; BRT = bus rapid transit; ICB = international competitive bidding; IFB = invitation for bid; MOF = Ministry of Finance; NCB = national competitive bidding; NMT = nonmotorized transport; OGC = Office of General Counsel; OSFMD = Office of Services, Financial, and Management Systems Department; PBER = price bid evaluation report; PC = procurement committee; PMO = project management office; PPFD = Procurement, Portfolio, and Financial Management Department; TBER = technical bid evaluation report; US = United States; YCJT = Yichang Jian Tou; YMG = Yichang Municipal Government. Source: Asian Development Bank.

Appendix 6 25

IMPLEMENTATION SCHEDULE PLANNED VERSUS ACTUAL 2013 2014 2015 2016 2017 2018 Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1. BRT Dongshan Avenue Component 1.1 Detailed Design and Resettlement Plan Update (Actual progress) 1.2 Land Acquisition and Resettlement ` (Actual progress) 1.3 Bidding and Contract Award (Actual progress) 1.4 Road Construction (Actual progress) 1.5 Landscaping Works (Actual progress) 1.6 Trial-run (Actual progress)

2. Dongshan 4th Road Component 2.1 Detailed Design and Resettlement Plan Update (Actual progress) 2.2 Land Acquisition and Resettlement (Actual progress) 2.3 Bidding and Contract Award (Actual progress) 2.4 Road and Tunnel Construction (Actual progress) Associated Engineering Works (Traffic 2.5 Engineering) (Actual progress) 2.6 Landscaping Works (Actual progress) 2.7 Trial-run (Actual progress) Capacity Building and Institutional 3. Strengthening 3.1 Recruit Consultant (Actual progress) 3.2 Provided Consultative Services (Actual progress) Source: Asian Development Bank.

26 Appendix 7

ORGANIZATIONAL STRUCTURE

ADB = Asian Development Bank, BRT = bus rapid transit, CCH = Construction Commander Headquarters, EA = executing agency, IA = implementing agency, MOF = Ministry of Finance, NDRC = National Development and Reform Commission, YMG = Yichang Municipal Government, YPMO = Yichang Project Management Office. Source: Yichang Municipal Government.

Appendix 8 27

CONTRACT AWARDS OF ADB LOAN PROCEEDS

Table A8: Annual and Cumulative Contract Awards of ADB Loan Proceeds ($ million) Annual Contract Awards Cumulative Contract Awards Amount Amount Year ($ million) % of Total ($ million) % of Total 2014 135.33 90.26 135.33 90.26 2015 14.60 9.74 149.93 100.00 2016 0.00 0.00 149.93 100.00 2017 0.00 0.00 149.93 100.00 2018 0.00 0.00 149.93 100.00 2019 0.00 0.00 149.93 100.00 Total 149.93 100.00 149.93 100.00 ADB = Asian Development Bank. Source: Asian Development Bank.

Figure A8: Projected and Actual Contract Awards of ADB Loan Proceeds ($ million)

160.00

140.00

120.00

100.00

80.00

60.00

40.00

20.00

0.00 2013 2014 2015 2016 2017 2018 2019

Contract Awards Projection Cumulative Contract Awards

ADB = Asian Development Bank. Source: Asian Development Bank.

28 Appendix 9

CONTRACTS FINANCED BY THE ASIAN DEVELOPMENT BANK Procure- Contract Contract ADB ADB Contract PCSS Date Contract Contract Description ment Contractor/Supplier Value Value Financing Financing No. Nos. Approved Date Mode (CNY) (US$)a (CNY) ($) 01A Works – Dongshan 4th Road Xilinger–Gangyao BRT CCCC Fourth Highway H2-B-C02 0001 Corridor Road ICB 1 Apr 2014 18 Apr 2014 Engineering Bureau 128,535,717.63 18,701,272.73 138,573,819.13 22,352,406.79 Reconstruction Ltd. Shanghai Civil H1-A-C03 0002 Xiduan I Tunnel Works ICB 1 Apr 2014 18 Apr 2014 Engineering Group 121,779,783.53 17,035,949.80 46,819,737.73 7,386,623.31 Co., Ltd. of CREC Xiduan I Bridge CCCC Fourth Highway H1-A-C01 0003 ICB 6 Jun 2014 19 Jun 2014 356,982,422.29 51,880,947.32 185,398,348.89 28,993,290.85 Construction Phase I Engineering Co., Ltd. Xiduan I Bridge CCCC Fourth Highway H1-A-C02 0004 ICB 6 Jun 2014 19 Jun 2014 300,725,025.60 43,704,950.82 174,870,453.08 27,286,693.13 Construction Phase 2 Engineering Co., Ltd. 01B Works – BRT and NMT – East Section (East Railway Station–Jiangjunyan) Jiangjun Rock Xilinger China Gezhouba H2-B-C01 0005 – ICB 6 Jun 2014 19 Jun 2014 105,168,294.68 14,712,144.63 91,394,438.58 14,562,383.36 Road Group Co., Ltd. Hubei Yitong Gangyao Road East H2-B-C03 0006 – ICB 6 Jun 2014 19 Jun 2014 Construction 243,649,566.39 34,084,489.73 241,213,070.73 37,980,256.98 Railway Station Engineering Co., Ltd. 02 Goods and Equipment (including Transportation and Insurance Costs) JV of Fiberhome H2-B- Traffic Engineering and 0010 ICB 17 Feb 2015 18 Mar 2015 Telecom. Tech./Shanxi 49,360,000.00 6,905,041.69 25,660,454.00 3,965,502.34 C05A Police Monitoring Jiaoyan Zhejiang Supcon H2-B- ITS Controlling 0011 ICB 17 Feb 2015 18 Mar 2015 Information Tech. Co., 11,967,115.00 1,674,097.00 7,144,902.45 1,119,448.21 C05B Engineering Ltd. 3 Operation System, Control Center, and 17 Feb Hisense Trans Tech H2-B-E06 0012 ICB 18 Mar 2015 99,270,000.00 13,887,023.67 53,308,484.00 8,274,872.98 Electromechanical 2015 Co., Ltd. Engineering 03 – Capacity Building and Quality Assurance External Environment CS03 0007 ICS 9 Oct 2014 22 Oct 2014 Mingtao Nie 0.00 62,656.00 0.00 62,656.00 Monitoring External Resettlement CS04 0008 ICS 9 Oct 2014 22 Oct 2014 Ming Dong 0.00 93,983.00 0.00 93,983.00 and Social Monitoring CS01-B 0009 Resettlement and Social ICS 9 Oct 2014 22 Oct 2014 Jianjun Yin 0.00 56,390.00 0.00 56,390.00 Project Management, Institute for 24 Jul CS01-C 0013 Capacity Building, CQS 28 Jul 2015 Transportation and 0.00 137,000.00 0.00 137,000.00 2015 Quality Assurance-BRT Development Project Management, 28 Jul CS01-A 0014 Capacity Building, QCBS 29 Jul 2015 HJI Group Corporation 0.00 1,173,940.00 0.00 1,173,940.00 2015 Quality Assurance-Main ADB = Asian Development Bank, CNY = Chinese yuan, CQS = consultants qualifications selection, ICB = international competitive bidding, PCSS = procurement contract summary sheet, QCBS = quality- and cost-based selection. Source: Asian Development Bank Loan Financial and Information System.

Appendix 10 29

GENDER AND DEVELOPMENT ANALYSIS OF RESULTS

A. Introduction

1. The project aimed at providing an efficient, inclusive, and sustainable transport system in Yichang. Its four outputs were to (i) build a 23.9 kilometer (km) bus rapid transit (BRT) system; (ii) implement nonmotorized transport (NMT) measures; (iii) improve the road network by building a 23.4 km extension of the Dongshan 4th Road; and (iv) build capacity in project management and implementation, traffic management, road safety, and BRT operation and management.

2. The project has been identified as effective gender mainstreaming (EGM). The project was designed with gender-sensitive features to boost women’s inclusion and participation. All four project outputs included features that go toward meeting gender-specific transport and economic development needs of the project beneficiary population. The poverty and social assessment (PSA) done during the period of project preparatory technical assistance (PPTA) indicated that 50.5% of women use public transport as the main mode of transportation, and 31% rely on walking. Women have particular needs for safe and convenient transport services that allow them to fulfill their diverse economic and social roles. Women's dual responsibilities for domestic duties and employment mean they have less time to participate in community meetings or other forums where programs such as transport are discussed. Due to traditional views on gender, women's views are often considered to be represented by male members of the household participating in community meetings or public forums. Moreover, women have personal safety concerns when using public transport. These gender-related considerations have been addressed in the project design to ensure that women benefit from BRT system that is safe and convenient. The NMT output ensured that women can safely use sidewalks and bicycle lanes. Rural women along Dongshan 4th Road benefitted with improved road infrastructure, introduction of public transport, road safety measures and improved access to employment opportunities, and non-farm income generation activities. Specific measures to promote gender equality were also included in the resettlement plan.

B. Methodology

3. In order to meet the EGM categorization, a gender action plan (GAP) was prepared which focused on (i) ensuring women’s equitable participation in the project including in public consultation, (ii) implementing the gender-responsive features of the project, (iii) promoting employment and income generation opportunities for women, and (iv) building institutional capacity for gender mainstreaming. The GAP implementation monitoring included (i) assessment of the progress of implementation of various activities outlined in the GAP, (ii) assessment of the adequacy and utilization of funding, (iii) assessment of the coordination between various line agencies responsible for implementation of the GAP, (iv) assessment of project impacts on the women population within the project area, (v) collection of gender disaggregated data and present an analytical report on how the GAP implementation has positively affected the targeted women population, and (vi) internal monitoring verified by an external monitor responsible for the resettlement plan.

C. Implementation of the Gender Action Plan

4. BRT corridor. At the time of BRT corridor construction, bus travel mode in Yichang city accounted for 21.90%, while private cars and official vehicles travel mode accounted for 8% but occupies more than 60% of the road resources. With the opening of the BRT, more people were given get equal access to road’s right of way and other public resources and enjoyed convenient public transport facility. The BRT had a dedicated lane where 100 buses can pass through an

30 Appendix 10 hour and convey about 15,000 people. The BRT corridor has 2 dedicated BRT lanes and 4 motorized vehicle lanes on both sides of the BRT lanes. To ensure safety along the BRT corridor, it is equipped with streetlights, signals, traffic signs, signage units, passenger guiding street furniture, and other traffic safety facilities. The BRT corridor has become a unique urban landscape in Yichang City. The total BRT patronage reached to 73.4 million person times, and BRT daily patronage reached to 240,000 person times. BRT travel speed increased to 20–25 kilometer per hour (km/h) from 10–15 km/h, as a result, travel time is shortened by 40%. After 1 year operation, six new bus flexible routes are added to BRT corridor with the consideration of taking full advantage of BRT corridor, the layout of the route network in the urban area, service expansion, capacity structure, and route network optimization. The 27 BRT bus routes (1 shuttle bus route and 26 flexible bus routes) cover services in the six urban districts such as Wujiagang, Xiling, New High-Tech Zone, Yiling, and Dianjun.

5. Traffic safety facilities in BRT stations/platforms include ceiling lights and roof lights on the structures, vehicle-stops, and foot lights at the platform entrance. Traffic fences are used to separate BRT dedicated lanes and social motorized vehicles lanes, social motorized vehicles lanes and nonmotorized lanes; nonmotorized vehicle lanes and pedestrian lanes are divided by lane markings. Pedestrian safety islands, bull barrels, and warning piles are set at intersections and pedestrian crossings. Public security video monitoring devices are installed along the BRT corridor, stations, and pedestrian underpasses. Given the initial finding of the gender assessment that indicates that women use public transport more than men, all the enhancements in the BRT corridor have likely positively impact women’s mobility and safe use of buses on this corridor.

6. BRT stations/platforms. There are 37 stations (including terminals) with 59 platforms in the BRT corridor, each platform is 60 meters (m) long and 5 m wide, and the average distance is 630 m between stations along the whole BRT corridor. Distinctive signs of route name and heading direction are installed inside and outside BRT station/platform structures to guide passengers to enter the right platform by inbound direction or outbound direction and to get correct transfer as well. A BRT platform is equipped with intelligent dispatching system, safety door system, automatic fare collection system, and passenger guidance system. Payment can be made through a coin box or an IC card reader, both located at the gate before entering the platform. The blind and persons with disabilities (PWD) are led by the blind path directly to the big middle gate (0.83 m wide). The BRT platform is enclosed by glass fences of 1 m high to separate passengers with BRT dedicated lanes. On both sides of the platform, there are six pairs of safety doors between the glass fences for passengers to get on or off buses. Two light-emitting diode (LED) monitors of passenger information service are installed overhead the platform. Supported by GPS transmission system, they display route names and the dynamic position of an approaching bus in the BRT corridor. BRT platform is also equipped with convenient facilities such as digital voice system, route information board, bus route network map, and spray electric fans. Considering the needs of women, children and the elderly, the disabled, and other vulnerable groups, three seats and three backrests are provided on the platform. Passengers are not required to swipe their cards to exit. At present, 2 attendants are assigned to each platform with high passenger flow and 1 attendant if with lower passenger flow to provide better service during busy days and peak hours.

7. BRT buses. A 12 m long BRT bus has 33 passenger seats and 1 driver seat for a total loading capacity of 90 people. In line with the road physical condition and BRT platform design in Yichang, BRT buses with doors open on two sides and low entrance design have two doors on each side and passengers can get on or off quickly; bus steps arrive at the platform level so passengers get level boarding and passengers on wheelchairs become accessible as well; inside BRT buses, there are LED energy saving lights, soft and bright; all seats are in grey except five priority seats (for the PWD, elderly, pregnant women, or women with babies) in bright orange red

Appendix 10 31 in the middle of the buses near the door; passenger armrests are made of light and beautiful aluminum alloy material, the height of the handrails also take into account the needs of the elderly, women, and children; information displays inside the buses and public announcement system broadcast or display the name of the approaching station; the indicator light above the door will be on to inform passengers well and prepare to get off at that door for the next stop. BRT buses are also especially designed with manual flip board, and passengers on wheelchairs can get on or off buses without obstacles at ordinary bus stops outside of the BRT corridors. There are 609 BRT bus drivers and 123 of them are female drivers, accounting for 20%; there are 227 BRT station attendants and 157 are female attendants, accounting for 69%; there are 29 administrative, technical, and management staff and 15 are women, accounting for 52%; there are 59 maintenance and support staff (BRT night patrol, BRT cash collectors) and 1 is female (because coins are very heavy, BRT cash collector is a heavy labor position). In total, there are 924 employees in Yichang BRT subcompany, of which 296 are women, accounting for 32%. All the targets for women’s employment promotion were achieved. There had been no laid-off female drivers from old bus routes, they were offered positions at the new BRT routes. They were given a choice to become BRT bus drivers or turn to be a BRT station attendant. Since the BRT initial operation, Yichang Public Transport Group (YPTG) have not only optimized and adjusted all the bus routes, but also reallocated the staffing. Those single mothers (divorced or widowed), senior and weak female employees, and those who have family members to look after or have financial difficulty (including female drivers) were all taken care of and provided with proper positions according to their desire. Nine HD cameras with recording function are installed in every BRT bus to monitor the full range of the bus including the door, driver, front, and rear, respectively; corresponding to the cameras, the monitor screen is divided into nine grids, respectively, showing pictures shot by each camera and the driver sitting on the seat is well aware of the passengers in the bus all the time; BRT bus is also equipped with Controller Area Network which comprehensively monitors bus safety, bus route, and bus machinery parts, so all the traffic situation in real-time will be clearly displayed on the panel; behind the driver's seat, there is an equipment box and GPS positioning, and video and audio recording collection equipment are placed inside the box so the dispatch center can immediately grasp the bus operation status and are able to react and direct the bus; all the windows can be opened to increase exits in emergency; four safety hammers with alarm function are provided in every bus; all the rear wheels are with a projection lid which is a special BRT bus wheel cover to effectively protect pedestrians and passengers nearby and avoid splash damage in case of tire explosion; a mobile TV is installed behind the driver (1 in rigid bus and 2 in articulated bus) and repeatedly displays BRT travel guide and traffic rules for pedestrian, nonmotorized vehicles, and motorized vehicles along the BRT corridor.

8. Pedestrian and nonmotorized transport facilities. Three new pedestrian underpasses and five overpasses are built along Dongshan Avenue section of the BRT corridor. A total of 71 sets of pedestrian crossing are located at each end of BRT station, intersections, and necessary locations at midblock. Pedestrian islands are provided in the wide road sections to protect pedestrians especially the elderly, children, PWD, and other vulnerable people from fast moving traffic and reduce the possibility of accidents. Warning blind tracks are constructed at intersections and connected with blind tracks on the sidewalks. Also, pedestrian signals are provided with an audio prompt function to make the blind or visually impaired people safe to cross the roads. In response to public suggestion from women, elderly, and other groups, 16 automatic escalators (ridership capacity of 6,000 person times per hour) have been installed along Dongshan Avenue to provide easy access to BRT, save passenger travel time, and ensure passenger safety. As for the three pedestrian underpasses, two variable-frequency escalators have been installed and in operation.

32 Appendix 10

9. Public bicycle system and facilities. As a value-added project to the BRT system, the Yichang Urban Area Public Bicycle System Phase I started construction in August 2016. This improved the service of Yichang BRT system and solved the "last kilometer" issue of people’s travel. Public bicycle renting stations were constructed at 28 locations with 700 bicycles provided. This system served the short distance travel of residents along BRT corridor and in the city center as a mode to connect with public transport system. Along BRT corridor, the average distance between the public bicycle renting stations is about 600–700 m within about 10 minutes cycling time. A total of 25.67 km bicycle and pedestrian lanes (green road) was constructed in Yichang. Bicycle riders and pedestrians were very pleased to use these facilities. One green road was a two-way 1.8 m wide 1.5 km long bicycle lane under the viaduct of the Xiling 2nd Road Expressway including three public bicycle stations constructed. Passengers from BRT along Dongshan Avenue can take a public bike and ride about 15 minutes to get to the Yangtze River (Binjiang Green Road/Yanjiang Avenue). All the new Yichang green roads adopted the BRT corridor bicycle lane iconic pavement eye catching red color. Within the first month of operation of the public bicycle system, 23 renting stations with about 280 bikes on dock generated 33,694 rentals, making 120 rentals per bike a month and 4 rentals per bike a day. About 50% of users of the system are female and 78% commute to work.

10. Dongshan 4th Road expressway construction and related infrastructure. This component built a 23.4 km extension of Dongshan 4th Road to accommodate through-traffic and freight traffic, including pass-dam transshipment. Dongshan 4th Road is a 10 lane divided urban arterial expressway with 6 lanes for 2-way motorized traffic, 2-way 2 motorized vehicle lanes access road with tree separation, 2 way 1 NMT/ bicycle lane (red asphalt pavement ) and pedestrian walkway with lane markings. The component also includes 5 flyovers, 1 viaduct, 2 underpasses, 2 tunnels, and 4 pedestrian underpasses. Dongshan 4th Road Expressway provides access to the High-Tech Zone and provide nonagricultural employment opportunities for residents in the area. The construction of Dongshan 4th Road brought unlimited employment and entrepreneurial opportunities for Lijiatai Village. Women were employed in the civil works of Dongshan 4th Road and related infrastructure. A total of 1,918 unskilled workers were employed and 23% were women.

D. Gender Assessment

11. Relevance of gender strategy. The overall project design was highly relevant in addressing the needs and issues faced by women in Yichang with the achievement of the GAP targets and actions (see table). Women benefitted most from the BRT system and the road construction. Livelihood recovery training and local jobs skills training for project-affected people have helped rural women along Dongshan 4th Road get more nonagricultural job opportunities and earn more income. Access to public transport services, and road safety measures were the benefits gained from the new road infrastructure. The GAP developed at appraisal was strictly implemented with set targets, sex disaggregated data collected, and good outcomes achieved.

12. Impact on gender relations at the institutional level. The strong support of the executing and implementing agencies and the appointment of a project staff responsible for gender mainstreaming has promoted gender mainstreaming in the relevant stakeholder institutions involved in project implementation, operations, and maintenance. Training programs instituted by the project enhanced the executing and implementing agencies gender and social safeguards consciousness.

13. Employment and income generation. The objectives of the GAP included creating employment opportunities for women during project construction and operation and ensuring that women participants learn job skills and benefit from the project. The project created more than

Appendix 10 33

1,000 jobs for women during the construction period and 157 jobs during the operation. In addition, women were involved in public awareness campaigns such as traffic safety.

14. The contractors for the BRT corridor civil works construction employed 1,469 unskilled workers. Out of this, 1,277 people were hired locally and 370 were women. Moreover, 166 unskilled workers were employed for BRT corridor landscaping and sanitation and 56% were women. Equal pay was given to both men and women engaged in unskilled labor. One example is the contractor of the civil works in the Yemingzhu road construction site which hired unskilled workers and provided equal pay for sweepers working 8 hours a day for about CNY2,500/month.

15. As of the end of December 2017, women were employed in civil works of Dongshan 4th Road and related infrastructure. In 2015, three civil works contract employed a total of 1,774 unskilled workers, of which 413 are women, accounting for 23%, 889 are local labors (including labors from project-affected households, low income families, and ethnic minority families), accounting for 50%. In 2016, 1 civil works contract (H1-A-C02) employed 120 unskilled workers, of which 36 are women, accounting for 30%, and 44 are local labors, accounting for 37%. In 2017, 1 civil works contract (H1-A-C02) employed 24 unskilled workers, of which 5 are women, accounting for 20%, and 11 are local labors, accounting for 45%. The target set in GAP is achieved to provide local women with 20% of unskilled civil works jobs.

16. The construction of Dongshan 4th Road brought unlimited employment and entrepreneurial opportunities for Lijiatai Village. The Dongshan 4th Road provided easy access to the Three Gorges Logistics Park, the largest commercial, trade, and wholesale logistic facility in the area between west of Hubei province and east of Chongqing. It is a modern comprehensive logistics park which offers living product exhibition and trade, warehousing, cold chain, distribution, e-commerce, hotel, office accommodation, catering, and entertainment service. Some villagers from Lijiatai started business in the Three Gorges logistics park, some are employed by the Three Gorges logistics park, and some turned to grow vegetables to sell to the Three Gorges logistics park or to the city. At the same time, villagers feel very convenient nowadays to go to the Three Gorges logistics park to buy daily necessities, agricultural products, fertilizers, and building materials for their own needs.

17. Capacity building. GAP training to key executing and implementing agency staff was provided and clearly identified the tasks for GAP implementation, 6 persons participated and 1 was female. Project implementation training to executing and implementing agency staff was also given on contract management, construction management, monitoring and supervision, and financial management. Moreover, capacity building on BRT fleet management, urban road safety, urban infrastructure asset management and public transport, and BRT operation and management was also conducted. A total of 242 persons participated in these project implementation and BRT operations and management trainings where 27% were women.

18. YPTG also provided training to BRT drivers and BRT-related personnel on operations and management. Topics included BRT rules and regulations, the bus service network layout, basic knowledge about BRT routes, BRT platform setting, how to use and operate BRT platform equipment, and how to better serve female passengers, the elderly, the disabled, pregnant women, and other groups of special needs. Trainees got better understanding of BRT routes and the far-reaching significance of BRT system construction on urban development through training.

19. There are 2,200 employees in YPTG with 796 buses and 78 bus routes. It organized training sessions of about 100 lectures on labor cost budget control, GPS for operation and dispatch, application of vehicle technology, fire and safety drills, handheld bus applications, bus trip scheduling, bus operation analysis, vehicle monitoring and maintenance of electronic signs,

34 Appendix 10 new employee orientation, safety education (including female safety needs) and 3,500 person times involved in the training, of which more than 50% participants were women. In addition, each subcompany held for the driver’s safety education, fire emergency and passenger evacuation drill once a month, 1–2 hours for each event, safety education film shown, and a safety instruction manual given to every driver. The traffic safety education training conducted may have contributed to the decrease in fatalities due to accidents by 85% from 2011 to 2019.

20. In the project area, non-farming skills training for affected persons were provided. Affected persons were provided skills training twice a year jointly organized by the Yichang project management office (PMO), district human resources bureaus, training centers, and enterprises. A total of 3,461 person-times participated in the trainings and women participants accounted for 32%. Training included agricultural skills training, rural labor transfer training, vocational skills training, and business start-up training. Vocational skills training included welding and forklift operations where women were not so inclined to attend.

21. Public participation and awareness. Different departments and bureaus have jointly coordinated for the public awareness campaigns of the project. The Yichang Municipal Price Bureau organized a public hearing on the Yichang urban area bus fare adjustment, 50% of those who participated in the hearing on behalf of all stakeholders were women. A BRT initial operation rehearsal was organized by YPTG, and more than 50% of the total 1,100 people who participated in the simulation were women. Volunteers from the All-China Women's Federation (ACWF) participated in the activities during the initial BRT operation. The activities were to guide passengers on the BRT platform to persuade passengers on the appropriate traffic behavior along the BRT corridor and at BRT platforms. Public awareness campaigns were also conducted such as distribution to communities of various BRT promotion materials, traffic changes and control measures, and intensive media publicity about the BRT and changes in the traffic routes due to the road construction under the project. These activities which encouraged volunteers from the community to participate enhanced the successful operation of the BRT system in Yichang. Neighborhood committees have coordinated with the YPTG in several activities like monitoring and data collection activities of the BRT system and awareness campaign and volunteering activities. Under the unified arrangements of Yichang Municipal Government, intensive BRT media publicity of all dimensions began in 2016 to make the public aware of the project.

22. Overall assessment. The project has successfully achieved its GAP targets and actions implemented can be replicated in other transport related projects. The strong support of the municipal government, YPTG, and other relevant stakeholders has contributed to the successful implementation of the GAP. The GAP formulation and designs were relevant to the project as it provided practical measures and targets to be followed in project implementation. The provision of traffic safety features in the BRT stations, buses, and at intersections contributed to security and safety of women and other vulnerable groups to use the BRT. Priority seating and pedestrian access for vulnerable groups provided convenience in their travel. Accessibility to employment centers brought about by the project has generated employment and created opportunities for income generation for residents and villagers. The project also contributed to longer-term gender capacity in Yichang through the appointment of a full-time staff responsible for gender mainstreaming activities. Public participation from the community with media publicity further advanced the success of the project.

Appendix 10 35

Table A10: Gender Action Plan Targets and Actions

Activities and Performance Project Output Indicators/Targets Achievements at Completion Output 1: BRT corridor (i) BRT system physical design includes: • Priority seating for people with Achieved. 3 seats and 3 backrests in special needs (i.e., pregnant women, each BRT platform parents with young children or prams, 5 seats in orange red color in each BRT elderly, and people with disability) in all bus buses and stations • Safe pedestrian access, including for Achieved. Blind and passengers on people with special needs wheelchair accessible in BRT platforms (blind path) and buses (level boarding); Pinghu Square Station platform installed smart retractable pedals easier boarding for the handicapped, the elderly and little kids • Height of the handrails inside BRT Achieved as required. Handrails were buses takes into account the needs of fitted to meet the needs of people the elderly, women and children to requiring this additional support. enhance safety • Design on pedestrian crossing and Achieved. 29 intersections redesigned pedestrian overpasses in the project area with pedestrian safety improvements, fully consulting with groups such as pedestrian crossings at 81 locations, females and elderly pedestrian overpasses at 5 locations with 16 auto escalators in service and underpasses at 3 locations. These specific elements were identified in consultations with relevant groups of women and other users. • Installation of ‘help buttons’ on all Achieved. 1 help button per BRT bus to BRT buses and at all stations alert the driver. Help buttons at BRT stations were deemed unfeasible during detailed design. • Security cameras on all BRT buses Completed. 9 security cameras per BRT and at all stations bus; 2 cameras per BRT platform; and cameras at monitoring spots in road sections and underpasses • Well-lit buses and bus stations Completed. LED lights inside BRT buses; ceiling lights, foot lights, box lighting, roof lights, glass fence lighting all over BRT platforms. (ii) Employ at least 20% local Achieved. Out of a total 1469 unskilled women in unskilled construction jobs workers for construction, 370 women were employed or 25%. (iii) Employ at least 20% as drivers, Achieved. 50% ticketing and fare collection works 123 female drivers were employed out of and administration work 609 or 20%; 157 female attendants out of 227 ticketing and fare collection works or 69%; and 15 women out of 29 administrative, technical and management staff or 52%. (iv) Ensure re-employment of Achieved. 100% has been re-employed female bus drivers from pre-existing bus as BRT bus drivers. routes which are replaced by the BRT system (v) Ensure equal pay for work of Completed as required. All BRT jobs equal value for all BRT jobs included clauses following national labor standards including on equal pay for equal work.

36 Appendix 10

Activities and Performance Project Output Indicators/Targets Achievements at Completion Output 2: NMT measures (i) NMT physical design will include Completed. “Dedicated, safe right-of- a “dedicated, safe right-of-way” with way” with pedestrian and bicycle lanes of pedestrian and bicycle lane facilities, 40 km and 30 km respectively along BRT modes of travel frequently used by corridor; 14.17 km of green roads or women. bicycle lane in Canal Park, along the Yangtze River and under Xiling 2nd Road viaduct; pedestrian crossings at 81 location; 28 public bicycle stations with about 700 bicycles, private bicycle parking places at 24 locations with over 400 parking racks, wind and rain corridors of 476 m at 3 BRT stations. (ii) Employ at least 20% local Achieved. Out of a total 1469 unskilled women in unskilled construction jobs (as workers for construction, 370 women part of the BRT corridor construction) were employed or 25%. (iii) Ensure at least 40% of females Achieved. More than 50% are females in public participation activities at all participated in public hearings for fare stages adjustment, for BRT operation rehearsals, and other activities. (iv) Project open activities and Completed. As required. A BRT Initial training etc. organized at time and Operation Rehearsal was organized by venues convenient for female YPTG and more than 50% of the total participation 1,100 people who participated in the simulation were women. Volunteers from the ACWF participated in the activities during the initial BRT operation. (v) 2 females in each community Completed. At least 2 women in each civilized traffic action team community participated as volunteers in the BRT passenger assistance and civilized traffic persuasion. Output 3: Road network (i) Employ at least 20% women in Achieved. Out of a total 1918 unskilled improvement unskilled local road construction jobs at workers for road construction, 454 equal pay for work of equal value. women were employed or 23.6%. (ii) Employ women in maintenance Achieved. A total of 166 unskilled labor jobs such as cleaning and landscaping at for landscaping and sanitation was hired equal pay for work of equal value. 43% were women. Both men and women had equal pay for their work. (iii) Road safety design including Completed. Four pedestrian/animal pedestrian crossing, animal underpasses and traffic calming underpasses, and traffic calming measures were included in the road measures such as signage and rumble design. strips. (iv) Ensure pedestrian walkways Completed as required. Roadside along access roads and crossings are lightings were installed along the BRT accessible and safe - including for people corridor, stations and Dongshan 4th with special needs - and have sufficient Road expressway. roadside lighting. (v) Training and awareness building Completed. At least 50% of participants programs – ensure at least 50% female are women. 3,500 person times involved participation in the training, of which more than 50% participants were women Output 4: Capacity (i) Recruit gender specialist to Completed. 1 gender specialist (female) building and quality support GAP implementation. recruited from HJI Group Corporation assurance throughout project implementation. (ii) Appoint a project staff Achieved. 1 responsible staff in each responsible for gender mainstreaming relevant organization appointed. and GAP implementation and reporting (iii) Provide GAP orientation/training Completed by August 2015. 6 persons to key executing/implementing agency participated and 1 was female. staff

Appendix 10 37

Activities and Performance Project Output Indicators/Targets Achievements at Completion (iv) Provide training for bus drivers Completed by YPTG in 2016. 3,500 and conductors on women’s safety person times involved in the training, of needs. which more than 50% participants were women. Collect sex-disaggregated data on Completed as required. project impacts (v) Gender-specific measures as Completed. As part of the resettlement part of resettlement plan implementation. plan, 598 were employed in various unskilled positions and 34% were women. (vi) Ensure at least 50% female Completed. At least 50% female participation in public consultation. participated in public consultations on BRT fare adjustment (4,000 respondents, 50% women). (vii) Include 50% women in Partly achieved. Only 32% women livelihood restoration training for affected attended livelihood restoration training, People. mainly on agriculture while the target was not achieved as some of the trainings offered were welding and forklift operation and not so many women were interested in them. (viii) Ensure women and men are Completed as required. 18 affected equally entitled to new house households in Lijiatai Village benefited registration, and both names are from house demolition. They were given reflected on titles. 2 apartments where they can live in 1 apartment and rent out the other for cash income of CNY1,000 a month, i.e., CNY12,000 a year, which is more than their current annual per capita net income of CNY9,000; every household got an average monetary compensation of CNY244,279.75. All real estate registration certificate of the apartments contains the names of the couples, except those households with single person, unmarried, divorced, and widowed elderly. (ix) Ensure cash compensation is Completed as required. Land acquisition paid into the joint account in name of compensation includes CNY16,200 for both husband and wife. land compensation, CNY16,200 for resettlement subsidy, and CNY12,650 for crop compensation, so to make CNY45,050/mu, or about CNY67.54/m2. The compensation for land acquisition and house demolition was directly paid to the affected households and all family members were informed about the compensation rate and agreement. Normally, the head of the households provide their bank account information as the representative of the family. The head of households could be men and women, young or elderly people. The compensation was paid to this bank account which is always used for the whole family and managed by the female member in the family as a local tradition. ACWF = All-China Women's Federation, BRT = bus rapid transit, CNY = Chinese yuan, GAP = gender action plan, km = kilometer, LED = light-emitting diode, meter= meter, m2 = square meter, NMT = nonmotorized transport, YPTG = Yichang Public Transport Group. Source: Asian Development Bank.

38 Appendix 11

DETAILED ENVIRONMENTAL IMPACT ANALYSIS

A. Introduction

1. The project is classified as category A for environment. A consolidated environmental impact assessment (EIA), including an environmental management plan (EMP) and an environmental monitoring plan (EMoP), was prepared in accordance with the Asian Development Bank’s (ADB) Safeguard Policy Statement 2009 and disclosed on ADB website in June 2013 for (i) a 23.91-kilometer Dongshan Avenue bus rapid transit (BRT) corridor including BRT depots, improved provision for pedestrians and bicycle facilities, and establishment of a parking management plan for the central business district and other traffic demand management measures; and (ii) a new 23.4 km long Dongshan 4th Road, an urban trunk road to enable heavy traffic to bypass the city center.

2. Domestic EIA was prepared by Hubei Gimbol Environmental Technology Co., Ltd. in accordance with relevant People’s Republic of China (PRC) national laws and regulations, which identified sensitive receptors and potential impacts on air quality, water, soil, community health and safety, and ecological environment. A set of comprehensive mitigation measures included in the domestic EIA went through a series of government consultation processes. Domestic EIA was approved by Hubei Provincial Environmental Protection Bureau on 6 January 2013. A soil conservation report was also prepared and approved by Hubei Provincial Water Resources Bureau on 25 October 2012.

3. BRT component started operation on 15 July 2015 and Dongshan 4th Road started operation in August 2017. Due to the change of project design, a Muslim cemetery was relocated. During the relocation process, five meaningful consultations were conducted with representatives of the affected people (Hui); Yichang Municipal Government (YMG), the executing agency and Gaoxin District government; local planning bureau; Yichang Ethnic and Religious Affairs Bureau; Mosque Management Committee; etc. Domestic EIA registration form was approved by Yichang Dianjun District Ecological and Environmental Protection Bureau on 14 July 2016 following the PRC regulations. The Yichang Municipal Urban Construction Investment and Development Co. (YMUCID), implementing agency, confirmed no complaints were received during relocation, construction, and operation of the cemetery. The detailed information on the relocation of the cemetery was included in the environmental monitoring report disclosed on ADB website in September 2016.

4. ADB project completion review mission was conducted during 25 November to 2 December 2019. The Mission visited the project sites. The Mission was informed that no domestic environmental completion checks and acceptance is required for this project. The Mission had extensive discussions with representatives of relevant stakeholders, including the executing and implementing agencies, Yichang Ecology and Environment Bureau, Public Transportation Group, etc. This analysis was prepared based on information obtained during the Mission and the records of environmental monitoring reports prepared from 2015 to 2018.

B. Institutional Arrangement

5. The project management office (PMO) was established by YMG with overall responsibility for environmental management of the project, including fulfilling EMP implementation and environmental monitoring and reporting requirements. YMUCID was responsible for daily project environmental management. The institutional arrangements for the project’s environmental management as agreed at appraisal and as implemented are shown in the table.

Appendix 11 39

Table A11: EMP Responsibilities and Summary of Implementation Status

Duties and Responsibilities as Agreed at Appraisal Implementation Status Executing Agency: Yichang Municipal Complied. Government Established a project management office and ensured proper Overall responsibility of the project’ implementation of EMP and EMoP. environmental management, including EMP and EMoP implementation

Implementing Agency: Yichang Complied. Municipal Urban Construction Two safeguard staff (one environment, one social) were appointed, who Investment and Development Co., Ltd. are responsible for managing the environmental activities carried out 1. Appointment of safeguard staff under the project and ensuring effective EMP implementation. 2. Environmental clauses and Complied. EMP provisions in all bidding All the bidding documents and contracts had environmental clauses and documents EMP provisions. 3. Supervision of contractors to comply Complied. with the EMP provisions Regular site visits, inspections, and supervision were carried out. 4. Implementation of operational phase Complied. EMP Yichang Ecology and Environment Bureau conducted regular noise and air quality monitoring. 5. Direct communication and Complied. cooperation with local government There was close communication and cooperation in implementing agencies for environmental mitigation measures with local ecology and environment bureau and protection and EMP and EMoP other concerned bureaus. 6. Engagement of a loan Complied. implementation environment A loan implementation environment consultant was engaged from consultant 2014, who supported the IA in environmental management of the project, including conducting regular site visits and preparing semiannual environmental monitoring reports, etc. 7. Supervision engineering company Complied. Domestic construction supervision companies were involved in and closely supervised and managed construction. Supervision to ensure proper environmental management planning and implement was one of the priority areas of those construction supervision companies. 8. Contractors Complied. Environmental management was taken seriously by contractors. Contractors implemented good environmental management practices and followed the agreed environmental management plan in their contracts. EMP = environmental management plan, EMoP = environmental monitoring plan, IA = implementing agency. Source: Asian Development Bank.

C. Environmental Impacts and Mitigations

6. Water and soil conservation. At construction stage, measures taken for soil-related impacts included preventive and mitigation construction practices such as reuse of stripping and storing topsoil, avoiding construction activities during rainy season, installing drainage ditches and sedimentation tanks at temporary construction sites to prevent soil erosion and manage run- off, storing petroleum products and other hazardous materials and wastes on impervious surface, and rehabilitating and restoring spoil disposal sites and along the road alignment following the agreed plan. A spill management plan for preventing contamination of soil from accidental spills of petroleum products and hazardous materials was developed and implemented. At operation stage, regular maintenance of the BRT corridor and Dongshan 4th Road is conducted for water and soil conservation.

7. Solid waste. At construction stage, centralized domestic waste collection points were set up and transported to licensed municipal waste disposal facilities. On-site burning of domestic

40 Appendix 11 waste was strictly prohibited. At operation stage, regular maintenance of the urban road is conducted following relevant PRC regulations, including cleaning roads and drainage systems, and collecting solid waste on a regular basis, etc.

8. Surface water. At construction stage, timely cleanup of scattered materials on site to prevent construction wastes from entering drainage system and water bodies was conducted. Berms/sandbags were erected during bridge foundation works to contain runoff from polluting the rivers. Construction wastewater were treated to appropriate standards prior to discharge. Portable toilets were provided for workers and staff and sedimentation tanks were installed on-site to treat processed water and muddy runoff. Water quality was regularly monitored during construction. At operation stage, drainage systems are cleaned up regularly to prevent clogging.

9. Air quality. At construction stage, mitigation measures included frequent watering of unpaved areas, backfill areas, and haul roads to suppress dust, especially at sensitive receptors such as hospitals, schools, and residential areas; immediate cleanup of muddy or dusty materials on public roads outside the exits of construction areas; covering the stockpile areas with tarpaulin and spray water to avoid mobilization of find materials; equipping trucks transporting earth materials with covers; and locating asphalt plants and mixers at 200 meters downwind of sensitive receptors with enclosures, and installing baghouse filters, etc. At operation stage, according to operational air quality monitoring through 2015–2018, the air quality levels at all representative receptors complied with national standards in corresponding functional areas.

10. Noise. At construction stage, a number of mitigation measures was applied including sensibly scheduling construction time, installing temporary hoarding or noise barriers to shield off noise sources, using low-noise equipment and machinery, locating sites for rock crushing, concrete mixing and other noisy activities away from sensitive receptors, limiting vehicles speed travelling on site and haul roads, minimizing the use of whistles and horns, and installing double- glazed windows for the apartments close to the BRT corridor. At operation stage, according to operational noise monitoring in 2018, the noise levels at all representative receptors complied with national standards in corresponding functional areas.

11. Ecology. At construction stage, measures for vegetation protection and restoration of disturbed areas were implemented, including demarcating the construction sites to prevent encroachment and damage to adjacent areas, sufficient aftercare for landscape planting to maximize survival, and placing marks and warning signs on valuable trees to avoid damaging and destroying them. At operation stage, greening along the BRT corridor and Dongshan 4th Road has positive environmental impacts on urban landscapes, contributing to soil erosion control, improving air quality, and creating microclimate. To some extent, roadside trees also provide noise protection.

12. Community and occupational health and safety. At construction stage, mitigation measures to avoid occupation health and safety hazards were taken, such as providing portable toilets and proper personal protective equipment to construction staff and workers, trainings on general health and safety issues and emergency preparedness and response procedures, and cleaning and disinfecting the sites prior to construction. A traffic management plan to prevent congestion and traffic jams was prepared in consultation with local Traffic Police Department prior to construction. Residents and businesses were informed in advance through publicity on the construction activities and duration, expected disruption, and grievance hotline. All construction sites were made secure with fencing or security guards and clear signs placed at the construction sites. Safety measures were adopted for the safety and convenience of pedestrians and residents. These included footbridges, fences, and appropriately situated lighting. At operation

Appendix 11 41 stage, the project is anticipated to have positive impacts on the social environment and urban transport infrastructure. Traffic laws are strictly enforced to improve road safety and reduce traffic accidents.

13. Cumulative and induced impacts. At operation stage, despite the increase of traffic volume, most sections along the BRT corridor is experiencing reduced traffic volume with the construction of Dongshan 4th Road, indicating that Dongshan 4th Road has played a role in redistributing traffic from the BRT corridor, especially heavy trucks. It is estimated that the reduction in traffic volume at the BRT corridor could result in a traffic noise reduction of up to 2 dB(A) at the sensitive receptors along the BRT corridor.

14. Environmental benefits. The project improves public transport services by introducing the BRT system along the main corridor of the city and develop nonmotorized transport and traffic demand management measures along this corridor to provide safe and convenient access to public transport and introduce parking management along the main corridor running through the central business district area. Residents in Yichang benefit from a fast, convenient, and sustainable transport system which also supports the urban and economic developments. The project also maximizes the benefits of improved infrastructure by encouraging behavioral change with respect to using public transport, road safety, and traffic management. The BRT system runs on dedicated center lanes, which improves the overall traffic flow along the main corridor in the city center, resulting in a decrease in traffic noise pollution during the daytime in future years compared with the “no BRT” scenario, despite future increases in traffic volume. The Dongshan 4th Road also contributes to a reduction in night-time noise levels in the urban center through diversion of heavy traffic from the city center. It also results in a reduction in carbon dioxide emissions of 102,570 tons per annum because of reduced congestion.

D. Environmental Monitoring and Reporting

15. A loan implementation environment consultant was engaged throughout the project construction stage who conducted regular site visits, monitoring of performance of environmental mitigation measures, and prepared environmental monitoring reports during 2015–2018. The environmental monitoring reports recorded that the implementing agency also conducted regular site visits and inspections throughout construction stage, and closely cooperated with local ecology and environment bureau on environmental monitoring, including water, air, noise quality, and soil erosion impact monitoring. A total of eight environmental monitoring reports were prepared and disclosed on ADB website during 2015–2018, which contained data on engineering progress, and environmental management status including implementation of mitigation measures, with a focus on water and soil conservation, air quality and noise control, and supervision and inspection records.

E. Public Consultation and Grievance Addressed

16. During project implementation, extensive public consultations were carried out to discuss project impacts, including environmental impacts. This included public consultation meetings, targeted consultation meetings, surveys, interviews, and information disclosure and feedback. Six public consultations have been conducted during project implementation. As of the project completion review mission, there was no record showing any pending grievance issues.

42 Appendix 11

F. Conclusion

17. Overall implementation of the EMP and EMoP is satisfactory. The institutional setting and arrangements followed the original project design. The EMRs were of good quality and provided sufficient information on the EMP implementation. No unexpected adverse environmental issue other than predicted in the original EMP was identified. A range of good engineering practices incorporating environmental protection measures were implemented. At the time of the project completion review mission, there were no pending environmental safeguards-related noncompliance issues.

Appendix 12 43

LAND ACQUISITION AND RESETTLEMENT AND SOCIAL IMPACT ANALYSIS

1. Land acquisition and resettlement impact. The project is classified as involuntary resettlement category A. At appraisal, resettlement impacts were identified, and one resettlement plan was prepared in accordance with the People’s Republic of China (PRC) laws and regulations and the Asian Development Bank’s (ADB) Safeguard Policy Statement 2009 in April 2013. The resettlement plan for the bus rapid transit (BRT) component and western section of Dongshan 4th Road (Fazhan Avenue–Bolinhe Road) was updated by the implementing agency (IA) and approved by ADB and was disclosed to the affected persons and on ADB website in March 2014. During implementation, the original scope and project design have been changed as follows: (i) a Hui People’s (Muslim) Cemetery with 213 tombs and 8 mu1 floor area was relocated in September 2015 and completed in 1 month, and (ii) the house demolition impacts of BRT Yemingzhu Road section have increased a lot due to the expansion of the range of construction caused by the domestic Yemingzhu Road integrated reconstruction project. The house demolition compensation for this section was completed by the end of June 2016, and all affected households have moved to resettlement communities by January 2018. The resettlement plan was not updated based on the final design and detailed measurement survey as the land acquisition and resettlement (LAR) implementation is very fast and was also agreed by ADB review mission in 2017. However, a due diligence report on the relocation of the cemetery has been prepared by the PMO and the progress of relocation has been reflected in monitoring reports and disclosed in ADB website accordingly. The design of BRT Yemingzhu Road Section was finalized in December 2015, and the house demolition compensation of this section was completed by end of June 2016. One due diligence report of BRT Yemingzhu Road section was prepared during the fourth external monitoring period. Meanwhile, the LAR changes and implementation were monitored and reflected in the semiannual resettlement monitoring reports as well as internal progress reports.

2. The construction of BRT Yemingzhu Road was completed in October 2017, and trial operation of the whole line started in January 2018. The western section of Dongshan 4th Road started operation in August 2017. LAR were implemented based on the resettlement plan. All affected persons were compensated prior to project construction.

3. There was a well-organized institutional structure for the management and implementation of the resettlement work. The consultants included internal resettlement monitoring at the beginning of the project in the progress reports between January 2015 and December 2017. The Yichang project management office (PMO) has prepared 10 resettlement progress reports that included resettlement monitoring with the assistance of consultants. The PMO engaged an external resettlement monitoring agency from January 2015 to December 2017, and six semiannual resettlement monitoring and evaluation reports were timely submitted by the consultants to the PMO and ADB.

4. With these changes, the total number of affected households and resettlement impacts are as follows: (i) western section of Dongshan 4th Road, 182 households with 930 mu of collective-owned permanent land acquisition, 126 rural residential house demolition with 75,134 square meters (m2); (ii) BRT component, there are 564 urban house demolition including 506 residential houses and 58 non-residential houses. A total of six resettlement communities were provided for the 97 affected rural households and three resettlement communities provided for 169 urban households who choose property swap. At the time of the project completion review mission, all affected persons were compensated and resettled according to the RP, and all affected households were relocated to the new houses except 14 affected households in

1 Chinese unit of measurement equivalent to 666.67 square meters.

44 Appendix 12

Heihushan village due to the delay of Heihushan resettlement community construction. The transition subsidy standard of Heihushan village has been increased from CNY8/square meter (m2) to CNY12/m2 and distributed to affected households semiannually in advance which is sufficient for the rental payment during the transition period. The director of land acquisition and house demolition office of Yaowan subdistrict reported that the reason for the delay was the natural gas, pipe water, greening, and park lots have not been completed which are prerequisites for building acceptance, but the main structure of Heihushan resettlement community has been completed. The resettlement community is expected to be completed and acceptance before July 2021.

5. As of December 2017, a total of CNY301.64 million2 have been fully paid to the affected persons in time, including (i) CNY158.68 million for the western section of Dongshan 4th Road (Fazhan Avenue–Bolinhe Road), among them, CNY61.42 million for collective land and temporary land occupation and CNY97.25 million for residential house demolition; and (ii) CNY142.96 million for BRT Yemingzhu Road Section, among them, CNY23.15 million for non- residential house demolition and CNY11.98 million for residential houses.

6. A grievance redress mechanism was set up and publicized among affected persons. The LAR of the project was in complete compliance with the resettlement plan. It was verified that all affected households have restored their income and all relocated households have improved their houses.

7. Based on the review of documents, including the project completion report, external monitoring reports, project completion review mission site visits and discussions with PMO, subdistrict offices, and related agencies, interviews with the stakeholders during project implementation, it is concluded that the LAR of the project complied with the resettlement plan. Gradually rising income levels of the affected households and improved housing quality and living environment of those affected by house demolition indicate that the affected persons are better off than they were before the project. No complaints, grievances, or other concerns were noted, and the evaluation concluded that affected persons were better off than before the project.

8. Follow-up actions. ADB and PMO have agreed that the following actions will be conducted: (i) accelerate the construction of the Heihushan resettlement community so that the resettlement housing can be handed over to the 14 affected households by July 2021; (ii) strengthen the information disclosure of resettlement community construction progress to the affected households; and (iii) monitor the payment progress of transition subsidy to affected households and pay close attention to their living conditions and provide help if necessary. YMUCID will monitor progress of the remaining resettlement for at least 2 years after circulation of the project completion report and submit semiannual monitoring reports to ADB starting April 2021. It is expected that the relocation of the 14 households will be concluded within the next 2 years and the status will be reported in the semiannual monitoring reports.

2 The cost here only refers to the compensation for affected persons and do not include taxes and duties for land acquisition, administration fee, etc.

Appendix 13 45

STATUS OF COMPLIANCE WITH LOAN COVENANTS Reference in Loan/ Status of Covenant Project Agreement Compliance Financials 1. (a) The Borrower shall make the proceeds of the Loan available, Loan Agreement, Complied. through HPG, to YMG upon terms and conditions satisfactory to ADB. Sec. 3.01 Except as ADB may otherwise agree, the terms on which the proceeds of the Loan shall be made available to YMG shall include (i) commitment charge and interest at the rates identical to those applied to the Loan; (ii) the repayment period including the grace period identical to that applied to the Loan; and (iii) YMG bearing the foreign exchange and interest rate variation risks. 2. (a) HPG shall make the proceeds of the Loan available to YMG promptly Project Agreement, Complied. and upon terms and conditions satisfactory to ADB. Except as ADB may Sec. 2.01 otherwise agree, the terms on which the proceeds of the Loan shall be made available to YMG shall include (i) commitment charge and interest at the rate identical to that of the Loan; (ii) a principal repayment period and grace period identical to that of the Loan; (iii) YMG bearing the foreign exchange and interest rate variation risks; and (iv) YMG agreeing to perform all obligations as set forth in the Loan Agreement and this Project Agreement, to the extent that they are applicable to YMG. 3. (b) The Borrower shall, through HPG, cause YMG to apply the proceeds Loan Agreement, Complied. of the Loan to the financing of expenditures on the Project in accordance Sec. 3.01 with the provisions of this Loan Agreement and the Project Agreement. 4. The proceeds of the Loan shall be allocated and withdrawn in Loan Agreement, Complied. accordance with the provisions of Schedule 3 to this Loan Agreement as Sec. 3.02 such Schedule may be amended from time to time by agreement between the Borrower and ADB. 5. Disbursement Procedures. Except as ADB may otherwise agree, the Loan Agreement, Complied. Loan proceeds shall be disbursed in accordance with the Loan Sch. 3, para. 4 Disbursements of Disbursement Handbook. loan proceeds were made according to ADB’s Loan Disbursement Handbook. 6. Imprest Account and Statement of Expenditures. (a) Except as ADB may Loan Agreement, Complied. ADB otherwise agree, the Borrower shall cause Hubei Provincial Finance Sch. 3, para. 5 approved removal Department to establish immediately after the Effective Date, an imprest of imprest account account at a commercial bank acceptable to ADB. The imprest account shall ceiling on 16 be established, managed, replenished and liquidated by Hubei Provincial November 2017. Finance Department in accordance with the Loan Disbursement Handbook, and detailed arrangements agreed upon between the Borrower and ADB. The imprest account shall only be used for the purposes of the Project. The currency of the imprest account shall be the Dollar. The maximum ceiling for the imprest account shall not exceed the equivalent of 10% of the Loan amount unless otherwise agreed between HPG and ADB. 7. (b) The statement of expenditures procedure may be used for Loan Agreement, Complied. reimbursement of eligible expenditures and to liquidate advances provided Sch. 3, para. 5 into the imprest account, in accordance with the Loan Disbursement Handbook and detailed arrangements agreed upon between the Borrower and ADB. Any individual payment to be reimbursed or liquidated under the statement of expenditures procedure shall not exceed the equivalent of $200,000. 8. Counterpart Support. The Borrower shall, through HPG, cause the EA to Loan Agreement, Complied. ensure that (a) counterpart funds and domestic commercial loan proceeds Sch. 5, para. 2 are provided to the IA in a timely manner; (b) additional counterpart funds are provided to cover any funding shortfalls or cost overruns during the Project implementation; and (c) all funds and resources necessary for construction, operation and maintenance of the Project facilities are provided on a timely basis. In the event that the domestic commercial loan is not available for any reason whatsoever, the Borrower shall, through HPG,

46 Appendix 13

Reference in Loan/ Status of Covenant Project Agreement Compliance cause the EA to provide funds without any delay in lieu of such domestic commercial loan proceeds. 9. HPG and YMG shall, and shall cause the IA to, maintain, or cause to be Project Agreement, Complied. maintained, records and accounts adequate to identify the items of Sec. 2.06 expenditure financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, their operations and financial conditions. 10. (a) HPG and YMG shall, and shall cause the IA to (i) maintain separate Project Agreement, Complied. All accounts and records for the Project; (ii) prepare annual financial statements Sec. 2.09 annual audit for the Project in accordance with financial reporting standards acceptable reports were to ADB; (iii) have such financial statements audited annually by independent submitted. auditors whose qualifications, experience and terms of reference are acceptable to ADB, in accordance with international standards for auditing or the national equivalent acceptable to ADB; (iv) as part of each such audit, have the auditors prepare a report (which includes the auditors’ opinion on the financial statements, use of the Loan proceeds and compliance with the financial covenants of the Loan Agreement and this Project Agreement as well as on the use of the procedures for the imprest account(s) and statement of expenditures) and a Management Letter; and (v) furnish to ADB, no later than 6 months after the end of the each related fiscal year, copies of such audited financial statements, audit report and Management Letter, all in the English language, and such other information concerning these documents and the audit thereof as ADB shall from time to time reasonably request. 11. (b) ADB shall disclose on its website the annual audited financial Project Agreement, Complied. Annual statements for the Project and the opinion of the auditors on the financial Sec. 2.09 audit reports were statements within 30 days of the date of their receipt. disclosed on ADB website. 12. (c) HPG and YMG shall, and shall cause the IA to, enable ADB, upon Project Agreement, Complied. ADB's request, to discuss the financial statements for the Project, and Sec. 2.09 financial affairs of HPG, YMG and the IA where they relate to the Project with the auditors appointed pursuant to subsection (a)(iii) hereinabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB. This is provided that such discussions shall be conducted only in the presence of an authorized officer of HPG, YMG or the IA, unless either HPG, YMG, or the IA, as the case may require, shall otherwise agree. 13. Except as ADB may otherwise agree, YMG shall, and shall cause the Project Agreement, Complied. IA to apply the proceeds of the Loan to the financing of expenditures on Sec. 2.13 the Project in accordance with the provisions of the Loan Agreement and this Project Agreement, and shall ensure that all items of expenditures financed out of such proceeds are used exclusively in the carrying out of the Project. 14. Counterpart Funding. The EA shall provide counterpart funding and Project Agreement, Complied. YMG domestic commercial loan proceeds in a timely manner, including any Sch, para. 4 was the EA additional counterpart funding required for any shortfall of funds or cost responsible for overruns. The EA shall cause the IA to maintain adequate annual funding project for the operation and maintenance of Project facilities and shall ensure implementation, that such facilities are operated and maintained in accordance with while YMUCID was applicable engineering practices. the IA responsible for timely provision of counterpart funds. 15. Financial Management. The EA and the IA shall establish and maintain Project Agreement, Complied. sound financial management systems in accordance with ADB’s Guidelines Sch, para. 5 on the Financial Management and Analysis of Projects, including the establishment of separate project accounts and the maintenance of minimum balances to ensure smooth cash flow and the timely settlement of Project construction liabilities and future debt servicing.

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Reference in Loan/ Status of Covenant Project Agreement Compliance Sector 16. (a) The Borrower shall through HPG cause YMG to carry out the Project Loan Agreement, Complied. with due diligence and efficiency and in conformity with sound applicable Sec. 4.01 technical, financial, business, and development practices. 17. (b) In the carrying out of the Project and operation of the Project Loan Agreement, Complied. facilities, the Borrower shall perform, or cause to be performed, all Sec. 4.01 obligations set forth in Schedule 5 to this Loan Agreement and the Project Agreement. 18. The Borrower shall make available, or cause to be made available, Loan Agreement, Complied. promptly as needed, and on terms and conditions acceptable to ADB, the Sec. 4.02 funds, facilities, services, land and other resources as required, in addition to the proceeds of the Loan, for the carrying out of the Project. 19. The Borrower shall ensure that the activities of its departments and Loan Agreement, Complied. agencies with respect to the carrying out of the Project and operation of the Sec. 4.03 Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures. 20. The Borrower shall enable ADB's representatives to inspect the Loan Agreement, Complied. Project, the Goods and Works, and any relevant records and documents Sec. 4.04 related to the Project. 21. The Borrower shall take all actions which shall be necessary on its part Loan Agreement, Complied. to enable HPG, YMG and the IA to perform their obligations under the Sec. 4.05 Project Agreement, and shall not take or permit any action which would interfere with the performance of such obligations. 22. Reallocation. Notwithstanding the allocation of Loan proceeds and the Loan Agreement, Complied. withdrawal percentages set forth in the Table, Sch. 3, para. 3 Two reallocation of (a) if the amount of the Loan allocated to any Category appears to be loan proceeds and insufficient to finance all agreed expenditures in that Category, ADB may, increase of ADB in consultation with the Borrower, (i) reallocate to such Category, to the financing extent required to meet the estimated shortfall, amounts of the Loan which percentage were have been allocated to another Category but, in the opinion of ADB, are approved on 4 July not needed to meet other expenditures, and (ii) if such reallocation cannot 2014 and 21 fully meet the estimated shortfall, reduce the withdrawal percentage November 2018. applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made; and 23. (b) if the amount of the Loan allocated to any Category appears to Loan Agreement, Complied. See exceed all agreed expenditures in that Category, ADB may, in consultation Sch. 3, para. 3 above. with the Borrower, reallocate such excess amount to any other Category. 24. Implementation Arrangements. The Borrower shall through HPG cause Loan Agreement, Complied. the EA to ensure that the Project is implemented in accordance with the Sch. 5, para. 1 detailed arrangements set forth in the PAM. Any subsequent change to the PAM shall become effective only after approval of such change by the EA and ADB. In the event of any discrepancy between the PAM and this Loan Agreement, the provisions of this Loan Agreement shall prevail. 25. (b) HPG and YMG shall, and shall cause the IA to, carry out the Project Project Agreement, Complied. with due diligence and efficiency, and in conformity with sound applicable Sec. 2. 01 technical, engineering, financial, business, administrative, environmental development, and urban transport practices. 26. (c) In the carrying out of the Project and operation of the Project Project Agreement, Complied. facilities, HPG and YMG shall, and shall cause the IA to, perform all Sec. 2. 01 obligations set forth in the Loan Agreement to the extent that they are applicable to HPG, YMG and the IA, and all obligations set forth in the Schedule to this Project Agreement. 27. HPG and YMG shall make available, promptly as needed, the funds, Project Agreement, Complied. facilities, services, equipment, land and other resources as required, in Sec. 2. 02 addition to the proceeds of the Loan, for the carrying out of the Project. 28. YMG shall, and shall cause the IA to, carry out the Project in accordance Project Agreement, Complied. with plans, design standards, specifications, work schedules and Sec. 2. 04 construction methods acceptable to ADB. YMG shall, and shall cause the IA to, furnish, or cause to be furnished, to ADB, promptly after their preparation,

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Reference in Loan/ Status of Covenant Project Agreement Compliance such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request. 29. (a) ADB, HPG and YMG shall cooperate fully to ensure that the Project Agreement, Complied. purposes of the Loan will be accomplished. YMG shall cause the IA to Sec. 2. 07 cooperate fully with ADB to ensure that the purposes of the Loan will be accomplished.

30. (b) HPG and YMG shall, and shall cause the IA to, promptly inform Project Agreement, Complied. ADB of any condition which interferes with, or threatens to interfere with, Sec. 2. 07 the progress of the Project, the performance of their obligations under this Project Agreement, or the accomplishment of the purposes of the Loan. 31. (c) ADB, HPG, YMG and the IA shall from time to time, at the request of Project Agreement, Complied. either party, exchange views through their representatives with regard to any Sec. 2. 07 matters relating to the Project, HPG, YMG, the IA and the Loan. 32. (a) YMG shall, and shall cause the IA to, furnish to ADB all such reports Project Agreement, Complied. and information as ADB shall reasonably request concerning (i) the Loan Sec. 2. 08 and the expenditure of the proceeds thereof; (ii) the items of expenditure financed out of such proceeds; (iii) the Project; (iv) the administration, operations and financial condition of YMG and the IA; and (v) any other matters relating to the purposes of the Loan. 33. (b) Without limiting the generality of the foregoing, YMG shall furnish Project Agreement, Complied. to ADB periodic reports on the execution of the Project and on the Sec. 2. 08 operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period. 34. (c) Promptly after physical completion of the Project, but in any event Project Agreement, Complied. not later than 3 months thereafter or such later date as ADB may agree for Sec. 2. 08 this purpose, YMG shall prepare and furnish to ADB a report, in such form and in such detail as ADB shall reasonably request, on the execution and initial operation of the Project, including its cost, the performance by HPG, YMG and the IA of their respective obligations under this Project Agreement and the accomplishment of the purposes of the Loan. 35. YMG shall, and shall cause the IA to, enable ADB's representatives to Project Agreement, Complied. inspect the Project, the Goods and Works, all other plants, sites, properties Sec. 2. 10 and equipment of YMG and the IA relating to the Project, and any relevant records and documents relating to the Project. 36. YMG shall ensure that the IA promptly notifies ADB of any proposal to Project Agreement, Not applicable. amend, suspend or repeal any provision of its constitutional documents and Sec. 2. 14 shall afford ADB an adequate opportunity to comment on such proposal prior to taking any affirmative action thereon. 37. Implementation Arrangements. HPG and the EA shall ensure that the Project Agreement, Complied. Project is implemented in accordance with the detailed arrangements set Sch, para. 1 forth in the PAM. Any subsequent change to the PAM shall become effective only after approval of such change by the EA and ADB. In the event of any discrepancy between the PAM and this Project Agreement, the provisions of this Project Agreement shall prevail. 38. The EA shall ensure that throughout the Project implementation, the Project Agreement, Complied. PMO (a) is fully equipped with professionally skilled and experienced staff Sch, para. 2 including (i) PMO director; (ii)deputy director; (iii) finance and accounting officer; (iv) resettlement and environment safeguards officers; (v) procurement officers; (vi) technical staff; and (vii) assistants; and (b)has reasonable office space, equipment, and adequate financial resources required for timely and smooth implementation of the Project. 39. The EA shall establish the (YPLG, to be chaired by the vice mayor of Project Agreement, Complied. Yichang and comprising of senior officials from the Development and Sch, para. 3 Reform Commission, Finance Bureau, Environmental Protection Bureau,

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Reference in Loan/ Status of Covenant Project Agreement Compliance Housing and Construction Commission, Transport Bureau, Land Resources Bureau and Planning Bureau. The YPLG shall meet regularly to facilitate interagency coordination and resolve any institutional problems affecting project implementation at municipal level. 40. Change in Ownership. The EA shall ensure that in the event of (a) any Project Agreement, Not applicable as change in ownership or control of the Project facilities; or (b) any sale, Sch, para. 7 no change of transfer, or assignment of the shares of the IA is anticipated, the EA shall ownership took consult with ADB at least 6 months prior to the implementation of such place during project change. The EA and the IA shall further ensure that concurrent with any of implementation. the changes described above, the rights and obligations of the IA under the Project (including the Project-related agreements) are assumed by the acquiring entity and all other policies of ADB are followed. The EA shall cause the IA to ensure that such changes are carried out in a lawful and transparent manner. Procurement 41. Except as ADB may otherwise agree, the Borrower shall procure, or Loan Agreement, Complied. cause to be procured, the items of expenditure to be financed out of the Sec. 3.03 proceeds of the Loan in accordance with the provisions of Schedule 4 to this Loan Agreement. ADB may refuse to finance a contract where any such item has not been procured under procedures substantially in accordance with those agreed between the Borrower and ADB or where the terms and conditions of the contract are not satisfactory to ADB. 42. Except as ADB may otherwise agree, the Borrower shall cause all Loan Agreement, Complied. items of expenditure financed out of the proceeds of the Loan to be used Sec. 3.04 exclusively in the carrying out of the Project. 43. Basis for Withdrawal from the Loan Account. Except as ADB may Loan Agreement, Complied. otherwise agree, the proceeds of the Loan shall be disbursed on the basis Sch. 3, para. 2 of the withdrawal percentage for each item of expenditure set forth in the Table. 44. Goods and Works. Except as ADB may otherwise agree, Goods and Loan Agreement, Complied. Works shall only be procured on the basis of the methods of procurement Sch. 4, para. 3 Procurement of set forth below:(a) International Competitive Bidding. goods and works followed the ADB Procurement Guidelines. 45. The method of procurement is subject to, among other things, the Loan Agreement, Complied. detailed arrangements and threshold values set forth in the Procurement Sch. 4, para. 4 Plan. The Borrower may only modify the method of procurement or threshold values with the prior agreement of ADB, and modifications must be set out in updates to the Procurement Plan. 46. Domestic Preference. The Borrower may grant a margin of preference Loan Agreement, Complied. in the evaluation of bids under international competitive bidding in Sch. 4, para. 5 accordance with paragraphs 2.55(a) and 2.56 of the Procurement Guidelines for domestically manufactured Goods. 47. Conditions for Award of Contract. The Borrower shall, through HPG, Loan Agreement, Complied. cause YMG not to award any Works contract which involves Sch. 4, para. 6 environmental impacts until YMG has incorporated the relevant provisions from the EMP into the Works contract. 48. The Borrower shall, through HPG, cause YMG not to award any Works Loan Agreement, Complied. contract which involves involuntary resettlement impacts, until it has Sch. 4, para. 7 prepared and submitted to ADB the final RP based on the Project's detailed design, and obtained ADB's clearance of such RP. 49. Consulting Services. Except as ADB may otherwise agree, and except Loan Agreement, Complied. as set forth in the paragraph below, the Borrower shall apply quality- and Sch. 4, para. 8 cost-based selection for selecting and engaging Consulting Services. 50. The Borrower shall apply the following method for selecting and Loan Agreement, Complied. engaging the following Consulting Services, in accordance with, among Sch. 4, para. 9 other things, the procedures set forth in the Procurement Plan: Consultants’ Qualifications Selection for training and study tours, the

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Reference in Loan/ Status of Covenant Project Agreement Compliance external environment monitor and the external resettlement and social monitor. 51. Industrial or Intellectual Property Rights. (a) The Borrower shall ensure Loan Agreement, Complied. that all Goods and Works procured (including without limitation all computer Sch. 4, para. 10 hardware, software and systems, whether separately procured or incorporated within other goods and services procured) do not violate or infringe any industrial property or intellectual property right or claim of any third party. 52. (b) The Borrower shall ensure that all contracts for the procurement of Loan Agreement, Complied. Goods and Works contain appropriate representations, warranties and, if Sch. 4, para. 10 appropriate, indemnities from the contractor or supplier with respect to the matters referred to in subparagraph (a) of this paragraph. 53. The Borrower shall ensure that all ADB-financed contracts with Loan Agreement, Complied. consultants contain appropriate representations, warranties and, if Sch. 4, para. 11 appropriate, indemnities from the consultants to ensure that the Consulting Services provided do not violate or infringe any industrial property or intellectual property right or claim of any third party. 54. ADB’s Review of Procurement Decisions. Contracts procured under Loan Agreement, Complied. international competitive bidding procedures and contracts for Consulting Sch. 4, para. 12 Services shall be subject to prior review by ADB, unless otherwise agreed between the Borrower and ADB and set forth in the Procurement Plan. 55. (a) In the carrying out of the Project, YMG shall and shall cause the IA Project Agreement, Complied. to employ competent and qualified consultants and contractors, acceptable Sec. 2.03 to ADB, to an extent and upon terms and conditions satisfactory to ADB. 56. (b) Except as ADB may otherwise agree, YMG shall procure all items Project Agreement, Complied. of expenditures to be financed out of the proceeds of the Loan in Sec. 2.03 accordance with the provisions of Schedule 4 to the Loan Agreement. ADB may refuse to finance a contract where any such item has not been procured under procedures substantially in accordance with those agreed between the Borrower and ADB or where the terms and conditions of the contract are not satisfactory to ADB. 57. (a) YMG shall, and shall cause the IA to, take out and maintain with Project Agreement, Complied. responsible insurers, or make other arrangements satisfactory to ADB for Sec. 2.05 insurance of Project facilities to such extent and against such risks and in such amounts as shall be consistent with sound practice. 58. (b) Without limiting the generality of the foregoing, YMG shall cause the IA Project Agreement, Complied. to undertake to insure, or cause to be insured, the Goods to be imported for Sec. 2.05 the Project against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such Goods. 59. Insurance. The EA and the IA shall insure, or cause to be insured, the Project Agreement, Complied. goods to be imported for the Project against hazards incident to the Sch, para. 6 acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods. Sector 60. Construction Quality. The EA shall cause the PMO to ensure that all Project Agreement, Complied. the Works for the Project are designed and constructed in accordance with Sch, para. 8 Applicable national national standards and specifications, and that the construction laws and standards supervision, quality control, contract management, and completion were used in the inspection and acceptance follow applicable national laws and regulations. design and construction. 61. BRT Fares. The EA shall periodically review BRT fares and from time Project Agreement, Complied. to time update them as necessary in order to cover the costs of operating Sch, para. 9 and maintaining the BRT system. If, as a result of this review exercise, the EA proposes to increase BRT fares, the EA shall use its best endeavors to ensure that the increased BRT fares nevertheless remain affordable for poor and vulnerable people and the prevailing preferential policy for

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Reference in Loan/ Status of Covenant Project Agreement Compliance special groups remains effective, in each case during and after Project completion. 62. Roads and Traffic Safety. The EA shall cause the IA to cooperate with Project Agreement, Complied. all relevant agencies to promote traffic safety provisions for all roads Sch, para. 10 constructed under the Project, including the provision of adequate traffic and safety signage, signal lamps, medium separators, traffic control and surveillance and other necessary facilities. In particular, the EA shall cause the IA to (i) operate and maintain the roads during and after completion and to take into consideration possible environmental impacts in sensitive areas; (ii) ensure that traffic safety education activities are conducted by means of radio and television in both local dialect and Mandarin and traffic safety booklets to enhance the traffic safety awareness of the local people. 63. Before the commencement of works under the Project, the EA shall Project Agreement, Complied. ensure that a traffic accident monitoring system is established to monitor Sch, para. 11 and promptly report traffic accidents to local police authorities during and after completion of the works. The EA shall work together with the PMO, local police authorities and (during the Works phase) Works contractors to ensure remedial actions are taken to minimize the incidence of future traffic accidents. 64. The EA shall coordinate and agree with other government agencies to Project Agreement, Complied. ensure that the design standards of the roads constructed under the Sch, para. 12 Project are consistent with the standards of the interconnecting roads. 65. Design and Construction Quality and Management. The EA shall Project Agreement, Complied. ensure that all major Works under the Project are designed by Class A Sch, para. 13 design institutes and that sufficient funds are available for the engagement of such institutes. 66. Prior to the construction of the urban infrastructures under the Project, Project Agreement, Complied. the EA and the IA shall complete the detailed designs, complete geological Sch, para. 14 (including seismic) and geotechnical investigations and ensure that adequate risk mitigation is fully incorporated in the Project designs. The EA and the IA shall also ensure that all Works under the Project are designed and constructed in accordance with all relevant national, municipal and local design codes and standards and that the construction supervision, quality control, contract management, and completion inspection and acceptance procedures will be in accordance with all applicable national laws and municipal and local regulations. 67. Operations and Maintenance. The EA shall ensure that adequate Project Agreement, Complied. funding and human resources are allocated so that the Project roads, BRT Sch, para. 15 lanes, bridges, utilities, street lights, advanced traffic control system, BRT stations, facilities and environmental facilities are maintained and operated in good condition, and in strict conformity with all applicable laws, regulations and standards of the Borrower. Social 68. Land Acquisition and Involuntary Resettlement. The EA and the IA Project Agreement, Complied. shall ensure that all land and all rights-of-way required for the Project are Sch, para. 19 Resettlement made available to the Works contractors in a manner and within impacts were timeframes compliant with the RP, and that all land acquisition and identified, and one resettlement activities are implemented in compliance with (a) all RP was prepared in applicable laws and regulations of the Borrower relating to land acquisition accordance with and involuntary resettlement; (b) the Involuntary Resettlement the PRC laws and Safeguards; and (c) all measures and requirements set forth in the RP, regulations and and any corrective or preventative actions (i) set forth in the Safeguards ADB’s SPS 2009 in Monitoring Report; or (ii) as subsequently agreed between ADB and the April 2013. The RP EA. was updated by the IA and approved by ADB and was disclosed to the affected persons and on ADB

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Reference in Loan/ Status of Covenant Project Agreement Compliance website in March 2014 69. Without limiting the application of the Involuntary Resettlement Project Agreement, Complied. All Safeguards or the RP, the EA shall ensure and cause the IA to ensure, that Sch, para. 20 affected persons no physical or economic displacement takes place in connection with the were compensated Project until (a) the RP is updated upon completion of the detailed design and resettled and detailed measurement survey and submitted to ADB for approval prior according to the to commencement of land acquisition and/or house demolition and award of RP, and all affected any Works contract; (b) such updated RP is disclosed to displaced people households were in accordance with ADB’s disclosure requirements applicable for relocated to their resettlement-related activities; (c) compensation and other entitlements new houses. have been provided to displaced persons under the Involuntary Resettlement Safeguards as described in and in accordance with the RP; and (d) a comprehensive income and livelihood restoration program has been established in accordance with the RP. 70. The EA and the IA shall ensure that (a) counterpart funds are provided Project Agreement, Complied. on a timely basis for land acquisition and resettlement activities, and any Sch, para. 21 obligations in excess of resettlement plan budget estimates are met; (b) adequate staff and resources are committed to resettlement monitoring and supervision; (c) resettlement implementation is reported to the PMO and ADB through semiannual progress reports, a resettlement completion report, and a project completion report; and (d) an independent monitoring agency acceptable to ADB is engaged to carry out monitoring and evaluation, including data disaggregated by gender where applicable, and forward semiannual reports to ADB during resettlement implementation and annually for two (2) years after completion of resettlement. 71. Ethnic Minorities. The EA shall ensure that the Project does not have Project Agreement, Complied. In any impact on ethnic minorities, all within the meaning of the SPS. In the Sch, para. 22 accordance with event the Project does have any such impact, the EA shall take all steps ADB’s SPS 2009, required to ensure that the Project complies with the applicable laws and the project was regulations of the Borrower and with the SPS. classified as category C for indigenous peoples as no ethnic minority or indigenous people lived in the project areas or were affected by the project. There is no outstanding grievance for indigenous peoples. 72. Gender and Social Development. The EA and the IA shall implement Project Agreement, Complied. The GAP the GAP including ensuring that (a) adequate resources are allocated and Sch, para. 28 was fully made available for the implementation of the GAP; and (b) the GAP is fully implemented. implemented including but not limited to ensuring (i) women’s participation during consultations with the general public during public hearings, in decision-making processes, and in any local decision-making bodies and structures; (ii) the prioritization of job opportunities for women during and after project implementation, and providing appropriate training; (iii) reemployment of female bus drivers from pre-existing bus routes replaced by the BRT system; (iv) women are included as participating members in project-related seminars, workshops, trainings and meetings; (v) the collection of sex disaggregated data where appropriate; (vi) incorporating gender-responsive physical design features in the design of urban transport infrastructure; and (vii) the EA and the IA assign suitable staff to work on implementation of the GAP. The staff shall be trained on gender specific impacts of the Project by the GAP implementation consultants.

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Reference in Loan/ Status of Covenant Project Agreement Compliance The EA shall also ensure that the PMO and the IA monitors the Project's impacts on women during project implementation and is reported in the periodic reports referred to in Section 2.08 of this Project Agreement. 73. The EA and the IA shall ensure that (a) the SDAP is implemented in a Project Agreement, Complied. timely manner during and after completion of construction activities under Sch, para. 29 the Project; (b) adequate funds are set aside for implementation of the SDAP; and (c) the implementation of SDAP is monitored and reported in the periodic reports referred to in Section 2.08 of this Project Agreement. Safeguards 74. Environment. The EA and the IA shall ensure that the preparation, Project Agreement, Complied. The design, construction, implementation, operation, maintenance, monitoring Sch, para. 16 preparation, design, and decommissioning of the Project and all Project facilities comply with (a) construction, all applicable laws and regulations of the Borrower relating to environment, implementation, health and safety; (b) the Environmental Safeguards; and (c) all measures operation, and requirements set forth in the EIA, the EMP, and any corrective or maintenance, preventative actions (i) set forth in a Safeguards Monitoring Report, or (ii) as monitoring, and subsequently agreed between ADB and the EA. decommissioning of the project and all project facilities have complied with (a) all applicable laws and regulations of the Borrower relating to environment, health and safety. (b) environmental safeguards; and (c) all measures and requirements set forth in the EIA and the EMP. 75. Throughout Project implementation, the EA and the IA shall review any Project Agreement, Complied. During changes to the Project design, including the Project’s associated facilities Sch, para. 17 implementation, a that may potentially cause negative environmental impacts, and in Muslim cemetery consultation with ADB, revise environmental monitoring and mitigation was relocated due measures as necessary to assure full environmental compliance. The EA to the change of shall provide ADB within 60 days, justification for any proposed changes to project design. the mitigation measures required during design, construction and operation, Five meaningful if any changes to the EIA must be implemented for safety or emergency consultations were reasons. conducted with representatives of the affected people (Hui) and relevant stakeholders. Domestic EIA registration form was approved. Detailed information on the relocation of the cemetery was included in the environmental monitoring report disclosed on ADB website. 76. The EA and the IA shall ensure that sufficient resources and full-time Project Agreement, Complied. personnel are provided for monitoring implementation of the EMP, under Sch, para. 18 Sufficient resources the guidance of the Yichang Environmental Protection Bureau, and and full-time

54 Appendix 13

Reference in Loan/ Status of Covenant Project Agreement Compliance making appropriate use of external independent environmental monitoring personnel were centers. provided for monitoring and implementation of the EMP. 77. Human and Financial Resources to Implement Safeguards Project Agreement, Complied. Requirements. The EA and the IA shall make available necessary Sch, para. 23 Available budgetary and human resources to fully implement the EMP and the RP. necessary budgetary and human resources to fully implement the EMP and the RP were made. 78. The EA and the IA shall ensure that (a) the Project implementation Project Agreement, Complied. consultants are engaged in a timely manner, including safeguards Sch, para. 24 Safeguards specialists; (b) licensed environmental monitoring stations are contracted to implementation conduct periodic environmental impact monitoring in accordance with the consultants were approved monitoring plan; and (c) the capacity building programs described engaged; licensed in the EMP and the RP are implemented as planned commencing on the environmental date of engagement of the consultants and continuing until the date of monitoring stations Project completion. were contracted; and capacity building programs were implemented as planned. 79. Safeguards-Related Provisions in Bidding Documents and Works Project Agreement, Complied. Contracts. The EA and the IA shall ensure that all bidding documents and Sch, para. 25 Safeguards-related contracts for Works contain provisions that require contractors to (a) comply provisions were with the measures relevant to the contractor set forth in the EIA, the EMP included in the and the RP (to the extent they concern impacts on the respective affected bidding documents people under the Environmental Safeguards and the Involuntary and works contracts Resettlement Safeguards during construction), and any corrective or as required. preventative actions set forth in (i) a Safeguards Monitoring Report, or (ii) subsequently agreed between ADB and the EA; (b) make available a budget for all such environmental and social measures; (c) provide the EA and IA with a written notice of any unanticipated environmental, resettlement or social safeguard risks or impacts that arise during construction, implementation or operation of the Project that were not considered in the EIA, the EMP and the RP; (d) adequately record the condition of roads, agricultural land and other infrastructure prior to starting to transport materials and construction; (e) reinstate pathways, other local infrastructure, and agricultural land to at least their pre-project condition as soon as possible and no later than the completion of construction; (f) (i) comply with all applicable labor laws of the Borrower on the prohibition of child and forced labor; (ii) give equal pay for equal work regardless of gender, ethnicity or social group; (iii) give priority to women in the employment and training opportunities generated in the Project’s construction and operation phases; (iv) maximize the employment of local people who meet the job and efficiency requirements for Project construction, operation and maintenance; and (v) provide such workers with adequate on-the-job and safety training; (g) (i) employ women and the local poor to at least the percentages of the labor force as set out in the GAP and SDAP; (ii) provide equal pay for equal work, regardless of gender, age, ethnicity or any other factors; (iii) provide the timely payment of wages; (iv) maximize the employment of local people who meet the job and efficiency requirements for Project construction, operation and maintenance and in that regard, not discriminate against people based on age, provided they are capable of performing the work; (v) advertise labor requirements in a timely manner prior to recruitment, in a venue that can reasonably be expected to be seen by interested men and women, regardless of age or ethnicity; (vi) provide workers with a written contract; (vii) provide such workers with adequate on-

Appendix 13 55

Reference in Loan/ Status of Covenant Project Agreement Compliance the-job training and safety training; (viii) comply with core labor standards and the applicable labor laws and regulations, including stipulations related to employment; (ix) not employ child labor; and (x) maintain records of labor employment (including the name, ethnicity, age, gender, working time and payment of wages) and ensure that such records are included in summary form in the Project performance management system; and (h) (i) disseminate information on sexually transmitted diseases (including HIV/AIDS) to sub-contractors/employees and local communities surrounding the Project construction sites; (ii) implement HIV/AIDS awareness and prevention training for sub-contractors/employees; (iii) provide necessary measures to ensure the safety and health of its sub- contractors/employees; and (iv) observe local customs concerning acceptable behavior towards the local population. 80. Safeguards Monitoring and Reporting. The EA shall do the following: (a) Project Agreement, Complied. Submit Safeguards Monitoring Reports to ADB (i) in respect of Sch, para. 26 Safeguards implementation of and compliance with Environmental Safeguards and the monitoring were EMP, semi-annually during construction and implementation of the Project conducted and and the EMP, until the issuance of ADB’s Project completion report unless monitoring reports a longer period is agreed in the EMP; and (ii) in respect of implementation were submitted to of and compliance with Involuntary Resettlement Safeguards and of the RP, ADB as required. semi-annually during the implementation of the Project and the RP until the issuance of ADB’s Project completion report unless a longer period is agreed in the RP, and disclose relevant information from such reports to respective affected people under the Environmental Safeguards and the Involuntary Resettlement Safeguards promptly upon submission; (b) if any unanticipated environmental and/or social risks and impacts arise during construction, implementation or operation of the Project that were not considered in the EIA, the EMP and the RP, promptly inform ADB of the occurrence of such risks or impacts, with detailed description of the event and proposed corrective action plan; (c) no later than the commencement of land acquisition and resettlement activities, engage qualified and experienced external experts or qualified NGOs under a selection process and terms of reference acceptable to ADB, to verify information produced through the Project monitoring process, and facilitate the carrying out of any verification activities by such external experts; and (d) report any actual or potential breach of compliance with the measures and requirements set forth in the EMP or the RP promptly after becoming aware of the breach. 81. Safeguards – Prohibited List of Investments. The EA shall ensure that Project Agreement, Complied. no proceeds of the Loan are used to finance any activity included in the list Sch, para. 27 of prohibited investment activities provided in Appendix 5 of the SPS. Others 82. (a) YMG shall ensure that the IA promptly as required, takes all action Project Agreement, Complied. within its powers to maintain its corporate existence, to carry on its Sec. 2.11 operations, and to acquire, maintain and renew all rights, properties, powers, privileges and franchises which are necessary in the carrying out of the Project or in the conduct of its operations. 83. (b) YMG shall, and shall cause the IA to, at all times conduct its Project Agreement, Complied. operations in accordance with sound applicable technical, financial, Sec. 2.11 business, administrative, environmental, operational and urban transport practices, and under the supervision of competent and experienced management and personnel. 84. (c) YMG shall at all times operate and maintain its plants, equipment and Project Agreement, Complied. other property, and from time to time, promptly as needed, make all Sec. 2.11 necessary repairs and renewals thereof, all in accordance with sound applicable technical, financial, business, administrative, environment, development, urban transport, and operational and maintenance practices. 85. Except as ADB may otherwise agree, HPG and YMG shall not, and Project Agreement, Complied. shall cause the IA not to sell, lease or otherwise dispose of any of their Sec. 2.12 assets which shall be required for the efficient carrying on of their

56 Appendix 13

Reference in Loan/ Status of Covenant Project Agreement Compliance operations or the disposal of which may prejudice their ability to perform satisfactorily any of their obligations under this Project Agreement. 86. Grievance Redress Mechanism. The EA shall ensure that separate Project Agreement, Complied. A safeguards grievance redress mechanisms, acceptable to ADB, are Sch, para. 30 transparent and established in accordance with the provisions of the EMP and the RP at effective grievance the PMO, within the timeframes specified in the relevant EIA, EMP and redress mechanism RP, to consider safeguards complaints. The EA shall further ensure that has been within 2 months following the Effective Date, a grievance redress established during mechanism acceptable to ADB, is established for non-safeguards resettlement complaints. In each case, such grievance redress mechanism shall implementation. As function to(a) review and document eligible complaints of Project of the reporting stakeholders; (b) proactively address grievances; (c) provide the period, YPMO has complainants with notice of the chosen mechanism/action; and (d) prepare not received any periodic reports to summarize (i) the number of complaints received and grievance on land resolved, (ii) chosen actions, and (iii) final outcomes of the grievances and acquisition and make these reports available to ADB. Eligible non-safeguards complaints resettlement. include those related to the Project, any of the service providers, any person responsible for carrying out the Project, complaints on misuse of funds and other irregularities as well as gender issues. 87. Public Awareness. The EA and the IA shall undertake public awareness Project Agreement, Complied. YMG, campaigns on the Project and its benefits. The public awareness campaign Sch, para. 31 YMUCID, and shall: (a) include, amongst others, those related to the RP, EIA, EMP, GAP resettlement and SDAP; and (b) be carried out through information disclosure, education agencies and consultation in languages and presentation formats relevant to the conducted location and literacy levels of the local populations, including easily extensive public understandable visuals. Such public awareness campaigns shall also include participation and information dissemination and education to concerned residents regarding consultation, HIV/AIDS, sexually-transmitted infection and other communicable diseases, including project environmental sanitation, health, hygiene and road safety. information disclosure, focus group discussions with affected peoples, public hearing on compensation rates, and resettlement information booklets distribution. 88. Governance and Anticorruption. HPG and the EA shall and shall cause Project Agreement, Complied. the IA to (a) comply with ADB’s Anticorruption Policy (1998, as amended to Sch, para. 32 date) and acknowledge that ADB reserves the right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practices relating to the Project; and (b) cooperate fully with any such investigation and to extend all necessary assistance, including providing access to all relevant books and records, as may be necessary for the satisfactory completion of any such investigation. In particular, the EA shall ensure that (a) periodic inspections of the Project contractors’ activities related to fund withdrawals and settlements are carried out; (b) relevant provisions of ADB’s Anticorruption Policy are included in all bidding documents for the Project; and (c) contracts, financed under the Project, include provisions specifying the right of ADB to audit and examine the records and accounts of the EA, the IA, the PMO, contractors, suppliers, consultants, and other service providers as they relate to the Project. 89. The EA shall, through PMO, undertake the following anticorruption Project Agreement, Complied. actions: (a)involve full time officials from Yichang Discipline Investigation Sch, para. 33 Committee in the bidding, award and implementation of contracts; (b) introduce a dual-signing system, in which the Works contract winner signs an anticorruption contract with the employer when they sign and execute

Appendix 13 57

Reference in Loan/ Status of Covenant Project Agreement Compliance the contract; (c) ensure that anticorruption provisions acceptable to ADB are included in all bidding documents and contracts, including provisions specifying the right of ADB to audit and examine the records and accounts of the executing and implementing agencies and all contractors, suppliers, consultants, and other service providers as they relate to the Project; (d) engage the Project management consultant to support the PMO to ensure good governance, accountability and transparency in Project implementation. 90. The EA shall, through the IA’s publicly-accessible website, disclose Project Agreement, Complied. information about various project matters, including general Project Sch, para. 34 information, summary of the Project’s audited financial statements, procurement, Project progress, details of any proposed fare increases and associated scheduled public hearings, information related to pro-poor subsidies or tariff life lines and contact details in the English and Chinese languages. The website will also provide a link to ADB's Integrity Unit (http://www.adb.org/site/integrity/main)for reporting to ADB any grievances or allegations of corrupt practices arising out of the Project and Project activities. With regard to procurement, the website will include information on the list of participating bidders, name of the winning bidder, basic details on bidding procedures adopted amount of contract awarded, and the list of Goods, Works and Consulting Services procured. ADB = Asian Development Bank, BRT = bus rapid transit, EA = executing agency, EIA = environmental impact assessment, EMP = environmental management plan, GAP = gender action plan, HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome, HPG = Hubei Provincial Government, IA = implementing agency, NGO = nongovernment organization, PAM = project administration manual, PMO = project management office, RP = resettlement plan, SDAP = social development action plan, SPS = safeguard policy statement, YMG = Yichang Municipal Government, YMUCID = Yichang Municipal Urban Construction Investment and Development, YPLG = Yichang Project Leading Group, YPMO = Yichang Project Management Office. Source: Asian Development Bank.

58 Appendix 14

DEMONSTRATION EFFECTS OF THE PROJECT

Since the construction of the Yichang bus rapid transit in the People’s Republic of China from 2014 to 2019, a total of 268 delegations from 91 different cities have visited Yichang bus rapid transit and learned the experiences from Yichang.

Number of Year City Delegations 2014 Ahmedabad, Kuala Lumpur, and Wuhan 3 2015 Beijing, Changde, Changsha (2), Chibi (2), Chongqing (2), Dandong (2), 79 E'zhou, Enshi (3), Fuyang, Guangzhou (3), Hangzhou, Hefei (2), Huanggang (2), Huangshi (3), Ji'an (2), Jiaozuo Jingmen (2), Jingzhou (3), Linyi, Luoyang, Manila, Nanchang (2), Nanning, Nantong, Nanyang, New York, Qianjiang (3), Shanghai, Shangrao, Shennongjia, Shiyan (4), Suizhou (3), Taiyuan, Tianmen, Tongling, Wuhan (6), Wuhu, Wuzhou, Xiangyang (2), Xianning, Xiantao (3), Xinxiang, Yingtan, Yiwu, Zhengzhou (2), Zhumadian, Zhuzhou 2016 Beijing; Berkeley; Bogota; Brasilia; Changchun; Chennai; Dandong; Delhi; 52 Dongguan; Enshi; Fuzhou; Guangzhou; Guiyang; Harbin; Hefei; Hong Kong; Huainan; Huanggang; Jakarta (2); Jiangsu; Jinan; Jinzhou; London; Los Angeles; Manila; Mexico City; Nairobi; Nanning (2); New York; Ningxia; Paris; Quanzhou; Peshawar; Pune; Santiago; Sao Paulo; Seattle; Seoul; Shenzhen; Shijiazhuang; Sydney; Washington, DC; Wuhan (3); Xiangyang; Zhongshan; Zhumadian; Zhuzhou (2) 2017 Anqing, Anyang, Baoding, Beijing, Bengbu, Botou, Cangzhou, Changzhou, 76 Chizhou, Chuzhou, Deyang, Dingxi, Fuyang, Gongyi, Guinea-Bissau, Handan, Handan China Civil Engineering (2), Harbin, Hebi, Hefei, Hengshui, Huaibei, Huaihua, Huainan, Huangshan, Huangshi, Huzhou, Ji'an, Jingmen, Jingzhou, Kaifeng, Liaocheng Lu’an, Luohe, Luoyang, Luzhou (2), Maanshan, Manila (2), Mianyang, Pingdingshan, Puyang, Quanzhou, Quzhou, Nanyang, Ruzhou, Sanmenxia, Shanghai (2), Shiyan, Suzhou, Taipei, Tongling, Wugang, Wuhan, Wuhu, Xiangcheng, Xiangyang (2), Xingtai, Xinyang, Xuancheng, Yancheng, Yiwu, Zhangye, Zhenjiang, Zhongshan, Zhoukou, Zibo, Zhumadian, Zhuzhou, Zunyi 2018 Changzhou (2), Chibi, Enshi, Fuyang, Ganzhou, Honghe Prefecture, 35 Jiangxi Fuzhou (2), Jinzhou, Lianyungang, Luzhou, Ma'anshan, Meishan, Nanchong, Pingdingshan (2), Quanzhou, Qiqihaer, Nanjing, Panzhou, Shiyan, Songzi, Taizhou, Ulaanbaatar, Wuhan, Xiantao, Xiangyang, Yancheng, Yanji (2), Yibin (2), Yunnan, Zigong 2019 Zhengzhou(2), Shanghai, Wenzhou, Enshi, Zhuzhou, Ezhou, Xiangyang, 23 Jinzhou, Shenzhen, Zhuzhou, Chuannan, Pingdingshan, Chengde, Yibin, Yichun, Vientiane, Qingdao, Liaocheng, Zaozhuang, Xinyang, Hohhot, and Xinxiang Source: Asian Development Bank.

Appendix 15 59

ECONOMIC REEVALUATION

A. Economic Cost

1. The economic analysis was conducted in 2018 CNY constant prices using a domestic price numeraire. A shadow exchange rate factor of 1.0231 was used to convert the financial price of traded goods to economic prices. The costs of unskilled labor are calculated using a shadow wage rate factor of 0.80. The composite conversion factor is 0.88. The economic opportunity cost of 12% is used as the discount rate for the economic evaluation. The economic analysis covers 25 years from 2013 to 2037, including 5 years of construction period. And the exchange rate used is CNY6.30 per USD.

2. The residual value of the bus rapid transit (BRT) system is estimated at 30% of the investment cost at the end of 25-year evaluation period. And the residual value of Dongshan 4th Road is estimated at 50% of the investment cost.

3. The maintenance costs of both BRT system and Dongshan 4th Road are expected to increase by 3% annually.

B. Economic Benefits

4. Benefits derived from the project consisted of (i) vehicle operating cost (VOC) savings, (ii) savings in passenger time, (iii) emission reduction (CO2), and (iv) safety savings by reducing the accident costs.

5. The VOC savings is calculated based on the actual operating cost savings in fuel, labor, material, and parts provided by BRT bus company. BRT bus is operating at an average speed of 18.3 kilometers per hour (km/h). Compared with 15 km/h of the old service bus, it reduced the running time by 40%. Survey shows passengers who chose to ride BRT instead of private cars and taxi accounts for 20% of total BRT passengers in 2015. The number increased to 38% in 2018. 2 The annual increase of passengers riding the BRT system is expected to be 5% consistently until the end of evaluation period.

6. Safety savings were attributable to the dedicated bus lane, improved traffic signals, fully enclosed bus station, and intelligent bus management system. The projection is based on the accident costs savings provided by BRT bus company.

7. For Dongshan 4th Road, the road will not be fully operational until January 2020, and the actual data was not available during the project completion review mission. The analysis assumes traffic will increase by 15% per annum from 2019 to 2024, and 5% thereafter until the end of the analysis period.

C. Reevaluation of Economic Internal Rate of Return

8. Table A15.1 presents the economic reevaluation of the project, which has an economic internal rate of return (EIRR) of 21.68%, much higher than ADB’s threshold of 12%.3 The project

1 ADB website. Shadow pricing for the People’s Republic of China, 2011–2015. 2 Institute for Transportation and Development. November 2018. Yichang BRT Impact Assessment. 3 If the report and recommendation of the President adopted 12% for the threshold of economic viability, the PCR needs to use the same 12% for the threshold for its consistency for the calculation, although the guideline changed the threshold from 12% to 9%.

60 Appendix 15

is considered economically viable. Moreover, the recalculated EIRR is higher than the EIRR at appraisal of 17.8% even though actual traffic is lower than the appraisal estimates considering the Yemingzhu Road section of BRT was not complete until February 2018, and Dongshan 4th Road will not be fully operational until January 2020.

Table A15.1: Economic Internal Rate of Return

Total VOC VOT CO2 Total Net Cash Year Investment O&M Costs Savings Savings Savings Safety Benefits Flow

2013 624.67 - 624.67 - (624.67) 2014 755.95 - 755.95 - (755.95) 2015 382.28 - 382.28 19.91 55.14 6.43 2.82 84.29 (297.99) 2016 113.21 70.31 183.52 42.76 138.43 72.74 3.57 257.49 73.97 2017 15.18 79.84 95.02 44.94 141.43 74.27 3.26 263.90 168.88 2018 81.11 81.11 42.17 156.77 72.08 4.65 275.68 194.57 2019 101.52 101.52 113.52 344.95 69.82 4.79 533.08 431.56 2020 105.81 105.81 126.64 394.92 71.92 4.94 598.42 492.61 2021 109.63 109.63 141.53 452.71 74.10 5.08 673.42 563.79 2022 136.00 125.88 261.88 158.45 519.62 76.33 5.24 759.63 497.75 2023 130.34 130.34 177.69 597.17 78.63 5.39 858.88 728.55 2024 134.95 134.95 199.59 687.15 81.00 5.56 973.30 838.35 2025 148.00 139.72 287.72 209.57 748.86 83.44 5.72 1,047.59 759.87 2026 144.66 144.66 220.05 816.17 85.95 5.89 1,128.07 983.41 2027 164.02 164.02 231.05 889.62 88.54 6.07 1,215.28 1,051.26 2028 169.73 169.73 242.60 969.77 91.20 6.25 1,309.83 1,140.10 2029 175.64 175.64 254.73 1,057.23 93.94 6.44 1,412.35 1,236.71 2030 136.00 181.75 317.75 267.47 1,152.69 96.77 6.63 1,523.56 1,205.81 2031 188.06 188.06 280.84 1,256.87 99.68 6.83 1,644.22 1,456.16 2032 194.59 194.59 294.89 1,370.60 102.67 7.04 1,775.19 1,580.60 2033 148.00 218.37 366.37 309.63 1,494.75 105.75 7.25 1,917.38 1,551.01 2034 218.78 218.78 325.11 1,630.29 108.93 7.47 2,071.80 1,853.02 2035 219.21 219.21 341.37 1,778.29 112.20 7.69 2,239.55 2,020.34 2036 219.64 219.64 358.44 1,939.91 115.56 7.92 2,421.83 2,202.18 2037 (1,058.79) 220.09 (838.70) 376.36 2,116.40 119.03 8.16 2,619.95 3,458.65 ENPV at 12% 2,268.85 EIRR 21.68% CO2 = carbon dioxide, EIRR = economic internal rate of return, ENPV = economic net present value, O&M = operation and maintenance, VOC = vehicle operating cost, VOT = value of time. Source: Asian Development Bank.

9. The sensitivity analysis considered the operation and maintenance (O&M) costs increase by 5%, 10% and total benefits decrease by 5%, 10% respectfully. In the worst scenario, with O&M costs increase by 10% and total benefits decrease by 10%, the EIRR is 19.80%, still higher than the ADB threshold of 12%. The sensitivity analysis results confirm the robustness of the project as shown in Table A15.2.

Appendix 15 61

Table A15.2: Sensitivity Analysis Changes in EIRR Item O&M Benefits (%) Base Case 0 0 21.68 Changes +5% 21.55 +10% 21.41 -5% 20.89 -10% 20.07 +10% -10% 19.80 EIRR = economic internal rate of return, O&M = operation and maintenance. Source: Asian Development Bank.

10. While the project will continue to be economically viable under all scenarios, it is much more sensitive to changes in benefits than costs. The EIRR would be lower at 20.07% in the case of 10% decrease in benefits, as compared with an EIRR of 21.41% with 10% increase in O&M.

62 Appendix 16

FINANCIAL REEVALUATION

A. Introduction

1. This appendix describes the financial analysis of the Hubei-Yichang Sustainable Urban Transport Project. The project outputs include (i) bus rapid transit (BRT) corridor constructed and put in operation, (ii) nonmotorized transport (NMT) and traffic safety improvement, (iii) Dongshan 4th Road and related infrastructure constructed and put in operation, and (iv) capacity building and quality assurance.

2. A financial reevaluation of the project was conducted to determine financial sustainability, including assessing the fiscal capacity of the Yichang Municipal Government (YMG), the executing agency, after project completion. The financial reevaluation was conducted in accordance with the Asian Development Bank’s (ADB) Guidelines for the Financial Management and Analysis of Projects1 and Financial Due Diligence – A Methodology Note.2 The financial projections are based on the updated information from YMG, BRT operations, subsidy and transfers, ADB loan debt servicing, and projected operation and maintenance (O&M) costs. The fiscal impact analyses pertain to outputs 2 and 3.

3. Basic assumptions. All revenues and expenses are expressed in constant 2019 prices. Project capital expenditures are updated figures incorporating the approved figures of the preliminary designs and awarded contracts. Capital expenditures include all incremental capital expenditures but exclude price contingencies and interest during construction.

4. The FIRR was calculated using incremental annual cash flows over 21 years (including the construction period of 3 years). The government will subsidize the replacement of BRT buses every 8 years at the cost of CNY800,000 per vehicle and included as part of the investment. Revenues are calculated based on the actual and forecasted volume, bus fare rate,3 and income from non-ticket related activity4 plus government subsidies. The O&M costs include annual incremental expenses incurred in operating the BRT but excluding depreciation.

5. At appraisal, it was noted that the bus companies are receiving the following subsidies from YMG annual fiscal budget based on government regulations: fuel, gas, discount cover,5 and subsidies for purchasing new public transport buses and replacing public transport facilities. However, a new policy was issued in 2016, canceling the gas subsidies. In 2018, the total government subsidy amounted to CNY41.46 million (Table A16.1).

1 ADB. 2005. Financial Management and Analysis of Projects. Manila. 2 ADB. 2009. Financial Due Diligence-A Methodology Note. Manila. 3 Bus fare rate at CNY2 and expected to increase by CNY1 every 6 years. 4 Such as bus leasing and advertisement. 5 To compensate for discounted fares for students and senior citizens.

Appendix 16 63

Table A16.1: BRT Subsidy (CNY) Discount YMG Annual No of Fuel Year Coverage Allocation to Total Vehicles (CNY/vehicle） (CNY/vehicle) YPTG 2016 200 23,400.00 35,714.29 11,822,858 2017 200 25,200.00 35,714.29 30,000,000 42,182,858 2018 200 21,600.00 35,714.29 30,000,000 41,462,858 2019 200 18,000.00 35,714.29 30,000,000 40,742,858 2020 200 14,400.00 35,714.29 30,000,000 40,022,858 2021 200 14,400.00 35,714.29 30,000,000 40,022,858 2022 200 14,400.00 35,714.29 30,000,000 40,022,858 2023 200 14,400.00 35,714.29 30,000,000 40,022,858 2024 200 14,400.00 35,714.29 30,000,000 40,022,858 2025 200 14,400.00 35,714.29 30,000,000 40,022,858 2026 200 14,400.00 35,714.29 30,000,000 40,022,858 2027 200 14,400.00 35,714.29 30,000,000 40,022,858 2028 200 14,400.00 35,714.29 30,000,000 40,022,858 2029 200 14,400.00 35,714.29 30,000,000 40,022,858 2030 200 14,400.00 35,714.29 30,000,000 40,022,858 2031 200 14,400.00 35,714.29 30,000,000 40,022,858 2032 200 14,400.00 35,714.29 30,000,000 40,022,858 2033 200 14,400.00 35,714.29 30,000,000 40,022,858 BRT = bus rapid transit, CNY = Chinese yuan, YMG = Yichang Municipal Government, YPTG = Yichang Public Transport Group. Source: Yichang Public Transport Group.

6. Weighted average cost of capital. The weighted average cost of capital (WACC) was calculated after-tax in real terms using actual capital mix and costs of funds. The real interest costs of loan funds were considered based on the actual cost of loan funds from ADB and domestic banks. The Economic Research and Regional Cooperation Department of ADB’s escalation rates were also used. The cost of government appropriation is assumed at 3.21%, the 10-year PRC bond yield plus a premium of 30 basis points, and the local income tax at 25%.

7. After project completion, the investment cost decrease from CNY1.28 billion to CNY0.927 billion. The WACC has declined compared with the appraisal estimate since the costs of ADB and local bank loans have decreased significantly, which also decreases the weight component of these two financiers, which has a higher factor in the appraisal assessment. The recalculated WACC for the project is 0.69% as shown in Table A16.2.

Table A16.2: Weighted Average Cost of Capital Item ADB Loan Appropriation Local Bank Total Amount (CNY million) 582.18 26.56 318.08 926.82 Weighting 62.81% 2.87% 34.32% 100.00% Nominal cost 2.65% 3.51% 4.90% Income tax rate 25.00% 0.00% 25.00% Tax-adjusted nominal cost 1.99% 3.51% 3.68% Inflation rate 1.50% 2.60% 2.60% Real cost 0.48% 0.89% 1.05% Weighted component of WACC 0.30% 0.03% 0.36% WACC 0.69% ADB = Asian Development Bank, CNY = Chinese yuan, WACC = weighted average cost of capital. Source: Asian Development Bank.

8. Financial internal rate of return. The financial internal rate of return (FIRR) at completion was higher than the WACC, indicating that the BRT project is financially viable. The FIRRs and WACCs at completion and appraisal are illustrated in Table A16.3. The projected cash flow is presented in Table A16.4. The main difference for the decline in the FIRR between

64 Appendix 16

the appraisal and completion is that the passenger traffic forecast at appraisal was too optimistic at a 30% increase per year as compared with the actual bus ridership.

Table A16.3: Financial Internal Rate of Return At Appraisal At Completion Item FIRR (%) WACC (%) FIRR (%) WACC (%) BRT 10. 4.80 11. 2.58 13. 2.53 14. 0.69 BRT = bus rapid transit, FIRR = financial internal rate of return, WACC = weighted average cost of capital. Source: Asian Development Bank.

Table A16.4: Financial Internal Rate of Return of BRT Component Capital Total Fare Non-Fare Total Net Cash Year Costs O&M Cost Revenue Revenue Subsidy Revenue Flow 2013 340.84 340.84 - (340.84) 2014 450.66 450.66 - (450.66) 2015 109.74 109.74 - - (109.74) 2016 25.57 82.72 108.29 75.85 2.43 11.82 90.10 (18.19) 2017 93.93 93.93 78.12 4.58 42.18 124.89 30.96 2018 95.43 95.43 78.58 8.65 41.46 128.70 33.27 2019 108.76 108.76 80.94 12.47 40.74 134.16 25.40 2020 113.49 113.49 83.37 16.52 40.02 139.91 26.42 2021 117.65 117.65 85.87 18.90 40.02 144.80 27.15 2022 136.43 136.43 132.67 21.42 40.02 194.11 57.68 2023 141.32 141.32 136.65 24.07 40.02 200.74 59.42 2024 146.39 146.39 140.75 26.86 40.02 207.63 61.24 2025 120.00 151.63 271.63 144.97 29.79 40.02 214.78 (56.85) 2026 157.06 157.06 149.32 32.87 40.02 222.22 65.16 2027 179.44 179.44 205.07 36.12 40.02 281.21 101.76 2028 185.76 185.76 211.22 39.53 40.02 290.77 105.01 2029 192.29 192.29 217.56 43.11 40.02 300.69 108.40 2030 199.04 199.04 224.08 46.87 40.02 310.97 111.93 2031 206.03 206.03 230.81 50.81 40.02 321.64 115.61 2032 213.26 213.26 237.73 54.95 40.02 332.71 119.45 2033 (158.04) 240.76 82.72 306.08 59.30 40.02 405.40 322.68 FIRR = 2.53% BRT = bus rapid transit, FIRR = financial internal rate of return, O&M = operation and maintenance. Source: Asian Development Bank.

9. Sensitivity analysis. Sensitivity analysis was performed to test the FIRR’s sensitivity to certain changes in parameters. The BRT component remains viable in all tested scenarios. The analysis shows that similar to the project evaluation at appraisal, the BRT component is very sensitive to the decrease in bus fare revenue and in the increase in O&M cost as indicated in Table A16.5.

Table A16.5: FIRR and Sensitivity Analysis Variable Change FIRR (%) 17. FNPV Base case 2.53 267.48 Increase in capital cost 10% 1.91 189.63 Increase in O&M 10% 0.81 16.45 Decrease in fare revenue 10% 0.78 12.35 Decrease in non-fare revenue 10% 2.22 219.85 FIRR = financial internal rate of return, FNPV = future net present value, O&M = operation and maintenance. Source: Asian Development Bank.

Appendix 16 65

B. Fiscal Capacity

10. Based on the Yichang Municipal Bureau of Statistics, the regional gross domestic product (GDP) reached CNY4,064 billion, and the per capita regional GDP reached CNY98,269 in 2018. Also, in 2018, the per capita disposable income of permanent urban residents was CNY26,139, and the per capita disposable income of rural residents was CNY16,514. With the urban expansion and population migration, the urban population in Yichang is expected to increase to 2.8 million by 2030.

11. Similar to other PRC cities, YMG has experienced strong socioeconomic development in the past 5 years, with an average annual GDP growth rate of 5.18% between 2013 and 2017. Local government revenue also maintained a rapid growth momentum, with fiscal revenue rising from CNY32.08 billion in 2013 to CNY40.39 billion in 2018, greatly supporting and stimulating the rapid development of the city. The capital requirements of this project, especially the subsidy and the O&M cost of the project, are still small compared with the financial capacity of YMG. Tables A16.6 and A16.7 presented the percentage of debt servicing and the required subsidy as compared with YMG’s total fiscal revenue from 2013 to 2033. With this, it can be noted that the financial requirements will not be a burden to the fiscal expenditure of YMG.

Table A16.6: Fiscal Impact of Debt Repayments and Subsidy to YMG Actual Index 24. Unit 2013 2014 2015 2016 2017 2018 GDP CNY billion 2,818 3,132 3,384 3,709 3,857 4,064 Annual GDP growth rate 40. % 11.50 9.80 8.90 8.80 2.40 7.70 Per capita GDP CNY/person 68,846 76,369 82,360 89,978 93,331 98,269 Total fiscal revenue CNY million 32,082 38,873 33,910 38,615 38,769 40,385 Total fixed asset investment CNY billion 210 52 292 319 258 no data 72. 73. 74. 75. 76. 77. ADB debt service CNY million80. 1.31 3.81 8.47 15.44 32.40 Subsidy to YPTG 87. 11.82 42.18 41.46 41.46 % of debt and subsidy/fiscal % 93. 0.003 0.011 0.053 0.149 0.183 revenue ADB = Asian Development Bank, CNY = Chinese yuan, GDP = gross domestic product, YMG = Yichang Municipal Government, YPTG = Yichang Public Transport Group. Source: Yichang Statistical Yearbook, published by China Statistics Press.

Table A16.7: YMG Fiscal Forecast and Impact of Debt Repayments and Subsidy Index 100. Unit 2019 2020 2021 2023 2027 2033 Total fiscal revenue CNY million 41,696 43,008 44,319 46,943 44,319 46,943 ADB debt service CNY million117. 40.16118. 41.74119. 43.32120. 47.16121. 57.33122. 82.59 Subsidy to YPTG CNY million125. 40.74126. 40.02127. 40.02128. 40.02129. 40.02130. 40.02 % of debt and subsidy/fiscal 132. 0.194133. 0.190134. 0.188135. 0.186136. 0.187137. 0.204 revenue % ADB = Asian Development Bank, CNY = Chinese yuan, YMG = Yichang Municipal Government, YPTG = Yichang Public Transport Group. Source: Asian Development Bank.

12. Overall, the financial reevaluation found that the project is sustainable as it showed that the FIRR exceeds the WACC and the fiscal budget of YMG could finance the debt repayment service, and the required subsidy to YPTG to sustain its yearly O&M budget requirement. This is in consideration that the projected economic outputs are maintained.

66 Appendix 17

CARBON DIOXIDE EMISSIONS REDUCTION

Total Operating Mileage along Dongshan 4th Road provided by Bus Company Item 2014 2015 2016 2017 2018 2019 Total Total Operating Mileage (km) 46,482,400 44,867,000 24,097,635 23,618,075 24,301,588 25,143,346 Saved (km) 1,615,400 22,384,765 22,864,325 22,180,812 21,339,054 90,384,356

CO2 Saved (ton) 171,911 2,382,187 2,433,222 2,360,482 2,270,902 9,618,703

CO2 Saved (CNY million) 5.16 71.47 73.00 70.81 68.13 288.56

Reused Concrete During Construction (cubic meter) 198,000

CO2 Saved (ton) 897,438 CO2 Saved (CNY million) 26.92