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World Bank Document PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB4849 Ningxia Highway Project Project Name Public Disclosure Authorized Region EAST ASIA AND PACIFIC Sector Roads and highways (100%) Project ID P096920 Borrower(s) Ministry of Finance PEOPLE’S REPUBLIC OF CHINA Implementing Agency Ningxia Transport Department No. 175 Beijing Middle Rd. Jinfeng District, Yichuan China Tel: (86-951) 503-2956, Ext. 521 Fax: (86-951) 608-6844 [email protected] Environment Category [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Public Disclosure Authorized Date PID Prepared November 19, 2009 Date of Appraisal November 17, 2009 Authorization Date of Board Approval May 11, 2010 1. Key development issues and rationale for Bank involvement 1. The Government of China is committed to developing an efficient multi-modal transport system to enhance competitiveness and promote development. At the core of their program is the National Trunk Highway System (NTHS), a 44,000 km network consisting of twelve Public Disclosure Authorized major expressway corridors (five north-south and seven east-west) connecting all provincial capitals and main cities, completed in 2005. The initial NTHS backbone made great progress toward providing the core network connectivity, and development is now shifting toward developing poorer western and central regions; the new engine of China’s economic growth. 2. Ningxia Hui Autonomous Region (Ningxia) is one of the smallest regions in China with a total area of 66,400 km2 and an estimated population of about 6.1 million with 36.4 percent urban residents and 63.6 percent rural. It is also one of the poorest regions in China with, approximately 10 percent of its people living below the poverty line. Ningxia’s lack of transport accessibility coupled its landlocked status has hindered its social and economic development and prevented it from meeting its development potential. To improve the situation, the State Council recently adopted a Policy of “Developing Western Region” and Ningxia’s economy has since significantly improved. The nominal GDP of Ningxia has Public Disclosure Authorized surged from USD 3.09 billion in 1997 to US$15.67 billion in 2007, reflecting a 5.1 times increase over 11 years. 3. Though living standards in Ningxia have improved notably as indicated by the rise in the region’s GDP per capita (US$583.5 in 1997 to US$2,571.8 in 2008), a large disparity exists between the urban and rural residents, with urban income more than three times that of the rural. Thus, Ningxia faces the challenge of connecting dispersed rural populations with a road network of sufficient quality to meet their needs. In more isolated areas, the unclassified and lower class roads provide limited transport services and result in high transport costs. Improving the conditions of the rural road network constitutes a key element to achieve a more balanced socioeconomic development of the region. 4. The manufacturing sector has played a major role in the economic growth of the region, contributing 43 percent of the region’s GDP in 2007. Ningxia’s main industries consist of coal, electrical, metallurgical, chemical, food processing, textile and paper making. Coal reserves are a major source of revenue for Ningxia as it sits on an explored coal reserve of 31 billion tons. Ningxia has an annual coal producing capacity of 25 million tons and is the largest generator per capita of electricity in China. The Ningdong Coal Center is one of 13 major coal centers approved for construction by the Chinese government, as mentioned in the 11th Five-Year Plan. The metallurgical industry is also rapidly developing and production of tantalum metal, currently exceeding 60,000 tons, represents 47 percent of the country’s total production. The integrated development of industrial areas is a major strategy in the 11th Five-Year Plan for Ningxia. As a result of this rapid development, traffic on the roads between 1990 and 2005 increased at an annual rate of 6.4 percent for passengers and 6.6 percent for freight. Recently there has been an even larger growth in traffic volumes, probably related to the massive investments in industrial areas. The toll revenue from roads increased 78 percent and vehicle maintenance fees increased 39 percent during the period 2005-2007. Although highway development in Ningxia compares favorably to the rest of China, rapid traffic growth on highways requires further development of the road network in order to provide adequate infrastructure connection between development zones and major cities for facilitation of industrial development, especially for shorter distance traffic and door-to-door delivery of labor and goods. There is also a need to promote improved transport services, multi-modal transport and logistics requirements of the agricultural and industrial sectors. 5. Road safety presents another key challenge for the Region particularly given the mixture of heavy vehicles used for transport between the industrial areas and smaller vehicles used in urban areas and for agricultural transport. As part of the solution, Ningxia intends to adopt expressway standards to isolate heavy traffic from smaller vehicles being used for local trips. In addition, there is a need for other measures including improved enforcement, overloading control, and driver education. 6. Finally, as one of the smaller and poorer province-level administrative areas in western China, Ningxia has had difficulty attracting staff with high capacity. The institutions are relatively weak and require capacity building through training, exposure to best practice, policy studies, and technical assistance in areas that are most relevant to the Region’s needs. 2. Objectives 7. The project’s development objective is to provide high-capacity and quality transport connections between targeted development zones and urban areas, as well as develop all- weather road access in selected rural areas of Ningxia Autonomous Region. 8. The assessment of the achievement of the project development objective will be carried out through the measurement of outcome indicators, including the direct outcome: increased traffic volume along the expressway corridor to be constructed and increased rural population with access to all-season road. Other intermediate outcome indicators include: (i) reduced travel time along the expressway corridor to be constructed; (ii) reduced accident rates along the expressway corridor and rehabilitated national highway; (iii) increased traffic volume and reduced average travel time on the rural roads; and (iv) enhanced knowledge and strategy on traffic safety, road network maintenance and transport services. 3. Rationale for Bank Involvement 9. The rapid economic development of Ningxia has increased the importance of connecting the major industrial areas with urban areas, and linking these areas to the provincial and national expressway network. The Ningxia Government has requested the Bank to support the implementation of the construction of a key infrastructure corridor in the Region to provide one of the missing links in the expressway network, and the rehabilitation of a key national highway to connect major developing areas. In addition, the Bank was requested to support part of Ningxia’s Local Road Improvement Program (LRIP), which addresses the needs of the poor and disadvantaged people, and fosters equality in the region. 10. The project will build on the institutional strengthening activities from the Tri-Provincial Highway Project supported by the Bank, the project would assist the Ningxia Transportation Department (NTD) in addressing three areas of concern: (i) improving the safety of the road network; (ii) contributing to the provincial policy and institutional knowledge on logistics and trade facilitation; and (iii) supporting development of the road network in a sustainable way by improving maintenance practice and technique. 11. The Bank is technically and financially in a good position to support the construction and improvement of provincial, national and local infrastructure in Ningxia. This project would build upon the experience gained in Ningxia with the Tri-Provincial Highway Project financed by the Bank. From a technical perspective, the Bank can provide guidance to infrastructure development in the difficult terrain of this project alignment. With recommendations provided by engineering and environmental experts, the impacts to the Baijitan Nature Reserve and other sensitive sites will be minimized during highway construction and operation. In addition, the Bank has extensive knowledge in key activities related to building up the capacity of Ningxia in logistics, design, and road safety issues that would contribute to more sustainable development of Ningxia’s infrastructure network. 4. Description 12. Component A: Development of the Guyaozi-Qingtongxia Expressway (GQE) Transport Corridor - (US$224.175 million financed by the Bank). The GQE would connect Guyaozi to Qingtongxia on a new alignment bisecting nine major national and provincial highways. It would also include a bridge over the Yellow River. The highway would connect two major industrial areas at the extreme east and west of the corridor as well as link Wuzhong’s and Lingwu’s urban areas. These two major industrial areas are the backbone of Ningxia’s economy and the engine of its future growth. The Ningdong development zone (in the east) is of national importance, being one of the five largest coal reserve bases in China. The cumulative investment in Ningdong is expected to reach US$44 billion by 2020 and is the most important development project in Ningxia. The GQE transport corridor is proposed to be a four-lane expressway with a total length of 75.68 km. The Bank would partially finance this component, including earthworks, pavement, Electronics and Mechanics (E&M) and traffic safety facilities. 13. Component B: Road Network Improvements Program (RNIP) - (US$25.20 million financed by the Bank). Under this component, the Bank would finance improvements to national, county and township roads with the aim of improving connections to key industrial and agricultural areas, and improving the feeder network to the existing expressway network.
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