Document of The World Bank

Public Disclosure Authorized Report No: ICR1376

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-47280)

ON A

Public Disclosure Authorized LOAN

IN THE AMOUNT OF US$91 MILLION

TO THE

PEOPLE‟S REPUBLIC OF CHINA

FOR A

FOURTH INLAND WATERWAYS PROJECT Public Disclosure Authorized

December 28, 2011

Public Disclosure Authorized China and Mongolia Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region

CURRENCY EQUIVALENTS (Exchange Rate Effective April 1, 2011) Currency Unit = Renminbi RMB1.00 = US$0.15 US$ 1.00 = RMB 6.55

FISCAL YEAR January 1-December 31

ABBREVIATIONS AND ACRONYMS

CPS Country Partnership Strategy dwt Deadweight ton (for vessels) EAP Environmental Action Plan EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return FIRR Financial Internal Rate of Return GPTD Guangdong Provincial Transport Department (former Guangdong Provincial Communications Department) GOC Government of China GPWB Guangdong Provincial Waterway Bureau GXTD Guangxi Transport Department (former Guangxi Communications Department) GWh Gigawatt hour GXWCDC Guangxi Xijiang Waterways Construction & Development Co. ICB International Competitive Bidding ICR Implementation Completion and Results Report IWT Inland Water Transport KWh Kilowatt hour MIS Management Information System MOT Ministry of Transport (former Ministry of Communications) MOF Ministry of Finance NCB National Competitive Bidding NEPA National Environmental Protection Agency NPV Net Present Value OED Operations Evaluation Department PAD Project Appraisal Document PMO Project Management Office QCBS Quality and Cost Based Selection RAP Resettlement Action Plan RMB Renminbi SOE State-owned Enterprise TA Technical Assistance

Vice President: James W. Adams, EAPVP Country Director: Klaus Rohland, EACCF Sector Manager: Paul Kriss, EASCS Project Team Leader: Wenlai Zhang, EASCS ICR Team Leader: Wenlai Zhang, EASCS

CHINA

FOURTH INLAND WATERWAYS PROJECT

Implementation Completion and Results Report

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 6 3. Assessment of Outcomes ...... 9 4. Assessment of Risk to Development Outcome ...... 13 5. Assessment of Bank and Borrower Performance ...... 13 6. Lessons Learned ...... 15 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 15 Annex 1. Project Costs and Financing ...... 17 Annex 2. Outputs by Component ...... 19 Annex 3. Economic and Financial Analysis ...... 22 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 26 Annex 5. Summary of Borrower's ICR and/or Comments ...... 28 Annex 6. List of Supporting Documents ...... 39 Maps: 1. IBRD 32887 2. IBRD 32888 3. IBRD 32889 4. IBRD 32890

A. Basic Information

Fourth Inland Country: China Project Name: Waterways Project Project ID: P077137 L/C/TF Number(s): IBRD-47280 ICR Date: 12/28/2011 ICR Type: Core ICR PEOPLE'S REPUBLIC Lending Instrument: SIL Borrower: OF CHINA Original Total USD 91.0M Disbursed Amount: USD 90.55M Commitment: Revised Amount: USD 90.55M Environmental Category: A Implementing Agencies: Guangdong Provincial Transport Department (Former Guangdong Provincial Communications Department) Guangxi Transport Department (Former Guangxi Communications Department) Co-financiers and Other External Partners:

B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 10/30/2002 Effectiveness: 01/09/2005 01/09/2005 Appraisal: 08/27/2003 Restructuring(s): - - Approval: 03/25/2004 Mid-term Review: - - Closing: 01/31/2010 06/30/2011

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Low Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance:

i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of Supervision No None time (Yes/No): (QSA): DO rating before Satisfactory Closing/Inactive status:

D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Ports, waterways and shipping 65 60 Power 10 15 Renewable energy 15 15 Sub-national government administration 10 10

Theme Code (as % of total Bank financing) Climate change 17 17 Infrastructure services for private sector development 33 33 Rural services and infrastructure 17 17 Water resource management 33 33

E. Bank Staff Positions At ICR At Approval Vice President: James W. Adams Jemal-ud-din-Kassum Country Director: Klaus Rohland Yukon Huang Sector Manager: Paul Kriss Jitendra Bajpai Project Team Leader: Wenlai Zhang Graham Smith ICR Team Leader: Wenlai Zhang ICR Primary Author: Kek Choo Chung

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The objective of the Project (as stated in the Loan Agreement) is to assist the Borrower in: (1) improving the market access for its southern region by upgrading navigation conditions on the region's major east-west river and other waterways feeding into the Zhujiang River Delta region; and

ii (2) meeting the growing energy demand in Guangdong and Guangxi by harnessing water flow in two rivers in such region to generate environmentally clean electricity.

Revised Project Development Objectives (as approved by original approving authority) Not Applicable.

(a) PDO Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : GX-Waterway traffic (thousand tons) - (i) Baise-Nanning Value quantitative or 814 2,180 - 2,395.9 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2009 Comments Tonnage of cargo carried on project waterway almost trebled since the project was (incl. % launched, is about 110% of target. achievement) Indicator 2 : GD-Waterway traffic (thousand tons) - (ii) Shaoguan-Qingyuan Value quantitative or 4,900 7,180 - 5,760 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2010 Comments Freight carried on the waterway was 80% of target, because the construction of the (incl. % new Qingyuan Complex reduced freight volume on the corridor. achievement) Indicator 3 : GD-Waterway traffic (thousand tons) - (iii) Laolonghu Waterway Value quantitative or 1,200 9,300 - 1,334 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2010 Comments The target volume of freight could not be achieved due to the delay in completion of (incl. % the reconstruction of Lianyao and Longma Bridges. The existing old bridges had achievement) inadequate height clearance to allow the passage of 1,000 dwt vessels. Indicator 4 : GX-Average barge size (dwt) - (i) Baise-Nanning Value quantitative or 97 152 - 144.7 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2009 Comments Average size of vessels using the project waterway is 95% of the target, but has (incl. % grown almost 50% since the project appraisal. achievement) Indicator 5 : GD-Average barge size (dwt) - (ii) Shaoguan-Qingyuan Value quantitative or 150 300 - 199 Qualitative)

iii Date achieved 12/31/2003 12/31/2009 12/31/2010

Comments Average barge size using the waterway has grown by 33% since the project (incl. % appraisal, but is 66% of target. There is usually a lag for barge operators to replace achievement) old/small barges with larger ones after the waterway is improved.

Indicator 6 : GD-Average barge size (dwt) - (iii) Laolonghu Waterway Value quantitative or 80 500 - 100 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2010 Only 20% of target was achieved, as the use of larger vessels on this waterway was Comments not possible because of the delayed completion of the reconstruction of two existing (incl. % bridges. The underneath clearance of the existing bridges limited the maximum size achievement) of vessels to 100 dwt. Indicator 7 : GX-Powerplant output (GWh) at (i) Naji Value quantitative or none 253 - 227 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2009 Comments (incl. % 90% of target was achieved due to the delay in filling the reservoir. achievement) Indicator 8 : GD-Powerplant output (GWh) at (ii) Xiniu Value quantitative or none 46 - none Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2010 Comments Power generation had not yet started due to the delay in installation of generators (incl. % and in the erection of the transmission line. achievement) Indicator 9 : GX-Transit time through lock incl. waiting time (minutes) - (i) Naji Value quantitative or none 90 - 90 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2009 Comments (incl. % Transit time through lock meets designed performance. achievement) Indicator 10 : GD-Transit time through lock incl. waiting time (minutes) - (ii) Xiniu Value quantitative or none 90 - 90 Qualitative) Date achieved 12/31/2003 12/31/2009 12/31/2009 Comments (incl. % Transit time through lock meets designed performance. achievement)

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(b) Intermediate Outcome Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : % of civil works completed - Guangxi Value (quantitative 0% 100% - 100% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2009 Comments Civil works contracts were completed as scheduled although commencement of (incl. % main contracts was delayed by about 9 months due to protracted processing for achievement) award of contract. Indicator 2 : % of civil works completed - Guangdong Value (quantitative 0% 100% - 98% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2010

Comments 98% of target achieved. All Bank-funded contracts were substantially completed, (incl. % while a couple of contracts financed by counterpart funds were on-going at the time achievement) of monitoring.

Indicator 3 : % of equipment (by value) contracted – Guangxi Value (quantitative 0% 100% - 100% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2008 Comments All contracts for the supply and installation of equipment were executed by the (incl. % target completion date. achievement) Indicator 4 : % of equipment (by value) contracted - Guangdong Value (quantitative 0% 100% - 100% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2010 Comments (incl. % All contracts for the supply and installation of equipment were executed. achievement) Indicator 5 : % of training (person-months) completed - Guangxi Value (quantitative 0% 100% - 100% or Qualitative) Date achieved 12/31/2003 12/31/2008 04/30/2010 Comments Overall target achieved 100%, while the reduction in overseas training was counter- (incl. % balanced by an increase in domestic training. achievement)

v Indicator 6 : % of training (person-months) completed - Guangdong Value (quantitative 0% 100% - 80% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2010

Comments Overall target achieved 80% due to a 20% reduction in the person-months of (incl. % overseas training. achievement)

Indicator 7 : % of resettlement completed – Guangxi Value (quantitative 0% 100% - 100% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2009 Comments (incl. % achievement) Indicator 8 : % of resettlement completed – Guangdong Value (quantitative 0% 100% - 100% or Qualitative) Date achieved 12/31/2003 12/31/2008 12/31/2010 Comments (incl. % achievement)

G. Ratings of Project Performance in ISRs

Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 06/17/2004 Satisfactory Satisfactory 0.00 2 12/22/2004 Satisfactory Satisfactory 0.00 3 04/29/2005 Satisfactory Satisfactory 0.46 4 12/23/2005 Satisfactory Satisfactory 2.46 5 07/19/2006 Satisfactory Satisfactory 14.44 6 01/11/2008 Satisfactory Satisfactory 39.63 7 02/20/2009 Satisfactory Moderately Satisfactory 71.93 8 01/12/2010 Moderately Satisfactory Moderately Satisfactory 83.84 9 06/10/2011 Satisfactory Satisfactory 90.55

H. Restructuring (if any) Not Applicable

vi I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

China‟s vigorous growth has strained the country‟s transport networks and the rate of growth in cargo had outpaced the increase in transport network capacity. Logistics costs in China in 1999 were estimated to account for 18% of GDP compared to 9.5% in the USA. Internal transport costs were so high that coastal provinces enjoyed considerable advantage in the export of goods over their inland provincial competitors. For the inland provinces to share in the export boom, either directly or as suppliers of inputs to manufacturers near the coast, special efforts were required to improve their access to seaports and to overcome resistance to cooperation across institutional boundaries.

China‟s inland waterway transport (IWT) network at the time of project appraisal was the world‟s largest in terms of length and freight volume. However, freight density (tons per waterway km) was only 40 percent of that of the United States and some European countries due to the low standard of navigation infrastructure; low investment in IWT; and institutional arrangements that made it difficult to attain coordinated actions to optimize IWT development. In the three preceding Five Year Plans (1986-2000)1, IWT‟s share of investment significantly lagged behind its share of the total traffic carried. Under-funding caused waterway infrastructure to deteriorate, reducing the net size of the navigable network from 172,000 km in 1960 to 110,200 km by the time of project appraisal.

Shipping services that were not cost effective: many of the vessels were small family- owned barges and operated as independent units; the few commercial fleets in operation were provincial or municipal government owned, companies with little incentive to become more efficient. The greatest impediment to increased operating efficiency and increased modal share was the lack of incentive to increase vessel size and thereby reduce costs.

Recognizing that IWT could support a much larger volume of China‟s inland transportation, the Government of China (GOC) took measures under the 9th Five-Year Plan (1996-2000) to develop the Pearl River in Guangdong Province and the Grand Canal in Jiangsu Province, the second and third largest IWT systems. These developments were supported by the Bank in the form of three inland waterway projects in 1996 (Guangxi, Hunan, and Zhejiang), 1998 (Guangdong and Jiangsu), and 2001 (Hunan).

The project that is the subject of this report (the Project) was the Bank‟s fourth inland waterway initiative in China. It combined the dual purpose of improving the inland waterway networks in Guangxi and Guangdong with meeting power shortages in the provinces through hydropower generation. The Bank‟s involvement in the Project was in line with the 2002 Country Assistance Strategy (CAS) which supported China in making two historic transitions --from a rural, agricultural society to an urban, industrialized

1 China‟s short-term national development plans are based upon five year intervals. Currently China is delivering the 12th Five Year Plan (2011-2015).

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society, and from a centrally-planned economy to a more globally integrated market-based economy.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

The objective of the Project was to assist the Borrower in: (a) improving the market access for its southern region by upgrading navigation conditions on the region's major east-west river and other waterways feeding into the Zhujiang River Delta region; and (b) meeting the growing energy demand in Guangdong and Guangxi by harnessing water flow in two rivers in such region to generate environmentally clean electricity. .

Key indicators for monitoring and evaluating the achievement of the project development objective included the volume of waterway traffic and the average size of vessels in the project waterways, power output at the project power plants, and transit time (inclusive of waiting time) through the project ship locks.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

There was no revision of the project development objective or key indicators.

1.4 Main Beneficiaries

The main Project beneficiaries would be users of the transport corridor from Yunnan and Guizhou Provinces through Guangxi to Guangzhou who would be able to take direct advantage of the water transport from Baise to the Pearl River Delta. The Project covered some of the poorest areas in Guangdong and Guangxi. Baise and Tianyang counties of the Guangxi component were both province-designated poverty counties. The Guangdong component would impact on six of the sixteen poverty counties of the province where the average GDP ranged between 20-30% of the province. Other inhabitants of the corridor would also benefit indirectly from the reduced congestion on the competing rail route and from the creation of new industries attracted by the transport improvements.

1.5 Original Components (as approved)

The Project consisted of the following parts:

Part A: Guangxi

(a) Construction of the Naji Navigation Complex on the Youjiang River between the cities of Baise and Nanning, including: construction of a 20 meter high dam; construction of a shiplock; construction of a power plant with a 57 megawatt capacity and two substations to link the power plant to the Baise grid; acquisition and installation of turbines and related equipment for the powerhouse; and acquisition and installation of lock gates.

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(b) Construction of access roads on both banks of the Youjiang River with a total length of about 9 kilometers; including the construction of a bridge across the river at the dam site.

(c) Construction of reservoir protection embankments.

(d) Carrying out of channel improvement, including construction of dikes and dredging of shoals between Baise and Nanning, and upgrading of navigational aids.

(e) Resettlement and rehabilitation of Displaced Persons in respect of (a) and (b).

(f) Capacity building of the Guangxi Transport Department (GTD), including the Project Management Office and the Guangxi Xijiang Waterway Construction and Development Company, and provision of technical assistance, training and study tours.

(g) Carrying out of studies on (a) the financing, management and operation of integrated waterways and power generation resources, and (b) the development and installation of a comprehensive management information and control system.

Part B: Guangdong

(a) Carrying out of channel improvements and regulation works on about 16 kilometers of the Lao-Long-Hu-Waterway, including deepening and widening of the waterway, replacement of dikes, construction of a diversion channel, construction of embankment protection, and installation of navigational aids. (b) Replacement of two bridges over the Lao-Long-Hu Waterway at Lianyao and Longma.

(c) Carrying out of channel improvements on about 180 kilometers on the middle reaches of the Beijiang River between Shaoguan and Qingyuan, including upgrading of navigational aids and construction of auxiliary facilities along the Beijiang River.

(d) Construction of the Xiniu Navigation Complex on the Lian River between the cities of Xiniu and Hanguang, including: construction of a 10.5 meter high dam; construction of a ship lock; construction of a power plant with a 10 megawatt capacity and two substations to link the power plant to the grid serving the city of Yingde; construction of auxiliary facilities; acquisition and installation of turbines, lock gates and related equipment for the powerhouse; and upgrading of navigational aids.

(e) Resettlement and rehabilitation of Displaced Persons in respect of (a) and (d).

(f) Capacity building of the Guangdong Provincial Transport Department (GPTD), including the Provincial Waterways Bureau and the Project Management Office, and provision of technical assistance, training and study tours.

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(g) Carrying out of a study for the development of a waterway electronic mapping system, and implementation of such system; and a study for the development of a shiplock management system, and implementation of such system.

(h) Acquisition of service vehicles, service vessels, and surveying and monitoring equipment.

1.6 Revised Components

There was no revision of the Project‟s components.

1.7 Other significant changes

While there was no revision of project components, some changes were made in the design, scope and scale, implementation schedule, and Bank loan allocations during project implementation.

For the Guangxi part of the Project, the significant changes were: Design Changes (a) Lowering the lowest navigational water level downstream of the Naji Dam by 0.8 m to minimize the impact on land use and resettlement behind the next downstream dam (Yuliang Navigation Complex) whose construction commenced in 2008. This change required some revisions of the main civil works contract as well as the technical specifications for the power generators; these added RMB29.07 million to costs.

(b) The foundation level of the lower head of the ship lock was lowered by 4 meters as the excavation of the foundation exposed a weak stratum at the original design level. In addition to the extra excavation, casting of some additional 4,000 cubic meters of concrete was required to bring the lower part of the ship lock to the revised design level.

(c) The installation capacity of the power plants was increased from the original 57 megawatt to 66 megawatt as a result of design optimization.

Scope and Scale The number of person-months of overseas training was reduced by some 58 person-months due to government restrictions on overseas travel. This reduction was counter-balanced by an expanded program in domestic training. Implementation Schedule (a) Despite the delay in the award of the main works contract, the Guangxi partwas essentially completed as scheduled except for some minor finishing works and the implementation of 3 overseas training and study tours which were completed in the first quarter of 2010. The slight delay in the completion of the Project did not affect the original loan Closing Date for the Guangxi part which was January 31, 2010. Loan Re-allocation

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The Loan Agreement was amended on December 5, 2008 with retroactive effect to the date of signing of the agreement (October 24, 2004), the disbursement percentage for Category 1 (a) (Works) from 50% to 70% and for Category 1 (c) (Consultants‟ Services) from 91% to 100%, and to re-allocate the amount under Category 1 (e) (Unallocated) to the categories for works and goods. Section 1.01 of the “General Conditions of Applicable to Loan and Guarantee Agreements for Single Currency Loans of the Bank, dated May 30, 2005 was also amended on the same date to enable the Borrower to withdraw the proceeds of the loan to pay for taxes levied by, or in the territory, of the Borrower on goods or services financed under the loan.

For the Guangdong part of the Project, the significant changes were: Design Changes There was a small change in the design of the Xiniu Complex to include a fish passage as required under the State Environmental Protection Agency (SEPA) clearance of the EA. At project appraisal, this facility had been dropped in favor of a release of fries on the reservoir to ensure a more-than-adequate supply of fisheries. SEPA (now the Ministry of Environmental Protection) did not accept this change and the fish passage was added at the late construction stage of the Xiniu Complex. Scope and Scale (a) The scope of Contract-W3 for channel improvement works on the middle reaches of the Beijiang River had to be revised due to the river changing its course between Suoyitan and Jiangwannan. (b) Due to difficulties in the acquisition of land, Guangdong Provincial Waterway Bureau (GPWB) decided to drop the construction of the terminal and maintenance station at Qingyuan from the Project, but complete the on-going land acquisition under the Project. GPWB will undertake the construction of the facilities outside the scope of the Project. (c) Land acquisition increased from 56.6 hectares in the Resettlement Plan to 77.8 hectares, an increase of 50%. (d) Contracts for consulting services for construction supervision had to be extended as a result of delays in the construction of the Xiniu Complex and channel improvement works on the Lao-Long-Hu and the middle reaches of the Beijiang River. Implementation Schedule As a result of delays experienced in almost all contracts, the closing date for the loan had to be extended from the original January 31, 2010 to June 30, 2011. Some domestically funded works in the contracts for the construction of the terminal at Yinde, reconstruction of the two bridges on Lao-Long-Hu waterway, and the channel marker telemetry system are expected to be completed by the end of 2011, delaying the achievement of some of the Guangdong outcome indicators by about a year. Loan Re-allocation The Loan Agreement was amended on December 5, 2008 to increase the disbursement percentage for Category 2 (a) (Works) from 50% to 80% and for Category 3 (c) (Consultants‟ Services) from 91% to 100% retroactive to the date of signing of the

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agreement (October 24, 2004), and the amount under unallocated was transferred to works and goods.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

Both Guangxi and Guangdong had experience in implementing the previous Bank-funded IWT projects and took lessons from them into account in the preparation of the project. Project agencies adopted international practices and Bank policies on procurement, environmental assessments and resettlement plans. Technical risks associated with design and construction were mitigated by appointing experienced consultants for design and for construction supervision. The importance of dam safety was recognized, and a dam safety panel of experts was established for each of the two dams early in the project cycle to provide guidance, advice and quality assurance in the design, construction and maintenance of the dam and related infrastructural works.

Careful assessment was made about the impact of operation of neighboring dams on the operation of the dams under the Project. The capacity of ports on the project waterways was examined in details as it was recognized that the upgrading of the navigation channel would only achieve the desired outcome if loading/unloading facilities at ports on the project waterways were able to handle vessels of the size for which the channel was upgraded to accommodate.

It was recognized that market response to the availability of improved IWT would depend on factors mostly beyond the control of the project implementing entities. In previous completed inland waterway projects, users responded positively to the improvements, e.g., the Bank-financed first Inland Waterways Project, completed in 2001, the average size of vessels passing through the Guigang ship lock increased by 17% in the first year of operation and a further 44% in the following year. Both Guangxi and Guangdong therefore decided not to stimulate the transition to larger vessels but to monitor traffic volumes against forecasts.

2.2 Implementation Early in the project cycle, each implementing entity set up a Project Management Office (PMO) adequately staffed with experienced engineers and various other specialists to manage the implementation of the Project. Procurement packaging and bid documents for major contracts were finalized ahead of loan approval in order that bids for major contracts could be called as soon as the loan was effective.

Both provinces institutionalized the structure for implementing the resettlement program, including resettlement offices at the provincial, county, and township offices, the design institutes, as well as the independent monitor. These offices had experienced staff and necessary equipment. An internal management and monitoring system was already designed and documented in the draft resettlement action plans.

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During project implementation, effective mitigation measures to safeguard the environment were promptly taken to ensure that all environmental indicators were within acceptable standards and protection targets were protected appropriately. Guangxi In Guangxi, the Project was implemented competently by the GXWCDC at a cost equivalent to US$133.22 million (US$1=RMB8.28), about 10% less than the original US$148.06 million appraisal estimate. The difference was due largely to the lower-than- estimated costs of turbines, lock gates and other equipment, channel improvement works between Baise and Nanning, and institutional strengthening consultant services and training, which in aggregate yielded a cost saving of about US$27.47 million. These were partially offset by the increased cost of the larger than appraised site of the administration complex, and resettlement and land acquisition cost exceeding the estimate by about US$15 million. The loan amount of US$44.775 was fully utilized.

Project implementation proceeded satisfactorily except for the following difficulties:

(a) Contract award - The award of the main civil works contract took longer than expected due to the clarifications required by the Bank to understand the reasons to justify the rejection of the lowest evaluated bid.

(b) Contractor performance - The performance of the main civil works contractor was constrained by limited resources in finance, manpower and equipment. Works, especially in the early stages of construction, were slow and the contractor had to be frequently required to ensure that sufficient labor and equipment were provided at site to meet contractual obligations.

(c) Unusual weather - A severe storm in July 2005 led to flooding of the construction site. Torrential rains from abnormally severe typhoons in July 2006 caused a sudden and unpredictable landslide on the side slope in the ship lock foundation pit resulting in the death of four laborers.

Guangdong In Guangdong, project implementation suffered delays due mainly to delayed contract awards, poor contractor performance, unusual bad weather (the worst flooding in 50 years), contract variations and difficulties in land acquisition. The root of the problem with the main contract for the Xiniu Complex appeared to be the contractor‟s low bid price, which the GPWB believed to be below cost. This resulted in a shortage of labor, plant and equipment being provided at site. Considerable delays in land acquisition affected the construction of maintenance terminals at Yinde, Shaoquan and Qingyuan significantly to the extent that GPWB decided not to undertake the construction of the terminal at Qingyuan under the Project as it could not be completed by loan closing. Land for the terminal at Qinyuan has been acquired as part of the Project, but construction of the terminal would be undertaken outside the Project. The Guangdong part was completed at the cost of approximately US$102 million, about 91% of the cost of US$112 million estimated at appraisal. Channel improvements at both

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the Lao-Long-Hu Waterway and the middle reaches of the Beijiang River cost significantly less than estimated, but this reduction in cost was offset by the increased cost of land acquisition.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

Indicators established to determine the achievement of the Project‟s development objective provided the means by which its design, implementation and utilization were monitored and evaluated.

The key indicators for monitoring the achievement of the navigational aspect of the development objective included the volume of traffic carried on the waterway and the size of vessels using it. For power supply, investment efficiency was determined by the cost per kilowatt of capacity installed and the cost per kilowatt of electricity delivered. Efficiency in operation and maintenance of the power plants was measured by the hours when the turbines were available for use. Given the purpose of the Project, the indicators were appropriate and had been used in the previous three inland waterways projects financed by the Bank.

Mechanisms for monitoring project implementation included: the review of semi-annual progress reports; the review of the audited annual financial statements; and two supervision missions a year.

2.4 Safeguard and Fiduciary Compliance

Fiduciary compliance was satisfactory. Project financial management met acceptable standards. Comments of independent auditors on annual financial statements, when they arose, were satisfactorily clarified and corrected.

Compliance with the EMP was generally satisfactory. Environmental monitoring during project implementation was undertaken by the Guangxi Communications Science and Research Institute for Guangxi and by the Water Environmental Monitoring Center of Pearl River Basin for Guangdong. Additionally in Guangdong, Guangdong Provincial Hydraulic and Hydroelectric Science Research Academy was engaged to conduct water and soil conservation monitoring to ensure full compliance with the relevant laws, regulations and contract specifications. Environmental monitoring reports were regularly submitted to the Bank for review in compliance with the provisions in the Project Agreement (Schedule 2, B8).

In Guangxi, land acquisition and resettlement were implemented satisfactorily and without undue hardship. Land acquisition was 864 ha., 4.2% higher than the planned in the Resettlement Plan (RP); and 131 households were relocated, 82 households more than in the RP. Total compensation paid came to RMB237 million, significantly higher than the budgeted amount of RMB66 million.

Living standards of households affected by land acquisition and resettlement has been found to be improved as a result of the implementation of the RP. At the dam site, the

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average income per capita increased by 112% between 2003 and 2008 while those in the reservoir area increased by 32%. All relocated households were able to build brick- concrete houses.

In Guangdong, the total area of land acquired was some 82.4 ha., about 46% more than the planned 56.6 ha. in the RP; the increase in land acquisition was localized in Zhangwu and Hetou villages. Compensation rates were generally higher than provided in the RP, and the overall resettlement cost was about 31% more than the planned sum of RMB56 million.

Living standards of households affected by resettlement was improved by about 24% and income per capita by about 29%. There was a noticeable shift in the composition of household income from agriculture, forestry, fishing and animal husbandry to retails and services.

2.5 Post-completion Operation / Next Phase

The Guangxi part of the Project, upon completion, is being operated and maintained by GXWCDC, which is already operating similar complexes at Guigang and Guiping. Income generated by GXWCDC will be sufficient to meet operating and maintenance costs, as well as the repayment of the loan and other financial obligations.

Following the Naji development, GXWCDC has undertaken the construction of another navigation complex at Yuliang, and is also embarking on a further phase of development of its Guigang Complex with the construction of a second ship lock.

For the Guangdong part of the Project, GPWB has assigned an operating unit for the operation and maintenance of Xiniu Complex upon its completion. The local waterway bureaus are responsible for routine maintenance and dredging of the improved Beijiang River and Lao-Long-Hu Waterways, with the earmarked annual budget allocated by the provincial government.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

The Project's development objective remains relevant in the context of China's present transport needs demonstrated by its increasing share of the country‟s freight market. Between 2004 (the year of appraisal) and 2008 (the year for which the most recent published data is available), IWT freight traffic intensity in ton-kms increased by 22.5% annually which is higher than the national total annual increase of 17.4% .

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China Freight Transport by Modes (2004-2008) (in units of billion ton-km) Waterways Civil Year Railways Highways Pipelines Total Ocean Coastal IWT Subtotal Aviation 2004 1,928.88 784.09 3,225.50 698.88 218.44 4,142.87 7.18 81.5 6,944.50 2005 2072.6 869.32 3,855.20 849.49 262.57 4,967.23 7.89 108.8 8,025.80 2006 2,195.44 975.42 4,257.70 988.3 302.5 5,548.57 9.43 155.1 8,884.00 2007 2,379.70 1,135.47 4,868.60 1204.6 355.3 6,428.48 11.64 186.6 10,141.90 2008 2,510.63 3,286.82 3,285.10 1,326.06 415.15 5,026.27 11.96 194.4 1,1030.08 Average Annual 7.5% 79.8% 0.5% 22.4% 22.5% 5.3% 16.6% 34.6% 14.7% Growth Source: China Statistic Yearbook, 2009

IWT is the least energy intensive, most cost effective, and lowest contributor to green house gases of all transport modes. IWT is also essential to the promotion of greater efficiency, productivity and competitiveness in the use of inland water resources in Guangxi and in Guangdong. The Project is consistent with the strategic objective of Pillar 3 (Managing Resource Scarcity and Environmental Challenges), as well as Pillar 4 (Financing Sustained and Efficient Growth), of the Bank‟s Country Partnership Strategy (CPS) for China for 2006-2010. The project objective and design are also expected to be still relevant to the most current government strategy and the new CPS for 2011-2015.

3.2 Achievement of Project Development Objectives

With the successful completion and operation of navigation and hydropower facilities along the Pearl River as originally designed at appraisal, project objectives (see Section 1.2) are largely met.

The main economic benefits identified at appraisal included: (a) the reduction in transport costs for existing traffic flows on the river; (b) the consumers or producers surplus associated with traffic diverted from road or rail to river transport, together with newly generated traffic; and (c) the social and economic gains from increased electricity generation and consumption.

Guangxi Component. Traffic on the project waterway in Guangxi, based on data available to date, has exceeded expectations, both in volume and in the average size of vessels using the waterway. The Naji Complex has supplied the local region with additional clean renewable energy of about 273 GWh per year.

Guangdong Component. IWT traffic under the three sub-components (Laolonghu sub- component, Beijiang River sub-component, and the Xiniu sub-component) in 2010 was only 1.3 million tons, 5.76 million tons, and 15,000 tons respectively; this was lower than the 2.60 million tons, 7.6 million tons, and 15,000 tons projected in the PAD. Most of the indicators are below the targets, but will catch up once the on-going works on the reconstruction of two existing cross-river bridges (that have insufficient clearance), and the

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Xiniu Complex are completed; these currently make the river section virtually not navigable.

The installation of the turbines with a total generation capacity of 10 MW was not completed until 2011. Electricity planned to be generated in 2011 is only 7.73 GWh, much lower than the projection of 46 GWh in the PAD. Based on the latest data, projected power generation will be 30.9 GWh in 2012 and 38.7 GWh from 2013. The lower-than-designed electricity generation was due to lower-than-designed water elevation behind the dam. With the full completion and operation of the infrastructure hydropower generation will pick up to the designed level.

The Project will also achieve global environmental benefits due to avoided CO2 emission from both transport energy savings and hydropower generation, which were not included in EIRR calculation at project appraisal. In addition, as envisaged at appraisal, the Project has particularly benefited poor regions and poor populations through providing local economic development opportunities and improving the living standard of local populations.

3.3 Efficiency

Economic. With the successful completion and operation of the navigation and hydropower facilities along the Pearl River as appraised, the project‟s objectives of improving the market access and IWT and generating environmentally clean electricity are largely met.

Guangxi Component. Cost-benefit analysis conducted at appraisal estimated an EIRR of 18%, as reported in the PAD. Following exactly the same valuation approach and using the same assumptions of travel cost saving per ton and the economic benefit of electricity generated per KWh, the EIRR at completion is 15.8%. The slightly lower EIRR is mainly due to the two-year delay in electricity generation at full capacity.

Guangdong Component. The same approach was applied to the economic analysis of three sub-components in Guangdong – Laolonghu Waterway, Middle Reach of Beijang River, and Xiniu Complex. The recalculated EIRR of the three sub-components at completion are 26.5%, 24.8%, and 5.1%, compared to the appraisal estimates of 51.0%, 24.1%, and 12.8%, respectively. The aggregated EIRR of the three sub-components is 15.3%, which may be considered acceptable despite being lower than the appraisal estimate of 23.0%.

Financial. Since the principal objective of the Project is the provision of public goods, the low financial return (or even a net loss) of the government-owned project implementing entities may be considered acceptable.

Guangxi Component. A FIRR of 3.4% was estimated at appraisal under the assumptions that electricity sale price would be RMB0.35 per KWh and the ship lock fee would be RMB0.40 per ton. However, these assumptions are no longer valid due to: the recent government decision that there would be no ship lock fee along the entire Xijiang River section in Guangxi in order to promote IWT; and the lower electricity sale price of RMB0.29 per KWh (six cents lower than the price proposed at project appraisal). The

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recalculated FIRR, using the latest data and projection of power outputs and sale prices, shows a decrease from 3.4% to 0.74%.

Guangdong Component. The PAD estimated a negative FIRR. The recalculation in ICR continues to show a net financial loss to the operator of the Xiniu complex. However, the government has agreed to cover the financial losses of the complex from its annual budget.

3.4 Justification of Overall Outcome Rating

The performance indicators for Guangxi part are achieved satisfactorily, while the indicators for the Guangdong part of the Project fall short of some of the targets established at appraisal due to the delayed completion of the relevant sub-components. Therefore, the overall outcome of the Project is considered moderately satisfactory based on: (a) the most achievement of Project‟s development objectives; (b) the consistency of the Project‟s development objective with the Bank's strategy for improving transport services to alleviate bottlenecks and China's policy and plan for increased economic development in interior regions; (c) the achievement of acceptable economic and financial efficiency; (d) attention given to lessons learned from the previous inland waterway and other transport projects in the design of the Project, and (e) compliance of the Project with Bank safeguard and fiduciary policies.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

The gender aspect of the Project was taken into account in the design of the Project, particularly in the context of project impacts, mitigation measures and ethnic minority groups. They were included in the terms of reference of the social assessment and resettlement planning exercises. The social assessments conducted focus group discussions with women and interviewed women representatives of the affected communities.

The poverty impact of the Project was very positive. In Tianyang County, which was directly impacted by the Naji development, income per capita of the farmers rose from RMB1,923 in 2004 to RMB3,579 in 2009 and of urban dwellers from RMB5,546 to RMB14,623. In the areas affected by the Guangdong part of the Project, average income per capita rose 28% to RMB4,690.

(b) Institutional Change/Strengthening

The impact of the Project on institutional development in the sector has been positive. As with the previous inland waterway projects, with the improvements in the navigational channel and increased capacity of the ship lock, larger vessels are being used. Measures to speed up the transition to larger vessels by standardizing the type and size of vessels using the waterway and discouraging the use of smaller vessels are being implemented. Tows of two to four barges, a more efficient and cost effective form of operation, have begun to be used. A shift from small family-based ownership to larger business enterprises is evident.

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TA studies under the Project have been conducted efficiently, and their outputs have been adopted into the management practices of the project provinces. GXWCDC has agreed to share the impressive features and capability of the real-time system developed by the study on the management of integrated water resources with other provincial IWT enterprises. The international and domestic training programs under the Project have been well implemented, and have increased capacity of staff.

(c) Other Unintended Outcomes and Impacts (positive or negative)

There were no unintended outcomes or impacts.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops No beneficiary survey or stakeholder workshops were conducted in the Project.

4. Assessment of Risk to Development Outcome

The risk to development outcome is negligible to low. Central and provincial governments' commitment to the Project continues to be strong. Economic conditions in the country and in both provinces have remained robust. Local staff has been adequately trained to manage and operate the Complexes. Traffic on the Guangxi waterway has met expectations, reflecting improvement in services and reduction in transport cost; however, the volume of traffic carried on the Guangdong waterways and the expected increase in vessel size have not yet met expectations. Increased attention is being paid to the maintenance of the waterway transport facilities in recent years. The risk that the development outcome would not be sustained, either in terms of the demand for the facilities provided, or in terms of the ability and capacity of the executing agencies to properly manage, operate, and maintain them, is low.

5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Bank performance in ensuring quality at entry was satisfactory. The design of the Project was technically sound. Lessons learned in past Bank financed projects were taken into account. Risks were identified and appropriate measures were taken to mitigate them. Care was exercised in preparing the PMO for project implementation. Key indicators selected to monitor and evaluate the performance and outcome of the Project provided the focus on project implementation.

The Resettlement Action Plan (RAP) was comprehensively developed and included processes for consultation and participation of the various stakeholders in the planning, adverse impact analysis, legal framework for resettlement, strategy and implementation program for compensation, relocation and livelihood development, monitoring, and airing and resolution of grievances.

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Environmental protection measures were adequate and included the control of air, water and noise pollution, regular sprinkling of roads in the project sites, restricting the speed of vehicles in the work area to 20 km/hr, limiting the height of wastes carried on trucks to prevent over-spilling, and the construction of sedimentation tanks and sewage treatment facilities to ensure the outcomes met the required standards.

(b) Quality of Supervision

The quality of Bank supervision was moderately satisfactory.

Regular implementation review missions focused on the quality and progress of works and their impacts on the achievement of the development objective. Issues that emerged during implementation were attended to efficiently and promptly. The Bank task team contributed positively in helping to overcome delays caused by contractors‟ financial, manpower and technical resources. These efforts were appreciated by the PMO as well as the contractors.

Compliance with safeguard and fiduciary policies was closely monitored and recommendations for improving the implementation of the EMP and the RAP were provided whenever necessary. Regular reviews of the work undertaken by independent monitors ensured the proper implementation of the plans and measures for environmental and social safeguards.

(c) Justification of Rating for Overall Bank Performance Overall Bank performance was moderately satisfactory, based on performance in preparing and supervising the Project.

5.2 Borrower Performance (a) Government Performance Government performance was moderately satisfactory, based on its commitment to the Project. Ministry of Transport (MOT) provided technical support and subsidy to GXTD and GDTD/GPWB in the preparation and implementation of the Project. At the provincial level, the Project was considered one of the key projects in the provinces and was given a high level of attention. GXTD and GPTD exercised close supervision on project implementation, with senior management personally participating with the Bank task team in regular review missions, and provided effective co-ordination between the project implementing entity and other governmental agencies. The commitment of the transport departments of both project provinces was evident by their interventions to overcome obstacles encountered in project implementation that were sometimes beyond the control of the implementing agencies.

(b) Implementing Agency or Agencies Performance The performance of implementing agencies was moderately satisfactory. GXWCDC was highly motivated and completed the Project competently within budget and schedule. The GPWB project team was relatively young but made it up with dedication and perseverance. Cooperation between the implementing agencies and the Bank was very good; consultations were extensive and meaningful; and issues were promptly raised and

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jointly resolved. Both GXWCDC and GPWB discharged their fiduciary responsibilities conscientiously and correctly. Compliance with Bank requirements during project implementation was satisfactory.

(c) Justification of Rating for Overall Borrower Performance Overall Borrower performance was moderately satisfactory, taking into account both Government and implementing agency performance.

6. Lessons Learned 6.1 The following lessons and conclusions may be drawn from the Project: (a) Inland water transport in China is a viable transport mode. The increase in traffic carried on the project waterways reflects the overall gain in market share in the freight transportation especially for low-value commodities in large consignments from and to origins alongside or near a river or inland waterway. During the project implementation period (2004-2008), IWT freight traffic intensity in ton-kms increased by 22.5% annually which is higher than the national total annual increase of 17.4%. (b) Measures to increase efficiency and cost effectiveness in the sector are well received by the market. Users responded positively to the Project by increasing the size of vessels operating in the project waterways. (c) Developments similar to the Project can be replicated taking advantage of experience gained in inland waterway network planning, macro-economic considerations, technical design, safety provisions and environmental and social safeguards. (d) Overseas training plans designed for implementation need to be more realistic and modest with due consideration given to government regulations on overseas travel. (e) Land acquisition has become more contentious and more time has to be given to resolve differences over compensation.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies Several issues regarding procurement were raised by the implementing agency, which are listed below with the comments of the Bank team.  (From Guangxi) - „As the local construction market is immature, the possibility of potential risks caused by the adoption of the principle of awarding contract to the lowest bidder may not be ruled out. In view of this, it is recommended that the employer be granted certain rights on decision-making where the Bank‟s rules and regulations allow.‟ Bank’s Comments: It needs to be clarified that the principle of contract award in Bank-financed procurement is the contract being awarded to the bidder who has submitted the lowest evaluated responsive bid and who also meets the minimum qualification requirements. It should not be simply or by misunderstanding to

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interpret that the contract is awarded to the lowest price bidder. The employer is of course the main decision-maker in selecting the contractor. But the process for bid evaluation and selection of contractor should follow Bank procurement guidelines.  (From Guangdong) – „We suggest that the World Bank take the actual situation of China into account and apply the World Bank policies to the project management flexibly and systematically, with the economy and efficiency as the first principles, while the Bank is promoting its normative procurement and project management system. ‟ Bank’s Comments: The Bank task team has made its endeavor to apply Bank policies into the actual context of the project in a pragmatic and flexible manner. And Bank management has encouraged the adoption of country systems, where it is applicable. Nevertheless, a Bank-funded project is also aimed to improve practices which have been used by introducing proven international practices.  (From Guangdong) - We suggest that relevant governmental departments make greater efforts to promote the waterways and the local government attach more importance to the waterways. Meanwhile, the fund raising channel for the waterway construction should be broadened and more capital should be invested. Through the improvements of waterways, the local economy can be boosted, forming a good economy cycle. Bank’s Comments: The importance of inland waterway transport to the local economy and to the comprehensive transport system has gradually been accepted by the central and local governments. However, more financing support and incentive policies from the central government will be needed to encourage local government investment in waterways development. (b) Cofinanciers None (c) Other partners and stakeholders None

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Annex 1. Project Costs and Financing

Project Costs: Guangxi

(US$1=RMB8.28) Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$ million) (US$ million) Appraisal Construction of Naji Dam, Power Station, 38.51 42.43 110% and Ship lock Construction of Access Roads 3.33 4.22 127% Bank Protection (Dam and Reservoir) 2.33 4.48 192% Turbines, Lock Gates, and Other 29.76 20.62 69% Equipment Channel Improvement (Baise-Nanning) 13.56 0.42 3% Institution Strengthening, Consultants 14.49 9.30 64% Services, Training Resettlement and Land Acquisition 22.31 37.25 167% Site Management Complex 1.92 3.61 188% Total Baseline Cost 126.11 122.33 97% Physical Contingencies 10.08 Price Contingencies 5.05 Total Project Cost 141.24 122.33 87% Interest During Construction 6.37 10.06 158% Front End Fee 0.45 0.23 51% Total Financing Required 148.06 133.22 90%

Project Costs: Guangdong (US$1=RMB8.28) Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$ million) (US$ million) Appraisal Channel Improvement-Lao-Long-Hu 15.71 9.60 61% Replacement of 2 bridges 7.02 1.01 14% Channel Improvement, North River Middle 15.33 10.65 69% Reaches Construction of Xiniu dam, power station, 19.91 24.37 122% shiplock and access road Turbine, lock gates and other equipment 10.45 11.60 111% Upgrading navigational aids 0.79 0.70 89% Computer hardware for electronic mapping, 1.40 2.21 158% shiplock management and MIS

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Service vessels, service vehicles, survey, 1.20 2.10 175% monitoring and ancillary equipment Institutional strengthening, consultant 16.69 18.02 108% services, training Land acquisition 8.28 15.93 192%

Total Baseline Cost 96.78 96.19 99% Physical Contingencies 7.74 Price Contingencies 3.87 Total Project Cost 108.39 96.19 89% Interest During Construction 3.51 5.51 157% Front End Fee 0.46 0.23 50% Total Financing Required 112.36 101.93 91%

Financing: Guangxi Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Co-financing Appraisal (US$ million) (US$ million) Borrower 0.00 103.285 88.445 85.6% International Bank for Reconstruction 0.00 45.000 44.775 99.5% and Development

Financing: Guangdong Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Co-financing Appraisal (US$ million) (US$ million) Borrower 0.00 66.135 56.930 84.6% International Bank for Reconstruction 0.00 46.000 45.770 99.5% and Development

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Annex 2. Outputs by Component

Component Planned Outputs Actual Outputs

Part A: Guangxi

1. Construction of the Naji a) 20 meter high dam a) 20 meter high dam Navigation Complex on the b) shiplock b) shiplock Youjiang River between the c) power plant with 57 c) power plant with 66 cities of Baise and Nanning megawatt capacity megawatt capacity d) acquisition and installation d) equipment for the of turbines and related powerhouse procured and equipment for the powerhouse installed as designed e) acquisition and installation e) lock gates installed as of lock gates designed

2. Construction of access Access roads on both banks of Access roads on both banks of roads and a bridge the Youjiang River with a total the Youjiang River with a total length of about 9 km and a length of 9 km and a bridge bridge across the river at the across the river on the crest of dam site the dam.

3. Construction of reservoir About 30 km of embankment About 30 km of embankment protection embankment to be reinforced reinforced as designed.

4. Channel improvement a) Dikes and dredging of a) Channel improvement works works shoals between Baise and undertaken according to Nanning requirements. b) Upgrade navigational aids b) Navigational aids between Baise and Nanning upgraded as planned

5. Resettlement and 49 households, 151 persons 131 households and 559 persons rehabilitation of displaced for relocation and were relocated and rehabilitated. persons affected by Naji rehabilitation. 16,532 sq.m of 15,622 sq.m of new navigation complex new home construction brick/concrete homes were development reconstructed

6. Capacity building of Technical assistance, training Domestic training of 546 GXTD and the GXWCDC and study tours person-months and overseas training and study tours amounting to 43 person-months provided.

7. Carry out technical studies a) Financing, management and Studies completed as planned operation of integrated waterways and power generation resources b) development and

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installation of management and information control system

Part B: Guangdong

1. Channel improvement and a) deepening and widening of Lao-Long-Hu waterway regulation works on Lao- 16 km long waterway, improved to Class 3 standard for Long-Hu Waterway b) replacement of dikes, navigation of vessels up to 1,000 c) construction of a diversion dwt. canal and embankment protection, and d) installation of navigation aids.

2.Replacement of two bridges New bridges at Lianyao and New bridges under construction Longma with sufficient at Lianyao and Longma that will clearance for 1,000 dwt have enough clearance for 1,000 vessels dwt vessels

3. Channel improvement a)Removal of shoals between Channel between Shaoguan and works on about 180 km of the Shaoguan and Qingyuan, Qingyuan improved to middle reaches of Beijiang b) upgrading of navigation accommodate 300 dwt vessels River between Shaoguan and aids, and through removal of shoals and Qingyuan c) construction of auxiliary upgrading of navigation aids. facilities Auxiliary facilities at Yingde and Shaoguan are under construction.

4. Construction of the Xiniu a) a 10.5 meter high dam, a) 10.5 meter high dam, Navigation Complex on the b) a shiplock b) a shiplock for 1,000 dwt Lian River c) a power plant with a 10 vessels, megawatt capacity and 2 c) power plant of 10 megawatt substations to link the power capacity, plant to the grid serving the d) auxiliary facilities at the city of Yingde, complex, d) auxiliary facilities, e) turbines, lock gates and e) acquisition and installation related equipment for power of turbines, lock gates and house and shiplock, and related equipment for the f) upgrading navigation aids power house, and f) upgrading navigation aids.

5. Resettlement and Acquisition of 849.32 mu of Land acquired was some rehabilitation of displaced land 1,236.37 mu persons

6. Capacity building Provision of technical 19 training groups involving 127 assistance, training and study persons were sent overseas. 17 tours domestic training programs were provided to 293 persons.

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7. Carrying out studies for a) waterway electronic a) electronic waterway mapping development mapping system, and system, and b) shiplock management b) shiplock management system system. completed as planned

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Annex 3. Economic and Financial Analysis

Economic Analysis

The development objectives of this Project are: (a) to improve the market access by upgrading navigation conditions on the region's major east-west river feeding into the Zhujiang (Pearl) River Delta region; and (b) to generate environmentally clean electricity (hydropower) to help meet the growing energy demand in the region. There were no changes in the PDO since appraisal. With the successful completion and operation of navigation and hydropower facilities along the Pearl River as originally designed at appraisal, these objectives are largely met.

The Project beneficiaries are local people, communities, and business entities engaged in waterway transport in the transport corridor from Yunnan and Guizhou Provinces through Guangxi to Guangzhou. They include many inhabitants of poor and remote rural areas in inland and western China, as these areas are commonly the source of many of the cargoes carried on the river.

The main economic benefits identified at appraisal have remained unchanged. They included: (a) reduction in transport costs for existing traffic flows on the river; (b) consumers or producers surplus associated with traffic diverted from road or rail to river transport, together with newly generated traffic; and (c) social and economic gains from increased electricity generation and consumption. At appraisal, the potential global environmental benefits due to avoided CO2 emission from both transport energy savings and hydropower generation were not included in the EIRR calculation.

The key monitoring indicators associated with economic benefits are the volume of waterway traffic, the average size of vessels in the project waterways, and power output at the project power plants.

Part A: Guangxi

2009 data shows that waterway traffic has reached 2.396 million tons, representing an increase of 193% from 0.814 million tons in base year 2003, and a 9.9% increase compared with the 2009 target value of 2.180 million tons.

Waterway transport capacity has also improved remarkably. Ship owners in the Baise Municipality have been responding to the improved navigation conditions very positively by increasing the size of their vessels. The average vessel size increased from 97 dwt in 2003 to 144.7 dwt in 2009, while the number of vessels registered in Baise dropped from 412 in 2006 to 330 in 2009. These results mean that ship owners have been able to replace their ships with larger-sized ones due to improvements in navigation conditions in the Baise section of the Youjiang River.

Bulky goods carried in the Youjiang River section between Baise and Nanning are mainly construction materials (transported locally) and coal (transported from neighboring

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Guizhou Province downstream to Guangdong). Other materials, which would take advantage of the improved waterway navigation in future, include other minerals and cane sugar, as well as timber. The Guangxi Government has recently made an ambitious plan to develop the entire Xijiang River system as a “Golden Navigation Channel” with an annual transport capacity of 100 million tons. The You River is the main tributary of the Xijiang River. The Naji Complex is an important part of a ladder of ten dams on the whole length of the You River, and the Yu River into which it flows. Its contribution to IWT would significantly increase once the completion of other navigation facilities, especially the ship lift of Baise Dam (already planned), Yuliang Complex (under construction), and Laokou Complex (under preparation). Together these navigation complexes will help further unleash the potential of IWT in the Pearl River basin. It is therefore expected that the Guangxi (Naji) component of the Project will achieve its objective targets related to IWT and market access.

The installation of three turbines with a total generation capacity of 66 MW (higher than the originally designed 57 MW at appraisal) was completed on schedule in 2008. Electricity generated in 2009 was 227 GWh, 10.2% lower than the 2009 target of 253 GWh. The lower-than-designed electricity generation was due to two factors: a delayed reservoir filling to the designed 115 meter elevation behind the dam, and a drought in 2009. The reservoir‟s water elevation was 113.8 m in the period from January to October 2009, and 114.2 m in November and most of December 2009 due to a slight delay in the completion of resettlement works. The river level reached its designed 115 meter by the end of 2009.

It is anticipated that the annual average amount of electricity generated by the Naji Dam will be 273 GWh or higher during the rest of the project implementation period. This represents a higher hydropower output than the appraisal target value. The average cost of electricity generation is RMB 0.24 per KWh; the electricity tariff that residential consumers pay is much higher (RMB 0.6003 in dry season and RMB 0.4563 in wet season), and the tariff for business and manufacturers is even higher. This implies a significant consumers‟ surplus, which is normally bigger than the difference between the average production cost and average electricity tariff for residential use. The consumers‟ surplus of electricity was not quantified at appraisal; instead, the opportunity cost of gas turbine was used to estimate the economic benefit of electricity generation.

Cost-benefit analysis conducted at appraisal estimated an EIRR of 18% as reported in the PAD. Following exactly the same valuation approach and taking the same assumptions of travel cost saving per ton and the economic benefit of electricity generated per KWh, the EIRR at ICR is 15.8%. The slightly lower EIRR is mainly due to the delay of full capacity electricity generation by 2 years. Most IWT traffic is local instead of long-distance from Guangxi or even upstream Guizhou Province to the Pearl River Delta in Guangdong Province.

Overall the component will achieve its economic targets based on the examination of project outputs or outcomes, including a big increase in IWT potential in the region, electricity generation, and global environmental benefits. Note that global environmental benefits were not quantified at appraisal and could be important. In 2009 the hydropower electricity generation of 227 GWh is equivalent to a reduction of about 170,100 tons of

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CO2, which is worth US$1.7 million at a conservative valuation of the economic benefit of CO2 emission reduction at $10 per ton of CO2. The global environmental benefit (conservatively estimated and omitted at appraisal) is equivalent to 8% of the sum of transport saving and power generation benefits.

Part B: Guangdong

The same approach was used in the economic analysis of three subcomponents in Guangdong Province – Laolonghu Waterway, the Middle Reach in Beijiang River, and Xiniu Complex.

Laolonghu Sub-component. IWT traffic in 2010 was only 1.33 million tons, much lower than the projected 2.60 million tons. The lower traffic volume is due to the delay in completing the reconstruction of two existing cross-river bridges that have insufficient clearance.

The EIRR at appraisal was 51.0%. The estimated EIRR at completion is 26.5%. The lower EIRR is attributed to the delay in project completion, especially the reconstruction of two existing cross-river bridges. However, the revised EIRR is still high and satisfactory.

North River Sub-component. 2010 data shows that waterway traffic was 5.76 million tons, which is lower than the projected 7.18 million tons at appraisal. The IWT data was obtained from Feilaixia Shiplock in the Beijiang River section, so it may represent a low end figure.

EIRR at appraisal was 24.1%. The estimated EIRR at completion is 24.8%. The slightly higher EIRR is attributed to the lower capital investment in the early years of the construction period.

Xiniu Sub-component. 2010 data shows that the waterway traffic passing the Complex‟s shiplock was merely 15,000 tons, much lower than the projected 2.6 million tons at appraisal. The low IWT is due to the delay in completing the Xiniu Complex, which has made the river section virtually not navigable. In the ICR analysis, it is assumed that the IWT in 2012 will be at the level projected in the PAD.

The installation of the turbines with a total generation capacity of 10 MW was not completed until 2011. Electricity planned to be generated in 2011 was only 7.73 GWh, much lower than the projection of 46 GWh at appraisal. Based on the latest data, it is projected that the power generation will be 30.9 GWh in 2012 and 38.7 GWh from 2013. The lower-than-designed electricity generation was due to lower-than-designed elevation behind the dam. The consumers‟ surplus of electricity was not quantified at appraisal; instead, the opportunity cost of gas turbine was used to estimate the economic benefit of electricity generation.

The EIRR at appraisal was 12.83%. The EIRR estimated at completion is only 5.12%. The lower EIRR is attributed to the lower IWT and power generation projection than at appraisal.

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The Guangdong component as a whole yields an aggregated EIRR of 15.3% which despite being lower than the appraisal estimate of 23.0%., is still satisfactory.

In summary, the project‟s economic objectives have largely been achieved.

Financial Analysis

For the Guangxi component, a FIRR of 3.4% was estimated at appraisal under the assumptions that electricity sale price would be RMB0.35 per KWh and that the shiplock fee would be RMB0.40 per ton. However, these assumptions are no longer valid because: Guangxi Government decided, after project appraisal, to local economic development with river navigation facilitation as a public service, and hence not to charge a shiplock fee along the entire Xijiang River section in Guangxi;. the sale price of electricity (sold by the power plant to state grid) has been fixed by the government currently at RMB0.29 per KWh (six cents lower than the price anticipated at project appraisal). The project implementing entity, which is 100% owned by the provincial government, faces a lower than expected financial return, as shown in the table below. The FIRR has decreased from 3.4% to 0.74% , but is still positive.

Construction Period Operation Period Item\Year 2004 2005 2006 2007 2008 2009 2010 2015 2020 2029

I. Cash Inflow 1.28 46.57 61.71 79.34 87.48 91.85 106.33 1. Electricity Sales Revenue (million Yuan) 1.28 46.57 61.71 79.34 87.48 91.85 106.33 Electricity sold to grid systems (Gwh) 4.38 157.00 212.80 273.60 273.60 273.60 273.60 Electricity Sale Price (yuan/Kwh) 0.29 0.29 0.29 0.29 0.32 0.34 0.39 II.Cash Outflow (million Yuan) 92.91 86.00 100.00 153.53 43.22 81.56 78.50 80.48 81.35 36.91 1.Capital Investment (own source) 92.91 86.00 100.00 148.00 21.19 0.00 0.00 0.00 0.00 0.00 2.Sales Tax and Associate Charge 0.23 8.23 10.91 14.03 15.47 16.24 18.80 3.Operating Cost（excluding depreciation） 5.30 9.47 9.56 9.66 10.15 10.67 11.67

4.Financial Cost（interest deducted） 12.14 2.90 1.86 0.83 0.00 5.Principal Payment (million Yuan) 0.00 0.00 48.94 48.94 48.94 48.94 0.00 Include： Domestic loan 0.00 0.00 20.71 20.71 20.71 20.71 0.00 World Bank loan 0.00 0.00 28.23 28.23 28.23 28.23 0.00 6.Income Tax (million Yuan) 0.00 4.33 0.00 2.97 4.06 4.67 6.44 III. Net Cashflow (92.91) (86.00) (100.00) (152.25) 3.35 (19.84) 0.84 7.00 10.50 69.42 IV. FIRR 0.74%

In Guangdong, the PAD estimated a negative FIRR. The recalculation at completion still shows a net financial loss to the operator of the Xiniu Complex. As the government has agreed to cover the losses of the complex from its annual budget, the negative FIRR does not affect the financial viability of the Project.

In summary, since the ultimate objective of the Project is to provide public goods, both local and global, low financial returns (or even a loss) of the government-owned project implementing entity is acceptable.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Responsibility/ Names Title Unit Specialty Lending Graham Smith Consultant SASDT Task Team Leader John Carter Scales Lead Transport Specialist EASCS Alternative Task Team Leader Xin Chen Senior Program Assistant EACCF Team Assistance Emmanuel Py Infrastructure Specialist EASIN Project Assistance Wenlai Zhang Senior Transport Specialist EASCS Civil Engineering Xiaowei Guo Senior Procurement Specialist EAPPR Procurement Emmanuel Py Infrastructure Specialist EASIN Project Assistance Naoya Tsukamoto Senior Environmental Engineer EASEN Environmental Assessment Han-Kang Yen Research Analyst EASIN Financial Analysis Chaohua Zhang Senior Social Sector Specialist SASDS Social Assessment Kek Choo Chung Consultant EASCS Navigation Hongyun Liu Consultant EASIN Hydropower Richard Y. Scheiner Consultant AFTTR Civil Engineering

Supervision/ICR Wenlai Zhang Senior Transport Specialist EASCS Task Team Leader (2008-2011) John Carter Scales Lead Transport Specialist EASCS Task Team Leader (2006-2008) Graham Smith Consultant SASDT Task Team Leader (2004-2005) Xin Chen Senior Program Assistant EACCF Team Assistance Teresita Ortega Program Assistant EASIN Team Assistance Xuan Peng Program Assistant EACCF Team Assistance Yunqing Tian Team Assistant EACCF Team Assistance Hong Chen Operations Officer EASSD Project Assistance Senior Financial Management Yi Geng EAPFM Financial Management Specialist Jianjun Guo Procurement Specialist EAPPR Procurement

Haiyan Wang Senior Finance Officer CTRDM Disbursement Senior Social Development Songling Yao EASCS Social Assessment Specialist Yiren Feng Environmental Specialist EASCS Environment Jian Xie Senior Environmental Specialist EASER Environmental Economics Peishen Wang Consultant EASCS Environment Jianming Zhao Consultant EASCS Geotechnical Kek Choo Chung Consultant EASCS Navigation Jiang Dai Consultant EASCS Hydropower

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(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY02 4.7 32.95 FY03 37.03 268.33 FY04 29.77 248.81 FY05 0 -1.06 FY06 0 0.00 FY07 0 0.00 FY08 0 0.00

Total: 71.50 549.03 Supervision/ICR FY02 0 0.00 FY03 0 0.00 FY04 1.25 15.71 FY05 19.37 103.98 FY06 14.05 67.70 FY07 14.67 65.21 FY08 14.84 91.92 FY09 13.56 79.44 FY10 8.99 68.99 FY11 10.50 74.52

Total: 97.23 567.47

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Annex 5. Summary of Borrower's ICR and/or Comments Part A: Guangxi According to the Comprehensive Utilization Plan of Yujiang River of the Xijiang River System of the Pearl River Basin approved by the State Council, Guangxi Youjiang Naji Navigation Complex Project is the fourth of ten cascade dams on the whole length of the Youjiang and Yujiang Rivers. As a navigation complex and one of the key construction projects in the State‟s “11th Five-year Plan”, the Naji Project is an integral component of the overall Xijiang River water management system, with supplementary functions of power generation, irrigation and other benefits. The Project mainly includes the construction of a power plant, a ship lock, a dam and channel improvement from Baise to Nanning. After completion, the Project is expected to generate 253 GWh of electricity per year and annual taxes amounting to RMB 16million. The navigation standard is improved to 500 DWT vessels of Class IV navigation standard from the previous Class VI for 120 DWT vessels. The channelized Youjiang River will be able to accommodate 1,000 DWT capacity of Class III Navigation Standard after the completion of the Yuliang, Jinji and Laokou Complexes. The improvement of navigation on Youjiang River is significant in contributing towards the ongoing course of improving the social and economic development in the poorer areas in Baise as well as in the development of the Xijiang Economic Corridor and the Pan-Pearl River Delta Economic Zone.

The total investment of the Project is estimated at RMB 1.18billion, including the USD 45million loan from the World Bank and the rest from the central and Guangxi government grants, contribution by the implementing entity and domestic loans. Since the commencement of the Project, with the support and assistance from the GTD, and under World Bank‟s guidance and supervision as well as the joint efforts from and close cooperation between contractors, consultants, engineers and the employer, the second phase closure was completed and navigation opened in Oct. 2007; the first generator started operation in Dec. 2007 followed by the second in Mar. 2008 and the third in Jun. 2008 respectively. Despite all difficulties, the Project has been implemented as planned and on schedule. We have gained many useful experiences and learned certain lessons on the project implementation as follows.

The cooperation with the World Bank has brought great positive changes in the philosophy and concepts of our practice, operation and management, which helped us to realize that equal attention should be paid to both economic and social benefits. As a result, more efforts have been made and effective actions taken in practice to improve efficiency in environmental protection and resettlement.

Adequate attention was given to resettlement to ensure that affected persons could improve and maintain livelihoods not lower than those before resettlement so as to create harmony and stability in the reservoir area where these people could live and work in contentment. For the purpose of smooth implementation of the resettlement program, the Employer, together with local governments and the task team of the World Bank Beijing Office has undertaken a series of studies and consultations for the most appropriate mode. Measures taken included: (1) affected persons were resettled in their own villages or nearby in the reservoir area without moving to other villages or towns; (2) dumped soil was used in

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raising/filling lands for cultivation and such farmlands were returned to the villagers. Lands were reallocated by local governments to ensure basic life security; where possible, unified resettlement was arranged and implemented so as to have it included into the Plan of Building New Socialism Countryside; some of the compensation for lands was used in the production development and planning in the resettled villagers for the purpose of increasing farmers‟ income. The implementation of such measures reflected the policy and the practice of building a resource-saving and environmental friendly society and the advocating of showing more concerns for the people, which has improved our relation with the local population. There was no obstruction to construction or complaint to the higher authorities during construction and after operation of the Project. Such measures have been proven to be effective in maintaining stability and harmony in both the reservoir and local areas. The Baise Municipal Government is in the process of inspecting and evaluating the outcome of the resettlement for categorizing it as having met the standards for a demonstration project.

Issues concerning environmental protection have been given considerable attention during the construction period. Under the guidance and supervision of the World Bank review missions, environmental monitoring was carried out throughout the construction period. Effective measures and actions were taken to mitigate adverse impacts on the environment and the ecology. Such measures included: (1) urging all concerned parties to build domestic sewage treatment stations in the living quarters of the work site so that waste water met relevant standards before being discharged; (2) building the two-stage sedimentation basin in the sand yard of the contractor so as to ensure the waste water from the sand yard met relevant standards; (3) frequent spraying to relieve dust emissions that caused adverse environmental impacts during construction; (4) timely cladding on the slopes of the dumping sites to mitigate washout of the slopes by rain water; (5) regular fry releases were conducted to protect the fishery ecology. (The first fry release was completed on Aug. 27, 2009); (6) greening and landscaping were carried out during the later period of construction in the entire dam site with local mango, peach and kapok trees planted along the banks at upstream and downstream of the dam. There is no doubt that a beautiful landscape of trees, green grass and flowers will eventually materialize. We consider this an important contribution to the enhancement of the local environment.

The Bank‟s supervision was important and necessary for improving proper and standardized project management. The implementing entity, GXWCDC, acquired advanced management methods and benefited from the experiences of the implementation of similar overseas and domestic projects, which could be used as references, in the preparation and development of relevant rules and regulations to ensure proper day-to-day operation and management.

Careful planning and strict management in the procurement and financial management (bidding, contract negotiation, contract execution, funds utilization, financial management, payment and claim for disbursements etc.) have greatly improved our level of management. Compliance with the Bank‟s procurement guidelines has positive influences on the designers, consultants and engineers whose work has been recognized and appreciated by the senior management.

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The World Bank loan was vital to the implementation and progress of the Project. The loan was sufficient and disbursed in time, which was a great help to the implementing entity.

The semi-annual missions allowed the World Bank to review, analyze and put forward recommendations to address issues and problems occurred during construction and project implementation. Besides, the World Bank‟s unique coordination capacity and position also made it easier to request immediate attention of the contractor‟s management to solve the problems such as negligence in work, insufficient resources and breaches of contract with continuous follow-up checks and inspections. Such measures and actions were of great importance to the smooth implementation of the Project.

A dam safety panel (DSP) was established as requested according to World Bank policy to provide necessary technical assistances. The DSP consisted of experts and specialists of whom more than half were professors or senior engineers in the fields of hydro-engineering, geology, construction and metal structure with specific expertise and experiences in both theory and practice and strong sense of responsibility. The DSP provided regular as well as non-scheduled consultations, supervisions, comments and recommendations as necessary for the smooth implementation of the Project. Their work, achievements and efforts were highly appreciated by the World Bank. Such successful experience is worthy of being duplicated.

The selection of an appropriate contractor is very important for the success of project implementation, as the contractor is the key performer of the construction works. In an immature market lacking of sound enforcement on social credibility, awarding contract to the lowest bidder may not always be cost-effective to the employer but rather may cost more in manpower and financial resources to make up for delay and poor quality of works. In the case of our project, the winner for the contract of the civil works was not good at hydraulic construction. Lots of deficiencies were exposed in work safety, quality, progress and management during the preliminary phase of construction. Despite all the efforts and assistances extended to the project site management office of the contractor, progress was still slow. The Employer had to request replacement of the inefficient site management of the contractor. Though the situation was improved gradually and finally, it was a painful experience and a costly lesson for the Employer and the senior management, and the engineers responsible for supervising civil works.

Construction safety is the first priority and safe work practices must be followed in accordance with relevant laws and safety codes. The contractor should be held liable for construction safety. The qualification and capacity of work safety management of the contractor must be carefully checked. All concerned parties, especially the contractor were required to take necessary precautions and fulfill their responsibility for site safety supervision. In case of non-conformity, the contractor would be ordered to take effective actions to improve or stop work as necessary. Termination of contract would be the last means if no improvement is made. An accident that caused the death of four laborers happened at the work site of the lower lock gate due to landslide in the slopes before dawn on July 30, 2006. Though the accident was caused by a unpredictable geological collapse; and the failure of the contractor to organize an efficient and effective emergency evacuation indirectly contributed to the damage and fatalities. Learning lesson from the

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accident which included efficient and proper measures for backfilling in the slope toes and slope surface, and wire-netting sprayed concrete for slope protection were taken. Necessary measures were also taken against potential safety hazards. Since then, no casualty accident has happened. It was a painful experience and a costly lesson. Safety should always be placed in the first place in comparison with work progress.

The quality of project relies greatly on the project management level of the employer. The Employer aimed for the efficient management of investments, quality control and implementation progress. In this case, the employer attached great importance to the overall coordination and planning so as to solve problems which occurred during construction. Such unified planning has been proven to be important for the completion of works ahead of schedule.

Attention must be paid to proper and efficient procurement of works, goods and services. The process concerning invitation for bids must be treated seriously. Preparation for invitation for bids for the Bank-financed procurement required a series of standard procedures and time for approval, therefore, sufficient time had to be allowed for the invitation for bids and bid award to avoid missing the planned schedule for implementation.

Proper and timely communication with the Bank team was important for the Employer to better understand the Bank‟s rules and regulations and likewise for the World Bank to know more about the real situations in China so as to mitigate potential risks and adverse impacts to the employer through following the principle of awarding contract to the lowest evaluated bidder.

As the local construction market is immature, the possibility of potential risks caused by the adoption of the principle of awarding contract to the lowest bidder may not be ruled out. In view of this, it is recommended that the employer be granted certain rights on decision- making where the Bank‟s rules and regulations allow.

The aforesaid are the experiences and lessons we learned through utilizing foreign funds in the implementation of the Project which we would like to share and hope they may be helpful to other similar projects. Our summary may not cover every aspect of project implementation. We welcome comments and appreciate any kind of suggestions.

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Part B: Guangdong 1. Project Introduction 1.1 General The Guangdong Component of the Project has three sub-components: regulation works on the middle reaches of Beijiang River (from Shaoguan to Qingyuan, 184 km), upgrading of Lao-long-hu Waterway (16km) and the construction of Xiniu Dam on the Lianjiang River. Guangdong Provincial Development and Planning Commission approved the Feasibility Study Reports (FSR) of the three sub-projects respectively through three official documents. The project was appraised in March, 2004; a loan of USD 46 million from the World Bank was negotiated; and the Loan Agreement was signed in May, 2004, with the effective date of January 9, 2005. The original closing date of the loan was January 31, 2010, and then extended to June 30, 2011. Channel regulation works on the middle reaches of Beijiang River upgraded the channel to national Class V standard to accommodate vessels up to 300 dwt. The depth of the waterway is 1.3 m, the width is 40 m, and the bending radius is 330m. As for regulation works on the Lao-long-hu Waterway, the channel was upgraded to national Class III standard to accommodate vessels of 1,000 dwt, with a depth of 4m, a width of 50m and a bending radius of 330m. For the construction of Xiniu Complex on Lianjiang River, the ship lock was designed to accommodate 100 dwt motor barges, with the annual tonnage capacity of 2.57 million tons. The installed capacity of the power station is 3×3,340kw. The total investment of this Project was estimated at RMB 930 million with an estimated construction period of 4 years. The EIRR at the time of appraisal was estimated at 16.58% and the ENPV was RMB 264.04 million. The project was aimed to reduce the cost of waterway transport from the impoverished rural and mountain areas in the west and northern part of Guangdong to the Pearl River Delta. It plays an important role in improving the comprehensive transport network, forming the Pearl River Delta waterway network of “Three-vertical-and-three-horizontal” waterways and promotes the development of the export-oriented economy. 1.2 Investment Estimate and Funds Source The total investment of the Project was estimated at RMB 930.34 million, equivalent to US$ 112.36 million (USD1=RMB8.28). The funding sources of this project included the World Bank loan, and the funds from MOT and the provincial government. Table 1. Project Funding Sources: Funding Sources Amount Amount (in USD million) (in RMB million) Ministry of Transport 35.11 290.74 Guangdong Province 31.25 258.72 World Bank 46.00 380.88 Total 112.36 930.34

1.3 Procurement Plan The project was undertaken through 21 contracts involving civil works, equipment

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procurement and consulting services. In terms of the procurement method, 8 contracts were procured by ICB, 4 contracts by NCB, 4 contracts by QCBS, 2 contracts by CQ, 1 contract by NS, and 2 contracts being non-Bank financed. The disbursement percentages of the Bank loan for the civil works, goods, consulting services and training were 50%, 100%, 91% and 100% respectively. 2. Performance of Project Implementation 2.1 Progress of Implementation The Guangdong Component started in March, 2005. The Bank-financed part of the project was completed by June 30, 2011 but the non-World Bank financed contracts are scheduled to be completed by May 2012. The implementation progress lagged behind the schedule due mainly to complicated geological conditions, excessive floods, large contract variations, difficulties in land acquisition, and the contractors‟ poor performance. 2.2 Quality of Construction The 4-grade quality guarantee system of “Government inspecting, Client managing, Engineer supervision and Contractor back-check” was adopted for the quality control of the Project. The contractors and the supervising engineers installed laboratories at the construction sites. The contractors did the sample inspection of the materials, semi-finished products and finished products while the supervising engineers did the parallel tests. Moreover, the client entrusted a third party to spot-check the materials, semi-finished products and finished products of the important component of the project, which effectively controlled the quality of these parts. The site supervision engineers and the management staff of the Client urged the contractor to inspect, site-supervise and examine the construction procedures, methods and techniques so as to monitor and ensure the construction quality. The qualifying rate of the quality of Contract W2 is 100% and the excellent rate reaches 70%. The quality of Contract W4 is rated as “qualified”. It has been awarded the Excellent Building Structure Project 2007 in Qingyuan, presented by Qingyuan Construction Quality Supervision Station, as well as the Excellent Sample Project 2009 in Qingyuan, issued by the Qingyuan Construction Bureau. Other civil works are predicted to be rated as “qualified” based on the present quality. As for the goods contracts, except Contract G5 being still on-going, other contracts are rated as “qualified”. Contract T2 (Electronic waterway mapping system) and Contract T4 (Shiplock Management System) are qualified. 2.3 Financial Management The actual total investment will be estimated at RMB 843.97 million. Up to June 30, 2011, the percentage of total actual disbursement to estimated amount is 89.75%, with counterpart funds 87.27% and the Bank loan 100%. To fully use the Bank loan and reduce financing cost, the disbursement percentage for civil works was increased from 50% to 80%. The financial management has been under appropriate control. All the annual audit reports during the project implementation were unqualified (clean). 2.4 Technical Assistance and Training The technical assistance comprised Contract T2 (Electronic Waterway Mapping System) and Contract T4 (Shiplock Management System). The Waterway Electronic Mapping System is a tool to analyze and process the waterway geographic data and support the

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decision-making. Contract T2 has designed and developed a waterway electronic mapping system which boosted the transformation of the waterway information managing mode and improved modern management level of the waterway. The Shiplock Management System has developed a shiplock management center, facilitating the collection, transmission, tabulation, analyzing, querying, comparison and statement printing of the data which showed the status, water level and vessels of the twelve shiplocks on the Lianjiang River. Meanwhile the shiplock management system realized the control of monitoring and warning as well as the water level regulating gate in the shiplock area. This system enhanced the information sharing and management between the shiplock managing departments at all levels, increased the management efficiency of the twelve shiplocks and promoted the management level and capability of the waterway shiplocks. Training programs of the Project include: study on inland waterway development planning, inland waterway management and vessel operation, environment protection; study on waterway polices and regulations, waterway construction and maintenance; research on waterway design optimization, navigation junction management and maintenance, procurement and contract, development and utilization of navigational aids, maintenance and monitoring of channel markers, advanced financial management, human resource management, project management, MIS, economic analysis and evaluation, informationization of waterway construction, software application, English language, etc. During 2005 and 2010, there were totally 19 overseas training groups, involving 127 persons. The overseas training planned to involve about 84 man-months. Actually there were accumulatively 64.52 man-months. Although the actual man-months were lower than the planned ones due to the government‟s restriction on the numbers of participants and the days of overseas training, the planned training topics and tasks have been mostly implemented. From 2004 to 2010, totally there were 17 domestic training groups, involving 293 persons. The domestic training was planned to involve about 130 man- months. But actually there were 97.37 man-months for domestic training. 3. Land Requisition and Resettlement 3.1 Land Requisition The total land requisition area of the Project is 1,236.371 mu, which is 386.051 mu more than the planned area figure (849.32 mu, not including the flood lands) in the resettlement action plan, increasing by 45.57%. 3.2 Infrastructure Removal and Restoration There was no removal of residences and enterprise housing. The buildings removed have been compensated. 3.3 Resettlement Fee The total cost of the resettlement was about RMB 129.49 million, which was more than the estimated cost in the resettlement plan. The increased cost mainly involved three aspects: (1) Zhangwu Village and Hetou Village whose cultivated lands per capita were less than 0.5 mu have been compensated by RMB 11.655 million; (2) the changed national policies for land requisition have increased the compensation rates for land requisition; (3) the removal fee for the Longma and Lianyao Bridges was RMB 10 million. The fees mentioned above were not listed in the resettlement plan. The land requisition

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compensation standard of this Project was apparently higher than the stipulated standard in the resettlement plan. The compensation standard of paddy fields for the Xiniu project have been increased by 36% and the standard of dry lands have been increased by 6%. As for the regulation work of Lao-long-hu River, the Xinhui Transport Bureau has basically reached the compensation standard according to the land types and use of lands (quarry and discarded lands in the brick yards). The comprehensive unit price of the land requisition compensation of the two bridges was 45% higher than that of the Lao-long-hu project. 3.4 Residents’ Living Standard As for the residents‟ living standard, the net income per household has increased by 23.7% and the net income per capita has increased by 28.5%, compared to that before the land requisition, which is not a significant increase compared with the households that are unaffected by the land requisition. Generally, the resettlement of the project has been carried out based on the requirements set in the resettlement action plan in terms of land requisition, compensation, information disclosure, economy recovery and complaints processing. It has achieved the goal of improving the living standard of the affected people. 4. Environment Protection and Monitoring During the project implementation, relevant environment management agencies were set up to make the management system for environment protection. The environment management agencies at all levels have taken measures in respect of the acoustic environment, water environment and ecological environment based on the requirements in the Environmental Impact Assessment Report and the Environment Protection Actions Plan. The measures included the effective noise-reducing and dust-controlling measures, reducing the influence of the suspended solids; the ecological restoration measures on the mud dumping area and temporary construction area; the compensation to the fishery resources; construction of the fish ladder. Meanwhile, the environment management system was improved by the Client and the supervising engineers. We insisted that the construction should be implemented together with the protection of environment. Therefore, we strictly carried out the project based on the environment monitoring plan during construction. 4.1 Protection of Fishery Resources With the objective of ecological and environmental protection and based on the requirements of ecological and environmental protective measures in the EIA and EMP, the protection of fishery resources in Lianjiang River has been carried out. For example, during the construction, the rubbish and harmful chemical hazards were forbidden to be discarded into the river. Meanwhile, no-fishing zones of 200 meters each was set in the upstream and downstream of the river. To effectively protect the fishery resources, the Qingyuan Branch of the Guangdong Fishery Corps took remedy measures of fishery resource enhancement and releasing to improve the situation of fishery decreasing. The fishery resource enhancement and releasing measures will last 15 years, with the total investment of RMB 1.5 million. By now, 4 fishery resource enhancement and releasing activities have been carried out, releasing about 2.16 million fishes such as black carp, dace, grass carp, crucian, carp and so on.

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To minimize the damage of the construction to the environment of the fishery and to solve the fish ladder issues, the GPWB entrusted the Environment Protection Center of the MOT and the Pearl River Fishery Research Institute to research the measures of protecting the fishery in Lianjiang River and design the scheme of the fish ladder. Meanwhile the GPWB also invited the experts from the Ministry of Water Resources, the Ministry of Agriculture, the Ministry of Transport and Guangdong Province to evaluate the fish ladder scheme. The construction of the fish ladder was completed and operational in February 2011. 4.2 Environment Monitoring According to the requirements of the environmental monitoring plan in the EIA and the EMP, the Pearl River Basin Water Environment Monitoring Center was selected through the public bidding to undertake the environmental monitoring during the construction. During Dec., 2004 and the end of the construction, the Pearl River Basin Water Environment Monitoring Center carried out the environmental monitoring on the construction area and made comprehensive analysis on the influence of the construction to the water environment based on the progress and environment. Meanwhile, the environmental monitoring materials as well as 13 semiannual monitoring reports have been periodically sent to the World Bank and relevant departments. In the water quality monitoring of middle reaches of Beijiang River and the Xiniu construction on Lianjiang River, the average value of the cross sections of each project has reached the Grade I-III water standard. There was no over proof and no big influence on the water quality. For some reaches of the river, there were more suspended matters during the flood period and the cofferdam dismantled period than usual, but the influence lasts not long. Since some reaches of Beijiang River was polluted by the industrial effluents containing the cadmium and the arsenic, whose heavy metals were over standard and the quantity of arsenic exceed the standard in the Controlling Standard for Pollutants in Farm- oriented Sludge (GB4284-84), the contractors paid great attention to the management of the dredged materials and did not discard them arbitrarily or apply them to the farm. According to the monitoring results during construction, the air quality of the urban residences around the constructed waterway was fine, and its TSP and PM10 were much lower than the Grade II limit in the Environment Air Quality Standard. This showed that the contractor had effectively reduced the dust from the dredging, excavation and transportation, and controlled the air pollution caused by the construction within a small range around the construction area, which did not influenced the air quality of the residents around the waterway. The measuring results of the noise gauging points in the monitoring plan were all within the limit of Grade II standard set in the Environment Noise Standard in Urban Area (GB3096-93), which met the requirements of acoustic environmental protection objective. It means that the construction did not brought significant noise on the area. 5. Experience, Lessons and Suggestions 5.1 Experience (1) The Guangdong province has introduced the World Bank loan twice to improve the waterway and its management level. This Project is the second World Bank loan project in Guangdong. By implementing the Project, we have studied the essential refined and scientific element in the management of World Bank loan project and improved the

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management mode, which upgraded the waterway comprehensive management level and advanced the sustainable development of waterway. (2) We expected that the application of Reno Gabion, a new material for environment protection, will bring a demonstration effect. Reno Gabion is a new material for environment protection, which can be applied to the construction such as bank protection, revetment and foot protection. The features of this material include good integrity, great erosion-resisting ability, flexible structure, good flexibility in adapting to the deformation of foundation. If the sludge fills in Reno Gabions, it is easy for the vegetation grow. Meanwhile, it is environmentally friendly and not expensive if there are available materials in the local area. It is the first time for us to apply the Reno Gabion to bank protection in terms of hydraulic engineering and waterway projects in Guangdong. Since there were a great amount of pebbles in Xiniu construction site, we decided to apply the Reno Gabion to bank protection of approach channels along the upstream and downstream around the ship lock, with the application area of about 50,000 ㎡. In July, 2006, the worst flood in 50 years took place, but the Reno Gabion was not affected. After the work completed, the Reno Gabion was basically covered with vegetation. Based on the effect of the application of Reno Gabion for the moment, we concluded that it is a success in applying this new material in the construction of Xiniu Dam. Meanwhile, the demonstration effect emerged. The Reno Gabion has been applied in the other waterway projects such as Reinforcement of Canalization Complexes and Waterway Improvement on Lianjiang River, as well as the Improvements of Meijiang River and Tingjiang River. (3) We have attached great importance to the environment protection and the compatibility of construction and environment protection. Based on the requirements of ecological and environmental protection in the EIA and EMP, we carried out monitoring on the water quality, air and noise of the regulation work of middle reaches of Beijiang River, the regulation work of Lao-long-hu River and the construction of Xiniu Dam on Lianjiang River. The results showed that the monitoring data met the national criteria. In order to protect the fishery resources in Lianjiang River and minimize the blocking loss brought by the construction of Xiniu Dam, the Project made a 15-year plan of fishery resource enhancement and releasing and built the first fish ladder in Guangdong Province. We can expect that the blocking loss brought by the construction of Xiniu Dam will be minimized in respect of the fishery protecting technology for the moment. 5.2 Lessons (1) The World Bank‟s procurement guidelines cannot be applied rigidly in China. Since the market economy started late in China, the market competition system is still incomplete and the credit system is still inadequate. Though the management experience of World Bank projects has been proven to be advanced and scientific, it is still difficult to promote the principle of low-quoted price bidding in project procurement. For most of the domestic bidders, the first thing they are considering is to win the bid instead of gaining profit because they need to sustain their business. Therefore, the World Bank projects low- bidding phenomenon is prevailing in China. However, in the project implementation, the contractor who won the bid with a low price would make up the margin by contract variation, claiming or even delaying the construction, which made it difficult to carry out the project.

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(2) Some local governments lack enough understanding and support to the waterway, which makes the coordination more difficult. The construction of waterways possesses the features of great public benefit, long investing period and low return, which means that a period of time is needed to show its social and economy effect. However, due to the slow economy effect of the waterway, some local governments take no account of the waterways. Instead, they attach importance to the construction of roads and highways, which caused difficulties in the coordination during project implementation. 5.3 Suggestions (1) We suggest that the World Bank take the actual situation of China into account and apply the World Bank policies to the project management flexibly and systematically, with the economy and efficiency as the first principles, while the Bank is promoting its normative procurement and project management system. (2) We suggest that relevant governmental departments make greater efforts to promote the waterways and the local government attach more importance to the waterways. Meanwhile, the fund raising channel for the waterway construction should be broadened and more capital should be invested. Through the improvements of waterways, the local economy can be boosted, forming a good economy cycle.

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Annex 6. List of Supporting Documents

1. The World Bank, Project Appraisal Document, Fourth Inland Waterways Project, March 1, 2004Guangdong Project Management office, “Project Cost Estimates and Financing Plan”, received on May 13, 2011. 3. The World Bank, Fourth Inland Waterways Project, Aide-Memoires, Management Letters, 2004-2011. 4. Guangdong Project Management office, “Semi-annual Project Progress Report”, 2004-2010. 5. Guangdong Project Management office, Social Assessment Report, July 2002. 6. Guangdong Project Management office, Environment Assessment Report, May 2005. 7. Guangdong Project Management office, Resettlement Action Plan, August 2008. 8. Guangdong Project Management office, Audit Reports, 2006-2010.

39 100° 110° RUSSIAN FEDERATION CHINA

Gulian FOURTH INLAND WATERWAYS HEILONGJIANG

MONGOLIA PROJECT Mangui JILIN

MAJOR NAVIGABLE WATERWAYS Sea of XINJIANG Mordaga L O LIAONING RIVER PORTS NG Japan JAPAN O Heihe EI M D.P.R. OF N BEIJING KOREA PREVIOUS BANK FINANCED RIVER PORTS BEIJING

SEA PORTS HEBEI TIANJIN Wuyiling REP. OF KOREA PREVIOUS BANK FINANCED SEA PORTS 50° SHANXI Yellow SHANDONG PREVIOUS BANK FINANCED SHIPLOCKS Manzhouli Sea Tongjiang NINGXIA Bei’an QINGHAI Hailar Hegang PREVIOUS CHANNEL IMPROVEMENTS GANSU JIANGSU SHAANXI HENAN East Shuangyashan MAJOR ROADS ANHUI Jiamusi Songling Qiqihar China Suihua EXISTING RAILWAYS SHANGHAI Sea Hulin XIZANG Yirshi AndaHUBEI HEILONGJIANG SICHUAN SELECTED CITIES ZHEJIANG Jixi

CHONGQING PROVINCE CAPITALS HarbinJIANGXI HUNAN NATIONAL CAPITAL GUIZHOU FUJIAN Mudanjiang Baicheng Suifenhe PROVINCE BOUNDARIES National Capital TAIWAN P ACIFIC INTERNATIONAL BOUNDARIES YUNNAN GUANGXI Jilin GUANGDONG Province For detailChangchun see Boundaries IBRD 32888 HONG KONG OCEAN MYANMAR MACAO Tumen International JILIN TongliaoVIETNAM For detail see IBRD Boundaries LAO 32889 and 32890 Songjianghe P.D.R. Siping HAINAN PHILIPPINES MONGOLIA Erenhot

120° Fushun 130° Yuanbaoshan Fuxin Huade Shenyang LIAONING 40° Liaoyang Benxi Jinzhou Anshan Sea Yingkou of Dandong Japan NEI MONGOLJining Zhangjiakou DEM. PEOPLE’S Hohhot BEIJING REP. OF KOREA To U Baotou Datong Qinhuangdao rum BEIJING qi Dalian Yumen Tangu Tianjin Bo Hai Shizuishan TIANJIN Shenmu HEBEI REP. OF Yinchuan Shijiazhuang Yantai Shengli KOREA Wuwei Taiyuan Hengshui Dezhou Zhongwei NINGXIA Jinan Zibo Yan’an Huang Ho SHANXI Handan Heze Qingdao Xining SHANDONG Changzhi Y ellow Yanzhou Shijiusuo QINGHAI Lanzhou Houma Jiaozuo Xeitai No.2 Zaozhuang (IWW2) Grand Sea Yueshan Kaifeng Shangqiu Lianyungang Tongchuan Pixian GANSU Xuzhou Canal SHAANXI Luoyang Zhengzhou Suqian No.3 (IWW2) Tianshui Baoji Xi’an HENAN Huaibei Huanyin No.3 (IWW2) Huanian No.3 (IWW2) Pingdingshan JIANGSU Mengmiao Jianbi No.2 (IWW2) Bengbu Fuyang Huainan Zhenjiang Nantong Yangpingguan Nanjing Zhangjiagang Ankang Wuxi Hefei Wuhu Shanghai East 30° Xiangfan ANHUI Huzhou Jiaxing Tongling Channel Improvements China Jiang Chang HUBEI Anqing (IWW1) Wuhan Hangzhou Ningbo Chengdu Huangshi Bailutang Sea XIZANG Zhicheng Da Xian ZHEJIANG 30° SICHUAN Jiujiang Jingdezhen Chongqing Chenglingji Zigong Shimun Xingtanbian Xiaonanhai Nanchang Zhuzhou Dam/ Wenzhou Luohuang Changsha Shiplock (IWW3) Yibin Yingtan Xiangtan JIANGXI HUNAN Zhuzhou Xichang Huaihua Pingziang Shaowu Zhijiang Channel Jiuchang Channel Imp.(IWW3) Improvements Laizhou Dayuandu Dam (IWW1) (IWW1) GUIZHOU Hengyang Guiyang Fuzhou Panzhihua Le An Yong’an FUJIAN MYANMAR Dongchuan Zhangping For detail see Hongshui IBRD 32889 Guilin Xiamen Kunming He Xiniu TAIWAN Right Dam Meixian YUNNAN Liuzhou River Naji Dam GUANGDONG Shantou GUANGXI Wuzhou Baise (Youjiang) Longchuan Dam Guiping Guangzhou (BMP) Guigang Xijiang Shenzhen

ujiang For detail see Y Hong Kong Channel River Nanning IBRD 32890 HONG KONG Improvements Left Macao MACAO Channel Improvements (IWW4) (IWW4) (Zuojiang) 20° Maoming Channel Improvements (IWW2) For detail see IBRD 32888 Beihai Guigang Dam (IWW1) Channel Shanjiang Improvements 0 100 200 300 400 500 MILES MYANMAR VIETNAM (IWW1) 0 200 400 600 800 KILOMETERS 20° LAO PEOPLE’S Haikou South MARCH 2004 DEM. REP. IBRD 32887 HAINAN China Sea THAILAND PHILIPPINES 100° 110° 120° IBRD 32888 105° 106° 107° 108° 109° 110° 111° 112° 1000 SURFACE PROFILE OF NAJI NAVIGATION COMPLEX DETAIL CHINA 26° GUIZHOU 26° STEPPED DAMS DEVELOPMENT

g n IN RIGHT RIVER (YOUJIANG) a HUNAN i FOURTH J g Guilin n G VALLEY o u

N R a i 25° 25° n J p i an a Jia n Riverbed Line INLAND WATERWAYS n g g H o n g See detail below s h 500 u

PROJECT i Liuzhou acun

H 350.0

e W

121.0 115.0 24° GUANGXI 24° Baise H on gs ELEVATION IN METERS ELEVATION 228.0

R h Baise GUANGXI PROVINCE ig u g h YUNNAN t i n Naji R. He a Wuzhou Ji Dam (Youjiang) e improvementschannel H Dongsun Naji X NAJI NAVIGATION COMPLEX ang ijiang 23° 23° Yuji NANNING DISTANCE IN KILOMETERS

AND Yulin nstream Approach 0 VIETNAM CHANNEL IMPROVEMENTS GUANGDONG 1100 1000 900 800 700 Dow Left R. (Zuojiang) PROVINCE CAPITALS 22° This map was produced by the Map Design Unit of The World Bank. Qinzhou 0 100 The boundaries, colors, denominations and any other information PROVINCE BOUNDARIES Fangcheng shown on this map do not imply, on the part of The World Bank Gezu KILOMETERS Group, any judgment on the legal status of any territory, or any INTERNATIONAL BOUNDARIES Beihai Beibu Gulf South China Sea endorsement or acceptance of such boundaries. 105° 106° 107° 108° 109° 110° 111° 112°

WATER SYSTEM OF YUJIANG VALLEY

New Bridge Chengbi CHANNEL IMPROVEMENTS RIVER PORTS Lingyun HYDROLOGIC STATIONS NATIONAL ROADS Tianlin WATER LEVEL STATIONS RAILROADS Baidong R. Bama Yaozu Wacun EXISTING DAMS PROVINCE BOUNDARIES FUTURE DAMS INTERNATIONAL BOUNDARY Boyi R. Baise Chengbihe OBSERVATORIES Dongshun BASIN BOUNDARY Tianyang Naji Dam For detail see Dahua Mashan Laibin Gula R. map at right Tiandong Yaozu Wuxuan Yuliang

Right R. (Youjiang) Embankment (Youjiang) Shanglin River Right Debao Pingguo Guiping Jingji Binyang Jingxi Long'an Wuming Guigang Tiandeng Embankment

Access Bridge Daxin NANNING ang ) g Laokou Hengxian Yuji (Zuojian Yongning Fusui Xijing Yulin

Left R. VIETNAM Chongzuo Longzhou Lingshan Luchuan Pubei Ningming Bobai Pingxiang Shangsi Dam Section Powerhouse Shiplock Section Section

Qinzhou

Fangcheng Gezu Hepu

010203040 50 60 050100 m. KILOMETERS Beibu Gulf

Upstream Approach

MARCH 2004 IBRD 32889

CHINA GENERAL PLAN LAYOUT OF FOURTH INLAND WATERWAYS PROJECT XINIU NAVIGATION COMPLEX GUANGDONG PROVINCE XINIU NAVIGATION COMPLEX AND BEIJIANG CHANNEL IMPROVEMENTS

Quan Yiliu Zhenshui Nanshui CHANNEL IMPROVEMENTS shui Reservoir Hexi Xinshao Pingjia Shaoguan EXISTING DAMS Lianxian Xijiang Luyuanyaozhu Longchuangchang Hougongdu Xilian Nanshui Toucun RIVER PORTS Dam Nanshui Mengzhouba Dam NATIONAL ROADS Lianjiang Longnan Longtang Longgui RAILROADS Huangpen Fengtian Jietan Section Dam inglian Qujiang L Luoyan A Baitu ia Q n 0 5 10 20 15 25 30 35 40 j an ia n g Jiangw KILOMETERS Xiaojiang Baisha Jiangwan Section Huangniutan B Dam Litou

86.0 Huangyantan Gumushui Wushi

81.0 SURFACE PROFILE Dam 90 Zhanshi

73.5 OF STEPPED DAMS Dabu 80 Dakengkou 70.0 Jiangying DEVELOPMENT Gaofeng Luokeng 62.7 70 Yan gshan Huamingzui 58.5 IN LIANJIANG VALLEY Dam L 53.3 ia 60 Jietan Daliang n ji Boluo a (North R.)Fengtian 49.6 n Boluo Qinglian g 44.3 50 Jiaojianbo Dam Qingkeng Dam Shakou

38.5 Qingshuan Longchuangchang

Huangniutan Shanlian Shuikou Dam

40 33.1

29.0 Zhutian Huangyantan Huangdong Huamingzui Jiaojianbo Dam Section

30 24.0 Shigutang Beijiang Qinglian ELEVATION IN METERS ELEVATION Riverbed Line Shuoyitan Hengshitang Yunling Lianjian Dawan Dam Section 20 Qingshuan C Baishiyao Dam

Shuoyitan Dongshan Huangmaoxia 10 Dam Zhangpo DISTANCE IN KILOMETERS keng Xiniu

Jiaqiaoshi Guanying-

Huangmaoxia Hangguang Shihuipu 0 Section 50 100 150 181 Jiaqiaoshi Dam Powerhouse Section Baisha Wangbu D 110° 111° 112° 115° 117° Mingjing Xiniu Dam HUNAN For detail see 25° JIANGXI Yingde FUJIAN map at right g n 25° Xiniu a Dazhan ji Shaoguan ng Jiulong We Shitang L For detail see ianjia Huanggang PROVINCE CAPITAL ng map at right xudai ong PROVINCE BOUNDARIES Lianjiang L

Beijiang Reach Meixian Shuibian 24° Section Shaba Shiplock Xiniu Chentang Boloukeng Dam Middle 24° Qingyuan Dadong Lianjiangkou Gaogang GUANGXI Heyuan Tankou Dam Xinzhou GUANGDONG Shahe Xijiang Shantou 23° GUANGZHOU Zhaoqing Foshan Huizhou Lixi Jingtou Dongguan 23° Binjiang Heyun Xiashui Shanwei Jaingmen Shenzhen Longnan Longjing Yuba For detail see

orth R.) Sanba IBRD 32890 Hong Ma’antou Dam Bei Jiang 22° Kong HONG KONG (N Shuitou Fogang MACAO Shenping Yangjiang 22° Zhukeng Gaotian Maoming Feilaixia Dam South China Sea Minan Huangshi 0 100 200 m. Zhanjiang This map was produced by the Map Design Unit of The World Bank. Longshan 21° The boundaries, colors, denominations and any other information shown B Qingxin Jiangkou 04080120 inj Section ian on this map do not imply, on the part of The World Bank Group, any 21° g Pajiang Gaoqiao Qingyuan E KILOMETERS judgment on the legal status of any territory, or any endorsement or Jingkou Dam acceptance of such boundaries. Huilian 110° 111° 112° 113° 114° 115° 116° 117° Qixinggang Zhouxin MARCH 2004 IBRD 32890

CHINA LAO LONG HU WATERWAY AND PROJECT BRIDGES

FOURTH CHANNEL IMPROVEMENTS RIVER REACH TO BE WIDENED EXISTING BRIDGE

INLAND WATERWAYS PROJECT BRIDGES SHORT-CUTTING REACH ROADS PROJECT GUANGDONG PROVINCE

LAO-LONG-HU APPROXIMATE SCALE 012345 CHANNEL IMPROVEMENTS AND KILOMETERS BRIDGE REPLACEMENT

Muzhou Town

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

Wa aterway

W Gouwei Bridge Babao replacement

Yin Sanjiang Hukeng 110° 111° 112° 115° 117° HUNAN zhouhu Town 25° JIANGXI FUJIAN 25° River reach to Dongcheng Waterway Shaoguan Village Hemaxi be widened Longquan For detail see aterway Babao PROVINCE CAPITAL IBRD 32889 W Village PROVINCE BOUNDARIES Lianjiang Hukeng Waterway Lo Sanjiawei Meixian ng 24° Beijiang Bridge qu Village Laolaoxi W Hukeng a n W Xiniu h a short-cutting aterway Dam 24° aterway i Qingyuang River reach GUANGXI Heyuan Longquan (Longma) GUANGDONG Bridge replacement Xiezhousha Xijiang Shantou 23° GUANGZHOU Huizhou Zhaoqing Foshan Dongguan 23° Laolaoxi

Shanwei Jaingmen Shenzhen For detail see map at right Hong W 22° Kong HONG KONG aterway MACAO Yangjiang 22° Maoming

Zhanjiang 21° South China Sea 04080120 21° KILOMETERS

110° 111° 112° 113° 114° 115° 116° 117° MARCH 2004