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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 12267-CRA STAFF APPRAISAL REPORT CHINA Public Disclosure Authorized FUJIAN PROVINCIALHIGHWAY PROJECT NOVEMBER17, 1993 Public Disclosure Authorized MICROGRAPHICS Report No: 12267 CHA Type: SAR Transport Operations Division Public Disclosure Authorized China and Mongolia Department East Asia and Pacific Region This document has a restricted distribution and may be used by reipients only in the perfonnance of their official duties. Its contents may not otherwisebe disclosed withoutWorld Bank authorization. CURRENCY EQUIVALENTS (as of July 1993) Currency name = R.enminbi Currency unit = Yuan (Y) = 100 Fen $1.00 = Y 5.75 $0.174 = Y 1.0 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square meter (m2) = 10.76 square feet (sq ft) I square kdlometer(kIm 2) = 0.4 square miles (sq mi) 1 hectare (ha) = 0.01 (kin2) = 2.47 acres (ac) = 15 mu I mu = 666.7 sq m = 0.0667 ha 1 kilogram (kg) = 2.2046 pounds (lbs) 1 metric ton (m ton) = 2,204 pounds (Ibs) PRINCIPAL ABBREVIATIONSAND ACRONYMS USED ADT - AverageDaily Traffic HPDI - HighwayPlanning and Design Institute CTF - ConsultantTrust Funds HSRI - Highway ScientificResearch Institute E&M Electrical& Mechanical ICB - IntemationalCompetitive Bidding EA - Environmental Assessment JST - Joint Supervision Team EAP - Environmental Action Plan LCB - Local Competitive Bidding EIRR - EconomicInternal Rate of Return MOC - Ministry of Communications 8FYP - Eighth Five-Year Plan (1991-95) MOF - Ministry of Finance FHCEI - Fujian Highway Consulting NPV - Net Present Value Engineers, Inc. NTHS - National Trunk HighwaySystem FP - Fujian Province PCC - ProvincialConstruction Commission FPECDO - Fujiian Provincial Expressway pcu - Passenger Car Unit ConstructionDirectorate Office PMS - PavementManagement System FPEPB - Fujian Provincial Etvironmental PRC - People's Republic of China ProtectionBureau PRCIS - ProvincialRoad ConstructionIndustry FPEPRI - Fujian Provincial Environmental Study ProtectionResearch Institute RAP - ResettlementAction Plan PPHAB - Fujian Provincial Highway RDB - Road Data Bank AdministrationBureau RDP - Road DevelopmentProgram FPTD - Fujian Provincial Transport RNIP - Road Network ImprovementProgran Department 7FYP - SeventhFive-Year Plan (1986-90) FPTPDI - Fujian ProvincialTransport Planning SAA - State Audit Administration and Design Institute SPC - State PlanningCommission FYRR - First-Year Rate of Return TA - Techn.ical Assistance GOC - Government of China TCU - Technical Coordinating Unit GOVAI - Gross Output Value of Agriculture TOR - Terms of Reference and Industry vpd - Vehicle per day r FOROMCIL UR ONLY CHINA FUJIAN PROVINCIAL HIGHWAY PROJECT LoAN PROJECT SummRY Borrower: People's Republicof China Beefciary: Fujian Province Amount: $140 million equivalent Terms: 20 years, includingS years of grace, at the Bank's standard variable interest rate Project Objectives: The project has been designed to (a) support the continued developmentof road infrastructurein Fujian Province to facilitate mobilityand increasethe efficiencyof ro4d transport in the interest of stimulatingeconomic activity; (b) develop an action plan for the strengtheningof the provincialroad constructionindustry; (c) assist in the developmentof institutionalcapabilities for transport planning and investment prioritization; and (d) ficilitate the transfer of highway constructionand maintenance technology through staff training and the provision of equipment. Projet Dsripton: The project comprises: (a) the construction of the Xiamen- Quanzhoufour-lane divided, access-controlledhighway (81.4 kn); (b) a Road Network ImprovementPtogram (RN1P),including the upgraang (58.3 EIn)and paving (202.7 kn) of seven rural arterial roads; (c) construction supervision of the Xiamen-Quanzhou Highway and the civil works includedin the RNIP; (d) purchase of equipment for highway operation and maintenance, road laboratories,a road data bank and a pavement managementsystem, (e) a study of the provincialroad construcdonindustry; and (f) staff taning. Project Beneits: The main quantifiablebenefits associatedwith developmentof the highwayand the sevenrural arterial roads include savings in vehicle operating costs, travel time, and road maintenance costs, and savings through reductionof taffic accidents. Benefits from the projects would accrue to road users, including the operators of freight and passengertransport services,enterprises and farmers, in the form of reduced vehicle operatingcosts. The Province would Thisdocument has a rstricted disttibutionand may be used by tecipientsonly in the performance Iof their ofciaWduties. !ts contents may not otherwise be disclose without World Bank authorization. -ii benefit from reduced cost of road maintenance,and a broad segmentof the communitywould benefit from the reductionin traffic accidents. Benefits,particularly from the RNIP, would accrue from improvedaccess to remote areas through fostering accelerated economicgrowth and greater mobility for social activities. Institutionalbenefits accrue from the involvementof local personnel in project preparation, requiring partcularly rigoroustreatment of economicand environmentalassessments, engineering design, technical specificationsand construction practices. Such exposurewill provide benefitsfar beyond the implementationpeiod of the proposed project through the expence gainedby thepersomnnel involved. The specificattention given to the road constructionindustry in Fujian Province to encourageits transitionto market-orientatedoperations is also an initiativewith good potentialfor long-termbenefits. Pisks: Basedon the experiencewith ongoinghighway projects, the main risk i implementationdelay, paricularly for the highway component.Because of the difficultsubsoil conditions along some of thehighway alignment, the relativelyhigh numberof tunnelsand bridges to be constructedand the extensive rock excavation involved,there are majorrisks of delayin the timelycompletion of thehighway. Sincethe Fujian Province is a first-timeborrower for a majorBank-financed highway project, the lack of experiencein executingmajor Bank-financedhighway projects adds an element of risk to smoothproject implementation. However, project preparationhas benefittedsignificantly from the Bank's previous expeience in similarhighway projects in China, the participation of foreignexperts in thedesign of the highwayand the preparation of the biddingdocuments and technicalspecifications, the stringent prequalificatonof contractors,and the careful fonnulationof supervisionto ensure regular monitoringand effective quality control. -in - Nvjed Costs: jg EDrwgn Inta - ($ million) - A. Works 1. Hlighway 188.9 126.0 314.9 2. Electrical add MechanicalWorks 1.3 5.2 6.5 3. Road Network ImprovementPrograir. _U I2Q Subtotal 21= 13f.Q2 3A B. $Suoion 1. Highway 5.9 2.5 8.4 2. Road Network ImprovementProgram u -, .suibtotal LLI C. Egidpment 1. Highway Opeations and Maintenance 0.2 2.1 2.3 2. Labortories 0.1 0.4 0.5 3. Road Data Bank/PavementManagement System DA DA Q Subtotal D. Sdy & Trining 1. Road Consttion Industry 0.1 0.2 0.3 2. Staff Training Q v Subtotal Q LD Base7. 3 146.1U3. fXSitngencie 1. Physical La 21.7 14.2 35.9 2. Price S 15A 4h2 Subtotal 111. 22 14A Land acquisition 24.6 0.0 24.6 Total 1 175. S28. 7 La Ten percent of Items A and Bl. 1k Identifiable ta and duties are about Y 106.4 million ($18.5 million). Taxes and duties would not be financed from the proceeds of the loan. - iv - E1andag P1n: LQca1 Foreign oItal -- ($ million) Pwvincialgovernment 304.4 35.7 340.1 Centrl government 48.7 - 48.7 IBRD - 140.0 140.0 Total Finacn =53. 175. 528 EstimatedDisbursements: Bank For 19924 1995 k 122 1226 1222 19 ------------- ($ million)-- Annual 18 9 15 20 30 34 14 Cumulative 18 27 42 62 92 126 140 Poverty Categary: Not Applicable. Economic!Ytate of Retum: 25 percent . v - 1 The Tisport Sector .................. 1 A. Introduction . 1 B. Traffic.. ... .. 1 C. T¶ransportReforms .. ............. 2 D. Bank GroupParicipation ........ 3 E. TheHighwaySubsctor.... S 2 FujanProvinceTransport Sector..... 12 A. GeographicandEconomicSetting . .12 B. Transport Network . 13 C. TrafficCharacteistics andGrowth . .................. 14 D. Transport Administration .......................... 15 E. The1VehicleFeet ...... ......................... 15 F. The Truckng ndustry ........................... 15 G. Road Safety .................................. 16 H. HighwayDevelopment ... 16 3 The 1ProJect . .18 A. Project Formulationand Preparation .. 18 B. Project Objectivesand Rationale for Bank Involvement ....... 18 C. Project Scope .. 20 D. EnvironmentalAssessment. 25 E. Land Acquisitionand Resettlement .................... 26 This report is based on the findings of a July 1993 appraisal mission comprising Otto Raggambi(Senior Highway Engineer, Task Manager), Rita Pasi (FinancialAnalyst), Han- Kang Yen (Research Analyst) and Dongchang Dai (Operations Officer). Consultants ElizabethRankdn (Economist), Ruwani Jayewardene (Resettlement Specilist), William L. Lane (EnvironmentalSpecialist), Jianfei Zhang (TransportSpecialist), and JonathanR. van Daveer (ConstructionIndustry Specialist) contributedto the preparation of the project. Peer reviewers for the project were Carlos Alvarez (Transport Engineer), Jean-MarieM. Lantran (Senior ConstructionIndustry Specialist)and Renato Schulz (Senior Economist). The Division Chief is Paul Stott (acting) and the Departnent