Zhengzhou–Xi'an Railway Project
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Completion Report Project Number: 37487-013 Loan Number: 2182 July 2017 People’s Republic of China: Zhengzhou‒Xi’an Railway Project This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion 14 August 2005 20 January 2015 CNY1.00 = $0.1235 $0.1606 $1.00 = CNY8.1002 CNY6.2236 ABBREVIATIONS ADB – Asian Development Bank CRC – China Railway Corporation CRH – China Railway Highspeed EIA – environmental impact assessment EIRR – economic internal rate of return EMP – environmental management plan EMOP – environmental monitoring plan EMR – environmental monitoring report FCTIC – foreign capital and technical import center FIRR – financial internal rate of return ICB – international competitive bidding LAR – land acquisition and resettlement LIBOR – London interbank offered rate MOR – Ministry of Railways O&M – operation and maintenance PDL – passenger-dedicated line PRC – People's Republic of China SDAP – social development action plan SEIA – summary environmental impact assessment SEPA – State Environmental Protection Administration TA – technical assistance WACC – weighted average cost of capital ZXR – Zhengzhou–Xi’an railway ZXRC – Zhengzhou–Xi’an Passenger Dedicated Railway Line Company WEIGHTS AND MEASURES ha – hectare km – kilometer m2 – square meter mu – Chinese unit of measurement: 1 mu = 0.0666 hectares km/h – kilometer per hour t/y – tons per year NOTES (i) The fiscal year (FY) of the Government of the People’s Republic of China and its agencies ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2016 ends on 31 December 2016. (ii) In this report, "$" refers to US dollars. Vice-President S. Groff, Operations 2 Director General A. Konishi, East Asia Department (EARD) Director R. Guild, Transport Division, EARD Team leader S. Saxena, Principal Transport Specialist, EARD Team member G. Gadiano, Senior Operations Assistant, EARD N. Kim, Senior Environment Specialist, EARD S. Kotagiri, Social Development Specialist (Safeguards), EARD J. Macrohon, Associate Project Analyst, EARD J. Sluijter, Transport Economist, EARD P. Striednig, Railway Specialist, EARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 2 C. Project Costs 5 D. Disbursements 5 E. Project Schedule 5 F. Implementation Arrangements 6 G. Conditions and Covenants 7 H. Related Technical Assistance 7 I. Consultant Recruitment and Procurement 7 J. Performance of Consultants, Contractors, and Suppliers 8 K. Performance of the Borrower and the Executing Agency 8 L. Performance of the Asian Development Bank 8 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving Outcome 9 C. Efficiency in Achieving Outcome and Outputs 9 D. Preliminary Assessment of Sustainability 10 E. Impact 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 13 C. Recommendations 14 APPENDIXES 1. Design and Monitoring Framework 16 2. Chronology of Major Events 21 3. Project Costs and Financing Plan 23 4. Projected and Actual Contract Awards and Disbursements 25 5. Appraisal and Actual Project Implementation Schedule 26 6. Organizational Chart (At Completion) 27 7. Compliance with Loan Covenants 28 8. Contract Packages Financed by the Asian Development Bank 36 9. Economic Revaluation 39 10. Financial Reevaluation 44 11. Social Impact and Poverty Reduction 48 12. Land Acquisition and Resettlement 55 13. Environmental Impact Analysis 62 BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 2182-PRC 3. Project Title Zhengzhou‒Xi’an Railway Project 4. Borrower People’s Republic of China 5. Executing Agency Ministry of Railways 6. Amount of Loan $400 million 7. Project Completion Report Number 1637 B. Loan Data 1. Appraisal – Date Started 23 May 2005 – Date Completed 31 May 2005 2. Loan Negotiations – Date Started 19 August 2005 – Date Completed 22 August 2005 3. Date of Board Approval 22 September 2005 4. Date of Loan Agreement 3 April 2006 5. Date of Loan Effectiveness – In Loan Agreement 2 July 2006 – Actual 22 August 2006 – Number of Extensions Two 6. Closing Date – In Loan Agreement 30 June 2012 – Actual 20 January 2015 – Number of Extensions Two 7. Terms of Loan – Interest Rate LIBOR1-based – Maturity (number of years) 26 years – Grace Period (number of years) 6 years 8. Terms of Relending (if any) Not Applicable – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower 1 LIBOR = London interbank offered rate. ii 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 02 August 2007 11 December 2014 89 months Effective Date Original Closing Date Time Interval 22 August 2006 30 June 2012 71 months b. Amount ($ million) Original Last Revised Amount Net Amount Amount Undisbursed Category Allocation Allocation Canceled Available Disbursed Balance 01 Equipment 271.78 320.55 7.61 320.55 312.94 7.61 02 Materials 105.85 79.45 0.00 79.45 79.45 0.00 03 Consulting Services 0.80 0.00 0.00 0.00 0.00 0.00 04 Unallocated 21.57 0.00 0.00 0.00 0.00 0.00 Total 400.00 400.00 7.61 400.00 392.39 7.61 C. Project Data 1. Project Cost ($ million) Cost Appraisal EstimateActual Foreign Exchange Cost 1,364.61 218.29 Local Currency Cost 2,767.32 6,680.52 Total 4,131.93 6,898.81 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Asian Development Bank 400.00 392.39 China Development Bank 1,667.27 3,239.05 MOR, HPG, SPG 2,064.66 3,267.37 Total 4,131.93 6,898.81 HPG = Henan provincial government, MOR = Ministry of Railways, SPG = Shaanxi provincial government. Source: China Railway Corporation. iii 3. Cost Breakdown by Project Component ($ million) Appraisal Cost Actual Estimate A. Base Cost 1. Railway works, facilities, and equipment 3,067.66 6,142.98 2. Administration, land acquisition, consulting services, and 424.09 576.50 environmental protection Subtotal (A) 3,491.75 6,719.48 B. Contingencies 1. Physical contingencies 240.50 0.00 2. Price contingencies 146.25 0.00 Subtotal (B) 386.75 0.00 C. Interest during construction 253.43 179.33 Total 4,131.93 6,898.81 Numbers may not sum precisely because of rounding. Sources: China Railway Corporation, Zhengzhou‒Xi’an Passenger Dedicated Line Railway Company. 4. Project Schedule Item Appraisal Estimate Actual Detailed design completed Jul 2005 Sep 2004 Commencement of land acquisition Sep 2005 Dec 2005 (Shaanxi Province) and resettlement activities and Mar 2006 (Henan Province ADB-financed contracts awarded Oct 2005 Feb 2007 Commencement of track laying Sep 2007 Mar 2009 Land acquisition and resettlement Sep 2008 Dec 2012 completed Civil works construction completed Sep 2009 Mar 2009 Track laying completed Mar 2010 Jun 2009 Telecommunications and signaling Aug 2010 Jul 2009 completed ADB = Asian Development Bank Sources: China Railway Corporation, Zhengzhou-Xi’an Passenger Dedicated Line Railway Company. 5. Project Performance Report Ratings Ratings Implementation Period Development Objectives Implementation Progress From 30 Sep 2005 to 28 Feb 2006 Satisfactory Satisfactory From 01 Mar 2006 to 31 Mar 2006 Satisfactory Unsatisfactory From 30 Apr 2006 to 31 May 2010 Satisfactory Satisfactory From 30 Jun 2010 to 31 Dec 2010 Satisfactory Highly Satisfactory Technical / Contract Awards / Disbursements / Financial Management / Safeguards From 1 Jan 2011 to 31 Dec 2014 On track iv D. Data on Asian Development Bank Missions Name of Mission Date No. of No. of Specialization Persons Person-Days of Membersa Fact-Finding 14–25 Mar 2005 7 84 a,b,c,d,e,f,g Inception 14–19 Oct 2006 2 12 h,i Review 1 12–14 and 17–19 Nov 2007 2 12 h,i Midterm Review 3–11 Nov 2008 5 45 j,k,l,m,n Review 2 23–27 Nov 2009 2 10 j,m Review 3 26–30 Jul 2010 1 5 a Review 4 11–16 Dec 2011 1 6 a Review 5 22–27 Aug 2012 1 6 a Review 6 11–13 Dec 2013 1 3 n Review 7 13–16 Nov 2014 1 4 n Project Completion Review 24–28 April 2017 4 16 i,o,p,q,r Note: a a = transport specialist (railways)/project team leader; b = principal transport economist; c = resettlement specialist, d = environment specialist; e = financial specialist; f = economist; g = counsel; h = senior transport specialist (railways)/mission leader; i = associate project analyst; j = transport specialist/team leader; k = senior social development specialist (resettlement); l = transport specialist (for environment protection); m = operations officer; n = senior transport specialist; n = senior transport specialist/team leader; o = senior operations assistant; p = principal transport specialist/team leader, q = railway specialist; r = resettlement specialist (staff consultant). I. PROJECT DESCRIPTION 1. People’s Republic of China (PRC) railway sector has been vital to the country’s economic and social development. The PRC’s vast area requires the movement of people and goods over long distances, and railways are an efficient and economic means of transport, with a competitive advantage in moving passengers and freight over medium to long distances. During 2003‒2015, the rail network expanded by 65%, from 73,000 kilometers (km) to 121,000 km. Passenger and freight railway traffic also grew substantially. The PRC has also developed the world’s longest high-speed rail network (19,000 km). The government’s plan for railway development prioritizes the expansion of the rail network and the construction of new rail lines in the central and western regions to enhance economic growth and reduce inequality.1 2.