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World Bank Document Document of The World Bank Public Disclosure Authorized ReportNo. 15160-CHA STAFF APPRAISAL REPORT Public Disclosure Authorized CHINA SECOND SHAANXI PROVINCIAL HIGHWAY PROJECT Public Disclosure Authorized FEBRUARY 5, 1996 Public Disclosure Authorized Infrastructure Operations Division China and Mongolia Department East Asia and Pacific Regional Office CURRENCY EQUIVALENTS (As of December 1995) Currency Name = Renminbi Currency Unit = Yuan (Y) I Yuan I 00 fen $1.00 Y 8.30 Y 1.00 - $0.12 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS 7FYP - Seventh Five-Year Plan 8FYP - Eighth Five-Year Plan 9FYP - Ninth Five-Year Plan BOT - Build-operate-transfer E&M - Electrical, electronic and mechanical EA - Environmental Assessment EAP - Environmental Action Plan EIA - Environmental Impact Assessment EIRR - Economic Internal Rate of Return FJTH - Famensi-Jiangzhuang-Tangyu Highway GNP - Gross national product GOVAI - Gross output value of agriculture and industry HRI - Highway Research Institute HSDI - Highway Survey and Design Institute ICB - International competitive bidding IS - Institutional Strengthening IST - Institutional Strengthening and Training ITC - International Tendering Company JST - Joint Supervision Team LA&R - Land Acquisition and Resettlement LAB - Levying Administration Bureau LGTPA - Leading Group for Transportation for Poverty Alleviation LTWMH - Lintong-Terra Cotta Warriors Museum Highway LXH - Lantian-Xiaoshangyuan Highway MAAP - Microcomputer Accident Analysis Package MOC - Ministry of Communications MOF - Ministry of Finance mte - Medium truck equivalent mvpd - Motor vehicles per day NTHS - National Trunk Highway System O-D - Origin-Destination pcu - Passenger car unit PSB - Public Security Bureau PTS - Provincial Traffic School PTTS - Provincial Traffic Technical School RAP - Resettlement Action Plan RIPA - Roads Improvement for Poverty Alleviation RMF - Road maintenance fee SAA - State Audit Administration SASS - Shaanxi Academy of Social Sciences SHGHAB - Shaanxi High-Grade Highway Administration Bureau SOE - Statement of Expenditures SPAO - Shaanxi Poverty Alleviation Office SPC - State Planning Commission SPG - Shaanxi Provincial Government SPHAB - Shaanxi Provincial Highway Administration Bureau SPHSDI - Shaanxi Provincial Highway Survey and Design Institute SPPC - Shaanxi Provincial Planning Committee SPRBC - Shaanxi Provincial Road and Bridge Company SPTD - Shaanxi Provincial Transport Department STC - Staff Training Center TCU - Technical Coordination Unit ton-km - Ton-kilometer THH - Tongchuan-Huangling Highway TRL - Transport Research Laboratory VS - Vocational School WTE - Weinan-Tongguan Expressway CHINA SECOND SHAANM PROVINCIAL HIGHWAYPROJECT LOANAND PROJECT SUMMARY Borrower: People's Republic of China Implementing Agency: Shaanxi Provincial Transport Department Beneficiary: Shaanxi Province Poverty: Not applicable. However, a component of the project targets poor counties in Shaanxi Province by imnprovingaccess to them. Amount: $210 million Terms: 20 years, including 5 years of grace, at the standard interest rate for LIBOR-based US dollar single-currency loans. Commitment Fee: 0.75 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan: See para. 3.48. Economic Rate of Return: 15.8 percent for the project overall 16.0 percent for the High-Grade Highways and their linking roads 15.0 percent for the first package of the Road Improvements for Poverty Alleviation (RIPA) Project ID Number: CN-PA-3652 CONTENTS 1. TRANSPORT BOTTLENECKS AND REFORMS ...................................................1 A. Background ............................................................... 1 B. Traffic .............................................................. 1I C. Transport Reforms............................................................... 2 D. The Highway Subsector ............................................................... 2 E. Bank Group Participation ............................................................... 5 F. Lessons From Previous Bank Operations ............................................................6 2. SHAANXI PROVINCIAL TRANSPORT SECTOR ................................................. 8 A. Situation and Economy ............................................................... 8 B. Transport Network ................................................................ 8 C. Traffic Characteristics and Growth ............................................................... 9 D. The Vehicle Fleet .............................................................. 10 E. The Trucking Industry .............................................................. 10 F. Highway Safety .............................................................. 10 G. Highway Administration .............................................................. 11 H. Planning, Budgeting and Financing ............................................................... 11 I. Engineering, Construction and Maintenance...................................................... 13 J. Training .............................................................. 14 K. Highway Development .............................................................. 14 3. THE PROJECT .. 16 A. Project Formulation and Preparation ............................................................. 16 B. Project Objectives and Rationale for Bank Involvement .................................. 16 C. Project Scope.............................................................. 17 D. Environmental Assessment .............................................................. 27 E. Land Acquisition and Resettlement............................................................. 28 F. Cost Estimates ............................................................. 31 G. Financing ............................................................. 32 This report is based on the findings of a July 1995 Appraisal Mission comprising Hatim Hajj (Transport Specialist, Task Manager), Yasuhiro Kawabata (Highway Engineer), Robin Carruthers (Economist), Claude Salem (Institutional Strengthening/Training Specialist), Katsunori Suzuki (Environmental Specialist), Maninder Gill (Resettlement Specialist), V. Setty Pendakur (Consultant, Rural Transport Specialist) and Richard Muskaug and Adriaan Schelling (Consultants, Road Safety Specialists). Ms. Xin Chen of the Bank's Resident Mission in China also contributed to the preparation of the project. The peer reviewers of the project were Chris Hoban (Sector and Engineering), Simon Thomas (Transport Economics), Ellen Schaengold (Poverty and Resettlement), Michael Cohen (Institutional Strengthening and Training), and Stein Lundebye (Roadway Safety). The Division Chief is Richard Scurfield and the Department Director is Nicholas C. Hope. - ii - H. Implementation ................................................ 33 I. Procurement ................................................ 36 J. Disbursements ................................................ 40 K. Auditing ................................................ 41 L. Project Supervision, Reporting and Monitoring ................................................ 41 4. ECONOMIC EVALUATION................................................. 44 A. Main Benefits and Beneficiaries................................................ 44 B. Evaluation of High-Grade Highways ................................................ 45 C. Evaluation of RIPA Component ................................................. 52 D. Project Risks and Actions ................................................ 52 5. AGREEMENTS REACHED AND RECOMMENDATION................................... 56 FIGURES Figure 2.1: Highway Revenues and Expenditures in Shaanxi in 1994............................. 12 TABLES Table 1.1: Traffic Turnover by Mode, 1980-93.59 Table 1.2: Road Accident Risks in Various Countries, 1993 .60 Table 1.3: China: Bank Group-Financed Transport Projects.61 Table 2.1: Economic Data, 1993 .. 63 Table 2.2a: Shaanxi: Passenger Traffic, 1980-94 .64 Table 2.2b: Shaanxi: Freight Traffic, 1980-94.64 Table 2.3: Shaanxi: Road Network, 1994.65 Table 2.4: Shaanxi: Length of Highway by Traffic Mix and ADT, National and Provincial Roads Only .. 66 Table 2.5: Shaanxi: Freight Handled by Public and Private Trucks, 1985-94. 67 Table 2.6: Shaanxi: Road Accidents (1985-94) .67 Table 2.7: Shaanxi: Road Accidents (1985-94) .68 Table 2.8: Shaanxi: HIghway Revenues and Expenditures .69 Table 2.9: Shaanxi: Fuel Prices .70 Table 2.10: Planned Highway Development in 9FYP (1996-2000) .71 Table 3.1: High Grade Highways: Geometric and Pavement Design Characteristics 73 Table 3.2: The Upgrading and New Construction Program for Linking Roads. 74 Table 3.3: Summary of Institutional Strengthening and Training .75 Table 3.4: Training Program.76 Table 3.5: Project Cost Summary .80 Table 3.6: Estimated Disbursement Schedule.82 - iii - Table 4.la: Traffic Volume Growth on the Weinan-Tongguang Highway, 1980-93 ... 83 Table 4. lb: Traffic Volume Growth on the Tongchuan-Huangling Highway, 1980-93................................................... 84 Table 4.1c: Traffic Volume Growth on the Xiaoshangyuan-Lantian Highway, 1980-93................................................... 85 Table 4.l d: Traffic Volume Growth on the Famensi-Jiangzhuang-Tangyu Highway, 1980-94 ................................................... 86 Table 4.le: Number of Tourists to the Terra Cotta Warriors Museum, 1983-92 ........
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