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World Bank Document Report No. PIC4820 Project Name China-Xiaolangdi Multipurpose Project Stage II (#) Region East Asia and Pacific Sector Hydro / Natural Resource Management Project ID CNPE34081 Public Disclosure Authorized Implementing Agency Yellow River Water & Hydropower Development Corp. (YRWHDC) Ministry of Water Resources Contact: Mr. Wang Xianru, Vice General Manager Xiaolangdi Site, Jiyuan City Henan Province P. R. China Tel. 86 379 390 5221 Fax. 86 379 390 5247 Environmental Category A Date Prepared February 14, 1997 Public Disclosure Authorized Projected Appraisal March 10, 1997 Projected Board Date June 2, 1997 1. Sector Background The Yellow River is the second longest water course in China and traverses nine provinces (Qinghai, Sichuan, Gansu, Ningxia, Inner Mongolia, Shaanxi, Shanxi, Henan, and Shandong). The catchment area accounts for 7T of China's total land area and supports the agriculture of 130 million people over a cultivated area of 12.7 million ha. (139 of the total cultivated area of China). Some of the most fertile and densely populated lands (2 million ha) in China are in the lower reaches of the Yellow River mainly in Henan Public Disclosure Authorized and Shandong Provinces. Floods in the lower reaches have brought severe destruction to farmlands and cities killing thousands of people and causing billions of dollars of damage. In addition, because of the young geomorphology of the loess plateau, soil erosion in the mid- regions of the river has resulted in enormous sediment being transported into the river (1.6 billion cum per year), depositing about W of this silt in the lower reaches of the river, which has caused the river bed to rise 3-5 meters higher than the surrounding ground. Historically, flood calamities in the lower reaches have affected 12 million ha and 70 million people in the provinces Henan, Shandong, and parts of Anhui, Hebei and Jiangsu. An enormous effort in fighting floods has been going on in the lower reaches for several centuries by building up the levees. However, despite these efforts floods have caused damage three Public Disclosure Authorized out of every four years. 2. Since 1955 the government has made great strides in developing a master plan for water resources which consists of a proposal to build 27 major dams for harnessing and controlling the Yellow River for hydropower, irrigation, municipal and industrial (M & I) water supply, mainly for the upper and middle reaches of the river. The master plan also proposes to implement comprehensive soil conservation measures to reduce silt flowing into the river. Seven major dams (of the 27 planned) have been built across the river. 3. The upper reaches of the river, which contribute 60t of the water resources, are now fairly well regulated. However for the lower reaches the only dam constructed (Sanmenxia) has had to be modified (resulting in only partial regulation of flood waters) to cope with large volumes of silt which filled the reservoir area within two years after its completion. The lower reaches of the Yellow River are currently protected only by flood levees. These have to be raised every 10 years at a cost of about $2 billion each time, and have to be maintained every year at a cost of $100 million. The levees at present do not provide adequate protection for the 103 million people below them, some key cities (Zhengzhou, Kaifeng, Xinxiang, Jinan, Heze, Liaochang, Dezhou, and Jining) and vital industries like the Shangli and Zhongyuan oilfields which produce about one fourth of the crude oil for China. In addition, because of the lack of regulation of water in the lower reaches, adequate irrigation water is available only once every three years, as against possible perennial irrigation for about 1 million hectares, and water supplies for cities (Beijing, Tianjin, Qingdao, Zhengzhou, Kaifeng, etc.) and for industries is very limited. Several cities such as Qingdao have to shut industries several hours every day because of lack of water. In order to solve some of these problems, the master plan recommends that the most cost effective solution will be the construction of Xiaolangdi Dam near Zhengzhou in Henan 4. Project Objectives The objectives of the project are: to provide flood protection for 103 million people in the North China Plain in rural areas, several large and medium cities and major industrial centers; to control sediment accretion in the lower reach of the Yellow River for a period of about 20 years; to generate much needed hydropower; and to supply irrigation water (and increase the reliability of irrigation) for some 2 million hectares and ensure more stable water supplies for downstream cities and industries. 5. Project Scope The project will finance the second stage in the construction of a dam and hydroelectric power plant on the Yellow River. The first stage, which consisted of the Xiaolangdi Multipurpose Dam Project and the associated Xiaolangdi Resettlement Project, was approved by the Bank Board in April 1994. The main features of the Xiaolangdi Multipurpose Project are (a)_a rockfill dam, 154 m high, with a crest length of 1,370_m; (b) a common intake structure, feeding nine large-diameter tunnels and a surface spillway for river diversion, flood handling and sediment management; and (c) a power station with six power tunnels with turbine and generators with an installed capacity of 1,800 MW (6 x 300_MW). Civil works have been under construction since 1994 -2 - under three contracts awarded following international competitive bidding procurement procedures. The contracts have an estimated total value to completion of US$883.2 million equivalent and the first-stage World Bank loan (Ln. 3727-CHA) financed US$386 million of this amount. The proposed second- stage project will provide Bank funding for (a) completion of the civil works contracts; (b) training in operation and maintenance (O&M)of the dam, powerhouse and related facilities; (c) planning and personnel training for operation of the project in the interests of flood control, sediment management, irrigation and water supply; and (d) creation of a flood forecasting system including training and equipment. As reviewed below, the implementation of stages 1 and 2 of the dam project will entail the resettlement of 200,000 people, which has been supported under a separate project. 6. Project Cost and Financing The total costs of the project are estimated to be $2,522 million equivalent, of which $1,140 million (45 percent) represents the foreign exchange component. These estimates exclude the costs of the resettlement program, totaling $821 million, financed under a separate project. The project base costs are in January 1997. Project financing would be provided as follows: $1,208 million from government contribution, $286 million from local bank loans, $138 million from export credit and $460 million and $430 million from the first and second Bank loans. 7. Implementation The project implementation period is 5 years (1997-2001). The Ministry of Water Resource (MWR) has overall responsibility for implementing the Xiaolangdi Project. A Central Project Leading Group, established under the leadership of the State Council consisting of a vice- minister of MWR and directors from the Ministry of Finance, the State Planning Commission, and Vice Governors of Henan and Shanxi Provinces, to oversee project management, resolve policy matters and solve interdepartmental/interagency problems. 8. Project Execution: The executing agency for implementing the project is the Yellow River Water and Hydropower Development Corporation (YRWHDC). YRWHDC has appointed an independent engineer Xiaolangdi Engineering Consulting Company (XECC) to be responsible for construction supervision of the project. YRWHDC will coordinate with the provincial Project Management Offices of Henan and Shanxi Provinces on matters relating to resettlement and land acquisition. YRWHDC is a state-owned enterprise whose main function is to build, operate and maintain the dam and power station. The general manager of YRWHDC reports to MWR. These organizations have performed well in implementing the first-stage project and will remain in place for the proposed second-stage project. 9. Project Sustainability The design of the dam is based on similar upstream dams functioning under large silt loads, -3 - and the designs have been tested by prototype technical studies. The safety factors used were conservative. The sustainability of technical operation of the project is therefore as certain as possible, given state-of-the-art technology in design of large dams. Project charges for power and water supply needed to recover the capital costs and to finance operation and maintenance are not excessive, making financial sustainability reasonably certain. 10. Environmental Aspects This project is classified as a category A project requiring a full environmental impact assessment (EIA). An EIA covering both stage 1 and stage 2 was carried out in 1993 by the Reconnaissance Planning and Design Institute (RPDI) with assistance of 20 design institutes for different aspects of the project and from international consultants. A copy of the complete EIA was sent to the Project Information Center (PIC) in March 1993. An update of the EIA was completed in February 1997 and will be submitted to the Board and PIC in early March 1997 prior to appraisal departure. The major environmental threat in the lower Yellow River region is catastrophic flooding. Xiaolangdi Project will offer virtually complete protection in the downstream reaches against the 1-in-1,000-year flood. Due to the initial sediment trapping and longer-term sediment regulation operations in Xiaolangdi, the project will also defer dike raising and strengthening for 20 years and reduce the magnitude of dike reconstruction thereafter. 11. The major social and environmental impact related to the project is resettlement of 200,000 mostly rural residents to be displaced by the reservoir. The resettlement program is comprehensive and represents a pioneering effort in project resettlement in China.
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