ASIAN DEVELOPMENT BANK PCR: PRC 28218 PROJECT COMPLETION REPORT ON THE JIANGXI EXPRESSWAY PROJECT (Loan 1484-PRC) IN THE PEOPLE’S REPUBLIC OF CHINA October 2004 CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion 14 October 1996 31 March 2004 CNY1.00 = $0.1205 $0.1206 $1.00 = CNY8.3017 CNY8.29 ABBREVIATIONS AADT – average annual daily traffic EIRR – economic internal rate of return FIRR – financial internal rate of return GDP – gross domestic product ICB – international competitive bidding JHCHAB – Jiangxi High-Class Highway Administration Bureau JPCD – Jiangxi Provincial Communications Department LCB – local competitive bidding MOC – Ministry of Communications NTHS – National Trunk Highway System PCU – passenger car unit PRC – People’s Republic of China TA – technical assistance VOC – vehicle operating cost WACC – weighted average cost of capital WEIGHTS AND MEASURES ha – hectare km – kilometer km/h – kilometer per hour m – meter NOTE In this report, "$" refers to US dollars. CONTENTS Page BASIC DATA MAP I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 4 D. Disbursements 5 E. Project Schedule 5 F. Implementation Arrangements 5 G. Conditions and Covenants 6 H. Related Technical Assistance 6 I. Consultant Recruitment and Procurement 6 J. Performance of Consultants, Contractors, and Suppliers 7 K. Performance of the Borrower and the Executing Agency 7 L. Performance of the Asian Development Bank 7 III. EVALUATION OF PERFORMANCE 8 A. Relevance 8 B. Efficacy in Achievement of Purpose 8 C. Efficiency in Achievement of Outputs and Purpose 10 D. Preliminary Assessment of Sustainability 11 E. Environmental, Sociocultural, and Other Impacts 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons Learned 13 C. Recommendations 14 APPENDIXES 1. Major Events in the Projects History 15 2. Training Provided under the Project 16 3. Project Costs and Financing Sources 17 4. Projected and Actual Disbursement Schedules 18 5. Appraisal and Actual Implementation Schedule 19 6. Organizational Chart of the Project Executing Agency 21 7. Compliance with Loan Covenants 24 8. Details of Contract Packages 27 9. Socioeconomic Indicators of Project Influenced Areas 29 10. Traffic Forecasts and Actual Traffic Volume 30 11. Financial Performance 33 12. Financial Reevaluation 37 13. Economic Reevaluation 39 14. Evaluation of Land Acquisition and Resettlement Activities 43 15. Project Framework-Actual Achievements 50 BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 1484-PRC 3. Project Title Jiangxi Expressway Project 4. Borrower People’s Republic of China 5. Executing Agency Jiangxi Provincial Communications Department 6. Amount of Loan $150.0 million 7. Project Completion Report (PCR) PCR: PRC 861 Number B. Loan Data 1. Appraisal – Date Started 22 July 1996 – Date Completed 2 August 1996 2. Loan Negotiations – Date Started 7 October 1996 – Date Completed 9 October 1996 3. Date of Board Approval 19 November 1996 4. Date of Loan Agreement 27 December 1996 5. Date of Loan Effectiveness – In Loan Agreement 27 March 1997 – Actual 12 March 1997 – Number of Extensions nil 6. Closing Date – In Loan Agreement 30 June 2002 – Actual 8 April 2003 – Number of Extensions two (2) 7. Terms of Loan – Interest Rate Asian Development Bank’s (ADB) pool-based variable rate for US dollar lending – Maturity (number of years) 25 years – Grace Period (number of years) 5 years 8. Terms of Relending (if any) – Interest Rate same as ADB’s lending rate – Maturity (number of years) 25 years – Grace Period (number of years) 5 years – Second-Step Borrower Jiangxi Province iii 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 7 August 1997 8 April 2003 64 months Effective Date Original Closing Date Time Interval 12 March 1997 30 June 2002 63 months b. Amount ($) Category Last Net or Original Revised Amount Amount Amount Undisbursed Subloan Allocation Allocation Canceled Available Disbursed Balance ($) ($) ($) ($) ($) ($) 1 110,700,000 97,731,227 12,960,773 97,731,227 97,731,227 0 2 5,900,000 7,973,737 0 7,973,737 7,973,737 0 3 1,600,000 913,156 686,844 913,156 913,156 0 4 1,000,000 926,866 73,134 926,866 926,866 0 5 16,000,000 16,000,000 0 16,000,000 16,000,000 0 6 14,800,000 0 12,726,263 0 0 0 Total 150,000,000 123,544,986 26,455,014 123,544,986 123,544,986 0 10. Local Costs (Financed) - Amount ($) 0 - Percentage of Local Costs 0 - Percentage of Total Cost 0 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 180.7 123.5 Local Currency Cost 185.6 196.7 Total 366.3 320.2 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower-Financed 96.0 84.2 ADB-Financed 134.0 107.5 Other External Financing 120.3 113.5 Total 350.3 304.2 IDC Costs Borrower-Financed 0.0 0.0 ADB-Financed 16.0 16.0 Other External Financing 0.0 0.0 Subtotal 16.0 16.0 Total 366.3 320.2 ADB = Asian Development Bank, IDC = interest during construction. iv 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual 1. Civil works 279.2 233.2 2. Equipment 6.6 15.2 3. Land Acquisition and Relocation 8.1 9.6 4. Consulting Services for Construction Supervision and 10.9 12.7 Training 5. Capacity Building, Training, and Human Resources 1.0 0.9 Development 6. Access Roads 5.8 32.5 7. Physical Contingency 15.6 0.0 8. Price Contingency 23.0 0.0 9. Interest During Construction 16.0 16.0 Total 366.3 320.2 4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants Construction Supervision June 1997 May 1997 Training June 1998 November 1999 Completion of Engineering Designs June 1997 December 1997 Civil Works Contract Date of Award June 1997 December 1997 Completion of Work September 2001 October 2000 Equipment and Supplies Dates First Procurement September 1997 March 1997 Last Procurement December 1999 August 2002 Completion of Equipment Installation October 2001 May 2002 Start of Operations December 2001 May 2002 Completion of Tests and Commissioning November 2001 November 2000 Beginning of Startup December 2001 November 2000 Other Milestonesb None 5. Project Performance Report Ratings Ratings Development Implementation Implementation Period Objectives Progress From 01 Nov 1998 to 31 Dec 1998 S S From 01 Jan 1999 to 31 Dec 1999 S S From 01 Jan 2000 to 31 Dec 2000 S S From 01 Jan 2001 to 31 Dec 2001 S S From 01 Jan 2002 to 31 Dec 2002 S S From 01 Jan 2003 to 31 Dec 2003 S S S=satisfactory v D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Missiona Date Person Person-Days of Membersb s Fact-Finding Mission 8-21 May 1996 5 14 a, b, c, d, e Appraisal Mission 22 Jul to 2 Aug 96 5 12 a, b, c, d, e Inception Mission 8-10 May 97 1 3 a Review Mission 1 1-3 Dec 97 1 3 a Review Mission 2 24-28 Nov 98 2 5 a, f Midterm Review Mission 15-22 Nov 99 3 10 a, b, g Special Project Administration Mission 1 1-3 Aug 00 1 3 a Special Project Administration Mission 2 24-31 Oct 00 2 16 c, g Consultation Mission 17-18 Nov 00 1 2 d Review Mission 3 10-16 Aug 01 2 14 a, h Review Mission 4 8-12 Dec 03 2 10 h, i Project Completion Reviewc 22 Mar to 02 Apr 2 24 h, i, j 04 Note: a a = engineer; b = economist; c = financial analyst; d = programs officer; e = environment specialist; f = transport specialist; g = associate operations analyst; h = head, project administration unit; I = operations officer; j = consultant. b The project completion report was prepared by Chwoon Sam Chin, head, project administration unit - mission leader; Perfecto Canlas, operations officer; a financial analyst-economist (staff consultant); and a resettlement specialist (staff consultant). vi I. PROJECT DESCRIPTION 1. The economy of the People’s Republic of China (PRC) has developed rapidly since the country embarked on economic reforms in the late 1970s. Gross domestic product (GDP) has grown an average of more than 9% per year over this period. This unprecedented economic growth has generated strong demand for goods and services, which in turn generated strong demand for vehicles because road transport is flexible and responsive to the needs of a market economy. Although the PRC has actively developed and improved its road network by adding 86,700 kilometers (km) of new roads and increasing its road investments fourfold over the last 7 years, the PRC still has one of the lowest road densities in the world in terms of population and land area. Its motorization rate is lower than that of other Asian and Pacific countries, with only about 1.3 vehicles for every 100 persons. Roads are the main mode of passenger transport—carrying about 55% of the total passenger-km—and the third major freight transport mode, responsible for 14% of total national freight tons-km. The PRC’s vehicle fleet is expected to expand rapidly with steadily increasing incomes and phenomenal expansion in automotive manufacturing capacity. The inadequate road network, coupled with poor quality roads, has created transport bottlenecks and hindered economic and social development. Economic growth has been unevenly distributed among the different regions in the PRC, resulting in growing inequality and deterioration in income distribution.