Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 45 164-CN PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED LOAN IN THE AMOUNT OF US$150 MILLION TO THE PEOPLE’S REPUBLIC OF CHINA FOR A HUBEI YIBA HIGHWAY PROJECT Public Disclosure Authorized March 2,2009 Transport, Energy and Mining Sector Unit Sustainable Development Department , East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective June 30,2008) Currency Unit = Yuan (RMB) Y 1.00 = US$0.14 US$l.OO = Y 6.90 FISCAL YEAR January 1 - December 31 ABBREVlATIONS AND ACRONYMS AADT Average Annual Daily Traffic AusAID Australian Government Overseas Aid Program CESC Client’s Environmental Supervision Consultants CFAA Country Financial Accountability Assessment CLS Complaint Logging System CPS Country Partnership Strategy CQ Consultant Qualification DA Designated Account EIA Environmental Impact Assessment EM Environmental Monitors EMDP Ethnic Minorities Development Plan EMP Environmental Management Plan EPB Environmental Protection Bureau ESRP Environmentally and Socially Responsible Procurement NEN National Expressway Network FIRR Financial Internal Rate of Return FM Financial Management FSL Fixed Spread Loan GOC Government of China HERO Hubei Expressway Resettlement Office HPAO Hubei Provincial Audit Office HPCD Hubei Provincial Communications Department HPFB Hubei Provincial Finance Bureau HPHDI Hubei Provincial Highway Design Institute HPYECH Hubei Provincial Yiba Expressway Construction Headquarters HYEMD Hubei Yiba Expressway Management Division ICB International Conipetitive Bidding ICR Implementation Conipletion Report IEC Information, Education and Consultation Communication Km Kilometer M Million M Meter m2 Square meter MOC Ministry of Communications MOCN2 Second National Survey and Design Institute from MOC MOF Ministry of Finance Mu Chinese measure of land area (15 niuihectare) NCB National Competitive Bidding NDRC National Development and Reform Commission NEN National Expressway Network NPV Net Present Value NTHS National Trunk Highway System PCU Passenger Car Units PDO Project Development Objective PDRC Provincial Development Reform Commission PRC People’s Republic of China QCBS Quality-Cost Based Selection RAP Resettlement Action Plan RPF Resettlement Policy Framework SA Special Account SBD Standard Bidding Documents SCMS Safeguards Compliance Monitoring System SEA Strategic Environmental Assessment SEPA State Environmental Protection Agency SIA Social Impact Assessment SIDA Swedish International Development Cooperation Agency SIL Specific Investment Loan SMS Short Message Service: a way of sending text messages via mobile telephone SOE Statements of Expenditure TA Technical Assistance TOR Terms of Reference VSL Variable Spread Loan WBFPO The HPCD World Bailk-Financed Project Office YBE Yichang-Badong Expressway Vice President: James W. Adams Country Director: David Dollar Sector Director John Roome Sector Managers: Junhui Wu and Ede Jorge Ijjasz-Vasquez Task Team Leader: Christopher R. Bennett FOR OFFICIAL USE ONLY This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. CHINA Hubei Yiba Highway Project CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A . Country and sector issues .................................................................................................... 1 B . Rationale for Bank involvement ......................................................................................... 2 C . Higher level objectives to which the project contributes .................................................... 3 I1. PROJECT DESCRIPTION ............................................................................................. 4 A . Lending instrument ............................................................................................................. 4 B. Project development objective and key indicators.,............................................................ 4 C . Project components ............................................................................................................. 4 D. Lessons learned and reflected in the project design............................................................ 6 E. Alternatives considered and reasons for rejection .............................................................. 9 I11. IMPLEMENTATION.................................................................................................... 10 A . Partnership arrangements (if applicable) .......................................................................... 10 B . Institutional and implementation arrangements. ............................................................... 10 C . Monitoring and evaluation of outcomes/results ................................................................ 12 .. D. Sustainability ..................................................................................................................... 12 E. Critical risks and possible controversial aspects ............................................................... 12 F . Loadcredit conditions and covenants ............................................................................... 14 IV. APPRAISAL SUMMARY ............................................................................................. 15 A . Economic and financial analyses ...................................................................................... 15 B. Technical ........................................................................................................................... 16 C . Fiduciary ........................................................................................................................... 17 D. Social ................................................................................................................................. 17 E. Environment ...................................................................................................................... 19 F . Safeguard policies ............................................................................................................. 21 G. Policy Exceptions and Readiness ...................................................................................... 21 Annex 1: Country and Sector or Program Background ......................................................... 22 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 28 Annex 3: Results Framework and Monitoring ........................................................................ 30 Annex 4: Detailed Project Description ...................................................................................... 33 Annex 5: Project Costs ............................................................................................................... 39 Annex 6: Implementation Arrangements ................................................................................. 41 Annex 7: Financial Management and Disbursement Arrangements ..................................... 44 Annex 8: Procurement Arrangements ...................................................................................... 50 Annex 9: Economic and Financial Analysis ............................................................................. 59 Annex 10: Safeguard Policy Issues ............................................................................................ 75 Annex 11: Project Preparation and Supervision ..................................................................... 95 Annex 12: Documents in the Project File ................................................................................. 97 Annex 13: Statement of Loans and Credits .............................................................................. 98 Annex 14: Country at a Glance ............................................................................................... 102 Annex 15: Pilot Testing Environmentally and Socially Responsible Procurement............ 105 Annex 16: Safeguards Compliance Monitoring System ........................................................ 110 Annex 17: Maps......................................................................................................................... 114 CHINA HUBEI YIBA HIGHWAY PROJECT PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASTE Date: March 2, 2009 Team Leader: Christopher R. Bennett Country Director: David R. Dollar Sectors: Roads and highways (1 00%) Sector ManagerdDirector: Junhui Wu and Ede Themes: Regional integration (P);Trade Jorge Ijjasz-VasquedJohn Roome facilitation and market access (S) Project ID: P101258 Environmental screening category: Full Assessment Lending Instrument: Specific Investment Loan Project Financing Data [XI Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 150.00 Proposed terms: Payable in 27 years including 8 years of grace and level principal repayments at six-month LIBOR for US Dollar plus variable spread for Variable-Rate Single Currency Loans Financing Plan (US%m)