Completion Report Project Number: 32336 Loan Number: 2014-PRC February 2011 People’s Republic of China: Western Yunnan Roads Development Project CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion 15 September 2003 22 June 2009 CNY1.00 = $0.1208 $0.1463 $1.00 = CNY8.277 CNY6.836 ABBREVIATIONS AADT – annual average daily traffic ADB – Asian Development Bank AFD – Agence Française de Développement EIA – environmental impact assessment EIRR – economic internal rate of return FIRR – financial internal rate of return GDP – gross domestic product GMS – Greater Mekong Subregion ICB – international competitive bidding MOT – Ministry of Transport MTE – medium-truck equivalent M&E – monitoring and evaluation NDRC – National Development and Reform Commission NTHS – National Trunk Highway System O&M – operation and maintenance PCU – passenger car unit PPMS – project performance management system RP – resettlement plan SEPP – soil erosion protection plan STI – sexually transmitted infections TA – technical assistance VOC – vehicle operating cost WACC – weighted average cost of capital YBEC – Yunnan Baolong Expressway Company YPDOT – Yunnan Provincial Department of Transport WEIGHTS AND MEASURES ha = hectare km = kilometer mu = 1/15 hectare NOTES (i) The fiscal year (FY) of the government and its agencies ends on 31 December. (ii) In this report, “$” refers to US dollars. Vice-President C. Lawrence Greenwood, Jr., Operations 2 Director General K. Gerhaeusser, East Asia Department (EARD) Country Director P. J. Heytens, PRC Resident Mission, EARD Team leader C. Chu, Project Management Officer, EARD Team members Z. Niu, Project Officer (Environment), EARD F. Wang, Financial Management Officer, EARD W. Zhu, Resettlement Officer, EARD H. Xia, Associate Project Analyst, 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 4 D. Disbursements 4 E. Project Schedule 5 F. Implementation Arrangements 5 G. Conditions and Covenants 5 H. HIV/AIDS Prevention 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 8 III. EVALUATION OF PERFORMANCE 8 A. Relevance 8 B. Effectiveness in Achieving Outcome 9 C. Efficiency in Achieving Outcome and Outputs 10 D. Preliminary Assessment of Sustainability 11 E. Impact 12 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 14 C. Recommendations 14 APPENDIXES 1. Project Framework 16 2. Chronology of Major Events 22 3. Local Roads Upgraded under the Project 23 4. Training Program Provided 24 5. Project Cost and Financing Plan 25 6. Projected and Actual Contract Awards and Disbursements 26 7. Implementation Schedule 27 8. Organization Chart 28 9. Compliance with Loan Covenants 29 10. Contract Details for Civil Works and Equipment 34 11. Economic Reevaluation 37 12. Financial Reevaluation 43 13. Socioeconomic Impact and Poverty Reduction 47 14. Land Acquisition and Resettlement 51 i BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 2014-PRC 3. Project Title Western Yunnan Roads Development Project 4. Borrower People’s Republic of China 5. Executing Agency Yunnan Provincial Department of Transport1 6. Amount of Loan $250.0 million 7. Project Completion Report Number PCR:PRC 1235 B. Loan Data 1. Appraisal – Date Started 24 March 2003 – Date Completed 4 April 2003 2. Loan Negotiations – Date Started 25 August 2003 – Date Completed 28 August 2003 3. Date of Board Approval 28 October 2003 4. Date of Loan Agreement 11 August 2004 5. Date of Loan Effectiveness – In Loan Agreement 28 October 2004 – Actual 28 October 2004 – Number of Extensions 0 6. Closing Date – In Loan Agreement 31 March 2008 – Actual 31 March 2009 – Number of Extensions 1 7. Terms of Loan – Interest Rate LIBOR-based – Maturity (number of years) 24 – Grace Period (number of years) 4 8. Terms of Relending (if any) – Interest Rate LIBOR-based – Maturity (number of years) 24 – Grace Period (number of years) 4 – Second-Step Borrower Yunnan Baolong Expressway Co., Ltd. 1 The Yunnan Provincial Department of Transport (YPDOT) was called the Yunnan Provincial Communications Department (YPCD) at appraisal. ii 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 11 February 2005 24 February 2009 48 months Effective Date Original Closing Date Time Interval 28 October 2004 31 March 2008 41 months b. Amount ($) Original Last Revised Amount Net Amount Amount Category Allocation Allocation Canceled Available Disbursed Civil Works— 187,620,000 221,916,877 0 221,916,877 221,916,877 Expressway Civil Works— 3,000,000 0 0 0 0 Building Works Equipment— 23,540,000 5,451,837 0 5,451,837 5,451,837 Expressway Equipment—Local 2,000,000 1,544,923 0 1,544,923 1,544,923 Road Maintenance Consulting Services 2,000,000 1,006,363 0 1,006,363 1,006,363 Front-end Fee 1,250,000 1,250,000 0 1,250,000 1,250,000 Interest and 15,830,000 18,830,000 0 18,830,000 18,830,000 Commitment Charge Unallocated 14,760,000 0 0 0 0 Total 250,000,000 250,000,000 0 250,000,000 250,000,0002 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 272.6 354.1 Local Currency Cost 309.4 412.6 Total 582.0 766.7 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower-Financed 174.1 252.3 ADB-Financed 234.2 231.2 Other External Financing 134.8 235.7 Total 543.1 719.2 IDC Costs Borrower-Financed 0 0 ADB-Financed 15.8 18.8 Other External Financing 23.1 28.7 Total 38.9 47.5 Note: ADB = Asian Development Bank, IDC = interest during construction, LIBOR = London interbank offered rate. Source: Yunnan Provincial Department of Transport. 2 The actual disbursed amount was $249,999,999.85; the discrepancy is due to rounding. iii 3. Cost Breakdown by Project Component ($ million) Appraisal Estimate Actual Component Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost A. Base Cost 1. Expressway Civil Works 187.6 203.3 390.9 296.7 305.4 602.1 2. Buildings 3.0 3.3 6.3 5.4 5.9 11.3 3. Expressway Equipment 23.5 2.6 26.1 26.8 0 26.8 4. Local Road Maintenance 2.0 0.2 2.2 1.5 0 1.5 Equipment 5. Land Acquisition and 0 20.0 20.0 0 23.3 23.3 Resettlement 6. Consulting Services and 2.0 8.0 10.0 1.0 23.1 24.1 Training 7. Local Roads 4.7 18.8 23.5 2.6 26.2 28.8 Subtotal (A) 222.8 256.2 479.0 334.0 383.9 717.9 B. Contingencies 1. Physical Contingencies 14.2 16.4 30.6 0 0 0 2. Price Contingencies 15.0 17.2 32.2 0 0 0 Subtotal (B) 29.2 33.6 62.8 000 C. Front-End Fee 1.3 0 1.3 1.3 0 1.3 D. Interest during Construction 19.3 19.6 38.9 18.8 28.7 47.5 Total 272.6 309.4 582.0 354.1 412.6 766.7 4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants April 2004 November 2004 Completion of Engineering Designs January 2004 July 2004 Civil Works Contract Date of Award April 2004 November 2004 Completion of Work April 2007 September 2008 Equipment and Supplies First Procurement January 2005 April 2007 Last Procurement December 2005 November 2007 Completion of Equipment Installation April 2007 September 2008 Start of Operations Completion of Tests and Commissioning September 2007 September 2008 Beginning of Start-Up September 2007 September 2008 5. Project Performance Report Ratings Ratings Development Implementation Implementation Period Objectives Progress From 28 Oct 2003 to 31 Dec 2003 Highly Satisfactory (HS) Satisfactory (S) From 1 Jan 2004 to 31 Dec 2004 S S From 1 Jan 2005 to 31 Dec 2005 S S From 1 Jan 2006 to 31 Dec 2006 S S From 1 Jan 2007 to 31 Dec 2007 S S From 1 Jan 2008 to 31 Dec 2008 S S From 1 Jan 2009 to 22 Jun 2009 S S iv D. Data on Asian Development Bank Missions No. of No. of Specialization of Name of Mission Date Persons Person-Days Members1 Fact-Finding Mission Apr 2002 4 60 a, b, n, o Appraisal Mission Mar 2003 8 76 a, b, o, p, q, r, s, t Inception Mission Jul 2004 1 5 a Loan Review Mission 1 Jul 2005 2 14 a, g Indigenous Social Safeguard Review Sep 2005 2 16 h, m (RSES) Midterm Review Mission/Handover May 2006 6 54 a, b, i, j, k, l Mission Loan Review Mission 2 Jun 2007 4 32 c, d, k, l Loan Review Mission 3 Jul 2008 3 15 d, e, l Loan Review Mission 4 Jul 2009 3 15 d, k, l Project Completion Review May 2010 6 42 c, d, j, k, I, p Note: 1 a = engineer, b = economist, c = financial officer, d = project management officer, e = control officer, f = programs officer, g = operations officer, h = social development specialist, i = transport specialist, j = resettlement officer, k = project officer, l = project analyst, m = social safeguard analyst, n = social scientist, o = financial analyst, p = project specialist, q = financial management specialist, r = resettlement specialist, s = poverty reduction specialist, t = environment economist.