ASIAN DEVELOPMENT BANK PCR: PRC 30082 PROJECT COMPLETION REPORT ON THE CHENGDU-NANCHONG EXPRESSWAY PROJECT (Loan 1638-PRC) IN THE PEOPLE’S REPUBLIC OF CHINA December 2004 CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion (19 July 1998) (20 August 2004) CNY1.00 = $0.1208 $0.1208 $1.00 = CNY8.2768 CNY8.2768 ABBREVIATIONS AADT – annual average daily traffic ADB – Asian Development Bank BME – benefit monitoring and evaluation EIA – environmental impact assessment EIRR – economic internal rate of return FIRR – financial internal rate of return GDP – gross domestic product ha – hectare ICB – international competitive bidding km – kilometer LCB – local competitive bidding LIBOR – London interbank offered rate MTE – medium truck equivalent MOC – Ministry of Communications NTHS – national trunk highway system O&M – operation and maintenance PCR – project completion report PRC – The People’s Republic of China PRCM – Asian Development Bank Resident Mission in the People’s Republic of China SCELLC – Sichuan Chengnan Expressway Limited Liability Company SPCD – Sichuan Provincial Communications Department SPG – Sichuan Provincial Government TA – technical assistance VOC – vehicle operating cost WACC – weighted average cost of capital NOTE In this report, "$" refers to US dollars. CONTENTS Page BASIC DATA ii MAPS vii 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 and Financing Plan 4 D. Disbursements 5 E. Project Schedule 5 F. Implementation Arrangements 6 G. Conditions and Covenants 6 H. Consultant Recruitment and Procurement 6 I. Performance of Consultants, Contractors, and Suppliers 7 J. Performance of the Borrower and the Executing Agency 7 K. Performance of the Asian Development Bank 8 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 10 E. Environmental, Sociocultural, and Other Impacts 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 12 A. Overall Assessment 12 B. Lessons Learned 13 C. Recommendations 13 APPENDIXES 1. Chronology of Major Events in the Project's History 15 2. Summary of Civil Works Packages 16 3. Details of Packages for Civil Works and Equipment 17 4. Project Costs and Financing Plan 19 5. Projected and Actual Contract Awards and Disbursements 20 6. Appraised and Actual Implementation Schedule 21 7. Sichuan Chengnan Expressway Limited Liability Company Organization Chart 22 8. Status of Compliance with Loan Covenants 23 9. Socioeconomic Development in Project Impact Areas 28 10. Traffic Analysis and Forecast 33 11. Sichuan Chengnan Expressway Limited Liability Company Actual and Projected Financial Performance 38 12. Financial Reevaluation 43 13. Economic Reevaluation 45 14. Poverty Impact Evaluation 48 15. Evaluation of Land Acquisition and Resettlement Activities 52 ii BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 1638-PRC 3. Project Title Chengdu-Nanchong Expressway Project 4. Borrower People’s Republic of China 5. Executing Agency Sichuan Provincial Communications Department 6. Amount of Loan $250 million 7. Project Completion Report Number PCR: PRC 842 B. Loan Data 1. Appraisal - Date Started 6 July 1998 - Date Completed 18 July 1998 2. Loan Negotiations - Date Started 12 October 1998 - Date Completed 14 October 1998 3. Date of Board Approval 10 November 1998 4. Date of Loan Agreement 23 February 1999 5. Date of Loan Effectiveness - In Loan Agreement 24 May 1999 - Actual 24 August 1999 - Number of extensions 1 6. Closing Date - In Loan Agreement 31 December 2003 - Actual 30 April 2004 - Number of Extensions 1 7. Terms of Loan - Interest Rate Pool-based variable lending rate transformed to LIBOR-based (Floating) - Transformation Date 31 July 2002 - Transformation Amount $86,258,768.26 - Maturity 24 years - Grace Period 4.5 years 8. Terms of Relending - Interest Rate Pool-based variable lending rate transformed to LIBOR-based (Floating) - Maturity 24 years - Grace Period 4.5 years - Second-Step Borrower Sichuan Provincial Communications Department iii 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 20 December 1999 24 August 2004 56 months Effective Date Original Closing Date Time Interval 24 August 1999 31 December 2003 52 months b. Amount ($ million) Last Original Amount Net Amount Amount Undisbursed Category or Subloan Revised Allocation Canceled Available Disbursed Balance Allocation Civil Works 178.9 192.9 0.0 192.9 192.9 0.0 Equipment 24.0 18.7 0.0 18.7 18.7 0.0 Consulting Services and Training 1.2 1.3 0.0 1.3 1.3 0.0 Provincial and County Roads 3.9 3.6 0.0 3.6 3.6 0.0 Interest and Commitment Charges 33.0 33.5 0.0 33.5 33.5 0.0 Unallocated 9.0 0.0 0.0 0.0 0.0 0.0 Total 250.0 250.0 0.0 250.0 250.0 0.0 Sources: Asian Development Bank, Sichuan Provincial Communications Department and Sichuan Chengnan Expressway Limited Liability Company. 10. Local Costs (ADB-Financed) - Amount ($) 0 - Percent of Local Costs 0 - Percent of Total Cost 0 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 317.0 301.1 Local Currency Cost 350.2 471.1 Total 667.2 772.2 Sources: Asian Development Bank, Sichuan Provincial Communications Department and Sichuan Chengnan Expressway Limited Liability Company. iv 2. Financing Plan ($ million) Appraisal Estimate Actual Cost Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost Implementation Costs Borrower-Financed 67.0 280.9 347.9 51.1 251.5 302.6 ADB-Financed 217.0 0.0 217.0 216.5 0.0 216.5 Other External Financing 0.0 60.0 60.0 0.0 166.0 166.0 Subtotal 284.0 340.9 624.9 267.6 417.5 685.1 IDC Costs Borrower-Financed 0.0 9.3 9.3 0.0 53.6 53.6 ADB-Financed 33.0 0.0 33.0 33.5 0.0 33.5 Other External Financing 0.0 0.0 0.0 0.0 0.0 0.0 Subtotal 33.0 9.3 42.3 33.5 53.6 87.1 Total 317.0 350.2 667.2 301.1 471.1 772.2 ADB = Asian Development Bank, IDC = interest during construction. Sources: Asian Development Bank. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People's Republic of China for the Chengdu-Nanchong Expressway Project. Manila. Sichuan Provincial Communications Department and Sichuan Chengnan Expressway Limited Liability Company. 3. Cost Breakdown by Project Components ($ million) Appraisal Estimate Actual Component Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost A. Base Cost 1. Expressway Civil Works 211.0 235.5 446.5 244.0 291.4 535.4 2. Expressway Equipment 24.0 0.0 24.0 18.7 0.0 18.7 3. Provincial and County Roads 9.0 21.0 30.0 3.6 31.5 35.1 4. Land Acquisition and Resettlement 0.0 32.2 32.2 0.0 87.8 87.8 5. Consulting Services and Training 1.2 6.6 7.8 1.3 6.8 8.1 Subtotal (A) 245.2 295.3 540.5 267.6 417.5 685.1 B. Contingencies 1. Physical contingencies 19.6 23.7 43.3 0.0 0.0 0.0 2. Price Escalation 19.2 21.9 41.1 0.0 0.0 0.0 Subtotal (B) 38.8 45.6 84.4 0.0 0.0 0.0 C. Interest During Construction 33.0 9.3 42.3 33.5 53.6 87.1 Total (A+B+C) 317.0 350.2 667.2 301.1 471.1 772.2 Sources: Asian Development Bank. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People's Republic of China for the Chengdu-Nanchong Expressway Project. Manila. Sichuan Provincial Communications Department and Sichuan Chengnan Expressway Limited Liability Company. v 4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants September 1999 September 2000 Completion of Detailed Designs September 1998 September 1998 Civil Works Contract Date of Award June 1999 October 1999 Completion of Work June 2003 December 2002 Equipment and Supplies First Procurement January 2002 November 2000 Last Procurement December 2002 April 2003 Completion of Equipment Installation June 2003 December 2003 Start of Operations Completion of Tests and Commissioning June 2003 December 2003 Beginning of Startup June 2003 December 2003 Sources: Asian Development Bank, Sichuan Provincial Communications Department and Sichuan Chengnan Expressway Limited Liability Company. 5. Project Performance Report Ratings Ratings Development Implementation Implementation Period Objectives Progress December 1998–July 2004 Satisfactory Satisfactory Source: Asian Development Bank. D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Members Fact-Finding Apr 1998 6 66 a, b, c, d, e Appraisal Jul 1998 5 55 a, b, c, d, f Inception Apr 1999 1 4 a Review 1 May 2000 2 9 a Review 2 May 2001 2 16 a, g Review 3 Jun-Jul 2002 1 8 a Handover1 Nov 2002 3 6 a, b Review 4 Nov 2003 3 14 a, b Project Completion Review2 Aug 2004 6 40 a, b, h, i Note: a = engineer, b = financial analyst, c = economist, d = program officer, e = environment specialist, f = counsel, g = procurement consultant or specialist, h=disbursement analyst, i= staff consultant. 1 The Chengdu-Nanchong Expressway Project was transferred to the Asian Development Bank Resident Mission in the People’ s Republic of China (PRCM) for administration on 15 December 2002. 2 The Project Completion Review Mission consisted of K.