INTEGRATED SAFEGUARDS DATA SHEET RESTRUCTURING STAGE Note: This ISDS will be considered effective only upon approval of the project restructuring Report No.: ISDSR1044 Public Disclosure Authorized Date ISDS Prepared/Updated: 12-Jan-2015 Date ISDS Approved/Disclosed: 13-Jan-2015 I. BASIC INFORMATION Public Disclosure Copy 1. Basic Project Data Country: China Project ID: P118647 Project Name: China: Anhui Shaying River Channel Improvement Project (P118647) Task Team Reda Hamedoun Leader(s): Estimated 24-Aug-2010 Estimated 12-Apr-2011 Public Disclosure Authorized Appraisal Date: Board Date: Managing Unit: GTIDR Lending Sector Investment and Instrument: Maintenance Loan Sector: Ports, waterways and shipping (99%), Public administration- Water, sanitation and flood protection (1%) Theme: Other rural development (30%), Infrastructure services for private sector development (30%), Water resource management (30%), Climat e change (10%) Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and No Emergencies)? Financing (in USD Million) Public Disclosure Authorized Total Project Cost: 291.14 Total Bank Financing: 100.00 Financing Gap: 0.00 Financing Source Amount Public Disclosure Copy Borrower 191.14 International Bank for Reconstruction and Development 100.00 Total 291.14 Environmental A - Full Assessment Category: Is this a No Repeater project? Public Disclosure Authorized 2. Current Project Development Objectives The development objectives of the proposed project would be: (a) to increase the carrying capacity; (b) to improve the efficiency; and (c) to reduce the adverse Page 1 of 13 environmental impact of the IWT infrastructure that serves the industries of th e Shaying River Basin. The immediate transport benefits of the Project will be to overcome capacity bottlenecks in the IWT system and reduce the average costs of transport in the corr idor. These benefits will, in the medium and long-term, also boost the regional economic development of the affected hinterlands in Anhui and Henan, mainly thro ugh facilitating the exploitation and economical transport of coal and other bul k goods to industrial areas of demand in the Yangtze Delta. Public Disclosure Copy Proposed New PDO (from Restructuring Paper) The development objectives of the proposed project would be: (a) to increase the carrying capacity; (b) to improve the efficiency; and (c) to reduce the adverse environmental impact of the IWT infrastructure that serves the industries of th e Shaying River Basin. The immediate transport benefits of the Project will be to overcome capacity bottlenecks in the IWT system and reduce the average costs of transport in the corr idor. These benefits will, in the medium and long-term, also boost the regional economic development of the affected hinterlands in Anhui and Henan, mainly thro ugh facilitating the exploitation and economical transport of coal and other bul k goods to industrial areas of demand in the Yangtze Delta. 3. Project Description Project Description. The Project will re-open and upgrade the 205.6 km long Shaying River channel between Changshenggou on the Henan-Anhui border and Mohekou at the confluence of the Shaying River with the Huai River. The improvement works will raise the standard of the channel and associated infrastructure to national standard Class IV, which will permit year-round navigation of laden or unladen powered vessels of 500 dwt. The Project consists of the following four main components: Component 1 – Navigation Infrastructure and Facilities. This component includes river channelization and dredging works, river bank strengthening and protection works, and provision of navigation aids and service facilities. Public Disclosure Copy Component 2 – Reconstruction and Relocation of Existing Infrastructure and Facilities. This component includes reconstruction and reinforcement of existing cross-river bridges that have insufficient clearance and relocation of other existing cross-river facilities that impede navigation. Component 3 – Erection of Waterway Transport Management Systems. This component includes provision and installation of the plants and equipment which are needed for building the management systems to be developed by the two technical studies under Component D. Component 4 – Technical Assistance. This component includes technical studies and training programs that are designed to build the institutional capacity of the IWT sector to enable sustainable IWT development in Anhui Province. The two technical studies are: (a) Shaying River Waterway Transport Management and Emergency Service System; and (b) Comprehensive Ship Lock Management System. Page 2 of 13 Misprocurement. In a letter dated June 4, 2014, the Bank declared misprocurement in the cases of two contracts (HD-01: waterway improvement works on 40km, and QL-01: bridge modification works). In parallel, the Bank also concluded that the violation may have resulted from a genuine misunderstanding and misinterpretation of the conflict of interest clause in the bidding documents and, therefore, the Bank consented to not cancel the Loan funds allocated to the contracts under the Loan Agreement. Addition of two ship locks under the proposed restructuring. The Ministry of Finance of China (MOF) requested, in a letter dated April 21, 2014, to use unallocated funds (from the misprocured contracts as well as savings from lower bidding price) to finance part of the cost of two new ship Public Disclosure Copy locks in Yingshang and Yangqiao. Civil works of the two new ship locks will be added to Component 2. The proposed locks will relieve capacity constraints on existing infrastructure and therefore advance the project in achieving its PDO: “to contribute to the increased cargo throughput of the Shaying River in Anhui Province through infrastructure improvements and capacity building”. • Second Yingshang lock: traffic through the existing Yingshang lock has reached 7 million tons/year, which is challenging its nominal design capacity of 6 million tons/year. The sharp traffic growth has created an emerging bottleneck at Yingshang lock, which is the key lock for IWT access to Fuyang City. It is therefore proposed to build a second lock, adjacent to the existing one, with a capacity of 12 million tons/year. • Yangqiao lock: the increase of IWT traffic has created the opportunity to extend the effective Shaying waterway network to Linquan County. The existing Yangqiao lock’s capacity is too low to accommodate this increase. On the banks of the Quan River, road trucks that carry various materials load and discharge directly into barges moored up in ranks immediately downstream of Yangqiao lock as they are unable to proceed further upriver. It is therefore proposed to upgrade and expand the existing ship lock. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The Shaying River, a major tributary of the Huai River in central China, originates from Henan Province and converges with the Huai River in Anhui Province. The total length of the Shaying River is 620 km, of which 206 km flows through Anhui Province. The proposed Project aims to improve 205.6 km long river channel within Fuyang City, Anhui Province. The project area is mainly flat alluvial plain, with intensive farmland cultivation. Public Disclosure Copy There is an existing Yingshang ship lock on Shaying River in Yingshang County of Fuyang City. The proposed second Yingshang ship lock, as part of the project restructuring, will be located in parallel to the existing Yingshang ship lock. The Quan River (also called Fenquan River) is a tributary of Shaying River. It originates from Henan Province and converges with the Shaying River in Sanliwan of Fuyang City. The total length of Quan River is about 241km, of which 82km flows through Anhui Province. The Quan River has undergone dredging and channeling for flood prevention purpose since 1950’s. As a result, it currently has a width of 25-30m, with a regular depth of 3.5-4m that allows navigation of 500-1000 dwt ships. However, the existing Yangqiao ship lock, located in Linquan County of Fuyang City, was built in 1980’s and allows navigation of 100 dwt ships only. Expanding the capacity of Yangqiao ship lock will make the ship lock match the existing navigation capacity of Quan River. Page 3 of 13 Construction at Yangqiao lock will affect local people’s livelihoods, as 10 people from 4 households will be resettled and 0.6 mu of land will be taken. A simplified Resettlement Action Plan (RAP) has been prepared and locally disclosed on August 28, 2014. Construction at the second Yingshang lock will require three pieces of land for temporary use as spoil disposal sites. The land will be restored to arable land and handed over to the local communities after use. Compensation will be provided during project use based on local land productivity. One state-owned enterprise, Yingshang Ship Lock Management Company, will be resettled and move to another place where they own the land. The cost of resettlement will be accounted within its mother company. A RAP has been prepared and will be disclosed locally before the end of December 2014, and the English version of the RAP will be disclosed at InfoShop. Public Disclosure Copy 5. Environmental and Social Safeguards Specialists Aimin Hao (GSURR) Ning Yang (GENDR) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Yes Assessment OP/BP 4.01 Natural Habitats OP/BP Yes 4.04 Forests OP/BP 4.36