Completion Report Project Number: 43025-013 Loan Number: 2760 October 2020 People’s Republic of China: Gansu Tianshui Urban Infrastructure Development Project This document is being disclosed to the public in accordance with ADB’s Access to Information Policy. CURRENCY EQUIVALENTS Currency unit – yuan (CNY) At Appraisal At Project Completion (2 June 2011) (12 August 2019) CNY1.00 = $0.1544 $0.1416 $1.00 = CNY6.4780 CNY7.0624 ABBREVIATIONS ADB – Asian Development Bank CHP – combined heat and power plant DMF – design and monitoring framework EIA – environmental impact assessment EIRR – economic internal rate of return EMP – environmental management plan FIRR – financial internal rate of return GAP – gender action plan GPG – Gansu Provincial Government GTEZ – Guanzhong–Tianshui Economic Zone LAR – land acquisition and resettlement NMT – nonmotorized transport O&M – operation and maintenance PIA – project implementing agency PRC – People’s Republic of China THC – Tianshui Heating Company TMG – Tianshui Municipal Government TPMO – Tianshui project management office TUCIC – Tianshui Urban Construction and Investment Group Co. Ltd WACC – weighted average cost of capital WEIGHTS AND MEASURES km – kilometer m – meter m2 – square meter m3 – cubic meter mu – 666.67 square meters NOTE In this report, “$” refers to United States dollars. Vice-President Ahmed M. Saeed, Operations 2 Director General James P. Lynch, East Asia Department (EARD) Director Yolanda Fernandez Lommen, People’s Republic of China Resident Mission (PRCM), EARD Team leader Xinjian Liu, Senior Project Officer (Energy), PRCM, EARD Team members Zhuoga Ciwang, Social Development Officer, PRCM, EARD Ning Li, Environment Officer, PRCM, EARD Ye Song, Senior Safeguards Officer, PRCM, EARD Fang Wang, Senior Project Officer (Financial Management), PRCM, EARD Xianyu Zhang, Associate Project Analyst, PRCM, 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. DESIGN AND IMPLEMENTATION 2 A. Project Design and Formulation 2 B. Project Outputs 3 C. Project Costs and Financing 4 D. Disbursements 4 E. Project Schedule 5 F. Implementation Arrangements 5 G. Technical Assistance 6 H. Consultant Recruitment and Procurement 6 I. Gender Equality 7 J. Safeguards 7 K. Monitoring and Reporting 9 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness 10 C. Efficiency 11 D. Sustainability 11 E. Development Impact 12 F. Performance of the Borrower and the Executing Agency 13 G. Performance of the Asian Development Bank 14 H. Overall Assessment 14 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 14 A. Issues and Lessons 14 B. Recommendations 15 APPENDIXES 1. Design and Monitoring Framework 16 2. Project Cost at Appraisal and Actual 19 3. Project Cost by Financier 20 4. Disbursement of ADB Loan Proceeds 22 5. Projected and Actual Implementation Schedule 23 6. Chronology of Main Events 25 7. Contract Awards of ADB Loan Proceeds 26 8. ADB-Financed Contract Packages 27 9. Gender Action Plan Evaluation 29 10. Environmental Impact Analysis 35 11. Land Acquisition and Resettlement 39 12. Status of Compliance with Loan Covenants 44 13. Economic Reevaluation 56 14. Financial Reevaluation 62 15. Social Development Action Plan Achievements Matrix 65 BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan number and financing source Loan 2760, ordinary capital resources 3. Project title Gansu Tianshui Urban Infrastructure Development Project 4. Borrower People’s Republic of China 5. Executing agency Tianshui Municipal Government 6. Amount of loan $100 million 7. Financing modality Project loan B. Loan Data 1. Appraisal – Date started 14 Sep 2010 – Date completed 1 Feb 2011 2. Loan negotiations – Date started 25 May 2011 – Date completed 26 May 2011 3. Date of Board approval 29 Jun 2011 4. Date of loan agreement 25 Oct 2011 5. Date of loan effectiveness – In loan agreement 23 Jan 2012 – Actual 14 May 2012 – Number of extensions 2 6. Project completion date – Appraisal 30 Jun 2016 – Actual 31 Dec 2018 7. Loan closing date – In loan agreement 31 Dec 2016 – Actual 31 Dec 2018 – Number of extensions 1 8. Financial closing date – Actual 12 Aug 2019 9. Terms of loan – Interest rate LIBOR + 0.6% − 0.3% – Maturity (number of years) 25 – Grace period (number of years) 5 10. Terms of relending (if any) – Interest rate LIBOR-based – Maturity (number of years) 25 – Grace period (number of years) 5 – Second-step borrower Government of Gansu Province ii 11. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 10 Oct 2012 20 Dec 2018 75 months Effective Date Actual Closing Date Time Interval 14 May 2012 12 Aug 2019 88 months b. Amount ($ million) Increased Canceled during during Original Implementa Implementa- Last Revised Amount Undisbursed Allocation -tion tion Allocation Disbursed Balance Category (1) (2) (3) (4 = 1 + 2 – 3) (5) (6 = 4 – 5) 01a-Works-Heating 19.25 5.66 0.00 24.91 23.87 1.04 Network 01b-Works-Roads, 62.38 (0.164) 0.00 62.22 62.22 0.00 Bridges and Flood Control Facilities 02-Equipment 11.67 (4.59) 0.00 7.08 6.82 0.26 03-Institutional 1.43 (0.23) 0.00 1.20 1.00 0.20 Strengthening and Training 04-Interest and 5.27 (0.68) 0.00 4.59 4.59 0.00 Commitment Charge Total 100.00 0.00 0.00 100.00 98.50 1.50 ( ) = negative. C. Project Data 1. Project cost ($ million) Cost Appraisal Estimate Actual Foreign exchange cost 21.0 18.8 Local currency cost 208.5 185.7 Total 229.5 204.5 2. Financing plan ($ million) Cost Appraisal Estimate Actual Implementation cost Borrower financed 61.4 103.0 ADB financed 94.7 93.9 Other external financing 54.8 0.0 Total implementation cost 210.9 196.9 Interest during construction costs Borrower financed 0.0 3.0 ADB financed 5.3 4.6 Other external financing 13.4 0.0 Total interest during construction cost 18.7 7.6 iii 3. Cost breakdown by project component ($ million) Component Appraisal Estimate Actual A.1 Qinzhou district heating network 52.7 49.8 A.2 Chengji road and flood control facilities 86.3 98.9 A.3 Tianshui urban transport improvements 39.7 47.2 A.4 Institutional strengthening and capacity building 1.4 1.0 Subtotal (A) 180.1 196.9 B. Contingencies 30.8 0 C. Financing charges during implementation 18.6 7.6 Total 229.5 204.5 4. Project schedule Item Appraisal Estimate Actual Date of contract with consultants 1 Sep 2011 10 Oct 2012 Completion of engineering designs 30 Dec 2016 30 Dec 2018 Civil works contract Date of award 10 Nov 2011 28 May 2012 Completion of work 30 Dec 2016 30 Dec 2018 Equipment and supplies 30 Dec 2015 7 Apr 2016 Dates First procurement 10 Nov 2011 28 May 2012 Last procurement 30 Apr 2016 24 Aug 2018 Completion of equipment installation 30 Oct 2016 30 Dec 2018 Start of operations Completion of tests and commissioning 15 Nov 2016 30 Sep 2016–15 Nov 2018 Beginning of start-up 15 Sep 2016 30 Sep 2016–1 Nov 2018 Other milestones 5. Project performance report ratings Implementation Period Ratings From 12 May 2012 to 30 June 2012 Potential Problem From 1 July 2012 to 30 September 2012 Actual Problem From 1 October 2012 to 31 March 2013 On Track From 1 April 2013 to 30 September 2013 Potential Problem From 1 October 2013 to 12 August 2019 On Track D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Members Loan Inception 16–21 December 2012 3 15 a, b, c Loan Review 17–24 June 2013 2 11 b, c Midterm Project Review 28 October–5 November 2013 2 12 b, c Loan Review 20–24 October 2014 2 8 c, d Loan Review 4–6 May 2015 3 9 c, e, f Loan Review 11–15 April 2016 3 12 f, g, h Loan Review 21–24 August 2017 4 11 f, g, h, i Loan Review 2–5 July 2018 4 12 f, g, j, k Loan Review 9–14 December 2018 3 15 f, g, h Project Completion Review 24–29 November 2019 6 24 g, h, j, l, m, n a = principal public management specialist, b = project analyst, c = urban development specialist, d = project analyst, e = senior project assistant, f = senior project assistant / associate project analyst, g = senior project officer, h = senior safeguard officer, i = senior procurement officer, j = senior environment officer, k = consultant, l = senior project officer (financial management), m = associate social development officer, n = associate project analyst. I. PROJECT DESCRIPTION 1. Gansu Province in 2009 had the second-lowest gross domestic product per capita in the People’s Republic of China (PRC). Its Tianshui municipality’s 3.6 million inhabitants included 640,000 urban dwellers in Qinzhou and Maiji districts with an estimated urban poverty rate of 13.5% (2009).1 Development barriers included poor infrastructure and Gansu’s remote inland location. Transport links were being improved by expressway and rail construction, and in July 2009 the State Council approved establishment of the Guanzhong–Tianshui Economic Zone (GTEZ). The GTEZ was intended by 2020 to become the northwest PRC’s economic backbone. Tianshui’s urban population was set to grow as rural migrants seized economic opportunities in the GTEZ, and this influx of industries and migrants would pressure Tianshui’s infrastructure. 2. Although positioned as an economically developed, environment-friendly, and livable city, Tianshui faced development challenges.