Com pletion Report Project Number: 29426 Loan Number: 1701 September 2006 People’s Republic of China: Shanxi Road Development Project CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion 30 June 1999 31 March 2006 CNY1.00 = $0.1208 $0.1246 $1.00 = CNY8.2800 CNY8.0268 ABBREVIATIONS ADB – Asian Development Bank BOC – Bank of Communications EIA – environmental impact assessment FIDIC – Federation International des Ingenieurs–Conseils (International Federation of Consulting Engineers) FIRR – financial internal rate of return GDP – gross domestic product IDC – interest during construction LIBOR – London interbank offered rate NPV – net present value O&M – operation and maintenance PCR – project completion report pcu – passenger car unit PPMS – project performance management system PRC – People’s Republic of China RP – resettlement plan SPCD – Shanxi Provincial Communications Department SPG – Shanxi provincial government SQEC – Shanxi Qilin Expressway Company Limited WACC – weighted average cost of capital WEIGHTS AND MEASURES mu – 1/15 hectare km/h – Kilometer per hour NOTES (i) The fiscal year (FY) of the Government ends on 31 December. (ii) In this report, "$" refers to US dollars. Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General H. S. Rao, East Asia Department (EARD) Director N. Rayner, Transport Division, EARD Team leader S. Noda, Project Specialist, EARD Team member Y. Li, Young Professional, EARD 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 5 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Consultant Recruitment and Procurement 8 I. Performance of Consultants, Contractors, and Suppliers 8 J. Performance of the Borrower and the Executing Agency 9 K. Performance of the Asian Development Bank 10 III. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Effectiveness in Achieving Outcome 11 C. Efficiency in Achieving Outcome and Outputs 13 D. Preliminary Assessment of Sustainability 14 E. Impact 14 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 16 A. Overall Assessment 16 B. Lessons Learned 17 C. Recommendations 18 APPENDIXES 1. Project Framework 19 2. Chronology of Major Events 25 3. Design and Implementation of Expressway 27 4. Rural Road Maintenance 30 5. List of International Training Provided 33 6. Project Cost and Financing Plan 35 7. Projected and Actual Disbursement 36 8. Implementation Schedule 37 9. Organization Charts of the Project 38 10. Compliance with Loan Covenants 41 11. Contract Details for Civil Works, Equipment, and Consultant 47 12. Traffic Volume Projection 51 13. Financial Reevaluation 53 14. Economic Reevaluation 58 15. Land Acquisition and Resettlement 60 16. Socioeconomic Impacts of the Project 66 BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 1701 3. Project Title Shanxi Road Development Project 4. Borrower Ministry of Finance 5. Executing Agency Shanxi Provincial Communications Department 6. Amount of Loan $250.0 million 7. Project Completion Report Number PCR: PRC 968 B. Loan Data 1. Appraisal – Date Started 08 June 1999 – Date Completed 18 June 1999 2. Loan Negotiations – Date Started 11 August 1999 – Date Completed 13 August 1999 3. Date of Board Approval 30 September 1999 4. Date of Loan Agreement 01 August 2000 5. Date of Loan Effectiveness – In Loan Agreement 01 November 2000 – Actual 01 November 2000 – Number of Extensions 0 6. Closing Date – In Loan Agreement 30 June 2004 – Actual 23 March 2006 – Number of Extensions 3 7. Terms of Loan – Interest Rate Pool-based variable lending rate for US dollarsa – Maturity (number of years) 24 – Grace Period (number of years) 4 8. Terms of Relending (if any) – Interest Rate Pool-based variable lending rate for US dollarsa – Maturity (number of years) 24 – Grace Period (number of years) 4 – Second-Step Borrower Shanxi Qilin Expressway Co. Ltd a Interest rate was changed to LIBOR-based loan on 31 July 2002 on the request of Shanxi Provincial Communications Department. iii 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 15 April 2001 23 March 2006 59 months Effective Date Original Closing Date Time Interval 1 November 2000 30 June 2004 44 months b. Amount ($) Category or Original Last Revised Amount Amount Subloan Allocation Allocation Canceled Disbursed A. C/W Expressway 162,300,000 185,100,000 98,791 185,001,209 B. C/W Provincial and 4,000,000 4,000,000 4,000,000 Country Roads to Intercity C. C/W County Roads to Township 1,000,000 1,000,000 0 1,000,000 Centers D. Equipment and Supply 39,600,000 28,600,000 2,144,501 26,455,499 E. Consulting Services and 1,500,000 1,500,000 1,051 1,498,949 Training F. IDC 29,800,000 29,800,000 6,691,093 23,108,907 G. Unallocated 11,800,000 0 0 0 Total 250,000,000 250,000,000 8,935,436 241,064,564 C/W = civil works, IDC = interest during construction. C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 330.5 271.8 Local Currency Cost 395.6 345.7 Total 726.1 617.5 2. Financing Plan ($ million) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 418.9 330.5 ADB Financed 220.1 218.0 Other External Financing 48.2 37.2 Total 687.2 585.7 IDC Costs Borrower Financed 9.0 8.7 ADB Financed 29.9 23.1 Other External Financing 0.0 0.0 Total 38.9 31.8 ADB = Asian Development Bank, IDC = interest during construction. iv 3. Cost Breakdown by Project Component ($ million) Appraisal Estimate Actual Component Foreign Local Total Foreign Local Total Exchange Currency Exchange Currency . A. Base Cost Civil Works 206.0 241.8 447.8 185.0 228.5 413.5 Equipment 39.6 5.2 44.8 34.7 4.6 39.3 Land Acquisition and 0.0 43.0 43.0 0.0 37.3 37.3 Resettlement Consulting and Training Services 1.5 5.5 7.0 1.5 29.5 31.0 Provincial Roads/Country Roads 17.3 40.6 57.9 27.5 37.1 64.6 Subtotal (A) 264.4 336.1 600.5 248.7 337.0 585.7 B. Contingencies 36.2 50.6 86.7 C. Interest During Construction 29.9 9.0 38.9 23.1 8.7 31.8 Total 330.5 395.6 726.1 271.8 345.7 617.5 4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants February 2000 24 Nov 2000 Completion of Engineering Designs February 1999 February 1999 Civil Works Contract Date of Award April 2000 13 Dec 2000 Completion of Work December 2003 28 Sep 2003 Equipment and Supplies Dates First Procurement March 2002 17 May 2002 Last Procurement October 2002 28 Apr 2005 Completion of Equipment Installation December 2003 December 2005 5. Project Performance Report Ratings Ratings Implementation Period Development Implementation Objectives Progress From 31 December 1998 to 31 December 2000 S S From 31 January 2001 to 30 August 2001 HS HS From 30 September 2001 to 31 August 2002 HS S From 30 September 2002 to 31 August 2003 HS HS From 30 September 2003 to 31 May 2004 HS S From 30 June 2004 to 31 December 2004 S S HS = highly satisfactory, S = satisfactory. D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date a Persons Person-Days of Members Fact-Finding Mission 9–22 March 1999 6 84 a, b, c, d, e, f Appraisal Mission 8–18 June 1999 7 70 a, b, c, e, h, i Inception Mission 14–19 November 3 18 b, c, j 2000 Review Mission 1 19–23 June 2001 1 5 c v No. of No. of Specialization Name of Mission Date Persons Person-Days of Membersa Review Mission 2 7–11 May 2002 1 5 c Review Mission 3 13–19 August 2003 3 21 b, c, j Review Mission 4 17–22 March 2005 2 12 c, j Project Completion Reviewb 10–17 April 2006 3 19 c, j, k Notes: a a – economist, b - financial analyst, c - engineer, d – social development specialist, , e – programs officer, f – environment specialist , g – counsel, h – audit specialist, i – manager, j – assistant project analyst, k – young professional. b The project completion report was prepared by , S. Noda, Project Specialist, (Roads) who was in field from 10 to 17 April while the other Mission members were in field from 12 to 17 April 2006. Map 1 o o 110 00’E 120 00’E 114o 00'E MONGOLIA INNER MONGOLIA Erenhot Shenyang LIAONING SHANXI ROAD DEVELOPMENT PROJECT o IN THE Hohhot 40 00’N BEIJING PEOPLE'S REPUBLIC OF CHINA Bohai Sea o Tianjin (as completed) 40 00’N TIANJIN SHANXI Yinchuan HEBEI Shijiazhuang t o Taiyuan NINGXIA E Qixian r Jinan e Yellow Sea n Xining I N N E R M O N G O L I A h Linfen SHANDONG o o t Yumenkou 30 00’N Houma Lanzhou GANSU Zhengzhou JIANGSU o HENAN 35 00’N Xi'an ANHUI Nanjing SHAANXI Hefei Shanghai Dadong o o HUBEI o SHANGHAI 40 00'N o 110 00’E 120 00’E 40 00'N o 111 00'E er DADONG iv R n a g Project Area g n SHOUZHOU a National Capital S Shuozhou Provincial Capital Prefecture Seat Other City/Town National Highway Other Road National Trunk Highway System Plan XINZHOU Project Expressway Project Provincial Road Project County and Township Road Xinhou ADB--Financed Shanxi Road II H E B E I Project Expressway S H A N X I YANGQUAN Other Expressway Opened LULIANG Yangquan Other Expressway Planned TAIYUAN Railway S H A A N X I TAIYUAN River Jinzhong Prefecture Boundary JINZHONG Wenshui Taigu Provincial Boundary C7 Luliang International Boundary P1 Taigu Qixian C2 Boundaries are not necessarily authoritative.