/ ~ ~ ) /\ ...... / ( /

Document of

The World Bank

FOR OFFICIAL USE ONLY

MI ( POAlF I CI]Fv CO'tPY

hepcirt No. :1 0653-CHA Type: ( CAR)

Ti tl r,: HENAN HIGHWAY PRO,TJFCT Report No. 10683-C1AAithor: LEMVY HFxt.. :84021 hFocrri:A7 099 Dept. : A.2IP

STAFF APPRAISAL REPORT

CHINA

HENAN HIGHWAY PROJECT

OCTOBER 19, 1992

Transport Operations DivisionChina and Mongolia DepartmentEast Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the performance of

their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS(as of March 1992)

Currency name - RenminbiCurrency unit - Yuan (Y) - 100 Fen$1.00 m Y 5.45$0.18 - Y 1.0$1.0 million - Y 5.450 million$183,486 = Y 1.0 million

FISCAL YEAR

January 1 - December 31

WEIGHTS AND MEASURES

1 meter (m) - 3.28 feet (ft)1 kilometer (km) - 0.62 mile (mi)1 square meter (m2) 5 10.76 square feat (sq ft)1 square kilometer (1m2) - 0.4 square miles (sq mi)1 hectare (ha) - 0.L1 (km2) - 2.47 acres (ac) - 15 muI mu - 666.7 sq m - 0.0667 ha1 kilogram (kg) - 2.2046 pounds (lbs)I metric ton (m ton) 2,204 pounds (lbs)

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

6th FYP - Sixth Five-Year Plan (1981-85)7th FYP - Seventh Five-Year Plan (1986-90)8th FYP - Eighth Five-Year Plan (1991-95)EA - Environmental AssessmentEAP - Environmental Action PlanEIRR - Economic Internal Rate of ReturnFINNRA - Finnish National Road AdministrationFYRR - First Year Rate of ReturnGOVAI - Gross Output Value of Agriculture and IndustryHAB - Highway Administration BureauHGHCA - High-Grade Highway Construction AuthorityHPCD - Henan Provincial Communication DepartmentHPDI - Highway Planning and Design InstituteHPEPB - Henan Provincial Environmental Protection BureauHPEPEC - Henan Provincial Expressway Project Executive CommissionHPEPRI - Henan Provincial Env:ronmental Protection Research InstituteHSRI - Highway Scientific Research InstituteICB - International Competitive BiddingLCB - Local Competitive BiddingMOC - Ministry of CommunicationsMOF - Ministry of FinanceNPV - Net Present ValuePMS - Pavement Management SystemPRC - People's Republir. of ChinaPTD - Provincial Transport DepartmentRAP - Resettlement Action PlanRDB - Road Data BankRDP - Road Development ProgramRIP - Road Improvement ProgramSAA - State Audit AdministrationSPC - State Planning CommissionTCU - Technical Coordinating Unit, Ministry of Communicationsvpd - Vehicles per day

FOR OMCIAL USE ONLY

BREAN tlGlWAY PROJECT

Loan and Pro1eet Summarv

AMU=owers People's Republic of China

Beneficl=ar s Henan Province

$120 million equivalent

Zima' 20 years, including 5 years of grace, at the Bank'sstandard variable interest rate

Pro ect Ob1ectilves The project objectives are to: (a) Improve Henan's roadnetwork, with a particular focus on relieving congestionon the heavily trafficked east-west corridor, linkingRenan end other provinces with the new port of LianyunGang; rehabilitating and expanding the provincial net-work, whose traffic is rising significantly throughout;end improving provincial and rural roads; (b) strengthenhighway sector agencies, mainly in the areas of invest-ment planning, construction end maintenance management,and environment; and (c) making recomendations forImproving the efficiency of road freight transport ser-vices, with a particular emphasis on enhancing competi-tion and facilitating entry by collective and smallprivate operators.

Prolect Descriutions The project consists ofs (a) civil works comprisingconstruction of a 120-km, two-lane axpresaway betweenZhengzhou and Luoyang; rehabilitation and improvement innorthwest Henan of five provincial roads (total of180 km) and six rural roads (total of 112 km) mainlylocated in poor areas; and a road improvement programfor rehabilitating and upgrading provincial and ruralroads (total of about 740 km) throughout the province;(b) equipment for highway maintenance and operations,Including environmental monitorings and (c) an institu-tional strengthening and reform component, which will:provide equipment and training to five key agencies ofHenanos Communications Department; offer a comprehensivetraining program for highway personnel at all levels;and study trucking services in the Province and ways toImprove its efficiency.

Pro1get lanefits: Reductions in vehicle operating costs, travel time andaccidents will be the main benefits of the road invest-ments. In addition, the expressway will generate sub-stantial benefits to the traffic remaining on the exiet-

This document has a restricted distribution and may be used by recipients only in the performanceof their official dudes. Its contents may not otherwise be disclosed without World Bank authorization.

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4 road, which includes a large proportion of normotor-ized vehicles, in the form of reduced congestion anddecrease in the aseident rate. Benefits from the ruralroads will otem from the provision of all-weather,motorized accee~' for many poor areas to and from marketsand social services.

Risks: Henan Highways Department lacks experience with theconstruction of modern highways, and with internationalprocurement methods. This poses a risk of delay incompleting the expressway. In line with findings ofongoing Bank-financed highway projects, the followingactions are being taken to minimize these risks:(a) detailed review of design with assistance of inter-national consultants; (b) tightening of the prequalifi-cation process for contractors; and (c) strengthening ofproject supervision arrangements and training of localstaff. An additional risk of delay stems from an arche-ological zone which the exprossway traverses, and therelated engineering uncertainties. To address thissituation, Henan authorities conducted detailed surveys,including over one million borings, so as to minimizechances that during construction new archeological findscould be encountered and to prevent damage to culturalproperty. In addition., works in this zone have beenstarted ahead of the other sections to provide an addi-tional time margin.

Estimated Coat:s Local Foreian Total~~~~- ($ million) -----

Zhengzhou-Luoyang Expressway 49.0 49.0 98.0Provincial and rural roadsin northwest Renan 22.4 11.4 33.8

Road Improvement Program 45.7 27.6 73.3

Subtotal 117.1 88.0 205.1

Supervision of con-truction 2.3 1.7 4.0Equipment 1.3 10.2 11.5Institutional strengthening 0.3 1.8 2.1Training 0.1 0.7 0.8Trucking Study 0.3 0.2 0.5

Total base cost 121.3 102.6 223.9

Physical contingencies 11.9 9.0 20.9Price contingencies 21.6 8.5 30.0Land acquisition & resettlement 25.9 0.0 25.9

Total vroiect cost L 180.7 120.0 300.7

Proiect Financing

Provincial government 144.0 - 144.0Central government 36.7 - 36.7IBRD - 120.0 120.0

Total financina required 180.7 120.0 300.7

gEtimated Disbursements:

Bank PY 1993 1994 1995 1996 1997 1998°--------- ($ million) -------

Annual 12 26 32 26 18 6Cumulative 12 38 70 96 114 120

Economic Rate ofReturn: 28 percent on components comprising 71 percent of total

project costs

Xmas IBRD Nos. 24225, 23486 and 23487

jj Excluding taxes and duties.

CHIN

RERAN RIGHWAY PROJECT

Table of Conten4.

Page No.

Loan and Project Summary .... . . . . . . . . . . . . i

I. THE TRANSPORT SECTOR . ....... ..... *... . 1

A. Introduction- .. .. .* . ... ... ... . * a * * * * 11Be Tr-ffic ..... , ................... a1 C. Investment . . . . . 2D. Transport Issues and Objectives . . 3E. Bank Group Participation in the Transport Sector 5F. The Highway Subsector .......... a ..... 8

The National Highway Network and its Utilization 8Highway Administration, Planning and Finance 10The Bank's Experience and Strategy in Highways 12

II. BREAN POVINCE . . . . . . . . . . . . . . . . . . . . . 14

A. Economic Background . 14B. The Transport System 14C* Traffic . . . . 16D. The TruckingIndustry . . .......d. 17E. Highway Administration . . . . . . . . . . . . . . . i8F. Planning, Budgeting and Financing . . a. . . .o . . 190. Engineering, Construction and Maintenance . o . . . . 20H. Staff Training . . ......... * ..... 22I. Highway Development in the Eighth FYP . r . . . * * 22

This report is based on the findings of an appraisal mission in February/March1992. Xembers of the appraisal team included Rernan Levy (Mission Leader),Hatim Hajj (Transport Specialiat), Hank Yen (Research Analyst), William Lane(Environmental Specialist), Tariq Hassan (Lawyer), Ruwani Jayewardene(Resettlement Specialist, Consultant), Robert Hallenborg (Road TransportSpocialist, Consultant) and Alan Ross (Highway Safety Specialist, Consultant).Mr. Asif FaiP (Highways Adviser) participated in the preappraslal andidentification missions. Peer reviewers were Paul Cadario (EA2CO), PedroGeraldes (EDINU) and Cesar Queiroz (AP4IN). The Division Chief is Mr. DaudAbmad and the Department Director is Mr. Shahid Javed Burki.

ZPix2No.

II. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . 24

A. Project Formulation and Preparation . . . . . . . . . 24B. Project Objectives and Rationale for Bank Involvement 24C. Project Scope . . . . . . a . . . . . . .. . . . . . 25D. Environmental Assessment . . . . . . .. ... . .. a 34E. Land Acquisition and Resettlement . . . . . . . . . . 35F. Cost Estimate. . . . . . . . . . . . . . . . . . . 37G. Financing .. .. .. . . . . . .. .. . .... . . .. . 38H. Implementation . . . . . . . . . . . . . . . . . . . 39I* Procurement . .. a. .. .a. ...... .. . .. . .. . . 42J. Disburseents . . . . . . . . . . . . . . . . . . . . 44

L. Project Supervision, Reporting and Monitoring . . . . 45

IV. ECONOMIC EVALUA .ON .................. 46

A. Objective. . . . . . . . . . . . . . . . . . . . . . 46B. Benefits and Beneficiaries . . . . . . . . . . . . 46C. Economic Analysis . . . . 46

Zhengzhou-Luoyang Expressway . . . . . . . . . . 47Provincial and Rural Roads in Northwest Henan . . 49Roads mprovement Program . . .* .. . . . 50

D. Overall Return, and Sensitivity Analysis . . . . . . 50E. Project Risks . . . . . . .... . ..... . o o. .. ... 51

V. AGREEMENT REACHED AND RECOMMENDATION . . . . . . . . . . 52

FIGURES IN TEXT

1.1 International Comparison of Land Transport Networks . . . . . 11.2 Transport Demand and Modal Split Trends . . . . . . . . . . . 3

1. Road Improvement Program ........... ... ... . 542. Training Program . . . . . o . .. . . . . . . . . .. . 583. Trucking Study--Draft Terms of Reference . . o . . . . . . . 684. Environmental A.ea.ment/Management/Montoring Summary for the

Expressway--Provincial, County and Rural Road Components ofthe Project .. . 9 9 9 . . ........ .. . 75

5. Resettlemont Action Plans ................. 906. Implementation Schedula . . . . . . . . . . . . . . . . . 967. SupervisionMissionPlan .... . . . . . . . . 1038. Toll Rate Study for the Zhengzhon-Luoyang Expressway--Out)ine

Ttrm of Reference . . . . . . . . . . . .. . . . .. . .. 1059. Selected Documents Available in the Project File * * * ... * 107

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Pago No.

TABLES

1.1 Freiqht Traffic Intensities in Seolkted Countries 1081.2 Road ain Railway Nereork Density in Selected Countries 1091.3 China: Freight Tra-fic . . . . . . . . . . . . . . 110

1.4 China: Passenger Traffic . . . . . . a . . . . . . .o . 111

1.5 China: Investments in the Transport Sector . . . . 1121.6 China: Transport Investment vs. Economic Output . . 1131.7 China: Highway Design Standards . . . . 1141.8 China: Civiliar -.otor Vehicles . . . . 1151.9 Chinat Highway Freight Transport * . . 116

2.1 Henan: Economic Data, 1990 . 1172.2 Henan: Traffic, 1980-90 1 IR... ..

2.3 Henan: Demographic and Transport Network Data, 1990 . . . . 112.4 Henan: Road Network, 1990 . . . . . . . . . . . . . . . 1202.5 Henan: Vehicle Fleet, 1980-90 . . . . . . . . . . . . . . 121

2.6 Henan: Provincial Automotive Vehicle Production, 1°85-90 * 1222.7 Henan: Freight Transported by Road, 1980-90 . 1232.8 Henan: Highway Finance, 1985-95 . 1242.9 Henan: Fuel Prices . . S . . . 125

3.1 Road Improvement Program of Henan Province during 1993-95 1263.2 Project Cost Su ary . . . . . . . . . . . . . . . . . . . . 1283.3 Estimated Disbursement Schedule . . . . . . . . . . . . . * 129

4.1 Zhengzhou-Luoyang Expressways Price Conversion Factors forCapital Costs . . . . . . . . . . . . . . . . . . . . . 130

4.2 Traffic on the Project Roads . . . .. . . . . .. . . .. . 1314.3 Economic Project Cost . . . . . . . . . . . . . . . . . . . 1324.4 Economic Vehicle Operating Costs by Type of Vehicle and

Road Type , . . . . . . . . . . . . . 1334.5 Zhengzhou-Luoyang Expressway: Cost-Bonefit Analysis . . . . 1344.6a Provincial Highways in NW Henan: Cost-Benefit Analysis 1354.6b Sanmenxia-Songcun Provincial Highway: Cost-Benefit

Analysis . . . . .... . . .... ........................... 1364.7 Rural Roads: Cost-Benofit Analysis 137

4.8 Economic Evaluation Summary and Sensitivity Analysis .o . . 138

gAART1. Organization of Henan Province Communication Department . . 1392. Organization of Henan Provincial High-Grade Highway

Construction Authority (HGHCA) . . * . . . . . . . . . . . . 1403. Organization of Henan Highway Institute . . . . . . . . . . 1414. Organization of Henan Highway Vocational School . . 9 . . . 1425. Organization of Henan Highway Scientific Research Institute 1436. Organization of Kenan Highway Design Institute (HPDI) 144

HAPS

1 Chtna, Major Highway Development Program, IBRD 242251 Henan Highway Project, Transport System, IBRD 234862 Henan Highway Project, Zhengzhou-Luoyang Expressway, IBRD 23487

CHINA

HENAN HIGHWAY PROJECT

1. THE IRANSPORT SECTOR

A. Introduction

i.1 The tranaport system in China is characterized by intensive freighttraffic in relation to economic output, heavily suppresead demand, high utili-zation of assets, a strong emphasis on railways, and distortions in tariffsand costs. Freight traffic intensity in China, measured in ton-km - dollarof GNP, is even higher than in the (former) Soviet Union, and it, u;' higherthan in India, Brazil or the United States (Table 1.1). The major xcasonsbehind China's high freight traffic intensity are a relatively large heavyindustry stator, reliance on zoal as the major source of energy, and a largevolume oi other bulk products. In addition, energy efficiency in China ierelatively low, and there is still little preprocessing of raw materialsbefore shipping. On the other hand, the density of China's transport notwork,measured both on the basis of geographic area and population, is among thelowest in the world (Figure 1.1 and Table 1.2).

Fiture 1.1: INTERNATIONAL COMPARISON OF LAND TRANSPORT NETWORKS

1ftilado C=Wism of ilwy Noea atwuaonal Compus of Ro,d Nrwab

B. Traffic

1.2 Freizht Traffic. The economic reforms introduced since 1979 haveprovided the impetus for a large upsurge in both freight and passenger traf-fic, severely taxing the transport system. Freight traffic has grown at about9 percent per annum; port freight traffic also has grown at about 9 percentper annum; and interclty highway freight traffic has grown at about 18 percentpet annum--consistently higher than the growth of gross domestic production(Table 1.3). These rates would have been even higher were it not for thecapacity constraints which are evident in all modes. Many power plants andfactories have fallen short of their productlon goals because the transportsystem has not been able to aeliver the needed raw materials in time. Coal

production in Shanxi province, the largest coal producer, continues to behampered by inadequate rail capacity. Rural areas throughout the country areshort of transport services, boti for crops and for local light industry. Thecapacity of navigabJe vwterways has declined due to lack of investment inupgrading and maintaining navigation channels. At the ports, lack of modernfacilities limits the handling in bulk of commodities such as fertilizers,cement, and grain.

1.3 Pamsenaer Traffic. The transport system is further taxed by themarked growth in the demand for passenger travel in the last decade. Sincethe economic reforms of 1979, passanger traffic has growrn at nearly 12 percentper annum, illustrating the positive relationship betwemn growth ir. income andgrowth in demand for travel (Table 1.4). Nonetheless, passenger travel percapita ins China remains very low, in part because of severe capacity con-atraAnts. Civil avintion traffic, despite growing much faster than any othermode, is still very limited, and most long-distance journeys are made by rail.

1.4 ansoot Demand and Modal SRlit Trends. Although the railway'sshare of traffic has declined over the last 10-20 years and the trend islikely to continue as the share of rcqd traffic growes unlike in other coun-tries, rail transport still dominates freight and passenger traffic in China.In 1990, 58 percent of freight (Table 1.3) and 46 percent of passenger traffic(Table 1.4) were moved by rail, and the rest was moved by road, inland water-way, coastal shipping, pipeline, and civil aviation. The continued preemi-nence of the railway is in part due to the stracture of the Chinese economy,wheroin heavy industry . prominent and coal is the dominant energy source.Coal and the large quantities of other bulk inputs associated with heavyindustry are well-suited for railway transport and constitute the majority ofrailway traffic in China. In the case of passenger transport, it is duepartly to the virtual absence of private automobiles, and partly to thelimited use of aviation. Civil aviation's share was only 3.1 percent forpassenger traffic and 0.04 percerut for freight traffic.

1.5 As a reosult of the slowdown in economic activities in 1939/1990,transport demand, particularly of passengers,, dropped significantly, and tem-porarily alleviated the congestion in transport facilities. Preliminary fig-ures indicate that resumption of high ecoromic growth in 1991 has resulted ina corresponding surge in transport demand.

C. Investment

1.6 The Government of Chincs .ias repeatedly pronounced transport bottle-necks to be one of the most severe constraints to economic growth. However,transport investment levels have not kept pace with the increased demands.Thus, while annual investments in the transport sector measured in currentprices surged approximately three times during the period of the fifth, sixthand seventh five-year plans (1976-90), the share of total public investmentdedicated to transport remained quite steady over this period, averaging about13 percent (Table 1.5). Further, investments in transport infrastructurerepresented about 1.4 percent of GNP during 1980-90, compared to 2-3 percentfor countries such as South Korea and Brazil. Transport investments as a per-centage of GNP have declined from a high of 2.4 percent during the FourthFive-Year Plan (1971-75), to 103 percent during the Seventh Five-Year Plen(1986-90) (7FYP), despite the absolute increase in transport investments dur-

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FigJrA 1:2s TRANSPORT DEMAAND MD (ODAL SPLIT TRENDS

adm Faft Tf & PIW Tf

4m ~ ~ m

-~~ ~~~~~~~~~~~~~~~ -!

a" us ui £5 12 15 aS 1am I 96 go £5 i m 1061 5 IN' J$ g I 1 23 I 15 to" M

Ing the period (Table 1.6). In the future, a substantial expansion of invest.mento will be needed if the transport-related constraints to economic growthare to be removed.

D. Transport Issues and Obiectives

1.7 The key issues in the transport sector are:

(a) chronic shortaLes in the supply of transport services due to under-investment, resulting in severe economic losses due to unmet demand;

(b) excess demands generated by underpricing of transport services andtransport-intensive commodities (particularly coal);

(c) uneven development of modes (i.e., excessive rel_ance or. rail, rela-tive neglect of other modes, and the absence of modern, integratedintermodal services);

(d) lack of modern technology within each mode (obsolescent vehicles,infrastructure, and operating systems), resulting in high iperatingcosts and poor services;

(e) shortages of human resource skills in specific key areas, particu-larly in multimodal planning and policy analys3Ls, economic analysis,and user-centere" logistics management; and

(f) structural weaknesses in highway construction capabilities relatedto project and company management, quality control and procurementprocedures.

1.8 Achieving a better balance between demand and supply is vitalbecaume chronic shortages of transport services have been increasingly con-straining the growth of the Chinese economy. The effects have been seen inthe past in electric powar shortages due to lack of coal transport capacity,but transport constraints pose economic problems well beyond their effects onthe energy sector. The poor quality of transport c_ .viees resulting fromshortages of often outmoded equipment and substandard, often congested infra-

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structure, imposes high costa and impedeo the integration of markets, which Isone of the major sources of economic efficiency in modemn soleties. Theability of China to compete in world export markets is also reduced, particu-larly for light manufacturing and high-value agricultural exports, whichreq ire effictont, flexible, fast door-to-door services.

1.9 Despite recent adjuatwents, pricing distortions are still a majorproblem. Cost analyses conducted during a recent study In Guangdong Prov-ince 1/ suggest that, iespite substantial tariff increases in 19899 nation-wids long-distance coa0 transport, for example, is underpriced by as much as40 percent relative to long-run Incremental costs, thus generating uneconomicexcess demands which clog the tranbs,ort system. Distortionc in the oppositedirection occur in highways and aviation, where tariffa may exceed long-runincremental costs, thus distorting the choice of modes. So far, enterpriseshave lacked appropriate incentives to set tariffs to reflect coats as theyhave had only limited financial autonomy, and competition among transportmodes has been minimal due to regulatory restrict 'ons and the congested con'i-tion of the system.

1.10 China has so far falled to acquire the full spectrum of moderntransport technology. It still relies on the railway to handle muc%i traffic

could be better served by modern highway vehicles and by the rhirplane.Both these modes are modernizing and are steadily increasing their share oftotal traffic, in highways for both freight and passengers, and in aviationespecially for the movement of people. There is also some railwag trafficwhich could be more economically served by coastal shipping. The Ministry ofRailways in recent years has significantly increased tariffs for short-haulcommodities, so as to encourage diversion of this traffic to other modes andto concentrate on long-haul bulk commodities, where its comparative advantagelies.

1.11 Over the long run, China's choice of which modes to expand and byhow much should be based on an understanding of the differences in costs andservice characteristics of the different modes, on the one hand, and prospec-tive changec in the structure and level of transport demand, on the other. Atthe present time, there is a need for China to train planners and policy ana-lysts in the analytical tools necessary to evaluate those choices and to iden-tify the instrnuments required to effect the necessary changes.

1.12 Trangnort Sector Reforms. The Government has already taken steps torespond to some of these challenges. Notably, it has:

(a) made major adjustments in transport tariffs and is conducting cost-Ing studies that will provide the basis for further adjustments. Inaddition, it has allowed local authorities more autonomy to plan,finance, and implement projects which will expand transport capa-city;

15 Guangdong Province Comprehensive Transport Study, Transportation Divi-sion, Country Department III, Asia Regional Office, World Bank, July 7,1991.

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(b) opened transport infrastructure, notably ports and highways, toparticipation by private financing. In highways, this will allowprivate capital to finance thc construction of toll road& andbridges and to manage their operations;

(c) allowed private individuals and coercially oriented collective andtownship enterprises to provide passenger and freight transportservices on roads and Inland waterways and has encouraged provincialauthorities to develop local railway systems;

(d) carried out major structural reforms in the organization and manage-ment of civil aviation and in the ports, leading to increased finan-cial autonomy and accountability, less central governnent controlsand paving the way for introduction of competitive services;

(e) reduced operating and capital subsidies for major infrastructureserviLes, through higher cost recovery and creation of user-fundedcapital construction fundsl

(f) en:ouraged introduction of more modern technology in the transportsystem primarily by improving rolling stock technology in the rail-way subsector; enhancing container and bulk handling capacity in theport subsector; improving road pavement design and geometric stan-dards for the expansion of motorization in the highway subsector;and increasing the use of computerized data processing and planningtechniques in operations in all modes.

S. l-ank Group Partigination in the Triansnort Sector

1.13 The Bank Group has supported the initiatives of the Government inthe transport sector through projects, sector studies, technical assistance,and training. Through June 1992, the Bank Group had loaned about $2.9 billionto China under 23 projects for the transport sector and presently is preparingseveral new transport sector projects.

1.14 The railwal subsector has received $1,385 million in Bank Groupfunding under six projects (Loan 2394-CM;I Loan 2540-CA; Loan 2678-CMA/Credit1680-CA; Loan 2968-CMA; Loan 3060-CMA/Credit 2014-CHA and Loan 3406-CA).These projects have assisted with the expansion of capacity on key routes andthe manufacture of electric locomotives, passenger coaches, and signalingequipment; one project is assisting construction of a line in Inner Mongolia.The most recent project is assisting with rail technology modernization;development of systemwide plans, planning tools and costing studies; and add-ing capacity where lt is urgently needed. The audit of the first RailwayProject noted that physical components were well executed and that macro-policy adjustmenta, especially in the area of tariff reforms, and investmentprioritization were likely to have the highest impact; these conclusions havebeen considered in d6signing the railway project currently under preparation.

1.15 The hiahwav subsector has received $788 million in Bank Groupfinancing under seven projects (Loan 2539-CMA/Credit 1594-CMA; Loan 2811-CMA/Credit 1792-CM;i Loan 2951-CM&/Credit 1917-CM; Loan 2932-CMA; Credit 191V-CKM Loan 3073-CRA/Credit 2025-CMA; Loan 3471-CA). These projects providefor the construction of high-quality national and provincial roads totaling

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about 1,276 km, and the expansion and improvement of ome 3,250 km of rural(lower class provincial, county, village) roads and major bridges. When com-pleted, some of these roads will help to provide vital missing links in thenational highway network; others will help to ease severe congestion in partsof the network or provide access to remote areas. The projects are alsodesigned to provide foreign technical assistance and training of Chinese per-sonnel in areas such as supervision and quality control of road construction,design, and plnning. Finally, the projects support studies on key issues ofnighway development such as road safety, pavement management, user charges,a0 m-4 eds of financing the expansion, improvement, and rehabilitation of theroad network. The first Highway Project (Loan 2539-CMA, Credit 1594-CMA) iscompleted; a PCR was issued in May 1992.

1.16 The ports subsector has received $509 million of Bank Group finan-cing under seven projects (Loans 2207-CHA, 2689-CHM, 2907-CMA, 2877-CHA, 3006-C3A, 3007-CMA, and Credit P-5623-CA). Most of the loan funds are being usedin Shanghai, Tianjin, Dalian, Huangpu, Ningbo, and Xlimen for construction ofterminals, jetties, and berths for handling bulk commodities, general cargo,and containers, as well as the dredging of navigation channels. Funds alsohave been used for training, technical assistance, and various studies such asport planning, operations management, and containerization. The audit reportof the first port project found the project successfully completed, on timeand below cost, but recommended developing long-term strategic port investmentplanning and Improving prequalification procedures; recommendations on theformer point have been incorporated in the preparation of the forthcoming portproject in Shanghai, and recommendations on the latter have been taken intoaccount in the discussion of procurement procedures In transport projectsunder preparation. The most recent project, the Ship Waste Disposal Project,cofinanced between IDA and the Global Environmental Facility (GE?), willreduce pollution of international and Chinese territorial waters caused byships' wastes.

1.17 The urban transport subsector had the first project (Credit 2296-CHA, $60 million), approved in September 1991, intended as a first stage of along-term program to upgrade and develop urban infrastructure in Shanghai,will finance capacity increases on key urban links and will assist theShanghai Metropolitan Government to improve planning, programming, financing,and management of its urban transport system.

1.18 One SUllmodal project was approved in 1991 (Loan 3316-CHA/Credit2226-CMA, $154 million) to improve provincial transport in Jiangsu. While themain focus of the project is on rehabilitating the provincial road network,this project also includes the first loan to the inland waterway subsector, tobe used to rehabilitate a section of the Grand Canal and expand an importshiplock.

1 19 The dialogue between the Gavernment and the Bank Group on transportsector operations and strategy has been strengthened both through the projectpreparation activities and project-financed studies mentioned above andthrough other studies carried out in collaboration with Chinese authorities.A provincial transport study has been conducted in Guangdong Province (para.1.9) to support the design of a new multimodal transport plan in the province.Tho Bank Group also conducted a survey cf the national water transport systom,which has reaffirmed the need to further exploit the large potential of thu

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Chinese waterways. In preparation for future highway lending, the Bankassisted in the screening of national highway improvement proposals, aimed tobetter identify highway construction priorities. Chinese authorities and theBank Group are currently preparing or undertaking new transport studies whichwill focus on long-term strategies for the country transport system. Thesestudies include a multiport optimization study to evaluate medium- to long-term options for developing the deep-water seaport at Ningbol a study of stra-tegic issues and the role of ports and shipping in southern China; a multimo-dal transport study to examine strategic options in developing the transportsystem for the Yangtze Economic Zone (Shanghai Municipality together with theprovinces of Jiangsu, Zhejiang and Anhui); a coal transport study to evaluatestrategies for alleviating coal delivery shortaFes through the year 2005; arailway investment study to optimize railway investments within a system-wideapproach, and a railway costing study that will allow the enterprise to estab-lish cost-based tariffs. In the highways subsector, the Bank and MOC arediscussing preparation of a number of studies that will cover finance, manage-ment and other policy issues in infrastructure and in road transport services(para. 1.38).

1.20 These projects and studies are helping to spur the growth and mod-ernization of the transport system. However, much more needs to be done tobring about the changes required to effectively deal with the emerging issues.In order to significantly alleviate the transport bottlenecks and rationalizethe transport system, the government would need, by the year 2000, to take thefollowing measures:

(a) increase the total level of transport investment in relation to GNP,to expand capacity to meet the new traffic demands and to clear upthe backlogs caused by past underinvestment;

(b) realize the most economical balance of investments among the majorfreight transpirt modes of railway, highway, and water;

(c) realign further the prices of freight transport services and thoseof the major commodities, especially coal, to bring them closer totheir true costs;

(d) increase further the productivity of existing transport assetsthrough technological modernization and management reforms; and

(e) improve multimodal investment decisions, both across and withinmodes, through the use of analysis and planning tools that morereliably determine the optimum economic priorities of transportinvestments under budget constraints.

1.21 In the past, the Bank has supported the government in implementingthe above measures mainly by focusing on expanding traffic capacity andimproving operational efficiency. While such support will remain, the Bankwill broaden its strategy and will assist the government in the design andimplementation of institutional and sectoral reforms in other areas, includinginvestment planning, pricing and financing, services' deregulation, opera-tional management, and transfer of advanced transport-related technologythrough training and provision of up-to-date equipment.

F. The Hiahwav Subsector

The National Highwav Network and its Utilization

1.22 The hi&hvav network totaled about 1,028,000 km in 1990 and relativeto either population or geographic area, ranked among the smallest in theworld (page 1, Figure 1.1). About 30 percent of China's villages have noaccess to roads suitable for motor vehicles. Investment in the highway sub-sector has been rather modest, at 21 percent of total investment in the trans-port sector during the 7FYP. Since the early 1980s, the highway system hasborne an increasing share of traffic. The network is, for the purposes ofdesign and technical specifications, classified by the Ministry of Communica-tions (MOC) as Expressway, and Classes 1, 2, 3 and 4 for various trafficcapacities in different terrain. These classifications are shown in Table1.7, which also shows the geometric standard. now being used. Foradministrative purposes, roads are classified as national, provincial, county,village, and special purpose.

1.23 China's road network consists mainly of aging roads with neither thegeometric capacity nor the structural strength to carry current traffic. Boththe volume of road traffic and the axle loads have increased over the pastdecade, with rapid economic expansion and diversion of traffic from rail andwater modes. Many of the roads need upgrading in addition to normal mainte-nance and rehabilitation. Despite major strides in road building during thelast decade, as much as 70 percent of the paved road syatem remains inadequatein terms of meeting the needs of modern road transportation.

1.24 A Bank policy study on roal deterioration in developing countriesclassified China among countries with an extensive and obsolete road networkin need of modernization to meet the rapid growth in road transport. Chinahas not neglected road maintenance, but the aging road system and the outmodedmaintenance technology have seriously constrained good maintenance practices.China needs to mobilize domestic and external resources for modernizing itsroad system with special emphasis placed on technology transfer, institutionalimprovement, and development of skills. There are few absorptive capacityconstraints relative to achieving these objectives given China's decentral-ized, stable, and financially accountable highway administration structure.

1.25 The rapid growth of highway traffic stems not only from the coun-try's rapid economic growth but also from other factors such as the nationalpolicy of shifting short-haul rail transport to road transport and the expan-sion of the service sector and rural industries. Purthermore, with the;ncrease in foreign trade, growth in transport demand will be concentrated intransport corridors serving the main ports and their hinterlands and, with thecontainerization of the higher value commodities, much of domestic movementsfor this foreign trade is expected to go by road. The new economic activitieshave generated traffic in excess of what the existing facilities can accommo-date. Congestion on roads resulting from the mix of slow-moving nonmotorizedand motorized traffic is a serious problem. Road pavements, which are gener-ally well maintained, are showing increasing levels of roughness.

1.26 The vehicle fleet totaled some 5.5 million trucks, buses and cars in1990, with trucks comprising over 71 percent. Most trucks are of four-toncapacity with outmoded designs and low fuel efficiency. Most of the trucks

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and buses are gasoline powered. These vehicles were manufactured domesticallyand, until recently, the production of trucks was barely sufficient to replacethe retired vehicles, let alone meot growing demand. It was not until theearly 1980s that a large number of modern vehicles was imported and jointventures with foreign manufacturers were started to manufacture trucks; pro-duction has grown steadily to reach 647,000 units in 1988, but dropped consid-erably in 1989 and 1990 due to the economic stagnation in those years. Thisproduction is contributing to the creation of a new fleet, although the oldervehicles still dominate. Growth in the truck and bus fleet has been fairlysteady over the last 12 years, with particularly strong growth in small pas-senger vehicles.

1.27 The tractor and motorcycle fleets, at 4.6 million and 4.2 million,rival the size of the truck and bus fleet. Both tractors and motorcyclesoffer a relatively cheap and basic form of transport, but add seriously totraffic congestion on rural roads (principally tractors) and urban streets(mainly motorcycles), and are a major cause of road accidents. Growth in thetractor and motorcycle fleets has increased sharply, with motorcycles showingthe strongest growth of all vehicle types (Table 1.8).

1.28 The truckina industry consists of publiclv owned trucks operated bytrucking companies affiliated with local (provincial or district) highwayauthorities, and other truck. operated by factories, cooperative organizationsand, recently, private Individuals. The relaxation of trucking regulations inthe early 1980a allowed own-account trucks to haul cargo for other factoriesand cooperatives and thus promoted competition between public and own-accounttrucks. In fact, nonpublic trucks have absorbed most of the growth in trafficover the past few years (Table 1.9). However, trucking costs are extremelyhigh, steamming in part from technological factors (poor roads, outmodedtrucks, etc.) but also from the lack of professional common carriers, which isessential to the development of modern and efficient trucking services. Whilemarket forces are expected to play a more important role in shaping the indus-try in the future, it is necessary to understand the current constraints tosuch development and to identify the measures needed to allow the reshaping ofthe industry to take place.

1.29 Road safety is a major issue in China's transport system. A studycompleted in 1987 under the first Highway Project found the accident rate tobe 100 deaths per 10,000 vehicles, one of the highest in the world and costingthe Chinese economy close to $1 billion annually. The study also identifiedessential measures needed to be taken, including improved police accidentreporting; introduction of computer-based accident analysis; identification ofaccident causes and dangerous road spots; preparation of guidelines for roadsafety design; improved administrative procedures; improved manpower training;and preparation of a road safety action plan. Comprehensive treatment of theroad safety problem has been hampered by the transfer, early in 1988, ofresponsibility for highway safety matters from MOC and the Provincial Trans-port Departments (PTDs) to the Ministry of Public Security and its provincialunits. This decision has created administrative barriers which still have tobe overcome.

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Hiahwav Administration. Planning and Finance

1.30 The provincial governments, through the Highway AdministrationBureaus of the PTDs, are responsible for the administration of the highwavnetwork. Arrangements for administration vary among provincest in the moredecentralized ones, the county and municipal governments perform some adminis-trative and all of the operational functions relating to the highway network.The central government's Ministry of Communications provides general policyguidance and support to the PTDs through its nationwide policies and regula-tions, specifying design and construction standards. MOC also provides spe-cialized manpower for planning and design, and also construction equipment formajor provincial civil works, if needed. However, the PTDs are financiallyindependent of MOC and carry out all the road planning, construction, mainte-nance, and administrition of roads and waterways in the provinces. MOC ismore heavily involved only in some large projects which are considered ofnational importance and for which MOC shares part of the financial burden.

1.31 While the provinces manage the country's highway network, MOC isresponsible for nlannina and investment strategies for the develovment of theNational Highway System. A reclassification of the country's road network in1981 led to the designation of key interprovincial links as National Highways.More recently, MOC has been deve'.oping a long-term strategy for the systematicupgrading of the national system in key corridors over a 30-year planninghorizon. The system, comprising twelve major routes, would connect all theprovincial capitals and cities with populations exceeding 500,000; routeselection would generally be based on the potential for maximizing industrialproduction in the corridors selected for the initial, minimum-length network(see Map IBRD 24225). Construction of 25,000 km of high standard, access-controlled roads, is expected to be completed by the year 2025. Priority forearly construction is being given to those routes already congested and hin-dering economic activity. By the end of 1991, some 500 km of the system hadbeen built, and a furthir 1,600 km is envisaged to be substantially completedby the end of the Eighth Five-Year Plan (1991-95) (8FYP) in 1995. The provin-cial governments are responsible for route location, engineering design, con-struction, operation and maintenance of the national highway system.

1.32 The provinces finance highway construction and maintenance throughthe revenues generated by road maintenance fees, levied on the revenue offreight and passenger transport companies and on the capacity of own-accountvehicles (para. 2.13). The MOC receives the revenues from a levy on vehiclesales and uses these funds, which reach about Y 2 billion/year, to contributefinancing for: (a) the roads included in the national highway network, pro-viding a higher share of ftlancing for the poorer, hinterland provinces and alower share for the richer, coastal provinces; and (b) construction or reha-bilitation of rural roads located in poverty-stricken areas. According to arecent study by HOC, if existing sources for funding both national and provin-cial roads are not improved, by the year 2000 they will provide 30 percentless than is needed to develop the highway system in line with the growth indemand. The issue is especially critical in the coastal provinces with thefastest economic growth, where the road systems are experiencing the highestlevels of congestion and deterioration.

1.33 Over recent years, HOC has embarked on two important activitiesdesigned to improve highway planning and investment decisions:

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(a) a computerized Road Data Bank (RDB), intended eventually to beintroduced In each provincial transport department. The road databank would contain all important road information at the national,provincial and county level, providing the basis for improving theeconomic rationale for decisions on expansion, rehabilitation,strengthening and maintenance of the road networks. MOC's HighwayPlanning and Design Institute (HPDI) has prepared a standard formatfor the data to be inputted in the data bank and is setting guide-lines for the provinces so that a uniform and fully integratedrstionwide system can be establishetd and

(b) a Pavement Manaaement System (PMS). This system would allow for thedevelopment of economically appropriate standards for pavementdesign and maintenance, leading to improved decision-making andtiming of investments. Following research initially sponsored bythe State Plsnnitig Comaission (SPC) and the Ministry of Science andTechnology in 1986, MOC has taken the lead role in implementingpavement management systems in the provinces, and pilot systems arebeing set up in Guangdong, Shandong and Heb-i, among others.

1.34 In addition to its role in planning and financing, HOC serves aniportant function as coordinator for the construction of priority sections ofthe national highway network. In early 1990, HOC established a TechnicalCoordinating Unit (TCU) to maintain close contact with the provinces executingprojects financed by the Bank and other external financiers. TCU's main focusha been to provide guidance to the project executing agencies and to coordi-nate staff training and the development of RDB and PIS at the provinciall-Ol.

1.35 In suary, despite government efforts to improve the highway systemand its utilization and administration, much more is needed to modernize thesystem and allow it to effectively meet the increasing demands placed on roadtransport, both in Improving physical capacity and the management of the sec-tor. In addition, strategy papers for the development of the railway ardhighway systems and for defining the Bank's assistance role are being preparedunder a joint effort by the Bank and China. The key areas on which the gov-ernment should focus attention to institutional reforms and training are:

(a) cost recovery and financing, to provide the resources needed to meetthe increasing costs of maintenance and operations and to encouragean efficient use of the highway systems

(b) highway planning and investment strateg. 9, to better identifyshort- and long-term highi ay development priorities;

(c) the role of MOC, to make it more consistent with the rapid decen-tralization taking place In the management and financing of highwayoperationso, and to strengthen its capacities to deal with itsexpanded role;

(d) preparation of feasibility studies using modern analytical tech-niqueo, and based on data and relationships reflecting actual condi-tions on China's highways;

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(e) the operations of the road user services industry, both for freightand passengers, to reduce costs and improve quality of services,through the promotion of competition, modern technology and bettermanagementI and

(f) the road construction industry, to improve the management and appli-cation of contract conditions, modernize equipment, and clarifyrelationships among clients, contractors and supervisory bodies.

The Bank's Exoerience and Strategv in Hi-hways

1.36 Of the eight Bank-financed highway and multimodal projects, (paras.1.15 and 1.18), only the first Highway Project has been completed. The pro-ject, which was designed to construct and improve 7 segments of the nationaland 59 segments of the provincial/county road networks in nine provinces,achieved its original objectives and clearly demonstrated the benefits accru-ing from improved accessibility to communities deprived of adequate transportinfrastructure in economically less developed regions. Economic activity inthe area of influence of the project roads surged, and income levels increasednoticeably. Furthermore, the Bank's involvement facilitated the acceptance ofcompetition in the contracting for road works, even for smaller civil workscontracts, in preference to force account operations, and demonstrated themerits of supervision of construction by specially assigned units.

1.37 Highways together with port projects constitute the Bank's firstmajor involvement with large civil works in China. As could be expected, theintroduction of international competitive bidding has been difficult. particu-larly as each project involves a new implementing agency. Despite these dif-ficulties, which have placed most civil works components in highway projectsbehind appraisal schedule, much peogre has been achieved and the concept ofcompetitive bidding is now generally accepted. These projects have brought tothe surface weaknesses in the local contracting industry and contract adminis-tration by the executing agencies. These lessons are being used in the prepa-ration of new projects, for example by strengthening the prequalification ofcontractors to avoid selection of unqualified contractors, by strengtheningarrangements for construction supervision and by advancing the bidding processin the implementation cycle. During preparation of the present project, suchexperience has been taken into account (para. 3.59). The Bank's involvementin highways has assisted HOC and the PTDs to develop a greater awareness ofthe need for systematic planning through the development of the RDB and PHS.The Bank has also helped in the transfer of technology through the supply ofequipment for road research and road maintenance, and through broad-basedtraining programs covering highway technology and advanced management prac-tices.

1.38 The Bank's strate4v for future hiLhwav lending is to continue tosupport institutional development and sectoral reforms a!med at modernizingthe highway system and its management. This support will continue both at thecentral and provincial government levels. The Bank's dialogue with centraland provincial authorities as well as the insights gained during supervisionof the highway projects portfolio have helped to identify key issues in thehighway sector and devise ways to address them systematically. While someinstitutional and sector issues will normally be addressed in every project,other issues requiring more detailed studies will be addressed selectively in

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individual provincial projects, with a view to formulating recommendationsthat may also serve other provinces (para. 1.39). During the next three toflive years, the investment components of highway projects will continue tofocus on high priority links of the national highway system, and to supportthe development of the provincial road networks. The Bank strategy alsoenvisages continuing close collaboration with the MOC, and assisting it,through economic and sector studies and through lending operations, in adapt-Ing to the evolving needs of the Chinese economy.

1.39 Specifically, the Bank's strategy for forthcoming highway projectscomprises addressing the following issuess

(a) Issues to be addressed in all highwav nroiects

(i) sound management of the existing highway network, includingadequate provision for rbhabilitation and maintenance, priori-tized according 't.o economic analysis;

(ii) development of high standard, limited-access highways in spe-cific corridors of proven high demand and inadequate existingcapacity;

(iii) satisfactory compliance with environmental and resettlementrequirements; and

(iv) promotion of road safety.

(b) Issues to be addressed in specific provincial hithwav Drolects

(i) Identification of a structure for adequate road user charges,in order to mobilize the necessary resources for road develop-ment and equitably recover from users the costs of the highwaysystem. A study would be conducted under a proposed GuangdongProvincial Highway Project.

(ii) Promotion of adequate road freight services, including encour-agement to private, collective and township enterprises toenter the business as part of the reform of the transport sec-tor. A study at the provincial level would be carried outunder the proposed highway project in Henan Province, and acomplementary study of trucking at the national level would beconducted under the Bank's transport sector program.

(iii) A study would be conducted under the proposed highway projectin Fujian Province regarding the need to upgrade the capacityand effectiveness of the highway construction industry. Thisstudy would be followed by a pilot program under the projectfor the provincial construction industry.

(iv) Integration of road transport services with other modes, par-ticularly in the field of containerization, and the establish-ment of modern, integrated multimodal services. The selectionof a highway project addressing this is still to be determined.

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II. EEN PROVINCE

A. Economic Background

2.1 Henan, with about 85 million people, i. he country's second mostpopulous province. Landlocked in China's central plain, tha Yellow Riverdivid.s the province in two, the larger part to the south. The total aroa isabout 167,000 km?, representing 1.7 percent of the couvtry; the areA is aboutequally divided between flat areas (56 percent) and rolling and mountainousareas (44 percent). In addition to the Yellow River, the province has threeother main river basins: the Weihe, Hanshui and Hauihe Rivers. Availabilityof water, a good amount of annual rainfall (785 mm), and a moderate climate,make agriculture the province's main economic sLczor. Wheat, corn, tobacco,and animal husbandry are the main rAgricultural outputs. The Bank is assistingthe development of agriculture through a project that aims to increase crop,livestock and fish production and productivity in Northern and Eastern Henan(Credit 2242-CRA) and is preparing a multipurpose dam project at liaolangdithat will further enhance the province's agricultural production. The YanahiThermal Power Project (Loan 3433-CHA) will help alleviate acute power short-ages in all sectors, including agriculture.

2.2 The province also has a well-developed industrial base, with machin-ery, textiles and foodstuffs having the highest output values. In 1990, thevalue of total provincial agricultural and industrial production reachad about$29 billion. Since the start in 1986 of the 7th FYP, the provincial economyhas been growing at an average annual rate of 7.6 percent, despite the reco-sion in 1989/90. This is an impressive economic performance, particularlysince Henan, as other inland provinces, has not benefitted from the "specialeconomic zone" incentives which have propelled growth in several coastal prov-inces. Despite Henan's high economic growth, its income per capita is some 40percent below China's average (Table 2.1), and the province has Importantpockets of poverty areas. In 1991, the Government had classified 34 prefec-tures and 42 counties, with a total population of about 10 million, as poor.Lack of transport infrastructure is one of the key factors behind thedepressed economic conditions in these areas.

B. The Tranesort System

2.3 Henan's strategic location as a crossroads of major north-south(N-S) and east-west (E-W) rail and road corridors attracts large amounts oftransit traffic to use such facilities, particularly the railways. The pre-dominsit transit cargo is coal, which originates in the neighboring provincesof Shanxi and Shaanxi. Transport demands have increased substantially overthe last five years, due to fast economic growth of the province and of therest of the country, whose output traverses Henan to and from ports and majorpopulation centers (Table 2.2).

2.4 Zhengzhou, the province's capital, is at the center of the key landtransport facilities. These are the N-S Beijing-Guangzhou railway andnational road 107, and the E-W Lenzhou-Lainyungang railway and national road310. A number of other major railways, as well as local railways and roads,cross the province. The total length of the province's rail network is

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2,090 km. Due to its important transit function, Henan's transport systemdensity is larger than China's average (Table 2.3). However, as in the caseof the country as a whole, the provincial land transport system is small inrelation to the province's area and population, many important rail linesoperate at capacity and the key roads have low standards, carry significantamounts of slow-moving traffic, and are severely congested. Rive- navigationis not a major transport mode because the Yellow River is affected by serioussand deposits in its riverbed. Other rivers also provide limited services.The total length of navigable rivers is about 1,110 km, but most sectionsallow small boats or ferries only, even under the best seasonal conditions.

2.5 With its high proportion of hilly and mountainous areas, and theseveral water streams, topography and hydrography pose difficult barriers tothe development of land transport infrastructure. The provincial sovernmenthas made a special effort to integrate the province's areas across the YellowRiver; over the last 20 years, it has built three highway bridges at Luoyang,Zhengzhou and Kaifeng, and a fourth bridge is being completed at Sanmenxia.

2.6 Henan's highwav svstem extends about 43,000 km, of which only about3,000 km (7 percent of the total) are of Class I and II roads, about 36,000 ofClass III and IV (83 percent of total), and the remainder are tracks (Table2.4). Some 16 percent of the province's highway network is located in itsnorthwestern area. The administrative classification of the road sy6.em in1990 was as follows:

km I

National 3,400 7.9Provincial 7,875 18.3Prefectural 10,753 24.9County 20,121 46.6Other 1,001 2.3

Total 43.150 100.0

2.7 As in the rest of the country, most of Henan's highways were builtin the 1960s, and their design standards were suitable for the light vehiclesand low traffic levels prevailing in China at the time About 50 percent ofthe roads have cement or asphalt pavement, but the pavements are of low bear-ing capacity for the vehicles that circulate on them. Due to the substantialgrowth in traffic levels and steady rise in the use of heavy vehicleo, theseroads increasingly are becoming inadequate to meet the needs. The provincialgovernment is giving high priority to repairing end strengthening the surfacesof these roads.

2.8 In addition to inadequate standards, Henan's road network is smalland significant segments of the population cannot reach it. About 12.5 per-cent of the villages have no access to roads of any kind, and 7.0 percent of

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the counties do not have all-weather roads available to them. During the 7thmYP, the piovincial government invested Y 40 million in poverty areas for 362rural road projects, of which HOC contributed Y 9.3 million for 32 projects.A slightly higher amount has been allocated by the province for this purposein the Sth FYP.

2.9 Henan's vehicle fleet expanded at a fast pace over the last decade(Table 2.5). Some of these vehicles are manufactured in Henan (Table 2.6).While the largest growth rates took place during the 1980-85 period, when somecategories such as small freight vehicles doubled every year, growth duringthe second part of the decade has continued to be strong. During this period,growth of small freight vehicles continued to be the highest (30.4 percentannually), followed by motorcycles (28.4 percent annually). However, allother vehicle categories also grew at high rates, between 7 percent and15 percent annually. This includes tractors, which reached 289,000 units in1990. This number is larger than all other freight vehicles combined. Whiletractors are mainly used for agricultural purposes, often they travel on theroads, posing significant safety hazards and, due to their lkw speeds,severely reducing road capacity.

C. Traffic

2.10 Over the last decade, traffic has been rising strongly in all modes,with annual average growth rates for land transport of 7.9 percent for freightand 10.0 percent for passengers. Highway traffic rose at even hxgher rates,22.6 percent and 16.7 percent annually, respectively, and is taking anincreasing share of total traffic (Table 2.2).

2.11 The increase in road freight and passenger transport is reflected inthe traffic growth on individual roads. In main trunk roads, such as Kaifeng-Zhengzhou-Luoyang, the annual rata of traffic growth over the last five yearshas ranged between 5 percent and 23 percent, depending on the section.

2.12 Highway traffic includes a high proportion of slow-moving vehicles,mainly tractors of various sizes. Traffic includes also substantial bicyclesand other nonmotorized vehicles. In 1990, tractors accounted for some10-30 percent of all motorized traffic in the Kaifeng-Luoyang route. While inthe main roads, slow-moving traffic is growing at lower rates than overalltraffic, it still is a major factor in road congestion. Special lanes forthis traffic are provided in some roads, and they help decongest and improvesafety, but do not fully address the problem due to speed differentials andvehicle mix (from manually-drawn carts to bicycles and tractors). To tacklethis problem, Henan is starting development of access-controlled highwayswhere traffic volumes are sufficiently high to justify them.

2.13 The high growth of road traffic and Its increasing share of totaltransport stm from the development of the road system, and from increasingvolumes of industrial output for which roads are a convenient mode of trans-port. The steep growth in road traffic shows the strong demand for highwayservice, since the surge in traffic took place despite severe constraintsposed by inadequate road standards, small coverage of the system, high conges-tion, and poorly developed trucking services. Over the next 5 to 10 years,highway traffic is likely to continue to grow at a high pace, in response to

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the growth of the national and provincial economies, to change& in economicstructure favoring faster door-to-door road services, and to improvements inthe national highways in Henan as in the neighboring provinces. ',uch roadimprovements will allow more long-distance, interprovincial trade and peopleto travel by road.

2.14 Over the medium term, differentials in road-rail tariffs shoulddecrease, curther increasing the demand for road transport. Rail tariffincreases since 1985, which have been especially strong for passengers and forshort-haul freight traffic (300 percent increase for freight distances lessthan 100 km) have reduced the tariff gap, but it is still high. At present,road transport tariffs for general cargo are close to four times higher thanthe railway (Y 0.038/ton-km compared to Y 0.11/ton-km, respectively) for hauldistances of about 100 km). The transport price differential diminishes whentransshipment costs and traval times are considered For passengers, thetariffs are much closer between the two modes (Y 0.049/pass-km on road trans-port, compared to Y 0.038 for railways, for distances of about 100 km). Thetariff differential should gradually decrease as the railways continues toadjust its tariffs upwards, and as improvements to tha roads and in the effi-ciency of the trucking industry reduce the costs of road transport.

D. The Truckina Industry

2.15 As elsewhere in China, public trucking operations in Henan are char-acterized by low load factors, high operating costs and rates, and poor qual-ity of services. Such services are provided by three categories of transportcompaniess state-owned, collective and private. Due to the weaknesses ofpublic trucking, most large industrial and commercial compar,ies have boughttheir own vehicles, making own-account trucking the major road freight car-rier. Such companies are estimated to own about 60 percent of the roadfreight fleet and to do about 40 percent of the ton-km. While own-accounttrucking is even less efficient than public carrier services, most enterpriseshave found this approach convenient, and the proportion of own-account truck-ing has been increasing in the last years (Table 2.7).

2.16 As noted in pars. 2.14, road freight tariffs are substantiallyhigher than the railway's. The differential is too large under intternationalstandards even taking into account that in China (a) road costs are high dueto poor road conditiong (b) railway operating costs are low due to high traf-fic densities and efficient operations and (c) many railway tariffs Are belowcost. Despite the high tariffs for road transport, most of the large truckingcompanies owned by the cities or prefectures lose money. Collective and pri-vate trucking companies appear to do well financially, in part due to betterutilization of their equipment and in part due to fewer social obligationsthan the government companies. Government-operated freight informationoffices throughout the province provide, for a fee, freight information/brokerage services to shippers and truckers. This service, which is operatedas a government monopoly,, does not provide the type of detailed informationand dynamic services required in a modern trucking sector.

2.17 Henan authorities are concerned about the low efficiency and poorquality of trucking services and the proliferation of own-account trucking.Recently, restrictions hisi been placed for enterprises to purchase and oper-

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ate their own vehiclec, and other measures have been taken to improve controlof trucking operations. While such measures are expected to generate someImprovements, they are not likely to induce the kind of gains in efficiencyand quality of services which is required. The proposed project includes adetailed study of trucking In the province, which will consist of a diagnosisof the present situation and of recommendations for improvements.

E. xi&gav Administrtio_n

2.18 The enna Provincial Communications Department (HPCD) controls high-way end iland river navigation end local railways undertakings in the Prov-ince as well as the Zhonguan Civil Aviation Company (Chart 1). The HPCDreports directly to the provincial govervment end acts as its administrativearm for planning, budgeting and financing of transport in the province. How-ever, HPCD conform to the general transport policy and technical guidelinesissued by HOC. Key agencies under Its administration for the management ofHennan's highway system are Henan Provincial Planning and Design Institute(HPDI), Henan Provincial Scientific Research Institute (HPSRI) of Communica-tions, Renan Provincial Highway Institute (HPHI), Henan Provincial VocationalSchool (HPVS) of Communications, and the High-Grade Highway Constructi-nAuthority (HGOCA). Their respective duties are to plan, survey and designroadsl conduct highway research; train and replenish technical and managementpersonnel; and construct and manage high-grade highways. The proposed projectwill help strengthen these five institutions (para. 3.23).

2.19 The hnnan Provincial Highway Administration Bureau (HAB) under theadministwation of HPCD is responsible for construction, renovation, mainte-nance and management of the provincial highway network. It receives profes-sional and technical guidance from the Engineering Administration Departmentof HOC. With a h'adquarters staff of about 99, HAB executes its responsibili-ties through the local admivtstrations set up in the various municipalitiesand profectures (total number, 17) and counties (131 county level and districtand 1,271 maintenace gangs) of the Province (Chart 1). The 17 highway dis-tricts are In charge of local construction, maintenance and management of thenational and provincial highway network in their jurisdiction. Each of thecounties has responsibility under the districts to construct and maintain thocounty and rural highway under Its jurisdiction. The total staff of HAB andthe highway departments of the cities, prefectures and counties amout toabout 40,640 in 1991, of which about 2,350 are engineeriag and technical per-sonnel and about 1,540 are finance, economics and management personnel. Thethree construction divisions of the Highway Engineering Bureau are responsiblefor construction of large- and medium-sized highay projects. The High-GradeHighway Construction Authority (HCHCA) is in charge of construction and man-agment of high-grade highways, such as expressways.

2.20 BONCA is a department-level Institution which reports directly toPCD. Established In 1990, HGHCA's first task, currently underway, is the

construction and managment of the Expressway between Kaifeng, Zhengzhou andLuoyang. However, as the network of high-grade highways is expanded, HGHCAwill be in charge of all that network, and as exproesways are put into opera-tion, IGECA is expcted to become responsible for the maintenance and oper-ation of that network. The organizational structure of HIGCA is shown onChart 2. The president of HGECA is the director of HPCD, and he is assisted

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by a committee of 20 members representing all agencies that have a bearing onthe work of HGHCA. The approved number of *taff for HGHC& is 50, including 32professional and technical personnel. All these positions have been filled.At present, EGHCA's source of finance la the income it derives from managinghigh-grade highway projects.

P. Planning. Budaetina ind Financing

2.21 P snninyt. HPCD has overall responsibillty ior planning, funding,and maintaining the provincial highway network. However, the highway adminis-tration units at the prefecture, county, and village levels have considerableautonomy in planning smaller road investments. These mallor investments aresubject to the approval of HPCD, largely as a formality. Bach administrativegroup prepares investment plans for the highway network under its jurisdictionand submits them to the planning division of HPCD by September of each yearfor the next year's plan starting January 1. Before the end of January, HPCDapproves the next year's plan for each county or local authority concerned.Similarly, using inputs from lower level administrative groups, HPCD preparesthe five-year road development plen reflecting national or provincial develop-ment policy guidelines and objectives for the plan period.

2.22 Budgeting. As is done in all provincial communication departmontnin China, HPCD follows a balanced budget policy. The proposed highway Invest-ment is always balanced against the revenue earmarked for highway development;the funds for investments and maintenance approved for each year are closelyrelated to the mount of funds expected to be available to HPCD for the seneyear. In October of each year and before BPCD approves the following year'sprojects, the current year's planned investments are reviewed against actualinvestments ant revenue receipts and adjustments are made where needed.

2.23 Finoncint. The road maintenance fee provides the main source offunds to finance construction and maintenance of the highway sector. Themaintenance fee structure is similar for various provinces, but the ratesdiffer from one province to another. HPCD collects this fee from motor vehi-cles throughout the province. HPCD determines the fee rates and, through theprovincial government, reports the fee to the State Council for approval. Therates vary according to the type and size of vehicle, as follows: (a) vehi-cles owned by state transport companies, and collective professional transportcompanies are charged 15 percent of their gross revenue; (b) vehicles owned bycollective and private transport companies are charged Y 130 per month perpayload ton for trucks and Y 150 por month per 10 passenger seats; and(c) passenger cars are charged Y 75 per month. The maintenance fee providesthe source of income for all maintenance and overhead, and for a substantialportion of upgrading costs. Revenue from this fee increased from aboutY 343 million in 1985 to about Y 680 million in 1990, or 14.7 percent peryear. However, not all of these monies are available to the Province forhighway purposes, as about 15 percent a t remitted to MWP for the Rnei&by &adComunmications Fund and 2 porcent are remitted to the Public Security Bureauto police highways, enforce traffic laws and for safety. Thus, the road main-tonance funds left to Henan Proavince increased from about Y 298 million in1985 to about Y 579 sillion in 1990, or 14.2 percent annually.

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2.24 Other sources of revenue for highways includes (a) allocations fromHOC for construction and reconstruction of national and major provincial roadson a selective basis; (b) local funds raised from tolls on the three bridgesat Luoyang, Zhongzhou and Kaifeng; (c) road bonds; and (d) loans from banks.Revenues from the first rose from About Y 50 million in 1985 to Y 86 millionin 1990 or an 11.5 percent annual increase. The second rose from aboutY .5 million in 1985 to about Y 32 million in 1990, or a 47.9 percentincrease per year, a higher growth rate due to opening of the toll bridgesduring the period. The third (road bonds) amounted to about Y 42.0 million in1986 and was zero for other years. HPCD does not expect to resort to thismethod of finance during the next few years. The fourth (bank loans) amountedto Y 72.0 million during 1986-88, and those funds were used for the construc-tion of the Zhengzhou and Kaifeng Yellow River bridges. Consequently, totalrevenues available to the Province for highway purposes have increased fromabout Y 352 million in 1985 to about Y 696 in 1990, or a 14.6 percent increaseper year (Table 2.8). However, these figures do not include local labor con-tributions, especially in countAes and villages, which averaged aboutY 150 million per year during 1985-90.

2.25 Fuel prices in China are not subsidized. Fuel taxes are charged toroad users, but they are collected by MOF and are not allocated back to roadwazka. PFel taxes currently amount to 43 percent of the base price of gaso-line and 13 percent of the base price of diesel fuels. Total fuel prices,including taxes, show that prices at the pump for planned fuel allocations arecomparable to international market prices, while those charged in the openmarket are well above international market prices and are increasing at a ratecomparable to the consumer price index (Table 2.9).

G. Engineering. Construction and Maintenance

2.26 Road and bridge projects are engineered by the planning and designinstitutes at the provincial, prefecture and county levolsa The Henan Plan-ning and Design Institute (HPDI) is responsible for designing all major road,bridge and tunnel projects. These design institutes are, in general, compe-tent and have experienced personnel for carrying out highway design tasks.These institutes will design the provincial and rural roads included in theproject. HPDI designed the Kaifeng-Zhengzhou-Luoyang Expressway (the partfrom Zhengzhou to Luoyang is included in the project). Since expressways arenew to Henan Province and to China as a whole, the design was reviewed by ateam of Finnish experts to ascertain the adequacy of the design and bid docu-ments and suitability for use in ICB for building the Expressway.

2.2? Construction of roads and bridges is supervised by personnel fromcounty, city and prefectural highway unite. Generally, these units have com-petent personnel to adequately supervise these work.. HPCD has created theHigh-Grade Highway Supervision Department -nitially to supervise the Raifeng-Zheugzhou-Luoyang Expressway. HAB has eetablished the Offico of Supervisionof Provincial and Rural Roads to be In charge of supervising the roads innorthwest Henan and the roads included in the Road Improvement Program, bothof which are components of the proposed project. Rowever, as Zhengzhou-Luoyang Expressway is the first high standard road (expressway) to be built inthe Province, it was considered appropriate to involve a limited number of

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qualified foreign personnel to help the local personnel in supervising theconstruction of this exproesway (para. 3.18).

2.28 Small-scale roads and bridges in the Province are constructed by theconstruction units of the highway department of each city or county. TheEngineering Highway Bureau of HPCD is respons._ble for the construction of large-and medium-sized highways and bridges. HGHCA io responsible for the manage-ment and construction of high-standard roads. Since the State Planning Com-mission directed that all major civil works are to be awarded after competi-tive bidding, many of the larger construction divisions are being reorganizedinto financially independent contracting companies and have been awagdJ t,.'aL

tracts either individually or as partners in joint ventures on previous Bank-financed highway projects. Thus, the construction units under the EngineeringBureau of HPCD can taki part in bidding within and outside Henan Province,whereas the construction units under the highway departments of various citiescan participate in transregional bidding activities organized by HPCD. Con-tractors for all the contract sections involved in the Raifeng-ZhengzhouExpressway (constructed by local funds) were selected through prequalificationand LCB. Contractors for the continuation of this expressway to Luoyang (tobe financed under the proposed project) will be selected through prequalifica-tion and ICB (paras. 3.50 and 3.60).

2.29 Maintenance of highways and bridges is conducted by the highwaydepartments of the concerned cities and counties. Maintenance is well orga-nized and is carried out well, but mainly through laboe-intensive operations.Consequently, maintenance has generally been adequate, and HPCD estimates thatin 1990, about 85 percent of the national and provincial roads were consideredin good condition. The corresponding figure for county and village roads Wasabout 75 percent. During 1985-90, expenditures for routine maintenance andperiodic maintenance averaged about Y 6,000 and Y 8,000 per km per year,respectively, for Class I roads, Y 4,000 and Y 3,000 for Class II and IIIroads and Y 29000-3,000 and Y 2,000 for Class IV and village roads (Table2.8). These figures are comparable to the corresponding ones in other prov-inces in China and generally have resulted in a reasonable standard of highwaymaintenance. However, expenditures for maintenance (routine and periodic) asa percentage of total expenditurea for highway purposes in Henan Province havedecreased from about 32 percent in 1985 to about 14 percent in 1990. Duringthis period, traffic increased rapidly and truck loads also increased. How-ever, expenditures for road rehabilitation have increased from about 33 per-cent in 1985 to about 44 percent in 1990, thus helping reduce the need formaintenance. Expenditures for new construction and improvement stayed rela-tively constant at about 16-18 percent of the total. HPCD is aware that con-tinuation of the existing trends (emphasis on construction, upgrading andrehabilitation at the expnse of maintenance) would lead to deterioration ofthe existing network. HPCD has stated its concern with this issue and itsintention of increasing resources to maintenance, possibly through raising theroad maintenance feel HPCD also will look into increasing the efficiency inthe allocation and use of the available funds. Under the project, the plan-ning and execution of both routine and periodic maintenance would be improved.Basic maintonnce equipment for rural and provincial roads would be providedIn addition to the equipment required for the operation and maintenance of theExpressway (paras. 3.21 and 3.22). Also, training would be provided to per-sonnel involved in the management and execution of maintenance activities

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(para. 3.30). In addition, the equipment to be provided under the project tosupport the Road Data Bank (RDB) and Pavement Management System (PNS) wouldhelp in preparing better road maintenance programs (para. 3.22).

B. Staff-Trianins

2.30 The staff of HPCD, prefectural, city and county highway departmentsare in general professionally competent, but many have not been exposed to newtechnology and therefore often use outmoded work methods and equipment. HPCDat-ff boenefitted from the training done by HOC and that provided by theHenan Provincial Highway Institute and the Henan Provincial Vocational School.The former is the only secondary technical school under the administration ofHPCD that trains and provides intermediate level technical and managementpersonnel for HPCD and related agencies in the various prefectures, cities andtownship. in the fields of highways and bzidges, automobile operation andservicing, highway transportation and management and highway transportationaccounting. The latter (vocational school) is the only vocational schoolunder the administration of HPCD. It trains junior middle-school graduatesfor three years in the areas of automobile operation, automobile servicing,highway engineering and management of transport by motor vehicles In addi-tion, it provides in-service training for staff of the communication agenciesof the province. Since it started operations in 1986, it has graduated about3,100 students.

2.31 The proposed project will support the training efforts of HPCD by:(a) providing training to personnel of HAB (and its branches in the prefec-tures, cities and counties) and HGHCA in the fields of highway planning,design, construction, maintenance and operation; and (b) strengthening theHighway Institute and the Vocational School as well as the Planning and DesignInstitute, Scientific Research Institute and HONCA through training of theirstaff and provision of modern equipment.

I. Highwav Develonment In the KLhth FYP

2.32 The 8th FYP (1991-95) envisages an important development of theprovince's highway system. The Plan will give priority to the road projectsfalling in the following categoriess

(a) trunk roads, including the sections, which lie in Henan Province ofthe national N-S Beijing-Guangshou and the E-W Lianyungang-Urumqicorridors and other national and provincial roads that are severelycongested, or otherwise are reaching the end of their economic life;

(b) road sections that have become part of urban areas;

(c) roads linking Henan with other provinces, particularly the roads inHenan that are inferior to the connecting sections in the neighbor-ing provinces;

(d) roads dastroyed or severely damaged by floods in recent years; and

(a) roads serving poverty aroe.

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2.33 The Plen targets some Y 4.25 billion for road construction, rehabil-itation and maintenance during the five-year period, or about Y 850 millionannually (Table 2.8). This amount, which is 27 percent larger in real termsthan the allocation under the previous plan, would be applied to carry out thefollowing program.

• New construction of expressway and Class I roads 305 km* New construction and improvement of Class II roads 466 km* Upgrading of Class III and Class IV roads 1,500 km* Upgrading/rehabilitation of Class IV and substandard 1,000 km

2.34 The 8th FYP Plan foresees an increase of 62 percent in the amountallocated to maintenance relative to the allocation under the 7th Plan (Table2.8). All road construction, rehabilitation and improvement included underthe proposed project are part of the Province's 8th FTP.

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II1. THE PROJECT

A. Proiect Formulation and Preyaratil.n

3.1 The proposed project is part of an increasing effort by the WorldBank, in agreement with the Government, to provide assistance to inland,lesser developeds provinces. Highway projects, with their institutional andprovince-wide physical coverage, are particularly apt to contribute to provin-cial economic and social development, and to the strengthening of the adminis-trative, planning and management structures of the sector.

3.2 The support of highway development in Henan is particularly impor-tant in light of the province's national strategic transport location, inaddition to its own infrastructure development requirements. One of its keytransport corridors, the east-west Kaifeng-Zhengzhou-Luoyang route, an essen-tial part of a major 1,573 km national road linking the port of Lianyungang inJiangsu province with Tianshui, in economically depressed Gansu province, hadbeen identified in the 6th FYP as a national investment priority. A feasibil-ity study in 1986, and its subsequent revision and updating, confirmed theimportance of this route. The State Council approved the project among thetop priorities to be started in the 1990s. The Expressway proposal was alsoanalyzed, and found to be satisfactory, as part of Highway Screening Missionsconducted by the Bank in 1989 and 1990, which reviewed several major roadinvestment schemes submitted by MOC. Construction of the section Raifeng-Zhengzhou was started early in 1991 under provincial and central governmentfinancing. The Bank is also considering to assist, through a subsequent proj-ect, in the construction of the north-south national route Zhengzhou-HubeiProvince border.

3.3 The proposed project was prepared under the directives of the HenanProvincial Communications Department, with the guidance of the State PlanningCommission (SPC) and MOC. Following earlier discussions, an identificationmission that visited Henan in April 1991 and two subsequent missions formu-lated and prepared the present project in close collaboration with HPCD, SPCand MOC.

B. Proiect Ob1ectives and Rationale for Bank Involvement

3.4 The main objectives to be pursued under the project are:

(a) improving Henan's road network, with a particular focus on:

(i) relieving congestion in the East-West Corridor, the province'smost trafficked route and a key link between Henan and otherprovinces with the new port of Lianyungang;

(ii) rehabilitating and expanding the provincial network, whosetraffic is rising significantly as a result of Henan's sus-tained economic growth and increasing short-haul freight diver-sion from the railway; and

(iii) improving rural roads mainly in poverty areas.

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(b) reinforcing the Henan Provincial Communications Department's capac-ity for planning and managing the highway system, through comprehen-sive training, strengthening of five key agencies of HPCD, and pro-viding equipment maintenance for the highway network and operationof the Kaifeng-Zhengzhou-Luoyang Expressway; and

(c) making recoimendations for improving efficiency and quality of roadtransport services, currently characterized by high costs, littlecompetition and inadequate industry structure.

3.5 The Bank's assistance strategy for highway development in Chinafocuses on supporting institutional development and sectoral reforms aimed atmodernizing the highway system and its management. The proposed project fitswell with this strategy as it includes clear objectives in these areas. Theproject's physical investments will support Henan's 8th FYP highway develop-ment plan's aims to reduce congestion, provide for a balanced improvement ofthe road network and improve road access in poverty areas. The project alsowill support recent Bank lending for agricultural development in Henan.

C. Prolect Scope

3.6 The project would include:

(a) Civil Works. This component of the project serves objective (a) ofthe project--to improve Henan's road network--and consists of thefollowings

Mi) Construction of a 120-km single carriage 2-lane access con-trolled expressway between Zhengzhou and Luoyang;

(ii) Rehabilitation and improvement of 5 provincial roads totallingabout 180-km in length and upgrading of 6 rural roads totallingabout 112-km in length in the northwest region of Henan Prov-incei

(iii) A province-wide road improvement program comprising the reha-bilitatior. and improvement of about 740 km of national, provin-cial, prefectural and rural roads scheduled for implementationduring the 8th FYP Plan; and

(iv) Supervision of construction of the above-mentioned civil worksand training of HPCD staff in the supervision and quality con-trol of highway construction.

(b) Rauivment for Hi&hwav Maintenance and Ooerations. This componentserves objective (b) of the projecz and consists of the following:

(i) Equipment for maintenance and operation, monitoring and test-ing, and environmental monitoring of the Kaifeng-Zhengzhou-Luoyang Expressway; and

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(ii) Equipment for maintenance of roads, monitoring and testing, andapplication of the pavement management systeau (PMS) and roaddata bank (RDB).

(c) Institutional Strengthening and Trainina. Thie component serveeobjective (b) of the project and consists of strengthening of fiveinstitutions affiliated with HPCD by providing modern equipment andtraining of their key staff.

(d) Training. This component serves objective (b) of the project andconsists of training of staff of the HGHCA and HAB and its divisionsat the local levels in specific areas related to highway planning,design, construction and maintenance.

(e) Trucking Study. This component serves objective (c) of the project--improving efficiency and quality of road transport services--and.consists of a study of the trucking industry in Henan Province andways of improving its efficiency.

3.7 Construction of the ZhenAzhou-Luovang Eaxresswav. The existingZhengzhou-Luoyang Road between Zhengzhou, the capital of Henan's Province,with 5.4 million population, and Luoyang, the moat populous area of the Prov-ince with a population of 5.7 million, is about 169-km long and traversespopulated and industrial and mining aregs, with particularly heavy concentra-tions in the cities of XZnxiang, Shangjie, Gongxian and Yanshi. The existingroad forms a part of National Route 310. The total length of the road whichlies in towns is about 37 km, or about 22 percent of the total. In addition,there are about 40 spots of poor sight distance with a total length of about 5km. The existing road was improved during 1985-87 to Class II and Class IIIstandards. The pavement is g-eri.lly 9-12 m wide (and some bridges are only 7m wide), which does not allow iot separation of the motorized and slow movingtraffic along a significant length of the road. Moreover, the pavement struc-ture is generally weak. Conseq-.ntly, travel speeds are generally low. Therecent high increases in traffic and the expected future growth cannot beaccommodated by the existing road beyond 1995 at an acceptable level of ser-vice. The widening of the existing road would not be feasible along most ofits length because of the extensive side development, the consequent highnumbers of people to be resettled and the related high construction costs.

3.8 For reasons outlined above, the feasibility of the construction ofthe Zhengzhou-Luoyang highway was investigated along a new alignment as a partof the road between Kaifeng and Luoyang. A feasibility study for the highwaywas carried out by HPCD's Design Institute and covered the investigation offive alternative routings for a new highway. The recommended alignment islocated to the north of the Longhai Railroad and to the south of the YellowRiver (Map IBRD 23487). Also, it Is generally about 5-10 km north of the maincities along the existing road, thus reducing the number of people to beresettled and providing space for these cities to expand in the future.

3.9 The proposed Expressway would be about 120 km long, consisting oftwo paved lanes, each 3.75 m wide, and two shoulders at 1.5 m wide. However,in the areas of interchanges and grade separations, long bridges and in someembankment sections and sections where the ground has to be cut, the Express-

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way would be designed to a 4-lane standard, as designated in the nationalgoometric atandards for highways (Table 1.7). The total length of theExpressway with four lanes is about 35 km, of wiahh about 15 km would be ini-tially constructed under this project. This design is a cost-effective solu-tion that allows controlled access while keeping road width, and therefore9costs, to a minimum. The standards have been reviewed by Bank staff andexperts from the Finnish National Road Administration (FINNRA) engaged by theBank under the Finnish Consultant Trust Fund and are considered appropriate.The highway traverses difficult topography in the Gongxian section where tun-nels and a viaduct have to be provided, and about 5 km of the Expressway areto be built on soft soils that require special treatment. Also, the last 20ku of the Expressway before Luoyang are located in an area of archeologicalimportance, which would.require special care during construction. Accass toand from the new highway would be provided at 8 interchanges. The Expresswayalso includes 24 grade separations, 9 long bridges, 18 medium-sized bridges,15 small bridgeo, 2,236 m of tunnels, 165 underpasses to provide access toadjacent property and 233 culverts. Asphalt pavements are used throughoutmost of the Expressway. The pavement structure consists of a 4 cm asphaltconcrete surfaco, 11 cm asphalt base, 1 cm asphalt sand seal, 15 cm lime flyash stabilized base course, and 40 cm lime stabilized soil subbase. TheExpressway would be operated as a closed toll facility.

3.10 In addition to roadway construction, the Zhengzhou-Luoyang Express-way includest (a) construction of three service areas (about 6,200 m2) atLiylin (Zheng:hou), Shihuiwu (Gonxian) and Luoyang that provide facilities forfuel pumping, vehicle repair, restaurants, parking and rest area, and commer-cial centers; (b) facilities for administration and maintenance of theExpressway (about 30,000 n); and (c) electrical, electronic and mechanicalinstallations required for toll collection, traffic monitoring telecommunica-tions, and lighting of major bridges, interchanges and tunnels. Land for allof the service areas and facilities for the operation and maintenance of theExpressway has been acquired but only tbe three service areas mentioned abovewill be constructed initially, with the remaining smaller service areas (nearinterchanges) to be constructed in the future as the need arises.

3.11 The preliminary and final engineering designs for the Expresswaywere completed by HPDI, and following internal procedures, the preliminarydesign was approved by MOC in 1991. These designs and the related bid docu-ments were reviewed by experts from FINNRA and were found to be satisfactory.Bank staff reviewed the same and concurred with the conclusions of FINNRAxperts.

3.12 The opening of the Expressway would bring a significant increase intraffic to the roads connecting it to the main cities along the existing road.Some of these roads have been recently upgraded and HPCD has plans to improvethe remaining ones, with a total length of about 42 km before 1995. Thebridges at interchanges allow for four lanes which is adequate to accommodatetraffic requirements for 20 years after the opening of the Expressway to traf-fic.

3.13 Constr uction of Provincial and Rural Roads in Northwest Henan. Thiscomponent consists of the rehabilitation and improvement of five provincialroads and six rural roads in the northwest region of Henan Province. All the

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necessary engineering and economic studies, as well as bid documents have beencompleted for these roads. On this basis, these roads are included as a sepa-rate component of the proposed project, rather than under the roads improve-mont program. Theae roads and their lengths are listed below:

Technicalstandard of

Length (km) proposed improvement

Provincial Roads

1. Sanmenxia-Border Road 94.9 II2. Luoyang-Luoyang Yellow River

Bridge Road 19.5 II3. Mengxiang-Qinyang Road 31.6 II4. Jiaozuo-Mengxian Road 25.7 II5. Sanjiaokou - Border Road 8.1 III

Total 179.8

Rural Roads

1. Xinang County: Entrance-Schungqiao 18.2 III2. Xianang Countys Taipingkou-Doyle Road 19.0 lII3. Jlyuang City: Wangwu-Xiaye Road 18.6 IV4. Jiyuang City: Liuzhuang-Nihetou Road 23.2 IV5. Huixian City: Beizhai-Nangpin Road 14.4 IV6. Huixiang City: Gaozhuang-Hankou Road 18.1 IV

Total 11..5

The design and bid documents for these roads were prepared by the respectivelocal highway administrations and reviewed by HPCD. The design and bid docu-ments for one of the provincial roads were reviewed by the 1INNRA experts andwere found to be adequate and form an acceptable basis for soliciting bids.Improvements to these roads include widening, strengthening of pavements,realignment of some sections, reducing number and curvature of curves andvertical grade.

3.14 Road Imorovement Prosram. As noted in Chapter II, Henan's highwaynetwork is small and of low standards. As the traffic level, and the impor-tance of heavy freight vehicles, have grown at a high pace and are expected tocontinue this trend in the future, the inadequacy of the network is rapidlybecoming a major constraint to Henan's development. To reverse this situa-tion, Henan authorities have targeted a substantial increase in overall spend-ing on highways during the 8th PYP, 1991-95.

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3.15 The proposed Road Improvement Program (RIP) component of the pro-posed project is intended to assist in the financing, design and implementa-tion of roads development and improvement included in the current plan. Over-all, Henan has in the past adopted a conservative policy of highway invest-ment, and there is no evidence in the province of over-designed or prematureinvestments. The five provincial and six rural roads in northwest Hanan,whose preparation is now complete and are a separate component of this proj-ect, confirm the rational economic criteria used in the selection of roadinvestments. In light of the high rates of traffic growth, and the poor con-dition of the network, the overall level of road investment proposed for the1993-95 period appears reasonable. RIP subprojects to be funded under theproject will be carefully screened (para. 3.16 and Annex 1).

3.16 The roads to be included under the RIP program will have to meetseveral criteria to be approved for inclusion and to receive funding under theproject. Such criteria consist of:

(a) an Economic Rate of Return (ERR) of at least 12 percent--it isexpected that most RIP subprojects will have an ERR substantiallyhigher;

(b) follow HOC engineering standards (Table 1.7), and sound engineeringand highway safety practices;

(c) comply with environmental and resettlement requirements, similar tcthe other road components financed under this project; and

(d) contracts for execution of the road subprojects would follow pro-curement procedures as detailed in para. 3.63.

3.17 The RIP will be implemented in phases, and HPCD is expected to sub-mit several road proposal packages for Bank approval during implementation ofthe project. An iniial list of candidate subprojects, part of the firstpackage to be financed under the RIP component (Table 3.1) agreed at negotia-tions comprises five proposals for improvement of existing roado (total of 159km). Selection of the remaining subprojects under the first package (fourroads and two bridges totalling 81 km) is expected to be completed upon sub-mission by HPCD, by December 31, 1992, of a reassessment of the subprojects'economic returns (An_nex1, Appendix).

3.18 Suuervilsion of Construction of Exoressway. Although independentsupervision of construction contracts is gaining general acceptance in China,local staff still have only limited experience in the supervision of majorhighway works, particularly those awarded under ICB conditions. Based on theexperience gained from ongoing Bank financed highway projects in other prov-inces, a combined team of local engineers, technicians and other personnel andforeign consultants would be set up to supervise the construction of theZhengzhou-Luoyang Expressway. The organizational arrangements for i-he con-struction supervision of the Expressway as well as the Terms of Reference forthe joint supervision team have been drawn up by HGHCA and found by Bank staffto be adequate. The foreign supervising engineers would be integrated intothe organization with operational responsibilities. Purthermore, the foreignconsultants would help establish procedures at all levels of the supervisory

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work, including on-site inspections and laboratory teoting, ani train localstaff both through formal training sessions and on-the-job. About 110 man-months of foreign consultant services are envisaged for construction supervi-sion and related staff training.

3.19 Sunervision of Construction of Roads in Northwest Henan and RIP. Aseparate supervision group would be set up in HPCD in Zhengshou to have over-all responsibility for supervision of construction of roads in northwest Henanand RIP. This group will be assisted by four subgroups in Xinxiang, Jiazhou,Luoyang and Sanmenxian to manage the roads within northwest Henan and by sub-groups in other key areas to supervise roads included under RIP. However, anadequate number of qualified personnel will be assigned for the site supervi-sion of each road. The supervision units will be provided with the necessaryoffices, laboratory facilities, transport and surveying instruments. Thesegroups will be composed of local personnel and are capable of supervising theworks.

3.20 Equipment. The equipment to be provided under the project has beenidentified by HGHCA (with respect to the Expressway) and by HAB (with resopectto other roads) and reviewed by the appraisal mission. The final agreed listsof equipment together with their estimated costs are available in the projectfiles. These lists include equipment for the Expressway and equipment for themaintenance of roads in Henan Province. However, such lists should be lookedat as subject to reasonable change with regard to type and number, and conse-quently, some flexibility should be exercised during project implementation toproperly allow for changing circumstances and needs.

3.21 Equipment for the Expresswa. To set up and efficiently operate acentral laboratory in support of the construction supervision activities,there is a need for equipment and instruments, perticularly for soils andasphalt concrete testing. In the course of drawing up en Environmental ActionPlan (EAP), the equipment and instruments required to implement the environ-mental Drotection measures have been identified. For the operation and main-tenance of the Kaifeng-Zhengzhou-Luoyang Expressway, equipment requirementshave also been identified. This equipment is in addition to the site labora-tory equipment and surveying instruments to be provided by the contractors forthe civil works and the toll collection, surveillance and comnunication equip-ment to be provided by the contractor for the electrical/mechanical works forthe Zhengzhou-Luoyang Expressway.

3.22 Eguinment for RIP. Northwest Henan Roade and Maintenance of Roads.This equipment consists of urgently required equipment for routine, periedicmaintenance and heavy repair of roads to replenish the equipment fleet of theprefectural and county maintenance units; equipment for supervision of con-struction and testing of roads included in RIP and northwest Honan; equipmentfor application of the road data bank and pavement management system; andequipment for environmental monitoring of roads included in northwest Henan.

3.23 Institutional Strenathenins. The institutional strengthening to beprovided under the proposed project consists of helping a new agoncy (High-Grade Highway Construction Authority) that will be In charge of the Zhengzhou-Luoyang Expressway and other high class roads in Henan Province and fourexisting autonomous, nonline agencies of HPCD. Two of these agencies (Highway

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Institute and Higlhway Vocational School) are training institutes and helpingthem has a multiplier effect embodied in better trainees who in turn will helpHPCD carry out its responsibilities better. Strengthening of the third agency(Scientific Research Institute) is focused on quality conitrol of highways andbridges, environmental issues and a newly created department of transporteconomics. Institutional strengthening of the fourth agency (Planning andDesign Institute) aims at making it function as an effective consulting firm.Overall, environment, transport and enSiueering economics will be the predomi-nant subject areas to be targeted for strengthening. In general, these agen-cies have relatively good staff but they have not been exposed to the recentadvances in the highway field. Also, some of their equipment is obsolete andneeds replacement. In addition, new equipment will be required for new orrecent areas of activities. Consequently, the proposed project concentrateson both training (inside China and abroad) of the utaff of these agencies andtheir equipment needs. Each of these agencies prepared good proposals forinstitutional development which were in turn reviewed by the preappraisal andappraisal missions and found to be satisfactory. Those proposals formed thebasis for the description and composition of this project component as summa-rized in the following paragraphs.

3.24 Hlghwav Institute. The Highway Institute is a oecondary technicalschool that offers training in highways and bridges, automobile operation andservicing, highway transportation management and highway transportationaccounting (Chart 3). Prosently, this institute has an enrollment of 868students and a staff of 198. The institute is funded by the Provincial Educa-tion Commission (Y 1,125/student/year) to cover operating costs and by annualappropriations by HPCD to meet the development needs of the institute. Theskills of the institute's staff need to be improved. Also, the institute doesnot have sufficient equipment and some of the existing equipment is outdated.The proposed project will help meet these deficiencies by providing:(a) training to the staff of the institute, especially in the areas of trafficengineering, environmental protection, transport economics and use and mainte-nance of precision measurement instrumonts, for a total of about 11 person-months, 5 person-months of which would be abroad; and (b) modern equipment foreconomic analyses, highways and bridges especially for geodetic surveying and

quality control purposes, and automobile testing to increase safe performanceof motor vehicles and traffic safety.

3.25 Vocational School. This school was established in 1986 and gradu-ates intermediate level technicians in the areas of automobile operation,automobile servicing, transport management and highway construction (Chart 4).It has an enrollment of about 670 students and a staff of about 210. Theschool does not have enough trucks or simulators for teaching how to drive.Also, it does not have enough equipment and Instruments for testing themechanical and electrical performance of vehicles. Moreover, the school doesnot have enough bighway construction equipment and lacks training models ofroad grading, rolling and surfacing equipment. In addition, the school is -inneed of modern computers and video recording equipment. The proposed projecthelps meet these equipment deficiencies in addition to providing six person-months of experts to train the trainers at the school in the use of the newequipment to be provided.

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3.26 Scientific Research Institute (HSRI). HSRI was established in 1981.It carries out research and development of new technology, including new mate-rials, now techniques and new products in respect of auitomobiles, highwaytransportation, highway engineering, bridgw engineering anc machinery forconstruction and maintenance of roads (Chart 5). It performs structural cal-culations by computer, automobile testing, highway and bridge testing andperforms transportation planning studies. It has a staff of 80. Since 1989,it changed from an institute relying on government appropriated funds to oneoffering technical services for a fee. To further reinforce this trend theproposed project aims at upgrading the skills of some of the key staff byproviding 5 person-months of training abroad and 4 person-months of' traininginside China in the areas of highway and bridge testing, automobile teitingand transport economics (Annex 2). Also, the proposed project helps meetHSRI's needs for additional equipment and instruments for: (a) quality con-trol testing of bridges and highways; (b) automobile testing station, espe-cially an engine performance analyzer, chassis performance tester, noncontactspeedometer; and (c) transport economics, especially computers. Staff will betrained in the use of the advanced instruments and equipment to be procuredunder the project. HSRI will be in charge of the trucking study under thisproject (para. 3.32) and this will further strengthen HSRI's capabilities intransport economics.

3.27 Pl_annina and Design Inst,swte (HPDI). This institute is the onlyinstitute in Henan Province that offers professional services in the area offeasibility studies, planning, surveying, designing and geotechnical studiesof roads and bridges (Chart 6). It has the highest ranking certificates(Grade A) from HOC in engineering design and geotechnical studies. It pre-pared the feasibility, design and bid documents for the Kaifeng-Zhengzhou-Luoyang Expressway. It has a staff of about 300, of whom 16 are senior engi-neers, 70 are engineers and 125 are assistant engineers. The financialsources of the institute are the income it derives from the professional ser-vices it renders, both inside and outside Henan. Hence, HPDI approximates aconsulting engineering firm. To help it become one, the project will assistHPDI in improving its managerial and marketing capability and its technicalcapacity in the areas of photogrametric surveys and transportation economics.The project includes training abroad for two HPDI staff members in engineeringeconcmics and project analysis and domestically for two highway design engi-neers, two engineers in highway and bridge computer-aided design software andtwo surveyors in aerial mapping. The total training effort amounts to about42 person-months. The project will supply HPDI with advanced highway designsoftware, computers and photogrametric survey equipment to help it carry outits work faster and better.

3.28 High-Grade Highwav Construction Authority (HGHCA). This agency ofHPCD (Chart 2) was established in 1990 and is in charge of construction andmanagement of the Kaifeng-Zhengzhou-Luoyang Expressway 'para. 2.20), the firstexpressway in the province &ad this is the right time to get HGHCA on theright track by giving it the needed support. The proposed project will pro-vide about 60 person-months of training to some of the staff of HGHCA in theareas of project management, contract management, pavement construction, traf-fic engineering, operation of toll roads, finance and accounting. Also, theproposed project will provide HOGCA with modern office equipment communication

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facilities and transport vehicles *o as to enable it to effectively manage theconstruction of ehe Kaifeng-Zh.ngzhou-Luoyang Expressway.

3.29 TraininQ. Training to be provided under the project consists ofthree kinds: (a) comprehensive training; (b) supervision training; and(c) training connected with institutional strengthening. In total, the proj-ect provides for training to about 355 people for 390 person-months, of which122 people will be trained for 132 person-months outside China (Annex 2). Thetraining program shown in Annox 2 should be looked at as subject to reasonablechange with regard to training courses, number of trainees and duration oftraining, and consequently, some flexibility should be exercised during proj-ect implementation to allow for changing circumstances and needs. Supervisiontraining consists of training engineers in China for a total of 130 person-months and 30 people outside of China for a total of 30 person-months. Thistraining is included in the supervision component of the project. Trainingunder institutional strengthening consists of training for 76 people for atotal of about 122 person-months and its cost is reported within the cost ofthe institutional training component. This section deals with comprehensivetraining only.

3.30 The comprehensive training program was prepared by HPCD and wasreviewed by the appraisal mission and found to be satisfactory. It consistsof about 108 person-months of training, comprisingt (a) inspection toursabroad for 40 senior personnel for a total of 20 man-months; (b) medium-termtraining abroad for 21 people for a total of 30 person-months; and (c) domes-tic training for 58 people for a total of 58 person-months (Annex 2). Themain training courses includet pavement construction, project management,materials testing, especially asphalt, traffic engineering operation of tollroads, highway maintenance, road data bank and pavement management systems,management and utilization of equipment and financial management and account-ing. As with ongoing Bank-financed provincial highway projects, the highway-related training program for provincial staff would be coordinated by TCU ofHOC in the interest of consistency, efficiency and economy. The trainingcourses would be programed in consultation with PTDs and the implementationadministered by TCU. Because of the large size and diversity of the trainingcomponent, HPCD has agreed to strengthen its Education Department (which is incharge of training) so that it can successfully implement this training pro-gram. Training abroad would be preceded by training within China with thebest performers selected for training abroad. Also, all trainees to be sentabroad would have a good working knowledge of English or else would take athree-month English language course prior to traveling abroad. At negotia-tions. agreement was reached that the training. both comprehensive and con-nected with institutional strengthening. would be carried out in accordancewith iro rams accentable to the Bank.

3.31 Truckint Study. The proposed trucking study would help Henan Prov-ince identify reasons behind the poor quality of road freight services, theirhigh coots, and shipper.' lack of confidence in public carriers resulting inincreasing purchase of freight transport equipment by industrial and commer-cial enterprises. The study would also make recommendations to tackle themain problems identified. This study would be part of the provincial-basedstudies of highway sector issues, to be supported by Bank highway projects, asagreed between HOC and the bank. The study would be expected to be useful to

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other provinces, *ince the economic framework of trucking is relatively simi-lar among provinces.

3.32 The study would cover the following areas: role of the governmentagencies; laws and regulations; fiscal conditional corporate structures;freight forwarding; transport volume levels; equipment; technical regulations;tariffs; marketing and sales; fuel; maintenance and repair of equipment; andtraining. The study would be conducted in two phases, the first basically fora diagnosis of the trucking industry and aervic*s, and the second to preparerecommendations for improving their efficiency and quality. A review panel,comprising provincial and central government agencles, and the Bank, willreview the report. on completion of the first phase and will provide guidancefor the scope and direction of the Second Phase. The review panel will alsoreview the Phase II report, with a view to fast implementation of the report'srecommendations. The study, which will be conducted by the Henan ScientificResoarch Institute with assistance from foreign consultants to be financedunder the project, is expected to last one year. Draft Terms of Reference forthe study are in Annex 3 At negotictions. aareement was reached that HenanProvince will: (a) bv December 31. 1994. undertake and complete the truckintstudv in accordance with terms of reference satisfactory to the Bank: (b) byMarch 31. 1993. establigh a review panel comprisint renresentatives of theBank. the central soverzment and Henan Province for, the ournose of reviewingthe results and recommendations of the studyt (c) upon completion of thetruckina study. aubmit it to the review panel for its comments: and (d) takega2rooriate steps to imlement the recommendations of the studt takina intoagecount the comments made by the review panel.

D. Environmental Assessment

3.33 Zhenazhou-Luoyana Expresswa. An environmental assessment (EA) wasprepared for the proposed Kaifeng-Luoyang Expressway by the Henan ProvincialEnvironmental Research Institute, and submitted for GOC environmental reviewin June 1989. The EA identified several areas of the proposed expressway ashaving potentially significant impact on the environment. The most importantof these impacts were related to archeological issues, noise, dust, trafficand social disruption during road construction and noise during operation ofthe Expressway. An environmental action plan (EAP) was prepared identifyingmethods to eliminate or mitigate these impacts on the environment during theconstruction and operation of the Expressway and the organizational and moni-toring arrangements. The engineering design and the technical specificationsfor the Expressway incorporate the mitigating measures required, and appropri-ate arrangements have been made to ensure their compliance during constructionof the Expressway. In particular, the terms of reference for the consultantswho will supervise construction of the Expressway include environmental super-vision. Also, equipment for envirormental monitoring are provided under theproject (para. 3.21) and will be procured early during implementation of theproject (par&. 3.55). The ZAP was reviewed during project appraisal and wasfound to be satisfactory. In particular, it complies vith the Bank's policyon the preservation of archeological sites. A summary of the main finding, ofth EL and ZAP is pr-esnted in Annex 4, and copies of the EA and RAP reportsare available in the Project File. Agreement was reached at nexotiations wlththe HPG tha*. -he envlronmental orotection measure- stloulated in the RAP with

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respect to the Zhenashou-Luoyana Hxnresew v would be carried out In a mannersatisfactory to tha Bank.

3.34 Provincial and Rural Roadg In Northwest Henan and Road ImnrovementProgrm. Since most of the works under these two project components wouldinvolve upgrading of facilities, rehabilitation and maiutenance of smallerroads, thoy are not expected to have a significant impact on the environment.Neverthelos,, the potential for any adverso effect of each subproject on theenvironment will be fully assessed.

3.35 Of the 11 provincial and rural roads In northwest Ronan, only one,which runs from the Sanmenxia town to the Shaanxi provincial border, willrequire significant construction on a new alignment. An EA and CAP wore pre-pared for this section of new alignment by the Henan Provincial ZivironmentalRessarch Institute. The EA and HAP for this provincial road were reviewedduring appraisal and found to be satisfactory.

3.36 Under the RIP component, the process of subproject identification,prioritization and preparation of road subproject will be programmatic, andessentially continuous over the loan implementation period. As such, only thefirst of several batches of subprojects was available by loan negotiations.The HAB is completing preparation of a Sectoral EnvironmAntal Asseesment (SEA.that will address the kinds of environmental Impacts expected from each typeof subproject (i e , road widening, pavement improvement, resurfacing, etc.)supported under the RIP component of the project. The SE will include ascreening process for identifying subprojects that might require a full sub-project specific Rh and HAP, a sectoral environmental action plan for subproj-ects that do not require a subproject specific HA, and an evaluation/appr'walprocess that will include Bank review of the environmental documents preparedfor all subprojects that will be submitted for funding during project imple-mentation. HAB has prepared a preliminary SEA, and a complete SEA is expectedto be submitted to the Bank by November 30, 1992.

3.37 For subprojects with an established risk of adverse impact on theenvironment, as identified by the screening process being developed by theSEA, a subproject-specific EA would be conducted and an ZAP prepared. Forsubprojects for which the onvironmental screening established that there is nopotential environmental risk, the appropriate elements of the Sectoral Envi-ronmental Action Plan would be applied with regard to the actions to be takenin the design and implementation. These actions would be sumarized in anabbreviated subproject specific H&P thit would be attached to the projectpreparation documents submitted to the Bank for approval prior to inclusion ofthe subproject in the lending program. Astreemnt wao reached at neaotiationswith the HPG that for the 2rovincial and rural roads in northwest Henan andfor each subt2nect of the RIP that the environmental urotection measuresstioulated In the "Zs would be carried out in a manner satisfactory to thelAnk.

S. Land Acqulition and Resettlemn,t

3.38 Zhentzhou-Luovang exresway. The Land Administration Law of thePRC and Henan Provincial Land Administration Regulations are the legal basisfQr the planning and implementation of land acquisition and resettlement for

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any land acquisition required for the project. The following two provincialdocuments are also applied when land acquisition li initiated:

(a) Implementation methods of "The Law of Land Management of Henan Prov-ince"; and

(b) No. 113 (1991) Document of Henan Administration of the People'sGovernment of Henan Province: "The Circular on Printing and IssuingCompensation Standards of Land Acquisition for State Construction ofHenan Province."

3.39 Land acquisition and resettlement is well regulated in China and theprocedures and compensation standards, in general, conform to the Bank's poli-cies on involuntary resettlement. A Resettlement Action Plan (RAP) for thoZhengzhou-Luoyang Expressway has been prepared by HGHCA and reviewed by Bankstaff and found to be satisfactory. Land acquisition and resettlement willaffect 117 administrative villages in 21 townships. Approximately 4,408households or 17,245 people will be affected by the project and will be com-pensated and resettled. The resettlement process is implemented by the localgovernments at city, county, township and village levels in accordance withthe terms and agreements signed between HG8CA and the respective local govern-ments and the land bureaus. Land replacement is provided through reallocationof land within the same villages, any surplus labor is absorbed into villageor township enterprises. Resettlement in some areas has already comsenced,and it is expected that resettlement along the highway alignment will be com-pleted by March 1993.

3.40 A summary of the RAP for the Zhengzhou-Luoyang Highway and its sta-tus is presented in Annex 5 A copy of the RAP is available 4n the projectfile which has been reviewed by Bank staff and found to be &..tisfactory. Atneaotiations. aareement was reached with the IGECA that all land acouisitionand reset.lement activities &ad monitorinat of resettlement with respect to theZhengzhou-Luovan2 Highwav would be com2leted accordint to the RAP in a mannersatisfactory to the Bank.

3.41 Provincial and Rural Roads in Northwest Henan. Resettlement ActionPlans were prepared for five provincial roads (four of which require landacquisition and resettlement) and six rural road projects in northwest Henan.Approximately 430 households and 2,120 people will be affected by the ruralroads and 596 households and 2,754 people will be affected by the provincialroads development program.

3.42 Land acquisition, resettlement and monitoring of resettlement forthe provincial and rural roads development program will be carried out in thesame manner as for the Zhengzhou-Luoyang Highway, with the respective localgovernments responsible for implementation of resettlement plans. At negotia-tions. areement was reached that theso activities would be comDleted accord-inx to the RAPs in a manner satisfactory to the Bank.

3.43 Road Imorovement Protram. As this is a programmatic component wheresubprojects will be defined during lmplementation, a reliable estimate of thepeople affected by the various subprojects in RIP ca,not be made at thisstage. However, an understanding was reached with during project preparation

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that the land acquisition, resettlement and compensation procedures to befollowed would be the same as that applied for the Expressway, which has beensatisfactory. The respective actions to be taken regarding land acquisitionand resettlement would be outlined in RAPs and correlated with the preparationof the engineering and evaluation process for the eubproject packages, requir-ing submission for Bank approval for financing under the project. Aareementwas reached with HPCD at netotiations that RAPs for subnrolects under the RIPwould be carried out in a manner satisfactory to the Bank.

3.44 The implementation of the RAPs for the Zhengzhou-Luoyang Expressway,the roads in northwept Henan, and the subprojects included in the RIP would bemonitored through the routine project supervision and quarterly progressreporting (para. 3.71).. The monitoring of the effectiveness and the socio-economic impact of resettlement on the population would also be undertaken bythe Land Management Bureau jointly with HGHCA in case of the Expressway andwith HAB In the case of the remaining roads. Atreement was reached with HPCDat negotiations that: (a) the monitoring teams to be established bv April 30L1993 would include aualified social ocientists accegtable to the Bankt and (b)monitorina r-eorts for the Expresawav and other roads would be submitted tothe Bank by December 15. 1993. and by the same date for the followina twoyears (1994 and 1995).

F. Cost Estimates

3.45 The project is estimated to cost about Y 1.64 billion or about$300 million, including land acquisition and physical and price contingenciesas sumnarized below and as detailed in the Project Cost Summary (Table 3.2).The foreign exchange cost is estimated at about $120 million, or about 40 per-cent of the total. Base costs are estimated in March 1992 prices. Physicalcontingencies are calculated at 10 percent of the base cost of works and con-struction supervision of the highway component. Price contingencies have beencalculated for both foreign and local costs, using international annual esca-lation factors of 2.8 percent in 1992, 3.9 percent in 1993, 3.9 percent in1994, 3.8 percent in 1995 through 1997 and price escalation factors for theYuan of 6.0 percent in 1992, and 5 percent thereafter.

3.46 The costs of civil works are based on work quantities calculatedfrom preliminary engineering designs, except that in the case of Section No.10, the actual price submitted by the successful bidder Was used. The costswere computed on the basis of MOC's standard manuals for labor and equipmentproductivity, the related annually-updated costs and the current market costsof materials. The unit rates were chocked against the unit prices provided inrecent bids for similar highway works executed under Bank financing. However,in the case of some of the roads proposed to be included in the Road Improve-ment Program, costs are based on very preliminary designs.

3.47 The estimated cost of equipment is based on prevailing prices andthose quoted by manufacturers and suppliers and includes the cost of equipmentdelivered in Zhenguhou, spare parts and related training if needed to operateand maintain the equipment. The estimated cost of consulting services isbased on recent contracts for similar services under ongoing highway projects.

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PROJECT COST 8ULIARY($1.0 - Y 5.45, March 1992 prices)

Foreigncosts I

Local Foreign Total Local Foreign Total of total----- 1Y mdlion) ------ ---- Million) -----

WorksZhengshou-Luoyasg Zzpresvay 267.22 267.21 543.43 49.03 49.03 98.06 50.0Provincial and rural roads In

NW Henan 122.02 61.98 !84.00 22.39 11.37 33.76 33.7Road Improvement Program 249.19 150.27 399.46 45.72 27.57 73.29 37.9

Subtotal 638.43 479.46 1.117.89 117.14 07.97 205.11 42.9

Supervision of construction 12.44 9.15 21.59 2.28 1.68 3.96 42.4Equipment 6.72 55.73 62.45 1.24 10.23 11.47 89.2Institutf.onal strengthening 1.83 9.75 11.58 0.33 1.79 2.12 84.4Training 0.52 3.51 4.03 0.09 0.65 0.74 87.8Trucking Study 0.59 1.56 2.15 0.24 0.23 0.47 48.9

Total bass cost 660.53 559.16 1.219.69 121.32 102.55 223.87 45.8

Phyblcal contingencies 65.10 48.90 114.00 11.90 9.00 20.90 43.1Price contingencls 117.61 46.11 163.72 21.59 8.45 30.04 28.1Land acquIsition & resettlement 141.10 0.00 141.00 25.89 0.00 25.89 0.0

Total orolect cost 984.34 654.17 1.638.51 180.70 120.00 300.70 40.0

G. financin&

3.48 The Bank loan of $120 million would finance about 40 percent of thetotal project cost or about 100 percent of the foreign exchange cost. TheCentral Government would provide the equivalent of about $37 million while theHenan Provincial Government would provide th, equivalent of about $144 millionto meot the remainig costs of the project, Including contingencies. Theproposed onlending terms for the loan between the Ministry of Finance andHenan Provincial Government are: 20 years, Including 5 years of grace, at75 percent of the rate payable to the Bank by the Borrower with 0.75 percentper annum commitment fee on the outstanding balance. Henan Provincial Govern-ment will bear the foreign exchange risks. The details of project financingare shown belows

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FINANCING PLAN($ million)

Component Government Bank TotalProvince Central

Zhengzhou-Luoyang Expressway 12.33 36.70 49.03 98.06Provincial and rural roads innorthwest Henan 22.39 0.00 11.37 33.76

Road Improvement Program 45.72 0.00 27.57 73.29Supervision 2.28 0.00 1.68 3.96Equipment 1.24 0.00 10.23 11.47Institutional strengthening 0.33 0.00 1.79 2.12Training 0.09 0.00 0.65 0.74Trucking study 0.24 0.00 0.23 0.47Contingencies 33.49 0.00 17.45 50.94Resettlement and land acquisition 25.89 0.00 0.00 25.89

Total 144.00 36.70 120.00 300.70

Z of total cost 48.0 12.2 39.9 100.0

H. Implementation

3.49 Imnlementint Aaencies. The implementation of the project would bethe responsibility of HPCD. HGNCA would be the executing agency for implemen-tation of the Zhengzhou-Luoyang Expressway including its construction, Super-vision, equipment to operate and maintain the Expressway and for monitoringand testing environmental protection. Also, EGaCA would be in charge of pro-curing equipment for its own institutional strengthening. The Highway Admin-istration Bureau will be the executing agency for provincial and rural roadsin northwest Henan, RIP, equipment for maintenance of provincial and ruralroads including PS and RDB, and equipment for institutional strengthening ofthe Highway Institute, the Vocational School, the Scientific Research Insti-tute and the Planning and Design Institute. The Education Division of HPCDwill be the executing agency for the training, including the part under insti-tutional development, and NSRI will be the executing agency for the truckingstudy. Since the Expressway Is a segment of the national highway network, HOCwold also provide general supervision and guidance for the execution of theExpressways.

3.50 gxnressway. The final engineering design and bid documents for theZhengzb.ou-Luoyang Exproseway will be ready for distribution to the prequali-fied contractors by mid-June 1992. Advertisement to prequalify for contrac-tors wa9 issued in mid-February 1992, and the prequalification process Isexpected to be completed by mid-June 1992. Acquiring of land and the reset-tlement process will be completed by March 1993. The construction of theExprossway would be carried out under four ICB contracts and one LCB contract(Section No. 10--21.5 km before Luoyang). Work on the ICB contracts is

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expected to start around the beginning of January 1993 and to be completed byend of June 1996. The LCB format for Section No. 10 was selected because theExpressway traverses an archaeologically important area whose extent cannot bedefined in advance and is thus not suitable for ICB (pars. 3.62). Work underthe LCB contract started in April 1992 and is expected to be completed byOctober 995. The installation of electrical, electronic and mechanical sys-tems for the operation of the Expressway is scheduled to commence around theend of 1994 and be completed by the end of March 1996 (Annex 6). The con-struction of service facilities along the Expressway would be a continuousoperation during the 42-month implementation period.

3.51 Sunervision of Construction of Exnresswaa. The supervision of con-struction of the Zhengzhou-Luoyang Expressway would be carried out by a jointlocal/foreign supervision team headed by a chief supervision engineer withheadquarters in Zhengzhou. There would be a resident engineer on site foreach of the five contract sections reporting to the chief supervision engi-neer. About 120 local personnel would be permanently engaged in supervisionduring construction. The selection of local personnel is underway. However,in the case of Section No. 10 in the archeological zone, local staff, whosekey members have been trained by MOC and approved by the Bank, have startedsupervising the ongoing work. The foreign experts consist of four seniorhighway engineers (one to work with the chief supervision engineer, one towork with the resident engineer for contract sections 6, 7, 8 and one expertto work with the resident engineers for contract sections 9 and 10, one engi-neer for the electrical/mechanical contract) and two experts for formal train-ing of local personnel prior to starting supervision of the sections of theExpressway to be constructed under ICB arrangements. Terms of reference forthe experts have been finalized and approved by the Bank. Invitations toshort-listed firms were issued in March 1992, and the evaluation of proposalsvas completed by end of July 1992, and a contract with a foreign consultantwas signed in September 1992. Training for local personnel in constructionsupervision is expected to commence by the beginning of October 1992. Actualsupervision of construction of the Expressway is expected to start by the

beginning of January 1993 (Annex 6).

3.52 Provincial and Rural Roads in Northwest Henan. Prequalification ofcontractors for construction of provincial roads in northwest Henan started inMay 1992 and is expected to be finished by the end of October 1992. Thedesign and bid documents for these roads as well as those for the rural roadsin northwest Henan were prepared by local administrations responsible for them

and were reviewed and approved by HPCD. Construction of the provincial roadsin northwest Henan is expected to start in April 1993 and be completed by endof September 1996 (Annex 6). Construction of the six rural roads in northwestHenan is expected to start in early 1993 and be completed in about 24 months.Supervision of construction of provincial and rural roads in northwest Henanwill be conducted by a special group to be set up in Zhengzhou assisted byfour subgroups in Xinxiang, Jiazhou, Luoyang and Sanmenzia. The staff ofthese &upervision groups will be local and primarily from local highwaydepartments. Some of these staff have attended the supetvision training pro-

grams run by HOC.

3.53 LIP. The relevant design institutes of municipalities and prefec-tures would be responsible for the preparation of the design and bid documents

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for the subprojects under RIP. These documents would be reviewed by HAB.Construction of the subprojects included in the first package of the programis scheduled to commence in 1993 and be completed in 12-30 months. The designand evaluation of subprojects to be included in subsequent packages of RIPwould be submitted to the Bank for approval sequentially at about 6-9 monthsintervals. The program as a whole is scheduled to be completed by the end ofJune 1997. Construction of subprojects under RIP would he supervised by thesame group referred to in para. 3.52. This group will uatablish subgroups inthe main cities in the area(s) where the subprojects are ocated, and a sitesupervision team would be assigned to each subproject. These subgroups andrelated site teams are capable of supervising the works, but their laboratorytesting facilities need strengthening. To remedy this deficiency, laboratoryequipment would be purchased under the project. Also, their needs for trans-port would be provided under the civil works contracts for the implementationof RDP. To help increase the effectiveness and coordination -if this supr,. ti-sion setup, the project provides for purchase of the needed communica"_onequipment. Details of the RIP program are in Annex 1. Agreement was reachedat negotiations that subDrolects to be included under the RIP Ald beselected in accordance with criteria and grocedures satisfactory to the Bankand would be submitted to the Bank for aDDroval prior to disbursement.

3.54 Training. Because of the size and scope of the training included inthe project, HPCD will strengthen its education division in charge of thisactivity by assigning a bilingual secretary to this division and supplying itwith a computer and related software and office equipment. Formal selectionprocedures for candidates to be trained will be developed and agreed to withthe Bank. Those to be trained abroad will be giver three months of Englishlanguage training. Each trainee will be required to submit a report on train-ing received to his/her parent department or agency. Moreover, HPCD has indi-cated that training to be provided under the project will be related to careerdevelopment and the professional growth of the selected staff. The comprehen-sive training program will be open to all highway staff in the province andwill be centrally administered by HPCD.

3.55 Eauipment for the Expressway. The responsibility for the procure-ment of equipment would be divided between the two executing agencies. HGHCAwould be responsible for the procurement of equipment related to the Express-way component, such as equipment for the central laboratory, environmentalprotection and the operation and maintenance of the Expressway. The equipmentof the central laboratory and environmental protection would be procured at anearly stage of project implementation (1993), while that for the operation andmaintenance of the Expressway is scheduled to be procured towards the end ofexpressway implementation (late 1995 or early 1996).

3.56 The responsibility for the procurement of equipment related to theroads in northwest Henan and RIP components of the project would rest withBAB. The survey and laboratory equipment would be procured at an early stageof project implementation, followed by procurement of maintenance equipment.RDB and PMS related equipment is scheduled to be obtained during 1993/94.

3.57 The project as a whole is scheduled to be completed by the middle of1997 with the loan closing date stipulated as June 30, 1998. The implementa-tion schedule for the project is presented in Annex 6.

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I. Procurement

3.58 Procurement under the project would be carried out as *hown in thefollowing tables

TotalProcurement method project

Project component ICB LCB Other fP cost-(----------Simlion) -----------

Works

Zhenguhou-Luoyang Ezpressway 103.93 12.70 5.00 - 120.93(49.60) (6.10) (2.42) (58.12)

Provincial and rural roads Innorthwest Henn 39.35 2.73 _ 42.08

(12.61) (0.87) (13.48)

Road Improvement Program 65.76 25.00 - 90.76(23.38) (8.90) (32.28)

Eapressway 3.86 - 2.60 - 6.46(3.49) (2.32) (5.81)

Prov fcial and rural roads 3.62 - 2.41 - 6.03(3.20) (2.13) (5.33)

Intitutlonal strengthening 0.98 - 0.93 - 1.91(0.81) (0.77) (1.58)

Trucking study _ 0.09 - 0.09(0.08) (0.08)

Teehncal nad Consultina ServicesSupervision of construction of

Expressway - - 4.91 - 4.91(2.08) (2.08)

Institutional strengthening--training - - 0.40 - 0.40

(0.36) (0.36)

Training - 0.80 - 0.80(0.70) (0.70)

Truckin study - 0.44 - 0.44(0.18) (0.18)

Land acoulsltion and nreettlement - - - 25.89 25.89

Total 111 117.U1 4S.31 A5.89 300.70t57.10) (42,091 (20.81) Q.02) (120.00O

Notet Figures In parenthe"s represent the moants finaed by the Bank Group. All flguresinclude estimted physical ad price contingencies but exclude cost of land acqulsitionand resettlement, which is shown as a separate component, and are rounded.

flft Not Dank-finaned.

3.59 The procuroebnt arrangements for tho project have tken into accountthe experience gained from the previous Bank-financod highway project.. Theprocurement documentation, Including that for prequalification of contractors,

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ICB and LCB for civil works and goods has re-ently been standardized forChinese conditions in cooperation between the Chinese government and the Bank.The new set of model documentation will be used for all relevant procurementprocesses under the project. In particular, prequalification criteria forcivil works under ICB procedures have been tightened and are now based onperformance requirements pertinent to each of the contracts. Under previoushighway projects force account was accepted by the Bank as a mode of implemen-tation for minor and scattered civil works in recognition of the scarcity ofconstruction industry units, particularly in the more remote areas in thecountry. however, during recent years, a sufficient number of contractingunits became capable of undertaking road improvement works through contractsawarded following a competitive bidding process. Since the capacity of thecontracting units is still limited, providing opportunity under Bank-financedprojects for local construction units would be beneficial for further techni-cal development and growth of the contracting industry.

3.60 Works. Except as noted below, contracts for civil works will beprocured under ICB. There will be four contracts in this category in theZhengzhou-Luoyaug Expressway with an estimated cost of $103 million. Bids forthese cont=acte will be invited and awarded concurrently to allow qualifiedfirms to bid for one or several contracts and make them more attractive tolarge contractors. Other works including provincial and rural roads, roadimprovements and small service facilities (toll stations, maintenance depots,servico and roet areas, administrative buildings, etc.) may be awarded follow-Ing local bidding procedures (LCB) acceptable .to the Bank. Foreign firms willnot be precluded from bidding for these contracts if they wish to do so.These contracts are smll in value (ranging from $0.2 million to $5 millionand totalling $120 million), scattered throughout the province and would beimplemented over a four-year period. Therefore, ICB is neither justified norpractical. All contractors for contracts costing more than $10 million willbe subject to prequalification. Domestic contractors competing under ICB willbe eligible for a 7.5 percent price preference. Domestic contractors areexpected to be competitive for all contracts under this project.

3.61 In the case of osall civil works contracts and those located inremote sites, recent experience in similar projects has been that only the fewconstruction entities located nearby the site submit bids. Larger agencies donot want to mobilize to remote sites for s,iall contracts. To expedite pro-curement of these small contracts and ensure sufficient competition, contractscosting $2 million or les up to an aggregate amount of no more than $33 mil-lion, may be awarded under local bidding procedures under which at least threebids will be invited from qualified contracts and bids will be publiclyopened. It is impo.tant to note that small works used to be carried out byforce account. Under this project, they will be put out for competition.

3.62 One section of the Expressway costing $12.7 million crosses a sensi-tive arch"aological area. There is uncertainty on the extent of the archaeo-logical finds and the relocation and interruptions necessary in the course ofthe works. Because of these complications, and of the need to protect thiscultural "aset the Government decided to start this contract early with alocal contractor selected under local competitive procedures. The contractwas signed in April 1992. In view of the circumstances of thie advanced pio-curement action to avoid project commissioning delays, retroactive financing

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is recommended. The amount subject to retroactive financing is estimated atabout $2.5 million. All retroactive financing would be within the maximumperiod of 12 months prior to the expected date of loan signing.

3.63 EpuinMent. All contracts for goods and equipment, with certainexceptions noted below, will be awarded under ICB. For specialized equipmentand where the number of suppliers is small, limited international biddingwould be followed, in an aggregate amount not exceeding $2.0 million. Allother items or groups of items covering minor maintenance equipment, equipmentfor RDB/PMS, laboratories, research and environmental protection purposesestimated to cost less than $200,000 per contract package, in an aggregateamount not axceeding $3.0 million, may be procured following shopping proce-dures on the basis of a comparison of pr.,ice quotations solicited from at leastthree suppliers eligible under the Bank Guidelines for Procurement. Domesticmanufacturers competing under ICB will be eligible for a margin of preferencein the comparison of bids of 15 percent for goods, or the prevailing customduties, whichever is lower.

3.64 Consultants. Foreign consulting expertise needs were identified forconstruction supervision, staff training, and trucking study although localexpertise available in the various provincial universities and institutes inthe subsector would be used as much as possible. All consultants would beemployed under the terms and conditions acceptable to the Bank in accordancewith Bank Guidelines on the selection of consultants. Because of the need tohave the local supervision staff trained and -eady to start supervision ofconstruction of the Expressway by the time contracts are signed with contrac-tors, HPCD requested that the Bank allow advance contracting for the servicesof the foreign consultants for supervision of the construction of the Express-way and retroactive financing of the portion of the consulting servicesrequired for training of local supervision staff and mobilizing the experts.The amount subject to retroactive financing is estimated at about $500,000.However, all of this amount will be within the maximum period of 12 monthsprior to the expected date of loan signing.

3.65 Bank Review. All contracts for civil works and goods with an esti-mated cost of $2 million or more and all consultants' contracts will be sub-ject to Bank prior review. This represents about 84 percent of the estimatedtotal contracts by value. All other contracts will be subject to ex-postreview.

J. Disbursements

3.66 Disbursement of the loan/credit would cover: (a) 50 percent of thetotal expenditures for civil works of the Zhengzhou-Luoyang Expressway;Cb) 70 percent of the total expenditures for the supply and installation ofelectrical and mechanical equipment for the operation of the Expressway;(c) 34 percent of the total cost of construction of provincial and rural high-ways in northwest Henan; (d) 38 percent of the total construction cost of RIP;(e) 100 percent of foreign expenditures for directly-imported equipment or100 percent of local expenditure (ex-factory) for locally-manufactured equip-ment and 75 percent of local expenditures for other items procured locally;(f) 100 percent of expenditures for consulting services and staff training.

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3.67 To facilitate disbursements, a Special Account would be opened withan authorized allocation of $7.0 million equivalent, the estimated averageexpenditures for a four-month period. The account would be opened in US dol-lars in a bank acceptable to the Bank and managed by Henan Provincial FinanceBureau- Applications for replenishment of the Special Account would be sub-mitted monthly or whenever the Special Account is drawn down to 50 percent ofits initial deposit, whichever comes first. A schedule of estimated disburse-ments is given in Table 3.3 which takes into consideration the project dis-bursement profile for transport projects in China. The proposed closing dateis June 30, 1998.

3.68 Disbursements would be made against priced contracts for the civilworks and for he delivery and installation of the equipment. Interim certif-ication of civil works completed and costed at unit rates in the contractswill be prepared by the contractors, reviewed by the supervision teams/unitsand payments authorized by HGHCA and HAB. Retroactive financing of up to$3.0 million would be applied to expenditures made after March 31, 1992 forContract No. 10 for the Zhengzhou-Luoyang Expressway ($2.5 million) and forconsultants for supervision of construction of the Expressway and training oflocal supervision staff ($0.5 million). Disbursements for staff training inChina or abroad will be made against the actual coste of travel, subsistenceand tuition or training fees. In case of expenditures relating to contractsfor works and goods, each valued less than $200,000 equivalent and expendi-tures for training, reimbursement would be made on the basis of SOEs. Docu-mentation supporting SOEs would be retained by the implementation agencies andmade available for review by the Bank supervision missions.

K. Audit&na

3.69 The Foreign Investment Audit Bureau of the State Auditing Adminis-tration (SAA) will be roaponsible for the auditing of project expenditure..A-reement was reached with Henan Provincial Government durina netotiationsthat the accounts of proiect-related expenditures would be audited by indeoen-dent auditors acceptable to the Bank and that audit renorts would be sent tothe Bank for review within six months of the close of each fiscal year. TheBank Group currently accepts SAA audits for this purpose.

L. Prolect Supervision. Reportina and Monitorina

3.70 The project would be supervised through Bank missions whose fre-quency would be guided by the progress of the works. However, on the average,a mission at about 6 months intervals would be mounted; a Supervision MissionPlan is presented in Annes 7. In addition, the Bank would monitor progress ofimplementation of all project components through quarterly progress reports tobe submitted by HPCD. It is estimated that over the implementation period ofthe project the total time expended on supervision would be in the order of 50staff-weeks. Regarding reporting requirements, an understanding was reachedduring appraisal with HPCD concerning the foi-mat of the quarterly progressreports. This format includes parameters for progress monitoring purposes. Acopy of a quarterly progress report outline is available in the project file.

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IV. ecoNotc EVALUATION

A. Obiectiveo

4.1 The proposed project would support the development objectives of the8th FYP for Henan Province, including enhancing China's physical and economicintegration. The proposed road improvements and the institutional componentswould help redress widespread transport bottlenecks, strengthen planning andprogranming of the road netwo-rk and improve efficiency in the movement offreight. In view of Henan's strategic location an a hub of the national landtransport systems, by reducing physical constraints to long-distance move-ments, the proposed project also will be expected to support the governmentobjective to expand interprovincial trade.

B. Benefits and Beneficiaries

4.2 Savings in operating costs for freight and passenger vehicles,reduction in travel time and in congestion, and increases in road safety, andthe provision of year-round, low-cost access to poverty stricken areas of theprovince by motorized vehicles will be the main benefits of the proposed roadinvestments. Construction of the Zhengzhou-Luoyang Expressway will signifi-cantly enhance safety for the large number of tractors and other slow-movingtraffic remaining on the existing road, as the heavier and faster vehiclesmove to the new expressway. By reducing Toad congestion, the new expresswaywill '.1so lower gasoline consumption and thus vehicle emissions, an importantnonquantifiable economic benefit for Henan's already highly polluted air.

4.3 While the project's institutional benefits are not quantifiable,they are significant: notably, they include the transfer of modern highwaytechnology and the strengthening of its management; improved highway invest-ment planning, and laying the foundation for more efficient operations andmanagement of trucking operations. The latter should, over time, allowgreater competition in trucking, thus leading to a substantial reduction inthe cost to the operators as well as to the shippers of moving freight byroad.

C. Economic Analysis

4.4 The economic evaluation of the project components, described below,has been based on 1991 prices for all costs and benefits, net of taxes, andappropriately adjusted to economic values to reflect the opportunity costs ofresources. Investment costs are net of price contingencies

4.5 Table 4.1 shows the economic and financi-al costs and the conversionfactors used to determine the economic costs of the Zhengzhou-Luoyang Express-way. Among key construction inputs, unskilled labor is overpriced (conversionfactor 0.66) and local steel and cement are severely underpriced (conversionfactors of 2.3 and 3.8, respectively). The overall conversion factor for theExpressway's investment costs, taking into account both the unit conversionfactors and the amount of the different inputs, is 1.25. Similar factors wereused to determine the economic investment costs for the other project compo-nents. Economic values were also used in the quantification of benefits.

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Zhenxzhou-LuovanZ Exnressw v

4.6 The proposed Zhengzhou-Luoyang expressway (120 km) and its extensionto Kaifeng (an additional 74.9 km, being constructed with provincial financ-ing), will run parallel to and some 5-30 km south of the Yellow River. Itwill provi0e a modern highway facility to Henez's main economic corridor andwill also be an essential link of a major, national, interprovincial roadproviding the 7-province Yellow River Economic Region (Qinghai, Gansu,Ningxia, Shanxi, Shaanxi, Henan and Shandong) with an efficient connection toocean port facilities. The Expressway will strengthen Zhengzhou's logisticalrole as one of China's key transport hubs,

4.7 In addition to shortening by 36 km the existing road distance of 156km between Zhengzhou and Luoyang, the Exprewsvay will allow faster speeds andlower operating costs. Plans for modernization of national route 310 beyondLuoyang and Kaifeng are included in Henan's 8th PYP, as well as in those ofthe neighboring provinces. Such plans envisage improvement of the roadSanmenxia to Shaansi province border, included in the proposed project, and,in Shaanxi, improvement of the t.ontinuation from the border until connectionwith the existing expressway to Xi'an. Improvements aleo are planned in theprovinces to the east, connecting ultimately with the modern port ofLianyungang.

4.8 Traffic. Traffic projections for the economic analysis have beenbased on an extensive origin-destination survey carried out by HOCD in 1989,which divided the area of influence of the Expressway into 21 zones. Esti-mates of the traffic exected to use the new road have been based on: (a) adetailed analysis of traffic by zones; and (b) on the vehicle operating costson the new and old roads, including the costs of reaching the new road, whichis located some 3-14 km north of the existing road. Since slow-moving vehl-cles will not be allowed to use the Expressway, this traffic Is assumed toremain on the existing road. In view of the significantly lower rail faresand rates compared with existing road transport costs and rates, it wasassumed that traffic from the railway would not be diverted to the new road.This is a conservative assumption, and the situation may change as railway-road tariffs differential continues to decrease and the quality of truckingservices improves. Traffic analysis rewilts, aggregated into three main sec-tions of the Expressway, are shown in Table 4.2. As expected, the heaviertraffic levels are around Zhengzhou; they are lower around Luoyang and betweenthe two cities.

4.9 Projections of future traffic discriminate between large truck-trailers, where higher growth rates are expected in consideration of thegreater potential for comuercial, long distance freight, and all other vehi-cles. Growth rates are forecast to be 5 percent during the three years priorto opening of the Expressway in 1996, to rise and remain at 6 percent there-after for teu year&, and to drop again to 5 percent at that time. Traffic forthe large truck-trailers is expected to grow at 2 percent higher rate than therest from 1996 onwards. These estimates are probably consorvative, consider-ing that traffic growth rates on the existing road over the last 5 years hasbeen in the range of 10-15 percent, depending on the road section. Trafficgenerated by the Expressway has been estimated at 50 percent of normal traf-

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fic. Sensitivity analysis explores the impact should generated traffic belower.

4.10 Road Desian. The Expressway design was selected after consideringalternatives regarding:

(a) Alignment Location. Four alternatives to the selected alignmentwere considered and discarded because they were generally moreexpensive without providing a corresponding increase in benefits;

(b) Cross Section. Alternatives ranged from a full-fledged four-laneexpressway to a full two-lane expressway. The option selected,providing for double carriageway only in the high traffic areas nearZhengzhou and Luoyang, as well as in the interchanges, meets trafficneeds while adequately providing for future expansion of theExpressway and reducing construction costs to that corresponding totwo-lanes for most of the initial stage of the Expressway; and

(c) Tolline System and Interchante Desimn. The selection of a closedtolling system with toll booths at the ramps (as opposed to thealternative open tolling system with toll booths on the Expresswayitself) was decided after considering a number of factors, notablythe need to ensure that slow-moving vehicles would not access theExpressway; avoidance of stopping traffic on the Expressway to paytolls, and investment and operating costs of the interchanges andtolling facilities.

4.11 Construction costs, expressed in economic values for the cost-bene-fit analyeis, are shown in Table 4.3. Such costs include the costs of equip-ment required for environmental monitoring. The construction period of 42months is estimated to be realistic. The effect of possible delays in comple-tion on the project's return is tested through sensitivity analysis. TheExpressway's maintenance costs, both routine and periodic, are also consideredin the analysis.

4.12 Benefits from the proposed road stem mainly from savings in vehicleoperating costs to the traffic that would use the Expressway instead of theexisting road. Additional quantified benefits arise from generated traffic(taken, on a unit basis, at one-half of the unit vehicle cost savings on theexisting road), reduced congestion on the existing road, and savings in acci-dent coats. The latter measures avoided costs of vehicle and goods damage anddirect medical expenses, and excludes the costs associated with fatalities.Calculation of unit benefits has been based on the vehicll operating costsdetermined by Guangdong Province Comprehensive Transport Study (para. 1.18),updated to 1991 (Table 4.4). Reduction in road congestion will also yieldsavings in fuel consumption (savings estimated at 110 million liters of gaso-line, in 1996, the opening year) and will result in lower vehicle emissions.For the purposes of the economic analysis, a 20-year life for the two-laneexpressway has been assumed.

4.13 To account for variances in unit construction costs and trafficlevels along the road, the economic analysis has been conducted separately forthree sectionst Zhengzhou-Shangjie; Shangjie-Yanshi and Yanshi-Luoyang. The

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economic returno, all satisfactory, are, rospectively, 32 percent, 30 percentand 22 percent The overall economic rate of return for the whole road is29 percent; the first year return is 26 percent.

4.14 Tollint. The new Expressway has been designed and will be operatedas a toll facility. Since the Expressway is projected to carry high trafficvolumes, and the existing road will continue to provide free service for non-motorized and other slow-moving vehicles, tolling is an appropriate usercharge for the traffic using the Expressway. An analysis of the traffic thatwould be diverted indicated that if the toll rates are equal to one third ofthe estimated savings in vehicle operating costs, the rate of return for thetolled expressway would still be a satisfactory 25 percent. To ensure thattoll rates would Ibe appropriate and would not significantly reduce the bene-fits of this investment, it will be necessary to make a detailed analysisbefore deciding on the toll structure. At negotiations. agreements wasreached with HPCD that by October 31. 1995. HPCD will Prevare and send to theBank a study on the nronosed toll r-tea. to be conducted followina the OutlineTerms of Reference in Annex 8. snd that such study will take lnto account themost recent exnerience with toll roads in China.

Provincial and Rural Roads in Northwest Henan

4.15 Provincial Roads. The five provincial roads to be financed underthe project are included in Henan's 8th FYP. They are listed in para. 3.13.Four of these roads (all except the Sanjiaokou-Border Road, 8.1 km in length)are expected to generate traffic that will feed conto the proposed expressway.While most of the worko to be done in the five provincial road components willconsist of road rehabilitation on the existing alignment, some sections willrequire new construction. The total length of the existing roads is 191.5 km,which the proposed project will shorten by 11.5 km. Construction costs usedin the economic evaluation are shown in Table 4.3.

4.16 Traffic on these roads is in the range of 1,000-3,000 vehicles perday, with the large trucks and tractors reaching close to 30 percent of thetraffic on the roads with the lower traffic levels. Traffic on these roads isprojected to grow at the same rates as those for the Expressway. Generatedtraffic has been assumed to be equivalent to 25 percent of the normal traffic.

4.17 A summary of the roads' costs and benefits is in Tables 4.6a and4.6b. Quantified economic benefits are vehicle operating cost savings to thenormal and to the generated traffic, and savings in accidents costs (propertydamage only). In those cases where new, by-pass sections are built, benefitrfrom reduced congestion on the existing road section have also been quanti-fied. The economic rates of return for these road projects are all satisfac-tory, and range between 17 percent and 29 percent. The first year returns areall over 12 percent.

4.18 Rural Roads. The six rural roads included in the project arelocated in three different prefectures, two roads in each. These roads, alsoall in northwestern Renan, are situated in depressed economic areas. Theexisting roads are mainly mountainous, unsurfaced and of poor alignment, whichmakes them Impassable by motor or even animal-drawn vehicles many Aays in theyear, thus depriving the population of access to markets, schools and social

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services. Traffic on these roads ranges between 150 and 200 vehicles per day.With Improved condition to year-round use to be achieved under the project,the traffic would conservatively be expected to grow at 5 percent annually.

4.19 Benefits were calculated on the basis of vehicle operating costsapplied to current traffic levels and their projections as noted above. Thisis a conservative stimate, as it omits potentially important benefits stem-ming from inereased agricultural outputs and producers' surpluses. The calcu-lations considered separately the benefits from shorter distance and thosefrom improved road condition. A summary of the costs and benefits is shown inTable 4.7. The economic rate of return for the proposed rural roads wouldrange from a low 18 percent to a high 43 percent. First year returns are over11 percent.

Roads Improvement Prorram

4.20 This component will help finance improvements of roads in alladministrative classes, included in the 8th FYP and located throughout theprovince. As in the case of the provincial and rural roads in northwestHenan, the RIP subprojects will consist mainly of rehabilitation and improve-ment of existing alignments, with little new construction.

4.21 A tentative list of the subprojects to be proposed for inclusionunder the project is shown in Table 3.1. An Initial list of five roads to befinanced under this component was agreed at negotiations. The estimated eco-nomic rates of return for these roads range between 28 percent and 86 percent,and the average is 43 percent. These rates of return were calculated by HPCDfollowing the methodology used in this appraisal report.

4.22 Candidate roads for subsequent tranches would be evaluated on thesame basis. Rates of return would be estimated separately for sections of thesome road showing significant differences in traffic levels or in other impor-tant design par ame tor.

D. Overall Returns and Sensitivity Analvyis

4.23 The overall rate of return for the civil works Investments, includ-ing the evvressway, provincial and rural roads, and the five initial subproj-ects under RIP (amounting to 71 percent of total projoct costs) to be financedunder the proposed project is estimated at 28 wnercent. A sensitivity analysisshow that all Individual subprojecto would a .1 have satisfactory rates ofreturn under a more unfavorable scenario, such as cost overruns, overestima-tion of benefits, and delays in project implementation, as well as under acombination of these more pessimistic assumptions. A delay of two years inthe construction of the Expresway (para. 4.11) would lower the rate of returnfor that component to 22 percent, which is aitisfactory (Table 4.8).

4.24 All Individual project investment components have high first yearreturns (Tables 4.5-4.7), showing that the investments are not premature.however, tolling may divert some vehicles from the Ezpressway. The toll ratesstructure and lels need to be set such as to balance cost recovery and eco-nomic efficiency objectives.

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e. Proiect Riksk

4.25 The main project risk is potential dela7s in the complotion of theExpressway. This risk stems from Henan Highways Department's lack of experi-ence with the international procurement process and construction of modernexpressways, and from uncertainties in the Expressway's section traversing anarcheological zone. Substantial measures have been taken during project prep-aration to minimize such risks. First, a detailed design review was carriedout with assistance from international consultants, and prequalification andsupervision arrangements have been tightened through the provision of quali-fied international consultants and training for local staff supervision per-sonnel. Second, Henan authorities conducted extensive survoys, Including overone million borings in the archeological section, so as to minimize chances ofencountering now archeological areas during construction of the Expressway andto prevent damage to cultural property and stoppage of the construction activ-ities as mandated by national and Henan laws (AEL 4, para. 14). In addi-tion, works in that zone have been started ahead of the other sections of theroad to provide a further buffer of time should any unexpected archeologicalfinds occur during construction.

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V. ACREMRENT REACHED AND RECOUENDATION

5.1 At negotiation., agreement wee reached with PRC that it would onl-ndthe proceods of the loan to Ronan Province (BP) under terms and conditionsspecified in the Loan Agreement.

5.2 At negotiation., agreement was reached with BP:

(a) that comprehensive and institutional training would be carried outin accordance with program acceptable to the Bank (para. 3.30);

(b) on the Terms of Reference, including implementation program andcomposition of the Review Panel, for the trucking study, on carryingout the study by December 31, 1994 under Terms of Reference *atis-factory to the Bank, and on HP'. comitment to take steps to imple-ment the study's recommendations (para. 3.32);

Sc) that the environmental protection measures stipulated In the Envi-ronmental Action Plan with respect to the Zhengzhou-LuoyangExpresway, and, similarly, for the roads in northwest Henan and thesubprojects under RIP, would be carried out in a manner satisfactoryto the Bank (pare.. 3.33 and 3.37);

(d) that all land acquisition and resettlement activities and monitoringof resettlement with respect to the Zhangshou-Luoyang Expresasway andthe provincial and rural roads in northwest Henan, as well as inrespect of the RAPS to be prepared under the RIP program, would becompleted according to the Resettlement Action Plans in a mannersatiefactory to the Bank (pares. 3.40, 3.42 and 3.43);

(e) that for monitoring of resettlement (i) monitoring teams wouldinclude qualified social *cientists and (11) monitoring reporta forthe Expressway and other roads would be submitted to the Bank byDecember 15, 1993, and by the same date, annually, In 1994 and 1995(pare. 3.44);

(f) that subprojects to be selected under the RIP program would beselected in accordance with criteria and procedures eatisfactory tothe Bank (para. 3.53);

(g) that the accounts of project-related expenditures would be auditedby Independent auditors acceptable to the Bank and that auditreports would be sent to the Bank for review within siz months ofthe close of each fiscal year (para. 3.69); and

(h) that by October 31, 1995, BP will prepare and send to the Bank astudy on the proposed toll rates, to be conducted following theagreed Outline Terms of Reference, and that such study will takeinto account the most recent xperience with toll roads In China(para. 4.14).

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5.5 Stcte Council approval of the Loan Agreoemnt Is a condition ofeffectivenes.. Bank approval of subprojects under the RIP program is a condi-tion of dieburoement.

5.4 Subject to the foregoing, the proposed project vould be suitable fora Bank loan of $120 million to the People's Republic of China. The loan mouldbe for a term of 20 year., Including a grace period of five yearc, at theBenk's standard variable Interest rate.

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CNuli

RAN HIGHWAY PROJECT

Road Imurovement Program

1. The Road Improvement Program (RIP) will ossist Henan Province inimplementing its 8th Five-Year Plan road program. Fiancing for the RIP pro-gram will be provided by UPCD's own resources (57 percent) and a loan from theWorld Bank (43 percent). The RIP w4ii be managed by Henan Province Communica-tions Department undev operational arrangements agreed with the Bank, whichinclude subprojact selection criteria, enginearing and procurament, environ-mental and resettlement assessements and plans, and economic evaluation meth-odology.

2. Since subprojects to be financed under the RIP will be selected inpart during lplementation of the proposed project, it will not be known inadvance how many km of roads will be covered by the RIP program. This willalso depend on the mix between provincial, other trunk and rural roads. Theproposed first p-ckage (Table 3.1) costing Y 100.7 million would cover 112 km.HPCD estimates that the total RIP program would cover some 700 km.

Hanaaement of the RIP

3. The RIP program will be managed by the Highway Administration Bureau(RAB) of Honan Province Communications Department. HAB's Engineering Sectionwill be in charge of all engineering aspects, except for the rural roads,which are under HAl's Rural Roads Section.

4. Preparation of design and bid documents will be done by the relevantDesign Institutes of Municipalities and Prefectures. These documents would bereviewed and *pproved by HAD. The performance of these design institutes onprovincial and rural roads in northwest Henan has been satisfactory.

5. Supervision of road works under the RIP will be carried out by HenanOffice of Supervision of Provincial and Rural Roads (HOSPPR) and its branchesat the prefectural levels. One Resident Engineer will be appointed for eachsubproject.

Subgrolect 8Slection Criteria

6. Subprojects will be selected from among road projects included inHenan 8th FYP. RIP funding could be applied to road Improvements locatedanywhere in the Province. Provincial as well as other trunk and rural roadsare expected to be finaneod under RIP, and no individual road should absorb asubstantial portion of RIP funds. Specifically, the RIP program is expectedto finance several rural roads improvement projects, especially those locatedIn poor counties.

7. Subprojects to be accepted under the RIP will need to meet the fol-lowing conditions:

- 55 - ANx I

(a) have an Sconomic Rate of Return (ERR) of 12 percent or higher. Themethodology to determine the ERR will follow the methodology used inthis appraisal report for analyzing the road investments in NWHenan;

(b) follow MOC engineering standards (Table 1.7), and sound engineeringand highway safety practices;

(c) comply with environmental and resettlement requiremonts as detailedIn paras. 8 and 9 below; and

(d) contracts for execution of the road subprojects would follow pro-curement procedures as detailed in para. 10 below.

Environmental and Rgoettlement Requirements

8. All RIP-financed projects must comply with environmantal and reset-tlement requirements, as noted below. For environmental and reettlementconsiderations, RIP subprojects can be classified in two categories:

(a) SubRroiects reuiring anew right-of-wav. or located in *nvironment-ally sensitive areas. For such subprojects, specific EnvironmentalAssessmenta, with detailed management, monitoring and resettlementplans would need to be prepared. Such EL and plans would be similarIn nature, content and detail to thQse prepared for the Zhsngzhou-Luoyang Expressway, and described in Annexes 4 and 5.

(b) Sub_grojects which neither reauire new right-of-wav nor are locatedin environmentally senitive areas. For such subprojects, only asimple environmental management and monitoring plan is required, andthe plan may be presented in tabular form.

9. In order to facilitate the preparation of management and monitoringplans for Category B subprojects, prior to start of the RIP program, HPCD willhave prepared a generic, Sectoral Environmental Assessment (SEA). Such SAwill identify the general kind of environmental impacts that can be associatedwith different types of works (e.g 8 road widening inside right-of-way, pave-ment strengthening, brigde reinforcement), and would provide guidelines forpreparing a table with environmental management and monitoring plans toaddress such impacts.

Procurement

10. The procurement method will vary depending on the contract value.Those subprojects with contract value $2 million and above will be procuredunder Local Competitive Bidding (LCB), and will require prior Bank review andapproval of bidding documents. Subprojects with contract value below $2 mil-lion will be procured under local bidding procedures under which at leastthree bids will be invited from qualified contractors and bids will be pub-licly opened. Documents would be made available to the Bank upon request.These smaller subprojects would be mainly rural road projects. Overall, pro-curement under local procurement procedures should not exceed $33 millionequivalent.

- 56 - ANg I

Onerational Arrangements

11. Subprojects will be Initially identified by the HAB, and will besubject to approval by HPCD's Planning Department prior to submission to theBank. Economic evaluation of the subprojects will be conducted by the DesignInstitutes of Municipalities and Prefectures. The economic evaluation will bereviewed by the HAB Preparation of the engineering design and bid documentswill also be prepared by the municipalities end prefectures' design insti-tutes. They will be reviewed (i) the smaller projects, by the RAB, throughits Technology Office, and (ii) the larger projects, by HPCD's PlanningDepartment.

First Packaae

12. The first package of road subprojects to be financed under the RIPconsist of the followingt

(a) five road improvement subprojects (about 159 km in total), for atotal of Y 90.3 million, with rates of return ranging between28 percent and 86 percent; and

(b) four road improvement and two bridge subprojects (about 81.3 km intotal) for a total of Y 48.3 million.

13. Selection of subprojects under (a) was argued at negotiations.Selection of subprojects under (b) is expected to be completed upon submis-sion, by December 31, 1992, of reassessed economic returns. The list of roadsunder (a) and (b) is in the Appendix to this Annex.

-57 - AM= IApaeadV

HEIAN HIGHWAY PROJECT

Road Imnrovement Protram

First Package

Road Length Cost ERR L(km) (Y million) (Z)

Road subprojects agreed for inclusion during nemotiations:

Wuichang-Sangji 24.50 9.3 85.9Shengju-Jieshou 29.16 19.8 30.5Qslian-Taikang 54.56 36.0 28.7Qizian-Longgu (31.76) (21.3) 29.8Longgu-Taik=ag (22.80) (14.7) 27.6

Tongzu-Boundary 34.49 22.4 29.5Yongxing-Nachao 16.00 2.8 38.3

Subtotal 158.71 290. 42.6

Road Subnroiecta for which gdditional information will be sent bv Henan Prov-ince by December 31. 1992:

Raifeng Access Road 9.35 10.2 -Panmisn-Taiqian 32.48 16.2 -Ganan Bridge 0.54 8.0 -Quanzhuang Bridge 0.13 1.5Hongylhe-La-wang 10.03 5.5 -Beiyang-Nanshan 28.76 6.9 -

Subtotal 418.29 43

Total 240.00 138.6 42.6

/A ERR combining costs and benefits streams. ERR for the aecond group of sixroad subprojects will be reassessed end included in the December 31, 1992submission.

- 58 - AhWi&2

HENAN HIG=WAY PROJECT

Trainina Program

1. Training to be provided under the proposed project consists of threekindos (a) comprehensive training; (b) training connected with Institutionalstrengthening; and (a) supervision training. In total, the project providesfor training to about 355 people for about 390 person-montha, of which aboutone third would be trained outside China. However, thi training programshould be looked at as subject to reasonable change with regard to trainingcoursas and number of trainees, and consequently, some flexibility should beexercised during project implementation to allow for changing circumstancesand needs especially that the number of trainees for many courses is small.The following sections present highlights of the three kinds of training and adetailed listing of the training areas and their cost. The purposa of thisannex is to present additional data and details to supplement the correspond-ing sections on training in Chapter III of this report (paras. 3.18 and 3.23-3.30).

2. A training program was propared by HPCD in October 1991. Followingreview by the BIak9s preappraisal mission, HPCD prepared a revised program.This program was reviewed by the appraisal mission and was found to be goner-ally satisfactory. The agreed program would split training into three catego-ries: a comprehensive program targeted at the personnel of the departments ofHPCD responsible for planning, designing, constructing and maintaining high-ways in Henan province; a program directed at Institutional strengthening offive agencies affiliated with HPCD, namely the Highway Institute, the Voca-tional School, the Scientific Research Institute, the Planning and DesignInstitute and the High-Grade Highway Construction Authority; and a program totrain local staff who will be involved in the supervision of the Expressway,roads in northwest Henan and RIP components of the proposed project.

3. Com2rehensive Training Program. Consists of three partst(a) inspection tours abroad for 40 senior personnel for a total of 20 man-months; (b) training abroad for 21 people for a total of 30 man-months in theareas of pavement construction, project management, quality control, trafficengineering, operations management, highway maintenance, management and utili-zation of equipment, highway finance and accounting; and road data bank andpavement management system (a) domestic training for about 58 peopls for atotal of 58 man-months In the same fields as for traininsg ' oad (Part I ofAppendix 1). The total number of people to be trained Is e*imated at about119 for a total of about 108 man-month.

4. Training for Instltutlongl Strengthenin. The flve agencies affill-ated with HPCD mentioned In para. 2 of this annex will be strengthened underthe proposed project. The main areas for training are highway and bridgeengineering design and economic analysis, highway construction and mainte-nanes, project management, traffic engineering, operation of toll roads, high-way finance and accounting, and environmental protection and testing. The

- 59 - ANNEX 2

number of trainees and associated cost for each of the five agencies arelisted In Part II of Appendix 1. Training will be conducted within China andabroad. A total of about 76 people will be trained for about 122 person-months of which about 41 people will be trained abroad for about 91 person-months. The areas of training are tailored to the needs of each of the fiveagencies.

5. unervision Trgining. The High-Grade Highway Supervision Office(HONSO) of HPCD and BAB estimated their needs for training in order to carryout their responsibilitios to supervise the construction of the Zhengzhou-Luoyang Exproseway and the provincial and rural roads in northwest Henan aswell as RIP. Those needs are based on the volume of work required and thecorrasponding number of staff to supervise the works and ensure that the spec-ifications aro properly enforced as well as uniformity of quality controlacross the roads included in RIP. The areas of training include project man-sgement, contract management, especially under PIDIC conditions, quality con-trol, and evaluation and resolution of disputes and claims. A total of about130 people will be trained within China for one month each (80 from HGHSO and50 from DAB) and the best 30 of them will be trained abroad for one month each(20 from hHSO and 10 from RAB). Training will be done by foreign experts tobe provided by the foreign consulting firm which will form a part of the jointlocallforeign team to supervise the construction of the Zhengzhou-LuoyangExpresaway. A total of about 5 man-months by foreign experts will be requiredfor training: 3 man-months for training within China and 2 man-months fortraining abroad. The same experts who will perform the domestic training willaccompany those to be trained abroad. It should be pointed out that generallysupervision training will be completed before the start of construction bycontractors. In addition to the formal supervision training, the foreignexperts who will participate in the supervision of the construction of theExpressway will provide on-the-job training to local staff, especially totheir local counterparts. Part III of Annex I summarizes the supervisiontraining to be provided under the proposed project as well as its estimatedcost.

6. Manaaement of the Trainng RProgram. Because of the small number oftrainees In a given area and the difficulty of finding training programs forsuch small number, the Technical Coordination Unit (TCU) of the Ministry ofCommunication will coordinate this program together with similar programsunder Bank-financed highway projects in China. This should lead to efficiencyand economy as well as consistency in training among provinces and reductionin the number of different philosophies of highway practice that trainees%would be exposed to abroad which would, in turn, lead to more efficiency inaffecting canges at hom. TCU would program the training courses in consul-tation with the Provincial Communication Departments and would administerthem.

7. The Zducation Division of HPCD will be in charge of the trainingprogram. However, It has not managed a program of the size and diversity asthe one lcluded under the proposed project. Consequently, HPCD has agreed tostrengthen this unit by assigning qualified additional staff, some of whomwould have foreign language capabilities and providing it with a computer andrelated software and copying equipment, as well as adequate access to goodmeans of communication. Training abroad would be preceded by training within

- 60 -

China with the best performer. selected for training abroad. Also, alltrainees to be sent abroad would have a good working knowledge of English orelse would take a three-month English language course prior to travelingabroad. Moreover, training would be related to the career development and theprofesslonal growth of the staff selected for training. The Education Divi-sion would develop a formal selection procedure, acceptable to the Bank, forcandidates to be selected for training. Each trainee would be required tosubmit a report on training received to his or her department or agency.

no"U HfIftWy PROJECT

Wrintlnt Prorr

astimstedPerson- cost In

Io. of trainees months of thousand.Type of training and duration traintng of dollars Remarks

I. ComNrehansive Trainina

A. Insuection Tours 40 persons 0 0.5 20 200 Study tours for senior personnel.month/person

Subcotal 40 20 200

D. Trainitn Abroad

1. Pavement con- 3 persons e 2 6 37 Mechanized road construction techniques, con-struetion months/person struction of asphalt concrete pavements, skid at

prevention, mnagement of road construction.

2. Project manage- 6 persons 0 1.5 9 63 lIcludes project preparation, appraisal, economicment months/person analyses, budgeting, highway planning, post

appraisal of completed projects.

3. Qualicy control 4 persons 0 1.5 6 42 Includes now techniques of testing of materials,monthsl/person lmproving quality of bitumen, emnlsified asphalt.

4. Traffic engineer- 1 person for 2 2 13 Includes traffic control devices, collection andINg months processing of traffic data, safety, computer

applications in traffic engineering.

S. Operations man- 1 person e 1 1 9 Operation of expressways with emphasis on tollagreent month/person facilities, monitoring and telecommunication sys-

tems and use of computers in these fields.

6. Highway mainte- 3 persons 0 0.5 1.5 15 Includes selection of maintenance equipment,nance months/person maintenance of asphalt and concrete roads on

expressways and lover level roads.

7. Management and 1 person for 1.5 1.5 11 Includes hirlng equipment, management and utili-utilization of months zation of equipment for removing snow and dealing I!equipment with accidents and hazardous materials.

EstimatedPerson- cost In

No. of trainees months of thousandsType of training and duration training of dollars Remarks

S. PFinnce and 2 persons * 1.5 3 21 Financing expressways including loans, accountingaccounting monthsiperson for highways, financial and accounting reports,auditing and financial analyses,

Subtotal--training abroad 21 30 211

C. Domestic TraiDinR

1. Pavement con- 4 persons e 1 4 2struction month/person 12. Operations man- 2 persons S 1 2 1S me nt month/person I3. Project manage- 8 persnas 0 1 8 4meAt month/person

4. QmuUty control 6 persos @ 1 6 3 Ixonth/person I0

S. Management of 3 persons for 1 3 2 Cotents same as for corresponding courses Inequipment and monthiperson ttraining abroad listed under I.3.materials

6. Higbhay mainte- 5 persons 0 1 5 2nance month/person

7. Traffic engineer- 2 persons e 1 2 1In monthiperson |S. innce and c- 3 persons I 3 2counting monthlperson I9. Iainbay design 12 perona e 1 12 5 J

sonthlpersonJ

10. lconioic aonlyss S persons e 1 5 2for highways month/perion

11. Road Data lank 8 persons e 1 8 4nd Po month/person

Subtotal--domestic training Se 58 28 Includes cost of 1 person-month of foreignxpert, 5 person-maonths of domestic experts

and cost of training material.Sotal--cowrbhensvs tralnina 119 108 439

IstilntedPerson- cost in

No. of trainees month, of thousandsType of trainin and duration training of dollars Remarks

II. Tr laln4 for Institu-tlonal Strengmtnen$

A. irinhway Intitute

1. Ttrainin Abroad

(a) Transport I person for I month 1 amrkat m-asgemnt

(b) Traffic engi- I person for I month 1 7neering

(C) Kuviroinental 1 person for 1 month 1 8p.-tection

(d) Economic ana- 1 person for 1 month 1 7lyses r

(e) Precision 1 person for I month 1 8 Use and maintenance of precision instruments forinstruments highway testing

Subtotal 5 5 38

2. Domestic training 6 persons for 1 6 4month each

Subtotal--Bighway Institute 11 11 42

B. Vocational School

1. Domestic Trainin

(a) Road grading 1 1Training of trainers by lnviting local expertsequipment Ito lecture and train vocational school staff inluse of new equipment. Services of trainers(b) Rolling 1 ronsist of (a) one expert for 2 months for roadequipment grading equipment (b) one expert for 2 months

1 for rolling equipment Cc) one expert for 2 D (c) Road surface Jrunths for road surface equipment.equipment

Subtotal--Vocational School 3I

NatimatedPersO- cost In

No. of trainees months of thousandsTyp of trainin and duration trainng of dollars Rmarks

C. Scientific RearchInstitut*

1. Trainlo Abrod

(a) Blglbay. and 2 persona I 1 2 15brLdge. qual- monthipersonity testing

(b) Autmobile 1 person for 1 nonth 1 8perfomancetesting

(c) Transportatlo 2 persons 1 2 15n econamis month/person

2. Domestic Trainina

(a) Highays *nd 2 persons e 1 2 2bridges qual- monthipersonlty t otin

(b) Ato obile persons 0 1 2 1perfonc ee month/persontesting

Subtotal--Scientif iResearch Institute 9 9 41

D. Plannin and DesnInstitutt

1. Trainin Abroad

(a) Appraisal of 2 persons 0 6 12 38highway proj- months personects and

feaibilitystudies I!

EstiatedPerson- cost in

No. of trainees months of thousandsType of tralning and duration training of dellars Remarks

2. Dometic Trainizn

(a) Hig y and 2 persons e 6 12 5bridge design monthslperson

(b) hPplication 2 persons 6 12 6of-highway monthsipersonnd bridgeCAD software

(c) ara l asp- 1 person for 6 6 3ping months

Subtotal--domestic training 5 30 14Subtotal--Planning and

Design Institute 7 42 S2I. RIh ugr dBldgsa

C6gitruction Author-~Z(GC&)

0%1. k&aIDiN Abro .

(a) Pavement con- 3 persons L 2 6 42.truclOiA months/person 1(b) Project man- 6 persons L 1.5 9 63agement monthslperson

(c) Operations 2 persons e 1 2 14management month/person

(d) Traffic engi- 2 persons 6 2 4 28 Course descriptions are some as correspondingnearing months/person courses for training abroad under ComprehensiveTraiinng (I).

(e) Highway main- 3 persons e 1.5 4.5 32tenance months/person

(f) Management I person for 1.5 1.5 11and utiliza- monthstion ofequipment

(g) Finance aid 2 persons 6 1.5 3 21accounting months/person J I>Subtotal--traluing abroad 19 30 211

isti_tedPerson- cost in

No. of tranes months of thousandsType of tralning and duration training of dollars Rimarks

2. Domestic Training

(a) Pavement con- 4 persons e 1 4 2*truction month/person I

(b) Project _- 8 persons , 1 8 4agseet month/person

(c) Operations 4 persons e 1 4 2manuemeat moth/person I

Cd) Highway maun- 5 persons 1 5 2 iCourse descriptions are same as correspondingten nc month/person fcourses for training abroad under ComprehensiveITrlainin (I).

(e) Kanagem'nt 3 pArsons e 1 3 2and utillsa month/person Ition of

Okequipment

(f) Traffic *ngi- 3 persons gl 3 1neerlng month/person I(a) Finoace and 3 persons e 1 3 2 1msnagement month/person J

Subtotal--domestic training 30 30 15Subtotal--HGHCA 49 60 226

Total--Institutional Trainian 76 122 364

5!ll

EstimatedPerson- cost in

go. of trainees mnths of thousandsTye of tradnig and dturation training of dollars Rearks

IIl. Sunervision Tratnun

A. Trainin Abroad

1. Supervision of 30 persons Q 1 30 210 1construction of monthlperson Cost estimate does not Include cost of 5 man-roads montbs of foreign experts, to be provided by the

Iconsulting fine who will form a part of the5. Dcmeotlc Trains joint local/fore$gn temr to supervise the con-130 persons e 1 130 58 *struction of the Zhengzhou-Luoyang Expresaway.1. Supervision of monthlperson IThat effort and the related cost are to beconstruction of Iincluded in the contract to be signed with theroads 160 160 268 Iforeign consulting fim. HPCD will pay sepa-irately for the cost of trainees both withinSubtotal--supervision JChina and abroad.

GRAND TOTAL--TR&INI3G PROGRAM 355 390 1.071c

52 Administration Fee and Contingencies 129

Total Cost of Train-na Proaram 1.200

fi

-68 -

CHI

HENAN HIG£WAY PROJECT

Trucking StudyDraft Terms of Reference

A. Background

1. The gonan Province is situated in the central part of China and hasa population of some 86 million inhabitants.

2. Henan is the crossroads for the main north-south and east-west rail-ways linking the country's extreme parts together. State and provincial high-ways also meet in the province's capital, Zhengzhou, which makes this provincean important hub in the national transportation system.

3. The economy of the Henan Province is heavily depending on agricul-ture, textile and light industry. There are abundant mineral resources andlUrge deposits of coal.

4. The major part of freight within as well as to and from the provinceis carried out by railways, working to full capacity.

5. With the assistance of a World Bank loan, the Province in the nextfive years will build its first expressway and Improve a significant portionof its road network.

6. The trucking industry is made up of four different corporate struc-tures, all with different background and operating conditions. These areprivate, collective, state-owned and own-account companies. In comon to thbfour categories is lack of management skills and techniques and poor stardardof roads and vehicles. Ths result is low utilization of existing resourcesand low-load factors.

7. The situation is further aggravated by a system with national uni-fied tariffs, offering different competitive opportunities to different opera-tors in that operating costs show a large variance between them but not theprice. The structure of these tariffs is furthermore unreasonable whichbecome an obstscle for an increased use of public trucking services. Inaddition, the high tariffs work as an encouragement for industry to acquireand maintain its own transport resources. Finally, rail tariffs are a frac-tion of trucking rates which attracts cargo to the already overburdened rail-ways. The Government has indicated its plan to Increase these tariffs.

8. Due to the prevailing situation, it is of great importance that astudy is carried out on the trucking industry with a view of proposing mea-sures to strengthen it and offer manufacturing industry transport of higherquality and lower costs. This view is supported by the provincial government.

- 69 - MM 3

9. The Henan Province Communications Department has appointed the HenanScientific Research Ir.stituto (HSRI) to be responsible for this study. HSRIhas entrusted its nevly created Transportation Economics Department with theresponsibility to organize and carry out the study. HSRI has put together aspecial team for this purpose. The team includes specialized personnelrecruited from other agencies and with experience in the trucking business.To assist the HSRI in this assignment, foreign consultancy will be calledupon. The role of the consultant will be that of an advisor.

10. The objec.ive of the Study are to:

(a) describe in detail the present situation and structure of the truck-Ing industry in the Henan Province;

(b) identify and assess the present problems which constitute an obsta-cle to the sound and quick development of the industry itself andits users;

(e) draw up a strategy for correcting the inadequacies with regard to,i.e., low utilization and low-load factors, irrational price differ-ences and limited management skills; and

Cd) identify and propose measures to be taken by the provincial govern-ment in order to make necessary Improvements and rectify shortcom-ings airAed at strengthening the trucking industry and achieve highercost efficiency.

B. Study Topics

11. The Study will concentrate on establishing the conditions prevailingin the trucking industry and the rules, regulations and other factors affect-ing it. To successfully describe the background present situation and possi-ble development of the trucking industry, the Study should include the follow-ing item.

12. Government Aeencies The national and provincial laws and regula-tions affecting trucking and the different agencies within the provincialgovernment which Implement and control the compliance with all these laws andregulations will be identified together with an assessment of their impacts oncosts and efficiency of trucking. Also, the power and tools available tothese agencies to direct the industry in desired direction will be Identified.The Study should establish to what extent these tools are in use and if dif-ferent trucking concerns are given equal competitive opportunities. The Studyshould also identify the areas the provincial government may introduce changeswithin existing national legal framework.

13. Fiscal Conditions. The economic conditions prevailing for difforentt7pes of companies in the sector should be described, including taxation,rules for entry into and exit from the industry and existing financial insti-tutions to support such entry.

14. Corporate Structures. The organizational structure at prosertincludes private operators, collective, state-owned and units owned by indus-

- 70 - AfE 3

try, the own-account. The Study should describe the different types withtheir relative sharo of the market in terms of volumes, commodities, etc., anddescribes

* ownership

e fleet and staff size

* operational performamce

* financial performance

* technical performance

* service levels

* growth potential

15. Forw ldn. An organization much resembling a conventional freightforwarding company operates in Province in order to assist truckers and usersto m it in the marketplace. This organization should bo investigated and anassesment made of the possibilities to increase the number and quality ofoperators and services in freight-forwarding.

16. Volme. In order to gain an understanding of the main cargo flowswith the Province, a detailed survey should be carried out. The survey willbe limited to cover the main seven cities, and the interviews with companiesand authorities will be the main method for collecting such data. A forecastfor the period up to the year 2000 should be done for the flows covered by theStudy.

17. goulam ng. The capacity of trucks ranges from 2-10.5 tons for themajority of the fleet. The majority of trucks ore made in China, but there isalso a growing Import of trucks. The Study should consider the consequencesof the limited vehicle carrying capacity in terms of operating costs, fuelconsumption and wear and tear on the road network. This will be compared withthe likely situation for larger trucks. The Study will also establish fiscalcosts for imported vehicles in comparison with domestic ones and the possibil-ities of chages in this respect.

18. Technical Rcuirements. Rulso and regulations as to technical stan-dards and design of vehicles required by the government should be defined.The Study should also assess safety regulations with regard to hazardouscargo, wide loads, etc. Government agencies that oversee compliance withrules and regulations appear to be relatively inactive. The reasons for thiswould be investigated, and changes in the future role of these agencies shouldbe analyzed.

19. Tariffs. Exsting tariffs establish in detail the prices allowed tobe charged by trucking operators. The Study will establish what influencethay have on the development of the trucking industry. The study will alsocompa3a ouch tariffs with the tranport costs of the own-account trucking

- 71 - AMEX .

operations of industrial units. The analyses should include the tariffs withregard to all different services included therein.

20. Marketina and Sales. Public carriers appear to be passive in thisarea. Radio and newspapers appear at present to be used to advertise ser-vices, although to a very limited extent. The study should consider ways forimproving this situation.

21. Fuel. Most trucks operate on gasoline. The Study should assessavailability of both gasoline and diesel, the present price end the Intentionsof the government to induce the industry to move towards use of diesel orcontinue as at present.

22. Z4ainteutance and Repair. Most truck operators have their own facili-ties for maintenance and light repairs. The Study should Identify the exis-tence of public garages and their equipment with professional mechanics ser-vicing both domestic and imported vehicles. Supply of spare parts for bothkinds of vehicles should also be assessed.

23. Trainina. In step with the ongoing reform process and the ambitionsto restructure state-owned trucking companies, the question of Improving mana-gerial skills should be addressed. The Study should establish the need forand interest in carrying out planned training programs for one or severaltypes of companies.

C. Consultants Services

24. In order to assist the HSRI Study team, it will be necessary to seekthe assistance of foreign consultants. Their role during the entire durationof the Study will be an advisory one, offering supervisory assistance, recom-mendations and support to the HSRI team. Two short saemnars on TransportManagement and Survey methodology will be carried out by the members of theforeign consultancy team.

25. The estimated total effort by the consultant is nine staff-months,of which oeven are identified in these terms of reference, two will be identi-fied and proposed in the first Progress Report.

D. Studr Stages

26. The Study will be divided into two stages, together comprisingapproximately 12 months. In addition, time should be added at the end of eachstage for a Review Panel to read, assess and take decisions on reports fromthe Study team.

27. The first stage of the Study will atart with brief seminars onTransport Management and Survey methodology for the HRSI Study team. There-after, a survey will be conducted at collecting basic data on the item men-tioned in Section D of these terms of reference. The first stage will *ndwith an interim report of the work achieved so far.

- 72 - ANJ

28. The second stage will continue with further fact-finding and analy-ses of the collected data and information. This stage is expected to last forsome five months at the end of which period the team will commence preparingrecommendations for measures to be taken.

29. In total, stage one will run over five months and stage two aboutseven months duration for a total of 12 months.

S. Renorts

30. All reports mentioned herein will be prepared by HSRI with assis-tance from the consultants, and will be submitted to a Review Panel. ThePanel wvll comprise representatives from the State and Henan Planning Commis-sions, the Ministry of Coamunication, Henan Provincial Comnunications Depart-ment and the World Bank. The Review Panel will take decisions on the Interimand Final Reports, whereas the Progress Reports serve as information from theStudy team.

31. During the entire duration of the Study, Progress Reports will besubmitted every two months to all members of the Review Panel. The firstProgress Report will include views on the Terms of Reference and recommend ifany items should be excluded from or new ones added to the TOR. This reportwill also identify the needs for additional consultancy services (see sectionon Consultancy Services).

32. Pive months into the Study an Interim Report will be submitted andthe Study team will b expected to arrange a meeting of the Review Panel inorder to discuss the contents. This report should include a preliminary anal-yses of zollected data and information and identify crucial issues for theReview P eil to consider.

33. The Study will be terminated with a Final Report, which will includethe recommendations from the Study team as to measures to be taken.

34. If called upon by the provincial government, the Study team may takeactive part in assisting with the execution of corrective activities recom-mended in the Final Report.

Ixoerts' Profiles

35. To assist the Highway Scientific Research Institute in the conductof the Study, the following personnel will be required from the foreign con-sultant in one or several visitat

(a) One senior transport specialist with at least 15 years in managerialpositions in the transport industry of which a significant part intrucking.

This individual will be the consultants' teom leader and is expectedto carry out the seminar aimed at the 8SRI team.

The astimated duration of service is 15 weeks.

- 73 - AN

(b) One survel and statistical alecialist with a minimum of 10 yearsexperience in public survey project., preferably from the transportlndustry.

He/she will be expected to give lectures on surveying during his/herInitial stay.

Estimated duration of service is 5 weeks.

(c) One senior economist with a minimum of 10 years of managerial posi-tions in the fields of finance and accounting in the transportindustry.

Estimated duration of service is 4 weeks.

(d) One traffic /overations specialist with a minimum of 15 years experi-ence in the transport industry with emphasi.o on traffic control andfleet management.

Estimated duration of service is 4 weeks.

Experts' Tasks

36. The staff of the consultant will have advisory positions and theirtask will include the followings

(a) to make recommendations and assist in the design of and carrying outof the surveys to be performed in order to establish the flows ofgoodsl

(b) to assist in the preparation of periodical reports and ensure thatthe reporting adequately describes progreso of work;

(c) to assist during visits to the field in the process of fact-findingwith transport orgLnizations and appropriate provincial governmentagencies.

(d) to assist in the analyses of data and information gathered duringthe Study period. Furthermore, assist in preparing recommendationsfor corrective measures that will be contained in the Final Report.

(e) prepare and carry out seminars with regard to Transport Managementand to Survey;

(f) assist HSRI with a comparison with other countries with regard toregulatory systems and other aspects5 and

(g) to offer technical assistance and other relevant issues of theStudy, including suitable literature.

- 74 - ANNEX 2

P. Sutoort to be Provided by the Provincial Government

37. BSRI wlll provide the Study team including the management and thesupport personnel as well as all required equipment facilities. HSRI willalso provide the consultants vith lodging, food and transport during theirstay in Henan Province.

- 75- ANNEX 4

CHINA

HENAN HIGHWAY PROJECT

Rnvironmental Assessament/Manaaement/Monitorint Summarv for the ExOreasway--Provincial. County end Rural Road Comvonents of the Proiect

A. Environmental Aiseesment. Zhengzhou-Louvan. Exoresswav

Backgroundt

1. On June 1989, the Scientific Research Institute of EnvironmentalProtection of Henan Province (USRIEP) submitted an environmental assessment(EA) of construction and operation of a proposed expressway link betweenRaifeng end Luoyang to the National Environmental Protection Agency (NEPA) ofChina. The Bank has been asked to support the section of this expressway,known as State Highway 310, that runs from Zhengzhou to Luoyang.

2. The policy and administrative requirements for environmental assess-ment of development projects in China followed during preparation and evalua-tion of this EA included the following:

(a) Management Guidelines on Environmental Protection of ConstructionProjects of PRC, 1986;

(b) Regulations for Engineering Design on Environmental Protection ofConstruction projects, 1987;

(c) Directive No. 17 of the Ministry of Communications, PRC/1990, Man-agement Guidelines on Environmental Protection of Construction Proj-ects; and

(d) Management Procedures for Environmental Protection of ConstructionProjects, NEPA, 1990.

3. A project proponsnt is required to undertake, directly or through atechnical institution, an Initial Environmental Analysis for submission to theProvincial Environmental Protection Bureau at the prefeasibility stage of ahighway proposal. for major infrastructure projects, the next step is thepreparation of en ZL. Only specially licensed institutions can undertake UAsin China. A completed EA would be submitted to the MOC for preevaluation,which ia uormUlly done by a panel of experts including representatives ofNEPA. NEPA's clearance of the HA is required for projects costing more than Y200 million end for obtaining SPC's approval to go ahead with the engineeringdesign for proposed highway projects.

4. The above-outlined internal procedures were followed for theKaifeng-Luoyng Expressway before the project was bro -ht to the Bank forpossible financial support. The EA and environmental action plan for theEprossway were submitted to the Bank before the preappraisal mission left forChina in October 1991. The Bank's review and commenta on these reports was

- 76 - AM= 4

provided to the Henan Provitncial Government in the Preappraisal Aide Memoire.A detailed archeological survey expanding the EA, and a final RAP incorporat-ing .he Bank's comments on the earlier draft, was submitted to the Bank inFebruary 1992. A sumnary of these documents follows.

Baseline Environmental Description

5. Toi,ooraihv and Climate. The propcsed Kaifeng-Luoyang Expresswayoriginates in Kaifeng County, passing the Henan Plain and into the hilly landof Sishue. It then pa.ses successively through six loeoss soil valleys ofLiaoyu, Yingyu, Jingou, Luokougou, Shayugou, and Rencunogou. Further uestwardit again enters hilly land and crosses the Yiluo River west of the GongxianCounty Seat. It will then enter the proposcd Kangdian Tunnel, finally passinginto a loess soil area and ending at the Village of Dongtouzhuang. Generally,the relief is greater along the western section of the Expressway than in theeast.

6. Henan Province is the natural demarcation line between the northernand southern weather patterns of China. The climate experienced along most ofthe ROW is generally warm/mild, with semi-dry and semi-damp continental mon-soonal seasons. Average temperature is 14.6 degrees centigrade in Luoyang,with average wind speed in this location of 3.1 m/second. The main winddirectioD along most of the ROW is generally north-northwest (13 percent) withthe second most common wind direction being from the south (10 percent),although the second most comnon wind direction in the Luoyang area is yes-terly. The rainfall along the ROW also seems to be relatively uniforL. Maxi-mum 24 hour recorded rainfall was 110.7 mm in Luoyang, 189.4 mm in Zhongzhou,and 176.5 mm in Kaifeng. Snow is a factor of the local climate, and the aver-age number of days in wbich measurable snow fall can be expected, based onprevious records, is 14.8 in Zhengzhou, 12.3 in Kaifeng, and 13.9 in Luoyang.

7. Air Oualitv. Although the Expressway passes through agriculturallands, air quality can occasionally suffer from elevated suspended particu-lates (dust) concentrations. The greatest expression of this is during sandand dust storms. The number of days of sand and dust storms is 1.7 inLuoyang, 7.2 in Zhengzhou, and 10.6 in Kr'feng. Despite the occasional prob-lems with dust, the air quality along the ROW can generally be described asgood.

8. Hvdroloav and Water Oualitv. All rivers in the Henan Plain areahave been realigned through previous river training projects and are heavilyutilized to condition alkali soils, improve drainage and prevent flooding, andfor irrigation. Surface waters in the loess storm valleys mentioned above artephemeral, flowing only during the wet season. These rivers experience flashfloods on a regular basis. The surface waters near the ROW have already beenpolluted by municipal, agricultural and industrial wastes. The Yiluo, Jialu,and Shidao Rivers are badly polluted because of industrial waste and sewagedischarges.

9. The groundwater quality of groundwater along and adjacent to the ROWhas generally been found, following sampling and analysis, to be within thedrinking water standards of the gc7ernment. The exceptions are excess fluo-ride in Wangfuzhai and Kaifeng.

-77- ANNE 4

10. Pulation. There are 50 villages, with tpproximate total popula-tion of 70,000, along or near the proposed expressway ROW. The most commonland use in this area is agricultural, which explains the relatively low popu-lation density. The greatest numbers of people along the proposed ROW arelocated in Shihuiwu, Baisha, northern Gongxian County Seat, and the Kangdianarea. This 9-km section of the Expressway accounts for 30 percent of thetotal population found to reside along the ROW.

II. Cultural and Archeolosical Aspects. The Expressway will pass nearor through areas having significant cultural and archeological value. Themain historic relic and scenic sites in the area within or near the ROW thatwere included in the RA evaluation includes

* Dahecun Ancient Village Sites which are the sites of Yangshuoculture. This area is located approximately 400 m southeast ofthe planned Liulin interchange in the city of Zhengzhou;

* Han Dynasty Tomb area from point "k202" of the proposedexpressway to the end of thi' section of State Highway 310(otherwise known as "section LO" of the Bank supported sectionof expressway). The Expressway would pass through an areacontaining many earthen tombs constructed during the Han Dynas-ty. This area is an identified cultural relic unit understate-level protection;

* Sanshilipu Cultural Relic and Scenic Site. This area is nearthe Luoyang grade separation bridge.

Imnact Analysis

12. It was determined that the most significent impacts that couldresult from construction and operation of the Raifeng-Luoyang Expressway wouldincludes

* Physical destruction of natural habitat, cultural relics andhistoric sites, homes, businesses end infrastructure within theROW;

* Pollution resulting from vehicle exhaust emission caused byincreased vehicle movements along the Expressway;

* Increase of noise in the area of the ROW because of construc-tion activities and because of increased traffic volume movingat speed during expressway operation, and its impact on areasof human habitation and congregation;

* Potential pollution of surface and ground waters during con-struction end operation (particularly from expressway serviceareas);

* Potential increase in frequency end duration of flooding epi-sodes resulting from expressway intersection of natural drain-age lines; and

-78 - ANNh 4

* Public health and safety, and economic damage resulting fromconstruction related road traffic and traffic jame.

Environmental ManaRement Planning

13. Route Location. Five routes were originally considered during thefeasibility study of the Kaifeng-Luoyang Expressway. The basis for routeselection of alternative 3 (proposed expressway) was on economic and technicalgrounds, including avoidance of population centers and identified tombs andarchasologic sites of significance.

14. Cultural/Archaeolosical Issues. Because of the archeological impor-tance of section 10 of the Expressway (the archaeologic zone), the hGHCA hasdecided to start work on this section as soon as possible. This would allowmore time to slow or temporarily stop construction should items of historic orcultural value be found in the ROW. Because of the importance of this area,the HGHCA agreed during Preappraisal to conduct an expanded survey of thearchaeologic zone of the Expressway. The survey subsequently done covered anarea approximately 14 km long and 46 m wide. Test bores were drilled withinthis area as a means of identifying tombs. The Cultural Relics ResearchInstitute employed to conduct this Purvay used a total of 450 people whodrilled 1,470,000 test bores along the study area. The survey resulted in thediscovery, excavation and recovery of historical relics from 133 undiscoveredtombs along the ROW. The National Cultural Relics Protection Law and theHenan Province Cultural Relics Implementation Clause of this law wuuld requireall construction activities to cease if an antiquity site was discovered dur-ing expressway construction. The policies and actions followed by the hGHCAand related agencies comply with the Bank's policy on the preservation ofarcheological sites.

15. Hvdrologv Mad Water Ouality. The design of the Expressway willallow unhindered passage of a 1 in 100 year return flood, with major bridgesbeing designed to pass 1 in 300 year return floods. There are to be 457 cul-verts along the proposed expressway, for an average of 2.3 culverts per km.Water is also to be spread over remolded and exposed soils four times par dayduring dry weather. Contractors are to construct and satisfactorily maintainseptic tanks for offices, temporary accommodation and other sites containingablution facilities. Storage (especially fuels), warehouses, laydown areasare to be sited away from surface waters and provided with ring drain. andsoak pits to prevent accidental spills from reaching surface waters.

16. Air and Noise Oualitv Issues. Control of dust during constructionwould consist of staging of work to avoid unnecessarily exposing soils to windand rain erosion. Asphalt mixing plants must be more than 1,000 m from areasof human habitation and congregation if located upwind of these areas. Con-struction activities in areas of human habitation and congregation are to belimited to between the hours of 6 am and 10 pm. Cement-bound aggregate mixingplanto, materials stores and warehouses, stone crushing and screening machinesare to be sot up far from areas of human habitation and congregation. Theworks for constructing noise barriere to control operational noise levels areincluded in the bid documents for the Expresaway. Those noise barriers are tobe constructed at nine locations along the Expreosway, with total length being2,505 m (Table 1). Where necessary, special graded pavement will also be used

-79 - ANNEX 4

Table 1s LOCATION AND LENGTH OF SOUND SCREENS TO BECONSTRUCTED TO CONTROL TRAFFIC NOISE

IN SENSITIVE AREAS

Location of sound screen Length(metors)

Hendongcun Village, Zh.ngzhou 200Xuzhai, Zingyang County 200Sishui, Xingyang County 385Renxingou, Xingyang County 200Luokou, Gongyi City 150Shayugou, Gongyi City 300Wayaougou, ECongyi City 670C&ngxi, Gongyi City 100Kangdian, Gongyi City 300

Total 2.505

to minimize tire noise caused by heavy tra lic along sensitive areas along theExpresavay.

17. It wva determined from numerical mod*lling that pollutants sourcedfrom vehicle exhausts would be only a minor issue, as the model and existingliterature suggests that deposition of problem ions such as lead is very lim-ited and localized. Trees will be planted to minimize these problems outsidethe area of the ROW.

I8. Miscellaneous Nmnatemnt Actions. All borrow and quarry sites to beused during construction of the Expressway have been surveyed by the Provin-cial Environmental Protection Bureau. A list of these areas that can beexploited for xpreosway construction in an environmentally acceptable way hasbeen prepared and included in the bid documents. The bid documents specifythat only material from environmentally acceptable quarries can be used. Newquarries and borrov pits specifically opened by the successful contractors areto be located in barren hills and rehabilitated after use.

!9. Transport of dangerous goods along the Expressway must first beapproved by the public security, fire protection and traffic departments.Policing of hazardous materials movement along the Expressway will be a func-tion of the HGHCA. A contingency plan for i-dling hazardous materials acci-dents hasJ been prepared by the BGHCA.

20. Appendix 1 presents a summary of environmental management measuresrequired, along with the organization responsible for Implementing or monitor-ing effectiveness of the management measure. Where the management measuredeals specifically with construction and the construction contractor, therelevent clause In the bid documents is also listed. Table 2 is a sumarylist of investment proposed for environmental protection.

- 80- ANNEX 4

Table 2: PROPOSED INVESTMENT FOR ENVIRONMENTAL PROTECTION

Item Unit Quantity Cost

Afforestation of expressway ROW trees 117,439 $108,000Grass (sod) planting m2 1,302,005 $240,000Monitoring stations 2 $74,000Monitoring equipment /a $280,000Training costs people 10 $9,300Sound screens m 2,505 $140,000

la See Table 3.

Environmental Monitorina

21. Construction monitoring of the "archeological zone," section 10, ofthe Expressway (the section started before loan negotiations) will requireinterim environmental monitoring measures to be taken. This is because train-ing, institutional strengthening and equipment to be provided under the HenanHighway Project, and the permanent monitoring orgailzation within the HGHCA,will not be available when construction starts on this section.

22* A temr- ary section will be created within the structural organiza-tion of the Ceni. al Laboratory of the Joint Supervision set up to suporvisethe construction of the Expresswey. This group will monitor the environmentalong section 10 of the Expressway during construction, and report results tothe supervising engineer of the works. The activities and capabilities ofthis group would be expanded to include the entire expressway once the HenanHighway Project loan becomes effective. The senior staff of this temporaryenvironmental office will be seconded frow the Henan Provincial EnvironmentalProtection Bureau, as needed.

23. Environmental monitoring of expressway construction and operationwill include regular dust, noise, traffic surveillance, effects of vehicleexhaust emission on air quality, accumulation in food crops, and surface andground water quality. Once all construction begins, the environmental sectionof the Central Laboratory of the Supervision Department will be expanded(para. 17) and strengthened to include environmental monitoring of the wholelength of the Zhangzhou-Luoyang Expressway. This would include purchase of atleast some of the field monitoring equipment to be funded under the loan(Table 3). The head of the Environmental Department will report to the JointSupervision Team of the Hr"CA and to the environmental committee of HPCD(which reports, in turn, to the Environmental Committee of Henan Province).Once the Expressway is completed and onerational, the environmental groupwithin the Central Laboratory of the Supervision Office can be transferred tothe newly created Environmental Department of the HGHCA (Figure 1). GOC ambi-ent air and water quality standards are presented in Tables 4, 5 and 6).

e

- 81 - ANNKX 4

Table 3s ENVIRONMENTAL MONITORING EQUIPMENT FOR THE TWO PERMANENTMONITORING STATIONS ALONG THE ZHENGZHOU-LUOYANG EXPRESSWAY

Equipment description Number

KM-6A atmospheric sampler 20Spectrophotometer 1Infrared analyzer 1KB-102 high-volume air sampler 20ND-10 sound classifier 10Survey vehicle (mobile lab) 2Passenger vehicle (transport of survey staff) 2Atomic absorption spectrophotometer 1B&K automatic environmental noise toeter 1Ultraviolet spectrophotometer 1Balance, oven, electric stove (sa.) 4Computer 2

Table 4t ENVIRONMENTAL ASSESSHENT AND ACTION PLAN FOR THE ZHENGZHOU-LUOYANGEXPRESSWAY ATMOSPHERIC QUALITY STANDARDS (GB 3095-82)

Pollutant Concentrotion limit (malstandard cu m)Fetching Time Class I st. Class II st. Class III at.

SPN Daily average 0.15 0.30 0.50Any time 0.30 1.00 1.50

TSP Daily average 0.05 0.15 0.25Any time 0.15 0.50 0.70

SO2 Annual daily avg. 0.02 0.06 0.10Daily average 0.05 0.15 0.25Any tim 0.15 0.50 0.70

NO. Daily average 0.05 0.10 0.15Any time 0.10 0.15 0.30

CO Hourly average 4.00 4.00 6.0010.00 10.00 20.00

03 0.12 0.16 0.20

-82 - AMR 4

Table 5s ANBIENT NOISE STANDARDS FOR URBAN AREAS (GB 3096-82)(unitt Leq (dB)]

Area Applied Daytime Night Remarks

Special residentlal '5 35 Designated as quiet

Residential and educationalquarters 50 40 Purely residential and educa-

tional and institutionalareas

Category I mixed areas 55 45 Ordinary-mixed residentialwith commercial areas

Downtown, Category II mixed area 60 50 Concentrated commercial, andmixed industrial and residen-tial areas

Concentrated industrial area 70 55

Both sides of traffic arteries 65 55 Traffic > 100 veh/h

Table s: CLASSIFICATION OF WATER QUALITY

Classification 1st Class 2nd Class 3rd Class 4th Class 5th Class

Composite Index <0.25 0.25-0.5 0.5-0.75 0.75-2.0 2.0-3.0

B. Environmental Assessment. Provincial and Rural Roads in NW Henan and RIP

Bhcktround

24. The RIP will involve Bank financing of rural road projects, many ofwhich will not be identified or fully prepared before the Henan ProvincialHighway project is brought to the Bank's Board for review. This programmaticapproach to the rural road component of the project requires that an environ-mental assesment process be developed to ensure that subprojects submitted tothe Bank for funding under the loan include adequate consideration of possibleproject impact on the environment.

Envlroinmettal Assment

25. §anmenxia Road NA Most of the Provincial, County and rural roadsto be supported under the loan will involve work in an existing ROW, although

- 83 - A 4ZL&

it is possible that some rural roads within the RIP component with significantnew construction may be considered at some time during the loan disbursementperiod. The Provincial road from Samenxia to the provincial border is anexception as about 27 km of it will be built on a new alignment. The HSRIEPprepared, on behalf of the HGOCA, an HA and EAP for this provincial road. TheEA was reviewed by the Appraisal Mission and found to be acceptable. Thenearest cultural/scenic area to the proposed ROW is the Miaodigon culturalruins. It is more than 1,000 m away from the ROW, and no impact is expected.Major environmental management recomundations included in the EAP were:

* The need to protect approximately 2,000 people living within 30m of the road from potential noise impacts expected during roadoperation to be accomplished either through erection of sound*creens or by resettling them away from the problem areas;

* Provision in the bid document to spread water on exposed soilsto control dust;

* Construction activity to be strictly controlled between 10 p.m.and 6 a.m. in areas of human congregation and habitation;

* Bitumen mixing plants to be sited at lcast 1,000 m upwind ofareas of human habitation and congregation;

* Contractors will be required to ccnstruct and operate septictenks where ablution facilities aro included as part of con-struction support facilitieos

* Borrow end quarry areas are to be located in barren hills andthose opened specifically for the project are to be rehabili-tated after use; and

* Transport of dangerous goods along the road must be approved bythe public security, fire protection, and traffic departments.

26. Road Imnrovement Protrem HA The RIP component of the project willtherefore require the preparation of a Sectoral Environmental Assessment(SEA). This SUA would:

* Present a screening process designed to identify subprojectshaving potentially significant issues that would neqed to beaddressed in a subproject specific EA from those that would beunlikely to have significant impact on the environment;

* Present a general assessment of the kinds of impacts that mightbe associated with the different types (road widening, pavementimprovement? traffic bottleneck alleviation, etc) of rural roadsubprojecte; and

* Develop a Sectoral Environmental Action Plar dstailing actionsthat would be Implemented to eliminate, minimixe to acceptablelevels or mitigato the minor Impacts identified in the SEA.

-84- A X 4

27. The objective of the environmental screening in the SEA will be toseparate the RIP subprojects into one of two categories:

(a) Cate orv Ono Subprojects that only include improvement/rehabilits-tion of roads within an existing ROW, minor realignment that mightbe needed for localiled improvement of a traffic "bottleneck", andthose not within or affecting environmentally sensitive areas L/i.e., subprojects with no potentially significant environmentalimpact; and

(b) Cateoor Iwo Subprojects that require substantial widening and/oracquisition of new ROW. This would primarily include roads on newalignments (especially new penetration road.) and, in general, sub-vroiects with oorentiallv adverse imoact on environmentally sensi-tive areas.

28. For category one subprojects, the SEAP would be applied during engi-neering design and implementation phase. Each category one subproject willhave an HAP and RAP (resettlement action plan) attached as one of the prepara-tion sections describing the project. The elements of the EAP would be drawndirectly from the SEAP, and not prepared on a subproject specific basis. TheRAP would likewise be a small, simple document as subprojects in this categorywould not be likely to require acquisition of land. Category two subprojectswill require a complete EA and the preparation of a detailed, kubproject spe-cific EAP.

29. The generic SEA is possible for the majority of subprojects withinthe RIP, and for the provincial and rural roads in northwest Henan other thanthe Sanmenxia-Borders Road, because the subproject types proposed are simplewith few, and easily identifiable impacts. Those Impacts that may be identi-fied would therefore be easy to remedy. Hovever, where a new ROW is required,or when a subproject is to be implemented within an environmentally sensitivearea, a subproject specific EA with detailed EAP will be required. Prepara-tion of th SEA/SEAP will be a collaborative effort between the Highway Admin-lstration Bureau (HAB) and the Environmental Protection Bureau of Henan Prov-ince. The H4B will provide details regarding specific project activitieswithin each type of rural road subproject to be included in the RIP, and theEnvironmental Protection Bureau will determine the likely impacts expectedfrom each of these individual activities. The SEASEAP is to be sent to theBank for review at least one month before loan negotiations. Disbursement onany subnroiect in the RIP will be dependent on Bank review of the EA, environ-mental action and resettlement action ulans.

1/ An environmentally sensitive area is tentatively described as includingzones of significant human hiubitation (urbanized areas, residential con-contrations, hospitals, schools, commercial and market complexes), eco-logically important zones such as wetlands, forests, or any area rela-tively unaltered by humans (i.e., an areA that is described by DOCNational/Provincial Environmental Protection Agencv/Bureaus as being in a"natural" state), archeological/historical/cultural sites, and terrainwith slope greater than 50 percent--especially when soils are erodibleand if near surfaco waters.

- 85 - AMNL 4

30. The responsibility for preparing and implementing the SEA and itsguidelines rests with HAB.

Environmental Monitorina

31. Since works under the provincial and rural roads in northwest Henanend RIP components of the project are under the authority of BAB, a separatestructural and institutional organization from that established for expresswaymonitoring is needed to implement environmental monitoring.

32. An environmental unit 1ll be created within the Quality ControlExamination Center of HAB to administer and provide high level support forenvironmontal monitoring of provincial and rural road construction and opera-tion. Local *mnironmental monitoring responsibilities will rost with thePrefectural Branch Office of the Supervision Office. If a local Branch Officeis weak or doesn't have equipment, it will be assisted by the PrefecturalEnvironmental Protection Bureau.

Table 7: ENVIRONMENTAL MONITORING EQUIPMENT FOR THE PERMANENTMONITORING STATIONS ALONG THE 8ANMENXIA TO THE

PROVINCIAL BORDER ROAD (AND RIP MONITORING STATION)

EQUIPMENT DESCRIPTION NUMBER

KB-6A gas sampler 6Spectrophotometer 1Infrared analyzer 1KB-120 high-volume Air Sampler 6Atomic absorption spectrophotometer 1ND-10 sound level meter 6Ultraviolet spectrophotometer 1Balance, incubator, electric furnace (ea.) 4Computer IMeteorologic multipurpose observation Unit 6Vehicle 1

33. The environmental unit within the Quality Control Examination Centerof BAB will be equipped, through the loan, to fulfill its environmental moni-toring role, and to support the Prefectural Branch Offices of the SupervisionOffice set up to supervise construction of roads in northwest Henan and RIP.The list suggested by the RAB can be found in Table 7. The local SupervisionBranch Offices would compile monitoring information and report to the localSupervising Engineers Office and to the Quality Control Examination Center sothat appropriate management recommendations could be made and remedial actionstoken.

86 ANNEX 4Appendix 1Page 1

2I

d a

131 11{iIQ

IIENAN PROVINCIAL IUCIIWAY PROJECT

SummrY of Key Elsent of EmaMevWa Action la

For Z _sw.bo - Lunt Exressav

EwAf_ 1 1mw bsue Me_s tskenlto be taken Responsible Entity Clause of Bid Document Renrkand lKme in block, yas sealed with can; wet Siot sprvigio stafif&deAligwil be appied to Aunel fomation & JEMTvendistion, dut & Vs conuol wil be wefta-uvw.

Conteracdr, site supevision(c) Ashalt pla hall be placed wiward 1000 saff & JEMT Clws 901.02mee away in populated ata.2. Nis pontion (d) Minim.. dud, wate & air pe11tdon C:ontact, RSS & 1PM? Cluse 29.2(e) Co _acio equpmen & connction avities Cotiractor, RSS & JBE T Oau 901.02wich genete excessive ma ne dei

ar, will be limt to daylih hours & adalowed to yos betwen 10:00 p.m. & 6.00 a.m.(M Mine nois prduced by c c Coractr, RSS h JET Clus 29.2

coadvMtsn m idemm are. s-3. Wate poUution Conatetiowase water, was duiyloil foa Contracto, RSS & IEMT Chuse 902.02tuan £ sewegrae fremfing questers ana be owed todea d i t fids, soues ofddakig war, inipton wme or waerresvoi Coeactor, RSS & JE&f Cls 903Ot) Teaqoalnag will be provided for cum &fils and mabiied reguly.

Of Mitain epedo ion Of eising t Contractor, RSS A EMT Clae 29.2system & habltae & mainain do ysm.Dung & was n frw the dsit wi betat-, to avid damag to naby chamel, filds& buis.

4. 7Taffic geneated risk (cnl To the exted possible bi e trott access to Conteactr, RSS & IEM1 Cae 103.02ofed taffic te alae slseve cogsion h conrl trafic t low peak.ooeetiw ouAmine mois aNW bow traflic._o _m i_

dr pll~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~G

t1 D V4

-. 88- ANNEX 4Appendix 1Page 3

A

iml~~~~~~.I

.3g U

lid i il,ll a tifill

~~~. S

ii 1

HENA4 PROVINCIAL MIIGIIWkY PROJECT

For Umpbou - Ltem ExDwewn

EAvimameWW lmMnmw" takcno be "ken Reaonal Entity Cue of Bid DoanneT Raen

S. Opetion _ 1! Mcnlmiq of CO, N4O TSP, water quafty, d artough ab o_inml. & vlbntloo& otaoaaty ad daiy liationmodouing of eoz. and hydro carbon on Ig-Mem bek.

Eavirimnsl aectia Of(U) Deagtionof a apecigrl to hanl t anqpot de futu High Grade

of hambdms conoditsa &eaidMe. ighway Adantimuon

OD

-o.

l.

- 90 - ANNE S

CHIPNA

EIMAN PROVINCIAL HIGHWAY PROJECT

Resettlement Action Plane

A. Zhenazhou-Luovana Exnresswav

Routs Location and Imact

1 SThe expressway between Zhengzhou and Luoyang (the second stage ofthe expressway between Kaifeng and Luoyang of the No. 310 National Road)starts east from Liulin, Jinshui district of Zhengzhou and ends vest inDongguanzhuang village, Chaoyang township of Mengjin county of Luoyang city.The alinement for the Expressway was selected to avoid densely populated areasand minimize the acquisition of agricultural lands. A total of 780.04 ha ofland will be acquired for the project of about 0.61 petcent of the total areaof various towns along the expressway. The cultivated area to be acquired forthe expressway is 725.25 ha, about 1.1 percent of the total cultivated area ofthe towns along the expressway. Of the 11,523 persons affected by land acqui-sition, 48 percent are economically active. The affected population is pri-marily engagod in farming but during the nonfarming season most people alsoengage in sideline occupations such as construction work. Approximately, 348households (8.60 percent) will be affected by land acquisition end houseremoval. The removal of houses will affect 1,252 households, 30 percent ofhouseholds (5,527 people) and 11 enterprises and institutions (195 people).

Policy Basis of Lend Acquisition and Resettlement

2. The province follows the Lend Administration Law of PRC and its ownregulations for land acquisition and resettlement. However, for initiatingaction on land acquisition end resettlement for major highway projects theprovinces involved are required to obtain the approval of the feasibilitystudy recommendations and MOC's approval of the preliminary engineeringdesign. Approval has to be sought from the National Land AdministrationBureau if over 1,000 mu of agricultural land is being acquired.

Compensation Policies

3. Based on the above, compensation provisions are applied to both theexpressway coIponent (project) end the provincial and rural roads componentsof the proposed project:

Lend Compensations 6x the average annual output value of the landacquired in the preceding three years.

Crop Compensation: 0.3x the average annual output value of the landacquired in the preceding three years.

- 91 - ANNX 5

Xesettlem_nt Subsidys 3x the average annual output value of the landacquired in the preceding three years.

Compensation fees for crops are paid to the individual owners.

4. Land compensation fees and reeettlement subsidies are paid tocounty, township or village governments and used collectively. Enterprisesthat absorb surplus labor are entitled to resettlement subsidies to meet thecost of taking on new labor. The comnpenation fees are used to develop thevillages and -ay be spent on land reclamation, road development, pump wellsand establishing new village or township enterprises. The local village com-mittees are expected to submit a plan for using the compensation monies to thetownship governments.

5. Compensation for personal belongings are calculated according tolocal regulations and meet the costs of replacing lost houses, trees, tombsand wells. Land for reconstructing houses are provided within the same vil-lage and individual owners are responsible for replacing houses. A resettle-ment subsidy of Y 50 per person is paid to Souseholds that are affected byhouse removal.

6. Compensation is also paid for removal and replacement of power andtransmission lines. The managing units are responsible for replacement.

7. The following unit prices had been used for estimating the costs ofcompensation:

Item Unit Unit Price(Yuan)

Building (brick) ma 120more than one floor ml 160

Simple house ma 40

Cave (pitching with brick or stone) ma 100

Surfacing with lime m s

Tomb (1 coffin) 100

Well (hilly area) 40 m 10,000(Y 150 for each extra moter beyond 40 meters)

Well (flat area) 40 m 3,000(Y 120 for every meter beyond 40 meters)

-92- ANX 5

Resettlement Procedurea

8. Investigation of ComDansation Standards. HGHCA, the responsibleprovincial athority for resettlement activities of the Expressway, carriedout the investigation of compensation parameters for various counties alongthe route and aubmitted the report for approval to the National Land Bureau inNovember 1991, The investigation was carried out with the assistance of thelocal land bureaus, local government officials and the village leaders. Thetotal compensation coat is estimated ut Y 83.45 million (Appendices 1 and 2 ofthis Annex).

Oraanizational Arran"lements

9. Provincial Level. The Coordination Department of HGHCA with fourstaff member. is responsible for supervising land acquisition and resettlementfor the Expressway.

10. City Level. City level reeettlement offices are set up with 10-15staff members. The city level officers work with the land management depart-ments to implement land acquisition and resettlement in the cities, countiesand districts.

1i. County Level. County le'el resettlement departments have 4 to 5staff members and are responsible for organizing subordinate township andvillage governments to undertake activities related to land acquisition andresettlement.

12. Townshio Level. The township level departments are staffed with 3to 4 staff members and 2 staff members for each village. They are responsiblefor disbursing compensation for crops and private property and for planningnew residential quarters for those whose houses will be demolished.

13. Survey of the Rijht-of-WaI (ROW). The survey of the ROW for theExpressway was assigned to the two major cities along the Expressway,Zhengz*ou and Luoyang. The provincial authority has signed land acquisitionagreements with the city governments and the people's governments in December1991. Once the local surveys are completed, records are prepared in unifiedformat and submitted to the county level for final verification and then for-warded to the city land acquisition and resettlement offices for review andthen reported to the Provincial Authority.

14. Contracts. The agreements authorizing land acquisition were signedbetween the RGHCA and the various local governments and land bureaus. OnJanuary 7, 1992, the Land Administration Bureau approved the land acquisitionfor the highway.

i5. Comoletion of ROW Acauisition and Resettlement. Acquisition ofland, payment of compensation and demolition of houses and resettlement willbe completed by March 1993. Resettlement through land adjustment is completein Contract Section No. 10 (archeological area) for which an early start isxpected. Other. will commence on a phased program, targeted for completionin the first quartor of 1993.

-93 - AEELS

B. Provincial and Rural Road. in Northwest Hen-n

16, The compensation standards, organization arrangements and resettle-ment procedures adopted are similar to those of the Expressway. The totalcompensation coat is estimated at Y 17.7 million. The Highway AdministrationBureau (BAB) of the Henan Provincial Department of Communications is In over-all charge.

17. The provincial and rural roads in northwest Henan involve 11 coun-ties and 35 townships and will require 246.05 ha of land. A total of 1,026households and 4,874 persons of whom 60 percent are economically active willbe affected by the projects.

C Road Improvement Proaram

18. As this component is not yet well defined, a reliable estimate ofthe people affected by the various subprojects in RIP cannot be made at thisstage. However, an understanding was reached'with HPCD during project prepa-ration that the land acquisition, resettlenent and compensation procedures tobe followed would be the same as that applied for the Expressway, which habeen satisfactory. The respective actions to be taken regarding land acquisi-tion and resettlement would be outlined in RAPs and correlated with the prepa-ration of the engineering and evaluation process for the subproject packages,requiring submission for Bank approval for financing under the project.Assurances would be obtained from HPCD at negotiations that RAPs for subproj-ects under the RIP would be carried out in a manner satisfactory to the Bank.

D. Monitorin_ of Resettlement

19. The monitoring of the effectiveness and the socioeconomic impacts ofresettlement on the population will be undertaken by the Land ManagementBureau jointly with HGHCA in case of the Expressway and with HAB in the caseof the remaining roads. The monitoring teams would include qualified socialscientists acceptable to the Bank. Monitoring reports for the Expressway andother roads would be submitted to the Bank by December 15, 1993 and by thesame date for the following two years (1994 and 1995).

-94 - AM 5

MENg PROVINCIAL 3I0RWA PRJBCT

Households ad ft2gbtion to be Relocatet l'oB th- Zbennrhou-Luovans 1xzr teava

Number go. ofLand *conmi- persons

City, county (diatrict), go. of to be calby not *conomi-township villap h,u.eholds acquired Popllation active caly active

(mu) (population)

Zhengzhou, Xinfyang Wauguhuang,Hancun 20 1,410.36 91 49 42

Si9hul, Qinsjlggou 35 2,994.0 191 90 101Slehuishen 28 2,205.1 175 98 77vujianin 25 2,241.3 141 71 70Zhougou 33 2,816.1 165 82 83Nantun 105 8,861.0 566 274 292Shilibao 119 10,331.5 496 248 248Liaoyu 44 3,745.82 220 102 11

subtotal 409 34.606.38 2.045 1014 1.031

Gon3 yl City, Shayugou, YTagyu 20 2,229 82 38 44Jingou 24 2,553 86 39 47Luokou 75 6,854 309 145 164Shayugou 83 7,552 336 162 174R.ucungou 32 3,999 124 60 64Huo 20 2,267 78 37 41Tanxiaogan 20 2,325 69 34 35LUOUi 5 407.5 25 12 13Zhanjieshan Cangxl 45 4,004 168 31 3710y7o 1 199 4 2 2Deiya0wan 162 13,264.7 719 353 366Xiaoyilhen Longvel 39 3,418 180 87 93Shlhuiwu 69 7,631.8 265 127 138Xangd1an Kangbel 169 22,689.5 707 347 360YeLing 11 2,585 94 47 47

Subtotal 78 81.978.S 3.246 1.S71 L.67S

Total 1JAM 116.5S4.88 I2M 2.S85 2.706

Luoyang, Yanshl, Shanhua, Iayoudlan 50 5,889 195 92 103Neva 7 439.17 41 19 22

Total Sz 6.328.17 236 1l1 12

GRAMD jOtAL 1.251 122.913.0S S.527 2.696 MM

Sourcs ROHCM.

fRO WIMIAL BIO 1Y

Land, Acaniltion and IeettLant Camuenatio S_najv(inu millon. of Yuans)

Fund for Nanasland & mentlprepa-

City, county Number of Reset- Young Sub- mdlvi- Collec- State- Sub- rolo- ration(district) hectares Land tlement crops total dual tive run total cation fund (52) Total

JSnahul, Zbengshou 54.1 2.73 1.37 0.14 4.24 0.21 0.78 1.12 2.11 6.35 0.32 6.67Nangehan, Zhng2hou 25.2 1.28 0.64 0.06 1.98 0.14 0.21 2.71 3.06 5.04 0.25 5.29

Zbonguan, Zbhngshou 56.3 2.88 1.44 0.14 4.46 0.12 0.59 0.45 1.16 5.62 0.28 5.90lingyang, Zhengzhou 202.4 6.22 4.67 0.47 11.36 4.55 4.15 1.62 10.32 21.68 1.08 22.76Gengal, Zhengzbou 169.8 5.22 3.91 0.39 9.52 9.20 2.34 2.56 14.10 23.62 1.18 24.80Tanshi, Luoyang 129.2 3.18 2.39 0.24 5.81 1.07 1.00 1.18 3.25 9.06 0.45 9.51

,end In, Luoyan8 142.5 3.52 2.64 0.26 6.42 0.19 0.48 1.02 1.69 8.11 0.41 8.52%O

Total 779.5 25.03 17.06 1.70 43.79 15.48 9.55 10.66 35.69 79.48 3.97 83.45

Notet The share of 30 percent of farmlsnd-occupying tax turned over to the State 1s Y 374.49 mllion. The find for survey andexcavation of historic relics is 3.5804 million. The above two funds are not included in the table.

Source EICD.

Ius

-96 _ AM. 6

Cal

RL3- BIGHWAY PROJECT

Imnlementation Schedule

This annex presents the implementation schedule for the va:'iouocomponents of the project. Appendix 1 *umarizes the overall lmplementationschedule for the project as a whole. Appendix 2 shows the detailed implemen-tation schedule for Contract Section 10 (Archeological Zone), remaining fourcontract sections of the Zhengzhou-Luoyang Expreosway to be constructed byICB, administration and maintenance buildings end service areas, and ele-trical and mechanical works for the Expressway. Appendix 3 depicts thedetailed Implementation schedule for the supervision of construction of theExpressway. Appendix 4 sumarizes the detailed Implementation schedule forthe five provincial roads in northwest Henan, whereas Appendix 5 summarizesthe similar schodule for the six rural roads in northwest Henan. The imple-mentation schedule for the first package of RIP will be developed when thesubprojects in this package are approved by the Bank. These schedules showthe estimated time requirements for construction activities as well as forpreconstruction activities such as preparation of bid documents, prequalifica-tion documents, advertliement, bidding process, evaluation of bids, negotia-tions end signing of contracts.

NE~ HIGH PJCT

UDUlmntatlof Schedule

1992 1993 1994 1995 1996 1997

1. Zhengzhou-Luoyan8 pressway

(a) 1CB contracts (Sections 7, 8 and 9)

(b) LCB contract (Section go. 10) _

(c) 8 and 1 supply and installation -Cd) Service and administration facilities

2. Proincial and rural roads In NW Henan

3. Road Improwemnt Program -Suvervision of Construction

1. Zbengzhou-Luoyang lxpresavy -2. Roads in NW Hean and rIP - -Procmnut of Kaulmt

1. Zbhenagou-Luoyan Epressay

(a) Monitori" and testln and avirosntalprot ctiD a,

(b) Operation and matenance " -2. Provincial ad rural road.

(a) Monitoring and testing, Etl1IRDB3

Sb) Routine and periodic maintenance

Cc) Institutional strengthenibg

Trainina

1. Comprebhnsive training

2. Istitutional strengthening

3. Supervislio training

Trucki nE td,-

Legends -tPre|ualPficatlon4Preparation of Bidding Documents/TORt11ES 31 B lSgPzoce9jCoap*tit1ou amoug Consultants¢c

ConstructlonISapervieton/Delivery- Training

-98 - ANNEX 6Apendix

HERANM HigWAY PROJECT

Imnpatign PyroArqM foi C5astructlon of Zhengzhou-Luovang Exoresgwar

I. Civil Works

A. Contract Section 10 (nJJ

Invite bido rom 4 selected eontractorst Dec. 1991Roceive bids by: Jan. 10, 1992Blid evaluation: Jan. 10 - Feb. 14, 1992

Notify successful bidder: Feb. 15, 1992Bank review of bLd documents &

bidding processs Feb. 26 - A?ril 15, 1992Contractor 'tart workas April 22, 1992Construction of contract Section 10: May 1992 - Oct. 1995

3. Contract Sections 6. 7. 8 and 9 (ICD)

Prequalification document available for sale ons Feb. 17, 1992Last date to submit PQ documentst April 17, 1992PQ documents evalsatton report & HOC review: April 18 - May 17, 1992Bank review and no objection to PQ documentsevaluation report: June 15, 1992

Reviw bid documents by HOC: March 16 - April 1, 1992Review bid documents by Bank: April 10 - May 31, 1992Sell bidding documents to prequalifiedcontractors: June 16, 1992

Last date to receive bid documents: Sept. 15, 1992Blid evaluation report & government reviews Sept. 15 - Oct. 10, 1992Bank review bid evaluation report andno objection: Oct. 16 - Nov. 15, 1992

Notify successful bidders Nov. 16, 1992Negotiate and sign contract with contractors Nov. 16 - Dec. 15, 1992Start construction on: Jan. 1, 1993Complete construction by: June 30, 1996

C. Administration and Maintenonce Buildngs gand ServiceAreas (Local Shor,ing)

Completed bid documentat Dec. 31, 1992 - June 30, 1993Invite bides Jan. 15 - July 15, 1993Receive bids: March 1 - Sept. 1, 1993Complete bids evaluations April 1 - Oct. 1, 1993Negotiate and sign contracts: May 1 - Nov. 1, 1993Start construction: June 1 - )c. 1, 19°3Complete construction by: Dec. 31, 1995

-99 - A hI 6

ZI. IIleerical and M chnical Works (ICB)

Complets bid documents and review by HOC: may S1, 1994keviow bid documents by eank and no objections June 1-30, 1994Invite bides July 1, 1994Last date to recolve bides Sept. 15, 1994Prepare bld *valuetion report and

HOC reviews Sept. 16 - Oct. 31, 1994Review bid evaluation report by Bank end no

objection Nov. 1 - 30, 1994Negotiato and sign contracts Dec. 1-31, 1434Start construction ons Jan. 1,Completion construction bys March 31, 19wv

- 100 - ANfX 6

Imnl.mentatlon ProarSm of 8uorlsie.n for Construction ofZhonaghou-LuoylMit Rxroressva

Review end no objection of Bank to terms of reference,letter of invitation and short list of consultantst March 20, 1992

Ievet lnvitations to conai.tantcs March 21, 1992

Last date to receive proposal.: May 31, 1992

Complete proposal evaluation report and HOC review: June '-30, 1992

Bank review proposal evaluation report andno objoction: July 1-31, 1992

Negotiations with consultant and sign contracts Aug. 1-31, 1992

Prepare training material b) 3onsultants Sept. 1-3G* 1992

Train local personnel in China: Oct. 1 - Nov. 30, 1992

Train local personnel abroad: Dec. 1-31, 1992

Start supervision of constructions Jan. 1, 1993

Complete supervision of construction: June 30, 1996

Atnmtiftta loul f - Jul U-4 im lb r !a I2 uy Cy Juy1*l 0 "

(94.9 be (19.5 be (3.6 b) (25.1 be (.i b)

so"pareIQ doe May 19, Kw2 is, 19. 1992 11 19. 1992 J 1i., 1m Eq is. 192

bu oie n _e objetio to SQ doaent Jul 2, £992 July 2. 1992 July 2, £992 July 2, 1i2 Jly 2, 1zm

Aieta 1 1lcl r. July 64, 1992 Ma !0, 1992 July 12. 199 July 12. 1992 Eq 10. ~928.1 of SQ douent. Jwly 5, 1992 Eq 13, 1992 July 13. 192 I S l,1. 192 Eq 13. 1992

Final dots to ubeidt 1(, docmet doat 24, 12 hapat 24, 1ma _ et 24, l192 _ nac 24, 192 _ 24. 192 2.kaluttAs rPt Of IQ deoMeIe Septmer 25. 9I92 a rm 29 - Ju1l 21 "Ft. 1 - Sept. 22 Set. 1 - Sert. 22 Jums 20 - Juty 21

Seek revim' so objection to SQ repor October 21, 1M2 October 21, 1ma2 October 21, 1ma Octoe 21, 12 Octobr 21. m2tfy rplii c _rtr October 25, 1"2 October 25, 1"2 Octor 25, 1992 Octber 2S. 1992 October 25, M29

Ce1nte bid dount. July 6, £92 JULY 6. 1992 JULy Go £992 July So 99 JUly 6, 192

au revie S a objection to bidin 4.-. "pter II, M2 Septer 11. 1"2 Septe_e II, 199 9ept-er 11, 12 Septer 11, 1992$U of bViA do_m_to 0flabor 26. 1a Oetober 26, 1m2 October 26, 9m Octebr 2t, 192 October 26, 1m9 0

Let dat. to rtceive bl,e Pec2er 31, £92 eceobe 31, m2 Deceber 31, M9 December 31, 19"2 Deceer 13. £9931A evalatinreprt Ja 3£. 1993 Jimam" s1, 13msa 31, 1M Janary 31. 1"S Jaay s1t 19"'

ba* renma. nd to objection to bidevaluation repr febru7 2I, 199 rebrua 23, 199 februar 2r , 1"93 eruar; .23,19w tebroay 28. 1993Accepteoc letter to e_1ceeful bidders Marc 1, 199 March 1. 1M March 1, £93 Marc. 1, 199s Marc 1, Im

eowtiat ud alga contracts Ma I6, 199 March 16, £99 ma is, 199 March 16, 199 march 16,. 199

cawtnetutios Stak

start co _tructio AP.t 16, 193 AriU 1is, 19 April 16, 199 Apra 16s, £4 April 16, 19

C 1.te omtznctiom 3m 30s. £m March 3S, m Jm 30, £6 S r 30, 1m99 Septer 30, 996

caMU'.

lmlemeatatio Proe_m for the Sbz RIral . In Northeast Boom

Rins County "aus Cosmty Jiluaua City 317mg city J 1wU g City N.lxbug Cityntrance. ta#ighbm- Vanu- Unetuiang- slesbal- ¢oosag-Sd_qao Doyl0 Rd. 11*7 Rd. ibetow. ld. 3a1'n W. i l M.(18.2 km) (19.0 hk) (!8.6 km) (23.2 Ie) (14.4 he (15.1 he

Prepaoe bid docomte Oct. 15, 1992 July 31, 1992 July 31, 1992 July 31, 1992 October LS, I2 Oct. IS, 1992

Lend acquieltios and rzeettlamet and*earizommntl asesaammt Jan. -March 1992 Oct. -Dec. " Feb. -Aprl 1993 Sept.-ov. 1992 Jn.-ihprll I993 Jan.-April 193

3mb reovism ed ae objoction to bid

docMeat poet reivie poet revie Aug. 31, 1992 poet reie w post rlo poot r ei

invitation Of bide Nov. 1, 1992 Aug. IS, 1992 Sept. 15, 992 Aug. 1S, 192 Sept. iS, im Sept. iS, 1992

teat date to receive bis Dec. 15, 1992 Sept. 30, 1992 ov. 30. 1993 Sept. 30, 1992 Nov. 30, 1992 Now. 30, 1093

Bid valuation report Jan. 31, 1993 Oct. 31, 1992 Jan. 15, 19"3 Oct. 31, 1992 Jan. 1S, 193 Jan. is, 19w3

Acceptance letter to euce.efu biddets Feb. 15, 1993 No. 15, 1992 leb. 15, 1993 NM. iS, 1992 Y?eb. AS, 1993 1eb. 15. 1993

Negotiate *1 sign cotmate l arcd 30, 1993 Dec. 15, 192 March 31, 19"3 Dc. U, 1992 Mach 31, 193 PAT 1 1993

Start construction April IS, 1993 Jan. 1, 1993 Apra 1, 1993 Jan. 1, 1993 ApriS, m 13 April 15, 1993

Complete conetrctio Jun 30, I995 Oct. 31, 1995 Ju 30, 1995 Oct. 31, 1995 Jan. 31, I9 ff m 30, I"S

UA

- 103 - AM 7

CHI

HERMI IGEHWAY PROJECT

Sunervision Mission Plan

TIming Main activities Skills requirement Staff-weeks

3193 Prolect Launch Highway Engineerlng 3The review of all key procedures for Bank- Proc trementEsecutig Agency Interactions, such a project Disbursementselection (RIP), procurement, disbursement, Ensviromentenvironment and resettlement, lmplementation Truckingschedule and progress reporting requirements.Review progress on Trucking Study.

10/93 General SuDervisiol Hligway Engineering 2S1) review of ovekall. progress for each com- Procurement

pon,at and identify pending Issues nd Resettlementagree on follow up actions

CLi) reach agreement on resettlement monitoringarrangemetst and

liII) review proposals for equipment for maintenanceof highway network and lntltutionalstrengthening.

3/94 Naior Suyervllon Highway ngineeraing 3In-depth review of implementation statue with Procurementparticular emphasis ons EnvirosmentC1) contractors' performance; RIP, PUS

(C1) effectiveness of supervision; Transport EconomicsC1ii) adequacy of enviromental protection ma- Trucklig

sures;(Cv) review proposal for equipment procurement

for the operation and maintennce of thehishway network;

(v) review bidding documents for LSA supply andInstallation contract for the Expressway;

(vi) preparation of RIP subprojects and RIP, PUS,and staff training programs and

(vii) review progress on trucking study.

10194 General Sunervlslon Highway Engineering 1.5(i) review overall progress for each component Procurement

and Identify penditng issues nd agree onfollow up actions;

C(i) reviow proposal for procurement of equipmentfor operatlon an maintenance ofExpressway; and

(iii) review progreoo on trucking study.

3/95 Malor Sunerviion Highway Enginering 2In-depth review of Implementation status with Envirowoentparticular emphsis ona Resettlemnt(i) contractors' performace; Truckiag

C(i) effectiveness of supervision(III) adequacy of enviroimental protection ma-

ures;C(Lv) RIP, PUS, and staff :raining progrm; and(v) review progress on implementation of

recommendatlons of truckikg study.

- 104 - ANNEX

TIn8In Main activities Skills requirement Staff-weeks

10/95 General $uvervision Highway Engineering 2Reviewing overall progress for each componentand identifying pending l uee and agreeing onfolov up actions.

3/96 Malor Suvervision Highway Engineering 2 5In-depth review of lmplementation status with Environmentparticular mphasis ons RIP, PHS(1) contractore' performancel Trucking1i1) effectiveness of supervision;

Ci1) adequacy of envirommental protection mea-sures;

(iv) RIP, PUS, and *taff training progranm;and

Iv) review progress on impleawntation of recommen-dations of trucking study.

10/96 General Sunervision Highway Engineering 1.5Reviewing overall progress for each componentand ldentifylng pending Issues and agreeing onfollow up actions.

4/97 General Suoervision Highway Engineering 1.5Reviewing overall progress for each componentand ldentifying pending lsues nd agreelig onfollow-up actions.

10/97 PCR ission Highway Engineering 4A consolidated review of project lmplement-- Transport Economicetion. Enviroment

ResettlementRIP, PHS, TrainingTrucking

Total 22

- 105 - ANNEX 8

CHINA

HENAN HIGHWAY PROJECT

Toll Rate Study for Zhengzhou-Luovang Exiresswav

Outline Terms of Reference

Obiective of Study

1. The objective of the study is to analyze and recommend a toll rate*tructure for the Zhengzhou-Luoyang Expressway. The study is expected to giveproper consideration to cost recovery goals, economic efficiency and equity inthe toll structure among different classes of vehicles.

Princiiles and Data for Establishina Toll Rates

2. Pricing the use of roads needs to balance cost recovery objectives,economic efficiency and equity among users. Achieving a proper balance amongthese objectives will be influenced by the level and composition of traffic,its effect on the cost of operating and maintaining the road, the vehicleoperating costs on the expressway, the existence of alternative routes and thevehicle operating costa on such routes, and the administrative costs of oper-ating the toll system.

3. While the roads' maintenance and operating costs, including theadministrative costs of operating the tolling system, will define the coststhat the road authorities will aim to recover, as a minimum, the analysisshould explore the extent to which loan repayment (principal plus interest)may also be recovered from toll revenues. This analysis should take intoaccount the existence of route alternatives, and that the difference in vehi-cle operating costs, including the price charged at the tolling stations,between the new and the existing road, will influence vehicle drivers' deci-sion to use the new tolled road or to remain on the old road. The trafficwhich tolls discourage from using the new road, will remain at the lower qual-ity existing roads, and will have higher vehicle operating costs. Such highercoats represent an economic loss for the society. Toll levels should be *stto minimize such losses to the regional and national economy. As a startingpoint, a good empirical rule is to charge tolls no higher than one third theestimated savings in vehicle operating costs between the new and the old road.

4. In order to be able to set a toll rate structure compatible with theabove principles, the following essential data will be required:

(a) traffic composition on the existing road, both existing and pro-jected, under "no toll" situation, and with breakdown by origin anddestinations

(b) Identification of alternative routes for the various origin-destina-tion pairs;

- 106 - ANNEX 8

(c) vehicle operating costs on the expressway and on the alternativeroutes, including the costs on access roads to and from the express-

(d) in light of (a) through (c), estimates of traffic demand elasticityto toll prices; and

(e) vehicle types, and their relative costs imposed on road maintenance.

Toll Revenue and Tr-ffic Diversion Pro1ections

5. On the basis of the proposed toll rate structure, and the presentand projected traffic and tolling cost data, the study will make estimateo of:

(a) Total toll revenues to be collected yearly, over a period of 20years;

(b) Net toll revenues, on a yearly basis, once toll collection costs aretaken into account;

(c) Estimates of the traffic that would not use the expressway as aresult of the toll charges.

Consideration of Chinese Exnerience with Toll Roads

6. The study will take particularly into account the experience to datewith toll roads in China, especially those under conditions similar to theZhengzhou-Luoyang Expressway. This experience will be especially useful fordetermining the data on vehicle operating costs, traffic demand elasticitiesand road maintenance costs. The review of Chinese experience should lookparticularly at the levels of toll rates charged, their relation to vehicleoperating costs savings between the new and the existing routea, and theextent of traffic diversion.

Timing of Stud,

7. The study is expected to be completed and submitted to the WorldBank by October 31, 1995.

107 - ANN 9

CHI

HENAN HIGHWAY PROJECT

Selected Documents Available in the Pro1ect File

1. Feasibiity Study Report on Zhengzhou-Luoyang Expressway.

2. Environmental Impact Assessment Concerning the Construction of Kaifeng-Luoyang Eprossway of National Highway 310; Scientific Research Instituteof Euvironmental Protection of Henan Provinco; June 1989.

3. Environmental Impact Report of Sasmnxia to Davang Reroute Engineering;Environmental Protection Scientific Research Institute of Sanmenxia Cityof Henan Province; December 1991.

4. Report on the Implmentation Plan of Land Acquisition and Relocation ofthe Expresevsy between Zhengzhou end Luoyang; High-Grade HighwayConstruction Authority of Henan Province; December 23, 1991.

3. Ronan Provincial Implementation Regulations of the "The LandAdministration Law"; PRC, Henan Provincial Land AdministrationDepartment; October 1987.

6. PRC Regulations on Land Acquisition, Resettlement and Compensations forStats Construction Projects; A collection of Selected Documents, Preparedby the World Bank Resident Mission in China, Beijing; April 1992.

7. Implemnatation Plan of Land Acquisition and Relocation of the ProvincialKey Highways and Rural Highways; Highway Management Bureau of theDepartment of Communications of Henan Province; Decomber 1991.

S. The Investigation Report on the Improvement of the Highway Network inNorthwest Nenan, Main Volume and Appendices 1 to 5; The Planning Sectionand Highway Bureau of Coamunication Department of Henan Province and theHigh-Grade Highway Construction Authority.

9. The People's Republic of Chin*a Northwest menan Provincial Road NetworkRehabilitation Program; Investigation Report on the Following Rural RoadProjects; March 1991.

10. Report on Equipment Purchase for the Henan Highway Project; January 1992.

11. Pavement Management System L4isted, Equipment Needs for HighwayConstruction end Maintenance Henan, Guangdong and Zhejiang Provinces;December 30, 1991.

CHINA

HENIN HIGHWAY PROJECt

Freight Traffic Intensities In Selected Counties...............................................

CoLntry a Tons originated / a Ton-kmla Averae Estimted WP Tons/S1 000 Ton-IMSPCosmtry (millions of sq km) (mltlions (billions) distance (km) (biLtions of S) of GNP

Chins (1967) 9.6 8,660 1.526 176 320 27.1 4.77USSIR (197 22.4 33.381 8,339 250 2,375 14.1 3.51USA (19) 9.4 5,261 3.702 704 4,486 1.1 0.83India (197/8) 3.3 551 335 608 241 2.3 1.40Brazil (1987) 8.5 847 355 /_b 419 315 2.7 1.13

a a Includes rail, hghWy, Internl waterway pipeline, and air freight only.I) 1966 de,

Sources: ChInr: "Statistical Yearbook of China". 198. p. 448. GIP from The World Sank At:as 198", p. 6.USSR: Uarodnoe Khozaistvo SSSR v. 1967 . ("The USSR National Economy in 1987"), pp. 306-307. CUP from NHandook of EconomicStatistics 19fV, p. 31. Truck traffic estimtes from Vladimir Kontorovich nd Noltand HLmter, "Trsport Performnce in 1987", p. 6.USA: "Tranportation in America", 1989, p. 8. GP from The World BankAtlas 1968", p. 9.India: World Dank estimtes bused on Goverment of India. mEconaic Survey, 1988/89 nd "Perspective Plaming forTrasport Oevetopment 1988. UNP estimte from "The World Sank Atlas 1968" p. 7.!^ Y world Bank Appraisl Report, Highays _agemnt and Rehabititicon Report", 1989. GP from "The World 8n Atlas1968 p. 6.

'"I

07

cmii

mRm RI;;;;; ICT

Road and Railway Network Density ni SIect*d Counties

al ____________________ _________________________________

Population Axea Length LengthCountry Ter (millions) ('000 *q km) ('000 km) (Is'000 pop) (bo/'000 *q 8.) ('000 km) (kin'000 pop) (k /.000 sq im)

China 1987 1,081 9,600 53 0.05 5.5 982 0.9 102.3

USSR 1987 282 22,403 145 0.52 6.5 1,610 5.7 71.9

USA 1987 244 9,400 213 0.87 22.6 6,242 25.6 664.0

India 1987 797 3,287 62 0.08 18.9 1,800 2.3 547.6

Brazil 1987 145 8,500 30 0.21 3.5 1,500 10.3 176.5 o

Sourcest Chbna *Statistical Yearbook of ChIna, 1988, p. 3, 428-429USSR: USSR State Statistical Commission: 'Earodnoe Ihozya atwo SSSR v. 1987 e ("The USSR Na.-ional Economy In 19870),

pp.312, 327, and 671USA: Eno Foundation for Transportation, Inc. (Westport, Conn.)s Transportation In hmerica, 7th Edition, in May 1989,p.4;

US Departmet of Tranportation, Federal Highway Administration: *Highway Statistics 1986, p. 1151ndia: States' Road Project, No. P-4812-IN, October 3, 1968, p. 1; Govermant of India, Ministry of Fiennc

*Economic Survey, 1988,89', p. *-1.Braxil World tank praisal Report, 'Hlghways Management and Rebabilitalon Report", 1989; CUP frm "The World Bank Atlas

1968', p. 6.

-.

cum

83Rm grHIA PROJsCT

Chiaa: Fr1ight Traffic

(in bllona of ton-km)

DomesticYear Rail Road waterways /_a Pipelines Civil Aviation Total Ocean Shipping

1952 60.2 1.6 11.8 -- 0.002 73.4 2.0Nowdl split (C) 82.0 2.0 16.0 -- -- 100.0 --

1977 456.9 25.1 102.1 38.7 0.076 622.9 174.1Modal split (Z) 73.4 4.0 16.6 6.2 -- 100.0 --

197i 559.9 76.5 139.3 47.6 0.123 821.4 317.11980 571.7 76.4 152.1 49.1 0.141 869.4 353.21981 571.2 78.0 150.7 49.9 0.170 850.0 366.31982 612.0 94.9 170.8 50.1 0.198 928.0 376.91983 664.7 108.6 181.1 53.6 0.229 1007.8 397.71984 724.6 153.6 196.1 57.2 0.311 1132.0 437.4 11985 812.6 169.3 237.1 60.3 0.415 1279.7 532.919 6 676.5 211.8 270.0 61.2 0.481 1420.0 594.81987 947.1 266.0 266.9 62.5 0.650 1565.2 657.6 0196 986.6 322.0 310.6 65.0 0.;30 1685.9 696.61989 1,039.4 337.5 349.8 62.9 0.690 1790.3 768.61990 1.062.2 335.8 345.1 62.7 0.620 1806.6 814.1Nodal split (Z) 50.6 10.6 19.1 3.5 -- 100.0 --

Gowth rsat (2) p. a.

1952-77 6.4 12.1 9.0 -- 15.7 6.9 16.01983/84 9.0 61.7 8.3 7.1 35.8 12.3 10.01984/85 12.1 10.2 20.9 5.6 33.4 13.0 21.81985/U 7.9 25.1 13.9 1.5 15.9 11.0 11.61986/87 6.1 25.6 7.0 2.1 35.1 10.2 10.61967/6 6.3 21.1 7.6 4.0 12.3 7.7 5.9196/69 5.2 6.6 12.7 (3.2) (5.5) 6.2 10.3199/"9 2.2 (0.5) (1.3) (0.3) 1.6 0.9 5.91960-90 6.4 16.0 8.5 2.5 19.3 7.6 8.7

/_I holud es ocem-going t*usapert

8Bout": Statistical Yearbok of t1s. 191. p. 499

-111 -

Table 1.4CBINA

HEWNA HIOrWAT PROJECT

China: Passenger TraffSc

(ln billions of passenger-kam)

CivilYear Rail Road Waterways /_ Aviation Total

1952 20.1 2.3 2.5 0.0 24.9Modal split (2) 80.9 9.1 9.9 0.1 100.0

1977 102.3 44.8 9.7 1.8 158.6Modal split (Z) 64.5 28.2 6.1 1.2 100.0

1979 121.6 60.3 11.4 3.4 196.71980 138.3 73.0 12.9 3.9 228.11981 147.3 83.9 13.8 5.0 250.01982 157.5 96 4 14.5 5.9 274.31983 177.7 1.0.6 15.4 5.8 309.51984 204.6 133.7 15.4 8.3 362.01985 241.6 172.5 17.9 11.6 443.61986 258.7 198.2 18.2 14.6 489.71987 284.3 219.0 19.6 68.7 541.61988 326.0 252.8 20.4 21.4 620.61989 303.7 266.2 18.8 18.6 607.31990 261.3 262.0 16.5 23.0 562.8

Modal split (S) 46.4 46.6 2.9 4.1 100.0

Crovth rate (S) p. a.

1952-77 6.7 12.7 5.7 18.9 7.71983184 15.1 20.9 0.0 43.1 17.01984/85 18.1 29.0 16.2 39.8 22.51985/86 7.1 14.9 1.7 25.9 10.41986/87 9.9 10.5 7.7 28.1 10.61987/88 14.7 15.4 4.1 14.4 14.61988/89 (6.8) 5.3 (7.8) (13.1) (2.1)1989/90 (14.0) (1.6) (12.2) 23.7 C7.3)1980-90 6.6 13.6 2.5 19.4 9.5

I_ Racludes ocean-gofng transport

Source: Statistical Yearbook of China, 1991, p. 497

CHM

BIsM BIGBW PROJECT

China: Iwveatmnt in the Transport Sector (Including Posts and Teleccainicatioms)

(in billions of Yuan)

6th FYP 7th FYPlat FmP at Fm 3rd YP 4thVTP Sth mF-P -------------------------------------1953-57 1957-63 1963-65 1965-70 1971-75 1976-80 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Trasport:Railway 5.916 10.416 3.395 11.250 17.308 4.047 1.445 2.637 4.221 5.852 7.7 8.5 8.7 10.2 5.4 9.3iAbway -- -- -- -- -- -- 0.799 0.887 0.722 1.196 2.3 2.7 3.3 4.2 4.3 6.8watrw -- -- -- -- -- -- 1.295 1.545 1.937 2.629 3.7 3.7 3.9 3.2 3.6 5.3Aviation -- -- -- -- -- -- 0.070 0.145 0.299 0.263 2.1 1.3 1.4 1.3 1.0 1.4Pipli. -- -- -- -- -- -- 0.018 0.017 0.006 0.010 0.1 0.5 0.1 0.1 0.1 0.3

Subtotal -- -- - - -- -- 3.627 5.231 7.185 9.950 15.9 16.7 17.4 19.0 14.4 23.1Post and telcm. -- -- -- -- -- -- 0.420 0.490 0.619 0.896 1.2 1.3 1.6 1.8 2.3 2.7

Total 9.015 16.330 5.387 16.001 31.759 30.245 4.047 5.721 7.804 10.846 17.1 18.0 19.0 20.8 16.7 25.8

Total capitalinveatmmnt 58.847 120.609 42.189 97.603 176.395 234.217 44.291 55.553 59.413 74.315 107.4 117.6 134.3 152.6 155.2 170.4

Traport as ofItotal invests. /_a 15.3Z 13.S2 12.8U 16.41 18.0Z 12.91 8.22 9.42 12.1Z 13.42 i4.82 14.21 13.0% 132.SZ 9.32 13.62

/_& Investamt of FM, before 1980, incldes Post and TllcoinAoatlans (about 42 of total).

Bource: Statistical Yearbook of China, 1991, p. 157, 160

U.I-J

-113 - Table 1.6

CHINA

HENAN HIGHWAY PROJECT

China: Transport Investment v. Economic Output

(in billions of Yuan)

GNP TransportTransport (current investment

Year investment prices) as 2 of GNP

1966-70 3FYP 15.0 /a 935.0 1.61971-75 4FYP 31.8 /Ia 1323.0 2.41976-80 5FYP 30.2 /I 1758.0 1.71981-85 6FYP 41.9 3130.0 1.31986-90 7FYP 85.5 6861.7 1.2

1980 5.9 447.0 1.31981 3.6 477.3 0.81982 5.2 519.3 1.01983 7.2 580.9 1.21984 10.0 696.2 1.41985 15.9 855.8 1.91986 16.7 969.6 1.71987 17.4 1130.1 I.1988 19.0 1401.8 1.41989 14.4 1591.6 0.91990 18.0 1768.6 1.0

1980-90 average 1.3

/la Investment of PYPe includes Post and Telecommunications(about 4 percent of total)

Source: Statistical Yearbook of China, 1991, p. 31, 156, and 160

car

CaM: 8labe Design Standards-- -- -- -- - -- -- -- -- -- -- -- -- -- -- -- -

PAter vehicle only bignshy General parpose hglsbwas

Zkprsmmy C1las 1 CaJs 2 Clas 2 Cl as 3 Class 4

Flet RoUing Mountalaous Flt Other Flat Other Flat Other Flat Otbhr Flat Other

c.,ilapadity (Vebdmi)Peasm car eq. ............ 25,000 + ..... .. 10,000-25,.000.

medle truok eq. .. .4.500-7.000 ... .. 2.000-5,000.. ... 200-2.000 ........ M . ...2 .

Desgn *ped tk jb) 120 100 80 60 100 60 s0 40 80 40 60 30 40 20

Carriges ay width (a) 2:7.5 2x7.5 2Z7.5 207.5 2x7.5 20.0 e.0 7.5 9.0 7.0 7.0 6.0 3.5 3.5

Subgrade width (a)General 26.0 24.5 23.0 21.5 24.5 21.5 11.0 9.0 12.0 8.5 8.5 7.5 6.5 6.5

Variation 24.5 23.0 21.5 20.0 23.0 20.0 12.0 -- -- -- -- -- 7.0 4.5

la. curve radius (a) 650 400 250 125 400 135 250 60 250 60 125 30 60 15

Mlu. sight distnce (s) 210 160 110 75 160 75 110 40 110 40 75 30 40 20

Mha. Fed C2) 3 4 5 5 4 6 5 7 5 7 6 8 6 9

Shoulder widtb (a)BErd - sten4erd '2.50 '2.50 '2.25 >2.00 >2.50 >2.00

minim 2.25 1.75 1.50 2.25 1.50soft '0.75 '0.75 >0.50 >0.50 '0.75 >0.50 1.50 0.75 1.50 0.75 0.75 0.75 0.5-1.5 0.5-1.5

Median width (a)Standard 3.00 2.00 1.50 1.50 2.00 1.50HinMINI 2.00 1.50 1.50

Source: MC: Bisbwey Igineerlg Technical Standard. 1983

I03'-

tD

-J

- 115 - Table 1.8

coiC....

OEM HIGHWAY PROJECT

Chinat Clvlian Motor Vehi¢le... .. _. ......... _....._..

(in tbousand.)

P^eseuer vehicles Total....... .._- motor motor

Large Small Total Trucks vehicles Trailers Tractors eycleo Other

1978 88 171 259 1,099 1,358 104 126

1980 130 275 406 1,585 1,991 168 245

1985 795 2,416 3,211 338 1,784 9461986 966 2,654 3,620 344 2,288 1,4831987 274 841 1,115 2,966 4,081 426 3,747 2,478 3051988 299 1,004 1,304 3,340 4,644 447 3,916 3,024 3181989 312 1,152 1,464 3,649 5,113 475 4,104 3,593 3751990 333 1,289 1,622 3,892 5,514 499 4,626 4,213 411

Annual growth rat s78.85187 132 192 172 122 132 182 332

85-87 18 112 132 12X 452 62287-90 72 152 13S 9S 11 5x 72 192 I1t

Proportion of !zdividuolly oncedt1985 22 11t1990 12 152

Sources Statistical Yearbook of China, 1991, p. 512

- 116 - Table 1.9

CHINA

HENAN HIGHWAY PROJECT

China- Highway Freight Transport-- _------------------------------

Freight tons Freight ton-M Average haul CMT)

Public/ a Other/ b Total Public Other Total Public Other Totalillion.T (billions)

1979 816 2,894 3,710 27 48 75 33 16 201980 760 3,060 3,820 26 51 76 34 17 201981 715 2,922 3,637 25 53 78 35 18 211982 788 3,004 3,792 30 65 95 38 22 251983 791 3,223 4,014 34 75 108 42 23 271984 789 4,545 5,334 .35 118 154 45 26 291985 762 4,619 5,381 35 134 169 46 29 311986 785 5,416 6,201 37 175 212 47 32 341987 791 6,323 7,114 39 227 266 49 36 371988 765 6,558 7,323 42 280 322 55 43 441989 697 6,640 7,337 41 297 338 58 45 461990 647 6,593 7,240 36 300 336 56 45 46

Average annual growth:79-84 -12 92 82 62 202 16284-90 -32 62 52 O0 172 142

Split 1979 222 782 1002 362 642 10021990 92 91S 1002 112 89S 1002

_*a Public - Trucks operated by trucking companies affiliated to, or ownedby, the Provincial Transportation Departments

/b Other - Trucks operated by other enterprises or by private Individuals

Sources Statistical Yearbook of China, 1991, p. 498

- 11.7 - Table 2.1

CHINA

HENAN PROVINCIAL HIGHWAY PROJECT________________________________

Economic Data, 1990

PER GOVAIPopulation GOVAI / 1 CAPITA times(million) (Y billion) (Y) Nat'l avg.

CHINA TOTAL 1,143.3 3,158.7 2,763 1.0

Henan Province: 86.5 153.9 1,779 0.6______________

North-west Region 21.5 64.7 3,009 1.1

Zhengzhou 5.5 19.9 3,618 1.3

Luoyang 5.7 14.9 2,614 0.9

Xinxiang 4.8 12.5 2,604 0.9

-iaozuo 3.5 12.8 3,657 1.3

Sanmenxia 2.0 4.6 2,300 0.8

Other Provinces:=______________

Sichuan Province 108.0 186.0 1,722 0.6

Jiangxi Province 38.1 68.1 1,787 0.6

Shaanxi Province 33.2 61.3 1,847 0.7

Xinjiang Aut.Reg. 15.3 36.5 2,385 0.9

Shandong Province 84.9 284.9 3,355 1.2

Guangdong Province 62.5 250.3 4,007 1.5

Jiangsu Province 67.7 334.5 4,943 1.8

Zhejiang Province 42.3 176.9 4,182 1.5

/_1: Gross Output Value of Agriculture and Industry

Sources: China Statistical Yearbook, 1991; pp 58, pp 81.Henan Provincial Communication Department, China

- .118 - Table 2.2

CHINA

HENAN PROVINCIAL HXGHWAY PROJECT

Henan: Traffic, 1980-1990_______ _____________O___

Freight Passenger_________________________ --------------------------

Highway Railway Waterway Highway Railway Waterway---- (million ton-kmn)----- --(million passenger-km)--

1980 2,101 52,531 133 4,135 12,240 23

1985 10,572 72,825 425 11,336 20,977 37

1986 9,973 77,712 505 12,934 22,854 32

1987 13,383 88,094 604 15,075 24,901 30

1988 13,964 93,237 725 19,424 29,016 37

1989 15,407 96,713 794 20,167 26,765 43

1990 16,066 100,179 699 19,310 22,990 46

% p.a. growth:

1980-85 38.1 6.8 26.2 22.3 11.4 10.0

1986-90 12.7 6.6 8.5 10.5 0.1 9.5

1980-90 22.6 6.7 18.0 16.7 6.5 7.2

Source: Statistical Yearbook Henan- 1989, pp.332.Statistical Yearbook Henan- 199i, pp.392.Henan Communication Department, China.

CNINA

NENAN PROVINCIAL NIGISMY PROJECT... ........................ ;..... ..--------

Henan: Demogrephic and Trnsport Network Data, 1990................ .................... . .. . . . . . . .

Transport Network Length Network Density Total No. of No. ofPopula- rea ------------- N o. of veh. per veh. pertion ('000 Road Rail water Road Rail Water vehicles '000 km

(million) sq k) -------('000 km)-------- ---- (km/'000 sq km)---- ('000) population road

CHINA TOTAL 1,143.3 9,600.0 102B.3 53.4 109.2 107.1 5.6 11.4 5,S14 4.8 5.4

Nenan Province 86.5 167.0 43.2 2.09 1.11 258.7 12.5 6.6 308 /1 3.6 7.1 1

Other Provinces:... ............

SIdhuan Province 108.0 560.0 97.2 2.88 7.90 173.6 5.1 14.1 310 2.9 3.2 1

JIwngxi Province 38.1 160.0 33.2 1.58 4.90 207.5 9.9 30.6 110 2.9 3.3

SheuixI Province 33.2 190.0 38.0 1.8S 0.77 200.0 9.7 4.1 140 4.2 3.7

Xlnjing Aut. Reg. 15.3 1,200.0 25.4 1.34 0.00 21.2 1.1 0.0 130 8.5 5.1

ShUwudub Province 84.9 150.0 40.8 2.04 1.84 272.0 13.6 12.3 373 4.4 9.1

Cunmdong Province 62.5 177.9 54.7 0.68 10.86 307.5 3.8 61.0 402 6.4 7.3

Jiwnu Province 67.7 100.0 24.8 0.7S 23.67 248.0 7.5 236.7 277 4.1 11.2

aejiuia PrwInce 42.3 101.5 30.2 0.63 10.62 296.7 8.2 104.3 156 3.7 5.2

/1: The fifure is slightly lower then the figure on Table 2.5 die to exclusion of s mspecial purpose cars(e.g. polifc car, fire engines ard mulance etc.).

Source: China Statistical Torboc&, 1991; pp. 58, 81, 513.

_ 120 Table 2.4

CHINA

HENAN PROVINCIAL HIGHWAY PROJECT

Henan: Road Network, 1990… ----- n l -- …---

---------------- Classification------------------------------- Class------------- Sub-

I II III IV standard Total

By Administration:

Nationhl 78 1,274 1,665 299 84 3,400

Provincial 1,546 4,410 1,602 317 7,875

Prefecture 83 3,068 6,229 1,373 10,753

County 29 1,553 15,923 2,616 20,121

Others 63 284 654 1. ,001

Total 78 2,995 10,980 24,707 4,390 43,150

Sand andBituminous Cement stone Earth Total

-- - -- - - --- - - - -

By Pavement 20,585 406 13,245 8,914 43,150

Source: Henan Provincial Communication Department, China

CHINA

HENAN PROVINCIAL HIGHWAY PROJECT

Henan: Vehicle Fleet, 1980-90

(in thousand of vehicles)

------------------- Motorized Vehicle-------------------------Passenger-- ---Freight--- Special Special Other Sub- Truck Motor-Small Large Small Large purpose freight freight total trailer Tractor cycle

/-I /_1 car /_2 car /_3 car /_4

1980 10.9 4.3 0.3 64.5 4.8 .. .. 84.8 52.3 42.0 7.31981 13.3 4.9 0.8 76.9 5.3 .. .. 101.2 60.1 48.0 9.71982 14.4 5.7 1.5 85.3 5.9 .. .. 112.8 66.9 49.8 12.61983 15.5 6.5 2.7 91.1 6.4 .. .. 122.2 69.9 157.0 25.91984 18.3 7.5 11.1 96.4 7.6 .. .. 140.9 42.8 156.6 41.81985 29.5 9.3 11.2 107.6 9.3 .. .. 166.9 41.7 186.5 48.91986 33.0 11.1 11.2 119.6 9.4 .. .. 184.3 98.2 160.1 59.51987 43.0 13.4 19.2 129.8 10.6 .. 216.0 76.1 149.6 125.61988 51.2 14.5 26.8 146.0 14.5 .. 6.1 259.1 82.8 130.0 148.01989 58.2 15.9 35.3 162.8 15.5 .. 7.2 *294.9 61.7 162.8 171.41990 66.4 15.8 42.3 168.6 17.0 4.7 3.0 317.8 70.7 289.0 207.8

* p.a. growth:

1980- 85 22.0 16.6 103.3 10.8 14.2 .. .. 14.5 (4.4) 34.7 46.21986- 90 15.0 7.5 30.4 7.1 12.7 .. .. 11.5 (6.4) 12.5 28.41980- 90 19.8 14.0 62.9 10.1 13.6 .. .. 14.1 3.0 21.3 39.7

Notes: /_1: a. 20 passengers or less; b. GT is 4.5 ton or less; andc. length of car is 6 meter or less.

/2: Including police cars, fire engines, emergency road maintenance vehicles,ambulance, management and special task vehicles.

/3: Including container truck, refrigerator truck./4: The figure is slightly higher than the figure on Table 2.2 due to inclusion ofsome special purpose cars (e.g. police cars, fire engine, ambulance etc.).

Source: Henen Provincial Communication Department, China.

-122 - Table 2.6

CHINA

HENAN PROVINCIAL HIGHWAY PROJECT

Henan: Provincial Automotive Vehicle Production, 1985-1990

Motor vehicles Tractor------------------------- -------------------------- Motor-

Year Passenger Freight Total Large/med. Small Total cycle

1985 2,004 1,687 3,691 4,481 94,160 98,641 8,359

1986 357 637 994 4,685 68,653 73,338 71,929

1987 540 586 1,126 6,237 106,181 112,418 76,422

1988 2,963 771 3,734 7,280 120,622 127,902 98,400

1989 2,603 621 3,224 5,487 125,726 131,213 71,598

1990 3,105 236 3,341 10,348 165,763 176,111 72,399

Source: Henan Provincial Communication Department, China.

HEMM PNOVIUCIAL HIGHNMY PROJECT. ,,,,,,,,,_,......................

He_ : Freight Transported by Road, 190- 1990.............................................

Freight Voltu (mitllion ton) Freight Density (million tkb) Average Distance (kim)

Social Ptic Private Social Publc Privete Social Public Privatetruck /1 truck /.2 truck /3 Total truck truck truck Total truck truck truck total

1960 101.63 46.11 .. 14T.94 2,101 1,210 .. 3,311 20.6 26.2 .. 22.4

1961 97.05 41.38 138.43 2.445 1.296 3,741 25.2 31.3 27.0

192 127.94 44.43 .. 172.37 3, 741 1.616 .. 5.357 29.2 36.4 .. 31.1

1983 143.08 40.22 .. 183.30 4,786 1,922 .. 6.7Q8 33.4 47.8 .. 36.6

1964 162.96 37.98 200.94 5.588 1,955 7,43 34.3 51.5 37.5

1985 157.43 37.39 .. 194.82 5,599 1,909 .. 7,5Q8 35.6 51.1 .. 38.51966 168.29 37.74 4.15 252.18 5.928 2.029 2,459 10,416 35.2 53.8 53.3 41.3

1987 306.70 37.85 127.05 471.60 13.383 2,220 4,702 20,305 43.6 58.7 37.0 43.1

1989 292.82 39.07 106.05 437.94 13,964 2,543 4,390 20,897 47.7 65.1 41.4 47.7

1969 268.11 37.08 92.85 418.04 15.407 2,396 3.910 21,713 53.5 64.6 42.1 51.9

1990 28M.18 37.19 88.52 413.89 16.066 2,009 3,977 22,052 55.7 54.0 44.9 53.3

Z p.a. grwth:

1960- 85 9.1 (4.1) .. 5.7 21.7 9.5 17.8 11.5 14.2 11.5

1985- 90 12.9 (0.1) .. 16.3 23.5 1.0 .. 24.0 9.4 1.1 .. 6.7

1980- 90 11.0 (2.1) .. 10.8 22.6 5.2 .. 20.9 10.5 7.5 .. 9.1

I 1 own accounat trucking, including governient and cotlective enterprises._2 Public carrier, including all government transport sectors./_3 Public carrier, private oemership.

Source: Henan Provincial Cooemication Department, China.

CHINA

HEIII PROINCIAL HIGNAY PROWECT

H : Ushmay Ffnae (1985-1995)

(oIllion Yuan)

7th Five-Year-Plan (actual) 8th Five-Tear-Plan (estimtelprolectfam)................................................... ..................................................................................................................

------Total----- --- T--Iotal. --1985 1986 1967 1988 1969 1990 Current Contant 1991 1992 1993 1994 1995 Current Constnt

A. Total Revem:.............

i. Road mintenace fee 342.88 441.11 450.00 537.50 577.81 680.00 2,686.42 1.806.78 730.00 784.75 843.60 906.90 974.90 4.240.15 2,118.812. Cpital cornstruction-Central 6owenust (HOC) 50.00 52.00 53.98 80.00 80.00 86.00 351.98 235.43 86.00 93.00 99.50 106.80 114.70 500.00 249.883. Capital constructiorProvineial Goven6 nt 11 4.50 8.53 2.01i .ji, 30.16 31.88 80.55 51.02 3.10C 37.65 40.45 43.50 46.80 203.40 101.63 4. Road bond 0.00 42.34 0.0 G 0 0.00 0.00 42.34 33.84 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5. Bnk loan /_ 0.00 32.00 20.0l 2-.1 0.00 0.00 72.00 54.03 32.76 65.52 98.29 196.57 262.10 655.24 314.97

Total 397.38 575.98 526.59 644.87 687.97 797.88 3.233.29 2.181.10 883.76 980.92 1.081.84 1.253.77 1.398.50 5.598.9 2,785.363 8 33= == 38== 33 3 =8==3 = 8= = = 332=2=B. Total Expnditur.:

.................

1. Trarsfer to Central Government 42.00 49.59 54.00 56.02 58.20 90.54 308.35 206.99 94.00 101.OC 108.50 116.60 125.40 545.50 272.612. Transfer to Pubifc Security 3.00 3.00 4.79 s.73 10.00 10.00 33.52 21.87 10.00 10.00 10.00 10.00 10.00 50.00 25.173. Road construction and fprovement 62.88 82.66 90.00 107.50 115.56 136.00 531.72 356.91 264.76 315.47 366.49 44.77 571.80 2.003.29 988.634. Road rehabilitatIon 131.65 257.92 230.10 308.42 320.73 347.12 1,464.29 987.06 251.10 267.40 284.50. 302.60 321.55 1,427.15 713.94S. Road mintenance 114.24 120.11 90.31 98.00 103.21 96.58 508.21 349.92 134.50 147.95 162.80 179.05 196.95 821.25 409.446. Overhead, research and training 43.61 62.70 57.39 69.20 80.27 117.64 387.20 258.35 129.40 139.10 149.55 160.75 172.80 751.60 375.57Total 397.38 575.98 526.59 644.87 687.97 797.88 3,233.29 2,181.10 883.76 980.92 1.081.84 1,253.77 1,398.50 5,598.79 2,M.36

Deflator /_3 1.1110 1.2510 1.3123 1.5144 1.6310 1.6913 1.7928 1.9004 1.9954 2.0952 2.2000X Growth p.m. 0.6X 6.63

/ 1: Hainly fro the toll reveie of three Yellow River Brfdses (LuW . Zhagzhou KAMifeng).o2: Durifg 1986-1990, loans from local bank for the constructions of Zhezhou and Kifeng Yellou River Bridges. NDuring 1991-1995. loan frm IBID for the constructios of Henan hiuway project.

/3: For 1985-1990 period, 1964 constant price, Statistical Yearbook of Chine- 1986, pp. 58; 1987. pp. 55; 1988. pp. 56; 01969, pp. 34; 1990, pp 40; 1991, pp. 38.For 1991-1995 period1 Bun estimtes.

Source: _en Provfncial Comnication Depwtmmnt, Chins

_ 125 - Table 2.9

CHINA

HENAN PROVINCIAL HIGHWAY PROJECT................................

Henan: Fuel Prices..................

(Yuan per liter)

Before March 20, 1984 After March 20. 1984 Current- March 1992 Inter-....................... -- ....................... nationalPlanned Negoti- Plnned Negoti- Plannd Negoti- prices

/_ ated /_b Market /_a ated /_b Market /4 ated /_b Market /_f

Gasoline(70 oct) /_c 0.53 0.70 . 0.53 0.70 0.80 0.53 1.17 .. 0.57

index 100 132 100 132 151 100 221

Gasoline(80 oct) /_c 0.56 0.73 .. 0.56 0.73 0.88 0.56 1.22 . 0.65

Index 100 130 100 130 157 100 218

Oiesel /_d 0.36 0.68 0.44 0.68 0.86 0.44 1.14 .. 0.57Irdex 100 189 122 189 239 122 317

Consumer priceindex /_ .-.----- 100. . - ------- 129.--------- ---- .184 .

Notes: /_*. Plamed allocation prices./_b. Negotiated bove quota.

c. Prices of gasoline include an aggregate of 43 percent contral governsent fuel taxes.l.d. Prices of diesel include a 13 percent contral government fuel taxes.*. Constuer prico index at end-of-year 1983, 1987 and 1990 repectively.lf. Average iholesale prices for regular/premium unleaded gasoline nd No. 2 diesel fuel,

FOB refineries, pipeline terminals and inland waterway barge torminals (March 30,1992, Now Jersey).

Souces: Henan Provincial Cormamication Department, ChinaPlott's Oilgram Price Report, McGraw-Hill Inc, NY, NY, USA; Vol 70, No. 63, pp. S.

- 12S-

Table S.1PaSa 1

gM

laid K nar,.ass iroarm 3.I a on)MamAIvavdfia o75 1663.6A. Roads Zov_veam lot. r to 2 1al 3m2

nW aeat Ibst l Ttal" W iOr a

1. qtzul rantkau.loa4a 3 I U III it $3 40 l0 1.2. la1*a Aacas.3RadA I 1p - Ca 6.35 0 S .

3.Vainl.aoTatqLm lafdA I p lit Uz Al 32.40 0 0 34.67 a4. 1OngMz4audong Rood Jg I 1 1K? K! * 34.60 0 0 17.30 aS. cbaMqtGa41aa Rood J I 1 III Xl 6.00 0 0 4.50 .3S. VA1obans3ag4% 3t load LS I 1 UK U A 24.50 - 11.00 .3

S. &oado Cosatguoton and lAbabtltattain Pr"oia 0.00 0 0 0.00

C. liaral load Proleot. 56.70 1SO 5 4.63

1. ?ooaz1ng4Uaoba load It1 ITK A 16.00 0 0 1.20 a2. la-yan4 ba load I I a * Neat KY a U.7 0 0 2.50 a3. qODAIb-Laous l Road I I - munt IT 6 11.00 1S0 5 1.03 A

2. rlrdaa CtnizIotLos I." 6 2 7.70

1. aganoBridge~ 1 3 -I 1.54 536 I 6.50 a2. Qsxan -wan hg. L I I t u 0.12 Io I 1.20 a

Subtotal..-Jroap t (firstasl p au1.21 iii £ m.$

A. load T.ravmt Proleota 1o1 72 15 Us*." s

1.3adoo.Ca aloa" 2 a lit K? AS 46 335 6 37.60 A2. Ku wan-Bordar lONA 2 3 U K? As 10 * 16.00 oS. Z5.av)aog-Wayang Sotier load 2 1 KU K! A 16.00 140 2 6.00 3o .Kat.Tacoaql" Road I 1 uK K? AN 26.00 0 0 14.00 e5. Liam Twas5p-3"atan load 2 1 in K C 67.00 UO 7 40.25 a

D. Awe GMOLlmgtl ftolont In." 5o5 7 140.60

1. lUAan-tahaba $rift* Read 2 1 UK Noes K? As 70.40 0 0 74.4 A2. . Lakaa4Uga Road Ulaal nt 2 U lit n C 7 12 1 11.7 A3. LrciPm 381464baricave Ised a p KU K? C 22.00 0 0 16.5 A*. d _mboan-I 2 p in it AS 13.00 173 4 t3.70 AS. ztam mow aseurom a U 1ru r ? C 6 1t 2 10.2 A

C. od Prolat 1260.00 475 3 1O.6

1. Qaaba ToWbaiEARS lOa I a Veal IT so 2.00 135 A 2.20 A2. Auyaug-P yag da Reed 2 i TV A 30.00 340 2 4U.2 A3. was-Laoubass aad 2 1 a - r i KY 6 35.00 0 0 2.m5 a4. l2 a * l A 15.00 0 0 3.00 AS. la d 2 a r Nt tm tt 6.00 0 0 0." a6. ZtauJU.apa load to Oiaangaban a a KU in A 14.00 0 0 1.407. Danhaa-CboenRead ftga.golea 2a NeAtl IT 6 40.00 0 0 3.20 A

P. IUiie ns1u 1.21 1.203 7 14.40

1.C-4dM Brltt a O -d r 0.27 271 1 3.30 a2. Slba _ t ld 2 p m n0.12 166 1 1.40 aS. -an gAT"" a r 0.24 1S0 I 1.60 a4. Ltdb ai d oi 2 p _ n J 0.22 205 1 2.70 aS. Cad3auUs tda 2 p 0. 4uo 2 o .00 a

Subto -O4lpco 2 (bo _ P ikUS) m11 MAU E oLI

- 127 -

Tablo 3.1Page 2

Adaini- Road Total Rwirou.lUP etretive Engineering Total _of WC OOt motel

group claso Class Pravent lenth Bridla astimsto categoryLo Lk Current Improved Type la (km) A L engtb No. LI ( mlD) LI

Stird P ehr

A. lads Imrovment Pr,JLgt_ 3.60 0 0 22.26

1.b SYn-Cb*naUn Road Realivmsnt S P UII II C 7.80 0 0 5.46 a2. IlaquansLnh S R III It C 24.00 0 0 16.60 t

3. loads Cotruetion and Robabilitation Protocta 55.50 0 0 11.00

1. Sbanqlu-Tu-Wan Border load 3 U III It 35.00 0 0 $0.00 A2. lnhso-f rjqiu load 9 P III UI C 20.50 0 0 21.00 A

C. Rural load Prolotes 0.00 0 0 0.00

D. 3ridge Conatruction 0.55 550 1 7.00

Luoshan brthe rdgSo 3 p - - 0.55 350 I 7.00 a

Subtotal--Group 3 (Tbird Package) 87.65 s i I 60.26

Total-'Orouo 1. 2 &no 3 827.17 *.31S 40 493.73

Otbert

A. loads KIvrovesmt Projecto 151.00 385 4 153.60

1. TaSJing-ulLyang load 4 a III II A 28.00 224 2 24.00 32. RUeyang-ieohAsn load 4 1 III It A 32.00 0 0 27.40 t3. 1srhs4U-IojUei4 lRoad 4 U III mount it A 43.00 59 2 36.00 A4. Iutha Bridgs-lanbuan Road 4 0 lit 1i A 18 - . 15.4 a5. Sbuiye-Llnzia lod 4 P IIt II A 30.00 0 0 30.00 t

3. loads Construction and ehabbtltation Prolecta 43.00 - . 70.16

1. ZIzmi City AccessRoad 4 P - i1 A 14.00 0 0 40.00 a2. Legqtu-aifen Tsllow liver Bridge 4 P - i A 21.50 0 0 22.00S. Puao-Ch_nuan Road ealigzint 4 P IlI UI A 7.5 0 0 6.16

C. burl Road Prolecta 69.00 0 0 2.75

1. ZlmndiAn-lsbin a load 4 R - motun IV SS 10.00 0 0 0.702. Ziaguan Townbip-Laohusag Road 4 R - Mount IV eS 39.00 0 0 2.05 I

0. Bridae Contruction 12.68 1,126 an

1. Chengge Intorchage 4 U - - - 9.04 35 1 9.602. Vaogdi"n lnrhe"ge 4 U - - - 1.54 35 1 7.00 I3. ?ingbe Bridge 4 0 - - - 1.38 138 1 2.80 a4. SObs Bridge 4 U - - - 0.22 124 1 2.60 IS.oiha3ridge 4 U - - 0.05 151 1 3.50 16. Wn3 Bridge 4 P - - - 0.11 104 1 1 a7. aSh. Bridrg 4 P - - - 0.54 536 1 9.00 B

Subtotal--Group 4 (Others) 235.8 1.509 11 242.33

ORAND TOT4L 1.10S.0S 5.524 51 736.46

J/ I - Group I Projectsa 2 - Group UI Projectas * Stand-by Projects for Group I and Group 2; and 4 * Other Projects.k R * Iatioal Road s P - Proicial lodas R - Rural Roads.o A * * Asphlt C - Concrete I A - Aspbhlt sd Staoe and 8S * Sand and StOne.

1 Inlud the lengb of roads, bridges plus the accaes road to the bridge.Including lrge- ed medium-sied bridges.

LA - Lnd acquiSitio nd resettlement ar reqired end 3 - Lnd acquisition and resettlement requirements arm little or nositent.g Roadst approved during loan negotiatioa.

lb lads expected to be approaed upon submision, by December 31, 1992, of revised economic anlysis.

- 128 -

mma

LoclVr.d otal Loa Votveoro Total ooats(Iwuajams ) *- --- ,- ---------.loa (5)

A.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

264.61 261.57 52.34 4S.5 47.9 96.6 50.0(Ii) 6up1 sag $.UA64U.tIO. (3 W U) 2.41 5.64 60 004 1:.46 70.0

(3Pllrorc~esoma) 122.02 61.96 164.00 28.39 11.37 13.76 13.71240.1 100.27 599.46 45.72 87.37 73 29 37.0

Subtotal 638.0 470.46 111 JA17J14 0AZ7. 20.11 ad!

S. SHIO& 1.1gs Ofu-Xz0 co tmot4.43 6.61 .13.04 0.61 1.36 2.39 6.1tb) P 1.1 and Rutal roada (Nouthoest SM) 4.00 0.37 4.27 0.73 0.03 0.76 6.4

(C) Road topro,mmt Prateve 4.01 0.27 4.26 0.74 0.05 0.79 6.3

Subtotal 1.244 Ljj 59 21J1.66 L.1 U2.t

C. bdmt"

(C. Z=2:488=7L6 2.96 26.$3 29.91 0.55 4.92 5.47 69.9(u) Ialtodag aN taotln 0.10 0.46 0.96 0.02 0.16 0.16 U.9

(iAL) awlo,teutal protectic O.1s 1.36 1.s5 0.03 0.25 0.26 69.3

Subtotal 3.23 29.05 - 2.29 gS .33 L2U fl(b) Itantena_ of provincal ural roa

(I) Routin asmst e 1.74 13.27 1s.01 0.32 2.44 2.74 04.4(Ii) P*riodic aattenat_ 0.93 7.09 6.02 0.17 1.30 1.47 66.4

(tii) Wcntorla an tootIn 0.11 0.64 0.95 0.02 0.13 0.17 66.2(Iv) S Road Dta a 0.71 .46 6.19 0.13 1.01 1.14 i6.6

Subtotal 3.49 26.66 30.17 L.jj 4.90 5.54 8&4

Subtotal--qu#..nt 55.73 6245 1.24 10.23 I.47 69.2

L T 0.0 0.16 0.22 0.01 0.03 0.04 75.0) t s0.39 1.90 2.29 0.07 0.35 0.42 63.3

Subtotal 0.43 2.03 0 La O.." O." ad(b) Hlghoay Vocationl Schol

(I) Trait 0.0 0.02 0.02 0.00 0.00 0.00 0.0(it) Squipeat 3.27 1.53 1.60 0.05 0.24 0.29 52.6

Subtotal 0.27 1&U "A LOS 0.24 02A9 62.$

(c) rHihwy sUceutoe Reaearcb Iwtituts(1) remaintn 00 0.0 02 000 .04 0.04 200.0

(S) arpmf °0: 2° St 2° ° oso° 02 ° 1°°(ii) quipinant 0.3~~~~~~~~~~~~~O7 1.1320 ?1. 0.05 0.:24 0.29 62.6

Subtotal 0.29 1.52 .aLL 0.05 OU L01 61.6

7d 11 CAU 1 i d Dodp titutC) f at0.05 0.23 0.20 0.01 0.04 0.03 60.0

(ti) squipment 0.30 2.49 2.9A O. O.4 0.55 63.6

Subtotal 0.55 2.n L. 7 0.10 0.30 0.60 t

( a) 31gbwra Ce oa ntasrt AutborityCUt ?tinif 0.11 1.22 1.33 0.02 0.23 0.2S 92.0

(ti) Equipmet 0.16 0." 1.04 0.03 0.16 0.19 64.2

Subtotal 0.29 34j LU 0.03 LU 0.44 U.(

~~ Ipsiltuticoal etremthanlna ~~~~~~~~~~~~~1.65 20 0 L - . 69.5TqF ~~~~~~~~~~~~~~~~~~~~~~~~~rO n : J - m i - m

TotEl 1U 9L7! 1 1.5_6 0.33 170*. r. s~

abrad 0.06 1.03 1.11 0.01 0.19 0.20 95.0(b) Train abroad 0.0 1..0 1.17 0.02 n.20 0.22 90.(a) Deneet"i trn 0.02 0.2 0.2 0.00 0.05 0.05 100.0(d) Superisic tning 0.33 1.14 1.47 0.O6 0.21 0.27 76.0

Subtotal. L-U Li L LU LU 0.i NZAl

0. a f d lt811 0.93 8:,0 0.:02 0°17 0. 69.5111) M.U."at Ull~~~~0.1 0.31 0.3 002 0.0 0.0 73.0

(c) 1.09 0.00 1.09 0.20 0.00 0.20 0.0

Subtotal. L-U L 3d LII LU LSo coat e" a" SS.'121os 0.4

aobonslee 1* 117.61 ".11 165.7 21.S9 6.4U 50.04 26.1

Subtotal $f3 . 24 654.17 1Jjj7.41 154.61 120.00 274.l1

Lad ecqwlitian ai rsettl3ant 141.10 0.00 141.10 25.69 0.00 25.69 0.0

TOtAL 23CS 005? 964.34 64.17 LAL.U1 1 120.00 300.70 MaQ

La 10 percet at Items A ad 3.

- 129 - Tabltt

CHIA

HEIAN HIGHWAY PROJECT

Estimated Disbursement Schedule($ million)

Disburementprofile

of transportprojects

Bank fiscal year Eotimated disbuwsements in Chinaand semester Semester Cumulative 2 2

1993Juno 30, 1993 12La/b 12 10 0

994December 31, 1993 12 24 20 6June 30, 1994 14 38 32 11

1995December 31, 1994 16 54 45 16June 30, 1995 16 70 58 26

:a99December 31, 1995 14 84 70 38June 30, 1996 12 96 80 48

1mDecember 30, 1996 12 108 90 60June 30, 1997 6 114 95 69

1998-December 31, 1997 4 118 98 70June 30, 1998 2 120 100 76

December 31, L998 0 120 100 98

Notes Project Completion Date: June 30, 1997Loan Closing Date: June 30, 1998

lI Including payment Into special account of $7.0 million and advancepayments to contractors*

Lk Physical works on one section of the Zhengzhou-Luoyang Expresswayeommenced under retroactive financing in April 1992.

Sources Mission's estimate.

CHINA

Henan Provincial Highway Project............... ......................... _

Zhenzhou - Luoyang Expressway

Price Caonersion Factor For Capital Costs............. ........................... _.,._ _

(In mitlion Yuan)

shbigjie (Yingyang)-Zhengzhou- ShangilI (Yinhyang) Tanshi (Gonxian) Yanshi (Gongxian)- Luoyang

Price ------------------------. -- , ,-_-__conver Financial Economic Financial Econamic Financiat Economic-sion -------------- ........-.... _---------factor tocat Foreign Total Locat Total Local Foreign Total Local Total Local foreign total Local Total

Land 1.00 20.46 20.46 20.46 20.46 10.26 10.26 10.26 10.26 8.48 8.48 8.48 8.48Labor:

Unskilled 0.66 1.93 1.93 1.27 1.27 1.70 1.70 1.12 1.12 1.36 1.36 0.90 0.90Semi skilled/Technician 1.51 7.70 7.70 11.63 11.63 6.77 6.77 10.22 10.22 5.42 5.42 8.18 8.18Supervisor 3.00 1.71 1.71 5.13 5.13 1.49 1.49 4.47 4.47 1.20 1.20 3.60 3.60

Haterials:Steel 2.32 10.68 21.10 31.78 24.78 45.88 5.85 11.6 17.11 13.57 24.83 3.49 7.32 10.81 8.10 15.42Timber 0.99 7.75 15.33 23.08 7.67 23.00 4.93 9.#*8 14.41 4.88 14.36 1.30 2.70 4.00 1.29 3.99Cement 3.75 8.03 15.87 23.90 30.11 45.98 4.28 8.23 12.51 16.05 24.Z8 4.71 9.85 14.56 17.66 27.51Sand 1.00 8.36 8.36 8.36 8.36 5.19 5.19 5.19 5.19 5.46 5.46 5.46 5.46Stone 1.00 18.94 18.94 18.94 18.94 7.49 7.49 7.49 7.49 10.70 10.70 10.70 10.70situmen 1.00 1.43 1.43 1.43 1.43 1.59 1.59 1.59 1.59 1.38 1.38 1.38 1.38others 2.00 9.52 18.80 28.32 19.04 37.84 2.27 4.37 6.64 4.54 8.91 2.67 5.60 8.27 5.34 10.94

Fuel:Diesel 1.82 5.83 5.83 10.61 10.61 6.13 6.13 11.16 11.16 6.32 6.32 11.50 11.50Gasoline 1.67 0.94 0.94 1.57 1.57 0.20 0.20 0.33 0.33 0.50 0.50 0.84 0.84Heavy oil 2.80Others 1.60

Electricity 5.00 0.84 0.84 4.20 4.20 1.03 1.03 5.15 5.15 0.52 0.52 2.60 2.60Construction 1.90 1.59 1.59 3.02 3.02 0.90 0.90 1.71 1.71 0.52 0.52 0.99 0.99Mechanical equipment 1.70 3.08 6.10 9.18 5.24 11.34 3.41 6.54 9.95 5.80 12.34 3.17 6.63 9.80 5.39 12.02Others 1.00 19.70 51.29 70.99 19.70 70.99 15.46 39.06 54.52 15.46 54.52 13.68 38.78 52.46 13.68 52.46

Total 128.49 128.49 256.98 193.16 321.65 78.95 78.94 157.89 118.99 197.93 70.88 70.88 141.76 106.09 176.97t:=:=== -:~~= ====== W==#S= === == ===- 5 ===CC ====== =CCC C = == =C-C ====C __C__

overall conversfon factor 1.25 1.25 1.25Ne ilcc t asd ra r l p=

Note: Similar calculation also apply to all provincial and rural rural roads proJects.

.0

X_mem prooela al Nigiy Proelc

traffic oa tla Project 11"4o

~~~~~~~~~~~...... ........ ___.......___....._.._.....(VII)

.-- s ....... _ .............-Tra-_ k--_ tt ctorl ---- Sw- ---- Dm i-Truck------ Trcet oisell Large Smll Nadlma Large trailer total Small ml Mdiu Large traUils total

_ ______ -:.... _ _ _ _ _ _ _ _ _ _ _ 399 ......... 4)..............4...................._. (I )- -I he3abom s o 1,16 052 616 1,Xe "a0 *50 5,49 2,053 1.415 1.025 2.U59 930 749 9,313a""mall, 1104. 403 304 So03 23 2.696 1.330 669 303 1.130 574 4.5 63$123 -Ta 9 30s 323 900 370 297 3.051 1.156 640 536 1.620 514 494 5,066

------------- 2es-----. I )--------------- --------------------- (20e0)---------------------I lbeoabou 4 I,9 2,390 1,131 3.646 859 1,9. 15,941 6.10 3,050 2.210 4.655 2.608 2,096 20.7692 SbIIc - s1 2,261 1 129 *5s 2.246 3:"146 6.426 2,6 440 1 6,6 2.666 361 1,309 10,997T am - eoau 3.954 1.00 90 2.750 1.226 67 6905s 23.49"4 319 1.156 3.510 1.723 1.565 13.45- -- ( 03).. -... .. 42e. --I ZbgbOu to 1,806 3,S24 2.554 539 ",I013 2,424 24,0002 S 1.- 3,664 8, . 3,659 2,2S5 13555 14.3793 - Luaug 3.113 1,40 1.476 4.461 2,414 1.941 15.25S

Proviacal &*d..…...........(3990)…-----------------------(996) ------------I Soaxaa - Smcua

Sa .:au_a - Llr00ba 416 126 253 634 16* 131 1.706 603 183 363 620 215 393 2.3175 Jlaocua - CabuoC "5 109 256 656 134 06 2.250 1.445 859 372 954 212 12S 3.267Dooe4baaUgq ao - cgas 319 122 242 s53 276 207 1.745 5e0 177 351 7154 40 300 2.5332 Lupang- Tellow River .rige 560 416 426 629 5J7 564 3.316 642 605 616 912 629 686 4,6243 uala - Qipaca, 310 861 I5 361 is5 366 13529 453 234 230 52A 218 564 2,220L uO I tanila 201 806 304 234 30 26 8.001 300 153 151 3)9 143 372 1.460S 6anjL;2 1m XZaoping 13 1 56 274 136 426 900 19 1 as 396 I99 616 1,316

… (------------------- -2005)…(203 ---- 5-…- --------------------- 5)201…---------------------I Snomnmla - Sogscuu:Ssa nxmi - L3.gbao 1,019 311 614 1.555 430 360 4.309 1,659 505 1,001 2.532 646 746 7,2913l1ocun - Ouarnbaogcua 2.440 260 629 16112 423 250 5s622 3.975 437 1 .024 2,626 s8. 491 9.3a4DoUS.buangqlao - Songrun 929 296 593 214 6ao00 600 4.494 1,S13 465 966 2.075 13,53 1.160 7.192

2 Laoang- Yllow livter riLdge 1,421 1,023 1.043 I,543 1.656 1.635 6 321 2.314 1,665 1,699 2,581 3.261 3,215 14.6653HMegaa - Qlngan 761 396 388 865 4371 1327 3:994 1.239 645 632 1,441 358 2,217 7.0324 1oa - I2 1asa 501 259 254 573 291 744 2.626 821 422 414 934 513 1.463 4.633S Sanjiaskou - Xlioping 32 1 137 613 396 1.235 2.416 52 1 224 13096 184 2.430 4.580_- -.......... -__-- . . . .............. _. .............. _ . . ... .Rural road.,

---------- … -........ 1990 … 89 ........ .- 95…-…--- .-------- 2004-------- -------- 2009-------…Nornl Tractorl Normal Tractorl llormal Tractorl Normal Tractoritraffic trailer Total trafftc tistler Total traffic trailer Total treffic traller Totalc. Ulne Prefecturel

1. CbeaUzuan - Slcuaqlao 144 34 178 176 42 218 273 65 336 349 83 4322. tolpligkou - Rely. 340 32 312 171 40 211 265 62 327 338 79 417b. Jilpn Prefectures3. 11n - stye 124 28 352 353 36 369 237 56 293 302 11 3734. Luaang - lhatonu 129 26 155 159 32 191 247 S0 297 315 65 380S.ila- Prefectures5. 1 aicb a- smug 161 32 393 898 40 236 S38 62 36V 392 79 4716. aodaAN -Uan%" IS 40 196 194 46 2U4 301 15 376 364 96 46

CHINA

Nenan Provincial Highway Project................................

Economic Project Cost

(1991 prices, million Yuan)

Econo dc shadow ----------Financial Cost /I 1--------- ---------Economic Cost----------------price factor 1991 1992 1993 1994 1995 Total 1991 1992 1993 1994 1995 Total

Expre any:

Zheqgbou - Shangile 1.25 34.12 14.92 69.08 70.98 67.08 256.98 42.65 18.65 87.35 88.13 83.85 321.23Shangjle - Yanshi 1.25 21.34 7.21 43.72 46.98 38.64 157.89 26.68 9.01 54.65 58.73 48.30 197.37Yanshi - Luyoang 1.25 20.64 24.14 48.70 8.28 0.00 141.76 25.80 30.18 60.88 60.35 0.00 177.21

Total- Expressuay 76.10 46.27 162.30 166.24 105.72 556.63 95.13 57.84 202.88 207.81 132.15 695.81...... ......... ...... ......... ... .... .. ...... ......... ...... ......... ...... ...... ... ...... ......... ..... .. .... ....

Provinvial Roads:................

I Sannxia - SongcuMSanmnxia - Lingbao 1.37 0.00 5.80 19.34 24.18 26.29 75.61 0.00 7.95 26.50 33.13 36.02 103.60Jiaocun - Guanshangoun 1.43 0.00 0.00 9.68 17.40 18.48 45.56 0.00 0.00 13.84 24.88 26.43 65.15Donpshuwngqlao - Songcun 1.45 0.00 0.00 0.00 4.69 5.02 9.71 0.00 0.00 0.00 6.80 7.28 14.08

Subtotal 0.00 5.80 29.02 46.27 49.79 130.88 0.00 7.95 40.34 64.81 69.73 182.83..... ...... ..... ....... ...... ......... ...... ...... . .. ...... ------ -----. -- -- -- -- . --.----.....

2 Luoyang Yellow River Bridge 1.46 0.00 8.57 9.78 14.66 2.82 35.83 0.oe 12.51 14.28 c.40 4.12 52.313 Meqian - Gingyang 1.42 0.00 6.70 19.18 19.18 13.50 58.56 0.00 9.51 27.24 27.24 19.17 83.164 Boai - lensian 1.59 0.00 4.87 12.92 4.90 0.00 22.69 0.00 7.74 20.54 7.79 0.00 36.075 Sanjiaokou - Xiaoping 1.44 0.00 2.91 6.79 9.71 5.71 25.12 0.00 4.19 9.78 13.98 8.22 36.17Total- Provincial Roads 0.00 28.85 77.69 94.72 71.82 273.08 0.00 41.90 112.18 135.22 101.24 390.54

.... ~~~~~.. ... . ... . ... . ... . .......... ... .... ... .. .. ...Rural road:...........

a. Xinan Perfecture:1. Chaouggun - Sleuigiao 1.13 0.00 0.00 0.90 0.95 0.00 1.85 0.00 0.00 1.02 1.07 0.00 2.092. Talpingkou - Beiye 1.12 0.00 0.00 1.16 1.44 0.00 2.60 0.00 0.00 1.30 1.61 0.00 2.91b. Jiyuan Perfecture:3. twngwu - Xiaye 1.12 0.00 0.00 0.95 1.22 0.00 2.17 0.00 0.00 1.06 1.37 0.00 2.434. Liuzhuang - Nibetou 1.20 0.00 0.00 1.46 1.41 0.00 2.87 0.00 0.00 1.75 1.69 0.00 3.4c. Nuixian Perfecture:5. aeixhlI - Naoping 1.16 0.00 0.00 0.97 1.17 P.00 2.14 0.00 0.00 1.13 1.36 0.00 2.496. Gaowzuang - Hankou 1.27 0.00 0.00 0.97 0.96 0.00 1.93 0.00 0.00 1.23 1.22 0.00 2.45

Total- Runal Roads 0.00 0.00 6.41 7.15 0.00 13.56 0.00 0.00 7.49 8.32 0.00 15.81...... ...... .... ...... ...... ...... ...... ...... ...... ...... ...... ......

Grnd Totat 76.10 75.12 246.40 268.11 177.54 843.27 95.13 99.74 322.55 351.35 233.39 1,102.16

/_1: Met of taxes, interest pasyents nd price contingency.

_ 13 3 l

CHINA

Nmnan Provincial NIgIiway Project................................

E:onomic Vehicte Opertfing Costs by Type of Vehicle and Rosd Type.................................................................

(1991, Y 1er km)

. Good .- Fit .. poo.

flat flat Flat

rstl HIlL Mount. roll MILL ounet. roll mfII Mount.

A. Paved rtad:auuaaua.ua

smtal car 1.00 1.05 1.08 1.12 1.17 1.20 1.45 1.50 1.53

SaimLl bus O.S5 0.77 0.8? 0.75 0.87 0.97 0.96 1.07 1.17

Mediun Bus 1.02 1.19 1.33 1.21 1.39 1.53 1.60 1.71 1.89

Large Ws 1.35 1.65 1.91 1.51 1.82 2.0? 1.83 2.12 2.38Smtl truck 0.35 0." 0.51 0.40 0.48 0.55 0.c8 0.56 O."1Madfin truck 0.47 0.58 0.69 0.53 0.65 0.76 0.64 0.76 0.88

Large trtuck 0.78 0.96 1.13 0.87 1.06 1.22 1.03 1.22 1.40

Tractor/trailer 1.28 1.68 2.04 1.39 1.80 2.16 1.65 2.05 2.41

S. Unpaved road:

Small car 1.35 1.61 1."1 1.77 1.83 1.85 2.42 2.46 2.49

SaimL bus 0.90 1.06 1.16 1.10 1.24 1.33 1.39 1.51 1.60Mo4dfun But 1.51 1.72 1.86 1.85 2.05 2.18 2.35 2.52 2.65

Large bus l.n7 2.12 2.37 2.07 2.40 2.64 2.51 2.82 3.06

Smtll truck 0.46 0.56 0.6o 0.54 o.64 0.72 0.66 0.76 0.84

Medium truck 0.61 o.7s 1.13 0.70 0.85 1.29 0.86 1.00 1.52

Large truck 0.79 0.99 1.16 o.8 1.08 1.25 1.05 1.24 1.42

Tractor/trailer 1.38 1.76 2.09 1.49 1.88 2.21 1.71 2.10 2.44

Source: 1. China: Cuangdo Provfncs Conprehwfve tranpore Study; Vol. tI; AS3TP,

Jurne 28, 1990, pp. t1.2. Updated by 10S to 199 prfced.

camSem S;;IniillUhpq Project

7 Lacpuig pre.ma

Coct41*nfit aslysit

(336111cm lua n3991 prices)

Zhsabom. Sheail. tlia.sal) ShugIe t ). aunbb ttofnlca) t Cawma (Co zisa)- Lopa total- EapresausCost - ---- ----- C-s-- --f in - Costs --- fle-f-- Coa _ ---- -Beosfits------------------------ bCC Rduced educed -__________---_ IIOC Reduced Reduced _______-_____iVCC Reduced Reduced -- ----------- lI ducod Reduc&dmt Goer- cor. ccd- met aet Ganr- cong. sccid- Not Got Gmenr- corg. accid- Net met er- cong. ccci- IetCoat- Rod a- *td *l. eas cash Comet- Road scv- aged *.3st. *agt cash cost- Road sav- mtad sxet. *Ots cash Coast- lod acW- ated iet,. cnte casb

Tesr ructicn m.i.t. lg. taffic road flowg ruction Halot. trgs traffic road flow ruction "aint. 'no. traffic road flew rection Wa. usgs traffic road fla3993 42.65 (42.45) 26.66 (26.6O) 25.80 (2S.80) 95.13 (95.13)992 la.65 4*.5 .1(9.011 30.18 (30.18) 17.64 (37.661

3993 87.5 (87.4) 54.61 (54 65) 60 .8 '60.6'8202.88 7202.8)399 88.35 (8.?) 58.7 (38.75) 60.35 (60.353207.81 (207.61)

3995 $3.85 (63.81) 48.30 (48.30) 0.00 0.08 24.49 6.12 6.81 u.33 31.68 132.15 0.0 24.49 6.12 6.81 0.33 (94.47)3996 0.13 9).00 23.75 16.81 0.47 335.96 0.12 58.00 14.50 1.33 0.76 74.47 0.08 26.00 6.50 7.21 0.33 *0.02 0.33 179.00 44.75 25.45 1.56 250.451997 0.11 303.34 25.33 17.94 0.47 344.97 0.32 63.85 35.46 3.42 0.76 79.37 0.08 27.60 6.90 7.76 0.33 42.51 0.31 190.79 47.69 27.12 1.56 266.851998 0.1I308.0 27.02 39.30 0.4) 354.58 0.12 65.96 36.49 1.52 0.76 84.61 0.08 29.30 7.32 8.28 0.334130.32.61.8 2.9 1562.4999 I0 1 315.31 28.82 20.34 0.4i 164.t3 0.12 70.34 17.58 1.63 0.76 9019o 0.08 31310 7.77 8.83 0.33 47.95 0.31 216.75 54.17 30.80 3.56 302.97

2000 0.11 323.00 30.75 21.65 0.47 175.76 0.12 75.00 18.75 1.35 0.76 96.14 0.0. 3.00 8.25 9.42 0.33 50.92 0.31 233.00 57.75 32.82 1.56 322.822001 0.13 133.07 32.77 23.06 0.47 187.26 0.12 79.91 19.98 1.87 0.76 102.40 0.08 34.63 8.66 10.06 0.53 53.60 0.31 241.63 63.43 34.99 1.56 343.26 W2002 0.11 139.67 34.92 24.56 0.47 199.51 0.12 85.14 21.29 2.00 0.76 109.07 O.0 36.34 9.09 10.74 0.33 56.42 0.31 261.15 65.30 37.30 3.36 345.002003 0.11 134.83 37.21 26.16 0.47 212.56 0.12 90.72 22.68 2.14 0.76 316.16 0.08 38.14 9.54 31.47 0.33 59.40 0.31 277.69 69.43 39.77 1.56 388.142004 0.3 S859 59.65 27.8 0.47 26.46 0.2 96.6 24.37 2.29 0.16 323.16 0.32 40.02 10.01 12.25 0.336740.52.7738 4.0 316 1.32005 0.37 169.00 42.25 29.66 0.47 241.22 0.38 103.00 25.75 2.47 o.76 333.0 0.12 42.00 10.50 13.07 0.33 65.18 0.47 314.00 78.50 45.20 1.56 438.602006 0.17 378.15 44.54 31.31 0.47 254.33 0.36 108.69 27.22 2.62 0.76 139.31 0.08 44.49 11.12 13.63 0.33 69.69 0.43 313.53 62.88 47.76 1.56 463.312007 0.11 387.80 46.95 33.05 0.47 2 6.36 0.12 115.11 28.78 2.78 0.76 147.31 0.0 47.12 33.76 14.64 0.33 73.79 0.31 350.03 875bl 50.47 1.56 469.262006 0.33 197.97 4.49 34G.8 0.47 282.70 0.12 121.69 30.43 2.95 0.76 155.71 0.08 49.91 12.46 15.49 0.33 78.33 0.31 369.57 92.40 53.32 1.56 516.542009 0.13 208.69 32.37 36013 0.47 2981.03 0.32 128.61 32.37 3.13 0.76 164.59 0.08 52.87 33.22 16.39 0.33 62.73 0.33 390.21 97.56 56.33 3.56 545.352030 0.33 220.00 55.00 36.85 0.47 334.23 0.32 336.00 34.00 3.33 0.76 173.97 0.08 36.00 14.00 17.33 0.33 67.60 0.33 ",12.00 103.00 59.53 3.56 575.762031 0.33 232.50 58.32 39.93 0.47 330.89 0.32 143.68 35.92 3.54 0.76 133.78 0.08 59.21 14.80 17.12 0.33 91.38 0.3Z 435.39 08.64 60.57 1.56 606.052012 0.11 245.71 61.42 41.00 0.47 348.49 0.12 IS3.60 37.95 3.76 0.76 396.35 0.0 62.60 15.65 16.69 0.33 95.39 0.31 40.11 315.02 61.65 1.56 638.032013 0.33 259.67 64.81 42.12 0.47 367.06 0.12 160.37 40.09 3.19 0.76 205.09 0.08 66.19 16.55 16.67 0.33 99.66 0.313468.23 121.55 62.76 3.56 671.912014 0.33 274.42 68.60 43.27 0.47 3806.85 0.12 369.43 42.35 4.24 0.76 236.64 0.08 69.96 37.50 16.45 0.33 104.38 0.33 513.83 328.45 63.96 1.54 0701692015 0.33 290.00 72.50 46.65 0.47 407.31 0.12 179.00 44.75 4.49 0.76 228.8 0. 0 74.00 38.50 16.23 0.33 308.98 0.3 543.00 335.15 65.17 3.56 741517fetal 323.23 367.37 177.23 695.63l

m - ~~~~~~~~~32.82 28.92 23.73 21.82319 4322) -658.43 ~~~~~~~~~~~~~~~~~~347.63 340.26 33416.29first Tear otwu - 331.42 25.02 15.72 26.32

3l1t. the ce' elation of ES for the first 7ear _seem a 122 appoutmlty coat of capitel in Cime.

4s

0n

cam

flna Pro,vinciai Niga Proec

Provirneial Nigh.., in NV Iun

Coot-Saintit hayeie

(milion tloan 1991 prices

.oyeng.- follow . ver Bridge Accels_Road tgtan- Qlimjfst Road Sosl- IWemmin Read Ssvjlsaok- XlSopLng RoadCosts -Benfits . Cots ----------- Benefit---------- Coatt ----- B-- enesift- i--t-- - Costs ----------- tfits--_-----_-________ COC Reduced ------------- VOC ReduCed ----- ------- 11CC Reduced ------------- VCC ReducedCspital not cnr. cong. Reduced Net Capitel nat Goner- cong. Reduced get CapLt.l met Gener- cong. Roduced let Capitel net Cer- cong. Reduced Nateoat- 'Road sav- atd exist. accid- cash conat- .Road W- *ted exist. aceld- cash ronst- Road $"- 4ted dIst. aceld- casb croot- Road sav- ated extet. accid- cashese. ruction Ibint. it; traffic road onts fiw ruectlo Ifalot. logs traffic road *mte flow ruction Ialat. lgn traffic rood ents flo, suction 11Int. loge traffic road ans flos5992 11.31 (12.511 9.51 49.51) 1.14 (7.74) 4.19 (4.19)1995 14.28 (14.28) 21.24 (27.24) 20.54 (20.541 9.78 (.1B)1994 21.40 (21.403 21.24 (21.24) 1.79 (1.719 33.9 (33.eB1195 4.11 (4.12) 19.17 (19.17) 0.04 6.66 0.5B 0.53 0.12 9.85 0.22 18.22)1996 0.0) 10.69 3.34 0.00 0.08 12.08 .CS 10.15 1.28 1.21 0.34 12.19 0.04 9.06 1.3) 0.71 0.12 33.00 0.05 6.60 0.82 0.32 0.06 7.75tol 0.0o3 113.2 1.43 0.00 0808 12.90 0.05 10.84 1.36 1.36 0.14 13.65 0.04 9.65 1.22 0.16 0.12 11.21 0.05 7.08 0.88 0.34 0.06 8.31lots 0.03 12.19 1.53 0.00 0.08 13.71 0.05 11.3B 3.415 1.45 0.14 34.51 0.04 30.28 1.30 0.81 0.12 32.47 0.05 1.59 0.44 0.37 0.06 8.91 -is" 0.02 13.02 3.65 0.00 6.08 34.70 0.05 12.37 5.55 3.55 0.34 35.56 0.04 30.95 1.38 0.81 0.12 13.29 0.05 S.4 1.01 0.40 0.06 9.56 wA2000 0.02 13.90 1.14 0.00 0.08 35.69 0.05 1o.21 3.65 1.65 0.14 36.60 0.04 35.66 3.46 0.93 0.12 34.35 0.05 8.12 i.09 0.43 0.06 30.25 Vl2001 0.05 14.06 I.36 0.00 0.08 16.71 0.05 14.12 3.16 3.71 0.l4 J1.74 0.04 12.46 3.56 0.99 0.32 15.09 0.05 9.36 3.11 0.46 0.06 I1.00202 0.05 3S.6 1.99 0.00 0.08 31.92 0.05 15.09 3.88 1.9 0.34 18.95 0.04 33.29 3.66 3.06 0.32 16.09 0.05 10.0S 1.26 0.49 0.06 II:8$2003 0.03 36.97 2.13 0.00 0.0N 19.15 0.0o 16.32 2.01 2.02 0.14 20.24 0.04 14.31 1.77 3.33 0.32 31.35 0.05 10.79 1.35 0.53 0.06 12.682004 0.05 18.14 2.20 0.00 0.08 20.41 0.03 31.22 2.35 2.36 0.14 23.62 0.06 13.11 1.69 1.21 0.32 18.21 0.05 33.58 1.45 0.51 0.06 13.612005 0.05 39.30 2.42 0.00 0.06 21.83 0.08 38.40 2.30 2.32 0.14 23.08 0.06 16.31 2.02 1.29 0.32 39.48 0.06 12.45 3.55 0.62 0.06 34.582006 0.05 20.52 2.56 0.00 0.08 23.33 0.08 39.48 2.43 2.46 0.34 24.43 0.04 31.02 2.33 1.31 0.32 20.60 0.08 13.22 1.65 0.66 0:06 IS.5M2001 0.05 23.13 2.11 0.00 0.08 24.49 0.05 20.63 2.51 2.63 0.34 23.90 0.04 31.98 2.25 1.45 0.32 21.16 0.05 14.06 3.76 0.71 0.06 16.542006 0.03 23.01 2.8 0.00 0.08 25.93 0.05 21.85 2.12 2.71 0.14 27.43 0.04 19.00 2.38 1.54 0.32 23.00 0.05 14.96 3.88 0.76 0.06 31.632009 0.03 24.37 3.04 0.00 0.08 21.46 O.OS 23.14 2.80 2.94 0.34 29.03 0.04 20.08 2.51 3.63 0.32 24.30 0.05 35.91 2.00 0.83 0.06 10.733030 0.03 25.60 3.23 0.00 0.08 29.08 0.05 24.50 3.05 5.32 0.34 30.76 0.04 23.22 2.66 3.13 0.32 25.69 0.05 36.93 2.33 0.87 0.06 19.942035 0.05 27.35 3.42 0.00 0.06 30.80 0.05 25.96 3.23 3.35 0.34 32.59 0.04 22.43 2.83 3.64 0.32 271.6 0.05 36.02 2.21 0.92 0.06 23.222012 0.05 28.95 3.62 0.00 0.06 32.62 0.05 21.31 3.43 3.31 0.34 34.34 0.04 23.11 2.97 3.96 0.12 26.12 0.05 19.39 2.42 0.98 0.06 22.592035 0.05 50.01 3.83 0.00 0.08 34.55 0.03 29.35 3.64 3.72 0.34 36.60 0.04 25.01 5.34 2.08 0.32 30.31 0.05 20.43 2.S5 3.04 0.06 24.042034 0.05 32.49 4.06 0.00 0.08 36. 0.0 30.69 3.86 3.95 0.14 38.19 0.04 26.50 5.32 2.21 0.32 32.33 0.05 23.72 2.75 3.33 0.06 23.592831 0.05 34.45 4.33 0.60 0.06 39.9 0.05 32.75 4.09 4.20 0.34 43.33 O.04 28.02 3.50 2.35 0.12 33.95 0.05 25.10 2.93 3.38 0.06 27.20Total 52.31 63.36 36.07 36.37

ms * 23.6* w1.01 27.92 22.33(V33) a 48.70 32.49 57.57 32.55firsn lesm trn71 * 1.0.6 13.2 3.* 36.32

awsg a th e alculsgi of 1t fow the firest losr assnme a 322 oppectnity eost of ecital In China.

3-3

creIIel I Project

Cuet-nf it heysi

Ohllion4Z Tss., 3993 trices*)

S_uamule. Liughoe JAsecn- Ouaushsegcou Dogshuangiao- SSegcua total_~~~~~~~~~~~~~~- ----- ---- 4 ft---- -- -- -- --- -------------- cft- -------------- efi---- -------Coot. -3.nofits- Coot.~~~~~~~~;;; ----- Its . Costs ----- it sCosts ------ 4o ie -f-t-----o 900 Re----------ed Reduced -------- 9cC Reduced -------- IcC ReducedCapital net Caer- come. Reduced Not Capital net Coer- . Reduced Pot Capital rwt Ganr- con. Reduced Not Capital net Caner- co. Rednced Noteot- Ree sew- ated exist. saeld- caeb *cost- Road sav- sted t. accid- cas cast- Road OaW- etad exist. secid- cash cont- Reed saw- td est. accd- cashTses. intion aIst. ings traffie roa ants floe iwtznd "slet. ts traffie road ents fl. OCtllon haint. 1ags traffic road onto flow ruetton Paint. lugs traffle rod ents fin

3"9 7.9s -7.95) 7.95 (7.93)309 24.50 (26 .0) 3.64 (33.64) 40.34 (40.34)3994 33.13 (35.33) 2It (2.68) 6.60 (6.80) 64.83 (e4._1"9S 36.02 (363.02) 2643 (26.43) I.6(.2)6.3 6.33it" 0.0? 12.46 1.35 3.54 0.21 37 .49 0.05 30.05 J.25 0.00 0.14 11.3 0.01 3.64 0.20 0.00 0.03 I.66 0.13 24.15 3.00 3.34 0.36 30.74309 0.07 33.26 3.61 3.s6 0.22 16.63 0.05 10.66 13.3 0.00 0.14 32.10 0.01 3.75 0.22 0.00 0.03 I.9 0.33 25.69 3.20 3.56 0.38 32.70399 0.07 3411.33 3 .179 0.21 9.e60 0.05 311 1.41 0.00 0.14 12.85 0.0o 1.67 0.24 0.00 0.03 2.13 0.33 27.33 3.41 3.79 0.36 34.76" 0.07 Is.02 3.U 4.03 0.23 21.07 0.0s 12.06 1.50 0.00 0.34 13.65 0.03 I.9" 0.26 0.00 0.03 2.27 o.13 29.07 3.64 4.03 0.38 36.992000 0.07 I5.96 2.00 4.29 0.23 21.41 0.0 2.63 I.6" 0.00 0.14 34.50 0.03 2.12 0.27 0.00 0.03 2.41 0.13 30.91 3.87 4.29 0.38 3.l322003 0.07 37.01 2.13 4.?7 0.21 23.81 O.S 13.61 1.70 0.00 0.34 35.40 0.01 2.27 0." 0.00 0.03 2.56 0.33 32.69 4.12 4.5s 0.38 41.632002 0.07 36.33 2.27 4.67 0.21 23.39 0.05 14.46 3.63 0.00 0.14 16.36 0.03 2.43 0.31 0.00 0.03 2.76 0.13 55.00 4.59 4.67 0.36 '4.St2003 0.07 36.26 2.42 5.19 0.21 27.03 0.05 13.37 1.92 0.00 0.14 17.38 0.01 2.60 0.33 0.00 0.03 2.93 0.33 37.25 4.67 5.39 036 47.362004 0.07 20.52 2.58 .5S3 0.21 28.77 0.05 16.33 2.04 0.00 0.34 16.46 0.03 2.78 0.35 0.00 0.03 3.15 0.13 39.63 4.97 5.53 0.38 50.38 L2005 0.33 21.64 2.74 5.90 0.21 30.s9 0.0 17.36 2.17 0.00 0.34 19.60 0.02 2.96 0.38 0.00 0.03 3.35 0.20 42.16 5.29 5.90 0.36 S3.5 d200 0.33 23.04 2.69 6.23 0.21 32.27 0.08 18.28 2.29 0.00 0.14 20.66 0.02 3.13 0.40 0.00 0.03 3.55 0.20 44.45 5.56 6.23 0.38 56.472007 0.07 24.31 3.05 6.36 0.21 34.08 0.05 39.25 2.41 0.00 0.14 21.75 0.01 3.31 0.42 0.00 0.03 3.71 0.33 46.67 s.68 6.56 0.38 3.S1200 0.07 25.65 3.22 6.95 0.21 33.96 0.03 20.27 2.54 0.00 0.14 22.90 0.03 3.so 0.44 Q.00 0.03 3.96 0.33 49.42 6.20 6.93 0.38 62.6220 0.07 27.06 3.40 7.34 0.21 37.94 0.05 21.34 2.67 0.00 0.14 24.10 0.03 3.70 0.46 0.00 0.03 4.39 0.33 52.30 6.53 7.34 0.36 66.722010 0m 28.54 5.56 7.73 0.21 36.99 0.05 22.46 2.63 0.00 0.14 25.36 0.03 3.92 0.50 0.00 0.03 4.44 0.33 34.92 6.69 7.13 0.38 69.792033 0.07 30.32 3.76 8.16 0.23 42.20 0.01 23.61 2.96 0.00 0.34 26.70 0.03 o .3 0.53 0.00 0.03 4.70 0.13 37.92 7.27 6.16 0.38 73.602032 0.07 31.78 3.99 8.62 0.23 44.13 0.01 24.93 3.32 0.00 0.34 26.32 0.01 4.39 0.56 0.00 0.03 4.97 0.33 63.08 7.67 6.62 0.38 77.622033 0.07 33.53 4.21 9.10 0.21 46.96 0.01 26.23 3.29 0.00 0.14 29.61 0.03 4.64 0.1. 0.00 0.03 5.25 0.13 64.40 8.09 9.30 0.38 93.842034 0.07 35.16 4.44 9.61 0.21 49.S5 0.05 27.62 3.46 0.00 0.14 31.17 0.03 4.91 0.62 0.00 0.03 1.33 0.13 67.91 6.32 9.61 0.36 66.292031 0.07 37.34 4.47 10.36 0.21 12.31 0.05 29.10 3.64 0.00 0.34 32.63 0.03 5.39 0.65 0.00 0.03 5.86 0.33 73.63 6.96 10.36 0.38 91.00TOLeL 103.60 65.15 34.06 162.63

- 361.68 19.72 16.98 36.923M (322) -0.72 39.39 5.29 69.92eL Te Return * 13.32 14.22 11.22 13.42

Sat te _ alcultime of M for the first year cmeo *22 Ionrtucit7 toot of cepital In C. Cet

t3-ED

0'

Z;-linen prefecture, CbenjuAp . Sic tao----a ---- --------- ..la PrefeeturesTaipiugkou. 97------- --e--------Jiyuaa Prefectures vaujm hta y.- - ------Coets -lene~~~~ ~~ft --- t------- net Costs ---------- leAfLt i t--------- Not Coats ---------- Xeeft t -----.------ met------ S-----S3.--ceuerat. Road cash ---------- TSD----- C -- Gutt Road eash ---------- TSD----- C-t-- ort Road cashYear., Cocat. Daiut.DgoTna Tractor MorualYractor traffic sesety flow. Coast. Haint.tormal, Tractor NomilTractor traffic afafty" flow Coast. slalut.Normal Tractor Uors.airractor traffic eafety tim,

129915.01? (1.051) 1.299 (1.299) 1.064 (1.064)1994 1,074 (1.074) 1.613 (1.613) 1.366 (I'36")3:99 69 131 505 339 i6 34 32 610 12 321. 3S6 344 is 61 44 1.339 71 291 199 301 66, 43 37 "661996 69 Ise Ito 316 £1 31 32 101 12 532 374 362 82 69 44 1.415 II 306 250 311 12 43 31 9563997 69 167 151 314 96 3? 32 742 12 319 392 360 6s 12 44 1.460 11 321 221 333 76 46 31 963l996 69 153 120 3931 69 39 32 119 12 601 430 396 69 73 1.4 1.135 15 336 232 348 s0 so 31 1.0123999 69 564 121 452 93 41 32 a36 72 636 421 458 93 19 441 1,621 15 .354 243 366 81. 52 31 8."S12000 69 593 332 433 99 43 32 663 12 666 "4S 438 97 62 441. .702 11 371 .2S1 361. 87 51 37 1.1512005 69 203 140 1.31 304 45 32 950 12 102 412 461 103 61 4 1. 5.79 11 390 265 4.04 Si 16 31 1.1742002 69 213 347 1.16 IS0 1. 32 956 12 136 499 463 109 91 44 5.690 15 4.09 276 423 93 60 371,82292003 69 223 331 S03 58 30 32 1.001 12 713 523 301 155 96 4 1. 8.66 15 430 293 41.3 105 63 31 3.2992004 304 234 162 326 121 52 32 1.021. 108 652 332 333 320 10' 41. 2,014 101 4351 309 1.61 106 67 3? 1.3312001 301. 246 510 113 126 55 32 5.019 J0e 632 519 339 126 I06 44. 2.138 501 1.13 326 490 552 70 31 1.4022006 69 216 I11 Sa0 532 37 32 1.167 12 691 606 Sol 132 135 4'. 2.303 71 1.96 342 511. l38 14 31 1.3502001 69 271 1a? 609 140 60 32 1.230 12 945 632 611 536 116 44 2.416 71 212 359 539 124 11 31 5.396z008 69 263 591 640 147 63 32 1.295 12 967 668 646 146 122 441 2.51.3 71 547 373 361 US9 8I 3 15.6652009 69 300 207 612 1531 61 32 1.363 12 1.036 104 660 153 2" 1.4 2.674.1 11 54 392 191 131 83 31 1.141Total 2.091 1.J04 2.912 51.152 2.1.30 5.336

231 - ~~~~~~~~~~~~~32.03 43.23 35.41 .,311(23) *3.004 1.020 4.554first Year Recurn -21.0.3 39.03 30.31

…Jlyuan Prefecture, Lluzbu&avg. -- ------o----Dullale Pgefecture, Belzhal- SlaIpint -------- S------- WUisa Pr*fecture. soahuong. Ilaukou --- . -Coat ------------- neilta…-------- t Coats…----------Bnefits…e---------nt Costa…----------lenef its…---------- tt- Y~~~~~-CS-D - Y- -- CS-R ---- Cenuerate Road cash ----------- S-D ------ TCS -1L---- Goeorsta toad cash ---------- TCS- --- -- TCS-R ---- Cenerate Road casE.Year. Conat. Kaiut.foul Yractor DorualTractor traffic sasfety fine Coast. Mtaint.11coral Tractor DorealTractor traffic safetyy fiow Coast. SIalut.11or.al Tractor SloruaJlTractor traffic saty fico.

5993 1.752 (1.752) 1.152 (1.123) 1.232 (1.232)1994 1.692 (1.692) 1.357 (3.351) 1.219 (1.25935993 68 219 126 350 16 41 1.1 S07 31 36 21 302 39 21 23 1.01 69 813 88I 312 69 33 30 6.991996 66 230 536 430 83 66 11 696 11 38 22 351 62 22 23 429 69 519 6s 391 92 34 30 6621991 66 245 141. 420 6s 90 41 91.3 13 40 21. 332 63 23 23 432 69 121 g0 410 96 36 30 1205996 66 234 312 412 90 91, 41 996 11 42 23 349 66 24 23 416 69 1335 91 438 504 36 30 1605999 66 266 560 1.11 95 800 41 1.046 13 1.4 26 366 11 21 23 S00 69 531 500 1.52 109 40 30 1992000 66 260 16 499 300 103 41 1.150 33 46 21 354 74 21 23 326 69 141. 303 1.11 85 42 30 6422001 68 294 816 123 304 l10 41 1.160 Ss 49 26 404 16 26 23 551 69 151 350 496 820 41. 3fl 6642002 of 309 586 330 30 [is 45 1.220 13 13 30 421. 62 29 23 164 69 519 153 323 126 46 10 9302003 661 324 892 S17 314 128 41 1.281 13 54 32 443 611 31 23 611 69 161 120 330 J31 46 30 9712004 132 345 20 607 359 127 41 1.303 53 36 33 466 91 32 23 623 104 113 521 111 539 35 30 9962003 132 337 212 636 526 833 41 1.373 83 39 33 491 96 31. 23 616 104 184 134 605 546 33 30 1.0492006 6 311 224 668 533 540 41 1.491 53 62 36 311 800 36 23 151 69 193 140 636 111. 16 30 1.5402001 as 393 236 702 31.0 547 41 1.571 11 63 36 341 104 37 23 133 69 203 51.1 669 565 19 30 1.2002008 66 454 246 137 11.1 53 45 5.614 13 69 40 149 1l0 39 23 793 69 213 1531 010 868 62 30 1.2392009 So 4331 261 714 514 562 41 5.739 33 12 42 199k 556 41 23 631 69 221. 162 136 179 63 ZO 1.326Total 3.444 1,4081 2.462 860 2.451 1.104

BR s ~~~~~~~~~~~~~~23.33 17.32 21.23a"I (1233 - 3.133 823 2.363first tear Retwur - 19.13 13.93 22.33

Dlotes, thea calculetico of ERR for the first year aes.mw a 123 opportuaity coat of capital Jo China. YC6- 0 *total TUC Savbne duo to Sborter Ditatace. -YC6- 6 Total VOC Savings due to Road taproveaeut.

Table 4.8- 138 -

CHINA

Henan Provincial Tr ansport Project

Econofic Evaluation Sumary and Sensitivity Analysis....................................................

. ~ ~ ------- Sensitivity.- ---- -Costs

Generated Total Total COO) 4Langhth Bass trafffc costs benefits benefits Delay Delay Toll

(IWm) case (-502) (.102) C-102) C-102) I year 2 years road

Expressway:..........

Zhengzhou lShanglie 41.50 32.0 30.32 30.2Z 30.0 28.3X 27.52 24.2 27.12Shangjio - Yanshi 48.00 29.9° 28.0X 28.22 28.02 26.4X 25.8S ZZ.7X 26.4XYanshi - Luoyang 31-00 21.7X 20.4X 20.22 20.12 18.72 18.92 16.82 17.12

Subtotal- Expresaway 120.50 28.92 27.3X 27.2a 27.12 25.52 25.02 22.12 24.6X...... .... . ... .... .... . ..... .... . ..... .... . ... .. ............ ... ..

Provineial Roods:,................

1 Sanmenxls - Songcun:Sarnmenxia - Lingbao 51.34 18.62 18.02 17.32 17.12 15.92 16.82 15.2XJiaccun - Guanshangoun 35.50 19.72 18.8X 16.32 18.12 16.72 17.82 12.72Dongshuaufqiao - Songcun 7.87 16.92 16.02 15.52 15.42 14.12 14.72 12.92

Subtotal 94.91 18.92 18.12 17.5s 17.3X 16.02 17.02 14.12. _ ...... .... ...... .... ..... .... ...... ...---- .. ... .. .....

2 Luoyang- Yellow River Srfige 19.50 21.82 21.02 20.5X 20.32 19.02 19.22 17.123 Nl xi an - ingyfng 31.60 17.02 16.42 15.8X 15.7X 14.5X 15.32 13.824 loaf - Wenxian 25.69 27.92 27.02 26.12 25.92 24.22 23.92 21.0X --5 Sanjiaokou a Xiaoping 6.10 22.32 21.42 20.82 20.72 19.32 19.8X 17.82

Subtotal- Provineial Roads 179.80 20.32 19.62 18.92 18.82 17.52 18.12 16.22=...... . .. .... .... . ..... ---- . . ---- ........ ..... ... ........

Aural Roads:...........

Xinan Prefecture:I Chengguan - Sicufaao 18.20 32.02 31.32 29.32 29.02 26.52 25.92 21.822 Taipingkou Boeiy* 19.00 43.2X 42.42 39.9X 39.52 36.4X 33.9X 28.12 --

Jiyuan Prefecture:3 wangwu - Xiye 18.60 35.4X 34.9Z 32.52 32.2X 29.5X 28.42 23.7%4 Liuzhuaug - ihetou 23.20 25.32 24.42 23.1X 22.92 20.82 20.92 17.7X

Nuixisn Prefecture:5 Seizhaf - oaing 14.40 17.SX 17.12 15.72 15.52 13.72 14.6X 12.2X6 Gaozhuang - Hankou 18.1U 27.22 26.62 24.82 24.52 22.3% 22.32 18.82

Subtotal- Rural Roads 111.50 30.5X 29.82 27.92 27.72 25.3X 25.62 21.62 --...... .... .... .... .... .... .... ....

Total 411.80 26.52 25.1X 24.9X 24.72 23.2X 23.5S 21.1X...... .... .... . ... .... .... ... ....

Total (including initial RIP)/a

/a The five initial road subprojects under RIPts First Package have an averageERR of 42.6%.

- 139- CHART 1

CHINA

5ENAN HIGHWAY PROJECT

Oraanlzation of 8enan Prpvince CoamunLcation Department

IHenan PravtnclalomaunicationDepartmenet

... ..................... ........................

Provaincial Headou.rtero Provincial Aaencia! Local Axenciesi

AAdminstration High-Grade Highw y MunicipalOffice _ Construction (Prafecture)Authority ICoamunication

2 Bureau_ PlannIng 2

Division Highway _________________|_ Munict- )

3, Bureau J (Prez- .ure)_ Pluance Hi AWay I4L :Dpg4v:ls:ion ~ l Transport D1v olon

4 _ Planning, SurveyScience nd o4 & Design Institute No. I Construction CountyTechnology; Division Highway

Division I4I DivisionHighway

5 - Engineering gNo 2 ConstructionEduation uConstruction Division fMaintenance

D iviOn BureauTo6~~~~~~~~ .56 S o3 Construction

Labor and Payroll |iTransportation DivlsionDivisionucec RsacIvJlon l _ Institute

7Transportation 6' Divlsion' Transport

} Dlvlalon l _- Vocational SchoolPersonnel 7~~~~Lo

VocationalBureau

9High-Grade Highray

--d 9uperv±asion

Division ofZhengzhou

Yellow RiverHighway Bridge

Anstration

11Material Storage& Warehouses

12Local Railvay

Company

13Zhonyn Civil AlviatinCompany

Weta Sod lne Direct r.lahtIcDotted Linu# tot ,.Iltimblp...........

CHINA

HENAN HIGHWAY PROJECT

Organization of Henan Provincial HiRh-Grade Highway Construction Authority (HCHCA)

| Dput Drector ll Deputy Directoran l| at CiefEngineer ||A:dmDinstration Office Head

Chi-of Engineer Office ~Deputy Administration Office(Deputy Chief Engineers)

Technology Planning Eiqancial Equipment Coordination Propaganda & Administration LiaisonSection Section Section Section Safeguard Section Section Office

l l~~~~~~~~~~~~

CHINA

HENAN HIGHWAY PROJECT

Ortanization of Henan Highway Institute

Vice-President for Vice-President forRea-rService [Eduwcational/Adminlet rat ion

on of C gory Section of Motor ofo io St Se ection of Educational tTraatoy ecurlCollege |General Office Educational Transpo rt ec a t Pupila Research Section Attached Sectlon OfficeAff-lrs Atdminli.- Corps Highway Management Offce tolte

It

E-

CHINA

HENAN HIGHWAY PROJECT

Organization of Henan Highway Vocational School

President

Vice-President ||Vice-Presidentllfor General Affals for Educational Administration]

r Section of Factory Trnn Section Practice Sectio o ecut Office ofSection General Attached Section Library of Pupil Section Educationl Office of Section FundamentalAffairs tollege _ Mana8ement Atdramtlnloln ~ Flnance Construction

C0

CHINA

HENAN HICHWAY PROJECT

Organization of Henan Highway Scientific Research Institute

Chief Manager,Chief Engineers

Scientific Research and Production System Management System

Highway Highvay Macbinery Office of Motor Labora- Section of Computer Office Office of Office ofResearch Bridge Research motor Testing tory Science and Room Office of Data, Infor- ScienceOffice Research Office Transport Station Technology Finance mation and andOffice Economy Development Archives Technology

L-

- 144 - CHART 6

CHINA

HENAN HIGHWAY PROJECT

Organization of Henan Highwav Design Institute (HPDI)

|President and Chief Engineer

Production System | Administrative System|

Surveying and Designing Team I Head Office

Surveying and Designing Team II E Finance Section

Surveying and Designing | Information and ArchivesTeam of Planning Section

Engineering Geological Chief Engineer's OfficeProspecting Team

Planning and ManagingCivil Engineering Designing Sectlon

Section

S ntific Research Laboratory

Computer Room

RUSSIARUSSIA

KAZAKHSTAN

ULAANMAATAR <

7 ZBEKISTAN AUAA MONGOLIAI- iATA

FRUNZfTE N0 ,1 S

KYRGHYZSTAN Oh JAPA<wrw OTu/pon ~ ~ ~ ~ ~ ~ ~ ~< ( &-yuar Q~~~OT JAPAN

TADJIKISTAN EM. REP

OF KOREA

* AToo Yje';( eogs&15 UN vila 514oREP OF-V /:A/ MSU, fd; Toannf3 ". (Shsa.hoasou ._' ) KOREA

Thns mod hs been psep=sed by , The Woldh nbs sin

6o-l slyd .f 2 /

'as hooonseof Thds. sod ,.aV's fo rshe stoma) uss of The WC/add B o nTw;;.9obmnos I Kbo-k OoG- The dnossnonons ®Z--no -a,' *

d od bnd-nsshononfIha,nao donsf.mply.nnshsrosn Uoo r~,s f?mI''.: JA:''5

of The Wcrdd Snob G-rP onssyjudgheenonlhsleaslsnTssosn- STONSvNI; 'ony h rris oY on ay e ndossssnnt K > '-sor oo

0fsnoeof so;l,boundvnes. _ . / -' .Ki 'n (<fnino -

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NEPAL s~ I 51(hoA n <5 01/

CHINA '.MAJOR HIGHWAY DEVELOPIAENT PROGRAM / / ..UNs :_ /I' F

LAWOR HIGHWAYS: - , YU'N

COMPLETED K ,

UN_ `R CONSTRUCION / bTH FIVE YEAR PLAN (I1491-19951 0 T

9TH FIVE 'EAR PLAN (I 996-2000) YUtsN,A a, /' K CU/ !

PLANNED BEYOND 2D70 '4 N. Hansdt1 Bans p Wa

g f3 Nmwng g EDthOn o ~~~~~HONG KONG, U.K._

WORLD bANK IVESTMENT IN THE MAJOR ROAD NEETWORK bANK FUNDED PORT PROJECTS Z .HMocNG, POr .

ONGOINGWORLD BANK PROJECTS A PROVNCECAPITALS VIET NAM PHILIPPINES

PROPOSED WORLD BANK PROJECTS f NATIONAL CAPITALS O

------- PROVINCE BOUNDARIES so LAO PEOPLE'S ot7maroa

NTTENATIONAL BOUNDARIES THAILAND OEM. REP ,,., -

T. ftiji, - ho . 'HENAN HIGHWAY PROJECT-96> . l i;L - Any>' >,/w'QV>? / $>P«g*/ TRANSPORT SYSTEM

fr S-H A N X I SheneXShenjEcLov tH bjo R\° y/O/NnibvongjR z ' , °/ \ PROPOSED PROJECT.S H A N X If~~~~~~~~~~~~~~~~~~~~ ZHENGZHIOU WOLUYANG EXPRESSWAY

f tNd5PanS p* ,w z fah 4Fo ^ % -NORTHWEST HENAN PROVINCIAL ROADS-NORTHWEST HENAN RURAL ROADS

- g HrnsLou fi >07gnXion r f Q EXPRESSWAY UNDER CONSTRUCTIONWITH GOVERNMENT PINANCING4 M~~~~~~~~~~~~~~~~SAIN SIR 5SYEAR PLAN ROADS

HX0SHA NDONG N -- NATIONAL ROADS RIVERS

PROVINCIAL ROADS R DIVER PORTS

RURAL ROADS -- PROVINCEN -- RAILROADS BOUNDARIES

TUXCYXCE - b 1 AIRPORTS - INTERNATIONAL

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T. HXi-E E I , --. '.aO:

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