World Bank

World Bank China TransportChina Day, SDN Forum, Washington, D.C.

January 26, 2010

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1. China Political Economic Context

2. World Bank Program Overview

3. Sub-Sector Scan

4. Challenges

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China Political Economic Context

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•Reform began

•Opening-up

•Rapid economic

growth in eastern

coastal areas

•Very small existing

transport system

•Capacity

constraints in

seaports and critical

inter-city links

•Ports

•Rail

•Highway

•Rail reform

•Port policy

•Highway and rail

comparative study

•Government

procurement and

contract management

Economy Sector Bank Operations

1979

China Political-Economic Context

World Bank

•Urban Land &

Housing Reform

•Tax Reform

(1994)

•Auto industrial

policy (1994)

•UT demand pattern

changed

•Framework for

resource

mobilization

established

•Traffic congestion

in mega cities

•Rapid expansion of

road & rail networks

in the late 1990s

•Rail

•Highway

•Inland Waterways

•Urban Transport

•Traffic management

techniques

•Motor vehicle

pollution control

•Anti-leaded gasoline

study

•Highway cost

recovery

Economy Sector Bank Operations

1990’s

China Political-Economic Context

World Bank

•WTO

•Western Poverty

Reduction Strategy

•PT Priority Policy

(2005)

•People centered

development

•Harmonized

society

•Green GDP

•Stimulus Package

(2009)

•Natural disasters

•Exploding demand

•Network expansion

•Paradigm shift

•Rural road

development

•Focus on

externalities

•Energy efficiency

•Infrastructure

investment priority

•DRM policies

•High Speed Railway

•Expressways

•Expanding Urban

Transport Operations

•Rural road support

•Land use

•Green Transport

•Railway expansion

•WERP and DRM

analytical work

Economy Sector Bank Operations

2000’s

China Political-Economic Context

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World Bank Program Overview

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Increase efficiency: energy, finance, land, services

Evolution of China Transport

Broaden objectives: social, environmental and land use externalities; passenger travel and cities; regional integration; promote lagging region economic development

Provide capacity: facilitate economic growth, emphasize freight

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Transport Lending Composition

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Transport Lending Composition

# ProjectsTotal Value

$Billions

Highways 36 7.3

Railways 14 3.6

Ports & Inland Waterways 14 1.5

Urban Transport 11 1.5

Total 75 13.9

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• Roads and Highways

• Railways

• Inland Waterways

• Urban Transport

Sub-Sector Scans

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Roads and Highways

Building a Road System

• Nearly tripling length of paved roads from 1985 to now

• Establishing a trunk highway system from zero in 1988 to about 65,000 kms by the end of 2009

• Providing the foundation for spreading economic growth nationally

• Establishment of a robust tolling system

• Introduction and institutionalizing of international construction supervision practices

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Roads and Highways

0

10000

20000

30000

40000

50000

60000

70000

1985 1990 1995 2000 2005 2010

Total National Trunk Highway System (kms)

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0

20

40

60

80

100

120

140

160

Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8

Tota

l In

vestm

ent $U

S b

illio

n

Period From Start of Construction

USA

Japan

China

Roads and HighwaysExpressway investment rates - USA, Japan, China

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Roads and Highways

Improving delivery

• Focus on road safety

• Enhancing environmental practices

• Strengthening planning processes

• Integration between classes of roads and modes of transport

• HIV/AIDS considerations

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Roads and HighwaysEnvironmental protection approach – from repair to mitigation

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Roads and Highways

Current initiatives

• Completion of the trunk highway system• Continuation of provincial highway system• Introduction of fuel tax and elimination of

some fees• Reorganization of the Ministry of

Transport• Strengthening planning mechanisms

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Roads and Highways

Challenges

• Energy efficiency and climate change• Provision for maintenance funding• Efficient utilization of toll revenues• Financing strains• Overcapacity concerns

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Henan

Jiangxi

AnhuiHunan

Hubei

Yunnan

GuizhouChongqing

Sichuan

Guangxi

Qinghai

Xinjiang

TibetNingxia

Inner

Mongolia

Gansu

Shaanxi

Shanxi

Hebei

Tianjing

Beijing

Jilin

Heilongjiang

Liaoning

Shandong

Hainan

Zhejiang

Jiangsu

Shanghai

Fujian

Guangdong

$0

$100

$200

$300

$400

$500

$600

$700

$800

$0 $100 $200 $300 $400 $500 $600 $700 $800

2.5% of Asset Value (US$ m)

Ro

ad

Ma

inte

na

nc

e F

ee

s (

US

$ m

)

1.5% of Road

Asset Value

2.5% of Road

Asset Value

Adequate

Funding

Inadequate

Funding

Marginal to

Inadequate

Funding

Roads and Highways

Availability of Maintenance Funds by Province

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0.0

0.5

1.0

1.5

2.0

2.5

To

ll fo

r 1

60

0 k

m a

s %

GD

P p

er

pers

on

Arg

entin

a

Ma

laysia

Co

lom

bia

Me

xic

o

Ch

ina

US

A

Ita

ly

Po

rtu

ga

l

Sp

ain

Canada

Au

str

alia

Fra

nce

Ja

pa

n

0.00

0.05

0.10

0.15

0.20

To

ll in

$U

S/k

m/c

ar

Arg

entin

a

Ma

laysia

Co

lom

bia

Ch

ina

Me

xic

o

Po

rtu

ga

l

US

A

Ita

ly

Sp

ain

Fra

nce

Au

str

alia

Ca

na

da

Ja

pa

n

International toll rates Affordability of tolls

Roads and Highways

Expressway tolling

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Railways

Providing Capacity

• Speed raising• Network improvements• Electrification program• Reform process• Social benefit reinforced

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RailwaysNetwork length (000 km) 2007

0 50 100 150 200 250

Passenger-km (billion) 2005

0 100 200 300 400 500 600 700 800

Traffic units /route-km (millions 2007)

0 5 10 15 20 25 30 35 40 45

EU

Japan

India

US

Russia

China

EU

Japan

India

US

Russia

China

Net tonne-km (billion) 2005

0 500 1000 1500 2000 2500 3000

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Railways

0

500

1000

1500

2000

2500

3000

3500

4000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Wo

rkfo

rce

(E

OY

) (0

00

)

Total CR Total rail Total RA

China Rail Workforce

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Railways

Step Change

• Dedicated passenger high speed rail system

• Freight improvements

• Regional railways• Continued reform• Technological advances

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The MLTDP planned network of high-speed

dedicated passenger lines in 2020.

Railways

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Bohai Intercity System

Yangtze Delta Intercity System

Pearl Delta Intercity System

The three MLTDP regional intercity

systems to be built

Railways

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Future of China

Rail

Economic and trade growth

Market evolution and demands

National Transport

Strategy and Funding

Industry structure and regulatory

framework

Railway management competence and actions

Railways

Five main external factors shaping China

Rail

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How to deliver long-term infrastructure

improvements – the biggest railway

development program in the world since C19th

How the industry can adapt to become more

responsive to the needs of customers in

China’s socialist market economy.

Key

challenges

for WB

engagement

Railways

China Rail and its policy-makers face two enormous challenges

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Railways

Other challenges emerging

• Economic stimulus emphasis• Disaster response • Financing• Pricing• National investment• Institutional integration• Planning improvements• Energy efficiency improvements• Carbon emission reduction

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Railways

Twin-track approach, separating project delivery

from policy dialogue. Recent and continuing

analytical work includes:

New traffic management information systems

Non-traditional financing sources

Handling multiple operators

Social costs of railways and other modes

A new integrated transport promotion law

Railway infrastructure investment policies in other countries

Market-based railway pricing policies and structures

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Inland Waterways

The other transport

• Benefits from long term planning• World’s largest inland waterway transport

network in length and freight tonnage• Bank finances capacity projects: multi-

purpose facilities and channel improvements

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50

100

0

125

0

115

0

120

0

110

0

105

0

950 900 850 800 750 700 650 600 550 500 450 400 350 300

100

150

200

250

300

350

400

450

130

0

410

450

330

362

240

218

196 181

170 (final)

157 (earlier)

88

78

6457

5142

36.5

Hu

an

gjin

Go

rge

Sh

iqu

an

Xi R

ive

r

An

ka

ng

Xu

nya

ng

Sh

u R

ive

r

Jia

he

Riv

er

Gu

sh

an

Da

njia

ngko

u

Wangfu

zh

ou

Xin

ji

Nia

np

anshan

Ya

ko

u

Hu

ajia

wa

n

Xin

glo

ng

Distance from Yangtze River (Wuhan) (km)

Wa

ter

Leve

l

(m)

Future Complex

Legend

IWW5

Cuijiaying

Hubei

ProvinceShaanxi Province

Existing Complex

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Inland Waterways

Sustainable transport

• Higher energy efficiency• Lower greenhouse gas

emissions• Minimizes loss of

agricultural land• Reduces congestion• Safer

…. but requires navigable river to realize benefits and is slower.

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Inland Waterways

Emissions /ton-mile

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VehicleVessel

DescriptionLength (Meters)

Capacity (Tonnes)

Barge tow 15-barge tow

(5X3)

327 23,800

Railway train

unit

108 cars, 3

locomotives

1,845 10,800

Road truck Tractor plus

16.2m trailer

21.3 23

Unit Cargo Comparisons

Mode Tonne-kms/litre

Inland Waterway Transport (IWT) 222

Railway freight 159

Road haulage 60

Fuel Efficiency Comparisons

Inland Waterways

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Spills of Hazardous Materials Comparison

Deaths and Injuries Comparisons

Inland Waterways

Mode Deaths

/ billion tonne-km

Injuries

/ billion tonne-km

IWT 0.019 0.031

Railway freight 0.445 3.982

Road haulage 2.980 67.84

Mode Liters of Spills/ mil. tonne-km

IWT 9.3

Railway freight 10.0

Road haulage 15.7

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Inland WaterwaysChallenges

1. Admin. planning, and management2. Financing needed3. Improved operations4. Modernize information technology5. Maintain central coordinative role6. Further port reform including encouraging private

investment7. Improve interface with seaports8. Improve social safeguards9. Maintain open barge market10. Continue to improve energy efficiency11. Mitigate negative impacts on small

barge-owners

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0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

2000 2001 2002 2003 2004 2005 2006

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

vessels DWT

Transformation of SP Freight Fleet, 2000-2006

Inland Waterways

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Inland Waterways

Future focus

• Modal integration• Carbon finance• Institutional

improvements

Xiangfan, Hubei Province

Bank financed IWW5

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Predominately non-motorized

Per

cent

Urban Transport

0%

20%

40%

60%

80%

100%

Cha

ngzh

i

Wei

hai

Jiao

zuo

Luoy

ang

Uru

mqi

Nan

chan

gXia

n

Gua

ngzh

ou

Cho

ngqing

NMT Public Transport Motorcycles Taxis Passenger cars Other trips

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Urban Transport

Rising incomes and urbanization leading to unprecedented motorization

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(Liaoning Anhui)

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Urban Transport

Road infrastructure plus

• Quality and timely construction

• Road network management

• Bus system improvement

• Planning, design, construction supervision, management, operations, reform

Shanghai

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Urban Transport

Public Transport plus

• Integrated corridor improvement

• Mass transit• Broaden capacity building

agenda

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Urban TransportSocial equity and environmental co-benefits

• Air quality and environmental management

• Improving resettlement policy and practice

• Integrated traffic safety approaches

• Public participation

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Urban Transport

Current initiatives

• Defining the role of national government• Public transport planning and policy• Urban form and transport

Jobs accessed

in radius around

CBD

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19:00

JOBS

This Minute:

12,000Cumulative:

127,300

COMMERCIAL SPACE

(square meters)

This Minute:

29,600Cumulative:

409,000

N

Beijing - GuoMao

World Bank

12:00Coventry Street

JOBS

This Minute:

13,100

Cumulative:

146,200

COMMERCIAL SPACE

(square meters)

This Minute:

364,300

Cumulative:

4,075,000

N

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Beijing

Guangzhou

Shanghai

-

200

400

600

800

1,000

1,200

1,400

1,600

- 10,000 20,000 30,000 40,000 50,000 60,000

Municipal GDP/capita (Yuan/yr)

Urb

an

Tra

nsp

ort

CO

2 p

er

cap

ita (

kg

/pers

on

/yr)

1993, 3 cities

2002, 17 cities

2006, 17 cities

Poly. (Guangzhou)

Poly. (Beijing)

Poly. (Shanghai)

Urban Transport

Current initiatives

• Integrating carbon into decision making• Vehicles and fuel

Urban transport

and GDP /

Potential carbon

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Future Challenges

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Challenges

Themes

• Climate change• Finance and capital

planning• Energy intensity• Modal integration• Urbanization and

motorization• Commercialization of

services• Asset management and

maintenance• Social equity• Safety

Response

• Green vehicles• PPP• Comprehensive transport law• Municipal finance• Performance based contracts• Demand management• Metropolitan and regional

integration• Inclusive transport and

protection for vulnerable groups

• Compact public transport oriented cities

• Traffic and road safety

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The value we bring

• Shaping the vision

• Learning by doing

• Access to international practice

…..contribution vs. attribution

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Xie Xie (Thank You)

WB China Transport Team

Beijing• John Scales• Shomik Mehndiratta• Zhi Liu• Wenlai Zhang• Xiaoke Zhai• Luquan Tian• Xuan Peng• Yunqing Tian• Lei Wu

Washington• Imogene Jensen – Sector Leader• Ben Gericke• Fei Deng• Rein Westra• Mitsuyoshi Asada• Ke Fang• Tess Ortega• Malou Juico• Emmanuel Py• Chris De Serio• Sivalingam Milton• Peng Wang