World Bank Documentdocuments.worldbank.org/curated/en/...and (v) Development of a Motor Vehicle Emission Control Plan (MVECP). 5. The Cultural Heritage Component (CH) will comprise:

Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: 40033-CN

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$150 MILLION

TO THE

PEOPLE'S REPUBLIC OF CHINA

FOR A

XI'AN SUSTAINABLE URBAN TRANSPORT PROJECT

May 29,2008

China and Mongolia Sustainable Development Unit Sustainable Development Department East 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

(Exchange Rate Effective July 2007)

ADB AQM ATC AWP AUCFP CCTV CEA CH CQS DA EIA EIRR EMP FM GDP GOC ID IIC ITS MFB MOF MV MVECP NCB NMV NO2 NPV PFM PIP PMO PMl0 PSC PT

Currency Unit = RMB (Chinese Yuan Renminbi) RMB1.00 = US$0.13 US$l.OO = RMB7.60

FISCAL YEAR January 1 - December 3 1

ABBREVIATIONS AND ACRONYMS

Asian Development Bank Air Quality Management Area Traffic Control Annual Work Program Annual Urban Construction Funding Plan Closed Circuit Television Consolidated Environmental Assessment Cultural Heritage Consultants' Qualifications Designated Account Environmental Impact Assessment Economic Internal Rate of Return Environmental Management Plan Financial Management Gross Domestic Product Government of China Institutional Development Infrastructure Investment Corporation Intelligent Transport System Municipal Finance Bureau Ministry of Finance Motorized Vehicle Motor Vehicle Emission Control Plan National Competitive Bidding Non-motorized Vehicle Nitrogen Dioxides Net Present Value Project Financial Management Project Implementation Plan Project Management Office Airborne particulate matter less than 10 micrometers in diameter Project Steering Committee Public Transport

FOR OFFICIAL USE ONLY

Q A QC QCBS RAP RMB RNC RNH RPF RUE SBD SPA0 SPFD SRFP SOE TA TOD TDM TM VMS XEPB XGBC XMCB XMCHB XMFB XMG XMPB XMPWMC XPSB

Quality Assessment Quality Control Quality and Cost Based Selection Resettlement Action Plan Chinese Yuan Renrninbi Road Network in Xi'an City Road Network in Huxian County Resettlement Policy Framework Road User Education Standing Bidding Documents Shaanxi Provincial Audit Office Shaanxi Provincial Finance Department Standard Request for Proposal State-owned Enterprises Technical Assistance Transit Oriented Development Travel Demand Management Traffic Management Variable Message Signs Xi'an Environmental Protection Bureau Xi'an General Bus Company Xi'an Municipal Communication Bureau Xi'an Municipal Cultural Heritage Bureau Xi'an Municipal Finance Bureau Xi'an Municipal Government Xi'an Municipal Planning Bureau Xi'an Municipal Public Works and Management Commission Xi'an Public Security Bureau

Vice President: Mr. James W. Adarns, EAPVP Country Director: Mr. David R. Dollar, EACCF

Sector Manager: Mr. Ede Jorge Ijjasz-Vasquez, EASCS Task Team Leaders: Mr. John Scales, EASCS

Ms. Rakhi Basu, EASTE

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

CHINA Xi'an Sustainable Urban Transport Project

CONTENTS

Page

STRATEGIC CONTEXT AND RATIONALE ........................................................... 1

.................................................................................................... Country and sector issues 1

........................................................................................ Rationale for Bank involvement 6

Higher level objectives to which the project contributes ................................................. 7

PROJECT DESCRIPTION ........................................................................................ 7

............................................................................................................. Lending instrument 7

Project development objective and key indicators .............................................................. 7

............................................................................................................. Project components 8

Lessons learned and reflected in the project design .......................................................... 10

Alternatives considered and reasons for rejection ............................................................ 12

IMPLEMENTATION ............................................................................................. 12

............................................................. Institutional and implementation arrangements 12

.............................................................. Monitoring and evaluation of outcomes/results 13 . . . ..................................................................................................................... Sustainability 14

............................................................... Critical risks and possible controversial aspects 15

............................................................................... Loadcredit conditions and covenants 16

APPRAISAL SUMMARY ......................................................................................... 18

.................................................... ............................ Economic and financial analyses .. 18

........................................................................................................................... Technical 19

Fiduciary ........................................................................................................................... 20

Social ................................................................................................................................. 20

...................................................................................................................... Environment 21

............................................................................................................. Safeguard policies 22

Policy Exceptions and Readiness ...................................................................................... 23

Annex 1: Country and Sector or Program Background ......................................................... 24

Annex 2: Major Related Projects Financed by the Bank andlor other Agencies ................. 36

Annex 3: Results Framework and Monitoring ........................................................................ 37

Annex 4: Detailed Project Description .................................................................................. 43

Annex 5: Project Costs ......................................................................................................... 55

Annex 6: Implementation Arrangements ............................................................................ 60

Annex 7: Financial Management and Disbursement Arrangements ..................................... 63

Annex 8: Procurement Arrangements ............................................................................... 70

Annex 9: Economic and Financial Analysis ............................................................................ 82

Annex 10: Safeguard Policy Issues ..................................................................................... 91

Annex 11: Project Preparation and Supervision .............................................................. 103

Annex 12: Documents in the Project File ............................................................................... 105

Annex 13: Statement of Loans and Credits ............................................................................ 109

............................................................................................... Annex 14: Country at a Glance 113

Annex 15: Public Participation ................................................................................................ 115

Annex 16: GEF .......................................................................................................................... 121

Annex 17: Maps ....................................................................................................................... 123

CHINA

XI'AN SUSTAINABLE URBAN TRANSPORT PROJECT

PROJECT APPRAISAL DOCUMENT

EAST ASIA AND PACIFIC

EASCS

Date: May 29,2008 Team Leader: John Scales Country Director: David R. Dollar Sectors: General transportation sector (96%); Sector ManagerIDirector: Ede Jorge Ijjasz- Sub-national government administration (4%) Vasquez Themes: Access to urban services and housing Project ID: PO9263 1 (P);Other urban development (P);Municipal

governance and institution building (S);Pollution management and environmental health (S);Injuries and non-communicable diseases (S) Environmental screening category: Full Assessment

Lending Instrument: Specific Investment Loan Safeguard screening category: Limited impact

Project Financing Data [XI Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other:

For Loans/Credits/Others: Total Bank financing (US$m.): 150.00 Proposed terms: The loan would be payable in 25 years, including 6 years of grace and annuity principal repayment at six-month LIBOR for US Dollar plus variable spread for Variable-Rate

RECONSTRUCTION AND 1 1 1

Single Currency Loans. Financing Plan (US$m)

Borrower: People's Republic of China, represented by Ministry of Finance Responsible Agency: Municipality of Xi'an Foreign Capital Utilization Division China Tel: 13-991 -804-500 "XDRC" <xajwwjc@vip. l63.com>

Total 264.29 150.00

DEVELOPMENT Total:

Foreign 0.00

150.00

Source BORROWER INTERNATIONAL BANK FOR

Local 264.29

264.29 150.00 4 14.29

Estimated disbursements (Bank FY/US$m) FY Annual Cumulative Project implementation period: Start: September 23,2008 End: December 31,2014 Expected effectiveness date: September 23,2008 Expected closing date: June 30,2015 Does the project depart from the CAS in content or other significant respects? Ref: PAD I. C

[ ]Yes [XI No

Does the project require any exceptions from Bank policies? Ref: PAD IK G [ ]Yes [XI No Have these been approved by Bank management? [ ]Yes [ 1 No Is approval for any policy exception sought from the Board? [ ]Yes [XI No Does the project include any critical risks rated "substantial" or "high"? Ref: PAD III. E [ ]Yes [XI No

Does the project meet the Regional criteria for readiness for implementation? Ref: PAD III. E [XIYes [ ] No

Project development objective Ref: PAD II. C, Technical Annex 3

The project development objective is to improve transport accessibility and mobility in Xi'an Municipality while protecting its cultural heritage and reducing the environmental impact of the urban transport system. The priority area for achieving this objective is the MWC.

Project description [one-sentence summary of each component] Ref: PAD ILD, Technical Annex 4

1. The Road Network Component (RN) will comprise: (i) in Xi'an city improvements to the First and Second Ring Roads and Taibai Nan Road to increase their functionality as major traffic routes; and (ii) upgrading of the road network in Huxian.

2. The Public Transport Component (PT) will comprise: (i) Eastern (Textile City) and Southern City Passenger Transport Terminals; (ii) Integrated public transport priorityltraffic management measures on thirteen selected bus corridors; and (iii) Xinzhu bus depot.

3. The Traffic Management Component (TM) will comprise: (i) An Area Traffic Control (ATC) system, with associated junction channelization; (ii) a Road safety program to investigate and analyze accidents, and implement remedial measures; (iii) Enforcement and Road User Education measures; (iv) Parking measures and equipment; and (v) traffic facilities for cyclists and pedestrians, and road marking equipment. All these investments complement investments in the ongoing ADB hnded project.

4. The Air Quality Management Component (AQM) will support the Xi'an Environmental Protection Bureau (XEPB) in developing and implementing comprehensive plans for air quality improvement and reduction of vehicle emissions. It will comprise: (i) A building to house the newly established Xi'an Ambient Air Supervising and Monitoring Center; (ii) Equipment for motor vehicle emission inspection compatible with inspection methods issued by SEPA in July

2009 5 5

2010 15 20

2011 2 5 45

2012 3 5 80

2013 40

120

2014 20

140

2015 10

150

2005; (iii) Civil works and equipment for two ambient air quality monitoring sub-stations and two traffic air pollution monitoring sub-stations for improvement of air quality monitoring network; (iv) Equipment for improvement of air quality assessment and information publication; and (v) Development of a Motor Vehicle Emission Control Plan (MVECP).

5. The Cultural Heritage Component (CH) will comprise: (i) Han Chang'an Site - recreation of the old Han Dynasty road network in the area of Weiyang Palace; and (ii) MWC - construction of a network of bicycle routes linking the main tourist sites.

6. The Institutional Development Component (ID) will support Xi'an in developing a capacity in the city for transport planning and policy making. It will comprise: (i) Urban Transport (UT) Policy & Comprehensive Planning; (ii) Support for Implementation of the TM component; and (iii) Domestic and International Training and Workshops. Support for public transport planning will be financed by a complementary, but separate GEF Project.

Which safeguard policies are triggered, if any? Ref: PAD IKF, Technical Annex 10 Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPIBPIGP 4.01) [XI [ 1 Natural Habitats (OPIBP 4.04) [ 1 [XI Pest Management (OP 4.09) [ 1 [XI Cultural Property (OPN 1 1.03, being revised as OP 4.1 1) [XI [ 1 Involuntary Resettlement (OPIBP 4.12) [XI [ 1 Indigenous Peoples (OD 4.20, being revised as OP 4.10) [ 1 [XI Forests (OPIBP 4.36) [ 1 [XI Safety of Dams (OPIBP 4.37) [ 1 [XI Projects in Disputed Areas (OPIBPIGP 7.60)* [ 1 [XI Projects on International Waterways (OPIBPIGP 7.50) [ 1 [XI

Significant, non-standard conditions, if any, for: Ref: PAD IIL F Note: ALL conditions listed Board presentation: None

Loadcredit effectiveness: None

Covenants applicable to project implementation: - Condition of Disbursement

The Subsidiary Loan Agreement has been executed on behalf of Xi'an Municipality and the Infrastructure Investment Corporation of Xi'an.

* By supporting theproposedproject, the Bank does not intend to prejudice thefinal determination of theparties' claims on the disputed areas

- Xi'an Municipality shall:

(a) maintain the Project Steering Committee throughout the period of implementation of the Project; (b) implement the Project in accordance with the Project Implementation Plan; (c) implement the RAPS, the RPF, and the EMP; (d) monitor and evaluate the progress of the Project and prepare project progress reports that cover the period of one calendar semester, and furnish to the Bank not later than one month after the end of the period covered by the report; (e) prepare and h i s h to the Bank as part of the semester project progress report, an interim un- audited financial report for the Project; (f) have its financial statements audited by independent auditors for the period of one fiscal year and furnish to the Borrower and the Bank not later than six (6) months after the end of the fiscal year; and (g) onlend the proceeds of the loan to IIC under terms and conditions satisfactory to the Bank for implementing the project, which shall, among others, required IIC to:

(i) have its financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited by independent auditors and furnish to the Bank and the Xi'an Municipality not later than six (6) months after the end of each such year; (ii) prepare semi-annual reports on the progress achieved in the carrying out of the Project

covering a six (6) month calendar period in each year, that is from January through June and from July through December, commencing on July 1,2008, and shall be furnished to the Bank and the Xi'an Municipality not later than thirty (30) days after the end of the period covered by such report; (iii) undertake to maintain throughout the period of implementation of the Project units headed

by managers with terms of reference and qualifications and in numbers acceptable to the Bank; and (iv) undertake to hold public consultations at least twice during Project implementation (by

December 3 1,201 1, and June 30,2013 respectively) on the impacts and benefits of the Project and furnish to the Bank (by February 28,201 1 and August 3 1,2013 respectively) reports integrating the results of the above-mentioned public consultations and setting out the measures recommended to address the issues raised.

I. STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

1. Xi'an, the starting point of the "Silk Road", is one of the most popular tourist destinations in China. The world-renowned Qin Terracotta Army, Tang pagodas, Han and Tang tombs and palace remains (the archaeological site of Han Chang'an), the Ming Walled City (MWC) and other cultural relics, attract millions of tourists every year. But Xi'an has another side - it is a vibrant and growing modern city, home to five million people', high-tech industry and world class universities - as well as a transport and logistics hub for western China. The key challenge for the city is to balance preservation and enhancement of its cultural heritage with the demands of a modern city - especially for access and mobility.

2. As part of the national goal to "coordinate and harmonize" development between eastern, central and western regions as identified in the loth and 1 lth Five-Year Plans (FYP), the Government of China (GOC) has initiated the strategy of promoting the "Development and Exploitation of Western Regions" and the "Rise of Central China". In line with this strategy, the GOC has designated Xi'an, together with Chongqing and Chengdu, as three major metropolitan hubs to be developed as the growth poles for the Western Regions. Benefiting from this strategy, Xi'an has enjoyed expedited growth in recent years: in 2005, the GDP growth was 13.1 % from the previous year; the annual average per capita income for urban residents was RMB 9,62g2, a 12.7% increase from 2004.

3. However, the rapid urbanization that accompanied Xi'an's growth has also put great pressure on its infrastructure provision. Transport demand, in particular, has grown much faster than economic growth, resulting in traffic congestion and increasing motor vehicle emissions. Between 1990 and 200 1, when real economic growth averaged 10.4% per annum, road traffic grew at 15.7% per annum. During the same period, vehicle ownership grew from 10.1 vehicles per 1,000 people to 23.1. By 2003, urban residents made on average 1.95 tripslday, with mode shares of walking 22%, bicycle 33%, bus 23%, and carltaxi 22%.

4. A tourist boom has contributed to this rapid economic growth. In 2004, there were 650,000 overseas tourists, and 20.8 million domestic tourists to Xi'an, with increases of 93% and 29% respectively compared to the previous year. The total revenue of the Xi'an tourism industry was RMB15.44 billion (equal to US$1.9 billion), which includes foreign exchange of US$330 million3, with increases of 45% and 130% over the previous year. While Xi'an's rich cultural heritage is an economic resource, it is also a fragile resource. Such large numbers of tourists require adequate access to sites, but at the same time the authenticity of the site has to be preserved.

5 . Conflict between preservation and growth. Xi'an faces the dual challenges common to all urban areas in China - increasing urbanization and rapid motorization4. For a historic city

' The total population of Xi'an Municipality is 8 million. Slightly less than the national average of RMB10,493for 2005 Xi'an Statistics Year Book, 2006 and Xinhua-PR Newswire January 13,2006 Urban population is forecast to reach at least 7 million by 2020, but no reliable estimates have been made of

increased travel demand over the same period.

with unrivalled cultural heritage the challenge is heightened as urbanization is threatening the sustainability and livability of the city. The centerpiece of the master plan is the protection of the MWC, which contains many of Xi'an's important cultural resources. Under the "Imperial City Recovery Plan", all government offices are being moved from the MWC to the northern quadrant of the city, while traditional commerce and tourism are retained as the main activities.

6 . The MWC is also the location of the Central Business District (CBD), yet few measures have been taken to ensure the integrity of this area. Currently 21% of travel demand has an origin or destination in this area. Xi'an's transport system is under great pressure to provide an enabling environment for sustaining development, while maintaining urban accessibility and mobility, preserving Xi'an's cultural and historical characteristics and minimizing environmental impacts.

7. The basic policy for urbanization in Xi'an city is to protect the heritage of the existing urban area, and to provide new areas for economic development. The sub-regional plan designates a number of satellite towns (including Huxian and Xianyang) as the main centers for development, with some development in smaller towns dotted about the sub-region. Most of these new development areas have inadequate internal transport networks. They are also not well linked to Xi'an. Unless improvements are made to extend the transport networks in satellite towns, and high capacity rapid transit services from Xi'an to the satellite towns are provided to support the implementation of this urbanization policy, the tendency will be for trips to and from these satellite towns to be made by car, facilitated by the rising trend in motorization in Xi'an. This will continue to challenge the energy needs of China and increase the level of green house gas (GHG) emissions in a city which is one of China's top twenty polluted cities.

8. Better context for tourism promotion. Tourism is a pillar industry for Xi'an and the local government is determined to make it more competitive in world tourism market^.^ However, Xi'an faces great challenges in maximizing its tourism potential because of poor infrastructure, site planning and management. A historic city such as Xi'an must above all preserve its character. The spirit of a place is its urban fabric which is very vulnerable to air and noise pollution and visual intrusion of traffic. In addition, bicycle routes are being used by buses or as parking lots for cars, making walking and cycling within the MWC more difficult. Investment in high quality transport infrastructure, together with implementation of an appropriate site management system, will provide a higher quality tourism experience commensurate with the World Heritage status of its famous Terracota Warriors site.

9. Roads with incompatibly mixed functions. Xi'an's road network does not present a reasonable functional road hierarchy - where the lower order roads in the network have a predominantly non-motorized vehicle (NMV) and pedestrian function. This is because most roads perform the incompatible functions of carrying both longer distance cross town traffic and short distance traffic, acting as major bus routes, and serving roadside activities (such as shopping). Road investments in the Asian Development Project (ADB)~, scheduled for

The Mausoleum of the First Qin Emperor containing the famous terracotta warriors was designated as a World Heritage Site by the United Nations Educational Scientific and Cultural Organization (UNESCO) in 1987.

A loan of US$270 million was made to Xi'an by the ADB in November 2003 for the $762 million Xi'an Urban Transport Project (PRC 33459) designed to relieve transport infrastructure bottlenecks. The major investments are

completion in 2008, will assist in developing a functional road hierarchy by providing primary roads for longer distance cross town traffic.

10. Inadequate facilities for NMVs and Pedestrians. Previously physically segregated wide bicycle lanes have been sub-divided for use by on-street parallel parking and bus lanes. Road space from nonsegregated bicycle lanes has been allocated to motor vehicles. Conflicts between motorized and non-motorized vehicles are frequent and severe, and facilities for pedestrians and cyclists to cross main roads are inadequate. The only exception is the recently created bicycle route within the MWC adjacent to the city wall. Better traffic management measures are especially needed within the MWC to provide a more human scale to the area, reduce severance for pedestrians and cyclists, and minimize the visual impact on historic sites.

11. Inefficient Public Transport (PT) system. Analysis of overall investment in the ADB project and the loth and 1 lth Five Year Plans showed that the road investment was already far greater than public transport investment, and that public transport was failing to meet existing travel demands. Bus operating speeds are now below lOkm/h within the MWC. As in other cities there is a shortage of maintenance depots, passenger interchanges and termini. Bus company and sector management need to be made more efficient and business focused. In line with the national strategy of "priority to public transport" (as set out in State Council Opinion # 46,2005), Xi'an Municipality has undertaken studies for a network of six metro lines. The first line runs north -south through the MWC from the new north railway station. Construction started in 2006 and the line is schedule to open in 2012. The second line which runs east-west through the MWC is scheduled to start construction in 2008, with completion in 201 5 timed to serve the World Horticultural Expo. (See Map 35430 Public Transport Component for the route of both lines). But without greater investment in bus based public transport the mobility and accessibility of the majority of the population without access to a car will not be improved.

12. Limited traffic management, poor road user behavior, and inadequate enforcement. Use of the existing road space is inefficient, with random illegal parking. Average speeds on trunk roads declined in 2002 to 19.3kmk, with the volumelcapacity ratio at 0.95 during peak periods in the MWC. Like other Chinese cities, Xi'an is hoping that automatic enforcement by electronic means will solve the problems of lack of respect for the traffic regulations. However, this requires a strong foundation of a complete and integrated vehicle, driver and traffic violation database. This is currently evolving.

13. While Xi'an is typical of China, and indeed considerably better than some smaller cities, compared to more developed countries there is scope for improvement. In 2005, for Xi'an Municipality, there were 14.2 fatalities11 0,000 registered motor vehicles7; this compares with 13.7 for China as a whole (2002); 34.4 and 27.9 for other Bank project cities of Benxi and Fushun respectively (2005); 1.6 for the US (2002); and 1.0 for the UK (2002). Accident analysis is underdeveloped due to a lack of software and equipment. Accident location data is also unreliable - there is no proper grid-reference system so that the exact location of an accident cannot

in the construction of the 71 krn Third Ring Road, and in the northern quadrant of the city, 16 km of connector roads between the Second and Third Ring Roads.

Data Source: Traffic Control Improvement Sub-project of Urban Comprehensive Transport Improvement Project in Xi'an, The Feasibility Study Report, Xi'an Traffic Police Detachment, Chang'an University, November, 2006 614 fatalities per 432,000 registered MVs

be determined. The development in Xi'an of urban Road Safety Councils, as required by the National Road Safety Law of 2004 (NRSL), is behind those being established elsewhere.

14. A need to strengthen institutional capacity. Xi'an exhibits all the shortcomings discussed in the recent East Asia Transport Working Paper. No 4 China: Building Sustainable Institutions for Sustainable Urban Transport. It is similar to many cities in China in lacking an organizational structure appropriate to the requirements for integrated policy formulation and program implementation. There is a lack of institutional capacity to plan, design and implement a sustainable transport program. This has been recognized by Xi'an's leadership, who see developing the required capacity and making use of the knowledge base in the various universities in Xi'an as a key outcome of the project.

15. Air pollution is threatening the city's cultural heritage and harming people's health. As air pollution from industrial sources is brought under control, increased motorization is emerging as one of the key sources of pollution threatening the urban environment. The increase of C02 emissions from transport sources is also recognized as an issue by the local government. The levels of inhalable particulate matter (PMlo) for (2001 -2005) have exceeded the National Class 2 Ambient Air Quality Standard. A PMlo source appointment study indicates that vehicular emissions represent 25% (including 12% of secondary PMlo) of local emission sources in July 1998, followed by coal combustion (24%) and fugitive dust (22%). Xi'an is enforcing national emission standards for in-use vehicles. However, the renewal of inspection equipment and development of a quality control system is an urgent need to meet SEPA's new inspection requirements issued in 2005.

16. With increasing motorization and urbanization, the development of more sustainable measures will be necessary to ensure that the economic vitality, cultural heritage and tourism potential of the city are enhanced, and the stature and quality of life in the city are improved. The city leaders recognize this in the proposals mentioned above for new satellite towns, and reducing activities within the MWC, and by investing in high capacity transit such as the N-S metro line.

17. For this project, the city leaders have identified the specific priorities as:

(a) Protection of the MWC;

(b) Facilitating economic development in Huxian;

(c) Strengthening public transport performance,

(d) Improving local air quality - with a target to meet national standards by 20 10; and

(e) Developing a transport planning capability in Xi'an Municipality.

18. An integrated package of investments is proposed which meets this overall vision and these specific priorities. The measures are pioneering and innovative as they seek to promote sustainable (or "green") transport, particularly within the MWC, and address the rapid urbanization that is taking place outside the MWC. The investments are designed to:

(a) Reduce the environmental impact ofprivate car traffic in the MWC by reducing the overall volume of cars, by concentrating them onto well designed and managed main arterials, and introducing traffic calming8 on other roads where appropriate. This is a very new area for Chinese cities and the first time in an urban transport project in China that the idea of traffic calming has been introduced. The project will educate transport professionals and pilot traffic calming techniques (this has already started during project preparation). For the first time, a standardized Chinese term for traffic calming has been established, "jiaotongpingjing hua", reflecting the emergence of new thinlung by Xi'an.

(b) Foster a Functional Road Hierarchy, by resolving the incompatible mixed functions of roads and implementing the desired functions through a combination of road infrastructure improvements, traffic management, traffic calming, parking, public transport, and environmental measures.

(c) Encourage the use ofpublic transport for travel to the MWC, and for access to newly developed areas outside the MWC, by giving priority to local public transport through the development of bus lanes coordinated with traffic management measures and service development through out the city, coordinated with the two metro lines under construction.

(d) Encourage and give priority to cycling and walking by ensuring continuity and safety of pedestrian and bicycle routes tolfkom and within the MWC. In Xi'an, given the flat terrain, the bicycle is an ideal mode of transport for short and medium distance journeys. At relatively small expense, people can be encouraged to cycle. A bicycle route linking the tourist sites is being designed to continue the high quality of urban design shown on the city wall bicycle route. Through promoting bicycle use for the benefit of the natural environment in a targeted way to tourists, (by improving the urban environment for cycling), it is anticipated that local residents will also see the benefits and increase their bicycle use.

(e) Engender a human scale to the MWC streetscapes with road cross-sections related to the desired pre-dominant road functions and adjacent land uses, in proportion to building heights and made visually attractive through urban design, with provision for vulnerable road users, traffic management measures, and new road infrastructure where appropriate.

( f ) Encourage tourism development by providing a more 'livable" environment within the MWC through streetscape improvement, improved conditions for walking and cycling, improving traffic safety measures and recreating the road network in an archaeological site. The cultural heritage component demonstrates how modest transport investments can have a positive impact on individual historic and tourist sites. If successful they can be replicated in other locations.

Covers a range of strategies and techniques designed to reduce the speed, volume and other adverse effects of traffic in urban streets.

(g) Provide the basis for sustainable improvement in air quality by creating a traffic pollution monitoring and analysis capability which can be developed after the project is completed to permit real time assessment of pollution levels.

(h) Manage on-street parking, freeing up space for buses and general traffic and remove parking on sidewalks, freeing up space for pedestrians who are otherwise forced to walk in the street.

(i) Facilitate the economic development in Huxian to relieve pressure on the MWC by provision of road infrastructure to improve accessibility.

19. These investments will assist the Xi'an Municipal Government in tackling the traffic pressures in Xi'an now and in the medium term. They also establish the foundations for Travel Demand Management (TDM) measures, and for complementary measures to reduce C02 emissions. The city leaders recognize that, with increasing motorization, additional measures will be required if traffic pressures are to be tackled on a continuous basis. More comprehensive transport planning including TDM and possible congestions pricing will be necessary to ensure that the quality of life and economic vitality of the city are enhanced. For these reasons, the city leaders have submitted a proposal for Global Environment Facility (GEF) funding of such measures as part of the GEF China World Bank Urban Transport Partnership Program.

20. The project also contributes to the reduction of greenhouse gas emissions. A portion of these benefits may translate into additional cash flow and financial returns to the Borrower through the sale of carbon credits under the Kyoto Protocol's Article 12 which establishes the Clean Development Mechanism (CDM) allowing public and private sector parties in industrialized countries to invest in greenhouse gas mitigation projects implemented in developing countries. The CDM enables investors to receive a credit toward their emission reductions target under the Kyoto Protocol and associated regional agreements such as the European Union Greenhouse Gas Emission Trading Scheme (EU ETS). The Bank is currently exploring a Carbon Finance Project based on the emission reductions associated with the anticipated savings in fossil fuel consumption.

B. Rationale for Bank involvement

21. The GOC's agenda for the development of the western region (outlined in Paragraph 2) provides the context for economic development in the western provinces. The Bank's support to this region in China is in response to GOC's agenda.

22. The Bank is well positioned to support these GOC initiatives and to help Xi'an address its development challenges, due to the Bank's competitive advantage in financing and policy advice in urban development, urban transport and cultural heritage. The Bank brings a combination of fifteen years of experience working in China on urban transport with international experience and good practice on urban transport solutions. Of particular relevance to this project is the Bank's experience in comprehensive resolution of congestion and air quality issues, creation of integrated and sustainable transport systems, and institutional strengthening and capacity building. The project goes beyond simply improving the transport infrastructure in Xi'an to encompass urban management and supporting tourism sector development. The Bank's

satisfactory engagement in urban and cultural heritage projects, as well as experience in developing cultural heritage sites,9 gives it a comparative advantage.

C. Higher level objectives to which the project contributes

23. The project is consistent with the 2006-10 Country Partnership Strategy (approved by the Board on May 23,2006), which, among other objectives, aims to: (i) promote balanced urbanization, and expanding access to basic social and infrastructure services; and (ii) manage resource scarcity and environmental challenges, through reducing air pollution, optimizing energy use, improving land administration and management, protecting cultural and natural heritage, promoting cultural tourism, and observing international environmental conventions.

24. Urban infrastructure development was identified as a priority area for investment by the GOC. The proposed project will support this priority by improving the urban transport system in Xi'an. The project also supports the implementation of State Council Opinion #46 on "Priority to Public Transport", the National Road Traffic Safety Law 2004, and stricter emission regulations issued by the State Environmental Protection Agency (SEPA) in July 2005, designed to regulate in-use vehicle emissions in a loaded condition.

11. PROJECT DESCRIPTION

A. Lending instrument

25. The proposed lending instrument is a Specific Investment Loan (SIL). The Bank's Board of Executive Directors on Feb. 12,2008 approved a Management proposal10 to extend the maturity of new IBRD loans and guarantees and to give borrowers easier access to risk management tools including unifying IBRD's Variable Spread and Fixed Spread loans into a single product. The Borrower has selected a variable-spread loan with a six-year grace period and a twenty-five year repayment term (including the grace period).

B. Project development objective and key indicators

26. The project development objective is to improve transport accessibility and mobility in Xi'an Municipality while protecting its cultural heritage and reducing the environmental impact of the urban transport system. The priority area for achieving this objective is the MWC.

27. Achievement of this objective is to be monitored by the following outcome indicators:

(a) Trip modal split (including walking) to and from the MWC; and

(b) Bicycle use and travel times to cultural heritage sites within the MWC.

28. Achievement of improved values of these indicators is facilitated through efforts to:

Leshan Grand Buddha, Shenyang Imperial Palace, Chongqing Huguang Huiguan, Lijiang, Gansu, China; Petra, Wadi Rum in Jordan. lo "IBRD, Loan Simplification and Maturity Extension", February 12,2008, Treasury, The World Bank

(a) Reduce motor vehicle (MV) traffic - especially traffic without an origin or destination in the MWC, in part by making the First Ring Road a more attractive route for cross town traffic;

(b) Support the basic policy for urbanization in Xi'an by improving accessibility in Huxian through upgrading of the road network;

(c) Increase accessibility and mobility by bus, non-motorized vehicles and walking by making journeys by these modes quicker, easier, more pleasant and safer;

(d) Protect the MWC from the congestion related environmental impacts (air pollution, noise, visual intrusion) of traffic by making journeys by bus and car inside the MWC quicker and smoother;

(e) Reduce motor vehicle emissions through development and implementation of a Motor Vehicle Emission Control Plan;

(f) Protect cultural heritage by removing vehicular traffic and parking fiom the vicinity of historic sites, and by increasing bicycle and pedestrian usage for visits to these sites; and

(g) Provide the institutional capacity for continued development of policies and investment programs after the completion of the project.

29. Annex 3 provides further details.

C. Project components

30. To achieve the above-mentioned objective and outcomes, the project comprises an inter- related package of six components separated into Investment Components and Enabling Components. The Investment Components are the heart of the Project and they comprise: a Road Network Component (Component 1); a Public Transport Component (Component 2); and Cultural Heritage Component (Component 5). These are complemented by Enabling Components which are operational, management and monitoring tools to realize the Investment Components, which comprise; a Traffic Management Component (Component 3); an Air Quality Management Component (Component 4); and an Institutional Strengthening Component (Component 6). Diagram 1 below shows how the components are related.

Diagram 1: Relationship of Project Components

Institutional Development Component I

Infrastructure Transport

Enabling Component

Heritage Investment Component

Road Safety Component Management Component Enabling

Component

3 1. A brief description of the components follows. Further details are provided in Annex 4. Details of the costs are provided in Annex 5.

32. The Road Network Component (RN) will comprise: (i) in Xi'an city improvements to the First and Second Ring Roads and Taibai Nan Road to increase their functionality as major traffic routes; and (ii) upgrading of the road network in Huxian.

33. The Public Transport Component (PT) will comprise: (i) Eastern (Textile City) and Southern City Passenger Transport Terminals; (ii) Integrated public transport priorityltraffic management measures on thirteen selected bus corridors; and (iii) Xinzhu bus depot.

34. The Traffic Management Component (TM) will comprise: (i) An Area Traffic Control (ATC) system, with associated junction channelization; (ii) a Road safety program to investigate and analyze accidents, and implement remedial measures; (iii) Enforcement and Road User Education measures; (iv) Parking measures and equipment; and (v) traffic facilities for cyclists and pedestrians, and road marking equipment. All these investments complement investments in the ongoing ADB funded project.

35. The Air Quality Management Component (AQM) will support the Xi'an Environmental Protection Bureau (XEPB) in developing and implementing comprehensive plans for air quality improvement and reduction of vehicle emissions. It will comprise: (i) A building to house the newly established Xi'an Ambient Air Supervising and Monitoring Center; (ii) Equipment for motor vehicle emission inspection compatible with inspection methods issued by SEPA in July 2005; (iii) Civil works and equipment for two ambient air quality monitoring sub- stations and two traffic air pollution monitoring sub-stations for improvement of air quality monitoring network; (iv) Equipment for improvement of air quality assessment and information publication; and (v) Development of a Motor Vehicle Emission Control Plan (MVECP).

36. The Cultural Heritage Component (CH) will comprise: (i) Han Chang'an Site - recreation of the old Han Dynasty road network in the area of Weiyang Palace; and (ii) MWC - construction of a network of bicycle routes linking the main tourist sites.

37. The Institutional Development Component (ID) will support Xi'an in developing a capacity in the city for transport planning and policy making. It will comprise: (i) Urban Transport (UT) Policy & Comprehensive Planning; (ii) Support for Implementation of the TM component; and (iii) Domestic and International Training and Workshops. Support for public transport planning will be financed by a complementary, but separate GEF Project.

D. Lessons learned and reflected in the project design

38. Client driven agenda. Client ownership is crucial if political support and resources are to be maintained through the life of the project. The key items in this project (protection of the MWC, improvement of public transport, improvement of air quality and institutional development) were announced early in the preparation process by the city leadership and have not changed. Investment in roads in Xi'an was not stated explicitly, but is understood to be an implicit part of the agenda (as in all Chinese cities). The project is also supporting implementation of the three recent policy initiatives on the national agenda - priority to public transport, road safety and stricter vehicular emission control.

39. Inclusion of public participation. International experience has shown that inclusion of the views of the public in the selection, planning and design of investments is essential to ensuring successful implementation and operation. The recent Liaoning project11 showed that benefits on the application of these technique in China. It is now being adopted as standard practice in Bank urban transport projects, and is being used in the design of the various investments in Xi'an.

40. Balanced package of investments. Proposals made by municipalities for Bank urban transport projects have also tended to allocate the majority of investments to road construction, without adequate analysis of travel demands, the needs of other modes (especially public transport) or people's views. Even when the needs of other modes are adequately met, the majority of investment will go toward roads. In this project, the need for investment in public transport and non motorized transport was stressed, in part in response to the large investment in roads in the ADB project. The percentage allocation to roads is the lowest of any Bank urban transport project in China.

41. Improving Institutional Mandate for Traffic Management. A thematic review of past Bank projects showed that traffic management implementation responsibilities assigned to the traffic police regarding activities for which they had no functional role (particularly the design and construction of infrastructure for pedestrian, cyclists and bus priority) had mixed success. With the exception of traffic signals and area traffic control, most traffic management activities were also not directly linked to other project investments. In this project the traffic management component is essentially an operations and enforcement component comprising only activities

" China - Liaoning Medium Cities Infrastrucuture Project (P099992)

that are hlly under the control of traffic police. Physical measures for on street bus priority are included in the public transport component.

42. Bus priority. In Bank urban transport projects it has proved difficult to find agencies willing to take ownership of on street bus priority measures. Civil works are the responsibility of road agencies. The traffic police are responsible for the design of the traffic signal and traffic engineering aspects, and enforcement. Bus operators (who benefit from the measures) are only responsible for operations and adjusting schedules to make use of reduced travel times. A working group of all three agencies is needed to design and implement schemes - but even then the overall "owner/project manager" is still unclear. The solution would appear to be to assign this role to the Xi'an Municipal Communication Bureau (XMCB), which has overall responsibility for all aspects of public transport planning, implementation and operation. This project, which includes thirteen integrated public transport priorityltraffic management corridors, is trying this approach.

43. NMVs. In previous projects the Bank tried to enhance non-motorized vehicle mode share through networks of segregated and exclusive non-motorized vehicle and motor vehicle roads. However, experience has shown that only the exclusive motor vehicle roads got implemented. In this project, the Bank aims to maintain and enhance non-motorized vehicle mode share by ensuring that that these vehicles are provided with appropriate facilities on as many roads as possible and that there is a spread of routes with non-motorized vehicle facilities across the network; introducing the concept of an functional road hierarchy; and creating an non- motorized vehicles predominant route with a high quality urban design and traffic calming to make cycling both a safe and pleasant experience.

44. AQM. The Bank conducted an AAA scoping study in 2006 focusing on motor vehicle emission control strategies in Chinese cities12. The findings and suggestions from this study, as well as the experience from previous projects, have been incorporated into the design of the AQM component from the early stage of project preparation. In particular, it has resulted in a focus on the establishment of an overall AQM system, and implementation of a Motor Vehicle Emission Control Plan, rather than just the development of such a plan.

45. Institutional DevelopmentICapacity Building is often seen by clients as a set of studies that the Bank wants completed. Yet GOC agencies all say that they value the Bank for the expertise and knowledge transfer it brings to projects as much as the finance. Xi'an stated that developing a transport planning capability was one of the priorities of the project. Therefore, the project includes what is considered by the Bank to be minimum amount of support to achieve this objective. The municipality will use GEF grant funding for the institutional development of public transport planning.

l2 Scoping Study on Air Quality Management and Motor Vehicle Emissions Control Strategies (AQMIMVECS) in P. R. Chma. Draft Report March 2007.

E. Alternatives considered and reasons for rejection

46. Allocation of loan funds across modes. The original proposal placed almost 80% of the total investment into the road network, with limited investment in public transport. Analysis of overall investment in the ADB project and 1 oth and 1 1 th Five Year Plans showed that the road investment was already far greater than public transport investment, and that public transport was failing to meet existing travel demands. Without greater investment in public transport the mobility and accessibility of the majority of the population without access to a car could not be improved, and the central government requirement to give greater priority to public transport would not be achieved.

47. Integrated, but not all embracing program. To be effective in achieving desired objectives and outcomes, urban transport projects need to include an integrated package of investments and other activities. But experience shows they need to be as simple as possible to ensure that objectives are achieved. With this in mind, it was decided in this project not to address road maintenance or the secondary road network (except in Huxian), and to limit the scope of activities on road safety, public transport enterprise and industry reform, and intelligent transport system. Some thought was given to limiting activities in traffic management to capacity building due to the limited outcomes in previous projects, but this was rejected in favor of the approach described earlier.

111. IMPLEMENTATION

A. Institutional and implementation arrangements

48. Xi'an Municipality - Project Steering Committee (PSC) and Executive Office (PSCEO). Xi'an Municipality, through a Project Steering Committee (PSC), established on March 29,2005 is responsible for providing overall leadership, policy guidance and institutional coordination as required on project preparation and implementation. The PSC, headed by the Vice Mayor responsible for urban construction, is composed of leaders and directors of fifteen l 3

relevant municipal government line agencies. The PSC will be maintained throughout project implementation with functions and membership satisfactory to the Bank, and shall meet on a regular basis (once every quarter).

49. Under the leadership of the PSC, the Xi'an World Bank Project Management Office (PMO) was established on March 29,2005 to execute project preparation on behalf of the Xi'an Municipality. At the start of project implementation, the PMO will be transformed into the Executive Office of the PSC (PSCEO), assisting the PSC with policy guidance, institutional coordination, and overall monitoring of project progress and implementation in accordance with the loan and project agreement.

l3 Xi'an Development and Reform Commission, Xi'an Municipal Finance Bureau, Xi'an Municipal Planning Bureau, Xi'an Municipal Construction Bureau, Xi'an Municipal Environmental Protection Bureau, Xi'an Municipal Communication Bureau, Xi'an Municipal Civil Administration Bureau, Xi'an Municipal National Land and Resources Bureau, Xi'an Municipal Cultural Heritage Bureau, Xi'an Municipal Public Security Bureau, Xi'an Infrastructure Implementation Corporation.

50. Infrastructure Investment Corporation (IIC). The IIC will implement the project. IIC is a State Owned Enterprise (SOE), established under the supervision of Xi'an Municipality in July 2000. It is the Xi'an Municipality's development agency for public works finance and implementation. IIC has implemented most of the public sector urban development projects in Xi'an in recent years. Funding for IIC comes mainly from the municipality and domestic bank loans. IIC will have responsibility for the following: (a) project management, (b) project financing and financial management, (c) progress monitoring, evaluation and reporting, (d) disbursement, (e) procurement(with the help of a qualified procurement agent (tendering company), (f) construction supervision, and (g)contract management, land acquisition and resettlement, environmental management and monitoring.

5 1. Line Agencies. Xi'an Municipality shall enter into an agreement with IIC for the purposes of coordinating the overall implementation of the project. During project implementation, the line agencies14 that were responsible for leading the preparation of the project sub-components and have ownership of the design will assist IIC in preparing the technical parts of the bidding documents (including design drawings), participating in the Bid Evaluation Committees, and signing off on the technical parts of the contracts and the completed works. The same line agencies will be responsible for the future operation of the sub- component~.

52. Project Agreement. The loan funds flow from the Ministry of Finance to Xi'an through the Province under an Onlending Agreement, and then from Xian to IIC under the Subsidiary Loan Agreement on the same terms as the Bank Loan. For implementing the Project, the Bank will enter into a Project Agreement with Xi'an and Xi'an will enter into the Subsidiary Loan Agreement with IIC

B. Monitoring and evaluation of outcomes/results

53. Annex 3 lists the outcome indicators for the project, as well as the results indicators for each component. IIC will be responsible for ensuring that the data required for monitoring and evaluation of outcomes is collected. The data on modal split and accessibility (travel times) for measuring project outcomes should be within the scope of data collected by the planning bureau on an "as required" basis for the purposes of formulating and monitoring the implementation of policy initiatives, and funded from their recurrent budget. The administrative arrangements and organizational responsibilities for such activities are in the process of being established, and will be strengthened during the project. Therefore, at least initially, IIC will be responsible for arranging the data collection by contracting it out to local universities. This activity will be funded from IIC contribution to counterpart funds.

54. The leading line agencies for each component will be responsible for collection of the data required for results monitoring of their respective components. The type of data collected by these agencies is within the scope of the data they should collect to fulfill their technical

l4 XMPWMC for the Xi'an Road Network, Huxian Construction Bureau for the Huxian Road Network, XMCB, XMPWMC, and XPSB for the PT 1 Bus Lanes, Xi'an Public Transit Company for the PT 2 Xinzhu Depot, XMPWMC and XPSB for the Traffic Management, XEPB for the Air Quality Management, XMCHB for the CH 1 Han Chang'an Site, XMCWSC and XMPWMC for the CH 2 Bicycle Network.

responsibilities, and for which funding should be allocated in their recurrent budgets. These monitoring and evaluation arrangements are based on such data collection and budget arrangements and are in accord with international good practice. IIC will review the annual results monitoring on the basis of progress reports provided by the line agencies. When the actual results are lower than forecast, IIC will discuss the potential causes with the line agencies and take appropriate corrective action. This approach is a further step in the capacity building provided during project preparation. It also provides a greater probability that monitoring and evaluation activities launched by the project will be sustained once the project is completed.

C. Sustainability

55. The project has been designed with sustainability in mind, and the emphasis has been on scaling 'down' rather than scaling 'up' - choosing investments that are appropriate in scale to the vision of the city leaders for Xi'an's future. However, the continued development of a sustainable transport system in Xi'an requires a change in the current incentive structure for city leaders to one which recognizes and rewards the implementation of sustainable infrastructure. Concepts such as "Green GDP" are just being developed in China. These concepts can help people understand the resource and environmental costs of economic development and avoid seeking economic growth at the expenses of precious resources and the environment. The project has attempted to promote the concept of balanced growth by funding the development of urban transport planning tools which would allow infrastructure investments commensurate with the available financial resources to be designed and optimized. The involvement of Xi'an in the GEF Program provides a further opportunity to advance sustainable transport in the municipality. The emphasis on preservation, particularly within the MWC, is reflective of the city's vision to protect and sustain its heritage and improve livability by reducing overall vehicle usage. The promotion of non-motorized vehicles, complemented by an intention to examine other concepts like congestion charging, increases the chances of sustainability of the MWC.

56. The public transport investments demonstrate the city's recognition that the sustainability of such services rests to a large extent on giving priority to public transport. The thirteen high priority public transport corridors in the project are being developed with this strategy in mind, and the GEF grant will allow these lanes to be well designed, which is a key step towards their sustainability. \

57. Socially sustainable development of the transport system in Xi'an requires that policies and investments be designed to benefit all transport users, particularly the socially disadvantaged and not just those with access to motor vehicles. The project places great emphasis on investments to provide mobility and accessibility for all. The surveys of the disadvantaged groups undertaken during project preparation are being used in the design and refinement of service delivery. The continuation of these surveys throughout project implementation will provide feedback on designs to ensure that they do meet the needs of the disadvantaged.

58 . The environmental sustainability of the project is dependent on the extent to which the overall level of local and global emissions due to increasing travel demand is monitored, contained or reduced. The whole AQM component is designed to address the issue of local emissions, and particularly the emissions per vehicle. The investments in facilities for public

transport, cycling and walking are all designed to reduce overall vehicle usage and thus the overall level of global emissions. The proposed GEF project is designed to further address global emissions.

59. Based on the Bank's experience with the transport sector in China, the physical assets are expected to be constructed to high-quality standards and completed on schedule. Long-term sustainability of the road assets will depend on effective and timely maintenance, which is not being addressed in the project. However, experience also shows that primary roads usually receive priority in maintenance budgets, and are generally maintained in good condition.

60. The sustainability of the policy, planning and design approaches introduced during project preparation and reflected in the project design will be facilitated by the further development of a transport planning capacity in Xi'an through the Institutional Development component (as well as the proposed GEF project).

D. Critical risks and possible controversial aspects

Rating (wl Mitigation)

S

S

M

M

M

M

Risk

To Project Objectives Political support for project weakens in face of competing Xi'an Municipality priorities

Investments fail to reduce motor vehicle traffic pressures in the MWC

PT journey times and usage do not improve

Increasing motorization and traffic congestion causes city to allow MV to use NMV lanes and sidewalks

Direct funding by line ministries to local agencies of certain items does not eventuate Lack of experience of Xi'an Municipality agencies in implementing a Bank project and complexity may affect project effectiveness and efficiency and result in dropping of subcomponents and failure to meet PDO

Mitigation

Project activities and loan allocation has been designed around the key interests of city leaders (regularly conf i i ed with them), and key GOC policy initiatives, including the State Council directive on "Priority to Public Transport" and "People Centered Development", the National Road Traffic Safety Law, and SEPA vehicle emission standards. Implementation of traffic management measures to increase journey times of through MV trips inside MWC, and reduce journey times outside, coupled with further improvements to PT services and facilities for NMT. Introduction of TDM measures (to be studied in project) Implementation of further measures to increase on street priority, customer surveys to identify service shortcomings and implementation of remedial measures. Design and implementation of permanent physical measures to prevent access and improve streetscape. Highlight success of effective measures and raise awareness. User surveys to gauge public support. These items are to be funded directly by IIC who will be reimbursed by line agencies once funds are received from line ministries. FM and procurement Manuals were prepared and training was provided to the project staff to furnish them necessary knowledge and information on Bank requirements, (particularly for FM and procurement). SPFD will supervise and monitor the project implementation by managing the loan proceeds. .Qualified procurement staff and a qualified procurement agent (tendering company) were appointed. Close monitoring by Bank staff. Semi- annual review of implementation program.

Note: High Risk - H, Substantial Risk - S, Modest Risk - M, Low or Negligible Risk - N.

Risk

To Project Components Road Network Improvements fail to reduce MV traffic through MWC

Public Transport

PT corridors implemented poorly and fail to increase PT usage

Traffic Management Traffic management measures are superseded by fast pace of development andlor are funded by Xi'an Municipality instead of the Bank. Cultural Heritage Bicycle routes changed during implementation Institutional Development Concerns over resources and institutional changes limit extent of institutional development Other Risks

Anticorruption and governance Fraudulent procurement practice could affect project implementation.

Overall Risk

E. Loadcredit conditions and covenants

61. The following conditions and covenants are to apply:

Mitigation

The road improvements subcomponents are designed as objective based programs which allow for traffic not to travel through the MWC. If close monitoring of the traffic situation w i t h MWC through indicators shows continued through traffic, then additional alternative investments for appropriate similar measures can be taken. Traffic flow monitoring by detectors will display information to Variable Message Signs (VMS) to direct traffic away from MWC. Allowance for alternatives has been ensured in the domestic Chinese Feasibility Studies to avoid problems with substituting project elements. XMCB has been designated as the lead agency to coordinate the planning, design and implementation with other agencies. If monitoring by missions shows that t h s arrangement is not effective, then other arrangements will be suggested, including creation of a special "Bus Priority" unit. The subcomponents are designed as objective based programs which allow for alternative investments for appropriate similar measures with the same objectives. Allowance for alternatives has been ensured in the domestic Chnese Feasibility Studies to avoid problems with substituting project elements.

Annual review of implementation program

Maintain dialogue with municipal leaders and leaders of key agencies separate from normal communications with IIC on project implementation.

During project preparation World Bank's anticorruption practice was explained to the local government officials, particularly the need for bidders, suppliers and consultants to apply the highest standard of ethics in procuring and implementing World Bank funded projects. In addition, there are significant fiduciary controls in place as checks against corruption.

Condition of Disbursement

Rating (wl Mitigation)

S

M

M .

M

S

M

S

(a) The Subsidiary Loan Agreement has been executed on behalf of Xi'an Municipality and the Infrastructure Investment Corporation of Xi'an.

Xi'an Municipality shall:

(a) maintain the Project Steering Committee throughout the period of implementation of the Project;

(b) implement the Project in accordance with the Project Implementation Plan;

(c) implement the RAPS, the RPF, and the EMP;

(d) monitor and evaluate the progress of the Project and prepare project progress reports that cover the period of one calendar semester, and furnish to the Bank not later than one month after the end of the period covered by the report;

(e) prepare and furnish to the Bank as part of the semester project progress report, an interim un-audited financial report for the Project;

( f ) have its financial statements audited by independent auditors for the period of one fiscal year and furnish to the Borrower and the Bank not later than six (6) months after the end of the fiscal year; and

(g) onlend the proceeds of the loan to IIC under terms and conditions satisfactory to the Bank for implementing the project, which shall, among others, required IIC to:

(i) have its financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited by independent auditors and furnish to the Bank and the Xi'an Municipality not later than six (6) months after the end of each such year;

(ii) prepare semi-annual reports on the progress achieved in the carrying out of the Project covering a six (6) month calendar period in each year, that is from January through June and from July through December, commencing on July 1,2008, and shall be furnished to the Bank and the Xi'an Municipality not later than thirty (30) days after the end of the period covered by such report;

(iii) undertake to maintain throughout the period of implementation of the Project units headed by managers with terms of reference and qualifications and in numbers acceptable to the Bank; and

(iv) undertake to hold public consultations at least twice during Project implementation (by December 3 1,201 1, and June 30,201 3 respectively) on the impacts and benefits of the Project and furnish to the Bank (by February 28,201 1 and August 3 1,2013 respectively) reports integrating the results of the above-mentioned public consultations and setting out the measures recommended to address the issues raised.

IV. APPRAISAL SUMMARY

A. Economic and financial analyses

62. Economic Analysis. A formal economic evaluation was conducted for the road infrastructure component which accounts for about 55% of total project cost and absorbs some 50% of the loan. Costs and benefits reflect December 2006 prices, and a project life of 20 years is assumed. Transport user benefits, measured as savings in vehicle operating costs (VOC) and passenger travel time, were estimated for each project using standard calculations, due to the lack of a comprehensive traffic model. Other project benefits, such as reduced road congestion and auto emissions were not quantified because of the lack of reliable data. The Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) reached through the evaluation can therefore be considered somewhat conservative.

63. The estimated overall EIRR for the above components is 14%, and NPV (at 12% discount rate) is estimated to be RMB 296 million. Table 2 below summarizes the results of evaluation. See Annex 9 for more details.

Table 2: Economic Evaluation Summarv

64. For the other components, the generally modest individual investments have been designed to reflect a wealth of Chinese and international experience, which indicates that small investments in traffic management, road safety and AQM facilities have very high economic returns and distributional benefits. Investments in Cultural Heritage are usually accepted as giving enough return to society to justify them.

Component Road Network Xi'an city Road Network Huxian

Total for above components

65. Financial Analysis. Separate analyses were carried out for Xi'an City and Huxian. The financial analysis focuses on the fiscal sustainability of Xi'an Municipality and Huxian. Total revenues and expenditures (on and off budget, transfers, and earmarked funds) were analyzed. The objective was to assess the health of the municipality's fiscal stance, its fiscal and debt repayment capacities. The analysis suggests that Xi'an's level of indebtedness appears to be within a manageable range, and the municipality has a well designed debt management plan. Further details can be found in Annex 9.

66. A municipal debt analysis was also conducted though only in limited scope, given that no reliable data were available for off budget debt and contingent liabilities. Overall, the municipal finance analysis shows that the project investments are affordable for Xi'an City and Huxian, and the proposed counterpart funding strategies are sound. (See Annex 9 for more details).

Present Value of Total Costs (million RMB

@ ,12% discount rate)

960 220

1180

EIRR (YO) 14 15

14

NPV (million RMB @ ,

12% discount rate ) 206 90

296

67. Analysis was also carried out separately on IIC. The sources of funds of IIC are municipal government budgetary support and domestic bank loans. IIC also acts as a platform for raising funds on behalf of the government, including taking out and repaying domestic bank loans, including both principle and interest. IICYs ability to pay back the bank loans largely depends on financial support from the government. The analysis suggests that the trend is for government fiscal support to IIC to increase and that it will continue to grow over the next few years. Borrowing from domestic banks has also been increasing over the last few years, but will decline in the next few years.

B. Technical

68. Focus of road investment program. The original proposals were not based on any systematic analysis of existing problems, or achievement of specific objectives, and tended to focus on a desire to upgrade all primary roads to urban expressways. Analysis showed that the most pressing problems related to relieving traffic pressures in the walled city, to strengthening the emerging road hierarchy, improving the functionality of existing First and Second Ring Roads, and improving conditions for cyclists and pedestrians. This provided the focus to select road investments.

69. Road Scheme Design Options. The key road investments were subject to alternatives analysis to ensure that the alternatives meeting the traffic needs with the lowest overall construction and resettlement costs and least impact on the environment were chosen. Details of the alternatives considered are provided in Annex 10.

70. Road Technical Issues. Soil condition together with drainage and water table problems were considered and discussed in the analysis of the different solutions in each case. Pavement design was also discussed to be based on heavy traffic loads. Design guidelines were provided related to pavement design and safety issues.

71. PT Investment Options: For the bus priority lanes, centrallmedian and curbsides options were explored and for the pilot corridor it was decided that where possible the lane should be in the center of the road and where this is not possible they should run at the curbside. Standard buses with doors on the right would be used since these lanes would be used by local bus services. Side-platform (lateral) platforms would therefore be required at stops when the lanes are in the center of the road. To avoid bunching and overloading the single dedicated bus lane, all major bus stops have independently accessible multiple bays and an overtaking lane so that stationary buses need not delay all other buses.

72. Cultural Heritage Protection: Han Chang'an Site - Weiyang Palace Roads. Three alternatives for the road pavement structure were analyzed, to balance the desire to reproduce the original features of the roads with present day requirements to use the roads as service roads. As road traffic levels will be low and because the roads will only be used by electric cars serving the tourist center, the weight in the decision making was given to the reproduction of the original features, with the service road requirements as secondary.

C. Fiduciary

73. Financial Management. A financial management assessment was conducted during appraisal. The Bank concluded, on the basis of guidelines issued by the Financial Management Sector Board on November 3,2005, that the project meets minimum Bank financial management requirements, as stipulated in BPIOP 10.02. Xi'an Municipality is taking the necessary actions to ensure that the project will maintain financial management arrangements that are acceptable to the Bank and that, as part of the overall arrangements that the borrower has in place for implementing the operation, provide reasonable assurance that the proceeds of the loan are used for the purposes for which the loan was granted. The financial management (FM) risk is the risk that World Bank loan will not be used for the purposes intended and is a combination of country, sector and project specific risk factors. The FM risk rating proposed for this project during the appraisal stage is modest. (see Annex 7 for Wher details).

74. Procurement. A procurement capacity assessment of the PMO, IIC and line agencies was carried out during pre-appraisal. The assessment concluded that the overall risk of the procurement process was average (details are provided in Annex 8). An action plan to strengthen the procurement capacity of the IIC and line agencies has been agreed with the PMO and the IIC. The plan calls for the preparation and dissemination of a project-specific procurement manual, training workshops, and measures to avoid excessive cost overruns and improve procurement economy and efficiency. Ways in which the Tendering and Bidding Law of China differs from Bank guidelines were addressed in the assessment, and clarifications for the procedures to be followed for Bank-financed National Competitive Bidding (NCB) procurement have been included in the Loan Agreement.

D. Social

75. Following the Chinese laws, regulations and the World Bank OP 4.12 on Involuntary Resettlement, separate resettlement action plans (RAP) have been prepared for the Xi'an city and Huxian road sub-components, the Southern Interchange, the Han Chang'an site and the AQM component and summarized into one project RAP. A resettlement policy framework (RPF) has been prepared for the Public Transport Component, with the exception of the Southern Interchange, as the exact location of various terminals and the depot are not yet determined. RAPS will be prepared for the public transport component (other than the southern interchange which already has a RAP) in accordance with the RPF once the sites are identified. Planning work included project impact inventories, social economic surveys and consultations over resettlement and livelihood rehabilitation strategies.

76. The project will require the acquisition of land, relocation of houses, compensation for businesses and relocation of infrastructure. The overall level of resettlement and land acquisition is modest among urban transport projects undertaken to date in China. The project will require the acquisition of approximately 1,423 mu of land, of which village land is approximately 1,3 13 mu and 1 10mu is state land. Most of the village land is cultivated land. The project would also require the demolition of 72,280 m2 of housing areas, including 3 1,075 m2 of residential areas and 41,205 m2 of non-residential areas. The project would affect a total of approximately 2,385 people in 527 households, including approximately 1,538 people through loss of land, 667

people through loss of houses, and 180 people at workplaces. Project impacts are detailed in the RAPs. Most of the resettlement impacts in rural areas are relatively scattered and marginal, considering the small scale of civil works and the significant share of household income from non-farm activities. Nine small factories and 114 small shops will be affected.

77. The RAPs (summarized in Annex 10) describe in detail the overall legal framework, project impacts, strategy and action plans for relocation and livelihood rehabilitation, consultations, grievance redress, implementation schedules, cost and budget as well as institutional and monitoring arrangements.

78. The IIC will assume the overall responsibility for the implementation of the resettlement program. An independent monitor will be engaged. All resettlement costs will be financed domestically from counterpart funds.

79. The social economic surveys have also confirmed that there are no ethnic minority communities in the project areas. Based on this finding, it is the Bank's assessment that this project does not trigger Bank OP 4.10 on Indigenous People.

E. Environment

80. The project is classified as Category A under OP 4.01 Environmental Assessment, due to the disruption caused by the upgrading of roads and the sensitive cultural properties in the project area. Following the requirements of Bank's OP4.01 and relevant domestic regulations, six full and individual Environmental Impact Assessment (EIA) reports have been prepared for the Xi'an city and Huxian road sub-components, the Han Chang'an site and MWC bicycle route subcomponents, the Public Transport component and the building for the Ambient Air Supervising and Monitoring in the AQM component. Based on the six individual EIAs, a Consolidated Environmental Assessment Report (CEA), and a stand-alone Environmental Management Plan (EMP) have been developed for the entire project under the guidelines and table of contents agreed with the Bank task team, as well as an Executive Summary of all the documents.

8 1. Two rounds of public consultation have been carried out for all components according to Bank requirements. In total, more than 1,300 people have been consulted, and their feedback has been addressed in EIA reports and project design. The individual EIA reports have been locally disclosed in Xi'an Public Library, Huxian Government Offices, and meeting houses of affected- villages in May, 2007 with an announcement made in the Xi'an Daily on May 2 1,2007. Annex 10 provides further details.

82. The proposed project will have substantial positive environmental benefits through physical investment in improving traffic efficiency, increasing pedestrian and bicycle facilities, promoting public transport in Xi'an, strengthening motor vehicle emission inspection control and protecting cultural heritage. Given the strong focus of environmental improvement and cultural heritage protection in the project design, it is expected that negative environmental impact of the project will be insignificant, non-precedent, site specific, and could be properly mitigated with adequate project design and good construction management practice.

83. The negative impacts during construction and operation (details in Annex 10) include dust, noise, land acquisition and resettlement, damage of surface vegetation, soil erosion and waste material disposal, construction wastewater, traffic impact, social disturbance and safety, impact on utilities, potential impact on underground cultural relics, and visual impact. The negative impacts during operation include noise and vibration, air pollution, road safety, wastewater from a bus depot and the air quality monitoring center.

84. These adverse environmental impacts are thoroughly addressed in the individual EIA reports for various components, and a set of comprehensive mitigation measures are provided in the Environmental Management Plan (EMP) (details in Annex 10). The EMP, besides describing mitigation measures, also addresses the environmental management and supervision mechanism, the necessary institutional capacity training plan, monitoring arrangement and the budget estimate for EMP implementation. The EMP will be incorporated into the bidding documents and civil works contracts to ensure its implementation.

85. The Bank's policy on Cultural Property OPN 11.03 is triggered. A baseline survey has been carefully conducted during EIA preparation. It concluded that there is no environmental protected aredsite in the project area, and there is no known cultural heritage site to be directly affected by the project construction. Han Chang'an site subcomponent will reconstruct the original road system around the Weiyang Palace at existing ground level, without touching the original roads buried underground. This is fully in line with the master plan of Han City preservation. For chance finds during construction, the project will follow the Chinese policy framework on cultural relics protection. China has established a regulatory policy framework in this regard, which requires that any chance finds must be reported and necessary exploration and protective work completed before construction work can continue. Along this policy framework, a regulatory and management system has also been put in place with their responsibilities and mandate clearly stipulated out.

F. Safeguard policies

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPIBP 4.01) [XI [ 1 Natural Habitats (OPIBP 4.04) [ 1 [XI Pest Management (OP 4.09) [ 1 [XI Physical Cultural Resources (OPIBP 4.1 1) [XI [ 1 Involuntary Resettlement (OPIBP 4.12) [XI [ 1 Indigenous Peoples (OPIBP 4.10) [ 1 [XI Forests (OPIBP 4.36) [ 1 [XI Safety of Dams (OPIBP 4.37) [ 1 [XI Projects in Disputed Areas (OPIBP 7.60)* [ 1 [XI Projects on International Waterways (OPIBP 7.50) [ 1 [XI

* By supporting theproposedproject, the Bank does not intend to prejudice thefinal determination of theparties' claims on the disputed areas

G. Policy Exceptions and Readiness

86. The project fully complies with all Bank policies. No policy exceptions are anticipated at this stage.

87. The Safeguard Policy on Resettlement, OP 4.12 and the Safeguard Policy on Environmental Assessment, OP 4.01, require the Borrower to prepare RAPs and EA reports in a form, manner, and language that are understandable to the displaced persons and local NGOs, which in this case would be Chinese. The full EIA (including EMP and RAP) in Chinese has been cleared by the Bank and was disclosed in the InfoShop in Beijing Office. The English translation of the Summary EIA was disclosed in the InfoShop in Washington. The disclosure dates were more than 120 days before the scheduled date of Board presentation.

88. Bank experience over the years has established the general practice of requesting the Borrower to provide the Bank also with the entire RAP and EA reports in English. In April 2007 Bank senior management endorsed "Guidelines for the use of English Translation of Summaries of Environmental Assessment Reports and Resettlement Action Plans in China Projects", which allowed the creation of English language comprehensive summaries of RAPs and EA reports for projects that meet certain criteria. The Regional Safeguards Secretariat has confirmed that the proposed project meets the criteria.

89. The project meets regional readiness criteria for implementation. The contents of the Project Implementation Plan (PIP) were discussed at appraisal. The Procurement Plan (in English) and the Financial Manual (in Chinese) have been prepared and accepted by the Bank. Detailed engineering designs and bidding documents for contracts (all NCB) to be procured in year one of the Project (FY09) are being prepared. Civil works in the first year require limited resettlement which can be implemented after Board without adverse impact on the construction schedule. For counterpart funds, initial undertakings for the domestic loans have been obtained from the Development Bank, and Xi'an Municipal Government budget allocations are included in the draft budget documents for the 2008.

Annex 1: Country and Sector or Program Background

CHINA: Xi'an Sustainable Urban Transport Project

1. As part of the national goal to "coordinate and harmonize" development between eastern, western and central regions, the Government of China (GOC) has initiated the strategy of promoting the "Development and Exploitation of Western Regions" and the "Rise of Central China". In line with the strategy, the GOC has placed Xi'an, together with Chongqing and Chengdu, as three major metropolitan hubs to be developed as the growth poles for the western regions. Given the strategic importance of the three metropolises in terms of their geological location, population concentration, economic development status, and transport access, investments in these regions are believed to offer the key links between the poorer western regions and the prosperous coastal areas and disproportionately contribute to regional g r o ~ t h ' ~ .

2. Road Network. Concerned with the increasing numbers of cars on the roads, leaders and transport professionals have focused on increasing road network capacity through new construction, and by reducing the amount of road space available for non-motorized vehicles. However, few cities seem to follow a systematic approach to investment decisions, which seek to identify problems, examine options, select the most efficient solution, and then produce a time based prioritized investment program. Many wish to: (a) build roads into areas designated for development, to use the money from land sales to finance more road construction; (b) build the roads shown in the master plans far earlier than required given the travel demands; andlor (c) build urban ring roads parallel to and a short distance from expressway ring roads, arguing that the traffic hnctions are different. Transport models and other planning techniques which would correct these tendencies are increasingly being used, but their role in decision making is still limited.

3. Road investment has also focused on primary roads, rather than being used to strengthen the networks as a whole - including secondary and local access roads. There appears to be no appreciation that the congestion on primary roads is due in part to absence of secondary roads, or that local roads are perhaps the most important for the accessibility and mobility of those without access to a motor vehicle. This is in part due to the road networks being seen in terms of engineering design standards that have to be met, rather than in terms of the functions the roads perform. The concept of a functional road hierarchy is not yet fully understood. Multi level interchanges are often sought by leaders when single flyovers or even signal controlled junctions would be more cost effective, and less intrusive on the urban environment.

4. Public Transport. Buses carry a clear majority of public transport passengers in China, even in large cities (for example, Chongqing, Guangzhou) which also have metros. Rail-based passenger transport services are limited to the largest cities16. Bus networks may be extensive

l5 "Growth Spillover Effects and Regional Development Patterns: The Case of Chinese Provinces," by Xubei Luo, World Bank Report 3652, June 2005. l6 Beijing, Tianjin Shanghai and Guangzhou already have extensive networks and are planning rapid expansion in the short term, driven by the 2008 Olympics in Beijing, the 2010 World Expo in Shanghai and the 2010 Asian Games in Guangzhou. Chongqing, Shenzhen, Wuhan and Nanjing have completed at least one line each and are now starting their next projects. Hangzhou, Shenyang, Chengdu, Harbin and Suzhou have received approval to start work on their first metro or light rail lines.

even in cities that have rail systems, but they are quite often not well matched with the changing travel and residence patterns in developing parts of the respective cities.

5 . Much of the public transport supply is still provided by SOEs or joint-ventures where the state has majority stake. Internal reforms in the last decade have ensured relatively low staffing levels and in most cities bus companies run with little or no subsidy. However, there has been relatively little modernization of management methods, operational systems, maintenance practices, or use of Intelligent Transport System (ITS). As motorization rates increase, (even though a majority of residents do not have access to motor vehicles), bus speeds in increasingly congested streets are falling, leading to increased operating and maintenance costs and lower attractiveness, especially for passengers with a motor vehicle option. There is a pressing need for on-street bus priority measures and improved general traffic management.

6. Though operators have been able to finance bus replacement with loans from local banks, they generally do not have adequate depot facilities for storing buses overnight, funds for maintaining them, or information technology equipment for routine business, maintenance and operations functions. Limited money has been invested in other public transport infrastructure and passenger amenities, e.g., interchanges, passenger information systems. The need for and benefits of on-street bus priorityltraffic management measures (bus lanes and signal priority) is not fully recognized, so facilities are only found in a few cities such as Kunrning and Shijiazhuang. Bus Rapid Transit is now accepted as a concept, but so far, only Beijing and Hangzhou have complete, integrated BRT facilities. This situation should change with the issue of State Council Opinion #46 which requires local governments to give more priority to public transport in decision making and allocation of funds.

Industry reform is still in its early stages. Separation of the "government" functions (of policy, planning, regulation, procuring services from operators, and quality management of service delivery) from the bus operators is underway. Cities have started enterprise reform - transforming the bus companies from municipal government departments into SOE "companies", and trying to attract "non-public" capital to invest in them. However, government regulatory and procurement functions need further strengthening; too often the new "investors" ask for (and all too often have been given) thirty year operating franchises to operate the system with few safeguards built-in to protect the municipality or the traveling public.

8. Traffic Management. In the recent past, traffic management techniques in Chinese cities tended to be reactive rather than proactive. This was considered by local leaders to be unavoidable due to the rapid economic expansion of their cities and the growth in motor vehicles. Responses also tended to be site and situation specific, and not a series of coordinated area-wide measures.

9. However, China has begun to adopt a more comprehensive approach to traffic management, in part fostered by Bank projects, but also fuelled by the burgeoning domestic consultant market and by city leaders. In the past 10 years the narrow focus of traffic management on operations and enforcement has been broadened to include the planning, design and implementation of measures using traffic engineering techniques and ITS. In addition to the 2004 Road Traffic Safety Law (see below), several nationwide initiatives are ongoing - the Smooth Traffic Project (which aims to increase efficiency for MVs), the People First Initiative

(improving conditions for ordinary people) and the Golden Shield Project (developing the foundations for ITS).

10. There is an increasing use of technology with aspirations to use ITS, often without addressing fundamental traffic management problems. While China can take the "latecomer's" advantage, there needs to be a stronger institutional and technical base to do this. Under the Golden Shield Project, the MPS has developed six centralized Traffic Management Information Systems which include driver and vehicle management, driver violation management and accident reporting. In 2002, the Ministry of Science and Technology (MST) announced that China would introduce a range of ITS in large cities and on major highways within five years. Guangzhou is one of ten cities currently being trialed as an ITS city along with Shenzhen, Dalian and Qingdao.

1 1. One key ITS tool is Area Traffic Control (ATC). This can provide the basis for an area wide traffic signal control system managed from a Traffic Command Center and incorporating such additional ITS features as variable message signs (VMS), congestion monitoring, priority for emergency and public transport vehicles, and at-grade crossings for pedestrians. Area Traffic Control is becoming standard for most large cities in China and the sector is poised for rapid growth.

12. Chinese cities are increasing their parking supply in city centers and residential areas without any clear parking strategy, often at the expense of non-motorized vehicle parking. In recent years, parking management has become more organized with the development of parking charge schemes for on and off-street parking implemented by civilian companies and by parking meters. But regulated on street parking is often at the expense of non-motorized vehicle use of the same road space However, parking pricing is not systematic and there is a need for hierarchical zonal systems to be developed.

13. The magnitude of the traffic safety problem in the project cities, and China in general, is dauntingly stark in the context of fatalities and injuries. There has been a sharp increase in road traffic accidents and casualties in China since the mid 1980s. During 2005, there were 1 10,000 fatalities in China; i.e. 'Everyfive minutes, every day of the year, oneperson is killed in trafic accident in China. In 2002, for every 10,000 registered vehicles, there were 13.7 traffic accident deaths in China, compared to 1.6 fatalities in the United States of America, 1.4 fatalities in Canada, 1.2 fatalities in Australia and 1.0 fatality in United Kingdom. (The fatality rate would be higher if China adopted the definition of death occurring up to 30 days after an accident instead of the current 7 days - as is the case in several of the other countries cited). The reasons for this high rate of fatalities are many and complex.

14. Until recently, road safety initiatives, accident analysis and remedial measures, enforcement and road user education were not a focus for national or provincial government. They were the responsibility of the local traffic police and were local in scale. However, in recent years there has been a growing realization of the importance and scale of the traffic safety challenge and this culminated in the promulgation of the 2004 Road Traffic Safety Law. There are two key areas where the new law will make a significant difference to road safety outcomes: the People First Initiative and Compulsory Third Party Insurance. The People First Initiative promotes an environment of mutual respect between drivers and pedestrians. Lawmakers

concluded that, as pedestrians are vulnerable road users, their right to life should take precedence over motorist's right-of-way. The law also provides for the State to compel drivers to take out Compulsory Third Party Insurance and to set up a social assistance fund for road traffic accidents. As a result, the traffic police will be freed from the role of settling compensation claims and be able to focus more on enforcement, education and accident remedial measures. Finally, to implement the law, Road Safety Councils are being set up at different levels of government to provide an institutional anchor around which traffic safety strategies have started to emerge.

15. The focus on increasing efficiency for motor vehicles at the expense of pedestrians and cyclists has also resulted in a poor road safety and efficiency outcomes. Although extensive networks of segregated bicycle lanes have been constructed in China since 1949, non-motorized vehicles have increasingly been marginalized and seen as backward. There are fewer high quality facilities and safe conditions for cyclists. Non-motorized vehicle lanes are often used for parking and as extra motor vehicle lanes. They are increasingly being banned from many city streets and the spread of routes available to them is decreasing. Bicycles are also affected by the use of single road cross-sections that do not provide physically segregated lanes. In Shanghai, bicycles are being increasingly banned from major routes. Some cities, such as Shenyang, have banned non-motorized vehicles from the main MV carriageway on many streets and forced them to use the footway with pedestrians. There has been surprisingly little innovation in traffic signals for non-motorized vehicles.

16. Planning for pedestrians has also lagged behind planning for vehicles. In many cities it is evident that the human scale of the urban landscape is being rapidly eroded by major new road construction. The aims of many cities to cater for fast and free-flowing motor vehicle traffic has resulted in the gradual physical segregation of pedestrians by over-bridges, subways and barriers. While physical segregation can provide safe facilities for pedestrians to cross, it also results in severance and inconvenience for them, particularly elderly or disabled pedestrians. More recent provision for pedestrians has been improved. This is following early western experience whereby a few commercial and "cultural" streets are pedestrianized, but with no comprehensive strategy to improve conditions throughout the network for pedestrians.

17. Finally, poor road user behavior is considered to be the major cause of accidents and traffic inefficiency with pedestrians and cyclists often wrongly seen as the worst wrongdoers by the traffic police. A legacy of lax enforcement and inadequate road user education programs is now being belatedly addressed through enforcement by automatic and remote means to reduce the burden on personnel. This is seen in the rapid development of CCTV cameras and "electronic traffic police".

18. Air Quality Management. China's rapid economic growth poses serious concerns in terms of air pollution and its impact on human health. The Bank's 2006 AAA scoping study suggests that Chinese cities be categorized into 2 groups in terms of sources of air pollution and their current approached to these sources: type 1 cities are still dominated by coal-burning and industrial sources and local authorities do not yet or are starting to take preventive measures for mobile sources; type 2 cities are characterized as a mixture with both stationary and mobile sources comparably important. Type 2 cities include mega cities such as Beijing, Shanghai and Guangzhou, while type 1 cities include most of the smaller cities. Cities such as Xi'an, Wuhan,

Jinan, and Shijiazhuang are in the course of transition from type 1 to type 2. However, most of them have not yet well prepared for addressing anticipated rapid increase of motor vehicle emissions. According to the AAA study, one of the common gaps is the lack of comprehensive emission control plans which covers traffic pollution monitoring, consolidated data management and analysis, inspection and maintenance programs with high-credibility, promotion of cleaner fuel vehicles, and other measures compatible with each city's circumstances.

19. Xi'an, the largest city17 in northwest China and the capital of Shaanxi Province, is a world-renowned historical city (on a par with Athens and Rome) and one of the most popular tourist destinations in China. Xi'an is also an important educational, scientific, manufacturing and high-tech base. Historically the starting point of the famous "Silk Road", Xi'an today is the largest trading centre in western China and a key inland air, highway and railway hub. The Government of China sees Xi'an as playing a key role in the development of the whole western China region. In addition to the national strategy, Xi'an municipality has formulated its own vision of developing Xi'an into a world class historic and cultural city.

20. Benefiting from being the national priority for western development, Xi'an has enjoyed expedited growth in recent years: in 2005, the GDP growth was 13.1 % from the previous year; the annual average per capita income for urban residents was RMB 9,62818, a 12.7% increase from 2004. However, the rapid urbanization that accompanied Xi'an's growth has also brought great pressures on its infrastructure provision. Transport demand, in particular, has been growing much faster then the economic growth, resulting in traffic congestion and increasing motor vehicle emissions. In 2003, the urban population was 5.2 million, and urban residents on average made 1.95 trips/day19. Between 1990 and 2001, when real economic growth averaged 10.4% per annum, road traffic grew at 15.7% per annum. During the same period, vehicle ownership in Xi'an grew from 10.1 vehicles per 1,000 people to 23.1. These trends are expected to continue in the future as Xi'an faces the dual challenges common to all urban areas in China - increasing urbanization and rapid motori~ation~~. As a result, Xi'an's transport system faces great pressures in providing an enabling environment for sustaining development, maintaining urban accessibility and mobility, preserving its cultural and historical characteristics or minimizing environmental impacts of transport systems.

21. With the completion of the roads being implemented under the ADB project, Xi'an will have adequate primary road network coverage. Improvements will still be required to provide adequate junction capacity and homogenous design standards so that the primary roads fulfill their function as high capacity traffic routes, particularly for longer journeys. The First Ring Road still has at-grade intersections at some of the city Wall Gates, so its ability to divert traffic from entering the city centre is compromised. The Second Ring Road also has some at-grade intersections on its east section, reducing its capacity for diversion of longer distance cross town traffic.

l7 Xi'an municipality comprises the city (with eight districts) and five counties, with a total population of 7 million. l 8 Slightly less than the national average of RMB10,493for 2005 l9 With mode shares of walk 22%, bicycle 33%, bus 23%, and carltaxi 22%. 20 Urban population is forecast to reach at least 7 million by 2020, but no reliable estimates have been made of increased travel demand over the same period.

22. The concept of a functional road hierarchy is not well understood or applied. Xi'an suffers from traffic congestion due to inefficient use of the existing road space, with random illegal parking; and inadequate interchanges. Average speed on trunk roads in 2002 was 19.3 krnh, with the volume/capacity ratio at 0.95 during peak periods in the MWC. Xi'an has a long list of road schemes that it wishes to construct, covering primary, secondary and local roads. This includes roads to assist in the planned development with the upgrading of the road network in accordance with the urban development vision, and new and improved local roads to improve access in existing urban area between the First and Second Ring Roads . It also includes proposals to convert a number of radial roads between the Second and Third Ring Roads from arterials into urban expressways. The schemes are not supported by any analysis of future travel demand. In common with other cities, Xi'an has not attempted to link the proposed program with the funding likely to be available. In addition it has not prioritized the schemes based on a needs assessment, policy objectives, traffic demands, and economic analysis.

23. Pedestrians and Bicycles. Pedestrians and bicycles are not well provided for; space for these vulnerable road users has been reduced to make more room for motor vehicles. At-grade crossing facilities are poor; the local trends are to physically segregate these modes by grade- separation. The main commercial street within the Ming wall, Dong Dajie, used to be a pedestrian street (from Bell Tower to Ming Wall) in the 1980s. This gradually stopped being enforced and today Dong Dajie is congested with motor vehicle traffic. While the traffic police have systematically introduced pedestrian signals at most traffic signals the pedestrian phase is walk-with-traffic and confronts three conflicting turning movements. Pedestrian connectivity is a main problem raised in the social assessment, due to poor design of intersections, bad traffic organization and poor driving habits which make it unsafe for pedestrians crossing the main avenues. There are no overall programs for improvement of pedestrian and bicycle routes and facilities.

24. Organizational Structure and Regulation. Bus Public Transport within Xi'an is the responsibility of Xi'an Municipal Communication Bureau. Bus services originating outside the Municipality area are administered by the Transport Enterprises Management Division. The Metro is the responsibility of a dedicated Metro Office.

25. Bus services in Xi'an are provided by three distinct entities:

(a) The six direct subsidiaries of Xi'an General Bus Company (XGBC), with a fleet of 3,290 buses and minibuses;

(b) Three joint venture or other investment entities, with a combined fleet of 977 buses and minibuses; and

(c) About seventeen other private operators of various sizes, with a combined fleet of 1,18 1 buses and minibuses.

26. Xi'an Municipal Communication Bureau is a wholly-owned entity of Xi'an Municipality. All fixed assets (land, depots) are the property of Xi'an Municipality (through the State Property Management Bureau) and are allocated to the company. XGBC is responsible for financing new vehicles and other assets of production, and these become the property of the company. XGBC

has substantially increased its fleet since early 2005, when it had 2,585 vehicles of which about 500 transferred to the joint-venture company.

27. The principal joint-venture company is the Xi'an Public Transport Bus Company Ltd. This was formerly the 1" Operating Company of XGBC. In 2005, inward investment was received from two Chinese SOEs and a Chinese investment company in return for a 70% shareholding. Xi'an Municipality retained 30% of the shareholding. The joint-venture company has entered an agreement with the Communications Bureau under which it received a franchise for the 25 routes formerly operated by lSt Operating Company. The franchise is for a period of 30 years. There are currently no active plans to convert the other operating companies of XGBC to similar joint ventures. The joint venture and investment entities are under the management direction of XGBC. The staff per vehicle ratio across all the XGBC controlled companies is 3.3. Maintenance facilities are generally adequate, but associated parking space at the depots is seriously below the needs, (due in part to land acquisition problems) with over half of all buses parked in the streets overnight. Use of advanced information and communications technologies for routine administrative or operational tasks (including ITSIAVL for on-street bus dispatch and monitoring) is limited. As with the road system, there is limited data available on ridership, service performance or forecasts of future demand.

28. The 17 private operators are independent companies that invest in their own vehicles, recruit their own staff, manage their own finances, organize their own operations, and collect and retain their own revenues. Private operators mostly entered the market between 1998 and 2000 as a means of expanding the bus supply in the city by using private finance. Private operators are not directly granted authority to operate routes on their own right. They are required to enter into a concession arrangement with XGBC for the routes they operate, and XGBC have oversight of their service quality and dispatching. They receive a concession of up to 9 years (4-year for minibuses) with entitlement to automatic rollover for satisfactory performance. To date, all 17 operators have had at least one review and renewal, indicating that the operator performance is acceptable, and that operators are willing to continue in the arrangement.

29. Operational Characteristics. Daily bus ridership in Xi'an in 2006 was about 3.2 million people. This has been growing at 15-20% per year, and compares to 2.4 million people per day in early 2005. The average, city-wide speed of public transport buses is 10 kmlhour to 15 km/hour during peak periods, while the speed in the historic city core is less than 9 km/hour.

30. Fares are set by the Xi'an Municipality for all operators. Current basic fare levels have been in place since 2000, when monthly tickets were abolished. The basic tariff is 1 RMB for a flat-fare, operated with non-air-conditioned buses, applicable on 96 routes. A further 14 routes with air-conditioned buses have a 2 RMB flat-fare. A further 80 routes have tariffs which vary by distance, 20 of which are capped at 2 RMB, and 60 of which have no set maximum.

3 1. Since 2000, there have not been any time-based passes, nor are there student/scholar reduced rate tariffs. Riders above 70 years of age are allowed to travel free on 1 RMB flat-fare non-air-conditioned buses after they show their certificate of eligibility. IC cards are also usable on these buses, and currently about 5% of passengers pay with cards. Some routes still have conductors, but the majority are driver-only with passengers paying fares on entry to a fare box or with an IC card.

32. XGBC had revenues of almost 600 million RMB in 2006 with slightly higher costs. The company incurred an operating loss of 2 million RMB for the year. In recent years, XGBC has not required operating subsidies on a regular basis from the city.

33. Some initial steps have been taken to implement the national strategy of "priority to public transport". An initial strategy has been prepared which identifies corridors that have potential for various forms of bus priority measures. Xi'an has plans to build six metro lines. Two of these are under construction - one running north-south and one east-west through the MWC and crossing under the historic Bell Tower.

34. General Traffic Management. Traffic management is undeveloped in the city where the focus is on police operations rather than a comprehensive package of integrated on-street traffic management measures. As with many other cities, the traffic police have tended to implement easy options of banned left turns, one-way streets and vehicle bans. In particular, ill- conceived banned left turns have resulted in extra circulating traffic on the north-south axis. This is a contributing factor to severe congestion at Nan Men, a large gyratory at the South Gate of the MWC where traffic has to exit and re-enter through the wall to turn left. There are about 10 one-way pairs in the city. There is a daytime ban on trucks and motorcycles running on and entering the area within the Second Ring Road between 0600 - 2000 hours. Chartered work unit buses are banned from running on and entering the area within the First Ring Road; although normal buses and tourist coaches are allowed.

35. Intelligent Transport Systems. Xi'an has so far deployed few ITS solutions and these have focused on policing and enforcement. ATC and traffic signals are undeveloped in the city, as are fundamental on-street traffic management measures such as junction channelization, pedestrian and non-motorized vehicle management and motor vehicle driver management. Of 742 junctions within the Second Ring Road, only 3 13 are signaled; of these, 91 are in a semi- adaptive system, 35 in a fixed time plan system and 187 operate isolated fixed time. The full potential for multi-phase signaling to cater for pedestrians, cyclists and conflicting turns has not been realized. Xi'an currently has a small Traffic Command Center and a new one will be equipped from the ADB project. There are currently 67 CCTV monitoring cameras with 18 sites within the MWC and 182 enforcement cameras - 92 enforcing red light violations, 29 for yellow centre line violations, 4 speed cameras and 57 at junctions for general traffic violations. There are 10 Variable Message Signs (VMS) with four within the MWC.

36. Junction channelization. Junction channelization tends to be by road markings only; the local view is that physical channelization is not considered to increase traffic efficiency. Recently white lines for guidance on turning left (so that opposing left turns can turn at the same time in front of each other) have been implemented. Many junctions have yellow-lined bicycle boxes whereby cyclists take two phases to turn left at junctions.

37. Road Safety. In 2005, for Xi'an Municipality, there were 14.2 fatalities/10,000 registered motor vehicles21; this compares with 13.7 for China as a whole (2002); 34.4 and 27.9 for other Bank project cities of Benxi and Fushun respectively (2005). While this measure

--

'I Data Source: Traffic Control Improvement Sub-project of Urban Comprehensive Transport Improvement Project in Xi'an, The Feasibility Study Report, Xi'an Traffic Police Detachment, Chang'an University, November, 2006 614 fatalities per 432,000 registered MVs

shows the relationship between fatalities and motor vehicles, it is a limited measure of travel exposure because it omits non-motorized vehicles. Nevertheless, while Xi'an is typical of China, and indeed considerably better than some smaller cities, compared to more developed countries there is major scope for improvement.

38. Traffic Accident Information System (TAIS). This is the accident data collection and analysis system developed by the Ministry of Public Security (MPS) whereby all cities (Xi'an included) and provinces have to report accident and casualty figures daily to Beijing through the internal MPS web network. The system specifies how accidents are categorized and how they are analyzed. The data are input to the Road Traffic Accident Statistics, published annually by the MPS. In Xi'an, accident data collection and analysis are underdeveloped due to a lack of software and equipment. The TAIS is not currently integrated with the Driver and Vehicle databases or with the Traffic Violation database.

39. Road Safety Committees (RSC). Currently the development of urban RSCs in Xi'an is behind those being developed elsewhere (such as in Liaoning). As the project progresses, it is envisaged that there will be collaboration to enhance the capacity of future RSCs.

40. Enforcement. Enforcement is inadequate and there is poor road user behavior. The traffic police are responsible for enforcement but often do not have enough resources. Some minor enforcement is done by civilian traffic wardens such as encouraging pedestrians to cross on the green man signal, or stopping bicycles from going over the signal stopline. Like other Chinese cities, Xi'an is hoping that automatic enforcement by electronic means will solve their problems. Current trends are to use CCTV cameras to capture the number-plates of cars violating the red light at traffic signals, the centre line on single two-way carriageways, and speed limits. However, follow-up rates for tracking and fining offenders are not very good due to the lack of complete databases on vehicle registrations, driver licenses and traffic violations. These databases are under development as part of the Ministry of Public Security national ITS project.

41. Parking. Parking requires stricter management and organization. Currently vehicles park along the roadside and on footways. Xi'an Public Security Bureau perceives a lack of parking spaces in the city centre and wants more to be built. However, parking has not been addressed systematically and there is a need for a zonal parking system with a hierarchy of charges to be developed. The concept of using parking supply and charging as a Travel Demand Management measure to enable some traffic restraint is not yet developed in the city. Under the ongoing national Smooth Traffic Project a new criterion for evaluating the cities taking part was for large cities to have a Parking Guidance System (PGS). To this end Xi'an is implementing Phase 1 of such a system which links six existing underground parking lots (>600 spaces).

42. Air Quality and Vehicle Contribution. Results of ambient air quality monitoring in Xi'an show that the primary air pollutant is fine particulate matters (PM). In recent years pollution levels of PMlo in the city have been constantly exceeding the National Class I1 Ambient Air Quality Standard. While the annual averages of nitrogen dioxides (NO2) have not exceeded the standard, ad-hoc measurements at roadsides reported the violation of the standard at peak hours. A PMlo source appointment study indicated that vehicular emissions represented 25% (including 12% of secondary PMlo) of local emission sources in July 1998, followed by

coal combustion (24%) and fugitive dust (22%). Vehicular emissions are currently considered as the main sources of NO2, carbon monoxide and hydrocarbons. Xi'an Environmental Protection Bureau (XEPB) is particularly keen to reduce PMlo and NO2 since a model estimation indicates the rapid increase of these pollutants from motor vehicles unless adequate measures are taken.

Table A 1-1: Estimated motor vehicle emission amounts in Xi'an Estimated emission amounts (tonlyear)

Year PMlo NO2 CO HC 2004 70,000 29,200 272,000 37,700 2010 120,000 50,000 350,000 40,000 2015 200.000 80.000 560.000 64.000 (Source) XEPB

43. Data Availability and Institutional Capacity. Xi'an generally has a moderate Air Quality Management capacity, but is far behind highly developed and motorized cities such as Beijing, Shanghai and Guangzhou, as well as international standards. Lack of traffic pollution monitoring stations, a complete inventory of emissions from fixed and mobile sources, and atmospheric models, significantly hampers opportunities for policy making and implementation based on scientific and quantitative analysis. XEPB takes most of the responsibilities for AQM, and their tasks are implemented by several agencies: Xi'an Environmental Monitoring Station (ambient air quality monitoring); Xi'an Supervision and Monitoring Center on Vehicle Emission Pollution (motor vehicle emission inspection); Xi'an Environmental Research Institute (research work). However, robust quantitative analysis of current problems and comprehensive proposals to address key issues are not available. This indicates that their institutional capacity to monitor and analyze air pollution, as well as to plan and implement mitigation measures has much scope for improvement.

44. Vehicular Emission Control Measures. Xi'an is enforcing national emission standards for in-use vehicles, which is the main motor vehicle emission control measure because emission regulation for new vehicles is basically under the responsibility of national government. In July 2005, SEPA issued a stricter emission regulation designed to regulate in-use vehicle emissions in "a loaded condition" that better represents the driving conditions on the road. Local governments are expected to enforce it as soon as possible while encouraging significant enhancement of inspection capacity. To meet this national requirement, the renewal of inspection equipment and development of a quality control system is an urgent need for Xi'an. In addition, although Xi'an is regulating in-use vehicle emissions and promoting the use of CNG-fueled taxis and buses, it does not have a comprehensive Motor Vehicle Emission Control Plan involving clear targets and broader measures, such as fuel quality control, elimination of high-emitter vehicles, and travel demand and traffic flow management, where collaboration with other relevant bureaus is necessary. This project will respond to these urgent needs and challenges which Xi'an is facing.

45. Xi'an is a city on a par with Rome, Istanbul and Athens in terms of its historical importance. It is the beginning of the Silk Road and was the capital in four dynasties - Zhou, Qin (the First Emperor of a united China), Han and Tang (the Golden Age of Chinese civilization in the 7th to 10th centuries). The total protected area is 108 km20f which 36 km2 is

the ancient Han Dynasty Capital of Han Chang'an. Relics range from Neolithic (Lantian Man; Banpo) to ancient tombs (Terracotta Warriors of the Qin Emperor; Han Tombs; Tang Tombs); from Buddhist relics (Big Wild Goose Pagoda; Fa Men Temple;) to heritage Muslim architecture (Great Mosque); from the Ming city walls to more recent revolutionary sites (the Xi'an Incident site; Eighth Route Army Headquarters).

46. The most recent legislation for the protection of cultural relics was promulgated in 2002. Within the Chinese cultural heritage management system, there are three levels of cultural relic protection - National, Provincial and CitylCounty level. Xi'an has 34 sites listed at National Level, 32 at Provincial, and 176 at CityICounty Level. In 1988 a survey listed 2,944 cultural relic sites comprising these protected sites, excellent residences (vernacular architecture not registered but subject to strict building codes), and historic streetsldistricts where through traffic should be controlled and there is strict development control.

47. Cultural relic planning is in the Master Plan which includes detailed plans for the management of key sites such as the Terracotta Warriors and the large area of the Han Chang'an City remains. The development principles are to: (1) protect the famous sites of the four key dynasties (Zhou, Qin, Han, Tang), especially the large scope of the Tang capital; (2) protect the Ming City Walls; (3) to develop parks around large scale remains such as Han Chang'an, Daming Palace and Afang Palace; (4) fully use laws to protect remains.

48. In Xi'an there are four types of cultural relic location; (1) the historic city (Tang City, also encompassing the MWC); (2) historic parks (e.g. Han Chang'an); (3) tourism corridors and historic streets (Shu Yuan Men, San Xue Jie, Bei Yuan Men and Zhu Ba Shi); and (4) historic districts (e.g. around the Bell Tower where within a 100m radius there is a height restriction on new buildings of the height of the Bell Tower, namely 36m).

49. There is a distinct emphasis on the tourist and commercial aspects of cultural heritage to strengthen the economy. Xi'an is promoted as a culture and travel city (wenhua luyou chengshi). The whole cultural relics sector is being driven by tourism with the Tourism Bureau determining tourist routes after consultation with the Cultural Relics Bureau.

50. Han Chang'an was the capital city of China in the Western Han Dynasty (206 BC - 8 AD). It occupies an area of 36 km2 and is located in the northwest quadrant of today's Xi'an, between the Second and Third Ring Roads. It is an extremely important archaeological site, on a par with Troy and Persepolis. It is a National Level Protected Cultural Relic. The remains consist of striking remnants of the clay earth city walls, vestiges of road lines, and remains of palaces and tombs. One of the most important relics, the Weiyang Palace, is situated in the southwest of the site.

5 1. However, since the 1950s, the site has become surrounded by urban development and heavy industry. The site lacks a protective green belt and the vehicle emissions, noise and vibration from traffic are likely to damage the remains. The aptly named Petrochemical Avenue that runs through the middle of the site is a major route to the airport. Within the site itself, development control has ensured that there was no heavy industry but there are still about 50 villages with a total population of 60,000 and many small enterprises. The existing roads serve these villages, but do not follow the layout of the ancient road system; indeed, they have

destroyed the integrity of the ancient road layout. Currently the site is not developed for tourists - there are no access roads or tourist facilities.

52. Xi'an is one of few cities in China to have retained its ancient city walls, in this case from the Ming Dynasty (1368 - 1644). These were renovated in the early 1990s and they run for 14km around the current city centre, enclosing an area approximately 4 km by 3 km (actually 1 3.5km2). There are 17 city gates in the walls - not all of them Ming, as several were broken through more recently in efforts to facilitate traffic flow. Notwithstanding this, not only do the gates provide a constraint to motor vehicle traffic entering and leaving the MWC area, they also provide a backdrop to a distinct tourist area with a profusion of historic sites which range from ancient Ming to Contemporary Revolutionary. There are over 40 cultural relic sites, 44 protected ancient trees, 20 streetslareas with actual Ming remains and three protected districts, the largest of which is the Muslim Quarter. The wall itself is a National Level Protected Cultural Relic. The sites are too far apart to walk between them. The best way of visiting the sites is by bicycle, although this method still requires better facilities. Most of the original bicycle lanes have been encroached on by motor vehicles and parking, causing inconvenience and a lack of road safety.

53. The Xi'an City Scenery Wall Committee, which manages the Ming City Walls, has identified 14 key tourist sites which could be linked by a purpose built bicycle route. These comprise 1 1 sites which are National Level Protected Relics (the City Wall, the Great Mosque, the Bell and Drum Towers, the Temple of the Town God, the Forest of Steles, Xi Wu Tai (Tang Terrace Pavilions) and four revolutionary sites), plus three sites protected at Provincial level (two temples and a mosque).

Annex 2: Major Related Projects Financed by the Bank andlor other Agencies

CHINA: Xi'an Sustainable Urban Transport Project

Sector issue Ongoing projects Latest supervision (PSR) ratings Implementation Development

Bank-financed Progress (IP) Objective (DO) Addressing urban transport needs in a comprehensive manner:

Selective road investments to enhance capacity and relieve bottlenecks. Public transport investments and support to policy, operations, and planning. Traffic management safety. Development of a motor vehicle emission control strategy. Road maintenance. Training and capacity

Guangzhou City Center MS Transport Project Urumqi Urban Transport MS Project Shij iazhuang Urban MS Transport Project Wuhan Urban Transport S Project Liaoning Medium Cities S Infrastructure Project

building. Supporting peri-urban expansion Fuzhou Nantai Island Peri- S S and coordination with transport Urban Development Project and urban plans. Urban Environment Second Liaoning Medium Infrastructure Cities Infrastructure Project

Liaoning Urban S S Infrastructure Project Liao River Basin Proiect S MS

Other development agencies Japan Bank for International Cooperation

Asian Development Bank Xi'an Urban Transport Project

PSR: Project Supervision Report. S: Satisfactory. HS: Highly Satisfactory.

Annex 3: Results Framework and Monitoring

CHINA: Xi'an Sustainable Urban Transport Project

Results Framework

PDO

Improve transport accessibility and mobility in Xi'an Municipality while protecting its cultural heritage and reducing the environmental impact of urban transport system.

Intermediate Outcomes

Component 1: Road Network Protect the MWC from inappropriate MV through traffic by (i) reducing traffic without an origin or destination within the MWC; and

(ii) Enhancing through traffic function of the First Ring Road.

To support the basic policy for urbanization in Xi'an by improving accessibility in Huxian through upgrading of the road network. Component 2: Public Transport

To increase accessibility and mobility by bus, by making journeys by this mode quicker; easier, more pleasant and safer.

Component 3: Traffic

Project Outcome Indicators

(i) Trip modal split (including walking) into and out of MWC.

(ii) Bicycle use and travel times to cultural heritage sites in the MWC.

Intermediate Outcome Indicators

(i) Total MV volume into the MWC through the 17 gates; and

(ii) MV journey speed on the First Ring Road (West, South & East)

Cross town journey time across the railway line in Huxian.

Bus travel timesljoumey speeds on all PT corridors under the Project; and

Use of Project Outcome Information

Allows city decision makers to manage the urban transport system on a continuous basis and take actions to adjust investments and other activities to ensure that project outcomes provide an appropriate balance of transport modes with increased accessibility and mobility by bus, NMVs and walking.

Use of Intermediate Outcome Monitoring

Allows city decision makers to monitor key traffic parameters such as traffic volumes, journey speeds and pedestrian walking times, and take action to consider more road infrastructure outside the MWC and future TDM and traffic calming measures within MWC if necessary.

Allows decision makers to judge if other measures are needed to improve cross town accessibility.

Allows city decision makers to monitor the progress of bus priority and make ongoing refinements to ensure the success of the schemes with beneficial outcomes for all road users, especially passengers.

Management Component

(i) To protect the MWC from the congestion related environmental impacts (air pollution, noise, visual intrusion) of traffic by making journeys by bus and car inside the MWC quicker and smoother; and

(ii) To increase accessibility and mobility by NMV and walking by making these journeys quicker, easier, more pleasant and safer.

(i) Journey speeds, delays and stops on selected routes in MWC; and

(ii) No. of traffic signals with pedestrian and bicycle phases that do not conflict with motor vehicle phases.

Enables the city authorities to monitor the progress of the Investment Component works and take action to consider and take action to consider more traffic management and road safety measures instead of new road infrastructure.

Component 4: Air Quality Management

To reduce motor vehicle emissions through development and implementation of a Motor Vehicle Emission Control Plan Component 5: Cultural Heritage Component

Ming Walled City Bicycle Route

To protect cultural heritage by increasing bicycle and pedestrian usage for visits to these sites.

Han Chang'an Weiyang Palace Roads

Strengthen the preservation of the cultural heritage of the Weiyang Palace.

Component 6: Institutional Development Component

To provide the institutional capacity for continued development of policies and investment programs after the completion of the project.

Implementation of Motor Vehicle Emission Control Plan

(i) No, of tourists renting bicycles; and

(ii) Volumes of bicycles using bicycle route.

(i) Completion of Han Chang'an road network.

Strategic planning study completed jointly by Xi'an Municipality Urban Transport Unit and consultant team.

Allows city decision makers to monitor the progress of vehicular emission control policy.

Enables city authorities to better promote Xi'an as a tourist destination by improving the visitor experience. Allows city decision makers to monitor the benefits of promoting sustainable green transport including NMVs to complement bus priority.

Enables authorities to monitor the progress of the activities in the component and to consider expansion of the approach to the whole Han Chang'an site.

Enables the city authorities to monitor the progress of the activities in the component and to consider more policy development and ID measures.

Arrangements for results monitoring

Notes: (1) Measured along Shuncheng Lane (17.9 km) and be based upon a baseline of number of bicycles annually at a point halfway along the route and the journey time along its length.

Project Outcome Indicators

1. Trip modal split (including walking) into and out of MWC.

2. Bicycle use and journey times on the Shuncheng Lane route (bicycleslday (1)

Baseline

Walk 21.7%, PT 25%,

Bicycle 35.2%, Motor Vehicle 18%

1,919

Target Values YR1

22%, 25%, 35%, 18%

2,387

Data Collection and Reporting Responsibility for Data Collection

IIC

IIC

YR2

22%, 25%, 35%, 18%

2,420

Frequency and Reports

Yearly

yeah

Data Collection Instruments

Traffic Surveys :- Classified trafiic counts and vehicle occupancy surveys

Traffic Survey

YR3

22%, 26%, 32%, 20%

2,453

YR4

22%, 27%, 31%, 20%

2,486

YR5

22%, 28%, 29%, 21%

2,520

Intermediate Outcome Indicators

3. Traffic pressure inside Ming City: total MV volume into the MWC through the 17 gates 4. MV journey speed on the First Ring Road at PM Peak (kmlh)

5. Huxian - cross town (Dong Chen Lu to Lao Bin Lu) journey time across the railway line Component 2:

Public Transport

6. Bus travel times/j ourney speeds on all priority corridors

Baseline

228,000

12 km/h

36 min.

9.5 kmlh

Arrangements for results monitoring

YR1

24 1,500

Data Frequency

and Reports

Yearly

Yearly

Yearly

(i) Yearly (ii) Yearly

YR2

248,000

Collection and Data

Collection Instruments

Automatic (unclassified) traffic counts

Data collected

from Moving Vehicle

surveys on the routes

Data collected

from Moving Vehicle

surveys on the route

Data collected from run times of buses in service

Reporting Responsibility

for Data Collection

Xi'an Public Security

Bureau Traffic Police

Detachment (XPSB)

Xi'an Public Security

Bureau Traffic Police

Detachment (XPSB)

Huxian Construction

Bureau

Xi'an Public Transport Company

Target Values YR3

260,000

23 kmlh

YR4

269,000

YR5

277,000

18-25km/h

1 1-12 min (first full year open)

23 km/h

Annex 4: Detailed Project Description

CHINA: Xi'an Sustainable Urban Transport Project

1. The development objective of the project is to improve transport accessibility and mobility in Xi'an Municipality while protecting its cultural heritage and reducing the environmental impact of the urban transport system. The project comprises an inter-related package of six components designed to protect the MWC by reducing vehicular traffic and increasing the accessibility by bus and other modes through investments in, bus, non-motorized vehicles and pedestrian facilities. Mobility by bus, non-motorized vehicles and walking is improved by activities focused on making journeys by these modes quicker, easier, more pleasant and safer. The protection of cultural heritage sites and their surroundings is enhanced by improved management of vehicular traffic and parking, and by providing quality bicycle and pedestrian routes between sites. These activities together with investments in local pollution monitoring and the Motor Vehicle Emission Control Plan will reduce local environmental impacts of transport. Diagram 1 in Section B.4 of the document shows how the components are related.

Component 1 Road Network (RN)

2. The road network component has separate subcomponents: for Xi'an City and Huxian.

Xi'an City (RNC)

3. The investments within Xi'an City, as shown on Map IBRD 35844 Road Network Component in Xi'an City, are designed to increase the functionality of the First and Second Ring Roads and Taibai Nan Road as main traffic routes.

(a) RNC 1 First Ring Road - Strengthen the function of the First Ring Road as a major traffic route carrying traffic around the MWC, and distributing city bound traffic to the different routes which provide access to the MWC through the various gates by the provision of underpasses at a number of at-grade junctions with the main gates.

(b) RNC 2 Second Ring Road - Strengthen the function of the Second Ring Road as a major traffic route carrying cross town traffic, replacing remaining roundabouts at two major junctions with interchanges.

(c) RNC 3 Primary Roads - Strengthen the function of Taibai Nan Road as a key radial route linking the Second and Third Ring Roads.

Table A4.1: Road Network Component - Xi'an City Code I RoadIFacility I Name I Length RNCl First Ring Road RNC11 I Western I YuxiangMen 10.86

RNC 12

RNC 13

RNC 1 First Ring Road

Scope of Works

New interchange to replace existing

RNC22

RNC3 RNC3 1

4. RNC 11 Yuxiangmen Interchange (0.9 km) is located on the north-south western arm of the ring road at the North West Gate, where the ring road intersects with Daqing Road. Dual two motor vehicle lane underpasses will be provided for the main motor vehicle flows running north- south along First Ring Road outside the gate. Turning movements of traffic intolout of the MWC city passing through the gates will be managed at a new at-grade signal controlled channelized junction, with signals linked to the Area Traffic Control system (TM1). The design removes the current at-grade roundabout.

Section Eastern Section

Southern Section

5 . RNC 12 Changlemen Interchange (0.8 km) is located on the north-south eastern arm of the ring road, at the South East gate where the ring road intersects with the main shopping street Dong Dajie. Dual two motor vehicle lane underpasses will be provided for the main motor vehicle flows running north-south along First Ring Road outside the gate. Turning movements of traffic into and out of the MWC will be managed at a new at-grade signal controlled channelized junction, with signals linked to the ATC system (TM1).

RNC2 Second Ring Road RNC2 1 1 2"d Ring Road I NE Interchange 1 3.15

20d Ring Road

Primary Roads Taibai Nan Rd

6 . RiVC 13 South First Ring Road (4.0 km) covers the whole section of the First Ring Road to the south of the MWC. Dual two motor vehicle lane underpasses for the main motor vehicle flows will be constructed along the full southern section, returning to ground level at both ends and ramps in the centre at the South Gate. An additional underpass for non-motorized vehicles will be built alongside the motor vehicle underpass at the South Gate. Turning movements of traffic into and out of the MWC city passing through the gates are managed at a new at-grade signal controlled channelized junction, with signals linked to the Area Traffic Control system (TM1). The design removes the current at-grade roundabout which uses both gates and forces all westbound ring road traffic to enter the MWC.

ChangleMen

South 1RR

New interchange to replace existing

SE Junction with Jiangong Road

Taibai RdIZhang Ba Rd junction

km 0.8km

4 km

roundabout New interchange to replace existing roundabout Underpass for whole section with new interchange at South Gate

km 1.08 km

2.05 km

roundabout New interchange to replace existing roundabout

Interchange connected with Third Ring Road interchange

RNC 2 Second Ring Road

7. RNC 21 North East Interchange (3.15 km). Currently, the eastern arm and the northern arms of the ring road intersect at a ninety degree angle, at an at-grade roundabout. As part of the ADB Project, the Second Ring Road eastern arm is being extended north to an intersection with the Third Ring Road, and the Second Ring Road northern arm is being extended eastwards, also to an intersection with the Third Ring Road. Improvement of the junction of the Second Ring Road and these new roads is not part of the ADB project. Dual two motor vehicle lane andloverpasses will be constructed for the main south to westjwest to south motor vehicle flows on the ring road. An additional ramp will be built for the west to east motor vehicle flows from the Second Ring Road northern arm to the eastern extension. These improvements are part of a design which allows for the later addition of other ramps when justified by traffic demand.

8. RNC 22 South East Interchange (I. 08km). Currently, the eastern and south eastern arms of the ring road meet at a roundabout at the junction with Jiangong Road. A dual two motor vehicle lane overpass for the main flow along the ring road will be constructed. All other motor vehicle movements, as well as non-motorized vehicles and pedestrian movements will remain at a ground level junction.

RNC 3 Primary Roads

9. RNC 31 TaiBai Nan Road /Zhang Ba Road Interchange. Currently there is an at-grade signal controlled junction between TaiBai Road and Zhang Ba Road which is extremely congested. Dual two MV lane overpasses will be built on Tai Bai Nan Road, which will connect the Third Ring Road interchange with TaiBai Nan Road, together with an overpass along Zhang Ba Road. All other motor vehicle movements, as well as non-motorized vehicles and pedestrian movements will remain at a signal controlled ground level channelized junction, with the signals linked to the ATC.

Huxian (RNH)

10. The objective of the investments in Huxian is to support the basic policy for urbanization in Xi'an by improving the accessibility of the existing urban area through upgrading of the road network. The key schemes in this sub-component are set out below, and shown on Map IBRD 3543 1 Road Network Component in Huxian.

1 1. All roads include in their design provisions for all road users.

Table A4.2: Road Network Com~onent - Huxian

12. RNH 1 Xincheng road is intended as east-west primary road in the Huxian urban road network, while RN 2 Dongcheng road is a main north-south connection to the urban area south of the expressway linking Huxian to Xi'an. Both will be constructed with four motor vehicle lanes, two 6 to 7 m wide non-motorized vehicle lanes segregated by a 2 to 4 m landscaped median, and 6 to 7 m wide footpaths.

13. RNH 3 Lvgong Road, including a new underpass of the Xi'an - YuXia railway, will be a new east - west primary road which will help in reducing the barrier effect of the rail line on east west travel. It will be constructed with four MV lanes, two 6 to 7 m wide NMV lanes segregated by a 2 to 4 m landscaped median, and 6 to 7 m wide footpaths. The underpass will have the same cross section, but with 5 m wide bicycle lanes, 3 m footpath and no landscaped median.

14. RNH4 MeiBei Road is an existing road on the northern limits of the existing Huxian city. The road will be straightened and extended to function as a road in the urban road network. The improved road is designed with one lane for motor vehicles and another for non-motorized vehicles in each direction, together with 6 m sidewalks on each side of the street.

Component 2 Public Transport (PT)

15. The PT Component consists of the following three subcomponents:

Table A4.3: Public Transport Component

PT 1 Passenger Transport Terminals

Code PT 1

PT 2

PT 3

16. PT 1.1 Eastern (Textile City) Terminal. The eastern terminal for long distance buses is located in Textile City. This project will provide a terminal hub for city buses adjacent to the northern part of the long distance passenger transport terminal. The city bus hub will have 20 bus platforms, and a building including a dining hall, repair shop, and porter's lodge. It will require a land area of 1.33 ha for the terminal inclusive in the total land to be acquired of 1.69 ha (also includes access roads, etc.).

17. PT 1.2 Southern City Terminal. The current southern terminal for long distance buses is becoming congested so it is proposed to move it to a new location which is south of Yanhuan Road and west of Changan Terminal. This project will provide a city bus terminal hub to be adjacent to the long distance terminal. It will have 18 bus platforms, and a building including a dining hall, repair shop, and porter's lodge. It will require a total land area of 2.5 ha.

Name Passenger Transport Terminals

Integrated public transport priorityltraffic management measures

Xinzhu bus depot

Scope of Works Construction of two new terminals - Eastern (Textile City) and Southern City Implementation of integrated public transport priorityltraffic management measures in thuteen of Xi'an's most heavily used bus corridors; total length 128.43 km Construction of a new depot for the maintenance of 386 buses, including maintenance facilities and adequate off street parking.

PT 2 Integrated Public Transport PriorityITraffic Management Measures

18. Although current bus operating speeds are reasonable in many areas of Xi'an, within the MWC and in other busy areas they are low. As car ownership increases it is inevitable that general traffic speeds, and therefore bus operating speeds, will fall in the coming years. In an attempt at reducing delays to bus passengers and to make travel times more regular and predictable, it is proposed to introduce bus priorityltraffic management measures on thirteen major traffic corridors in Xi'an. The priority measures proposed currently are for exclusive bus lanes on the full length of the roads. Details of the corridors are given in Table A4.4 together with the type of bus lanes proposed. Map IBRD 35430 Public Transport Component shows their location.

19. Since Xi'an has limited experience in the design and implementation of bus priorityltraffic management measures, it was decided to design and cost measures in one corridor as a pilot prior to appraisal, for implementation in the first year of the project. The experience gained will be used in the phased design and implementation of the remaining twelve corridors during the project. The pilot corridor selected (#3 on the map) runs from the existing main railway station on the northern section of First Ring Road along Jiefang Road to the Great Wild Goose Pagoda south of the southern section of Second Ring Road. Provisional bus priority and traffic management measures have been identified. Design work and detailed costing will be completed before appraisal.

20. The corridor is 5.8 krn long with about 2.6 km within the Ming MWC. The road width varies from 33 m in a small section south of the No 5 Road junction to 51 m near the southern end. All major junctions along the corridor are currently signalized. Under the project all will become part of the ATC system (TM1).

2 1. The proposed priority measures vary along the corridor. Between the Railway Station and the Second Ring Road they consist of lateral bus lanes with stops on islands on the right hand side of the buses. For a short section south of the No.5 Road the current arrangement is retained in the northbound direction but with bus bays being added. Between the Second Ring Road and the Great Wild Goose Pagoda the bus lanes are located in the centre of the road.

22. All bus stops will be in bays with an overtaking lane so that buses not needing to call at the stop will not be delayed by buses loading or unloading. To achieve this road space for buses it is necessary to reduce the width of existing median and planted divider strips, and also in some cases the cycle and pedestrian road space. Where there are many routes at a particular stop, more than one loading area will be provided, for example at the northbound stop north of Minleyuan there will be three independently accessible loading bays to accommodate seventeen routes.

23. Technical assistance to support the implementation of this subcomponent is to be provided. This will assist with detailed design and other matters, and is to be paid from counterpart funds.

PT 3 Xinzhu Bus Depot

24. Xinzhu is in the north-east quadrant of the city near the Third Ring Road. This area is being developed in part to relieve pressure inside the MWC. The bus depot is designed to serve this new area, as well as to overcome some of the current shortages of depot and off-street bus parking space. The depot will be capable of maintaining 386 buses and workshop space. A site has still to be identified.

Component 3 Traffic Management (TM)

25. Traffic management in the project extends beyond activities included in this component and also comprises key management and operational tools which enable the Investment Components to be successful. Road Network, Public Transport, and Cultural Heritage measures all require significant inputs of traffic management measures, as shown in Table A4.5 below. Specific measures that have been included in the scope and costing of these other components are included in their description.

Table A4.5: Traffic Management Subcomponents Relationship to Investment Components Traffic I Investment Components Management

I subcomponent I I Public Transport I Road Infrastructure I Cultural

Control (ATC) Bus pre-emption on bus lanes increases operating speed and improves frequency

CCTV cameras monitor traffic flow and allow police to respond quickly to incidents

Coordinated traff~c signals with multi-phases allow more turning movements, including the opening up of more left turns which increase road capacity

Heritage Traffic signals with pedestrian and bicycle phases that do not conflict with vehicles makes travel easier for cyclists and pedestrians. Mid block pedestrian crossings.

26. The TM component comprises five subcomponents, as shown in Table A4.6. Based on experience in other cities, the subcomponents are designed as programs to achieve certain objectives. This allows for appropriate changes in the detailed list of measures within the subcomponent but with the same objectives, to take account of the rapidly changing circumstances of Xi'an.

TM2

TM3

TM4

TM5

27. TM 1 Area Traffic Control (A TC). This is the main sub-component, which comprises a new ATC system providing coordinated signal control at 200 junctions in and around the MWC, and 18 mid block pedestrian crossings, to improve accessibility by all modes. The capability of the ATC signal controllers will mean that bicycle and pedestrian crossing phases can be signalled at-grade and bus priority phases can be implemented. Provision is made for civil works for physical channelization at these 200 junctions to improve efficiency for vehicles and provide

49

Road Safety

Enforcement and Road User Education (RUE)

Parking

Traffic Facilities for cyclists and pedestrians

Improved and more accurate accident data and faster response times to accidents, coupled with design and implementation of measures at accident blackspots which will improve the safety of travel for all road users. Implementation of enforcement and education measures to improve the efficiency of road use and the safety of travel for all road users. Variable message signs (VMS) are used to improve traffic efficiency by displaying pre-programmed traffic plans, congestion information, journey times, safety information etc.

'l'able A4.6: 'l'ratfic Management Subcomponents

Parking meterslsigns to legalizelmanage appropriate on-street parking to ensure the bus lanes are free of parked vehicles. Signs, lines and barriers where appropriate on bus lane routes to protect cyclists and designate pedestrian crossings.

Code TM1

TM2

TM3

TM4

TM5

Parlung meterslsigns to legalizelmanage appropriate on-street parking to ensure eff~cient operation of the road network.

Signs, lines and barriers where appropriate on new and existing road infrastructure to protect cyclists, designate pedestrian crossings, and prevent encroachment of MV parking.

Name Area Traffic Control (ATC)

Road Safety

Enforcement and Road User Education (RUE)

Parking

Traffic facilities for cyclists and pedestrians

Parking meterslsigns to legalizeslmanage appropriate on-street parking to clear footways of parked cars.

Signs, lines and barriers where appropriate on bicycle routes within the MWC to facilitate their usage by cyclists, and prevent encroachment of MV parlung

Scope of Works Supply and installation of an ATC signal control system for 200 junctions including physical junction channelization, 100 monitoring closed circuit television (CCTV) cameras and communications network. Purchase of accident investigation equipment and analysis software, undertaking accident analysis leading to design and implementation of remedial measures. Purchase of 100 CCTV to record red light and other traffic violations, software to improve effectiveness of existing databases in tackling traffic violations, design and implementation of RUE programs. Design and implementation of parking control measures, parking meters. Supply and installation of signs, lines and barriers to support ongoing program

more safety for pedestrians. The component also includes installation of 100 sets of closed circuit television (CCTV) cameras to support the operation of the ATC, and construction of a communications network for the ATC and CCTV. The ATC and CCTV are shown on Map 35870 Traffic Management Component.

28. Technical assistance to support the implementation of this subcomponent is to be provided from loan funds for the drafting of the ATC Technical Specification and Bid Evaluation. This is described in the Institutional Development component under item ID 3.1.

29. TM 2 Road Safety. This subcomponent comprises (i) an integrated package of measures to improve road safety including purchase of accident investigation vehicles and equipment for District Brigades to improve investigation and analysis, purchase and setting up of accident analysis software; (ii) consultant services to assist in the design of remedial measures, under the three "Es" of road safety - engineering, enforcement and education; and (iii) funding for implementation of the remedial measures.

30. Technical assistance to support the implementation of this subcomponent is to be provided from loan funds for the analysis of accidents and design of remedial measures. This is described in the Institutional Development component under item ID 3.2 Accident Analysis Study.

3 1. TM 3 Enforcement and Road User Education (RUE). This subcomponent includes a package of measures to improve the efficiency of enforcement and the quality of road user education, two of the three "Es" of road safety. It includes (i) the purchase and installation of 100 CCTV cameras for enforcement of red light and other traffic violations; (ii) software to enable more effective use to be made in dealing with traffic violations drivers, vehicle and violations databases being established using local funds; (iii) 60 VMS to display congestion information, journey times, and safety information; and (iv) other measures to improve road user behaviour. The VMS are shown on Map 35870 Traffic Management Component. No decision has yet been made on the communications network for the CCTV. One option under consideration is the use the same network as is being proposed in TM1.

32. TM 4 Parking. This subcomponent assists in the reduction of parking near historic sites, the reduction of parking on footpaths and bicycle lanes, and the legalization and management as appropriate of on street parking, through the provision of parking signs and meters.

33. Parking policy is to be examined in a TDM Study included in the Institutional Development component under ID 2.2.

34. TM 5 Traffic facilities for cyclists andpedestrians and road marking equipment. This component supports an ongoing program of the traffic police to improve travel conditions for cyclists and pedestrians by provision of various items such as signs, lines and barriers.

Component 4 Air Oualitv Mana~ement (AQM)

35. This component will support the Xi'an Environmental Protection Bureau (XEPB) in developing and implementing comprehensive plans for air quality monitoring and improvement and the reduction of vehicle emissions. Under the component, data collection, data analysis and institutional arrangements will be strengthened, and a Motor Vehicle Emission Control Plan (MVECP) formulated, and adopted for implementation. This component comprises five subcomponents as shown in Table A4.7.

Table A4.7: Air Quality Management Subcomponents Code I Name I Scope of Works AQ1 I Xi'an Ambient Air Supervision and I Construction of a 19,271 m2 building to house the

36. AQ 1 Xi 'an Ambient Air Supervision and Monitoring Center. Construction of a building to house the Center, with a total land area of approximately 29,000 m2, inclusive in the total land acquisition area of approximately 54,000 m2, and a floor area of 19,271 m2. The Center has the comprehensive functions of motor vehicle emission inspection and investigation, as well as quality control, and the compilation, analysis and use of data for policy making. The Center will include the functions of the existing Xi'an Environmental Monitoring Station and Xi'an Supervision and Monitoring Center on Vehicle Emission Pollution with some organizational reform for each to address newly added functions. The building will include spaces for a motor vehicle emissions inspection workshop with emission inspection lanes vehicular emissions control investigation and technical services laboratories, central station for air quality monitoring QAIQC and analysis, and an urban air pollution control information center.

AQ2

AQ3

AQ4

AQ5

37. AQ 2 Motor vehicle emission inspection program. Purchase of equipment to enable vehicle inspection compatible with inspection methods newly issued by SEPA to be undertaken, and investigation of control measures. The equipment is for:

(a) vehicular emission inspection under loaded conditions (newly issued methodologies) for gasoline light vehicles (6 sets), diesel light vehicles (2 sets), diesel heavy vehicles (1 set) and gasoline heavy vehicles (1 set);

Monitoring Center Motor vehicle emission inspection program. Improvement of air quality monitoring network Improvement of database management, data analysis and publication Motor Vehicle Emission Control Plan

(b) vehicular exhaust remote sensing inspection where HC, CO, NO2 and C02 concentrations of vehicle tailpipe exhaust are directly measured using an infra-red or ultra-violet light beam across a road; and

(c) measuring air toxics emissions (gas chromatograph), emissions under real driving conditions (on-board measurement instrument for emission factor development), and automatic noise monitoring.

center. Purchase of equipment, and investigation of control measures Construction of monitoring stations and purchase of equipment Purchase of hardware and software, and development of an on-line emissions monitoring system Development and adoption of a plan to reduce vehicle emissions

38. AQ 3 Improvement of air quality monitoring. Construction of two ambient air quality monitoring sub-stations (Xi'an Qujiang Tourism Resort and Xi'an Economic and Technological Development Zone) and two traffic air pollution monitoring sub-stations (one each on the First Ring Road and the Second Ring Road); purchase of three vehicles for mobile monitoring; equipment for measurement of pollutants (PM10, NO2, SOz, 03, CO, HC, etc.), and for QAIQC and data transmission.

3 9. A Q 4 Improvement of air quality assessment and in formation publication. Purchase of software and hardware for a Global Information System (GIs) -based air quality database, air quality assessment model, and an Internet-based information publication system. Development of an on-line emissions monitoring system at ten key stationary air pollution sources to check on a regular basis compliance with emission standards for stationary sources.

40. AQ 5 MWCP. Formulation of an MVECP with short-term (2012), mid-term (2015) and long-term (2020) targets, and adoption for implementation. Implementation of strengthened emission inspection programs in subcomponent AQ2 and other regulatory measures will be the main short-term measures to reduce per vehicle emissions. The short-term target year coincides with the project completion year. Mid-term and long-term measures will also start implementation in the project period making full use of tools and equipment financed under the other subcomponents.

41. Technical assistance to support the implementation of subcomponents AQ2 and 4 and formulation of the AQ5 MVECP is to be provided from loan funds.

Component 5 Cultural Heritape (CH)

42. This component comprises two subcomponents: Han Dynasty Weiyang Palace Roads and bicycle network within MWC - as shown in Table A4.8 below.

Table A4.8: Cultural Heritage Subcomponents Code I Name I Scope of Work CHI I Han Chang'an Weiyang Palace Roads I Recreation of 8.4 km of the old Han Dynasty road

I system, about 1 meter above ground level CH2 I Ming Walled City Bicycle Routes I 41.52km of bicycle routes around the main tourist

I sites.

CHI Han Chang'an Weiyang Palace Roads

43. The objective of this subcomponent is to re-create the old Han Dynasty road system to convey to tourists the extent and layout of these ancient roads. Currently, the original roads are about 1 m under the existing ground level. The project will protect the archaeological integrity of the ruins by recreating the layout 1 m above ground, making the original roads about 2 m under ground. In addition, there will be some preliminary archaeological excavations to be funded under the project as part of the engineering investigation work to prepare for the road system. Map IBRD 35432 Han Chang'an Site Weiyang Palace Roads illustrates the proposals.

44. The key investment under this subcomponent consists of the construction of 8.4 km of roads and 47,000 m2 of landscaping. The subcomponent also includes the construction of a 2,500 m2 parking lot plus water supply and sewage systems, street lighting, planting and tourist signs at the entrance to the site.

45. The proposals form part of the first phase of the General Plan for the Preservation of the Han Chang'an City Ruins.

CH2 Ming Walled City Bicycle Route

46. This subcomponent has been developed in the context of the Xi'an Master Plan (currently awaiting State Council approval), the Tang Palace City Restoration Plan and the Ming City Plan. It will provide 26.7 km of bicycle routes linking the fourteen main tourist sites in the MWC, (including the city wall itself) and comprising:

(a) Shuncheng Lane - the 17.9 km bicycle-only ring route inside and adjacent to the city wall, currently under implementation by Xi'an Municipality using local funds; and

(b) 8.8 km of additional routes, construction of which is to be funded from the Bank loan.

47. Two thousand high-specification bicycles for tourists to hire will also be purchased.

48. There are three types of bicycle route in the subcomponent. In all cases there will be a high standard of urban design, street furniture and landscaping:

(a) Bicycle pre-dominant roads (the specially constructed Shuncheng Lane plus existing local roads) where bicycles would be pre-dominant and motor vehicles would only be allowed for access with a permit; some of these routes will use blue brick road surfaces as part of city beautification measures;

(b) Segregated (physically and non-physically) bicycle lanes on secondary roads where bicycles run alongside motor vehicles. The segregation will be done using road markings, barriers and green belts together with consideration of innovative techniques such as physical sloped kerbs and textured road markings between motor vehicle and non-motorized vehicle lanes; and

(c) Local lanes and non-motorized vehicle streets with mixed bicycle and motor vehicle traffic where traffic is low and slow and where natural traffic calming occurs due to physical constraints and land use. At some sites, road cushions, road humps and rumble strips are expected to be used as traffic-calming devices following their success elsewhere in the city. At other sites, the cross-section between the footway and bicycle lane is expected to be re-engineered at one level, avoiding a kerb and using colored surfacing to delineate pedestrian and bicycle functions, also as implemented successfully elsewhere in the city.

49. Map IBRD 35428 Ming Walled City Bicycle Routes illustrates the proposals.

Component 6 Institutional Development (ID)

50. This component is intended to support the institutional development of transport planning activities in Xi'an Municipality. It provides technical assistance for building the institutions and capacity in Xi'an to develop the policies, programs and investments needed to ensure the project objectives and outcomes are sustained after the Bank funded project is completed. It is proposed that support for activities in Integrated Public Transport and Development Planning related to Public Transport will be complemented by the proposed GEF Grant to Xi'an. See Annex 16 for details on this grant.

Table A4.9: Institutional Development Subcomponents

# ID1 1.1

1.2

ID 2 2.1

2.2

ID 3 3.1

3.2

Activity I Scope and Status Xi'an UT Policy & Xi'an Urban Comprehensive Strategic Transport Study Financial Planning

Support for Implementation Traffic Management ATC Assistance Accident Analysis Study WAS)

Training Domestic Training

International Training

Comprehensive Planning Original proposal from XMG to cover current lack of strategic planning capability.

Improves capacity of XMFB to determine funds available for investments in transport infrastructure and of XTPI to formulate investment plans. Input to activity 1.1.

of Project Investments Supports XPSB to in the design and supervision of implementation of the TM 1 ATC system. Develops capacity for XPSB to analyze causes of accidents and to propose remedial measures in the TM 2 Road Safety component.

Expose those working on the project to new developments in their fields and train them to do their jobs more effectively (including for AQM). Expose those working on the project to new ideas some of which they then apply in Xi'an.

Annex 5: Project Costs

CHINA: Xi'an Sustainable Urban Transport Project

Table A5.1: Project Cost

Table A5.2: Project Cost by Category

Road Component

RNI. Road Component. Xi'an

RN2. Road Component. Huxian

Public Transport

Traffic Management

Air Quality

Cultural Heritage

CHI Weiyang Palace

CH2 MWC Bicycle routes

Institutional Development

TOTAL PROJECT COSTS

$I=RMB7.10

China IBRD - Total Categories IBRD %

USD m i l US$ m i l US$ m i l RMB m i l

Civil Works 148.952 110.190 259.142 1,839.905 43%

Road Network - Xi'an 89.183 55.945 145.128 1,030.407 39%

Road Network - Huxian 13.551 12.488 26.039 184.877 48%

Public Transport 19.822 19.064 38.886 276.087 49%

Traffic Management 7.736 0.000 7.736 54.925 0%

Air Quality 2.871 3.312 6.183 43.896 54%

Cultural Heritage - Weiyang Palace 0.980 8.049 9.029 64.103 89%

Cultural Heritage - MWC Bicycle Routes 14.810 11.332 26.142 185.61 0 43%

Goods 10.822 21.114 31.937 226.750 66% Road Network 0.000 0.000 0.000 0.000 0%

Public Transport 0.000 3.328 3.328 23.632 100%

Traffic Management 10.822 10.822 21.645 153.676 50%

Air Quality 0.000 6.178 6.178 43.862 100%

Cultural Heritage - Weiyang Palace 0.000 0.504 0.504 3.580 100%

Cultural Heritage - MWC Bicycle Routes 0.000 0.282 0.282 2.000 100%

Services 1.787 5.458 7.245 51.440 75% Road Network 0.000 0.000 0.000 0.000 0%

Public Transport 0.000 0.000 0.000 0.000 0%

Traffic Management 0.378 2.423 2.801 19.890 86%

Air Quality 0.000 0.289 0.289 2.050 100%

Cultural Heritage 0.000 0.000 0.000 0.000 0%

Institutional Development 1.408 2.746 4.155 29.500 66%

Base Costs 161.561 136.763 298.323 2,118.095 46%

Total

RMBmil. I %

1,647.717 56%

1,391.433 47%

256.284 9%

477.588 16%

277.756 9%

124.304 4%

384.576 13%

163.822 6%

220.754 8%

29.550 1%

2,941.490 100%

GoC

US$m I %

156.580 67%

134.004 68%

22.575 63%

42.618 63%

24.191 62%

6.945 40%

32.546 60%

14.130 61%

18.415 59%

1.408 34%

264.288 64%

IBRD

US$m I %

75.493 33%

61.972 32%

13.521 37%

24.648 37%

14.929 38%

10.562 60%

21.620 40%

8.943 39%

12.677 41%

2.753 66%

150.000 36%

Total

US$m I %

232.073 56%

195.976 47%

36.096 9%

67.266 16%

39.120 9%

17.508 4%

54.166 13%

23.074 6%

31.092 8%

4.162 1 %

414.294 100%

$l=RMB7.10

China IBRD - Total Categories IBRD %

USD m i l US$ mi l US$ mi l RMB m i l

Design & Supervision 14.949 0.000 14.949 106.135

Other fees 7.61 1 0.000 7.61 1 54.036

Land Acquisition and Resettlement 44.856 0.000 44.856 318.478

Interests and Bank fees 28.172 0.000 28.172 200.019

Front-end Fee 0.000 0.375 0.375 2.663

Contingencies 7.140 12.869 20.009 142.064

Total Costs 264.288 150.000 414.294 2,941.490 36%

Table A5.3: Project Cost by Component

ROAD COMPONENT XI'AN

Component 1. Road Network

RNI. Xi'an Road Nehnrork

Civil Works

RNCI. 1st Ring Road

RNCI I Yuxiangmen

RNCl2 Changiemen

RNCl3 South Section 1 RR

RNC2. 2nd Ring Road

RNC2l NE Interchange 2RR

RNC22 SE Interchange 2RR

RNC3. Primary roads

RNC3l TaiBai Interchange

Other costs

Design & Supervision

Fees

Interest & Bank fees

- Interest & local fee

- Front end fee

Resettlement & LA

Contingencies

Base Costs

RMB mil.

1,391.433

1,030.407

729.451

80.428

47.121

601.902

144.535

74.096

70.438

156.421

156.421

361.026

65.279

22.117

110.401

109.301

1.101

96.162

67.068

US$ m

195.976

145.128

102.740

11.328

6.637

84.775

20.357

10.436

9.921

22.031

22.031

50.849

9.194

3.115

15.549

15.394

0.155

13.544

9.446

GoC

US$ m

134.004

89.183

63.135

6.961

4.078

52.095

12.510

6.413

6.097

13.538

13.538

44.822

9.194

3.115

15.394

15.394

0.000

13.544

3.574

Bank

US$ m

61.972

55.945

39.605

4.367

2.558

32.680

7.84 7

4.023

3.824

8.493

8.493

6.027

0.000

0.000

0.155

0.000

0.155

0.000

5.872

ROAD COMPONENT: HUXIAN

Component 1. Road Network

Civil Works

RNHl Xincheng

RNH2 Dongcheng

RNH3 Lvgong

RNH4 Lvgong Interchange

RNH5 Meibei

Other costs

Design & Supervision

Fees

Interest & Bank fees

- Interest & local fee

- Front end fee

Resettlement & LA

Contingencies

PUBLIC TRANSPORT COMPONENT

Component 2. Public Transport

Civil Works

PT1. Interchanges

PT2. PT Priority

PT3. BUS Depot

Equipment

PT1. Interchanges

PT2. PT Priority

PT3. Bus Depot

Other costs

T A & Consultant services

Design & Supervision

Fees

Interest & Bank fees

- Interest & local fee

- Front end fee

Resettlement & LA

Contingencies

Bank

US$ m

12.488

4.981

1.933

2.099

1.531

1.944

1.033

0.000

0.000

0.034

0.000

0.034

0.000

0.999

Base Costs

RMB mil.

184.877

73.738

28.619

31.079

22.661

28.781

71.407

6.84 1

3.204

17.822

17.581

0.24 1

30.042

13.498

Base Costs

RMB mil.

276.087

43.509

153.366

79.212

23.632

11.445

0.000

12.187

177.869

0.000

17.368

16.104

25.347

24.907

0.440

99.306

19.744

US$ m

26.039

10.386

4.031

4.377

3.192

4.054

10.057

0.963

0.451

2.510

2.476

0.034

4.231

1.901

GoC

US$ m

13.551

5.405

2.098

2.278

1.661

2.110

9.024

0.963

0.451

2.476

2.476

0.000

4.231

0.902

US$ m

38.886

6.128

21.601

11.157

3.328

1.612

0.000

1.716

25.052

0.000

2.446

2.268

3.570

3.508

0.062

13.987

2.781

GoC

US$ m

19.822

3.124

11.011

5.687

0.000

0.000

0.000

0.000

22.796

0.000

2.446

2.268

3.508

3.508

0.000

13.987

0.587

Bank

US$ m

19.064

3.004

10.590

5.470

3.328

1.612

0.000

1.716

2.256

0.000

0.000

0,000

0.062

0.000

0.062

0.000

2.194

Civil Works

TRAFFIC MANAGEMENT COMPONENT

TM 1. Traffic Control

TM2. Road Safety

TM5. Facilities for NMV and pedestrians

Component 3. Traffic Management

Equipment

TM1. Traffic Control

TM2. Road Safety

TM3. Enforcement and RUE

TM4. Parking

TM5. Facilities for NMV and pedestrians

Other costs

T A & Consultant Services

Design & Supervision

Fees

lnterest & Bank fees

- lnterest & local fee

Base Costs

RMB mil.

- Front end fee

Contingencies

US$ m

AIR QUALITY COMPONENT

GoC

US$ m

Component 4. AIR QUALITY

Civil Works

AQ1 Monitoring centre

Equipment

AQ1 Monitoring centre

AQ2 Motor Vehicle Inspection Program

AQ3 Monitoring Equipment

AQ4 Air Quality Assessment

Other costs

AQ5 TA Services (MVECP)

Design & Supervision

Fees

Interest & Bank fees

- Interest & local fee

- Front end fee

Resettlement & LA

Contingencies

Bank

US$ m

Base Costs

RMB mil.

43.696

43.896

43.862

3.233

10.547

18.952

11.130

36.546

2.050

2.335

3.749

5.569

5.384

0.185

16.121

6.721

6.183

6.183

6.178

0.455

1.485

2.669

1.568

5.147

0.289

0.329

0.528

0.784

0.758

0.026

2.271

0.947

US$ m

GoC

US$ m

Bank

US$ m

CULTURAL HERITAGE COMPONENT I I I I

Component 5. CULTURAL HERITAGE

Civil Works

Equipment

Other costs

Design & Supervision

Fees

Interest & Bank fees

- Interest & local fee

- Front end fee

Resettlement & LA

Contingencies

INSTITUTIONAL STRENGTHENING COMPONENT

Base Costs

RMB mil.

Civil Works

Equipment

Other costs

Design & Supervision

Fees

Interest & Bank fees

- Interest & local fee

- Front end fee

Contingencies

64.103

3.580

96.139

4.493

2.915

2.769

2.612

0.156

76.84 7

9.116

US$ m

9.029

0.504

13.541

0.633

0.411

0.390

0.368

0.022

10.824

1.284

185.610

2.000

33.144

5.730

1.580

14.134

13.907

0.227

11.700

Component 6. INSTITUTIONAL DEVELOPMENT

Consultant services

ID I. I Xi'an Urban Transport Study

ID 1.2 Financial Planning

ID 2.1 Traffic Management (ATC)

ID 2.2 Accident Analysis Study

ID 3 Training

Other costs

Interest & Bank fees

- Interest & local fee

- Front end fee

26.142

0.282

4.668

0.807

0.223

1.991

1.959

0.032

1.648

GoC

US$ m

Base Costs

RMB mil.

29.500

16.000

6.000

0.500

0.500

6.500

0.050

0.050

0.000

0.050

Bank

US$ m

US$ m

4.155

2.254

0.845

0.070

0.070

0.915

0.007

0.007

0.000

0.007

GoC

US$ m

1.408

1.408

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

Bank

US$ m

2.746

0.845

0.845

0.070

0.070

0.91 5

0.007

0,007

0.000

0.007

Annex 6: Implementation Arrangements

CHINA: Xi'an Sustainable Urban Transport Project

1. This annex provides further details on implementation arrangements to complement the information proceed in Section I11 of the main text.

2. Xi'an Municipality - Project Steering Committee (PSC) and Executive Office (PSCEO). Xi'an Municipality, through a Project Steering Committee (PSC), established on March 29,2005 is responsible for providing overall leadership, policy guidance and institutional coordination as required on project preparation and implementation. The PSC, headed by the Vice Mayor responsible for urban construction, is composed of leaders and directors of fifteen 22

relevant municipal government line agencies. The PSC will be maintained throughout project implementation with functions and membership satisfactory to the Bank, and shall meet on a regular basis (once every quarter).

3. Under the leadership of PSC, the Xi'an World Bank Project Management Office (PMO) was established on March 29,2005 to execute project preparation on behalf of the Xi'an Municipality. At the start of project implementation, the PMO will be transformed into the Executive Office of the PSC (PSCEO), assisting the PSC with policy guidance, institutional coordination, and overall monitoring of project progress and implementation in accordance with the loan and project agreement.

4. Currently, Infrastructure Investment Corporation (IIC) has about forty staff in four functional departments for Planning, Financial Management, Business Operation, and Engineering. For this World Bank financed project, IIC has proposed that its Planning Department will be responsible for overall project planning, contract management, procurement, supervision, coordinating with sub-project agencies and reporting. TIC'S Financial Department will be in responsible for overall financial management, including raising domestic loans, managing all project funds from different sources, disbursement, and auditing. The engineering department will be responsible for land acquisition, resettlement, construction supervision, environment and social monitoring.

5. As noted in Section I11 By the same leading line agencies (shown in Table A 6.1) that were responsible for the preparation of the project sub-components, and have ownership of the design will be responsible for their future operation. IIC shall enter agreements with these agencies for the purposes of coordinating the overall implementation of the project. These agencies will assist IIC in project implementation by preparing the technical parts of the bidding documents (including design drawings), participating in the Bid Evaluation Committees, and signing off on the technical parts of the contracts and the completed works. IIC and its qualified procurement agent (tendering company) will have overall responsibility for procurement.

22 Xi'an Development and Reform Commission, Xi'an Municipal Finance Bureau, Xi'an Municipal Planning Bureau, Xi'an Municipal Construction Bureau, Xi'an Municipal Environmental Protection Bureau, Xi'an Municipal Communication Bureau, Xi'an Municipal Civil Administration Bureau, Xi'an Municipal National Land and Resources Bureau, Xi'an Municipal Cultural Heritage Bureau, Xi'an Municipal Public Security Bureau, Xi'an Irhastructure Implementation Corporation.

Table A6.1: Leading Line Agencies for Each Project Component I No. I Project Component I Component Leading Line Agencies

Road Network 1.1 Xi'an City

1.2 Huxian Public Transport 2.1 Passenger Transport Terminals 2.2 Bus Lanes 2.3 Xinhua Depot

Xi'an Municipal Public Works and Management Commission (XMPWMC) Huxian Construction Bureau

I Xi'an Municipal Communication Bureau (XMCB)

Xi'an Municipal Communication Bureau (XMCB) Xi'an Public Transport Company

I I

I Traffic Management I Traffic Police Brigade of Xi 'an Public Security Bureau J

4

I Palace Roads I Institutional Development

Cultural Heritage I I 5.1 Ming City Bicycle Routes 5.2 Han Chang'an Weiyang

Air Quality Monitoring

Xi'an City Scenery Wall Committee Xi'an Municipal Cultural Heritage Bureau (XMCHB)

6. There are three source of funding for the project: (i) World Bank loan; (ii) Xi'an Municipality Budget allocation; and (iii) Domestic Bank Loans. The Budget allocations are of two types: (a) funds sourced by Xi'an Municipality from their own revenues; and (b) funds raised by line agencies from outside the Xi'an Municipality (such as line ministries direct allocation to municipal line agencies).

(XPSB) Xi'an Environnent Protection Bureau (XEPB)

6.1 UT Policy & Planning 6.2 TM Implementation Support 6.3 Training

7. Xi'an Municipality's budget allocation to IIC is provided by Xi'an Municipal Finance Bureau based on Xi'an's Annual Urban Construction Funding Plan (AUCFP) issued by the Urban Construction Committee, XMFB, and Xi'an Development and Reform Committee. The annual allocation will be based on an annual work program and financial plan which forms part of the Project Implementation Plan (PIP). The AUCFP will specify the planned use (subcomponents and contracts) of all sources of funds. A line item on debt payment is designated in the AUCFP for annual repayment of loan proceeds.

Xi'an Municipal Planning Bureau (XMPB) XPSB All line agencies

8. The World Bank loan will be signed between the People's Republic of China through its Ministry of Finance (MOF) and the World Bank. The MOF will on-lend the Bank loan to Xi'an Municipality through Shaanxi Provincial Finance Department (SPFD) under an Onlending Agreement satisfactory to the Bank, with similar terms and conditions to those of the World Bank loan. Xi'an Municipality will further on lend to TIC under a Subsidiary Loan Agreement satisfactory to the Bank, with similar terms and conditions to those of the World Bank loan. Signing of the Onlending Agreement and the subsidiary loan agreement and financing agreement are conditions of effectiveness of the World Bank loan. The Domestic Bank Loans will be provided directly to IIC.

9. Project Implementation Plan (PIP). IIC is preparing a PIP to guide the overall implementation of the project, a copy of which will be placed in the project file. The PIP will include: (i) an implementation schedule which will clearly identify the start and completion of each activity at the subcomponent level (ii) Annual Works Programs (AWP); and (iii) a Financing Plan;

10. Financial Management procedures are set out in the Financial Management Manual.

11. The Environmental Management Plan (EMP) sets out the environmental management requirements of project implementation. See Annex 10 for more details.

12. The Resettlement Action Plan (RAP) and the Resettlement Policy Framework (RPF) sets out the resettlement and livelihood restoration requirements for project implementation. See Annex 10 for more details.

13. The Annual Works Programs will be reviewed and updated annually, together with the procurement plan and the financing plan. The Annual Works Programs will be the basis for the IIC submission to the Xi'an Municipal Finance Bureau for the Municipality's AUCFP budget allocation to the project.

14. Project Reporting. IIC will establish a project reporting system to monitor the physical and financial progress of the Project, and to provide progress reports on key indicators to the Bank every six months. The progress reports are to be sent to the Bank within 45 days of the end of the six month reporting period, (i.e. by February 15 and August 15 each year), starting from February 1 5,2009.

15. The Mid Term Review for the Project should be undertaken no later than June 30,2012.

16. Changes to the Project during implementation. Any proposed changes in project scope, project components, obligations and PIP should be substantiated by IIC and referred to the PSC for review, discussion, and decision and then furnished to the Bank and MOF, for World Bank and MOF prior concurrence.

Annex 7: Financial Management and Disbursement Arrangements

CHINA: Xi'an Sustainable Urban Transport Project

1. The Financial Management assessment was based on guidelines issued by the Financial Management Sector Board on November 3,2005. It concluded that the project meets minimum Bank financial management requirements, as stipulated in BPIOP 10.02. The project will maintain financial management arrangements that are acceptable to the Bank and that, as part of the overall arrangements that the borrower has in place for implementing the operation, provide reasonable assurance that the proceeds of the loan are used for the purposes for which the loan was granted. The financial management (FM) risk is the risk that World Bank loan will not be used for the purposes intended and is a combination of country, sector and project specific risk factors. The FM risk rating proposed for this project during the appraisal stage is modest.

2. Funding sources for the project include Bank loan and counterpart funds. The Bank loan will be signed between the Bank and the People's Republic of China through its Ministry of Finance (MOF). MOF will on-lend the Bank loan to Xi'an Municipality through Shaanxi Provincial Government. Xi'an Municipality will fhther on-lend to the Xi'an Infrastructure Investment Corporation (IIC) who will implement the project. The Bank loan proceeds will flow from the Bank into project designated account (DA) to be set up at and managed by Shaanxi Provincial Finance Department (SPFD), then reimbursed to Xi'an Municipal Finance Bureau (XMFB), then to IIC, and finally to the contractors. Counterpart funds comprise appropriations from Xi'an Municipality and commercial borrowings by IIC.

3. No outstanding audits or audit issues exist with the implementing agency involved in the proposed project. However, the task team will continue to be attentive to financial management matters during project supervisions.

4. The Bank requires that project financial statements be audited in accordance with standards acceptable to the Bank. In line with other Bank financed projects in China, the project will be audited in accordance with International Auditing Standards and the Government Auditing Standards of the People's Republic of China. The Shaanxi Provincial Audit Office (SPAO) has been identified as the auditor for this project. Annual audit report will be issued by SPAO.

5 . The annual audit report of project financial statements will be due to the Bank within six months after the end of each calendar year. This requirement is stipulated in the loan agreements.

6 . In addition, the annual audit report on financial position and operations result of the IIC will be due to the Bank within six months after the end of each calendar year. Such audit report and financial statements are not for fiduciary requirements, but rather for sustainability purposes. The requirements for this audit will not be included as part of the loan covenant but rather included in Schedule 2 of the Project Agreement between the Bank and Xi'an Municipality.

7. The Funds Flow for the Bank loan will follow Bank and MOF requirements. One designated account (DA) will be established and managed by SPFD. The loan proceeds could be paid from the DA to suppliers and contractors against eligible expenditures, or to be reimbursed

to IIC through XMFB against eligible expenditures paid by IIC. The funds flow is as shown in Figure A7.1 below.

-

Figure A7.1 Funds Flow

B ank contractors

8. The Bank loan proceeds will be disbursed against eligible expenditures as indicated in Table A7.1 below.

Table A7.1: Disbursen

(1) Civil Works a) under Part A, B, and E-2 of the Project b) under Part D of the Project b) under Part E-1 . of the Project

(2) Consulting services a) under Part C of the Project b) under Part D and F-2,3,4&5 of the Project c) under Part F-1 of the Project

(3) Equipment a) under Part B, D, and E ofthe Project b) under Part C of the Project

(4) Interest during construction (5) Front End fee TOTAL

nts by Disbursement Ca

Amount of the Loan Allocated (US$ mil.)

egory Percentage of expenditures

to be financed

9. Four disbursement methods: reimbursement, advance, direct payment and special commitment are all available to the project.

10. Supporting Documentation. For expenditures against contract amounts indicated in the table below, Statements of Expenditure (SOE) will be furnished as supporting documentation to request for reimbursement and reporting eligible expenditures paid from the DAs.

Table A7.2: Request for Reimbursement and Reporting Eligible Expenditures and against Statements of Expenditure (SOE)

I Firm Consultant 100.000

Expenditure Category Civil Works Goods

Contracts Less than US$ Equivalent 4,000,000 300.000

11. For contract amounts subject to the Bank prior review indicated in the table below, the list of payments against the contracts, and records evidencing eligible expenditures, e.g., copies of receipts, supplier invoices, will be furnished as supporting documentation to request for reimbursement and reporting eligible expenditures paid from the DAs.

Individual Consultant Training

Table A7.3: Requesting Reimbursement and Reporting Eligible Expenditures

50,000 All

[ Goods 300,000

against List of Payments to Prior Review Contracts Expenditure Category Civil Works

12. Designated Account. One Designated Account (DA), a segregated US$ account, will be established in SPFD. The authorized allocation to the DA is proposed to not exceed US$5 million. To ensure proper usage of loan proceeds and mitigate risks, the Bank loan proceeds will not be further advanced from DA to any other project accounts.

Contracts Equivalent to or More than US$ Equivalent 4.000.000

Consulting firm Individual consultant

13. SPFD will be directly responsible for the management, monitoring, maintenance and reconciliation of the DA activities of the project. To be consistent with the on-lending arrangement and using the government appropriations channel, the flow of withdrawal application is proposed as follows:

100,000 50,000

Figure A 7.2: Flow of Withdrawal Applications

14. Risk Assessment and Mitigation. The following risks with corresponding mitigating measures have been identified during assessment:

IIC + XMFB World Bank SPFD +

Inherent Risk Country level

Entity Level

Project Level

Control Risk Budgeting

Accounting

D Internal Control

D Funds Flow

Financial Reporting

Risk Rating

Modest

Modest

High

Modest

Low

Modest

Modest

Low

ncial Management Risks and Mitigation Measures Risk Mitigating Measures Incorporated into I Conditions of

Legal and institutional framework is acceptable and current Project Financial Management (PFM) systems are functioning reasonably well. See the following mitigating measures utilized in the project. As IIC has no prior Bank project experience, monitoring of compliance with PFM and Bank procedures will be important. However, IIC's experience in ADB and JBIC projects and finance bureaus involvement will mitigate some of these risks. Furthermore, Bank will work with IIC to further strengthen its FM knowledge and capacity It is the fust time for IIC to independently implement a Bank financed project, and the IIC has little experience in managing Bank projects. Also, the multi-agency project structure may affect project effectiveness and efficiency. To address these risks, FM training will be provided to the IIC and XMFB project financial staff to h s h them necessary knowledge and information. The FM manual is required to help standardize their financial work as well as clarify the interagency coordination required in financial management and disbursement. Furthermore, SPFD will supervise and monitor the project implementation by managing the Bank loan proceeds.

Project Design

The FMS will work with the XMFB and IIC to improve budget preparation, execution and budget to actual variation monitoring and evaluation. Accounting policies and procedures are already in place. Circular #13 has been issued by MOF and adopted for all World Bank financed projects. Proper guidelines for accounting of beneficiary contributions will be documented in the FM manual. Necessary training will be provided to the accounting staff to

Board or Effectiveness

improve their knowledge and qualifications. Internal control procedures and policies will be ( documented in the FM manual and all concerned parties are required to follow them. In addition, monitoring activities will be conducted by XMFB on a regular basis focusing on compliance and transaction examinations. Funds flow arrangement has been agreed with all concerned parties. To avoid delayed disbursement and poor cooperation during implementation, related requirements and procedures are documented in the FM manual and require all agencies to follow. The financial reporting responsibilities are established. The form, content and periodicity of financial reports

15. Therefore, the overall FM risk-rating of this project at the appraisal stage is modest. The task team will monitor the project FM risk during project implementation.

Risk

Auditing

16. Strengths. All the project funds will be exclusively mobilized and closely monitored by IIC whose experience in implementing ADB financed project should mitigate the fiduciary risk. Additionally, SPFD has managed Bank loan proceeds for over 20 years covering various sectors. SPFD had accumulated extensive experience in managing Bank projects, its supervision and guidance upon this project will benefit project implementation.

17. Weaknesses and Action Plan. Besides the FM risks identified above, no other significant weakness are identified.

18. Implementing Entities. A Project Steering Committee (PSC), established by Xi'an Municipality, is responsible for providing overall leadership and guidance as required on project preparation and implementation. Under the leadership of PSC, the Xi'an World Bank Project Management Office (PMO) was established to execute project preparation on behalf of the Xi'an Municipal Government (XMG). IIC will be responsible for the overall implementation of all project components. IIC, a 100% State Owned Enterprise (SOE) established under XMG in July 2000, serves as the XMG's development agency for Public Works financing and implementation.

Conditions of Board or

Effectiveness

Risk Rating

Low

19. IIC has implemented and financially managed several foreign funded projects, including two JBIC loan projects in water supply and environment improvement, one Spanish Government loan project in natural gas production and supply, one French Government loan project in medical care, and one ADB urban transport project. IIC has generally sufficient accountability and experience in managing foreign funds under the national legislation and regulation.

Risk Mitigating Measures Incorporated into Project Design

are well defined by MOF and understood by IIC. The external auditors, Shaanxi Provincial Audit Office, have extensive experience with Bank project audits. The audit will be conducted in accordance with acceptable auditing standards and the audit reports will be due to the Bank every June 3oth.

20. Budgeting. In accordance with project implementation plan and construction progress, IIC will prepare an annual budget in consultation with the related line agencies. This budget will be jointly reviewed and approved by Municipal Construction Commission, Municipal Development and Reform Commission, and Xi'an Municipal Finance Bureau. Based on such approved budget and construction progress, Xi'an Municipal Finance Bureau will pass the government construction funds to IIC who will also mobilize domestic loans. IIC will use the counterpart funds to make payments to contractors or suppliers directly and then get reimbursement of Bank loan proceeds from SPFD through Xi'an Municipal Finance Bureau. For budget variances arising during execution, necessary authorization and close monitoring shall be established. Timely and accurate information on variances should be used as the basis for mid- term adjustments.

21. Accounting. The administration, accounting and reporting of the project will be set up in accordance with the Circular #13: "Accounting Regulations for World Bank Financed Projects" issued in January 2000 by MOF. The circular provides in-depth instructions of accounting treatment of project activities and covers the following:

(a) Chart of accounts;

(b) Detailed accounting instructions for each project account;

(c) Standard set of project financial statements; and

(d) Instructions on the preparation of project financial statements.

22. The project financial reporting package, including the detailed format and content of the project financial statements was agreed to between the Bank and MOF. The project financial reporting package includes the following:

(a) Balance Sheet;

(b) Summary of Sources and Uses of Funds by Project Component;

(c) Uses of Loans by Project Category;

(d) Designated Account (DA) Activity Statement; and

(e) Notes to Financial Statements.

23. IIC will be managing, monitoring and maintaining the project accounting records. IIC will also prepare a consolidated project financial reporting package for the project and submit it to the Bank for review and comment on a regular basis.

24. Adequate project accounting staff with educational background and work experience commensurate with the work they are expected to perform is one of the factors critical to successful implementation of project financial management. Based on discussions, observations and review of educational background and work experience of the staff identified for financial and accounting positions in the IIC, the task team noted that the staff appears qualified and appropriate to do the work they are expected to assume. However, given that most of the project financial staff are new to Bank projects, FM and disbursement training to all the financial staff should be provided before start of implementation.

25. To strengthen financial management capacity and achieve consistent quality of accounting work, the task team requested that a project financial management manual (the FM Manual) be prepared. The FM Manual provides detailed guidelines on financial management, internal controls, accounting procedures, fund and asset management and withdrawal application procedures. The FM Manual has been prepared by the IIC, and reviewed by the Bank. The Manual acceptable to the Bank will be distributed to all the relevant financial staff before project start.

26. IIC will use User friend (Yong You), a well-established China accounting software package approved by MOF, for this project. The task team will monitor the processing of accounting work closely, especially in the initial stages to ensure complete and accurate financial information will be provided in a timely manner.

27. Internal Control and Internal Auditing. The project has established internal control procedures and policies, including approval and authorization controls, segregation of duties, clear staff functions, and safeguarding assets. The funds flow will be arranged and monitored through the finance bureau channels and will include their substantive review.

28. Xi'an Municipal Finance Bureau has its internal inspection division, who normally conducts compliance and transaction oriented examinations on regular basis. During project implementation, the Bank will review their project examination reports and determine whether the Bank can rely on their work. Additionally, SPFD's management, monitoring and annual external audits will serve as the mechanism to ensure that financial management controls are functioning appropriately.

29. Financial Reporting. The format and content of the project financial statements represents the standard project financial reporting package agreed to between the Bank and MOF, and have been discussed and agreed to with all parties concerned.

30. IIC will prepare consolidated project financial statements, which will be submitted to the Bank for review and comment on a regular basis. In line with the updated World Bank's Operation Manual, the interim un-audited project financial statements should be submitted as part of progress report to the Bank on a semi-annual basis (prior to February 15 and August 15).

3 1. Supervision Plan. The supervision strategy for this project is based on its FM risk rating, which will be evaluated on regular basis by the task team.

Annex 8: Procurement Arrangements

CHINA: Xi'an Sustainable Urban Transport Project

A. General

1. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004; and revised October 2006 "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and revised October 2006 and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

2. Procurement of Works: Works procured under this project would include civil works in these components: (i) Road Network (RN); (ii) Public Transport (PT); (iii) Traffic Management (TM); (iv) Air Quality Management (AQM); and (v) Cultural Heritage (CH).

3. The preliminary design and detailed design shall be approved by the Bank in advance for all prior review and post review contracts.

4. The procurement will be done using MOF's Model Bidding Documents (MBD) dated May 1997 agreed with the Bank for National Competitive Bidding (NCB) through post qualification (each contract below US$20 million) and the latest Bank's Standard Bidding Documents (SBD) for International Competitive Bidding (ICB) through prequalification (each contract above US$20 million). The current versions of SBD are "Standard Procurement Document, Prequalification Document for Procurement of Works and User's Guide August 2006 revised May 2007"and "Standard Bidding Document, Procurement of Works, April 2007". Contracts above US$4 million are subject to Bank prior review.

5. Procurement of Goods: Goods procured under this project would include equipment and instruments in these components: (i) Public Transport (PT); (ii) Traffic Management (TM); (iii) Air Quality Management (AQM); and (iv) Cultural Heritage (CH).

6. The procurement will be done using MOF's MBD dated May 1997 agreed with the Bank for NCB (each contract less than US$400,000 and more than US$100,000), and the latest version of Bank's Standard Bidding Documents (SBD) for ICB (each contract more than US$400,000) and Shopping (each contract less than US$100,000). The current versions of SBD are Procurement of Goods, May 2004, revised May 2005, September 2006 and May 2007 and SBD Supply and Installation of Plant and Equipment, May 2005, revised June 2007. Contracts above US$300,000 are subject to Bank prior review. In addition, the Bank will prior review the first contract procured under each category.

7. Procurement of non-consulting services: Not applicable.

8. Selection of Consultants: Consultants selected under this project will provide services in the Institutional Development component. The procurement methods will be Quality and Cost Based Selection (QCBS) or Quality Based Selection (QBS) conforming with sections 2.8 and 3.2 of the Consultant Guidelines for all contracts above US$200,000 and Selection based on Consultants Qualifications (CQS)) for all contracts below US$200,000, and Individual Consultants (IC) in conforming with section V of the Consultant Guidelines. Consultant services which are estimated to cost less than US$200,000 equivalent per contract, may, with the Bank's prior agreement, be procured in accordance with the provisions of paragraphs 3.9 through 3.13 of the Consultant Guidelines for Single Source Selection.

9. Short lists of consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Consultants that are Universities and Government Research institutions will be selected in accordance with the provisions of paragraphs 1.1 l(c) and 2.8 of the Consultant Guidelines. The Banks latest Standard Request for Proposal (SRFP) shall be used. The current version is: Standard Request for Proposal, Selection of Consultants May 2004. Contracts above US$100,000 for firm, US$50,000 for individual consultants, and all Single Source Selection are subject to Bank prior review. In addition, the Bank will prior review the first contract procured under each category.

10. Operating Costs: Not applicable.

1 1. Others: Institutional development through the overseas and domestic training and study tours by staff of the agencieslinstitutions involved in research, planning, construction, operation and maintenance of urban infrastructure. Overseas training and study tours will be arranged and contracted with consultants.

12. The procurement procedures and SBDs to be used for each procurement method are presented in the Procurement Manual prepared by IIC.

B. Assessment of the agency's capacity to implement procurement

13. Procurement activities will be carried out by IIC assisted by the qualified procurement agent (tendering company) and the line agencies. IIC will be responsible for the reporting of procurement plans and activities for the Bank review in accordance with the precepts of the Loan and Project Agreements. The line agencies will assist IIC by preparing the technical parts of the bidding documents - including design drawings - and participating in the bid evaluation. The qualified procurement agent (tendering company) will assist IIC in preparing the commercial part of bidding documents, publishing the Specific Procurement Notices, hosting the bid opening, participating in the bid evaluation, and sending the bidding documents and the Bid Evaluation Reports to the Bank for review as instructed by IIC.

14. IIC is staffed by forty persons, with a high proportion of civil engineers and finance staff. The agency is divided into four divisions responsible for Planning, Engineering, Financial

Management and Business Operations. The procurement function is within the Planning Division and currently consists of three senior staff professionally qualified as civil engineers.

15. An assessment of the capacity of, IIC and the line agencies to implement procurement actions for the project was carried out by Yang Dawei in February and April 2007, and reported in May 2007. The assessment reviewed the organizational structure for implementing the project and the interaction between the project staff responsible for procurement activities in the IIC, the line agencies, and the qualified procurement agent (tendering company).

16. The assessment found that there are some deviations from the Bank's guidelines in government procurement practices. The proposed provisions in the legal agreements for NCB procurement, Bank prior review and post review on the procurement activities, as well as training on the Bank's policies and procedures, will address these issues. The Bank's procurement policies and procedures for Bank financed contracts will be followed. The procurement risk has been assessed as average.

17. The key issues and risks concerning procurement for implementation of the project have been identified and are shown in Table A 8.1. (Details are included in the procurement capacity assessment report.) The corrective measures which have been agreed are also shown in Table 8.1.

Table AS.1: Procurement Assessment - Risks, Issues and Corrective Measures No 1 Risks and Issues

I Ministry of Commerce. 3 1 Lack of a procurement manual describing I Procurement Manual shall be distributed to all procurement staff

Corrective Measures

2

all the procedures to be - followed in Bank-financed procurement and responsibility of each organization handling procurement. Limited knowledge of Bank procurement.

1 I IIC and line agencies have insufficient I IIC and line agencies shall appoint qualified procurement staff

IIC will organize periodically, or send staff out, for procurement training, seminars, study tours and workshops for procurement staff and other staff in line agencies. On the job training shall be conducted for all staff from time to time to strengthen the

experienced staff dedicated to procurement activities. Lack of agent for procurement of equipment through ICB as required by

IIC and Provincial Finance Bureau shall hire a qualified procurement agent (tendering company)

18. The overall project risk for procurement is average.

5 Disclosure of procurement under the project

agency's capacity to implement the procurement for the project Publish a General Procurement Notice (GPN) on United Nations Development Business (UNDB) online and dgMarket

C. Procurement Plan

19. IIC developed a Procurement Plan for project implementation which was later agreed between IIC and the Project Team. It will be available in the Project database and in the Bank's website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

20. Prior review thresholds for the Project will be:

Table AS.2: Prior Review Thresholds I Civil Works I Goods I Consultant I Consultant

21. In addition, the Bank will prior review the first contract procured under each category.

22. Procurement method thresholds for the Project will be:

Table AS.3: Procurement Method Thresholds

Above US$

23. Advertisement. In addition to a national newspaper, all Procurement Notices for ICB, and consultant contracts above US$200K for firms shall be advertised on UNDB on line and dgMarket. The advertisement for Expression of Interest (EOI) for selection of consulting firms shall be in a national newspaper, regardless of the contract value.

4 million

Procurement Method

ICB

NCB advertisement in a national newspaper

NCB advertisement in a provincial newspaper Shopping

24. Bidlproposal evaluation and contract award shall be published in accordance with paragraphs of the Guidelines 2.60, 3.4, and 3.7 for works and goods, and 2.28,3.8 and 3.13 for consultant services.

300,000

Civil Works

>US$20 million >US$2 million

<US$2 million NA

services Firm 100,000

Goods

>US$ 400,000 >US$ 300,000

<US$ 300,000 US$ 100,000

,

services Individual 50.000

Consultant services

>US$300,000 (short list to contain not more than 2 firms from any country) <US$300,000 (shortlist may include only national consultants)

>US$200K: QCBS / QBS <US$00,000: CQSISSS

Individual Consultant (IC) First contract for shopping regardless of the value

D. Frequency of Procurement Supervision

25. The Bank will monitor procurement closely through its prior review procedures, regular supervision missions, and procurement post-review missions. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the implementing agency has recommended supervision missions to visit the field to carry out post review of procurement actions every 12 months, if there are post review contracts procured during the period.

26. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the implementing agency has recommended annual supervision missions to visit the field to carry out post review of procurement actions.

Table AS.4: Contract packages in the Procurement Plan prepared by borrower (US$l=RMB7.10)

I Total I 1 145.131

Contract packages for the Road Network Subcomponent in Xi'an City (RNC)

Notes: 1. Bidders for RNC13 and RNC3 1 are subject to prequalification. 2. All six contracts are civil works construction contracts. Equipment for pumping stations, lighting,

ventilation and safety in RNC 1 1, RNC 12, and RNC 13 is included in the civil works contracts. 3. RNC 13 may be divided into 2-3 contract lots after the completion of preliminary design and approved

by the Bank.

Contract packages for the Road Network Subcomponent in Huxian (RNH)

Contract duration months

6

6

24

18

12

24

No

1.

2.

3.

4.

5.

6.

Notes: 1. RNH 4 is shown as a separate contract to RNH3 as it involves a railway crossing and will therefore be

only open to contractors approved by China Railways. 2. Pumps are included in RNH4

Contract No.

RNCl 1

RNC12

RNC13

RNC21

RNC22

RNC3 1

Contract duration months

18

18

12

18

18

No

7.

8.

9.

10.

1 1.

Contract name, feature

Yuxiangmen Interchange 0.86 km Changlemen Interchange 0.8km South 1'' ~ i n g Road, 3.9km

2nd Ring Road North-East Interchange 3.15 km 2nd Ring Road South-East Interchange - 1.08 km Tai Bai Nan-Zhang Ba Interchange 2.05 km

Contract No.

RNHl

RNH2

RNH3

RNH4

RNH5

Total

Cost Estimates US$ million/ RMB 10K 1 1.331 8042 6.641 4712 84.771 60190 10.441 7410 9.921 7044 22.031 15642

Contract name and feature

Meibi Road 3.6km

Lvgong Road 2.8km

Railway Crossing (Underpass) on Lvgong Road 0.75km XinchengRoad5.lkm

Dongcheng Road 2km

Procurement method

NCB

NCB

ICB

NCB

NCB

ICB

Cost Estimates US$ million/ RMB 10K 4.0512878

4.3813108

3.1 912266

10,3917374

4.0312862

26,04118488

Prior review or post review Prior review Prior review Prior review Prior review Prior review Prior review

Start bidding process

2008 the first year 2008 the first year 2010

2008 the first year 2009

2009

Procurem ent methods

NCB

NCB

NCB

NCB

NCB

Prior review or post review Prior review Prior review Post review

Prior review Prior review

Start bidding process

2008 the first year 2008 the first year 2008 the first year

2009

2009

Contract packages for Public Transport Component

PT 1 No.

12.

13.

14.

15.

16.

17.

18.

PT2 Bus Priority Lanes

1 23 stops, 14.65 km 2 1. I PT2.3 I Jiefang R-Heping R- 1 1.351961 I NCB I post 1 2008 1 10

Bus Contract No.

PT1.l

PT1.2

PT1.3

PT1.4

PT1.5

1.6

1.7

Total

19.

20.

No. Contract No.

PT2.1

PT2.2

I Dayanta 5.87km, 18 stops I

Interchanges Contract name

South Bus Interchange Civil Works Textile Town Bus Interchange Civil Works South Bus Interchange Facilities: Bus Performance Testing Equipments South Bus Interchange Facilities: Bus Repairing Testing Equipments Textile Town Bus Interchange Facilities: Bus Performance Testing Equipments Textile Town Bus Interchange Facilities: Bus Repairing Testing Equipments Automatic telescopic gate

Contract name

I review

23.

24.

Cost Estimates US$ million/ RMB 10K 2.3711686

3.7512665

0.361252

0.361255

0.361252

0.361255

0.181130

7.7415495

Start bidding process

Weiyang-SIN Street- Chang'an R, 17.87km, 22 stops Hongqichang-Taihua R- 1RR East-Taiyi R-Qujiang

22. I PT2.4 I Keji R-Xixieqi R-Jixiang 1 1.7411237 I NCB I post 1 2010 1 10

I km

Procurem ent methods

NCB

NCB

NCB

NCB

NCB

NCB

NCB

Contract duration months

Cost Estimates US$ million/

PT2.5

PT2.6 I review

Start bidding process

2010

2008

201 1

201 1

2010

2010

2010

Prior review or post review post review prior review

prior review

Prior review

Prior review

Prior review

Post review

RMB 10K 3,5112491

2.3611 672

25. I PT2.7 I Youyi R 9.97km, 13 stops 1 1.5711 113 I NCB ( post 1 2008 1 10

Contract duration months

18

18

3

3

3

3

2

Procurem ent methods

R-Xiaozai E&W R-Xiying R 25 stops, 13.22 km Laodong R-Gaoxing R, 9 stops, 5.34 km Xinqing R 6 stops, 3.07

Prior review or post

NCB

NCB

0.9 11647

0.611432

review post review

post review

NCB

NCB

2010

2010

10

10

review

post review post

201 1

2010

10

10

Contract duration months

10

10

10

10

10

10

No.

26.

27.

28.

29.

30.

31.

PT3 Bus Depot

32.

Contract No.

PT2.8

PT2.9

PT2.10

PT2.11

PT 2.12

PT2.13

Total

No.

33.

34.

35.

36.

Prior review or post

PT3.1

37.

38.

39.

Contract name

Zhuhong R-Xinghuo R- 1 SS West-Taibai R 19 stops, 15.6 km Hangcheng R -Zhangbabei R 10 stops, 9.29 km Honguan R-Fenggao R- Xiguanzhengjie-E&W Street-Shiyuan R-Huzhu R-Hansen R 23 stops, 13.14 krn Zhangbadong R (Xiwanglukou-Zhuque Street) 4km, 8 stops Xianningzong R- Xiangningxi R-1 SS South- Fengqing R 10.56km, 27 stops ZhuqueR(Zhangbad0ng R-Zhuque Gate) 5.88km, 15 stops

Contract No.

PT3.2

PT3.3

PT3.4

PT3.5

Start bidding process

Depot Civil works

PT3.6

PT3.7

PT3.8

Total

Cost Estimates US$ million/ RMB 10K

1.8111288

0.601427

2,0711468

0.831586

2.4411734

1.8011280

21.601153.36

Contract duration months

Contract name

Automatic telescopic gate, washmg station and petrol station Bus Performance Testing Equipments Bus Repairing Testing Equipments Bus repairing

11.1617921

machines, tools Office facility

Office furniture

Management facility

Procurem ent methods

NCB

NCB

NCB

NCB

NCB

NCB

Cost Estimates US$ million/ RMB 10K

0.271190

0.251181

0.3 11223

0.241169

Procuremen t methods

NCB

0.281200

0.201144

0.161112

12.8719140

Prior review or post review review post review

post review post review

Post review

Post review

Post review

NCB

NCB

NCB

NCB

Start bidding process

2010

201 1

201 1

2010

201 1

201 1

review prior

NCB

NCB

NCB

review Post review

post review Prior review post

2008

review Post review Post review Post review

17

2010

2010

2010

2010

3

3

3

3

2010

2010

2010

3

3

3

Contract packages for Traffic Management Component

TM 1 Area Traffic Control

TM 2 Road Safety

No

40.

4 1.

42.

43.

Notes:

TM3 Enforcement and RUE

1. Includes 177 junctions mostly within MWC ATC, plus 23 junction allowance for other components; 2. Implementation of ATC is split into four contracts (TM 11-14) as experience has shown this is most efficient way to implement ATC

Contract No.

TMl 1

TM 12

TM13

TM14

Total

No.

44.

45.

46.

Contract name

ATC, signals & controllers for 200 road junctions & associated equipment

200 road junction channelizations (see Note 1)

100 CCTV traffic monitoring cameras

Communications system for ATC,CCTV,VMS

No.

47.

Prior or post review

Prior review

Prior review

Prior review

Prior review

Contract duration months

12

12

12

Contract No.

TM21

TM22

TM23

Total

Prior review or post review Prior review

Post review

Prior review

Contract No.

TM3 1

Cost Estimates US$ million/ RMB 10K 8,9616359

4.991354 1

2.4311722

1.341958

17,72112580

Start bidding process

2008

2010

2008

Contract name

National "Golden Shield" ITS local deployment

Start bidding process

2009

2009

2009

2009

Procurem ent methods

ICB Goods

NCB works

ICB Goods

ICB Goods

Contract name

Accident analysis software and database development

Accident Remedial Measures -Engineering, Enforcement, Education arising from AAS T A

Accident investigation equipment

Contract duration months

18

18

12

12

Contract duration months

6

Cost Estimates US$ million/ RMB 10K 1.5611 108

Prior or post review

Prior review

Cost Estimates US$ million/ RMB 10K 0.201141

0.661470

1.8211293

2.6811904

Procurem ent methods

QCBS services

Start bidding process

2011

Procurem ent methods

CQS services

NCB Works

ICB Goods

Contract No.

TM32

TM33

I I I I 1

Total 1 8,4716016 1

Contract name

36 VMS Variable Message Sign and 212 detectors

TM34

TM4 Parkin No 1 Contract

100 Enforcement Cameras ("Electronic Police")

No.

Cost Estimates US$ million/ RMB 10K 3.4912481

Road User Education (RUE) Development of Campaigns

Traffic F Contract No.

2.3811 687

Total

Procurem ent methods

ICB Goods

1.041740

Contract name

ICB Goods

Parking meters & signs (Supply and Install)

Prior or post review

Prior review

QCBS services

cilities

Prior review

Contract name

Start bidding process

2009

Prior review

Traffic facilities (Supply and Install) for bicycles and pedestrians(Marking mark line, protect a column ) Equipment to apply & remove thermoplastic lines

Contract duration months

18

2009

Cost Estimates US$ million1 RMB 10K 0.981696

18

2010

Cost Estimates US$ million/

12

RMB 10K 2.0911482

Goods review

Goods review

Start bidding process

Start bidding process

Contract duration months 1

Contract duration months 1

Contract packages for the Air Quality Management Component

No.

54.

55.

56.

57.

Contract No.

AQ 1.1

AQ1.2

AQ1.3

AQ1.4

Contract name

Air Quality Monitoring Center Building 19,271 m2 lifts

Boilers (one set)

alc

Cost Estimates US$ million/ RMB 10K 6,1814390

0.12185

0.07148

0.271191

Procurem ent methods

NCB Works Shopping

Shopping

NCB

Prior review or post review Prior review Prior review Post review Post review

Start bidding process

2008

2008

2009

2009

Contract duration months

3 0

24

12

12

Contract packages for Culture Heritage Component

No.

58.

59.

60.

61.

62.

63.

64.

65.

66.

67.

68.

CH 1 Han Changan Dynasty Weiyang Palace 1 No. 1 Contract 1 Contract name I Cost I Procuremen 1 Prior I Start 1 Contract

Contract No.

AQ2.1-1

AQ2.1-2

AQ2.2-1

AQ2.2-2

AQ3.1

AQ3.2

AQ4.1

AQ4.2

AQ5.1

AQ5.2

AQ5.3

Total

69.

Contract name

MV tail gas mobile monitoring equipment (2008) MV tail gas mobile monitoring equipment (2009) MV tail gas fixed monitoring equipment (2008) MV tail gas fixed monitoring equipment(2009) 3 Air quality monitoring vehicles Air quality monitoring equipment Pollution source on-line monitoring equipment (ten points) Air quality data analysis IT system MV emission control data system MV emission pollution assessment MV emission control plan

70.

No.

CH1.1

I power engineering

Cost Estimates US$ million/ RMB 10K 0.13195

0.301212

0.07148

0.991700

1.4511033

1.211862

0.671477

0.901636

0.1 1/80

0.1 1/75

0.07150

12.65118982

CH1.2

I engineering I

72.

5 Han road 8.4 km,

71. 1 CH1.3 1 30 units of 8-seats 1 0.341240 I NCB Goods I Prior 1 2009 1 5

73.

74.

Procurem ent methods

NCB, Goods

NCB, Goods

NCB, Goods

ICB, Goods

ICB Goods ICB Goods ICB Goods

ICB Goods TA-CQS services TA-CQS services TA - CQS services

110,000 m2 2 km lOkv transmission line & 2 units 500kva transformer Electric

CH1.4

Estimates US$ million/ RMB 10K 8.5916096

CH1.5

CHI .6

Prior review or post review Post review

Prior review

Post review

Prior review

Prior review Prior review Prior review

Prior review Prior review Post review Post review

0.4413 14

electric cars 30 units of horse car

t methods

NCB Works

100 units of bikes

Site monitoring camera

Start bidding process

2008

2009

2008

2009

2008

2009

2008

2009

2008

2008

2008

NCB Electric power

0.05136

Contract duration months

24

12

30

2 1

24

30

12

2 1

3 6

3 6

3 6

review or post review Prior

0.017112

0.10170

review Post review

Shopping

bidding process

2009

Shopping

Shopping

duration months

18

2009

review Prior

6

review Post review Post

2009 5

2009

2009

5

5

:H2 Ming City Bicycle Route (CH2) No. 1 Contract 1 Contract name I Cost I Procurem I Prior

Estimates review

No. Prior review or post review

Contract No.

Total

75.

Start bidding process

76.

Contract duration months

Contract name

CH2.1

77.

CH2.2

78.

I

2008 the 1 18

Cost Estimates US$ million/ RMB 10K 9. 53716768

12 exclusive bicycle streets and 26 junctions

CH2.3

79.

first year I

Procuremen t methods

22 bicycle lanes and 28 junctions

CH2.4

Contract packages for the Institutional Development Component I No. 1 Contract 1 Contract name I Cost 1 Procurem 1 Prior I Start I Contract

RMB 10K 16.45111677

Landscaping of 34 bicycle route sections

CH2.5

5.7314066

Street furniture on 34 bicycle route sections

I Transport Study 81. 1 ID1.2 ( Financial planning 1 0.841600 I QCBS I Prior 1 2009 1 12

NCB Works

0.321226

2,000 bicycles

80.

review Prior review

NCB Works

3.6512592

I review I 85. 1 ID3.2 I International Training 1 0.711500 I Training I Prior 1 2008 1 36

Prior review

NCB Works

0.281200

No.

ID1.l

82.

83.

84.

Post review

NCB Works

ID 3.1 & ID 3.2 will be a made up of a number of short contracts of various durations (ID 3.1 includes $0. lmillion for AQM training)

Post review

NCB, Goods

Xian Urban Comprehensive Strategic

ID2.1

ID2.2

ID3.1

I review I

Post review

I Total

Estimates US$ million/ RMB 10K 2.2511600

TM-ATC Technical specification, bidding documents and bid evaluation. TM-Accident Analysis Study Domestic Training

Notes: QCBS = Quality and Cost Based Selection, CQS = Selection on Consultant Qualification 1 4.1512950

ent methods

QCBS

0.07150

0.07150

0.211150

1

review or post review Prior review

CQS

CQS

Training

bidding process

2008

review post review

post review Prior

duration months

18

2008 (the first year)

2009

2008

6

6

3 6

Annex 9: Economic and Financial Analysis

CHINA: Xi'an Sustainable Urban Transport Project

A. Economic Evaluation

1. All road schemes in the road network component have been subject to an economic analysis. In the bus priority component, only the pilot project has been analyzed. The traffic safety and management components are small investments that past experience indicates will provide very significant benefits in increased levels of safety (lower levels of accidents, fatalities and associated economic loss) and savings in travel time.

2. For the air quality management component, the generally modest individual investments have been designed to reflect a wealth of Chinese and international experience that indicates that small investments in air quality facilities have very high economic returns and distributional benefits. Investments in Cultural Heritage are usually accepted as giving enough return to society.

3. The items subject to formal economic evaluation in the road network account for about 50% of the loan and 55% of total project cost. Both costs and benefits reflect December 2006 prices, and a project life of 20 years is assumed. Financial costs have been converted to economic costs by the elimination of price contingency, taxes, customs duty on imported materials, and by the application of shadow price factors. The resulting overall economic cost is about 97% of the financial cost. An overall analysis was undertaken, thus providing results for the whole component.

4. A pre-screening based on an informal assessment of economic return was an integral part of the project identification process. The original proposal placed almost 80% of the total investment into the road network, with limited investment in public transport. The original proposals were not based on any systematic analysis of existing problems, or achievement of specific objectives, and tended to focus on a desire to upgrade all primary roads to urban expressways, and service new development areas. The following criteria were used to guide the selection of project subcomponents:

(a) Focus on investments targeting existing bottlenecks in built-up areas;

(b) Focus on improving the functionality of existing infrastructure (First and Second Ring Roads) to tackle existing problems; and

(c) Focus on Public Transport investments, as in recent years investment in the road network was much higher than in public transport, and the quantity and quality of public transport has failed to keep pace with Xian's rapid growth and rising income.

5. The lack of a comprehensive transport and traffic network and demand model was a main problem in performing an economic appraisal as without such a tool it is difficult to estimate the changes in travel demand and system performance that are prime input criteria.

Road Network Component

6. Alternatives. The main road investments were subject to alternatives analysis to ensure that the most cost-effective alternatives meeting travel needs were selected for implementation. The alternatives analyzed are summarized below. A fuller description of the alternatives considered in project planning and design is given in Annex 10.

7. RNC 2 Xi'an Second Ring Road interchanges. The Second Ring Road needed to improve its continuity and functionality at two at-grade intersections, (north-east and south-east comers). The major debate was whether to construct full interchanges or simple one movement under/overpasses which might be enough to solve current traffic problems. A traffic model would have provided a better understanding of the problem and the cost-effectiveness of the two main alternative solutions, but in its absence only a minor trafficlcapacity analysis was carried out. This indicated that the simplest solution, underpasses, would be adequate in the short to medium term, and recommended that the projects be designed to be extended in the future if needed.

8. RhT 13 Xi'an First Ring Road South Section improvement. There are two alternatives for improvement of the south section of the First Ring Road: a complete underground solution, with entrylexit ramps at both ends and near the south gate (at the centre of the section) or a less invasive and costly alternative featuring three underpasses near the three main gates in this section. The adopted approach was to move the section completely underground as even with current surveyed traffic volumes, it provides a better ratio of benefits to costs than the less expensive option. It also reduces the visual, noise and other negative impacts of the road on the Ming City Wall.

9. RNH 3 Huxian Lvgong Road Rail Crossing. Underpass or overpass alternatives were evaluated as ways to remove an at-grade rail crossing which is a significant cause of traffic delays and safety problems. An underpass is preferable to reduce the environmental and visual impacts, but the cost resolving the associated drainage problems give rise to long technical discussions. Finally, the underpass solution was adopted as the preferred approach.

10. Methodology. Due to the lack of a comprehensive network and travel demand model, transport user benefits, i.e., savings in vehicle operating costs, accidents and public transport passenger travel time, were estimated based on individual estimates made for each criterion for each road scheme. Other project benefits, such as reduction in travel times for auto users, and auto emissions were not quantified because of the lack of reliable data. The Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) presented in this annex can therefore be considered conservative.

1 1. Main Assumptions. Forecasts of traffic volumes were estimated by extrapolating recent trends. Table A9.1 presents the traffic growth rates utilized.

Table A9.1: Traffic Growth Rates Forecast overall Xi'an Traffic 1

12. Economic Internal Rate of Return (EIRR). The overall EIRR for the entire package of improvements is estimated to be approximately 14 %, while the NPV (at 12 % discount rate) is estimated to be RMB 296 million, as summarized in Table A9.2.

13. Sensitivity Analysis. The basic evaluation of the road schemes, either as stand alone investments or as an integrated package shows that the investments are economically viable, and the sensitivity tests (one-year delay in project completion, higher cost, lower benefit, lower passenger time savings and lower traffic projections) confirm this result. See Table A9.3 below.

Table A9.2: RN Component Economic Evaluation Summary

Table A9.3: RN Component Results of Sensitivity Analysis

Subcomponent Xi'an City Huxian

All projects

14. In addition, sensitivity tests of variations of costs and benefits of the project indicate that the project's viability is unlikely to fall below the minimum acceptable economic efficiency threshold (e.g., a negative NPV or an EIRR lower than 12%). Benefits would have to fall to less than 89% of those in the base case with no change in costs, costs would have to increase to 1.5 times those of the base costs, or costs would have to increase by 11% and benefits fall to 89% at the same time. The results of sensitivity tests (EIRR in percentage) to cost and benefit variation are summarized in Table A9.4

Present Value of

Total Costs (million

RMB, 12%) 960 220

1,180

Parameter (a) Delay the completion by one year

Higher capital cost (+lo%) (b) Lower benefits (- 10%) Combine (a) and (b) Lower value of PTS (15%) Lower traffic projection (- 10%)

Approx. EIRR (in

YO) 14 15

14

Switching values (c) Cost increase to reduce EIRR to 12% 125% (d) Benefit reduction to reduce EIRR to 20%

12% Combine (c) & (d) to reduce EIRR to 12% Cost: 11 1%; Benefits: 89%

EIRR (%) 14.3 13.3 13.2 12.2 13.5 13.3

NPV (million

RMB, 12%) 206

90

296

NPV (12%, millions of RMB)

255 167 141 23 182 155

Table A9.4: Sensitivity of EIRR to Cost and Benefit Variation

Variation Variation in benefits in cost -50 -40 -3 0 -20 -10 0 10 20

-40 12,39 14,32 16,lO 17,75 19,30 20,76 22,16 23,49 -30 10,88 12,68 14,32 15,85 17,29 18,65 19,93 21,17 -20 9,65 1 1,34 12,89 14,32 15,67 16,94 18,15 19,30 -10 8,64 10,23 1 1,70 13,05 14,32 15,52 16,66 17,75 0 7,78 9,30 10,69 1 1,98 13,18 14,32 15,41 16,44 10 7,04 8,49 9,8 1 11,05 12,20 13,29 14,32 15,31 20 6,39 7,78 9,05 10,23 11,34 12,39 13,38 14,32

Public Transport Component

PT2 Bus Priority Lanes

15. The economic benefits of the bus priority lanes include:

(a) Lower travel times and better regularity for bus passengers;

(b) Reduced accidents;

(c) Reduced emissions; and

(d) Net cost savings for the public transport system operations.

16. A summary of these benefits / savings for the Pilot Bus Lane for year 2007 is given in Table A9.5.

Table A9.5: Pilot Bus Priority Lane Summary of Benefits (RMB10,OOO)

17. It can be seen that the benefits are such that they cover the expected capital costs of Corridor No 3 bus lane within two years. It is believed that the other proposed bus lanes will also be economically viable, but each corridor will be evaluated individually in more detail during the design stage.

Comdor

I assumption) I Pilot Corridor

Reductions in PT operating costs

(Y 10,000)

345.0

Reduction in travel times (Y10,OOO)

144.0

Reductions in Accidents

(Y10,OOO) (25% of wage rate

Reductions in emissions

(Tons)

7.4 0.671

B. Financial Analysis

18. Project Cost Estimation and Financing Plan. The objective of the municipal finance analysis was to confirm that Xi'an municipality has sufficient financial resources to afford the investments. Specifically, the municipality should have sufficient resources to: (i) contribute the required counterpart funds; (ii) repay the amount borrowed from the Bank; and (iii) maintain and operate the assets created under the project.

19. Methodology. The financial analysis of this project focused on the fiscal sustainability of the municipality and IIC. The analysis looked at the total revenues and expenditures of the municipality and IIC. Total municipal revenues, infrastructure revenues and expenditures were projected by the municipalities up to 2010 based on conservative planning assumptions (especially in terms of revenues available for infrastructure). Given the lack of multi-year budgets and the high incidence of one-off municipal funding patterns (i.e., through land sales), these projections can, however, only be indicative estimates. (For the same reasons, less emphasis was placed on projections for the outer years, i.e., beyond 2010).

20. Overall economic situation. Xi'an has been enjoying rapid growth both in terms of the GDP per capita and fiscal revenue in the past several years. Its average growth rate of GDP per capita from 2000 to 2004 was 14%. Local government revenue during the same period grew at an annual average rate of 18% (see Table A9.10).

Table A9.10: Xi'an Municipality - Overall Economic Situation

21. The total investment on urban development was RMB 8 billion in 2004 and 10 billion in 2005. The urban development investments mainly focused on the development of road and drainage, development of infrastructure in three development zones, and environment and ecology improvements. The main funding sources for urban development include 1) government fiscal expenditure; 2) domestic bank loan and national bonds; 3) foreign funds; and 4) enterprise and local government self-funds and economic zone development funds. In 2004 and 2005, the funds contributed from these sources were 25%, 40%, 10% and 25% respectively. The trend continued in 2006, with the government keeping a similar level of investment on urban development as in the previous two years. The government will continue to enhance investment

-~ccumulated Debt Balance

Debt / GDP Debt / Fiscal Revenue Repayment / Fiscal Revenue

11,799

9% 116%

5%

CNY million

YO % %

15,199

11% 131%

5%

0% 0% 0%

18,499

11% 140%

5%

3,154

4% 53% 0%

21,699

12% 144%

5%

4,685

5% 64%

3%

24,799

12% 144%

5%

8,274

8% 96%

3%

27,799

12% 142%

5%

in urban development using government funds and foreign funds. The details of investment scale and fund sources are set out in Table A 9.1 1.

tble A9.11: Xi'an Municipality Total Investment in Urban Development (RMB million) I I I I I

Total

22. The data in Table A9.12 indicates that, the investment on urban road and drainage development is the core of overall urban development. In 2004, the total investment on urban road and drainage was RMB 3,891 million, about 49% of the total investment in urban infrastructure development. In 2005 and 2006, the investment on urban road and drainage was about 46.3% and 47.2% of the total investment on urban development. Due to continued large scale investment in urban road and drainage, the urban road development is relying more on bank loans (domestic and international) and national bonds. In 2004 and 2005, bank loans (domestic and international) contributed to approximately 80% of the total investment cost in urban road development. Since the implementation of the ADB financed Xi'an Urban Transport

the foreign funds have played an increasing role in supporting urban road development, which contributed to 14% in 2004 and 15% in 2005. In 2006, foreign funds were expected to contribute about 25% of the total investment in road and drainage development.

2005

2006 (planned)

Table A9.12: Investment and Fund Sources on

I

Source: Xi'an Municipal Construction Commission and the Mission's calculation

Government Expenditure

23 An ADB loan of $270 million (35.4% of the total project cost) was approved in 2003 to support the Government's development strategy by improving the urban transport system by (i) constructing an urban ring road; (ii) improving connector roads; (iii) urban transport facilities and services; and (iv) providing consulting services and training to enhance construction quality, road safety, vehicle emission control, and project monitoring and evaluation

Source: Xi'an Municipal Construction Commission and the Mission's calculation

10,000

100%

10,000

100%

Domestic Loan & Bond

2,480

25%

3,130

31%

Foreign Fund Other

4,060

41%

2,5 10

25%

920

9%

1,360

14%

2,540

25%

3,000

30%

23. In the 1 lth 5-Year Plan the government will enhance investments in several key areas, including urban development. It is planned that the total fixed-asset investment of Xi'an Municipality will keep an average of 15% annual increasing rate. To meet the large investment fund requirement, the government will implement other fund raising policies and mechanisms to support the fast urban infrastructure development, including 1) strengthening fee collection of urban utilities; 2) expanding leasing of reserved land; 3) selling national properties to private sector; 4) continuing to use variety foreign loans; 5) trying to issue 3 billion enterprise bonds; and 6) enhancing monitoring and supervision of government funds

24. Financial Analysis of IIC. IIC is a state owned company, on behalf of the Xi'an Municipal Government, specially focusing on fund raising and asset management for government financed urban infrastructure projects. IIC has implemented most of the recent urban development projects in Xi'an, which are financed by the government. The fund sources of IIC are mainly from government expenditure and bank loans. In 2005, the total investment implemented by IIC was RMB 4,356 million (about 44% of the total investments to urban development in Xi'an). Among IIC's investments, RMB 1,589 million was from government fiscal expenditure (about 60% of total government expenditure to urban development). IIC is also a platform for raising domestic funds on behalf of the government, including borrowing bank loans. In 2005, the total bank loan borrowed from both domestic and international sources was RMB 4,199 million. IIC is responsible for paying the bank loans, including both principles and interests.

25. Table A 9.13 is a general financial statement of IIC, including the revenue and expenditure in the last few years and an approximate projection for the next few years. The numbers in the table indicate that the investment funds are mainly from bank loans and government fiscal expenditure. It indicates that the government fiscal support kept an increasing trend and will continue at a high level in the next few years. The borrowings from bank loans also indicate an increasing trend in the last few years, but one that will decline in the next few years. However, overall investment in the next few years will continue at a high level.

26. The financial statement indicates that the revenue and expenditure are well balanced in the future years. However, repayment of bank loans in the next few years will rely large on financial support from government budget. To reduce the fiscal burden on the government, IIC is also trying to explore other ways to raise funds, which include restructuring government property, participating in operation of infrastructure projects, selling stocks in capital market, borrowing long term loans, etc.

Table A 9.13: Financial Statement of IIC (RMB million)

Annual Balance I 0.47 1 4.06 1 0.60 1 -1,799.68 1 194.11 1 160.91 1 2,088.11 1 1,350.04 1 806.68 1 -1,301.13 Accumulated Balance 0.47 1 4.53 1 5.13 1 -1,794.55 1 -1,600.44 1 -1,439.53 1 648.58 1 1,998.62 1 2,805.30 1 1,504.17

* include the revenue of selling land and others Source: Xi'an Urban Infrastructure Investment Corporation

27. Indebtedness. The Municipality's annual and projected debt is projected to be a very small fraction of the GDP (1 2% in 201 0). Between 2006-2010, (i) the government revenues will continue growing at an annual rate of 14%; (ii) The amount of new loans will remain at a level of RMB 4,000 million per year; and (iii) the repayment of bank loans, including principle and interest, will increase from RMB 600 million in 2006 to RMB 1,000 million in 2010. The projection shows that in 2010 the accumulated government debt balance would be about RMB 27,799 million, and the repayment of bank loans would take about 5% of local government revenue. In general, the repayment level would thus be affordable to the government, while the debt balance will be in a fairly safe level.

28. Debt Management Measures. Like most cities in China, the Xi'an government debt in urban infrastructure development presents an increasing trend. In the 1 1 th Five Year Plan period (2006-201 O), the investment on urban development will remain at a high level, about RMB 10 billion per year. The municipal government will continue to use government debt (national bonds, domestic bank loans, and foreign loans) to support urban development. However, the government will control the level of new debt and keep it to a reasonable level, about 40% of total investment in urban development projects. In the meantime, the government will take a series of measures to minimize the risks of government debt, including:

(a) Continue a high level of economic development and financial revenue growth. In the "1 lth Five Year Plan" period, it is planned that the GDP growth will sustain an average annual rate of 14%. Government fiscal revenue rate will remain at 14% per annum. According to the latest statistics, the government fiscal revenue in 2006 increased by 17.1 % compared to 2005.

(b) Establish earmarked debt repayment funds. A special account has been established in the Construction Commission for debt repayment. In this account, the total fund was RMB 900 million in 2005 and will continue to grow in the following

years. Both the municipal financial bureau and XUICC will also develop and implement similar measurement;

(c) Enhance the use of long-term as opposed to short term loans. The normal foreign loan period is about in 20-30 years. Domestic loan periods are about 7-8 years. Recently, domestic banks have started to issue long-term loans with 15-20 year repayment periods. The government will restructure existing loans and try to use long-term borrowing as much as possible;

(d) Invite private investors in urban development. The government and relevant agencies will carefully evaluate and select some profitable infrastructure projects and invite non-government sector andlor private investors to develop and operate such projects; and

(e) Lease and corporatize operations of profitable or semi-profitable urban infrastructure. The government will use the funds raised to support other infrastructure development.

29. Based on the above analysis, it can be said that the Xi'an government should not face serious debt repayment problems in the short to medium term future. Economic development in Xi'an Municipality will continue at its current pace if does not accelerate. This will generate government fiscal revenues high enough to support urban development financial requirements and meet repayment commitments for previous investments. The municipal government economic development target will be met and even exceeded. In addition, Xi'an, being in the western part of China, is part of the focus of the Central Government's financial and other support. In response to this Central Government policy, domestic banks must provide special assistance to development in poor areas. When necessary, they are postponing principle repayment and otherwise working with municipalities to help them meet their financial obligations. All of this suggests that the Xi'an Municipal Government will not face serious debt repayment problems in the next 5-10 years.

Annex 10: Safeguard Policy Issues

CHINA: Xi'an Sustainable Urban Transport Project

A. Social Safeguards

1. The project has five components involving civil works. They are located in and around Xi'an City, including a road network component in the neighboring Huxian. Project works include both new construction and rehabilitation works that would have resettlement impacts in both in the urban area and rural settings in the peri-urban area.

2. Following the Chinese laws, regulations and World Bank OP 4.12 on Involuntary Resettlement, the Xi'an Project Office has prepared five component resettlement action plans (RAP), summarized into one project RAP. A resettlement policy framework (RPF) was also prepared for the Public Transport component, excluding the Southern Interchange. RAPs will be prepared for the public transport component (other than the southern interchange which already has a RAP) in accordance with the RPF once the sites are identified. The resettlement planning work was carried out by the line agencies under the guidance of the Shanxi Academy of Social Science Academy. Planning work included project impact inventory surveys, social economic surveys and consultations over resettlement and livelihood rehabilitation strategies. The social economic surveys also confirmed that there are no ethnic minority communities impacted in the project areas.

3. Major impacts relate to land acquisition and demolition of buildings. The project will require the acquisition of land, relocation of houses, compensation for businesses and relocation of infrastructure. The overall level of resettlement and land acquisition is modest among urban transport projects undertaken to date in China. The project will require the acquisition of 1,423.108 mu of land, of which village land is 1,3 13.108 mu and 1 1 Omu is state land. Most of the village land is cultivated land. The project would also require the demolition of 72,280 m2 of housing areas, including 3 1,075 m2 of residential areas and 41,205 m2 of non-residential areas. The project would affect a total of 2,385 people in 527 households, including 1,538 people through loss of land, 667 people through loss of houses, and 180 people at workplaces Project impacts are detailed in the RAPs. Most of the resettlement impacts in rural areas are relatively scattered and marginal, considering the small scale of civil works and the significant share of household income from non-farm activities. Nine small factories and 114 small shops will be affected. Most of them are small ones. Table A 10.1 below table summarizes the impacts.

Table A1O.l: Summary of Resettlement Impacts I I Southern I

Item

RNC Xi'an

Unit

RNH Huxian Road

Network

CH 1 Weiyang Palace Roads

AQ 1 Air Quality

Monitoring Center

- - -. - . . -

Interchange

Total

Land 1 28111120 1 15167 1 621276 1 15/75 1 37311538 Total I HWPop 1 391375 ( 35911435 1 521224 1 621276 1 15/75 1 52712385

4. The following were the guiding principles for developing the RAPS:

(a) The original living standards of all affected people should be improved or at least be restored;

(b) Resettlement plans, sites of new houses, standards and building areas should be determined after consultation with the affected people;

(c) For all affected buildings, the compensation should be calculated on the basis of the current replacement cost without consideration of depreciation;

(d) Compensation rates, location of new residential sites and areas should be formulated after consultation with the affected population;

(e) Redistribution of remaining farmland among the farmers is the bdamental measure for livelihood development and must be carried out for all seriously affected villages;

(f) All compensation funds should be paid before acquisition;

(g) Construction units are responsible for restoring temporarily used land to its productive status after the leasing period; and

(h) Special assistance will be provided to the vulnerable households identified during the detailed planning and implementation process.

5. Economic rehabilitation. The village rehabilitation approach was developed in consultation with affected farmer groups. The project will follow a rehabilitation strategy combining land-for-land measures and cash payment options. Redistribution of the remaining village land is the primary measure. Land to be redistributed will be from village reserved land, returned contract land and land to be developed. The land compensation fund is retained by the villages for collective use following villagers' decisions. This measure is planned for the Huxian road network, the Air Quality Monitoring Center, and the Weiyang Palace road network subcomponents, following consultations with the villagers. For the Southern Interchange subcomponent, cash compensation will be used.

6. Relocation of households. The project would require the relocation of 667 people from 154 households. Due to the linear nature of the project road works, they are all scattered and no concentrated settlements are affected. In the peri-urban areas, the number of households to be relocated in each village is relatively small. They can all be resettled within existing villages. They will be allocated new plots for their new house construction. These sites will be selected in consultation with the relocating households. County and township governments will be responsible for their design and construction. All relocating households will be provided access to basic infrastructure services either through sharing existing infrastructure or new infrastructure to be provided by the project. All houses will be paid at replacement cost without depreciation, and without deduction of salvageable materials. The resettled households will be responsible for their new house construction in rural areas. Where households have difficulties in house construction, the government or village committees will assist them. In the "urban villages", households losing residential houses will be provided the option of self-resettlement with cash payment or replacement houses according to their own preference. The project office and local governments assisted in collecting information on alternative housing in nearby locations and in coordinating with the developers. This helped the households finalize their relocation decisions.

7. Rehabilitation of infrastructure and businesses. Infrastructure affected is mainly power, telecommunications and transport facilities. For these facilities, compensation based on the reconstruction cost will be paid to the government departments who are responsible for them. The government departments will be in charge of the reconstruction. Most businesses affected are small family business or village workshops. They will be compensated in cash and assisted in reestablishing their business if they wish. Surveys during preparation of the RAP indicated that the temporary loss of income by small business due to relocation would be minimal as the move would be done in a day and the customer base would be retained.

8. Consultation and participation. Resettlement planning followed a participatory process. Affected villagers and various government agencies participated in the social economic survey, impact census, inventory and formulation of the compensatory and livelihood rehabilitation plan. Project information, relevant government policies and regulations were broadly disseminated through village meetings in the project areas. Project RAPs have also been disclosed. A project Resettlement Information Handbook will be developed and distributed to every affected farmer household.

9. Resettlement organization. IIC will assume the overall responsibility for the implementation of the resettlement program. IIC will work with the district and country government offices, on a contract basis, to implement the resettlement programs. These offices will employ competent and experienced staff. Their respective responsibilities and functions are detailed in the RAPs. Training will be provided to the project staff.

10. Grievance redress. A mechanism has been established for grievance redress. Grievances can be filed both orally and in writing. Starting at village and neighborhood committee level, the grievances can be elevated to countyldistrict, city level if they are not happy with the resolution at the lower level. The affected people could also file their cases in court if they are not happy with the resolution by the project authority. All grievances and their resolution will be recorded. This mechanism has been disclosed to the local population and will be further disseminated through the Resettlement Information Booklet.

11. Monitoring and Evaluation. Both internal and external monitoring is planned for resettlement implementation. The resettlement offices will be responsible for the internal monitoring. An external institute will be appointed to undertake the independent monitoring of the resettlement program. The monitoring scope, targets, indicators, procedures, methodology and reporting requirements are described in the RAPS.

12. Resettlement Cost. The total resettlement cost is RMB 200 million, equivalent to US$38.1 million. This budget includes the compensation fund for land, houses and attached structures, infrastructure and trees, various relocation allowances, business loss during transition, special allowances for vulnerable groups, management and monitoring costs, and contingencies. All resettlement costs will be financed by domestic funding.

13. The Public Transport Component includes the construction of, bus corridor improvements, a bus depot and two passenger transport terminals. Some sites are yet to be identified and confirmed and resettlement impacts are yet to be determined, following a participatory approach with the citizens. Therefore, where applicable and with the exception of the Southern Interchange, a resettlement policy framework (RPF) has been developed to guide future resettlement planning. A sub-component RAP will be developed for the Southern Interchange.

14. This policy framework is developed according relevant local laws and regulations as well as World Bank OP 4.12 on Involuntary Resettlement. It describes the overall legal framework, planning principles, procedures, compensatory and rehabilitation approach, consultation and participatory requirements, grievance redress mechanisms, organization and monitoring arrangements.

B. Environmental Safeguards

15. Climate. The city of Xi'an is located in the middle of the Guanzhong Plain, about 400 m above the sea. The project area is in the warm temperate zone where a monsoon climate prevails. The annual precipitation averages 580.2 rnrn, with 45% to 60% in the months from July through September. The temperature over a year averages 13.3'~. The prevailing wind is northeast in the winter and southwest in the summer with annual average of 1.7 mls. The frost free period over a year is 2 10 days.

16. Water Quality. There are a number of rivers within Xi'an, which are mostly part of the Wei River System within the Yellow River Basin. However, the proposed project will not have a direct impact on these rivers.

17. Cultural Heritage. Due to more than three thousand years of history, there are rich cultural heritage resources in Xi'an Municipality, including 34 national level, 72 provincial level and 176 city/county relics as well as 2944 other relics and archaeological finds. The major cultural heritage sites related to the project include the Ming Wall and the Weiyang Palace relic site in Han Chang'an.

(a) The Ming Wall is a rectangular wall enclosing the central part of Xi'an city, with a perimeter of 11.9 km. Built in the 1 4 ~ ~ century, it has been renovated three times, most recently in 1983; and

(b) Weiyang Palace relic site is within the Han City protection area. Han Chang'an protection area is about 36 km2. Han Chang'an was the capital of Han Dynasty (ca. 200 B.C.), and the Weiyang Palace is one of the major palaces. Abandoned in the 6th century, the existing relics are mainly compacted soil foundations, ruins of earth walls, and underground roads and water canals. As development in the area is restricted, the area is largely farmland. There are 55 villages in the area with a total population of 53,178.

18. Sensitive Receptors. The baseline survey also identified other sensitive receptors to be potentially impacted by the project. These are mainly residential building, schools, and hospitals. The impacts would be due to traffic noise, air quality and airborne dust.

19. Air Quality. Baseline environmental quality is assessed through monitoring and collection of available data. In summary, the air quality is in compliance with relevant standard in Xi'an, except for PMlo (29% over standard). This is because Xi'an is on the loess plateau and influenced by the continental monsoon. A PMlo source appointment study in July 1998 indicated that vehicular emissions represented 25% (including 12% of secondary PMlo) of local emission sources. With the rapid increase of the vehicle fleet in Xi'an, it is foreseeable that vehicle contribution to air pollution in Xi'an will continue to increase.

20. Noise. The analysis of traffic noise monitoring results indicates that overall compliance with Urban Ambient Noise Standards.

21. Baseline conditions in Huxian. Baseline environmental information for Huxian is also monitored and assessed, which indicated generally good air quality (except PMlO for the same reason), good water quality for Lao River, and a good acoustic environment.

22. The project is expected to provide substantial positive environmental benefits through the investments in improving traffic efficiency, increasing pedestrian and bicycle facilities and promoting public transport, strengthening motor vehicle emission inspection control, and protecting cultural heritage. Environmental benefits will also come from the institutional development of city government agencies with particular emphasis on traffic management, and environmental protection.

23. Given the strong focus on environmental improvement and cultural heritage protection in the project design, the negative environmental impact of the project will be limited, site specific, and can be properly mitigated through adequate project design and good construction management practice.

24. Careful attention has been paid in the selection of alternative investments to minimize land acquisition, and permanent loss of farmland. Such losses are relatively small and scattered, and have a marginal impact on the affected households since income from agricultural is not a significant portion of total income. Details are provided above in the Social Safeguards section of this Annex.

25. The negative impacts during construction include dust, noise, land acquisition and resettlement, damage of surface vegetation, soil erosion and waste material disposal, construction wastewater, traffic impact, social disturbance and safety, impact on utilities, potential impact on

underground cultural relics, and visual impact. The main mitigation measures are summarized below:

26. Social Disturbance. The construction of urban roads will have an impact on traffic flow, particular during the daily rush hours when the traffic is particularly heavy. The residents will be affected through traffic disturbance, increased difficulties to access stores, workplaces, services, schools and residences near the project roads, possible bus route changes, and construction safety risks. The impact will be mitigated by well designed traffic measures during construction, and prior information on the construction schedule via media announcements. Safety shields will be provided in areas where there are overhead construction activities on the access routes and sidewalks.

27. Ecological impact. The major impact will be due to dust, spoil disposal and temporary occupation of land. Mitigation will be through careful balancing of cut and fill, proper covering of temporary stockpiles of spoil to minimize erosion; protection of existing trees and water spraying to minimize the impact of dust on roadside crops.

28. Noise. Mitigation measures include the careful scheduling of construction activities near sensitive sites such as schools and hospitals. Prior consultation with these sensitive receptors will be conducted as necessary. Night-time construction will be avoided. In case it is necessary, notices will be published, there will be prior public consultation, and necessary mitigation measures shall be adopted (e.g. temporary noise barrier, no use of high-noise equipment). The construction supervision team will be equipped with portable noise meters to monitor the noise level at the sensitive receptors.

29. Air pollution. The mitigation measures to be adopted (with clauses included in the EMP attached to construction contracts) include frequent water spraying on construction site and access roads to suppress dust, covering of trucks transporting bulk materials and timely site clean up after construction. The frequency of water spraying near sensitive receptors will be increased as needed. Access roads will be paved with gravel to reduce generation of air-borne dust.

30. Wastewater. Wastewater from construction camps will be collected into septic tanks. Construction slurry will be filtered to remove fine solids prior to discharge into collection facility and not allowed to be discharged into water bodies nearby.

3 1. Spoil and Solid Waste. Spoil will be collected and hauled to the Dengfengge landfill in Xi'an and Quyou landfill in Huxian. Top soil in Huxian will be sent to Cangyou Town for the poor land improvement program (which is to improve the quality of 1,330 ha farmland).

32. Vibration. Careful measures are planned and construction activities will be guided by professional specialist from Xi'an cultural heritage authorities. Activities which generate heavy vibration will be banned, and construction activities using equipment that generates heavy vibrations will not be permitted during night time construction. A major concern in this project is the potential vibration impact on cultural heritage sites. The cultural heritage sites within the scope of the impact assessment are at least 30 m away from project activities and beyond the adverse impact scope of vibration. In addition, heavy vibration equipment will not be used in the

Weiyang Palace site, on the MWC bicycle route and the road schemes in or adjacent to the MWC.

33. Cultural heritage. As the project is designed with a clear objective to protect cultural heritage sites, no such site will be directly impacted by construction activities or by vibration from them, and careful measures will be adopted where construction is near the cultural heritage sites. Chance find procedures will be put in place, within the established policy framework described in section D6.

34. The negative impacts during operation include noise and vibration, air pollution, road safety, wastewater from the bus depot and the air quality monitoring center. These impacts were addressed and necessary mitigation measures were developed in the component EIA reports and summarized in the Consolidated EIA. The main mitigation measures are summarized below:

35. Air quality. The air modeling results that although the concentration of NO2 on the road sides from motor vehicle emissions will increase as the traffic flow increases after the project road schemes are operational, the NO2 concentration on most of the road sections under the full design traffic flow conditions will not exceed the standard. From the city wide perspective, however, as the project will reduce traffic congestion, it will minimize stop and go traffic, therefore it is expected that motor vehicle emissions for the same amount of traffic volume and distance traveled will decrease. The project also includes a component for the development and implementation of measures to further mitigate the vehicle emissions, including an Motor Vehicle Emission Control Plan.

36. Noise. Modeling was conducted for the noise impact for roads in Xi'an for withlwithout project scenarios. In general, the noise level on these receptors is projected to be less than that in the without-project scenario. Noise prediction for Huxian indicates noise level compliance with standards except for one village which noise will exceed standard at night time by 5.8 dB(A) in 2010. The principal mitigation measure will be the provision of noise insulation windows with ventilation duct at the sensitive receptors, where noise levels are projected to increase.

37. Water. The key impact on water quality is wastewater from the bus depot and to a lesser extent from the passenger transport terminals. Wastewater will first be discharged to onsite septic tanks. The supernatant from the septic tanks will be discharged to the municipal sewer, while the sediment and sludge will be removed and disposed of in local landfill or other dedicated facilities. All effluent from bus washing will be collected. The effluent will be treated on site first through an oillwater separator to remove oil and also a sedimentation tank to remove the solids. Effluent from the oillwater separator and sedimentation tanks will then be discharged to municipal sewer and treated at a centralized wastewater treatment plant before discharged to the environment.

38. Fuel storage management at the Bus Depot. The storage facility will be designed with full consideration of safety issues with an underground storage tank constructed to prevent seepage. An emergency response plan was in place and training will be provided to staff on safety operations and emergency response.

39. Since the sites for the Eastern and Southern City Passenger Transport Interchanges and the Xinzhu Bus Depot were not finalized at the time of appraisal mission, the EIA for Public Transport Component only provided a general description on potential environmental and social impacts and mitigation measures. To address the site-specific environmental and social issues later once these sites are finalized, an EIA Framework for the Public Transport Component was developed in the EMP, which provided guidelines on site selection criteria, key issues to be addressed, public consultation requirements and approval procedures. Based on the framework, this component EIA was updated after the sites were finalized early 2008 and was reviewedl commented by the Bank. The final Component EIA report was submitted and found acceptable in May 2008 and was disclosed locally on May 8, 2008 and Public Information Center of WBOB.

C. Alternative Analysis

40. Alternatives analysis was conducted at various levels, including a "without project" scenario, project planning and project design.

41. Annex 4 describes the current transport issues in Xi'an. Without the project many of these issues would be expected to become more acute. Without improvement of the Ring Road intersections, traffic congestion will become more and more serious at these intersections along with rapid motorization, and eventually become a bottleneck to the road network development in Xi'an. If current issues of public transport in Xi'an are not well addressed, the effectiveness and the service level of public transport will further decline, which will inevitably lead to a substantial increase of private vehicles causing more traffic congestion and air pollution issues. Continuation of current traffic management practice will obviously not be sustainable for Xi'an. The need for a more comprehensive approach to traffic management is clearly recognized to broaden current practices from police operations to include traffic management planning, design and implementation of on-street physical measures, use of traffic management and ITS tools to help establish the foundations for future TDM, better provision for pedestrians and cyclists, parking management and a comprehensive parking strategy, and better road safety.

42. The Weiyang Palace site is a world-class cultural relic and has strong potential to become a new tourist attraction in Xi'an. Without proper protection and exhibition of the site its important archeological, education and tourism value will not materialize, and the Han City area will very likely be encroached gradually by rapid economic development. Motor vehicles are the main mode of transport for tourists into the city every year, contributing to the already severe traffic congestion and air pollution situation, particular in tourism season. Without development of alternative solutions, such a situation will continue to deteriorate with an increase of tourists in the future. Based on the current increase of motor vehicles in Xi'an, it is foreseen that vehicle emission pollution will increase rapidly (confirmed by model estimation of Xi'an EPB) unless adequate measures are taken.

43. At project design level, in all project components, various alternative designs, alignments and sites were identified during the project feasibility study and environmental assessment stage. The EA team worked closely with the engineers and planners, and communicated the results of environmental analysis of the alternatives to the engineers and planners which, where

appropriate, have been incorporated into the decision making process. The objective of the analysis of alternatives during the EA was to identify and select the project planning and design alternatives with the least adverse impact so that the adverse impacts of the project on the natural environment and local communities can be avoided or minimized. The alternatives evaluated for various components are summarized as follows:

44. RNC 11 First Ring Road YuxiangMen. The alternative of a direct four lane dual carriageway underpass for the ring road versus the conversion of the current round about at the ground level to traffic light controlled intersection was considered. The first alternative was selected due to its low construction phase impacts and superior operational stage results for the environment and traffic flows.

45. RNC 12 First Ring Road ChangleMen. The alternative of a direct four lane dual carriageway underpass for the ring road versus the underpass pass only for north to south traffic was considered. Although the first alternative has higher impacts on utilities and the moat alongside the city wall, it can best solve the traffic congestion and can best meet the project Transport target. It was therefore adopted for the project.

46. RNC 13 First Ring Road (S). The alternatives considered were an underground tunnel from the west to east ends versus an underpasses only under the sections of the ring road near Hanguang gate, South gate and Heping gate. The first alternative was adopted for the project due to the better cultural conservation, lower emissions and noise impact and better solution for the traffic congestion in the area.

47. RNC 21 Second Ring Road NE Interchange. Several alternative configurations for a four level interchange were examined. The one with least land occupation and lowest construction phase impact was selected.

48. RNC 21 Second Ring Road SE Interchange. Several alternative configurations for a partial interchange were examined. The one with least land occupation and lowest construction phase impact has been selected.

49. RNC 31 TaibaYZhangba Road. A partial interchange versus a full four - level interchange was considered. Although the fill interchange has higher impacts overall, it best resolves traffic congestion and meets the transport objective at the location so was selected for the project while mitigation measures are to be taken to address the higher impacts.

50. A bridge and an underpass were considered for the RN3 Lvgong Rail Crossing. Even though Huxian has heavy rains in the summer months causing flooding, increasing the burden on the local drainage system, which could interrupt traffic at underpasses, the plan with the underpass was adopted for the project, including sufficient water pumps. This alternative produces less impact from emissions and noise and no visual intrusion.

5 1. Public Transport sites for the bus depot and the bus passenger transport terminals will be selected with consideration of urban planning, traffic demand and management, less land acquisition/resettlement and environmental impact.

52. Two alternative sites were considered for the AQ 1 Air Quality Inspection Center - at Lintong and Chang'an. The Lintong site is better from the environmental perspective but has no expansion potential. The Chang'an site was finally selected as it provides expansion potential - with necessary mitigation to address the environmental concerns.

53. CH 1 Han Chang'an Weiyang Palace Roads

(a) Two alternatives for the scope of road to be protected were developed for comparison. The alternative with better cultural property protection, cultural relic conservation, tourist and tourism development and access to the site, although higher in construction cost, was selected for the project; and

(b) Three road surface pavements were compared and evaluated. The alternative with better resemblance to the ancient architect and road style, while suitable for electrical vehicle operation and the problems of dust and drainage, was selected for the project.

54. CH 2 Ming Walled City Bicycle Routes. Three alternative routes were considered, which provide connections between different tourism spots, traditional streets, famous restaurants, with consideration of local demand for shopping, working and education. The selected route has the smoothest alignment, shortest distance, and reasonable coverage of Xi'an city.

D. Environmental Management Plan

55 . A stand-alone Environmental Management Plan was developed for the project, which details the environmental management organization and responsibilities, mitigation measures, capacity training plan, monitoring plan, and budget estimates of EMP implementation. The EMP will be incorporated into bidding documents and contracts to ensure effective implementation. The environmental management responsibilities of key organizations are set out below.

56. Xi'an Urban Transport Project Management Office (PMO). Will handle at the request of IIC and on an "as needed" basis any policy or institutional coordination issues related to the implementation of the EMP.

57. Xi'an Infrastructure Investment Corporation (IIC). IIC will be responsible for overall implementation of environmental mitigation measures. More specifically, they will (i) organize environmental training for IIC, Contractors and Supervision Engineers; (ii) develop an environmental protection work plan; (iii) ensure EMP provisions are incorporated into bidding documents and contracts; (iv) hire construction supervision engineers with clear requirements for environmental supervision; (v) provide guidance to contractors and supervision engineers on environmental mitigation measures implementation during construction; (vi) supervise implementation of environmental mitigation measures during construction; and (vii) consolidate EMP implementation reports and communicate with the World Bank. IIC will have dedicated environmental staff responsible for these environmental issues, and liaison with regulatory agencies.

58. Contractors. Contractors are responsible for implementing the environmental mitigation measures as specified in contracts; developing environmental protection working plan for its contract; reporting to IIC new environmental issues or chance-find of any cultural relics encountered during construction; carrying out continued public consultations for construction. Each Contractor will be required to appoint one to two full time environmental staff responsible for environmental management under its contract.

59. Construction Supervision (CS) Engineers. CS Engineers will supervise both engineering quality as well as the environmental performance of contractors; identify deficiencies in the contractor's environmental performance and provide corrective instructions; report the EMP implementation status to IIC. Each CS engineering company will be required to appoint one environmental supervision engineer.

60. Xi'an Environmental Monitoring Station @EMS) will conduct environmental monitoring according to the EMP Monitoring Plan for both construction and operation stages; provide monitoring reports to IIC; and recommend corrective actions based on analysis of monitoring data.

61. A two tier monitoring program has been developed for this project: daily and regular monitoring is to be carried out by contractors and construction supervision companies, and periodical compliance monitoring by professional monitoring stations.

E. Public Consultation and Information Disclosure

62. Consultation. Two rounds of public consultation were conducted for all project components around Xi'an and in Huxian by the EA team. The first round was conducted in March 2007 during the EA preparation stage, through public meetings and the distribution of 700 questionnaires. The concerns raised related to compensation for resettlement, construction noise, dust and disruption to traffic, rehabilitation of sites after construction, implementation of mitigation measures and the extent of continued public consultation. All these concerns were dealt with in the RAP and EMP.

63. The second round of public consultation was conducted in May 2007 after the draft EIA reports had been prepared, to explain the result of impacts assessment, mitigation measures and environmental management plan. Different methods were used for public consultation, including a public opinion questionnaire survey (556 responses were received from 600 questionnaires), public meetings and interviews with special groups, individuals and other stakeholders with a focus on the project directly affected people. For the public transport component, a new round of consultation was carried out in April 2008 after the sites for two bus interchanges and one bus depot were finalized and Component EIA was updated.

64. Noise and dust were the primary concerns during construction while noise and protection of cultural relics are the main concerns of the surveyed public for the operation phase. The public was generally satisfied with the mitigation measures proposed by the EA team.

65. As part of the project involves national level cultural properties, specific interviews were made with cultural property administrative authorities to solicit their concerns and opinions on project itself as well as mitigation during construction and operation phases. Their concerns

were mainly about minimising vibration during construction (which has been dealt with in the EMP) and the overall effect of the project on cultural heritage sites which was assuaged when details of the project were explained.

66. Disclosure. The six component EIA reports and the Consolidated Environmental Assessment (CEA) were disclosed in the Xi'an Public Library, Huxian Government Offices, and meeting houses of affected-villages in May, 2007 with announcement made in Xi'an Daily on May 21,2007. The CEA was finalized and disclosed following the second of public consultation. Details are shown in Table A1 0.1.

Table A1O.l: Disclosure of Safeguards Information

Time

May 18/07

May 21/07

May 19/07

May 17/07

May 25/07

July, 2007

May, 2008

Venue Internet

Newspaper (Xi'an Daily) Xi'an Public Library

Huxian Government Offices and meeting houses of the three project affected villages Xian Public Library

Xian Public Library

Xian Public Library

Method Public notice

Public notice

EIA report displays EIA report display

CEA report display CEA report display Newspaper advertisement and EIA report display

Content Project information and invitation for public comments and inputs Announce the availability of EIA reports and invitation for public comments and inputs Six draft component EIA reports have been placed in the Xi'an library for public review The draft Huxian component EIA report was placed in these locations for public review

The draft CEA was placed in the library for public review The final CEA report was placed in the library for public review The updated Public Transport Component EIA was placed in the library for public review

Annex 11: Project Preparation and Supervision

CHINA: Xi'an Sustainable Urban Transport Project

Planned Actual PCN review 11/29/2005 11/05/2005 Initial PID to PIC 0211 612006 0211 612006 Initial ISDS to PIC 07/26/2006 07/26/2006 Appraisal 0911 012007 1011 512007 Negotiations 05/07/2008 05/08/2008 Board/RVP approval 06/24/2008 Planned date of effectiveness 09/23/2008 Planned date of mid-term review 06/30/20 12 Planned closing date 06/30/20 1 5

Key institutions responsible for preparation of the project:

(a) Ministry of Finance;

(b) National Development and Reform Commission;

(c) Shaanxi Provincial Government, including SPDF, SDRC, SPCD, and SPEPB;

(d) Municipal Government of Xi'an; and Development and Reform Commissions Urban Construction, Finance Bureaus, and other associated organizations;

(e) Design institutes; and

(f) Other institutes or organizations.

Bank staff and consultants who worked on the project included:

Name Title Unit John Scales++ Co-TTL EASCS Rakhi Basu++ Co-TTL EASTE Edward Dotson++ Ex TTLIConsultant EASTE Wenling Chen Junior Professional Associate EASTE Xuan Peng Team Assistant (Beijing) EACCF Maria Luisa Juico Team Assistant (HQ) EASTE Wenlai Zhang Transport Specialist EASCS Rod Stickland* Highway Planner/Consultant EASTE Miguel Angel Reguero Highway Engineer/Consultant EASTE Gordon Kirkwood Neilson PT Specialist/Consultant EASTE Samuel Zimmerman UT Advisor1 ETWTR S yed Ahmed Legal Counsel LEGES Carlos Escudero Legal Counsel/Consultant LEGES

Brendan Finn + PT Specialist/Consultant Irish CTF Gladys Frame Traffic EASTE

ManagementIConsultant Andre Pettinga Bicycle Network Dutch CTF

DesignIConsultant Rafael Fontes Cultural Heritage Spanish CTF

Specialist/Consultant Jitendra Shah** AQM Specialist EASRE Hiroshi Ono AQM Specialist EASRE Chuntai Zhang Municipal Finance EASTE

Specialist/Consultant Jian Xie* * * Environment Specialist EASRE Wang Peishen Environment Specialist EASCS Liu Zhefu* * * * Resettlement EASCS Chaohua Zhang Social Scientist EASSO Zeng Jun Social and Resettlement EASCS

Specialist Li Xiaohua Social Assessment EASRE

Specialist/Consultant Geng Yi FM Specialist EAPCO Yang Dawei Procurement Specialist EAPCO Fang Ke Urban Planner SASDT Hu Shunong Civil Engineer EASCS

* Initial missions only - later Miguel Reguero ** Initial missions only - later Hiroshi Ono

*** Initial missions only - later Wang Peishen **** Initial missions only - later Chaohua Zhang and Zeng Jun

+ Initial missions - later Gordon Kirkwood Neilson ++ Ed Dotson was the TTL from inception through March 2006

Rakhi Basu was the TTL from March 2006 until January 2008 John Scales and Rakhi Basu are the co-TTLs, beginning in January 2008, as of the date of this document.

Bank funds expended to date on project preparation: 1. Bank resources: US$719,020 2. Trust funds: US$51,795* 3. Total: US$770,8 15

Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$15,000 2. Estimated annual supervision cost: US$90,000

* Out of a total trust fund amount of US$176,999, US$125,204 was used to fund an ESW of broader scope.

Annex 12: Documents in the Project File

CHINA: Xi'an Sustainable Urban Transport Project

1. Feasibility Study on a Traffic Guidance System for Xi'an (Xi'an Shi Jiaotong Youdao Xitong Kexingxing Yanjiu Baogao) (English, undated), Xi'an Public Security Bureau Traffic Police Detachment (XPSB)

2. "Traffic Control Improvement Sub-project of Urban Comprehensive Transport Improvement Project in Xi'an, The Feasibility Study Report, Engineering Design Academy of Chang'an University, June 2007'' (Hard copy, English; electronic copies English and Chinese), XPSB

3. A3 Maps of ATC signal locations, CCTV locations and VMS locations (Hard and electronic copies, English), XPSB

4. Xi'an Urban Air Pollution Comprehensive Monitor and Control Construction Project Feasibility Research Report (in English), Xi'an Environmental Protection Bureau

5. "Feasibility Study Report of the Bikeway Project in the Ming Dynasty City Wall Travel Function Area", Engineering Design and Research Institute of Chang'an University, May 2007 (English, hard copy)

6. A3 colored map showing Bicycle Route classified by type of measure (Three hard copies, English)

7. Junction designs for Bei Xin JieIXi Qi Lu; Li Xin JieITang Fang Jie; and Dong Xin JieIShang Jian Lu. Road section design for Bei Xin Jie south of Hou Zai Men. (Electronic and hard copies, Chinese)

Safeguards

8. Outline of 1 lth Five Year Plan for Socioeconomic Development of Xi'an Municipality, in Chinese

9. Application Document for GEF Fund, October 7,2006, in Chinese

10. Urban Public Transport Plan of Xi'an Municipality, by Xi'an Communication Bureau and Chang'an University, May 2006, in Chinese

1 1. Outline of 1 lth Five Year Plan for Socioeconomic Development of Hu County, February 8,2006, in Chinese

12. Procedures and Document Required for Investment Project Approval, Xi'an DRC, March 2006, in Chinese

13. Statistical Abstract of Socioeconomic Development of Xi'an Municipality (2005), Xi'an Statistical Bureau, February 2006, in Chinese

14. Notice on Mobilizing Feasibility Study for Xi'an Urban Comprehensive Transport Improvement Engineering Project and Relevant Issues, Xi'an Municipal Development and Reform Commission, July 14,2006, in Chinese

15. Domestic Procedures for EIA, informal, April 2006, in Chinese

16. TOR for Traffic Survey, Traffic Research Institute, April 2006, in Chinese

17. TOR for Bicycle Lane Sub-project, October 2006, in Chinese

18. TOC for Han Palace Sub-project, October 2006, in Chinese

19. TOR for Traffic Management Sub-project, October 2006, in Chinese

20. A set of government financial data, received in June and July

21. Consolidated Environmental Impact Assessment Report, Xi'an Environmental Science Institute, July 2007

22. Environmental Management Plan, Xi'an Environmental Science Institute, July 2007

23. EA Executive Summary, Xi'an Environmental Science Institute, July 2007

24. Environmental Impact Assessment Report for Xi'an Road Network Component, Xi'an Environmental Science Institute, June 2007

25. Environmental Impact Assessment Report for Huxian Road Network Component, Xi'an Environmental Science Institute, June 2007

26. Environmental Impact Assessment Report for Public Transport Component, Xi'an Environmental Science Institute, June 2007 (Draft)

27. Environmental Impact Assessment Report for Bicycle Route in Ming Wall City Component, Xi'an Environmental Science Institute, June 2007

28. Environmental Impact Assessment Report for Road Network in Han City Component, Xi'an Environmental Science Institute, June 2007

29. Environmental Impact Assessment Report for Air Quality Management Component, Xi'an Environmental Science Institute, June 2007

30. Memo of Comments by the Bank on Chinese EIAs, February - May 2007

Public Participation

3 1. lS' round reports (CN and EN) provided to Rakhi and Mariana in hard copies

32. Bank comments on lSt round report (in AM Annex)

33. A summary of issues raised under lSt Round public participation

34. 2nd round work plan sent via email

35. (i) Bicyclist/ foreign tourist surveys, (ii) responses to team design questions from the February mission, and (iii) responses on the solutions to public raised issues in FSR

Procurement

36. Xi'an Sustainable Urban Transport Project (XSUTP) Procurement Capacity Assessment Report, the World Bank, second draft dated May 15,2007, revised third draft dated July 10,2007

37. Procurement manual/instruction, IIC (in Chinese), first draft in June 2007

38. Procurement Packaging Plan, IIC, discussed in June 2007

Financial

39. Xi'an Sustainable Urban Transport Project Financial Management Assessment, Prepared by Yi Geng, Financial Management Specialist, EAPCO, Reviewed by David I, Sr. Financial Management Specialist, EAPCO

40. Xi'an Sustainable Urban Transport Project Draft Financial Management Manual (in Chinese) not finalized, PLGEO, June, 2007

Consultant Reports

41. Urban Design of the Cultural Heritage Component, Mission Report Mission Report from 23d June 3oth June, 2007 By Hans Carl Jacobsen, Architect, Erik Holm-Petersen, Economist/Tourism Planner, Carlbro (English electronic)

Others

42. Summary English version of Xi'an Urban Traffic Management Plan (Xi 'an Chengshi Daolu Jiaotong Guanli Guihua) (September, 2003), Xi'an Public Security Bureau Traffic Police Detachment (XPSB)

43. English version of Cost Estimates for a Traffic Guidance System for Xi'an (October, 2004), XPSB

44. Report on Suggestions for Improving Traffic Management in Xi'an ("The Item Suggestion File about the Improving Engineering of the Road TrafJic Management of Xi'an City), English (hard and electronic copies), Chinese (electronic); July 2005. This is XPSB's proposals for the project scope.

45. Equipment List, Chinese, (hard copy), XPSB

46. ADB Project Equipment List (Chinese, hard copy), XPSB

Draft TOR for AAS ("Study Outline of Road TrafJic Safety and Accident of Urban Area in Xi'an'j), English, (hard copy), Chang'an University

Draft TOR for TDM Study ("Study Outline on the City Transportation Demand Management for Xi'an'j), English, (hard copy), Chang'an University

Draft TOR for Parking Study (English), electronic copy

Draft TOR for ATC Technical Specification, (English), electronic copy

"Research of Xi'an Parking", dated 2005-1 2, (English and Chinese), electronic copy, XPSB

"Research on Area Traffic Control", dated 2006-01, (English and Chinese), electronic copy, XPSB

"Research on Traffic Safety in Xi'an", dated 2006-01, (English and Chinese), electronic copy, XPSB

"The Study of Traffic Demand Management of Xi'an City", erroneously dated 2006-12, (English and Chinese), electronic copy, XPSB

"The Project's Proposal of Xi'an Road Traffic Manage Development", dated 2006-02, Xi'an Traffic Police Detachment/Changlan University, (English and Chinese), electronic and hard copies, XPSB

"The Planning of the Bicycle Line in the Ming City Wall Area", dated 2006-04, Xi'an City Wall Scenery Committee/Changlan University, (English), electronic copy

"The Project's of the Bicycle Line in the Ming City Wall Area", dated 2006-04, Xi'an City Wall Scenery Committee/Changlan University, (English), electronic copy

Annex 13: Statement of Loans and Credits

CHINA: Xi'an Sustainable Urban Transport Project

Difference between expected and actual

Original Amount in US$ Millions disbursements

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd

CN-Gansu Cultural & Natural Heritage

CN-Guiyang Transport

CN-Han River Urban Environment

CN-BENGBU INTEGRATED ENVMT IMPROVMT

CN-Anhui Highway Rehab & Improvement

CN-3rd National Railway

CN-SICHUAN URBAN DEV

CN-GUANGDONGlPRD2

CN-SHANDONG ENVMT 2

CN-Shaanxi Ankang Road Development

CN-Guangxi Integrated Forestry Dev

CN-Fujian Highway Sector Investment

CN-LIAONING MED CITIES INFRAS 2

CN-W. Region Rural Water & Sanitation

CN-MSE Finance

CN-ChangjiangPearl River Watershed Reha

CN-HENAN TOWNS WATER

CN-IAIL 111

CN-Economic Refonn Implementation

CN-5th Inland Waterways

CN-Heilongjiang Dairy

CN-3rd Jiangxi Hwy

CN-Renewable Energy I1 (CRESP 11)

CN-Liaoning Medium Cities Infrastructure

CN-SHANGHAI URBAN A P U

CN-Fuzhou Nantai Island Peri-Urban Dev

CN-Inner Mongolia Highway & Trade Comd

CN - Agricultural Technology Transfer

CN-TAI BASIN URBAN ENVMT

CN - Poor Rural Communities Development

CN-NINGBO WATER & ENVMT

CN-Renewable Energy Scale-up Program

CN-CHONGQING SMALL CITIES

CN-HUNAN URBAN DEV

CN-LIUZHOU ENVIRONMENT MGMT

CN-Gansu & Xinjiang Pastoral Development

CN-Jiangxi Integrated Agric. Modem.

CN-GUANGDONGIPRD UR ENVMT

CN-ZHEJIANG URBAN ENVMT

CN-4th Inland Waterways

CN-Hubei Shiman Highway

CN-Basic Education in Western Areas

CN-Wuhan Urban Transport

CNJrd Xinjiang Hwy Project

CN-SHANGHAI URB ENVMT APLl

CN-TIANJIN URB DEV I1

CN-2nd Anhui Hwy

CN-Yixing Pumped Storage Project

CN-Sustainable Forestry Development

CN-Hubei Hydropower Dev in Poor Areas

CN-Tuberculosis Control Project

CN-HUAI RIVER POLLUTION CONTROL

CN-Shijiazhuang Urban Transport

CN-LIAO RIVER BASIN

CN-BEUING ENVIRONMENT I1

CN-HEBEI URBAN ENVIRONMENT

CN-CHONGQING URBAN ENVMT

CN-Yangtze Dike Strengthening

CN-Accounting Reform & Development

CN-Tec Coop Credit IV

CN-Health IX

Ertan I1 Hydroelectric Project

Total:

CHINA STATEMENT OF IFC's

Held and Disbursed Portfolio In Millions of US Dollars

Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

2002 ASIMCO 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.00

2006 ASIMCO

2005 BCCB

2003 BCIB

2006 BUFH

2005 Babei

Babei Necktie

1999 Bank of Shanghai

2000 Bank of Shanghai

Bank of Shanghai

BioChina

CDH China Fund

CDH China I1

CDH Venture

CT Holdings

CUNA Mutual

Capital Today

Changyu Group

Chengdu Huarong

China Green Ener

China Re Life

China Walden Mgt

Chinasoft

Colony China

Colony China GP

Conch

Dagang NewSpnng

Darong

Deqingyuan

Dynamic Fund

Epure

Fenglin

Fenglin HJ MDF

Five Star

GDIH

Great Infotwh

Hangzhou RCB

HiSoft Tech

HiSoft Tech

IB

Jiangxi Chenming

Launch Tech

Maanshan Carbon

Maanshan Carbon

Minsheng

Minsheng & IB

Minsheng Bank

Minsheng Bank

NCCB

Nanjing Kumho

Nanjing Kumho

Neophotonics

New China Life

New Hope

Newbridge Inv.

North Andre

PSAM

RAK China

2006 Renaissance Sec 0.00 0.00 20.04 0.00 0.00 0.00 0.00 0.00

2006 Rongde 0.00 35.00 0.00 0.00 0.00 31.38 0.00 0.00

SAC HK Holding 0.00 1.60 0.00 0.00 0.00 1 .OO 0.00 0.00

2003 SAIC 12.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00

2006 SBCVC 0.00 20.00 0.00 0.00 0.00 2.00 0.00 0.00

2000 SEAF SSIF 0.00 3.74 0.00 0.00 0.00 3.37 0.00 0.00

SH Keji lT 3.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2004 SHCT 38.18 0.00 0.00 28.64 29.04 0.00 0.00 21.78

2004 SIBFI 0.14 0.07 0.00 0.00 0.00 0.07 0.00 0.00

1998 Shanghai Krupp 19.25 0.00 0.00 36.75 19.25 0.00 0.00 36.75

2006 Shanshui Group 50.00 5.50 2.20 0.00 50.00 5.50 0.00 0.00

1999 Shanxi 12.61 0.00 0.00 0.00 12.61 0.00 0.00 0.00

SinoSpring 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.00

Stora Enso 20.83 0.00 0.00 4.17 11.00 0.00 0.00 0.00

2005 Stora Enso 29.17 0.00 0.00 20.83 0.00 0.00 0.00 0.00

2006 Stora Enso 50.00 0.00 0.00 175.00 0.00 0.00 0.00 0.00

2006 TBK 4.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00

2006 VeriSilicon 0.00 1.00 0.00 0.00 0.00 1 .OO 0.00 0.00

Wanjie High-Tech 9.89 0.00 0.00 0.00 9.89 0.00 0.00 0.00

2004 Wumart 0.00 1.62 0.00 0.00 0.00 1.62 0.00 0.00

2003 XACB 0.00 17.95 0.00 0.00 0.00 0.64 0.00 0.00

2004 Xinao Gas 25.00 10.00 0.00 0.00 25.00 10.00 0.00 0.00

2006 Zhejiang Glass 50.00 24.96 0.00 18.00 0.00 0.00 0.00 0.00

2003 Zhengye- ADC 10.43 0.00 0.00 4.87 10.43 0.00 0.00 4.87

2002 Zhong Chen 0.00 4.78 0.00 0.00 0.00 4.78 0.00 0.00

2006 Zhongda-Yanjin 21.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Totalpoltfolio: 733.58 577.30 181.40 340.89 470.95 371.06 29.61 108.03

Approvals Pending Commitment

FY Approval Company Loan m i @ Quasi Partic.

2002 SML

2004 NCFL

2007 Xinao CTC

2004 China Green

2006 Launch Tech

2005 MS Shipping

2003 Peak Pacific 2

Total pending commitment: 0.05 0.03 0.03 0.14

Annex 14: Country at a Glance

CHINA: Xi'an Sustainable Urban Transport Project POVERTY and SOCIAL

2006 Population, mid-par(mil1ions) GNIper capita (Atlas method, US$) GNI (Atlas method, US$ billions)

Life expectancy

T

East Lower- As la 6 mlddle-

Average annual growth, 2000.06 I 1

Chlna Pac i f l c Income

Population (%J Laborforce (%)

dlamond'

M 05t recent est lmate ( latest year avallable, 2000-06)

Poverty (%of population belo wnationalpo vertyline) Urban population (%oftotalpopulation) Life expectancy at birth ()ears) Infant mortality (per $000 live births) Child malnutrition (%ofchildren under 5) Access to an improved watersource (%ofpopulation) Literacy (%o fpopulation age 159 Gross primaryenroliment (%of school-agepopulation)

Male Female

Gross primary

capita

Access to improvedwatersource

C h i n a 1 - Lo wer-middle-Income gro up

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

STRUCTURE o f the ECONOMY

1986 1996 ZOO5 2006

GDP (US$ billions) 295.7 856.1 2243.9 2,644.7

Gross capital formationiGDP 38.6 40.4 43.9 44.6 w o r t s of goods and servicesiGDP 118 20.1 37.3 40.1 Gmss domestic savingslGDP 35.8 42.5 49.4 52.5 Gross national savingsiGDP 35.9 413 510 54.1

Current account balanceiGDP -2.8 0.8 72 Interest paynents1GDP 0.2 0.5 0.1

9'4

Total debVGDP 8.0 15.0 Q.6 Total debt serviceiexports 8.2 8.7 3.0 Present value of debtiGDP 12.3 Present value of debtlexports .. 30.6

1986.96 1996-06 2005 2006 2006-10 (average annual gro wth) GDP 0.1 9.0 0.4 0.7 0.6 GDP percapita 8.6 8.2 9.7 0.1 9.9 w o r t s of goods and services 0.0 218 24.3 23.3 77.4

(%of GDP) Agriculture Industry

Manufacturing Services

Economic ratlor.

Trade

Domestic + Capital savings formation

indebtedness

C h i n a

-Lo wr-middle-income group

Household final consumption expenditure General gov't final consumption expenditure Imports of goods and services

(average annual gro wth) Agriculture Industry

Manufacturing Services

Household final consumption expenditure General gov't final consumption expenditure Gross capital formation Imports of goods and services

Growth o f capl ta l and GDP (X) 20 T I

Growth o f exports and Impor ts (%)

40 T

- - ---

Note: 2006 data are preliminaryestimates. This table was pmducedfmm the Development Economics LDB database.

owfourkeyindicators in thecountry(in bold)compared with its income-group average. If data are missing,thediamond will

China

PRICES and GOVERNMENT FINANCE 1986 1996 2005 2006

D o m e s t l c p r i ces (%change) Consumer prices .. 8.3 18 15 Implicit GDP deflator 4.6 6.4 4.2 3.6

Government f inance (%of GDP, includes current grants) Current revenue 0.0 0.5 7.2 18.4 Current budget balance -7.7 0.2 2.4 3.0 Overall surplus/deficit -24.8 -14 -13 -0.7

TRADE

(US5 millions) Total eqorts (fob)

Food Mineral fuels, lubricants, and Manufactures

Total imports (cif) Food Fuel and energy Capital goods

w o r t price index (2000=WO) Import price index (2000=WO) Terms of trade (2000=WO)

lg8' Igg6 2005 2006 IExport and Import levels (US$ mill.)

30,942 151048 761999 969,073 1,2S0,000

4,448 0,231 22,481 25,722 related material! 3,683 5,931 7,621 7,776 j

59 122 0 4 0 7 1 00 01 0 2 03 0 05 CU

76 0 8 118 124 I Exports 0 Imports 77 10 88 87

Memo: I Reserves including gold (US$ millions) .. m 7 7 831427 1046,465 Conversion rate (DEC, local/US$) 3.5 8.3 8.2 8.0

B A L A N C E o f PAYMENTS

EXTERNAL DEBT and RESOURCE FLO

(US$ millions) lgg6 2005 2006

Exports of goods and services 34.952 l71678 836,888 1061681 Imports of goods and services 43,453 154,127 712,090 852,769 Resource balance -8,501 7,551 124,798 208,912

Net income -23 -12,437 0,635 11755 Net current transfers 378 2,129 25,385 29,200

Current account balance -8,146 7,243 60,818 249,867

Financing items (net) 6,48 24,462 46,88 -2,842 Changes in net reserves 1,727 -31705 -207.06 -247,025

(US$ millions) Total debt outstanding and disbursed

IBRD IDA

Current account balance t o GDP (%)

30

00 01 0 2 03 04 05 08

Total debt service IBRD IDA

Composition of net resource f l o w Official grants Official creditors Privatecreditors Foreign direct investment (net inflow) Portfolio equity (net inflows)

Worid Bank program Commitments Disbursements Principal repayments Net flows hterest payments Net transfers

Compos l t l on o f 2005 debt (US5 mlll.]

Note:This tablewas producedfrom the Development Economics LDB database. 9/28/07

Annex 15: Public Participation

CHINA: Xi'an Sustainable Urban Transport Project

Background

1. In addition to the public consultations required for environmental impact assessment and resettlement planning under Chinese law and Bank policies, the project also incorporated a public participation process as a separate strategic input into the project preparation to enhance project design. This annex provides details on the public participation processes conducted for project design. Public consultation activities carried out under the EIA and resettlement planning processes are summarized in Annex 10.

2. International experience suggests that public participation during the technical planning process generates solutions with widespread benefits, while minimizing adverse impacts. Recent Bank consultation efforts in China have demonstrated the success in developing meaningful public participation processes that influenced project designs. Built upon international and the Bank good practices, public participation is integrated into the XSUTP and carried out at three stages of the project cycle: (i) Project Design and Feasibility Stage Public Participation, when participation is designed to identify key issues of public concern; (ii) Appraisal Stage Public Participation, when solutions to issues raised were presented to the public for review and comments; and (iii) Implementation Stage Public Participation, when the satisfaction level of the public with project implementation and outcomes will be ascertained.

Participatory Methods

3. For each stage of public participation, an independent consultant was (and will be) hired to conduct an extensive consultation using three methods: - open meetings, focus group discussions and questionnaires. Special efforts were made to ascertain the needs of vulnerable groups, such as the elderly, recent migrants from rural areas, persons with disabilities, and the low income population. Findings from the Design and Feasibility Stage Public Participation led to special attention to involve pedestrians, bicyclists, and bus users in the Appraisal Stage Public Participation. The design institutes and city authorities will respond to issues raised in the project design and implementation.

Design and Feasibility Stage Public Participation

4. The Design and Feasibility Stage Public Participation was carried out in September 2006. Table A 15.1 below summarizes the scope of activities. The public participation activities were primarily focused on the project impacted area as indicated in Figure A 15.1.

I Jin Kang (Xin Cheng) 17

Table A 15.1: Design and Feasibility Stage Public Participation Activities District

Jun Gong (Bei Lin) Suo Luo Xiang (Bei Lin) Dian Jian 4 (Ba Oiao)

Open Meeting (Persons)

14 22 23 . ,

Fang Xin Village (Wei Yang) Tai Bai (Yan Ta)

I Total TBD 186 2171

23 12

Yao Wang Dong (Lian Hu) Cao Jia Bao (Han City) Hu Countv

Figure A15.1: Locations of Districts Involved in Public Participation

Focus Group Discussions (Persons)

19 19 37

5 . Characteristics of the Participants. The gender, age and professional distributions of the participants are summarized in Figure A15.2 and Figure A1 5.3 below. The characteristics of the participants reflect representation from various citizen groups in Xi'an. Special efforts were made to ensure senior, the lower income population, and other urban vulnerable groups are well represented.

Questionnaires (Number)

Figure A15.2: Gender and Age Distributions of the Participants Focus Group Participants: Gender

Distribution Questionnaire Respondents: Gender

Distribution

Focus Group Participants: Age Distribution Questionnaire Respondents: Age Distribution

Figure A15.3: Professional Distribution of the Participants

Focus Group Participants: Professional Distrubition

Unemployed Other Government Officials - . . . - . - . -

Medical Doctors

Questionnaire Respondents: Professional Distribution unemployed o t k s

3% 7 5%

6. Major Findings. The findings from this stage of public participation highlighted some of the key issues/problems facedlperceived by the residents. Specifically, the most urgent transport issues and concerns included: (i) traffic congestion; (ii) insufficient bus service, and inappropriate routing; (iii) NMV and MV mixed traffic; (iv) illegal occupation of NMV lanes by MV; (v) safety concerns with crossing roads; (vi) poor drainage system condition; (vii) insufficient parking; (viii) poor traffic management; and (ix) poor street lighting conditions.

7. In addition, the consultation identified major barriers of travel for users of NMV, PT , and other modes, including:

(a) Walkers: safety concerns with crossings and junctions, and poor pedestrian facilities;

(b) Bicyclists: lack of parking facilities, and safety concerns related to mixed traffic, crossing, and road condition when it snows;

(c) PT riders: short PT service duration, poor stop locations or stop facilities, and service sensitivity to the senior (and other vulnerable groups);

(d) Commuting bus riders: limited service time, routing and short service duration;

(e) Motorcyclists: lack of parking and safety concerns related to mixed traffic, and unclear hnction of right of way - e.g. bike lane used as bus lane;

(f) Taxi riders: cost; and

(g) Cars drivers (major trip purposes are shopping and entertainment): congestion.

8. From the perspective of vulnerable groups, the major barriers to travel and the major demand for improvements include:

Elderly (mainly PT riders and walkers):

(a) Barriers: safety concerns, poor road and sidewalk conditions, and lack of sensitivity of PT service to the needs of the elderly; and

(b) Needs: more public toilets, higher PT driver qualifications, increased provision of protected pedestrian crossing time, improved road and sidewalk conditions, and expanded coverage of discount bus fare.

Women (mainly PT riders and Bicyclists):

(a) Barriers: poor road and sidewalk conditions and peak hour congestion; and

(b) Needs: improved road and sidewalk conditions, improved PT service level (reduced crowding, extended service duration), improved street light and traffic light conditions, and proper management of the use of bike lanes.

Persons with Disabilities (wheel chair riders, bicyclists, and PT riders):

(a) Barriers: poor road conditions, and safety concerns with mixed traffic, and crossing facilities; and

(b) Needs: improved road and sidewalk conditions, provision of more road facilities for persons with disabilities, and improved junction traffic management.

Recent migrants (PT riders, Bicyclists and Walkers):

(a) Barriers: congestion, mixed traffic, and poor sidewalk management; and

(b) Needs: properly maintained sidewalk, improved road condition and pavement, strengthened traffic management, less congestion, and improved crossing facilities (e.g. under and over passes).

Low income population (motorcycle, walking, and tricycle):

(a) Barriers: poor secondary road and sidewalk conditions, and illegal parking on sidewalks; and

(b) Needs: improved pavement conditions, move cars from sidewalks, improved drainage and snow treatment facilities, improved traffic management and enforcement, and proper resettlement for low income people.

9. This effort successfully highlighted problems such as safety at intersections, the need to separate the stream of NMV from MV, the need to improve public transport services, and the poor condition of roads and sidewalks. It helped to identify, on a priority basis, the needs of the population without access to a motor vehicle. While such participatory planning was not part of the existing planning practice, it provided a good model for interacting with the public on transport planning issues.

10. Incorporating the Pubic Consultation Findings. A list of location specific issues by project components was identified by the Public Consultation consultant. The list allowed the design team and city authorities to look into, address and1 or respond to the specific issues identified. The Bank has asked that the issues identified be addressed specifically under the project and that solutions will be incorporated into the preliminary/final designs.

Appraisal (Pre-Negotiation) Stage Public Participation

1 1. Objectives. The objectives of the Appraisal Stage Public Participation include: (i) ensure that the project design has successfully addressed all the key issues raised in the Design and Feasibility Phase Participation; (ii) identify any concerns the public has related to project implementation and identify suggestions made by the public to minimize disruption related to project implementation; and (iii) provide a baseline for public satisfaction with the urban transport system in the project affected areas and support the assessment of project outcomes.

Implementation Stage Public Participation

12. During this stage, an independent consultant will be hired to follow up on the public participation work conducted during project preparation and appraisal. The implementation stage public consultation will include annual monitoring of how well the agreed design solutions to the publicly raised issues are incorporated during project implementation. The method of monitoring is to carry out annual surveys and consultation in the project impacted areas on the same issues and questions included in the first and second round public consultation. The comparison of different public satisfactory levels at project preparation and implementation stages will indicate the effect of the project on addressing the identified issues.

Annex 16: GEF

CHINA: Xi'an Sustainable Urban Transport Project

1. The proposed GEF activities are complementary to the existing Bank project. GEF financing (US$2.0) million is proposed to be used for the following incremental Technical Assistance (TA) activities:

2. GEF 1 - Support for better integrating Bus Priorityltraffic management corridors with Non Motorized Modes. Support for improving performance of the bus system in all high passenger volume corridors. TA would be available for corridors covered under the proposed Bank project as well elsewhere (e.g., connections with Xianyang). The TA will focus on:

(a) Detailed planning of high performance PT improvements in high passenger volume corridors. The objective is to develop a rationale plan for developing the PT corridors into a network, including serving newly developing areas. Assistance would also be available for any plans that Xi'an (or Xianyang) might have for additional corridors during the period of the TA. The TA will also focus on PT service and operations planning to improve PT performance. It includes planning of NMV pedestrian routes improving pedestrian and bicycle access to PT and metro stations;

(b) Establishing a permanent PT Study Centre to provide PT planning and policy advice, and formulate investment plans; and

(c) Developing and implementing a public awareness, outreach and consultation process, The TA will provide technical and logistical support for a comprehensive, two-way communications program from project design, through construction to operation of the project's components. The program will include opinion and attitude surveys, open or closed workshops with stakeholders, public consultation centers in malls, a newsletter, and a website. The program is particularly important because it will help set the stage for later development of other high performance PT corridors, NMV improvements, traffic management strategies, etc.

3. GEF 2 - TDM, including road pricing, parking management. The TA will support preparation of the technical materials and logistical arrangements for a congestion pricing seminar which will include presenters from China, Singapore, London and Stockholm, the US, and the EU. Following the seminar and based on the outcome of discussions and input from attendees and citizens, a broad outline plan for a comprehensive traffic demand management scheme for the MWC will be prepared. This would not only include strategies like congestion and parking pricing (including any legislative changes that may be required), increasing enforcement of parking and traffic regulations, provision of remote parklride, and encouragement of car pooling, but would also outline the PT improvements that would sustain the access and mobility of MWC residents, workers and visitors and make it politically acceptable.

4. GEF 3 - Public transport-based metropolitan planning, including Transit Orientated Development (TOD). The inability to coordinate across municipal jurisdictional

boundaries is one of the most significant shortcomings that inhibit metropolitan considerations to transport (and other infrastructure) problems in China today. This is particularly an issue in the fast developing areas of the coast and east where urbanization is blurring old city and municipal boundaries. Xi'an offers a rare opportunity (in large part because the neighboring city of Xianyang is also a proposed demonstration city) in China to develop strategic multi-modal and PT plans on a metropolitan scale that are coordinated with land use plans. The assistance will focus on: (i) strategic multi-modal and PT network planning efforts be closely coordinated with similar effort in Xianyang, Huxian and other neighbors of Xi'an; and (ii) planning and design for TOD - ensuring new areas are planned and designed to facilitate use of buses.

5 . GEF 4 - Support for Monitoring and Evaluation of Public Satisfaction and Public Awareness. GEF would support a series of monitoring and evaluation activities to measure the benefits gained by the city so far as a result of the World Bank and GEF project initiatives.

6. GEF will be supporting, but not limited to the following activities related to public satisfaction monitoring and public education and awareness campaign: (i) regular monitoring~consultation on public satisfaction of how well the project addresses the public concerns raised during the first phase public consultation; and (ii) non-designltechnical related solutions to address the public raised issues, including driver training and station propaganda materials to promote public awareness of the transport needs of the senior and disabled citizen.

Annex 17: Maps

CHINA: Xi'an Sustainable Urban Transport Project

In the order shown: 1. IBRD 35427 2. IBRD35844 3. IBRD35431 4. IBRD 35430 5. IBRD 35870 6. IBRD 35432 7. IBRD35428

Tomb of the EmperorQin Shihuang, Army of

Terracotta Warriors

MING WALLEDMING WALLEDCITYCITY

HAN CITYHAN CITY TANGTANGDAMINGDAMINGPALACEPALACE

SITESITE

XI’ANXI’AN

XIANYANGXIANYANG

GXINGPING WEIYANGWEIYANGPALACEPALACE

MING WALLEDCITY

HAN CITY TANGDAMINGPALACE

SITEWEIYANG

PALACE

XI’AN

XIANYANG

HUXIAN

Weihe River

0 3 6

KILOMETERS

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

ANCIENT RELICS

TOMBS

TEMPLES

PAGODAS

MOUNTAIN/PARK

EXPRESSWAYS

HIGHWAYS

RAILROADS

MAJOR CULTURAL HERITAGE SITES

ANCIENT CITY WALL

IBRD 35427

C H I N AXI’AN SUSTAINABLE URBAN

TRANSPORT PROJECTPROJECT CITY

DECEMBER 2007

airport

BEIJING

HEILONGJIANG

JILIN

LIAONING

NEI MONGOL

HEBEI TIANJIN

SHANXI

SHAANXISHAANXIXi’anXi’anXi’anSHAANXIGANSU

QINGHAI NIN

GXI

A

SHANDONG

HENANANHUI

JIANGSU

ZHEJIANG

SHANGHAI

SICHUAN

CHO

NGQIN

G HUBEI

GUIZHOU

HUNANJIANGXI

FUJIAN

GUANGXI GUANGDONGTAIWAN

HAINAN

YUNNAN

HONG KONGMACAO

RUSSIANFEDERATION

MONGOLIA

PHILIPPINES

VIETNAMLAO

REP. OFKOREA

D.P.R. OFKOREA

P.D.R.

Sea ofJapan

YellowSea

EastChinaSea

PACIFICOCEAN

CHINA

Xi’anShaanxiProvince

For detail, See IBRD 35432

For detail, See IBRD 35430

For detail, See IBRD 35428

MING WALLED CITYMING WALLED CITY

HAN CITYHAN CITY

TANGTANGDAMINGDAMINGPALACEPALACE

SITESITE

AA ii rr pp oo rr tt EE xx pp rr ee ss ss wwaa yy

XX ii --TT oo

nn gg EExx pp rr ee

ss ss wwaa yy

XX ii --YYaa nn EE

xx pp rr ee ss ss ww aa yy

XX ii -- LL ii nn EE xx pp rr ee ss ss ww aa yy

XX ii -- HH aa nn EE xx pp rr ee ss ss ww aa yy

XXii ’’ aa

nn OOrr bb

ii tt aall EE xx

pprr ee ss ss ww

aayy

2nd Ring Road2nd Ring Road

1st Ring Road1st Ring Road

A i r p o r t E x p r e s s wa y

X i -T o

n g Ex p r e

s s wa y

X i -Ya n E

x p r e s s w a y

X i - L i n E x p r e s s w a y

X i - H a n E x p r e s s w a y

Xi’ a

n Or b

i t al E x

pr e s s w

ay

2nd Ring Road

1st Ring Road

NN OO RR TT HH EE RR NN 33 rr dd RR II NN GG RR OO AA DD (( oo vv ee rr ll aa pp pp ii nn gg ww ii tt hh NN oo rr tt hh OO rr bb ii tt aa ll EE xx pp rr ee ss ss ww aa yy ))

SS OO UU TT HH EE RR NN 33 rr dd RR II NN GG RR OO AA DD (( oo vv ee rr ll aa pp pp ii nn gg ww ii tt hh SS oo uu tt hh OO rr bb ii tt aa ll EE xx pp rr ee ss ss ww aa yy ))

WWEE SS

TT EE RRNN

33 dd

RRII NN

GG RR

OOAA

DD

EEAASS

TTEERRNN

33rrdd

RRIINN

GG RR

OOAA

DD

NNoorrtthheerrnn eexxtteennssiioonn ooff ZZhhuuhhoonngg RRooaadd

NNoorrtthheerrnn eexxtteennssiioonn ooff NNoorrtthheerrnn 22nndd RRiinngg RRooaadd

NNoorrtthheerrnn eexxtteennssiioonn ooff EEaasstteerrnn 22nndd RRiinngg RRooaadd

KKuunnmmiinngg RRooaadd

SSoouutthheerrnn eexxtteennssiioonn ooff TTaarryyii RRooaadd

N O R T H E R N 3 r d R I N G R O A D ( o v e r l a p p i n g w i t h N o r t h O r b i t a l E x p r e s s w a y )

S O U T H E R N 3 r d R I N G R O A D ( o v e r l a p p i n g w i t h S o u t h O r b i t a l E x p r e s s w a y )

WES

T E RN

3r d

RI N

G R

OA

D

EAS

TERN

3rd

RIN

G R

OA

D

Northern extension of Zhuhong Road

Northern extension of Northern 2nd Ring Road

Northern extension of Eastern 2nd Ring Road

Kunming Road

Southern extension of Taryi Road

MING WALLED CITY

HAN CITY

TANGDAMINGPALACE

SITE

Wei Jiang

RNC 3.1 Taibai Nan Road / Zhang Ba Road InterchangeRNC 3.1 Taibai Nan Road / Zhang Ba Road Interchange

RNC 1.1 Yuxiangmen InterchangeRNC 1.1 Yuxiangmen Interchange

RNC 2.1 North East InterchangeRNC 2.1 North East Interchange

RNC 1.2 Changlemen InterchangeRNC 1.2 Changlemen Interchange

RNC 2.2 South East InterchangeRNC 2.2 South East Interchange

2nd Ring Road2nd Ring Road

RNC 1.3 South 1st Ring RoadRNC 1.3 South 1st Ring Road

RNC 3.1 Taibai Nan Road / Zhang Ba Road Interchange

RNC 1.1 Yuxiangmen Interchange

RNC 2.1 North East Interchange

RNC 1.2 Changlemen Interchange

RNC 2.2 South East Interchange

2nd Ring Road

RNC 1.3 South 1st Ring Road

DECEMBER 2007

IBRD 35844

PROJECT SCHEMES:

ROAD WORK

INTERCHANGES

ADB ROAD PROPOSALS:

THIRD RING ROAD

CONNECTOR ROADS

METRO AND STATIONS UNDER CONSTRUCTION

EXISTING EXPRESSWAYS

PLANNED EXPRESSWAYS

URBAN MAIN ROADS

SECONDARY ROADS

TERTIARY ROADS

RAILROADS

MAJOR CULTURAL HERITAGE SITES

TRAIN STATIONS

ANCIENT CITY WALL

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.

C H I N AXI’AN SUSTAINABLE URBAN

TRANSPORT PROJECTROAD NETWORK COMPONENT

IN XI’AN CITY

Xi-Lan Expressway

RNH 4 Meibei RoadRNH 4 Meibei Road

RailwayRailwayUnderpassUnderpass RNH 3 Lvgong RoadRNH 3 Lvgong Road

RNH

2 D

onch

eng

Road

RNH

2 D

onch

eng

Road

RNH 1 Xincheng RoadRNH 1 Xincheng Road

EE xx pp rr ee ss ss ww aa yy

RNH 4 Meibei Road

RailwayUnderpass RNH 3 Lvgong Road

RNH

2 D

onch

eng

Road

RNH 1 Xincheng Road

E x p r e s s w a y

to Xi’an

DECEMBER 2007

C H I N AXI’AN SUSTAINABLE URBAN

TRANSPORT PROJECTROAD NETWORK COMPONENT

IN HUXIAN

IBRD 35431

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shownon this map do not imply, on the part of The World Bank Group, anyjudgment on the legal status of any territory, or any endorsement oracceptance of such boundaries.

PRIMARY ROADS

SECONDARY ROAD

EXPRESSWAY

URBAN MAIN ROAD

RAILWAY

MING WALLED CITYMING WALLED CITY

HAN CITYHAN CITY

TANGTANGDAMINGDAMINGPALACEPALACE

SITESITE

0101 0202

0303

0303 0404

040407070707

1212

10101010

0505

0505

0606

0606

0808

0101

0202

0808

0909

0909

121212

111111

131313

01 02

03

03 04

040707

12

1010

05

05

06

06

08

01

02

08

09

09

THIRD RING ROAD

RING ROAD

THIRD RING ROAD

THIRD RING ROAD

RING ROAD

RING ROAD

RING ROAD

RING

ROA

D

RING ROAD

RING ROAD

RING ROAD

THIRD

THIRD

RING

ROA

D

AD

B FUN

DIN

G O

F

THIRD

RING

ROA

D

AD

B FUN

DIN

G O

F

AD

B FU

ND

ING

OF

THIR

D R

ING

RO

AD

RIN

G

RO

AD

MING WALLED CITY

HAN CITY

TANGDAMINGPALACE

SITE

Wei

Jiang

11

2

2

01020304050607080910111213

No. Proposed CorridorCheng yun - TV Town TowerHongqi - QuijangTrain Station - Dayan PagodaKeji Road - Xiying RoadLaodong Road - Hi Tech DistrictXiang Qing RoadYouyi RoadZhu Hong Road - Tai Bar RoadHan Cheng Road - Ziang Ba Ber RoadHongquang Road - Han Seng RoadZhangba East RoadXianning Mid Road-S 1RR-Fengqing RoadZhuque Road

FEBRUARY 2008

IBRD 35430

BUS PRIORITY CORRIDORS UNDER THE PROJECT:

EAST-WEST ROUTES

NORTH-SOUTH ROUTES

TERMINALS

BUS DEPOT

METRO AND STATIONS UNDER CONSTRUCTION

EXPRESSWAYS

URBAN MAIN ROADS

SECONDARY ROADS

TERTIARY ROADS

RAILROADS

OTHER MAJOR CULTURAL HERITAGE SITE

ANCIENT CITY WALL

Southern TerminalSouthern TerminalSouthern Terminal

EasternEastern(Textile City)(Textile City)TerminalTerminal

Eastern(Textile City)Terminal

Xinzhu Bus DepotXinzhu Bus DepotXinzhu Bus Depot

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.

C H I N AXI’AN SUSTAINABLE URBAN

TRANSPORT PROJECTPUBLIC TRANSPORT COMPONENT

FIRST RING ROAD

Shuncheng Lane Shuncheng Lane

Shuncheng LaneShuncheng Lane

Shun

chen

g

La

ne

Shuncheng Lane

FIRST RING

ROA

D

FIRS

T RI

NG

RO

AD

SECOND RING ROAD SECOND RING ROAD

FIRST RING ROAD

MING WALLED CITY

TANG DAMINGPALACE SITE

TRAFFIC SIGNALS (ATC)

CLOSED CIRCUIT TELEVISION (CCTV)

VARIABLE MESSAGE SIGNS (VMS)

HISTORICAL STREET BLOCKS

EXPRESSWAYS

URBAN MAIN ROADS

SECONDARY ROADS

TERTIARY ROADS

RAILROADS

OTHER MAJOR CULTURAL HERITAGE SITE

TRAIN STATION

ANCIENT CITY WALL

VARIABLE MESSAGE SIGNS BEYOND MAIN MAP AREA

AREA WITHIN THE SECOND RING ROAD

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.

IBRD 35870

C H I N AXI’AN SUSTAINABLE URBAN

TRANSPORT PROJECTTRAFFIC MANAGEMENT COMPONENT

FEBRUARY 2008

For detail, see main map

2nd Ring Road

2nd Ring Road

1st Ring Road

MING WALLED CITY

CangchiPool

W E I YA N GW E I YA N GPA L A C EPA L A C E

North PalaceNorth PalaceGuigong PalaceGuigong Palace

W E I YA N GPA L A C E

North PalaceGuigong Palace

THIRD RING ROAD

THIRD RING ROAD

SECOND RING ROADSECOND RING ROAD

AD

B FU

ND

ING

OF

THIR

D R

ING

RO

AD

AD

B FU

ND

ING

OF

THIR

D R

ING

RO

AD

HAN C I TYHAN C I TY

THIRD RING ROAD

SECOND RING ROAD

AD

B FU

ND

ING

OF

THIR

D R

ING

RO

AD

HAN C I TY

MingguangPalace

GuigongPalace

JianzhangPalace

NorthPalace

ChanglePalace

WEIYANGPALACE

EastMarket

WestMarket

CangchiPool

Area ofArea ofMain MapMain Map

Area ofMain Map

DECEMBER 2007

IBRD 35432

This map was produced bythe Map Design Unit of The World Bank. The boundaries, colors, denominationsand any other information shown on thismap do not imply, on the part of TheWorld Bank Group, any judgment on thelegal status of any territory, or anyendorsement or acceptance of suchboundaries.

PALACE GATES

ANCIENT CITY WALL

ROADS

SITES

PROJECT WORKS:

ROADS TO BE RECONSTRUCTED

PARKING LOT

EXPRESSWAYS

URBAN MAIN ROADS

RAILROADS

URBAN AREAS

C H I N AXI’AN SUSTAINABLE URBAN TRANSPORT

PROJECTHAN CHANG’AN SITE WEIYANG PALACE ROADS

ABOVEGROUNDRELICS:

BELOWGROUNDRELICS:

ZhichengGate

WeiyangPalace

Front HallRelics

Arms WarehouseRelics

CentralGovernmentOffices Relics

ShiquPavillionRelics

Unnamed RammingPlatform Relics

No. 8 WeiyangPalace Relics No. 12 Weiyang

Palace Relics

Brick Kiln Relics

No. 4 WeiyangPalace Relics

No. 13 WeiyangPalace Relics

No. 14 WeiyangPalace Relics

No. 10 WeiyangPalace Relics

No. 9 WeiyangPalace Relics

No. 11 WeiyangPalace Relics

ZhangchengGate

Xi’an Gate

Anmen Gate

JiaofangPalace Relics

TianluPavillionRelics

Inner Zhicheng Gate Street

Elevated expressway

ADB

fund

ing of

Third

Ring

Roa

d

Inne

r Anm

en G

ate S

treet

Inne

r Xi’a

n Ga

te Str

eet

Outer

Anm

en G

ate S

treet

Outer

Xi’a

n Ga

te Str

eet

0 500 1000 1500

METERS(approximate scale)

0 500 1000 1500

METERS(approximate scale)

Temple of ExtensiveTemple of Extensive Benevolence Benevolence

Five Western TerracesFive Western Terraces

Memorial Hall ofMemorial Hall ofYang Hu ChengYang Hu Cheng

Western MosqueWestern Mosque

Great MosqueGreat Mosque

DrumDrumTowerTower Bell TowerBell Tower

Forest of StelesForest of Steles

Temple of the Recumbent DragonTemple of the Recumbent Dragon

City Wall City Wall (Nan Men)(Nan Men)

Residence of GeneralResidence of GeneralZhang Xue LiangZhang Xue Liang

Xi’an Office of the Eighth Route ArmyXi’an Office of the Eighth Route Army

Temple of the Temple of the Town GodTown God

Temple of Extensive Benevolence

Five Western Terraces

Memorial Hall ofYang Hu Cheng

Western Mosque

Great Mosque

DrumTower Bell Tower

Site of theSite of theXi’an IncidentXi’an Incident(not open to tourists)(not open to tourists)

Site of theXi’an Incident(not open to tourists)

Forest of Steles

Temple of the Recumbent Dragon

City Wall (Nan Men)

Residence of GeneralZhang Xue Liang

Xi’an Office of the Eighth Route Army

Temple of the Town God

FIRST RING ROADFIRST RING ROAD

FIRST RING

ROA

DFIRST RIN

G RO

AD

FIRS

T RI

NG

RO

AD

FIRS

T RI

NG

RO

AD

SECOND RING ROAD

SECOND RING ROAD

SECOND RING ROAD

SECOND RING ROAD

MING WALLEDMING WALLED

CITY CITY

TANG DAMINGTANG DAMINGPALACE SITEPALACE SITE

FIRST RING ROADFIRST RING ROAD

FIRST RING ROAD

Shuncheng Lane Shuncheng Lane

Shuncheng LaneShuncheng Lane

Shun

chen

g La

ne

Shuncheng Lane

FIRST RING

ROA

D

FIRS

T RI

NG

RO

AD

SECOND RING ROAD

SECOND RING ROAD

FIRST RING ROAD

MING WALLED

CITY

TANG DAMINGPALACE SITE

BICYCLE PRE-DOMINANT ROADS (MV ACCESS ONLY)

SEGREGATED BICYCLE LANES (ROAD MARKINGS)

SEGREGATED BICYCLE LANES (GREEN BELT)

SEGREGATED BICYCLE LANES (BARRIERS)

LOCAL LANES AND NMT STREETS USED BY BICYCLES

TOURIST SITES

SPECIAL FOOD

ANCIENT TREES

TRADITIONAL RESIDENCES

HISTORICAL STREET BLOCKS

EXPRESSWAYS

URBAN MAIN ROADS

SECONDARY ROADS

TERTIARY ROADS

RAILROADS

OTHER MAJOR CULTURAL HERITAGE SITE

TRAIN STATION

ANCIENT CITY WALL

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.

IBRD 35428

C H I N AXI’AN SUSTAINABLE URBAN

TRANSPORT PROJECTMING WALLED CITY

BICYCLE ROUTES

DECEMBER 2007