Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 30 Nov 2006
PDS Updated as of 21 Oct 2013

Project Name Hunan Roads Development II
Country China, People's Republic of
Project/Program Number 35338-013
Status Approved
Geographical Location Hunan Province
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Transport and ICT
Subsector Road Transport
Strategic Agendas
Drivers of Change
Gender Equity and Mainstreaming Categories No gender elements

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan2089Ordinary capital resources312,500
Counterpart 146,400
TOTAL US$ 458,900

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment A
Involuntary Resettlement A
Indigenous Peoples A

Summary of Environmental and Social Issues

The EIA assessed environmental impacts of the selected alignment of the expressway and the local road component, and prescribed environmental protection and mitigation measures costing $2.4 million. The proposed alignment does not cross or impinge on any protected areas. There are no known rare or endangered species in the project area, and no old growth forest, with the exception of one tree near Guanzhuang village. This tree is believed to be more than 400 years old, and has been tagged as a protected item. The alignment was diverted away from this area, thereby increasing its length by about 700 meters. The Project s major environmental impacts include soil and water conservation, erosion control, borrow and disposal site management, and revegetation. Borrow and spoil disposal sites were identified at 10 km intervals. An erosion control and protection plan was prepared separately from the EIA, and approved by the Water Resources Bureau. Environmental mitigating measures will be incorporated in the bidding documents and bills of quantities of the civil work contracts. The Project will contribute through improved access to markets and social services for the poor; lower transport costs of agricultural inputs and products; better access to and interaction with other regions, and employment opportunities during construction and after completion owing to increased economic activities. The expressway will help accelerate economic growth, spur interregional trade, and reduce poverty in the project area. To maximize the benefits of the expressway to the poor, the local road component was integrated into the Project. The integrated approach will improve the rural poor s mobility and road access to economic opportunities , and thereby contribute to poverty reduction. Better tie-ins between the major roads and local roads will help rural agricultural products reach markets and allow farmers to upgrade farming practices. As reliable transport to markets becomes more readily available, cash-crop farming in remote or isolated areas will also be stimulated and the access to off-farm employment opportunities, broadened.

Environmental Aspects
The Project is classified as environmental category A by ADB. The EIA report was prepared by HCD, under the supervision of HEPB, and approved by the State Environmental Protection Administration in November 2003. The EIA assessed environmental impacts of the selected alignment of the expressway and the local road component, and prescribed environmental protection and mitigation measures costing $2.4 million. The proposed alignment does not cross or impinge on any protected areas. There are no known rare or endangered species in the project area, and no old growth forest, with the exception of one tree near Guanzhuang village. This tree is believed to be more than 400 years old, and has been tagged as a protected item. The alignment was diverted away from this area, thereby increasing its length by about 700 meters. The Project s major environmental impacts include soil and water conservation, erosion control, borrow and disposal site anagement, and revegetation. Borrow and spoil disposal sites were identified at 10 km intervals. An erosion control and protection plan was prepared separately from the EIA, and approved by the Water Resources Bureau. Environmental mitigating measures will be incorporated in the bidding documents and bills of quantities of the civil work contracts.
Involuntary Resettlement
The project expressway will directly affect 22 townships, 97 villages, and 465 landowning groups in 3 districts or counties: Dingcheng District, Taoyuan County, and Yuanling County. In the 97 villages, minority nationalities account for 38% of the population. According to the DMS, 1,349 ha of land will be acquired. Of which 38% is farmland, composed of irrigated land (79%) and dryland (21%). The remaining portion permanently acquired land comprises of forestland, housing plots and bush land. About 290 ha of land will be temporarily used during the construction phase. According to the method described in the Administration Land Law, land acquisition will directly affect 30,564 persons who will totally lose their land. Along with land acquisition, about 235,000 m2 of houses and other structures will be demolished, which will affect about 1,414 rural households, 5 primary schools, and 1 tree nursery in the Zhengjiayi Forestry Farm. The total number of affected people is estimated at 37,000. An RP was formulated in accordance with PRC laws and local regulations, and the ADB s Policy on Involuntary Resettlement and Indigenous People s Policy. The resettlement strategy, compensation standards, entitlements, and rehabilitation plans were based on impact surveys and consultations with local officials and affected households. Considering that the degree of the impact on villages is modest and most of the affected persons are not poor compared with the average income in their community, the RP will be implemented smoothly. Land acquisition will be completed in 2004 and compensation will be paid prior to the displacement of people or loss of land. Compensation and other allowances will be used to invest in economic and social infrastructure so that farmers livelihoods and living standards will improve. Economic rehabilitation plans have been prepared for 10 seriously affected villages. Special attention will be paid to the vulnerable groups to prevent their marginalization or impoverishment.
Indigenous Peoples
The minority population in the project area totaled 1.3 million in 2002 (41% of the total population), of whom 96% were Tujia and Miao. Of the total minority people in the area, 60% will benefit from the Project. The major benefits to the minorities include higher income from increased cash-crop farming, more cash income sources due to seasonal migration work, enhanced contract with urban centers, and better access to social services. Minorities comprise about 38% of the people affected by land acquisition and resettlement. Adverse impacts on minorities are addressed in the RP.32 The EMDP was prepared based on RP, SAP, and ongoing government policies and programs for minority groups. In accordance with PRC regulations and ADB s indigenous peoples policy it provides special mitigation measures for the minority households identified as poor and vulnerable.

Stakeholder Communication, Participation and Consultation

During the feasibility study, environmental impact assessment (EIA), and resettlement planning, consultations were conducted with government agencies, villagers, other people likely to be affected by the Project, and local groups to discuss environmental concerns, land acquisition and resettlement issues, and economic development potential. Village investigations and surveys were conducted in the project area to assess the potential adverse effects and benefits of the Project. Over 3,370 people were interviewed in public opinion surveys, social assessment, environmental assessment, and resettlement planning. For the RP, consultation meetings were held with the affected counties, townships, and villages. The Project was well known by the rural people and public support for it was high. The local officials explained the policies and regulations for land compensation and housing removal to those who would be adversely affected by the loss of farmland or housing. These concerns were considered in (i) determining the alignment to reduce adverse social, resettlement, and environmental impacts; (ii) designing connector roads and pedestrian access; and (iii) completing a detailed RP. The consultation process was expanded to finalize the design and formulate appropriate compensation standards and rehabilitation measures for people displaced by land acquisition or house demolition. Villagers participated in the discussions and decisions on village resettlement.

During Project Design
During the feasibility study, environmental impact assessment (EIA), and resettlement planning, consultations were conducted with government agencies, villagers, other people likely to be affected by the project, and local groups to discuss environmental concerns, land acquisition and resettlement issues, and economic development potential. Village investigations and surveys were conducted in the project area to assess the potential adverse effects and benefits of the project. Over 3,370 people were interviewed in public opinion surveys, social assessment, environmental assessment, and resettlement planning. For the RP, consultation meetings were held with the affected counties, townships, and villages. The project was well known by the rural people and public support for it was high. The local officials explained the policies and regulations for land compensation and housing removal to those who would be adversely affected by the loss of farmland or housing. These concerns were considered in (i) determining the alignment to reduce adverse social, resettlement, and environmental impacts; (ii) designing connector roads and pedestrian access; and (iii) completing a detailed RP. The consultation process was expanded to finalize the design and formulate appropriate compensation standards and rehabilitation measures for people displaced by land acquisition or house demolition. Villagers participated in the discussions and decisions on village resettlement.
During Project Implementation
The expressway construction had directly employed around 4,643 local labors along the alignment, mostly in Yuanling County. In addition, the locally procured construction materials and supplies have also provided a large amount of employment opportunities in project areas, a total of 6,150 local labors worked for materials and supplies for the expressway construction.

Description

The project is located in the western part of Hunan Province, one of the poorest regions of the PRC. The project will (i) construct a 173 kilometer (km) expressway across hilly to mountainous terrain; (ii) improve 517 km of local roads servicing poor counties and townships; and (iii) provide consulting services and training to enhance construction quality, road safety, and project monitoring and evaluation.

Project Rationale and Linkage to Country/Regional Strategy

The Project will support the Government's Western Region Development Strategy by supplying a link in the vital Changsha to Chongqing corridor, one of the eight prioritized western corridors included in 10th Five-Year Plan. The project area is largely rural and mountainous with limited accessibility. Around 56% of the rural population is defined as poor with an annual income of below CNY900. Road infrastructure is inadequate to support economic growth, a necessary prerequisite to tackle poverty in the project area. Some 86% of the roads in Hunan fall below class III. The national highway (NR319), which runs parallel to the project expressway and currently serves as an outlet to major trading destinations such as Chongqing, is a combination of class III and below roads with pavement in poor condition. Over 65% of the highway's length experiences frequent congestion and interference from nonmotorized traffic. Traffic on NR319 has grown at around 7.3% annually over the past few years and will exceed the highway's capacity at several points by 2008. A better road network in western Hunan is needed to facilitate economic growth and to integrate the poor, isolated western regions with the economic centers. The Project is expected to boost economic activities in western Hunan, encourage interregional trade, thus reducing poverty in the project area. Consistent with ADB's country operational strategy, the Project's approach integrates the construction of the expressway and improvement of local roads so that the benefits of the expressway are spread over a wider crosssection of local poor communities.

Development Impact

Promoted economic development and poverty reduction in Hunan Province.

Project Outcome

Description of Outcome
Improved transport efficiency, accessibilities of rural areas to markets and social services, and road safety in the transport corridor.
Progress Towards Outcome
The project was completed by 31 December 2010. PCR mission is conducted in November 2011. PCR is being prepared and will be circulated to the Board in the second quarter 2012.

Outputs and Implementation Progress

Description of Project Outputs
Construction of a 173 km, four-lane access-controlled, toll expressway from Changde to Huaihua, including tunnels and bridges, interchanges and toll stations, and service areas. Upgrading or improving of 517 km of local roads. Procurement of equipment for road maintenance and safety, toll collection, surveillance and communications, tunnel ventilation and lighting, vehicle axle road testing, and environmental protection. Provide international consulting services on construction supervision and capacity building.
Status of Implementation Progress (Outputs, Activities, and Issues)
The project expressway consisted of (i) 21 ICB packages for subgrade works; (ii) 6 ICB packages for pavement works; (iii) 15 NCB packages for traffic engineering; (iv) 2 ICB packages for toll collection, communications and traffic monitoring; (v) 4 NCB packages for buildings and ancillary facilities; and (vi) 12 NCB packages for greening and planting. Procurement of subgrade packages started in July 2004 and commenced construction in September 2005. Subgrade works, including tunnels, bridges, drainages, overpasses and protection works were completed in early 2008. Procurement of pavement works, including prequalification and bidding started in May 2006 and pavement contracts were awarded in August 2007. Pavement works were commenced in the end of 2007 and were completed in October 2008. Traffic engineering and toll collection packages financed by domestic funds were completed in December 2008. Buildings and ancillary facilities including project management building, traffic monitoring center, two service areas, seven toll stations, two maintenance centers, and one tunnel administration station funded through domestic sources started construction in 2007 and were completed before December 2008. Planting and greening were completed in 2008. The project expressway was completed 8 months ahead of schedule from 48 months envisaged at appraisal to 40 months and was opened to traffic under trial operation basis since 18 December 2008. Local roads improvement program consisted of nine roads. Eight local roads with total length of 383 km financed by domestic funds were upgraded or improved from 2004 to 2008. The 135 km Zhangyuan Highway financed by ADB was divided into two sections: (i) 75 km section in Yuanling County (Yuanling Section) implemented in 2006, and (ii) 60 km section in Zhangjiajie Municipality (Zhangjiajie Section). Construction of Yuanling Section and Zhangjiajie Section was commenced in 2006 and 2009, respectively. Zhangyuan Highway was opened to traffic by the end of 2010 which reduced travel time from 6-8 hours to 2 hours with improved travel conditions. There are four equipment packages, including toll collection, surveillance, communications, tunnel lighting and ventilation system (toll and tunnel system), equipment for accident management, and maintenance equipment. Procurement of equipment for toll and tunnel system followed ICB procedures and started in July 2007. Contract awards were approved in April 2008. The equipment for accident management and maintenance were funded by domestic sources and were procured in 2008. All equipment are now operational. An international consulting firm was engaged to provide 49 person-months consulting services. The international consultant team comprised a team leader/highway engineer, pavement engineer, tunnel engineer, vehicle road safety specialist, vehicle emission specialist, social poverty and benefit monitoring and evaluation specialist, and operation & maintenance concession specialist. The international consultant was mobilized in October 2005 and worked closely with IA and domestic consultants. There were 10 national consulting firms engaged to provide 6,390 person-months inputs and 124 staff from EA and IA participated in 14 overseas training totaling 85 person-months. The IA also organized on-site trainings for 1,040 persons.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2006 Nov 30
Consulting Services
The Project will provide 49 person months of international consulting services and about 5,184 person-months of domestic consulting services. International consulting services will be provided under the Project to (i) assist in project management during the construction period; (ii) provide expertise in tunnel and bridge construction; (iii) assist in preparing the operation and maintenance concession framework and bidding documents; (iv) enhance the provision of transport services; (v) conduct a safety audit of the project design and make recommendations on improving the safety of completed construction works; (vi) help set up and implement quality control procedures; (vii) assist in formulating a human resource development and training program; and (viii) help establish and implement a project performance management system, including the assessment of the impact on poverty reduction. Of the 5,184 person-months of domestic consulting services, 300 person-months will be allocated to the local road component for ensuring proper design and supervision, project monitoring and evaluation, training of the engineering staff, and managing the Project.
Procurement
Goods and services financed by the ADB loan will be procured in accordance with ADB's Guidelines for Procurement. Civil works for the expressway will be procured through international competitive bidding. Procurement for the local roads financed by the $12.5 million ADB local will use local competitive bidding, while procurement for the local roads under government financing will follow government procedures acceptable to ADB. Equipment will be procured through international competitive bidding. ADB approved advance action for procurement of civil works in May 2004.
Procurement and Consulting Notices
http://www.adb.org/projects/35338-013/business-opportunities

Timetable

Concept Clearance 19 Jun 2004
Fact-finding 06 Nov 2003 to 12 Nov 2003
Management Review Meeting 04 May 2004
Approval 09 Sep 2004
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 2089 09 Sep 2004 26 May 2005 16 Aug 2005 30 Jun 2010 31 Dec 2010 06 May 2011

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
01 Sep 2014 Loan 2089 295,234 0 95.00%
Cumulative Disbursements
01 Sep 2014 Loan 2089 312,292 0 100.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 2089 Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory

Contacts and Update Details

Responsible ADB Officer Eunkyung Kwon (ekwon@adb.org)
Responsible ADB Department East Asia Department
Responsible ADB Divisions PRC Resident Mission
Executing Agencies Hunan Provincial Department of Transport (HPDOT)
*

Links

Project Website http://www.adb.org/projects/35338-013/main
List of Project Documents http://www.adb.org/projects/35338-013/documents