China, People's Republic of: Inner Mongolia Road Development Project

Sovereign Project | 43029-013

Summary

Inner Mongolia Autonomous Region (IMAR) is the third largest administrative region of the PRC in terms of land area and is well endowed with natural resources. As a result of mining, IMAR's economy has been growing rapidly, with gross domestic product increasing at 18% per annum from 2003 to 2011. The proposed project is located in Hulunbeier, one of the fast growing areas of IMAR. Hulunbeier is a vast area of 253,000 square kilometers which is very sparsely populated (fewer than 4 million inhabitants). It borders PRC's Heilongjiang province, the Russian Fedeatin, and Mongolia. Its economy depends heavily on resource extraction industries (coal, oil, and various minerals), animal husbandry, trade with the Russian Federation and to a lesser extent Mongolia, and a developing tourism industry.

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Project Name Inner Mongolia Road Development Project
Project Number 43029-013
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3042-PRC: Inner Mongolia Road Development Project
Ordinary capital resources US$ 200.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Sector / Subsector Transport - Road transport (non-urban)
Gender Equity and Mainstreaming Effective gender mainstreaming
Description Inner Mongolia Autonomous Region (IMAR) is the third largest administrative region of the PRC in terms of land area and is well endowed with natural resources. As a result of mining, IMAR's economy has been growing rapidly, with gross domestic product increasing at 18% per annum from 2003 to 2011. The proposed project is located in Hulunbeier, one of the fast growing areas of IMAR. Hulunbeier is a vast area of 253,000 square kilometers which is very sparsely populated (fewer than 4 million inhabitants). It borders PRC's Heilongjiang province, the Russian Fedeatin, and Mongolia. Its economy depends heavily on resource extraction industries (coal, oil, and various minerals), animal husbandry, trade with the Russian Federation and to a lesser extent Mongolia, and a developing tourism industry.
Project Rationale and Linkage to Country/Regional Strategy It is designed to support the government's Western Region Development Strategy and Northeast Region and other Old Industrial Bases Revitalization Strategy. It is in line with ADB objectives in the PRC Coutnry Partnership Strategy (2011-2015) and its focus on road safety, rural roads, environmental conservation, and cross border transport aligns it with the core objetives of ADB's Sustainable Tranport Initiative.
Impact Efficient, inclusive, and safe movement of people and goods in IMAR and across the borders of Russian Federation and Mongolia
Project Outcome
Description of Outcome Safe and efficient road transport network that supports environmental conservation and sustainable tourism
Progress Toward Outcome to be assessed
Implementation Progress
Description of Project Outputs

1. Highway upgrading and road safety improvements

2. Upgrading of rural roads

3. Cross border transport improvement and trade facilitation

4. Support for community-based sustainable tourism and environmental conservation

5. Institutional strengthening and capacity building

Status of Implementation Progress (Outputs, Activities, and Issues)

Output 1: Highway upgrading and road safety improvements. This output comprises (i) upgrading 132 km of provincial highway S203 from Manzhouli to Alatanemole from class III to half-class-I standard; and (ii) improving safety on the provincial highway by introducing measures including road markings, signage, speed controlled junction design, barriers and underpasses for animals, designated parking, viewing points, and service areas. Three civil works contracts under advanced contracting MA-1, MA-8 and MA-9 started to construction since April 2014. The contracts for MA-2 to MA-7 were signed. On 27 July 2014, PCSS numbers for lots MA-3, MA-4, MA-5 and MA-7 were issued by ADB and PCSS numbers for the other two lots will be issued upon receiving the required performance securities. However, the mission was informed the domestic approval of land acquisition for S203 is still pending. The mission showed serious concern and urged the EA and IA to sort out the issue as soon as possible. (See para.28)

Output 2: Upgrading of rural roads. This output comprises upgrading (i) 61 km of a natural (unclassified) road from Xinboluke to Manzhouli to class III, (ii) 127 km of a sand and stone unclassified road from Nuogannuoer through Wubuerbaolige to Alantanhadagacha to class IV, (iii) 54 km of a sand and stone unclassified road connecting Baogedewula with Beiersumu to class IV, and (iv) 45 km of a natural unclassified road from Amugulang to Wubuerbaolige to class III. The contract was signed for upgrading the road from Xinboluke to Manzhouli on 15 June 2014. The construction has not started as the domestic approval of land acquisition is pending. The mission was advised that the procurement of other two roads will commence by December 2014.

Output 3: Cross-border transport improvement and trade facilitation. This output comprises (i) rehabilitation and upgrade of 82 km of the class III road from Alatanemole to Arihasate border-crossing point to class II, (ii) rehabilitation and upgrade of 22 km of the class III road from Amugulang to Ebuduge bordercrossing point to class II, (iii) construction of bus stops and terminals in Hulunbeier, and (iv) cross-border trade facilitation between the PRC and Mongolia. The mission was advised that the detailed design for the two roads and three bus stops and terminals were approved but all the domestic approval for land acquisition are pending. The mission was advised that the location of one of bus stops needs to be changed. The mission requested the PMO to submit a proposal with detailed information for the change by 31 August 2014. The PMO also confirmed that all required domestic approval for the change will be completed by 31 October 2014.

Output 4: Support for Community-Based Sustainable Tourism and Environmental Conservation. This output comprises (i) construction of rest areas and installation of signage and information boards along the S203 to reduce uncontrolled driving and parking in environmentally sensitive areas; (ii) development of an eco-cultural trail to enable tourists to experience grasslands, wetlands, and traditional lifestyle; and (iii) support for the Dalai Lake NNR Management Bureau, including constructing a multipurpose protection center; providing equipment for protection, research, and monitoring; and assisting with development of the 10-year master plan for habitat management, eco-tourism development, and habitat restoration.

It was highlighted that it was the intention that the specialist environmental conservation and ecotourism development support consulting services (Package CS.1) were procured in advance of any loan or TA activities so the Consultants could manage and support these activities. The Procurement Plan proposes QCBS for these services. The PAM states that a Firm should be recruited to provide the proposed 33 person months of services. ADB has previously provided recommendations of suitable firms and individuals for the proposed positions and following update of the TORs can provide the PMO with this information and support to procure these services, as needed. It is recommended that these services are procured before any further activities associated with Output 4 of the loan and TA are implemented.

Output 5: Institutional strengthening and capacity building. This output comprises (i) project management and implementation support to ensure compliance with ADB's policies and procedures; (ii) capacity building of the project executing agency and implementing agency in road safety, operation, and maintenance; and (iii) capacity building of Dalai Lake NNR Management Bureau staff to improve management of the nature reserve. The mission discussed with the EA and IA the arrangement of consultant recruitment and requested the EA and IA to immediately start the procurement of consulting service for supporting project management. The EA and IA confirmed that they will use domestic funds for external monitoring service and the recruitment of monitoring agencies will be completed by 30 September 2014.

Geographical Location
Safeguard Categories
Environment A
Involuntary Resettlement B
Indigenous Peoples A
Summary of Environmental and Social Aspects
Environmental Aspects According to the Project Administration Manual and the project environment impact assessment (EIA) report, the Project will involve a set of institutions to secure a sound environment management and to implement the project environment management plan (EMP). ADB mission reviewed the institutional setup for environment management within the executing agency and the project management office (PMO) and confirmed that PMO has a unit (i.e. general office) to oversee the implementation of safeguards.
Involuntary Resettlement Four resettlement plans were prepared for S203, two port roads, and three rural roads during the project preparation. According to those resettlement plans, the project will permanently acquire a total of 15,680 mu of land (mostly grassland), which partially affects the livelihood of 202 herder's households with 792 people. A total of 3,045 mu land will be temporarily used during construction. The project will also relocate 175 m2 of residential houses and partially affect a cement factory.
Indigenous Peoples The project is classified as category A for the indigenous peoples safeguard. The ethnic minority population in the project area is mainly Mongolian representing 31.9% of the total population. An ethnic minority development plan (EMDP) was prepared to ensure the equitable sharing of project benefits and propose measures to mitigate adverse impacts for the Mongolian community within the project area. It was noted that a small number of Mongolian herders are affected by land acquisition and this will be addressed by resettlement plan. In terms of gender development, the project is categorized as effective gender mainstreaming. A project gender action plan was prepared to promote women's participation and gender equality.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services to be determined
Procurement to be determined
Responsible ADB Officer Xiao Guangrui
Responsible ADB Department East Asia Department
Responsible ADB Division PRC Resident Mission
Executing Agencies
IMAR Department of TransportHDJG666@163.COMNo. 68 Dizhiju S. Street
Saihai District, Hohhot, China
Timetable
Concept Clearance 16 Nov 2012
Fact Finding 19 Nov 2012 to 29 Nov 2012
MRM 19 Mar 2013
Approval 08 Oct 2013
Last Review Mission -
Last PDS Update 27 Mar 2015

Loan 3042-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Oct 2013 17 Dec 2013 01 Apr 2014 30 Jun 2018 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 502.11 Cumulative Contract Awards
ADB 200.00 08 Oct 2013 103.85 0.00 52%
Counterpart 302.11 Cumulative Disbursements
Cofinancing 0.00 08 Oct 2013 48.43 0.00 24%

TA 8479-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Oct 2013 02 Jan 2014 02 Jan 2014 30 Jun 2015 30 Jun 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 0.00 0.00 0.00 0.00 0.00 0.00 08 Oct 2013 0.00
Title Document Type Document Date
Inner Mongolia Road Development Project: Audited Project Financial Statements (January-December 2014) Audited Project Financial Statements Jun 2015
Inner Mongolia Road Development Project: Procurement Plan Procurement Plans Mar 2015
内蒙古道路开发项目 : 项目数据表 Translated PDS Jan 2014
Loan Agreement for Inner Mongolia Road Development Project Loan Agreement (Ordinary Resources) Dec 2013
Project Agreement for Inner Mongolia Road Development Project Project/Program Agreement Dec 2013
Inner Mongolia Road Development Project Project/Program Administration Manual Sep 2013
Inner Mongolia Road Development Project Reports and Recommendations of the President Sep 2013
Inner Mongolia Road Development Project Gender Action Plans Sep 2013
Inner Mongolia Road Development Initial Poverty and Social Analysis Nov 2012

Evaluation Documents

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