China, People's Republic of: Hai River Estuary Area Pollution Control and Ecosystem Rehabilitation Project

Sovereign Project | 43054-013

Summary

The project will support the Tianjin municipal government (TMG) to implement green growth demonstration activities in the coastal areas surrounding the Hai River estuary that will contribute to a recycling economy. The proposal for Asian Development Bank (ADB) financing includes (i) wastewater management and pollution control, including the establishment of a wastewater treatment plant (WWTP) and water reuse facilities along the south bank of the Hai River estuary; (ii) clean-up and reuse of contaminated sediment in the Hai River estuary area; (iii) ecosystem rehabilitation in the Hai River estuary area; (iv) establishment of an environmental monitoring and emergency response center (EMERC) in the Harboer Economic Area (HEA), formerly called the Harbor Industrial Park; and (v) prevention of storm-surge disasters. A project preparatory technical assistance was provided [ADB. 2009. Technical Assistance to the People's Republic of China for the Hai River Pollution Control and Ecosystem Rehabilitation.

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Procurement Documents


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Project Name Hai River Estuary Area Pollution Control and Ecosystem Rehabilitation Project
Project Number 43054-013
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2829-PRC: Hai River Estuary Area Pollution Control and Ecosystem Rehabilitation Project
Ordinary capital resources US$ 100.00 million
TA 7985-PRC: Capacity Development for Green Growth Demonstration
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Water and other urban infrastructure and services - Urban policy, institutional and capacity development - Urban sewerage
Gender Equity and Mainstreaming Some gender elements
Description The project will support the Tianjin municipal government (TMG) to implement green growth demonstration activities in the coastal areas surrounding the Hai River estuary that will contribute to a recycling economy. The proposal for Asian Development Bank (ADB) financing includes (i) wastewater management and pollution control, including the establishment of a wastewater treatment plant (WWTP) and water reuse facilities along the south bank of the Hai River estuary; (ii) clean-up and reuse of contaminated sediment in the Hai River estuary area; (iii) ecosystem rehabilitation in the Hai River estuary area; (iv) establishment of an environmental monitoring and emergency response center (EMERC) in the Harboer Economic Area (HEA), formerly called the Harbor Industrial Park; and (v) prevention of storm-surge disasters. A project preparatory technical assistance was provided [ADB. 2009. Technical Assistance to the People's Republic of China for the Hai River Pollution Control and Ecosystem Rehabilitation. Manila (TA 7312-PRC, $700,000, approved on 14 July)].
Project Rationale and Linkage to Country/Regional Strategy

Tianjin municipality, the sixth largest city and one of four special municipalities in the PRC with a provincial status, has a total area of 11,760 square kilometers (km2) and a population of 11.6 million. It is located in the lowest reach of the Hai River basin. Of the nine major rivers in the basin, seven flow through Tianjin to the Bohai Sea. The central government identifies the Tianjin Binhai New Area (TBNA), established in January 2010 and administered by Tianjin municipality, as the third economic growth focal point of the country, after Shenzhen in the 1980s and the Shanghai Pudong area in the 1990s. With a planned area of 2,270 km2 and population of 1.4 million, this new development area is proposed to become a center of finance, business, and industry in the northern PRC in the near future. TBNA contributed more than 50% of TMG's gross domestic product in 2009.

The HEA, a land reclamation area in the tidal-flat portion of Bohai Bay, south of the Hai River estuary, is one of the functional areas in TBNA. The development of this state demonstration zone for the recycling economy began in 2003 and is due to be completed by 2018. The area will accommodate large domestic and international companies, including petrochemical industries, shipyards, offshore oil engineering bases, heavy equipment manufacturing, technological research, and development institutes; and will provide for residential areas and corresponding public utilities. It will also accommodate industries that will be moved from existing residential areas. The initial 2005 master plan for HEA development covered three phases, with a total area of about 80 km2. Land reclamation under phase I (about 20 km2) is complete; industries are still being established. Phase I includes the ADB-supported integrated gasification combined-cycle power plant, which is more efficient than other clean coal technologies and emits less greenhouse gases and only a fraction of sulfur dioxide and nitrogen oxide pollutants. Land reclamation under phases II and III is ongoing; about 30 km2 of the total 60 km2 are completed. In 2010, the Tianjin Harbor Economic Area Administrative Commission (HEAAC) approved the revised master plan, which (i) restructures the plan for phases II and III areas to accommodate cleaner, nonpolluting industries; and (ii) extends the HEA to 200 km2 to encompass the adjacent Harbor Manufacturing Park. Future impacts of climate change on the HEA are of concern for TMG, which is taking measures to ensure adequate resilience.

Rapid economic development in the Hai River basin and the Bohai Bay coastal areas of Tianjin municipality has resulted in the degradation and scarcity of natural and environmental resources. Impacts include (i) highly polluted waterways because of untreated wastewater discharges; (ii) silted canals with highly contaminated sediments, including heavy metals and persistent organic pollutants; and (iii) serious degradation of the Bohai Sea ecosystems. The government has been addressing the serious water pollution problems in the Hai River basin and Bohai Bay by (i) promoting an integrated approach to water management in river basins and coastal development zones; (ii) reducing pollution sources, particularly industrial and urban point sources; and (iii) continuing institutional and financial management reforms to facilitate sustainable environmental management. Many development partners, including ADB, the Global Environment Facility, the United Nations, the World Bank, and international nongovernment organizations, provide assistance to help control pollution in the Hai River basin. These efforts have primarily focused on controlling upstream pollution sources and constructing WWTPs, which have resulted in significant improvements for the urban areas in Tianjin municipality. To reduce upstream pollution, TMG recently developed a 3-year action plan (2010 2012), which aims to (i) reduce sewage overflow to rivers in urban areas; and (ii) improve the wastewater collection and treatment ratio from 82% in 2008 to 90% by 2012. The action plan sets a target of 30% for the water reuse ratio. Both are significantly higher than for other cities in the PRC. The Bohai Gulf also suffers from frequent and serious storm surges year-round. Storm surges have caused serious damage to Tianjin and increase the risks of pollution accidents.

Implementation of related ADB-financed projects demonstrates that the introduction and strengthening of green growth approaches are critical for sustainable development of Tianjin's coastal areas. Rapid economic development often overshadows the need to integrate adequate environmental management practices and risk mitigation measures into development activities. The project integrates the lessons and complements achievements under related ADB-financed projects, including the Tianjin Wastewater Treatment and Water Resources Protection Project, the Hebei Province Wastewater Management Project, and the Shandong Hai River Basin Pollution Control Project; and the World Bank-financed Hai Basin Integrated Water and Environment Management Project. Lessons include (i) the need to promote innovative technology and standards for project components, including sound solutions for sludge treatment; (ii) the importance of providing realistic projections for wastewater flows; and (iii) the need to address financial and institutional arrangements for proper operation and maintenance (O&M). Activities are needed to (i) demonstrate practical green growth interventions that can be easily replicated; and (ii) strengthen sound environmental management for the rapidly developing TBNA functional areas, which poses significant challenges for local governments. Specific concerns include government capacity to (i) provide and protect scarce environmental resources, such as freshwater ecosystems; (ii) control existing and potential pollution sources and avoid accidents; (iii) establish adequate emergency and disaster risk management; and (iv) adapt to potential climate change impacts and sea-level rise. Climate change impacts have already resulted in an increase in the incidence of storm surges, subsequent economic damage, and increased exposure to environmental accidents and disasters.

The project supports ADB's strategic priorities in the country partnership strategy (2008 2010) and the country operations business plan (2011 2013) for the PRC. It aims to promote inclusive growth and environmental sustainability. The project has a strong linkage with ADB's emerging water operational plan, which focuses on wastewater management and reuse, pollution control, and river rehabilitation. It also supports the PRC's sustainable development agenda for a harmonious society, as outlined in the PRC's Twelfth Five-Year Plan (2011 2015). Climate change and environmental sustainability are key considerations, including greater preparedness for extreme weather events, reduction of heavy metal and wastewater pollution, and conservation of water and natural resources.

Impact Sustained green growth of the Bohai Bay coastal areas of the Tianjin municipality
Project Outcome
Description of Outcome Innovative environmental and public safety investments demonstrated in HEA
Progress Toward Outcome

Constructed wetland completed.

ISO certifications 9001 and 14001 were awarded to one of the implementing agencies (and final operators of project components) in July 2014.

Implementation Progress
Description of Project Outputs

1. Water conservation and ecosystem rehabilitation implemented

2. Disaster prevention and emergency response management established

3. Capacity development and project implementation support provided

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

The constructed wetland was completed in April 2013.

The contaminated sediment subcomponent has been removed from the scope of the Project. (Memo for minor change in scope approved on 24 June 2014.)

Construction of the breakwater component was completed in April 2013. (Fully financed by Government).

The detailed design of the WWTP is on-going.

EMERC construction will start in Q2 2015.

CDTA consultant mobilized on 19Aug2013 to assist with the EMS certification, which was obtained by the IA in July 2014. Project management consultant (from Loan) was recruited in February 2014 and has been assiting the EA since on design and procurement review.

Geographical Location TBD
Safeguard Categories
Environment A
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The project is classified as category A following ADB's Safeguard Policy Statement (SPS, 2009). During project preparation, separate domestic environmental impact assessment (EIA) reports were prepared for each of the five subprojects in compliance with the PRC regulatory framework, and an EIA report, including an environmenal management plan (EMP) for the overall project was prepared in compliance with ADB's requirements.

The EMP was revised to reflect the cancellation of the contaminated sediment subcomponent and disclosed on ADB's website.

Semi-annual environmental monitoring reports are regularly submitted.

Involuntary Resettlement

The project does not involve land acquisition and displacement of people. Therefore, it was categorized as "C" regarding involuntary resettlement and no resettlement plans need to be prepared according to the Safeguard Policy Statement. No further actions are required by the executing and implementing agencies.

The Ocean Area Usage Certificate issued to HIP in 2005 confirmed the government's approval of HIP's land reclamation in compliance with requirements of relevant laws, regulations, and administative procedurs.

Indigenous Peoples Following ADB's Safeguard Policy Statement (SPS, 2009), the project was categorized as "C" regarding ethnic minorities and no further actions are required by the executing and implementing agencies.
Stakeholder Communication, Participation, and Consultation
During Project Design Various public consultations were conducted in the course of the preparation of the feasibility study reports and EIAs. During the feasibility stury, the respective municipality governments were consulted to assist in site and process selections. During EIAs and project preparatory technical assistance, public consultations with various groups of stakeholders were conducted. The main focus of public consultations were to assess the environmental impacts of the proposed subcomponents on nearby communities and mitigation measures. These activities were carrid out in accordance with MEP Interim Guidelines on PUblic Participation in Environmental Impact Assessment (2006), and ADB Environmental Assessment Guideline (2003).
During Project Implementation Future plans for public involvement during the construction and operation phases were developed during project preparation.These plans include public participation in (i) monnitoring impacts and mitigation measures during the construction and operations stages, (ii) evaluating environmental and economic benefits and social impacts, and (iii) interviewing the public after project completion. They include several types of consultation, e.g., site visits, workshops, investigatiion of specific issues, interviews, and public hearings.
Business Opportunities
Consulting Services

An estimated 132 person-months of consulting services (67 international and 65 national) are required to (i) review and improve as necessary the quality of the final detailed design of project infrastructure; (ii) introduce an environmental management system; (iii) support and strengthen the institutional and operational capacity of the executing and implementing agencies; and (iv) provide training to, and strengthen the capacity of, the EMERC. Due to the specific expertise required for the capacity building of the EMERC staff, consulting firms will be engaged using the quality-based selection (QBS) method. All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The terms of reference for all consulting services are detailed in Section D of the Project Administrative Manual. Consulting services to be financed under the ADB loan will be selected in accordance with ADB's Guidelines on the Use of Consultants by the Asian Development Bank and its Borrowers (2010, as amended from time to time). The relevant sections of ADB's Anticorruption Policy (1998, as amended to date), will be included in all documents and contracts relating to engagement of consultants.

The executing agency has requested advance contracting and retroactive financing for contract packages covering consulting services. Advance contracting and retroactive financing will be undertaken in conformity with ADB's Procurement Guidelines. The issuance of request for proposals under advance contracting and retroactive financing will be subject to ADB approval. The Mission explained that retroactive financing can only be applied for expenses incurred within one year prior to loan signing, up to the agreed maximum amount.

Procurement

All procurement to be financed under the ADB loan will be carried out following ADB's Procurement Guidelines (2010, as amended from time to time). Contracts for civil works valued at over $10 million and contracts for goods and related services valued at over $1 million will be procured through international competitive bidding procedures. Contracts for civil works valued at $10 million or less but over $100,000, and contracts for goods and related services valued $1 million or less but over $100,000 will be procured through national competitive bidding procedures. National competitive bidding will be undertaken following the PRC Tendering and Bidding Law (1999), subject to modifications agreed with ADB. Contract packages for civil works, goods, and related services valued at $100,000 or less will be procured through shopping procedures. A procurement agency that is familiar with ADB procurement procedures was hired by HIPCDC in November 2010 to undertake procurement of works, goods, and services under the project on behalf of HIPCDC.

A procurement capacity assessment of HIPAC and HIPCDC was undertaken. The assessment confirmed that HIPCDC, acting through the procurement agency, and with the assistance of HIPAC, ADB, and the project consultants, would be capable to carry out procurement, including advance contracting.

HIPAC has requested advance contracting and retroactive financing for contract packages covering civil works for constructed wetland and wetland water treatment. Advance contracting and retroactive financing will be undertaken in conformity with ADB's Procurement Guidelines (2010, as amended from time to time). The issuance of requests for proposal and invitations to bid under contracts eligible for advance contracting and retroactive financing will be subject to ADB approval. The borrower, HIPAC, HIPCDC, and TBNA finance bureau have been advised that (i) approval of advance contracting and retroactive financing does not necessarily commit ADB to finance the project, and (ii) retroactive financing may only apply to eligible expenditures incurred prior to loan effectiveness but not earlier than 12 months before loan signing up to a maximum amount of $20 million, or20% of the total ADB loan amount.

The relevant sections of ADB's Anticorruption Policy (1998, as amended to date), will be included in all documents and contracts relating to engagement of consultants. Procurement plan indicating thresholds and review procedures; contract packages for goods, works, and consulting services; and national competitive bidding guidelines is provided in Section 3 of the Project Administration Manual.

Responsible ADB Officer Maria Pia Ancora
Responsible ADB Department East Asia Department
Responsible ADB Division PRC Resident Mission
Executing Agencies
Harbor Economic Area Administrative CommissionHEPPMO@163.COMNo. 1 Harbor Economic Area,
Tianjin Binhai new area (TBNA),
300452 Tianjin, PRC
Timetable
Concept Clearance 08 Oct 2010
Fact Finding 06 Dec 2010 to 15 Dec 2010
MRM 08 Jul 2011
Approval 13 Dec 2011
Last Review Mission -
Last PDS Update 17 Mar 2015

Loan 2829-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2011 06 Mar 2012 20 Aug 2012 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 249.12 Cumulative Contract Awards
ADB 100.00 13 Dec 2011 45.77 0.00 46%
Counterpart 149.12 Cumulative Disbursements
Cofinancing 0.00 13 Dec 2011 37.32 0.00 37%

TA 7985-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2011 26 Jan 2012 26 Jan 2012 28 Feb 2015 28 Feb 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 13 Dec 2011 544,062.16

Evaluation Documents

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