The first financing tranche of the Investment Program comprises (i) introduction of (a) energy-efficient technologies, (b) environmentally friendly equipment, and (c) safety
equipment; (ii) a review of the existing institutional arrangements for integrating energy efficiency and environmental issues in railway management; (iii) conducting safety and energy
audits of a nominated railway administration; and (iv) providing capacity building support. ADB will finance (i) procurement of more energy-efficient equipment and material than that is currently in use; (ii) procurement of modern environmental equipment; (iii) procurement of equipment that will enhance maintenance and safety and can respond to emergencies more quickly, efficiently, and effectively; and (iv) capacity building, including staff training.
The first tranche's physical components are (i) energy efficiency component: (a) electric power supply system, and (b) railway electrification equipment; (ii) environmental protection
component: noise barrier; and (iii) railway safety enhancement component: (a) anti-seismic bridge bearing, (b) enhanced railway fastener, (c) railway telecommunication system, (d) railway signal system, and (e) operation maintenance and safety equipment. Examples of the kind of equipment proposed to be financed under the IP are single phase transformers instead of the conventional transformers, vacuum circuit breakers instead of oil circuit breakers, and infrared hot box detection system instead of the manual system of checking hot axle-boxes. These equipments have significant energy efficiency and safety benefits compared to what is used currently on the PRC railways. Integrating these equipments in the PRC railways would help optimize performance, ensure reliability, and enhance safety. The technologies will be compatible and adaptable to existing systems; and will be proven and scalable. A key aspect of their adoption will be having an adequate trial and testing period, to ensure their successful operation. Adequate maintenance spares will be provided to ensure their sustainability. A number of these technologies will be sourced from advanced countries, which will influence integration of advance technology in the railway system and offer opportunities for private sector. At an institutional level, ADB will work with MOR to study the international best practices and integrate energy efficiency, and environmental sustainability in its operations and management. The key inputs needed for the first tranche implementation include equipment,
installation, and MOR staff.
|Project Rationale and Linkage to Country/Regional Strategy
Ministry of Railways will implement a plan for railway development (2009-2016) at a cost of about $25 billion for capacity expansion over the southwestern region of the PRC. This includes activities such as new construction, double tracking, electrification, and rehabilitation. Within this plan, one option was to support railway construction or capacity expansion as has been done in the past and another option was to support targeted areas such as energy efficiency, environmental sustainability, and safety, where ADB's contribution could be clearly distinguished. Within this plan, ADB identified an IP of $3.24 billion to support these three areas, for which it will provide a support of $1 billion through the proposed MFF. The cost of the equipment is small compared to the cost of other capital assets or construction of a railway line but their benefits are significant; and it is easy to integrate them when the Government is implementing the development plan. This would have high value added with a smaller investment leveraging much more value added.
The proposed IP is consistent with two of the four pillars of ADB's Country Partnership Strategy of the PRC: (i) inclusive growth and balanced development, and (ii) resource efficiency and environmental sustainability. The IP encompasses (i) network development, which will enhance capacity and reduce bottlenecks; (ii) improved energy efficiency and environmental sustainability by providing a more efficient and environment-friendly mode of transport in the region; (iii) enhanced safety through the provision of a reliable and safe mode of transport; (iv) support for the PRC railway development plan and the Western Region Development Strategy; and (v) promotion of pro-poor economic growth in the region, thereby reducing poverty.