China, People's Republic of: Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche 2

Sovereign Project | 43332-033

Summary

The Tranche 2 of Investment Program will finance (i) procurement of equipment that will enhance maintenance and safety and can respond to emergencies more quickly, efficiently, and effectively; and (ii) capacity building, including staff training.

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Project Name Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche 2
Project Number 43332-033
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2724-PRC: Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche II
Ordinary capital resources US$ 100.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Transport - Rail transport (non-urban)
Gender Equity and Mainstreaming No gender elements
Description The Tranche 2 of Investment Program will finance (i) procurement of equipment that will enhance maintenance and safety and can respond to emergencies more quickly, efficiently, and effectively; and (ii) capacity building, including staff training.
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.

Impact Improved transport system in the region that supports sustainable socioeconomic development and the western region development strategy
Project Outcome
Description of Outcome An energy-efficient, safe, reliable, affordable, and environment-friendly railway transport system is developed in the region.
Progress Toward Outcome To be assessed at project completion.
Implementation Progress
Description of Project Outputs 1. Investment program implemented by installing safety equipment
Status of Implementation Progress (Outputs, Activities, and Issues) The project has been implemented smoothly. As of February 2015, the overall progress is about 90% which is ahead of the implementation schedule. All contracts have been awarded and about 82% loan proceeds have been disbursed by 31 December 2014. The current loan closing date remains unchanged.
Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Classified as category C for Environment. Because the investment program deals with the procurement of energy-efficient, environment-friendly, and safety equipment, no potential safeguard impacts are envisaged.
Involuntary Resettlement Classified as category C for Involuntary resettlement. Because the investment program deals with the procurement of energy-efficient, environment-friendly, and safety equipment, no potential safeguard impacts are envisaged.
Indigenous Peoples Classified as category C for Indigenous People. Because the investment program deals with the procurement of energy-efficient, environment-friendly, and safety equipment, no potential safeguard impacts are envisaged.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations were held with government agencies. MOF noted that the framework approach may provide an opportunity for streamlining domestic procedures. Consultations were held with MOR, the Second Survey Design Institute and Chengdu Railway Administration on designing the technical features of the IP and the selection criteria for investments. A steering committee for selecting the investments for ADB-financing has been set up by MOR.
During Project Implementation The consultation process will be continued to select the projects, as per the agreed selection criteria, to be financed under the IP. Consultations will involve the design institutes, MOR, and the railway administrations. A steering committee established by MOR will help coordinate the selection of subsequent projects for ADB-financing.
Business Opportunities
Procurement All goods and services to be financed under the Facility will be procured in accordance with the relevant procurement rules in ADB's Procurement Guidelines (2010, as amended from time to time), and as provided in the Procurement Plan in Annex 3 to this PFR. Disbursements for this tranche will be made in accordance with the conditions of disbursement in the Loan Agreement and Loan Disbursement Handbook (2007, as amended from time to time). The loan proceeds will be used solely for the procurement of equipment and materials in the project description
Responsible ADB Officer Chenglong Chu
Responsible ADB Department East Asia Department
Responsible ADB Division PRC Resident Mission
Executing Agencies
China Railway Corporation (Formerly MOR)CRC_WZB@163.COM10 Fuxing Road
Beijing 100844
People's Republic of China
Timetable
Concept Clearance -
Fact Finding -
MRM 15 Nov 2010
Approval 14 Dec 2010
Last Review Mission -
Last PDS Update 13 Mar 2015

Loan 2724-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Dec 2010 11 Mar 2011 10 Jun 2011 30 Jun 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 323.73 Cumulative Contract Awards
ADB 100.00 14 Dec 2010 99.50 0.00 100%
Counterpart 223.73 Cumulative Disbursements
Cofinancing 0.00 14 Dec 2010 85.68 0.00 86%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

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