China, People's Republic of: Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche 3

Sovereign Project | 43332-043

Summary

Tranche 3 of Investment Program will finance (i) procurement of energy efficient, environmental protection, and safety equipment that will result in energy savings, environmental protection, and enhanced safety. Physical components of Tranche 3 are (i) energy efficiency component: (a) railway electrification equipment, and (b) electric power supply system; (ii) environmental protection component: (a) noise barrier; and (iii) railway safety enhancement component: (a) enhanced railway fasteners and switches, (b) railway telecommunications system, (c) railway signaling system, (d) advanced railway inspection equipment, and (e) emergency rescue equipment, and any other equipment as agreed between PRC and ADB. This equipment has significant energy efficiency, environmental, and safety benefits compared to what is used currently on the PRC railways. Integrating this equipment into the southwestern PRC railway network will help optimize performance, ensure reliability, and enhance safety.

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Project Name Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche 3
Project Number 43332-043
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2765-PRC: Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche III
Ordinary capital resources US$ 250.00 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 Tranche 3 of Investment Program will finance (i) procurement of energy efficient, environmental protection, and safety equipment that will result in energy savings, environmental protection, and enhanced safety. Physical components of Tranche 3 are (i) energy efficiency component: (a) railway electrification equipment, and (b) electric power supply system; (ii) environmental protection component: (a) noise barrier; and (iii) railway safety enhancement component: (a) enhanced railway fasteners and switches, (b) railway telecommunications system, (c) railway signaling system, (d) advanced railway inspection equipment, and (e) emergency rescue equipment, and any other equipment as agreed between PRC and ADB. This equipment has significant energy efficiency, environmental, and safety benefits compared to what is used currently on the PRC railways. Integrating this equipment into the southwestern PRC railway network will help optimize performance, ensure reliability, and enhance safety.
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 develoed in the region.
Progress Toward Outcome To be assessed at project completion.
Implementation Progress
Description of Project Outputs 1. Investment program implemented by installing energy efficiency, environmental protection, and safety enhancement equipment
Status of Implementation Progress (Outputs, Activities, and Issues) The overall Tranche progress is about 82% which is ahead of the construction schedule. As of February 2015, about $206 million contract packages have been procured and approved. About $130 million has been disbursed. Procurement of environmental protection equipment (sound barriers) are ongoing and contracts are execpted to be awarded in June 2015. 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 the National Development and Reform Commission (NDRC), Ministry of Finance (MOF), and MOR on structuring the proposed IP. MOF and NDRC have expressed support for the use of the MFF modality. MOF also 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 (now CRC), and the railway administrations. A steering committee established by MOR will help coordinate the selection of subsequent projects for ADB-financing.
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 08 Jun 2011
Approval 20 Jul 2011
Last Review Mission -
Last PDS Update 13 Mar 2015

Loan 2765-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Jul 2011 25 Oct 2011 15 Feb 2012 30 Jun 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 819.70 Cumulative Contract Awards
ADB 250.00 20 Jul 2011 238.31 0.00 95%
Counterpart 569.70 Cumulative Disbursements
Cofinancing 0.00 20 Jul 2011 179.31 0.00 72%

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