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

Sovereign Project | 43332-053

Summary

Tranche 4 of the Investment Program will finance procurement of (i) environmental protection and (ii) railway safety enhancement. The outputs for this tranche are (i) environmental protection which comprises introduction of environmental protection equipment, and (ii) railway safety enhancement which comprises introduction of track safety operation and aintenance equipment, anti-seismic bridge bearings, enhanced railway fasteners, heavy duty switches, and signaling system facilities.

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Project Name Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche IV
Project Number 43332-053
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3082-PRC: Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche IV
Ordinary capital resources US$ 180.00 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 4 of the Investment Program will finance procurement of (i) environmental protection and (ii) railway safety enhancement. The outputs for this tranche are (i) environmental protection which comprises introduction of environmental protection equipment, and (ii) railway safety enhancement which comprises introduction of track safety operation and aintenance equipment, anti-seismic bridge bearings, enhanced railway fasteners, heavy duty switches, and signaling system facilities.
Project Rationale and Linkage to Country/Regional Strategy

With railway network extension, energy efficiency, environmental sustainability and safety enhancement have been important elements of the ADB policy dialogue with the China Railway Corporation (CRC), formerly the Ministry of Railways (MOR). These were identified as the three most important areas of sustainable development in the Eleventh and Twelfth Five-Year Plans (11FYP and 12FYP). ADB helped create awareness of these three issues and encouraged the use of clean energy and energy-efficient technologies, safety enhancement, and environmental improvements in railway construction, operation, and maintenance so as to develop a sustainable, green, and safe railway system with high quality and efficient services in the PRC.

On 8 December 2009, ADB approved a multitranche financing facility (MFF) in the amount of $1.0 billion to the government for the Railway Energy Efficiency and Safety Enhancement Investment Program (Investment Program) from ADB ordinary capital resources with interest determined in accordance with ADB's LIBOR-based lending facility and such other terms and conditions set forth in the related loan agreement. The Framework Financing Agreement (FFA) was signed between the PRC and ADB on 10 November 2009. The impact of the investment program will be an improved transport system in the southwestern region of the PRC that supports sustainable socioeconomic development. The outcome will be an energy efficient, safe, reliable, affordable, and environment-friendly railway transport system developed in the region. The outputs of the investment program comprise (i) introduction of energy-efficient technologies and environment-friendly and safety equipment; (ii) integration and institutionalization of energy efficiency and environmental issues in railway management; (iii) safety and energy audits of a nominated railway administration; and (iv) capacity building support.

Impact Improved transport system in the southwestern 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 assess at project completion.
Implementation Progress
Description of Project Outputs

1. Environmental protection

2. Railway safety enhancement

Status of Implementation Progress (Outputs, Activities, and Issues) As of February 2015, 8 lots are being procured. Contracts are expected to be awarded within second quarter of 2015. Other remaining packages are expected to be procured in 2015 and 2016. The project is being implemented smoothly.
Geographical Location PRC
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Tranche 4 is classified as category C for all safeguard aspects (environment, involuntary resettlement, and indigenous peoples). The investment program selection criteria require that equipment installation should not involve land acquisition, have adverse impacts on ethnic minorities, or have negative environmental impacts. The EA has confirmed that none of the equipment and materials to be financed under Tranche 4 will involve land acquisition, involuntary resettlement, have adverse impacts on ethnic minorities, or have negative environmental impacts. Tranche 4 has been prepared in accordance with the safeguards framework in the FFA. This is similar to the previous tranches and semi-annual safeguard assessments have confirmed there have been no impacts during implementation.
Involuntary Resettlement Tranche 4 is classified as category C for all safeguard aspects (environment, involuntary resettlement, and indigenous peoples). The investment program selection criteria require that equipment installation should not involve land acquisition, have adverse impacts on ethnic minorities, or have negative environmental impacts. The EA has confirmed that none of the equipment and materials to be financed under Tranche 4 will involve land acquisition, involuntary resettlement, have adverse impacts on ethnic minorities, or have negative environmental impacts. Tranche 4 has been prepared in accordance with the safeguards framework in the FFA. This is similar to the previous tranches and semi-annual safeguard assessments have confirmed there have been no impacts during implementation.
Indigenous Peoples Tranche 4 is classified as category C for all safeguard aspects (environment, involuntary resettlement, and indigenous peoples). The investment program selection criteria require that equipment installation should not involve land acquisition, have adverse impacts on ethnic minorities, or have negative environmental impacts. The EA has confirmed that none of the equipment and materials to be financed under Tranche 4 will involve land acquisition, involuntary resettlement, have adverse impacts on ethnic minorities, or have negative environmental impacts. Tranche 4 has been prepared in accordance with the safeguards framework in the FFA. This is similar to the previous tranches and semi-annual safeguard assessments have confirmed there have been no impacts during implementation.
Stakeholder Communication, Participation, and Consultation
During Project Design

Consultations were held with the National Development and Reform Commission (NDRC), Ministry of Finance (MOF), and China Railway Corporation (CRC) on structuring the Investment Program. 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. The preliminary designs of the project have been completed. The project was approved by the steering committee and the government in December 2012. The PMO was established and staffed. Two tendering companies, CMC International Tendering Corporation and CITIC International Tendering Co., Ltd., were selected on a competitive basis to assist CRC in all

ADB-financed procurements under Tranche 4. The EA is ready to draft the bidding documents for the first procurement in accordance with ADB's Procurement Guidelines. To assist in smooth implementation, an updated FAM has been prepared.

During Project Implementation The consultation process will be continued to select the projects, as per the agreed selection criteria, to be financed under the Investment Program. Consultations will involve the design institutes, CRC, and the railway administrations. The steering committee established by CRC will help coordinate the selection of subsequent projects for ADB financing.
Business Opportunities
Procurement All procurement to be financed under Tranche 4 will be procured in accordance with ADB's Procurement Guidelines (2013, as amended from time to time), and as provided for in the Procurement Plan (Section VI of the FAM).
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 -
Approval 04 Dec 2013
Last Review Mission -
Last PDS Update 13 Mar 2015

Loan 3082-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Dec 2013 30 May 2014 10 Sep 2014 30 Jun 2019 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 547.60 Cumulative Contract Awards
ADB 180.00 04 Dec 2013 112.18 0.00 62%
Counterpart 367.60 Cumulative Disbursements
Cofinancing 0.00 04 Dec 2013 7.84 0.00 4%

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