China, People's Republic of: Xinjiang Akesu Integrated Urban Development and Environment Improvement Project

Sovereign Project | 46049-002

Summary

The proposed project aims to improve the urban environment and promote inclusive economic development of Akesu City, Xinjiang Uygur Autonomous Region (XUAR), the People's Republic of China (PRC). It is a multisectoral and integrated urban upgrading project that will address urgent environmental and infrastructure needs, including the (i) rehabilitation of the Akesu Duolang Wetlands; (ii) upgrading of urban infrastructure and services, including roads, public parks, water supply, sewerage, and district heating; and (iii) strengthening the institutional capacity for sustainable urban development, planning, and management of Akesu Municipal Government (AMG).

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Project Name Xinjiang Akesu Integrated Urban Development and Environment Improvement Project
Project Number 46049-002
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3262-PRC: Xinjiang Akesu Integrated Urban Development and Environment Improvement Project
Ordinary capital resources US$ 150.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector Agriculture, natural resources and rural development - Water-based natural resources management
Transport - Urban roads and traffic management
Water and other urban infrastructure and services - Other urban services - Urban solid waste management
Gender Equity and Mainstreaming Effective gender mainstreaming
Description The proposed project aims to improve the urban environment and promote inclusive economic development of Akesu City, Xinjiang Uygur Autonomous Region (XUAR), the People's Republic of China (PRC). It is a multisectoral and integrated urban upgrading project that will address urgent environmental and infrastructure needs, including the (i) rehabilitation of the Akesu Duolang Wetlands; (ii) upgrading of urban infrastructure and services, including roads, public parks, water supply, sewerage, and district heating; and (iii) strengthening the institutional capacity for sustainable urban development, planning, and management of Akesu Municipal Government (AMG).
Project Rationale and Linkage to Country/Regional Strategy

Located in the northwest of the PRC, XUAR is a remote region linking the PRC to Central Asia. Despite rapid economic development in recent years due to the expansion of agriculture and extractive industries, XUAR remains one of the poorest and least developed regions in the PRC. In 2013, XUAR's average urban per capita disposable income was the second lowest in the PRC, at CNY19,874. XUAR is one of the less-developed western regions targeted for accelerated socioeconomic development and poverty reduction by the preferential policies under the National Strategy for Development of the West. XUAR has a large ethnic minority population, with the Uygur accounting for 45.73% and other ethnic minority groups for 14.77%. The regional capital, Urumqi, with a population of 3.1 million, and the populated urban centers in the northern part of the region are the main industrial hubs. They are also the primary points of public infrastructural investments and private sector activities. On the other hand, investments in the southern part of XUAR, mainly constituted of mountains and desert areas, lag behind. The development of an arc-shaped urban and transport corridor between the southern piedmont of Tianshan Mountain and the northern rim of Taklamakan Desert presents an opportunity to achieve a more balanced level of development across the region.

The national railway and highway A314 run through the southern region, and stretch from Korla towards the Karakoram pass. They cross a series of alluvial plains which are separated by large desert areas. Historically, oases formed in these plains, and the available water resources created conditions for the development of settlements and herding of grasslands. Today, there are five oases along A314, each with an urban population between 300,000 and 700,000. Historically, these oases' water resources provided conditions for the development of settlements and herding of grasslands. Overtime, agricultural expansion, poorly managed urbanization, and extractive industries have degraded the local environment, decreasing the sustainability of the oasis towns. Lack of employment opportunities outside agriculture has caused constrained local development. This has resulted in significant migration in search of jobs and education opportunities from these areas to Urumqi that took place over the last two decades. The oases' main cities represent the only urban centers that are capable of clustering economic activities in the southern part of the region. Intensifying strategic infrastructure investment in oases' urban centers will enhance the conditions for economic development and support employment diversification from agriculture to secondary and tertiary sectors.

Akesu is a medium-sized city in southern XUAR, which has a higher poverty rate than regional and national averages. In 2013, the poverty incidence rate in Akesu was 5.45% for the urban population, and 12.3% for the rural population. The city has expanded in recent years following (i) economic growth in agricultural production, (ii) exploration and processing of oil and gas, and (iii) regional and intercity transport improvements. The urban population grew from 422,470 in 2005 to 509,200 in 2013, reaching an urbanization rate of 61.2%, while the built-up area expanded from 27 to 46.5 square kilometers over the same period. Though the burgeoning city benefits from a good economic outlook, inadequate infrastructure investment in existing areas and environmental degradation are contributing to a poorer quality of life in the city.

Akesu's long-term sustainable development is dependent on the improvement of urban infrastructure and services, as well as the protection of the natural environment. There is urgent need to address its significant urban infrastructure and service deficiencies in Akesu. Current access to water, sanitation, and heating in Akesu is low and variable. In the project area, the households with connection to piped water supply account for 52.6%, the households with sewerage connections account for 8.0%, the households with access to central heating account for 12.7%, and the households covered by solid waste management coverage account for 18.7%. Meanwhile, poor land use and waste management practices threaten environmental conditions in Akesu's rivers and wetlands. While improved services will reduce the negative impact of urbanization on the environment in Akesu, additional measures are needed to rehabilitate and preserve the existing water resources for the city and the larger watershed. The Akesu Duolang wetlands, located within the ecological conservation zone of the pilot Xinjiang Akesu Duolang River National Wetland Park, provide important ecosystem services. These include groundwater replenishment, flood retention, sediment and nutrient removal, micro-climate regulation, cultural services, and biodiversity conservation. Rehabilitation of these wetlands will enhance the National Wetland Park network in the PRC, provide a demonstration of wise wetland use as promoted by the Ramsar Convention, and contribute to improved water resources management within the Tarim River Basin.

The proposed project is to support (i) urban road network improvement; (ii) expansion of public and green spaces; (iii) significant water supply, sewerage service, and district heating service improvements; (iv) solid waste collection coverage expansion; (v) wetland rehabilitation; and (vi) enhance wetland, solid waste, and traffic management in Akesu. The project would improve municipal services in the project area significantly: (i) the households with connection to piped water supply would increase from 52.6% to 88.6%, (ii) the households with sewerage connections would increase from 8.0% to 66.6%, (iii) the households with access to central heating would increase from 12.7% to 87.0%, and (iv) the households covered by solid waste management coverage would increase from 18.7% to 100%. The components are aligned with the "Comprehensive Transportation Planning of the Urban Center Area of Akesu (2013 2030)," to improve conditions and connectivity of the urban road network in Akesu for all users on arterial, secondary, collector, and lane-scale roads. The improvement of services will have large environmental impacts, including interception of some 21,600 m3 of currently uncollected wastewater, reducing contamination of the Akesu water resources. The project area covers 31 km2, not only the central urban district, but also the Akesu Duolang wetlands to the north of the central urban district. The residential alleyway subcomponent upgrading targets for peri-urban communities that are inhabited mostly by ethnic minorities.

Impact Socially inclusive and environmentally sustainable urbanization in Akesu
Project Outcome
Description of Outcome Quality of municipal services and environment improved.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Urban infrastructure and services improved

Akesu Duolang wetland rehabilitated and protected

Project and urban environmental management and inclusive capacity enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects A consolidated project initial environmental examination (IEE), including an environmental management plan (EMP) was prepared during the project preparatory technical assistance (PPTA) in accordance with ADB requirements, and disclosed on 25 February 2015. The project implementation consultants will ensure that final projects designs and activities comply with the IEE and EMP.
Involuntary Resettlement A resettlement plan was prepared during the PPTA in accordance with ADB requirements, and disclosed on 26 February 2015. The project implementation consultants will ensure that the resettlement plan is updated based on final projects designs and project activities comply with the resettlement plan.
Indigenous Peoples An ethnic minority development plan was prepared during the PPTA in accordance with ADB requirements, and disclosed on 4 March 2015. The project implementation consultants will ensure that final projects designs and activities comply with the ethnic minority development plan.
Stakeholder Communication, Participation, and Consultation
During Project Design The main stakeholders include XUAR government agencies; AMG's development and reform commission; real estate administration, finance and housing and construction, water resources, land resources, and environmental protection, planning, transportation, public utilities, municipal management, public health, civil affairs, poverty alleviation bureaus; private companies providing work forces; design institutes; project affected people, and project beneficiaries including service customers, urban residents and those near the wetland, as well as ethnic minorities in the old city and in peri-urban areas. Local people were consulted during PPTA implementation and preliminary design through consultations, EMDP, and GAP. PPTA conducted poverty and social analysis and addressed social safeguards. Socioeconomic survey, stakeholder workshops, focus group discussions and informant interviews were conducted during PPTA. This was complemented by survey and consultations under the resettlement and environment safeguards. The PPTA participation strategyfocused on identifying key stakeholders and communicating how they may be affected by the proposed project. Additionally, information was collected to identify ethnically and religiously appropriate ways of community involvement.
During Project Implementation Key documents such as the social action plan (SAP), gender action plan (GAP), resettlement plans, ethnic minority development plan (EMDP) and environmental management plan (EMP) outline consultation and participation for implementation. Loan assurances address implementation and monitoring of the plans.
Business Opportunities
Consulting Services An international consulting firm with a total consulting inputs of 43.5 person-months (17 international and 26.5 national) will be engaged on the basis of the quality- and cost-based selection method, with a quality-cost ratio of 90:10, in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time).
Procurement All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). A procurement agent will be hired to support the executing and implementing agencies. Advance contracting and retroactive financing will be considered.
Responsible ADB Officer Kristina Noel Katich
Responsible ADB Department East Asia Department
Responsible ADB Division Urban and Social Sectors Division, EARD
Executing Agencies
Xinjiang Uygur Autonomous Region GovernmentXUAR Housing & Urban-Rural Dev't Bureau
No.462 Zhongshan Road,
Urumqi, Xinjiang, PRC
Timetable
Concept Clearance 18 Dec 2012
Fact Finding 15 Oct 2014 to 28 Oct 2014
MRM 06 Mar 2015
Approval 26 Jun 2015
Last Review Mission -
Last PDS Update 03 Mar 2015

Loan 3262-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Jun 2015 - - 30 Apr 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 250.99 Cumulative Contract Awards
ADB 150.00 26 Jun 2015 0.00 0.00 0%
Counterpart 100.99 Cumulative Disbursements
Cofinancing 0.00 26 Jun 2015 0.00 0.00 0%

Evaluation Documents

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