|Project Rationale and Linkage to Country/Regional Strategy
The Weifang-Zibo aquifer, which is in the NCP, is the largest over-exploited area in the Shandong province, and the second largest in the PRC. Water per capita in the Weifang-Zibo area is about one-sixth the average in PRC. The two cities are developing rapidly and domestic and industrial water demands are increasing. Known as the vegetable basket of Beijing, the agricultural production in the Weifang-Zibo area is high with a large concentration of greenhouses. The agricultural sector is the largest water user, which uses an estimated &.% of the total current groundwater abstractions.
Seasonal rainfall fluctuates widely, with an average 70% of the rainfall occurring from June to September. Frequent flooding occurs during the summer months, often followed by droughts during the remaining periods of the years. Recharge of groundwater resources over the year is insufficient to recover from the excessive pumping during the dry periods. Storm waters flow to the sea unutilized, and often cause serious damage to land and properties in the area. The pattern of irregular rainfall is expected to worsen as a result of climate change.
The consequences of the current unsustainable groundwater utilization are serious: (i) future domestic water supplies and agricultural production are at risk; and (ii) the area is already suffering from significant financial and economic damages caused by land subsidence, increasing pumping costs, and groundwater quality deterioration due to seawater intrusion and environmental pollution. The process of land subsidence is irreversible, and urgent action is needed to avoid worsening. Some areas have already experienced subsidence of up to 2.25 meter, and seawater intrusion ( up-coning') in the north has reached 35 kilometer from the coast.
Shandong province is selected by the central government as a demonstration province for modernized water administration. The Shandong provincial government (SPG) has already taken multiple initiatives to address water scarcity in the NCP, including promoting water efficiency and re-use, and introducing regulations on groundwater pumping. The results have not yet been successful in stopping further decline of groundwater levels in the Weifang-Zibo area. Also, the government is constructing the south-north water transfer scheme, which is expected to provide additional water for Shandong province in 2014. Studies indicate that, because the diverted water will be mainly for municipal and industrial use, this scheme will not be sufficient to mitigate the current over-exploitations of the groundwater resources in the NCP.
Aspects that require urgent action include (i) increased efficiency in the use of groundwater, in conjunction with the retention of surface and storm water; (ii) introduction of groundwater pricing; (iii) improved monitoring of groundwater quality and use; (iv) technical solutions to recharge groundwater resources; and (v) empowerment of local communities to manage and protect their groundwater resources. Also, there is an urgent need to raise the awareness and capacity of the central and local governments in managing groundwater information, assessing the scale and priorities of the problems, and enforcing legislations.
The project is consistent with PRC's Twelfth Five-Year Plan (2011 2015), which pursues the long-term goal of building a harmonious and moderately prosperous society through regionally balanced and environmentally sustainable growth. It is also in line with ADB's country partnership strategy, 2011 2015 for the PRC in supporting the government's overarching strategic goal by focusing on inclusive and environmentally sustainable growth, and ADB's Water Operational Plan 2011 2020. The proposed project is included in ADB's lending pipeline as 2015 standby for the PRC. Project loan is proposed as financing modality of the project.