Project Name
Dali-Lijiang Railway Project
Project Number
Country / Economy
  • China, People's Republic of
Project Status
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 2116-PRC: Dali-Lijiang Railway Project
Source Amount
Ordinary capital resources US$ 180.00 million
Loan: Dali-Lijiang Railway Project
Source Amount
Agence Francaise de Developpement US$ 40.00 million
Strategic Agendas
  • Inclusive economic growth
Drivers of Change
  • Governance and capacity development
  • Private sector development
Sector / Subsector
  • Transport / Rail transport (non-urban)

No gender elements
The main objective of the Project is to remove a constraint to sustainable economic growth. Providing economic railway transportation in the unserved, less developed, and poor areas will help create the conditions necessary for developing local resources and generating employment and income-enhancing opportunities that will raise living standards in the Proect area. The Project will entail constructing 167 km of single-track, standard gauge, Class I railway, reserved for electrification, between Dali and Lijiang, and expanding the capacity of the existing Guangtong-Dali line (Guangda line) to accommodate additional traffic. The Project comprises the following components: (i) laying railway track consisting of rails and accessories, concrete sleepers, and stone ballast; (ii) constructing 11 new railway stations complete with facilities; (iii) a safety component that includes providing modern technology and equipment for signaling, communications, a dispatch management information system, freight yard operation, operational safety equipment, mechanized maintenance of tracks; (iv) installing e-governance and management information systems, including computerization and linking Dali and Lijiang to the national railway network; (v) supply of environmental mitigation and protection equipment and facilities; (vi) training on the use and maintenance of equipment provided under the Project; and (vii) strengthening institutional capacity of MOR and WYRC.
Project Rationale and Linkage to Country/Regional Strategy

The Project meets the railway sector operational strategy of the ADB for the PRC to reduce railway network constraints and to promote sustainable economic growth in poor areas not served by railways. The Project is also in line with the Government's development strategy to provide less developed regions with better infrastructure to facilitate economic growth thereby increasing the opportunity for people to improve their living standards. The poor interior regions in the PRC have not benefited as much from economic growth and reforms as have the east coast. The gap in economic and social development has increased. Transport constraints and high logistics costs are two of the factors contributing to regional economic disparities and are two of the constraints that prevent the western region from capitalizing on its comparative advantages. The Project will reduce transport constraints northwestern Yunnan province and provide connectivity to Kunming, Shanghai, and Beijing through 3 of the 16 east-west and north-south national railway corridors. This will provide accessibility to the ports of Fangcheng and Beihai in the PRC and Haipong in Vietnam. The Project will promote the regional cooperation in the Greater Mekong Subregion (GMS), of which the PRC is an active participant through Yunnan Province, which shares borders with other GMS countries. The Project, a joint venture railway between Ministry of Railways and Yunnan Provincial Government, will have substantial managerial and financial autonomy. The Project will contribute to changing the railway enterprises from a cost center in a planned economy to a profit center in increasing competitive transport market. The components are formulated in line with MOR's new railway development plan (2004).

As of end 2002, the PRC's railway system comprised 72,000 route-km of local railways including 26,700 route-km of railways in the western region. The railway system reached 75,000 route-km in 2005. Given the location of the population, natural resources, and industries in the PRC, the curent size of the railway network does not provide adequate coverage. there are vast inland areas in the central and western parts of the country that do not have any rail transport. The lack of railway capacity to meet the increasing demand for transportation services is constraining economic growth. The Government's Railway Development Plan for 1998-2004 gives priority to unserved areas, particularly railway lines that would imrpove links between the poor inland provnces in the western and central PRC and the more prosperous coastal areas. The Proposed Project is in the southwest and supports the Government's Western Region Development Strategy.


Sustainable economic growth and poverty reduction in poor northwestern part of Yunnan province

Project Outcome

Description of Outcome

An efficient, safe, reliable, and affordable railway transport system is developed in the region

Progress Toward Outcome
Project implementation is proceeding satisfactorily. Outcome to be realized after becoming operational.

Implementation Progress

Description of Project Outputs

1. Dali-Lijiang railway line, including stations and access roads constructed

2. Employment opportunities generated for poor and vulnerable groups to raise incomes and living standards and reduce poverty

3. Insitutional capacity of WYRC strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

167 km of railway line and 11 stations completed.

Trial operation started in January 2010.

WYRC and their contractors have given priority to APs for construction employment and transport of local materials. Local government has provided livelihood training to APs; and compensation standards were raised, which was financed from local government; local government was very active to consult with local communities and find solutions to assist with the rehabilitation of affected persons.

The loan amount intended to finance 12 person-months of international consulting services for (i) strengthening marketing and business development functions of WYRC, and (ii) researching and strengthening the development, operations, and management of the joint venture railway systems in the PRC were already financed by the EA and no longer requires ADB financing. Reallocation of loan amount has been requested and approved from consulting services to civil works to meet cost overruns on other items resulting mainly from appreciation of the CNY against the US Dollar.

Geographical Location

Safeguard Categories

Involuntary Resettlement
Indigenous Peoples

Summary of Environmental and Social Aspects

Environmental Aspects

Potential adverse environmental impacts include: (i) clearing of vegetation, (ii) management of excavated rock and soil wastes, and (iii) induced impacts related to secondary tourism and industrial development. Institutional arrangements for environmental management, monitoring, reporting, and oversight are summarized in the summary EIA. The EIA concluded that the adverse environmental impacts can be successfully mitigated. Implementation of the environmental management, mitigation, and monitoring programs included in the EIA will ensure compliance with the environmental guidelines and procedures of ADB and the Government. MOR/WYRC agreed that the anticipated industrial development would be subject to a stringent environmental review and approval process, whereby a project normally approved at county level would be approved at city level, and a project normally approved at provincial level would be approved at state level.

A qualitative review of potential induced impacts in the project area and BOA was undertaken. The EIA included an evaluation of the impacts of tourism, urbanization, and industrial development. The evaluation noted that (i) the ongoing development activities are

adequately managed with respect to environmental protection, (ii) the institutional capacity for environmental protection is adequate, and (iii) the ongoing environmental protection programs are consistent with PRC and ADB requirements. Based on the analysis, ADB agreed with the Government that (i) the Project will be designed, constructed, operated, and maintained in accordance with the environmental laws and regulations of the PRC and the environmental policy of ADB; (ii) the environmental management and monitoring program (EMP) and the mitigation measures included therein, as specified in the EIA prepared for the Project, are properly implemented; (iii) any environmental permits, licenses, and clearances are obtained in a timely manner; (iv) any adverse impact on the environment that may arise from project implementation activities is promptly mitigated or minimized in accordance with the EMP; and (v) the implementation of the EMP, including any safety breaches, violation of environmental standards, and the necessary corrective measures are reported regularly to ADB. The evaluation also noted that there is substantial external assistance for environmental management efforts, particularly for environmental preservation, in northwestern Yunnan. An independent monitoring agency will be hired to carry out the external monitoring and evaluation work during project implementation.

Involuntary Resettlement
The railway alignment will cross 56 villages in 13 townships from Dali city to Lijiang city. The railway lengths in Dali prefecture and Lijiang city are 138 km and 28 km, respectively. Based on the field survey of the first stage of the preliminary design study, the total permanent acquisition of land is 394 hectares. About 70% of the land to be permanently acquired is currently under cultivation, affecting 4,159 people (assuming total loss of cultivated land on the basis of average per capita landholdings). The houses of 3,150 rural people (680 households) will be demolished. During construction, temporary land occupation of about 107 ha will affect another 250 people. The relocation of one school and a brick-kiln will require 594 square meters and affect an additional 150 people. In total, 7,709 people will be directly affected. Ethnic minorities account for 83% of the affected people, including Bai, Lisu, and Naxi villages. The railway alignment was selected to minimize resettlement impacts, where possible. Special measures have been included in the resettlement plan and the EMDP to ensure compliance with ADB's social safeguard policies.
Indigenous Peoples

In the project area, about 73% of the total population consists of ethnic minorities. Of

the total population, the largest ethnic group is the Bai (46.2%), followed by Han (26.7%), Naxi (18.3%), Yi (3.2%), Lisu (2.8%) and others (2.8%). The project will have potential adverse impacts in terms of resettlement, mainly on the Bai people (74.3%) and also some Han (16.8%), Naxi (6.2%), Yi (1.5%), and Lisu (0.4%) people. Specific provisions to address land acquisition and resettlement impacts are included in the resettlement plan. To assess the potential induced impacts, people and NGOs within the seven BOA counties have also been interviewed and consulted. These seven counties have many ethnic groups, including Tibetans in Xianggelila county (Zhongdian), Yi and Miao in Lijiang prefecture, and Pumi and Mosuo in Ninglang county. The results of these studies showed strong support for the railway and economic development in general. The local people believe that the DLR is an important project that will benefit the area. The evaluation also noted that there is substantial external assistance for poverty reduction, and social development in northwestern Yunnan, and saw the Project as a key development investment, the positive social impacts of which are expected to substantially outweigh the negative ones.

Stakeholder Communication, Participation, and Consultation

During Project Design
Various public consultation and participation activities for the Project have been carried out since 2002. The MOR, West Yunnan Railway Company (WYRC), and Second Survey and Design Institute have had formal and informal consultations with local communities and relevant local government agencies through meetings, surveys, household interviews, written communications, and workshops, etc.. Issues discussed included the selection of the line route, the outlet design for wastewater discharge, selection of water source, arrangement of borrow pits and spoil disposal sitting, and sand and stone supply. A change in the location of Lijiang station is an example of public influence on the project design. Further public consultation occurred during various field surveys. Surveys were carried out among local residents, other stakeholders, and visiting tourists. Over 75 village surveys and 800 households surveys were conducted for the environmental impact assessment (EIA), poverty and social assessment, ethnic minorities development plan (EMDP), and resettlement plan. ADB commissioned two supplementary studies to further assess the induced development impacts of the Project on the environment and vulnerable ethnic minority groups. Disclosure procedures have been followed for all plans. MOR and ADB also held a consultation workshop in Dali city to review the technical aspects of the Project, the draft final resettlement plan, EMDP, and summary EIA with provincial and local governments, county-level offices, relevant line agencies, Yunnan-based NGOs, and locally affected people. Participants from Dali, Heqing, Lijiang, and Kunming attended the workshop, and voiced support for the Project based on the benefits brought by economic, tourism, and natural resource development. Discussions were held on induced development impacts, land acquisition, and resettlement impacts and compensation standards, migrant population impacts due to tourism, and the EMDP action plan.
During Project Implementation
MOR, WYRC, and Second Survey and Design Institute continues to have formal and informal consultations with local communities and relevant local government agencies through meetings and surveys.

Business Opportunities

Consulting Services
About 12 person-months of international consulting services to (i) strengthen marketing and business development functions of WYRC, and (ii) research and strengthen the development, operation, and management of the joint venture railway systems in PRC. The consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants. Suitable domestic consulting services for project design, construction supervision and construction quality control, environmental supervision, procurement, monitoring and evaluation of the safeguard aspects of the Project will be engaged and financed by WYRC in accordance with Government procedures acceptable to ADB.
ADB-financed components will be procured by MOR's Foreign Capital and Technical Import Center (FCTIC) in accordance with ADB's Guidelines for Procurement. Other items will be procured following Government procedures acceptable to ADB. Advance action for procurement of civil works was approved on 15 June 2004.


Responsible ADB Officer
Chen, Xiaoxin
Responsible ADB Department
East Asia Department
Responsible ADB Division
Transport and Communications Division, EARD
Executing Agencies
West Yunnan Railway Company


Concept Clearance
07 Mar 2004
Fact Finding
11 Mar 2004 to 23 Mar 2004
15 Jun 2004
02 Dec 2004
Last Review Mission
PDS Creation Date
27 Nov 2006
Last PDS Update
10 Sep 2012


Loan 2116-PRC

Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Dec 2004 27 Jun 2005 14 Nov 2005 30 Jun 2010 31 Dec 2011 09 Jul 2012
Financing Plan
  Total (Amount in US$ million)
Project Cost 508.00
ADB 180.00
Counterpart 328.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 17 Jun 2022 179.99 0.00 100%
Cumulative Disbursements 17 Jun 2022 179.99 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory
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