China, People's Republic of : Ningxia Integrated Ecosystem and Agricultural Development Project

Agriculture, natural resources and rural development / Agricultural production - Irrigation - Rural water policy, institutional and capacity development - Water-based natural resources management

The Project is aimed to improve environmental management to rehabilitate the ecosystems and increase rural incomes in the Yinchuan area. The Project's main outcome is to introduce an integrated ecosystem management (IEM) approach to provide sustainable livelihoods for the population of the project area.

The component to be financed by the Global Environment Facility (GEF) will support a multifocal approach to conserving biodiversity and combating land degradation, and will ensure that the integrated ecosystem management approach is followed to contribute to restoring the productive and protective functions of ecosystem resources.

The PRC has some of the worst land degradation problems in the world, especially in the vast western region where more than 350 million people live and poverty incidence is the highest. In recent decades, the pressures of intensified use, increased population, and rapid economic growth have led to losses of vital ecosystem services, and reduced productivity of grasslands, farmlands, wetlands, forests, and mountain areas.

Programs to combat land degradation were initiated under the 9th (1996-2000) and 10th (2001-2005) five-year plans, and have resulted in some environmental improvements. However, the high cost of top-down and uncoordinated sector approaches are of concern. The root causes, such as rural poverty and alternative livelihood options to reduce activities that damage the environment, were inadequately addressed. The project area typifies problems found in many parts of the western region. Very fast economic growth in recent years, overuse of water and agrochemicals in agriculture, conversion of marginal desert-edge lands to irrigation for poor farming households, and rapid urban and industrial spread with high pollution have resulted in significant loss of vital ecosystem services and values. Reversing this trend requires strengthening the quality of the policy and regulatory framework, coordinating land and water planning and management, and expanding the role of markets in activities that are compatible with the rehabilitation of ecosystems and their sustainable future use.

IEM Capacity Building and Project Management: All public and private stakeholders have the capacity, regulations, and information to jointly implement IEM.

Land and Water Resource Management: Land users, public and private farmers, and NWRD implement sustainable land and water management.

Rural Livelihood Improvement: Rural households and smallholders are provided with alternative agriculture-based incomes through links with three enterprise groups.

Ecosystem Conservation: Commercial enterprises and conservation objectives are linked.

PPMS is built and under operation.

Project progress report, monitoring evaluation baseline report and monitoring evaluation report are submitted as planned, PPMS are updated and reports are submitted in time.

IEM institutional capacity built and demonstration were conducted with the support of grant consultant.

NHAR's IEM strategy and action plan on preventing land degradation have been built, including legislation, regulations and policy framework.

13 departments have signed data sharing agreement, IEM data sharing mechanism has been established.

Ningxia Wetland Management Statute following IEM principles has been issued.

Integrated environmental management plan of HPCMA has been established.

Water resource and land use policy start to draft.

Integrated water resource plan has been finished; part of the data has realized sharing.

2,400 ha NARB's vineyard were compeleted water-saving irrigation project and irrigating facilities, 1,764 ha vineyard were realized drip irrigation.

About 6,000 rural households increased their water use efficiency.

Agricultural fertilizer usage of NARB's vineyard was 630 Kg/ha, water usage in drip irrigation was 4,480 m3/ha.

For State Farm, about 10,000 households increased their income by beef breeding, dairy production, alfalfa planting and grape planting.

About 17,000 households increased their income.

Measures of water quality improvement, ecological dredging and re-vegetation play a good demonstration role in improving wetland ecological environment in Yinchuan Municipal.

Improved wetland environmental quality, attracted lots of water birds to habitat, played a key role in rehabilitating and improving wetland biodiversity giving priority to valuable and rare birds.

Improved surrounding environment of wetland, drove surrounding related industry development, indirectly gave play to wetland economic benefits.

During the reconstruction of 1,599 ha Yinxi wetlands, design, grass planting, and planting materials were provided by forestry department, infrastructure and labor force were supplied by NWRD.

Wetland conservation area was 5,866 ha.

Number of visitors was 0.547 million (Haibao Lake, Mingcui Lake, Yueya Lake).

NARB wetlands (Sand Lake and Yuehai Lake):Visitors reached 1.384 million, wetland conservation area reached 7,134 ha.

The yield of fishery was 7,996 tons.

Helan Mountain Conservation area reached 193,536 ha.

The project investments have a range of positive impacts on the environment through changes in land, water, wetlands, and conservation management practices. The project was classified as Category A for environment impacts due to potential significant impacts from construction of Xixia Canal. The summary environment impact assessment (SEIA) was carried out at appraisal.

A scope change was approved in March 2011, under which the subcomponent of Xixia Canal construction was cancelled. Activities of six Category B subcomponents were modified and one Category B subcomponent will be added. Upon the scope change, the project will comprise 11 Category B and five Category C subcomponents. The overall environmental benefits of the project are expected to be significant. With the application of the recommended mitigation measures, the potential negative environmental impacts associated with the project can be reduced to the point that no significant residual environmental impacts will occur.

The project was categorized B for involuntary resettlement (IP) impact due to one component involving land acquisition and resettlement, which is Xixia Canal construction and associated irrigation rehabilitation. According to the original design, the extension part of Xixia Canal will serve for the 15,546 ha irrigated areas. In this area, the subproject will repair the irrigated facilities, through lining and improving the irrigation channels and ditches, it will reduce the loss of water seepage and the impact to the salinization of farming land, and transform the pumping water system with high cost to the economical gravity irrigation system, meanwhile enhance the irrigation efficiency and water utilization rate. The resettlement plan was prepared and disclosed on the ADB website in May 2007.

A scope change was approved in March 2011, under which the proposed Xixia canal and irrigation rehabilitation was removed from the ADB financed project scope due to adjustments in the government water program. With the cancellation of the Xixia canal and irrigation rehabilitation, the anticipated IP impacts from the component will no more exist. The due diligence was undertaken and confirmed that the project will not induce any land acquisition and resettlement impacts. The project IR impacts has been re-categorized as C.

With the approved change in scope, the consulting services have been re-grouped into three packages. The indicative working scope of each package and implementation arrangement was agreed as follows:

(i) Package A: Grape Wine Strategy Development. The purpose of the study is to develop a strategy plan for the grape wine sector in Ningxia, particularly, Helan Mountains eastern piedmont area. The indicative allocation for the consulting services is about $150,000 under the ADB loan. The NARB will coordinate the study, which is expected to start in June 2011 and complete by end of 2011. The consultants will be recruited on individual basis. The ADB will assist in the recruitment process while NARB will be responsible for the contract management.

(ii) Package B: IEM Project Management. The consulting services will support project management to PMO over a two and a half year period to ensure smooth procurement, contract management, and effective development and maintenance of the project performance monitoring system (PPMS) and reporting frameworks. The funds allocation for Package B is about $138,000 under GEF. The consultants will be recruited on individual basis. The ADB will assist in the recruitment process and the PMO will be responsible for the contract management.

(iii) Package C: IEM Training of Trainers Program. The engagement of consulting services will develop the core resources for the supply of IEM related training service from the IEM training and demonstration center on the eastern piedmont to be established under the project. The indicative expertise inputs include IEM, soils and conservation agriculture, dairy and beef livestock, water-use efficiency and irrigation management, wetlands and biodiversity conservation, grape and vineyard management, horticulture, agronomist. The funds allocation for Package C is about $814,000 under GEF. The consulting services will be recruited through a consulting firm as agreed in the procurement plan and is expected to start work in the early of 2012. The PMO will be responsible for the recruitment and the consultant management.

Goods, related services, and civil works financed partly or wholly by ADB and GEF will be procured in accordance with ADB's Procurement Guidelines (2007, as amended from time to time) and the procurement plan described in Appendix 7, which will be reviewed and updated on an annual basis. Contract packages for goods and related services exceeding $1,000,000 will be awarded on the basis of international competitive bidding or limited international bidding, while those costing between $100,000 and $1 million will be awarded through national competitive bidding. Contracts below $100,000 will be procured through shopping. For contracts below $10,000, direct contracting can be used. Civil works contracts costing more than

$10 million will be procured using international competitive bidding, while those valued at the equivalent of $10 million or less can be procured using national competitive bidding procedures acceptable to ADB. Small-scale works and contracts in rural areas may be awarded using community participation procedures. The selection of suppliers and/or contractors and award of contracts will be subject to ADB approval. The relevant sections of ADB's Anticorruption Policy (1998, as amended to date) will be included in all procurement documents and contracts. A procurement plan setting out an indicative list of all procurement packages and the procurement methods is provided in Appendix 7 of the RRP.

Three PPMO staff will be assigned procurement management activities, including monitoring of the procurement plan and coordinating procurement activities under the Project. Measures to strengthen the capacity of PPMO staff in undertaking procurement activities will be implemented, including the engagement of project management consultants, financed by the GEF grant, to provide training on procurement and other aspects of project implementation. PPMO staff will be nominated to attend ADB-sponsored courses and seminars on procurement and project implementation. NFD will appoint a procurement agent to help with procurement and to ensure compliance with ADB policies and procedures, on terms and conditions satisfactory to ADB.