ADB is helping the People's Republic of China provide cleaner, safer and more energy-efficient railway services in poor southwest regions. The second financing tranche of the program will be used to purchase equipment that will enhance maintenance and safety and can respond to emergencies more quickly, efficiently, and effectively; and to provide capacity building, including staff training.
|Project Name||Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche 2|
|Country||China, People's Republic of|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|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||The Tranche 2 of Investment Program will finance (i) procurement of equipment that will enhance maintenance and safety and can respond to emergencies more quickly, efficiently, and effectively; and (ii) capacity building, including staff training.|
|Project Rationale and Linkage to Country/Regional Strategy||
Ministry of Railways will implement a plan for railway development (2009-2016) at a cost of about $25 billion for capacity expansion over the southwestern region of the PRC. This includes activities such as new construction, double tracking, electrification, and rehabilitation. Within this plan, one option was to support railway construction or capacity expansion as has been done in the past and another option was to support targeted areas such as energy efficiency, environmental sustainability, and safety, where ADB's contribution could be clearly distinguished. Within this plan, ADB identified an IP of $3.24 billion to support these three areas, for which it will provide a support of $1 billion through the proposed MFF. The cost of the equipment is small compared to the cost of other capital assets or construction of a railway line but their benefits are significant; and it is easy to integrate them when the Government is implementing the development plan. This would have high value added with a smaller investment leveraging much more value added.
The proposed IP is consistent with two of the four pillars of ADB's Country Partnership Strategy of the PRC: (i) inclusive growth and balanced development, and (ii) resource efficiency and environmental sustainability. The IP encompasses (i) network development, which will enhance capacity and reduce bottlenecks; (ii) improved energy efficiency and environmental sustainability by providing a more efficient and environment-friendly mode of transport in the region; (iii) enhanced safety through the provision of a reliable and safe mode of transport; (iv) support for the PRC railway development plan and the Western Region Development Strategy; and (v) promotion of pro-poor economic growth in the region, thereby reducing poverty.
|Impact||Improved transport system in the region that supports sustainable socioeconomic development and the western region development strategy|
|Description of Outcome||An energy-efficient, safe, reliable, affordable, and environment-friendly railway transport system is developed in the region.|
|Progress Toward Outcome||The progress towards outcome will be assessed at the project completion.|
|Description of Project Outputs||1. Investment program implemented by installing safety equipment|
|Status of Implementation Progress (Outputs, Activities, and Issues)||About 95% progress has been achieved. The Chengdu-Chongqing Railway Line was put in operation at the end of 2015. However, construction of two railway stations in Chongqing (Caiyuanba and Shapingba) encountered difficulties in resettlement, which affects implementation of two equipment contracts under the tranche. The current loan closing date remains unchanged.|
Summary of Environmental and Social Aspects
|Environmental Aspects||Classified as category C for Environment. Because the investment program deals with the procurement of energy-efficient, environment-friendly, and safety equipment, no potential safeguard impacts are envisaged.|
|Involuntary Resettlement||Classified as category C for Involuntary resettlement. Because the investment program deals with the procurement of energy-efficient, environment-friendly, and safety equipment, no potential safeguard impacts are envisaged.|
|Indigenous Peoples||Classified as category C for Indigenous People. Because the investment program deals with the procurement of energy-efficient, environment-friendly, and safety equipment, no potential safeguard impacts are envisaged.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||Consultations were held with government agencies. MOF noted that the framework approach may provide an opportunity for streamlining domestic procedures. Consultations were held with MOR, the Second Survey Design Institute and Chengdu Railway Administration on designing the technical features of the IP and the selection criteria for investments. A steering committee for selecting the investments for ADB-financing has been set up by MOR.|
|During Project Implementation||The consultation process will be continued to select the projects, as per the agreed selection criteria, to be financed under the IP. Consultations will involve the design institutes, MOR, and the railway administrations. A steering committee established by MOR will help coordinate the selection of subsequent projects for ADB-financing.|
|Procurement||All goods and services to be financed under the Facility will be procured in accordance with the relevant procurement rules in ADB's Procurement Guidelines (2010, as amended from time to time), and as provided in the Procurement Plan in Annex 3 to this PFR. Disbursements for this tranche will be made in accordance with the conditions of disbursement in the Loan Agreement and Loan Disbursement Handbook (2007, as amended from time to time). The loan proceeds will be used solely for the procurement of equipment and materials in the project description|
|Responsible ADB Officer||Chu, Chenglong|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||PRC Resident Mission|
China Railway Corporation (Formerly Ministry of Railways)
10 Fuxing Road
People's Republic of China
|MRM||15 Nov 2010|
|Approval||14 Dec 2010|
|Last Review Mission||-|
|Last PDS Update||13 Mar 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|14 Dec 2010||11 Mar 2011||10 Jun 2011||30 Jun 2017||30 Jun 2019||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||323.73||Cumulative Contract Awards|
|ADB||100.00||14 Dec 2010||98.62||0.00||99%|
|Cofinancing||0.00||14 Dec 2010||92.43||0.00||92%|
|Status of Covenants|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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|Title||Document Type||Document Date|
|Loan Agreement for Railway Energy Efficiency and Safety Enhancement Investment Program - Tranche 2||Loan Agreement (Ordinary Resources)||Mar 2011|
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Evaluation Documents See also: Independent Evaluation
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