China, People's Republic of: Chongqing Integrated Logistics Demonstration Project

Transport / Multimodal logistics - Water transport (non-urban)

The project will develop a modern and efficient multimodal logistics system in Chongqing. The outputs of the project will be (i) the Chongqing transportation logistics park, (ii) the Nanpeng logistics park, (iii) the Yangtze River inland waterway roll-on roll-off (Ro-Ro) operations, (iv) a logistics information system, and (v) institutional capacity building.

The proposed project is the third urban development project in Chongqing. Lessons from past and ongoing projects were incorporated in the project design, such as devolving more responsibilities to the implementing agency while strengthening its project management and financial management capacity. The proposed project will have demonstration features, namely integrated logistics parks, logistics information system, and inland waterway Ro-Ro operations. These features are all relatively new for logistics projects in the PRC, and their successful introduction through this project will offer opportunities for replication and scaling up. Integrated logistics functions and services in the new logistics parks will reduce wasteful freight movements. Logistics information services will enable logistics service providers, such as freight forwarding companies, to increase efficiency and reduce costs through better tracking and control over the supply chain. Ro-Ro operations will reduce the time and costs of transshipments, incentivizing freight movement on inland waterways.

The project is consistent with the plans of the Government of the PRC to develop the logistics sector and is in line with the Thirteenth Five-Year Plan. The project is also closely aligned with the government s priorities to develop the Yangtze River Economic Belt and the Silk Road Economic Belt initiative. The project's focus on logistics development is in line with the Sustainable Transport Initiative of the Asian Development Bank (ADB), which highlights logistics improvements as an important opportunity for sustainable transport operations. The project also draws on the recommendations of the previous ADB study on logistics development in the PRC.

The logistics sector in the PRC, while stronger than many Asian countries, trails behind several developed nations. According to the World Bank's logistics performance index, the PRC has a global ranking of 27 (1 is the best and 160 is the worst). The PRC's ranking indicates a potential for improvement. On 11 June 2014, the State Council approved a plan to develop the logistics industry. This reaffirms the government's continued emphasis on improving and reforming the logistics sector, which is expected to continue during the Thirteenth Five-Year Plan of the PRC.

Existing logistics constraints. In 2015, Chongqing handled 1.1 billion tons of cargo at 24 locations within the inner city region and ring road in Chongqing. The movement of freight trucks in urban areas worsens traffic congestion, creates air pollution, and slows down the delivery time for goods. Moreover, most of these small logistics centers do not have enough parking spaces, resulting in large trucks being parked along the streets causing more traffic congestion. Since April 2014, the government has restricted the movement of big freight trucks in parts of the inner city during certain times of the day. These restrictions are expected to be further tightened to cope with growing traffic congestion. While this has provided some relief to the traffic congestion problem, the trucks idle just outside the inner city for several hours before they are allowed to enter, thus contributing to considerable air pollution. There is also a risk that the supply of daily commodities used by local residents may be affected. The government plans to create the new logistics parks beyond the inner ring road as a long-term solution to these problems. The existing logistics centers in the inner city would gradually be consolidated and transferred to the new logistics parks. The new parks would combine all of the logistics functions in one location which will eliminate unnecessary freight movements. The parks will also integrate the various transport modes such as railways, highways and inland waterway resulting in the development of an efficient multimodal logistics system. These improvements will reduce logistics costs, which in turn may result in lower prices of consumer goods.

Inland water transport. Chongqing is one of the most important inland ports in the PRC. The development of the Three Gorges Dam has increased the shipping capacity of the Yangtze River. The dam has made the river deeper and slower, allowing for easier navigation, especially upstream, for cargo and passenger vessels. The limiting factor for cargo, however, is the capacity of the ship lock across the 181 meter high dam. Presently, container ships have to wait for several days in order to pass the dam. To avoid delays, shippers unload goods upstream of the dam and often transfer goods to their final destination by road. The delays and costs of loading and unloading goods on vessels deter shippers from using inland waterway transport.

Logistics information system. The logistics information systems in the PRC are not fully developed. The existing systems provide information related to a single transport mode (e.g., tracking cargo moving on road transport), and there is little integration between different transport modes. Limited information is available in the public domain, making it difficult for transportation companies and freight forwarding companies to operate efficiently. Poor information-sharing creates a bottleneck for logistics and results in higher costs and delays. There is a need to develop an accessible information system that could be used by all the logistics centers and service providers. This will enable the logistics companies specializing in one or more aspects of logistic operations to work seamlessly together in a more efficient and cost effective manner.

Chongqing transportation logistics park developed

Nanpeng logistics park constructed

Yangtze River inland waterway Ro-Ro transport demonstrated

Logistics information system established

Institutional capacity strengthened

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The contract for package IA-CTJC08 (earthworks/ground leveling of Area and B) was awarded and completed. Package IA-CTJC01 (construction of Building nos. 1 to 16, including no. 10 driveway) was awarded in December 2018 and construction of the foundation of all 8 logistics building is ongoing.

Ongoing.

Borrower proposed use of government financing; 100% of the civil works in the subcomponents of the Nanpeng Logistics Park (area C and D) have been completed with using domestic funds.

Borrower proposed use of government financing; 100% of the civil works in the subcomponents of the Nanpeng Logistics Park (area C and D) have been completed with using domestic funds.

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The three roll on/roll off ship packages are replaced with the two containers supply packages for 2021 procurement.

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The project is category B for environment. A consolidated initial environmental examination and an environmental management plan (EMP) that cover all project components have been prepared. These documents comply with the PRC's regulatory requirements and ADB's Safeguard Policy Statement (2009), and have been disclosed on the ADB website. Public consultations were carried out to inform the project design and environmental assessment process and will continue during project implementation. The EMP outlines potential impacts, mitigation and monitoring measures, institutional arrangements, training requirements and an implementation budget of 0.2% of the total project budget. Capacity development and institutional strengthening will be provided to minimize environmental risks. Environmental complaints will be handled through a project safeguards grievance redress mechanism.

ADB safeguards scope is applied to all the project components regardless of ADB or domestic finances. The required biannual Environmental Monitoring Reports have been submitted to and approved by ADB. Moreover, the first systematic project environmental management training for the PMO, project IA and PIU was carried out. The training contents included: (i) the ADB's safeguard policy; (ii) environmental management; (iii) the contents of environmental monitoring report and (iv) environmental mitigation measures adopted.

The project is category A for involuntary resettlement. A resettlement plan is prepared for the Chongqing transportation logistics park component. Due diligence has also been conducted for the Nanpeng Site (already cleared prior to the proposed project). The due diligence report was prepared which includes some actions to address remaining resettlement issues.

The resettlement activities for both Chongqing transportation logistics park (Output 1) and Nanpeng logistics park (Output 2) have been completed. The remaining project activities will not involve any LAR.