China, People's Republic of : Guizhou Rocky Desertification Area Water Management Project

Agriculture, natural resources and rural development / Irrigation - Land-based natural resources management - Rural water supply services - Water-based natural resources management

The project will help the Guizhou Provincial Government (GPG) reduce rocky desertification areas and improve the livelihoods of people living in rocky desertification areas by conserving water resources; restoring environment, ecology, and land productivity; and increasing resilience to climate change.

Rocky desertification is characterized by vegetation degradation, soil erosion, and bedrock exposure. It occurs in various countries and regions, including the Mediterranean and Dinaric karst regions of the Balkan Peninsula as well as the southwest region of the PRC on a large scale._In the PRC, rocky desertification is one of the most serious land degradation problems in karst areas spreading in the southwest, which has a population of 220 million and overlaps the Yangtze River Economic Belt. Karst area is susceptible to rocky desertification because of the low soil formation rate and high permeability of limestone. Where arable flat land and water are limited, originally vegetated karst areas are cultivated by removing vegetation and planting rain-fed crops which are less effective for soil conservation. Soil erosion control is not conducted in most cultivation areas. Such repeated unsustainable cultivation has increased the rocky desertification areas. Climate change is expected to increase temperatures and the frequency and intensity of extreme climatic events, including storms. This could exacerbate rocky desertification by exposing the soil surface to warming and evaporation, and by causing physical damage such as erosion. Rocky desertification reduces vegetation, soil, land productivity, and arable lands; increases natural disasters such as landslides and debris flows; and deteriorates ecology, increasing vulnerability to climate change and deteriorating people's livelihoods.

Guizhou is in the southwest PRC and has a population of 35 million, of which 36.1% is ethnic minority. Agriculture, forestry, and fishery account for 16.3% of Guizhou's gross domestic product (GDP) much higher than the PRC average of 9.2%. Crop production is the most important agricultural activity (10.4% of Guizhou's GDP and 64.0% of its agricultural, forestry, and fishery products). Guizhou's total area is 176,167 square kilometers, of which 92.5% is mountain or hilly area. It has 112,240 square kilometers of karst areas (63.7% of its total area). Guizhou is in the Yangtze River Economic Belt and is an important province to develop the southwest and far west regions. It has the biggest rocky desertification area in the PRC, at 30,237 square kilometers (17.2% of its total area and 25.2% of the total rocky desertification area in the PRC)._

Water is necessary to change unsustainable land use and restore vegetation in rocky desertification areas. In the southwest PRC, including Guizhou, rainfall concentrates during the rainy season and becomes floodwater that cannot be used._Porous limestone formations cannot capture and store much rainfall. Much of the water drains into rivers quickly through numerous short creeks and streams that run deep in valleys, or through deep aquifers (groundwater rivers) in limestone layers._Although annual precipitation in Guizhou (1,273 millimeters) is much higher than the PRC average (622 millimeters), the amount of annual water supply per person (272 cubic meters [m3]/person) is about 60% of the PRC average (447 m3/person). To capture sufficient water and distribute it to users in karst areas, and to change unsustainable land use and restore vegetation in rocky desertification areas, water storage facilities are essential.

Guizhou has the lowest GDP in the PRC at CNY26,444, which is 56.7% of the PRC average. The rural poverty ratio in Guizhou (18.0%) is much higher than the national rate (7.2%)._The poor population in rocky desertification areas accounts for 50.2% of Guizhou's total poor population. Rocky desertification is a main cause of the deterioration of livelihoods in Guizhou.

Livelihoods of people living in rocky desertification areas improved

Rocky desertification area reduced

Water resources conserved

Environment, ecology, and land productivity restored

Based on midterm review mission conducted during 29 March-2 April 2021, the overall project progress is 34.8% against the elapsed project implementation period of 52.3% as of 31 December 2020. Construction of the Pingqiao Reservoir is estimated to be delayed by 27 months due to (i) delay in the acquisition of the dam site; (ii) delays in the procurements and constructions of temporary diversion tunnel, dam, spillway, and related structures and facilities; and (iii) the optimistic original schedule. The construction of Pingshan Reservoir is estimated to be delayed by 55 months due to (i) delay in updating the domestic resettlement implementation plan and the acquisition of the dam site, and (ii) the optimistic original schedule. The mission updated the overall project implementation schedule. Based on the updated schedule, it is likely that the loan closing date of 31 December 2023 needs to be extended by 2 years to 31 December 2025. The mission strongly informed the Guizhou Provincial Government (including the Finance Department and the project management office [PMO]) and the project implementation units (PIUs) that further delay in the construction of the reservoirs will not be allowed; and if it happens, it may cause the cancellation of the delayed activities and relevant loan amount.

Issue for guidance and recommendation: Closely monitor project implementation based on the updated schedules for project implementation and procurement, and the agreed follow-up actions so that project implementation will not be delayed anymore and the contract award and disbursement will be made in 2021 as agreed upon with the PMO.

Next steps: Update contract award and disbursement projections in eOperations system, and conduct a review mission in early 2022.