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Implementation Completion Report (ICR) Review - Gef-ningbo Water And Environment Project

1. Project Data:   
ICR Review Date Posted:
Project Name:
Gef-ningbo Water And Environment Project
Project Costs(US $M)
 17.12  23.76
L/C Number:
Loan/Credit (US $M)
 5.00  5.00
Sector Board:
Cofinancing (US $M)
Board Approval Date
Closing Date
12/31/2010 12/31/2010
General water sanitation and flood protection sector (100%)
Pollution management and environmental health (50% - P) Water resource management (25% - S) Biodiversity (25% - S)
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Richard C. Worden
George T. K. Pitman Christopher David Nelson IEGPS1

2. Project Objectives and Components:

a. Objectives:

    This GEF grant-financed project was a companion to the World Bank's 2005 Ningbo Water and Environment Project that provided water supply and wastewater infrastructure. The Project Appraisal Document (PAD page 3) states the project development objectives of the GEF-financed project were to:
        “reduce land-based pollution along the Cixi coast and the East China Sea, promote the replication of innovative, simple and effective wastewater treatment techniques, and encourage coastal zone conservation.”

    There is no specific definition of the project development objectives given in the Grant Agreement.

    The statement of the The Global Environmental Objective (GEO, PAD page 3) was to:
        “mobilize international and domestic financial resources to demonstrate an innovative wastewater treatment technology – wetland treatment – to reduce land-based pollution to East Asia's Large Marine Ecosystems.”

b. Were the project objectives/key associated outcome targets revised during implementation?

c. Components:
There were three components:
1: Constructed Wetland (estimated cost at appraisal: US$7.12 million; actual cost: US$7.12 million).
The project was designed to support the creation of a new wetland to provide 100,000 m3/day of tertiary water treatment for a new wastewater treatment plant financed by Ningbo Water and Environment Project (NWEP) on 86 hectares of recently reclaimed land provided by the Cixi City Government. The proposed constructed wetland was to be a combination of vegetated submerged gravel bed and free surface water wetland.

2: Establishment of a Wetland Center (estimated cost: US$8.0 million; actual cost: US$14.64 million). The Wetland Center was planned to cover 43.5 square kilometers of tidal and non-tidal lands and buffer strips and contain a visitors' center for wetland education and research. Its primary function, in addition to recreational tourism, was to demonstrate the viability of efforts to restore the area’s ecological functions and improve water quality in surrounding canals by natural wetland treatment.

3: Design and Management Assistance (estimated: US$2.0 million; actual: US$2.0 million).
This financed three activities: (i) engineering design of the Constructed Wetland and Wetland Center; (ii) provision of management assistance for the Wetland Center; and (iii) training and information dissemination activities provided by a consortium of NGOs and universities.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates

Project Cost: The estimated cost of the project was US$17.12 million; the actual cost was US$23.64 million, or nearly 38 percent over its projected cost. The additional expenditures were necessitated by cost over-runs of US$4.37 million to build the Wetlands Visitors' Center, and an additional US$2.35 million to undertake the required ecological function restoration works in the surrounding wetlands. There was a small savings of US$80,000 on resettlement issues related to livelihood compensation to local fisherman and family subsistence.

Financing: The GEF Grant of US$5.00 million was fully disbursed.

Borrower Contribution: While the estimated contribution at appraisal was US$12.12 million, the Borrower’s actual contribution was US$18.76 million.

Dates: The project was extended for one year due to two institutional changes in local oversight of the Cixi Wetlands Management Company. The Cixi Construction Bureau to the Cixi Tourism Bureau was unprepared for implementation and, following creation of Hangzhou Bay New Zone Administration (HBNZA) in 2009, responsibility for the administration of the Cixi coast, including these wetlands, was transferred from the Cixi Municipal Government to the HBNZA. The project closed on December 31, 2011 one year later than planned.

3. Relevance of Objectives & Design:

a. Relevance of Objectives:
Project objectives were originally conceived as part of the IBRD-financed Ningbo Water and Environment Project that was approved in FY05 and had three components: Ningbo water supply; Cixi wastewater; and institutional development. Project objectives were highly relevant as an environmental enhancement to the Cixi wastewater component.

Project objectives were highly relevant to the China 2030 report (The World Bank and Development Research Center of the State Council of China, 2013), which provided also the strategic policy foundation for the China Country Partnership Strategy for fiscal years 2013-2016. Although neither document was published prior to the project’s closure at the end of 2011, they were in preparation at the time, and therefore better reflect the relevance of the project’s objectives to current policy directions in China than the last Country Assistance Strategy published in 2006.

The Country Partnership Strategy had two strategic themes: supporting greener growth and promoting more inclusive development. Under the first theme of supporting greener growth, the World Bank Group was to focus on impacts achieved through demonstration projects, stand-alone knowledge services, and the synergies between them. In addition, project objectives were consistent with three (of the seven) desired outcomes under the CPS: (i) enhancing urban environmental services), (ii) demonstrating sustainable approaches to natural resources management approaches, and demonstrating pollution management. The goals sought by these outcomes were to improve sanitation, solid waste and other basic urban services in selected second-tier cities (such as Cixi), while reducing pollution, and to “pilot cutting edge technologies to address environmental challenges in large cities and help establish "eco cities" that will be models for cities in China and the world."

b. Relevance of Design:
Even though the three parts of the development objectives were clearly stated, the results chain between inputs, expected outputs, and desired outcomes was only partial. Thus the importance placed on coastal zone conservation and biodiversity restoration was not matched by separate project components to provide support for achievement of those objectives. Instead, the three components of the project were more closely aligned to the two construction components.

Institutional factors affecting the project’s implementation were identified, but not adequately mitigated in project design. Although the risk of continued land reclamation in the coastal project area was well understood from the start, the lack of clear provincial government policy on the issue was not adequately taken into account. No formal agreements or covenanted actions to protect the area as an ecological conservation zone were incorporated into project agreements or incorporated into the project’s design as a separate component. No actions were proposed to stop fishing and construction of fish ponds, encroachment in the area to be protected, or their better management. Inadequate attention was given to supporting reform of the legal status of the inter-tidal mudflats and wetlands whose reclamation was undermining the ecological integrity of the entire area.

Finally, lack of precise baseline data on existing pollution levels caused the design of the constructed wetlands to be over-sized.

4. Achievement of Objectives (Efficacy) :

“reduce land-based pollution along the Cixi coast and the East China Sea, promote the replication of innovative, simple and effective wastewater treatment techniques, and encourage coastal zone conservation.”

The outcomes discussed below cannot be fully attributed to the GEF-financed activities because they were highly dependent on the outcomes of the parallel Ningbo Water and Environment Project (NWEP).
a) Reduce land-based pollution along the Cixi coast and the East China Sea: Modest


    Only modest progress was achieved toward reducing land-based pollution because land-based pollution levels were much lower than anticipated at appraisal. While the overall level of pollution was reduced, this was mainly due to the effectiveness of the secondary treatment enabled under the NWEP project.

    Two measures of progress for each contaminant are given below, reflecting the contribution of the Constructed Wetland at the Northern Waste Water Treatment Plan (WWTP) only, and by the combined effect of both the constructed wetland at the Northern WWTP and the wetland serving the other (eastern) WWTP financed under the Bank’s NWEP loan.

        Biological Oxygen Demand:
        • For both WWTPs the achievement was only 1,583 tons/year, or 16 percent of the target of the 10,000 tons/year.
        • The constructed wetland of the Northern WWTP achieved 20.6 tons/year, just 6.9 percent of the target of 300 tons/year
        • For both WWTPs the achievement was 240 tons/year or 12 percent of the target of 2,000 tons/year.
        • The constructed wetland of the Northern WWTP achieved 30.7 tons/year, or 7.7 percent of the target of 400 tons/year.
        • For both WWTPs the achievement was 52 tons/year or 26 percent of the target of 200 tons/year.
        • The constructed wetland of the Northern WWTP achieved 4 tons/year, or 16 percent of the target of 25 tons/year.
    Construction of a 60 ha wetland at the Northern WWTP was completed to provide tertiary treatment for a maximum of 100,000 cubic meters of wastewater per day (m3/day), while reaching Chinese Class 1A water quality standards. The 60 ha site provided treatment of 90,000 m3/day.

    The second constructed wetland to be built on the remaining 26 ha was not built but there are plans to do so once the output of the WWTP reaches 100,000 m3 from its current operating capacity of 58 percent.

    Enhancement and restoration of 300 ha (target 330 ha) of natural wetland area immediately surrounding the Cixi Wetland Center was achieved. This wetland, located along the Cixi coastline, was divided into a 75 ha constructed wetlands to provide tertiary treatment of water discharged from the WWTP while the remaining area was restored and reserved as a wildlife reserve. This wildlife reserve was later designated as a National Wetland Park at the close of the project in December 2011.

b) Promote the replication of innovative, simple and effective wastewater treatment techniques: Modest


    Despite its comparatively low cost and high effectiveness, only one example of replication was mentioned in the ICR: the approval of the Huai River Basin Marine Pollution Reduction Project in February 2012. No other evidence of the replication was provided. The Borrower commented (ICR, page 34) that, “It is unclear whether the constructed treatment wetlands implemented under the project will promote replication.”

    The wetlands surrounding the Center have provided additional benefits of wildlife habitat, flood surge reduction, educational purposes, promotion of “greener” economic growth, and recreational uses (e.g., bird-watchers and other naturalists who access the area). They thereby served as an educational tool for the nearly 80,000 visitors in 2011, as well as a model promoting the adoption of constructed wetlands in other areas of coastal China.

    The 6,000 square meter Wetland Environmental Education Visitors' Center was built on the Cixi coastline to demonstrate the effectiveness of constructed wetlands to “polish” pre-treated wastewater that was easier to operate and more cost-effective than traditional WWTP tertiary treatment.

    Although the actual Visitors' Center building was completed in June 2010, it had not been put to use by grant closure at the end of 2011. This was because internal decorations, fittings and equipment were not completed due to a shortage of funds caused by the change in the Center’s administration.

    Four international and several domestic workshops were held (total target 4), as well as several local governments which visited the Center and constructed wetlands around the Center.

c) Encourage coastal zone conservation: Modest.


    The counterfactual of the project’s intervention is that the entire 43.5 square kilometer area may have been fully reclaimed and used for alternative land use – probably for industry and agriculture as has happened to surrounding areas. The ICR asserts that the project contributed to the decision to review additional reclamation strategies in the new eco-development zone, and to consider future conservation efforts along the entire coastline. This may be true, but it is conjectural.

    Little evidence exists to demonstrate the practical effect of the project in encouraging coastal zone conservation in the Cixi area or in other coastal areas of China. The inter-tidal mudflats were not restored, fishermen working there were not resettled, and further encroachment and expansion of unauthorized fish farms continues. The result is further silting-up and sedimentation of the inter-tidal mudflats.

Progress toward achieving the GEO: “mobilize international and domestic financial resources to demonstrate an innovative wastewater treatment technology – wetland treatment – to reduce land-based pollution to East Asia's Large Marine Ecosystems (LME).”

    The project was fairly successful in mobilizing financial resources. The Cixi City Government and Hangzhou Bay New Zone Administration allocated over US$6 million to complete the Wetland Visitors' Center. They contributed significant funds for the operating budget of the Center during the initial years of operation when visitor fees and other revenues did not fully cover operating costs. Contributions have exceeded appraisal estimates by US$7.25 million, or 135 percent.

    In addition, according to the ICR (page 34), the presence of the Wetland National Park and the Environmental Educational Visitor Center have attracted additional private sector companies and businesses to the area due to its improved “green” image.

5. Efficiency:

Economic and Financial efficiency
  • An Incremental Cost Analysis was conducted during appraisal as is normal practice for GEF-financed projects.
  • While the PAD and ICR qualitatively identified some of the economic, ecological and social benefits associated with wetland and biodiversity conservation, no cost-benefit analysis was undertaken at appraisal or completion. Potential project benefits included: slowing down the decline in productivity of the area by restricting the harvesting of fish and shellfish within the National Wetland Park; providing habitat for migratory water birds and other species; facilitating bird watching activities and other environmental educational opportunities; and improving the quality of life for local residents and visitors,
  • Preliminary results indicate that the unit cost of wastewater treatment using constructed wetlands was 20 – 25 percent of the cost of conventional tertiary treatment (ICR, page 8). The constructed wetlands at both sites are clearly an effective means of tertiary treatment as treated discharge now exceeds China’s Class 1-A standards where WWTPs on their own only meet Class 1B discharge standards.
  • Notwithstanding the efficiency of constructed wetlands to provide tertiary water treatment, facilities were over-sized and thus were more costly than they needed to be. Even so, the ICR (page 10) states that constructed wetlands offer a lower cost solution to wastewater treatment. According to preliminary estimates, the unit cost of wastewater treatment by constructed wetland is below 0.1 yuan/ton, much lower than the 0.40-0.50 yuan/ton of conventional tertiary treatment.

Administrative and Operational Efficiency
  • There were a number of operational inefficiencies that were partially responsible for the reductions in the area of wetlands constructed and the need to extend the project for one year.
  • Implementation was delayed and suspension of counterpart contributions occurred on two occasions when the implementing agencies changed without adequate preparation.
  • Very tight GEF supervision budgets (US$40,000 a year) hindered the Bank’s supervision efforts and its ability to bring in sufficient technical expertise to assist with the project’s constructed wetlands and visitor center re-design, a criticism noted by the Borrower in its comments (ICR page 32).
Overall, efficiency is rated modest.

a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:

Rate Available?
Point Value
ICR estimate:

* Refers to percent of total project cost for which ERR/FRR was calculated

6. Outcome:

Relevance of Objectives is rated was high and relevance of design modest. Achievement of all three of the project’s development objectives was partial and the efficacy of each is rated modest. Efficiency was also rated modest due to the lack of quantitative or comparative data presented in the ICR by which to assess it, and to a number of administrative and operational inefficiencies identified in the project’s implementation.

a. Outcome Rating: Moderately Unsatisfactory

7. Rationale for Risk to Development Outcome Rating:

  • The continued functioning of the constructed wetlands and visitor center depend on more effective government actions to curtail human activities in Hangzhou Bay that are threatening its ecological functions and integrity. Development of aquaculture ponds and harvesting of aquatic resources actually accelerated and intensified during the project period with a loss of natural aquatic resources.
  • The continued reclamation of inter-tidal wetlands and mudflats in the areas surrounding the National Wetlands Park is causing increasing siltation and sedimentation that blocks outflow to Hangzhou Bay.
  • The Bank has supported a “Hybrid Option” approach of expanding the current 1,200 ha of protected areas to 4,200 ha by preserving an additional 3,000 ha of inter-tidal flats north of the project site to prevent encroachment, and by converting the silted/sedimented area into an expanded freshwater wetlands/reservoir.
  • The HBNZA has promised to implement the reclamation and land utilization plans for the 40 km2 natural mudflat surrounding the area of the wetland center, and is committed to taking mitigation actions for the continual protection of these wetlands in accordance with the framework of the “Hybrid Option." However, this option carries a cost of US$40-50 million that has yet to be realized.

    a. Risk to Development Outcome Rating: Significant

8. Assessment of Bank Performance:

a. Quality at entry:

The project was consistent with China’s wetland conservation and restoration policies, and the urgent need to address the problem of overly complicated and costly engineering approaches to tertiary treatment of wastewater. It simultaneously attempted to address these twin challenges by introducing an innovative approach of using nutrient-absorbing aquatic vegetation in wetlands constructed to mimic natural filtering processes through a mixture of financial investments, technical assistance, and capacity-building activities. Because it was never explicitly negotiated with the Borrower, there was a difference of opinion with the Bank regarding the emphasis to be placed on final wastewater treatment versus coastal zone restoration and biodiversity conservation efforts. In addition, the project lacked components to address coastal zone management and conservation. There were also a number of other significant shortcomings in appraisal that resulted in sub-optimal performance and unnecessary delays in project implementation. The M&E system was poorly designed and key performance indicators was not uniformly appropriate for measuring project outcomes. Several were over-estimated due to the lack of appropriate baseline data and analysis of the water quality for the Sanba Canal, which meant that targets established for pollutant removal were unrealistically high. Inadequate analysis of key stakeholder institutions led to the selection of inappropriate or unprepared institutions to be responsible for critical project activities and outcomes, and jeopardized their achievement.

Quality-at-Entry Rating: Moderately Unsatisfactory

b. Quality of supervision:

Given the limited GEF budget for supervising project implementation the job of conducting regular supervision missions was done in tandem with semi-annual missions to supervise the much larger IBRD-financed NWEP. However, these joint supervision arrangements limited the amount of time devoted by Bank staff to supervising the project and the adequacy and quality of technical assistance provided for the designs of the constructed wetland and visitors' center. No actions were taken about the unrealistic targets for pollution reduction through a formal amendment to the Grant Agreement. However, the Bank proactively undertook an important study in response to the unabated land reclamation and increased harvesting of aquatic resources in the surrounding area, and achieved agreement from the Chinese authorities that they would adopt and implement a "Hybrid Option” to preserve the area’s ecological integrity starting in 2013.

Quality of Supervision Rating: Moderately Satisfactory

Overall Bank Performance Rating: Moderately Unsatisfactory

9. Assessment of Borrower Performance:

a. Government Performance:

The Ningbo Municipal Government was the borrower and recipient of the GEF grant. There was a one-year delay in project counterpart funding when leadership for the construction of the wetlands and visitor center was transferred from the Cixi Tourism Bureau to the Hangzhou Bay New Zone Administration (HBNZA) in 2009. While the Ningbo Municipal Government did not contribute the US$0.61 million planned, the other government agencies exceeded their expected combined contribution of US$11.51 million by US$7.25 million or 63 percent. While the problem of continued land reclamation and fish harvesting in adjacent areas was not adequately addressed, the government supported the project’s goals by designating the 1,200 ha of tidal flats around the constructed wetlands as a National Wetland Park in December 2011. According to the ICR (page 11) this is only a 29% of the area required for adequate protection.

Government Performance Rating: Moderately Satisfactory

b. Implementing Agency Performance:

Performance problems were mostly the result of factors beyond the control of the implementing agency that was changed from the Cixi Construction Bureau to the Cixi Tourism Bureau in October 2007. Then, in late 2009, responsibility for the Wetland Center was transferred to the HBNZA and the interior design and furnishing of the Environmental Educational Visitor Center was put on hold exacerbated by the year-long hiatus in counterpart funding. Some delays were caused by factors beyond the control of the project, such resolving legal responsibility and compensation for the ruptured wastewater trunk line leading from the North wastewater treatment plant to the constructed wetlands. Together these problems caused cost-overruns, delays in completion of the Visitors' Center, and the generation of new revenues from visitors to support its operation. Management of the Wetland Center was contracted out to external service providers that only started operations in October 2011, two months before project closing.

Implementing Agency Performance Rating: Moderately Satisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

10. M&E Design, Implementation, & Utilization:

a. M&E Design:

While the development objectives were clearly stated and well selected, the selection of intermediate and outcome indicators were not always appropriate or ideal in terms of measuring progress made toward achieving desired outcomes. Other indicators selected were not well aligned with the development objectives, such as using the number of workshops in which Ningbo participated or organized as a proxy for replication of the innovative approach, or using number of visitors to the Visitor Center as a measure of coastal zone conservation. Targets for pollution reduction were over-estimated due to the lack of accurate baseline data and imprecise estimates of pollution loads coming from the wastewater treatment plants. Some of this was understandable given the experimental nature of this novel approach, but in many cases it was more attributable to inadequate preparation. The arrangements for carrying out the M&E data collection and analysis functions were incomplete also. A number of important potential stakeholder and government institutions were overlooked in the design of M&E system.

b. M&E Implementation:

The Cixi Wetlands Management Company was responsible for monitoring the ecological conservation aspects of the project and the constructed wetlands’ performance, and this was done effectively and regularly. In addition, the assistance of international consultants contributed to the collection of high quality monitoring data. However, project delays meant that monitoring of the efficiency of the wastewater treatment plant and constructed wetlands was possible only in September and October of 2011, only a few months prior to project closure, and before they had reached operational stability.

a. M&E Utilization:

The utilization of M&E data was uneven because the M&E system could only provide feedback to project managers toward the end of the project, or in some cases, not until after the closure of the project.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
The project was classified as cateory "B" under OP/BP 4.01 Environmental Assessment. In addition, Natural Habitats (OPBP 4.04), and Involuntary Resettlement (OP/BP 4.12) safeguard policies were triggered. Environmental impacts were expected to have a significant net positive effect, improving ambient water quality in Cixi City and Hangzhou Bay, while the negative impacts were expected to be minimal, site specific, reversible, and easily mitigated. An Environmental Management Plan (EMP) was prepared to address potential adverse impact associated with the construction and operation of the constructed wetland and Wetland Visitors' Center. No issues were mentioned in the ICR regarding the supervision and monitoring of the EMP’s implementation.

The major social impact was expected to involve the restriction of aquaculture activities in the wetlands and mudflats surrounding the Wetland Center. These activities included crab or fish farming, fishing with preset nets on mudflats, fishing in boats within those areas, and picking clams and snails. A Resettlement Action Plan (RAP) was prepared to provide for adequate compensation and livelihood restoration. However, since the restoration of the mudflats did not take place, those people engaged in aquaculture were not displaced nor were their livelihoods affected by the project. Thus, the RAP was never implemented as envisaged. No issues of non-compliance were encountered or described in the ICR.

b. Fiduciary Compliance:
Supervision of procurement of works, goods and consultant services was carried out by Beijing-based procurement specialists in accordance with Bank policies and procedures. The ICR (page 7) states that no particular issues were observed and that there was no misprocurement.

Financial Management
According to the ICR (page 7), the project had an adequate FM system and controls that provided accurate and timely information that the grant was used for its intended purpose. Reporting requirements were all met satisfactorily in compliance with Bank procedures as well as China’s own Ministry of Finance regulations. Withdrawal procedures and arrangements for the flow of funds were appropriate throughout project implementation, and grant proceeds were disbursed to the project in a timely manner.

c. Unintended Impacts (positive or negative):

d. Other:

12. Ratings:

IEG Review
Reason for Disagreement/Comments
Moderately Satisfactory
Moderately Unsatisfactory
Relevance of design was modest, as was the efficacy of all three objectives and efficiency. 
Risk to Development Outcome:
Bank Performance:
Moderately Satisfactory
Moderately Unsatisfactory
There were significant problems with quality-at-entry. 
Borrower Performance:
Moderately Satisfactory
Moderately Satisfactory
Quality of ICR:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:
The ICR has five lessons and the three most useful are:
  1. Constructed wetlands can be an effective method to treat wastewater. The project demonstrated that properly designed wetland can provided tertiary water treatment at much lower cost than conventional wastewater treatment plants.
  2. Ensure that all relevant stakeholder interests are considered at appraisal and built into arrangements for project implementation. A key shortcoming of the project was inadequate assessment and inclusion of relevant government institutions and other stakeholders concerned with coastal zone development, conservation, and management. Thus continued reclamation of inter-tidal mudflats around the project jeopardize sustainability of project outcomes.
  3. Ensure that objectives are correctly prioritized. The experience of this project was that the objective of removing nutrients and solids from wastewater inflow competed with other objectives to restore converted wetlands to increase habitat for important species of waterfowl and water plants.

14. Assessment Recommended?


15. Comments on Quality of ICR:

The ICR was thorough, well-organized, internally consistent and logical, and comprehensive in its coverage of all required areas of analysis, except for the efficiency of the project in its execution. It provided sound evidence in most cases and focused on results and objectives. Budgetary, staff support, safeguard and fiduciary management material were all presented in a clear, concise and logical manner without any discrepancies.

a. Quality of ICR Rating: Satisfactory

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