|1. Project Data:
ICR Review Date Posted:
|Third Jiangxi Highway Project
Project Costs(US $M)
Loan/Credit (US $M)
Cofinancing (US $M)
Board Approval Date
|Roads and highways (97%), Sub-national government administration (3%)|
|Trade facilitation and market access (33% - P)
Infrastructure services for private sector development (33% - P)
Injuries and non-communicable diseases (17% - S)
Rural services and infrastructure (17% - S)|
||ICR Review Coordinator:
||Robert Mark Lacey
|2. Project Objectives and Components:|
a. Objectives:According to the Project Appraisal Document (PAD, page 2), the objective of the project was to improve east-west passenger and freight flows in Jiangxi province by investing in the construction of an expressway, enhancing local roads, and strengthening highway management.
The PDO in the PAD and the Loan Agreement are identical.
b. Were the project objectives/key associated outcome targets revised during implementation?
c. Components:The were three Components
Component A: Ruijin-Ganzhou Expressway (RGE) (appraisal cost excluding contingencies US$550 million, actual cost US$715 million). Construction of the RGE in the southern part of Jiangxi Province, including: (a) construction of about 117 kilometer of a divided, two-by-two lane, access controlled expressway between the cities of Ganzhou and Ruijin, including bridges and tunnels; (b) supply and installation of electrical, electronic, and mechanical equipment for toll collection, traffic monitoring, lighting and emergency telecommunications facilities; and (c) construction of related toll stations, interchanges, service areas, as well as facilities for highway administration and maintenance of the expressway.
Component B: Local Roads Improvement Program (LRIP) (appraisal cost excluding contingencies US$66 million, actual cost US$17 million). Development and implementation of a Jiangxi Province Local Roads Improvement Program (LRIP) to improve access in selected poor areas of the province, including: (a) rehabilitation and upgrading of the Chongyi-Fengzhou Road (about 48.5 km) and the Meicun-Longbu Road (about 34.8 km); and (b) rehabilitation and upgrading of additional selected road sections.
Component C: Institutional Strengthening (appraisal cost excluding contingencies US$10 million, actual cost US$5 million). This component consisted of four technical assistance subcomponents, intended to (i) produce a tunnel safety management plan, (ii) improve safety conditions on expressways, (iii) support the implementation of electronic toll collection for expressways, and (iv) provide training and equipment for expressway management, maintenance and environmental monitoring.
On August 14, 2009 the Board approved the restructuring of the project to reduce the scope of the Local Road Improvement Program (LRIP) component and to make related adjustments in intermediate results and indicators. The PDOs were not changed. One road section was canceled from Phase I of the LRIP, and the four road sections originally planned under Phase II were reduced to one section. The main reason for the project restructuring was the change in the investment focus of Ganzhou prefecture to act upon the State directive (2006) to implement a significant Rural Roads Pavement Improvement Program (RRPIP). The RRPIP program covered about 15,000 kilometers of rural roads and was expected to link almost all villages of this prefecture by 2010 and serve about four million villagers.
d. Comments on Project Cost, Financing, Borrower Contribution, and DatesProject Costs: The actual project cost was US$736 million, 3.6 percent above the appraisal estimate. There were substantial variations within specific components. The cost of RGE was 14 percent higher than the appraisal cost (US$715 million actual, versus US$627 million at appraisal), because of: (i) an increase in the price of steel and (ii) the depreciation of the US dollar vis-à-vis the Renmimbi. The LRIP program was completed at 25 percent of the appraisal estimate due to the reduction of scope.
Financing: US$12.2 million were cancelled from the Loan.
Borrower Contribution: The Borrower contribution was US$512 million, almost identical to the amount foreseen at appraisal.
Dates: The project closed on December 31, 2010 as scheduled.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:The project's objectives are highly relevant to China's transport needs and to the Government of China's priorities in the roads sub-sector. The Government has focused on the development of the highway network for better integration of the regions in China's national economy and to promote development. The construction of the National Trunk Highway System (NTHS), comprising 12 major expressways connecting all provincial capitals and main cities is at the core of the system. Jiangxi province, in south central China is one of the lagging regions in China. The construction of the Ruijin-Ganzhou Expressway (RGE), planned to link Guangzhou and the areas east to an expressway under construction in Fujian province, was to provide a high quality transport link to the coastal and international port at Xiamen (Fujian province).
The project objectives are also fully consistent with the Bank's Country Partnership Strategy (CPS) 2006-2010 (which was current at closure), particularly in two areas: (i) reducing internal and external barriers to trade; and (ii) promoting more efficient sector management support. A World Bank Report (Working Paper 13 "China's Expressways: Connecting People and Markets for Equitable Development", Report No. 36550, May 18, 2007 ) analyzed the major positive impacts that the program has brought to China. It emphasizes that decentralization has been a key factor in the successful delivery of road network improvements.
The relevance of the objectives is high.
b. Relevance of Design:The project components were well selected to meet the objectives. Project design appropriately balanced the physical and institutional components and the physical components included both provincial and local roads. The Results Framework (PAD page 22) discussed the objectives and clearly identified intermediate outputs such as completion of 117 km of the Ruijin-Ganzhou Expressway; improvement of 83 km of local roads in the Ganzhou City Prefecture during phase I; and successful completion of the institutional strengthening studies and staff training. These outputs could be expected to support attainment of the PDO through achievement of the main outcome indicators.
The relevance of design is high.
|4. Achievement of Objectives (Efficacy) :|
Efficacy of the project development objective - to improve east-west passenger and freight flows in Jiangxi province by investing in the construction of an expressway, enhancing local roads, and strengthening highway management -- is assessed as substantial.
- The Ruijin-Ganzhou Expressway has been completed.
- The only road project that was implemented under the revised LRIP was the rehabilitation of 48.5 km of the Chongyi-Fengzhou road.
- Tunnel and expressway safety manuals were prepared and implemented.
- 100 Electronic Toll Collection (ETC) lanes covering over 3,000 kilometers of expressway have been constructed and put into operation.
- The Public-Private Infrastructure Advisory Facility (PPIAF, a multi-donor technical assistance facility) provided a grant that focused on road maintenance by micro enterprises.
- Technical staffs from JPTD were trained in highway management, highway design and planning, financial management, highway maintenance and traffic engineering. The program comprised 172.4 person-months of training courses (150 domestic and 22.4 overseas) and 33.0 person-months of overseas tours. The ICR reports that these trained staff played an active role during the implementation of the project.
- Although the Ruijin-Ganzhou Expressway (RGE) was completed ahead of the original schedule, the actual daily traffic volume on RGE at project closure was below the target value as shown in the table below.
Average Daily Traffic on four section of RGE (passenger cars per day per section)
- The main reasons are: (a) the construction of the Ruijin-Fujian border expressway (ARE) -- a vital link of the RGE, but which was not part of the project -- was delayed. At appraisal, it was expected that a BOT concession contract signed with a Hong-Kong based company would allow this section to be completed early and feed traffic to Jiangxi’s expressways. However, the BOT contractor failed to reach financial closure, leading to contract cancellation. The Jiangxi Province Communications Department (JPCD) launched construction of the expressway under its own financing and execution, after rescinding the BOT contract. The ICR reports that ARE was expected to open by the end of 2011; and (b) National Highway 323 (the section from Ruijin to Ganzhou) was reconstructed in 2005 and the road condition is good. From February 21, 2009, vehicles on this road did not have to pay toll and as a result some potential RGE traffic was diverted to National Highway 323.
- The Task Team subsequently informed IEG that the ARE successfully opened to traffic on August 12, 2011 and the appraisal targets for Average Daily Traffic on the RGE (set out in the above table) were achieved. This was despite the fact that National Highway 323 remains toll free, primarily because of the time saved through using the RGE. Travel time between Ruijin and Ganzhou has been halved from 150 to 75 minutes, in accordance with the target.
- With the Local Roads Improvement Program (LRIP) being reduced to only one road after the project was restructured, the overall direct benefits from this program were lower than originally expected. The average daily traffic in 2010 on the Chongyi-Fengzhou road (the one road that was financed under the program) was 2,588 vehicles per day (vpd), substantially surpassing the 1,800 vpd target. The number of days the road was closed was zero in 2010 (versus a target of 10 days) and travel time was reduced to 50 minutes (versus a target of 60 minutes). Bus frequency improved with 45 buses per day, higher than the target of 40. The ICR reports that the reduction in the number of days closed and the lower travel time has led to a significant improvement in the accessibility for the population and in trade logistics for freight.
- The RRPIP launched by the Jiangxi Government covers close to 15,000 kilometers of rural roads, and had objectives similar to those of the LRIP. All roads considered under the project were included in the RRPIP rural roads program.
- The implementation of the tunnel and expressway safety manuals substantially improved the capacity of the Jiangxi Province Transportation Department (JPTD) to deal with safety issues. Accident rates fell on Jiangxi Province expressway network from 7.61 per 100 million vehicle kilometers in 2005 to 5.98 (target 6.15) in 2010. Over the same period, fatalities fell from 0.37 per 100 million vehicle-kilometers to 0.22 (target 0.24). The targets for reduced accident rates on National Highway 323 were partially met. The ICR reports that there were large yearly variances in accident and fatality rates which make the data difficult to interpret.
- The ICR (page 9) reports JPTD as stating that the introduction of Electronic Toll Collection lanes has reduced corruption in toll collection, and has led to significant improvement in the management of Jiangxi’s road network. The ICR does not provide more precise information.
- The PPIAF grant has raised awareness of the potential for the use of microenterprises in road maintenance. It resulted in the preparation of a compact disc with road maintenance data from Ganzhou County, and technical and managerial manuals for routine maintenance teams and a guide for implementing team-based routine maintenance.
The overall ex-post Economic Rate of Return (ERR) was 14.4 percent, close to the appraisal estimate of 14.2%. The analysis assumes that full benefits started to accrue in 2010 for twenty years and uses a 12 percent discount rate. The ex-post economic analysis updated the main inputs of the appraisal model to reflect current status: (i) actual construction costs; (ii) actual construction cost distribution; (iii) actual traffic; and (iv) revised traffic growth rates. Project benefits consisted of savings in vehicle operating costs, travel time savings, and reduction in accident costs.
The ERR of the Ruijin-Ganzhou Expressway (RGE) is 14.1 percent, close to the appraisal estimate of 14.2 percent. The RGE was completed ahead of the original schedule, though its cost was 14 percent higher than the appraisal estimate (US$715 million actual, versus US$627 million), because of: (i) an increase in the price of steel and (ii) the depreciation of the dollar vis-à-vis the Renmimbi.
The ERR of the Chongyi - Fengzhou LRIP road is 32.3 percent, which is considerably higher than the appraisal estimate (16.3 percent) due to lower construction costs and higher traffic.
The actual total project cost was US$736 million, 3.6 percent above the PAD estimate. The project closed on schedule.
Overall, efficiency is rated substantial.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated