|1. Project Data:
ICR Review Date Posted:
|Second Tianjin Urban Development And Environment Project
Project Costs(US $M)
Loan/Credit (US $M)
Cofinancing (US $M)
Board Approval Date
|Sewerage (45%), Sub-national government administration (25%), General transportation sector (20%), Flood protection (10%)|
|Pollution management and environmental health (29% - P)
Urban services and housing for the poor (29% - P)
Infrastructure services for private sector development (14% - S)
Municipal governance and institution building (14% - S)
Water resource management (14% - S)|
||ICR Review Coordinator:
|2. Project Objectives and Components:|
a. Objectives:Objectives as in the Loan Agreement (Schedule 2) were "to assist Tianjin in enhancing the efficiency and equity of wastewater management and transportation system aimed at the sustainable development of Tianjin".
Objectives as in the Project Appraisal Document ( PAD, p.2) were "help develop and carry out physical and institutional measures that would enhance the efficiency and equity of urban wastewater management and transportation systems, and thus facilitate the sustainable development of Tianjin and serve as models for other cities in China"
This review assesses the objectives formulated in the Loan Agreement.
b. Were the project objectives/key associated outcome targets revised during implementation?
1) Stormwater and wastewater Networks in Tianjin City (estimated cost US$ 77.60 million, actual cost US$165.92 million). This component comprised construction of storm water drains, sanitary sewers and pumping stations in Nanbeicang and Fukangnanlu areas, complementing the wastewater treatment plant (WWTP) being financed by Japan Bank for International Cooperation (JBIC) and Asia Development Bank (ADB); and, construction of drains and sewers in the South Suburb (Nanjiaowai) district of Tianjin. These activities will complete the drainage system envisioned in the Tianjin Drainage Master Plan.
2) Shuanglin Wastewater Treatment Plant (estimated cost US$55.36 million, actual cost US$ 0 ). This component was to construct a WWTP of a 200,000 m3/day capacity in Shuanglin, serving Nanjiaowai area which has many small industries and lower-income residents.
3) Urban Wastewater Reuse (estimated cost US$16.7 million, actual cost US$0 million). This included construction of water reclamation plants of 12,500-15,000 m3/day capacity each, attached to the Dongjiao and Shuanglin WWTPs; and reclaimed water distribution systems mainly for industrial and landscape uses.
4) Dagu Canal Rehabilitation (estimated cost US$55.15 million, actual cost US$ 72.07 million). This component included dredging of sediment and rehabilitation of cross-sections, bridges and culverts and three pump stations for Dagu Canal and its associated tributaries.
5) Suburban Sewerage (estimated cost US$ 43.1 million, actual cost US$26.95 million). This component included creation of municipal wastewater collection and treatment systems in about two suburban towns of Tianjin Municipality on a programmatic basis, to initiate and set models for wastewater management in suburban areas.
6) Urban Roads (estimated cost US$ 62.3 million, actual cost US$36.84 million). This component included construction of interchanges at two major intersections of the Middle Ring Road (MRR) and low cost traffic engineering improvements on selected locations along the Inner Ring Road and the Eastern and Southwestern parts of the MRR.
7) Traffic Management (estimated cost US$4.1 milion, actual cost US$0). This component included extension of the existing Area Traffic Control System to 300 new intersections with channelization and in connection with bus priority measures.
8) Bus Priority Measures (estimated cost US$15.16 million, actual cost US$6.95 million). This component included preparation and implementation of bus priority measures on selected corridors, including bus ways and traffic engineering measures, to increase the efficiency of bus operations and to contribute to increasing the modal share of the bus system.
9) Technical Assistance and Training (estimated cost US$ 4.63 million, actual cost US$4.17 million). This component included (i) development of infrastructure information systems; (ii) reform and development of sewerage institutions and finance; (iii) improvement of traffic forecast model; and (iv) bus routes restructuring and design of bus priority measures.
The project was restructured twice: on May 11, 2007 and on April 14, 2011.
Under the May 11, 2007 restructuring, the following revisions were made:
- Component 1) was expanded to include upgrading of road surfaces as well as underground infrastructure including storm drainage and wastewater networks;
- Component 3) was dropped altogether as feasibility studies and survey showed that there was insufficient demand for reusing wastewater;
- The scope of component 5) was reduced to exclude Tangu District, which used its own funds for building a wastewater Treatment Plant;
- Under component 6), the construction of the Daguanlu interchange was canceled when a study determined that a lower cost improvement such as a set of simple road modification and traffic management measures would suffice. Another road expansion investment under this component was canceled when road capacity was increased as a result of investment outside the project;
- Component 8) was expanded to include the Lingbin Bus Parking Depot, located near to planned bus priority corridors;
- Four key project performance indicators were simplified into just two mainly to ease data collection. They were "Percentage of wastewater collected and treated: 2010 target 75%"; and, "Modal share of passenger traffic for public transportation (bus and metro): 18% in 2010".
Under the April 14, 2011 restructuring, the following revisions were made:
- The scope of Component 1) was further increased to include additional roads (incorporating sanitation infrastructure) in the rapidly developing north western and south eastern parts of Tianjin city to improve storm water and wastewater collections networks as well as improve traffic flow and pedestrian safety.
- Component 2) was cancelled due to changes in the regional master plan which made the Shuanglin Wastewater Treatment Plant superfluous;
- Four contract packages under component 4) were funded by the Borrower so as to coordinate with the development of the District where Component Four activities located. All remaining contracts were financed by the loan.
- The scope of component 5) was revised to construct a 100,000 m3/d wastewater treatment plant in the Binhai New area serving Hangu and the new “ECO City.”
- The scope of component 6) was reduced because many road sections were completed as part of the city drainage component under component 1).
- Component 7) was withdrawn from the project but completed with the Borrower's own funds after the winning bidder was disqualified by the Bank for corrupt practices elsewhere.
- Engineering and traffic management measures on selected bus corridors under component 8) were no longer financed by the Loan, instead funded by the Borrower.
- The scope of component 9) was reduced. The development of a management information system was canceled, but some elements were merged into other parts of the same component.
d. Comments on Project Cost, Financing, Borrower Contribution, and DatesProject Cost:
The actual project cost at completion was US$21.1 million less than the total costs estimated at appraisal, principally because of the net downsizing of some project components as a result of restructuring noted above.
At completion 98% of the Bank Loan had been disbursed with an amount of US$2.75 million being cancelled. (information source: Project portal).
The original appraisal estimate of Borrower counterpart funding was for US$185.50 million. This commitment was reduced to US$153.1 million under the first project restructuring and then raised back up to $221.4 million under the second project restructuring (Project Second Restructuring Paper Table 1). At completion, the actual Borrower contribution was $167.15 million, about 90% of the original appraisal commitment.
Dates: the project's closing date was extended twice, each time by 12 months. The actual closing date was June 30, 2012. The reason for the extensions was to allow sufficient time for the completion of all project activities, the scope of several of which had changed through restructuring.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:Rated: Substantial
At project preparation, the project development objectives were consistent with the Bank's Country Assistance Strategy (CAS FY2003-2006), the overarching theme of which was "facilitating rural-urban transition and sustainable development" and the four specific goals listed under the CAS's overarching theme were: (i) improving public sector management and pubic service provision; (ii) assisting the less advantaged population and areas; (iii) strengthening environmental protection, and (iv) improving natural resource management (CAS, p23). At project completion, the project development objectives were still consistent with the Country Partnership Strategy (CPS) for China (FY2013-2016), which listed "addressing the country's environmental deficit" as an ongoing challenge and called for "enhancing urban environmental services" as one of the outcomes under Strategic Theme I: Supporting Greener Growth. (CPS pp. 5 and12). The project development objectives were fully in line with the Country's strategic priorities at project completion, one of which was to "Intensify environmental protection" (China's 12th Five Year Plan, section (25)).
b. Relevance of Design:Rated: Substantial
The causal chain of project design was logical. In order to achieve the stated project objectives of enhancing efficiency and equity of wastewater management system and transport system, the project activities were twofold: infrastructure investments on the one hand and institution enhancement on the other. The investments on wastewater management system included the construction of a wastewater collection network to enable full and efficient utilization of the new capacity of the Waste Water Treatment Plant under the Government's program, and the establishment of wastewater management systems in less developed areas to give them more equitable access to these services. Project institutional enhancement would help improve the management and operation of wastewater management systems in Tianjing City (PAD p4-5), which would consequently bring about more effective and efficient wastewater management systems.
A transport system is considered to be more efficient if such system would allow traffic and passengers moving in a quicker and lower cost manner. The Project investment in the transport system targeted the two most congested intersections in the Middle Ring Road (MRR) of the city. The project intervention included the expansion of some congested road sections, the construction of a flyover, the installation of a traffic management system and the improvement of urban transport management. All would contribute to the alleviation of traffic congestion in the urban area generally and enable more smooth traffic flow through project road areas in particular. Consequently, the vehicle transport cost and passenger transport cost is reduced and travel time shortened. The measures of promoting bus transportation would also enable the poor urban population who could not afford a private car to take urban transport service, therefore increasing the equity aspect of urban transport system.
Given that the project design was very complex with 9 components covering two sectors (transport and wastewater) with many uncertainties, the more appropriate instrument under such circumstance would have been Adaptable Program Loan (APL) than the selected Special Investment Lending (SIL), so as to allow more flexibility to the project implementation given the fast urbanization in Tianjin. However, the SIL did not affect the achievement of the proejct development outcomes
|4. Achievement of Objectives (Efficacy) :|
Outputs: the major project outputs at project completion were as follows:
1. 52km of storm water drains and 52km of wastewater sewers were improved;
2. Dagu Canal was dredged and sediment was safely disposed;
3. One Wastewater treatment plant was constructured in Binhai New Area;
3. Jinzhonghe Interchange was constructured;
4. One bus garage was built;
5. 7 technical assistance were conducted.
There are four objectives under this evaluation, the achievement of each was assessed below:
1. Enhancing efficiency of the urban wastewater management system; The ICR reported that at project completion, the wastewater treatment coverage in Tianjin City increased to 85% from initial 49%, however, it was noted by this assessment that increased coverage of wastewater treatment is not necessary equivalent to enhanced efficiency. The ICR did not provide information other than the increased wastewater treatment coverage as evidence for the enhanced efficiency of urban wastewater management system. From the discussion with the TTL and the Information acquired from other sources (a list of performance indicators on International Benchmarking Network Water and Sanitation Utilities Website), this assessment considered using the following indicators to measure the efficiency of the wastewater treatment system: BOD (Biochemical Oxygen Demand (before and after wastewater treatment); unit cost of wastewater treatment; and number of employees/number per wastewater treatment connection. The information provided by TTL indicated that:
Before the project, the BOD in the Dagu canal wastewater was 13mg/L. after the project, BOD reduced to 2 mg/L.
In 2011, 3,577 tons of BOD loading was removed by Hangu Sewage Treatment Plant which started the operation in 2011, the amount of BOD loading rose to 5,585 tons in 2012. The amount of BOD loading being removed will continue increasing as the plant gradually reaches its full design capacity of 100,000 m3 per day;
The unit cost of wastewater treatment at Hangu Sewage Treatment Plant is around RMB1.70 per ton, the unit cost of wastewater treatment is expected to decrease further as the plant reaches its full design capacity.
Hangu Sewage Treatment Plant employs 30 works in charge of the services around 50,000 wastewater treatment connections, translating to about 1,667 connections per employee. As the plant gradually reaches its planned capacity, labor productivity is going to increase given that the number of employees is not going to increase proportionally.
The achievement of this objective is rated as Substantial.
2. Enhancing the equity of the urban wastewater management system; As informed by the project documents and the project team that prior to the project, there was not a Wastewater Treatment Plant outside the urban core area except one in the Tianjin Economic Development Area, meaning that wastewater in the lower income areas outside of the urban core area was not being collected, taken away or treated. Evidence of enhanced equity of urban wastewater management system would be that wastewater management services are also provided in those lower income areas. As stated in the ICR, 58% of project investment (both on wastewater treatment and transport) focused on lower income areas in Tianjin to benefit the low-income population. Additional information provided by the project team indicated that 168,400 people in Hexi District and Beichen District now have access to wasterwater management services such as wastewater being collected and taken away, which did not happen prior to the project. In addition, a cleaner Dagu Canal after being dredged and a more beautiful environment around Dangu Canal also bring benefits to the local lower-income population as the canal flows over some lower income areas. Therefore, the achievement of this objective is assessed as Substantial.
3. Enhancing the efficiency of the urban transportation system; As stated in section 3, enhanced efficiency of urban transport could be evidenced by more smooth traffic and passengers flows through urban transport system at lower cost and reduced time. The ICR did not provide information on travel time to cross selected points due to the difficulty of data collection. However, the project team informed that traffic is now flowing more smoothly through project road sections as a result of relieved traffic congestion:
Traffic volume per hour through improved Nanjing Road Section increased by 74% from 3,180 passenger car unit (pcu) in 2001 to 5,435 pcu in 2012;
Traffic volume per hour through improved Jinzhonghe Road Section (with flyover constructed above this road section) increased by 78% from 5,075 pcu in 2001 to 9,042 pcu in 2012;
Traffic volume per hour through improved Beicang Street Section increased by 251% from estimated 764 pcu before the project to 2,681 pcu in 2012;
It is noted that increased traffic volume per hour through project road sections could not be solely attributed to the efficiency gained under the project. Overall increased car ownership in Tianjin also contributed to the result. However, it was confirmed by the project team that traffic through project sections did move more smoothly as a result of project intervention as both Nanjing and Beicang road sections were highly congested before. The achievement of this objective is rated as Substantial.
4. Enhancing the equity of the urban transportation system; increased share of public transportation is a good proxy of increased equity of urban transportation system as low-income groups tend to comprise a larger percentage of the ridership of public transport. In this specific project, as reported by the ICR, at project completion, the bus system accounted for 21% of traffic mode as compared with the target of 18% and the baseline of 6%. Yet, it is not clear how much of the public transport share increase should be attributed to the project because the Government also invested heavily in public transport during the project period. In addition, it will be good to supplement the information with the number of low-income population having access to public transport service, which was not provided by the ICR. The achievement of this objective is rated as Modest.
At project appraisal, a cost-benefit analysis was carried out to assess the economic return of several project subcomponents at transport sector: construction of Jinzhonghe interchange and DaguNan interchange, reconstruction of NanjingLu and Beicang Street improvement. Sensitivity analysis was carried out on two scenarios: 20% increase in costs and 50% reductions in travel time savings. The analysis showed Economic Internal Rates of Return in the range of 17.4%-302%, and the Benefit-Cost Ratios (BCR) in the range of 1.6-64.7.
The same methodology was applied at project completion to reassess the economic return of three project subcomponents, the reassessment of DaguNan interchange activity could not be done because this activity was dropped from the project. The range of the Economic Internal Rate of Returns at project closure for the three activities reassessed is 13.5%-243% and Benefit-Cost Ratios are in the range of 3.4-58.2.
As reported by ICR, the main reasons for the differences of Economic Internal Rate of Returns and Benefit-Cost Ratios at project completion were: 1) higher than estimated investment costs; 2) higher than projected traffic growth and consequently, traffic did not flow as fast as expected, hence the time saving is lower than the projected.
It was noted during the review that the project closing date was extended by two years so as to allow the full completion of project activities. Such extension was counted in the economic analysis at project completion and reflected in the final economic internal rate of return; therefore, the project efficiency should not be double discounted due to the extension.
The economic analysis of the investment in transport sector shows that the efficiency is substantial. However, the analysis is limited to three subcomponents in the transport sector, the total investments for these subcomponents were about 18.6 % of total project cost at appraisal and 11.7% of total project cost at completion (this is rough estimation based on the information in the ICR, given there is no detailed updated project activities costs provided), as there was no other evidence on efficiency has been provided on the other more than 80% project investment, the overall project efficiency is rated as Modest.
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