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PROJECT INFORMATION DOCUMENT (PID) 
CONCEPT STAGE 
Report No.:  AB652 
Project Name 
Fuzhou Nantai Urban Development Project 
Region 
EAST ASIA AND PACIFIC 
Sector 
General transportation sector (100%) 
Project ID 
P070519 
Global Supplemental ID 
P086724 
GEF Focal Area 
C-Climate change 
Borrower(s) 
THE PEOPLE'S REPUBLIC OF CHINA 
Implementing Agency 
 
Environment Category 
[X] A   [ ] B   [ ] C   [ ] FI   [ ] TBD (to be determined) 
Safeguard Classification 
[
]
S
1
[X] S
2
[
]
S
3
[
]
S
F
[
]
TBD (to be determined)
 
Date PID Prepared 
January 31, 2004 
Estimated Date of 
Appraisal Authorization 
October 15, 2004 
Estimated Date of Board 
Approval 
February 15, 2005 
A. Key Development Issues 
–
Rational for Bank’s Involvement 
1. 
For China to continue the impressive growth that has taken much of the country out of 
poverty in the last few decades, it is imperative that the engines of that growth
,
namely the cities of 
the South and East, continue to function efficiently and effectively.  
The current urbanization process, 
however, is fundamentally different from the experience of the last fifty years,  since cities need 
to be responsive to a decentralized market-driven economy rather than a planned central 
economy. The Chinese planning profession, though often accomplished technically, is still 
exploring ways to creatively and effectively deal with the above transformation. With the rapid 
pace of motorization, the magnitude and nature of the urban development challenge is further 
complicated.  Motorization accompanied with rising incomes threatens to overwhelm existing 
road infrastructure in cities.   
2. 
The Bank’s CAS (#25141, January 2003) recognizes the magnitude of China’s urban 
development challenge, and supports China in making two transitions: from a rural, agricultural 
society to an urban, industrial society, and from a centrally planned economy to a more globally 
integrated market-based economy.  In the context of urban transport, Bank operations can 
provide valuable support to two related issues: urban development planning and establishment of 
a
sustainable infrastructure financing framework.   
3. 
Both issues are relevant in the case of Fuzhou, the capital of Fujian Province situated on the 
Min river.  Fuzhou is growing rapidly:  the City’s expectations are that per capita income of 
US$1070/year (2002) will increase to US$10,000/year by 2020, and the population of 1.4 million 
(2000) will grow to over 2.0 million by 2015.  Auto ownership has already increased by about 
50% since 2001.  The economy, which had suffered because of Taiwan related tensions in the 
past, has been growing at an annual rate of about 13-16% in the last decade.  
4. 
As per Fuzhou’s 1995-2010 Master Plan, the City is envisaged to expand
 
eastward and 
southward.  The centerpiece of this strategy has been the development of Nantai Island, located 
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to the south of the city center.  Parts of the Island (12 sq km) are already urbanized. Much of the 
island (total area 142 sq km) however is in a state peri-urban transformation with a mixture of 
farms, irregular settlements and some organized development.  According to the Fuzhou Master 
Plan and other Island-specific plans, it is envisioned that by 2020, the planned urban area will 
cover 121.3 sq km to house 800,000 urban residents (the current population in the island is 
344,000).  In the first phase of development (through 2010), 70 sq km will be developed.   
5. 
Available plans  provide a conceptual vision for the Island development, and outline an 
ambitious construction agenda for roads, power, water supply and sewerage facilities.  
Preliminary discussions suggest that most financing comes from either value-capture from the 
development of peri-urban land or from development Banks.  The Asian Development Bank is 
presently supporting development of water supply systems on the Island.  The China 
Development Bank has provided funds for the local road network.  An industrial zone and 
residential area in the western part of the Island have been completed and getting occupied.  
6. 
The systems, institutions, and processes to implement such a plan successfully need 
strengthening.  There is little evidence that Fuzhou has undertaken any systematic market or 
fiscal analysis to determine development timing, required integration between infrastructure and 
services,  and the transport implications of present land-use de
cisions.  Moreover, the City’s 
incentives to promote sustainable development are somewhat clouded by their fiscal dependence 
on value capture from peri-urban development. 
7. 
Clearly, the management of urban development task confronting municipal authorities 
remains formidable.  Fuzhou has asked the World Bank to support the construction of  three 
major road projects, which together constitute the bulk of the short-term program for major 
transport infrastructure on the Nantai Island.  The Bank can help to ensure that these investments 
are made in ways that support public transport and NMV use and thus assist low income 
population and reduce dependence on private vehicle use.  In addition, the Bank can assist 
Fuzhou with the development management of such a fast growing urban area.  In particular Bank 
involvement would help with: 
·
Urban development and planning
.
First, the  establishment of a continuous, transparent 
and participative urban planning process, that is responsive to changing needs and 
evolving market conditions. Second, support for an integrated urban transport and land-
use management process that fosters development of a sustainable city that is able to 
function and grow amidst increasing incomes and motorization.   
·
Infrastructure financing mechanisms
.
Support the City to establish a fiscal capacity 
assessment process for managing new development, and to determine the level city’s of 
exposure to market uncertainties.  The Bank is also ideally positioned to heighten 
awareness of alternative urban financing mechanisms that have a stronger base in 
recurring funds, a reduced degree of exposure to land market volatility, and provide the 
City with greater access to new funding sources.    
8. 
The City is revising its urban transport and urban development Master plans (the masterplan 
is due to be revised in 2005) and has expressed an interest in seeking the Bank’s assistance in the 
revision process.  This is perhaps the first time the Bank has been asked to play such a role in 
China.  Further, at the Bank team’s suggestion the City is considering a Bus Rapid Transit (BRT) 
system to facilitate the development of Nantai Island.  The City has already asked the Bank for 
assistance in developing an appropriate BRT proposal.    
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B. Project Development Objectives 
9. 
To assist Fuzhou city development as it expands to include Nantai Island by:  
(i) Financing transport and associated infrastructure to facilitate development of existing 
peri-urban land in Nantai Island; and  
(ii) Assisting the city  in developing a strategy that promotes fiscally, socially and 
environmentally sustainable development of Nantai Island. 
C. Preliminary Project Description 
10.  Three components (with estimated total cost of $419 M have been tentatively identified 
under this project:  
(i) 
Road component 
(total US$396M, IBRD US$120M):  There would be three sub-
components:  
·
Nan Jiang Bin Lu
.
This 9 new km road section will extend the existing road along the 
north of Nantai Island (total US$86.5 M, US$40.8 M construction, US$27.6 M 
resettlement).  The prime objective of this road is to facilitate urban development and 
improve environment of the riverbank. The City  is planning to start works on a 3 km 
section (total US$36.3 M, US$13.8 M construction). The Eastern section of this road is to 
be constructed on a yet to be built dyke along the Min River (construction US$16.3 M). 
·
2
nd
 Section of the 3
rd
 Ring Road
.
This 12.5 km road section is proposed as a 100 meter 
wide 6-lane expressway (US$227 M) serving the development and expansion of the 
Southern parts of Nantai Island.  To keep pace with demand, the City has decided to adopt  
a
phased construction approach.  The Phase 1 as advance works (31.5m width, 9 km long, 
andUS$70 M including resettlement) will begin this year. 
·
Kuiqi bridge
.
Fuzhou municipality is also considering a bridge that would connect the 
section of the 3
rd
 Ring road described above to the North end of the river, connecting a 
harbour and the newly developed/developing industrial areas in Nantai Island (US$73.4 M 
total, US$ 39.3 M construction). 
(ii) 
Public Transport
 (US$ 18M, IBRD US$ 3M).
 
Investment in public transport 
infrastructure to facilitate introduction of high quality bus services in  tune with the 
growth in demand.  Current proposals include two new bus maintenance depots 
(including a city public transport controlling center) and an advance bus information 
system. 
(iii)
Technical Assistance 
(US$ 5M tentatively).  This component will include training, 
capacity building and institutional development related to urban development 
management practices, as well as planning, implementation and operation of urban 
transport investments and services.  Participation of Bank experts (including consultants 
with experience with integrated transportation land development and municipal finance  
to conduct City’s fiscal capacity assessment) in the design of Fuzhou’s new masterplan is 
scheduled to start in February 2004.  Coincident with that effort, the design of the 
technical assistance component will be further discussed during preparation. 
D. Safeguard Policies That Might Apply 
11.  The project is likely to be an Environmental Category A project. OP/BP 4.01 and 
OP/BP4.12 are expected to apply.  Though Fuzhou Municipal Government (FMG) has no 
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experience with the preparation of a World Bank financed project, it has appointed advisors 
(from Guangzhou) with significant experience in preparing projects compliant with Bank 
policies.  FMG also understands that Bank safeguard requirements need to be met before 
beginning advance works. 
FMG and
 their consultants are working closely with the Bank’s social 
and environmental specialists on Environmental Assessment and preparation of Resettlement 
Action Plans.
 
E. Tentative Financing 
Source: ($m.) 
BORROWER 294 
INTERNATIONAL BANK FOR RECONSTRUCTION AND 
DEVELOPMENT 
125 
 Total 
419 
F. Contact Point 
Contact: Shomik Raj Mehndiratta 
Title: Transport. Specialist 
Tel: (202) 473-2472 
Fax: (202) 614-0167 
Email: smehndiratta@worldbank.org