Document of The World Bank Report No: 61705-CN RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE LIUZHOU ENVIRONMENT MANAGEMENT PROJECT LOAN 4781-CHA BOARD DATE: MAY 24, 2005 TO THE PEOPLE’S REPUBLIC OF CHINA MARCH 25, 2011 ABBREVIATIONS AND ACRONYMS LMWTC Liuzhou Municipal Wastewater Treatment Company PDO Project Development Objective Regional Vice President: Mr. James W. Adams, EAPVP Country Director: Mr. Klaus Rohland, EACCF Sector Manager: Mr. Ede Jorge Ijjasz-Vazquez, EASCS Mr. Vijay Jagannathan, EASIN Task Team Leader: Mr. Victor M. Vergara, EASIN 2 CHINA LIUZHOU ENVIRONMENT MANAGEMENT PROJECT P081776 CONTENTS Page ANNEX REALLOCATION OF LOAN PROCEEDS 3 Restructuring Status: Draft Restructuring Type: Level II Last modified on date : 1. Basic Information Project ID & Name P081346 – Liuzhou Environment Management Project Country China Task Team Leader Victor M. Vergara Sector Manager/Director Ede Jorge Ijjasz-Vasquez Country Director Klaus Rohland Original Board Approval Date May 24, 2005 Current Closing Date June 30, 2011 Proposed Closing Date [if applicable] N/A EA Category A Revised EA Category No Change EA Completion Date January 12, 2005 Revised EA Completion Date Not Applicable 2. Revised Financing Plan (US$) Source Original Revised BORROWER 105.60 116.13 IBRD 100.00 100.00 Total 205.60 216.13 3. Borrower Organization Department Location Ministry of Finance International Department Beijing, China 4. Implementing Agency Organization Department Location World Bank Project Management Liuzhou Development and Liuzhou, Guangxi Zhuang Office, Liuzhou Reform Commission Autonomous Region, China 5. Disbursement Estimates (US$m) Actual amount disbursed as of 3/23/2011 87.45 Fiscal Year Annual Cumulative 2011 12.55 100.00 Total 100.00 4 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Have these been approved by Bank management Is approval for any policy exception sought from the Board? Does the scale-up of restructured projects trigger any new safeguard policies? If yes, N please select from the checklist below. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The development objective of the project is to assist Liuzhou Municipality of Guangxi Zhuang Autonomous Region in improving the municipality’s environmental conditions by investing in wastewater treatment facilities, industrial pollution control, municipal sanitation services and solid waste services and management. 7b. Revised Project Development Objectives/Outcomes [if applicable] The PDO remains unchanged 5 ANNEX: Reallocation of Loan Proceeds 1. Proceeds for the China Liuzhou Environment Management Project, Ln. 4781-CHA (P081346) will be reallocated as follows: Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised (1) Works under (a) Part A(1), 45,430,000 47,283,000 100 No Change A(2), A(3), A(4), and A(5) of the Project (1) Works under (b) Other Parts of 24,220,000 29,777,000 100 No Change the Project (2) Goods under (a) Part A(1), 18,760,000 16,070,000 100 No Change A(2), A(3), A(4), and A(5) of the Project (2) Goods under (b) Other Parts of 8,360,000 3,960,000 100 No Change the Project (3) Consultant’s services and 1,950,000 1,950,000 100 No Change training under (a) Part E(1), and E(2) of the Project to be carried by LMWTC (3) Consultant’s services and 780,000 460,000 100 No Change training under (b) Other Parts of the Project (4) Fee 500,000 500,000 Amount No Change due under Section 2.04 of the Loan Agreement Total 100,000,000 100,000,000 2. Project implementation is satisfactory with only six of a total of 51 contracts still under construction. The PDO remains relevant and achievable by the current closing date. The total project costs have increased from US$205.6 million to US$216.13 million due to substantial depreciation of US dollars against RMB, as the exchange rate is reduced from 8.2868 at appraisal to 6.6275 at end of 2010. 3. The proposed reallocation is necessary to fully fund the remaining ongoing works after recent price escalations increased contract costs. 4. In order to ensure that the Project Management Unit and Project Implementing Units have sufficient time to submit final withdrawal applications after the Loan closing date, a four month grace period, through October 31, 2011, is added. 6 7