Document of The World Bank FOR OMCIAL USE ONLY Rqeet No. 5408HA, STAFF APPRAISAL REPORT CHINA HIGHWAY PROJECT April 19, 1985 Transportation Division 1 Projects Department East Asia and Pacific Regional Office This document has a restricted distribution and mav be used by recipnts only in the perfermance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRNCY EQUIVALENTS Currency Unit - Renminbi (RMB) US$1.00 = Y (Yuan) 2.84 (as of March 1985) US$0.35 = Y 1.0 US$l milLion = Y 2.84 million USS352,113 = Y I million FISCAL YEAAR January I - December 31 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (ki) = 0.62 mile (mi) 1 square meter (sq m) = 10.76 square feet (sq ft) I square kilometer (km2) = 0.4 square miles (sq mi) I hectare (ha) = 0.01 k1m2 = 2.47 acres (ac) = 15 mu I mu = 666.7 sq m = 0.0667 ha L kilogram (kg) - 2.2046 pounds (lbs) I metric ton (m ton) = 2,204 pounds (Lbs) PRLINCIPAL ABBREVIATIONS AND ACRONYMS USED AADT - Average Annual Daily Traffic CADE - Compucer-Aided Design and Engineering CHB - County Highway Bureau CNTIC - China National Technical Import Corporation CTC - Central Trucking Company C-I - County Transport Department ERR - Economic Rate of Return GNP - Gross National Product HB - Highway Bureau HPDI - Highway Planning and Design Institute ESRI - Highway Scientific Research Institute ICB - International Competitive Bidding LCB - Local Competitive Bidding mOC - Ministry of Communications MOE - Ministry of Education MOF - Ministry of Finance PHB - Provincial Highway Bureau PTC - Provincial Trucking Company PTD - Provincial Transport Department SAA - State Auditing Agency VOC - Vehicle Operating Costs FOR OFICUL USE ONLY HIGHWAY PROJECT TabLe of Contents Page No. Loan, Credit and Project Smmary .................................... v I. TRANSPORT SECTOR A. Economic Setting lI B. Transport System . C. Traffic Trends . . .1 D. Investments ...........2................ .2 E. Ports and Waterways.. . 3 F. Railways... 3 -. Highways 3............ .3 R. Transport Policies and Objectives for the 1980s. 4 II. HIGHWAY SUBSECTOR A. Network ..4 B. Traffic Growth and Characteristics. 6 C. The Vehicle Fleet. 6 D. The Trucking Industry ........... . .............. o....... 7 E. Vehicle Operating Costs, Trucking Tariffs and Profit 8 F. Highway Administration. 8 C. Planning, Budgeting and Financing. 9 H. Engineering ........10 I. Construction and Mtan te nance ...I... Io ........ ... . J. Road Safety .11 K. Staff Training .12 L. Highway Development: Policy and Objectives for the 1980s ...12 III. THE PROJECT A. Project Formulation and Preparation . . 13 B. Project Objectives and Scope ..13 C. Detailed Featuresar.... .... 14 D. Cost Estmts .....i... ...a...0 e0...... 17 E. Financing ...19 F. Implementation ...20 G. Procurement .... ..22 H. Disbursements ...23 This report is based on findings of a Bank Group mission which visited China in October/November 1984, comprising B. P. Kennedy (mission Leader), G. Mahoney, R. J. N. Leonard (Engineers), C. Ohri (Procurement Specialist), J. Yenny, S. Teravaninthorn (Economists) and G. Morra (Training Specialist). The report was written by B.P. Kennedy, R. J. N. Leonard, J. Yenny and S. Teravaninthorn and edited by Ms. P. Brereton. Tis docmet has a resticted distnbution and may be used by reopients only in the peaformance of their oflfi duie Its contents may not otherwise be disdosed witbout World Bank authorization. Page No. I. Auditing, Reporting and Monitoring ...................... 24 - J. Environmental Effects ................................. 24 IV. ECONOMIC EVALUATION A. General ................................................. 25 B. Construction and Improvement of National Roads .......... 26 C. Construction and Improvement of Rural Roads ............. 26 D. Overall Evaluation and Risks ............................ 27 V. AG REEMENTS REACHED AND RECOMMENDATION .......... ........ ..... 27 TABLES 1.1 Annual Crowth and Modal Split in Freight Traffic, 1949-1983 1.2 Annual Growth and Modal Split in Passenger Traffic, 1949-1983 2.1 Highway Design Standards in China 2.2 Road Pavement Standards 2.3 International Comparison of Vehicle Production in 1980 2.4 Motor Vehicles Manufactured in and Imported into China, 1980-1984 2.5 Total Freight Transport Handled bv State and Social Trucks 2.6 CTC's Vehicle Operating Cost in 1983 2.7 Composition of Vehicle Operating Cost: A Comparison 3.1 National Road Sections to be Improved or Newly Built 3.2 Rural Roads to be Improved or NewLy Built 3.3 Training Program 3.4 Estimated Disbursement Schedule ANNEXES 1. HOC Highway Institutes 2. Significance of Proposed National Road Investments 3. Provincial Profiles 4. Project Implementation Schedule 5. Project Monitoring Indices 6. Economic Evaluation of the Xian-Sanyuan National Road 7. Economic Evaluation of the Fucheng-Yuquan Rural Road 8. Selected Documents and Data Available in the Project File - iii - CHARTS 1. Organization of the Ministry of Communications (IBRD 26870) 2. Organization of the Highway Bureau of the Ministry of Communications (IBRD 26871) 3. The Relationship between Central and Provincial Transport Departments (IBRD 26423) 4. Organization of the Education and Science and Technology Bureaus of the Ministry of Conimunications (IBRD 26869) MAPS China Transport System - IBRD 18708 Anhiui Province - IBRD 18345 Yunnan Province - 3RD 18347 Guangxi Province - IBRD 18349R Zheijiang Province - IBRD 18350 Sichuan Province - IBRD 18351 Jiangxi Province - IBRD 18352 Shandong Province - IBRD 18353 Shaanxi Province - IBRD 18554 - L - CIAINA HIGHWAY PROJECT Loan, Credit and Projecc Summarr Borrower: People's Republic of China Amount: US$72.6 million equivalenc comprising USS42.6 million equivaient IBRD and SDR 30.3 million (USS30 million equivalent) IDA. Terms: Loan: 20 years including 5 years of grace; standard variable interest rate. Credit: Standard. Project Description: As the Bank Group's first involvement in China's high- way subsector, the proposed project would address a number of needs by assisting Government in: (a) improving the quality of future construction works by modernizing highway design, and by updating and improving construction and material specifications; (b) increasing the cost-effectiveness of highway investments, by improving economic evaluation tech- niques for the evaluation and selection of road investments, and by supporting Government's new policy of moving to competitive bidding for public works; Cc) supporting a highway research program, with par- ticular emphasis on improving and strengthening the existing paved national road network, improving road capacity in congested areas and improving road safety; and (d) strengthening the capabilities of staff working in the highway subsector by carrying out a training program. In addition, the project would support the Government's program for completing the national road network by constructing or improving about 230 km out of a total of 4,000 km of missing links in the network. It would also support a national program of improving economic activity in rural areas through the construction or improvement of about 1,400 km of rural roads. There is some risk of delays in project implementation since this is the first time that competitive bidding will be used for highway construction in China, and these delays could increase costs. This risk would be reduced by appro- priate supervision in the early project stages. Project Costs: Local Foreign Total (USs million)- Road construction 77.7 51.5 129.2 Design and research improvement 0.1 2.5 2.6 Road maintenance improvement - 1.8 1.8 Training program 2.1 2.1 Consultant services - 0.6 0.6 Base Cost 77.8 58.5 136.3 Physical Contingencies 7.8 5.9 13.7 Price Contingencies 11.2 8.2 19.4 Total Project Cost /a 96.8 72.6 169.4 Right-of-way cost 7.2 - 7.2 Total Financing Required 104.0 72.6 176.6 Financing Plan: IBRD/IDA - 72.6 72.6 Goverrment 104.0 - 104.0 Total Financing 104.0 72.6 176.6 Estimated Disbursement: Bank Group FY 1986 1987 1988 1989 1990 1991 - ----- (USs million) Annual 9 25 30 5 2 1.6 Cumulative 9 34 64 69 71 72.6 Economic Rate of Return: 20% /a Including taxes and duties of about US$16.8 million equivalent. CHINA HIGHWAY PROJECT I. TRANSPORT SECTOR A. Economic Setting 1.01 Like other centrally planned economies, China's economy is very "transport intensive." In the same land area, U.S. freight traffic is only four and a half times the freight traffic of China with a GNP nine cimes as large. This intensity of transport is explained partly by: (a) China's economic structure, with the service sector accounting for a very low share of GNP; (b) the historical emphasis on heavy industry, requiring the movement of ores, steel, and other bulk products; and (c) the high level of energy con- sumption per unit of output in China's industry (energy use per unit of wDP is two and a half times that of other low-income developing countries). B. Transport System 1.02 China's transport system is heavily concentrated along che eastern seaboard. It comprises about 52,000 route-km of railways, 915,000 km of roads, 109,000 km of rivers navigable by barges of 100 tons or Larger, 15 major national ports and a large number of smaller provincial and municipal ports, and 48 major airports. The main transport corridors are Harbin-Dalian and Beijing-Shenyang in the northeast; Beijing-Tianjin-Shanghai along the east coast; Beijing-Wuhan-Guangzhou linking industrial areas in the northeast and southeast; and Shanghai-Wuhan-Chengdu which cuts across the east-west indus- trial areas. The first four corridors are served mainly by rail, while the last is served mainly by the Changjiang (the Yangtze River). The physical characteristics of the country have also encouraged coastal shipping services. Transport facilities are still very poor in the outlying regions of the north- west and the southwest, where mountainous topography makes investment costs relatively high. C. Traffic Trends 1.03 Domestic freight traffic in 1983 reached 1,007 billion ton-km, almost a fourteen-fold increase since 1952, or an average annual growth rate of almost 9X, systematically higher than the growth of domestic product. The elasticity of freight growth to overall economic growth is, however, less than that experienced by some other low-income countries and reflects the policy emphasis given to regional self-sufficiency rather than inter-regional trade. 1.04 Passenger traffic reached 310 billion passenger-km in 1983, a 12.5-fold increase since 1952 and an average annual growth rate above 8Z. Since 1978, growth has averaged 12% per annum, well above twice the overall rate of economic growth. It is likely that this growth would have been more rapid if it had not been constrained by the limited capacity, particularly of - 2 - the railways, to offer more passenger services. Despite the rapid growth of passenger traffic in recent years, the mobility of peopie in China is still very low, reaching 270 passenger-km per capita in 1982 versus 785 in India, where GNP per capita is lower chan in China. Assuming an income elasticity of 1.5-1.7, well below the elasticities observed in India and BraziL, passenger traffic in China would reach about 1,500 billion passenger-km per year by the turn of the century, about five times current levels. 1.05 The amount of traffic carried by the various transport modes is becoming somewhat more balanced than in the past. Railways, which have his- torically handled the greatest share of freight and passenger traffic and which have shown substantial growth in recent years, are now beginning to show a decreased share in relative terms. Highway craffic has increased steadily, particularly with the recent development of rural areas which generated a vastly increased demand for short distance passenger travel. The share of railways in freight and passenger traffic measured in ton-km and vassenger-km decreased from 79% and 73%, respectively, in 1960 co 70Z and 59% in 1982. The traffic lost by the railways has apparently gone to highways whose share increased from 2% to 11% for freight traffic and 18% to 36% for passenger traffic over the same period (Tables 1.1 and 1.2). However, the predominance of railways is expected to continue for quite some time, especially for freight traffic. D. investments 1.06 Over the period 1949-79, some Y 110 billion, or 17% of all new investment coming under the heading "State Capital Construction," went to transport. In comparison to other countries, the annual investment in China's transport sector has been relatively low. At about 1.lZ of GNP, it is compar- able to the level in India, but is less than the USSR's 1.41, 2Z in Korea, and 3.3% in Brazil. China's low investment in the sector has made transport a bottleneck to economic development. Coal production, for example, has been curtailed to match available transport, rural areas are short of transport for both agriculture and local enterprises, and ports lack adequate handling tacilities for bulk fertilizer and grain. 1.07 In the past, the railways received nearly 70% of all investment in transport and communications, but starting in the late 1970s the share of investment in railways declined to about 50%, implying a redistribution of investment to other transport facilities. However, the highways subsector has not yet benefitted from this redistribution. Investment on highways has steadily decreased from 25% during 1963-65 to only 12% by the end of 1975%; since then, it has stabilized at around 15% of total transport investment. 1.08 In the coming decades, much larger investment will be needed in transport if bottlenecks to economic development are to be avoided. The pro- posed project would assist in this regard by supporting a major development program of national and rural road construction in order to facilitate both industrial and agricultural growth. - 3 - E. Ports and Waterways 1.09 Port traffic increased rapidly in the period 1976-80 at an annual average growth rate of 11.3%, reflecting the economic opening of China to foreign trade. Domestic coastal shipping and inland water transport also increased substantially. As a result, ports became congested despite commend- able efforts to achieve higher productivity. A major effort to modernize ports started in the early 1970s and continues, with particular emphasis on container and bulk terminals, the latter mainly for coal. Mhe Bank Group's first involvement in the China transport sector was the Three Ports Project (Loan 2207-CHA) in 1982 which includes a coal berth at Huangpu and container berths at Huangpu, Shanghai and Tianjin. A second ports project is being prepared. F. Railways 1.10 China's railway system more than doubled in size between 1949 and 1983, when it totalled some 52,000 route-km, of which about 9,182 km were double or multiple tracked and some 2,650 km were electrified. Further double tracking and electrification are in progress. Some 75% of all locomotives are still steam-powered. Rail freight traffic has grown from about 39.4 bil- lion ton-km in 1950 to 665 billion ton-km in 1983, at an average rate of 9% p.a. Since 1978, freight traffic has grown less rapidly, averaging about 4.5% p.a. Ten commodities (coal, timber, iron and steel products, construction materials, petroleum, non-metallic ores, grain, metallic ores, fertilizer and cement, in that order) account for about 74% of the ton-km. Passenger traffic by rail has grown from about 21.2 billion pasenger-km in 1950 to 178.0 billion passenger-km in 1983, at an average annual rate of 6.7%. Passenger traffic has exploded since 1978, increasing 62% in five years and putting heavy demand on the existing equipment and line capacity. 1.11 Railway operations are very efficient and show a high level of track and equipment utilization. Traffic density is the second highest in the world after the USSR, averaging 11.9 million net ton-km per route-km for freight and 3.1 million passenger-km per route-km for passengers. Freight car turnaround time is extremely low (at three days) and further savings will not likely be achieved. The Bank Group's first involvement in China's railway sector was the China Railway I Project (Loan 2394-CHA) in 1984 which financed priority infrastructure investments on two lines as well as equipment, technical assis- tance and training for improving electric locomotive production. A second railway project has also been prepared. C. Highways 1.12 The development of the highway network has been relatively neglected compared to the other transport modes. The existing paved network is limited and the quality of road pavements is poor. With motor traffic on the national highways growing at a very high overall annual average rate of 15% since 1978, and in line with che emphasis of Government's new economic policy on the development of light industry and agriculture, and the intention to shift short-distance traffic (less than 200 miles) from the railways to the roads, the Government, in its Seventh Five-Year Development Plan (1986-90), proposes - 4 - to increase investment to expand and improve the highway network. The highway subsector is described in detail in Chapter II. H. Transport Polices and Objectives for the 1980s 1.13 The transport development policy in the 1980s, unLike that of the past 30 years, has broadened to include not only the expansion of individual modes but also the establishment of links between each mode, the incorporation of new technology, and the improvement of institutions. With these objectives in mind, policy discussion has centered on: (a) capacity constraints for both freight and passenger traffic; (b) the appropriate economic role of the various modes and, in particular, the modal allocation of short-distance traffic; (c) management of the transport system, including policy, planning, coordination, and pricing; (d) the choice of technoLogies for both infrastruc- ture and vehicles; (e) energy conservacion; and (f) the training and develop- ment of staff to handle the above matters. II. HIGHWAY SUBSECTOR A. Network 2.01 Although China's road network is now the sixth largest in the world, it is still relatively underdeveloped. In 1983, the network comprised about 915,000 km, of which only 173,000 km or about 19Z had asphaltic concrete or bituminous coated macadam pavements. Most of these pavements are of poor quality, have exceeded their design life, and are deteriorating rapidly with the increased traffic. As a result, maintenance is becoming increasingly more difficult and costly. Under the project, assistance would be given to carry out a pavement evaluation analysis in order to identify strengthening, rehabi- litation and maintenance programs for the existing paved road network. Current road density of about 94 km per 1,000 sq km or 9.1 km per 10,000 popu- lation is also low, even though the network in 1983 was already 11 times larger than that in 1949. A comparison of China's road density with that of other countries is shown below: Road Network Density km/10,000 population km/1,000 sq km China (1981) 9.1 93.49 USSR (1979) 54.1 63.71 Korea (1980) 12.4 476.77 India (1979) 24.3 488.31 Japan (1980) 95.2 2947.95 Brazil (1980) 118.2 163.85 USA (1979) 280.2 673.24 - 5 - 2.02 For purposes of design and cecbnical specifications, the highway network is classified as Expressway, Class 1, 2, 3 and 4. The various classes are designed for the following average annual daily traffic (AADT) capacities; expressway for more than 25,000 vehicles; Class 1 for more than 5,000 vehicles; Class 2 for 2,000-5,000 vehicles; Class 3 for less than 2,000 vehicles; Class 4 roads, which mainly serve agriculture, for less than 200 vehicles. Table 2.1 shows the road-bed and pavement widths for the various classes of road. A road pavement specification classes paved roads into highest, high, medium or Low quality (Table 2.2). No expressways have yet been built and only some 2% of the total road length has been built co Class I and 2 standards; the network is thus generally of Low standard. 2.03 For administrative purposes, roads are classified as trunk, councy, rural (communal), and special purpose. Trunk roads, which are the responsi- bility of the Provincial Transport Departments (PTDs), consist of national and provincial roads. National roads serve as links between provincial capital cities, other imporcant cities, autonomous regions, ports and major transport terminals. They have been so designated regardless of their condition. Pro- vincial roads serve the provinces and cities, whose local governments are responsible for design and technical specifications. Most provincial roads have been built to standarc's lower than Class 2. County roads, the responsi- bility of the County Transport Departments (CTDs), are usually lower than Class 3. Most commune roads which are built and maintained by local authorities cannot meet even Class 4 road standards, and some road sections are impassable after severe rain. The special purpose roads, built exclusively for mining, forestry or other purposes, are constructed and main- tained by the main user. The length of road in each category is given below. Road Network by Administrative Category Road Length X of total classification (km) network Trunk National roads 108,000 12 Provincial roads 146,300 16 County 322,700 35 Commune 295,500 32 Special purpose 42,500 5 Total 915,000 100 2.04 The administrative classification of the network has become more systematic since 1978, indicating fundamental improvement in planning and management. One of the results has been the identification of some 4,000 km of national road sections which are either missing entirely or substandard and not currently motorable, and as such are considered to be missing road links. The upgrading of the nationai -oad network, including the construction of missing road links, is among the top priorities of the Ministry of Commznications' v OC) road devejopment plan. which rhe 3ank Group will support under the oroposed projecc by helping to upgrade or construct about 230 km of the identified missing national road links. B. Traffic Growth and Characterist.cs 2.05 Although roads have carried a relatively small share of total traffic in China, the recent growth of motor traffic on the trunk highways has been very rapid. This has led to many problems related to the capacity and structural strength of many roads which were not designed for such traffic. Assuming current annual growth rates of 15Z for motor craffic and 14.5Z for the vehicle fleet, traffic volume will double in less than five years. In the vicinity of some major cities, the annual growth of traffic is now as high as 18-19Z and congestion is already a serious problem. 2.06 Traffic growth and congestion have resulted from several factors including the country's rapid economic growth and a general shift of short- haul transport from rail to road. Congestion, however, is mainlv due to mixed traffic, with slow-mtoving vehicles Like bicycles, tractors, and animal-drawn vehicles impeding traffic flows. Multipurpose tractors, in particular, cause congestion on trunk roads and will not be easily diverted to other roads in the short term. Assuming that the present traffic composition continues. many segments of the existing trunk road network will be saturated within the next five years. M0C is aware of this problem and will study it with assistance under the proposed project. The study would identify possible solutions such as road widening to separate various types of traffic; the addition of parallel restricted-access links in high-volume corridors; construction of bypasses around cities, towns and villages; and substitution of more small (1/2 to 1 ton) pickup trucks for slow-moving vehicles; or a combination of all these measures. Furthermore, future highway planning should seek to relieve traffic congestion. 2.0? Although the Government is aware of existing constraints, its approach to the traffic problem should be broadened to respond more fully to the needs at hand. In 1978, MOC introduced a thorough traffic counting system for some national and provincial roads. With 120 permanent counting stations on the national network and about 6,000 check points on the provincial road network, the count is on a 24-hour basis, three times a month, year-round and includes non-motorized vehicles. However, more origin-destination surveys are needed in order to obtain more accurate information for highway planning and design. C. The Vehicle Fleet 2.08 Most motor vehicles in China are domestically produced. Several features of this production are striking. First, unlike other developing countries, trucks outnumber cars by about nine to one. The yearly production of passenger cars is only one car per.. 84,000 population. This is about 114 that of India, 1/28 that of Peru, and 1/135 that of Chile (Table 2.3). Second, there are almost no light trucks (less than 2 ton capacity) and few large crucks more than 8 ton capacity (Table 2.4). Finally, -zehicles have outmoded designs and verv low fuel efficiency, wich most trucks being gasoline rather than diesel powered. 2.09 Vehicle manufacturing efficiency is Low due to the small production scale of the large number of manufacturing plants which exist. Some 70 motor vehicle plants are reporced co be in operation, only a Eew of whnch can pro- duce between 15,000-70,000 vehicles per year and some serve only local demand and pr4duce less than 20 vehicles a year. Recognizing the inefficiencv of these operations, the Government is trying to rationalize the industry by integrating smaller factories into larger companias with each ractory special- izing in producing certain parts and components for a final assembly plant. The new integrated plants are expected to avoid duplication, increase special- ization, and make full use of production equipment so as to gain economies of scale. 2.10 In 1983 China produced some 140,000 trucks and was ranked tenth largest among civilian truck producers worldwide, yet this is still not sufficient for the huge and growing domestic demand. The entire stock of trucks is about 1.6 million units. Assuming a very optimistic 10-year depreciation period per vehicle, the present production would be bareLy enough to repLace those depreciated. With a 9Z arn.al increase in freight transport, a shortage of vehicles is inevitable, and tne need 'or trucks with capacities of over 8 tons and less than 2 tons is expected to be particularly acute. China has been regularly importing trucks but the numbers are small and fluctuating: 21,000 in 1981 and about 8,000 in 1982 and 1983. In the long run, there will also be a problem in planning for che complementary development of the vehicle fleet and the road network. The Bank Group has responded to this situation by initiating discussions on the need for a comprehensive review of the road transport industry in China which would '-xamine industry problems and recommend solutions. D. The Trucking Industry 2.11 Competition between public trucks operated by MOC and social trucks 1- is becoming increasingly evident. The share of social trucks in the total fleet grew very rapidly from 30X in 1949 to 86Z in 1979. However, HOC trucks still handle more than 25Z of freight traffic (Table 2.5). MOC's trucking industry comprises the Central rlucking Company (CTC) and the Provincial Trucking Companies (PTCs). CTC specializes in modern, large-volume transport, including a container trucking service. It handles longer distance inter-provincial traffic, while the PTCs handle the shorter hauls and inter- modal transfers. 2.12 Both the MOC and social trucks share problems of misallocation and mismanagement of truck and fuel resources which result in a simultaneous 1/ The term "social trucks" is loosely equivalent to "own account trucks.-' Social trucks are owned by factories, communes or any cooperative organization. - 3- shortage of some trucks whiLe a large number of trucks are not fully used. This is -R more serious oroblem for the social trucks. iudging from their very low average Load factor of about 35Z compared to the 65Z average load factor for XOC trucks. Aside from empty back hauls, in some communes social trucks are in garages one third of the year because :he communes either Lack fuel to run ctem, or aave more trucks than necessary. Mhe review of che road trans- port industry (para. 2.10) would also examine -wavs to improve operational efficiency, including the potentiaL for using intermodal and road freight terminals. E. Vehicle Operating Costs, rucking Tariffs and Profit 2.13 TvpicaL -;ehicie operating costs (VOWCs) for trucks are show-n .n Table 2.6. .-or the most commonlv used 4-tcn truck, coszs range from 0.10 to 0.17 Yuan (US 3.5 zo 6 cents) per ton-km, derer.ding ia the design standards of the road. FueL (mostly gasoline) and vehicle maintenance account for over 40Z of total VOCs (Table 2.7). Gasoline which is rationed by coupons has been priced for manv years at an average of Y 800 per ton (USS282). The price varies regionally to reflect differences in transport and distribution costs; and has been well above world market price until the recent major fluctuations in exchange rates. Gasoline sold above the cGupon quota is around Yuan 1,000 per ton (US$352), substantially above the FOB Singapore price of US$303 per ton. 2.14 Each year, the Trucking Division of MOC issues a set of planned vehicle operating cost targets and official tariff rates which serve as guide- lines for trucking companies. The official tariff rates ranging from 0.18 to 0.20 Yuan per ton-km are about 17Z higher than the planned VOC target and in theory would ensure a 17% profit to trucking companies; however, actual VOCs are sometimes higher. Details of costs and tariffs are given in the project file. One reason for higher costs is topography and road conditions; another is the practice of trucking companies of keeping many old, inefficient trucks in their fleets which need to be maintained and overhauled at consideraable expense. F. Highway Administration 2.15 Highways as well as inland waterways and coastal shipping are under the HOC which is directly under the State Council. MOC has 11 bureaus in four groups under four vice-ministers in charge of roads and road transport, inland waterways and coastal transport, planning and budgeting, and science and technology (Chart 1). One of the bureaus is the Highway Bureau (HB), with 9 divisions. The MOC also controls 13 highway institutes and companies and, indirectly, the Provincial and County Highway Bureaus in the Provincial and County Transport Departments (Charts 2, 3 and 4). 2.16 The HB gives general policy direction and support to the Provincial Highway Bureaus (PHMs). It issues nationwide policies and regulations, speci- fying construction standards, and provides technical support to the PHBs and -9- through them to the County Highway Bureaus (cHBs). It also controls the cen- tral pool of construction equipment and manpower which can be mobilized to assist some provincial work if necessary, but does not itself cake the initiative in constructing major infrastructure. The PHBs have financial independence and carry out road planning, construction, maintenance and administration of their roads in line with HB's general policy guidelines; they also oversee the work of the CHBs. Although HB determines overall road design standards, field engineering designs are normally prepared by the Design Institutes of the PHBs. Construction and supervision of works are also done at the PHB level. 2.17 After 1979, in an effort to unify the planning and development of the national road network, the HB became more active in regulacing the PHB's construction and financial decisions. Nevertheless, although the "national road" concept was incroduced for the first time. there was no change in the responsibility for the administration, mainEenance, or financing of these roads. The PHBs still construct, maintain and administer the national roads in their provinces using their provinciaL budgets. Only for some very large projects or for major periodic maintenance would HB plan, coustruct, and share part of the financial burden. G. Planning, Budgeting, and Financing 2.18 MOC and the State Planning Commission are responsible for overall planning of the country's road network, but are directly involved onLy in major projects. Approved projects are passed on to lower level authorities for execution. Highway planning shows three main weaknesses: the planning of roads in relation to other transport modes is not being done; selection of road investments has not been based on economic criteria; and design standards recommended by HB are frequently not followed by the provincial implementing agencies due to shortages of funds. While the application of economic criteria for road investments is now becoming an accepted practice following Bank involvement in the sector, the other two problems persist. The present planning and budgeting system is decentralized enough to promote local initia- tives in planning provincial transport development with the efficient use of local revenues. However, under this system it is difficult to maintain road construction standards throughout the country because quality and design frequently reflect availability of funds. For provincial and commune roads, the formal planning bodies, i.e., the PTDs and PHBs, have to take into account three factors: the present condition of the highway system, MIfC's long-term highway development plan, and projected maintenance fee revenues. Budgetary allocation for roads by the provincial authorities is realistic and adjusted to the predicted road maintenance fee revenues, but recommended standards may be reduced in line with local resources. The question of financing construc- tion will be addressed within the general context of pricing in the transport sector, and specifically through road user charges in the subsector. Under the proposed project, economic criteria have been applied in the selection of road investments. The problem of the lack of intermodal planning would be addressed in the future. 2.19 Road Financing. There are two major sources of road financing: the Capital Construction Investment Budget from the central government and the - iO - road maincenance *ee coLlecced by che orovincial governments. Funding from the Capital Construction Investment 3udget is in the form of a grant or loan depending on whether the Dro2ect is considered a national investment. It is used only for new investment projects, not for road maintenance. The approved .unds can be withdrawn from the People's Construction Bank which also super- vises the use of funds. The amount of Capital Investment funds allocated for highways in 1981 amounted to Y 823 miLlion. Total revenues from road main- cenance fees amounted to Y 4.0 billion in 1983, 30% of which goes directly for road maintenance expenditures and 20% for expenditures on workshops, machin- ery, equipment, selected road improvements, research, training, administration and management. On this basis, the direct expenditures for the maintenance of the road network would average about Y 3,500 per kilometer which can be considered high. 2.20 The road maintenance fee is imposed on both M1OC and social trucks, but using a different rate system. The road maintenance fee for .MOC trucks is a fixed proportion (10-15Z) of total revenues, but for social trucks, it is a lump-sum fee charged on the vehicle loading capacity (Y 70-100/capacity- ton/month). With the differenc systems, MOC trucks cend co pay a lower tax than do social trucks of comparable size. The road maintenance fee rate is especially costly for the many social trucks which are underused. The justi- fication for the two types of road maintenance fee is unc l" r, particuLarLy since a uniform pricing system exists in most other areas.- The present fee- charging system should therefore be reviewed to determine whether it is an effective tool for use in achieving specific policy targets, that is, whether there is any allocation or distribution rationale behind the non-uniform fee, and what are the economic effects of this fee-charging system. This question will be addressed as part of the Bank Group's dialogue with Government. H. Engineering 2.21 The engineering of road and bridge projects is done by the Planning and Design Institutes at MOC's central, provincial, prefecture and county levels. Major road and bridge projects are done by the HOC Highway Planning and Design Institute (HPDI), by the First and Second Survey and Design Institutes located at Xian and Wuhan respectively and by Provincial design institutes. There is no fixed arrangement for allocation of work to the MOC Institutes based on geographical or technical considerations, the criterion being the current work load of each Institute. The Highway Scientific Research Institute (HSRI) provides support and advice on materials, etc., as needed. Annex 1 gives a description of the Institutes. The design standards (Table 2.1) and guidelines for engineering design are set by HOC. Expatriate consultants are used only for specialized studies and then in joint venture with the HPDI. Since the workload of the HPDI is expanding in line with the increase in traffic on the highway network, the design capacity of the Institute would be strengthened under the project through the provision of 1/ Reasons given by HOC for the lump-sum fee charged on social trucks are (a) the difficulty in getting accurate figures on revenues for a revenue- based fee and (b) a lump-sum fee was expected to encourage efficiency. - 11 - computer-aided design and engineering equipment and site investigation equipment and through scaff training. I. Construction and Maintenance 2.22 Construccion of roads and bridges was, in the past, normally done as a force account operation by construction bureaus attached to MOC headquarters or to the PTDs and CTDs. The major contractor unit, the China Road and Bridge Engineeri-n Companv attached to the MOC, has operated as a contractor in the Xiddle East and Africa. Formerly caLled the China Highway Construction Company for Foreign Countries, when it undertook projects financed by China under its aid program, the Company in its new capacity as an incernational contractor now executes a wide variety of civil works projects abroad. Although -well staffed wich professional engineers and technicians. -:ae Company Lacks staff experienced in international contracting saw, contract management, and bid preparation. 2.23 In May 1984 the State Council authorized the incroduction of competitive bidding for civil works projects and the establishmenc of con- struction companies from the existing pubLic construction bureaus -o carry out works on national and provincial roads. The MOC has proposed the use of competitive bidding - both incernational competitive bidding (ICB) and local competitive bidding (LCB) - for highways to be financed under the proposed project. To support the Government's move to competitive bidding on highways, the Bank Group staff and an expert on bid documentation are helping prepare the documents needed for ICB and LCB, and expertise would also be financed under the project to help MOC supervise works and ensure quality control. 2.24 National and provincial roads are well maintained by the PTDs. However, maintenance of paved roads is becoming more costly, ranging between Y 3,500 and Y 5,000 per kilometer, due to their poor quality and the rapid traffic growth. The proposed study of the paved road network (para. 2.01) would identify strengthening and rehabilitation needs, and thus help to lower future maintenance costs. Maintenance of county roads by the CTDs is adequate in scope and well organized, but due to the labor-intensive methods used, roads are surfaced with large size, hand-crushed stones providing poor riding surfaces. Equipment would be provided to correct this problem in the project areas. J. Road Safety 2.25 Although the available ctatistics on road traffic accidents are neither comprehensive nor reliable, it is evident that the situation regarding road safety is far from satisfactory. The low geometric and quality standards of most roads combined with the mix of slow and fast moving traffic are not conducive to road safety. It is proposed to strengthen road safety research in China by having the ESRI carry out a study to identify the causes of road traffic accidents. The study would cover (a) a review of the existing system of reporting, recording and analyzing accident statistics; (b) recommendations on improved traffic accident data collection, recording and analysis; and (c) identification of a program for the reduction of traffic accidents. - 12 - K. Staff Training 2.26 Existing staff of che MOC and the PTDs are in general professionally competent, but many have not been exposed to new technology and therefore often use outmoded work methods and equipment. Preliminary estimates indicate that a substantial number of engineers, assistant engineers and technicians would be required each year by MOC to meet the proposed targets in the Seventh Five-Year Development Plan (1986-90). Following the difficult period of the Late 1960s and early 1970s, technical manpower planning and assessment of related training needs for the highway subsector have only recently been resumed. There is clearly an urgent need to strengthen and expand the output of formal education and the ongoing training programs to increase and upgrade the number of technical staff required to meet the demand for trained person- nel during the PLan period. 2.27 The MOC's Education Bureau has three major divisions, each one responsible for a specific aspect of staff deveLopment, as follows: (a) Training Division. responsible for training courses to upgrade administrative staff, engineers, assistant engineers, technicians and skilled and semi- skilled workers; (b) Education Division (technical/vocational level), respon- sibLe for education and training activities carried out by some 40 technical schools for mid-level technicians and some 100 vocational schools for skilled workers; and (c) Education Division (engineering level), responsible for three highway institutes, one transportation school, six maritime, waterway, and navigation schools, and one medical college (Chart 4). In addition, the PTDs have their own Provincial Transportation Technical Schools and district training centers and carry out their share of education and training programs in accordance with general guidelines issued by MOC's Education Bureau. Most MOC and PTD institutes, schools and centers lack the physical capacity to meet the increasing manpower demand, have scarce and outmoded training equipment, and need to have most of their curricula upgraded to reflect modern technology in the various highway disciplines. The training component included in the proposed project would therefore assist MOC to correct these deficiencies, and to modernize and raise staff professional standards in the highway subsector. L. Highway Development: Policy and Objectives for the 1980s 2.28 Government policy for the highway subsector in the 1980s has a joint focus on quality improvement and expansion of the network to meet increasing demand. This differs from the policy of the past 30 years which sacrificed road quality for road length and left China with a Legacy of substandard roads unable to sustain the recent increase in traffic resulting from rapid economic growth. The MOC now realizes that programs for road network expansion and rehabilitation must proceed simultaneously, supported by quality improvement programs for construction, construction materials, road transport equipment, and road transport industry management. 2.29 The Bank Group's strategy for the subsector is to support Govern- ment's twin objectives for highways by assisting the process of network expan- sion while helping to direct development policy toward greater quality improvement. This support would be within the framework of longer-term objectives concerned with increasing efficiency and cost-effectiveness in - 13 - meeting the increased transporc demand in the subsecror. These objectives would address specific poiicy, inscttutional and technciogical areas such as: improved economic evaluation techniques for the selection of road invest- ments; improved intermoda. ?Lanninx; transport tariff and road user taxation systems; increased efficiency in -he road transport industry; improved effi- ciency in conscruction by suDporcing Government's policy ot compezitive bidding and deveLopment of the local concraccing industry; staff training; modernization of highway design and updating and improving construction and material specifications; and supportine highway research. The Bank Group has agreed with Government that a number or tnese objectives would be dealt with under the proposed project. Action on the remaining obieccives will be decided in the course of ongoing discussions with Government relating to the Bank's economic and sector work. III. THE PROJECT A. Project Formulation and Preparation 3.01 Preliminary discussions with Government on the highway subsector began i7 1980 during preparation of the Bank's first Economic Repoi.: on China.2l Following further discussion, MOC requested Bank Group assistance to finance a highway project, which was identified in June 1983. A Bank Group preappraisal mission visited China in May 1984 and the project was appraised in October/November 1984. The project was prepared by the Ministry of Commu- nications (MOC) and the Highway Bureaus of the Provincial and County Transport Departments. B. Project Objectives and Scope 3.02 The proposed project would support the Government's policy and institutional objectives for the subsector by: (a) improving che quality of future construction works by i) modernizing highway design and (ii) updating and improving construction and material specifications; (b) increasing the cost-effectiveness of highway investments by (i) improving economic evaluation techniques for the evaluation and selection of road investments and (ii) supporting Government's new policy of moving to competitive bidding for public works; (c) supporting a highway research program, with particular emphasis on improving and strengthening the existing paved national road network, improving road capacity in congested areas and improving road safety; and 2/ Report No. 3391-CHA, China: Socialist Economic Development, June 1, 1981. - 14 - (d) strengthening the caDabilities of staff working in the highway subsector by carrying out a training program. 3.03 To accomplish these objectives, the projecE would include: (a) construction or improvement of about 230 km of national roads; (b) construction or improvement of about 1,400 km of rural roads; (c) provision of computer-aided design and engineering equipment and site investigation and related laboratory equipment for the Highway Planning and Design Institute (HPDI) in order to modernize future highway designs; (d) provision of laboratory testing and other research-related equipment for the Highway Scientific Research Institute (HSRI) in support of their research program, including studies on the strengthening of the paved national road network, road congestion, and road safety; (e) training of staff from MOC's Highway Bureau, the Provincial Highway Bureaus (PHBs), the HPDI and the HSRI; (f) consultants' services and technical assistance to help the MOC, the PHBs and the Highway Institutes in the supervision and quality controL of road construction, and for studies to be done under the research program and for seminars and workshops as needed; and (g) purchase of basic road maintenance equipment for selected provinces. Other Government development objectives would also be supported by the con- struction works to be carried out under the project. These works would provide important interprovincial road links which would allow increased and more efficient economic activity in and between the provinces. In addition, the improvement of some rural roads would support the Government's policy of promoting economic development in rural areas, where agriculture, the country's primary economic activity, still employs 72% of the country's work force. 3.04 Project roads were selected on the basis of economic criteria and economic evaluation procedures which have been newly introduced into China and which Covernment intends to follow in the future to ensure the cost-effective- ness of investments. Project road construction, both of the national and rural networks, has been kept modest relative to actual needs and is consid- ered to be well within the capacity of the implementing agencies. C. Detailed Features 3.05 The Construction or Improvement of National Roads. The 230 km of national roads to be constructed or improved under the project comprise seven road sections located in six provinces (see Maps). The roads, road length, design standard, estimated cost, traffic and provincial distribution are shown - 15 - in Table 3.1. Estimated present traffic is relatively heavy and ranges from 264 AADT to 3,064 AADT. One road has been designed to Class 1 standards, two roads to Class 2 and the remainder to Class 3; these design scandards are appropriate. Assurances were obtained from Government that road sections to be constructed/improved and the related design standards would be as agreed during negotiations. Existing alignments will be used to the extent compati- ble with sound engineering and road safety. The significance of each project road is described in Annex 2 and a profile of the project provinces is given in Annex 3. 3.06 The roads, which were selected by the Provincial Transport Depart- ments (PTDs) as che missing Links in the national necwork in most need of urgent construction or improvement, have been the subject of derailed Feasi- bility studies, also prepared by the PTDs with assistance from Bank Group staff. Detailed engineering has been completed and the contract documents for ICB and LCB are being prepared by MOC's Highway Bureau with the guidance of Bank Group staff and the help of expatriate consultants financed under Technical Cooperation Credit 1412-CHA. 3.07 The Construction or Improvement of Rural (County) Roads. The 1,400 km of rural roads to be constructed or improved under the project con- sist of 59 road sections in six provinces (see Maps). The roads, road length, design standard, estimated cost, and provincial distribution are shown in Table 3.2. The roads have been designed to Class 3 and Class 4 standards which are appropriate. Assurances were obtained from Government that the road sections to be constructed/improved and their design standards would be as agreed during negotiations. Existing alignments and bridges will be used to the maximum extent to reduce costs. 3.08 Feasibility studies and designs for the roads have been completed. More simplified documentation suited to such roads, comprising longitudinal profiles, typical cross-sections and priced bills of major quantities have been prepared. The rural roads have been selected for improvement by the County Transport Departments (CTDs) which have also prepared the feasibility studies and detailed designs with the guidance of PTDs, MOC's Highway Bureau, and Bank Group staff. 3.09 Assistance to the Highway Planning and Design Institute (HPDI). GovernmentTs current emphasis on the expansion and improvement of the highway network has involved the Institute in planning and supervising the designs of highways throughout China, but its performance is hindered by outmoded equip- ment and a lack of trained staff. To help the Institute carry out this increasingly heavy work program more efficiently and more cost-effectively, staff would be trained under the project (para. 3.12), and the Institute's equipment would be upgraded and modernized. Computer-aided design and engin- eering (CADE) and other computer equipment as well as equipment for site investigations and materials testing would be financed under the project. In addition, to improve management, an engineering data bank including a national roads condition inventory would be computerized, and computerized management information systems introduced. - 6 - 3.10 Assistance to the wijarwav Scientific Research Institute (HSRI). The researcn program of the nsti-:ute is described in Annex 1. To support this program. soils and materials :esring equipmenc would be financed under the project. This equipment combined -with the training ot staff (para. 3.12) would enable the Institute :o carry out its program and fulfill its task of being the major scientific and technoLogical research base in China for highway transportation. 3.11 Assistance in the form of equipment and expatriate expertise would also be provided for che olilowing Ehree studies to be carried out bv the Institute: a studv to assess :re methodoLogy for pavement strength evaluation to identify the improvemenc and strengthening needs of the existing paved national roads (para. 2.01); studies for improving road capacity in congested areas near cities (para. 2.06) and road safety (para. 2.25). Assurances were obtained from Government during negotiations that -he studies wouid be carried out under _erms of reference acceptable to the Bank/Association, beginning by July i, :986 and compLeted by December 31, 1987; and that Government and the Bank/Association would exchange views on the findings of the studies. 3.12 Staff Training. The proposed three-year training program (1986- 1988) aims at upgrading and modernizing the skills of the technical staff in the various fields concerned with the highway subsector. The program has a two-fold approach and would: (a) improve the proficiency of engineers and other staff by sending abroad selected personnel to attend academic and practical training courses as well as relevant international conferences; and (b) strengthen the capacity of MOC's Highway Institutes as well as the Provincial Transportation Technical Schools by: (i) purchasing laboratory, computer and photogrammetry equipment, training aids and essential technical books and publications; (ii) training abroad of professors/instructors; and (iii) inviting foreign academic experts for short visits to help upgrade curricula. 3.13 As part of the program, about 65 overseas fellowships would be needed in transportation planning, soils and materials engineering, aerial photogrammetry, economic analysis, financial management and accounting, highway maintenance and equipment management, construction management and supervision including quality control, bridge hydrology, concrete technology and asphalt concrete and asphaltic cement. It is expected that on their return, the trainees would play a major role in the development and management of the Chinese road system and in the transfer of updated technology to other highway staff. The HB would have overall responsibility for implementation of the training component at the national level since the training program is directly concerned with the highway subsector. The PTDs would be directly responsible for day-to-day training activities in the provinces. This train- ing component, although relatively small compared to MOC's staff development needs, is an essential first step toward a long-term process of modernization of the country's highway subsector. Detailed costs of the training program are given in Table 3.3. Assurances were obtained from Government during - 7 - negotiations that the training would be carried out according to a program agreed with the Bank/Association. 3.14 Consultant Services. A total of about 50 man-months of expatriate consultant expertise is estimated to be needed under the proposed project. Local expertise available in the various Institutes in the sector would be used to the extent possible. Expatriate help would be sought only for those areas of advanced technology where local expertise is lacking. Such areas include the use of advanced instrumentation for measuring road deterioration, analysis of traffic flows, transport economics, etc. Supervision of national road construction or improvement works will be done mainlv bv local staff sup- ported by a number of key expatriates; about 20 man-monchs of foreign exper- tise is estimated to be needed to help set up and implement che crganizational systems and procedures for effective quality control on site. About 15 man- months of expatriate expertise would be needed for studies and the research program to be done by the HSRI (para. 3.11) and about another i5 man-months for help on seminars and workshops on specialized topics related to the high- way subsector. During negotiations, agreement was reached with Government on terms of reference for the consulting services. All consultants wouLd be employed under terms and conditions acceptable to the Bank/Association and in accordance with Bank Group Guidelines. 3.15 Road Maintenance Equipment. Maintenance of the existing rural roads is difficult because the roads are mostly surfaced with uncompacted large size hand-crushed stone, which gives a very rough riding surface. The level of service of these roads could be greatly improved with the application of fine crushed material compacted to a dense layer. Under the project, some mainte- nance equipment, such as motor graders, mobile crushers and smooth-wheel rollers, would be provided to the CTDs for the maintenance of these roads and the rural roads to be constructed or improved under the project. D. Cost Estimates 3.16 The total project cost including physical and price contingencies but excluding right-of-way costs is estimated at about Y 450.4 million, or US$169.4 million equivalent, with a foreign exchange component of US$72.6 mil- lion or about 43%. Project costs are shown on page 18. All base costs are estimated in March 1985 prices. Physical contingencies are calculated at 10% of base cost estimates and applied to all components. For the calculation of price contingencies, it is assumed that exchange rate adjustments will, on average, be made to maintain "purchasing power parity" during the project implementation period. On this basis, price escalation for both foreign and local costs, (a) when expressed in U.S. dollars, is based on expected inter- national annual inflation rates of 5% in 1985, 7.5% in 1986 and 8% in 1987- 1988; (b) when expressed in Yuan, is based on expected domestic inflation of 3% p.a. in 1985-1989. Taxes and duties on construction are estimated at US$16.8 million equivalent. 3.17 The costs of civil works on national and-rural roads have been estimated by the PTDs and CTDs and are based on work quantities calculated from detailed designs. Unit prices for the work items have been computed on the basis of MOC's standard manuals for labor and equipment productivity and PROJECT COST SUMMARY /a Total Total % of X of Local Foreign Total Local Foreign Total foreign total Project element ------- (Yuan'000) -- - ------ (US$'000) ------- exchange base costs National Road Construction Yancheng-Gaotang (53 km) 16,657 16,657 33,314 5,865 5,865 11,730 50 9 Xian-Sanyuan (35 km) 34,073 34,073 68,147 11,998 11,998 23,995 50 17 Other roads (138 km) 30,233 20,155 50,388 10,645 7,097 17,742 40 13 Rural road construction 139,751 75,251 215,002 49,208 26,497 75,705 35 55 Equipment HPDI 311 3,149 3,460 110 1,109 1,218 91 1 HSRI - 3,900 3,900 - 1,373 1,373 100 1 Training - 6,049 6,049 - 2,130 2,130 100 2 Consultant oervices - 1,778 1,778 - 626 626 100 1 Road maintenance equipment - 5,200 5,200 - 1,831 1,831 100 1 Total Base Costs 221,026 166,212 387,238 77,826 58,525 136,351 43 100 Physical contingencies 22,103 16,621 38,724 7,783 5,853 13,635 43 Price contingencies 14,156 10,265 24,421 11,264 8,188 19,452 42 Total 257,284 193,098 450,382 96,873 72,565 169,438 43 Right-of-way costs 20,269 - 20,269 7,137 - 7,137 Total Financing Required 277,553 193,098 470,651 104,010 72,565 176,575 41 /a Columns may not add up due to rounding. - 19 - the related annualLy-updated costs, combined with the current costs of materials; the unit prices include adequate allowances for equipment deprecia- tion, overheads and profit for contract work. The cost estimates were reviewed at appraisal and found satisfactory. 3.18 The base cost per kilometer of the Class 1, dual two-lane Xian- Sanyuan national road is about US$680,000, which is acceptable since it includes about 2,000 meters of major bridge works and an underpass to the railway. The base Post per kilometer for the remaining two-lane nationaL roads is about US$155,000, and about US$55,000 for the rural roads. The foreign exchange component is estimated at about 50Z for foreign contractors, and about 40% for domestic contracEors. For the force account work on ruraL roads, the foreign exchange component is estimated at about 35% which reflects the more labor-intensive construction method to be used. 3.19 The costs of computer and laboratory equipment are based on prices quoted by manufacturers outside China. A notional amount has been included for the road maintenance equipi..:.at pending finalization of a list of the PTDs' needs. The costs of the training program are shown in Table 3.3. E. Financing 3.20 The Bank loan of US$42.6 million and an IDA credit of SDR 30.3 mil- lion (US$30 million equivalent) would finance about 43Z of total project costs, or about 1002 of the foreign exchange costs. The Government would provide about US$104.0 million equivalent to meet the remaining capital costs of the project. Details of project financing are shown in the following table: - 20 - FINANCING PLAN Government (MOC and PTDs) Rank/IDA Total (USs million) National Road Construction - 28.5 25.0 53.5 Rural Road Construction - 49.2 26.5 75.7 Equipment for HPDI and HSRI 0.1 - 2.5 2.6 Road Haintenance Equipment - - 1.8 1.8 Training - 2.1 2.1 Consultant Services - - 0.6 0.6 Subtotal 0.1 77.7 58.5 136.3 Contingencies - 19.0 14.1 33.1 Right-of-way costs - 7.2 - 7.2 Total 0.1 103.9 72.6 176.6 F. Implementation 3.21 MOC would have over'!.l responsibility for implementing the proj- ect. National roads ;;;,Id be constructed or improved under unit priced con- tracts and supervised by the PTDs, which are part of the provincial govern- ments but under HOC leadership. Construction Bureaus presently attached to the MOC or PTDs which have satisfactory experience on road works and adequate resources are being set up as financially and legally independent construction companies to bid on the national road contracts; these companies will form the basis of the new contracting industry in China. PTDs will supervise the con- tracts through a project management unit to be established in each province; each unit will be comprised of a proiect manager, engineer, supervisor and other staff as needed. Construction Gf nationaL roads is expected to start in early 1986 and be completed in about two and a half years. 3.22 Construction or improvement of rural roads (US$94.1 million) would be carried out under force account by CTD construction units for reasons of efficiency. The CTD construction units are well organized and experienced, and have adequate resources and ready access to local materials and local labor, enabling them to start work without delay. Because the works are gen- erally small in scope and are located in remote mountainous areas, inter- national contractors are unlikely to be interested, nor would the preparation - 21 - of detailed engineering and bid documents to ICB standards be cost-effective for such low standard roads. Similarly, for domestic contracting, there are at present virtualiy no Local contractors for such work in these areas, and the construction companies neWLv-tormed for purposes or national and provin- cial road construccion and upgrading (para. 2.23) mould face substantial mobilization costs, given the tack of familiarity with these areas and their remoteness. The const.uccion units would be directly supervised by the CTDs, but under the overall control of the PTD project management units. The con- struction of rural roads is expected co start by late 1985 and be completed within two years. Funding for ruraL roads under the project will come from the Bank Group, and provincial and local sources. No centrai government resources are anticipated. Local contributions would cover :he costs of 'ocal labor and mate-ials, and compensation within the right-of-way. The scattered location of project rural road construction will require frequent and care- fully planned supervision by Bank staff. Supervision wilL be assisted by quarterly reports an project physical and financial progress. which wilL be base4 on agreed priced Bills of Quantities ior each rural road subproject (para. 3.30) and submitted to the Bank by MOC (para. 3.36). The reports, combined with selective site visics to the various provinces during super- vision missions, are expected to provide a satisfactory means of monitoring progress. 3.23 Road works included in the project represent the total road programs of the various provincial and county governments involved during th2 project period. Under the pr,ject, specialized expertise would be made available to both the provincial and county authorities to help them set up suitable organizations with appropriate systems and procedures to control the quality of work. 3.24 The PTDs are part of the provincial governments, but professionally under the leadership and guidance of MOC. Decisions will be required at the provincial level for project implementation by the PTDs, including allocation of funds and road maintenance charge revenues. Consequently, assurances were obtained from Government during negotiations that MOC and the project pro- vinces viil enter into a Project Implementation Agreement setting out their respective responsibilities in project implementation. While the Bank Group would not be a party to this Agreement, signing of the Project Implementation Agreement on terms and conditions satisfactory to the Bank/Association would be a condition of loan/credit effectiveness, and non-compliance with its pro- visions could be grounds for default under the loan/credit agreement. 3.25 MOC's Highway Bureau would be responsible for implementation of the training component, which would start in late 1985 and continue until end of 1988. The HSRI would continue its research program during the project period and would carry out the three project studies during 1986-87. 3.26 The MOC would be responsible for selecting consultants to provide the expertise on supervision and quality con_rol of civil works; the experts are expected to start work in early 1986 in order to help establish the super- visory organization prior to start of civil works. The expatriate experts needed for the HSRI studies and research program would be recruited as needed from early 1986 and during the period of the studies. It is expected that the procurement of all research equipment would start in early 1986 and be com- pleted by late 1986. - 22 - 3.27 An implementation schedule for the proposed project (Annex 4) was agreed with Government during negotiations. C. Procurement 3.28 Procurement under the Droject would be carried out as shown in the following table. Procurement Method Total Project Element ICB LCB Other Cosc (US$ million) Civil Works National Roads 44.4 22.0 - 66.4 (20.5) (10.2) - (30.7) RuraL Roads - - 94.1 94.1 (33.1) (33.1) Equipment 2.3 3.2 5.5 (2.3) (3.1) (5.4) Training and Consultants - - 3.4 3.4 (3.4) (3.4) Total 46.7 22.0 100.7 169.4 (22.8) (10.2) (39.6) (72.6) Note: Figures in parentheses are the respective amounts financed by the Sank Group. All figures include estimated physical and price contingencies. 3.29 Construction of national roads under the project will be carried out under international and local competitive bidding (ICB and LCB). The International Tendering Corporation of the China National Technical Import Corporation (CNTIC), in conjunction with MOC, will organize the ICB. HOC and the provinces will organize the LCB. Local bidders wiLl be required to be finAncially and legally autonomous. Two major national road contracts (US$44.4 million) will be carried out through contracts awarded on the basis of ICB by prequalified firms in accordance with Bank Group Guidelines. The other national roads (US$22.0 million), which are unlikely to attract inter- national contractors because of their dispersed location and size, would be awarded on the basis of LCB, the documentation for which is being prepared (para. 3.06). 3.30 Construction or improvement of rural roads (US$94.1 million) would be carried out under force account (para. 3.22). Currently, such construction is done under a Guarantee Letter from the provincial government to MOC and the - 23 - Ministry of Finance (MOF), ensuring -hat the funds wiil be made a'iailable from budget, Loan or grant sources for mhe roads in question, based on a guarantee from the CTD to the PMD. In the future and under the proposed project, the PTDs would sign priced agreements with the county governments for the con- struction of works. During negotiations agreement was reached with Government on a priced Bill of Quantities for each rural road subproject in order co estabLish a firm and agreed cost. 3.31 Road maintenance equipment (US$2.3 million) would be procured by ICB, but as the equipment to be procured for the HPDI and fSRI (USS1.4 million and US$1.7 million, respectively) and for the training component is highiv specialized, Limited international bidding from at least Ehree suppliers wouLd be used. However, items or groups of items estimated co cost Less than the equivalent of US$50,000 per contract, up co an aggregate amount not to exceed the equivalent of USS300,000, may be procured on the basis of a comparison of price quotations solicited from at least three suppliers eligible under the GuideLines, and in accordance with procedures acceptable to the Bank/ Association. CNTIC or another authorized government agency would be responsible for alL equipment procurement through ICB. 3.32 Under ICB, qualifying domestic contractors and manufacturers would be permitted to participate and would be eligible for a margin of preference of 7PZ for civil works and 15% for goods, or the prevailing customs duties, whichever is lower, in the comparison of bids. Since this would be the first time that contracts would be awarded on the basis of competitive bidding in the highway subsector in China, all contracts for civil -works and equipment would be subject to prior review and agreement by the Bank Group. H. Disbursements 3.33 Disbursement of the Bank loan/IDA credit would be as follows: Ca) 46% of the total cost of national road construction; Cb) 35% of the total cost of rural rcad construction; (c) 100% of foreign expenditures for directly imported equipment or 100% of local expenditures (ex-factory) and 75% of local expenditures for other items locally procured; (d) 100Z of the costs of foreign consulting services and local experts; and (e) 100% of the costs of overseas training of staff. To facilitate disbursement, a Special Account would be opened in US dollars in a Bank acceptable to the Bank Group with an initial deposit of the US dollar equivalent of SDR 10.0 million, which represents the estimated maximum expenditures for a four-month period. Applications for replenishment of the Special Account would be submitted quarterly or whenever the Special Account is drawn down to 50Z of its initial deposit, whichever comes first. The project would be compLeted by June 30, 1990. Loan/credit closing is expected - 24 - by June 30, 1991. A schedule of estimated disbursements is given in TabLe 3.4 which also shows the Regional highway project disbursement profile. Disburse- ments under the prooosed proiect are estimated to be completed sLizhcly earLier tian .he regional -rofiLe shows. Since China's economv 's arcwing steadily, revenue accruaL. is expected to remain strong during the =rolect period and :herefore delays due to budgetary constrainrs are not an::Ci-ated. A'thougn -he new competitive bidding procurement nehnod is being introduced for the first time in China Eor h.ighways and could cause problems. anv delavs are expecced to be minimizea bV appropriate 3ank GrouD supervisiGn and -ssis- tance duri g the earlv sCage or the -rojecc. 3.34 roanicredit disbursements would be made against priced cznEraccs for national road civii works and ecuipment. and priced agreemencs tor :-e =3rce account Cl';ii. works on rurai roads. Interim certification of cii vorks compLeted and costed at unit rates _n the contracts and agreements Wu;L be done by the Provincial and County Highway Bureaus and certified by -"e HOC. Loan/credit disbursements for training overseas will be made against -he actual costs of travel, subsistence and tuition or training fees. Disburse- ments against statements of expenditure will be needed for the training component and for goods or services costing less than US$50,000. Documents to support statements of expenditure would not be submitted to the Bank Group, but would be retained by the HOC and made available for review by Bank supervision missions. I. Auditing, Reporting and Monitoring 3.35 A State Auditing Agency (SAA) has been established to carry out detailed audits of government agency accounts. Assurances were obtained from Government during negotiations that the accounts of project-related expendi- tures would be audited by independent auditors acceptable to the Bank/ Association, and that audit reports would be sent to the Bank Group for review within six months of the close of each fiscal year. The Bank Group currently accepts SAA audits for this purpose. 3.36 Assurances were obtained from Government during negotiations that project progress reports would be submitted to the Bank Group quarterly by MOC, based on the Project Monitoring Indices shown in Annex 5. Assurances were also obtained on the preparation and submission by Government of a Project Completion Report not later than six months after the loanlcredit closing date. J. Environmental Effects 3.37 The road improvements should cause no significant environmental problems. By following existing alignments to the extent technically and economically feasible, the acquisition of scarce agricultural land will be minimized. The improved alignment and reduction of existing hazardous dust and mud by paving would improve road safety. - 25 - IV. ECONOMIC EVALUATION A. General 4.01 China's new economic poLicies, particuLarly the empha -s on light industry and the economic responsibility system in agriculture.- are creating a rapidly growing demand for both long- and short-distance road transport. The rapidly increasing oucput of textile. chemical, electronic and food processing industries. which are all well suited to road transport, has been accompanied by a growing demand for transport from producer to consumer between cities and often across provinciaL boundaries. £n rurai areas, agri- cultural production as well as the increasing production of household and rural enterprises must be transported, often very rapidly. _o nearby towns and other neighboring areas. Moreover, various enterprises have come to realize the financial advantages of highway transport, which enables -nem to deliver industrial goods and perishable products rapidly and promptly to cities. The development of tourism throughout China and the very rapid increase in highway passenger traffic have also indicated the need for substantial development of highway infrastructure to serve the various and steadily increasing needs of China's economy. 4.02 To handle the emerging demand for both long- and short-distance road transport, development of roads should be on two fronts: (a) the improvement and strengthening of major intercity highways, including bridges; and (b) the development and expansion of rural road networks. The proposed project would address both of these needs by directly contributing to the Government's plan of closing gaps in the national road network to facilitate interprovincial road transport, and by helping to develop rural roads in areas presently accessible only by footpaths. The benefits of the national road construction will accrue widely throughout the economy. Rural roads will open opportuni- ties to exploit resources for which low-cost motorized transport is required, and benefits will accrue to the residents of the areas served. The detailed economic analyses of the major project components are given below. 4.03 For this analysis, all inputs and outputs were evaluated in September 1984 constant economic prices. Taxes and duties were excluded from financial prices. For traded goods, the c.i.f. prices of imports and f.o.b. prices of exports were used in estimating the cost of materials and equipment with due adjustment for the cost of inland transportation. The official exchange rates were used to convert foreign currencies to Renminbi. A conver- sion factor of 0.5 was applied for unskilled labor costs, while the shadow wage rate was calcul-ated at four times the actual wage for highly qualified supervisory staff. 3/ Under the economic responsibility system, surplus production belongs to the producing farmer. - 26 - B. Construction and Improvement of National Roads 4.04 Since the road sections included in the project are missing links in the network, traffic will be diverted from more circuitous routes. In order to estimate potential traffic diversion, traffic counts carried out on these routes since 1980 have been used, supplemented by origin-destination surveys in 1983 and 1984. The 1984 traffic Levels that could have been expected on the project roads if they had existed range from 264 AADT to 3,064 AADT. Traffic volumes have been estimated by using a growth rate of 9Z p.a. between 1984 and 1988, when the roads would be opened. Allowance for generated traffic was made bV increasing the growth rate to 12Z p.a. for two years following opening of the roads and then a gradually decreasing growth race over the project Life. Traffic forecasts are shown in TabLe 3.1. 4.05 The main benefits obtained from the construction of the roads are substantial savings in vehicle operating costs (VOCs) resuLting primarily from distance savings and to a lesser extent from reduced VOCs due to improved sur- face conditions. Other benefits such as time savings and reduced accidents and congestion on the existing alternate routes are smaller and have only been quantified when significant on roads with the highest traffic volumes. Annex 6 gives the decailed analysis for the Xian-Sanyuan road, and the economic rates of return (ERR) for other roads, calculated in the same way, are given in Table 3.1. They range from 17% to 37%. C. Construction and Improvement of Rural Roads 4.06 The benefits of rural roads would be in terms of transport cost sav- ings as well as value added to new production which the roads would make possible by reducing transport costs. The service areas of the project roads are presently only accessible by trails and all transport is by porters. Usually a porter can carry a 50 kg load for about 20 km each day; the cost per ton-km is between 3 and 4 yuan. With the road, transport costs will fall to some 0.2 yuan per ton-km. The largest benefit however will be in terms of value added through the exploitation of resources which are uneconomical at the prevailing transport cost and impractical in terms of the hard labor involved. Since the proposed roads to be constructed are in the more hilly areas of the various provinces included in the project, the resources are mainly from mining of coal, construction materials, marble, timber and bamboo production, and only to a lesser extent from increased agricultural production of cash crops. Annex 7 gives the detailed analysis for one rural road in Sichuan Province, and the ERRs for the others calculated with the same model are given in Table 3.2. They range from 14% to 37%. - 27 - D. Overall E7aluation and Risks 4.07 Based on the combined costs and benefits of all project roads and some minor maintenance equipment to be provided under the project, the overall ERR of the project is 20%. 4.08 The major project risk invoLves possible delays in project start-up and implementation due to the introduction of ICB and LCB. To minimize this risk, appropriate Bank Group assistance and supervision will be provided in the early project stages. It is unlikely that traffic growth will be lower than estimated since road transport in China is at an early stage of deveLop- ment and the potential for growth is very large. Traffic growth may well be higher than estimated. The risk is therefore very low that the race of return would fall below the above estimate. The sensitivity for the major project components is summarized below: Internal Economic Rates of Return National Roads Rural Roads Entire Project (x) () (z) Best estimate 21 21 20 Construction cost up 202 18 18 17 Traffic growth reduced by 10% 20 n.a. n.a. Slower increase in value added by 25% n.a. 17 n.a. n.a. - not applicable. V. AGREEMENTS REACHED AND RECOMMENDATION 5.01 Agreement with Government was reached during negotiations on: (a) road sections to be constructed under the project and their design standards (paras. 3.05 and 3.07); (b) an implementation schedule for the training program (para. 3.13); (c) terms of reference for consulting services for the project (para. 3.14); (d) a project implementation schedule (para. 3.27); and (e) a priced Bill of Quantities for each rural road subproject (para. 3.30). - 28 - 5.02 Assurances were obtained from Government during negotiations that: (a) road segments to be constructed/improved and related design standards would be as agreed (paras. 3.05 and 3.07); (b) studies would be carried out under terms of reference and timing acceptable to the Bank/Association and Government and the Bank/ Association would exchange views on the findings of the studies (para. 3.11); (c) training would be carried o:t according to an agreed program (para. 3.13); (d) the audited accounts of project-related expenditures prepared by the State Auditing Agency will be sent to the Bank Group for review within six months of the close of each fiscal year (para. 3.35); and (e) project progress reports will be submitted quarterly to the Bank Group, and a Project Completion Report will be submitted to the Bank Group not later than six months after the loan/credit closing date (para. 3.36). 5.03 Signing of the Project Implementation Agreement (para. 3.24) and State Council approval of the Loan/Development Credit Agreements would be conditions of loan/credit effectiveness. 5.04 With the above agreements, assurances and conditions, the proposed project is suitable for a Bank loan of US$42.6 million for a term of 20 years, including a grace period of five years at the standard variable interest rate, and an IDA credit of SDR 30.3 million (US$30 million equivalent) on standard IDA terms. The borrower would be the People's Republic of China. - 29 - Table 1.1 CHINA HIGHWAY PROJECT Annual Growth and Modal Split in Freight Traffic, 1949-83 (Billion ton-km) Inland Years Highways Railways waterways Pipelines The Expansion Period (1950s) 1949 0.81 18.4 6.31 1950 n.a. 39.4 n.a. 1952 1.45 60.2 14.58 1957 4.80 134.6 n.a. 1958 6.96 185.5 n.a. 1960 n.a. 228.0 n.a. Annual growth over the period (X) 27.0 25.0 Modal split (Z) 1.9 79.0 19.1 The Retrenchment Period (1960s) 1965 9.51 269.6 n.a. 1970 17.50 272.0 n.a. Annual growth over the period (%) 13.0 1.8 The Re-expansion Period (1970s) 1975 20.26 427.6 102.1 /b 1979 26.83 (74.5)/a 559.8 139.0 47.6 Annual growth over the period (Z) 4.8 8.0 11.0 Modal split (Z) 9.6 72.4 18.0 The Modernization Period (1980s) 1980 25.5 (76.4) 571.7 152.3 49.1 1981 25.3 (78.0) 571.2 150.7 49.9 1982 30.3 (94.9) 612.0 170.8 50.1 1983 (108.4) 664.6 180.5 52.4 Annual growth 1980-83 (Z) 4.2 (8.5) 3.5 7.2 Modal split (X) 11.0 66.0 18.0 5 /a In the case of highways, figures in parentheses show total freight traffic in the country; figures not in parentheses show freight traffic handled by public trucks. /b 1977 figure. Sources: Ten Great Years, pp. 146, 148, Beijing, September 1959 (for 1949- 1958 figures); Joint Economic Committee, Congress of the United States, People's Republic of China: An Economic Assessment, Washington, D.C. 1972 (Estimated figures for 1960-1970); China Economic Yearbook, 1981 (foi 1970-1975 figures); Communique issued by the State Statistical Bureau, Beijing, April 1982 (for 1975-1982 figures). - 30 - Table 1.2 CHINA HIGHWAY PROJECT Annual Grcwth and Mbdal Split in Passenger Traffic, 1949-83 (Billion passenger-km) Inland- Years Highways Railways waterways Aviation Total The Expansion Period (1950s) 1949 0.8 13.0 1.5 1950 1.3 21.2 1.5 1952 2.3 20.1 2.4 1957 8.8 36.1 4.6 1958 11.6 40.9 4.6 1960 14.6 67.4 4.6 Annual growth over the period (%) 35 13.8 15 21.6% Modal split (%) 17.8Z 72.8% 9.42 The Retrenebment Period (1960s) 1965 16.8 47.8 4.74 1970 24.0 71.8 7.1 Annual growth over the period (%) 24.3 68.9 6.8 Modal split (%) 31.2 62.9 5.9 The Re-expansion Period (1970s) 1975 37.45 95.3 9.06 1979 60.30 121.6 11.40 3.5 Annual growth over the period (%) 12.8 6.4 6.0 8.4Z Mbdal split (%) 31.22 62.9% 5.92 The Modernization Period (1980s) 1980 72.9 138.3 12.9 4.0 1981 83.9 147.3 13.8 5.0 1982 96.4 157.5 14.5 6.0 1983 110.6 177.6 15.4 5.9 Annual growth 1980-83 (X) 17.0 9.0 8.4 11.6% Modal split (X) 36.0 57.0 5.0 2 CHINA HIGHWAY PROJECT Highway Design Standards in China Expressway Class 1 Class 2 Class 3 Class 4 Plain- Hilly- Plain- Hilly- Plain- Hilly- Plain- Hilly- Plain- Hilly- hilly mountain hilly mountain hilly mountain hilly mountain hilly mountain area area area Prea area area area area area area Number of vehicles accommodated ---->25,000----- --5,000-25S,000-- --2,000-5,000--- -----<2,000----- ------<200------ Design travel speed (km/hr) 120 80 100 60 80 40 60 30 40 20 Surface width (m) 2x7.5 2x7.0 2x7.5 2x7.0 9 7 7 6 3.5 3.5 1 Subgrade width (m) 26 23 23 19 12 8.5 8.5 7.5 -------…6.5…------- Minimum radius of horizontal curves (m) 650 250 400 125 250 60 125 30 60 15 Maximum gradient (% 3 5 4 6 5 7 6 8 6 9 Minimum passing sight distance (m) 210 110 160 75 110 40 75 30 40 20 ' WV Nonsuperelevated radius of hori- zontal curve (m) 5,500 2,500 4,000 1,500 2,500 600 1,500 350 600 150 Source: Technical Standard on Road Engineering, Highway Bureau, Ministry of Communications, Beijing, 1981. - 32 - Table 2.2 CHINA HIGHWAY PROJECT Road Pavement Standards Pavement surfacing Pavement surfacing material Vehicle accommodation capacity (number of vehicles/day) Highest standard Asphaltic concrete >5,000 (expressway and Class 1 Cement concrete roads) Hot-mix macadam High standard Penetration macadam surface 2,000-5,000 (Class 2 roads) Cold-mix macadam Bituminous-coated macadam 300-2,000 (Class 3 roads) Medium standard Bituminous-lime treatment 50-400 (Class 4 roads) Graded-aggregate, gravel surface 50-300 (Class 4 roads) Low standard Improved earth surface <50 (rural roads) Source: Ministry of Communications. _ 33 - Table 2.3 CHINA HIGHWAY PROJECT International Comparison of Vehicle Production in 1980 /a Area Trucks Popula- (sq km)/ Country Population Area Cars & buses Total tion/car truck ('000 people) ('000 sq km) China 1,000,410 9,600 11,940 163,705 175,645 83,786 58.6 (Z of total) (6.8) (93.2) India 680,000 2,974.7 29,183 72,044 101,227 23,301 41.3 (Z of total) (28.8) (71.2) Romania 22,300 237.5 75,020 37,116 112,136 297 6.4 (X of total) (66.9) (33.1) TIrkey 45,217 780.6 43,808 29,001 72,809 1,032 26.9 CX of total) (60.2) (39.8) Peru 17,293 1,285.2 5.808 4,940 10,745 2,977 260.1 (Z of total) (54.0) (46.0) ahile 11,136 741.8 18,015 2,136 20,151 618 347.3 (Z of total) (89.4) (10.6) Philippines 47,914 299.7 34,831 32,740 67,571 1,375 9.1 (Z of total) (51.5) (48.5) Malaysia 13,297 329.6 60,582 14,395 74,977 219 23.0 (Z of total) (80.8) (19.2) /a Data for China are for 1981. Source: The Wbrld Automotive Market. - 34 Table 2.4 CHI HIGHWAY PROJECT Motor Vehicles Manufactured in and Imported into China, 1980-1984 (thousands) Type 1980 1981 1982 1983 1984 Domestic Production Total Vehicles 222.3 175.6 196.2 239.8 (305.0)/a of which trucks 135.5 108.3 121.8 137.1 u.a. as Z of total 61.0 62.0 62.0 57.0 Imports Cars 1.4 1.1 5.8 Trucks 22.0 20.8 7.7 8.4 Dmp trucks 1.5 1.1 2.3 Chassis with engines 0.3 0.4 0.9 Total 24.0 10.3 17.5 /a Estimated. -The Beijing Review" (March 11, 1985) reports a 27% increase over 1983 production. Source: Statstical Yearbook of China 1982, 1983 and 1984. - 35 - Table 2.5 HIGWAY PROjECT Total Freight Transport Handled by State and Social Trucks Freight volume Freight density Average distance (million tons) (billion ton-km) (km) Public Social Public Social Public Social truck truck Total truck truck truck truck 1978 852 2,406 3,258 27.4 44.6 32.1 18.5 1979 816 2,748 3,564 26.8 47.7 32.8 17.4 1980 760 2,060 2,820 25.5 50.9 33.5 24.7 1981 715 2,922 3,637 ?5.3 52.7 35.4 18.0 1982 788 3,004 3,792 30.3 64.6 38.4 21.5 1983 n.a. n.a. 4,010 33.5 74.9 n.a. n.a. Note: Percentage of truck distribution: Public trucks 142 Social trucks - 86Z Source: Mlnistry of Communications, 1984 China Statistical Yearbook, 1983 - 36 - Table 2.6 CHIN~A HIGTWAY PROJECT CTC's Vehicle Operating Cost in 1983 /a Type of vehicle Cost 4-10 ton trucks 154 (Y/l,000 ton-km) Container truck 1,245 (Y/1,000 container-km) Truck-Trailer 960 (Y/1,000 ton-hr) Standard 4-ton truck 107-167/b CYI1,000 ton-km) /a Data may represent planned targets. /b Ranges as follows: Y 107/1,000 ton-km on Class 1 roads; Y 134 on Class 2 roads; and Y 167 on Class 3 roads. Note: Statistics are based on CTC's branch office in Tienjin. Source: Central Trucking CoDpany. _ 37 - Table 2.7 CIA HIGHWAY PROJECT Composition of Vehicle Operating Cost: A Comparison Cost Sichuan CTC composition Province Shanghai average Fuel 28.9 22.0 15.2 Vehicle repair 15.2 23.0 17.8 Overbauls 4.0 n.a. 9.1 Road maintenance fee 15.6 7.0 14.0 Tires 9.7 7.0 12.7 Labor cost 5.6 17.0 3.5 Vehicle depreciation 5.4 5.0 8.5 Administration and misc. 15.6 19.0 19.2 Total 100.0 100.0 100.0 Sources: Sichuan Provincial Transport Office, 1981; Shanghai Transport Office, 1981; and Central Trucking Company, 1983. Note: Gasoline cost - Y 0.60/liter Diesel cost - Y 0.40/liter Average gasoline consumption - 0.086 - 0.0906 liters/ton-km Average diesel consumption - 0.065 - 0.73 liters/ton-km CHINA HIGHWAY PROJECT National Road Sections to be Improved or Newly Built Investment Forecast Traffic (AADT) cost /a Actual Annual (at 1985 traffic 1988 1997 growth Length prices: (1984) (opening (After 10 rate Section No. From - To (km) Standard Y mln) (AADT) year) years) (%) ERR Shandong 01 Huihe-Majiadian 20.85 Class 2 9.39 726 1,127 2,126 7 19 02 Yancheng-Gaotang 53.20 Class 2 33.31 1,100 1,708 3,222 7 17 Shaanxi 03 Xian-Sanyuan 35.18 Class 1 80.30 3,064 4,758 8,974 7 18 1 w Anhui 04 Laibang-Baojiahe 35.11 Class 3 7.59 264 429 809 7 23 Fujian 06 Gaotien-Huashanjie 32.45 Class 3 13.41 469 668 1,260 7 37 Sichuan 07 Longtai-Tangba 28.26 Class 3 17.50 507 787 1,485 7 20 Yunnan 08 Yangwu-Honglongehang 21.39 Class 3 9.34 774 1,202 2,267 7 24 Total 226.44 158.69 - - /a Includes right-of-way costs and MOC contingencies. Note: Road Number 05 has been canceled. Table 3.2 - 39 - Page 1 of 2 CHINA HIGHWAY PROJECT Rural Roads to be Improved or Newly Built Road Investment cost/a Length class (at 1985 prices: Section No. From - To (km) standard Y million) ERR Zhejiang (01-11) Total 261.74 40.05 01 Deqing-Tongxiangzhouquan 36.00 3 6.61 31 02 Yukangtangqi - Deqlng 17.34 3 3.20 28 03 Lin'antuankou - Chun'anxiazhong 28.00 4 3.11 16 04 Najian-Jinsbazhuji 4.60 4 0.61 26 05 Pan'anfangqian - Tiantaihuaqiang 8.82 3 1.37 26 06 Yongjiaxiasbeng - Jinyunnanxi 30.98 4 3.23 17 07 Rui'anyaozhuang - Ouhaiheshangling 10.00 4 1.36 28 08 Qingtiantangqiang - uIi'anshilong 49.40 3 9.27 22 09 Wenchengshanxi - Taishunxiahong 40.80 4 5.47 20 10 Yunhedajun - Shwan 21.80 4 3.86 16 11 Qingyuanjianggen - Shouningkengdi 14.00 4 1.96 15 Anbui (12-16) Total 195.63 23.36 1.2 Jiapeng-Jingzhou 30.00 4 2.67 23 13 Nanyuankou-Shendu 30.02 4 3.06 19 14 Huangbei-Xiaochuan 20.35 4 1.72 18 15 Tangpohe-Qianshan-Yuexi 60.10 3 9.44 34 16 Huanggang-Bailitun 55.16 4 6.47 29 Jiangxi (17-31) Total 284.30 41.84 17 Linjia-Fanzhen 10.35 4 1.25 33 18 Wuning-Xinji 25.75 3 5.46 17 19 Huangshageng-Xixia 12.87 4 2.32 29 20 Yushan-Tongfang 55.78 4 4.45 19 21 Yaoli-Nifengjie 10.40 4 1.57 33 22 Jiaokang-Le'an 38.94 4 5.33 30 23 Yutang-Lujiang 14.40 4 1.41 30 24 Xincheng-Qiusha 16.80 4 3.87 22 25 Wanhe-Potou 11.60 4 1.78 22 26 Hanxia-Nanlin 5.60 4 0.73 28 27 Juncun-Ruangtang 23.71 4 3.39 22 28 Ruikeng-Shatianshui 5.00 4 0.72 37 29 Lintan-Guting 14.00 4 2.18 27 30 Zhuangkuo-Hhiangling 29.80 4 6.01 21 31 Longbu-Tianxin 9.30 4 1.37 20 - 40 - Table 3.2 Page 2 of 2 Road Investment cost/a Length class (at 1985 prices: Section No. From - To (km) standard Y million) ERR Guanxi (32-38) Total 185.60 34.60 32 Xindu-Huaiji 32.80 3 6.85 25 33 Yunbiao-Nayang 18.00 3 3.08 32 34 Tiandong-Zukong 13.80 3 6.24 .18 35 Dishui-Luoxiang 32.00 4 4.66 16 36 Baizhupu-Niutangjie 39.00 4 4.00 20 37 Antai-Dongtou 13.00 4 2.49 18 38 Chuanshan-Xiangzhou 37.00 3 7.28 20 Sichuan (42-58) Total 276.34 59.45 42 Linkou-Miaoxi 25.74 4 4.24 20 43 Lujiao-Gongtan 15.00 4 1.50 18 44 Yushan-Lianhe 16.50 4 3.54 17 45 Xiangkou-Baima 25.00 4 6.91 27 46 Fucheng-Yuquan 16.00 4 4.40 18 47 Zhouhe-Wangyu 5.50 4 1.84 17 48 Sijing-Yuquan 11.00 4 2.20 16 49 Kuile-Nanbaoshan 16.10 4 4.60 18 50 Minzhi-Minhe 15.05 4 3.78 16 51 Wudu-Tuanshan 9.70 4 4.27 21 52 Jinshan-Zhuyuan 12.30 4 2.46 16 53 Mingjing-Sanhekou 30.03 4 5.37 18 54 Yaojia-Jinshan 17.20 4 2.17 17 55 Fenshuiling-Shanhekou 14.41 4 1.68 18 56 Puguang-Fenshuiling 10.03 4 1.42 18 57 Dayuan-Qifo 25.78 4 5.67 19 58 Yanjing-Tianhuaban 11.00 4 3.40 16 Yunnan (59-62) Total 168.37 26.56 59 Mongzi-Bada 51.52 4 6.61 14 60 Kunluoxian-Nannuoshan 11.55 4 2.07 15 61 Jinghong-Monglun- Xiaomenglum 70.30 4 12.04 19 62 Mengla-Yaoqu 35.00 4 5.84 16 Total Length 1,371.98 Total Cost 225.86 /a Includes right-of-way costs and MOC's contingencies. Note: Roads 39, 40 and 41 have been canceled. -41- Table 3.3 CHINA HIGHWAY PROJECT Training Program Description US$ Training Equipment and Materials 720,000 Audiovisual training aids and laboratory, computer, and other training equipment for Provincial Transportation Schools (PTS) in project provinces. Work Visits of Expatriate Experts to China 100,000 Short visits to selected MOC Rigbway Colleges and PTS by expatriate experts to upgrade relevant curricula. Books and Technical Publications 48,000 Essential books and technical publications for MOC, HPDI, HSRI, and PTD/PTS of project provinces. Training Abroad (Fellowships) /a 1,262,000 - Short courses on teaching methodology for about 20 teachers- lecturers of PTS of project provinces. 160,000 - Practical secondments for about 24 MOC senior engineers and PTD design and construction technical managers connected with the project for about 6 months. 440,000 - Training courses and practical secondments on project manage- ment, accounting, planning (economic) and statistical infor- mation for about 20 HOC and PTD staff for about 3 months. 150,000 - HPDI and Provincial HPDIs. Courses and practical secondments for survey and design of highways and bridges, for 14 engineers for about 2 months. 90,000 - HSRI and Provincial HSRIs. About 20 staff to attend courses related to their respective research programs for about about 3 months. 150,000 - Short courses on engineering management, subgrade and pavement technology, aerial survey, etc., for about 22 PTD staff for about 3-6 months. 240,000 - Advanced courses /b for interpreters from MOC and PTDs. 32,000 Total 2,130,000 /a Specific number of trainees and duration of courses, secondments, etc., will depend on availability of courses and actual cost of programs. /b Some of these courses may be conducted in China. - 42 - Table 3.4 CHINA HIGHWAY PROJECT Estimated Disbursement Schedule Estimated cumulative Disbursement IBRD/IDA fiscal year disbursements profile of Regional and semester US$ million Z highway projects (Z) 1986 December 31, 1985 2.0 3 June 30, 1986 9.0 12 7 1987 December 31, 1986 21.0 29 June 30, 1987 34.0 88 22 1988 December 31, 1987 50.0 69 June 30, 1988 64.0 88 42 1989 December 31, 1988 67.0 92 June 30, 1989 69.0 95 63 1990 December 31, 1989 70.0 96 June 30, 1990 71.0 98 80 1991 December 31, 1990 72.6 100 92 June 30, 1991 1992 December 31, 1991 June 30, 1992 100 - 43 ANNEX- Page 1 of 3 CHINA HIGHWAY PROJECT MOC Highway Institutes The Highway Planning and Design Institute 1. Located in Beijing with a staff of more than 240 engineers and tech- nicians, of whom some 60% are senior engineers and specialists, the Institute has, for 30 years, pLayed a leading role in the planning, design and manage- ment of the highway system in China. 2. The principal responsibilities of the Institute are: (a) Preparation of Master Plans for the Highway Networks. This covers long- and short-term planning of the national highway network, over- all guidance in planning of the provincial highway network and pre- paration of programs for the improvement and reconstruction of the existing national highway network. Some 133 permanent traffic counting stations and 3,000 semi-permanent traffic counting stations have been set up to provide data which are combined with the find- ings of studies on key industries such as agriculture and industry to develop patterns for highway transport. (b) Preparation of feasibility studies for key highway projects as well as budgetary estimates for highway projects. (c) Preparation of national design standards for highways and bridges such as: - Code of Practice for Site Reconnaissance and Survey of Highway Bridges; - Standard Specifications for Design of Flexible Pavements; - Standard Specifications for Design of Concrete Pavements; - Design Specifications for Roads in Factory and Mining Areas; and - Standard Specifications for the Design of Highway Bridges and Culverts. (d) Preparation of standard plans for bridges and culverts. (e) Design of major bridges and expressways. (f) Design of highway industry buildings, automobile repair shops, container and long-distance bus terminals. ANNEX 1 - 44 - Page 2 of 3 The Highway Scientific Research Institute 3. Located in Beijing, the Institute has a total staff of 485 of whom about half are scientists and engineers. about 70Z of the scientists and engineers have more than 15 years practical experience and 22 are senior engineers and researchers. Facilities include laboratories and experimental areas for bridge structures, motor vehicle operation, civil engineering materials, etc. Construction of a new building for experiments started in 1983 and will be completed in 1986 to provide an additional 15,200 sq m of space. On completion, it is intended to rearrange the Laboratories and introduce more advanced experimentaL capabilitv. The Institute provides technical and scientific advice to help formulate, develop and implement government policy on highways and highway transport and is the main scientific and technological base for highway transportation in China. 4. The Institute's main tasks are: - to help formuLate highway transport policy and the highway scientific and technological development program; - to coordinate scientific research work on highway transport in the country; - to undertake research and development related to planning, design, construction and maintenance, highway structures including bridges and tunnels, engineering materials, road construciton and maintenance equipment, traffic engineering, computer applications and the operation, maintenance and energy efficiency of motor vehicles; - to serve as a medium for the evaluation and introduction of advanced or new technology on highway transport; and - to foster graduate students and in-house expertise in specialized aspects of highway transport. 5. The Institute's major research tasks over the next five years would be on: (a) technology concerned with the qualitative evaluation of existing paved highways and bridges in order to prepare a strengthening, rehabilitation and maintenance program for these facilities; (b) low-cost solutions to road congestion near cities; (c) identification of optimum axLe loads for China; (d) prevention of road traffic accidents; (e) design of semi-rigid base layers under asphaltic eonrcto surfacing; ANNEX 1 Page 3 of 3 (f) the potential for preparing high grade asphaltic concrete pavemenc, using locaily produced asphaltic cement; (g) the use of cement concrete highway pavement; (h) the compaction of highway foundation layers in relation to various soil and moisture characteristics in order to improve technology for constructing highways under various conditions such as frost, desert, morass, saline, etc.; {i) technology related to the management of expressways; (i) the geometric structure of highways in order to formulate a rational basis for classification and for design criteria; (k) bridge hydrology; (l) technology related to the quality control of concrete; rm) special concretes; and (n) soil stabilization. The First Survey and Design Institute 6. Locatied in Xian, Shaanxi Province, the Institute was founded in the early days of the Peoplets Republic as the Northwest Design Company. The Institute, which is connected to the China Road and Bridge Engineering Company, has a total staff of 305, comprising 5 high-level civil engineers, 104 civil and management engineers, 67 assistant engineers, 10 technicians and about 119 university and middle school graduates. 7. The Institute's main tasks are the survey and design of major high- ways, large- and medium-size highways, bridges and tunnels, urban highways, rehabiLitation works, as well as geological and site investigations including the location of aquifers and the preparation of technical feasibility studies. Since its founding, the Institute has surveyed and designed high- ways, bridges, tunnels and other engineering projects in China as well as in Asia and Africa. Recent major projects in China include the Qinghai-Tibet Highway (Roof-of-the-World Highway); the Tianshan Highway crossing the Tianshan mountain range; the Luanchi Highway in the Yanshan Region; and high- grade highways for the Zhunger coal fields and the Beijing-Tiangin-Tanggu Expressway. Major bridges surveyed and designed include: Wujiang Bridge, Gezhentan Yellow River Bridge, the Lanzhou Yellow River Bridge and Jiangsu Guan River Bridge. Major tunnels surveyed and designed include the 1,000 meter long Yuxi Molegai Tunnel at 3,400 meter altitude on the Tianshan Highway in a geologically complex area, and four tunnels on the Luanchi Highway beyond Yantai. The Institute was also concerned with the proposed Nanjing-Hangzhou- Ningho and the Guangzhou-Shenshen-Zhuhai expressways. Overseas, the Institute has surveyed and designed about 1,520 km of highways in Vietnam, Somalia, Iraq, Yemen Arab Republic and the People's Democratic Republic of Yemen. -46- ANNEX 2 CHINA HIGHWAY PROJECT Significance of Proposed National Road Investments Road Province number Class Justification of choice Shandong 01 2 - Completes the links between Bingzhou City to Jinan, the provincial city of Shandong. It will contribute to the industrial develop- ment of this area. 02 2 - Completes the links from Jinan to Hebei Province, and has junctions with several other trunk roads. It will contribute immensely to industrial development. Shaanxi 03 1 - Links Xian-Sanyuan to Tongehuan and Shaanbei, an important coal mining and industrial area of Shaanxi. This area is called the "Black Belt of Shaanxi." Anhui 04 3 - To transport approximately 100,000 tons of agricultural products between Laibang and Baojiahe counties. It is a hilly area close to Hubei Province. Fujian 06 3 - At the border of Fujian and Jiangxi Provin- ces. This road is linked to the economic development of the mountainous province of Guangfeng county. Sichuan 07 3 - Completes the links from Chengdu, capital city of Sichuan, to Chongquing, the most important industrial city of the province. The population density and the level of development of the two cities are as high as that of the Beijing and Tianjin area. Yunnan 08 3 - To reduce the distance between Suijiang and Xinshizhen by 89 km. It will make a major contribution to the agricultural economies in these counties. Note: Road No. 05 has been canceled. ANNEX 3 47 Page I of 2 CHINA HIGHWAY PROJECT Provincial Profiles Province Geographical and economic conditions Shandong - Located in the northeast, with 65% of its area swampy and 35% hilly. Flooding from the Yellow River reduces the harvest, and it was not self-sufficient in agricultural products until 1970. There are some coal mines, gold mines, iron ore and tin. Its industrial products are cement, cotton textiles, chemical fertilizers and machines. Shaanxi - Located in the middle range of the Yeilow River with 45Z of its area highland, 35% mountainous and 202 plain. Agriculture and irrigation have long been developed, buc there stiLl is a serious problem of land erosion. Mineral resources are abundant, especially coal in the Tongchuan area to che north of the Weihe River, in the area called the "Black Belt of Shaanxi." This is also an industrial center for Shaanxi. Light industries are textile and paper mills. Heavy industries are steel, machine building, cement, chemical fertilizers, etc. The proposed national road link will pass through this industrial center. Anhui - The Chang Jiang (Yangtze River) passes through the southern half of the province. An irrigation system has been well developed over a long time. The land is very fertile even though 70t of the area is mountainous and hilly. There is also an abundance of iron ore and coal. However, industry has developed only in the past 30 years and comprises food processing, paper products and chemical industries. Sichuan - The province, in the southwest, has long been important economically, culturally, militarily and politically. In terms of politics, it has been the passage leading the Han people to the tribal people in the west. In terms of economics it is very fertile Land for tropical plants, particularly cotton, oil seed and sugarcane. Industrial development started relatively early, beginning with silk weaving. Now there are machine, chemical, fertilizer and wood processing industries. There is also a vehicle manufacturing plant in Chongqing. The population density in the two major cities, Chengdu and Chongqing, is comparable to that of Beijing and Tianjin. However, because of the difficult topography characterized by high mountains and deep valleys, transportation investment costs in this province are high. ANNEX 3 - 48 - Page 2 of 2 Province Geographical and economic conditions Fujian - Located on the southeastern coast of China with 90Z of its area mountainous. Main economic activities are cea plantations and forestry. There are also some mineral resources. Industrial development started only after 1950, with steel, textile, paper, timber and sugar refining industries. Yunnan - Located on the southern border of China close to Burma, Lao PDR and Vier Nam. It has many tribal people. 93% of the cotal area is mountainous and highlands and only 6% is cultivable land. The main economic activity is forestry. There are large amounts of tin ore. IndustriaL development is stilL at an early stage. Zheijiar'g - Located on the east coast with 70% of its areas mountainous and 30X valley. It is a very fertiLe area with good irrigation developed since the second century; 80% of the cultivated area is irrigated. Industrial development began at the beginning of the twentieth century. It was very famous for textile, paper, tea and distilling industries. During the past 30 years, it has introduced heavy industries such as chemicals and machine building. The transport sector is also one of the relatively well developed sectors. This is one of the richest provinces in China. Jii;1gxi - Located south of the Chang Jiang with 70Z of its area mountainous and hilly; land erosion is serious, and drought common. However, it is the most important tungsten ore area in China. It is also very famous for ceramic work. Some heavy industries started after the 1950s but are not yet well developed. Guangxi - On the southern boundary of China and the autonomous region for the Juan tribe which is the largest minority in China. The topography is 85% mountainous and 15% plain. Agriculture pro- ducts are paddy, tropical plants, timber and marine products. There is an abundance of natural resources, the most important being manganese. Light industry is being developed, mainly sugar refining, canned food products and handicrafts. Development is still slow, and it is one of the lowest income provinces of the country. ANNEX 4 ~ 49 ~ Page 1 of 2 CHEIN HIGHWAY PROJECT Project Implementation Schedule Implementation Start Complete Part A - National Road Construction and Improvement - Prequalification of contractors including Bank review Mar 5, 1985 May 31, 1985 - Bid period Jun 10, 1985 Aug 31, 1985 - Receive and open bids, evaluation and receipt by Bank of copy of Evaluation Report and Government recommendations Sep 1, 1985 Dec 20, 1985 - Appoint supervision staff Jan 01, 1986 - Select consultants for organization of supervision of works and award contracts Jan 20, 1986 - Construction of national road links Mar 1, 1986 Jun 30, 1988 Part B - Rural Road Construction and Improvement - Sign contracts with County Governments Sep 30, 1985 - Set up Project Management Unit Oct 15, 1985 - Appoint supervision staff Nov 01, 1985 - Construction/i=provement of rural roads Nov 15, 1985 Nov 15, 1987 Part C - The Provision of Computer Aided Design and Engineering (CADE) and Other Computer Equipment for the HPDI and the HSRI - HPDI and HSRI prepare functional requirement study Jul 31, 1985 - Consultant review of functional requirement study Aug 1, 1985 Sep 30, 1985 - Prepare specifications and documents Oct 1, 1985 Nov 30, 1985 - Invite bids from selected international suppliers Dec 15, 1985 - Evaluation of bids and receipt by Bank of report on evaluation with Government recommendation Mar 15, 1986 Apr 15, 1986 - Carry out bench tests of equipment selected for consideration May 01, 1986 May 31, 1986 - Evaluate bench tests Jun 15, 1986 - Negotiate with selected supplier JuL 01, 1986 Jul 31, 1986 - Carry out acceptance testing of equipment Sep 01, 1986 ANNEX 4 ~ 50 - Page 2 of 2 Implementation Start Complete Part D - Provision of Site Investigation and Laboratory Testing Equipment for the HPDI and the HSRI - Prepare equipment list, specifications and bid documents and submit to Bank for review Oct 31, 1985 - Invite bids from selected international suppliers Nov 15, 1985 - Evaluation of bids Jan 15, 1986 Jan 30, 1986 - Receipt by Bank of report on evaluation with recommendation for award Feb 15, 1986 - Award contracts Mar 01, 1986 - Delivery of equipment. Apr 01, 1986 Sep 31, 1986 Part E - Consulting Services - Assistance in supervision of construction Nov 01. 1985 Nov 15, 1988 - Assistance in CADE equipment procurement including function requirement study, evaluation of Jul 31, 1985 May 01, 1986 proposals, testing, etc. (part-time) - Assistance in studies, seminars and workshops Jan 01, 1985 Jan 01, 1988 (part-time) Part F - Studies by HSRI - Paved road evaluation study for the Jul 1, 1986 Dec 31, 1987 preparation of paved road strengthening and rehabilitation - Study to identify a low cost solution to road congestion near cities Jul 1, 1986 Dec 31, 1987 - Road traffic safety study Jul 1. 1986 Dec 31, 1987 Part G - Staff Training - Selection of trainees Aug 31, 1985 - Placement of trainees Sep 30. 1985 Sep 30, 1986 - Training Continuous - Workshoos As needed - Seminars As needed ARMEX 5 -51- Page 1 CEfA HIGHW PROJECr Project Monitoring Indices Actual as Reason for Esti- Z of difference Action to Project Component mated Actual estimated (if any) be taken National Road Construction and IMprovement Ca) Contract awards (dates) (b) Earthworks completed (m3) (c) Paving completed (km) (d) Culverts (number) (e) Bridges (number) (f) Construction work completed (date) (g) Maintenance certificate issued (date) (h) Completion certificate issued (date) (i) Final cost Supervision of Construction (i/months) Rural Road Construction and Improvement (a) Contracts signed (dates- (b) Earthworks completed (in) Cc) Pavement completed (km) Cd) Culverts (number) (e) Bridges (number) (f) Construction work completed (date) (g) Final cost Consultant Services Supervision of Construction (a) Consultants selected (b) Consultants start work (c) Supervision organization, proce- dures and systems agreed by MOC and Bank (d) Supervision staff appointed (e) Office and laboratory buildings constructed (f) Laboratory equipment in place (g) Supervision of construction in progress ANNE 5 - 52 - Page 2 Actual as Reason for Estl- Z of difference Action to Project Component mated Actual estimated (if any) be taken Consultant Services (cont'd) StudiesWobrkshops CADE and Other Computer and Laboratory Equipment for HPDI and HSRI, and Road Maintenance Equipment (a) Prepare equipment list and speci- fications (b) Complete functional requirement study on computer equipment (c) Invite bids from selected interna- tional suppliers for computer equipment gd) Invite bids for road maintenance equipment (e) Evaluate bids and send government report on evaluation to Bank gf) Make bench tests of computer equipment selected for consid- eration (g) Evaluate bench tests of computer equipment selected for consid- eration (h) Evaluate bid for road maintenance equipment vi) Negotiate with selected computer equipment suppliers for soft- ware, etc. (j) Carry out acceptance tests of computer equipment (k) Delivery of laboratory equipment HSRI Research Program (a) Program implementation (b) Studies (i) Paved road evaluation (ii) Road congestion (iii) Road safety Staff Training (a) Selection of trainees (b) Placement of trainees (c) Training (d) Curriculum review ANNEX 6 _ 53 - Page 1 CHINA HIGHWAY PROJECT Economic Evaluation of the Xian-Sanyuan National Road Road-Route and Function 1. The road will be the most direct route from Xian, :he capical of Shaanxi Province, to Sanyuan where it will connect with the existing Class 2 road to Tongchuan, an important industrial area in Shaanxi. The construction of this road is divided into two sections. One is a 8.6 km section from Xian to Zhangjiabao including part of the ring road around Xian City. (This section is not included in the Bank-financed project, but is being built separately by Xian municipality.) The other is a 35.18 km section from Zhangjiabao to Sanryuan which is included in the project. 2. This section of national road will be the first 'Class 1' road in Shaanxi Province and is important in three ways. First, it will improve access to coal mining areas in Shaanbei (northern Shaanxi Province) and to the industrialized area around Tongchuan. Second, it will fill in important gaps in national roads 210 and 211. National road 210 is a major north-south axis starting from Baotou in Nei Mongol Province, and crossing Shaanxi, Sichuan and Cuizhou Provinces to reach Nanning in Guangxi Province. Road 211 originates at Xian, extending northwest to Yunchuan. Third, this road will provide access to the new international airport which is planned to open by 1990. An access road from the airport will join the project road north of the Wei River bridge. 3. In addition to providing a main link into the national network, the new road will also serve the industrial and agricultural development of five major cities and towns, i.e., Xian, Sanyuan, Tongchuan, Jingyang and Kaoling (Table 1). The industries which will benefit are textiles around Xian, coal and cement in Tongchuan and Sanyuan, and agriculture in Jingyang and Kaoling. ANNEX 6 -54 Page 2 Table 1: KEY CHARACTERISTICS OF THE XIAN-SANYUAN ROAD INFLUENCE AREA Xian Sanyuan Tongchuan Jingyang Kaoling City county City county county Total Area (sq km) 2,441.0 569.0 2,204.0 792.0 294.0 Cultivated land ('000 Mu) 1,635.5 562.0 959.6 734.5 305.0 Population ('000) 2,822.5 305.5 603.3 376.8 177.8 Total Value of Industry and 5,196.9 154.1 462.9 159.3 75.1 Agriculture Product (Y mln) Of which: Industry 4,821.5 79.4 403.7 54.1 21.3 Agriculture 375.4 74.7 59.3 105.1 53.8 Per capita output (Y mln) 1,841.2 504.4 767.3 422.8 422.4 Existing civilian vehicles (No.) 20,020.0 n.a. 2,610.0 319.0 181.0 Existing tractors (No.) 7,928.0 1,492.0 n.a. 1,216.0 744.0 Motorable roads (km) 1,035.0 620.0 542.0 895.0 273.0 Road density (km/'000 km2) 424.0 1,090.0 246.0 1,130.0 929.0 Traffic 4. Present Situation. At present there is no direct route from Xian to Tongchuan. The two existing alternatives, one in the east and one in the west, are 13 km and 15 km respectively longer than the proposed road. A railway line also follows the western alignment, crossing the Wei River at Xianyang. The roads carry 88% of the passenger traffic between Xian and Tongcnuan while the railway carries about 75% of the freight; its capacity is saturated. After completion of the project, the distance from Xian to Tongchuan will only be 112 km versus 158 km by railway. Besides savings in time and vehicle operating costs for the shorter distance, congestion on the existing roads will be reduced. Traffic on the existing roads is already very heavy and is increasing with the present high economic growth. It reaches 3,980 AADT east of Xian and 3,736 AADT west of Xian, decreasing to 1,223 and 2,004 north of the Jing &nd the Wei Rivers. (The figures are only for motorized vehicles.) According to six traffic count stations, traffic growth in this area averaged 9% in 1983. (The six stations are Huokou and Yaozian on national road 210, Weihe bridge, Potou, Yunyang and Tunhuo on national road 211.) Congestion was also particularly serious there due to the traffic-mix of slow and fast moving vehicles. 55 - ANNEX 6 Page 3 5. Anticipated Future Traffic. The anticipated traffic on the project road comes from three main sources: (a) traffic diverted from national roads 210 and 211, Local traffic. and traffic diverted from the Xian-Tongchuan railway; (b) traffic generated from newly developed industrial and agricuL- tural activities in the area, incLuding the new cement plant project in Yaoxian; and (c) traffic from the new Xianyang international airport. ro determine the required capacity of the road, all traffic was converted to a car equivalent, using the conversion factor of traffic moving on 50Z flat land, 50Z hilly land. Based on an origin-destination survey done Ln July- August 1984, it is estimated that traffic on the proposed road wouLd be equivalent to 10,761 car AADT in 1984 (Table 2). Assuming a 9% p.a. arowth rate, MADT in 1988 would be equivalent to 13,936 cars and would require a 4- lane road. - 56- ANNEX 6 Page 4 Table 2: ANTICIPATED TRAFFIC CAPACITY IN TERMS OF CAR EQUIVALENT (1984) Conversion Jingyang Yong-le station - factors to Gengzhen station station between car equivalent Total on road 210 on road 211 Xian to Sanyuan Motorized Vehicles (excluding tractors) - small truck (2.0) /a (250)/b 500 (23)/b 46 (118)/b 236 - medium truck (3.0) (1,670) 5,010 (488) 1,464 (384) 1,156 - large truck (4.0) (213) 852 (52) 208 (72) 288 - small passenger car (1.0) (200) 200 78) 78 (65) 65 - large passenger car (3.0) (184) 552 (35) 105 (30) 90 - truck trailer (5.0) (225) 1,125 (29) 145 (148) 740 Total 'in car equivalent) 8,239 2,046 2,511 Diversion factor (Z) 73.3% 20.6% 50% Expected traffic on riew road 7,716.16 6,039.2 421.5 1,255.5 Tractors - small (2.0) (133) 266 (51) 102 (374) 748 - large (3.0) (179) 537 (106) 318 (123) 369 Total (in car equivalent) 803 420 1,117 Diversion factor (Z) 19.4%' 7.7% 80Z Expected traffic on new road 1,081.7 155.8 32.3 893.6 Man & Animal Drawn Carts (3.0) (141) 423 (54) 162 (213) 639 Diversion factor (%) 0% 0% 1002 Expected traffic on new road 639 0 0 639 Bicycle (0.5) (2,950) 1,475 (804) 402 (2,649) 13,245 Diversion factor (X) 0% OX 100% Expected diversion to new road 1,324.5 0 0 1,324.5 Grand Total 10,761.36 /a Figures in parentheses are car equivalent factors of vehicles moving on 50% flat land and 50% hilly land. /b Figures in parentheses are the absolute number of traffic counted by each origin-desti- nation survey station in 1984. ANNEX 6 _57 - Page 5 Economic Evaluation 6. Capital Cost. Table 3 shows the derivation of economic costs starting from financial costs and applying either CIF prices of traded goods or conversion factors for non-traded goods. Table 3: Adjusted Economic Cost on Xian-Sanyuan National Road (million Yuan) Financial Economic Conversion Adjusted Components cost cost /a factors economic cost Design Cost 1.20 1.20 4.00 /b 4.80 Land 9.54 Ic 9.54 1.00 9.54 Construction Cost 74.96 _7 74.12 0.97 72.42 Labor (12%) 9.00 9.00 0.50 /b 4.50 Materials - Cement (7%) 5.25 5.14 1.00 5.14 - Timber (42) 3.00 2.97 1.00 2.97 - Steel (5%) 3.75 3.67 1.00 3.67 - Bitumen (12%) 9.00 8.64 1.00 8.64 Equipment (22%) 16.49 16.49 - domestic (50%) 8.25 8.25 1.34 11.05 - foreign (50%) 8.25 8.25 1.00 8.25 P.O.L. (12Z) 9.00 9.00 1.00 /e 9.00 Overhead (1OZ) 7.50 7.50 1.00 7.50 Profit (lIZ) 8.25 8.16 1.00 8.16 Mis. (5%) 3.54 3.54 1.00 3.54 Total 85.70 84.86 1.02 86.76 /a Economic cost is net of duty and taxes. For the four traded commodities, cement, timber, steel and bitumen, the prices are based on recent import contracts and refLect CIF prices. /b A conversion factor of 4.00 is used for works that require highly skilled manpower and 0.50 for unskilled labor. /c The financial cost of land including funds for relocation of the displaced population and removal of electricity poles. /d 10% physical contingency is included. /e In 1984 the Chinese Government increased the diesel price by about 30%, which made the domestic price reflect the international price. AINEX 6 - 58- Page 6 7. Other Costs. The road requires routine maintenance every year and periodic maintenance every ten years. The routine maintenance cost is esti- mateI at Y 4,000/km for a 4-lane paved road, and periodic maintenance is 10% of the construction cost. Maintenance cost reduction on existing roads is expected to be small and has been omitted. (All national roads in this project use the same costing method.) 8. Benefits and Internal Economic Rate of Return. The principal benefits of this road are attributed to the transport cost saving due to the shorter distance (45Z) and road improvement (28Z). Other benefits are time saving, road safety, and congestion reduction on the old road. ln order to calculate the transport cost saving, the anticipated traffic volume for 1984 has been converted into an equivalent number of trucks. Based on the origin- destination survey, some 3,064 AADT (motorized vehicles excluding tractors) could be expected to use the Xian-Sanyuan road in 1984: 66% diverted from national road 210; 4% from national road 211; 14% local traffic, and 16Z diverted from the railway (Table 4). Table 4: EXPECTED TRAFFIC ON XIAN-SANYUAN ROAD: A DERIVATION FROM THE ORIGIN-DESTINATION SURVEY (1984) Total Gengszhen Jingyang Yong-le station Traffic diver- station station between diverted sion on road 210 on road 211 Xian to Sanyuan from railway Motorized Vehicles (excluding tractors) Small truck (1.0)/a 250 23 118 Medium truck (1.0) 1,670 488 384 Large truck (1.0) 213 52 72 Small passenger car (0.5) 200 78 65 Large passenger car (1.0) 184 35 30 Truck trailer (1.5) 225 29 148 Total (no. of vehicles) 2,742 705 817 Total (in standard vehicles) 2,754 680 859 Diversion factor (Z) 73.3 20.6 50.0 Expected diversion to new road 3 064 2 019 140 429 476 2 of total 6io o)4M (1i6) /a Figures in parentheses are truck equivalent conversion factors. ANNEX 6 - 59 - Page 7 9. Traffic growth is estimated to be 9Z p.a. between 1984 and 1988, a one-time increase of 10% in 1988 to account for traffic generated by the road, and 12% p.a. from 1988 to 1990 due to che opening of the new Xianyang inter- national airport and full operation of the industrial and agricuLtural p:oj- ects being developed. After 1990, traffic growth is assumed to stabilize at 6X p.a. The resulting traffic by year is shown in Table 5. Table 5: ANTICIPATED TRAFFIC ON XIAN-SANYUAN ROAD (1984-2000) No. of motorized Growth Year vehicles rate (Z) 1984 3,064 } 1985 3,349 } 1986 3,640 } 9 1987 3,968 } 1988 4,325 + 432/a } 1989 5,329 } 12 1990 5,968 } 1991 6,326 } 1992 6,706 } 1993 7,108 1 1994 7,534 } 1995 7,986 6 1996 8,466 } 1997 8,974 } 1998 9,512 } 1999 10,083 1 2000 10,688 1 /a Normal increase 9% plus 10Z increase for the opening year. 10. Benefits are calculated in Table 6; the method of estimation is as follows: (a) The annual transport cost saving due to the shorter distance represents the savings for all vehicles that would have traveled on the extra length of the oLd road with the old VOC if the new shorter road had not been constructed. This is based on the annual traffic volume (AADT x 365), the difference in length between the old and new roads, the VOC for the old road, the average load, and the conversion of all vehicle types into the AADT of standard trucks. (b) The annual transport cost saving due to road improvement represents the savings of all vehicles that would travel on the new road with the lower VOC. This is based on the annual traffic volume, the new ANNEX 6 -60 - Page 8 road length, and the difference in VOC between the old and new roads, the average load and the conversion factor. (c) Time savings for freight (or for passengers) represents the value of time of freight (or passengers) that would have been spent on the old road with its congestion and stow moving traffic, if the new road had not been built. This is derived from the annual voLume of freight (or passenger) traffic, average hours saved, and opportunitv cost of time for freight (or passengers). (d) The benefit from road safety represents the financial value of the reduction in road accidents based on the number of road accidents avoided and the cost of each accident. (e) Congestion reduction represents the contribution of the new road to relieve the congestion on some sections of the old road. It is the annual traffic remaining on the old road, and the VOC reduction resulting from congestion reLief on the previously congested sections. 11. The total benefit for the opening year of the road is 9.7 million yuan which is 11% of the construction cost. The net benefit flow yields an economic rate of return (ERR) of 18%. 12. Sensitivity and Risk Analysis. The main risks of this road are: lower traffic growth and construction cost overrun. The sensitivity of the ERR to these factors and to the value of these has been tested with the following results: ERR Best Estimate 18 Smaller Traffic Growth - Traffic growth reduced to 7% from 1989-2000 17 - Traffic growth reduced to 7% from 1985-2000 15 Investment Cost Overrun - 20% cost increase 15 - 20% cost increase and traffic growth reduced to 7% from 1985-2000 12 Opportunity Cost of Time Saved - Decrease by 50% 16 - Decrease by 100% 14 Table 6t Economic Analysis of Xian-Sanyuan National Road Parameteres - …--sotert 45.81 Road length (old) (km) = L0 (1) TCS due to shorter distence . Traffic volumn*365*LD*CO*AL Road length (new) 34.46 (km) * LN (2) TCS due to road Improvement a Traffio volunn*365*LK*CD*AL Ave length diff. 11.35 (km) , LD (3) Time saving of freigth * Freigth traffic*365*TS*TVF VOC on old road 0.134 (Y/t-km) = CO (4) Time saving of passenger = Passenger traffio*365*TS*TVP VOC on new road 0.107 (Y/t-km) * CH (5) Road safety = AC*Pao Cost diff. 0.027 (Y/t-km) - CD (6) Congestion reduction on old road = Remaining Traffic *365*CRD*CSO Conv.faotor 0.943 . CF Tonnage(stand.ve) 4.36 (ton) - TV Load factor 0.644 LF Average load 2.808 (ton) * AL Ave time saving 0.615 (hr) * TS Time value(fr.) 2.05 (Y/.hr/pa)= TVF Time value(pass.) 0.327 (Y/hr/ve). TVP Acoident Reduce 187 (case) a AC Prioe of aooident 2430 (Y/case) a Pao VUC red.on old Rd 0.003 (Y/t-km) a CR0 Cong..ec.(old rd) 18 (km) . CSO Traf.Vol Cons.Cost Dist.TCS RdImp.TCS PasaTrans TimeSav.P Fr.Trans TlmeSav.F RoadSafe OldRdTraf CongesRed Net Ben. ^ (AADT) ('000Y) ('oooY) ('oOoY) (OOOP/yr) (OOOY) (OOOV/yr) ('OOOY) ('ODOY) (AADT) ('000y) ('000Y) 1984 3064 4800 -4800 1985 3340 14453 -14453 1986 3640 28907 -28907 1987 3968 28907 -28907 1988 4758 14453 3708 2268 5332 1072 1637 2064 454 5377 106 -4781 1989 5329 141 8306 5081 5972 1201 1833 2311 454 5753 113 17326 1990 5968 141 9302 5691 6688 1345 2053 2589 454 6156 121 19362 1991 6326 141 9860 6032 7090 1426 2176 2744 454 6587 130 20506 1992 6706 141 10452 6394 7515 1511 2307 2909 454 7048 139 21719 1993 7108 141 11079 6778 7966 1602 2445 3083 454 7542 149 23004 1994 7534 141 11744 7184 8444 1698 2592 3268 454 8069 159 24367 1995 7986 141 12449 7615 8951 1800 2748 3464 454 8634 170 25812 1996 8466 141 13195 8072 9488 1908 2913 3672 454 9239 182 27344 1997 8974 141 13987 8557 10057 2023 3087 3892 454 9885 195 28967 1998 9512 696 14826 9070 10660 2144 3272 4126 454 10577 208 30133 1999 10083 141 15716 9614 11300 2272 3469 4373 454 11318 223 32513 2000 10688 141 16659 10191 11978 2409 3677 4636 454 12110 239 34447 IRR 18 % Ia- ANNE 7 - 62 - page ' CHINA HIGHWAY PROJECT Economic Evaluation of the Fucheng-Yuguan Rural Road A. Background 1. The road will be located in Ya-an Prefecture, southwest of Chengdu, the capital city of Sichuan Province. The road will be a Class 4 mountainous road running along the Jing River passing four villages: Fucheng, Shize, Fengyu and Yuquan. The road is 16 km long, with an influence area covering about 290 sq km and a population of 10,000. The area has abundant natural resources: coal, timber, bamboo, iron ore and asbestos. However, the present production of these resources is limited to the amount that local households can consume, because the area is served by only a track which is impassabLe by motorized vehicles. Transport is mainly by porters and the transport cost is too high to couercialize the resources. Thus, besides improving agriculturaL production, opening of the road will contribute greatLy to mining and forestry in the area. 2. In 1983, out of the 15,500 tons produced in the influence area of the road, a surplus of some 3,000 tons, including 2,000 tons of timber, was marketed (details in Table 2). Without improvement of the road, production would continue to grow slowly at 3-4Z p.a. and the market tonnage would reach 3,500 tons in 1987, when the road would be opened and 4,800 tons ten years later. With the road, however, production of coal, timber and bamboo will increase greatly as the reduced transport cost will make production economic- ally justified and attractive. B. Economic Cost and Benefit of the Road Capital Cost 3. The adjusted economic cost of this road is Y 4.25 million. The derivation of economic costs starting from financial costs and applying either CIF prices of traded goods or conversion factors for non-traded goods is shown in Table 1. Other Costs 4. The road requires routine maintenance every year and periodic main- tenance every ten years. The routine maintenance cost is estimated at Y 1,0001km for a Class 4 rural road. Periodic maintenance is 10Z of the construction cost. ANNEX 7 - 63- page 2 Benefits 5. The project road has two main quantifiable benefits: (a) transport cost savings for the commodities which are and would continue to be transported mainly by porters and other non-motorized transport means without the project; and (b) value added to the production which is generated by the Lower transport costs made possible by the opening of the project road. 6. Transport Cost Savings Benefit. The transport cost savings benefit is the difference between the transport cost without the project ana that with the project. Transport by porters is commonly valued at 3-4 yuan per con-km on the basis of one man carrying about 1 ton-km per day (equivalent to carrying a 50 kg load for 20 km). Therefore, the present transport cost per marketed ton is estimated at Y 44. With the road, the transport cost is expected to fall to some Y 21ton or a saving of Y 42/ton. The total benefit is calculated by multiplying the tonnage that would be transported without the project by the unit transport cost saving. It has been assumed that the tonnage transported without the project would continue growing at an average 3.72 p.a. (details by commodity are given in Col-mns (3A) to (SA) of Table 2 and the total benefits for 1987 and 1996 are in Columns (7A) and (gA). 7. Value-added Benefit. All production in addition to what would occur withouc the project is directly attributable to the project. Project produc- tion for 1987 is shown in Column (6B) of Table 2 as the difference between the forecasts of production marketed with the project (Column 2B) and without the project (Column 4AW. The value-added of this generated oroduction is the difference betweea its market value and its production plus transport cost (Column 7B for 1987). The same calculation is done for 1996. the Economic Rate of Return 8. Table 3 sh:jws the streams of costs and benefits calculated as explained above. For the benefit streams, a constant annual growth rate was applied between 1987 and 1996, to reach the estimated benefit for l996. As the road will open about mid-1987, only half of the estimated benefits were attributed to that year with the full benefit starting in 1988. The transport cost saving benefits account for 29Z of total benefits in the opening year, decreasing to 12% by the year 2000. The value-added benefit will be the prin- cipal benefit, and constitutes 71Z and 88% of total benefits in 1987 and 1996, respectively. The resulting ERR is 18%. 9. Sensitivity and Risk Analysis. The main risks of the proposed investment are: (a) a lower growth of value-added benefit, (b) construction cost overrun, and (c) a delay in benefits. The sensitivity of the ERR to the change in these factors has been tested with the follou-ing results: ANNEX 7 - 64 - page 3 ERR (z) Best estimate 18 Growth of Value-added Benefit Lower by 50Z 12 lower by 252 15 Cost Overrun increase by 20% 15 Benefit delayed for one year 14 ANNEX 7 -65 - Table 1 CHA HIGHWAY PROJECT Adjusted Economic Cost on Fucheng-Yuguan Rural Road ('000 yuan) Financial Economic Conversion Adjusted Components cost cost /a factors Economic cost Land 110.05 /b 110.05 1.00 110.05 Construction cost 4,577.05 /c 4,526.69 0.90 4,139.92 Labor (22%) 1,006.95 1,006.95 0.50 503.47 Materials cement (12%) 549.25 527.28 1.00 527.28 timber (11%) 503.47 493.40 1.00 493.40 steel (10%) 457.70 439.39 1.00 439.39 Equipment (15X) domestic (7.5%) 343.28 343.28 1.34 459.99 foreign (7.5%) 343.28 343.28 1.00 343.28 P.O.L. (8%) 366.16 366.16 1.00 366.16 Overhead (15%) 686.56 686.56 1.00 686.56 Miscellaneous (7%) 320.39. 320.39 1.00 320.39 Total 4,6867.10 4,636.74 0.91 4,249.97 /a Economic cost is net of duty and taxes. For the three traded comodi- ties, cement, timber and steel, the prices are based on recent import contracts and reflect c.i.f. prices. /b The financial cost of land including funds for relocation of the displaced population and removal of electricity poles. /c 10% physical contingency is included. - mEEE Ec-amnei Inlyls of wtma-Y_wm Rmel Rood Bemi Infrueto Rad legth (o7A) (km) ladf l1th (mr) 16.0o (km) Trensport Coat (old) 44.00 (!Ito) - 7 Trasort Coot (now) 2.09 (/l) - T Trmpat Cost Saved 41.91 (!Itr) _T Ca2culation, fetbodz CoI:mn(1A){C9A)ar* fo transport cot sawng benfit emrIi a tu_al Colaw (1) to (103) am tar value-edded bent frm the proet g-roth of traffic vithout additIonml traffic geneamted by project roadz road g mted traffic (IA) 1983 Productiom . Ob_erxed (1) 1987 Produotic (with ptoject)-Farecated (2A) 1985 R8rketed prodsct. Obeerved (2B) 1957 1ted (with proect) -Farnoetud (SA) hm.d growth rate =- A3med (B) 1996 Ibrked (with project) forecasted (4A) 19B7 Marketed produt - F_recated - (2A)*(3)-4 (48) Pzie of I_d pIoduct- .8beerved (5A) 1996 Nwketed product - Farcated - (2A)*(3A)-9 (SB) Pkoductiom cast -Observed (6A) unit TC Sarvin (0700) - Obeerved - T1D-TC (6B) 1987 Veln-edi_ed In tom -Forecasted - (2)(4A) (7) 1987 TncPort Cost Sfting - Forecasted - (4A)*(6&) (73) 1987 value-added ln Yuen , F_reoste -{(4S)-W)-4M)*(63) (S) Unlit TC Sawvg (0i) - Obered - TOO-MM (8B) 1996 vaIn-eddd in tn -Forecasted -(3)-) (9M) 1996 Tzanport Cost Saving - Faeted - (L)"(a) (9B) 1996 v -eddied in am -Frecated(4))-1C) (1OD)AUm growth of velue-added .1987-1996 - ((93)I(7SW( h ) Bcefit fra Trenport Cost Sa5n (IA) (20) (30) (4A) (5A) C6A) (7A) (BA) (9A) Ptd8a3 Nxk83 AieCraw T5f87 Tref 96 s U0 T87 S CS87 z QT7CS96 TcS'96 it_ ((t) (tam) () (tt) (t) s (ltM) (I) s (lta) (1) Food Grain 11951 466 0.01 485 530 41.91 20325 41.91 227 O*L Sed 36 23 0.04 *7 3B 41.91 1128 41.91 1605 Swim 403 117 0.04 137 195 41-91 5736 41.91 8165 Tet 49 39 0.04 46 65 41-91 1912 41.91 2722 Timber 221S 2050 0.04 2398 3413 41.91 1005o9 41.91 14306 Bamboo 379 359 0.04 420 598 41.91 1761 41U.91 25052 Coma 340 0 0.04 0 0 41.91 0 41.91 0 In-comingTraffic us. oa. am. a. 41.91 0 41.91 0 Total TCS BfXlt 147210 202826 Psighted Avwe.Crovth 0.037 % Value Added Bft (la) (2B) (3B) (4B) (DD) (6B) (7B) (8B) (93) (tOB) Prodaff 3ark87 HRl,kc96 LPric ProdCost. Y81 AS1187 t TA'96 VA96 t Anrowth Itms (t) (tan) (ton) (t/taWn) (f/ton) a (ton) (r) t (ton) (r) a U1 Food Crain 13714 509 664 260 153 24 2526 134 14021 0.21 il Seed 40 24 33 780 420 0 0 0 0 o. swin 509 135 204 1440 122D 0 0 9 2002 -. Tom 53 42 51 1100 700 0 0 a 0 on. TImber 4754 5399 5568 150 60 1001 87579 2155 189411 0.09 Bamboo 267o 2416 5362 120 70 1996 95629 4764 228Z55 0.10 Coel 30724 30000 154793 22 14 30000 177300 154793 914821 0.20 Total VA Benefit 3634 315t 0.157 - 67 - ANNEX 7 Table 3 CEI 1IGHAAY PROJECT Econominc Rate of Return of Fucheng-Yuguan Rural Road ConsCost TCSBen. VA Ben. NetC.Flow (Y) (Y) (I) (r) 1985 1062000 -1062000 1986 2125000 -2125000 1987 1062000 73605 181718 -806678 1988 16000 152613 420494 557107 1989 16000 158213 486512 628725 1990 16000 164020 562894 710914 1991 16000 170039 651269 805308 1992 16000 176280 753518 913798 1993 16000 182749 871820 1038570 1994 16000 189456 1008696 1182152 1995 16000 196409 116 061 1347470 1996 16000 203618 1350290 1537907 1997 425000 211090 1562285 1348376 1998 16000 218837 1624777 18Z7614 1999 16000 226869 1689768 1900636 2000 16000 235195 1757358 1976553 IRR = 18 % -68 - ANNEX 8 CHINA HIGHWAY PROJECT Selected Documents and Data Available in the Project File A. General Reports A.1 CHINA: Socialist Economic Development, World Bank, June 1. 1981. A.2 Statiscical Yearbook of China, 1983, State Statistical Bureau, PRC. B. General Reports and Studies on the Sector or Subsector B.1 CHINA: Socialist Economic Development - Annex F. B.2 Transport Sector, June 1, 1981, AEA. B.3 ,ransport Sector Paper, December 10, 1984, AEPTI. B.4 3asic Data on Chinese Highway Subsector - Answers to Questionnaire (Chinese with English translation). C. General Reports and Studies Relating to the Project C.1 Feasibility Study of 8 NationaL Roads (Chinese). C.2 Feasibility Study of 60 Rural Roads (Chinese). C.3 Proposed Cost Calculation for Physical and Price Contingencies. C.4 Estimation of Tax and Foreign Exchange Component of Road Construction Costs. t~~~it ~~1111 I~~~~~~~~ 69 - CHINA HIGHWAY PROJECT Organization of the Highway Bureau In the Mlnlstri of Communlcatlons VnM.neo Roods & eod Trar | DMslon 0~~Hghayn FmgnAfor Trucking Ea~?. Fctory I E~t. Fatory I I & Cosin Ins? I I EngFop eig O~~Ino Road Cons?,. R~oad Conift.INPaig ScodHS Gecantin Diison TechnokW ~ ~~~~~~~~~ vehicleMc |q |dot Maintenance| Mdow R Msood Ddsnto Transport . & Derg Hwt r Sig. nt. EDp I~~~~~oto Rood C ;7 onstr Rood; Cosr HW Fk Hwv SLcnd ;;1 t HwyHF Rood Beodge Ecipt. Foctofy Eqpt. FoctorV & Deogn hdt. Dftg Indt. Eng. Dept. t Ctporotlon XLAN XN*J _EUIt4 YAJN XIAN et Oc?obet 1984 Would Eai-2C871 71 Chart 3 CHINA HIGHWAY PROJECT The Rekaonship Behween Central and Provincial Transport Deparments &*t.y orvnu Trscollcn F-T-1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Deporments 4 PtowirviaIHigh~woy ---4 I~~~~~ _ I I Ptetecture& I l COuy Transport D - Depatrtrmets_ I ~ ~~~oaMaintenance TownhAttflof Con lheom* 'The brdhen bressiiaw toe conirc ove poliy & aiVnk*frWtne isses 2 The -cad lInes showv the dkect control o.er thnd decains aoid fornm policy and odmhintwe IRWssues OctoberfW 9X - 72- Chart 4 C~ ~~~~~1_1_ B'__- - ili--l-- -l---X__ Oa~~~~~~~~~~~5I 2ii. U S. S R ' r 'I~~ ? /lohoo -,E' '7 ) N_ 0 N G 0 L I A 1 ' _ w.s ,. - -3~~~~~~~~~~~~~~~~~~~~~~~, A r-GA A,FAINIISTAr4 Z - p~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~l 7=W ftW BW*-S Mg o _sV - '--r tiMdw 3333s Oen wpe.%* ror tiomWad mm V. of Te VV c&Bank NW VWENMhW'33 OFenr3c C4,WXh 7 0 A de a-, ba >W .*M wo mid M VW h,u. 1W Ie ho3, X - I dO The YWf BW* d- h Fv,x CaCpmaulk. TRANSPORT SYSTEM * Proicial Capitals sLh- Provincial Bodari£-s *- Interrnational Boundaries oft"r I E,T N4( I _ LAO PEOPLE'SsL. ' ~0 J ItA t DEIViOCRATIC/ / tZ CHINA Ii TRANSPORT SYSTEM~~~~~~~~~I ME IBRD ISM ,m'i.' *0 " z 7 s ...... 1 x ~~~~U . S 5. R., .................' 1,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 * '--. 2[iif I~~~~~~~~~~~~~~ . t S XzI r * ./ _ o ~~ .j,-. ~~ DEMAOCRAT IC . HE3 o REPUBLIC JAPAN CIF; KOR EA Toiro f~~~~~~~~~~~~~~~~~~*~ /* h f f,l ,I . ra Ao ioo sea 5 HILIPPENB S VS -js NGSlJ ;N - < r : tS 9-~NSHAGA H AN~~~~~~~~~~~~~~HNtA W - znij,2~~~~~~~~~~~~~~~~~~A IIf IVe\, G UPr/VKONG, Kr J-> V- t' ~MACAO, PORT ,;$-weJ)7~~~~~~~4L *IY.IE' -,W rl ! ;i17; ) 00 Boo PHILIPPINES - 1! 4 IIIMILES r 100 200 300 100 502 1W . ,- y;;;t fEr '9.4 DECEMBE R 1 984 ON O L IA /- ' 1e 1;7 118' IT19 120' *,J_.> ) {rT -|4eD,>oJ rrkyr-S45 {' CHINA :|V ' 5~>AI~ IrA JSla,:1zt BfA HIGHWAY PROJECT z4 e ii0Afl>) JJ SHANDCNG rO Jinai.ng ANHUI PROVINCE 7 ~~~~~~~~~~~To Jm,erifg 9~~~~.s .- -. '~~x r> .T C Mir SEA -rsu , Hbrw lvto, 5t c5.s^4 ^ To Jmrf4ne_ PROJECT ROOADS! -3'-!4 National 3 1w.i (;2u . 'g3U 13 Rural A., HOIIO KO. UK < r>fUIEl NA 1* t; , ,, ,! \ Pal Xian, n- National roads Xian ~~~~~~~~~~~~~~~~~~~~Seconidary roads ~~~~ c~~~~~~~~~~' 4-i- ~~~~~~~~~~~~~~Railways Fr. PW s , - lpwd byo Beijing r AirporTs rMZefMMns Wald...... B.rlik Ry - # #3 .i Rivarsr I rlof rA ca7umar.S a Shangghl _angh uivefs de'sVWir ama UG&* 1W ft ronlwe a,*rie V.ble ai r'h * ; W -' District IShen) boundaries Carwalin The d.c,ar ,' -- Provincial bo.Jnldaries .wad md ft br.MAna Unn y . ' T Lianyuriging pa VW do Mr \4 Sr xiaai ft - - InTArnaston'il boundaries hwn"11Aaw1inlannd C84,wako 55 un! i9sMt4Wi aso fr hal4 d *to 5uSd / _ // '.3'. aI&WIWleOyMW\ -'V2 / . ' GI' <>+ lwd\ N NWn | - '~~v.. L / yoi g c L *Hah / Ho~ Sian ,. HENAN / < g ; < W JA - ~~* iraahou ,,. ~Mengchas ahs, ( (,- . Jlnir h slg - T o1 T'lh o .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7 . _,Ton 33, ~ ~ ~ ~ ~ ~~/32' TO X'~~~~~~~~va~~~~~g To Cheng:heu~~~~~~~~~~~~~iy La' ~~\ ' < longe"f) ' t ,, < ,lCuaWhe v~~~~~~~~~~~~~~~~~~~~~uon To ChWng/hou Jinshalt t 6 Xanshan \ i d 2 ~a a xan, 31 ~~\..1i \I / /7.ai-i 1 Pichn Lan XI Wuxng 3 ashAn h~~~~~~~~~~~~~~~~~u8lhn - un/ HUBEI (( WIngj .- XIANG bn a -30'Oongal .Yi Xliih -- '30 I , 1-S' ...... W 1~~I yoxi onT *rngihau O Jngdeahel i Ty . To Nanchangi; .X/ (' JIANGXI :00 tZ s ) i > ^# g J ( 01 26 50llun76J1ng ian HUBEI~~ GI I -* / .K.i r '!' wxs\ ILOMETCRS ... W~~~~~~~~~~~~~~~~~~sn W!5 nglan ingzh rn~~~~~~~~~~~~~~~ila un. p 1 p~~~~~~~~~~~~~~~~~~~vt.m4~ s.AWA~Aaf M PW& 3Bj ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~n.IW~~ ma 3m>. .A .- f 13d \1 OVII °-' \Z.°S C; j M.)->cB' / t t \ inwH / I u -. .. ' wn -UV (( \>) vm /8\, - --° 1IX. k X - '-1 -I- I ) X-g O A ~I * .-' .X [\" O k~~ y , NVHJ A- \: -- : - /V x', NVnHSIS ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I ,SI, ,1_ .'-.'Q'~~~~~'- 7U .ZGL £y 9 ; _ - IBRD 1847 TO cIiw.ga CHINA XKha HIGHWAY PROJECT ) - YUNNAN PROVINCE ) f-~~~~~~~~~~~~~ ~~PROJECT ROAMS No Nabonw 5 Runl -Nationl~ foad, :' \5N ziiaam - Secondary I a: teo§yX <> Dt~~~~~~~~~~~~~~-I-H- oRm 4 AwPafl Sh* ~ ~ ~ ~ ~ ~ ~ ~ ~ h | t f r ( / rF-_,2K ~~~~~rO AnzbunP"dcabonri F~~~~~~~~Fni ~~~~~ ( 'Xcfo GUA GIZO . N- Yun~mu Muguawi Maliro KUM Imlgy' ,~ '\ ?%GUANGXI Jiwii.ifigO*, i H ,9x ° Napo N I, 22-- _E'SK-_ VIET NAM CRATIC) 3L1C _ 3LIC / g Gulf : - - of ) / Tonkin DECEMBER 19S4 10t teR ~~las. lao tr to.tao CHINA HIGHWAY PROJECT To o GUANGXI PROVINCE GUIZHOU PROJEr ROAM 32 Fk) - Seconday t as '1 Pam \, 6_ -. Dbrt (Shen) boundws Xl_k f\ ,9 To _AJ n\Sa. . *o )- < \&DtS+ X~~~~~~~~~~~~~~~~~~~ ,, -9Jag The ~ ~ ~ ~ ~ ~ ~ ~~~~~~~m YUNNAN - ad_A * 105-, dJ _d-*~- VIET NAM > ,/ / n .. .__.- .tr. - 'S '_r2 Beibu Wan ,_,,__1 j I I s . -,*- "IO. 01r \lor '- j '- i1W_ IBRD 184R tt t~~~~~~~~~~~~~~~~~ 112@s t' Jr i icr ~ ~ ~ ~ ~ ~~~zn HUNAN -_ \ / n _>5: X s I r~~~~4Y O Hww 25t Uu~~~~~~~~~~~~~~~~~~~~~~Sh Ukii~ ~ ~ ~ ~ ~~~~~~ i \/~~~~~~~~~~~~~~~~3 3 2 /<$. Us\/-)(>. -. - - - * N . U . ''/ /, i 2 ...................................................APRI.196 3' /d ) I I Y°r A / \ A\ lGu p) I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ri23--0QIVU>> 9s t f \X--B . " ° GUANGDONG .-a''' hw Nan HaiV ' ; ,.,,,;C ?t X,2, e I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2 ) -, ' S h S d 8 A ' ~~~~~~~~~APRL 98 nr7 iir wig r ts --. , JIANGSU CHINA To aImEI2 - HIGHWAY PROJECT 3,. ZHEJIANG PROVINCE PROJECT HIOADS: 07RuslX 1 - Ntiona roads// =aoondaryra.ds ANHUI - / Sl--l C aidwy' ro ui y'. - , pon ,Vuka - Prowin"i bmrftri r ,. 03 _ : lnt-wntflici bobu ndS5-- 0L 2s g 7,5 10e TO T 9 0- KILOMETERS Cu~~~~~~u _~~~~~~~~~~~-~~~~' _' _.**"**-.. 2r t~ L 7d7-wl \ !T 'a v- - \ < 1 CHuhng v Hul~~~~~ingO < 5 :unxmhongf T:a> " 12(r 121' 122' 123' DFEMEbBER 1984 34 ~ ~ ~ ~ ~~~98 0 182- To O,NwrF 104 IT L&ntmw {- - _r X QINGHAI z , Se- g \ t < C -Da.nkug)o__Jg I-gUjn> > - - 8erxr >< 02~~~~Oamung i -Ph uo /. . sUC t'--\j-' - "u~~~~~81ka uswa 0~~~ B\y " Ab' w ~ 'P. X.inlngO fi u' OXaIopn ' unX s u e 0 ~XIZANGG jD I_ e o - >2 ~~~~~("SHAANXI n cpingu 0- Da Hs7Jn9= u~ a...Zhush.... .arigchang -v --<5rA ~~~~~h~~~jan ~ ~ ~ ~ Wnr.n |, ou Tonglu ) Oo Xbaufa i Z I \px,L'~~~n c,h' "kou : "~~~u * ~~>\ ' i~angzhong >- Wuind tIMi Zhu 4 nrang \ >>_ L \ ( OXunilwin / Shlin~ n gn g virlpmn, jurn Fe unEgI.n ba i Y bia Ngang) H-bn | , Wamui dani D1(al Xng Lnan OGo~~~wn Q.. Y.~~~~~YO' mniShU, , cl w iS "ls xiSwrlan~~~~~~~~~~~~Ynyn2 ;~n, JunTian t 2 ro Gu.yang To Tongr.n : 2Er unn .' ejb C H I NA X. \ r- ~HIGHWAY PROJECT - SICHUAN PROVINCE \ ~~~~~~~~~~~~~~~PROJECT ROADS: 1,~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~N ) To Ah,~~~~n - NationalHUBE __~~~~~~~~~~~~~~~ - National roads5 on G U I ZH O U Secondary roads GUIZHOU~ ~I Railways Z8. j *~~~~~~~~~~~~~ Airports - ~~~~~~~~~~~~~~~~~~Rivers / -'~ O,strrct (Shefl} boundaries we/ a ----Provinciai boundaies --- Yntihonal boundaries 106 _ 108 ~~~~~~JANUARY 1985 1 1 4 OA \ N P V , I A WUHAN Anqing 30~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TowAtm v.w0eZ JeA P AL A HUNAN~~~~~~~~N X j- ' 392 Huangihi 0 -NHUI To WAu A u- 30*. To Huaagshi -- ( < \ 4~~~~~~~- >- E TWh 1 A --f w2 G; ?;" ' Tuevang )/> t > < ) @ jurng gpa ro; *g g S h o F UJaN YU Wuning~~~~~~~~~~~~~~~~~~\'uhag.~ uun XiuAhuI - **~,~i s;u,anhang in N , ~H ~ n sh g n ng- fl } k 9 g C hang 2." 29,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2* K -t Lu Sh°ill-ht ' Li | < spingIh FUJIAN Lianhus - To~~~~~~~~~~~~~~~~~~~~~~~~~~~~neF Neiiqing t I' tX /u Wa In aO %@f 1) 276 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~27" TO Chla a ngchaC 0 he ~~~~~~~nln unhngCHINA HIGHWAY PROJECT JIANGXI PROVINCE 2 uncun n g PROJECT ROADS: 27 - ingdchu s I *Ru @ Ntioral S ti u o2iwauin Huangeg Sh)chng 17 Rural : WuluU\~ US j,,a'iS National roads 26* ulullng\' - Secondary roads 26 u ~~~~~~~~~~~~~~~~~~1--Railways To Chen XIan I "'~~~~~~~~~~~~~~~~~~~~~~'~~~9you ~~~~~~~~4 ~~Airports To Ch0 n iA@n tSe / V O W ; , , 7;g,"0 lngo Rivers { _ Chongyt Shonsyou\/>_ { 2 f R°n o rgi - - District (Shen) boundaries r3uting/i 9 fiNcnkang // Longb u f \riK / \ Provincial boundaries 2r; Int} tJ ztung - - International boundarIes |~~~~~~~~~~~~~~~~~~ Lnn | 0 / ulanto uchang 9 0 25 s5 75 100 Anx/ t oDudn / % } f 5 fi. a : iga mEn tW' an A.unn )l9 &V d - m basiw n fl % an tom ua n Dt d *. o n m I Po of Tt Wd am tmw S" cr t T % aw qf jWrxan rd Wmp skka a gzhou e ly cr T GUANGDONG 1141 1 1t8 117 1870 IL to~~~~~~~~~~- ~ 117' Z, HEBEI T.- Pfiudi To Shpzhua-9 Zhenhue Chenjimbuitng Nt ..r Vangpin PHRJMNU 115- To shq,.Zh..m Ling Xian Sho .01 a Wuchmo -37. _90ngtie $11. J( Z we. X,.., i-YA-90 ,n G.0t. Unqu CL-ch..g 11,ng'6P 43 Shen X,,n i'an x mulun D.W. Yanqg., -36' 0. Fa. X.an L,2.gsha 0 N."y ybhw ID Lenshan T. ng Y.nche.g. ENA 0 I..h'C'IU Yinen Ju Oufu Ju Kid. D,;ng..ng 0 Chwqqe. Fei 0 xizhmg owqmo J-m" Teng 35. x Xili U.3hu ra zhenozho. 0 C.0 Xmn % WOi3h /Sh.n X- P" Xuln. )Zlg X, U) Oangsh JIANG HENAN ANRUI TO L.CWW 115- 116- TI) Fuyang Bangb. To earigbu IBRO 16353 |~ ~ ~~~~~~~~~~~~~~~~~~~~21 i ||6 -- 119z 120- t2t- 122- 3s. 0 Changdo lin \WeXi>n t~nqi Jm \ . / i ~~~~~CHINA i, I / / / i '-~ngu H I GHWAY PROJ ECT SHANDONG PROVINCE ) _JZhananOn (i | \ 2 PROJECT ROAD& /hi National tnl S -u.,, -i".- + / - Ntioarad / - Secondary roafd R.zI~ao0 -+--4-- Railways 4 IPorts ! ~~~~~~~~~~~~~~~~~~~~~~~~~~Ries :' - -- iDistrict (Shen) bounrdari3 Provincial boundarii j C - _-_ Internmaional beundries Ganyu0 Unnyungpng _L n Lanyunaflgr \ O ~ ~~ ~ ~~~~~~ ~ ~~~~~~~~~ 25 fi 75i 100 KILOMETV:RS Gu nanyt 119 120 121 12- OECEMBER Ind T 1o5 0'tO 0'10', tic, 112' H I GHWAY PROJ ECTt f SHAANXI PROVINCE . ungar Qi i Elin Hera OI,1 PROJECT ROADS:LZ < r -f , ( b;h~~~~~~~~~~~~~~~~~~~~~~~Li XihinoI - SHANXI i ! 2, >\ { e { t~~b !hI NINGXIA HUIZV, Zi1ZHIQU ( :.!Zholatngy ' \ -4--(Fny. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Zhang i4osll' r ()a % ;,- Linf \ > - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~nl Zidn na nan Sho -Y /raLngh A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ . Iaokc;i *^Fux t ! 8 5 ! fHesl ui Hua~~~~~~~~~~~~ ~~~~~~~~~isnthr nsa n g' \ g ih i ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~hda YoIh - 'iu ln"xian Z? ~~_B;_ > r>nglew @g s W ?k/ChKgJ;t; ;( / , \\L rl>> C / l~~~~~~~~~~~~~~~~~~~~~~~~~~~~Fmx in lian i u igioi 1. Jingyusn Nino Xian Zhoongn xion I un 0 in ong uanqu Zhuanglang loys p -changiiiiri 'Jin Balshu Hualing, yi C, hen g n tXm X14n -35' ..... ng WV 331L ro Lanihoti Zhanglia 'humn Linglil flin Xian Tunyliuan inan L 9 Xian 0 x:.n Iq in Shul rihua ro tuoying nyano 0Liflyou Yongshou Yu Ytirt yal Tianshul Ji an an ngy (34011no Wei Q<9A14ng my n Luon!nq".'' 92i . 0 '51141 Ong uoj4n ng Moi h4ngan n uthl 0 Lush HENAN 34- flu C 34t ibal uonAn', Llan dan Bainy?'0111 )ian ng Xian 10 Cheng Xian, _ i 0h;whenti lul Xion nlong Luenchu4n /Plhoshul IU 4 A,", Kang Xian.' Fopin7 anyang LuoyanQ Xiang Yang Xian .Mrm h long ro Nonvang .33' Mian I tian I 33k Nanshe ant Ong Xiidp. % HUBk1---yu fan In ngq ang u ny4nq 041he ng hivan Belba 111- yusn henba plyang Pingo r V 0 N 0 0 t I A Nonliang h ""x8omw ngcang Da ra Xislioldin -32' nyumn Zhonping "a ffw nso bw "t, ro Chend ---..h4nokou RN ftu lionk's 6:1-.= J A Gaaho 0- kr ft corwonlipwo w ft t"s vd of "dAh* ow re angxi DI Po MUM SICHUAN C"Womn QA IND mv cb Rd b*, on to rn 2,1 1,0 7.5 ILJ P&I of FM waom Oona ow ft OL 9")c KILOMEtEnS ft k" OIOA ro Notiling lor any 'Mwo- Not m of igg, 110- !41N,