ICRR 13204 Report Number : ICRR13204 IEG ICR Review Independent Evaluation Group 1. Project Data: Date Posted : 10/14/2009 PROJ ID : P056596 Appraisal Actual Project Name : Shijiazhuang Urban US$M ): Project Costs (US$M): 286.2 268.8 Transport Country : China Loan /Credit (US$M Loan/ ): US$M): 100 100 Sector Board : TR US$M ): Cofinancing (US$M): 0 0 Sector (s): Roads and highways (91%) General transportation sector (8%) Sub-national government administration (1%) Theme (s): Other urban development (50% - P) Pollution management and environmental health (25% - S) Municipal governance and institution building (25% - S) L/C Number : L4600 Board Approval Date : 03/27/2001 Partners involved : None Closing Date : 12/31/2006 12/31/2008 Evaluator : Panel Reviewer : Group Manager : Group : Kavita Mathur Peter Nigel Freeman Monika Huppi IEGSG 2. Project Objectives and Components: a. Objectives: The objective of the project is to foster the development of an efficient and environmentally sustainable urban transport system in the city of Shijiazhuang while providing a wider set of travel choices for users. The sub-objectives are to: (i) develop a stronger and more efficient urban road network; (ii) improve the efficiency and safety of the road system for all modes of transport while preserving the benefits of the bicycle; (iii) develop stronger and more effective public transport services; (iv) improve the quality and efficiency of road maintenance activities in the city; (v) promote better environmental protection and environmental improvements; and (vi) strengthen the institutions for managing transport planning, services and operations. b.Were the project objectives/key associated outcome targets revised during implementation? No c. Components (or Key Conditions in the case of DPLs, as appropriate): Components: A. Road infrastructure (appraisal estimate US$204.5 million, actual cost US$204.5 million). Improvements were proposed for the First Ring Road, increased capacity of the rail crossings, and to complete "missing links" in the basic grid of arterial streets. These works fell into three groups: road works (25.2 km), railway overpasses and underpasses (4.9 km), and road bridges and interchanges (2.8 km). B. Traffic management (appraisal estimate US$29.8 million, actual cost US$29.8 million). This component was to finance 2 km of bikeway, in addition to 33 km of segregated bicycle lanes incorporated into widened arterial streets. The project was also to finance the channelization of 130 junctions, eight pedestrian overpasses, a pilot bus priority scheme, and an Area Traffic Control System (computer-coordinated traffic lights), plus a number of smaller traffic engineering and road safety works and activities, and equipment. C. Public transport (appraisal estimate US$12.2 million, actual cost US$12.2 million). This component was to rationalize the layout of the bus station adjacent to the central Railway Station. One bus maintenance depot, one bus parking lot and five suburban bus terminals were also to be built, bus stops improved, and a management information system installed. D. Road maintenance (appraisal estimate US$15.4 million, actual cost US$15.4 million). Modem planning tools and procedures were to be introduced, and key pieces of maintenance equipment procured. E. Control of vehicle emissions (appraisal estimate US$2.4 million, actual cost US$2.4 million). A vehicle emissions control program was to be introduced, together with improved air quality monitoring. F. Institutional development and technical assistance (appraisal estimate US$3.5 million, actual cost US$3.5 million). Studies were to be carried out and technical assistance provided to strengthen existing institutions and enhance the skills of staff working in these agencies. The components were not revised. d. Comments on Project Cost, Financing, Borrower Contribution, and Dates: Project Cost & Financing: The actual project cost was US$268.8 million, slightly lower than the appraisal estimate of US$286.2 million. The ICR does not discuss the reasons for this difference. The Loan was fully disbursed. Borrower Contribution: The actual Borrower Contribution was US$168.8 million, slightly lower than the appraisal estimate of US$186.2 million. Again, the ICR does not provide the reasons for this. Dates: The project closed two years behind schedule. The Project Office (PO) ran into several difficulties during implementation, causing substantial delays. These include securing agreement with: (i) the national railway, whose tracks several road bridges were to cross, (ii) among people to be displaced, who were unwilling to accept the compensation offered, and (iii) among farmers on whose land the Bus Company wanted to buy to build its terminals. It also encountered coordination difficulties with other local municipal authorities and the new structure for internal audit such as the establishment of the Enforcement Office. 3. Relevance of Objectives & Design: The project development objectives were and continue to be substantially relevant under both the old (1998) Country Assistance Strategy (CAS) and the most recent Country Partnership Strategy (2006). The CAS at the time of appraisal highlighted the importance of reducing infrastructure bottlenecks as a key component of the Government’s development strategy. It also recognized the importance of managing urban development. The project objectives also address several of the goals of the Bank’s current China Country Partnership Strategy: balanced urbanization, reducing air pollution, optimizing energy use and improving public institutions. The project design included appropriate components and was substantially relevant to the achievement of objectives. Preparation took into account lessons from the two urban transport projects in Shanghai. Also, the project was facilitated by a Bank financed Japanese Grant which funded preparation of the urban transport strategy for the City, the environmental impact assessment and action plan, and plans for specific components. The Quality Assessment Group (QAG) rated the quality at entry as excellent. It noted that preparation had been very thorough in all dimensions and borrower ownership showed clearly in many ways, auguring well for the sustainability of results. Among the many performance indicators, the Quality at Entry review singled out the cross-town average speeds as the main indicator to integrate all others. QAG considered the social assessment and resettlement action plan as "best practice". IEG considers the quality at entry as substantial but believes that QAG underestimated the impact of project complexity given the available capacity. 4. Achievement of Objectives (Efficacy): Develop a stronger and more efficient urban road network: modestly achieved. The share of main roads in good condition increased from 60% to almost 70%, exceeding the target of 65%, while that of secondary streets was raised from about 46% to about 63%, exceeding the target of 60%. Travel speeds on the main streets in the city center improved steadily from the base year, 1998 until 2006, when most of the project works had been completed. In 2006 travel speeds on the three corridors monitored exceeded the 2006 targets. However, in 2008 the travel speeds across four completed corridors show a mixed picture: On two corridors the speeds were still ahead of the 2006 targets in 2008. On the other two corridors growing congestion seems to have reasserted itself, as travel speeds fell to below 2006 targets, but still above the 1998 baseline values (see table below). Cross-town Journey (Travel) Speed, km/hr 1998 Target Actual 2006 Actual 2008 a) Heping Rd (east to 15.1 25 40 19 west 2nd Ring,), 12.5 km b) Zhonghua Rd 15.1 25 28.7 21 (Heping to South 2nd RR), 5.9 km c) Tiyu Road (North 14.9 25 32.6 36 2nd RR to South 2RR), 7.6 km d) Shigang Road 14.8 30 na 33 (North 2nd RR to Heping) 3.1 km Vehicle delays were reduced. The time that vehicles were stopped as a part of total trip time improved on both corridors tracked. On Zhonghua Street: from 43.5% in 1998 to 26% in 2008, virtually on the 2006 target of 25.7%; On Zhongshan Street: from 28.4% in 1998 to 14% in 2008, exceeding the 2006 target of 15.5%. Improve the overall efficiency and safety of the road system for all modes of transport, while preserving the benefits of the bicycle: substantially achieved. The safety of the road system was improved: During the project period the number of accidents in the city proper decreased substantially from over 3,500 in 2002 to 769 in 2008, well below the 2006 target of 1,060. The rate of fatalities also fell from 428 in 1998 to the range 120-100 in 2008. This too was still well below the 2006 end-year target of 340 fatalities per year. Injuries similarly declined from 1,040 in 1998 to 186 in 2008, well below the 2006 target of 832. A database of road accidents was set up and made operational. However, the ratio of deaths per crash grew over the period, as did the ratio of deaths to injuries. That is mainly because as speeds increased over the years, accidents were more likely to cause fatal injuries. Mobility of cyclists was largely improved. The length of reserved lanes for bicycles increased from 66 km in 1998 to 140 km in 2008, more than double the baseline and above the 2006 target of 130 km. Each civil works contract provided reserved lanes for cyclists. The planned underpass that was to connect Gongnong Street with Huaibei Street and the dedicated bicycle street had to be dropped as the railway authorities vetoed the construction. On the main streets the bicycle paths are amply proportioned. However, in some places they are intruded upon by parked vehicles. On the East-West corridor, bicycle volume per peak hour dropped from 52,000 in 1998 to 40,000, just below the 2006 target of 42,000. On the North-South corridor, bicycle volume per peak hour dropped from 78,400 in 1998 to 76,200, some 25% below the 2006 target of 105,000. A modern integrated traffic light system was procured and installed. It works satisfactorily, with appropriate phasing and inclusion of signals for cyclists and pedestrians. Develop stronger and more effective public transport services: modestly achieved. The City’s buses succeeded in tripling their modal share, going from 3 percent to nearly 9 percent (no target was set for this indicator). In a meeting between IEG and the project Task Team Leader, the project Task Team Leader confirmed that these numbers represent the modal share. Also, the number of buses in operation more than tripled, from about 900 to over 3,100 well above the 2006 target of 1,429 buses. The fleet is now relatively young, diversified in size to fit the various sub-markets, and appropriately sized to the demand. The occupancy ratio (the average of peak and off-peak hours) declined steadily from a maximum of 78 percent in 2002 to 54 percent in 2008, well below the target of 75%. As ridership grew, this was made possible by the deployment of double-decker buses, offering considerably greater capacity. The buses in the downtown area are being monitored in real time by a GPS based dispatching system. This system allows information to be fed in real time to message screens at each main bus stop showing waiting passengers how close the next bus is to arriving. Bus passengers also benefitted from smart cards for paying the fare. The cards can be bought for fixed time periods or for a fixed number of trips, at a discount from the standard RMB 1 fare paid on board. As of March 2009 they were accounting for some 20 percent of bus revenues, the rest being paid in cash on the bus. However, the City bus financial situation deteriorated (no target set). At the outset revenues covered about 95 percent of expenditures, but this ratio slipped below 90 percent by the 2007 and fell sharply to 75 percent in 2008. This was despite some improvement in staff efficiency: starting at 4 employees per bus, it hovered around 3.2 to 3.4 during most of the project period, and ended up at only 2.4 per bus, which is deemed very low and not sustainable. A reserved bus lane in the center of Zhongshan Street went into operation in 2002. It raised bus speeds and was widely acclaimed by users. After five years of operation, in 2008, the central bus lanes was replaced by curb-side bus lanes on safety grounds. In a meeting between IEG and the project Task Team Leader, the project Task Team Leader confirmed that this decision was taken by the City Government in consultation with provincial government leaders, and the Bank was not consulted. In the Bank's view, based on international experience, this was a backward step since it would reduce speeds, while the safety issue could have been addressed by other measures. Improve the quality and efficiency of road maintenance activities: modestly achieved. Modern planning tools and procedures were introduced, and key pieces of maintenance equipment procured. A road maintenance management information system was established. A pavement management system was designed, installed and made operational. The ICR notes that the pavement management system has some shortcomings that still need to be ironed out. It however does not discuss these shortcomings. In a meeting between IEG and the project Task Team Leader, the project Task Team Leader confirmed that these shortcomings were largely software glitches . The Road Maintenance budget was increased from RMB 20.5 million in 1998 to RMB 80.5 million in 2008. This reflected a big increase in the City’s spending on road maintenance – more than three fold. However, the funding is substantially short of the ideal maintenance budget. It is not clear from the ICR what the Bank’s role was in respect of the increase in maintenance funding. Promote better environmental protection and environmental improvements: substantially achieved. Nine Vehicle Emission Inspection and Monitoring Stations were established compared to the target of only three. Moreover, while the target was four inspection bays, nine were put into operation. The number of cars inspected each year increased from zero to over 12,000 by the middle of the project implementation period and to about 100,000 by project closing. Strengthen the Institutions for managing transport planning, services and operations: substantially achieved Studies were carried out and technical assistance provided to strengthen the efforts of the existing agencies and to enhance their skill levels and capacity. In all, 19 technical assistance/advisory contracts were implemented, and training was provided for many professionals in the PO and other relevant City offices, including study tours to mainland Chinese cities, Hong Kong, Seoul, London and Bogota. Most of the TA was carried out early in the project implementation period. This allowed the benefits from it to be plowed back immediately into management of the project. However, no indicators were agreed at entry and no mid-term or end-of-project assessment was made of the TA’s outcome. 5. Efficiency (not applicable to DPLs): At appraisal, the Economic Rate of Return (ERR) was estimated at 29%. This ERR was calculated based on savings in personal travel time and vehicle operating costs against the total project costs. No economic analysis of project performance was carried out at completion. The ICR notes that the City has not yet provided any ex-post economic evaluation of the project probably because of the technical complexity of the task, which involves modeling traffic flows at many complex intersections and short street sections where localized improvements were made. IEG maintains that the ERRs at completion should have been calculated given the delays in the project. However, since there were no major over-runs in the construction costs and traffic volumes have grown broadly in line with appraisal forecasts, the ex-post ERR would still have been substantially over the threshold rate. ERR )/Financial Rate of Return (FRR) a. If available, enter the Economic Rate of Return (ERR) FRR ) at appraisal and the re- re -estimated value at evaluation : Rate Available? Point Value Coverage/Scope* Appraisal Yes 29% 80% ICR estimate No * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome: Outcome is rated moderately satisfactory. The relevance of project objectives was substantial. Efficacy is rated modest because while some targets were met by the original completion date of 2006 they have fallen back since then. In particular the degrading of the reserved bus lanes – which has contributed to the longer travel times since 2006, and is likely to erode the market share of public transport - and the worsening financial deficit of the bus company are disappointing, as is the continuing shortfall between the road maintenance needed and actual needs. Ex-post efficiency in terms of the ERR, while likely still substantial was not assessed for this operation. a. Outcome Rating : Moderately Satisfactory 7. Rationale for Risk to Development Outcome Rating: There are two main risks: First, the pressure to continue expanding street capacity more for the benefit of car users than for bus passengers, cyclists and pedestrians. The regression of the reserved bus lanes on Zhongshan Street and the indefinite postponement on Jianshe Street is evidence of this trend. There is still a wide need to strengthen enforcement of parking restrictions on sidewalks and in lanes intended for bicycles. Second, there is a risk that the maintenance funding will be inadequate. Although the Government has shown a strong commitment to increase funding for maintenance and is trying to close the gap between the actual and the ideal, road maintenance still falls short of the optimal. Several streets improved under the Project were already showing premature cracking and deterioration by project closing. A road maintenance management information system was established to prioritize maintenance. Overall, the risk to Development Outcome Rating is assessed as moderate. a. Risk to Development Outcome Rating : Moderate 8. Assessment of Bank Performance: As discussed in Section 3, the Quality-at-Entry was substantial. The Bank showed a thorough and systematic preparation, and effective incorporation of lessons learned from the earlier China Urban Transport projects. The project was facilitated by a Bank financed Japanese Grant which funded preparation of the urban transport strategy for the City, the environmental impact assessment and action plan, and plans for specific components. The project design was too complex, given the limited administrative capacity of the City government and the difficulties inherent in cross-agency coordination. The idea of assigning TA components to the appropriate line departments was a good one, but indicators should have been devised. The social assessment and resettlement action plan were of high quality. The Quality of Supervision was also satisfactory. Both Environmental Safeguards and Involuntary Resettlement was appropriately supervised. The frequency of missions (twice a year throughout) was appropriate as was the composition of the supervision teams, with resettlement and environmental specialists present on almost every mission. The Bank succeeded in creating an awareness of the need for traffic management measures such as a properly enforced parking policy. A modern integrated traffic light system was also introduced. at -Entry :Satisfactory a. Ensuring Quality -at- b. Quality of Supervision :Satisfactory c. Overall Bank Performance :Satisfactory 9. Assessment of Borrower Performance: Government Performance. The Project Agreement was signed by Shijiazhuang Municipal Government, which was responsible for the provision of counterpart funds, loan repayments to Central Government, and ensuring compliance with World Bank policies. During project preparation, the Shijiazhuang Municipal Government provided the necessary leadership and commitment. The EMP was compiled by a leading Chinese technical institute, certified by the State Environmental Protection Agency. Tsinghua University and a local design institute wrote a paper on “Strategic Research on Shijiazhuang Motorized Vehicles Pollution Control�, and also set up an air quality model for estimating future air quality. During implementation, the Government ownership of the project could have been stronger. During the implementation period, China vigorously promoted growth of the Gross Domestic Product and every city – including Shijiazhuang-- invested heavily in infrastructure. The Bank loan was only a small part of the total project financing and an even smaller part of the City’s total investment budget. Therefore, throughout the period of implementation the Project Office (PO) had to compete to secure sustained priority for the activities planned under the Project. The actual Government contribution was slightly lower than the appraisal estimate. Also, the construction of the bus terminals was delayed, because the municipality could not get approval from the national government to acquire the land. In the end it chose instead to relocate the terminals to land already under its control.. It should be noted that the Shijiazhuang Municipal Government approached the resettlement issues positively. In response to objections from occupants of condemned housing, the city government reduced the need for demolition by modifying the civil works design. Overall, the Government Performance is rated moderately satisfactory. Implementing Agency: In the first year of implementation an adjustment in the Municipal administration’s structure reduced the PO’s coordinating powers. The hybrid institutional approach to project management was adopted --under which works were the responsibility of the PO, while components with a strong focus on institutional strengthening were entrusted to the respective permanent line agencies. Also, until 2004 the Project Office (PO) was under-staffed to manage the large number of civil works and equipment contracts (nearly 40) and the multiple complications arising from delayed resettlement and variation orders. The PO did not have enough authority to ensure timely actions by other municipal bodies, with whom it had only a coordinating relationship. The substantial delays in implementing the civil works and some other components resulted in slow disbursement of the loan from start to finish and a delay by two years in project completion. The Implementing Agency performance is rated moderately satisfactory. a. Government Performance :Moderately Satisfactory b. Implementing Agency Performance :Moderately Satisfactory c. Overall Borrower Performance :Moderately Satisfactory 10. M&E Design, Implementation, & Utilization: M&E Design: The outcome indicators were adequately designed for measuring most of the project objective. Among the many performance indicators, the Quality at Entry review singled out the cross-town average speeds as the main indicator to integrate all others. In IEG's view this was simplistic. There were no indicators to assess the efficacy of TA to strengthen institutional capacity. Target indicators were also absent for public transport market share and ridership. The ICR raises important issues regarding the measurement of the success of vehicle emissions inspection program. ‘Numbers of vehicles inspected’ says nothing about the effectiveness of the testing equipment or the integrity of the testing. Nor does ‘more than a target percentage passed’ or ‘more than a target percentage failed’. This needs to be discussed under a Bank-wide initiative. M&E Implementation: During implementation data for the performance indicators were collected.These indicators are reported in the ICR. The ICR notes for example, that the supervision mission of December 2004 included a detailed evaluation of progress as tracked by the performance indicators. M&E Utilization: A Road Information System and the Road Accident Data Bank were setup and are now in use. a. M&E Quality Rating : Substantial 11. Other Issues (Safeguards, Fiduciary, Unintended Positive and Negative Impacts): Safeguards: Environmental Safeguards: The environmental management plan (EMP) was implemented in full. The ICR notes that the Bank specialists have rated this ‘best practice’ and are publishing a note summarizing its features for the benefit of other client cities. Involuntary Resettlement Safeguards: The City applied the safeguards appropriately and found solutions, albeit at the expense of some delay. Complaints were received from several residents who were reluctant to move on the terms offered to them by the City. The City had accepted the Bank’s procedures for dealing with resettlement and its rules on compensation, but some residents complained that the assessors whose job it was to value their property were poorly trained and undervalued their properties. Others claimed that they were moved before they had given written approval. At least one resident came to the Bank’s Beijing Office to pursue his complaint. The responsible persons in the PO reviewed cases carefully and in some instances increased the offered compensation. When faced with dozens of railway employees who objected to moving from an old apartment block, the PO modified the design of the civil works so that the demolition was no longer essential, and the residents were allowed to stay. The bus terminals were delayed, likewise, because the municipality could not get approval from the national government to acquire the land. In the end it chose instead to relocate the terminals to land already under its control. Fiduciary: Financial management was satisfactory, financial audits were duly submitted and were satisfactory. Unintended Positive & Negative Impacts: none. 12. 12. Ratings : ICR IEG Review Reason for Disagreement /Comments Outcome : Moderately Moderately Satisfactory Satisfactory Risk to Development Moderate Moderate Outcome : Bank Performance : Satisfactory Satisfactory Borrower Performance : Moderately Moderately Satisfactory Satisfactory Quality of ICR : Satisfactory NOTES: NOTES - When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. - The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate . 13. Lessons: Complex project designs should be avoided when possible in a weak implementation environment. Urban transport projects need to achieve a balance between private cars, public transport services and other road users including cyclists and pedestrians. Traffic management measures including a appropriate parking policy need to be considered along with measures to promote the use of public transport. The implementation of the Involuntary Resettlement Safeguard requires respect for affected persons. Some of the delays were the result of the city taking a more respectful attitude towards affected persons and taking time to negotiate mutually accepted solutions. An effective M&E requires not only the definition of a good set of performance indicators during project preparation, but that it be supported by a well articulated monitoring and evaluation framework.The question remains, however, how to capture the strengthening of institutional capacity in a meaningful way and what indicators are most appropriate for evaluating public transport and the effectiveness of a vehicle inspection program. 14. Assessment Recommended? Yes No Why? This project should be assessed along with similar Chinese urban transport projects to better evaluate how well a balance between private and public transport is being achieved. 15. Comments on Quality of ICR: This is a well written ICR that fully documents the project experience and clearly assembles evidence to illustrate the achievement of objectives. The discussion of the need for traffic management measures is also good. However, there are a few shortcomings: (i) lack of ex-post ERR; (ii) no discussion of the reasons for lower total project costs/Borrower contribution; and (iii) no elaboration of the shortcomings of the Pavement Management System. a.Quality of ICR Rating : Satisfactory