62237 v1 Document of The World Bank Report No: RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE GUANGDONG PEARL RIVER DELTA URBAN ENVIRONMENT PROJECT (GEF TRUST FUND GRANT NUMBER TF053359) (BOARD APPROVAL DATE: JUNE 8, 2004) TO THE PEOPLE’S REPUBLIC OF CHINA MAY 30, 2011 ABBREVIATIONS AND ACRONYMS GEF Global Environment Facility GIS Geographic Information System PDO Project Development Objective PRD Pearl River Delta Regional Vice President: Mr. James W. Adams, EAPVP Country Director: Mr. Klaus Rohland, EACCF Sector Manager: Mr. Ede Jorge Ijjasz-Vazquez, EASCS; Mr. Vijay Jagannathan, EASIN Task Team Leader: Mr. Sing Cho, EASCS 2 Restructuring Status: Draft Restructuring Type: Level II Last modified on date : 1. Basic Information Project ID & Name P084003 – GEF Guangdong Pearl River Delta Urban Environment Project Country China Task Team Leader Sing Cho Sector Manager/Director Ede Jorge Ijjasz-Vasquez GEF Regional Coordinator Jiang Ru Country Director Klaus Rohland Original Board Approval Date June 8, 2004 Current Closing Date December 31, 2011 Proposed Closing Date [if applicable] EA Category A Revised EA Category No Change EA Completion Date November 2003 Revised EA Completion Date Not Applicable 2. Revised Financing Plan (US$m) Source Original Revised Recipient 76.50 76.50 GEF 10.00 10.00 Total 86.50 86.50 3. Borrower Organization Department Location Ministry of Finance International Department Beijing, China 4. Implementing Agency Organization Department Location Guangdong Provincial Office for Guangdong Provincial Guangzhou, Guangdong, China World Bank Project Finance Bureau 3 5. Disbursement Estimates (US$m) Actual amount disbursed as of 04/15/2011 2.97 Fiscal Year Annual Cumulative 2011 3.62 6.59 2012 3.41 10.00 Total 10.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Have these been approved by Bank management Is approval for any policy exception sought from the Board? Does the scale-up of restructured projects trigger any new safeguard policies? If yes, N please select from the checklist below. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The development objective of the Project is to assist the Recipient address the environmental problems of the Pearl River Delta in Guangdong Province, through the improvement and rationalization of environmental service delivery based on a regional planning approach. Global Objective - The project’s global environmental objective is to improve the environmental condition of the South China Sea’s large marine ecosystem, by addressing the major threat of land-based pollution. 7b. Revised Project Development Objectives/Outcomes [if applicable] The PDO remains unchanged. 4 CHINA CN-GUANGDONG PEARL RIVER DELTA URBAN ENVIRONMENT PROJECT GEF TRUST FUND GRANT TF053359 CONTENTS Page A SUMMARY B PROJECT STATUS C PROPOSED CHANGES 5 CHINA: GUANGDONG PEARL RIVER DELTA URBAN ENVIRONMENT PROJECT GEF TRUST FUND GRANT TF053359 Restructuring Paper A. SUMMARY. The proposed restructuring intends to: (a) amend the description of the disbursement category in Schedule 1, Item 1, Category (2) as “Consultant’s services, Goods and Training under Part B.2, C.1, C.2, D.2 and E.4 of the Project”, and (b) increase the ceiling of the Special Account from US$175,000 to US$400,000 to expedite disbursements. B. PROJECT STATUS. The GEF-financed portion of the project has three components: (a) water quality monitoring; (b) public-private partnership; and (c) inter-municipal environmental infrastructure. A number of activities have already been successfully implemented: (a) overall system design, GIS, river coding system and database software of water quality monitoring system (Part D.2 of the Project); (b) regulatory frame work study and market survey for Hazardous Waste Management (Part B.2 of the Project); (c) updating of the Pearl River Delta (PRD) wastewater master plan (Part E.4 of the Project); (d) GEF-supported Study and Workshop for Inter-Municipal Cooperation (Part C.1 of the Project); and (e) construction of two of the three inter-municipal infrastructure development subcomponents (Part C.2 of the Project). The following contracts are underway and will be completed in the fall of 2011: (a) four contracts for implementation of the water quality monitoring system; and (b) one contract of consulting service for supporting Public-Private-Partnership operations. Contracts relating to the following activities are expected to be awarded in May 2011 and are expected to be completed by end of 2011: (a) three contracts under the Water Quality Monitoring component; (b) one contract of consulting service to assist in the selection of a private operator for the Hazardous Waste Management facility; and (c) one contract for construction of the Luoxi Island sewerage system. The performance of the Recipient and Project Implementing Agencies is satisfactory and the project development objective continues to be relevant and achievable. C. PROPOSED CHANGES. 1. Eligible Expenditures under Category (2): Currently, eligible expenditures under Schedule 1, Paragraph 1, Category (2) includes only consultants’ services for Parts B.2, C.1, C.2, D.2 and E.4 of the project. The Recipient has requested the addition of “goods and Training” which were originally intended to be financed. However, these were not included as eligible expenditures under the category of disbursement in the Grant Agreement. Goods proposed to be financed include the software for the Water Quality Monitoring Component (Part D.2 of the Project.). Training proposed to be financed will be under the Water Quality Monitoring Component and the Private-Public Partnership 6 (PPP) Component (Part D.2 and E.4 of the Project). The Recipient shall develop, adopt and apply the procurement requirements as set forth in the Grant Agreement. 2. An amendment to the description of the disbursement category to include “goods and Training” is necessary to finance software and training related to the remaining works under the Project. Under the GEF supported Components, there is a Water Quality Monitoring Component (Part D.2 under the Grant Agreement), managed by the Guangdong Environment Protection Bureau (GDEPB), and there are ten contracts/activities. One of these ten contracts/activities (WQM4.5) requires the supply of software and is implemented by the Guangdong Environment Information Centre (PIU established by GDEPB) to implement, and the training (WQM 4.7) would support the capacity building of Guangdong Environment Information Centre. There is also a private- public partnership (PPP) Component managed by Jiangmen Municipality Government to promote PPP in wastewater management (Part E.4 of the Grant Agreement), and there are two contracts/activities. One of these two contracts/activities (JM-B) would support the capacity building of Jiangmen Municipality Government to promote PPP. 3. These activities under the Part D.2 and E.4 of the Project in GA, for an estimated total cost of USD 470,000, were included as goods/training in the Procurement Plan approved by the Bank at appraisal. However, the corresponding disbursement category that should have included these contracts was denominated as consultants services both in the Grant Agreement and the PAD. The Recipient has requested the amendment on this disbursement category to enable the procurement and disbursement of these goods and training. 4. Definition of “Training”: Accordingly, the term training will be defined as: “Training” means the costs of training under the Project, based on annual work plans and budgets approved by the Bank, and attributable to travelling, accommodation, per diem, local tour guide, interpreter fees and conference cost.” 5. Increase Ceiling of Special Account: The ceiling of the Special Account is currently set at US$ 175,000. However, this amount is too low and is causing delay in disbursement. In order to complete disbursements within four months of the closing date of December 31, 2011, it is necessary to raise the ceiling to US$400,000. 7