Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR0000191 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-45890) ON A LOAN IN THE AMOUNT OF US$74.0 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A WATER CONSERVATION PROJECT March 27, 2007 Rural Development, Natural Resources & Environment Sector Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS ( Exchange Rate Effective March 5, 2007 ) Currency Unit = RMB Yuan RMBYuan 1.00 = US$ 0.129 US$ 1.00 = RMB Yuan 7.743 Fiscal Year January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CPCG Central Project Coordination Group CPMO Central Project Management Office EIRR Economic Internal Rate of Return ET Evapo-transpiration FIRR Financial Internal Rate of Return FMS Financial Management System FNPV Financial Net Present Value GW-MATE Groundwater Management Advisory Team IAIL Irrigation Agricultural Intensification Loan IAWSP Irrigated Agricultural Water Saving Program ICRR Implementation Completion and Results Report M&E Monitoring and Evaluation MIS Management Information System MOF Ministry of Finance MST Mobile Specialist Team MTR Mid-term Review MWR Ministry of Water Resources NPV Net Present Value O&M Operation and Maintenance PAD Project Appraisal Document PDO Project Development Objective PMO Project Management Office QAG Quality Assurance Group SOCAD State Office for Comprehensive Agricultural Development WCP Water Conservation Project WRB Water Resources Bureau WSO Water Supply Organization WTO World Trade Organization WUA Water User Association Vice President: James W. Adams, EAPVP Country Director: David R. Dollar, EACCF Sector Manager: Rahul Raturi, EASRE Task Team Leader: Liping Jiang, EASRE China Water Conservation Project Implementation Completion and Results Report Contents Page number D a t a S h e e t ...............................................................................................................i 1. Project Context, Development Objectives and Design............................................. 1 2. Key Factors Affecting Implementation and Outcomes............................................. 2 3. Assessment of Outcomes .......................................................................................... 7 4. Assessment of Risk to Development Outcome....................................................... 10 6. Lessons Learned...................................................................................................... 12 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners......... 13 Annex 1. Project Costs and Financing........................................................................ 14 Annex 2. Outputs by Component................................................................................ 16 Annex 3. Economic and Financial Analysis............................................................... 19 Annex 4. Bank Lending and Implementation Support/Supervision Processes........... 29 Annex 5. Beneficiary Survey Results ......................................................................... 31 Annex 6. Stakeholder Workshop Report and Results................................................. 33 Annex 7. Summary of Borrower's ICR and/or Comments on the Bank's ICR .......... 34 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders.................... 37 Annex 9. List of Supporting Documents .................................................................... 38 Maps: CHN30946, CHN30947, CHN30948, CHN30949 A. Basic Information CN-Water Country: China Project Name: Conservation Project ID: P056516 L/C/TF Number(s): IBRD-45890 ICR Date: 03/30/2007 ICR Type: Core ICR Lending Instrument: SIL Borrower: PRC Original Total USD 74.0M Disbursed Amount: USD 72.3M Commitment: Environmental Category: B Implementing Agencies: Ministry of Water Resources Beijing Water Affairs Bureau Hebei Water Resources Bureau Qingdao Water Resources Bureau Shenyang Water Resources Bureau Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 01/15/1999 Effectiveness: 05/03/2001 05/03/2001 Appraisal: 05/01/2000 Restructuring(s): Approval: 12/19/2000 Mid-term Review: 05/08/2004 Closing: 06/30/2006 06/30/2006 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Highly Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Highly Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Highly Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Highly Satisfactory Overall Bank Overall Borrower Performance: Satisfactory Performance: Highly Satisfactory i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Performance Indicators (if any) Rating Potential Problem Project No Quality at Entry None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Forestry 4 4 General agriculture, fishing and forestry sector 25 14 General public administration sector 7 6 Irrigation and drainage 64 76 Theme Code (Primary/Secondary) Land administration and management Secondary Secondary Other rural development Primary Primary Water resource management Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: James W. Adams Jemal-ud-din Kassum Country Director: David R. Dollar Yukon Huang Sector Manager: Rahul Raturi Mark D. Wilson Project Team Leader: Liping Jiang Liping Jiang ICR Team Leader: Liping Jiang ICR Primary Author: Christopher S. Ward Qun Li F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective was to enhance beneficial use of water resources over 100,000 hectares in four provinces/municipalities, and to increase the incomes of 257,000 farm families by: (1) increasing the value of agricultural production per unit of water ii consumed through increasing yields and reducing non-beneficial water losses; and (2) establishing mechanisms for sustainable use and management of water resources in irrigated areas. Revised Project Development Objectives (as approved by original approving authority) There were no revision of the project development objectives and key indicators throughout the project implementation period. (a) PDO Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Revised Achieved at approval Target Completion or documents) Values Target Years Indicator 1 : Increased Grain Crops production (Ton). Value quantitative or 659906 659089 NA 556803 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of PAD: 84.5% achievement) Indicator 2 : Increased Cash Crops production (Ton). Value quantitative or 946077 2359305 NA 2874648 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of PAD: 121.8% achievement) Indicator 3 : Annual farmer incomes per capita increased in Beijing (Yuan). Value quantitative or 3314 4110 NA 4715 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of PAD: 114.7% achievement) Indicator 4 : Annual farmer incomes per capita increased in Hebei (Yuan). Value quantitative or 1441 1608 NA 2349 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of PAD: 146.1% achievement) Indicator 5 : Annual farmer incomes per capita increased in Qingdao (Yuan). Value 1790 2178 NA 3928 iii quantitative or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of PAD: 180.3% achievement) Indicator 6 : Annual farmer incomes per capita increased in Shenyang (Yuan). Value quantitative or 1174 1770 NA 3445 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of PAD: 194.6% achievement) Indicator 7 : Increased Wheat yields (kilograms per unit of ET; kg/m3). Value quantitative or 1.01 NA NA 1.84 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of baseline: 82% achievement) Indicator 8 : Increased Corn yields (kilograms per unit of ET; kg/m3). Value quantitative or 1.21 NA NA 2.22 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of baseline: 183% achievement) Indicator 9 : Increased Rice yields (kilograms per unit of ET; kg/m3). Value quantitative or 0.79 NA NA 1.34 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of baseline: 70% achievement) Indicator 10 : Increased Greenhouse Vegetables (kilograms per unit of ET; kg/m3). Value quantitative or 15.63 NA NA 25.10 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/30/2005 Comments (incl. % Percentage of baseline: 61% achievement) Indicator 11 : Increased agriculture yields and value per unit of irrigation water (kg/m3 / yuan/m3) iv Value quantitative or 3.6/5.6 NA NA 6.9/11.7 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline:92%/9% achievement) Indicator 12 : Estimated total reduction of non-beneficial water losses (mm) Value quantitative or 735.0 NA NA 612.4 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 83% achievement) Indicator 13 : Irrigated area covered by WUA (Ha). Value quantitative or 0 59726 NA 62797 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 105.1% achievement) Indicator 14 : Irrigated water charged volumetrically - Field (Ha). Value quantitative or 0 56988 NA 62362 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 109.4% achievement) Indicator 15 : Average water charges increased - O&M costs (Yuan/m3) Value quantitative or 0.09 0.25 NA 0.34 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 135.3% achievement) Indicator 16 : Annual average reduction groundwater level - Project area (m) Value quantitative or 0 NA NA 0.02 Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 5%. Annual average reduction groundwater level achievement) (m) - Non-project area is about 0.41m. v (b) Intermediate Outcome Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Achieved at approval Revised Completion or documents) Target Values Target Years Indicator 1 : Household per capital income for Canal lining component in Beijing, Hebei, Qingdao, and Shenyang (average; Yuan) Value (quantitative 917.75 1137.75 NA 2170.75 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 206.98% achievement) Indicator 2 : Householder per capita incomme for Low pressure pipeline component in Beijing, Hebei, Qingdao, and Shenyang (average; Yuan). Value (quantitative 1539 2183.75 NA 3397 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 189.63% achievement) Indicator 3 : Household per capita income for Sprinkler component in Beijing, Hebei, Qingdao, and Shenyang (average; Yuan) Value (quantitative 1911.50 2300 NA 3955.75 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 257.18% achievement) Indicator 4 : Household per capita income for Drip component in Beijing, Hebei, Qingdao, and Shenyang (average; Yuan) Value (quantitative 3349.50 4044.25 NA 4913.25 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 151.88% achievement) Indicator 5 : Estimated total reduction of non-beneficial water losses in Beijing (mm) Value (quantitative 776 NA NA 595.6 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments Percentage of baseline: 77% vi (incl. % achievement) Indicator 6 : Estimated total reduction of non-beneficial water losses in Heibei (mm) Value (quantitative 734 NA NA 578.5 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 79% achievement) Indicator 7 : Estimated total reduction of non-beneficial water losses in Qingdao (mm) Value (quantitative 726 NA NA 684.6 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 94% achievement) Indicator 8 : Estimated total reduction of non-beneficial water losses in Shenyang (mm) Value (quantitative 726 NA NA 594 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 82% achievement) Indicator 9 : Increased agriculture yield and value per unit of irrigation water in Beijing (kg/m3 / yuan/m3) Value (quantitative 3.7/3.0 NA NA 7.3/10.9 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 97%/63% achievement) Indicator 10 : Increased agriculture yield and value per unit of irrigation water in Heibei (kg/m3 / yuan/m3) Value (quantitative 2.4/2.9 NA NA 3.3/4.5 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 138%/55% achievement) Indicator 11 : Increased agriculture yield and value per unit of irrigation water in Qingdao (kg/m3 / yuan/m3) Value (quantitative 3.3/3.8 NA NA 5.0/5.6 vii or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 52%/47% achievement) Indicator 12 : Increased agriculture yield and value per unit of irrigation water in Shenyang (kg/m3 / yuan/m3) Value (quantitative 4.3/9.1 NA NA 9.0/18.5 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of baseline: 9%/3% achievement) Indicator 13 : Agriculture improvement - Cropping intensity (%) Value (quantitative 134 151 NA 137 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 90.8% achievement) Indicator 14 : Agriculture improvement - Quality seed coverage (%) Value (quantitative NA 96 NA 99 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 103.1% achievement) Indicator 15 : Agriculture improvement - Degree of mechanization (%) Value (quantitative NA 86 NA 92 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 107.0% achievement) Indicator 16 : Agriculture improvement - cult. area covered by pest control & forecast (%) Value (quantitative NA 98 NA 98 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 100.0% achievement) Indicator 17 : Rate of water charges covering O&M costs - Canal lining component (yuan/m3) Value 0.09 0.14 NA 0.20 viii (quantitative or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 144.60% achievement) Indicator 18 : Rate of water charges covering O&M costs - Low pressure pipeline component (yuan/m3) Value (quantitative 0.09 0.22 NA 0.28 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 127.3% achievement) Indicator 19 : Rate of water charges covering O&M costs - Sprinkler component (yuan/m3) Value (quantitative 0.09 0.27 NA 0.35 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 131.8% achievement) Indicator 20 : Rate of water charges covering O&M costs - Drip component (yuan/m3) Value (quantitative 0.10 0.37 NA 0.52 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percecntage of PAD: 138.9% achievement) Indicator 21 : Rate of water charges covering O&M costs - Rate of collection (yuan/m3) Value (quantitative 75-90 95 NA 96 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of PAD: 100% achievement) Indicator 22 : Annual average reduction groundwater level in Beijing - Project area (m) Value (quantitative 0.50 NA NA 0.18 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 36%. Annual average reduction groundwater achievement) level (m) in Beijing - non-project area is 0.50m. Indicator 23 : Annual average reduction groundwater level in Hebei - Project area (m) ix Value (quantitative 0.53 NA NA 0.18 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 33.96%. Annual average reduction groundwater achievement) level (m) in Hebei - Non-Project area is 0.53m. Indicator 24 : Annual average reduction groundwater level in Qingdao - Project area (m) Value (quantitative 0.14 NA NA 0.004 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 2.85%. Annual average reduction groundwater achievement) level (m) in Qingdao - Non-Project area is 0.14m. Indicator 25 : Annual average reduction groundwater level in Shenyang - Project area (m) Value (quantitative 0.45 NA NA -0.28 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 62%. Annual average reduction groundwater achievement) level (m) in Shenyang- Non-Project area is 0.45m. Indicator 26 : Annual average reduction groundwater level in Qingdao - Project area (m) Value (quantitative 0.14 NA NA 0.004 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 2.85%. Annual average reduction groundwater achievement) level (m) in Qingdao - Non-Project area is 0.14m. Indicator 27 : Annual average reduction groundwater level in Shenyang - Project area (m) Value (quantitative 0.45 NA NA -0.28 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 62%. Annual average reduction groundwater achievement) level (m) in Shenyang- Non-Project area is 0.45m. Indicator 28 : Annual average reduction groundwater level in Shenyang - Project area (m) Value (quantitative 0.45 NA NA -0.28 or Qualitative) Date achieved 12/31/2000 06/30/2006 09/30/2006 12/31/2005 Comments (incl. % Percentage of non-project area: 62%. Annual average reduction groundwater achievement) level (m) in Shenyang- Non-Project area is 0.45m. x G. Ratings of Project Performance in ISRs Actual No. Date ISR Archived DO IP Disbursements (USD millions) 1 12/29/2000 Satisfactory Satisfactory 0.00 2 06/26/2001 Satisfactory Satisfactory 0.74 3 12/18/2001 Satisfactory Satisfactory 5.21 4 06/27/2002 Satisfactory Satisfactory 11.16 5 12/20/2002 Satisfactory Satisfactory 17.92 6 06/17/2003 Satisfactory Satisfactory 24.15 7 12/24/2003 Satisfactory Satisfactory 29.76 8 06/23/2004 Satisfactory Satisfactory 38.69 9 12/19/2004 Highly Satisfactory Highly Satisfactory 47.10 10 05/31/2005 Highly Satisfactory Highly Satisfactory 51.34 11 02/21/2006 Satisfactory Satisfactory 66.56 12 08/28/2006 Highly Satisfactory Satisfactory 71.94 H. Restructuring (if any) Not Applicable I. Disbursement Profile xi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1.1.1 Country Background. In recent years, the very rapid growth of China's cities and industries has created a strong demand for water in the urban sector. Demand has also increased in agriculture, where most water is still used but where use has been comparatively inefficient. As a result, China suffers from a serious imbalance between water demand and supply, particularly in the populous North China Plain, causing serious overdrawing of the groundwater resource and pushing the country towards costly water transfer projects to bring water from the relatively water-rich south. By the 1990s, the government had concluded that major water savings in agriculture were essential to deal with water scarcity and the growing demand for water yet, at the same time, government policy was to increase rural incomes and so reduce imbalances between urban and rural standards of living. Therefore, government programs focused on improvements in irrigation efficiency in order to raise water productivity whilst increasing farmer incomes. 1.1.2 Rationale for Bank Assistance. At the time of project identification, the government was implementing its irrigation policies through the national Irrigated Agriculture Water Saving Program (IAWSP). However, that program had an engineering bias, focusing largely on investment in irrigation infrastructure, and had not succeeded in reducing the pace of groundwater overdraft. Therefore, the government requested Bank assistance for a water conservation project that could test and demonstrate ways to achieve its policy goals. This request was in line with the Country Assistance Strategy (CAS) objective of support to sustainable land and water management. 1.1.3 Bank sector work and project experience had identified a number of important innovations that had potential for helping to achieve the government's goals. Although some of these innovations had been tested on a small scale in other projects, the Water Conservation Project was the first project to combine them in an integrated fashion. The introduction of these innovative elements in a project designed to demonstrate to an initially skeptical water management community their value for all water scarce areas of China provided the rationale for Bank engagement in the project. 1.2 Original Project Development Objectives (PDO) and Key Indicators 1.2.1 The project development objectives were to enhance the beneficial use of water resources over 100,000 ha in four provinces/municipalities and to increase the incomes of 257,000 farm families by: (a) increasing the value of agricultural production per unit of water consumed through increasing yields and reducing non-beneficial water losses; and (b) establishing mechanisms for sustainable use and management of water resources in irrigated areas. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 1.3.1 There were no revisions of the project development objectives or the key indicators. 1.4 Main Beneficiaries 1.4.1 The primary target group comprised farm families for which project investments in water-saving infrastructure, agricultural improvements and better water management were expected to increase incomes significantly. There was no change in this beneficiary group targeted at appraisal (although the number of beneficiaries at completion was 40% higher than originally foreseen, see below). Indirect 1 beneficiaries were to include: workers employed upstream and downstream of project production together with those benefiting from the increase in levels of economic activity stimulated by the project; the community at large, benefiting from improved water resource sustainability, reduced pollution and enhanced rural environment; and local governments benefiting from reduced fiscal outlays on irrigation operation and maintenance. 1.5 Original Components 1.5.1 The project comprised four components to be implemented in 27 counties/cities in four provinces/municipalities in the North China Plain: Hebei and Liaoning provinces and Beijing and Qingdao municipalities. The project components were: (a) Irrigation and Drainage Works and On-farm Systems; (b) Agriculture Support and Services; (c) Forestry and Environmental Monitoring; and (d) Institutional Development. 1.6 Revised Components 1.6.1 There was no major revision of the project components during project implementation. 1.7 Other significant changes 1.6.2 There were no significant changes in project design, scope and scale, implementation arrangement and schedule, and funding allocations, etc., except in the Beijing sub-project area where the total developed water-saving area had been adjusted at the time of the mid-term review (MTR) and reduced by 9,088 ha as a result of the urban development plan. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry The background analysis 2.1.1 The project was the latest in a series of seventeen water resources and irrigation projects which China and the Bank had financed together over the previous fifteen years. Bank sector work at the time of preparation highlighted the problems of water scarcity in North East China (see Section 6.1) and the high financial and environmental costs of water transfers (China Water Strategy). At the same time, sector work in rural development had underlined the need to improve rural incomes (Rural China: Transition and Development). Both studies identified the improved management of scarce water resources for irrigation as a key solution. 2.1.2 Based on previous Bank project experience and sector work, the project was correctly focused on new approaches to two key issues: (a) finding investment and institutional packages that would reduce water consumption whilst increasing farm incomes; and (b) developing institutions that could manage water in rural areas in a sustainable manner. The innovative approaches introduced in the project are well described and justified in the PAD. 2.1.3 The first innovation was to target a reduction in consumptive use rather than increases in irrigation efficiency. Experience in China had shown that focusing on improvements to physical infrastructure alone might increase irrigation efficiency but could also reduce the recharge to groundwater and the availability of water for downstream users. Only a reduction in actual consumption of water represented a genuine saving of the resource to the hydraulic system. The Bank therefore proposed to government to adopt a reduction in consumptive use of water as the objective, and to use evapo-transpiration (ET) - that is, water lost to the hydraulic system through evaporation from the soil surface or through the leaves of 2 plants - as the performance indicator. The innovative target proposed for the project was to reduce ET and to increase value-added per unit of ET. 2.1.4 In parallel, the second innovation proposed was to adopt a comprehensive approach to water saving, integrating not only physical improvements to irrigation and drainage systems but also a broad range of agronomic measures together with improved water management focused on optimizing soil moisture available to the crop. 2.1.5 A third innovation was to return groundwater use to sustainable levels through a combination of planning, investment and incentives. A particular feature was the recognition that farmers would only comply if they found it profitable to do so. Hence priority was to be given to incentives through the development of packages that would increase incomes while reducing water consumption. 2.1.6 The final innovation was in institutional arrangements for operation and maintenance through delegation to water user associations (WUA). For the first time on any scale in China, WUAs were to assume responsibility for both financing and running the parts of the irrigation system that came under their control - typically a whole groundwater system or the command area of a lateral canal in surface irrigation. 2.1.7 These innovations, proposed by the Bank during project identification, did not match the government's initial concept of the project, which was focused on investments in sprinkler technology. A protracted (two year) preparation and appraisal period was needed to reconcile the contrasting views about the project - in which the Bank's Groundwater Management Advisory Team (GW-MATE) played an important role. Each of the innovations required study and discussion before it could be adapted to the project. 3 Assessment of project design 2.1.8 With the background described above, the project objectives were clearly stated and evidently responsive China's priorities. They met Bank goals as set out in the CAS. The components were well designed and well matched to project objectives. Because of the wide variation in conditions in the 27 project counties/cities, the irrigation and drainage component provided for a choice of four technologies: canal irrigation improvement; low pressure pipe irrigation; sprinkler irrigation; and drip irrigation. To reflect uncertainties over which technologies would prove most appropriate, the project was designed on a programmatic basis. The first year's program was ready at appraisal, and subsequent investments were to be approved based on annual work programs to be agreed with the Bank. This flexible approach not only allowed the mix of different technologies to be agreed once the conditions in the sub-project areas had been studied in detail but also allowed the innovative approaches to be tested and proved. This was an appropriate approach, given the uncertainties over the innovative approaches. 2.1.9 Environmental and social factors were adequately incorporated in project design. Environmental impacts were expected to be largely beneficial, with any minor negative impacts mitigated by project interventions. A sound concept for participation and WUAs was developed (see below). The only safeguard to apply to the project was the Environmental Assessment safeguard, although a resettlement policy framework was agreed in line with OD 4.30 and Chinese law in case unexpected resettlement issues arose. Government commitment and stakeholder involvement 2.1.10 Reflecting the innovations built into the project, central government designated the project as a "demonstration project" intended to develop and test new approaches that could subsequently be scaled up in national programs. Central government provided institutional support, setting up the Central Project Coordination Group (CPCG) and the Central Project Management Office (CPMO) before appraisal, and the PMOs were also set up at local levels. Consistent with government policy that development should, wherever possible, be locally financed, local government commitment was demonstrated by the fact that provinces/municipalities and counties/cities were prepared to borrow a share of the Bank Loan, to allocate their own counterpart resources and to pay a management fee for the CPMO. 2.1.11 The project design provided adequately for stakeholder involvement. Priority in design of sub- projects was given to improving farmer incomes and participatory processes under the project were to involve farmers in sub-project design, implementation, monitoring and management from the outset in order to give a genuinely demand-driven character to investments. The development of WUAs was to create an institutional structure for self-management and self-financing of irrigation water, and a channel for capacity building on water saving and agricultural productivity. 4 Risk assessment 2.1.12 Many risks were assessed at appraisal and, where appropriate, mitigation measures were correctly built in to the project. In addition to the institutional, government commitment and environmental risks discussed above, the principal risks and mitigation measures were: (a) macroeconomic risk - financial, trade and price policy risks were correctly assessed as only moderate to negligible in the context of China's sound economic management policies; (b) technological and economic risks - there was a risk that the innovative approaches under the project would be inadequate to tackle the problems. The project provided for adequate research, training and investment, and for a flexible and empirical approach adequate to mitigate the risk; and (c) risk to sustainable operation and maintenance - this risk, particularly that farmers would not accept higher water charges, was assessed as substantial, and was mitigated appropriately by the participatory approaches adopted through WUAs, with extensive dialogue and training and a focus on increasing farmer incomes as a top priority in sub-project investments. 2.1.13 Overall, this was a well designed project. There was no Quality Assurance Group (QAG) review of the project's quality at entry. 2.2 Implementation 2.2.1 The project was implemented very largely as designed, with small adjustments during the MTR. Only minor problems and delays occurred during implementation. These were successfully resolved and did not affect final outputs or outcomes. The project met or exceeded most output targets and was completed on schedule on June 30, 2006 at the close of the planned five-year implementation period. Although the irrigated area improved in Beijing was reduced by 9, 088 ha at the MTR as described above, the total project irrigated area improved at completion was 104,730 ha, 98 percent of the PAD and 100 percent of the MTR targets. There was no project restructuring. 2.2.2 Mid-term review. Conducted in May 2004, the MTR found implementation largely on track. However, significant differences from appraisal expectations had arisen in rates of implementation of the different irrigation technologies under the engineering component. In particular, the poor water conservation performance of sprinkler technology and the high operating costs had led to a low level of adoption by farmers. By contrast, there was very strong interest in the canal irrigation improvement sub- component. Demand for other groundwater technologies (low pressure pipe, drip) was also somewhat below appraisal estimates. These differences were reasonable in a demand-driven project implemented on a programmatic basis and with innovative approaches. 2.2.3 As a result of the MTR findings, it was agreed to reallocate funds within the Loan to reflect: (a) the reduction in the sprinkler target area from 26,817 ha to 10,788 ha; (b) the increase in the target area for canal irrigation improvement from 17,125 ha to 46,137 ha; (c) somewhat lower targets for pipe conveyance (reduced from 49,963 ha to 37,327 ha) and for micro and drip irrigation (reduced from 12,914 ha to 10,630 ha); and (d) a reduction in agricultural equipment purchase (farmers financed this themselves) and reallocation to the greenhouse sub-component. Funds were also reallocated to reflect the government's decision not to finance vehicle purchase under the Loan. The government request for a corresponding increase in the Bank's financing share for works from 33 to 50 percent was agreed. 2.2.4 Overall, the MTR proved very effective in accelerating implementation and disbursement. The report highlighted ten important project actions which had been lagging and set a time-bound agenda for the balance of the project period. The remaining two years of implementation were without major problems. 5 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 2.3.1 The project monitoring and evaluation system, designed with consultant support, selected a large number of indicators to track outputs and outcomes. A household survey instrument was designed to collect key socio-economic data. Implementation units were established at every Project Management Office (PMO) level with adequate staffing, training and supervision. A baseline survey was carried out and regularly updated. Periodic reports were produced and consolidated at provincial and central level. Overall, the monitoring and evaluation system was well designed and implemented and reliable information was generated and put to use. 2.3.2 Various arrangements for continuing monitoring are in place or are under consideration. Monitoring and evaluation of water balance and ET will continue under the Hai River Basin Integrated Water and Environment Management Project (P075035) in Hebei Province, and Beijing Municipality. Groundwater monitoring will continue in all areas under a variety of programs and budgets. At the time of the Completion Mission, central and local government units were considering how to continue the household surveys, which would be taken over by the follow-up project if approved. 2.4 Safeguard and Fiduciary Compliance 2.4.1 Financial management was generally of good quality. Capacity was built through the development of standardized written procedures and by intensive training. Issues detected through the supervision process were promptly resolved, and audit reports were timely and of acceptable quality. Procurement performance was good. The Management Information System (MIS) allowed real-time tracking of procurement and the prompt identification of issues. As a result, procurement was rapid and efficient and in line with Bank requirements despite the very large number of contracts (2,097 in all) and contracting units (all 32 PMOs). 2.5 Post-completion Operation/Next Phase 2.5.1 Transition arrangements. It is very likely that sub-projects financed under the project will be operated profitably and in a sustainable manner. Viable operation and maintenance plans are being implemented for all sub-projects, generally providing for self-management and self-financing by the WUAs. Experience with this so far is entirely positive, and performance is reinforced by the evident profitability of the project investment for farmers. 2.5.2 Scaling-up. The project has successfully demonstrated that water consumption can be reduced while farmer incomes increase and that workable institutional arrangements can be implemented to allow the recovery of groundwater tables. The government is enthusiastic about scaling-up project successes, particularly: (a) the targeting of the reduction in consumptive use of water and the employment of ET as the performance measure; (b) the comprehensive approach integrating engineering, agricultural and water management measures; and (c) the development of WUAs. The lessons are already being scaled-up in central government programs, notably the National Water Conservation Program financed by the Ministry of Finance's State Office for Comprehensive Agriculture Development (SOCAD) and the National IAWSP by the Ministry of Water Resources (MWR). In addition, lessons are also being scaled-up through local government programs, particularly in Beijing and Qingdao where prosperous urban areas are keen to invest both in water saving, with a view to urban water supply, and in the "harmonious society" approach to balancing rural and urban development and incomes. Lessons are also being scaled- up through other Bank-financed projects, notably the Irrigated Agricultural Intensification Projects II and III. 6 2.5.3 In addition to these specific investment programs, some of the technical and institutional innovations introduced under the project are being adopted in policy, planning and investment for rural water saving nationwide. For example, the preparation of county-level groundwater management plans, piloted in four counties under the project, has been taken up by a further 21 counties across Northern China. Management instruments developed under the project ­ the MIS and the monitoring and evaluation system ­ have been adopted in both projects and regular operations. This process of scaling- up responds to China's major policy decision to create a "water saving society" with such broad-ranging facets as a nationwide education campaign and the rating of local governments and officials based on their contribution to water saving in their area. In order to assist this scaling-up, the MWR, together with six provincial/municipality governments, has identified a follow-on project for Bank assistance, and it is likely that a formal request from the government to the Bank for this project will be received shortly. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 3.1.1 The project, as designed and implemented, addresses key development priorities that remain highly relevant to China today, notably: (a) increasing rural incomes whilst reducing water consumption in areas of water stress; (b) recovering control over groundwater and managing it in a sustainable manner; and (c) reducing agricultural water use so that resources can be released for the fast expanding cities. The project developed viable and replicable models for China to address these problems. The successful experience under the project is also of global significance, as many water scarce countries are beset by problems comparable to those of China (see Section 6). 3.2 Achievement of Project Development Objectives 3.2.1 The project fully achieved its two development objectives. In the achievement of the first objective, the value of agricultural production per unit of water consumed increased throughout the project area and non-beneficial water consumption was reduced. The project reached or exceeded in almost all cases the monitorable outcome targets set at appraisal (see Section 6.5). Regarding the increase in agricultural production, cash crop production tripled, an increment of 1.9 million tons a year and 122 percent of the appraisal targets. Regarding the increase in farmer incomes, per capita incomes increased by between 102-554 percent, depending on the area, compared to all cases were well in excess of appraisal targets. Regarding the increase in production per unit of water consumed, production per unit of ET rose for all crops planted within the project areas, in the range 60-80 percent. Average income per cubic meter of water consumed doubled on average, with increases ranging from 72 percent in Shenyang to 112 percent in Beijing. Regarding the total annual reduction of non-beneficial water consumption, average consumptive water use across the project area was reduced from 735 mm to 612 mm, representing an annual water saving of 1,200 m³/ha or 128 million m³ for the whole project area. 3.2.2 In the achievement of the second objective, mechanisms for sustainable use and management of water resources were successfully established in the project area and the project reached or exceeded in almost all cases its outcome targets. Regarding the development of self-financed WUAs, at appraisal it was expected that about 100 associations could be established; in fact, at completion over 500 had been set up, covering 62,800 ha, about two-thirds of the project area (with 100 percent coverage in Hebei and Beijing). Regarding the area covered by volumetric water charging, at project completion volumetric water charging was operational on 62,400 ha, well above the target area of 57,000 ha. Regarding the progressive increase in water charges, water charges for all irrigation types rose from the relatively low pre-project baseline by a multiple typically of three to four times, to levels above appraisal targets. Regarding the control of groundwater use, depletion has been reduced to negligible levels or eliminated across most of the project area (on average 0.02 m depletion annually, against rates of 0.41 m a year in 7 comparable non-project areas). Annex 2 gives the details of project outputs which reflect the linkages between the outputs and the positive outcomes described in this section. 3.3 Efficiency 3.3.1 The expected benefit targets were reached. Economic analysis conducted at completion using the same methodology as at appraisal showed that the project is likely to achieve a high overall net present value (NPV) and economic internal rate of return (EIRR) (about US$226.3 million and 24.1 percent, respectively), above the appraisal estimates of US$88.4 million and 20.7 percent, respectively. High EIRRs were also anticipated, ranging from 17.7 to 24.4 percent in each sub-project area. The financial net present value (FNPV) and financial internal rate of return (FIRR) were calculated to be about US$180.5 million and 17.6 percent, respectively, above the appraisal estimates of US$47.4 million and 15.6 percent, respectively. 3.3.2 Benefits accrued to a very large number of beneficiaries: 358,088 farm families, more than the appraisal target of 257,000. On-farm and upstream and downstream employment creation was considerable: about 423 million labor days during the project period alone. Farm household incomes rose considerably compared to the baseline data and the PAD expected targets in project area, and were 102- 554 percent of appraisal estimates. This highly satisfactory result can also be added to the numerous non- quantifiable social and environmental benefits, even though all these gains are not only directly from the project but also from the other factors, such as the WTO accession and the higher incomes in urban area that increase in demand for the high-value agricultural products, etc. 3.3.3 Although the conventional economic analysis does not include benefits from "real" water resources savings, annual project M&E results have showed the substantial benefits from savings of water resources through the reduction of the groundwater "overdraft" and non-beneficial water losses. Following appraisal methodology, the benefits from the water resource savings have been recalculated based on the actual monitoring data collected annually in the field. The achieved total NPV of these benefits is as much as US$228.5 million. At completion, the total cumulative amount of water saved from the reduction of non-beneficial water losses in 2001- 2005 was estimated to be about 435.4 million m³ and the annual amount saved from 2006-2011 is expected to be about 128.4 million m³. The project has therefore contributed to the sustainable use of surface and groundwater resources in the North China Plain region. Based on the cost of alternative supplies from water transfer of Y2.0/m³ (or 25 US cents/m³), the economic value of the water savings from 2001-2005 is expected to be as high as US$108.8 million under project, and the NPV of these savings from 2001-2011 would be about US$196 million (or Y1,568 million). If these benefits had been included in the economic analysis, the project total NPV and ERR would have both been much higher than the values shown above. Annex 3 provides more details for the overall project economic and financial analysis. 3.4 Justification of Overall Outcome Rating Rating: Highly Satisfactory 3.4.1 The project was highly relevant to current country and global priorities and to the Bank assistance strategy; it met or exceeded all targets as measured by outcome and impact indicators and so fully attained all development objectives, and it was highly efficient, with a rate of return well in excess of the opportunity cost of capital and above appraisal expectations. 3.4.2 The rating is further justified by the strong demonstration effect of the project (see Section 2.5). Although not captured in the overall outcomes rating, the demonstration under the project that, with the innovations tested, agricultural production and farmers' incomes in the vast North China Plain can be sustained within the rainfall budget without groundwater "overdraft" or water imports has far-reaching 8 implications for policy makers pondering the challenge of high-cost south-north water transfer. This demonstration could prove, in the long run, to be the most valuable benefit of the project. In addition, the government has highly appreciated and built in the ownership of the comprehensive approach developed under this project for irrigated agricultural water savings, integrating engineering, agricultural and water management measures, together with the institutional innovation of WUAs. The experiences and lessons are already being scaled-up in central government programs, notably the National Water Conservation Program financed by the Ministry of Finance's SOCAD and the National IAWSP of the MWR. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 3.5.1 Many beneficiaries are poor, and several of the project counties were officially classified as poor areas, and it is likely that many of the beneficiaries were below the official poverty lines. One indication of a "pro-poor" impact is that farm incomes increased faster in Hebei, the poorest of the four provinces, than elsewhere in the project area. Women's participation in the project was significant, especially with the high number of female-headed households in rural areas resulting from the temporary migration of men folk. Women's participation in WUAs was estimated at 30-40 percent, and women were regularly elected to WUA committee posts. In cases where women were the permanent or temporary head of household, they were the contracting party for sub-projects. (b) Institutional Change/Strengthening 3.5.2 The project caused significant beneficial institutional change. The networks and institutional linkages between the water resources, agriculture and forestry bureaus, universities and research institutes that were created under the project have become ingrained in institutional behavior. These linkages have been consolidated at the working level by the creation in much of the project area of "one stop" integrated technical service centers at the township level to provide a package of irrigation, agricultural and forestry guidance to farmers. This integration of producer services at the local level is now being implemented nationwide. 3.5.3 Several project management innovations introduced have been adopted as standard for the national irrigations programs (SOCAD, IAWSP), including: (a) project identification and planning procedures; (b) procurement procedures; (c) the MIS developed under the project; (d) the monitoring and evaluation procedures; and (e) the environmentally sensitive approaches (e.g., on soil fertility and pest control) and the use of Environmental Impact Assessments. The ex post evaluation of the latest phase of the IAWSP used the key indicators developed for the Water Conservation Project. 3.5.4 The organization of WUAs for lower-level irrigation management proved, despite initial reticence from the Chinese side, to be one of the most significant achievements of the project, proceeding faster than anticipated in all areas. The innovation generated a high degree of enthusiasm both from local government and agencies and from farmers. Local government and agencies were able to devolve management and financing responsibilities to the WUAs and to use the new organizations as a channel for project innovations in improving water management and farming productivity. (c) Other Unintended Outcomes and Impacts (positive or negative) 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 3.6.1 Efficient irrigation management contributes not only to saving water, energy and money, but also to growth of crop yields and farmers' incomes. These benefits became the basis for farmers' incentives for WUA operation and development as well as for their aspirations and achievements of a real win-win 9 situation. Many case studies show farmers' incomes were enhanced with scientific irrigation methodology and cropping pattern readjustment under WUA arrangement, such in Guantao of Hebei, with the low- pressure pipeline irrigation managed by the WUA of Hanxu village, wheat yield increased from 400kg/mu to 600kg/mu; and in Faku county of Shenyang, greenhouses produced vegetable yield increasing from 1400kg/mu before the project to 3400kg/mu after it, by which farmers' incomes increased by about Y3000. These kinds of yield growth and farmer income enhancement had been further demonstrated through typical household survey done in project area (see Annex 5). 4. Assessment of Risk to Development Outcome Rating: Low 4.1.1 There are possible financial risks to the sustainability of project outcomes. Although prospects for the financial viability of project investments are good, especially as the market for higher-value produce is growing very fast, there is a risk that further currency devaluation could affect export market prospects. However, local authorities and farmers in the project areas have developed strong market awareness and have the skills and flexibility to manage the risk. 4.1.2 There is a potential social risk of over-rapid expansion of WUAs, with numerical targets and a high level of government involvement in their creation. In some areas, such as Beijing municipality, WUAs are being designated as the fourth and lowest level of water management and government is proposing to subsidize the post of water master in each Association. The development of WUAs does need to be tracked and periodically evaluated, but the following factors suggest that these risks - which stem from a significant success under the project - will not compromise the autonomy inherent in the democratic WUA concept: (a) their creation responds to farmers' clear desire to take control of their own water management; (b) the partnership arrangement between farmer-controlled WUAs and government agencies is essential in order to attain the public interest objectives of a reduction in consumptive water use and sustainable groundwater management, and reflects a politically- and socially-appropriate approach in the rural development and political economy context; and (c) in practice, farmers and local government and agencies have adopted a flexible approach to WUA development, adapting the concept to local needs and constraints. For example, in Beijing municipality where the massive national capital market is adjacent, WUAs have been legally established as cooperatives rather than as civil society organizations in order to ensure that they have legal personality and can engage in commercial operations. 4.1.3 The environmental benefits of reduced resource depletion and improved water and soil quality are implicit in the project and are likely to be sustained and expanded on a much larger scale. There is, however, an environmental risk throughout the North China Plain of declining precipitation which would constrain water resources still further and could lead to a decline in farmer incomes in some areas. Precipitation during the project period was on average 40-70 mm below the long-term average in Hebei and Beijing. The project has developed the instruments needed to manage this risk through water planning and reduction in agricultural water consumption, with compensating investment strategies to sustain rural incomes. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Highly Satisfactory 10 5.1.1 Overall, the Bank ensured through the preparation and appraisal process that the project design was sound and that the project could achieve its development objectives. The Bank also ensured that fiduciary arrangements were adequate and that provision was made to respect safeguards. The project was of high strategic relevance, and the Bank played a vital role in ensuring that it was responsive to issues of the highest concern to policy makers. Preparation and appraisal of technical aspects was exceptionally well conducted, with the Bank engaging government in dialogue, studies and fieldwork to develop and build a constituency for the inclusion of the major project innovations. (b) Quality of Supervision Rating: Satisfactory 5.1.2 The Bank maintained a focus on development impact, consistently emphasizing the targeted outcomes and the innovations being tested under the project. Bank missions ensured that monitoring and evaluation began early in the project period and that the baseline survey was promptly conducted. Aide Memoires systematically recalled the development objectives, and variations from target key indicators were raised as issues. Learning and ownership building about key innovations was continuous, and the incorporation of lessons into other Bank and national programs was timely and appropriate. The supervision of fiduciary and safeguard aspects was of good quality: specialists in financial management, procurement and social science participated consistently in supervision. 5.1.3 Issues were promptly flagged and resolved. Aide memoires and supervision reports were full and clear. Supervision inputs and processes were adequate. The mid-term review was well prepared and the mission well staffed. Careful early preparation for the ICR process focused on transition arrangements: there was organized training of project staff at all levels in ICR requirements, and a fully staffed and complete ICR mission visited all project areas. There was no supervision rating by QAG. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 5.1.4 The Bank teams played a decisive role in ensuring quality at entry and in resolving problems and identifying opportunities during supervision. The Bank had a determinant input into the success of the project. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 5.2.1 A strong impetus to both preparation and implementation was provided by the commitment of central and local governments at all levels, which not only provided both loan and counterpart funding but actively coordinated project preparation and implementation. The Central government, although initially reticent about the proposed innovations, accepted the lengthy process of dialogue and study needed to work out the project concept and design the project, agreeing to an empirical process that ultimately resulted in a change of project concept away from an emphasis on engineering towards a comprehensive approach and the concept of reduction in consumptive use. There was notable involvement of the Ministry of Finance as a full project partner at central and local levels. Central and local government ensured that the CPMO and PMOs at all levels were financed and fully staffed and effective. 11 (b) Implementing Agency or Agencies Performance Rating: Highly Satisfactory Implementing Agency Performance Central Project It performed well, focusing on implementation and problem solving. Project handbooks were Management Officeprepared at the central level on water resources savings, water balance analysis, M&E, MIS, groundwater management guidelines, and the establishment of WUAs. Beijing Municipal It made a tremendous contribution to development of an effective and standardized project PMO management system which set up a good example for the rest of the PMOs. Hebei Provincial It was technically supported by its Mobile Specialist Team and made a great contribution to the PMO dissemination of the project concept and approaches, and development of WUAs, which helped the other PMOs in these aspects. Qingdao Municipal It made big efforts in resolving problems during the early project implementation, PMO particularly the problems of shortage of counterpart funding and the Bank Loan repayment, which contributed to successful completion of the project. Shenyang It took important initiatives in carrying out cropping pattern adjustments which contributed Municipal PMO greatly to the substantial increase of farmer incomes, which set an excellent example to the other PMOs. (c) Justification of Rating for Overall Borrower Performance Rating: Highly Satisfactory 5.2.2 Overall Borrower performance is rated as highly satisfactory. The experiences and lessons are already being scaled-up in central government programs, notably the National IAWSP of the MWR. 6. Lessons Learned 6.1.1 This demonstration project offered an innovative and well thought out package. Linked to decision making about broader policy and investment, the project proved to be a powerful way to test responses to water scarcity that could be rapidly scaled-up. An innovative but initially contested approach to water management was successfully tested and mainstreamed because of a partnership approach between the Bank and China, the flexible and learning approach under the project, and the institutional linkages between the demonstration project and national policy and programs. The lesson is that where the correct responses to water stress are not evident, a demonstration project linked to decision making about broader policy and investment is a powerful approach. It is recommended that, where the institutional conditions are right, innovations in water resource management should be tested through a demonstration project, and then scaled up. 6.1.2 A comprehensive approach giving priority to farmer incentives can increase farmer incomes and reduce water consumption. Through a comprehensive approach involving not only engineering works but also agricultural investments, husbandry and cropping pattern improvements and improved irrigation management, the project raised farmer incomes whilst reducing water consumption and helping groundwater levels to recover. Factors that facilitated the success of the approach were: (a) China's very fast growing economy which provided profitable market outlets for higher-value produce; (b) a well-functioning mechanism for delivering agricultural and water management services; (c) the existence of numerous straightforward 12 productivity improvements; (d) good social capital and a sound governance structure at all levels; and (e) central and local government policy priority to raising rural living standards. The lesson is that approaches to water saving in agriculture are more likely to succeed if they give priority to farmer incentives to change water use and water management behavior. The factors helping success in the project are not unique to China, although they do not exist everywhere. Where they do exist, the project shows how the potential for water conservation may be exploited. 6.1.3 A flexible, decentralized approach can facilitate WUA development. The success of WUAs stems, in part, from the clear establishment principles adopted: democratic self- organized Associations based on hydraulic boundaries, measuring and charging for water on a volumetric basis. Other factors in success were: (a) flexibility in approach and adaptation to local social, economic and political conditions; (b) the inclusion of farmers from the very start in sub-project design, so that the Associations grew as the sub-project developed; (c) the transfer to the Associations of real control and responsibility over water structures; (d) the incentive framework, with farmers in Associations seeing their incomes rise significantly faster; and (e) the commitment and enthusiasm of both the Ministry of Water Resources and local government. Central government has now adopted WUA development as national policy, and Associations are being promoted on a broad scale. 6.1.4 The approach targeting reduction in consumptive water use and based on ET can be a powerful instrument for water management in conditions of extreme water stress. The approach targeting reduction in consumptive water use and adopting measurement and management based on ET was highly contentious and was included in the project only following long and arduous dialogue. After successful demonstration during implementation that these concepts are of great practical value to China in managing water scarcity, they have been scaled-up to river basin level (in the Hai Basin Project), where they are being used for overall river basin management and for allocation of water rights and quotas at all levels from sub-basins down to individual farmers. The lesson is that targeting reduction in consumptive water use and the use of ET and remote sensing technology for measurement and management are powerful instruments for water conservation in conditions of extreme water stress. It is recommended that these approaches should be considered in all water-stressed countries. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies (See Annex 7) (b) Co-financiers (NA) (c) Other partners and stakeholders (NA) 13 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Appraisal Estimate MTR Estimate Actual/Latest Estimate Percentage Components of Percentage Local Foreign Total Local Forei of MTR gn Total Local Foreign Total Appraisal A. Irrigation and Drainage Works and On-farm Systems 1.Canal Irrigation 10.73 5.61 16.34 22.71 10.29 32.99 25.25 10.82 36.08 221 109 2.Low pressure pipeline Irrigation 19.69 11.89 31.58 22.74 10.82 33.56 22.45 9.62 32.07 102 96 3. Sprinkling Irrigation 13.31 8.96 22.27 13.19 7.82 21.00 10.35 4.44 14.79 66 70 4. Drip Irrigation 26.89 16.48 43.37 37.90 17.35 55.25 40.64 17.42 58.06 134 105 5. Facility Improvement of Water Source 3.11 1.59 4.70 6.03 2.69 8.72 6.74 2.89 9.63 205 110 B. Agriculture Support and Services 8.59 11.22 19.81 18.16 11.28 29.44 16.33 10.89 27.21 137 92 C. Forestry and Environmental Monitoring 1.96 2.37 4.33 5.00 3.05 8.05 3.87 4.68 8.55 197 106 D. Institutional Development 1. Institutional Development/Support 0.90 7.52 8.42 0.96 5.80 6.76 0.69 5.77 6.46 77 96 2. Project Survey Design and Management 4.69 0.00 4.69 4.20 0.00 4.20 4.67 0.00 4.67 100 111 Total Baseline Costs 89.87 65.64 155.51 130.87 69.09 199.97 131.00 66.52 197.52 127 99 Physical Contingencies 4.49 3.28 7.77 1.81 1.00 2.82 - - - - - Price Contingencies 5.68 4.08 9.76 1.03 0.58 1.62 - - - - Total Project Costs 100.04 73.00 173.04 133.72 70.68 204.40 131.00 66.52 197.52 114 97 Interest during construction - 11.88 11.88 - 11.71 11.71 - 5.29 5.29 45 45 Front-end fee - 0.74 0.74 - 0.74 0.74 - 0.74 0.74 100 100 Total Financing Required 100.04 85.62 185.66 133.72 83.13 216.85 131.00 72.55 203.54 110 94 14 (b) Financing (in US$ million equivalent) Source of Funds Type of Co- Appraisal Actual/Latest Percentage of financing Estimate Estimate Appraisal Government 52.81 52.32 99 IBRD/IDA 74.00 74.00 100 Local Farmer Contributions 58.85 77.21 131 Total 185.66 203.54 110 15 Annex 2. Outputs by Component Indicator Unit Original Formally Actual Percentage Percentage Target Revised Achieved at of PAD of MTR Values Target Competition Values Values (PAD) (MTR) (ICR) Output Indicators A. Irrigation and Drainage Works and On-farm Systems Total irrigated area ha 106,819 104,882 104,730 98 100 Canal irrigation ha 17,125 46,137 45,160 264 98 Low pressure ha 49,963 37,327 37,641 75 101 pipeline irrigation Sprinkling irrigation ha 26,817 10,788 11,327 42 105 Micro/drip irrigation ha 12,914 10,630 10,602 82 100 Canal lining m³ 362,667 726,784 1,633,213 450 225 Precuts U-channels m 354,089 495,210 272,704 77 55 Precuts concrete m 214,071 212,127 224,364 105 106 pipes New well no. 444 10,000 9,554 2152 96 Improved well no. 2,152 2,500 2,377 110 95 Sprinkling machines set 1,373 1,373 1,473 107 107 Metal pipes m 200,000 250,000 252,639 126 101 PVC pipes m 903,139 2,000,000 2,401,394 266 120 Plastic pipes m 37,929 2,519,482 17,756,315 46815 705 Rural transmission km 143 526 3,429 2398 651 lines Rural roads km 278 1,237 1,465 527 118 Water measure set 7,462 10,000 9,273 124 93 equipment 16 Indicator Unit Original Formally Actual Percentage Percentage Target Revised Achieved at of PAD of MTR Values Target Competition Values Values (PAD) (MTR) (ICR) B. Agriculture Support and Services Landing leveling ha 70,900 48,292 70,445 99 146 Deep plowing ha 47,700 27,891 55,227 116 198 Stalk shredding & ha 36,500 25,976 27,121 74 104 incoration Plastic mulching ha 12,900 30,762 34,688 269 113 Balanced fertilizer ton 9,300 15,756 34,878 375 221 Moisture retainer ton 603 52 40 7 78 Tractors no. 628 49 70 11 143 Stalk shredding & no. 215 27 44 20 163 incoration Fertilizers/tillers no. 735 11 78 11 709 Seeders no. 1,021 23 16 2 70 Harvesters/accessories no. 9 16 15 174 94 Training-farmers man/month 18,350 18,350 32,408 177 177 Demonstration/extension '000 yuan 6,051 1,443 2,842 47 197 New tech. '000 yuan 4,605 712 674 15 95 Study/experiment C. Forestry and Environmental Monitoring Windbreaks ha 1,730 9,415 11,511 665 122 Economic forestry ha 1,000 3,669 4,205 421 115 Pest & disease ha 279 150 160 57 106 control and monitoring Monitoring for soil '000 yuan 3,030 2,981 4,460 147 150 qualities Monitoring for water '000 yuan 2,176 2,691 2,126 98 79 qualities Monitoring for '000 yuan 6,279 5,129 6,069 97 118 groundwater qualities Groundwater County 4 9 9 225 100 management (no.) program 17 Indicator Unit Original Formally Actual Percentage Percentage Target Revised Achieved at of PAD of MTR Values Target Competition Values Values (PAD) (MTR) (ICR) D. Institutional Development Domestic training man/month 759 960 874 115 91 International training man/month 75 49 39 51 79 Domestic study tour man/month 180 205 192 107 94 International study man/month 74 82 82 111 100 tour Mobile specialist man/month 1,158 655 601 52 92 team Domestic consultant man/month 62 110 133 215 121 Research/study/dem- '000 yuan 9,080 7,437 6,250 69 84 onstration The number of no. 5 6 8 160 133 registered WSC/WSO The number of no. 107 356 536 501 151 registered WUA The number of no. 127,521 139,591 109 household covered by WUA Water measuring no. 7,462 10,000 9,273 124 93 facilitates installed Training on no. 7,575 5,925 9,370 124 158 scientific irrigation- farmers 18 Annex 3. Economic and Financial Analysis 1. Major economic and financial benefits achieved by the project include the increase in agricultural production and farmers' incomes through increases in crop yields and in the value of agriculture production per unit of consumed water, and reductions in non-beneficial water losses. These benefits were obtained in all four project areas (Beijing, Hebei, Qingdao and Shenyang sub-project areas) and the expected benefit targets were in almost all cases achieved or exceeded. 2. The economic and financial analysis was conducted for the completion report on the same basis as at appraisal. The analysis included the quantifiable benefits derived through the (substantial) improvements in water and agriculture productivities resulting from the implementation of improved irrigation technologies, through the integrated water-saving measures, and through the significant adjustments in the cropping pattern (from grain crops to higher-value cash crops). Following appraisal methodology, the benefits resulting from "real" water resources savings were also estimated but these were not included in the EIRR and NPV calculations. Irrigated Agricultural Benefits 3. Increases in production and financial returns per unit of water. The project made a significant impact on agricultural production in the project area, compared to the baseline case and also compared to the quantitative targets set at project appraisal for the "with-project case". At completion, the expected agricultural benefit targets have been fully achieved and, in most cases, exceeded. The average yields of main crops in the project area increased from 4.55 tons to 6.14 tons for wheat (121 percent of PAD estimate), 5.78 tons to 6.32 tons for corn (104 percent of PAD estimate), 3.89 tons to 5.03 tons for peanuts (105 percent of PAD estimate), 0.8 tons to 1.16 tons for cotton (123 percent of PAD estimate), 62.1 tons to 224.7 tons for greenhouse vegetables (299 percent of PAD estimate), 3.42 tons to 3.45 tons for chestnut (101 percent of PAD estimate), and 14.57 tons to 21.33 tons for grape (122 percent of PAD estimate). 4. Overall, the average crop yield and value per unit of irrigation water increased: (i) in Beijing from 3.7 kg per m³ of water and Y3/ m³ to 7.3 kg/ m³ and Y10.9/ m³; (ii) in Hebei from 2.4 kg/ m³ and Y2.9/ m³ to 3.3 kg/ m³ and Y4.5/ m³; (iii) in Qingdao from 3.3 kg/ m³ and Y3.8/ m³ to 5 kg/ m³ and Y5.6/ m³; and (iv) in Shenyang from 4.3 kg/ m³ and Y9.1/ m³ to 9 kg/ m³ and Y18.5/ m³. The particularly high yields and values in Beijing and Shenyang are due to the large greenhouse area for high-value vegetables in those provinces. Clearly the project had a significant impact on the crop yields and the value of agriculture production per unit of consumed water, compared to the "without-project" scenario; all these gains cannot be directly attributed to the project, but are also the result of other factors such as the WTO accession and the higher incomes in urban area that increase demand for high-value agricultural products, and were also one of the major drivers behind the increase in high financial return. 5. Increases in aggregate production. The total area of irrigated land improved under the project was 104,730 ha. At completion, the aggregate crop production and value had increased significantly for all sub- project areas, due to the substantially improved water-use efficiency, irrigation technologies and management, and adjustment of the cropping patterns. This is mainly due to the higher yields for both grain and cash crops, and shifted cropping pattern (to higher-value cash crops). The annual incremental productions are about 98,717 tons for rice (216 percent of PAD estimate), 30,245 tons for peanuts (202 percent of PAD estimate), 6,229 tons for cotton (227 percent of PAD estimate), 1505,819 tons for greenhouse vegetables (362 percent of PAD estimate), 110,572 tons for pears and grapes (484 percent of PAD estimate), 41,192 tons for apples (154 percent of PAD estimate), 5,027 tons for watermelon (183 percent of PAD estimate), 81.57 million piece for flowers, 30,300 m³ for timber, 49,427 tons of new production for garlic and walnut, and 3,159 tons for other crops (309 percent of PAD estimate, mainly for various beans and other small-scale cash crops). 19 6. Move to higher value crops. These very large increases are offset to a minor extent by a small reduction in aggregate grain production, which fell by about 2,679 tons for wheat (64 percent of PAD estimate) and 199,141 tons for corn (73 percent of PAD estimate). This decline in grain production was in fact largely a result of project success in equipping farmers to move out of lower-value grain production into higher-value crops. This change to higher-value crops occurred at a faster rate than anticipated at appraisal: comparing the "without-project" case and quantitative targets set at project appraisal, the cropping pattern shifted from 81.6 percent to 59.6 percent for grain crops (70 percent was anticipated in the PAD) and from 18.4 percent to 40.4 percent for cash crops (30 percent at PAD). Thus the total area cultivated for grain crops dropped by about 12,373 ha for wheat (53 percent of PAD estimate) and 37,244 ha for corn (70 percent of PAD estimate). This positive development was helped by changes in relative prices resulting from the freeing of the grain market; grain prices declined during 2001-2004 (affected by WTO accession). 7. Aggregate increase in production. Overall, the total incremental gross value of production (grain and cash crops) is estimated at Y1267.6 million in 2005 (about 161.3 percent of PAD estimate). The detailed incremental cropped area, yield and production of various crops are summarized below: Incremental crop area, yield and production PAD Estimate ICR Estimate Without With With ICR/PAD Crops Area Yield Prod. Area Yield Prod. Area Yield Prod. Area Yield Prod. (ha) (kg/ha) ton (ha) (kg/ha) ton (ha) (kg/ha) ton % % % Wheat 46150 4551 210048 63826 5072 323746 33777 6139 207369 53% 121% 64% Corn 67763 5783 391858 43391 6058 262843 30519 6315 192717 70% 104% 73% Rice 7733 7500 58000 7733 9375 72500 17413 9000 156717 225% 96% 216% Soybean 882 2830 2497 907 3482 3159 971 3365 3267 107% 97% 103% Other crops 463 2000 926 463 2856 1323 1357 3010 4085 293% 105% 309% Peanuts 5346 3892 20806 5275 4801 25326 10144 5033 51051 192% 105% 202% Cotton 3198 800 2559 4101 945 3877 7567 1161 8788 185% 123% 227% Greenhouse 8047 62096 499689 7359 75187 553303 8924 224732 2005508 121% 299% 362% vegetables Field vegetables 3815 78294 298716 4309 84726 365061 7305 65986 482031 170% 78% 132% Field 21880 57000 1247179 vegetables(sy) Apple 3344 13515 45189 3369 16642 56058 6426 13442 86381 191% 81% 154% Peach 2528 19744 49913 2975 23103 68732 2094 21717 45475 70% 94% 66% Pear 207 13333 2760 207 17937 3713 3233 18144 58661 1562% 101% 1580% Grape 1066 14565 15526 1314 17457 22938 3291 21330 70197 250% 122% 306% Chestnut 999 2999 2996 999 3419 3416 67 3448 231 7% 101% 7% Watermelon 120 37500 4500 120 43500 5220 219 43502 9527 183% 100% 183% Timber (cum.) 964 60 57858 505 60 30300 52% 100% 52% Flower ( '000 1147 469 537897 67 1218 81574 6% 260% 15% no.) Aloe ('000 no.) 89 30 2661 garlic 2733 18000 49194 walnut 126 1849 233 Tea 47 404 19 Seedling('000 829 0.4 321.7 no.) 20 Economic Analysis 8. Methodology. Following appraisal methodology, the NPV and the ERR were re-estimated for each irrigation technology in Qingdao, Shenyang, Beijing and Hebei, and for the project as a whole. The analysis compared "with-project" and "without-project" scenarios, and the quantifiable benefits derived through the improvements in irrigation technology and management, water and agricultural productivities, the eco-environmental system (forestry belt), and the estimated economic costs. The economic analysis included the estimated economic costs, but not the benefits, for institutional development and improved environmental management. The benefits resulting from "real" water resources savings were also estimated (see below), but these were not included in the NPV and ERR calculations. 9. Overall highly favorable returns. Comparing costs and benefits over a period of 20 years, the estimated ERRs are all favorable and in line with appraisal expectations. The ERRs for individual irrigation technologies range from about 20.9 percent for canal lining irrigation to 25.3 percent for sprinkler irrigation, and for the various sub-project areas from 17.7 percent in Beijing to 24.4 percent in Shengyang. The factors in the variation in returns were the variation between technologies and areas in actual improved crop yields, cropping intensity and cropping pattern, in the size of the irrigated land planted, and in the investment, production, and O&M costs for each type of irrigation technology at the time of implementation. The overall project ERR is estimated at 24.1 percent (with a NPV of about Y1810.2 million) which is higher than the 20.7 percent (with a NPV of about Y734.1 million) estimated at appraisal. A comparison of detailed ERRs by each sub-project area and irrigation technology is showed below: 21 Economic Cost and Benefit Analysis Summary PAD Estimate ICR Estimate NPV EIRR NPV EIRR (%) (Y million) (%) (Y million) Province/City sub-project Beijing City 109.4 18.1 92.2 17.7 - Canal Lining Irrigation 1.7 15.3 1.1 14.3 - Low Pressure Pipeline Irrigation 71.6 18.1 56.1 17.8 - Sprinkler Irrigation 4.3 15.9 2.0 15.9 - Drip irrigation 31.8 19.1 32.9 18.2 Hebei Province 108.8 21.0 120.6 20.0 - Canal Lining Irrigation 17.3 17.5 35.9 21.7 - Low Pressure Pipeline Irrigation 60.3 22.9 57.5 18.5 - Sprinkler Irrigation 4.8 21.0 3.0 18.7 - Drip irrigation 26.5 21.0 24.3 24.3 Qingdao City 90.3 20.5 128.9 22.7 - Canal Lining Irrigation 26.3 25.3 81.3 22.6 - Low Pressure Pipeline Irrigation 34.3 18.7 26.1 27.2 - Sprinkler Irrigation 9.2 17.1 2.5 17.3 - Drip irrigation 20.5 23.4 19.0 21.1 Shenyang Province 434.6 21.7 1468.6 24.4 - Canal Lining Irrigation 7.9 13.9 70.1 19.7 - Low Pressure Pipeline Irrigation 23.7 21.7 111.6 28.8 - Sprinkler Irrigation 189.6 26.5 235.4 26.0 - Drip irrigation 213.5 20.6 1051.5 24.2 Total Project 734.1 20.7 1810.2 24.1 - Canal Lining Irrigation 53.1 17.4 188.3 20.9 - Low Pressure Pipeline Irrigation 189.9 19.6 251.2 21.3 - Sprinkler Irrigation 207.9 24.5 243.0 25.3 - Drip irrigation 292.2 20.6 1127.6 23.9 10. Reasons for lower than expected returns. The economic analysis of the sub-projects shows that the recalculated overall ERRs for sub-project areas and overall irrigation technologies are all favorable, and generally higher than those estimated in the PAD. The slightly lower than anticipated (but still very satisfactory) returns in the Beijing sub-project area are due to the reduced irrigation area (9,088 ha) adjusted at the MTR. This is linked to the very fast expansion of the urban area ­ under the urban development plan in Beijing, a part of the project area will be transferred to the city according to the local government policy. The main reasons for the lower than anticipated returns for low pressure pipeline and sprinkler irrigation in Hebei, for drip irrigation in Qingdao, and for sprinkler irrigation in Shenyang were the higher than expected unit costs, attributed to higher quality and standard of the construction work. 11. Reasons for higher than expected returns. In most cases, results were above appraisal expectations. The main reasons include: (a) the substantial increase in yields and outputs for both grain and cash crops (see above); and (b) the faster than anticipated adjustment of the cropping pattern to high- 22 value cash crops (see above). Costs were somewhat higher than expected (108 percent of the PAD estimate) but this was more than compensated by the higher than expected revenues. 12. Non-quantifiable benefits. In addition to the highly satisfactory rate of return, the project produced numerous non-quantifiable social and environmental benefits. These include the benefits from the lower groundwater drawdown resulting in less O&M and replacement costs in pumping areas (see below), the water resources savings (see below), increased employment opportunities for farmers (about 413.3 million labor days provided under the project), improved women's status (especially through the WUA activities), development of improved water management, social capital and institutional capacity through the success of WUA, improved road access to communities and the rural social service system, the improved quality of soil and agricultural products due to IPM, and improved forestry coverage and farmland ecological environment. Benefits from Reductions in Consumptive Use of Water 13. Reason for assessing benefits from reductions in consumptive use. A reduction in consumptive use of water was one of the main project objectives. The conventional economic analysis does not include the benefit of this water conserved within the hydraulic system ­ and, in fact, the conventional agriculturally-derived benefits were more than sufficient to provide economic justification for the project. However, an exercise was carried out at appraisal to try to quantify and value the benefits from this water saving, which are of two types: (i) a reduction in pumping costs below the levels that would have been incurred had groundwater depletion continued at the same rate as without the project; and (ii) a calculation of the economic value of the "saved" water. Policy makers have expressed interest in this latter calculation, because it provides useful information for China's water planners as they consider the alternatives of pushing for further water savings in agriculture or of investing in very expensive inter- basin water transfers. 14. Reduction in rates of groundwater overdraft. The effective implementation of integrated water saving measures has resulted in a reduction in consumptive use. The average groundwater pumped for irrigation in the project area dropped by about 30 percent (from 296 m³ to 200 m³ per mu). This was a better performance even than that anticipated at the mid-term review (115 percent of the MTR estimate). This reduced pumping led to consequent reductions in rates of groundwater overdraft and has helped to stabilize groundwater levels. Comparing the annual groundwater monitoring data in the Beijing project area with the non-project area, the average annual reduction of groundwater level in the project area is estimated at 0.18 meters, compared to 0.50 meters without the project. Equivalent figures are 0.18 m and 0.53 m in Hebei, 0.004 m and 0.14 m in Qingdao, and -0.28 m (i.e., a recovery of the groundwater table) and 0.45 m in Shengyang, respectively. These are average figures: the actual values in each year vary, largely depending on rainfall. 15. Reduction in pumping costs. These reductions in rates of groundwater depletion result in lower annual operation and maintenance costs (O&M) including repair, maintenance, energy, management, overhead, depreciation and the extra replacement cost for deeper wells and larger size of pumps. The benefit analysis indicated that the annual benefits from the reduction in O&M costs ranged from Y33.7 million to Y34.7 million in 2001-2005, and from Y35 million to Y35.6 million in 2006-2011 for the groundwater used in the project areas. The NPV of these savings would be Y260.4 million (about 124 percent of PAD estimate). 16. Economic value of water resources saved. The project M+E calculated water resource savings by measuring the reduction in consumptive use of water (by measuring the reduction in evapo- transpiration). By this method, the cumulative water saving over the period 2001-5 was calculated to be 23 about 435.4 million m³, and the annual amount likely to be saved between 2006-2011 has been estimated at about 128.4 million m³. Following appraisal methodology, the "opportunity cost of water" has been applied to estimate the economic value of water savings under project. The opportunity cost was assumed, as at appraisal, to be Y2 per m³ of water, equivalent to the unit cost in 2000 for the water transferred from the Yangtze River Basin to the North China Plain region. On this basis, the economic value of the water savings from 2001-2005 was Y870.8 million, and the annual value 2006-2011 would be Y256.8 million (135 percent of PAD estimate). The NPV of these savings would be about Y1,568 million. 17. Total benefit from water savings. Taking the saving in pumping costs and the value of water saved together, the total NPV of these benefits is as much as Y1,828.4 million. Had these benefits been included in the EIRR calculation, returns would have been considerably higher. Financial Analysis 18. Project impact on farm household incomes. Farm-level financial analysis was carried out to assess the improvements in financial viability of farming through project investments. The financial analysis indicates that all expected benefit targets have been fully achieved and exceeded. The project investments generated substantial increases in farmers' incomes for some 358,088 farm families (139 percent of PAD estimate), resulting from improved irrigation efficiencies and technologies, increased crop yields, and the shift of cropping patterns toward higher-value cash crops. 19. Methodology and increase above expected levels. To measure the increases in farmer incomes, and in line with the PAD approach, representative farm households were selected in the four sub-project areas and surveyed as part of the project M&E system. The survey data show that, in 2005, the average net per capita income of typical farm households benefiting from the project varied according to project area and irrigation technology but was almost always above appraisal expectations. The pattern by region and technology is as follows: In Beijing, incomes range from Y2,183 for canal lining (229.5 percent of PAD estimate) up to Y6,020 for drip irrigation (102.5 percent of PAD estimate). In Hebei, incomes range from about Y1,985 for canal lining (153.7 percent of PAD estimate) up to Y2,937 for drip irrigation (120.5 percent of PAD estimate). In Qingdao, the range is from about Y1,910 for canal lining (285.9 percent of PAD estimate) up to Y5,856 for drip irrigation - this latter figure is in fact slightly (5 percent) below PAD estimates, because investment is for fruit trees not yet at full production. In Shenyang, net incomes range from about Y2,605 for canal lining (158.8 percent of PAD estimate) to Y4,840 for drip irrigation. 20. Increase above base-line levels. These increases all represent a substantial increase over non- project and base-line income levels. Actual growth rate of per capita income in 2005 in each sub-project area ranged from about 23.1 percent to 209.6 percent in Beijing, about 38.4 percent to 88.3 percent in Hebei, about 14.1 percent to 619 percent in Qingdao, and about 109.4 percent to 237.6 percent in Shengyang. Thus, the project clearly achieved its objective to increase farmers' incomes. This highly satisfactory result can also be added to the numerous non-quantifiable social and environmental benefits, even though all these gains are not only directly from the project but also from the other factors, such as the WTO accession and the higher incomes in urban area that increase in demand for the high-value agricultural products, etc. The summary table of income impact on typical households in each sub-project area is presented below: 24 Income Impact on Typical Households PAD Estimate (constant 2000 Yuan) Actual at ICR (constant 2000 Yuan) Baseline in 2000 PAD estimate Component/Area Income Per Per Growth Per Growth rate Growth Family capita capita rate capita Rate income income (%) income (ICR/baseline) (ICR/PAD) Canal lining Beijing 2819 705 951 34.94 2183 209.62 129.53 Hebei 5890 1178 1291 9.56 1985 68.49 53.74 Qingdao 3808 544 668 22.72 1910 251.03 185.87 Shenyang 3732 1244 1641 31.94 2605 109.44 58.77 Low pressure pipeline Beijing 12234 3059 4263 39.39 4763 55.7 11.72 Hebei 5948 1190 1315 10.54 2079 74.7 58.11 Qingdao 3506 877 1071 22.16 3638 314.8 239.65 Shenyang 3097 1032 2086 102.1 3108 201.1 48.98 Sprinkler Beijing 23950 4790 5352 11.73 5894 23.1 10.13 Hebei 6361 1272 1386 8.93 2395 88.3 72.77 Qingdao 4194 599 777 29.73 4307 619.0 454.30 Shenyang 2955 985 1685 71.07 3227 227.6 91.51 Drip Beijing 18814 4703 5873 24.87 6020 28.0 2.51 Hebei 10615 2123 2438 14.86 2937 38.4 20.48 Qingdao 20552 5138 6197 20.6 5856 14.0 -5.50 Shenyang 4301 1434 1669 16.39 4840 237.6 190.02 Note: All prices in 2000 baseline prices. 20. Financial Rate of Return. Overall, the project has substantially improved the financial viability of farming through increased annual returns to farm labor and capital investments. Comparing costs and benefits over a period of 20 years, the recalculated FRRs are all favorable. The FRRs for individual irrigation technologies range from about 16.9 percent (low-pressure pipeline irrigation component) to 21.5 percent (sprinkler irrigation component). The overall project FRR is re-estimated at 17.6 percent (with a NPV of about Y1,443.9 million), which is higher than the 15.6 percent (with a NPV of about Y393.3 million) estimated at appraisal. Overall, the results of the financial analysis indicate the financial incentives of farmers to participate in the project and the financial viability of the project investments. A comparison of detailed FRRs by each irrigation technology is shown below: 25 Financial Cost Benefit Analysis Summary (Yuan Million) PAD ICR Financial NPV FRR Financial FRR Sub-project/Component (%) NPV (%) Total Project 393.3 15.6 1443.9 17.6 -Canal Lining Irrigation 24.9 14.2 130.6 17.1 -Low Pressure Pipeline Irrigation 98.1 15.2 163.8 16.9 -Sprinkler Irrigation 79.3 15.4 210.6 21.5 -Drip irrigation 191.0 16.3 938.8 20.0 22. Water Charges and Farmers' Ability to Pay. The substantial increase in beneficiary farmers' incomes provided adequate incentives and full ability for farmers to participate in the development investment, take over the full responsibility for O&M of on-farm irrigation system through the WUAs, and pay for the increased water charges as expected at the project appraisal. Water charges for all types of irrigation technologies have increased from the relatively low pre-project baseline to levels above appraisal targets. Comparing the rate of water charges "with-project" (the current rate covered by O&M costs) and baseline scenarios, average rates of water charge (Y/ m³) for different type of irrigation technologies have gone up as follows: from Y0.09 to Y0.2 for canal lining irrigation (143 percent of PAD estimate) from Y0.09 to Y0.28 for low-pressure pipeline irrigation (117 percent of PAD estimate) from Y0.09 to Y0.35 for sprinkler irrigation (152 percent of PAD estimate) from Y0.1 to Y0.49 for drip irrigation (132 percent of PAD estimate). 23. Collection rates. The overall collection rate for water charges has improved from between 75-90 percent to 96 percent, above the target at appraisal (101 percent of PAD estimate). In addition, the area covered by volumetric water charging at completion was 62,362 ha (about 109 percent of MTR estimate). In almost all cases, these higher water charges cover all O&M expenditures (and in some areas part of the replacement costs as well), thereby creating good prospects for WUA self-financing. 24. Share of water charges in farmer incomes. The financial analysis indicates that although water charges went up by a multiple of two to three, their actual share in farm incomes generally dropped. The drop varied by technology: for example, for canal lining, the share fell from an average about 5.6 percent to 3.2 percent, from 2.8 percent to 2 percent for low-pressure pipeline irrigation, and from 2.4 percent to 1.4 percent for sprinkler irrigation. Only for the drip/micro irrigation did the share increase (from 1.2 percent to 2.5 percent) because of the higher water demand for greenhouse vegetables production with a multiple harvest of three to four seasons per year. These shares in income are lower than expected at appraisal because, on the one hand, farmers' costs were lower (reduced O&M costs resulting from the stabilization of the groundwater tables) and, on the other hand, farmers' incomes were well above expectations. Thus, the project is likely to be financially sustainable because farmers can well afford to take over full responsibility for O&M and pay the increased water charges, and have good incentives to do so. A comparison of detailed water charges and their impact on household income by different irrigation technologies in each sub-project area is presented below: 26 Actual Impact of Water Charge on Household Income by Different Irrigation Technology Irrigated Area Water Tariff (Y/m3) Water cost (Y/ha) Income (Y/ha) Water cost/income Baseline PAD ICR Baseline PAD ICR Baseline PAD ICR Baseline PAD ICR Canal lining (O&M) (O&M) (O&M) (O&M) Beijing 0.07 0.12 0.19 550.1 441.4 525.0 11171 12168 30465 4.9 3.6 1.7 Hebei 0.14 0.18 0.25 543.4 590.3 847.0 7115 9138 15329 7.6 6.5 5.5 Qingdao 0.05 0.08 0.20 185.6 279.8 655.6 10958 14161 44186 1.7 2.0 1.5 Shenyang 0.11 0.18 0.17 946.6 1521.9 1021.9 10500 13125 22726 9.0 11.6 4.5 Average 0.09 0.14 0.20 556.4 708.4 762.4 9936 12148 28177 5.6 5.8 2.7 Low pres. pipeline Beijing 0.07 0.37 0.35 240.0 680.5 974.8 11400 13110 15975 2.1 5.2 6.1 Hebei 0.12 0.15 0.26 465.7 486.2 832.5 7115 9138 15760 6.5 5.3 5.3 Qingdao 0.05 0.13 0.28 181.4 443.9 829.6 15326 19397 71882 1.2 2.3 1.2 Shenyang 0.11 0.32 0.23 230.4 1811.2 572.2 6750 22800 37047 3.4 7.9 1.5 Average 0.09 0.24 0.28 279.4 855.5 802.3 10148 16111 35166 2.8 5.3 2.3 Sprinkler Beijing 0.07 0.22 0.31 826.0 1153.9 1575.1 45202 51984 62452 1.8 2.2 2.5 Hebei 0.12 0.25 0.40 465.7 789.6 1052.4 7115 9289 17508 6.5 8.5 6.0 Qingdao 0.05 0.13 0.30 184.0 403.6 744.0 11787 15339 92711 1.6 2.6 0.8 Shenyang 0.11 0.30 0.40 230.3 1698.0 886.4 6750 22800 47630 3.4 7.4 1.9 Average 0.09 0.23 0.35 426.5 1011.3 1064.5 17714 24853 55075 2.4 4.1 1.9 Drip Beijing 0.07 0.41 0.55 825.9 2813.7 2906.2 90000 117000 130820 0.9 2.4 2.2 Hebei 0.16 0.34 0.49 980.2 1846.3 1739.5 19187 23896 31399 5.1 7.7 5.5 Qingdao 0.05 0.36 0.48 417.0 1443.6 1548.0 78803 97500 100513 0.5 1.5 1.5 Shenyang 0.11 0.38 0.43 132.0 342.0 1735.1 7200 8550 27054 1.8 4.0 6.4 Average 0.10 0.37 0.49 588.8 1611.4 1982.2 48798 61737 72446 1.2 2.6 2.7 Main Assumptions for Financial and Economic Analysis: 25. The ERR estimate was compared with that calculated in the PAD, using revised estimates based on the latest data and information for actual costs and benefits and up-dated assumptions on future costs and benefits provided by PMOs in MWR, and in Beijing, Qingdao, Shengyang and Hebei sub-project areas in 2006. The framework of the analysis follows, to the extent possible, that of the PAD. Key assumptions have been changed only when clearly better estimates are available. The general assumptions are as follows: (a) The analysis compared "with-project" (the up-graded irrigation system with canal lining, low-pressure pipeline, semi-fixed sprinkler and micro/drip irrigation systems plus agronomic and management water saving measures) and "without­project" (the original groundwater irrigation system with wells and the conventional canal facilities and techniques) scenarios; (b) All project costs [1], including project investment costs, physical contingencies, agricultural production costs and O&M costs (including reduced energy requirements for pumping resulting from the 1 At completion, total actual project investment costs in financial terms for the four sub-project areas were about US$203.54 million (or about Y1,669 million, 108 percent of PAD estimate). 27 improved irrigation efficiencies), have been considered in estimating the economic costs of the project, but price contingencies, taxes, duties and other charges were omitted. The economic analysis also included the economic costs, but not the benefits, from institutional development and improved environmental management; (c) The analysis has been expressed in constant prices [2]. Input and output prices used in the crop budgets are 2005 average farm-gate prices prevailing in all sub-project areas and provided by the project authorities. Bank commodity price projections or export prices actually realized in China were used to estimate farm-gate prices in constant 2005 terms. These were then used to calculate the farm-gate value of wheat, maize, paddy rice and fertilizers with appropriate adjustments for domestic and international transport and handling costs for each sub-project area. A standard conversion factor of 1 was applied to all non-traded items. All economic values were converted to local currency at the prevailing official exchange rate of Y8 to US$1. A discount rate of 12 percent was used to approximate the opportunity cost of capital in China. The economic life of sub-projects is assumed to be 20 years. (d) The benefit analysis for reduced groundwater drawdown resulting in less O&M and replacement costs in pumping areas excludes: (i) the negative impact on the sub-project areas from surrounding areas that may continue to over-extract groundwater and thereby have a negative impact on the groundwater table in the sub-project areas; and (ii) the positive impact of the groundwater stabilization in the sub-project areas on surrounding areas lessening their overall groundwater drawdown and consequent O&M costs related to groundwater extraction outside the sub-project areas; (e) Project benefits are based on the actual performance of existing crop production and the implementation of integrated water-saving measures, especially for the reductions in groundwater overdraft and non-beneficial water losses in each sub-project area. All data/information were collected from the project monitoring sites during project implementation and reflect actual cropping patterns and intensity by year and type of the irrigation technology in each sub-project area. The detailed crop budgets reflect actual scenarios for various crops in the field with actual average yields from 2001-2005. The amount applied of seeds, fertilizers, farm chemicals and irrigation water delivered and consumed by main crops are also the actual average and incremental levels in each sub-project area applied for different irrigation technologies. The details of these and other assumptions applied in the financial and economic analysis are presented in the project files. 2 2005 levels, except for income analysis in the table Income Impact on Typical Households above. 28 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/Specialty Lending Douglas Olson Principle Water Resources Specialist EASRD Water Resources Richard Reidinger Agricultural Economist EASRD Farmer Participation Qun Li Economist EASRD Financial and Economic Analysis Weiguo Zhou Economist EASRD Project Cost Analysis Zong-cheng Lin Anthropologist EACCF Safeguard Policies Nancy Chen Financial Management Specialist EAFSP Financial Management Junxue Chu Disbursement Officer EACCF Disbursement Dawei Yang Procurement Specialist EACCF Procurement Robert Crooks Environmentalist EASRD Safeguard Policies Chaogang Wang Social Development Specialist EACCF Safeguard Policies Clifford Garstang Lawyer EASTE Legal Covenants Simon Bradbury Financial Management Specialist LOAG1 Financial Management Cecilia Belita Program Assistant EASRD Yinfeng Zhi Task Team Assistant EACCF Arlene D. Reyes Program Assistant EASRD Matrice Denny Program Assistant EASRD 29 Supervision / ICR Yi Dong Senior Financial Management Specialist EAPCO Financial Management Douglas Olson Principle Water Resources Specialist LCSEN Water Resources Qun Li Agricultural Officer EASRE Agricultural Economist Zong-Cheng Lin Senior Social Development Specialist EASSO Social Development Dawei Yang Procurement Specialist EAPCO Procurement Hongkun Yang Procurement Specialist EAPCO Procurement Patria Consuelo Merchan Morente Program Assistant EASRE Li Ouyang Team Assistant EACCF Hongwei Zhao Team Assistant EACCF Xiuzhen Zhang Program Assistant EACCF (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ thousands No. of staff weeks (including travel and consultant costs) Lending FY98 69.16 FY99 182.52 FY00 94 187.61 FY01 44 78.85 FY02 11 13.58 FY03 2.44 FY04 2.07 FY05 0.00 FY06 0.00 FY07 0.00 Total: 149 536.23 Supervision/ICR FY98 0.00 FY99 0.00 FY00 2 2.29 FY01 5 46.59 FY02 20 76.78 FY03 21 41.51 FY04 23 58.47 FY05 14 18.63 FY06 19 42.12 FY07 11 62.80 Total: 115 349.19 30 Annex 5. Beneficiary Survey Results 1. Efficient irrigation management contributes not only to saving water, energy and money, but also to growth of crop yields and farmers' incomes. These benefits became the basis for farmers' incentives for WUA operation and development as well as for their aspirations and achievements of a real win-win situation. Many case studies show farmers' incomes were enhanced with scientific irrigation methodology and cropping pattern readjustment under WUA arrangement, such in Guantao of Hebei, with the low-pressure pipeline irrigation managed by the WUA of Hanxu village, wheat yield increased from 400kg/mu to 600kg/mu; and in Faku county of Shenyang, greenhouses produced vegetable yield increasing from 1400kg/mu before the project to 3400kg/mu after it, by which farmers' incomes increased by about Y3000. These kinds of yield growth and farmer income enhancement could be further demonstrated through typical household survey done in Hebei, as shown in below. Table 1. Typical Household Survey on Cropping Pattern Readjustment Items Farm Cropping Area (mu) Multi- Crop Irrigation Income House- Cropping average water Per- Yield Value Years holds Wheat Corn Cotton Rates ET m³ person Yuan/mu mm Yuan No.1 5 5 2 1.71 667.9 1970 2159 899.9 2001 No.2 8 8 4 1.67 655 3272 1210 706.2 No.1 5 5 2 1.71 613.1 1664 2185 1003.4 2002 No.2 8 8 4 1.67 598.6 2768 1300 706.2 No.1 3 3 4 1.43 603.8 405 2050 1162.3 2003 No.2 0 0 12 1 500.4 0 2936 1500 No.1 2 2 5 1.29 531.6 780 3508 1302.9 2004 No.2 2 2 10 1.17 508.5 1140 2658 1299.3 2. Furthermore, a statistical analysis of irrigation water consumption, crop yields and water productivity rates in the WAU areas all over the four project province/municipalities can be shown in Table 2 below that also explains the factual economic increase between 2000 and 2005 as the project impact in general. Table 2. Statistical Survey of Water Productivity Rates in the Typical WUA Areas Water Productivities Irrigated water (m³/mu) Yield Value (Yuan/mu) Provinces Yuan/ m³ Change Change Change 2000 2005 2000 2005 2000 2005 (%) (%) (%) Average 330 256 -32.1 1811.5 2704.2 49.3 5.5 10.5 97.0 Hebei 205 173 -15.6 930 1440 55.0 4.5 8.3 85.0 Beijing 590 366 -38.0 1405 1870 21.7 2.4 5.1 112 Qingdao 285 205 -28.0 2140 3907 82.5 7.5 13.6 82.5 Shenyang 240 182 -37.5 2771 3600 30.0 11.5 19.8 72.2 31 3. Finally, typical statistics of annual net incomes per person of WUAs before and after the project could conclude the general situation of project WUAs' impact on farmers' economic lives, as shown in Table 3 below. Table 3. Changes in Farmer Annual Net Incomes in WUA Areas before and after WCP Annual Net Incomes Per Person (Yuan) Provinces Change Rates Increments 2000 2005 % Per YearYuan Average 2500 4273 71.0 355 Hebei 1194 2223 86.2 205 Beijing 3000 5200 73.3 440 Qingdao 3540 5710 61.3 434 Shenyang 2272 3973 74.9 340 4. Farmer incomes grew everywhere under WUAs in the project context. Hebei as the poorest place among the four project provinces grew the most, with its 86 percent growth rate compared with 71 percent as the average and 61 percent as the lowest. This certainly means that the project WUAs had more impact in poor areas than others. On the whole, according to the project M&E statistical analysis, five years of project implementation helped local farmers improve their life quality by reducing 7.7 percent of their production costs on average and enhancing 8.2 percent of their living consumptions, meanwhile rehabilitating their living environment of housing and drinking water, promoting their access to health care and school education. At this point, along with the national program of new countryside construction, farmers were able to start creating and enjoying their better-off lives. 32 Annex 6. Stakeholder Workshop Report and Results NA 33 Annex 7. Summary of Borrower's ICR and/or Comments on the Bank's ICR 34 35 36 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders Not applicable. 37 Annex 9. List of Supporting Documents 1. Aide Memoires and their Annexes prepared by 11 supervision missions from May 2001 to May 2006 2. Aide Memoire and its Annexes of the ICR mission in October 2006 3. Consolidated ICR and its Annexes prepared by Central PMO, Ministry of Water Resources 4. ICR and its Annexes prepared by the PMO of Beijing Municipality 5. ICR and its Annexes prepared by the PMO of Hebei Province 6. ICR and its Annexes prepared by the PMO of Qingdao Municipality of Shandong Province 7. ICR and its Annexes prepared by the PMO of Shenyang City of Liaoning Province 8. Groundwater Management Plans prepared by Guantao County of Hebei Province and Fangshan District of Beijing Municipality 9. Annual Monitoring & Evaluation Reports consolidated by Central PMO, Ministry of Water Resource 10. Annual Monitoring and Evaluation Report prepared by Beijing, Hebei, Qingdao and Shenyang PMOs 38 IBRD 30946 CHINA NATIONAL IRRIGATED AGRICULTURE WATER WATER CONSERVATION PROJECT SAVINGS PROGRAM PILOT COUNTIES AND WATER CONSERVATION PROJECT COUNTIES WATER CONSERVATION PROJECT COUNTIES QINGDAO MUNICIPALITY, SHANDONG PROVINCE SUB-PROJECT AREAS COUNTY (XIAN) HEADQUARTERS PREFECTURE HEADQUARTERS RIVERS NATIONAL HIGHWAYS RAILROADS L A I X I COUNTY (XIAN) BOUNDARIES C O U N T Y PREFECTURE BOUNDARIES Laixi P I N G D U C O U N T Y Pingdu JiolaiHe J I M O C O U N T Y Jimo JIAOZHOU COUNTY Jiaozhou C H E N G YA N G Chengyang D I S T R I C T L A O S H A N D I S T R I C T QINGDAO H U A N G D A O 0 10 20 30 D I S T R I C T KILOMETERS J I A O N A N RUSSIAN C O U N T Y FEDERATION HEILONGJIANG Jiaonan MONGOLIA JILIN Sea of XINJIANG LIAONING D.P.R. OF Japan GOL KOREA MON BEIJING NEI BEIJING JAPAN HEBEI TIANJIN Yellow REP. OF H u a n g H a i Sea KOREA Oingdao QINGHAI SHANXI SHANDONG Municipality NINGXIA JIANGSU GANSU SHAANXI HENAN ANHUI SHANGHAI E a s t XIZANG HUBEI SICHUAN ZHEJIANG C h i n a CHONGQINGHUNAN S e a JIANGXIFUJIAN National Capital GUIZHOU TAIWAN Province YUNNAN This map was produced by the Map Design Unit of The World Bank. GUANGDONG Boundaries GUANGXI P h i l i p p i n e The boundaries, colors, denominations and any other information International HONG KONG shown on this map do not imply, on the part of The World Bank S e a Boundaries MACAO VIETNAM Group, any judgment on the legal status of any territory, or any LAO HAINAN endorsement or acceptance of such boundaries. P.D.R. PHILIPPINES NOVEMBER 2000 IBRD 30947 RUSSIAN FEDERATION HEILONGJIANG MONGOLIA JILIN Sea Shenyang Municipality of XINJIANG LIAONING D.P.R. OF Japan KOREA MONGOL BEIJING NEI BEIJING JAPAN HEBEI TIANJIN Yellow REP. OF Sea KOREA QINGHAI SHANXI SHANDONG K A N G P I N G NINGXIA JIANGSU GANSU SHAANXI HENAN C O U N T Y ANHUI SHANGHAI E a s t XIZANG HUBEI SICHUAN ZHEJIANG C h i n a Kangping CHONGQINGHUNAN S e a JIANGXIFUJIAN National Capital GUIZHOU TAIWAN Province YUNNAN GUANGDONG Boundaries GUANGXI P h i l i p p i n e International HONG KONG S e a Boundaries MACAO LAO VIETNAM P.D.R. HAINAN PHILIPPINES NATIONAL IRRIGATED AGRICULTURE WATER Faku SAVINGS PROGRAM PILOT COUNTIES AND WATER CONSERVATION PROJECT COUNTIES WATER CONSERVATION PROJECT COUNTIES He FA K U SUB-PROJECT AREAS Xiushui C O U N T Y COUNTY (XIAN) HEADQUARTERS PREFECTURE HEADQUARTERS RIVERS NATIONAL HIGHWAYS RAILROADS COUNTY (XIAN) BOUNDARIES PREFECTURE BOUNDARIES X I N M I N He C I T Y Liao Xinchebgzi Xinminshi X I N C H E B G Z I D I S T R I C T Y U H O N G O U D I S T R I C T Yuhongou Donglingou SHENYANG SHENYANG D O N G L I N Swiatunou D I S T R I C T LIAOZHONG C O U N T Y S U J I AT U N D I S T R I C T Liaozhongxian 0 10 20 30 40 He KILOMETERS Hun This map was produced by CHINA the Map Design Unit of The WATER CONSERVATION PROJECT World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank SHENYANG MUNICIPALITY, LIAONING PROVINCE Group, any judgment on the legal status of any territory, or any endorsement or a c c e p t a n c e o f s u c h boundaries. NOVEMBER 2000 IBRD 30948 RUSSIAN CHINA FEDERATION WATER CONSERVATION PROJECT HEILONGJIANG BEIJING MUNICIPALITY MONGOLIA JILIN Sea of NATIONAL IRRIGATED AGRICULTURE WATER SAVINGS PROGRAM PILOT COUNTIES AND RIVERS XINJIANG LIAONING D.P.R. OF Japan KOREA WATER CONSERVATION PROJECT COUNTIES MONGOL BEIJING GREAT WALL NEI BEIJING JAPAN HEBEI TIANJIN REP. OF WATER CONSERVATION PROJECT COUNTIES KOREA MAIN ROADS SHANDONG Yellow QINGHAI SUB-PROJECT AREAS SHANXI Sea RAILROADS NINGXIA JIANGSU GANSU SHAANXI HENAN COUNTY (XIAN) HEADQUARTERS COUNTY (XIAN) BOUNDARIES ANHUI SHANGHAI E a s t XIZANG HUBEI SICHUAN ZHEJIANG PROVINCE BOUNDARIES C h i n a NATIONAL CAPITAL CHONGQINGHUNAN S e a JIANGXIFUJIAN National Capital GUIZHOU TAIWAN Province YUNNAN GUANGDONG Boundaries GUANGXI P h i l i p p i n e International HONG KONG S e a Boundaries MACAO LAO VIETNAM P.D.R. HAINAN PHILIPPINES Tanghe HUAIROU COUNTY HEBEI Baihe MIYUN Tanghe COUNTY YANQING COUNTY Miyun Reservoir Yanqing Huairou Miyun Res. CHANGPING Guanting Huairou Reservoir DISTRICT Changping PINGGU SHUNYI COUNTY Pinggu Shunyi COUNTY Yongding HAIDAN DIST. MENTOUGOU Chaoyang DISTRICT Haidan Mentougou CHAOYANG Shijingshan DIST. BEIJING Tongxian Chaobai HEBEI FENGTAI Fengtai DIST. TONGXIAN Yanshan Daxing DISTRICT FANGSHAN DISTRICT Fangshan DAXING Juma COUNTY TIANJIN SHI Yongding 0 10 20 30 Kilometers The boundaries, colors, denominations and any other information HEBEI shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. NOVEMBER 2000 IBRD 30949 RUSSIAN FEDERATION CHINA HEILONGJIANG WATER CONSERVATION PROJECT MONGOLIA JILIN HEBEI PROVINCE Sea of XINJIANG LIAONING D.P.R. OF Japan KOREA MONGOL BEIJING WATER CONSERVATION PROJECT COUNTIES NEI BEIJING JAPAN HEBEI TIANJIN REP. OF KOREA SUB-PROJECT AREAS SHANDONG QINGHAI SHANXI Area of Map COUNTY (XIAN) HEADQUARTERS NINGXIA JIANGSU GANSU SHAANXI HENAN PREFECTURE HEADQUARTERS ANHUI SHANGHAI E a s t XIZANG HUBEI SICHUAN ZHEJIANG RIVERS C h i n a CHONGQING NATIONAL HIGHWAYS HUNAN S e a JIANGXIFUJIAN National Capital GUIZHOU RAILROADS TAIWAN Province YUNNAN GUANGDONG Boundaries GUANGXI P h i l i p p i n e COUNTY (XIAN) BOUNDARIES International HONG KONG S e a Boundaries MACAO PREFECTURE BOUNDARIES LAO VIETNAM P.D.R. HAINAN PHILIPPINES LINGSHOU PINGSHAN XINLE ZHENGDING WUJI HUOLU SHENZE 38° SHIJIAZHUANG Shijiazhuang SHI JINZHOU XINJI JINGXING GAOCHENG 38° LUANCHENG YUANSHI Yuanshi ZHAOXIAN SHANXI ZANHUANG NINGJIN GAOYI BAIXIANG LINCHENG XINHE NEIQIU LONGYAO NANGONG JULU SHI XINGTAI 37° RENXIAN XINGTAI Xingtai SHI PING- XIANG WEIXIAN NANHE QINGHE SHABE SHI GUANGZONG 37° JIZE WU'AN SHI LINXI YONGNIAN QIUXIAN HANDAN QUZHOU SHANDONG AO Handan Shexian Feixang SHEXIAN HANDAN SHI FEIXIANG GUANT Cheng'an CHENG'AN GUANGPING CIXIAN DAMING Linzhang This map was produced by the Map Design Unit of The WEIXIAN World Bank. The boundaries, colors, denominations and LINZHANG any other information shown HENAN 0 10 20 30 40 50 on this map do not imply, on the part of The World Bank Group, any judgment on the KILOMETERS legal status of any territory, or any endorsement or a c c e p t a n c e o f s u c h 115° boundaries. 116° NOVEMBER 2000