Document of The World Bank FOROFFICIAL USEONLY ReportNo: 44913-CN PROJECTAPPRAISALDOCUMENT ONA PROPOSEDLOAN INTHEAMOUNTOFUS$60MILLION TO THE PEOPLE'SREPUBLICOF CHINA FORA GUIZHOUCULTURALAND NATURAL HERITAGEPROTECTIONAND DEVELOPMENTPROJECT April 7,2009 UrbanDevelopmentSectorUnit SustainableDevelopmentDepartment EastAsia andPacific Region This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 1, 2009) Currency Unit = RenminbiYuan RMB 1.0 = US$ 0.146 US$ 1.0 = RMB 6.849 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS CBD Community-based Development CDD Community-driven Development CFAA China Financial Accounting Assessment CNAO China NationalAudit Office CPMG Community Project Management Group CPS Community Partnership Strategy C V M Contingent Valuation Method DA DesignatedAccount EA Environmental Assessment EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EMP Environmental Management Plan EPB Environmental Protection Bureau FMM Financial Management Manual FMS Financial Management Specialist GDP Gross Domestic Product GFB Guizhou ProvincialFinance Bureau GNU GuizhouNormalUniversity GPG Guizhou ProvincialGovernment GTB Guizhou ProvincialTourism Bureau ICB International Competitive Bidding ICOMOS International Council on Monuments and Sites IPP Indigenous PeoplesPlan MBD Model Bidding Document MOF Ministry o f Finance NCB NationalCompetitive Bidding O&M Operations andMaintenance OMCP OperationManualfor Community Participation PIU Project ImplementationUnit PLG Project Leading Group PMO Project Management Office PPLG Guizhou ProvincialProject Leading Group PPMO Guizhou ProvincialProject ManagementOffice FOROFFICIAL USEONLY RAP Resettlement Action Plan SACH State Administration for Cultural Heritage SBD StandardBiddingDocument VIG Village ImplementationGroup VSG Village Supervision Group W A Withdrawal Application WTP Willingness-to-Pay Vice President: Mr.JamesW. Adams Country Director: Mr.DavidR.Dollar Sector Managers: Mr.EdeJorge Ijjasz-Vasquez Mr.KeshavVarma Task Team Leader: Ms.ShenhuaWang I I This document has a restricted distribution and may be used by recipients only in the performance of their official duties.Its contents may notbe otherwise disclosed without WorldBank authorization. CHINA GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject CONTENTS Page I STRATEGICCONTEXTANDRATIONALE . .................................................................. 1 A. Country and sector issues .................................................................................................... 1 B. Rationale for Bank involvement .......................................................................................... 3 C. Higher level objectives to which the project contributes .................................................... 4 I1 PROJECTDESCRIPTION . .................................................................................................. 4 A. Lendinginstrument .............................................................................................................. 4 B. Program objective and phases ............................................................................................. 4 C. Project development objective and key indicators .............................................................. 5 D. Project components ............................................................................................................. - 5 E. Lessons learned and reflected inthe project design............................................................ 6 F. Alternatives considered and reasons for rejection.............................................................. -8 I11. IMPLEMENTATION ....................................................................................................... 9 A. Partnershiparrangements .................................................................................................... 9 B. Institutional and implementationarrangements .................................................................. 9 C. Monitoring and evaluation of outcomeshesults ................................................................ 11 D Sustainability ..................................................................................................................... . 11 E. Critical risks and possible controversial aspects ............................................................... 12 F. Loanlcredit conditions andcovenants ............................................................................... 13 I V. APPRAISAL SUMMARY .............................................................................................. 14 A. Economic and financial analyses....................................................................................... 14 B. Technical ........................................................................................................................... 15 C. Fiduciary............................................................................................................................ 16 D. Social ................................................................................................................................ -16 E. Environment ...................................................................................................................... 17 F. Safeguard policies.............................................................................................................. 18 G. Policy exceptions andreadiness ........................................................................................ 18 Annex 1:Country andSector or ProgramBackground .......................................................... 19 Annex 2: Major RelatedProjectsFinancedby the Bankand/or otherAgencies ..................26 Annex 3: ResultsFrameworkandMonitoring ......................................................................... 27 Annex 4: DetailedProjectDescription ...................................................................................... 31 Annex 5: ProjectCosts ................................................................................................................ 37 Annex 6: ImplementationArrangements .................................................................................. 39 Annex 7: FinancialManagementandDisbursementArrangements ..................................... 44 Annex 8: ProcurementArrangements ....................................................................................... 56 Annex 9: EconomicandFinancialAnalysis .............................................................................. 80 Annex 10: SafeguardPolicyIssues ............................................................................................. 97 Annex 11:ProjectPreparationand Supervision .................................................................... 110 Annex 12: Documentsinthe ProjectFile ................................................................................ 112 Annex 13: Statementof Loansand Credits ............................................................................. 113 Annex 14: Country at a Glance ................................................................................................ 118 Annex 15: PlanningFramework,ImplementationPrinciplesand Procedures ...................120 Map: No 36386 . .......................................................................................................................... 134 CHINA CN-GUIZHOU CULTURAL AND NATURAL HERITAGEPROTECTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASUR Date: April 7, 2009 Team Leader: ShenhuaWang Country Director: DavidR.Dollar Sectors: General water, sanitation and flood Sector Managers: EdeJorge Ijjasz-Vasquez, protection sector (100%) Keshav Varma Themes: Other environment andnatural Project ID: PO91950 resources management(P);Other social Environmental Assessment: FullAssessment development (P);Other urbandevelopment (S) Lending Instrument: Specific Investment Loan [XI Loan [ ]Credit [ 3 Grant [ ]Guarantee [ ]Other: For Loans/Credits/Others: Total Bank financing (US$ m.): 60.00 Proposedterms: The loanwill be payable in30 years, including a five-year grace period with BORROWERRECIPIENT Borrower: Government of China Ministry ofFinance Sanlihe, Beijing China 100820 Tel: 86-10-68551123 Fax: 86-10-68551125 xz.guan@mof.gov.cn Responsible Agency: Guizhou Provincial Tourism Bureau No. 242-5 North Zhonghua Road Guiyang, Guizhou Province China 550004 Tel: 86-851-6832574 / 5801590 Fax: 86-851-6825822 gzxmbl l15@,gmail.com Estimateddisbursements(BankFY/US$ m) FY ~ ~~~ 09 10 11 12 13 14 15 16 Annual 0 5 7 10 13 13 7 5 Cumulative 0 5 12 22 35 48 55 60 Project implementation period: Start: September 15,2009 End: June 30,2016 Expected effectivenessdate: September 15,2009 Expected closing date: June 30, 2016 Does the project depart from the CAS incontent or other significant respects? Ref:PADI.C. [ No Doesthe project require any exceptions from Bank policies? Ref:PADI K G. [ ]Yes [XINO Have these beenapproved by Bankmanagement? [ ]Yes [XINO I s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated "substantial" or "high"? Ref:PAD III.E. [XIYes [ ]No Does the project meetthe Regional criteria for readiness for implementation? Ref:PADI K G. [XIYes [ ]No Project development objective Ref:PAD II.C., TechnicalAnnex 3 Theproject development objective is to assist Guizhou Province inincreasing economic benefits to local communities (including minority groups) through increasedtourism and better protection of cultural andnatural heritages. Project description [one-sentence summary of each component] Ref:PADII.D., Technical Annex 4 Component1:EthnicMinority CulturalHeritageProtection(US$44.62 million),aiming at increasing employment and incomes of residents of selectedminority villages and ancient towns inQiandongnanand QianxinanPrefecturesandimprovingtheir basic livingconditions, with special attention to the protection of their cultural heritage, through the carrying out of the following: (a) construction of small scale infrastructure facilities to serve the villages andtowns; (b) rehabilitation andconservation ofuniquehistoric buildings andconstruction or establishment of cultural andvisitor centers; (c) rehabilitation and conservation of traditional private houses; and (d) carrying out ofincome generation activities that preserve andprotect intangible cultural heritage for provisionof technical assistance, training and goods. Component2: NaturalHeritageand Scenic SiteProtectionandDevelopment(US$21.35 million), consisting the carrying out ofphysical investmentsto improve infrastructure and tourism facilities in: (a) GuanlingNational Geo-Park inAnshunMunicipality; (b) Dingxiao NationalGeo-Park inQianxinan Prefecture; (c) Wanfenglin National Scenic Park inQianxinan Prefecture; and (d) ShanmuRiver Scenic Park inQiandongnanPrefecture, including construction and/or rehabilitation ofpedestrianroads, public toilets, water supply and sanitation facilities, signage, andtourist service centers, and implementation of measuresfor environmental and ecological protection of suchparks. Component3: Tourism Gateway Town FacilitiesDevelopment(US$16.34 million), consisting the following: (a) construction oftourist informationcenters inselectedcounties inQiandongnan Prefecture andprovision of goods, technical assistance andtraining to strengtheninstitutional capacity, at the county level, for the promotionoftourism; and (b) construction ofthe Guizhou Cultural andNatural Heritage Protection andDevelopment Center inGuiyang, which will carry out researchon natural heritage and tangible and intangible cultural heritage; host performances and lectures; provide tourist informationand services; develop and deliver training inruraltourism development andmanagementand cultural awareness and conservation; and develop a tourist destination managementwebsite for tourist sites informationandmarketing. Component4: CapacityBuildingandProjectImplementationSupport (US$1.81 million), consisting the following: (a) strengtheningof institutional capacity and capability: (i) the provincial level to manage, at implementandmonitor project activities; and(ii) the village level, for conservation of at traditional buildings and for facilitatingcommunity organization andvillage-level activities especially ingrant programs for traditional private house rehabilitation and conservation and intangible heritage preservation; (b) strengtheningof capacity and capability inthe tourism sector: (i) the county level through at the provision of goods andtechnical assistanceto Project ManagementOffices (PMOs); and(ii) at the provincialand local levels through provisionoftraining for staff of PMOs, Project Implementation Units, andprovincialand local government tourism administrative units; and (c) reviewing andupdating ofthe Guizhou Tourism Development Master Planto align its strategies to current circumstances, including improved access oftourism sites to highways; and development of design guidelines for the conservation of traditional buildings and traditional environments inminority villages. Which safeguardpolicies are triggered, ifany? Re$ PADIVY., TechnicalAnnex 10 Environmental Assessment (OP/BP 4.01); Physical Cultural Resources (OP/BP 4.11); Involuntary Resettlement (OPiBP 4.12); Indigenous Peoples (OP/BP 4.10) Significant, non-standardconditions, if any, for: Re$ PAD III.F. The following covenants are included inthe Project Agreement: Loan Effectiveness Condition: There is no loaneffectivenesscondition. DatedImplementationCovenant: (a) With respect to the implementation of the Ethnic Minority Cultural Heritage Protection component, Guizhou shall cause a Community Project Management Group and a Village Supervision Group to be establishedat each of the selected minority villages by September 15, 2009, with terms ofreference, staffing and other resources acceptableto the Bank, as set out in the OperationManual for Community Participation (OMCP). Key ImplementationCovenants: (a) Guizhou shall: (i) out, and cause to be carried out, the project inaccordancewith the carry OMCP; and (ii) to the Bank for its prior approval any proposed amendmentto the furnish provisions of the OMCP and, thereafter, put into effect only such amendmentsas shall have been agreed withthe Bank. (b) Guizhou shall causethe project participants to implementGuidanceNo. 30 of 2007 issuedby the GuizhouProvincial Party Commission andthe GuizhouProvincialGovernemnt on November 28,2007, on safeguarding interests of ethnic minorities andtheir cultural heritage in the developmentofrural tourism andensuringthat ethnic minorities receive the benefits from tourism development. I. STRATEGICCONTEXTANDRATIONALE A. Country and sector issues 1. Guizhou Province is located insouthwest China and has atotal population of about 39.5 million. The province has one of the largestethnic minority populations inChina with 14 million, or 38% of the population, belonging to 49 differentethnic groups. The Miao people form the largestminority group with 4.3 million, followed by the Buyi at 2.8 million andthe Dong at 1.6 million. Over 90% ofthe province's total landarea is mountainous. The difficulties posedby this landscapehave ledto inadequateinfrastructure and low levels of outside investment. The landscape has constrainedoverall development, particularly inrural areas. About 15% of Guizhou's villages are still inaccessibleby road, 27% of the village population is not connectedto an electrical grid and the average ruralper-capita income i s only 27% of that of the province's urbanareas. 2. Although underdeveloped,Guizhou is richly endowed with cultural and natural resources. The minority villages haveunique, centuries-old traditions includingethnic heritage architecture, cultural landscapes, and livingtraditions of song, dance, crafts, and festivals. Natural resources include karst landscapes, gorges, rivers, rapids, caves, andpre-historic fossils. These rare cultural and natural heritage assets represent an attraction of immense appealto both domestic and international tourists. 3. Guizhou's recent Five-Year Plan seeks to increasethe pace of tourism development, particularly ruraltourism, as a key means of economic restructuring andpoverty alleviation. Basedon the Tourism Development Master Planfor Guizhou, which was preparedin2002 by the UnitedNations World Tourism Organization with financial support from the World Bank, the Guizhou Provincial Government (GPG) has formulated policies andplans that pursue sustainabletourism development andpoverty alleviation through anumber of approaches. These include: development of tourism resources; protection of natural and cultural heritage; vocational andprofessional training; andpromotion of domestic andforeign investments inthe sector. 4. Guizhou's tourism development efforts have been increasingly successful over the past few years. Its total tourism income has grownby over 30% for six consecutiveyears since 2000. Tourism has become a pillar industry inGuizhou. However, this rapid growthhas exposed structural weaknesses inthe implementation of the current tourism strategy and presented challenges for the conservation and sustainabledevelopment o fthe province's heritage assets. The following issues, among others, needurgent attention iftourism is to be a sustainablemeans of poverty reduction for Guizhou Province. 5. Inadequate Basic Inpastructure. Many of Guizhou's minority villages, ancient towns, andparks lack basic infrastructure suchas roads, footpaths, water andpower supply, sanitation, and solid waste management systems. Investmentinbasic infrastructure is therefore critical, not only for the sustainable development and protection of heritage sites, but also for raising local standardsof living, developing facilities requiredby visitors, andcreating opportunities for local economic development. There i s a particularneedfor investmentto be based on appropriate technology -low-cost, efficient, andeasy to operate andmaintain. 1 6. Insuficient Attention to Heritage Protection and Preservation. While the central and provincialgovernmentshave well-articulated institutional and legislative frameworks to protect cultural heritage, bothtangible and intangible as well as natural heritage, many of these laws and regulations are poorly understood andimplementedat the local level. (a) BuiltHeritage. The traditional buildings and streetscapes of Guizhou's ancient towns and villages are at risk from the intrusion of incompatible development, a lack of adequate maintenanceand substandardconservation measures. Compliance with conservation regulations, as well as the development of community-level support for conservation plans, i s essential to maintain the value of Guizhou's built heritage. (b) IntangibleHeritage. The traditional forms of life styles, includingcustoms andproductivity inGuizhou's minority villages are continually evolvingas residentsbecomeincreasingly mobile, tourists introduce new influences and communities strive to improve their standardof living. A sustainable model for safeguardingintangible heritage requires: (i) researchand documentation ofpast and present intangible heritage; (ii) community appreciation of the importance of heritage for social capital and cohesiveness; (iii) economic development basedon intangible heritage (e.g. cultural tourism); and (iv) the integration of communities' changing practices andpriorities into the definition oftheir intangible heritage. (c) Cultural Landscapes'. Generally, Guizhou's cultural landscapesretain their character and integrity, but they remain highly susceptible to awide range o f agents of change including tourism and economic development. Compiling inventories, documentation, monitoring, and effective managementof cultural andnatural landscaperesources will be critical to avoid losing this asset. (d) NaturalHeritage andParks. Limitedbudgets, a lack of conservation expertise and poor management skills have left Guizhou's natural heritage andparksvulnerable to damage from overuse, theft, vandalism, andthe elements. To develop a sustainable systemwhich can cope withthe expectedleveloftourist development, parks will require adequate conservation, management systems, andprotective measures. 7. Lack of Community Involvement. Inthe past, government initiatives have usually useda "top-down" approachfor planning and decision making, whichhas not generatedsustainable development at the local level. Stronger community involvement inproject planning, especially heritage conservation andtourism development, must be implementedto ensure that local communities commit to the successful implementation ofproject activities. This involvement will maximize their economic benefits andultimately maintainthe long-term healthoftheir cultural and natural heritage. 8. Inappropriate TourismPlanning andManagement. Tourism operators and site managers inGuizhouhavelimitedexperiencewithlong-term destination management, international ' CulturalLandscapeshave beendefinedby the World HeritageCommitteeas distinct geographicalareas or propertiesuniquely "representing the combinedwork ofnature andof man." Throughtheir form, features, andthe ways they are used, cultural landscapesrevealmuchaboutman's evolving relationshipswith the naturalworld. 2 tourismstandards, andthe expectations o fincreasingly sophisticated domestic tourists. Many o f Guizhou's tourism leaders have yet to conceive o f tourism as a multi-sectoral, dynamic system that goes beyond individual sites and involves a network o f transportation, hotels, shopping, restaurants, entertainment and tour operators. Consequently, there i s a significant need to enhance understandingo fthe tourism sector and promote cooperation among all its actors. 9. Absence of Income Generating Opportunities.Despitethe recent growth o f unplanned tourism inGuizhou, economic benefits are not yet significantly accruing to local communities. The lack o f employment and business opportunities intraditional villages and ancient towns has resulted inmigration o f young people to nearby urbanareas andprovinces. This has left behind local populations o f mostly women, children, and the elderly. A continuation o f this trend will eventually create non-viable communities andundermine the conservation o f cultural heritage. While some community members have developed small entrepreneurial activities connected to tourism, many o fthese efforts are o f very low quality, provide only small income and leadto over supply, excessive competition, andrepetitious goods for sale. Careful evaluation of potential income earningopportunities and training will be required to mitigate this situation. B. Rationale for Bank involvement 10. This project provides the Bank with the opportunity to address poverty and development issues inthe least developed province o f China, usingthe area's rich tourism resources as the primary means. It also allows the Bank to support the conservation o f cultural andnatural heritage assets for future generations. The Bank's participationcan provide the GPG with financing to conduct heritage protection and development inmany minority villages, which would subsequently realize maximumbenefits from this project. 11. An important feature ofthe project is the adoption ofthe community-based development (CBD) approach for the project goals, which are to protect cultural heritage and to generate local income. The CBD approach involves special skills training and capacity buildingfor minority villages. The communities, therefore, make the decisions and implement the small projects, and eventually receive the benefit directly. 12. The Bank will bring to the project extensive global experience innatural and cultural heritage protection, sustainable tourism development, andrural economic development. Lessons learned from similar projects inEastern Europe, South and Central America, Africa and Asia will be applied to the project.2 The Bank will also draw onmany insightsgained from firsthand experiences inChina, which include: conservation planningactivities at the Leshan Grand Buddha inSichuan; Chongqing's HuguangHuiguan; the historic city center o f Shaoxing; rehabilitation and conservation work at the Imperial Palace andMing dynasty tombs in Shenyang; and Gansu Province's similar project for cultural and natural heritage protection and development. ~ ~ * Projectsincludethe MacedoniaCommunityDevelopmentand Cultural Heritage Project, the CopanValley Regional SustainableTourismand Cultural HeritageProject,the NiasLivelihoodsand EconomicDevelopmentProgram, and the Ethiopia and Tunisia CulturalHeritage Projects. 3 13. The project will further strengthenthe collaborative relationship betweenthe World Bank, the State Administration for Cultural Heritage (SACH), the Ministry of Construction, and other Chinese authorities. International conferencesinBeijing (2000) and Shaoxing (2006) have allowed all parties to disseminatethe bestpractices (whether international or Chinese) for heritageprotection and sustainable tourism development. C. Higherlevelobjectivesto which the projectcontributes 14. The project i s consistent with China's 1lthFive-Year Plan, especially the highpriority placed by the central government on the improvement of cultural heritage preservation. The government's strategy inthis regard is articulated inthe State Council's Notice on Strengthening CulturalHeritage Protection, which was issued in2005, andwhich requires substantialprogress to be made by local governments inthe protection of cultural heritage before 2010. Inaddition, the project is consistentwith two strategic pillars inthe Country Partnership Strategy (CPS) 2006-2010. To address the CPS strategy of "Reducing Poverty, Inequality and Social Exclusion," the project will target extremely poor andethnic minority communities for economic development and poverty reduction. The project will address the second strategy o f "Managing ResourceScarcity and Environmental Challenges" by providing technical assistanceand strengtheninginstitutions. This will helpprotect and manage the province's irreplaceable cultural andnaturalresources. 15. Inthe ResultsMatrix ofthe CPS, the developmentgoal of "Managing Resource Scarcity and Environmental Challenges" includesa clauseto "protect cultural and natural heritage and promote cultural- and eco-tourism." The CPS also supports the development of demonstration tourism sites, an increaseinthe number of listed heritage sites, and the activation of environmental protection measures.The project, as designed, will contribute to these goals. The project will also address additional goals found inthe CPS. These include:providing basic infrastructure services (water supply, solid waste management, drainage and road upgrading); increasing the capacity o f villages for planning and management; and focusing on sustainable income increasesfor the poor. 11. PROJECTDESCRIPTION A. Lendinginstrument 16. The lending instrumenti s a Specific Investment Loan. The loanwill be a single currency, variable spreadloano f US$60 million, with amaturity o f 30 years, including a five-year grace period and a front endfee of 0.25%. B. Programobjectiveand phases 17. Not applicable. 4 C. Project development objective and key indicators 18. The project development objective is to assist Guizhou Province inincreasing economic benefits to localcommunities (including minority groups) through increasedtourism and better protection of cultural and natural heritages. 19. The objective would be achievedthrough the following: prioritizedand sustainable investmentsininfrastructure; initiatives to enhanceincomes of the ethnic population; special attention to the protection and development ofnatural and cultural heritage; and capacity building for tourism development and heritageprotection. 20. Outcome indicators for the project are detailed inAnnex 3. The indicators focus on achieving the project development objective of increasing economic benefits to local communities, as well as cultural andnatural heritageprotection and development, and sustainabletourism management.The key outcome indicator i s "averageper capita income in project minority villages". D. Project components 21. The project is designedto: protect and preserve cultural andnatural heritage assets; improve basic living conditions by upgrading infrastructure facilities; increaseemployment and incomes for residents of minority villages; improve facilities for tourists; and support project managementand capacity building for sustainabletourism management.The four components are summarizedbelow and a detailed description of each component i s also found inAnnex 4, includingdetails of activities inindividualproject villages. Component 1: Ethnic Minority CulturalHeritage Protection (US$44.62 million), aiming at increasing employment and incomes of residents of selected minority villages and ancient towns inQiandongnanand Qianxinan Prefecturesand improvingtheir basic living conditions, with special attentionto the protection oftheir cultural heritage, through the carrying out of the following: (a) construction of small scale infrastructure facilities to serve the villages and towns; (b) rehabilitation and conservation ofuniquehistoric buildings and construction or establishmentof cultural and visitor centers; (c) rehabilitation and conservationof traditional private houses; and (d) carrying out of income generationactivities that preserve andprotect intangible cultural heritage for provisionoftechnical assistance, training and goods. Component 2: NaturalHeritage and Scenic Site Protection and Development (US$21.35 million), consisting the carrying out ofphysical investments to improve infrastructure and tourism facilities in:(a) GuanlingNational Geo-Park inAnshun Municipality; (b) DingxiaoNational Geo-Park inQianxinan Prefecture; (c) Wanfenglin 5 National Scenic Park inQianxinan Prefecture; and (d) ShanmuRiver Scenic Park in Qiandongnan Prefecture, includingconstruction andor rehabilitation ofpedestrianroads, public toilets, water supply and sanitation facilities, signage, andtourist service centers, and implementation of measures for environmental and ecological protection of such parks. Component3: Tourism Gateway TownFacilities Development(USN6.34 million), consisting the following: (a) construction of tourist informationcenters inselectedcounties inQiandongnan Prefecture andprovisionof goods, technical assistance and training to strengthen institutional capacity, at the county level, for the promotionof tourism; and (b) construction ofthe Guizhou Cultural andNaturalHeritage Protection and Development Center inGuiyang, which will carry out research on natural heritage and tangible andintangible cultural heritage; host performances and lectures; provide tourist informationand services; develop and deliver training inrural tourism development and managementand cultural awareness and conservation; and develop a tourist destination managementwebsite for tourist sites informationand marketing. Component4: CapacityBuildingand ProjectImplementationSupport (US$1.81 million),consisting the following: (a) strengthening o f institutional capacity and capability: (i)at the provincial levelto manage, implementand monitor project activities; and (ii) at the village level, for conservation of traditional buildings andfor facilitating community organization and village-level activities especially ingrant programs for traditional private house rehabilitation and conservation and intangible heritage preservation; (b) strengtheningof capacity andcapability inthe tourism sector: (i) the county level at through the provisionof goods andtechnical assistanceto Project Management Offices (PMOs); and (ii) at the provincial andlocal levels through provisionof training for staff of PMOs, Project Implementation Units(PIUs), andprovincialandlocal government tourism administrative units; and (c) reviewingandupdating of the Guizhou Tourism Development Master Planto align its strategiesto current circumstances, includingimproved access of tourism sites to highways; and development of design guidelines for the Conservationo ftraditional buildings andtraditional environments inminority villages. E. Lessonslearnedandreflectedinthe projectdesign 22. The Bankhas gained experienceinthe support of heritage conservation andtourism development through a series of projects inChina over the past 16years. Inaddition, an analysis 6 ofthe cultural heritage sector entitledManagement of Urban Cultural Heritage in China: A Sector Overview, has provided key lessonsthat have beenincorporatedinto the project de~ign.~ 23. Heritage Conservation Practices. Some local officials andpractitioners inChina follow heritage conservation practices which are outdated, and employ lower standards than the best practices either currently mandatedby Chinese law or recommendedby international organizations. To encourage better practices, project activities will emphasize compliance with all state, provincialandprefecture laws and standardsfor heritage protection. Inaddition, the project will advocatethe use ofPrinciplesfor the Conservation of Heritage Sites in China, which is a set of guidelines issuedby China's SACH, as well as the China Chapter ofthe International Council on Monuments and Sites (ICOMOS).4 24. Land Use Planning. Past project experience indicates that authorities in China would benefit from more assistancewith planning so as to develop plansthat address the impact and trade-offs among different landuse categories. Dueto a lack of appreciation for these trade-offs, local officials andplannersoften incorporate inappropriate development near traditional villages and heritagesites whichis inconsistent with heritageprotection laws, diminishingthe value and significance of these sites. During early project implementation, these issues will be addressed by screeningplans and ifnecessary,they will be improved to ensure consistency with the project's objectives and China's laws. 25. Appropriate Infiastructure Design. Bank-financedinfrastructure projects inChina have shown atendency toward infrastructure that is larger or more technical than is necessaryor appropriate for the situation. This has occurred largely due to the absence o f demandprojections and an inadequateunderstanding of the community's ability to operate andmaintain the facilities. Extrascrutiny was given during project preparation to ensure that project infrastructure represents: (a) the realistic level of community demand; (b) technology appropriate for rural conditions; (c) local capacitiesfor operation and maintenance (O&M); and (d) lowest cost. 26. Sustainable Tourism Development. Recent observationsof China's tourism sector suggest that the requirementsof sustainabletourism development are not well understood. Moreover, the negative impact that tourism can have on traditional villages and ancient towns andtheir social fabric is not fully appreciated. Experience from the World Bank's global engagementontourism development has shown that project activities must focus on: (a) raising awarenessand capacity building for communities andtourism development officials; (b) cultural tourism market researchand analysis; (c) appropriate cultural tourism activities and interpretation; (d) delivering maximumbenefits andminimumcosts to communities; and (e) cooperation, rather than competition, among localtourist destinations. 27. Community Participation and Bene& Previous projects inbothheritage and environmental conservation have establishedthe importance of involving communities during the planningphase, inorder to maximize benefits andengage their support for conservation. The WorldBank, 2005. Management of Urban Cultural Heritage in China:A Sector Overview.WorkingPaperNo. 2, UrbanDevelopmentWorkingPapers, EastAsia InfiastructureDepartment.WashingtonD.C. Available on the ChinaICOMOSwebsite (http://www,icomoschina.org.cn). 7 project will focus on bringing benefits to the community through: (a) the strengthening or formation of representativevillage organizations to establish village-level consensus on organization, management, and conflict resolution for tourism development; (b) awareness raising on the importance of cultural heritage for social and economic development; (c) provision of basic infrastructure services (e.g. water and sanitation androad improvements) intarget communities; and (d) skills training inincome-generating activities (e.g. restaurants, guest houses, performances, and souvenir production). 28. ExperienceJi.om China Cultural Heritage and Tourism Projects. Many of the lessons describedabove have come from experience indeveloping the recently-approved Gansu Cultural andNatural Heritage Protection andDevelopment Project. Additional lessonsfrom Gansuthat have been incorporatedinto this project include: (a) the positive potential for partnershipsand cooperation with state-level agencies; (b) the challenges related to China's institutional and legal frameworks for heritage protection; and (c) the level of capacity for physical and economic planning related to heritage sites. Other project experiencesinChina that have beenusedinclude conservation and development of the HuguangHuiguan complex underthe Chongqing Urban Environment Project, and the LeshanBuddha site underthe SichuanUrbanEnvironment Project. 29. To address the issues of sustainabletourism development, the project will make use of the lessonslearned inthe development ofcultural heritagetourism activities inGansuand Shaoxing andNingbo underthe Zhejiang UrbanEnvironment Project. The project has made use of information developed on: (a) the organization and capacity of the tourism sector inChina; (b) the growth andcomposition ofthe domestic and international tourist demand; and (c) the challenges faced by government, the private sector, andlocal residents inmaximizing benefits from tourism development. F. Alternatives consideredand reasonsfor rejection 30. Geographic Coverage. The GPG originally proposedthat the project cover all of the province's municipalities andprefectures. This would have involved a vast area, comprising over 100 sites. Such aprogram would have been unaffordable by the GPG, and difficult to manage and supervise for boththe GPG andthe World Bank. After detailed discussions, the GPG andthe Bankagreedto focus on a few key districts where the biggest impact couldbemade in:(a) poverty reduction, by focusing on areas with the greatest concentration of poverty; (b) demonstration purposes, by choosing an illustrative range o f cultural andnatural sites; and (c) effective implementation and supervision, by concentrating resourceson a smaller number of sites. These considerations limitedthe project's geographic coverageto a smaller number of project sites inAnshunMunicipality, and Qiandongnan and Qianxinan Prefectures. 3 1. Tourism Development Companies.A government proposal was made to create government-owned or privately-owned tourism companies inminority villages. These would have beencompanies with the capacity to borrow and repay project funds. This proposal was rejected because the villagers would havehad little input or control inany of the activities, the companieswould be driven by profit, and the overall processwould not give priority to the needs and interests of the communities. 8 32. Modelsfor CommunityParticipation. Three alternative models were considered to give the ethnic communities, the owners o f the cultural heritage, a larger role inthe decisions affecting the communities. These were: (a) community-driven development (CDD) model that requires passing all funds to the communities for them to decide on potential interventions; (b) CBD model that enables them to makeall decisions on the interventions, but with control o f funds; and (c) mere consultations on proposed interventions. The CDD model was considered to have too many fiduciary risks due to the weak capacity that exists at all levels and also because o f issues relating to monitoring the proper use o fproject funds. The option that allowed consultation alone was considered to be not adequate. Hence, the CBD model was selected. 33. Balance Between Infrastructure, Heritage, and Tourism.The early proposal for project investmentwas drivenby tourism bureaupriorities, rather thanvillage priorities, andemphasized infrastructure construction. However, following in-depthdiscussions on the project goals and the means by which these goals could be achieved, priorities shifted. More emphasis has beenplaced on the community participatory approach, intangible heritage conservation, guidance on appropriate cultural tourism, and measuresto generate more income and benefits for poor ethnic minorities. 111. IMPLEMENTATION A. Partnershiparrangements 34. The proposed project i s a free-standing project and does not have any other international co-financiers. B. Institutionalandimplementationarrangements 35. Project Management. The GuizhouProvincialProject Leading Group, headed by the Vice Governor o f Guizhou Province, has been established to provide policy, financial, and institutional guidance on the project. 36. The Guizhou ProvincialProject Management Office (PPMO) has been established under the GuizhouProvincial Tourism Bureau(GTB) for overall project coordinationand management. The PPMO will be responsible for developing annual work plans, preparing consolidated project progress and financial reports for Bank review, andmonitoring overall implementationprogress andproject impacts. 37. PMOs have also been established inthe municipal/prefectural and county-level tourism bureaus. These PMOs will be incharge o f guiding andmanaging the preparation and implementationo f project subcomponents under their jurisdiction and coordinating day-to-day activities with the PPMO. The county-level PMOs will have the overall responsibility to manage implementation o f village-level activities, andbe directly responsible for the implementation o f the grant programs for private house conservation and rehabilitation and intangibleheritage protection and preservation(items (c) and(d) o fthe Ethnic Minority Cultural Heritage Protection component). 9 38. Project Implementation. PIUs have beenestablishedat the component or subcomponent level. The PIUs are mainly prefectural and county-level tourism bureaus. The PPMO and the Guizhou Normal University (GNU) will beresponsible for implementingthe Capacity Building and Implementation Support component andthe Guizhou Cultural andNatural Heritage Protection and Development Center subcomponent, respectively. 39. Eleven subcomponentsin 17minority villages underthe Ethnic Minority Cultural Heritage Protection component will be implementedthrough the CBD approach. The county- level PMOSwill have overall responsibility for fund managementandprocurement, while the minority villages will decide upon and implement all village-level activities, includingthe selection of: infrastructure packages; rehabilitation andconservation of uniqueand historic traditional buildings; andbeneficiaries for grant programs for rehabilitation and conservation of private houses, and intangible cultural heritageprotection. A representativevillage organization ineachvillage the Community ProjectManagementGroup (CPMG), will bethe mainagency - to coordinate activities inthe village. The CPMG will identify and determine eachactivity to be carried out inthe village through a process of consultation with villagers to reflect their needs andpriorities. Other organizations at this levelare the Village Committee and the Village Supervision Group (VSG). Below this layer are the Village Implementation Groups (VIGs). Prior to project implementation, villagers will be organized into differentVIGs, such as Village Tourism Association, Construction Team, Arts and Crafts Association, and Senior Citizens Association based on the needs of eachvillage. To provide support the efforts of the villages, the project will provide: community coordinators/facilitators for community mobilization and guidance, andtechnical specialiststo helpdevelop designsfor conservation of traditional buildings and environments inminority villages. This organizational arrangement would ensure maximumcommunity participation inproject activities, andtechnical support to villages. Details ofthe CBD approach are describedinthe Operation Manual for Community Participation (OMCP). Detailed implementation procedures are also describedinAnnex 15. 40. Technical Guidance. The Tourism Development Expert Committee has been established to assist inthe preparation and implementation of the project through technical support and guidance. The committee i s composed of Guizhou's scholars and government officials with technical expertise relatedto the project, suchas cultural heritage protection, planning, engineering, and poverty alleviation. 41. Fund Flow. The proposed loanof US$60 millionwill be madeto the People's Republic of China. The loan proceeds will flow from the Bank into aproject designated account, which will be establishedat and managedbythe Guizhou Provincial FinanceBureau(GFB). The GFB will pass onthe loanproceedsthrough the municipal/prefectural finance bureauto: (a) county financial bureaus, which will implementthe subcomponentsinminority villages, scenic areas, andnatural heritage sites; (b) the GNU, which will implementthe Guizhou CulturalandNatural Heritage Protection and Development Center subcomponent; and (c) the PPMO,which will implementthe Capacity Building and Project Implementation Support component. Following internal arrangements, eachcounty government andthe GNUwill be responsible for repaying their respectiveloansto the GFB. Guizhou Province will beresponsible for repaying the Bank loan. 10 C. Monitoringand evaluation of outcomes/results 42. Key outcome indicators for the project development objective, as well as for three project goals -cultural heritage protection and development, natural heritage protection and development, and sustainabletourism management-are found inAnnex 3. The prefecture- and county-level tourism bureaus, the county-level PMOS,andthe CPMGs under the project will regularly collect the data necessaryto monitor and evaluatethe outcome indicators. The PPMO will work closely withthese organizations to consolidatethe datainprogressreports andupdate the ResultsFramework as necessary.The datawill be collected through: (a) progressreports; (b) annual community surveys for the minority villages; (c) village account records; and (d) registry informationat the gateway town tourist informationcenters. D. Sustainability 43. The GPG is firmly committed to tourism developmentas the vehicle for economic development and poverty alleviation inGuizhou Province, especially inminority communities. With the assistance ofthe World Bank andthe World Tourism Organization, the GPG has developedthe Tourism Development Master Plan, whichfocuses on rural tourism. The GPG's policies and developmentplansdeem it necessary to: develop tourism facilities; protect natural and cultural heritageassets; provide financial support; improve infrastructure inminority villages andancienttowns; improve tourism-related skills withincommunities; encouragetourism- related services and businesses; and promote domestic and foreign investments inthe sector. Municipal/prefectural and county governmentsinGuizhou view tourism as the key to local economic development. The project's technical assistance inputs will helpbuild-upthe capacities of the provincialand county-level tourism bureaus (andvillage organizations) inthe following fields: tourism planning, development, andmarketing, hospitality service standards, and business planning and development. 44. The adoptionofthe CBD approachempowerscommunities andassures ownership. Communities will be involved inthe decision-making, implementation, and monitoring of all activities, as well as the identification, interpretation, andprotection of their heritage assets. This approach strengthens the communities' awareness of the importance of heritage assets. It also assigns to them the responsibility of protecting and preserving the assets for long-term sustainability . 45. Underthe project, the villages will receive assistance from community coordinators/facilitators and technical specialists, who will facilitate community mobilization andprovide technical advice to: develop conservation plans; restoretraditional buildings in accordance withproject guidelines; maintain the overall visual integrity o f the traditional village environment; and select appropriate infrastructure that is easily maintainable and meets high conservation standards. 46. The infrastructure and facilities constructedinthe minority villages will be owned and maintained by the villages. The government will provide funds for O&M o f facilities at the scenic and natural heritage sites. Improvement and expansionof basic village infrastructure will ensure that the increased need for sanitation and solid waste management (created by rising 11 numberso ftourists) will be handledina sustainable manner.Firesafety measures - including education, firefightingequipment, and inspection of electrical installations - areincluded inthe project to protect heritage buildings and landscapes. E. Critical risksand possible controversialaspects Toproject development objecti ?S Loss of minority villages' Provide minority villages with Modest values and an increase in information onthe likelyimpactsof social problems tourism development and other outside forces. 0 Guide minority villages to participate, discuss, and agree on the amount and type of change andtourism development. Inappropriatedevelopmentat Screen physicaland cultural heritage Modest cultural andnaturalheritage protection plans for consistencyand sites suitability prior to infrastructure investments. Conduct workshops/seminarsto raise awareness of local government and PMO officials. Inadequateor inappropriate 0 Monitor and supervise eachvillage to Modest conservationat cultural and ensure that appropriate architectural naturalheritage sites guidelines are beingfollowed. Engage local craftsmenor qualified specialists inconservationwork. 0 Conductworkshops/seminarsto raise awareness of communities on appropriate heritageprotectionand conservation. Exclusion of minority villages 0 Prepare and adopt appropriate Substantial from sharingthe benefits of regulationsto safeguard the interests of tourism development ethnic minorities by the GPG. 0 Use a participatory approachto ensure village needs andpriorities are being funded. Lack of senior leadershipand Secureagreements with the GPG to Substantial commitment to provide ensure sufficient financial and human sufficient financial and human resources before implementation. resources 12 To component outputs/results Influence of majority 0 Require, by state and provincial Low community at the county and regulations, that officials dealing with PMO level on interventions in minority matters be from the same minority villages. minority group. 0 Use the CBD approach to ensurethat interventions in minority villages are decided bv communities. Lack of counterpart fundingto 0 Confirm commitment from municipal Substantial implement the project as and local finance bureaus for timely scheduled. payment of counterpart funds. 0 Provide Bank financing o f about 70%. Weak implementationand 0 Provide support for project Substantial management capacity of implementationand management. PMOs 0 Conduct capacity-strengthening training for PMO staff. 0 Conduct regular supervision by the Bank to address issues ina timely manner. Failure to use loan proceeds 0 Control and regularly monitor Substantial for the intendedpurposes counterpart funding, expenditures, and loan funds, especially at the country level. 0 Conduct frequent financial management reviews. 0 Refuse to fund proven irregularities. Noncompliance with social Prepareannual monitoringand Modest and environmental safeguards evaluation reports on environmental and social safeguards. Conduct regular safeguard supervision by internationalanddomestic specialists. Slow procurement processdue 0 Provide technical assistancefor Substantial to insufficient experience and procurement and supervision on a regular knowledge of PMOS and PIUs basis. about procurement and Bank- 0 Provide PMOs and PIUs with financed projects procurement training. 0 Ensurethat the Procurement Manualand the OMCP will befollowed for project imdementation. OverallRiskRating Substantial * Gbility that an outcome will not be achieved: High>75%; Substantial>50%; Modest 25%;LOW <25% F. Loadcredit conditions and covenants 47. The following covenants are included inthe Project Agreement: 48. Loan Effectiveness Condition: There is no loan effectiveness condition. 13 49. DatedImplementation Covenant: With respect to the implementationo fthe Ethnic Minority Cultural Heritage Protection component, Guizhou shall cause a CPMG and a VSG to be established at each o f the selected minority villages by September 15,2009, with terms o f reference, staffing and other resources acceptable to the Bank, as set out inthe OMCP. 50. Key Implementation Covenants: (a) Guizhou shall: (i) out, and cause to be carried out, the project inaccordance with carry the OMCP; and (ii) to the Bank for its prior approval any proposed amendment to furnish the provisions o f the OMCP and, thereafter, put into effect only such amendments as shall have been agreed with the Bank. (b) Guizhou shall causethe projectparticipantsto implement Guidance No. 30 o f2007 issued by the Guizhou Provincial Party Commission and the GPG on November 28,2007, on safeguarding interests o f ethnic minorities andtheir cultural heritage inthe development o f rural tourism and ensuring that ethnic minorities receive the benefits from tourism development. IV. APPRAISAL SUMMARY A. Economic and financial analyses 51. Economic Analysis. This project will bringvarious economic benefits to both local residents andtourists through local economic development. Income will increase due to tourism activities, enhancement o f local skills, protection and development o f cultural heritage, conservation o f natural ecosystems, improvement o f living standards and environmental health in ethnic minority areas, and strengthening o f local institutions. Some o fthese economic benefits will come as direct use value for tourists and localresidents, such as their enjoyment o f cultural heritage. Some are indirect, such as the ecological and environmental improvements provided by natural heritage preservation. 52. The economic valuation o fthe project, however, i s a challenge. This is due to the nature o fthe heritage, which is priceless, and the uncertainty about the number o f future tourists. Economic valuation also depends on how muchthe project contributes to increasing revenue at the project sites, some o f which have already become tourist destinations. All o fthese factors are difficult to determine exactly. A mix o f a cost-effectiveness approach and a cost-benefit analysis was therefore used for the economic analysis. 53. A cost-effectiveness approach was usedto ensure that least-cost options are adopted to achieve the development goals. Guidelines for least-cost options were therefore followed while designing most o fthe investment components, especially those that provided basic infrastructure for heritageprotection and tourism development. The guidelines recommend technical design ideas and alternatives, such as different construction materials, technical standards (e.g. the width o f access roads and hikingtrails), or technologies (e.g. types o f wastewater treatment methods andpublic toilets). By weighing the alternatives, the design process will select the least-cost 14 option for construction. Additionally, a cost-benefit analysis was performed on several selected project sites - a scenic park area, a Miao ethnic minority village, a Dong ethnic minority village, and an ancient town -to further examine the economic justification o feach site. The results should illuminate the economic viability o f the entire project. 54. The analysis quantifies only the direct use benefits to visitors and local residents. Other benefits mightalso be important, but are not included due to data and time limitations inthe analysis. Inthe cost-benefit analysis o f the four selected project sites, tourists andresidents completed surveys about their willingness-to-pay for cultural preservation, inorder to quantify this extra economic value to them. These economic benefits were quantified basedon conservative projections o ftourist growth at the site. 55. Each individual site had a different economic internal rate o f return (EIRR). This ranged from 13.7% at AnshunJiuzhou Ancient Town to 19.6% at Langde UpperMiao Village. The variation i s due primarilyto the different nature and size of investments at the different sites. All o fthese have an EIRR above the Government o f China's acceptable threshold, i.e. the 8% discount rate for investment projects, recommended by the National Development andReform Commission in2002. It is likely that the result of the economic analysis is at the low end o f estimation, but can still economically justify the project. Sensitivity analysis -which assumes a 10% reduction inthe number o f visitors and a 10%increase ininvestment costs - shows that the analysis remains robust. 56. The project will improve the condition o f local infrastructureandbringeconomic and health benefits to the entire population (including the poor) inthe project areas. To ensure that the project revenue will be shared fairly among local residents, a CBD approach will be employed inproject implementation. Accordingly, the project anticipates no negative impact on the poor. 57. Financial Analysis. Given the nature o f the project, i.e. the private sector only is unable to ensure the preservationof heritage sites and assets and the equitable distribution o fbenefits to the public, municipal financial analysis was carried out for the project municipality and prefectures. 58. For all the project municipality andprefectures, the counterpart financing and loan repayment are considered to be well within the fiscal capabilities o ftheir governments and thus have little impact on their finances. Inaddition, given the municipality andprefectures will receive transfer payments from the central government, their financial resources will be adequately secured for the project. B. Technical 59. Factors considered inthe provision of infrastructure inminority villages are described below. Similar considerations were used inthe provision o f infrastructure facilities at scenic areas and natural heritage sites: (a) infrastructure options selected hadthe least cost andwere easily maintainable by minority communities; (b) infrastructure caused minimumenvironmental impact to the minority villages; (c) vehicular access to the village was limitedto the main access 15 route (i.e. one main spine road); (d) concrete pavement or structures were avoided infavor of traditional localmaterials; (e) parking for tour buses or other visitors was located outside the village entrance; (f) adequatesanitary facilities were provided to meet the demandand standards of domestic and foreign visitors (this includes appropriatetechnologies such as septic tanks, stabilization ponds, double pit flush latrines, and biogas disposal systems); and (8) simple, but appropriate, solid waste collection systems were selected, including arrangementsfor disposal at the nearest landfill. 60. Proposals for rehabilitation and conservation of traditional buildings and individual houses ensuredthe following: (a) designs conformed to traditional architectural styles; (b) workers usedonly local traditional buildingmaterials; (c) rehabilitation and conservation methodswere easily replicated by villagers; (d) adequate measuresto reduce fire risks were incorporated; and (e) the least-cost method was chosen. C. Fiduciary 61. Financial Management. An assessment was carried out on the adequacy of the financial management systems for the project. The assessment, basedon guidelines issued by the Financial Management Sector Board on November 3,2005, concluded that the project meets the minimumBankfinancial managementrequirements,as stipulated inBP/OP 10.02. Taking into account the risk mitigation measures proposedunder the project, the financial managementrisk rating i s assessed as `substantial.' 62. Procurement. A procurement capacity assessment was carried out and found out that the capacities available at the county government level are weak. The overall procurement risk rating i s thus assessed as `high'. Basedon this assessment, recommendationswere made on the appropriate threshold for prior review and on measuresto strengthenthe PIUS'procurement managementcapacities. Procurementfor this project will be carried out inaccordancewith the World Bank`sGuidelines: Procurement under IBRD and IDA Credits, May 2004, as revised October 2006 (the Procurement Guidelines) and Guidelines: the Selection and Employment of Consultants by the WorldBank Borrowers, May 2004 as revisedOctober 2006 (the Consultant Guidelines)andthe provisions stipulated inthe LoanAgreement. D. Social 63. Social Benejt. The project aims to facilitate the sustainable development of Guizhou's cultural and natural heritage, and i s therefore expectedto deliver positive benefits by improving preservation and conservation of the heritage. The project will instill a commitment to, and practical experience of, sustainable approachesto tourism development among the government andthe public inGuizhou. This will ultimately enhance cultural heritage appreciation, environmental sustainability, andthe economic development of isolatedpopulations. Social and economic benefits can berealized by increasing the number of tourists to acceleratethe service industry's development. Economic development (drivenby tourism) will increasejob opportunities and enhanceincentives for the protection of cultural and natural heritage. 16 64. Land Acquisition and Resettlement. Resettlement impacts will be limited. Inmost cases, landneeded for the village project will be obtained through landadjustments or donations. Facilities built under the Natural Heritage and Scenic Site Protectionand Development and Tourism Gateway Town Facilities Development components will inmost cases use empty state- owned land. Only one village involves housing demolition accordingto the provincial planfor cultural heritage preservation. A consolidated Resettlement Action Plan, including a Resettlement Policy Framework, has been developed incompliance with OPBP 4.12 Involuntary Resettlement, and the relevant domestic policies. 65. Ethnic Minorities. Social assessment has been carried out. The majority o f the project's beneficiaries are minorities, and three minority groups -the Miao, Dong and Buyi-will be affected. The affectedminority groups were consulted duringproject preparationand the OMCP has been prepared. E. Environment 66. One o f the project objectives is to contribute to the overall improvement o f the environment inthe project areas by creating the basis for long-term protection andmanagement o f heritage. More specifically, the project investments will improve the environmental conditions withinproject sites by usingrehabilitationand conservation works such as landscaping andby upgrading andpaving access roads and footpaths. The environmental impacts o f local residents and tourists will be mitigated through the provision o fkey environmental services. These include sanitation, solid waste collection and disposal, power supply, storm drainage, water supply, and wastewater management. The environmental impacts o ftourists will also be reduced by providing fences, pathways, and tourist service centers, all o f which will reduce the possibility o f improper site use by visitors. 67. Environmental Assessment. The project i s classified as a Category A project under OP/BP4.0 1Environmental Assessment (EA). This i s because some proposed subcomponents are located insensitive areas with significant cultural relics or natural environments, although most of them are simple andhave a small investment scale. Furthermore, this classification was primarilybased on the importance o fsites, rather than the potentialimpacts o fthe individual project investments. The environmental safeguard documents -EA report, Environmental Management Plan, andEA summary -have been prepared on the basis o f China's legal and policy frameworks for pollution control and environmental protection, project master plans, and conservation plans, as well as applicable World Bank safeguard policies. The environmental safeguard documents have applied the relevant methodologies as set out invarious technical guidelines issued by the former State Environmental Protection Administration, which is currently the Ministry of Environmental Protection, and also intechnical sourcebooks/safeguard policies fiom the World Bank.The scope o f the project covered by the EA report is based on the feasibility study reports for the project components. Inaddition to the environmental safeguard documents mentioned above, a Strategic Environmental Assessment was conducted by international consultants, which evaluated three o f Guizhou's plans -the economic development plan, the cultural and natural protection and development plan, and the tourism development plan -fromanenvironmentalperspective, 17 F. Safeguard policies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPiBP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) [I [XI PestManagement(OP 4.09) [I [XI Physical Cultural Resources(OPiBP 4.11) [XI [I Involuntary Resettlement (OPiBP 4.12) [XI [I Indigenous Peoples (OPiBP 4.10) [XI [ I Forests (OP/BP 4.36) [ I [XI Safety of Dams(OPiBP 4.37) [ I [XI Projects inDisputedAreas (OPiBP 7-60). [ I [XI Projects on International Waterways (OP/BP 7.50) [ I [XI G. Policy exceptions and readiness 68. Theproject requiresno exceptions from Bankpolicies. Theproject also meets all key readiness criteria. The capacity o f PMOs, PIUs, andparticipating minority villages is the key to successfulproject implementation; however, it is consideredto be relatively low. Training and capacity building programs, as well as implementation support will be thus provided throughout project implementation to mitigate any possible project risks to which it might lead. * By supporting theproposedproject, the Bank does not intend toprejudice thejnal determination of theparties' claims on the disputed areas 18 Annex 1: CountryandSector or ProgramBackground CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject 1. Guizhou Province is located insouthwestern China. The province has a population o f approximately 39.5 million, o f which about 38% belong to 49 ethnic groups. Guizhou's ethnic minority population i s about 14 million-the highest number for any province except Guangxi andYunnan. Manyo fthe ethnic groups are indigenousand live inremote rural areas with a standard o f livingthat is muchlower than Guizhou's urbanaverage. About 15% o f Guizhou's communities remain inaccessible by road, and 27% o fthe population i s not connected to an electrical grid. The average rural per-capitaincome is only 27% o f that inthe province's urban areas. Data from 2005 indicates that, out o f Guizhou's 87 administrative counties and cities, the number o fnational-level poverty counties actually increasedfrom 47 to 50. While the recent increase intourists has brought benefits to some specific segments o f the population, mainly those who participate intourism-related activities, the overall benefits to minority communities have been limited. 2. Guizhou's ethnic minorities maintainunique, centuries-old livingtraditions insmall, rural villages. These villages consist o f extensive traditional architecture and cultural landscapes, where visitors can experience ancient traditions o f song, dance, food, andfestivals. Many traditional crafts are still practiced with great skills. These include embroidery, batik, silver smithing, andweaving. The opportunity to observe these ancient ways o flife inremote village settings represents an attraction o f immense appeal to tourists. 3. The province also has significant natural heritage and has established nature reserves, scenic areas, and geo-parks o f great diversity. About 60% o f the province features dramatic karst land formations. The most spectacular examples can be found at MaolanNational Nature Reserve inQiannanPrefecture and Wanfenglin Scenic Area inQianxinan Prefecture. Many deep gorges have impressive waterfalls, such as Maling River Gorge inQianxinan Prefecture. Guizhou also has numerous ancient monuments, including temples, gates, and statues, as well as some more recent historical attractions, such as the sites associated with the Long March o f the Red Army inthe 1930s. GovernmentEfforts towardTourismDevelopment 4. Compared to the neighboring provinces o f Yunnan and Guangxi, Guizhou receives fewer tourists due to its relative isolation, inadequate access roads, and poor facilities. However, the Guizhou Provincial Government (GPG) beganpromoting tourism inthe late 1990sand the recently expanded network o f highways and railways has significantly improved access to the region. At present, visitors are concentrated inthe Guiyangand Anshun areas, with the secondary areas being Qiandongnan, Qianxinan and Qiannan Prefectures. These three prefectures have recently become attractive tourist destinations generating jobs and revenue. According to the Guizhou Provincial Tourism Bureau, about 2,600 villages inthese three prefectures have attracted 10.84 million visitors, resulting inthe total revenue o f RMB 2 billion, equivalent to about 8% o fthe province's total tourism revenues. About 137,000 people were directly or indirectly employed, representing about 37% o f the total tourism-related employment 19 inGuizhou. Recently, theprovince's tourism marketing hasbeensuccessful, withtourist arrivals in2005 and2006 exceedinglong-term averages. Over 90% ofvisitors are domestic. However, the proportion offoreign visitors is expectedto rise followingthe increasedmarketing, improved access, and construction of facilities. It is also expectedthat these improvements will encourage visitors to spendmore time experiencing the local lifestyles and culture andthereby increase villagers' incomes. 5. This recent and rapidincreaseinvisitor numbersmeansthat there is anurgent needfor Guizhou to develop policies, protection measures, infrastructure, public awareness, and capacitiesto ensure that it can achieve its goals for local economic development, conservation of cultural and environmental resources, sustainabletourism development, and tourist satisfaction. 6. The groundwork for the necessaryimprovements for tourism development beganin2002 when the World Bank, together with the GPG and the UnitedNations World Tourism Organization, financed atourism development master plan.The master plan set out a framework for coordinated sustainable tourism that includes: infrastructure development; environmental improvements; upgrading ofproducts and services; tourism managementand planning; marketing; and finance and investment.Basedon this masterplan, Guizhou has formulated a rural tourism development planwithprovincialpolicies and plansthat pursuetourism development and poverty alleviation by generatingemployment, contributing to local economic development, and ensuring sustainable development through the responsible use o ftourism resourcesinthe poor national minority areas. Thus, tourism is a major element of Guizhou's current strategy for poverty alleviation and economic restructuring. This i s consistent with the Chinese Government's 1lthFive-Year Plan, which also gives highpriority to tourism development and cultural heritage conservation. Key Challengesfor SustainableTourismDevelopment 7. Improving Basic Injastructure. Many of Guizhou's minority villages, ancient towns, and parkslack basic infrastructure such as access roads, footpaths, water andpower supply, telecommunications, sanitation, and solid waste managementsystems. Investment inbasic infrastructure is critical, not only to the sustainable development andprotection ofthese sites, but also to creating the facilities that are requiredby visitors so as to increaselocal economic opportunities, and to raise residents' standardsof living. All basic services infrastructure supportedunder the project will be operated andmaintained by recipient villages, towns, and parks. Giventhe capacity and resourcesavailable for local-level operation and maintenance, these investmentsshould be basedon appropriate technology. Solutions should be least cost, easy to operate and maintain, and functionally efficient. For example, low-cost technologies should be considered for sanitation (e.g. twin-pittoilets, communal septic tanks, lagoons, stabilization ponds, etc.). Leaders invillages, ancient towns andparksmust have sufficient informationto base their systemchoices onproven technologies, affordable operating costs, and manageablemaintenancerequirements. 8. Building Capacityfor TourismPlanning and Management.Tourism operators and site managers have yet to conceive oftourism as a multi-sectoral, dynamic systemthat goes beyond individual sites andinvolves anetwork of transportation, hotels, shopping, restaurants, 20 entertainment and tour operators. Anecdotal evidence indicates that government leaders, tourism officials, parkmanagers, and village residents have limited experience with international tourism standards or with the expectations o f domestic tourists, who are becoming increasingly sophisticated and well-informed. 9. Ofparamount importance is the needinGuizhouto improve its managerialandtechnical skills and resources at all levels o f the tourism administration. Guizhou requires strategic tourism development to ensure bothpoverty alleviation andthe sustainable use o f resources, as well as to create the tools for proper management, protection, and development o f cultural and natural heritage assets. Currently, the present course o f development i s over-exploiting the assets. This will cause damage to the foundation o ftourism inthe longterm. The mainneed, therefore, is to: (a) strengthen the resources and capacities at all levels o ftourism administration; (b) define appropriate sources o f finance to support the proper course o f action; and (c) increase awareness o fthe importance and vulnerability o f the province's cultural andnatural assets, especially the cultural traditions o f the national minorities. 10. Many o f Guizhou's minority villages, ancient towns, andparks, have suffered from a lack of resources to undertake the necessary planningfor tourism development and conservation. Issues that must now be addressed include: (a) visitor flow and carrying capacity to avoid damage to heritage assets and to provide for visitors' safety and comfort; (b) clear boundary and buffer zone demarcations andregulations to prevent encroachment and uncontrolled development; (c) identificationo fnew products to increase the number o f visitor activities and opportunities for spending; (d) environmental protection(e.g. against deforestation and erosion); and(e) business development programsto support direct benefitsfor local communities (e.g. site-related employment and entrepreneurial activities). To facilitate Guizhou's tourism development there is a significant need to promote cooperation among all the relevant parties and develop tourism relatedknowledge, planningand infrastructure investments. 11. IncreasingAttention to Heritage Protection and Conservation. While the central and provincial governments have well-articulated institutional and legislative frameworks to protect cultural heritage, many o f these laws and regulations are insufficiently understood and implemented at the local level. Many o f Guizhou's key cultural and natural assets are at significant risk from environmental impacts, or from theft or exploitation due to the vulnerability o fpoor rural communities. Overall, the level o fpreservation andprotection has been inadequate, primarily due to a lack o f financing and institutional capacity, particularly at the local level. 12. Furthermore, institutional barriershave beensignificant. It i s often unclear who has authority over a specific relic or heritage site. Insome cases there appear to be conflicting authorities incontrol. Frequently, tourism authorities may control the sites but are not responsible for the relics withinthe sites. This has ledto over-building o ftourism infrastructure around the relics, with little or no preservationo f the relics themselves. 13. Another challenge for managing Guizhou's heritage is the scope o f China's cultural heritage laws, which recognize relics as individual monuments rather than as clusters or landscapes. This approach i s not conducive to the situation inGuizhou. For example, insome areas with multiple cultural relics, each asset is listed separately - some at the state level, others 21 at the provincial level, others below those levels. However, the site as a whole, and the connections and relationshipsbetweenthe relics, are not recognizedby the laws. This makes it difficult for the local authorities to take a comprehensive view when managing parks, towns, or villages and their landscapes, environment, and heritage. 14. Intangible Heritage. It i s widely acknowledged that the unique intangible heritage o fthe ethnic minorities inGuizhou i s one o f the province's primarytourism assets. However, traditional forms o f life styles, including productivity and customs inGuizhou's minority villages are continually evolving as communities strive to improve their standard o f living and enjoy the benefits o f economic progress. Incommunities all over the world, intangible cultural heritage i s subject to adaptationand reinterpretation, especially inrapidly changing societies. Therefore, a sustainable model for safeguarding intangible heritage integrates ways o fpreserving and documenting traditions, while also reflectingthe changing needs, priorities andexpectations o f communities as they evolve. One o f the most effective tools for developing this balance i s the community-baseddevelopment (CBD) approach to ensure that local communities will be fully involved inthe identification, interpretation, protection, monitoring and evaluation o ftheir evolving cultural assets. 15. The presentation o f intangible heritage for tourism can result inovercommercialization andthe treatment o f cultural assetsmerely as commodities. For instance, inethnic minority villages, tourism frequently involves presentations o f traditional music and dance. For the most part,these performances are sincerely presented by villagers andrespectfully attended by visitors. However, insome villages that receive many visitors, dances that usually occur only once a year are now performed as often as three times a day. This obviously diminishes their significance for the community and results ina commercialized tourism product that can quickly lose its authenticity. Communities that have not experienced tourism development may not realize these risks or the need to anticipate tourism's influences. As a first step, communities need support to understand the important role their heritage plays intheir core social values and beliefs that underpintheir societies. The CBD approach enables communities to: identify and evaluate all aspects of their cultural heritage; determine what i s to be shared with outsiders; and provide authentic presentations for visitors without undermining their meaning(See 21. Enhancing Community Awareness and Decision Making for more detail). 16. Traditional Housing; and Streetscapes. Intraditional villages and ancient towns, poverty has resulted inthe deterioration o f basic residential facilities. Improvements such as electricity, sanitation, thermal insulation, wind proofing, and water proofing are warranted inthe large majority o fhomes and it i s inevitable that as residents can increasingly afford modern conveniences and lifestyles, renovations and improvements will be made to these homes. Experience inChina and around the world has shown that this upgrading cannot be severely restricted or residents will move to adjacent areas or new towns to improve their standard o f living, leaving villages and ancient town centers uninhabited. Inmany cases, provincial and national regulations on the conservation o f traditional architecture and streetscapes apply in project villages andtowns. It i s also extremely important to create a community-level consensus on compliance with these regulations or to develop conservationplans where none exists inorder to maintain the value o f the traditional buildingsand streetscapes. Housing renovations should be carried out by master artisans who have traditional skills, andwho will pass on these skills to 22 younger generations. Upgrading of exteriors should retain the original building's architectural style by using traditional materials and construction techniques. The addition of any services, includingwater and electricity, should use fixtures, ducts, andmaterials compatible with historic designs andmaterials. They should also cause minimal harmto the historic structure andrestrict any visual impact to aminimum.Inaddition to community-based conservation andplanning regulations, guidelines and examples of local architectural styles, materials, construction techniques andmodern adaptations should be available to all those who are renovating traditional buildings. 17. Publicly-owned traditional buildings that are rehabilitated and conserved should be adapted for productive and active newuses such as community centers and cultural centers. Facilities that serve visitors -performance areas, museums, public toilets, administration buildings, informationcenters, visitor service facilities, and small hotels - should be housedin the rehabilitatedtraditional buildings, as often as possible. All new structures should be designed to suit local climate and geography and be consistentwith the local architectural styles interms of quality of detail and design, appropriate height and scale, and harmonious materials and color. 18. CulturalandNatural Landscapes. The scale, complexity, and historical character o fthe natural andhistoric landscape of Guizhou Province represent a remarkable resource of great importance. Reflecting large-scale, dynamic geologic processes, extensive biodiversity, and roughly 5,000 years of continuous humansettlement and use, the landscapeof Guizhou inherentlyprovides a rare opportunity for the development of landscape-heritagetourism. Generally, the landscaperetains its character and integrity, but is also highly susceptibleto a wide range of agents of change includingsome aspects oftourism. Compiling an inventory, documentation, monitoring, and effective managementof cultural and natural landscape resources associatedwith participating project sites should bepart ofthe community-based heritage stocktaking and identification activities. Iti s of paramount importance that any new structures plannedto be built inthe natural and cultural landscape must be designed and sited with as little impact as possible onthe character ofhistoric villages andtowns or onthe natural and scenic areas. Installation of infrastructure systems such as electrical lightpoles anddrainage ditches should be carefully consideredto minimize their impact onthe visual (streetscape) environment. Finally, it is imperative that leisure, recreation and amusementfacilities be separatedphysically and visually from primary cultural andnatural assets. 19. Nationaland Scenic Parks. Limitedbudgets and a lack of conservation expertise and managementskills have had animpact on Guizhou's parks.Some have suffered from the addition ofpoorly-designed servicebuildings and low-quality protective rails, lighting, and walkways. Conversely, sites have not benefitedfrom managementandprotection measures that prevent andmitigate damage from overuse, fire, theft, vandalism, andthe elements. To develop a sustainable systemwhich can cope with the expectedlevel oftourist development, parkswill require adequateconservation, management systems, andprotective measuresfor their cultural andnatural resources. Investments for services, such as toilets andparkinglots, should bebased on appropriate low-cost technology and materials and should be sufficient to cope with average visitor numbers, ratherthanthe excessivedemandduring peak periods. Insteadalternative existing parkinglots that can be accessed and usedduring highvolume periods should be identified. 23 20. Issues that need to be addressed inpark planningand development include: (a) zoning and landuse, cultural andnatural resource protection, infrastructure and facilities development, architectural and landscape design standards, interpretation and information development, commercial services management policies, and marketingandpromotion; (b) cultural and natural resource inventory, monitoring and documentation systems that establish base lines andprovide ongoing information for strategy development and change management; and (c) provision o f infrastructure-including access roads and parking, pathways, power supply, rest rooms (water supply and sanitation), solid waste collection and disposal, administration buildings, tourist service stations, first-aid and safety arrangements. 21. Enhancing Community Awareness and Decision Making. Villagers can clearly see tourists' interest intheir traditional customs andthe subsequent potential to increase their income through tourism development. However, it is muchmore difficult for them to anticipate the changes their communities may experience as a result o f this increased tourism. Risks include the possibility of: (a) exposure to dissimilar lifestyles and higher incomes that undermine local appreciation o ftraditional social values and lifestyles; (b) commercialization o f traditional practices, which are sold andperformed as ethnic products, but are specifically designed for the tourist consumers; and (c) unequal distribution o f income. To addressthese risks, the project will use a CBD approach that has been applied successfully inmany Bank-financedprojects inother countries andwhich has been tested inChina with the approval and involvement o f the central government. Community involvement inthe process o f decision-making, implementation and monitoring o ftourism development, will help ensure that local communities: (a) understand the changes tourism will bring anddiscuss the resultant advantages and disadvantages; (b) decide the limits o f acceptable change and define strategies for dealing with this change; (c) control the extent and pace o ftourism development; and (d) create arrangements for sharing boththe benefits and costs o ftourism development at the village level. 22. Experience inother countries has shown that the CBD approach can also greatly improve project effectiveness by: (a) generating more in-depth information about local cultural heritage; (b) determiningthe most relevant investments; (c) improving infrastructuremaintenance arrangements; and (d) creating overall community commitment to project activities. The CBD approach will meannot only participation indecision making, but also community responsibilities and, when feasible, the allocation o f funds to communities (with necessary financial safeguards) for work to be completed. 23. Generating Income and Alleviating Poverty. The lack o f employment and business opportunities and the low standard o f living intraditional villages and ancient towns have resulted inincreased migration o fthe younger populationto nearby urban areas and to other provinces. This has left behind local populations o f mostly women, children, and the elderly. Clearly, a continuation o f this trend will eventually create non-viable communities and undermine the preservationo f cultural heritage. While some community members have developed small entrepreneurial activities connected to tourism inthe minority villages, ancient towns andparks, many o fthese efforts are of very low quality, provide only small incomes and leadto over supply, excessive competition andrepetitious goods for sale. Itis critical to provide training andtechnical assistance inactivities that can create sustainablejobs and income. Relevant efforts would include: (a) expansion o f craft production, including training for younger 24 generations; (b) training inheritage interpretation, exhibition andpresentation; (c) tourism promotionand marketing mechanisms; (d) funds channeledto villages to implementproject improvements, ensuring that a majority of the village's labor will be employed; (e) financial assistance for restoring traditional buildings, andfor improvingprivate houses; (f) training in vocational trades, and small business development; (g) training and support for the practice o f intangible heritage arts; and (h) organization oftourism activities at each site to increaseinterest, lengthof stay, andspendingby visitors. 25 Annex 2: Major RelatedProjectsFinancedby the Bankand/or other Agencies CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject Latest Supervision Rating Sector Issue Project (Bank-financed rojects Only) Implementation Development Progress Objective Bank Financed Basic urban services upgrading Zhejiang Multi-cities S S includingconservationandrepair of Development (C2475; historic buildings andurban fabric 05/18/1993); (ICR #23946; 06/06/2002) Pilot urbanservices upgrading and ShanghaiUrban Environment S S adaptivereuse ina medium density (L4705; 11/10/2003) historic area; preparationof a strategy for the support andmanagementof living culture and the arts Urban heritageconservationstrategy, Zhejiang Urban Environment S S tourism planning; upgrading of urban (L4724; 06/02/2004) infkastructureand traditional housing Documentation, conservation, Liaoning Environment (L3781; S S rehabilitation, protection, and 09/16/1994); (ICR #28833; presentationof cultural resources 06/25/2004) Earthquakereconstruction support for Yunnan Earthquake HS HS basic urban services andrepair of Reconstruction (C3078; traditional streets, bridges, canals and 06/12/1998); (ICR #22216; historic buildings 06/29/2001) Strategic conservationmasterplan and SichuanUrban Environment S S conservationand rehabilitation of key (C3251L4496; 01/09/2001); heritage sites includingWorld (ICR #377; 01/10/2007) Heritage-listed LeshanBuddha Strategicmaster planfor heritage Chongqing UrbanEnvironment S S conservationinChongqing; restoration (L4561; 11/03/2000) ofthe HuguangHuiguan andto assist the site becomeself-financing Heritage conservationand Gansu Cultural andNatural S S preservationofkey relics; research, HeritageProtection and interpretation and presentationof Development(L7542; cultural and natural heritage assets 3/20/2008) OtherDevelopment Agencies Support for World Heritage listing of UNESCO Performancereported satisfactory Chinese cultural relics Technical assistance incultural UNESCO, UNWTO Performancereported satisfactory heritagemanagement andtourism development 26 Annex 3: ResultsFrameworkandMonitoring CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject ResultsFramework PDO ProjectOutcomeIndicators Use of ProjectOutcome Information To assist Guizhou Province in 0 Average per capita income in 0 Measure progress toward the increasing economic benefits to project minority villages PDO of local economic growth local communities (including (RMB/year) minority groups) through increased 0 Support government decision tourism and better protectedcultural makers inmanagingtourism development and the and natural heritages protection and preservation of heritage sites ina sustainable manner I IntermediateOutcomes IntermediateOutcome Use of Intermediate Indicators OutcomeMonitoring 0 Cumulative number o fproject 0 Analyze the preservationo f sites with conservation work cultural heritage assets at completed inline with project sites and the approved conservation plans involvement o f local communities inthe efforts 0 Cumulative number o fyouths toward heritage protection trained for traditional arts and techniques 0 Percentage o f the selected basic infiastructure inplace against the plan Natural Heritage Protection Analyze the preservationand 0 Numberofthe natural heritage 0 development o fnatural sites with improved access heritage sites as sustainable 0 Numbero fthe natural heritage tourist destinations sites with appropriate interpretation and signage in place Sustainable Tourism Management Analyze the sustainability o f 0 Numberoftourists at the 0 tourism development in gateway town information Guizhou centers 0 Percentage o f minority employment at the gateway town information centers 27 t I M U 0 O P O P 0 .I 8 a x a x 24 0 L 1 .I Y - 3 0 0 0 N z . xm m N N N N t: a - h L e 2 3 Z M z i ? 2 N N N m Y I a U B 0 i ? 8 0 m 0 o 0 % 2 8 M Z M 2 N U i E!I 0 6 8 5 0 s N N - %1 0F- 0 - 0 0 s? 2 2 0 i? N + E 0 2 2m 0 0 5a 5ea r e 8e ke 5a e Ei a te Eaei eM v) v) v) v) i? Ei v1 v) a ae e b 9aEI .I Y E 0 a ! 8 Pi N I z l n0 t- W M E .I >F L. 0 0 2 L ! m Y N 0 .I NW 0 E - -- B I i 1 .c, a :: 0 0 a !2 N N F v1 E 3 L. Y (El s E Y a N i I E 8 2 m 0 4EE 0 0 N R L i I 0 2 r> N i ! I - 3 0 E W N I E Y E e I 9a n t I .m Y /t f E l 0 0 d v8n ba n t- I .I I. Y0 m EB .I I B 0 m I c1 2 I. (El B9 c % i@t-i 2E E I 0 0 a Annex 4: DetailedProjectDescription CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopment Project 1. The project sites are located inthe southernpartof GuizhouProvince, including Qiandongnan and Qianxinan Prefectures, AnshunMunicipality and Guiyang, the provincial capital. The project development objective is to assist Guizhou Province in increasing economic benefits to local communities (including minority groups) through increasedtourism andbetter protection of cultural and natural heritages. Component1:EthnicMinorityCulturalHeritageProtection(UW44.62 million) 2. This componentwill beimplementedin 17ethnic minority villages and four ancient towns inQiandongnan and Qianxinan Prefecturesto increaseemployment and incomes of their residents and improve their basic living conditions, with special attention to the protection of their cultural heritage. Investmentswill be in: (a) construction of small scale infrastructure facilities to serve the villages and towns; (b) rehabilitation and conservation ofuniquehistoric buildings and construction or establishmentof cultural andvisitor centers; (c) rehabilitation andconservation of traditional private housesthrough a grant program; and (d) carrying out ofincome generationactivities that preserve andprotect intangible cultural heritagethrough a grant program for provisionoftechnical assistance, training and goods, including: (i) for skills training inarts, crafts, music, stone masonry and carpentry; (ii) for ethnic product promotion, marketing andsales; (iii) capacity buildingincommunity mobilization, formation of for community organizations, community-based intangible cultural heritage protection andpreservation; and (iv) for rehabilitation and conservation of historic and traditional buildings andconstruction of buildings andinfrastructure under the project. Subcomponent ProjectSite Activity InfrCIstructure: road; drainage; garbagetransport station; rubbish bin 1. Tianlong Tunpu Cultural Heritage Tianlong Ancient Town Historic Buildin&Wtural Center: Tunpu culture museum; information center Protection Private House Rehabilitation: traditional residential house; demonshation house 31 Subcomponent I ProjectSite Activity Infrastructure : parkinglot; pedesaianroad; firehydrant;drainage; water supplyingfacility; garbagetransportstation;rubbishbin; publictoilet; river channeltreatment; indicationsign; , J 'ulturalHentage IJiUzh0' I Privute HouseRehabilituion: traditionalresidentialhouse; demonstrationhouse ~~ ~ lnfrustructure access, walkmgpass,parkinglot, fire fightingpool, firehydrant, dmnage, sewagetreatment, rubbishbin, rubbishpool, publictoilet, afforestation,indicationsign, . E Private House Rehubilitation: traditionalresidentialhouse; demonstrationhouse Infrastructure : foot path;village roadmaintenance;parkinglot; watersupplyingpipe; reservoir; drainage; sewagetreatment; fire hydrantpool; fire hydrant;hydranthose; rubbishbin; garbage transferstation; rivercleanup; poolenvironmentimprovement; afroestation;indicationsign; interpretationsign XiaohuangDongvillage Historic BuildinglCultural Center:Xiaohuangcultural heritagecenter _.DuliuRiverDong Private HouseRehabilitation traditionalresidentialhouse EthnicCulturalHeritage Protection lnfrustructure : foot path; village roadmaintenance; parkinglot; water supplyingpipe; reservoir; drainage; sewagetreatment; fire hydrant;hydranthose; rubbishbin; poolenvironment improvement ZengchongDongVillage Historic BuildinglCulrural Center: Zengchongconstructiontechniqueheritagecenter; opening singhall; traditionalwindandrainbridge I I I I I /PrivateHouse Rehabilitation: baditionalresidentialhouse lnfrastrucfure: walkingpass;parkinglot; water supplyingpipe; drainage; sewagetreatment; fire hydrant;rubbishbin; rubbishpool, publictoilet,rivercleanup; village environment 5. ShiqiaoAncient PapermakingProtection ShiqiaoMia0Village Historic BuildinglCulturul Center: tourist senice and informationcenter; protectionofpaper makinghistoric siteandancient village door IPrivute House Rehubilifurion:demonstrationhouse; papermakingworkshop ~ ~~~ ~~ ~~ lnjiastructure old streetrenowtion,dronage,firehydrant,rubbishbin, garbage transfer 6 JiuzhouAncient Town station, garbagetruck, signalsystem, indicationsign, interpretationsign HentageProtection JiuzhouAncient Town Historic BuildinglCulturul Center monument,catholicchurch,palace,temple, ancientnver bank, ncientwharf, ancient vlllagegate, ancientresidentialhouse 32 _____~ Subcomponent ProjectSite Activity Infrastructure :walkingpass; trestle; parkinglot; wind andrainbridge; wharf;watersupplying pipe; water pool; drainage; sewagetreatment; firehydrant; hydranthose; rubbishbin; rubbish pool; publictoilet; afforestation; barn; pool environmentimprovement; interpretationsigns Wubao Mia0Village Historic BuildingICultural Center: Wubao redembroideryculturecenter; souvenir selling house; informationcenter; bull fightingplace;shrine; hollytreerestplace; well andpavilion Yang'asha Miao thnic CulturalHeritage IPrivateHouseRehabilitation: demonstrationhouse I rotection Infrastructure: walkingpath; access path;bridlepath; trestle; parkinglot; water supplypipe; water pool; drainage;sewagetreatment; firehydrantpool; firehydrant; firehose; rubbishbin; rubbishpool; publictoilet; environmentalimprowment;afforestation;inidcatiionsign; interpretationsign ZhanliuMiaoVillage Hisforic BuildingICultural Center: Caiguplace; datingcorridor; tin embroideryheritagecenter Private HouseRehabilitation: traditionalresidentialhouse; demonstrationhouse Infrastructure : access; drainage; sewagetreatment; firehydrantpool; firehydrant;cityriver reconstruction;rivercleanup; environmentimprovement;indicationsign; interpretationsign LongliAncient Town LongliAncient Town eritageProtection Historic Buildin~CulturalCenter: touristinformationcenter; touristsenice center; Longbiao Ancient Academy; temple; pavilion; monument;ancientwall; citymoat;bridge; ancientwall protection Private House Rehabilitation: traditional residentialhouse;demonstrationhouse Infrastructure : walking pass; parkinglot; drainage;sewagetreatment; rubbishpool; fire hydrant HualenpuMiaoVillage Pool; publictoilet Private House Rehabilitation: traditional residentialhouse Infrastructure : walking pass; access to the village; parkinglot; wind andrainbridge;water supplyingpipe; reservoir;drainage; sewagetreatment;rubbishpool; rubbishbin; firehydrant BalaRiverMiao pool; publictoilet; barn; indicationsign; interpretationsign thnic CulturalHeritage lidaoMiaoVillage rotection HisforicBuildinglCultural Center : culturalandinformationcommunicationcenter ~~ Private House Rehabilitation tradihonalresidentialhouse, demonstrationhouse Infrastrucfure access, parhnglot, dranage, sewagetreatment, fire hydrantpool, rubbishpool, Vanhua Miao Village publictoilet Historic BuildingICultural Center tourist smcecenter, Balanverinformation center Infrastructure access, walkmgpath,parkinglot, firehydrantpool, water supplpngpipe, reservoir,dranage,sewagetreatmentstahon, rubbishbins, publictoilet 1. BalaRiverMiao thnic CulturalHeritage LangdeUpperMiao Village Historic BuildingICultural Center: Yangdaluformerresidenthouse; communityculturalcenter; atection mill workshop; waterwheel; ancientwar 6ont; information center IPrivate House Rehabilitation: traditional residentialhouse I Infrastructure : access; walkingpass; parkinglot; fire hydrant;drainage; sewagetreatment; rubbishtransferstation; publictoilet I.XijiangMiaoEthnic ultural Heritage XijiangMiaoVillage Historic BuildingICultural Cenfer: tourist informationcenter; village entrancedoor; drum otection place; view sightseeingplatform Private House Rehabilitation: traditional residentialhouse; demonstrationhouse 33 ~ Subcomponent ProjectSite Activity Infrnstrucfure : walkingpass; riwbankprotection; firehydrantpool; fire hydrant; firepump; water supplyingstation; drainage;sewagetreatment; rubbishbin; rubbishpool; medical station anganDongVillage and administrativeroom Private House Rehabilifafion: traditionalresidentialhouse Infrasfructure :walkingpass; access to the village; riwr bank protection; fire hydrantpool; fire hydrant;firepump;water supplyingstation; drainage; sewagetreatment; rubbishbin; rubbish pool; medicalstationand administrativeroom;pwl improvement;indicationsign; interpretation 2. ZhaoxingDong sign lageDongVillage thnic CulturalHeritage rotection Historic BuildingICulfural Cenfer: village entrancedoor Private HouseRehabilifafion: traditionalresidentialhouses Infrafructure: mainstreets;walkingpass; access to the ~llage;riverbankprotection; fire hydrantpool; fire hydrant;firepump;water supplyingstation; drainage;rubbishbin; rubbish pool; medicalstationand administrativeroom ..""..... /HistoricBuildingICulfural Cenfer: protectionofdrumtowerand flower bridge IPrivafe House Rehabilitation: traditionalresidentialhouse; demonstrationhouse Infrnsfrucfure : walkingpath; parkinglot; water supplyingpipe; drainage; sewagetreatment; fire hydrantpool; firehydrant;rubbishbin; garbage transportstation; publictoilet; indicationsign; 3, ShidongMiaoEthnic ulturalHeritage bidongMiaoVillage rotection Historic Buildin@dfurol Center: protectionofancientarchitecture,mansion; temple; Shidonl Miaoethnic art display center ~ ~~~ PrfvafeHouseRehabilifation:traditionalresidentialhouse Infrastructure : walkingpath;fire hydrant;hydranthose; fire fightingpump; water supplying pipe; drainage; sewagetreatment; rubbishbin; rubbishpool, publictoilet; temple; protectionof ancient stelesandancientwharf, indicationsign; intapretationsign 1.SanmentangDong thnic CulturalHeritage anmentangDongVillage rotection Hisforic BuildingICultural Cenfer : administrativehouse;tourist informationcenter; ethnic cultureandperformanceplace IPrivafe HouseRehabilifofion: traditionalresidentialhouse IInfrastrucfure : walkingpath; sewage system;publictoilet; water supply system; afforestation 5. NachanBuyiEthnic ~~~ ulturalandNatural achanBuy Village eritageProtection Historic Buildin/Cultural Center Buyiculturalcenter IPrrvafeHouseRehabilifofion: traditionalresidentianlhouse; demonstrationhouse Component 2: Natural Heritage and Scenic Site Protection and Development (US$21.35 million) 3. This component consists ofthe carrying out ofphysical investmentsto improve infrastructure andtourism facilities in: (a) GuanlingNational Geo-Park inAnshun Municipality; (b) Dingxiao NationalGeo-Park inQianxinan Prefecture; (c) Wanfenglin National Scenic Park inQianxinan Prefecture; and (d) ShanmuRiver Scenic Park in QiandongnanPrefecture, includingconstruction and/or rehabilitation ofpedestrianroads, publictoilets, water supply andsanitation facilities, signage, andtourist service centers, andthe implementation ofmeasuresfor environmental andecological protection of such parks. 34 Project Site Activity Parkinglot; public toilets; demonstrativeexcavatedarea; tourist servicecenters; constructionofapark and supportingfacilities; rubbishbins; garbage transfer station; GuanlingNationalGeo-Park demonstrationfacility; theme hall; parkafforestation; researchcenter; indication signs; interpretationsigns Administrativerooms; teahouse; walking pass; wharf; parking lots; wind andrain bridge; walking bridge; entranceroad; scenerybridge, water supplyingstations; 2. ShanmuRiver ScenicPark drainage; sewage treatment; rubbish bins; garbage transport stations; public toilets; monitoring system; security system;indication signs; rehabilitation oftraditional Iresidentialhouses I F a o National Geo-Park IDragonfossil museumand square Walkingpath; bridge; entrancedoor; view point station; water supply; drainage; public toilets; garbage station; cultural center; holly tree place; tourist information cente; 4. WanfenglinNational ScenicPark villageenvironment protection; ancient tree protection;rubbish bins; sewage pipes; hiking andmountainbicyclingexperiencesystem(rest station, campingfacilities, hikin path, bicycle road, sight seeingplatform, environmental protection); rehabilitation of traditional residentialhouses anddemonstrationhouses inthe village Component3: TourismGateway Town FacilitiesDevelopment(US$16.34 million) 4. This component consists ofthe following: (a) construction of three tourist informationcenters inJianhe, Leishan, and Liping Counties inQiandongnanPrefecture, andprovisionof goods, technical assistance andtraining to strengthen institutional capacity, at the county level, for the promotionof tourism; and (b) construction ofthe Guizhou Cultural andNatural Heritage Protection and Development Center inGuiyang to house: (i)CulturalandNaturalHeritageProtectionandTourismDevelopment a ResearchCenter with researchsections on natural heritage, tangible cultural heritage, andintangible cultural heritage-as well as an international academic researchand exchange facility, aperformance hall and a lecture hall; (ii)TouristInformationandServiceCenter,includingareasforinformation, a services, and minority culture displays and product sales; (iii)TourismTrainingCenterfordevelopingandprovidingtrainingtotourism a bureaustaff, site managers, andvillagers inthe following fields: rural tourism developmentand management (which will cover issues such as visitor expectations, community rights andetiquette, home-stays and restaurantbusiness planning, managementand standards, and event and festival planning); and cultural awareness and conservation (which involves participatory identification andawareness raising of community cultural heritage, development of authentic informationon ethnic minority customs, crafts, costumes, performance, sports, cuisine and history, best practice for avoiding commercialization of local heritage, and planning ofcultural heritage interpretation and exhibits); and 35 (iv) a Tourist DestinationManagementWebsite for site informationand marketing. Component4: CapacityBuildingandProjectImplementationSupport (US$1.81 million) 5. This component consists o fthe following: (a) strengtheningof institutional capacity and capability: (i) at the provincial level to manage, implement andmonitor project activities; and (ii) at the village level, for conservation of traditional buildings and for facilitating community organization andvillage-level activities especially inthe grant programs for traditional private houserehabilitation and conservation and intangible heritage preservation; (b) strengtheningof capacity and capability inthe tourism sector: (i) the county at level through the provisionof goods and technical assistanceto Project ManagementOffices (PMOs); and (ii) at the provincialand local levels through provision of training for staffof PMOs, Project ImplementationUnits, and provincial and local government tourism administrative units; and (c) reviewing and updating of the Guizhou Tourism Development Master Planto align its strategiesto current circumstances, includingimproved access oftourism sites to highways; and development of design guidelines for the conservation of traditional buildings and traditional environments inminority villages. 36 Annex 5: ProjectCosts CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopment Project Local Foreign Total Project Cost By Component US$ million US$ million US$ million 1. Ethnic Minority CulturalHeritage Protection 30.26 5.06 35.32 (1) TianlongTunpu Cultural Heritage Protection 0.86 0.14 1.00 (2) JiuzhouTunpu Cultural Heritage Protection 2.76 0.46 3.22 (3) BashaMia0 Ethnic Cultural HeritageProtection 0.94 0.16 1.10 (4) DuliuRiver DongEthnic Cultural Heritage Protection 2.38 0.40 2.78 (5) ShiqiaoAncient PapermakingProtection 0.87 0.15 1.02 (6) JiuzhouAncient Town Heritage Protection 3.01 0.51 3.52 (7) Yang'asha Miao Ethnic Cultural HeritageProtection 1.99 0.33 2.32 (8) Longli Ancient Town Heritage Protection 4.4 1 0.74 5.15 (9) Kaili BalaRiver Miao Ethnic Cultural HeritageProtection 2.00 0.33 2.33 (IO) Leishan Bala River Miao Ethnic Cultural Heritage 0.71 0.12 0.83 Protection (11) Xijiang Miao Ethnic Cultural HeritageProtection 2.01 0.34 2.35 (12) Zhaoxing DongEthnic Cultural Heritage Protection 3.00 0.49 3.49 (13) ShidongMia0 Ethnic Cultural HeritageProtection 2.19 0.37 2.56 (14) SanmentangDong Ethnic Cultural Heritage Protection 1.29 0.22 1.51 (15) NachanBuyi Ethnic Cultural and NaturalHeritage 1.84 0.30 2.14 Protection 2. Natural Heritage and Scenic Site Protection and 14.27 2.40 16.67 Development (1) GuanlingNational Geo-Park Heritage Protection 3.90 0.65 4.55 (2) ShanmuRiver Cultural andNatural Heritage Protection 2.20 0.37 2.57 (3) Xingyi National Geo-Park Dingxiao Guizhou Dragon 2.02 0.34 2.36 HeritageProtection (4) Wanfenglin National Scenic Park Cultural andNatural 6.15 1.04 7.19 HeritageProtection 3. Tourism Gateway Town FacilitiesDevelopment 10.02 3.13 13.15 (1) Jianhe Tourist Information and Training Center 2.28 0.39 2.67 (2) LeishanTourist Information Center 0.27 0.05 0.32 (3) Liping Tourist Information Center 0.99 0.17 1.16 (4) Guizhou Cultural andNatural HeritageProtection and 6.01 2.45 8.46 Development Center (5) Minority Ethnic Culture Tourism Promotion and Training 0.47 0.07 0.54 4. Capacity Buildingand Implementation Support 1.62 1.62 (1) Technical Assistance for Project Implementation and 0.63 0.63 CapacityBuilding (2) PMO Strengtheningand Training for Tourism Sector 0.63 0.63 (3) Revision of Tourism Master Planand Preparationof 0.36 0.36 Design Guidelines for Construction and Conservation Total BaselineCost 56.17 10.59 66.76 Physical Contingencies 2.43 0.49 2.92 Price Contingencies - 13.76 0.68 14.44 Total Project Costs 72.36 11.76 84.12 Interest During Construction 5.57 5.57 Front-endFee 0.15 0.15 Total FinancingRequired 72.36 17.48 89.84 37 IBRD Total Project CostBy Component Counterpart US$million US$ million US$ million 1. Ethnic Minority CulturalHeritageProtection 13.22 31.40 44.62 (1) TianlongTunpuCulturalHeritageProtection 0.37 0.89 1.26 (2) JiuzhouTunpuCulturalHeritageProtection 1.23 2.92 4.15 (3) BashaMiao Ethnic CulturalHeritageProtection 0.40 0.97 1.37 (4) DuliuRiver DongEthnic Cultural HeritageProtection 1.03 2.47 3.50 (5) Shiqiao AncientPapermakingProtection 0.38 0.90 1.28 (6) JiuzhouAncient Town HeritageProtection 1.32 3.12 4.44 (7) Yang'asha Mia0 EthnicCulturalHeritageProtection 0.86 2.05 2.91 (8) Longli AncientTown HeritageProtection 1.94 4.57 6.5 1 (9) Kaili BalaRiver Miao EthnicCultural HeritageProtection 0.86 2.06 2.92 (10) LeishanBalaRiver MiaoEthnic CulturalHeritage 0.31 0.73 1.04 Protection (11) Xijiang Mia0 Ethnic CulturalHeritageProtection 0.88 2.09 2.97 (12) ZhaoxingDongEthnic CulturalHeritageProtection 1.30 3.07 4.37 (13) ShidongMia0 Ethnic CulturalHeritageProtection 0.97 2.30 3.27 (14) SanmentangDongEthnic Cultural HeritageProtection 0.57 1.36 1.93 (15) NachanBuyi Ethnic CulturalandNaturalHeritage 0.80 1.90 2.70 Protection 2. NaturalHeritageand Scenic Site Protection and 6.36 14.99 21.35 Development (1) GuanlingNational Geo-Park HeritageProtection 1.77 4.17 5.94 (2) ShanmuRiver Cultural andNaturalHeritageProtection 0.96 2.26 3.22 (3) Xingyi National Geo-Park Dingxiao GuizhouDragon 0.93 2.17 3.10 HeritageProtection (4) WanfenglinNational Scenic Park Cultural andNatural 2.70 6.39 9.09 HeritageProtection 3. Tourism Gateway Town FacilitiesDevelopment 4.69 11.65 16.34 (1) Jianhe Tourist Information andTraining Center 1.04 2.43 3.47 (2) LeishanTourist InformationCenter 0.12 0.29 0.41 (3) LipingTourist InformationCenter 0.45 1.06 1.51 (4) GuizhouCulturalandNaturalHeritageProtectionand 3.06 7.19 10.25 DevelopmentCenter (5) Minority Ethnic CultureTourismPromotionandTraining 0.02 0.68 0.70 4. Capacity Building and Implementation Support 1.81 1.81 (1) TechnicalAssistance for ProjectImplementationand 0.70 0.70 Capacity Building (2) PMO StrengtheningandTraining for Tourism Sector 0.70 0.70 (3) RevisionofTourism Master PlanandPreparationof 0.41 0.41 DesignGuidelinesfor Conservationof Traditional Buildings Total Project Costs 24.27 59.85 84.12 FinancialChargesDuringImplementation 5.57 0.15 5.72 Total Financing Required 29.84 60.00 89.84 38 Annex 6: ImplementationArrangements CHINA: GuizhouCulturalandNaturalHeritageProtectionand Development Project 1. The Guizhou Provincial Tourism Bureau (GTB) has been designated as the project execution agency. The diagram below indicates key institutional and implementationarrangements for the project, which are summarized indetail inthe following paragraphs. I GuizhouProject LeadingGroup I TourismDevelopment Expert Committee .1 4Guidance I I I MunicipaLPrefectural GuizhouProject + - - - - - IITechnicalGuidance ProjectLeadingGroup ManagementGroup I 1 I I I I I I County-levelProject MunicipalPrefectural + - - - - - - - - - - - - - j Management I I I .................................................................................................................................................................. Consultationand Management > II I I Village Supervision CommunityProject ImplementationUnit Village Committee Group ManagementGroup I I I I I Village ImplementationGroups I ............................ Community CoordinatorFacilitator Village TourismAssociation Guidance ConstructionTeam A r t s and CraftsAssociation and Assistance Senior CitizensAssociation Other Village Organization Svstem 2. Project Leading Groups.Project Leading Groups (PLGs) have been established at the provincial, municipal/prefectural and county levels. 3. The Provincial Project Leading Group (PPLG) i s headedby the Vice Governor o f Guizhou Province, with the Deputy Secretary o fthe Guizhou Provincial Government, the Director o fthe GTB, the Vice Director o f the Guizhou Provincial Development and Reform Committee, andthe Accountant-General of the Guizhou Provincial Finance 39 Bureau as deputy leaders. Other membersofthe PPLGinclude representativesfrom the Guizhou Provincial Economy and Trade Commission, the Guizhou ProvincialEthnic Affairs Commission, the Guizhou Provincial Landand Resources Bureau, the Guizhou Provincial Construction Bureau, the Guizhou Provincial Transportation Bureau, the Guizhou Provincial Water Resources Bureau, the Guizhou ProvincialForestry Bureau, the GuizhouProvincial Culture Bureau, the GuizhouProvincialEnvironmental Protection Bureau, andthe Guizhou Provincial Office of Poverty Alleviation. The PPLG is responsiblefor providing overall guidance onthe project. Specifically, its main responsibilities include: (a) mobilizationof financial, technical and institutional resources; (b) coordination and resolutionof key project issuesacross government agencies; and (c) review and approval of project planning, implementation, and managementschemes. 4. Municipal/prefectural and county-level PLGs have similar structural arrangements as the PPLG, with leaders from corresponding government agencies at the local level. They have similar responsibilities for preparation and implementation of project components under theirjurisdiction to those ofthe PPLG. 5. Project Management Offices. Project Management Offices (PMOs) have been established at the provincial, municipal/prefectural, and county levels to manage and coordinatethe implementation o ftheir respectiveproject subcomponents. 6. The Guizhou ProvincialProject Management Office (PPMO) is located under the GTB and ledby the DeputyDirectorofthe GTB. Besides an executive deputy director and an assistantdirector, the PPMO has atotal of six full-timestaff for: (a) project administration andmanagement; (b) quality control andmonitoring; (c) procurement; and (d) financial management. Staffwith appropriatebackgroundsfrom suchgovernment agencies as the Guizhou Provincial Environmental Protection Bureau andthe Guizhou Provincial Culture Bureauwill be appointed to provide the PPMO with technical guidance anddirection, as needed. The PPMO will be responsible for developing annual work plans, preparing consolidated project progress and financial reports for Bank review, and monitoringoverall implementation progress andproject impacts. 7. Municipal/prefectural and county-level PMOs are located under their respective tourism bureaus and are ledby the directors or deputydirectors of the tourism bureaus. The PMOswill have an adequatenumberof staff for project administration and management, procurement, financial management, and other technical aspects, supported by consultants for project management(including monitoringofthe private house and intangible heritage grant programs inthe case ofthe county-level PMOs). The PMOs will be incharge of guiding and managing the preparation and implementation ofproject subcomponents undertheir jurisdiction and coordinating day-to-day activities with the PPMO. 8. Project Implementation Units. Project Implementation Units(PIUs) have been establishedat the component or subcomponent level. While the PIUs for the project are mainly prefectural and county-level tourism bureaus, the PPMO is the PIUfor the 40 Capacity Buildingand Implementation Support component, and the GuizhouNormal University for the Guizhou Cultural andNatural Heritage Protection and Development Center subcomponent. The list ofthe PIUs is found at the end ofthis Annex. 9. Tourism Development Expert Committee. The Tourism Development Expert Committee has supportedproject preparation (especially for social aspects) through technical guidance and consultation. It will continue this function during project implementation. The committee is composedof scholars and government officials in Guizhou inthe areas of: (a) agriculture; (b) cultural heritage protection; (c) environmentalism; (d) planning; (e) engineering; (f) poverty alleviation; and (g) construction. 10. Village-levelImplementation. Eleven subcomponents in 17 minority villages under the Ethnic Minority Cultural Heritage Protection component will be implemented through the community-based development approachina fully participatory manner.The county-level PMOSinQiandongnanand Qianxinan Prefectureswill be incharge of fund managementand procurement, and administer the grant programs for private house rehabilitation and conservation and intangible cultural heritage protection (items (c) and (d) ofthe Ethnic Minority Cultural Heritage Protection component) andoverseethe implementation o fvillage-level activities. However, the minority villages, through the representativeorganizations that will be formed, will be involved inthe design, selection of sites and beneficiaries for grant programs, implementation of small works, and managementof the village-level activities to ensure that their needs andpriorities are met andthat long-term sustainability is achieved. The Community Project Management Group (CPMG), which is composedof a range o f village representatives, will play a lead role inreaching consensuson decisions on eacho fthe various activities through consultations with the village, with the guidance and support of a community coordinator/facilitator and other technical specialists. The role and organization of each organization inthe minority villages are summarizedbelow, and also describedindetail inthe OperationManualfor Community Participation. (a) Village Committee. The Village Committee is establishedaccording to the Organic Law of the Villagers Committees of the People's Republic of China and other relevant laws. Its major responsibilities under the project include:(i)organizing a village assembly, informingvillagers of project implementation, and publicizingthe details ofthe project; (ii) and supervising the implementation of the village- guiding level activities; and (iii) resolving conflicts among villagers. (b) Community Project Management Group. The CPMGconsists ofthree members from the Village Committee a secretary or head of the village, a director of women's - issues, and an accountant - as well as elected village representatives for accounting, engineering, material management, and other technical aspects. The number of village representativeswill vary dependingon the structure of the village and its responsibilities for project activities. The major responsibilities ofthe CPMG under the project are to: (i) establish working rules and administrative regulations; (ii)be the signatory for the implementation agreementwiththe county-level PMO for 41 coordinating the private house rehabilitation and conservation, and intangible heritage protection grant programs; (iii) supervise the use of allocated funds; (iv) planand guide the selection ofproject sites and grant beneficiaries; (v) coordinate implementation ofproject activities, includingproviding guidance to Village ImplementationGroups (VIGs); and (vi) keep records of meetings, project implementation progress, fund allocations; and (vii) maintain transparencythrough regular disclosuresto villagers. (c) Village Supervision Group. The Village Supervision Group (VSG) consists of three to five electedvillage representatives. The number of group members will be determinedby the village population andproject size. However, at least one thirdof the memberswill befemale. Its major responsibilities underthe project are to: (i) ensure that the CPMG adheres to the establishedrules andregulations and remains openand fair inthe selection, implementation, and managementofproject activities; (ii)supervise villagers to ensure the establishedprocedures are followed and respected; (iii) opinions and suggestionsfrom villagers inmeetings with the reflect county-level PMO andthe CPMG; and (iv) preparesupervision reports for submission to the county-level PMO as well as the CPMG. (d) Village Implementation Groups. Priorto project implementation, villagers will be organized into different VIGs, such as Village Tourism Association, Construction Team, Arts and Crafts Association and Senior Citizens Association basedonthe needs of eachvillage. These groups will have akey role inproviding expertise and skills to conduct project activities, and will actively participate inarchitectural rehabilitation and conservation and intangible cultural heritage protection. 11. A community coordinator/facilitator underthe project will assist the minority villages inestablishing the CPMG, the VSG, andvarious VIGs. The coordinator/facilitator will also provide support and guidance to these village organizations during the project implementation phase to ensure that their responsibilities are fulfilled for successful execution of project activities. The PPMO will also provide technical specialiststo work inthe villages to assist inthe conservation oftraditional buildings andimproving environments. 12. Implementation Support and Training. Project implementation support will be provided to the PPMO through the Capacity Building and Project Implementation Support component which will ensure smooth project managementand coordination during the implementation phase. Similar support will beprovided to the minority villages through the same component which will also allow effective and sustainable community organization and development, again during the implementation phase. In addition, training will be conducted for PPMO, PMO, andPIU staff, and provincial and local officials inthe tourism sector. The PPMO will be responsible for managing all training activities, includingplanning, development, and budgeting, which will be describedindetail inannualwork programs. 42 , 1! i 3! i! , 1 I ! i I ! 1 ! d ~ ! , I t-"3 C Annex 7: FinancialManagementandDisbursementArrangements CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopment Project Introduction 1. The Financial Management Specialist (FMS) conducted an assessment ofthe adequacy ofthe project financial managementsystemof the project. The assessment, basedon guidelines issuedby the Financial Management Sector Board on November 3, 2005, has concluded that the project meets the minimumBank financial management requirements,as stipulated inBP/OP 10.02. Inthe FMS' opinion, the project will maintain adequate financial managementarrangementsacceptableto the Bank and, as part ofthe overall arrangementsthat the borrower has inplace for implementing the project, provide reasonableassurance that the proceedsof the loanwill be usedfor the purposesfor which the loanis granted. Financial managementrisk is the riskthat World Bank loanproceedswill notbeusedfor thepurposesintendedandis a combination of country, sector and project specific risk factors. Taking into account the proposedrisk mitigationmeasures, the financial managementriskratingproposedfor the project is substantial. 2. Funding sources for the project include the Bank loan and counterpart funds. The loanproceedswill flow from the Bankinto aproject designatedaccount (DA)to be set up at andmanagedbythe Guizhou Provincial FinanceBureau (GFB), to various municipal/prefectural and county finance bureaus, to Project Implementation Units (PIUs), and finally to contractors or suppliers. The LoanAgreement will be signed betweenthe Bank andthe People's Republic of Chinathrough its MinistryofFinance (MOF), and on-lending agreements for the Bank loanwill be signed betweenthe MOF andthe GFB, inturnbetweenthe GFB andrelatedmunicipal/prefectural finance bureaus, andfinally betweenmunicipal/prefectural finance bureausand county finance bureaus. CountryIssues 3. To date, no China Financial Accounting Assessment (CFAA) has beenperformed for China, though dialogue with the Government of China inrespect of the CFAA exercise has beeninitiated. However, basedon observations of developments inthe areas of public expenditures, accounting and auditing, and Bank experience with China projects inthe past few years, ithas been noted that substantial achievementinthe aforementioned areas has been made and further improvement i s expectedinthe next few years. This is work inprogress, and as the economic reformprogram unfolds further, the Government of China has come to realize the importance o f establishing and maintaining an efficient and effective market mechanismto ensure transparency and accountability, andminimize potential fraud or corruption. 4. Dueto auniquearrangementby the Government of China, funding (particularly the Bank loan) of Bankprojects is controlled and monitored by the MOF and its extension (i.e. finance bureausat the provincial, municipal/prefecture and county level). 44 However, project activities are usually carried out by implementing entities of a specific industryor sector due to the levelandcomplexity of expertiseinvolved. This arrangementthen usually requires more coordination for the project, as the multi-level managementof the funding and implementation mechanismsometimesworks to the detrimentof smoothproject implementation. Summary of ProjectDescription 5. The development of the proposedproject is to assist Guizhou Province in increasing economic benefits to local communities (including minority groups) through increasedtourism andbetter protection of cultural and natural heritages. The project i s designedto: enhance opportunities to protect andpreserve cultural and natural heritage assets; improve basic living conditions through upgrading infrastructure facilities; increaseemployment and incomes for residents of minority villages; improve facilities for tourists; and support project managementand capacity buildingfor sustainable tourism management.For the detailed project description, pleaserefer to Annex 4. Audit Arrangements 6. The Bankrequires that project financial statements be audited inaccordancewith standardsacceptableto the Bank. Inline with other Bank-financed projects inChina, the project will be audited inaccordance with International Auditing Standards and the Government Auditing Standardsofthe People's Republic of China. The Guizhou Provincial Audit Office has beenidentifiedas auditor for the project. Annual audit reports will be issuedby the Guizhou Provincial Audit Office and subject to reviews by the China NationalAudit Office (CNAO). The Bank currently accepts audit reports issued by the CNAO or provincial/regional audit bureaus/offices for which the CNAO is ultimately responsible. 7. The annualaudit report ofproject financial statementswill be due to the Bank withinsix months after the end of eachcalendar year. This requirementis stipulated in the LoanAgreement. The responsibleagency and timing are summarizedas follows: Audit Report SubmittedBy DueDate Consolidated project financial statements PPMO June 30 of eachcalendar year RiskAssessmentandMitigation 8. The following risks with corresponding mitigatingmeasures have been identified during the assessment: 45 Risk Rating Risk Conditions Risk Before IncorporatedRisk Rating After of, Board or Mitigating Mitigating Measures Mitigating Effectivenes Measures Measures S Inherent Risk Country Modest Continuous dialogue with related Modest Level government entities, andtechnical assistance fkom the Bankwill help the government improve its public sector financial management. Inthe short-term, annual audit requirements will reduce the riskthat project fhds arenot usedfor intendedpurposes. For those areas where the government system cannotbeused,the Bank's specific requirements will be embedded into the project financial management system. Entity High Although the Guizhou Provincial Project Substantial Level Management Office (PPMO) has no prior experience with Bank-financed projects, GFB's involvement will mitigate some o f these risks. Furthermore, the Bankwill work with the PPMO to strengthen their financial management knowledge and capacity to supervise the project's financial management. The PPMO has recruited experienced financial staffto manage and overseethe overall financial management o f the project. All Project Implementation Units(PIUs) have recruited experienced and competent finance staff either with proper finance/accounting education or with two to three year working experience in finance/accounting areas. Project High To furnishthe PPMO and PIUs with Substantial Level enough knowledge and information in managingthe project, a training schedule for financial management/disbursement will be established. A training session should be provided to the project financial staff during a project launch workshop by the Bank and another training session for the project staff by the PPMO andthe GFB within one year after the project starts implementation. 46 A Financial ManagementManual (FMM) including detailedfinancial management and disbursement procedures has been draftedto standardize all PIUs' financial work and to detail roles andresponsibilities ofPIUs, the PPMO and finance bureaus. Control Risk Budgeting Modest There are some existing budgetingcontrols Modest at PIUs, althoughthey do not specifically -7- r focus on the project activities. Accounting Substantial Accounting policies and procedures for the Modest Bankloanare alreadyinplace.Checking by the Bank at the initial implementation stageto ensure the accountingsystemhas beencorrectly set up. This shouldbe followed up by regular supervision missions. Internal High There are some existing internal controlsat Substantial Control PIUs althoughthey do not specifically focus on the project activities. The FMM has beenpreparedand issuedto all PIUs to uniformly align their financial management arrangements, disbursement requirements and internal control procedures. Also, the I disbursement documents will be reviewed by the GFB to ensure compliance. Funds Flow High The flow ofwithdrawal applications(Was) Substantial and loanproceeds will go through several finance bureaulevels, which will affect project implementationefficiency. The Bank will ensure that mechanisms will be inplaceto ascertainthatthe Bankloanand counterpart fhds will be releasedto the ultimate beneficiarieson a timely basis and avoid bottleneckindisbursements. Procedureson WASand funds flow are clearly documentedinthe FMM. Financial High The format and contents of financial Substantial Reporting statements have beenstipulatedby the MOF and all PIUs will use them for project financial reporting. The FMMalso establishes suchfinancial reporting requirementsconsistent with MOF's regulationsand guidance. The PPMO will t be responsiblefor the consolidatedproject financial statements. Auditing Modest The external auditor, Guizhou Provincial Modest Audit Office, has experience with previous Bankprojects. Overall High Substantial I 9. Basedonthe above assessment, the overall financial managementrisk rating o f the project, after consideration ofthe mitigatingmeasures, at the appraisal stage is 47 substantial. The FMS will monitor the project financial management risk duringproject implementation. DisbursementArrangements 10. Four disbursement methods: advance, reimbursement, direct payment and special commitment are available for the project. Supporting documents required for Bank disbursement under different disbursement methods will be documented inthe Disbursement Letter issued by the Bank.Applications will be supported by: (a) The list o fpayments against the contracts, andrecords evidencing eligible expenditures, e.g. copies o f receipts, supplier invoices, for the contracts subject to the Bank's prior review indicated inthe table below: Equivalent Works 1,000,000 Goods 300.000 I Individual Consultant 50,000 (b) Statement o f expenditures for any other expenditure. 11. One segregated DA denominated inU S Dollars will be established at a commercial bank acceptable to the Bank, and managed by the GFB. The ceiling o f DA for the Bank loan will be specified inthe Disbursement Letter issued by the Bank. 12. The GFB will be directly responsible for the management, maintenance and reconciliation o f DA activities o fthe project. Supporting documents required for Bank disbursement will be prepared and submitted by respective PIUs through the PPMO for final verification and consolidation before sending to the GFB for further disbursement processing. The flow o f funds and WASfor the loan proceeds is illustrated inthe following chart: 48 ------b FlowofWAs Flow ofFunds 49 13. The Bank loanwould be disbursedagainst eligible expenditures as indicated in thetable below: Amount of the Loan Percentage of Expenditures Category Allocated to be financed (expressed inDollars) (inclusive of taxes) (a) Civil works 51,068,000 90% (b) Goods 759,000 100% (c) Consultants' services, training and study tours 3,500,000 100% (d) Block grants 4,373,000 100% (e) Incremental operating costs 150,000 100% I Amount payable pursuant to (f) Front-endfee 1I Section 2.03 of the Loan 50,000 Agreement inaccordance with Section 2.07 (b) ofthe General Conditions Amount payable pursuantto (g) Premium for interest rate cap or interest rate Section 2.07 (c) of the Loan Agreement and Section 4.05 collar (c) of the General . _ Conditions Total amount 60,000,000 14. Limitedincremental operating costs will be financedby the Bank loan, and would cover the reasonableexpenditures incurred by the PPMO for local business travel for consumables, and salaries o f additional staff hiredon individual contracts. The definition of incremental operating costs and its coveragewill be inaccordancewith the Bank's policy, and as specified inthe LoanAgreement. Inorder to better manage the incremental costs, the PPMO will submitthe annual budget for incremental operating costs, including a detailed description, for approval by the Bank.The incremental operating costs will be disbursedon an actual basis butthe actual costs incurred shall not exceedthe annual budget approvedby the Bank.All relevant supporting documents including receipts and bills shall be retained by the PPMO for Bank review. 15. Retroactive financing amounting to US$2 million might be providedfor eligible expendituresunder categories (a), (b) and (c) inthe above table, incurred after December 1,2008, provided procurement is carried out inconformity with Bankprocurement procedures. 50 16. The project includes two subcomponents which will be implemented solely on the community-based development (CBD) approach. These are grant programs defined under items (c) and (d) o fthe Ethnic Minority Cultural Heritage Protectioncomponent (rehabilitation and conservation o f traditional private houses invillages and intangible cultural heritage protection and preservation). Disbursementarrangements and procedures for these subcomponents are described below. 17. DeJinition. The Block Grant mechanismwill be used to disburse the expenditures associated with the implementation of the two subcomponents. This is a means o f financing grants to be made out o f the proceeds of the loan to: (a) a beneficiary household who conducts rehabilitation or conservation of selected traditional houses; and (b) a village that conducts intangible cultural heritage protection andpreservationactivities. The respective county government is responsible for repayingthe loanproceeds to the GFB. 18. The eligibility criteria andprocedures to disburse the expenditures associated with the implementationo fthe grant programs are summarized below, and also described in Annex 15 and the Operation Manual for Community Participation(OMCP). (a) Private House Conservation and Rehabilitation (i) HouseAnnualWorkPlan.Thecounty-levelPMOwillselecttraditional Private private houses andhouseholdbeneficiaries through a participatory approach in accordance with the procedures and selection criteria set out inthe OMCP. The annual work planwill include: the list of selected houses; details o f work proposed; and estimated cost of the work andthe amount of grant proposed to be financed from the loan proceeds. The planwill require the approval o fthe PPMO andthe Bank. (ii) HouseImplementationAgreement.Thecounty-levelPMOwillsign Private an implementation agreement with the householdbeneficiary which will include: the scope o fwork; total cost ofthe work, the amount o fthe loanproceeds to be used to finance the work, and householdcontribution; work implementation schedule; agreed technical and construction standards; supervision and final acceptance procedures; and payment schedule and conditions. (iii)Payment Schedule and Conditions. The county-level PMO will make available the grant to each household under the implementation agreement intwo installments: the first installment, which will be between 30% and 50% o fthe grant upon the signingo f the implementationagreement; and the reminder o f the grant upon the completion of the work as evidenced by a satisfactory inspection report issued by the county-level PMO. 51 (b) Intangible Cultural Heritage Protection and Preservation (i) Intangible Cultural Heritage Annual Work Plan. The county-level PMO will select the activities that preserve andprotect intangiblecultural heritage and village community beneficiaries through a participatory approach and in accordance with the procedures and selection criteria set out inthe OMCP. The work planwould include, but not be limited to, the following: the list o fthe selected activities; details o fthe activities, including methods o f implementation; and estimated cost of each activity andthe types and amount ofexpenditure proposed to be financed from the loan proceeds. The work planwill require the approval o f the PPMO andthe Bank. (ii) Intangible Cultural Heritage Implementation Agreement. The county-level PMOwill sign animplementation agreement withthe Community Project Management Group o fthe village concerned for carrying out the selected intangible cultural heritage protection activities. The implementationagreement will include: the list o fthe selected activities; total cost o fthe activities andthe type and amount o f expenditures to be financed from the loan proceeds; activity implementationschedule; agreed outputs andreporting and verification requirements; and payment schedule and conditions. (iii) Payment Schedule and Conditions. The county-level PMO will make available the grant to each village under the implementation agreement intwo installments: the first installment, equal to 50% o f the grant, upon the signing o f the implementationagreement; andthe reminder o f the grant when the agreed outputs stated inthe implementation agreement have been produced and as evidenced by a satisfactory inspection report issued by the county-level PMO. Financial Management and Reporting Arrangements 19. Strengths.The GFB has experience with World Bank-financed projects. The GFB is thus familiar with the management o f DA and WASprocedures for Bank-financed projects. 20. WeaknessesandAction Plan. The PPMO and all the PIUs do not have experience inBank-financedprojects. To addressthis, a training session will beprovidedto the project financial staff during a project launch workshop by the Bank, and another will be provided to the project staffjointly by the PPMO and the GFB withinone year after the project begins implementation. 21. ImplementingAgencies. A Provincial Project Leading Group (PPLG) has been established to provide overall policy guidance and facilitate coordination among different agencies. The PPLG will consist o f representatives from the provincial finance bureau, the provincial development and reform committee, the provincial tourism bureau and other key bureaus. 52 22. The PPMO has beenestablishedunder the Guizhou Provincial Tourism Bureau. The PPMO is responsible for overall project managementand coordination, providing necessaryguidance to and coordinating with Project Management Offices (PMOS)at prefectural/municipal and county levels as well as PIUs. The PPMO consists of six full- time staff, includingtwo financial staff andone procurement staff. Generally, ineach project city or county, a municipal/prefectural PMO or a county-level PMO has been established. 23. EachPIUwill be responsible for day-to-day implementation of its component or subcomponent. IneachPIU, aproject team has beenestablished which includes one or two financial staff members.The accounting, reporting andpreparation of WASfor each componentor subcomponent will be handledby eachPIU. The list of the PIUs is found below: QiandongnanPrefecture 12 Zhaoxing Dong Ethnic Cultural Heritage Protection 13. ShidongMiao Ethnic CuhuralHeritage Protection 114. SanmentangDongEthnic CuhuralHeritage Protection I 15. NachanBuyiEthnic Cultural andNaturalHeritage Protection Qianxinan Prefecture ZhenfengCounty Tourism Bureau 16. GuanlingNationalGeo-Park Heritage Protection AnshunMunicipality GuanlingCounty TourismBureau 17. ShanmuRiver CuhuralandNaturalHeritage Protection QiandongnanPrefecture ShibingCounty TourismBureau 18. XingyiNationalGeo-ParkDinpiao GuizhouDragon Dinpiao DevelopmentZone Government Heritage Protection Qianxinan Prefecture 19. WanfenglinNationalScenic Park Cultural andNatural Hikingtrails: QianxinanPrefecture Tourism Bureau Heritage Protection Scenic area:Xingyi City TourismBureau 20. Tourist Informationand TrainingCenter Jianhe County Tourism Bureau 21. Tourist InformationCenter LeishanCounty Tourism Bureau 22. Tourist InformationCenter LipingCounty Tourism Bureau 23. GuizhouCulturalandNaturalHeritage Protectionand QiandongnanPrefecture DevelopmentCenter GuizhouNormalUniversity 24. Minority Ethnic Culture TourismPromotionand Training QiandongnanPrefectureTourismBureau 25. Technical Assistance GuizhouProvince GuizhouPMO 24. Budgeting. Although the cost table has beenpreparedfor the project andthe project will prepare its annual implementing plan, the budgeting systemwithinthe project is usually not well maintained or monitored. The FMSwill work with the related entities to improve their budgeting systems during project implemenation. 53 25. Accounting. The administration, accounting and reporting of the project will be set up inaccordance with Circular #13: "Accounting Regulations for World Bank FinancedProjects" issuedinJanuary 2000 bythe MOF. The circular provides in-depth instructions of accounting treatment of project activities and covers the following: 0 Chart of account 0 Detailed accounting instructions for eachproject account 0 Standardset ofproject financial statements 0 Instructions on the preparation of project financial statements 26. The standardset ofproject financial statementsmentioned abovehasbeen agreed between the Bank andthe MOF and applies to all Bank projects appraised after July 1, 1998 and includes the following: 0 Balance sheet of the project 0 Statementof sources and uses of fundby project components 0 Statementof implementation of loan agreement 0 Statementof DA Notes to the financial statements 27. Each PIUwill manage, monitor andmaintain its respective project accounting records for its components. Original supporting documents for project activities will be retained by eachPIU. Inaddition, eachPIUwill prepareits own financial statements, which will then be reviewed, approvedand consolidated by the PPMO before sendingto the Bank for review and comment, on a regular basis. 28. To strengthen financial managementcapacity and achieve consistent quality of accounting work, a project FMMhas beenprepared.The FMMprovides detailed guidelines on financial managementincludinginternal controls, accounting procedures, fundandasset management, WA procedures, financial reporting and auditing arrangement. 29. Some PIUs will use computerized financial management informationsoftware, while others will manually record andmaintaintheir project accounting books. The Bank will monitor the accounting process, especially during the initial stage to ensure that complete and accurate financial informationwill beprovided ina timely manner. 30. Internal Control and InternalAuditing. The relatedproject accounting policy, procedures and regulations were issued by the MOF and the FMMhas beenpreparedand issuedby the PPMO to uniformly align the financial management and disbursement requirementsamong the different PIUs. The project will follow these documents. 31. There is no formal independentInternalAudit Departmentfor the project. However, this will not have an impact on the project's financial managementas the PPMO, relevant finance bureaumonitoring, and annual external audits will serve as the mechanismto ensure that financial managementcontrols are functioning appropriately. 54 32. Financial Reporting. The format and content of the project financial statements represent the standardproject financial reporting package agreed to betweenthe Bank and the MOF, andhave been discussed and agreed to with all parties concerned. 33. Each PIUwill prepare financial statements on its implemented components, which will then be used by the PPMO for preparing consolidated project financial statements to be submitted to the Bank for review and comment on a regular basis. Inline with the updated World Bank Operation Manual, the interim un-auditedproject financial statements should be submitted as part o f a progress report to the Bank on a semi-annual basis. 34. Financial Covenants. No specific financial management covenants are applicable to the project except for those standardfinancial covenants such as project audit and interimfinancial reportsas described inparagraphs 6 and7. 35. Supervision Plan. The supervision strategy for the project i s based on its financial management risk rating, which will be evaluated on a regular basis by the FMS and in consultation with the Task Team Leader. 55 Annex 8: ProcurementArrangements CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopment Project A. General 1. Procurementfor the proposedproject will be carried out inaccordancewith the World Bank's "Guidelines: ProcurementUnder IBRDLoans and IDA Credits" dated May 2004, revised October 2006 and"Guidelines: Selection andEmployment of Consultantsby World Bank Borrowers" datedMay 2004, revised October 2006, and the provisions stipulated inthe Legal Agreement. The various items under different expenditure categories are described ingeneral below. For each contract to befinanced bythe Loan, the differentprocurement methodsor consultant selection methods, the need for pre-qualification, estimatedcosts, prior review requirements,and time frame have been agreedbetweenthe Borrower andthe Bank inthe ProcurementPlan. The ProcurementPlanwas preparedby the Guizhou Provincial Project Management Office (PPMO) andwill be updated at least annually or as required, to reflect the actual project implementation needs and improvements ininstitutional capacity. 2. Procurementof Works. A total of about US$51.07millionworth ofworks will beprocured. Works procuredunderthis project will include: Construction o f roads, squares, footpaths and parking lots includingauxiliary facilities such as road signs; Construction o fbuildings such as visitor service centers, tourist information centers, museumhalls, administrative staff offices, training centers for cultural heritage, and toilets; Construction, installation and commissioning of water supply systems including pipelines, water tanks, etc.; Construction, installation and commissioning of waste water treatment systems including pipelines and small treatment plants; Construction o f garbage collection facilities and small landfills; Improvement of river banks and construction of bridges; Rehabilitation and conservation of ancient buildings including auxiliary protection works and facilities such as signs and guardrails; Rehabilitation and conservation of traditional private houses; and Protectionandpreservation o f intangible heritage includinglectures andtraining hostedby local masters for intangible heritage, rehabilitation of workshops, business development of products made by traditional processes, etc. Procurementwill be undertaken usingthe Bank's StandardBiddingDocuments (SBDs) for all International Competitive Bidding(ICB) andthe Chinese ModelBidding Documents (MBDs)for goods and works agreed with or satisfactory to the Bank for all NationalCompetitive Bidding (NCB) procurement. Where procurement o f small works through shopping is applied, the PPMO will prepare a model quotation document which 56 will be agreed with the Bankbefore implementingthe relatedprocurement. Any contract for works estimated to cost US$lOO,OOO equivalent or more will be procured underN C B procedures. Any contract for works estimated to cost less than US$lOO,OOO will be procuredunder shopping procedures. According to the current Procurement Plan, no ICB procurement i s expected due to the nature and value o fthe contracts. 4. Civil works associated with the rehabilitationor conservationo f private houses in villages, will be carried out by the householdbeneficiary through community participation inaccordance with the following procedures: (a) Selection of Households. Traditional private houses and household beneficiaries will be selected through a participatory approach inaccordance with the selection criteria set out inthe OperationManual for Community Participation (OMCP). A list o f the selected private houses shall be included inthe annual work plan which will be prepared by the county-level Project Management Office (PMO) and approvedby the PPMO andthe Bank. (b) Signing of ImplementationAgreement with Households. The county-level PMOwill signan implementationagreement with individual household beneficiaries. The implementation agreement will include: (i) the scope o f work; (ii) costofthework,theamountoftheloanproceedstobeusedtofinance total the work, andhousehold contribution; (iii) work implementation schedule; (iv) agreed technical and construction standards; (v) supervision and final acceptance procedures; and (vi) payment schedule and conditions. (c) Implementation. Householdbeneficiaries will purchase requiredmaterials such as sand and cement, from the local market. Wherever possible the individual householdbeneficiary will obtain three quotations from local shops andpurchase the materialsaccording to the lowest quotation. Where there are no available competitive sources o f supply the household beneficiary may purchase the materials directly from the only source available. The household beneficiary may employ certified technicians to carry out the works which will be supervised by themselves under the technical guidance from the county-level PMO in accordance with the technical standards set out inthe implementation agreement. The OMCP provides the details o f implementationand the householdbeneficiary shall comply with these requirements. Ifsome materials are unavailable, the county-level PMO, at the request o fthe householdbeneficiary, may help purchase those materials inlarge packages andprovide suchmaterials to them. Insuch cases, the county-level PMO shall follow appropriate procurement methods in procuringthese materials. Depending on the size o fthe contract, they shall either follow shopping (for contracts up to US$lOO,OOO) or N C B (for contracts exceeding US$lOO,OOO). (d) Payment Scheduleand Conditions. The first installment, which will be between 30% and 50% o f the grant, will be made to each householdupon the signing o f the implementation agreement, andthe reminder will be made upon the 57 completion o f the work as evidenced by a satisfactory inspection report issued by the county-level PMO. (e) Review and Disclosure. Reviews will be carried out by the county-level PMO to verify the implementation o fthe work andthe use o fthe grant on a six-month basis andwill be undertaken by external consultants hired by the county-level PMO. A six-monthly inspection report will be available for review by Bank supervisionmissions. Inaddition, records o f such reviews shall be made available to the public. 5. Non-consulting Service. Non-consulting services procured under this project include the collection o f tourism information and will be financed by the counterpart fund. 6. For protection andpreservationo f intangible cultural heritage such as the collection o f intangible heritage resources and training hostedby the local master, the relevant activities will be carried out by village communities through community participation inaccordance with the following procedures: (a) Signing of Implementation Agreement. Based on an annual work plan approved by the PPMO and the Bank, the county-level PMO will sign an implementationagreement with the Community Project Management Group (CPMG), which will coordinate and monitor the implementation o f the agreed activities for intangible cultural heritage protection. The implementation agreement will include: (i) the list o fthe selected activities; (ii) cost ofthe total activities and the type and amount o f expenditures to be financed from the loan proceeds; (iii) activity implementationschedule; (iv) agreed outputs and reporting andverification requirements; and(v) payment schedule andconditions.. (b) Implementation. Village communities will mobilize local villagers, use local resources (local masters) andpurchase materials ifnecessary through local shoppingto implement the activities as specified inthe signed implementation agreement under guidance from the county-level PMO. (c) Payment Schedule and Conditions. The first installment, equal to 50% ofthe grant, will be made to each village uponthe signing o fthe implementation agreement, andthe reminder o fthe grant will be made available when the agreed outputs stated inthe implementationagreement have been produced and as evidenced by a satisfactory inspection report issued by the county-level PMO. (d) Review and Disclosure. The county-level PMO will carry out six monthly reviews, together with financial departments, to verify the implementation o fthe activities and the use o f the grant. The reviewreport will be provided to the Bank supervisionmission withinone month after completion, andbe also made available to the public. 58 7. Procurementof Goods. A total ofUS$759,000 has been allocated for the purchase o f goods under this project. The goods required include: electronic monitoring security systems; electronic exhibition systems; office equipment; hardware for IT systems; software; temperature and humiditymonitoring devices; first aid equipment; and vehicles. Procurement will be undertaken usingthe Bank's SBDs for all ICB and the MBDsas agreedwith or satisfactory to the Bank for allNCB. Procurement inaccordance with shopping procedures will also be applied for this project anda sample of a quotation document request shall be prepared and agreed by the Bank before implementing the relatedprocurement. Any contract for goods estimated to cost US$500,000 equivalent or more will be procured under ICB. N C B procedures will be used for procurement of goods costing less than US$500,000 equivalent per contract. Other goods will be procured using shopping procedures with contracts under US$100,000 equivalent per contract. 8. Consultants' Services,Training,andStudyTours.A total o fUS$3.5 million has been allocated to the procurement o f consultants' services, training and study tours. The consultants' services will typically include: (a) technical assistancefor project implementationand capacity building and strengthening and training for tourism sector staff; (b) revision of the Guizhou Tourism Development Master Plan; (c) development o f guidelines for the conservation o ftraditional buildingsand environments inminority villages; (d) tourism promotion in Qiandongnan Prefecture; (e) community coordinators/facilitators to mobilize and advise villages; and (f) technical specialists to assist inthe conservation and rehabilitation o ftraditional buildings.All consultants' services will be provided by consulting firms. Qualification and Cost Based Selection will apply to contracts with anestimated cost o fUS$200,000 or above. Selectionbased on the Consultant's Qualification may be applied to contracts with contract estimates below US$200,000. Qualification Based Selection may be applied particularly where universities and government research institutes that have the capability and qualifications to be considered for short listing for some o fthe consultancy assignments. Single Source Selectionmay be used under the specific circumstance specified inparagraph 3.10 o f the Consultant Guidelines. The short lists o f consultants for services estimated to cost less thanUS$300,000 equivalent per contract may be composed entirely ofnational consultants inaccordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 9. Training and study tours will be conducted inaccordance with the implementing agency's administrative procedures. The PPMOwill prepare an annual training planand submititto the Bank for review andapproval. All training programs will be conducted and financed based onthe planapprovedby the Bank. 10. IncrementalOperatingCosts.Inorder to ensure that the PPMO has necessary financial resources to support effective project management, the following incremental operating will be eligible for Bank financing: (a) salaries of contractual staff; (b) project- relatedtravel costs; and (c) office consumables. The available budget for incremental costs is US$150,000. The PPMO shall submit annual budgets for approval by the Bank, including a detailed description o f activities. The actual expenditures incurred shall not 59 exceed the annual budget approvedby the Bank. All relevant receiptshills shall be kept for Bankreview. 11. Advertisement and Publicationof ContractAward. The General Procurement Notice shall be published inUnitedNations Development Business online and dgMarket. Inaddition, itwill be advertised ina nationalnewspaper. All Special Procurement Notices for ICB, as well as Requests for Expressiono f Interest for consulting services expected to cost more than US$200,000, will also be publishedinUnitedNations Development Business online and dgMarket. Advertisements for Requests for Expression o f Interest for consulting services will be advertised ina national newspaper, regardless o f contract cost estimate. Contract awards will be publishedinaccordance with paragraph 2.60 o fthe Guidelines for works and goods as well as with paragraph 2.28 o fthe Guidelines for consulting services. B. Assessment of the Agency's Capacityto ImplementProcurement 12. Procurement activities will be carried out by the PPMO and Project ImplementationUnits (PIUs) for each subcomponent. EachPIU has assigned three to five staff to be responsible for procurement management. 13. An assessmento fthe capacity o fthe implementing agency to implement procurement actions for the project was carried out by the Bank on March 3-7 and April 1-7,2008. The assessment reviewed the organizational structure for implementing the project andthe interactionbetweenthe project staff responsible for procurement and relevant county, city andprovincial entities for administration and finance. 14. The key issues andrisks concerningprocurement for implementation o fthe project inthe PIUs and the PMOShave been identified and include: (a) insufficient experienced staff for procurement; (b) lack o f procurement knowledge andprocedures for Bank-financed projects; and (c) insufficient staff for project management and contract administration. For the agencies which are responsible for the implementation o f contracts awarded through community participation, the key issues and risk have been identified and include: (a) no experienced member for project management, including procurement management inthe CPMG set up inthe village; (b) no procurement knowledge and understanding o fthe World Bank's principles and objectives o f sound project management among relevantpeople; (c) insufficient experienced procurement staff members inthe county-level PMO, who are expected to provide necessary guidance and assistanceto village organizations and; (d) uncertainty o f availability o fprofessional and experienced community coordinator/facilitator. 15. The corrective measures which have been agreed with the PPMO are as follows: (a) The PPMO will recruit staff that has experience o fprocurement and constructionmanagement for similar projects; 60 (b) The PPMO will prepareaprocurement manual, which will be finalized in accordance with the comments from the Bank.This manualwill be distributedto the PIUs or agenciesfor reference; (c) Usingcounterpart funds, the PIUs will employ anexperienceddesign institute to provide engineering design includingthe preparation ofthe technical requirementsinthe biddingdocuments. The PPMO will assignanexperienced tendering company as aprocurement agent. This will help ensure the quality of procurement and the staffing of the PIUs and will also simplifythe working procedures; (d) The PPMO will employ aninternational consultant to provide technical assistance for project management; and (e) Procurementtraining will take placeprior to project implementation. The Bank's Beijing Office presented aprocurementworkshop to the procurement staff o fthe PMOs andthe PIUs inDecember 2007 and March2008 inGuizhou Province. Training of current procurement staff from the PIUs and the PMOs on procurement knowledge and procedures of Bank financed projects will be also conductedby the PPMO. Additional training would beprovided by the Bank during project implementation, ifnecessary. 16. For the agencies responsible for the implementation of contracts awardedthrough community participation, the following corrective measures were agreedwiththe PPMO: (a) Training o f procurement staff inthe county-level PMO on procurement knowledge, proceduresfor Bank-financedprojects, andmonitoringand evaluation of implementation; (b) Training of CPMGmembers invillages onprocurement knowledge and procedures for Bank-financed projects; (c) Finalization of, Bank approval for, and distribution of the OMCP to all village communities, and support for the villages to understandanduse the OMCP; (d) Appointment ofa community coordinator/facilitator ineachvillage for the assistance and supervision of project implementation; and (e) Employment of additional professional engineers for supervision of the project during implementation. 17. The overall project risk for procurement is rated as m. C. ProcurementPlan 18. The Borrower, at appraisal, developeda ProcurementPlan for project implementation which provides the basis for the procurement methods. This planwas agreedbetweenthe Borrower andthe Bank on March 19,2009 and i s available at the PPMO inGuiyang, China. Itwill also be available inthe project's database and inthe Bank's external website. The ProcurementPlanwill be updatedannually, inagreement with the Bank, to reflect the actual project implementation needs and improvements in institutional capacity. The ProcurementPlan is provided inTable C below. 61 D.AdvanceContractingandRetroactiveFinancing(Ifany) 19. Retroactive financing will be applied for expendituresincurred after December 1, 2008 for construction of civil works under the GuanlingNational Geo-Park Heritage Protection, village tourism project model design, and domestic and foreign training program for staff of Guizhou Province tourism industry.Advance contracting will be in accordancewith the Bank's Procurement Guidelines.Proposedadvance contracting and retroactive financing are summarized inTable B.The estimatedexpendituresare approximately US$899,000, which i s belowthe threshold of 20% of the total loanof US$60 million underthe World Bank Operational Policy 6.00. The local government of the aboveproject has beenmade awarethat payments made inexpectation of retroactive financing is at the Borrower's risk, and does not commit the Bankto making a loanfor the project or to finance suchpayments. E.Frequencyof ProcurementSupervisions 20. Inadditionto thepriorreviewsupervision to becarried out bythe Bankon an ongoing basis, the capacity assessment ofthe implementing agency has recommended one supervision mission every six months (including the specialprocurement supervision for ex-post review) to visit the field. 62 L 1 0 1All 35 0 1 a 0 .I h r .I a"3uE Q C C c, c:0 Q ii c, C C 0 u --- E2 8 W W 1 2 x 0 I I I s rn 0 0 I - * Y a a 8 El QI 0 2 c? 0 0 W Q m 0 0 QI 2 xm p m \o B 4- Y a u m z m CI I \o cz 3 3 I 0 x 0 0 I ea 1 O ~ 3 4 rj > u .I 1 I / I I I I .r. .-> I 0 - El m v) v) 3 El El Q\ 0 0 0 r r r m m El Y Y Y a a 8 8 a8 3 d I I 0 0 0 z 0 m 0 -i N 2 3 3 e f .-3> c i3 P m 3 '"* W r! N $I 3 a 3 0 c! 0 0 0 r! c! m c! 3 B c) a a x0 - u m m z 0 z 3 m 3 i N P P 38 m m m 0 0 0 0 0 Q Q Q 0 \o ,-. m .rl Cf:8 m m 0 0 0 0 m 0m - - 0 0 0 0 P 09 41 hl- a .-a 0 .I CI L n f PE m Annex 9: EconomicandFinancialAnalysis CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopment Project EconomicAnalysis Development Context 1. Renowned for its variety of ethnic minorities and its uniqueheritage, Guizhou has recently beenpromoting tourism while also preserving andprotecting its cultural and natural heritage. The tourist sector has beenmade a priority inthe 11th Five Year Plan of the province. According to the plan, tourist earnings are expectedto grow 25% per year from 2006-2010, andtotal tourism revenue is expectedto exceedRMB 76 billion (or 23% of the province's GDP) in2010. Inaddition, the province developed atourism development masterplanin2002 with the assistanceof the World Bank and the World Tourism Organization. It also developeda ruraltourism development planin2006 to guide the protection and development of the cultural andnatural heritage inthe province. 2. According to statistics from the Guizhou Provincial Tourism Bureau, the tourism sector i s growingrapidly, makingGuizhou one of the most popular tourist destinations in China. Since the early 1980s, the number oftourist visits5by domestic visitors has grown at an average rate of 16% per year from 2 million in 1984to 62 million in2007. Meanwhile,the numberof international visitors increasedfrom 1,500 in 1980to 430,000 in2007, representinganaverageincreaseof22% peryear. While the overall trendhas beenupward, growth has occasionally fluctuated due to changes inthe external environment. For instance, there was a significant drop in2003 due to the SARS outbreak. But the growth, driven mainly by domestic tourism, has since beenspectacular, with an average annual increaseof 36% from 2004 to 2007 (Table A). This is much higher thanthe master plan's projected annual growth rate of 15%. Correspondingly, tourism earnings increasedby over 30% per year from 2000 to 2006 andhave become a key source o f revenue for the Guizhou economy. In2007, tourism earnings were around RMB51 billion, whichcontributedto about 19% oftheprovince's total GDP. TableA: Developmentof TouristNumbersandRevenueinGuizhou Sources: GuizhouTouristYearbooks from 2000 to 2006 'Note that the number of "visits" may be larger than the number of individual peoplevisiting: visitors who visited morethan one site duringtheir trip to Guizhouor visited one site more than once within ayear are countedseparately. 80 3. Despite the overall development strategy andthe rapid development o ftourism, many challenges remainto ensure that sustainable tourism development is promotedand that the cultural andnatural heritage o fthe province is protected. These challenges include poor living standards and environmental conditions inmany proposedproject sites, low awareness and appreciationo fminority cultural heritage, poor infrastructure and facilities to protect andpromote heritage, and inadequate management, including weak institutions at the grass-roots level. Economic Benefits and Costs 4. The project i s designed to increase economic benefits to local communities by encouraging tourism andprotecting Guizhou's cultural and natural heritage. It i s expected to generate a variety o f benefits for the project beneficiaries, including local ethnic minorities, domestic and international tourists, local communities and governments, and tour operators inproject areas. 5. Economic Benefits Identified. Ingeneral, the economic benefits o fthe project are associated with local economic development and increases inincome which result from tourism activities, local skills enhancement, cultural heritage protection and development, natural ecosystems conservation, institutional strengthening, and improvement o f living standards and environmental healthinareas that are remote or have many ethnic minorities. 6. Some o f the economic benefits are direct use benefits enjoyed by both local communities and tourists. Some o fthese benefits are monetized as admission fees to the sites or as increases ineconomic rents captured by service providers. Other benefits are not monetized and include increases inconsumer surplus to both residents andvisitors. Some o fthe economic benefits are indirect and include the ecological and environmental benefits provided by improved natural heritage preservation. There are even economic benefits due to non-use values which do not involve directly using the sites inany way. This means that some people appreciate andare willing to pay for the existence o f ethnic minority cultures even ifthey may never planto visit the site. Economists usually refer to these as bequest values and existence values. 7. Even for direct use values, these economic benefits may be further divided into monetized andnon-monetized benefits. Monetized benefits are mainly those with cash returns to local residents or other service providers inthe form o f admission fees. Alternatively, these benefits can be increased net revenues from the provision o f cultural shows, foods, accommodation, parking, souvenir and handicrafts sales, etc. - all o f which are due to the improved protectionprovided by the project. Some o f these economic benefits are easy to quantify, such as admission fees or other extra tourism area feeshaxes. Others, such as those associated with increased or more sustainable provision o f services, are harder to estimate. 8. Itis also recognizedthat to a visitor the value o fenjoying cultural heritage is usually larger thanthe amount o f actual (monetized) expenditures o f the visitor. This 81 "extra benefit" is called consumers' surplus ineconomics. Although difficult to measure, some estimates can be made using various valuation techniques, including contingent valuation method (CVM) surveys andthe travel cost approach. 9. The main economic benefits o fprotectingcultural and natural heritage, as well as their beneficiaries andvaluation techniques, are summarized inTable Bbelow. These vary fiom site to site due to the differences inthe characteristics as well as the actual investments made. It should be notedthat the table does not list benefits other thanthose directly associated with the protection and development o f cultural and natural heritage. Other benefits, such as improvement o f living conditions andpublic health o f local people, are not valuated inthe analysis. Table B: EconomicBenefitsof ProtectingCulturalandNaturalHeritage Type of Benefits I Descriptionof Benefits I Beneficiaries IValuation Techniques Direct Use Benefits Monetized Admission fees and any Mostly tourists Measure direct special"tourism tax" payments of visitors appliedto goods and and estimate the services; in addition, the "economic rent" "extra profit" (or economic portion where rent) from the values of appropriate cultural and natural heritage-related services providedby local communities and paid for by tourists Non-monetized Extra values of cultural and Tourists and C V M natural heritage-related residents services provided by local communities and NOT paid for by tourists or residents (Le. consumer's surplus) Indirect Benefits Benefits of ecologicaland People living outside Not quantified in the environmental the project areas analysis but could be improvement(i.e. bequest done usingvarious values and existencevalues valuation techniques of cultural heritage) 10. Proiect Costs. The cost side o fthe project i s relatively simple. The costs o f the project are mainly capital investment and operationandmaintenance (O&M) costs. The project does not identify any major direct or external environmental and social costs created by new construction. GeneralAssumptions,BasicData and Methods Used 11. The economic analysis assumes that marketprices for the main elements o f costs andbenefits are not at muchvariance with their economic values. Therefore, shadow prices and conversion factors were not applied. The economic benefits and costs are valued at base year 2007 price levels. All o fthem are net amounts, factoring ininflation, duties, and taxes. The duration o f the project components can be 20 to 35 years after 82 completion o f construction, dependingon the nature o f investments. Replacement costs are included duringthe period according to the estimated lifespan o f equipment.To be conservative on economic returns, a time horizon o f 20 years was usedinthe cost-benefit analysis. 12. The discount rate accepted by the Chinese government for most o f its projects i s normally 8%.6 The rate can be as low as 6% for projects with long-term social and environmental benefits. Accordin to the (draft) Ministry o f Construction Guidelines for evaluation o f scenic parkprojects ,the acceptable rate o f economic returncan be 4% to f 6% given the importance o fthese projects to nature conservation. For a project featuring cultural and natural heritage protectionandtourism development, the benchmark for economic return i s set at 8%. 13. Methodoloav. Economic valuation o f a cultural andnatural heritage project is more difficult than for a traditional infrastructure investment project, such as water supply and sanitation. This is because a cultural and natural heritage project i s complicated, involving not only direct use values o f cultural andnatural heritage to tourists and local residents, but also indirect and optional and existence values to people who may never visit the site. Also, there is normally a greater fluctuation and uncertainty inthenumber ofbeneficiaries (i.e. tourists) dueto many externalfactors likeeconomic recessions and outbreaks o f epidemic diseases. Therefore, bothquantifying economic values and projecting the number o f visitors are difficult tasks for a cultural and natural heritage project. Also, given the large number o f project sites involved and the wide range o f basic infrastructure investments (such as access roads, water supply and sanitationfacilities, waste collection networks, buildingrehabilitations, fire safety, hiking trails), it is difficult to conduct a full cost-benefit analysis for each and every component o f the project. Therefore, a cost-effectiveness approach and a cost-benefit analysis were used inthe economic analysis. 14. For most o f investment components, the cost-effectiveness approach was usedto ensure that the least-cost options were adopted. Inparticular, the guidelineso f lower cost infrastructure options were provided to local design institutes and entities duringproject preparationand design. Inthe guidelines, design andtechnical alternatives (such as construction materials), technical standards (such as the width o f access roads and hiking trails), and technologies (such as types o ftoilets) are recommended to help reduce the cost o f each construction component inthe project design process. 15. To quantify the economic benefits and economic return rates, cost-benefit analysis was undertaken for several representative components. These include Wanfenglin Scenic ParkArea, Langde Miao Ethnic Minority Village, Zhaoxing Dong Ethnic Minority Village, and Anshun Jiuzhou Ancient Town. As noted, the project will provide non-monetized benefits to tourists and local residents and even non-use values to others, all o f which are difficult to quantify. Boththe survey-based (willingness-to-pay) ChinaNational Development and Reform Commission and China Ministry of Construction, 2006. EconomicAnalysis of ConstructionProjects: Methods and Parameters. Beijing: China PlanningPress. MinistryofConstruction, 2007. Evaluation Methodsfor ScenicSite ConstructionandProtection Project. 83 approachandthe travel cost approachwere employed at the representativeproject sites in anattemptto monetize some ofthese benefits (Le. consumer's surplus) -thereby offering abetterpicture of heritage protection investmentsto visitors and localresidents. However, because ofpoor datasets, the travel cost study results cannotbe easily used. 16. Proiection of Tourist Growth. Although many direct benefits such as admission fee revenues can be quantified, one of the most critical but uncertainparameters usedin valuing these direct economic benefits is the projected number of future visitors to each site. It i s difficult to project future tourism growth and estimate the contribution of the project to growth ineconomic values. The cost-benefit analysis has to make some strong butconservative assumptions due to the lack of reliable statistical dataand good models as well as the difficulty inassessing any impact on increases inthe number of site visits. As noted, Guizhouhas beenexperiencing very rapidgrowthinits tourism sector inrecent years (about 36% per year over the last four years). This rate i s much higher thanplanned intheprovince's tourism developmentmasterplan, whichaimsto achieveamore steady and sustainablegrowth. A simple extrapolation ofthe recenttourist growth will present a high growth scenario which i s unlikely to be realistic and sustainableinthe longrun given the local carrying capacity. 17. Therefore, inthis analysis, the annual growth oftourists i s projected and controlled at a sustainable and conservative levelbasedon discussions with local authorities andresearchinstitutes. Itis generally assumed that the longterm growth rate oftourism is to be a diminishing trendbut one which varies by site according to its development situation (such as carrying capacity) andthe investmentsmade at the site. For example, annual growth rates of 10% in2009-2018 and 5% in2019 to 2027 are assumedinthe analysis of Langde Miao Village. 18. Contribution ofthe Pro-iect.Many sites have already developedtheir tourism attractions and are already receiving visitors prior to the project. Therefore it i s a complex issue to analyze the changes that are directly causedby the project investment and estimate that share o fthe total incremental benefits. Again, this is a complicated task which has to be determinedsite by site, by taking into account the share of the project investment inthe total investment ofthe site, the relative importance o fthe investment in terms of attracting visitors, and the expectedlifespan of the investment, among other things. 19. The economic costs ofthe project mainly consist ofcapital investment duringthe constructionperiod and O&M costs inthe project implementation period. The project involves no resettlementor landacquisition andtherefore there are no major environmental costs. The construction periodof the project is on average four years. However, this may vary at some sites due to the nature and size of the proposed investments. The duration ofthe project is 20 to 35 years dependingon the investment components at each site. Again, to allow for conservative projected economic returns, a time horizon(period ofthe analysis) of20 years has been usedinthe cost-benefit analysis. 84 20. The incremental direct economic benefits oftourism development were estimated based on pricing and statistical data provided by local tourism bureaus and on the projection o fvisitors duringthe project period. For example, the admission fee i s based on the current fee level and the projection o f future increases. Although only used indirectly inthe economic analysis (via an estimate o f an "economic rent" premiumdue to the project), average expenses per tourist on food and accommodation are based on statistical data at the site or at the county level. The non-monetized benefits (consumer's surplus) o f heritage protection were estimated based on the results o f a C V M approach study that estimated the willingness-to-pay (WTP) values o f both tourists and residents for cultural heritage conservation. Other indirect benefits such as improvement o f local public healthwere not quantified due to a lack o f data. Willingness-to-Pay Survey at Selected Sites 21. As discussed, economic questionnaires for bothtourists and local residents were usedto value indirect benefits. Three sets o f questionnaires were designed: for local residents; for tourists at individual tourist destinations; and for tourists departing from the local airport. For tourists, the questionnaire included background information on a number o f variables including their trip information and expenses, their point-of-origin (what province they came from), the number o fpeople intheir party, sites visited, duration o f stay (inGuizhou, at the surveyed site, and at other sites), travel costs and other expenses (inGuizhou, at the site, and at other sites), and so on. Inaddition, a C V M survey was also conducted to estimate the value o f their WTP for the protection o f cultural and natural heritage at the survey site. For local residents, the questionnaire focused on their WTP for the conservation o f cultural and natural heritage at their local sites. A pre-test was conducted for the draft questionnaires, andthen the questionnaires were finalized. The surveys were carried out by a local design institute under the guidance o f Chinese and international consultants inSeptember-November, 2007. About 1,000 questionnaires were completed and the number and locations o fthose surveyed are summarized inTable C. Tourists Local Residents Planned Actual Planned Actual Langde 120 164 80 77 Zhaoxing 50 41 50 50 Wanfenglin 80 81 120 100 Libo* 100 129 nla nla Jiuzhou nla nla I 30 Airport and selected hotels inGuiyangCity 300 283 nla nla O f which international visitors 66 I Total 750 729 250 257 * dropped from the project. 85 22. The results of the WTP surveys are presentedinTable D.They show that both tourists and local residents are willing to pay for preserving cultural and natural heritage. The amount they are willing to pay varies by site. For example, inthe Wanfenglin area, tourists are willing to pay an average of RMB24 and local residentsRMB 12 for natural heritage preservation. At most sites, amuchhigher percentageof local residents are willing to pay for natural heritage conservationthan tourists. This is probably because the project sites are seen as more important to their daily life. Butthe WTP values for local residents are generally lower because of their lower income levels comparedto visitors from other partsof China (or international visitors). A possible reasonwhy a significant portiono ftourists are not willing to pay at some sites (e.g. Zhaoxing) i s because they may consider that the entrance fee they have already paid should be usedto finance the protection of natural and cultural heritage. TableD:Willingness to Pay Values by Survey Site Langde Zhaoxing Wanfenglin I Jiuzhou %with Average /o with Average 0 Average % with Average WTP WTP /oWTP with WTP WTP value WTP values WTP values WTP values (RMB) (RMB) (RMB) Tourists 76.8 10.7 13.5 44 30.9 24.2 I* I* Residents 88.2 I I 17.1 I100 I 18.4 I 85 I 11.8 I 85.0 I 27.8 1 * The survey was not conducted at this site because there are currentlytoo few visitors. 23. The average WTP estimatesvaried from RMB 11to over RMB 44, depending on the site. Although there is some uncertainty about the results it is assumedthat for tourists who will probably only visit the site once inmany years these are "one time payments". However, for local residents, who dependon the same sites for their livelihood, the WTP numberis consideredan annualvalue. 24. Inaddition to the contingent valuation (WTP) approach, another approach collected informationon travel costs and local expenditures. Tourists were asked about the total costs oftheir trip (thisvaries dependingonwhether they were from Guizhou or another province), the list of tourist destinations visited, and the number of days spent at aparticular site. The total travel cost was thendistributedto all sites visitedinorder to estimate the share o fthe travel cost at the study site. The average travel costs of study sites are listed inTable E. For example, inZhaoxing DongEthnic CulturalVillage, the average travel cost per visitor fiom other provinces inChina is RMB 359 while the average travel cost per visitor from Guizhou province i s RMB 118. This expendituredata indicate that many visitors are willing to travel a significant distance to visit Guizhou, and that they clearly valued the sites visited. It is not possible, however, to estimatethe economic rentkonsumer's surplus generatedby these visits from the data collected. 86 Table E:Average Travel Costs per Visitor Average travel Site Origin ofvisitor costs per visitor (RMB) Domestic but I I Langde outside Guizhou 444 Guizhou I 360 I Domestic but Zhaoxing outside Guizhou I 444 1 Guizhou Domestic but Wanfenglin outside Guizhou Guizhou I 332 I Cost-Benefit Analysis of SelectedProject Components 25. Four sites, representingtypical project components, were selectedas samples for the cost-benefit analysis. The four sites were Wanfenglin ScenicParkArea, Langde UpperMiao Village, Zhaoxing DongMinority Village, andAnshunJiuzhouAncient Town. WTP surveys were conductedat these four sites, and a cost-benefit analysis was carried out for eachof them. The results o ftheir economic analysis are briefly presented below. Wanfenglin Scenic Area inXingyi City, Oianxinan Prefecture(southwest) 26. Wanfenglin (ThousandPeaks Forest) Scenic Area i s located inXiyi City and Anlong County of Qianxinan Buyi andMiao Prefecture. It is anational Geo-park with magnificent karst landscapesandrichBuyiminority culture. The area comprises Maling River Valley, Dongfenglin(East Peaks Area), Xifenglin (West Peaks Area), and Wanfeng Lake with atotal area of about 450 km2.Despite its natural beauty, tourism here was undeveloped as it didnot become apriority inthe region untilthe early 2000s. 27. Tourism has since grown at an immense 73% in2004-2006 andpark admission fee earnings grew by 110%during the same period. However, despitethe fast growth in the early stage of development, insufficient tourist infrastructure i s emerging as a bottleneck inthe area. 28. The project component would significantly improve infrastructure andprotect cultural and natural heritage inorder to promote tourism. The project will invest in:the construction of a tourist informationcenter anda Buyi ethnic culture center; the construction and restoration of bridges over NahuiRiver; bike trails and footpaths; river bankecological management; andthe integrated protection anddevelopment oflocal villages. The direct economic benefits of the project are mainly the incremental tourism revenuesfrom admission fees, as well as any extra "economic rents" generatedfrom the 87 enjoyment ofnatural beauty, cultural heritage, accommodation, food, parking, and souvenir and handcraft sales. The indirect benefits are the extra, non-monetized values of natural and cultural heritage protection to visitors (exceedingwhat they have paid) and localresidents-that is, the consumer's surplus oftourists and residents. The result from the WTP survey was usedto quantify the indirect benefits receivedby bothresidents and visitors. The project's life spanis 20 years, after the construction periodo f four years. 29. Tourist Numbers and GrowthRate. The number of tourist visits to the scenic park was about 90,000 in2007. The area's impressive landscape and large carrying capacity makeitapotential center oftourism growth inthe province, as longas the project significantly improves local tourism infrastructure andprotects natural and cultural heritage. Inthe economic analysis, it is assumed that the annual growthrate of tourist visits would be 15% in2009-2015, 10% in2016-2025, and 5% in2026-31. It is also assumed that the project would be attributable to halfofthe growth. Giventhe outstanding performance of tourism inthe area, the assumptions appear to be very conservative. 30. Admission Fee and Other Net Tourism Earnings. The park charges an admission fee for sightseeing, rafting, and other activities. The average cost per visitor i s RMB 82 andthe fee is expectedto be raisedby RMB20 upon completion of the project. It is assumed that 75% of visitors to the area would enter the park and pay the admission fee. According to local statistics, visitors also pay an average o f RMB 103 per person for their accommodation, food, and shopping inthe park area. This generatesa net tourism income of about RMB21 for the city. 31. Consumer s Surplus. The WTP survey inthe scenic park shows that 31% of tourists are willing to pay an average of RMB24.2 for the protection of natural and cultural heritageinthe park area. This is inaddition to the admission fee already paidby visitors. 32. Costs. The total fixed capital investment is RMB 80.5 million. The incremental O&M costs are about RMB 5.2 millionper year from 2012 onwards. 33. The results o fthe economic analysis are presentedinTable F. They show that the economic internal rate of return(EIRR) i s ahealthy 13.7%. 88 Table F:Economic Analysis Results(EIRR) Fixed capiral investment [Yml 16.12 20.14 24.17 20.14 Incremental vanable costb [Yml 5.20 5.39 5.42 5.45 5.66 5.92 6.01 6.01 Total ecommfc cost [Yml 16.12 20.14 24.17 20.14 5.20 5.39 5.42 5.45 5.66 5.92 6.01 6.01 Directtourismearnings Earningsfmm admissionfees l r m l 170 5.18 6.88 8.83 1Z98 32.72 43.45 45.93 Net earningsfrom otherservicespmvided w visitors p m ] 0.25 0.53 0.86 1.24 3.01 5.86 7.94 8.42 Total monetizedeconomic benefits l r m l 3 95 5.71 7 74 10.07 2099 38.58 51.39 54.35 Non-monetizedbenefitsofheritageproteetion Vlsltors' consumersurplu? l r m l 1.39 1.60 1.81 2.11 3.40 5.48 6.99 7.34 Local residents' W P PmJ 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 Total non-monetizedbenefits l r m l 142 163 187 215 344 551 703 738 Totaleconomic benefits [Ym] 173.6 0.00 0.00 0.00 0.00 5.37 7.34 9.61 12.22 24.43 44.09 58.42 61.73 Net economicflows [Ym] 66.9 -16.12 -20.14 -24.17 -20.14 0.17 1.95 4.19 6.77 18.77 38.17 52.41 55.72 EIRR [%] 13.7% 34. Sensitivity analysis was conductedfor two scenarios -a 10%decrease in projected growth rate of tourist visits and a 10% increaseintotal project cost -as they may be the key parameters affecting the final results ofthe analysis. The sensitivity analysis results below show that the EIRRsremain above the 8% threshold. Although the non-monetized benefits derivedfrom the consumer's surplus are legitimate values and project benefits, they are not collected by local communities. Evenwithout counting this portion of extra benefits to visitors, the project would still yield an EIRR of 11.8%. Therefore, the project component shouldbe consideredeconomically justified androbust. EIRR 13.7% 10% decrease intourist growth rate 11.5% 10% increase ininvestment costs 12.5% I Non-monetized benefits excluded I 11.8% I LangdeUpper Village Miao Cultural Heritage, Leishan County, Oiandongnan Prefecture 35. LocatedinLangde Town of Leishan County, Longde UpperMiao Village has about 757 residents. The village, which startedover 640 years ago inthe MingDynasty, has a long history anda richMiao minority culture. The investment inthe village consists of the construction andrestoration of facilities (such as roads, footpaths, water supply, fire protection, sewage network, toilets, and solid waste collection); conservation, rehabilitation andprotection of ancient and minority architecture; construction of public buildings and informationcenters; and intangible heritageprotection. 36. Thevillage's tourism activities beganinthe 1990sandhave attractedmany visitors since, mainly drawnby the Miao cultural heritage. Iti s estimatedthat the village attractedabout 79,600 visitors in2006. From2001 to 2006, its growth rate was 15.2% per year due to goodmarketing efforts. However, withlimitedcapacity to carry tourists, the rapidgrowth rateof the small village couldnot be sustainedinthe longterm. To be 89 conservative, it is assumed that the future growthrate ofvisitation i s controlled at 10% per year from 2009 to 2019, and 5% per year for the remainder ofthe period. It is further assumedthat the project contributes to only half ofthe growth oftourism during the period. 37. Direct TourismEarnings. A mainsource ofthe benefits ofthe project can be measuredby the admission fees collected from visitors. Basedon dataprovidedby the local government and community, the admission fee in2008 is about RMB 60 per visitor and about 90% of visitors pay the fee. The entrance fee will be raised by RMB 20 after the project construction i s completed in2012. Inaddition, the project helps sustain economic activities inthe village. Iti s estimatedthat anaverage visitor spends another RMB49.5 on site, ofwhich RMB 10is for food, RMB 12is for accommodation, RMB 12.5 is for cultural shows, andRMB 15 is for souvenirs andhandicrafts. Only a small portionof these expenditures are included inthe analysis. Based on the assumption that the existence of the project allows vendors to charge more, it is assumedthat 20% of expenditures form the "economic rent" contribution ofthe project. This 20% was included as an economic benefit ofthe project. 38. Consumer's Surplus. The WTP survey inLangde shows that 77% oftourists are willing to pay an average of RMB 10.7 for the protection ofthe culturalheritage ofthe village. This amount is inaddition to the visitor's admission fee. 39. Costs. The total capital investmentis RMB 26.17 million. The incremental O&M costs are about RMB 1.16 millionper year from the year 2012 onwards. 40. The results ofthe economic analysis are presentedinTable G.They show that the EIRRis 19.6%. Table G:EconomicAnalysisResults(EIRR) Economic cost Fmedmprtolrnwshnenl IYml 634 7.93 9.52 793 Incrementalvanablecosts [Yml 1.16 116 I 1 6 1.16 116 1 I 6 1 I 6 116 Totalcconomfccos1 [Yml 634 7.93 9.52 7.93 1.16 116 1.16 116 116 116 116 116 3.00 3.76 4.60 5.52 10.97 15.27 20.77 22.03 0.06 0.13 0.21 0.29 0.79 1.19 1.69 1.81 3 0 6 389 481 581 1176 1646 2246 2384 Non-monetizedbenefitsofheritage protection vfsrfors'sm P'ml 1.16 1.18 1.41 1.55 2.38 3.03 3.87 4.07 Lacnl-dents' UTP Irm/ 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Toldnonmanetired benenefih P'ml 118 129 142 156 239 305 389 408 Total economicbenefits vm] 90.9 0.00 0.00 0.00 0.W 4.24 5.19 6.23 7.37 14.15 19.51 26.34 27.92 Net economic flows [Ym] 56.5 -6.34 -7.93 -9.52 -7.93 3.08 4.03 5.07 6.21 12.99 18.35 25.18 26.76 EIRR [%] 19.6% 41. Sensitivityanalysis was done for two scenarios- a 10% decreaseinprojected growthrate of tourist visits and a 10% increase intotal project cost - as they may be key parameters affecting the final results of the analysis. Although the non-monetized 90 benefits derivedfrom the consumer's surplus i s legitimate, they are not collected by local communities. Ifthey are completely excluded from benefits, the project would still yield an EIRRof 16.9%. The sensitivity analysis, therefore, shows that the investment i s both economically justified androbust. I EIRR I 19.60% I 10% decrease intourist growth rate 18.40% 10% increaseininvestmentcosts 18.30% Combined 17.10% Non-monetized benefits excluded 16.90% Zhaoxing; Dong Ethnic Cultural Village, LipinnCounty, Oiandongnan Prefecture 42. Zhaoxing Dong Village has about 4,000 residents. It also has a long history and is famous as a center of Dongminority culture showcasingsinging, customs, andtraditional architecture. Currently, the site has inadequate infrastructure facilities to protect and promote ancient architecture and intangible cultural heritage, bothof which are under threat from booming tourism. 43, The main subcomponentsof the proposedinvestment include: a culture and tourist informationcenter; renovation and construction of communication facilities such as the main street of Zhaoxing Town and footpaths; construction of infrastructure such as water supply, sewers, wastewater treatment, fire protection, garbageboxes, solid waste containers; medical stations; river ecological protection and restoration; conservation, rehabilitation and protection of ancient architecture; and conservation and rehabilitation of private houses. 44. Again, the project economic benefits were measuredby admission fees, net tourism earnings, andconsumer's surplus of visitors, as well as the WTP value of local residents for improvingtheir living and environmental conditions. 45. The village attractedabout 113,000 visits in2006. From2001 to 2006, its average growth rate was 26% per year. However, it is not likely that the rapid growth rate can be sustainedinthe longterm. Iti s conservatively assumed that the future growth rate of visitation will be controlled at 10%per year from 2009 to 2019, and 5% per year for the rest of the period. It is further assumed that this project contributes to halfo f the projected growth during this period. 46. Direct Tourism Earnings. A main source of the benefits of the project can be measuredby the admission fees collected from visitors. Basedon the data provided by the localgovernment and community, the average admission fee for entrance andcultural shows is currently about RMB40 per visitor, and about 50% of visitors pay the fee. The fee i s expectedto be raised by RMB 10after project construction completion in2012. In addition, the project helps sustaineconomic activities inthe village. It i s estimatedthat an averagevisitor spends another RMB 105 on site for accommodation, food, souvenirs, 91 handicrafts, and other expenses. 20% of this becomesthe net income (economic renuextra profit) andwould be included as an economic benefitof the project. 47. Consumer s Surplus. The WTP survey inZhaoxing shows that 14% o f tourists are willing to pay an average o f RMB44 for the protection of the cultural heritage ofthe village. This amount is inaddition to the visitor's admission fee. 48. The results ofthe economic analysis are presentedinTable H.They show that the EIRRis 12.6%. Table H:Economic Analysis Results (EIRR) Economic cost Fixed capilal inveslmenl [Yml 634 793 952 793 Incremental vanable COSIS [yml 197 199 201 203 214 344 361 361 Tolal economiccas1 [yml 634 793 952 193 197 199 201 203 214 344 361 361 Direct tourism earnings Earningsfrom admissionfees lYmJ 123 158 196 239 189 687 940 999 Ne1earningsfrom other servicesprovided to visifors p m ] 0.19 0.40 0.63 0.89 2.39 3.58 5.09 5.43 Total monetized economic benefits lymJ 142 198 2.60 3 27 7.28 10.45 14.50 15.43 Non-monetized benefitsofheritage protection Visilors`s WTP FmJ 1.19 1.31 1.44 1.58 2.43 3.11 3.96 4.16 Local residents' WTP (rmJ 0.07 0.07 0.07 0.07 0.08 0.08 0.08 0.08 Tolal non-monetized benefils l r m l 126 138 151 166 251 318 404 424 Total economic benefits [Ym] 62.6 0.00 0.00 0.00 0.00 2.68 3.36 4.11 4.93 9.79 13.63 18.54 19.67 Net economicflows [Ym] 18.2 -6.34 -7.93 -9.52 -7.93 0.72 1.38 2.10 2.90 7.65 10.19 14.92 16.06 EIRR [ % ] 12.6% 49. The results of sensitivity analysis show that the project component is economicallyjustified andquite robust. EIRR 12.60% 10% decrease intourist growth rate 10.80% 10% increase ininvestment costs I Combined 11.30% 1 9.50% I Jiuzhou Town, AnshunMunicipality 50. Jiuzhou Town is located insouthwest Xixiu District of AnshunMunicipality. Jiuzhou is the oldest military fortress inthe area, founded inthe early Ming Dynasty over 600 years ago. The traditional "Tunpu" culture of old Hanpeople, including architecture, customs, performances, etc i s well preserved inthe town. Through this project, Anshun plansto preserve the ancient town and develop it into a destination for tourists to experience Tunpu culture. 51. Theproject component includes: conservation andrehabilitation of traditional residential houses and public buildings; protection of intangible cultural heritage; reconstructiodconstruction of tourism facilities including footpaths and parkinglots; and 92 improvement of basic infrastructure such as water supply, sewers, and sanitaryfacilities. The project life spanwill be 20 years, after the construction period of four years. 52. Tourist Numbers and Growth Rate. The town isjust beginning to develop its tourism business. Currently, there are few visitors but it is expectedthat the number of visits will gradually grow to 50,000 in2011.Inthe economic analysis, it is assumedthat the annual growth rate of visitors would be 15% in2009-2015, 10% in2016-2025, and 5% in2026-31,which means an average of 830 visitors per day in2031. 53. Admission Fee and Other Net TourismEarnings. An admission fee of RMB 50 i s expecteduponcompletion ofthe project. It is assumed that 50% of visitors wouldpay the fee. Inaddition, visitors would spend RMB 89 per person for their accommodation, food, andshopping inthe town, which generates anettourism income (an economic renuextra profit) of about RMB 17.8 per visitor for the local community. 54. Consumer's Surplus. No WTP survey on visitors was conductedbecause there are few visitors inthe town at present. Although 85% of local residents are willing to pay for the project at an averageofRMB27.8 perpersonper year, non-monetized values were not includedinthe analysis. 55. Costs. The total fixed capital investment is RMB 22 million. The incremental O&M costs are about RMB 2 millionper year. 56. As showninTable I,basedonproject costs, and estimatedadmission fees, economic rents from other activities and WTP estimates, the EIRR of the project is 10.1%. TableI:EconomicAnalysis Results(EIRR) MI 6.34 7.93 9.52 1.93 [Yml 1.97 1.99 2.01 2.03 2.14 3.44 3.61 3.61 [Yml 6.34 7.93 9.52 1.93 1.97 1.99 2.01 2.03 2.14 3.44 3.61 3.61 1,63 2,M 2.55 3.12 5.79 10.09 13.22 13.95 0.13 0.29 0.46 0.67 1.62 3.15 4.26 4.52 Totaldcbenehb [ynl 517 0.00 0.00 aoo aoo 1.76 234 3.02 3.79 7.41 13.24 17.49 1847 Neteammictlw Iynl 83 -634 -7.93 -9.52 -7.93 4 2 1 0.36 1.01 1.76 5.27 9.80 13.87 1486 57. The sensitivity analysiswas conductedfor two scenarios-a 10%decrease in projected growthrate of tourist visits and a 10% increase intotal project cost -as they may be the key parameters affecting the final result ofthe analysis. Althoughthe EIRR of the combined scenariosis 7.1% (still abovethe government threshold of 6% for social projects), the investmentis more economicallyjustified when the presentlynon- monetized (andnon-estimated) values are included inthe analysis. 93 EIRR 10.1% 10% decrease intourist growth rate 8.4% 10%increaseininvestmentcosts 8.9% Combined 7.1% 58. Inadditionto the application ofthe least cost options inproject design, the cost- benefit analysis of four selectedrepresentativesites further shows that the project investmentwill bring attractive economic returns, even whenusing conservative assumptions oftourism growth and economic benefits. This leads to the conclusion that the project i s economically justified and will have apositive economic impact on the poor. 59. Theproject will improve the condition of localinfrastructure and bring economic andhealthbenefitsto the entire population, includingthe poor, inthe project areas. Most ofthe project investmentwill be shoulderedby local governments andcause no tariff or tax increaseon local residents, although aportionof the project loan will be disbursed through a grant program to those localresidents who borrow for their own home improvement. To ensure that the project revenuewill be sharedfairly among local residents, a community-based participatory approachwill be employed inproject implementation. Accordingly, the project anticipates no negative impact on the poor. Financial Analysis GeneralAssumptions,BasicData and Methods Used 60. The project intervenes inheritage sites, landscapes, andminority villages. The World Bank's experiences inother Chinese cities, as well as inLebanon, Egypt and Jordan, have shown that the private sector alone is unable to adequately preserve and develop these areas, nor canit ensure an equitable distribution of benefits (public good or otherwise) that emanate from those historic assets. Therefore, there is a strong case for public sector/governmentinterventionto preserve andmanagethe assets andthereby enhancepublic welfare. Municipalfinancial analysis was thus carried out for the participating municipality/prefectures. Anshun Municipality 61. The GDP of AnshunMunicipality increasedfrom RMB7.875 billion in2005 to RMB 12.374billionin2006, with anaverageannualgrowthrate of 19.04%. To be conservative, the GDP growth rate was predictedbased on 2006 data, and assumedto be 7% in2008-2010,6% in2011-2013, 5% in2014-2017, and 3% in2018-2024, respectively. 62. The on-budget revenueof Anshungrew from RMB0.519 billion in2003 to RMB 0.973 billion in2006, with an average growthrate of about 29.2%. The on-budget revenueindicates a kindof correlation as it appearsthat the on-budget revenue is about 94 7% of the GDP. Since Anshunis designatedas apoverty municipality inChina, it will receive additional sources ofrevenuebesides the on-budget revenue, as well as transfer payments from the central government although the amount will vary over the years, which will enhance the municipality's financial resources. 63. Thetotal investment capital is RMB72.76 million, of which the World Bank loan i s about RMB 48.60 million, and the counterpart fund i s RMB 24.16 million. During the implementation period of the project (2010-2014), the annual counterpart fundwill be RMB4.41 million, RMB6.04 million, RMB 7.35 million, RMB 5.86 million, and RMB 0.5 million, respectively, representingaround 0.4%-0.58% of on-budget municipal revenues. Duringthe repayment period(2015-2039), the annualrepayment amount will only be about RMB2.94 million, representingabout 0.2% of the on-budget revenuesin that particular year. The counterpart financing and loan repayment are therefore consideredwell withinthe fiscal capabilities ofthe Anshun Municipal Government. In addition the municipal financial resources are to be augmentedby transfer payments from the central government. Qianxinan Prefecture 64. The GDP of Qianxinan Prefectureincreasedfrom RMB 8.565 billion in2005 to RMB 14.048billionin2006, with anaverageannualgrowth rateof21.3%. To be conservative, the GDP growthrate was predictedbasedon 2006 data, and assumedto be 7% in2008-2010, 6% in2011-2013, 5% in2014-2015, and 3% in2016, respectively. 65. The on-budget revenueof Qianxinan Prefecturewas RMB 1billion in2006, with an average growthrate o f about 31.2%. The on-budget revenueindicates a kind of correlation as it appears that the on-budget revenueis about 7% of the GDP. Since Qianxinan Prefecturei s designated as apoverty prefecture, itwill also receive transfer payments from the central government, which will vary over the years. 66. InQianxinan Prefecture, the total investment capital is RMB 106.32million, of which the World Bank loani s about RMB 70.60 million, andthe counterpart fund i s RMB 35.72 million. Duringthe implementation period ofthe project (2010-2014), the annual counterpart fund will be RMB 3.02 million, RMB 6.44 million, RMB 9.41 million, RMB 5.99 million, andRMB 0.5 million, respectively, representing around 0.26%-0.74% of on-budget municipalrevenues. Duringthe repayment period (2015- 2039), the annual repayment amount will only be about RMB4.28 million, representing about 0.2%-0.3% of the on-budget revenuesinthat particularyear. Therefore, the counterpart financing and loanrepayment are consideredto be well withinthe fiscal capabilities ofthe Qianxinan Prefecture Government, especially considering transfer payments fiom the central government. QiandongnanPrefecture 67. The GDP of Qiandongnan Prefecturewas RMB 16.61 billion in2006, with an average annual growth rate of 16.78%. To be conservative, the GDP growthrate is 95 assumed as 10% in2008-2010,9% in2011-2015,8% in2016-2020,7% in2021-2025, and 6% in2026-2027, respectively. 68. The on-budget revenueof Qiandongnangrew from RMB 0.94 billion in2003 to RMB 1.89billionin2007, with anaveragegrowth rate of about 19.08%. With rapidGDP growth, it is assumed that on-budget revenue will grow at arate o f 16% from 2008 to 2016. 69. Thetotal investmentcapital is RMB308.3 1million, ofwhichthe World Bank loan i s about RMB217.87 million, andthe counterpart fund i s RMB 90.44 million. Duringthe repayment period(2015-2039), the annual recurrent expenditureswill represent 1.16% of the on-budget revenuesand 0.12% of the GDP. The Bank loan represents 3.62% of the on-budget revenues and 0.73% of the GDP. Therefore, the counterpart financing and loanrepayment are consideredwell withinthe fiscal capabilities ofthe Qiandongnan Prefecture Government. Considering transfer payments from the central government, the prefectural financial resources are strongly guaranteed. 96 Annex 10: Safeguard Policy Issues China: Guizhou Cultural and NaturalHeritage Protection and Development Project Environmental Safeguards 1. The proposed project i s classified as a Category A project under OP/BP 4.01 Environmental Assessment, consideringthat some proposed subcomponents are located at significant sites with cultural relics and sensitive natural environments. However, most subcomponents are simple with small investment scales. Based on environmental screening, four Bank safeguard policies are triggered: (a) Environmental Assessment (OP/BP 4.01); (b) Involuntary Resettlement (OP/BP 4.12); (c) Physical Cultural Resources (OP/BP 4.11); and (d) Indigenous Peoples (OP/BP 4.10). Environmental Assessment 2. The project feasibility studies were prepared by Chinese designinstitutes and an institute specializing inEnvironmentalAssessment (EA) was hiredby the project entity. This institute has subsequently carried out the preparationofEnvironmental Impact Assessment and Environment Management Plan documents for the entire project - documents independent o f those'for the feasibility studies. As a Category A project, an EAreport, anEMPreport, and anEA summary havebeenprepared accordingto the Bank's policy andrequirement. The environmental safeguard documents identify potential environmental benefits and consequences o f the project, propose measures to avoid, mitigate or otherwise compensate negative environmental impacts during construction and operation, and allow incorporation o f appropriate measures inthe design to keep the negative impacts to a minimumand acceptable level. The documents have been prepared on the basis o fthe country's legal and policy frameworks for pollution control and environmental protection, master plans and conservation plans, as well as applicable World Bank safeguard policies. Technically, the environmental safeguard documents have applied methodologies set out invarious technical guidelines issued by the State Environmental ProtectionAdministration and World Bank safeguard policies/technical sourcebooks. The scope of the project covered by the EA report is based on the feasibility studies for the project components. 3. Inadditionto the environmental safeguard documents mentioned above, a Strategic Environmental Assessment was conducted by the international consultant who evaluated Guizhou's economic development plan, cultural and natural protection and development plan, andtourism development plan-all from an environmental perspective. 4. Policy Framework and Institutional Responsibility. The EIA Law, issued in October 2002 andeffective on September 1,2003, i s applicable to all construction projects that may cause a negative impact on the environment. According to the Management Regulation on Environmental Protection for Construction Projects, issued on November 29, 1998, by the State Council, anEIA must be prepared duringthe project 97 feasibility stage. EIA approval is a necessaryprerequisite for securing a construction and operation permit. 5. Guizhou Provincial andMunicipaVPrefecture Environmental Protection Bureaus (EPBs) are incharge of: drafting and issuing local laws and regulations; organizing environmental monitoringand control; supervising the treatment of pollution; dealing with major pollutionincidents; and carrying out education andtraining inenvironmental protection. Accordingly, withinits duties, the Guizhou EPB reviews and approves the EA documents preparedfor the project. 6. Brief Project Description. The details of the project are provided inAnnex 4. The physical investments are generally small, and primarily limitedto: upgrading of access roads andtourist footpaths; provisionof small-scalewater supply, sanitation, wastewater collection and treatment, fire fighting facilities, andother environmental services; provisionof tourist facilities such as service centers and exhibitionfacilities; environmental restoration; and conservation works on relics. The project has been designedto ensure aminimumfootprint on the sites, andto minimize negative environmental impacts o f individual investments. 7. Baseline Environmental Conditions. Guizhou is located insouthwest China and borders Sichuan, Chongqing, Hunan, Guangxi, and Yunnanprovinces. It has atotal area of 176,100 km2,and an average altitude of 1,100m.About 92.5% of Guizhou i s mountainous, and 61.9% features karst topography - the most notable feature of Guizhou's physical environment. Guizhou i s located inthe subtropical monsoon zone, characterizedby a warm andhumidclimate. 8. Guizhouhas anabundance o f surface water which primarily flows withintwo river systems, the Yangtze andPearlRiver basins.Although surface water quality is generally good according to national standards, the water quality at the urbansections of the rivers i s a serious environmental issue. 9. Guizhouhas one of China's most pristineenvironments. The botanical resources ofthe province are well knownand include a large amount of rare flora, ancient trees of historic and cultural value, and a vast landscapeof forests. Guizhou also provides a habitat for a large range o fwildlife. Protectedfauna include Golden Monkeys and assortedbirdlife. Investigation shows that there are no protected ancient trees or rare flora inproject towns/villages. Although some of the project locations have ancient trees they are far from construction sites or are well protected.No significant impacts are anticipated. 10. In2004, out of Guizhou's total populationof 39 million, 26% were urban residents. Guizhou i s home to 49 ethnic minority groups with apopulation of 13.39 million, which accounts for 36.77% of Guizhou's total population. Ethnic groups whose population exceeds 100,000 includethe Miao, Buyi, Dong, Tujia, Yi, Gelao, Shui, Hui andBai. 98 11. Guizhou has a predominantly agriculture-based economy. Development o f industry (apart from miningand heavy industry)andthe service sector (especially tourism) are lagging behindthe rest o f China. Despite exceptional fast growth inrecent years, Guizhouremains the poorest province inChina, with an annual per-capita GDP o f only US$3,603 in2005 compared to US$9,101 for the rest o f the country. The Human Development Index o f Guizhou -which compares levels o f culture, education, and science - i s greatly below China's average. 12. Analysis ofAlternatives. Impacts on the environment "with andwithout the project" have been analyzed duringproject preparation. Analysis reveals that the project's goal o fpromoting sustainable development o fthe tourism industrywill have a positive effect towards the protection o f Guizhou's cultural and natural heritage and towards poverty alleviation. Adverse impacts will be avoided or mitigated by implementing the EMP. The proposedproject i s thus recommended. 13. Impact Assessment and Mitigation. The proposed project aims to facilitate the sustainable development o f Guizhou's cultural and natural heritage, and therefore can be predictedto deliver the benefits o f improvedpreservationand conservation o fthe local heritage. The project will instill a commitment to, andpractical experience of, sustainable approaches to tourism development amongst the government o f Guizhou andthe public, resulting inenhanced cultural heritage appreciation, environmental stability, and economic development o f isolatedpopulations. Giventhe national significance o f Guizhou's heritage, the project also has the potential to make a substantive contribution to the development o f similar approaches across China generally. 14. The project can also be predictedto deliver environmental and social benefits. If the investmentsat each site are carried out responsibly, they will contribute to the improvement o f local environmental conditions. Social and economic benefits can be realizedby increasingthe numbers o ftourists which will accelerate the development o f service industries. Economic development drivenby tourism will increasejob opportunities and enhance incentives for the protection of cultural andnatural heritage. 15. Construction Phase. The project components will potentially cause a variety o f short-term impacts, such as dust, noise, and soil erosion. However, those impacts are relatively minor and a series o f mitigation measures have been plannedto reduce the impacts to acceptable levels. Details o f mitigation measures, monitoring programs, and responsibilitiesare provided inthe EMP.The Guizhou Provincial Project Management Office (PPMO) will have an ongoing responsibility to track andreport the monitoring work o f all Project Implementation Units (PIUs), inaddition to its own direct monitoring activities, as well as the progress and status o f EMP implementation. 16. Details o f mitigation measures, locations, time frames, andthe agencies responsible for implementation and supervision are provided inthe EMP. The EMP covers such areas as water management, air quality control, noise management, construction site waste, removal o f soil by layer and separate stockpiling, covering piles 99 to limit wind erosion, construction of runoff channels and water storage, and correct orientation of roads and paths. 17. Operation Phase. Some potential environmental impacts/issues, which may appear inthe longterm, havebeenidentified,suchas solid waste collection anddisposal and noise management. However, manyo fthe concerns have beenaddressedinthe courseo f the designofthe facilities. Localcapacity ofenvironmental managementwill be strengthenedthrough the technical assistance component supportedby the Bank loan. 18. Public Consultations andInformation Disclosure. Two rounds ofpublic consultation were conducted at the preparation ofthe EA terms of reference from April to May, 2007, and at the completion ofthe draft EA report from November to December, 2007, byusing questionnaires, expert consultation, household interviews, andpublic hearings.Participants were mainly individuals who would be affected by environmental impacts, as well as organizations, institutes, nongovernmental organizations, andexperts. The detailed informationon the public consultations is available inthe Project File. 19. Informationonthe project andpotential environmental impacts has beenpublicly disclosedthrough various means, includingonline (www.ghidri.com.cn) and inlocal newspapers (Guizhou Daily, January 30,2008). 20. Environment Management Plan. The EMP has beendeveloped ina separate and stand-alone document for the project. The EMP includes policy basis and applicable environmental standards, environmental management systems, mitigation measures, monitoringplans, institutional arrangements, capacity building and estimatedcosts for the mitigationmeasuresandmonitoring programsduring construction and operation. To ensure that national, provincial, and municipal environmental laws, regulations and standards -as well as World Bank environmental requirements-are respectedduring project preparation and implementation, environmental specialistswill be directed to monitor and supervise the project. The Bank loan will be provided to hirethe environmental specialists andto implementthe EMP. 21. The EMP includes environmental monitoringprograms for bothconstruction and operation phases. The parametersto be monitored include noise, dust, water quality, and solid waste disposal. To ensure the strict andefficient implementation of the mitigation measures (including environmental obligations during construction), aprogram of monitoringactivities will be required.This includes two types of monitoring(further details are found inthe EMP): (a) environmental supervision, i.e. the general environmental monitoring of construction sites and activities; and (b) compliance monitoring, i.e. the specific monitoring of water quality, air quality, andnoise levels. The progress report furnished by the PPMO will include environmental monitoringreports, as perthe formats inthe EMP. An annual summary report on EMP implementation progress will beprovided to the Bankto report the activities conductedinthe previous calendar year. 100 Physical CulturalResources 22. According to the World Bank's OP/BP 4.11, the analysis ofphysical cultural resources and their protectionmeasures has beenconductedas part of EA.Inthe EA report, a chapter Chapter 7 has beenaddedto present relevant information. The project - - components cover a broad spectrumof attractions from cultural andnatural heritage assets to stunning geological formations. 23. The legal framework for the protection and managementof cultural resources in China i s strong. The Cultural Heritage Protection Law ofthe People's Republic of China (1982), the Law of Cultural Relic Protection (2002), and associatedregulations provide the legal basis inChina for protection ofcultural relics. 24. The Law of Cultural Relic Protection stipulatesthat construction andtourism development should comply withthe policy of cultural relic protection. This means that these activities are prohibited from causing any damage to cultural relics. Within the `construction control zone' or the `cultural relic protection unit,' it is prohibited to build facilities that cause pollution-related damage to cultural relics andtheir environments. Any activity which may affect the safety and environment of cultural relics is prohibited. Construction projects within the construction control zone that threatenthe historical view and style are prohibited. This law also stipulatesthat existing facilities whichhave caused pollutiondamage to the cultural relic and its environment should betreatedto end the problem. 25. The Principles for Conservation of Heritage Site inChina - the China Principles - - were developedthrough ajoint effort of China's International Council on Monuments and Sites andthe State Administration of Cultural Heritage in2000. The ChinaPrinciples are professional guidelines for conservation practices withinthe existing legislative framework. 26. Presently, there are no specific laws concerning tourism development inChina, althoughthe needfor such laws has become evident due to the rapiddevelopment of China's tourism industry over the last decade. A series oftechnical standards have been developedrecently to provide technical guidance on tourism planning and facility development. Two inparticular have beenapproved. These are: Measures for the Administration of Tour Guide Assessment and Appraisal; and the Chinese National Tourism Administration's Amendmentto the Implementation Measures for Tour Guide Administration. 27. Designs and biddingdocuments for conservation works will bepreparedby qualified institutes under the direction ofthe PPMO. Furthermore, the appropriate culture bureaumust approve the designs. This i s aprerequisite for the implementation o f conservation works, as per Chinese law. The contractorsmustprovide the certification, which will be assessedduring pre-qualification. Inaddition, all contractsunderthe project will include provisions for chance-find procedures. 101 Social Safeguards 28. Bank Guidelines. The Bank's OP 4.10 states that incases where "Indigenous Peoples are the sole or the overwhelming majority of direct project beneficiaries, the elements of an Indigenous PeoplesPlan (IPP) should be included inthe overall project design." A summary of how the elements of the IPP have been integrated inthe overall project design andhow the project complies with the relevant policies is provided below. The details are also found inthe "Social Assessment: Indigenous Peoples". SocialAssessment 29. Indigenous Peoples. Guizhou i s renowned for the diversity of its ethnic minority groups. The proposed GuizhouCultural & Natural Heritage Protection and Development Project involves 17villages, four ancient towns, four scenic sites, and four gateway towns, spreadacross 17counties infour prefectures/municipalities. Among the 17 counties, 13 are national poverty counties and autonomous ethnic minority counties. The total beneficiary population of the project i s 61,767. O fthese beneficiaries, about 38,879 (or 63%) are ethnic minorities. O fthese, 35,924 (or over 90%) belong to the Miao, Dong, andBuyiminorities. The ethnic minoritypopulation inthe project areas canbe further broken down as follows: 13,452 Miao (34.6%), 15,746 Dong (40.5%), 6,726 Buyi (17.3%), with the remaining 2,955 or so (7.6%) belonging to other ethnic groups. 30. The Guizhou ProvincialCenter for Tourism Researchand Public Outreach conductedtwo field surveys inthe four project municipality/prefectures from May 2007 to February 2008. The team collected baselineinformationon the demographic, social, cultural, and political characteristics ofthe affected indigenous peoples' communities includingthe landandterritories that they havetraditionally owned or customarily used or occupied, andthe natural resources on whichthey depend. Survey methods included interviews, public forums, and questionnaires. The surveys targeted residents inthe proposedproject county towns and villages, as well as business owners, local government agencies, and other companies. The survey team carried out free, prior, and informed consultations with the indigenous stakeholders (especially women andpoor indigenous peoples) inthe communities by way o f questionnaires (242 intotal), interviews, workshops (47 intotal) and observations, to identifytheir needs for the project and analyze the impacts of the project. The team subsequentlyconfirmed extensive support from the indigenous peoples' communities. 31. The findings o fthe surveys and analysis have beenpreparedinaccordance with OP 4.10 and includedinthe Social Assessment report. Ithas been concluded that minorities' needs are appropriately integrated into the project design. The report has also concludedthat the proposed project will have an overwhelmingly positive impact on the indigenous peoples' communities, providing themwith non-agricultural job opportunities inthe short-term, promotingtourism andurbanization inthe longterm, andencouraging themto follow environmental protection measures.The Operation Manualfor Community Participation (OMCP), which includesproceduresfor project implementation and management, has beenalso preparedand endorsedby the PPMO. 102 This manualwill be distributed to the indigenous peoples' communities to help them participate inthe project, manage their components, andreceive direct benefits. 32. Interms ofbenefits to the indigenouspeople, the projectwill mostly affect areas with highpercentages o ftheir communities. Inmost instances, these communities make upmore than50% ofthe beneficiaries. Furthermore, most ofthe project areas are autonomously runby the indigenous peoples. There are a range o f policies, regulations, and decision-making processes, from the state to the local level, to ensure the affected indigenous peoples are free to maintain or reform their own cultural customs and practices. These indigenouspeoples are also free to arrange andmanage local economic construction activities, as well as manage and conserve local natural resources. The autonomous government organizations also ensure that all affected indigenouspeoples enjoy equal rights.All project activities to be carried out inthe indigenous peoples' areas mustconform to these policies andregulations. Inthe project areaswhere the indigenous peoples are not a majority o fthe beneficiaries, the above policies and regulations still apply. Their equal rights inpolitics, economy, culture, and natural resources are assured so that they may benefit equally from the project. 33. Potential negative impacts on lands and natural resources inindigenouspeoples' areas include engineering landrequisition andrelocation, and change intheir landuse. However, since the jurisdiction o f the village protectionproject lies with the village committee andthe village tourism association, the collectively-owned landmay only be usedby the project after fully consulting with villagers. Only the Longli Ancient Town Heritage Protection subcomponent may involve housing demolition. Consequently, the Resettlement Action Plan (RAP) has been prepared for the affected indigenous peoples to guarantee housing restoration, and to reduce any negative cultural, economic, and social impacts arising from resettlement. Furthermore, the Resettlement Policy Framework includes procedures andprocesses for adjustment o f collective landuse. 34. Ithas been concludedthat marketingthe indigenouspeoples' cultural resources will not conflict withtheir customs, religious beliefs, or culture. 35. Policy and regulations. Guizhou Province has enacted its ordinance o f autonomous prefectures inaccordance with the Constitution, which stipulates how to enforce the Law on Regional National Autonomy. Each prefecture's indigenous autonomous counties have also formulated their ordinances that give specific stipulations on national economic goals -pursuantto the state and provincial laws and policies, which protect traditional cultures and natural resources o f indigenouspeoples, as well as guarantee their equal political, economic, and cultural rights.The project locations and components have been selected incompliance with the above policies and regulations, andthey reflect the consensus ofthe communities o fthe Miao, Dong, Buyi, and other ethnicities. 103 MinoritiesAffected by Component 36. Component1:Ethnic Minority Cultural Heritage Protection. The component involves atotal of 17villages and four ancient towns inGuizhou Province. As showed in thetable below, amongthese counties, 11are nationalpoverty counties andautonomous ethnic minority counties. The total beneficiary population is 52,440, of which 33,372 (63.6%) belong to ethnic minorities. Ofthese, over 90% belongto either the Miao, Dong, or Buyiminority. The percentage of the Miao, Dong, and Buyiis 34.6%, 40.5% and 18.8% respectively ofthe ethnic minority beneficiary population inthe project areas. Table: Indigenous Peoples in Component 1 8 Balla River HuaienbaoMiao CulturalHeritage Kaili City no no 350 280 80% Protection 9 BallaRiver Nanhua Miao Cultural Kaili City no no 812 812 100% HeritageProtection 10 Balla River Lmgde Leishan Upper Miao Cultural Yes Yes 757 757 100% HeritageProtection County 11 Balla River Xiijiang Mia0 Cultural Leishan Yes Yes 5280 5254 99.5% Heritage Protection County 12 Zhaoxing Dong Cultural Liping Yes Yes 3610 3610 100% HeritagProtection County 104 Percentof National Ethnic Total Ethnic Beneficiary NO. Project Description CityiCounty Poverty Minority Beneficiary Minority Ethnic County County Population Population Minority 1 Jiuzhou Ancient Town Heritage Huangping Yes Yes 4800 2688 56% Protection County 2 Longli Ancient Jinping Town Heritage Yes Yes 3873 775 20% County Protection 3 Tianlong Tunpu Pingba Cultural Heritage no no 6500 0 0 County Protection 4 Jiuzhou Tunpu Cultural Heritage Xixiu District no no 9114 3472 38.1% Protection 37. Component 2: Natural Heritage and Scenic Site Protection and Development. This project includes four Scenic Sites: (a) Guanling NationalGeo-Park inAnshun Municipality; (b) DingxiaoNational Geo-Park inQianxinan Prefecture; (c) Wanfenglin National Scenic Park inQianxinan Prefecture; and (d) ShanmuRiver Scenic Park in QiandongnanPrefecture. As showed inthe table below, the total beneficiary population is 9,076, of which 5,507 (or 61%) are ethnic minorities (Le. Buyiethnicity). Table: IndigenousPeoples in Component2 Percentof National Ethnic Total Ethnic Beneficiary NO. Project Description City/County Poverty Minority Beneficiary Minority Ethnic County County Population Population Minority Population I Cultural and Shibing Natural Heritage County 85 Notes: this i s the number Protection yes yes o f employees inthe scenic 2 GuanlingNational site, as no villages are Guanling involved. Geo-Park Heritage 62 Protection county I 105 Percent of National Ethnic Total Ethnic Beneficiary NO. Project Description CityKounty Poverty Minority Beneficiary Minority Ethnic County County Population Population Minority Population 3 Wanfenglin National Scenic Park Cultural and Xingyi Natural Heritage City no no 4498 2433 55% Protection (Lower NahuiVillage) 4 Dingxiao Geo-Park Dingxiao I I I Heritage Protection County no no 4431 3074 70% 38. Component 3: Tourism Gateway TownFacilities Development. The component has four Tourist InformationCenters located inJianhe County, Liping County, Leishen County and Guiyang. The Guizhou CulturalandNaturalHeritage Protection and Development Center will be established at the GuiyangNormal University, Guiyang. As showed inthe table below, Jianhe and Lipingare bothnational poverty counties and minority counties (withmainly the Miao and Dongethnicities). The direct beneficiaries are 176 employees. Table: IndigenousPeoples in Component3 I ' Ethnic m . , Ethnic Minority NO. I ProjectDescription ICityICountyI I h.linority National .-..-..-. Poverty I BI Minority Population 1 1 Jianhe Tourist ves ves 25 Heritage Protection Guiyang no no 68 and Development Center Social ImpactsIdentified and Integration of IPP Elements in Project Design 39. While minority communities benefit from the project indifferent ways as indicated inthe Social Assessment report, some potential risks and adverse impacts were identifiedas well. The following table summarizes how these risks and impacts have beenaddressed inthe overall project design: 106 Table: Integrationof IPP ElementsinProjectDesign Risks and Impacts Identified Measures Taken inProject Design Lack o f community Inthe earlier stage ofproject preparation, it was discovered that ethnic participation and villager minorities lacked adequateparticipation and involvement inthe project. participation Subsequently, fiee, prior and informed consultationhas been carried out during social assessment, so that villages/communities have a better understanding o f the project. Meanwhile, the OMCP has been preparedto ensure villagers (especially ethnic minorities) will participate. Inadequate After consultation with the communities, the following actions will be understanding on the conducted: (a) ensuring sufficient participation and training for identification, issue o f cultural heritage prioritization, interpretation, and protection o f culture, through community- protection basedparticipation; (b) mobilizing communities to helpprepare a list o f cultural heritage intheir own village, so they can better understand and recognize the value and significance o ftheir cultural heritage, especially as a way to potentially mitigate poverty; (c) establishing the subjective positiono f natives incultural heritage protection; (d) encouraging the young to inheritand engage indevelopment o f traditional crafts and arts, and inturnparticipate in tourism; and (e) reducing possible risks o f large-scale commercialization and market profiting. Lack o fprotection o f Most villagers have `masters' who possess skills and knowledge about ethnic handicrafts, folk intangible cultural heritage (embroidery, dyeing, silver works, tinworks, arts, traditional skills, songs, dances, stories, etc.). The skillstransfer could include: (a) use o f masters and rituals to provide training to interested young people inthe village; (b) organizing a series o fregular short-duration formal training programs for interested persons along with hands-on training; and (c) production o fbooks, brochures, and CDs o f the various ethnic arts, crafts, songs, stories and oral histories, etc. This may involve creating space for an arts and crafts workshop with an attached outlet that could sell handicraft items, recordings o f folk songs, brochures, etc. The project could support the fee payments to masters, and all costs o fboard, lodging, and logistics for trainees who commit to formal training. Prospective trainees would be screenedto ensure that they have genuine interest inusing the skills. Riskof Inappropriatetourism investmentsare likely to destroy cultural heritage. The overcommercialization Guizhou Provincial Government has developed guidelines and regulations to protect the minority villages and ensure that they reap the benefits from their own cultural heritage assets. It has been agreed that all proposed commercial activities would: (a) conform to the list o f approved commercial activities; (b) require agreement with the Village Tourism Association; (c) conformto design and construction guidelines for minority villages; and (d) require construction permits from the Village Committee andthe County Government, to denote their approval ofstructures. Potentialrisks associated Inthe designreport, the traditional architecture andhousingconservation and with the renovation o f rehabilitation requirementsare presented: (a) any changes must be based on old buildings traditional patterns and use traditional materials; (b) safety and aesthetics should be taken into consideration during renovation, such as electrical wiring, sanitation improvement, heating, water-proofing and wind-proofing. In addition, detailed selection criteria andprocedures will be included inthe OMCP. 107 Risks and Impacts Identified Measures Taken inProject Design Criteria o f village hotel, The architectural guidelines and criteria are to be stipulated during project home-stay and Family implementation to promote consciousness o f ethnic architectural protection, museum andto improve use and management. A loomingthreat is the loss o ftraditional ethnic arts and crafts due to a trend o f rapid commercialization. The Community's Guide for BusinessPlanning, therefore, mustencourage ways to regulate marketbehavior and adjust project implementation, to promote cultural heritage protection andprevent over-commercialization. Moreover, this guide will provide the villagers, especially craftsmen, with effective ways to protect their rights (such as patent rights), and allow them to actively participate inthe protection o ftheir own intellectual products. Lack o f funding Generally, the grant program inthe project will benefit villagers by capacity building.Such programs may provide a solution to the lack o ffinancial resources inmany villages, and allow the villagers to develop ethnic crafts. Also, this type o fmeasure may encourage villager participation inthe project. Indoing so, they would share more ofthe economicbenefits oflocaltourism, as well as earn a certain degree o f decision-making power over the grant. Inadequacy o f villagers' Detailed participation andtraining planshave been preparedinthe OMCP. capabilities These planswill be carried out to guarantee villager participation, monitoring, and capacity building, especially through institutional designs (such as the establishment o f project implementation committees and project monitoring groups at the community level) and specific regulations (such as interest allocation). Financialburdens on Itwas agreedthat the government will take fullresponsibility for loan communities repayment. All facilities will be owned by the community. To make the project results sustainable, the community will be responsible for the maintenance o f facilities constructed within the community. The maintenance fund will be generated from users' fees and tourism revenues. These arrangements can be found inthe OMCP. Community members will be informed during implementation. 40. LandAcquisition and Livelihood Reformation. Potentially adverse impacts include landacquisition, change inlanduse (particularly affecting agricultural land), and noise and public safety concerns during construction. The Social Assessment on Indigenous Peoplesdiscussesmeasures to mitigate such risks, and also discussesthe rangeof state and localpolicies andregulations which guarantee the indigenous peoples' equal rights under the law. The RAP provided detailed measureso f livelihood reformation for minority people affected by landacquisition. The summary is presented inthe followingtable. 41. O fall the subcomponents,three involve acquisition of collectively-owned land. Moreover, the landacquired intwo ofthese cases -Xingyi National Geo-Park Dingxiao Guizhou Dragon Heritage Protection, and Guanling National Geo-Park Heritage Protection subcomponents-i s uninhabited barrenhills. Since these areas are collectively-owned andaffect no people, it is unnecessaryto compile a RAP. The third case, the Longli Ancient Town Heritage Protection subcomponentinJinping County, involves landacquisition and house demolition. Consequently, a culturally-sensitive RAP has beenpreparedfor the affected indigenous peoples to guarantee their house restoration, and to reducethe negative cultural, economic, and social impacts arising from resettlement. 108 0 0 O i O Annex 11:ProjectPreparationand Supervision CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject Planned Actual PCN review 04/23/2007 04/23/2007 Initial PID to PIC 06/27/2007 Initial ISDS to PIC 06/28/2007 Appraisal 08/18/2008 09/08/2008 Negotiations 03/24/2008 03/18/2009 BoardRVP approval 05/26/2008 Planneddate of effectiveness Planneddate of mid-termreview Plannedclosing date Key institutions responsiblefor preparationofthe project: Guizhou Provincial Project Management Office Guizhou Provincial Tourism Bureau Guizhou Provincial Development andReform Commission Guizhou Provincial Finance Bureau Guizhou Provincial Environmental Protection Bureau Guizhou Provincial Construction Bureau Guizhou Provincial Land andResourcesBureau Guizhou Provincial Economy and Trade Commission Guizhou Provincial Ethnic Affairs Commission Guizhou Provincial Water ResourcesBureau Guizhou Provincial Cultural Bureau Guizhou Provincial Office o f Poverty Alleviation Bank staff andconsultantswho worked onthe project included: Name Title Unit ShenhuaWang Task Team Leader EASUR Mingyuan Fan Senior Sanitary Engineer EASCS Senior Environmental Chongwu Sun EASCS Specialist Chaogang Wang Senior Social Scientist EASCS Jim Xie Senior Economist EASRE MikiEndo Operations Officer EASUR HaixiaLi Senior Financial Management Specialist EAPCO XujunLiu Piocurement Specialist EAPCO Margaret Png Senior Counsel LEGES Junxue Chu Senior Finance Officer LOAFC ChandraGodavitarne MunicipalEngineer Consultant KatrinkaEbbe CulturalHeritage Specialist Consultant 110 Kristoffer Hvidsteen Tourism Marketing Specialist Consultant ErikHolmPeterson Tourism Development Consultant Specialist LuisaElena Mengoni Intangible Heritage Specialist Consultant Architecture andTangible Pierre DanielCoute Heritage Specialist Consultant KunimasaNishigaya Economist/Financial Analyst Consultant Tong ManAhn LandscapeArchitecture Consultant Specialist Vellet Fernandes Program Assistant EASUR Xuemei Guo Program Assistant EACCF 111 Annex 12: Documentsinthe ProjectFile CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject A. Governmentand ConsultantReports 1. Guiyang 11th Social and Economic Development Five-Year Plan, January 2006 2. Guiyang City Master Plan 2003-2020 - Executive Summary Report 3. Circular on Establishing Leading Group for Guizhou Cultural andNatural Heritage Protection and ManagementProject 4. Report on UsingWorld Bank Loanfor Guizhou Cultural andNaturalHeritage Protection and Development Project 5. Social Assessment 6. Consolidated Feasibility Study Reports 7. Consolidated Resettlement Action Plan 8. Environmental Impact Assessment 9. Environmental Management Plan 10. OperationManual for Community Participation 11. Community-Based RuralTourism Guidelines, preparedby the Guizhou Provincial Tourism Bureauand the Performance Excellence Limitedo fNew Zealand, July 2006 B. BankStaffAssessment 1. MissionAide Memoires 2. ProcurementCapacity Assessment Report 3. Financial Management SystemAssessment Report 112 Annex 13: Statementof Loansand Credits CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject Difference between expected and actual Original Amount inUS$ Millions disbursements ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm.Rev'd PO86035 2007 CN-CF-Tianjin Landfill Gas Recovery 0.00 0.00 0.00 0.00 0.00 8.41 0.00 0.00 PO86515 2007 CN-3rdNationalRailway 200.00 0.00 0.00 0.00 0.00 200.00 13.33 0.00 PO83322 2007 CN-SICHUAN URBANDEV 180.00 0.00 0.00 0.00 0.00 170.70 19.20 0.00 PO87318 2007 CN--GEF-Guangxi IntegratedForestry 0.00 0.00 0.00 5.25 0.00 4.65 0.13 0.00 Dev. PO81776 2007 CN-GUAh'GDONGPRD2 96.00 0.00 0.00 0.00 0.00 96.00 4.33 0.00 PO88964 2007 CN-Guangxi IntegratedForestry Dev 100.00 0.00 0.00 0.00 0.00 84.09 -14.25 0.00 PO90377 2007 CN-GEF-2nd ShandongEnvironment 0.00 0.00 0.00 5.00 0.00 4.50 0.00 0.00 PO96285 2007 CN-MSEFinance 100.00 0.00 0.00 0.00 0.00 100.00 81.33 0.00 PO75613 2007 CN-ShaanxiAnkang RoadDevelopment 300.00 0.00 0.00 0.00 0.00 300.00 10.57 0.00 PO95315 2007 CN-W. RegionRuralWater & Sanitation 25.00 0.00 0.00 0.00 0.00 25.00 0.00 0.00 PO77752 2007 CN-SHANDONG ENVMT 2 147.00 0.00 0.00 0.00 0.00 132.00 -10.83 0.00 PO92618 2007 CN-LIAONING MED CITIES INFRAS2 173.00 0.00 0.00 0.00 0.00 173.00 0.00 0.00 PO91020 2007 CN-FujianHighwaySector Investment 320.00 0.00 0.00 0.00 0.00 320.00 34.50 0.00 PO81255 2006 CN-ChangjianglPearlRiverWatershed 100.00 0.00 0.00 0.00 0.00 96.80 15.47 0.00 Reha PO82992 2006 CN-GEF-Termite ControlDemonstration 0.00 0.00 0.00 14.36 0.00 14.36 1.03 0.00 PO81348 2006 CN-HENAN TOWNS WATER 150.00 0.00 0.00 0.00 0.00 149.63 19.63 0.00 PO82993 2006 CN-GEF-PCBMgnt & Disposal 0.00 0.00 0.00 18.34 0.00 17.57 9.12 0.00 PO84742 2006 CN-IAlL I11 200.00 0.00 0.00 0.00 0.00 113.92 5.62 0.00 PO70519 2006 CN-FuzhouNantaiIslandPeri-UrbanDev 100.00 0.00 0.00 0.00 0.00 99.75 21.00 0.00 PO85124 2006 CN-Ecnomic ReformImplementation 20.00 0.00 0.00 0.00 0.00 18.44 3.27 0.00 PO75732 2006 CN-SHANGHAI URBANAPL2 180.00 0.00 0.00 0.00 0.00 146.64 13.31 0.00 PO85333 2006 CN-5thInlandWaterways 100.00 0.00 0.00 0.00 0.00 68.70 22.53 0.00 PO99992 2006 CN-LiaoningMediumCities 218.00 0.00 0.00 0.00 0.00 190.41 -7.18 0.00 Infrastructure PO96158 2006 CN-RenewableEnergy I1(CRESP 11) 86.33 0.00 0.00 0.00 0.00 72.67 28.06 0.00 PO94388 2006 CN-HFC-23 EmissionsReduction 0.00 0.00 0.00 0.00 0.00 1,042.93 0.00 0.00 PO93906 2006 CN3rd Jiangxi Hwy 200.00 0.00 0.00 0.00 0.00 169.89 -0.11 0.00 PO90336 2006 CN-GEF-NINGBOWATER & ENVMT 0.00 0.00 0.00 5.00 0.00 4.50 1.33 0.00 PO86629 2006 CN-HeilongjiangDairy 100.00 0.00 0.00 0.00 0.00 94.64 14.48 0.00 PO86505 2005 CN-NMGBO WATER & ENVMT 130.00 0.00 0.00 0.00 0.00 92.53 -2.97 0.00 PO75730 2005 CN-HUNAN URBANDEV 172.00 0.00 0.00 0.00 0.00 155.62 50.79 0.00 PO81161 2005 CN-CHONGQING SMALLCITIES 180.00 0.00 0.00 0.00 0.00 154.70 42.97 0.00 PO72721 2005 CN-GEF-Heat Reform & Bldg EgyEff, 0.00 0.00 0.00 18.00 0.00 14.95 7.66 0.00 PO67625 2005 CN-GEF-RenewableEnergy Scale-up 0.00 0.00 0.00 40.22 0.00 37.67 -0.35 0.00 Program PO71094 2005 CN - Poor RuralCommunities 100.00 0.00 0.00 0.00 0.00 75.45 42.95 0.00 Development PO81346 2005 CN-LIUZHOU ENVIRONMENT MGMT 100.00 0.00 0.00 0.00 0.00 66.38 1.23 0.00 PO67828 2005 CN-RenewableEnergy Scale-upProgram 87.00 0.00 0.00 0.00 10.00 5.41 10.91 0.00 PO87291 2005 CN-CF-JinchengCoal BedMethane 0.00 0.00 0.00 0.00 0.00 18.13 0.00 0.00 Project 113 PO69862 2005 CN Agricultural Technology Transfer - 100.00 0.00 0.00 0.00 0.00 76.17 31.27 0.00 PO57933 2005 CN-TAI BASINURBANENVMT 61.00 0.00 0.00 0.00 0.00 34.18 19.36 0.00 PO68752 2005 CN-InnerMongoliaHighway& Trade 100.00 0.00 0.00 0.00 0.00 45.76 -8,82 0.00 Corrid PO81749 2004 CN-HubeiShimanHighway 200.00 0.00 0.00 0.00 1.oo 9.19 -13.14 0.00 PO84003 2004 CN-GEFGUANGDONGPRD URB 0.00 0.00 0.00 10.00 0.00 9.58 6.04 0.00 ENV PO77615 2004 CN-GEF-Gansu& Xinjiang Pastoral 0.00 0.00 0.00 10.50 0.00 5.29 8.44 0.00 Develop PO77137 2004 CN-4thInlandWaterways 91.00 0.00 0.00 0.00 0.46 52.06 25.69 25.19 PO65035 2004 CN-Gansu& XinjiangPastoral 66.27 0.00 0.00 0.00 0.00 23.75 12.19 0.00 Development PO75728 2004 CN-GUANGDONGPRDUR ENVMT 128.00 0.00 0.00 0.00 0.64 74.54 19.92 0.00 PO75602 2004 CN-2ndNationalRailways(Zhe-Gan 200.00 0.00 0.00 0.00 1.oo 0.25 -22.08 -23.08 Line) PO75035 2004 CN - GEF-HaiBasin Integr.Wat. 0.00 0.00 0.00 17.00 0.00 10.33 11.13 0.00 Env.Man. PO73002 2004 CN-Basic EducationinWesternAreas 100.00 0.00 0.00 0.00 0.00 35.52 32.70 0.00 PO65463 2004 CN-JiangxiIntegratedAgric. Modern. 100.00 0.00 0.00 0.00 0.00 61.14 35.40 0.00 PO66955 2004 CN-ZHEJIANGURBANENVMT 133.00 0.00 0.00 0.00 0.00 90.34 39.55 0.00 PO69852 2004 CN-WuhanUrbanTransport 200.00 0.00 0.00 0.00 1.oo 70.83 68.53 0.00 PO67337 2003 CN-2ndGEF EnergyConservation 0.00 0.00 0.00 26.00 0.00 7.17 25.84 0.00 PO40599 2003 CN-TIANJINURB DEV I1 150.00 0.00 0.00 0.00 0.00 126.17 76.92 1.58 PO68058 2003 CN-YixingPumpedStorageProject 145.00 0.00 0.00 0.00 0.00 47.17 34.93 0.00 PO70191 2003 CN-SHANGHAIURB ENVMTAPLl 200.00 0.00 0.00 0.00 0.00 88.67 52.85 0.00 PO70441 2003 CN-HubeiXiaogan XiangfanHwy 250.00 0.00 0.00 0.00 0.00 19.25 19.25 0.00 PO58847 2003 CN-3rdXinjiang Hwy Project 150.00 0.00 0.00 0.00 0.00 12.25 11.58 0.00 PO76714 2003 CN-2ndAnhui Hwy 250.00 0.00 0.00 0.00 0.00 42.71 13.55 0.00 PO60029 2002 CN-GEF-Sustain.ForestryDev 0.00 0.00 0.00 16.00 0.00 4.59 14.45 0.00 PO58846 2002 CN-Natl RailwayProject 160.00 0.00 0.00 0.00 5.00 1.56 6.56 0.00 PO64729 2002 CN-SustainableForestryDevelopment 93.90 0.00 0.00 0.00 0.00 20.14 13.25 0.00 PO68049 2002 CN-HubeiHydropowerDev in PoorAreas 105.00 0.00 0.00 0.00 0.00 14.39 7.85 0.00 PO70459 2002 CN-InnerMongoliaHwy Project 100.00 0.00 0.00 0.00 0.00 7.84 1.84 0.00 PO71147 2002 CN-Tuberculosis Control Project 104.00 0.00 0.00 0.00 0.00 41.63 27.33 0.00 PO45915 2001 CN-UrumqiUrbanTransport 100.00 0.00 0.00 0.00 0.00 23.16 23.16 0.00 PO47345 2001 CN-HUAI RIVERPOLLUTION 105.50 0.00 0.00 0.00 0.00 15.25 15.25 0.47 CONTROL PO51859 2001 CN-LIAO RIVERBASIN 100.00 0.00 0.00 0.00 0.00 14.47 14.01 0.00 PO56199 2001 CN-3rdInlandWaterways 100.00 0.00 0.00 0.00 0.00 4.56 3.31 0.00 PO56596 2001 CN-ShijiazhuangUrbanTransport 100.00 0.00 0.00 0.00 0.00 38.31 38.31 0.00 PO42109 2000 CN-BEIJINGENVIRONMENTI1 349.00 0.00 0.00 25.00 26.51 156.56 183.07 10.76 PO45910 2000 CN-HEBEIURBANENVIRONMENT 150.00 0.00 0.00 0.00 0.00 27.83 27.83 5.38 PO64730 2000 CN-YangtzeDike Strengthening 210.00 0.00 0.00 0.00 0.00 64.21 64.21 40.54 PO64924 2000 CN-GEF-BEIJMGENVMT I1 0.00 0.00 0.00 25.00 0.00 18.95 25.00 10.48 PO49436 2000 CN-CHONGQINGURBANENVMT 200.00 0.00 0.00 0.00 29.50 53.32 82.82 -1.37 PO56424 2000 CN-TongbaiPumpedStorage 320.00 0.00 0.00 0.00 100.00 27.76 132.96 6.68 PO51856 1999 CN-AccountingReform& Development 27.40 5.60 0.00 0.00 0.00 6.25 6.03 5.25 PO38121 1999 CN-GEF-RenewableEnergy 0.00 0.00 0.00 35.00 0.00 4.27 34.77 28.90 Development PO42299 1999 CN-TecCoop CreditIV 10.00 35.00 0.00 0.00 5.84 10.87 14.18 0.00 PO36953 1999 CN-HealthIX 10.00 50.00 0.00 0.00 0.40 9.59 7.85 7.85 114 PO36414 1998 CN-GUANGXI URBANENVMT 72.00 20.00 0.00 0.00 13.48 10.96 23.80 3.80 PO03614 1998 CN-GuangzhouCity Transport 200.00 0.00 0.00 0.00 20.00 41.85 61.85 41.85 PO03539 1998 CN-SustainableCoastalResourcesDev. 100.00 0.00 0.00 0.00 2.06 8.63 10.69 8.63 Total: 9,205.40 110.60 0.00 270.67 216.89 6,109.31 1,780.54 172.91 CHINA STATEMENT OF IFC's Heldand Disbursed Portfolio InMillions ofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2002 ASIMCO 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.00 2006 ASIMCO 0.00 0.00 4.12 0.00 0.00 0.00 3.61 0.00 2005 BCCB 0.00 59.21 0.00 0.00 0.00 59.03 0.00 0.00 2003 BCIB 0.00 0.00 12.04 0.00 0.00 0.00 0.00 0.00 2006 BUFH 8.14 0.00 0.00 0.00 8.14 0.00 0.00 0.00 2005 Babei 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00 BabeiNecktie 11.00 0.00 0.00 6.00 8.94 0.00 0.00 4.88 1999 Bank of Shanghai 0.00 21.76 0.00 0.00 0.00 21.76 0.00 0.00 2000 Bank of Shanghai 0.00 3.84 0.00 0.00 0.00 3.84 0.00 0.00 2002 Bank of Shanghai 0.00 24.67 0.00 0.00 0.00 24.67 0.00 0.00 2005 BioChina 0.00 3.70 0.00 0.00 0.00 3.13 0.00 0.00 2002 CDH ChinaFund 0.00 2.02 0.00 0.00 0.00 0.00 0.00 0.00 2005 CDH ChinaI1 0.00 17.99 0.00 0.00 0.00 11.38 0.00 0.00 2006 CDH Venture 0.00 20.00 0.00 0.00 0.00 0.51 0.00 0.00 2005 CT Holdings 0.00 0.00 40.00 0.00 0.00 0.00 0.00 0.00 2004 CUNA Mutual 0.00 10.53 0.00 0.00 0.00 0.00 0.00 0.00 2006 CapitalToday 0.00 25.00 0.00 0.00 0.00 0.32 0.00 0.00 2005 ChangyuGroup 0.00 18.07 0.00 0.00 0.00 18.07 0.00 0.00 1998 ChengduHuwong 3.36 3.20 0.00 3.13 3.36 3.20 0.00 3.13 2004 ChinaGreenEner 20.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 2004 ChinaRe Life 0.00 0.27 0.00 0.00 0.00 0.27 0.00 0.00 1994 ChinaWaldenMgt 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 2006 Chinasoft 0.00 0.00 15.00 0.00 0.00 0.00 10.00 0.00 2004 Colony China 0.00 15.31 0.00 0.00 0.00 9.29 0.00 0.00 2004 Colony China GP 0.00 0.84 0.00 0.00 0.00 0.49 0.00 0.00 2006 Conch 81.50 40.93 0.00 0.00 81.50 0.00 0.00 0.00 2006 DagangNewspring 25.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002 Darong 10.00 0.24 0.00 8.00 6.67 0.24 0.00 5.33 2006 Deqingyuan 0.00 2.85 0.00 0.00 0.00 2.85 0.00 0.00 1994 Dynamic Fund 0.00 2.21 0.00 0.00 0.00 2.01 0.00 0.00 2007 Epure 0.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 Fenglin 17.64 0.00 6.00 13.47 13.64 0.00 6.00 12.53 2006 FenglinHJMDF 0.23 0.00 0.00 3.27 0.00 0.00 0.00 0.00 115 2005 FiveStar 0.00 0.00 7.00 0.00 0.00 0.00 0.00 0.00 2006 GDIH 50.85 0.00 0.00 0.00 50.85 0.00 0.00 0.00 2003 GreatInfotech 0.00 1.73 0.00 0.00 0.00 1.03 0.00 0.00 2006 HangzhouRCB 0.00 10.85 0.00 0.00 0.00 0.00 0.00 0.00 2005 HiSoflTech 0.00 4.00 0.00 0.00 0.00 3.00 0.00 0.00 2006 HiSoft Tech 0.00 4.34 0.00 0.00, 0.00 1.74 0.00 0.00 2004 IB 0.00 52.18 0.00 0.00 0.00 52.18 0.00 0.00 2004 JiangxiChenming 40.00 12.90 0.00 18.76 40.00 12.90 0.00 18.76 2006 LaunchTech 0.00 8.35 0.00 0.00 0.00 8.33 0.00 0.00 2001 MaanshanCarbon 5.25 2.00 0.00 0.00 5.25 2.00 0.00 0.00 2005 MaanshanCarbon 11.00 1.oo 0.00 0.00 5.00 1.oo 0.00 0.00 2005 Minsheng 15.75 0.00 0.00 0.00 7.00 0.00 0.00 0.00 2006 Minsheng& IB 25.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 MinshengBank 0.00 23.50 0.00 0.00 0.00 23.50 0.00 0.00 2005 MinshengBank 0.00 2.80 0.00 0.00 0.00 2.79 0.00 0.00 2001 NCCB 0.00 8.94 0.00 0.00 0.00 8.82 0.00 0.00 1996 NanjingKumho 0.00 3.81 0.00 0.00 0.00 3.81 0.00 0.00 2004 NanjingKumho 31.38 2.23 0.00 0.00 31.38 2.23 0.00 0.00 2006 Neophotonics 0.00 0.00 10.00 0.00 0.00 0.00 10.00 0.00 2001 NewChinaLife 0.00 5.83 0.00 0.00 0.00 5.83 0.00 0.00 2005 New Hope 0.00 0.00 45.00 0.00 0.00 0.00 0.00 0.00 1995 NewbridgeInv. 0.00 0.22 0.00 0.00 0.00 0.22 0.00 0.00 2005 NorthAndre 8.00 6.74 0.00 0.00 0.00 4.25 0.00 0.00 2003 PSAM 0.00 2.01 0.00 0.00 0.00 0.00 0.00 0.00 RAKChina 13.00 0.00 0.00 0.00 13.00 0.00 0.00 0.00 2006 RenaissanceSec 0.00 0.00 20.04 0.00 0.00 0.00 0.00 0.00 2006 Rongde 0.00 35.00 0.00 0.00 0.00 31.38 0.00 0.00 SAC HK Holding 0.00 1.60 0.00 0.00 0.00 1.oo 0.00 0.00 2003 SAIC 12.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 2006 SBCVC 0.00 20.00 0.00 0.00 0.00 2.00 0.00 0.00 2000 SEAF SSIF 0.00 3.74 0.00 0.00 0.00 3.37 0.00 0.00 SHKejiIT 3.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 SHCT 38.18 0.00 0.00 28.64 29.04 0.00 0.00 21.78 2004 SIBFI 0.14 0.07 0.00 0.00 0.00 0.07 0.00 0.00 1998 ShanghaiKrupp 19.25 0.00 0.00 36.75 19.25 0.00 0.00 36.75 2006 ShanshuiGroup 50.00 5.50 2.20 0.00 50.00 5.50 0.00 0.00 1999 Shanxi 12.61 0.00 0.00 0.00 12.61 0.00 0.00 0.00 SinoSpring 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.00 StoraEnso 20.83 0.00 0.00 4.17 11.00 0.00 0.00 0.00 2005 StoraEnso 29.17 0.00 0.00 20.83 0.00 0.00 0.00 0.00 2006 StoraEnso 50.00 0.00 0.00 175.00 0.00 0.00 0.00 0.00 2006 TBK 4.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00 2006 VeriSilicon 0.00 1.00 0.00 0.00 0.00 1.00 0.00 0.00 Wanjie High-Tech 9.89 0.00 0.00 0.00 9.89 0.00 0.00 0.00 2004 Wumart 0.00 1.62 0.00 0.00 0.00 1.62 0.00 0.00 2003 XACB 0.00 17.95 0.00 0.00 0.00 0.64 0.00 0.00 2004 Xinao Gas 25.00 10.00 0.00 0.00 25.00 10.00 0.00 0.00 2006 ZhejiangGlass 50.00 24.96 0.00 18.00 0.00 0.00 0.00 0.00 2003 Zhengye-ADC 10.43 0.00 0.00 4.87 10.43 0.00 0.00 4.87 116 2002 ZhongChen 0.00 4.78 0.00 0.00 0.00 4.78 0.00 0.00 2006 Zhongda-Yanjin 21.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total portfolio: 733.58 577.30 181.40 340.89 470.95 371.06 29.61 108.03 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic. 2002 SML 0.00 0.00 0.00 0.00 2004 NCFL 0.00 0.00 0.02 0.00 2007 Xinao CTC 0.04 0.01 0.00 0.14 2004 China Green 0.00 0.00 0.01 0.00 2006 LaunchTech 0.01 0.00 0.00 0.00 2005 MSShipping 0.00 0.01 0.00 0.00 2003 Peak Pacific2 0.00 0.01 0.00 0.00 Total pendingcommitment: 0.05 0.03 0.03 0.14 117 Annex 14: Countryat a Glance CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject East Lower- POVERTY and SOCIAL Asia h mlddle- China Pacific Income Development diamond. 2006 Population. mid-year(miliions) 13n8 1900 2,276 i GNIpercapita(Atlas method, US$) Lifeexpectancy 2,000 1863 2,037 GNI(Atlas method, US$ billions) 2,623.6 3,539 4,635 Average annual growth, 2000-06 Population(4 0.6 0.9 0.9 Laborforce (%) 10 13 14 GNI Gross ~ per , primary M o s t recent estimate (latest year available, 2000-06) capita enrollment I Poverty (% of population belownationaipovertyiinej Urbanpopulation (%oftotelpopulation) 41 42 47 Lifeexpectancyat birth(pars) 72 71 71 Infant mortality(per 1OOOiivebirths) 23 26 31 Childmalnutrition (%ofchildren under4 8 15 t3 A C C ~ S Sto improvedwatersource Access to en improvedwatersource (%ofpopulation) 77 79 81 Literacy(%ofpopulationage d+j 91 91 69 . Gross pnmaryenrollment (%of school-age population) m M m --China M ale m 115 M -Lover-middle-incomegroup I Female nz m M KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1986 1998 2006 2006 Economic ratlos' I GDP (US$ billions) 295.7 856.1 2.243.9 2,644.7 Grosscapitalformation!GDP 38.6 40.4 43.9 44.6 Eqorts of goods andservices/GDP 116 20.1 37.3 40.1 Trade Gross domestic savings/GDP 35.8 42.5 49.4 52.5 Gross national SavingslGDP 35.9 413 510 54.1 Currentaccount balancelGDP -2.8 0.8 7 2 9.4 I Domestic Interestpayments/GDP 0.2 0.5 0.1 Total debt/GDP 8.0 15.0 Q.6 savings formation Total debt service/exports 8.2 8.7 3.0 Present value of debt/GDP Q.3 Present value ofdebt/exports 30.6 Indebtedness 1986-96 1998-06 2005 2006 2006-10 (averageennualgmwlhj GDP 0.1 9.0 0.4 0 . 7 0.6 -China GDP percapita 8.6 8.2 9.7 0 . 1 9.9 -.Lowr-middle-incomegroup Exports of goods andservices 0 . 0 218 24.3 23.3 U.4 STRUCTURE of the ECONOMY 118 China PRICES and GOVERNMENT FINANCE 1986 1936 2001 2006 Domestic prices lnflatlon (Oh) I (%change) Consumer prices 8.3 18 15 Implicit GDP deflator 4.6 6.4 4.2 3.6 Government finance (%of GDP,includes current grants) Current revenue 0.0 a.5 7 . 2 6.4 Current budgetbalance -77.7 0.2 2.4 3.0 OverallSUrDIUS/defiCit -24.8 -14 -13 -0.7 -GDPdeflator -CPI TRADE 1986 1996 2001 2006 (US$ millions) Export and Import levels (US$ mlll.) Totalexports (fob) 30,942 151048 761999 969,073 1250 000 T Food 4,448 Q,231 22,481 25,722 4 Mineral fuels, lubricants,and relatedmateriait 3,683 5,931 l7,621 7,776 11000.000 ,I Manufactures 8,670 P9,93 7P.960 98.147 750,000 Totalimports (cif) 42,904 138.833 660,118 7916'4 I 500.000 Food 1625 5,672 9,368 9,997 Fuel and energy 504 6,877 63,957 89.002 250 000 1 Capital goods 6.781 54,763 290,626 357,Q7 0 Export priceindex(20OO=?JOj 59 a 2 n 4 0 7 00 01 02 03 04 05 MI import priceindex(200O=x)O) 76 0 8 m P4 n Exports Imports Terms of trade (20OO=WO) 77 it3 88 87 BALANCE of PAYMENTS 1986 1996 Z O O S 2008 (US$ millions) Current account balance to GDP (K) E~portsof goods endservices 34,952 71678 836.888 1061681 4" - Importsof goods andservices 43,453 154,P7 712,090 852,769 Resource balance -8,501 7,551 94,798 208,gP Net income -23 -P,437 1),635 11755 Net current transfers 378 2,P9 25,385 29,200 Current account balance -8.146 7,243 60,818 249,867 Financing items (net) 6.48 24,462 46,88 -2,842 Changes innet resews 1727 -31705 -207,OB -247,025 1 00 01 02 03 04 05 LXI I Memo: Reserves includinggold (US%millions) 111,7l7 831427 1046,465 Conversion rate (DEC,iocaVUS$) 3.5 8.3 8.2 8.0 EXTERNAL DEET and RESOURCE FLOWS 138s I996 2001 2006 (US$ millions) Composltlon of 2001 debt (US$ mlll.) Total debt outstanding anddisbursed 23,78 728.87 28168 IBRD 965 7 6 8 11140 11415 A: 11,140 IDA 774 7,579 9,741 9,997 B: 9,741 I Total debt service 2,973 15,756 27,361 IBRD 66 640 1139 1443 IDA 8 73 296 3 6 Compositionof net resource flows Official grants 155 245 332 Official creditors 1 8 5 4,401 844 Privatecreditors 3,693 6,454 5,144 i Foreign direct investment (net inflows) 1875 40.60 79.P7 Portfolio equity(net inflows) 0 0 20,346 I World Bank program Commitments 1PO 1900 1,277 0 A. IBRD E- Eil&!ad Disbursements 607 2,097 1111 190 E-IDA D-Othwrmltll~aal F-Rlvate Principal repayments 0 364 1004 1144 C - I M F 0 -Short.tsrm Net flows 607 1734 P 7 27 interest payments 75 549 430 6 8 Net transfers 532 1185 -303 -588 - Note:Thistablewas producedfrom the Development Economics LDB database. 9/28/07 I 'Thediamonds showfourkeyindicators inthecountly(in bold) comparedwithits income-groupaverage.iidataaremissing,thediamondwili ~ 119 Annex 15: PlanningFramework,ImplementationPrinciplesand Procedures CHINA: GuizhouCulturalandNaturalHeritageProtectionandDevelopmentProject A. Background 1. Most o f Guizhou's ethnic minorities are indigenous, live inremote rural areas, and have a very low standard ofliving, which constitutes the key rationale for Bankinvolvement inthe project. The major focus o f the project is to provide as mucho fthe project's benefits as possible, directly to the participating minority communities. To ensure that this occurs, a community- based development (CBD) approach will be adopted, specifically for the Ethnic Minority Cultural Heritage Protectioncomponent. B. Community-basedDevelopmentApproachto ProjectPlanningandImplementation 2. To provide the necessary support anddecision-making power to the ethnic minority villages that are developing cultural tourism under the project, a CBD approach will be used. This approach has been applied successfully inmany Bank-financed projects inother countries andhas beentested inChina withthe approval andinvolvement o fthe central government. 3. Based on extensive deliberations betweenBank experts, provincial experts, andvillage communities, including village elders, the community-based project planningand implementation arrangements and principles described below have beendeveloped. Although there has been positive experience with this approach inChina, there i s limited understandingin implementing such a large CBD program. Therefore, the effectiveness and success o fthe approach will only be known during implementation. The project includes flexibility to monitor and evaluate these implementingmethods, using a `learning by doing' approach, andto make adjustments, as appropriate. Successful models o f implementationwill be evaluated and publicized inother communities. 4. Village-level Organizationsfor Community-based Development. The main village-level organization to be formed for project implementation i s the Community Project Management Group (CPMG), consisting o f representatives from the Village Committee and elected representative villagers. Prior to project implementation, villagers will be organized into secondary-level village organizations or village implementationgroups (VIGs), such as Village Tourism Association, ConstructionTeam, Arts and Crafts Association and Senior Citizens Association based on the needs o f each village. These groups will undertake the activities funded by the project including those supporting intangible heritage and implementation o f community- level infrastructure andbuildingconstruction. The Village Supervision Group will supervise implementationo fvillage activities organizedby the CPMG to ensure that the established process andprocedures are followed. 5. Decision-making Process. The package o f infrastructure works and other investments for heritage protection proposed for each village inthe feasibility study report i s based on consultations with the villagers duringproject preparationandtechnical input from specialists. The resultingcost estimates that were developed will be considered as the budget allocation for 120 each village. At the start ofproject implementation, the CPMG ineachvillage will havethe opportunity to decide on the exact package of investmentsthey wish to undertake, based on the complexity and effectiveness of technology, ease ofmaintenance, and capital and operating costs. 6. Infrastructure Facilities in Villagesand Towns.Inconsultation with the village organizations, the CPMG will make decisions andrecommendationsto the county-level Project ManagementOffice (PMO) on: (a) the infrastructure packagefor eachvillage; (b) works suitable for implementation by the VIGs; (c) the activities, training, and technical assistancepackagefor intangible heritageprotection, and income generation; (d) beneficiaries eligible for skills training, includingbusiness development; (e) beneficiaries eligible for financial support for conservationand rehabilitation of buildings; and (f)measures to raise revenuesfor operation and maintenance (O&M) of village assets. 7. The CPMG will makeadecision onthe packagefor infrastructure investmentsbasedon a complete knowledge and understanding of appropriatetechnology options andO&M costs, assistedby advice and guidance from community coordinators/facilitators and technical specialists. The final package for eachvillage will be recommendedto the county-level PMO for funding. The county-level PMO will award the works for infrastructure using procurement procedures, includingNational Competitive Biddingand shopping. Contracts awardedto communities through `shopping' procedureswill be basedon quotations developedby the VIGs, assistedby technical specialistsand community coordinators/facilitators provided by the project, and endorsedby the CPMG. All physicalinvestmentswill be coordinated,andwill comply with the village conservationplansandrequirementsto protectthe traditionalvisualand historicenvironmentof the villages andsurroundingculturallandscapes. 8. Participatory Heritage Identijkation andPublic Awareness Raising. Raisingvillagers' awareness ofthe significance and value oftheir traditions, andtheir appropriate use as a vehicle for poverty alleviation, will be one ofthe first and most important project activities. A participatory processwill be establishedby community coordinators/facilitators inconjunction with the CPMGto create discussions and develop an inventory of the natural and cultural (intangible andtangible) heritage resourcesfor villages. The purpose ofthis inventory is to increase community interest, knowledge, appreciation, and validation of local customs, history andtraditional skills andto form a common vision oftheir importance for the community. Public awareness will increaseas a result of these discussions and awarenesscan befurther enhanced through small community-defined exhibits and events. 9. Boththe participatory heritage identification process and the awareness raising activities basedon this informationcan serve to develop community commitment to stewardshipof local cultural resources andproject objectives. The increasedappreciation of local culture can also foster anew sense o f identity andpride, encourage young people to continue practicing traditional crafts andperformance arts, and create new energy for other types of development activity. 10. Authentic Documentationand Interpretation of Heritage. Authentic documentation and interpretation is not only critical to heritage conservation, but is also the basis for long-term 121 visitor interest and appreciation for Guizhou's cultural assets. It is crucial to involve local communities inthe definition and explanation of their intangible heritage becausethey are the owners ofthis heritage, andthey possess the relevant knowledge. The more inclusive the group (e.g. elderly, women, youth, and poor) that defines a village's heritage, the more representative and richer the outcome will be.Itis also important to integrate specialists (i.e. anthropologists) who have knowledge of local heritage and expertise inthe documentation, interpretation, and presentation of minority cultures. A close connection with the Guizhou Cultural andNatural Heritage Protection and Development Center inGuiyang is part of the project design and collaborations with other expert organizations suchas the Universityof Minority Cultures in Beijing andUNESCO will be sought (See Annex 4 for details of the Guizhou Cultural and NaturalHeritage Protection and Development Center). 11. Tourism and Community Decision Making. The CBD approachwill be usedto facilitate a broad village discussion and to develop consensus on the level and type of cultural tourism that communities want to host. Considerationsthat requirecommunity consensus include: number of tourists per day; whether guest houses should be located within the village or only nearby; the extent of sharing o f rituals and celebrationswith outsiders; days that villages are closed for private celebrations; villagers' expectationsfor tourist behavior; levels of acceptable change in the appearanceof the village and its lifestyle; the content of interpretation o f the villages sights, traditions and activities; the training intourism-related activities that villagers feel they need (e.g. guide services, handicrafts, sales shops, teachers or facilitators for workshops, home-stay and restaurantmanagement); the organization andmanagementofnewtourismactivities; arrangementsfor sharing the benefits and costs oftourism; and grievance procedures. 12. Cultural Heritage and Income Generation. During the participatory identificationof cultural heritage it will be important to assess how local communities currently perceive their traditional culture andthe risks and constraints associatedwith its development for tourism. The CBD approachshould be usedto help communities identifythe costs andbenefits associated with revitalizingtraditional crafts, dance, songs, and celebrations andprioritize these activities. Some considerations are markets and earning potential, community pride, the risk of commercialization, current local use andtrade networks, and availability o f expertdmaster teachers. 13. This analysis will beusedto identifystrategiesandthe potential for conservation and income generation. For example, some of the issues associatedwith crafts development include: (a) risks (high expenses, low return, limitedmarket, difficulty inlearning, lack of incentives, family pressure, etc.); (b) perceived market demands (local and tourism-based) and existing (if any) marketing strategies; (c) existing localtrade networks; (d) reasonsfor learning or continuing to practice a craft (as a specialist activity or for home use); (e) modalities of learning (at home, inworkshops, inother towns); (f) willingness to teach skills to local villagers, outsiders, and tourists; (g) choice ofpatterns, materials andtechniques; (h) current use of traditional clothes, body ornaments and hair-styles, andwillingness to maintain them; (i) level o f participation at traditional events inthe village (festivals, religious events, competitions); and (j) activities involved intraditional events (offerings, dance, music, sale andpurchase o f goods, etc.). 122 14. Village Cultural Centers and Exhibits. The CBD approach will be also used to identify potential benefits, costs, risks, and challenges relatedto establishing village cultural centers and permanent exhibits, andto clarify their objectives, functions, internal organization, staff needs, and costs. An important element to consider is how these facilities will benefit local communities (employment, training opportunities, heritage revitalization activities, constitutiono f dance/music groups, etc.), and whether these activities will be economically sustainable inthe long term. This analysis will help design appropriate models (cultural centers, workshop demonstrations, community-based museums,temporary fairs, and special events) for heritage Conservation and interpretation. 15. Inadditionto the goal ofprotectingheritage, cultural centers, exhibits,andworkshops in the villages shouldbe viewed inthe context o ftourism product development. Tourists prefer to have personal experiences (i.e. touch, smell, feel, etc.), thus the development o f workshops and other engaging activities, such as crafts and cooking demonstrations, along with good interpretation, would be popular with tourists. Investments and space requirements for exhibitions and workshop demonstrations should be drivenby documented tourist demand and the villages' carrying capacity. Some project villages have physical size and capacity constraints that will limit the absolute numbero ftourists. 16. Factors to be considered before undertaking any permanent exhibits or community-based museums include: (a) manpower for management and maintenance; (b) infrastructure and facilities; (c) quantity, quality and availability o f crafts products and artifacts; (d) collection strategies (purchase from families, short-term loan, etc.); and (e) conservation issues (special conditions needed to protect objects). 17. Conservation Plansfor Ethnic Minority Villages.All participatingvillages will be requiredto have approved conservation plans. Development o fminority village conservation plans includes: (a) community identification o f important physical andnatural heritagethat requires conservation; (b) development o f locally-enforceable heritage protection measures that will maintainlanduse patterns, cultural landscapes, traditional architecturalintegrity, andoverall aesthetic consistency; (c) guidelines and acceptable limitso f change for basic infrastructure installation; (d) guidelines for residential upgrades, new construction, and rehabilitation o f traditional buildings, including improvement o f interior facilities (e.g. sanitation); and (e) development o f village-level informational materials (displays, signs, guide programs, and other materials) to raise awareness o f community members and to educate visitors on the meaning, value, and significance o fthe local heritage. 18. Rehabilitation and Improvement of Private Assets. The project will include a limited amount o f fundingto support individual families to improve traditional housing andpursue economic activities. Specifically, the activities include: (a) facade rehabilitation and structural strengthening o f historic public buildings; (b) facade rehabilitation and structural strengthening o f private buildings; (c) internal refurbishment o fprivate buildings to improve water and sanitation facilities, (d) upgrading o f houses for use as home-stays; (e) creation o f in-home workspace for intangible heritage activities; and (f) support to start business ventures. 123 19. Criteria for the selection of beneficiaries have beendevelopedand described inthe OperationManual for Community Participation (OMCP). Beneficiaries will be selectedby the CPMG basedon these criteria, following adequate consultation, andthe decisions will be made public inthe village. The county-level PMO will makedisbursementsfor these activities based on the CPMGrecommendations.Aggrieved personswill have an opportunity to seek a review of their case bythe county-level PMO. Consultations doneduring projectpreparationindicate that by andlarge, villagers will abide by the decisions ofrepresentativevillage organizations. 20. Community Worksand Labor. Inaneffort to maximize the benefits that will accrueto communities, the project includes a provisionto award small works contracts to the VIGs. This would be done by awarding suitable simple community works and building construction contractsto these groups, through quotations, preparedwith the assistanceof project technical staff and community coordinators/facilitators. Efforts will also be madeto employ labor from villages to work on project contracts. 21. Participatory Monitoring and Evaluation. For communities to betruly engagedintheir own development andheritage conservation, they musthave a solid understanding of the results of project activities. Participatory monitoringand evaluation will offer villagers a concrete means of assessing and learning from the project activities inways that are directly responsiveto their needs and goals. Through the CBD approach, theproject will support village residents in: identifyingoutcomes to be measured; defining the indicators of success; collecting information; and designing any corrective actions neededto improve performance andoutcomes. Participatory monitoringand evaluation will be gearedtoward: measuring the effectiveness of project activities; creating ownership and empowering residents; developing accountability and transparency; and building local capacity to analyze, reflect and take corrective action. 22. Implementation Guidelinesand Manuals. The following manuals, preparedunderthe project, provide detailed advice, guidance and requirementsfor implementation o fthe project components: (a) OMCP; (b) Architecture and Building Design and Construction Guidelines Manual; (c) Electrical Wiring for RuralHousing Manual; (d) Procurement Manual; and (e) Financial ManagementManual. C.ActivitiesSupportingIncomeGenerationandPovertyAlleviation 23. The protection anddevelopment ofnatural andcultural (tangible andintangible) heritage inGuizhou's ethnic minority villages aims to safeguardauniqueresourcethat is at riskof disappearingdue to the effects o f globalization and emigration, andto revitalize localtraditions to generate new forms o fproductivity and sources of income. The project will support the following initiatives for income generation andpoverty alleviation. 24. IntensiveSkills Transfer. Elder "village masters" and "village artisans" who possess knowledge of intangible cultural heritage (history, folklore, songs, dance, etc.), crafts (embroidery, dyeing, silver works, tin works, etc.), and traditional construction skills such as stone masonry and carpentry will be employedto provide intensive training to interested young people inthe village. This would be done through: (a) providing a series of regular short-duration formal training programs with hands-ontraining inintangible cultural heritage; (b) delivering 124 training instone masonry, carpentry, and electrical wiring, including a manual on simple electrical wiring for rural housing; (c) producing books, brochures, and CDs on the various ethnic arts, crafts, songs, stories and folklore; and (d) providing space for arts and crafts workshops with a sales counter for handicraft items, recordings o f folk songs (CDs), and brochures. Prospective trainees will be screenedto ensure that they have real interest inusingthe skills. 25, Involvement of Villagers in Construction Activities. The project provides for village residents to be involved inconstruction activities, through the award o f simple small contracts to communities, based on simplified procedures o f procurement, i.e., shopping, and utilization o f labor o f the village by contractors executing works. 26. Creation of Facilities. To pursue the activities described above, space will be created in the proposed cultural centers and tourist information centers, or through provision o f additional facilities. The facilities will be provided with the necessary equipment and tools for hands-on training and possibly some space for trainees who wishto start their own businesses. These facilities will provide the opportunity for visitors to witness the productiono f arts and crafts and some display space for exhibits and sales. 27. Craft and Performance Associations. The status o fproducers o f arts and crafts will be strengthened by helping communities to organize themselves into associations that are able to: (a) represent the interests o fthe communities; (b) negotiate prices and reduce exploitation; and (c) procure the raw materials at wholesale prices for their members. Such organizations would enable expansion o fproduction; organize production based on demand, and increase artisan incomes. 28. Information Dissemination on Products, Markets and Quality. The project will provide an expert(s) with good knowledge of China's urbancrafts markets and international demand, and the product variations andquality improvementsthat could increase sales. The intention is to provide only information to minority villages; not create new designs or change traditions. The information may be usedby villagers to plantheir activities. 29. Market Development Support. To reduce the exploitation by middlemen, and retainmore income for the artisans, community coordinatodfacilitators and/or companies will be engaged to helpinmarketingthrough: improvedproduct advertising; negotiationswith wholesalers; linking domestic and foreign buyers; developing contacts with established organizations dedicated to poverty alleviation (e.g. Oxfam) and; local companies or university organizations (other than the Guizhou Normal University) actively engaged inminority community development activities. 30. Organization of Events/Festivals. To generate interest, encourage visitors to experience cultural heritage, and generate revenues for communities, the Guizhou Provincial Tourism Bureau will assist inorganizing special events or festivals inminority villages. 125 D.The PlanningFrameworkandImplementationPrinciplesfor CulturalHeritage ProtectionandTourismDevelopment:Laws and Guidelines 31. Existing Laws, Regulations,and Guidelines.All existing national andprovincial laws and regulations will apply to activities supportedby the project. (a) Built Heritage. Planning for interventions innatural and cultural heritage sites i s covered by: national andprovincialcultural heritage protection laws and regulations; village conservation plans; andthe World Bank safeguardpolicy on Physical Cultural Resources(OP/BP 4.11). Inaddition, communities will be encouragedto follow the principleslaid out inthe "Principles for the Conservation ofHeritage Sites inChina", which is available on the China International Council on Monuments and Sites (ICOMOS) website (http://www.icomoschina.org.cn). (b) IntangibleHeritage. Interventions to protect andconserveintangible cultural heritage will comply with national andprovinciallaws and regulations for its protection andbe basedon the UNESCO Convention for the Safeguardingof the Intangible Cultural Heritage signedby China in2004; the Recommendationsto Strengthenthe Protection o f China's Intangible Cultural Heritage issuedby the State Council in2005; and the Operational Manual for Inventory Making for the IdentificationandProtection of Intangible Heritage issuedby the Ministryof Culture. (c) NaturalHeritage. Depending on their categorization, preservation activities for parks will conform to national andprovinciallaws andtourism masterplans, inaddition to conservation plans, for proposed activities. Formal approval at the appropriate level is necessary for national heritage sites. (d) Tourism. Tourism development will comply withthe national, provincial and county tourism laws, the Guizhou Tourism Development Master Plan (2001); andthe Guizhou Rural Tourism Development Plan, which focuses on tourism development andpoverty alleviation by: generating employment and contributing to local economic development inthe poornational minorityareas; and ensuring sustainabledevelopment through the responsible use o ftourism resources inminority areas. 32. Planning Toolsfor Conservation.All bank supportedactivities will be developed using planning tools such as those describedbelow. (a) Village and Historic Town Conservation Plans. Each cultural heritage site must have a conservation andprotection plan, and all project investmentsmust be based on this plan. The planmust incorporate: (i) protection areas where no newdevelopment can occur core andonly conservation ofthe highest standardshould beundertaken;(ii) secondary protection areas surrounding the core areas where some limitedand appropriate development can occur, ifapproved by the appropriate body; (iii) buffer zones that are meantto protect the cultural landscapeviews inandout ofthe site, (e.g. rice paddies should beprotected rather than developed as parkinglots); and (iv) photographic surveys 126 of existing village streetscapes, squares, paths, historic buildings and cultural relics for baseline recording and documentation. (b) Park Conservation Plans. Park planning should take account of: (i) andland zoning use, cultural and natural resourceprotection, infrastructure and facilities development, architectural and landscapedesign standards, interpretation and informationdevelopment, commercial servicesmanagementpolicies, and marketing andpromotion; (ii) cultural andnatural resource inventory, monitoringand documentation systems that establish base lines andprovide ongoing informationfor strategy development and change management; and (iii) provisionof infrastructure, includingaccess roads and parking, pathways, power supply, rest rooms (water supply and sanitation), solid waste collection and disposal, administration buildings, cultural and/or visitor centers, first-aid and safety arrangements, and docks (where applicable). (c) Conservation of Historic CulturalProDerty (e.g. temples, gates, streets, walls and monuments, etc.). For the repair andrehabilitation of historic cultural property, all such works must comply with all applicable Chinese law and regulations. The guidelines "Principles for the Conservation of Heritage Sites inChina" are available on the China ICOMOS website (http://www.icomoschina.org.cn). The applicable key principlesare: (i) abuilding that no longer exists must not bereconstructedunless there i s very strong evidence o f structure and style; (ii)each step inthe conservation process mustbe based onthe results of research and evidence; (iii) physical remains must be conservedintheir historic condition without loss of evidence; original components must be retained as far as possible; (iv) new and additional construction must be clearly distinguishable from the original construction; (v) inundertaking repair, it is not permittedto redo decorative painting for new or gaudy effect; and (vi) surrounding structures and landscapesthat underminethe historic and/or visual integrity of cultural property mustbe addressedto reducenegative impacts. 33, DeJinitionsfor Conservation of Historic Cultural Property. The following definitions will apply to built-heritage conservation activities. (a) Adaptive Reuse. Upgrading and rehabilitation of traditional housing for continued use by families or for tourist accommodationswill be done inthe originalbuilding's architectural style using traditional materials and construction techniques. Upgrading would consider the safe andaesthetic installation of basic services such as electricity and sanitation and improvements to provide increasedthermal insulation and wind and waterproofing. These improvements will use fixtures, ducts and materials compatible with historic designs and materials, createminimal destruction of the historic structure andkeep visual impact of changes as subtle as possible. Generalstandardsandguidelines onthe rehabilitation and upgrading of traditional housing inChina will be located or, if non-existent, developed for use by homeowners andthe private sector, andprovided as guidelines. (b) Rehabilitation. `Rehabilitation of traditional buildings' includes conservation and upgrading of traditional buildings that, to the greatest extent possible, use original 127 materials and construction techniques to return buildings to their original exterior style and state, while adapting only their interiors: (i) to modern standards of living for owner occupants; and/or (ii) for productive uses such as guest houses, restaurants, and museums etc. Any changes to the exteriors to accommodatethe adaptations will be keptto the absolute minimumandmustuse: (i) appropriate scale and height; (ii) compatible materials; (iii)harmonious color and form; and (iv) high quality detail anddesign. Designs for rehabilitation will bebasedon the Architectural and BuildingDesign and Construction Manualthat illustrates characteristicsof eachindividual site's architectural forms and details allowable materials and constructiontechniques. Methods usedfor installing modern conveniences, such as electricity andwater, mustnot disturb the visual environment or damage the traditional structures. (c) Restoration. Restoration includes returning the existing fabric of a place to a known earlier state by removingaccretions or reassemblingexisting componentswithout introducing newmaterials. It is appropriate only if:(i) there is sufficient evidence of the earlier state of the fabric, and (ii) returning the fabric to that state reveals the significance ofthe place and does not destroy other parts of the fabric. (d) Reconstruction. The World Bank loanproceedsshall not beusedto support the reconstruction (chongjian)of any buildings where there is not strong and substantiated evidence of original style, scale and materials. When there is no evidence, this work will be consideredre-creation (zaijianfujian) andwill not beeligible for Bank funding. (e) New Construction. New construction must be carefully integratedinto historic areas if the newforms are sensitively developedto be compatible with the old. Newconstruction does not need to copy historic motifs or forms to achieve compatibility but must carefully use: (i)appropriate scale andheight; (ii) compatible materials; (iii) harmonious color and form; and (iv) highquality detail and design. Designs for new construction should be evaluatedineach specific case by apanelof experts. (f) Environmental Restoration(e.g. greening, river andpondrehabilitation). Remediation of damagedecological environments mustnot be confusedwith creating environmentally inappropriate landscaping that requires specialcare or permanent irrigation. Any planting mustuse indigenous or appropriate non-invasive species inthe correct microclimate and topographical location. All planting must be evaluatedfor its potential to negatively impact character-defining views. E.InfrastructureinMinority Villages, ScenicAreas andNaturalHeritage Sites 34. Community Infrastructure. Community infrastructure falls into two categories: (a) external access roads and main vehicular roads insidethe village, parkinglots, (at the entranceto the village), spring-sourcedwater supply, sanitation, storm and wastewater disposal (inwetlands and stabilization ponds), solid waste disposal, andfire protection services; and(b) folk art performance stage/centers, community centers, cultural display centers and workshops. 128 35. Conservation of Ancient, Historic and TraditionalBuildings. Duringproject preparation, a list o fpublicly-owned historic, ancient andtraditional buildings suitable for conservation was developed. Specialists have selected appropriate buildings from the list provided by communities and developed preliminary conservation proposals inconsultation with the concerned communities. Architectural details, constructionmethods and materials are outlined inthe Architectural and BuildingGuidelines and the OMCP. Detailed designs will be developed during project implementationusing these guidelines. 36. ScenicArea and Natural Heritage Site Inpastructure. Infrastructure includes buildings for exhibition, interpretation andpresentation, visitor and information centers, visitor rest facilities, access and internal roads, footpaths, hikingandbicycle trails, water supply, sanitary facilities, and solid waste management. All improvements are subject to approval from national andprovincial cultural heritage authorities, andpreparationo f conservation plans, as appropriate. 37. Visitor Centers, Museums and Exhibition Halls. While some good examples o f museums and exhibition halls can be seenat Guizhou's heritage sites, many o fthese facilities are poorly funded, lack interesting information and are under utilized. Mucho f the information presented for tourists is conveyed ina static manner with an emphasis on statistics and historic chronologies. These methods do little to engage visitor interest or to reveal the rich meaning and value o fthe sites. To further develop these facilities for tourism inGuizhou, it will be necessary to improve exhibits through: research and knowledge development; updated presentation methods; higher quality fixed displays and written materials; and expanded themes that present all the cultural and natural features o fthe sites and appeal to all types o f visitors - adventure, cultural, and eco-tourists. 38. Visitor centers ingateway towns should supply tourists with objective andneutral information about hotels, restaurants, transport and all nearby attractions. They should have a contact person available to answer specific questions, monitor displays, and provide brochures. Managers could also consider sales o f local products with profits to be usedto help finance exhibits and brochures. Visitor centers inparks should introduce the park, its resources and values andprovide the location o fkey facilities, safety messages, temperature readings and weather forecasts, potable water and public toilets, andregional tourism information. Large visitor centers that require largebudgets for maintenance, heatinglcooling, and security will not be supported. 39. Appropriate Technologyfor Inpastructure.Infrastructure constructed on collective land owned by a village will be owned and operated by the village andmust be appropriate for rural villages. Project supported infrastructure mustbe: (a) affordable by communities with low operating costs; (b) based on a simple technology that is within the capability o f communities to maintain; and (c) the least cost alternative and appropriate to the size o fthe population it serves. Specifically, the following need to be considered inthe choice o f infrastructure design, technology, andmaterials. (a) Provision o f vehicular access inside minority villages should be minimal. 129 (b) Concreteor asphaltpavingis not appropriate for roadsandfootpaths inside villages; paving should be of local materials. (c) Pedestrianways of 1.2 mto 1.5 mare adequate; special paths with troughs to collect cattle droppings are not recommended. Inmost rural conditions, the dung i s collected by villagers for use as manureor for biogas plants. (d) Hikingtrails do not needto have surfacing other thanclearanceandminimal measuresto address slopes (with steps of logs or stone), where safety is a concern. Hikingtrails should not be a means to construct roads to connect distantvillages. (e) Connector roads and parking lots should be constructed with appropriate local materials for road surfacing, signage andparkinglots that are sensitive to the traditional context. Strong consideration should be givento locating parking lots outside o fhistoric towns and villages and scenic areas. Options should consider a series of small lots that canbe phased-in basedon need, rather than one large lot built for maximum future capacity. (f) Transporting water over long-distances (5 km-6 km) to serve minority villages i s an expensive option. Other lower-cost options such as springs and wells, should be considered. Packagedwater treatment plants are not appropriate at the village level. Few villages would be able to pay RMB 0.4/m3for water. (g) Piped sewerage andthe packagedwastewater treatment plant are not appropriate, as most houseshave no flush latrines, they are expensiveto operate and maintain, and are not technologies that can be maintained and operatedby small rural villages. Low-cost sanitation options, including biogas tanks, twin-pit flushtoilets, individual and community septic tanks, and aeratedlagoons, should be considered, inthis order. Referenceshould be made to a wealth of literature onthis subject on the UNDP and UNICEF websites. These technologies have beensuccessfully usedinAsia and Africa. (h)Riverembankmentimprovements are notthe focus ofthe project; cleaning up garbage on river banksshould be accompanied by a community education program designedto change behavior. (i) dredgingtodeepenriverbedsorremovalofsedimentisnotsupportedunderthe River project. (i)Provisionshouldnotbemadefor garbagetrucks forvillages. Thevillages arenotable to operateandmaintaingarbagetrucks. Insmall villages, garbagemay be collected and removed by the county governments, once every seven to 10 days, for which garbage containersof adequate size may beprovided. Ifthe county governments are interested, the project could consider providing a garbagetruck to service a number o f villages. (k) Inscenic andnatural heritage areas, materials, finishes andinstallationtechniques for walkways, fencing, lightingand other facilities should be given special attention. When 130 feasible, rustic materials such as wood and stone should be used, to ensure visual compatibility. F.OperationandMaintenanceOrganizationandFunding 40. County governments will provide funds for all capital investments inminority villages, scenic areas and natural heritage sites, including a limited amount o f funds to improve private assets and assist individual persons or families inincome generating activities. 41. Ethnic Minority Villages.Ethnic minority villages are located on collectively-owned land. Ownership of assetscreated underthe project on collective land, will be transferred to communities. As a general rule, those who own the assets have responsibility for their O&M. All assets inside minority villages will be maintained by the villages, and funds for this will be mobilized by the village community. The sources o f funds for O&M will consist of: taxes levied by the Village Committee; county government budgettransfers; fundcollections from the village to undertake specific repairs and maintenance; and revenues from entrance fees and other user fees. 42. Access roads, parking areas and other tourist facilities outside the confines o f the village will be operated andmaintained by the county governments/prefectures. As is the case inthe rest o f the country, provision, O&M o f schools, health facilities, etc. will be the responsibility o fthe county governments/prefectures. 43, Scenic andNatural Heritage Sites. O&M o f scenic areas andnatural heritage sites will be carried out by the county-level tourism bureaus using budgets provided by county governments and prefectures. O&M o f some natural heritage sites located on collective landwill be done by county governments/prefectures. The primary source o f revenue for O&M i s tourist revenue from entrance fees and government budget allocations. G. Proceduresfor (a) Rehabilitationand Conservationof UniqueHistoric Buildings,and (b) GrantProgramsfor PrivateHouseRehabilitationand Conservationand Intangible CulturalHeritage Protection 44. Rehabilitation and Conservationof UniqueHistoric Buildings. Based on consultations with communities duringproject preparation, the technical specialists have identified the unique traditional historic buildingsthat would be conserved andrehabilitated. Preliminary designs for their rehabilitationand conservationhave also been prepared. Prior to implementation, communities will be consultedagain through the CPMG to confirm the selection and their subsequent uses. Detailed designs will be prepared inaccordance with the Guidelinesfor Conservation o f Traditional Buildingsand Environments inMinority Villages, prepared under the project. 45. GrantProgramfor Rehabilitation and Conservationof Private Houses.Inconsultation with all village organizations, the county-level PMO will select beneficiaries whose houses will be rehabilitatedor conserved. The total amount o f grant will be limited by the amount o f funds allocated for each village for house rehabilitation and conservation, which was based on the 131 numbersofhouses allocated for eachvillage during projectpreparation. Technical specialists will prepareplansandcost estimates for the rehabilitation and conservation, andrecommendthe amount of grant for eachprivate house. The grant would cover all or part o f the cost of strengthening of the structure, roof, repair o fthe faGade, and some internal space modifications. The cost of internal improvements to houses such as water supply, sanitation, power, etc. will be computed, and will constitute the minimumcontribution to be madeby the houseowner. An implementation agreement will be concluded betweenthe household beneficiary andthe county- level PMO setting out the household's obligations. 46. The following procedureswill be adoptedfor conservation or rehabilitation ofprivate houses invillages: (a) Private House Annual Work Plan. Annual work plansfor private house rehabilitation andconservationwill bepreparedby the county-level PMO, approvedby the Guizhou ProvincialProject Management Office (PPMO), and submittedto the Bank for approval. The work planshould include: the list of selected houses; details ofwork proposed; and estimated cost ofthe work; and the amount of grant proposedto be financed from the loanproceeds. The houses and householdbeneficiaries should be selected through a participatory approachinaccordance withthe selection criteria set out inthe OMCP. (b) Private House ImplementationAgreement. Basedonthe approved annual work plan, the county-level PMO will sign an implementation agreement with the individual household beneficiary. The implementation agreementwill detail: (i) the scope ofwork; (ii) costofthework,theamountoftheloanproceedstobeusedtofinancethework, total and householdcontribution; (iii) implementation schedule; (iv) agreedtechnical and work construction standards; (v) supervision and final acceptanceprocedures; and (vi) payment schedule and conditions. (c) Payment Schedule and Conditions. The county-level PMO will makeavailable the grant to eachhousehold under the implementation agreementintwo installments: the first installment, whichwill be between30% and 50% o fthe grant upon the signing of the implementation agreement; andthe reminderofthe grant upon the completion of the work as evidencedby a satisfactory inspection report issuedby the county-level PMO. 47. Grant Programfor Intangible CulturalHeritage Protection. The package o f activities related to the grant program for intangible cultural heritage protection will be basedon the results of a participatory community-based process. The county-level PMO will select the types of investmentsand activities (mostly training andtechnical assistance) that will be supported in their villages inaccordancewiththe proceduresand selection criteria set out inthe OMCP. Participatory stocktaking will include, but not be limitedto: (a) all heritage resources, their importance and their appropriate interpretation for visitors; (b) the level andtype of tourism to develop; and (c) the priorities for traditional activities and/or businessopportunities for project support. 48. The following procedureswill be adoptedfor the grant program for intangible cultural heritageprotection andpreservation: 132 (a) Intangible Cultural Heritage Annual Work Plan. The county-level PMO will select the activities that preserve andprotect intangible cultural heritage and village community beneficiaries through a participatory approach and inaccordance with the procedures and selection criteria set out inthe OMCP. The work planwould include, but not be limited to: the list o fthe selected activities; details o f the activities, including methods o f implementation; and estimated cost o f each activity and the types and amount o f expenditure proposed to be financed from the loan proceeds. The work planwill require the approval of the PPMO and the Bank. (b) Intangible Cultural Heritage ImplementationAgreement. Based onthe approved annual work plan, the county-level PMO will sign an implementationagreement with the CPMG o f the village concerned for carrying out the selected intangible cultural heritage protection activities. The implementation agreement will include: the list o fthe selected activities; total cost o f the activities andthe type and amount of expenditures to be financed from the loan proceeds; activity implementation schedule; agreed outputs and reporting andverification requirements; and payment schedule and conditions. (c) Payment Schedule and Conditions. The county-level PMO will make available the grant to eachvillage under the implementationagreement intwo installments:the first installment, equal to 50% of the grant, uponthe signingo f the implementation agreement; andthe reminder o fthe grant when the agreed outputs stated inthe implementationagreement have beenproduced and as evidenced by a satisfactory inspection report issued by the county-level PMO. 133 MAP SECTION IBRD 36386 COMPONENT 1: ETHNIC MINORITY CULTURAL HERITAGE PROTECTION CHINA 106° 107° 108° 109° ANSHUN MUNICIPALITY 1 Pingba County Tianlong Tunpu Cultural Heritage Protection GUIZHOU CULTURAL AND Jiang 2 Xixiu District Jiuzhou Tunpu Cultural Heritage Protection NATURAL HERITAGE PROTECTION AND Changangtze) (Y QIANDONGNAN PREFECTURE CHONGQING 29° 3 Congjiang County Basha Miao Ethnic Cultural Heritage Protection DEVELOPMENT PROJECT 4 Congjiang County Duliu River Dong Ethnic Cultural Heritage Protection Daozhen 5 Danzhai County Shiqiao Ancient Papermaking Protection 6 Huangping County Jiuzhou Ancient Town Heritage Protection PROJECT PREFECTURES SUB-PROJECTS 7 Jianhe County Yang'asha Miao Ethnic Cultural Heritage Protection 8 Jinping County Longli Ancient Town Heritage Protection EXPRESSWAYS Chishui Zheng'an Wuchuan Yanhe 9 Kaili City Bala River Miao Ethnic Cultural Heritage Protection HIGHWAYS 10 Leishan County Bala River Miao Ethnic Cultural Heritage Protection 11 Leishan County Xijiang Miao Ethnic Cultural Heritage Protection MAIN ROADS Xishui Dejiang 12 Liping County Zhaoxing Dong Ethnic Cultural Heritage Protection RAILROADS Songtao 13 Taijiang County Shidong Miao Ethnic Cultural Heritage Protection COUNTY (XIAN) CAPITALS Tongzi 14 Tianzhu County Sanmentang Dong Ethnic Cultural Heritage Protection PREFECTURE CAPITALS QIANXINAN PREFECTURE 28° Suiyang Yinjiang 28° 15 Zhenfeng County Nachan Buyi Ethnic Cultural and Natural Heritage Protection PROVINCE CAPITAL SICHUAN Fenggang Sinan COUNTY (XIAN) BOUNDARIES Renhuai COMPONENT 2: NATURAL HERITAGE AND SCENIC SITE PROTECTION AND DEVELOPMENT PREFECTURE BOUNDARIES Meitan Jiangkou ANSHUN MUNICIPALITY Tongren PROVINCE BOUNDARIES Zunyi 16 Guanling County Guanling National Geo-Park Heritage Protection Wanshan QIANDONGNAN PREFECTURE Zunyi Tequ Shiqian 17 Shibing County Shanmu River Cultural and Natural Heritage Protection Jinsha QIANXINAN PREFECTURE Bijie 18 Dingxiao D.Z. Xingyi National Geo Park Dingxiao Guizhou Dragon Heritage Protection Yuping HUNAN Yuqing 19 Xingyi City Wanfenglin National Scenic Park Cultural and Natural Heritage Protection Cengong Hezhang Dafang Xifeng Kaiyang 17 Zhenyuan COMPONENT 3: TOURISM GATEWAY TOWN FACILITIES 27° Qianxi Weng'an Shibing 27° QIANDONGNAN PREFECTURE AND PROVINCE Sansui Tianzhu 20 Jianhe County Tourist Information and Training Center Huangping Weining 14 21 Leishan County Tourist Information Center Xiuwen 6 Nayong 22 Liping County Tourist Information Center Fuquan 13 Jinping 23 Guiyang Guizhou Cultural and Natural Heritage Protection and Development Center Zhijin Guiyang 9 24 Guiding Kaili Taijiang Jianhe 8 24 Qiandongnan Pref. Minority Ethnic Culture Tourism Promotion and Training Shuicheng 7 20 1 23 25 Qiandongnan Prefecture COMPONENT 4: CAPACITY BUILDING AND IMPLEMENTATION SUPPORT Pingba Longli GUIZHOU PROVINCE Leishan Puding 10 11 21 25 Guiyang Technical Assistance Duyun YUNNAN Liping Anshun Danzhai Liuzhi 12 22 Tequ 2 Huishui 5 RUSSIAN Changshun FEDERATION 26° Zhenning 26° Guanling16 Sandu KAZAKHSTAN Rongjiang HEILONGJIANG Anshun Municipality Pingtang Qinglong Dushan MONGOLIA Ziyun Pu'an Congjiang JILIN Pan Xian Sea 3 4 KYRGYZ REP. LIAONING of D.P.R. OF KOREA Japan XINJIANG MONGOL BEIJING NEI BEIJING 15 Luodian TIANJIN REP. OF JAPAN Xingren Zhenfeng Libo HEBEI KOREA Qianxinan Prefecture SHANXI SHANDONG Yellow Sea QINGHAI NINGXIA JIANGSU GANSU Wangmo SHAANXI HENAN Anlong ANHUI SHANGHAI E a s t Xingyi 25° XIZANG SICHUAN HUBEI 25° ZHEJIANG 18 GUANGXI NEPAL AREA OF C h i n a Ceheng MAP CHONGQING S e a 19 HUNAN JIANGXI FUJIAN GUIZHOU This map was produced by the Map Design Unit of The World Bank. National Capital TAIWAN 0 25 50 75 100 The boundaries, colors, denominations and any other information YUNNAN GUANGDONG shown on this map do not imply, on the part of The World Bank Province Boundaries GUANGXI P h i l i p p i n e KILOMETERS Group, any judgment on the legal status of any territory, or any HONG KONG endorsement or acceptance of such boundaries. International Boundaries MACAO S e a ANMAR VIETNAM B a y o f MY LAO P.D.R. HAINAN 104° 105° 106° 107° 108° 109° B e n g a l THAI- PHILIPPINES LAND OCTOBER 2008