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Document of The World Bank

Report No: ICR0000572

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-45900)

ON A

LOAN

IN THE AMOUNT OF US$ 100 MILLION

TO THE

PEOPLE’S REPUBLIC OF CHINA

FOR AN

URUMQI URBAN TRANSPORT IMPROVEMENT PROJECT

June 26, 2008

China Sustainable Development Unit East Asia and Pacific Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective June 2007)

Currency Unit = Renminbi (RMB) RMB 1.00 = US$ 0.125 US$ 1.00 = RMB 8.0

FISCAL YEAR

January 1 – December 31

Acronyms/Abbreviations: Area-Wide Traffic Control ATCAutomatic Vehicle Location AVLCentral Business District CBDDevelopment Reform Commission DRCEnvironmental Impact Assessment EIAEnvironmental Management Plan EMPGlobal Environment Facility GEFImplementation Completion and Results Report ICRImplementation Status Report ISRMinistry of Construction MOCNNon Motorized Vehicles NMVQuality Assurance Group QAGProject Affected People PAPProject Executive Office PEOProject Leading Group PLGPublic Transport Leadership Group PTLGResettlement Action Plan RAPRoad Maintenance RMRoad Maintenance Management Information System RMMI Ring Road RRTechnical Assistance TATerms of Reference TORTraffic Management TMUrumqi Communication Bureau UCBUrumqi Construction Commission UCCUrumqi Development Reform Commission UDRCUrumqi Environmental Protection Bureau UEPBUrumqi Planning Bureau UPBUrumqi Public Security Bureau/Traffic Police Detachment UPSB-TPDUrumqi Public Transport Company UPTCUrumqi Urban Transport Improvement Project UUITP

Vice President: James Adams Country Director: David Dollar

Sector Manager: Ede Jorge Ijjasz-Vasquez Project Team Leader: Shomik Mehndiratta

ICR Main Authors: Georges Darido/Graham Smith

PEOPLE’S REPUBLIC OF CHINA Urumqi Urban Transport Improvement Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design............................................... 12. Key Factors Affecting Implementation and Outcomes .............................................. 43. Assessment of Outcomes .......................................................................................... 104. Assessment of Risk to Development Outcome......................................................... 145. Assessment of Bank and Borrower Performance ..................................................... 156. Lessons Learned ....................................................................................................... 177. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 18Annex 1. Project Costs and Financing.......................................................................... 19Annex 2. Outputs by Component ................................................................................. 20Annex 3. Economic and Financial Analysis................................................................. 25Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 27Annex 5. Beneficiary Survey Results ........................................................................... 29Annex 6. Stakeholder Workshop Report and Results................................................... 30Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 32Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders....................... 36Annex 9. List of Supporting Documents ...................................................................... 37

MAP – IBRD 30808

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A. Basic Information Country: China Project Name:

Urumqi Urban Transport Improvement Project

Project ID: P045915 L/C/TF Number(s): IBRD-45900 ICR Date: 06/26/2008 ICR Type: Core ICR

Lending Instrument: SIL Borrower: PEOPLE'S REPUBLIC OF CHINA

Original Total Commitment:

USD 100.0M Disbursed Amount: USD 97.6M

Environmental Category: A Implementing Agencies: Urumqi Urban Transport Improvement Project Executive Office (PEO) Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 11/25/1998 Effectiveness: 05/10/2001 05/10/2001 Appraisal: 01/10/2000 Restructuring(s): Approval: 12/19/2000 Mid-term Review: 06/04/2004 Closing: 12/31/2005 12/31/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators Implementation

Performance Indicators QAG Assessments (if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) General transportation sector 4 4 Roads and highways 88 88 Sub-national government administration 8 8

Theme Code (Primary/Secondary) Access to urban services and housing Primary Primary Climate change Secondary Secondary Infrastructure services for private sector development Primary Primary Municipal governance and institution building Secondary Secondary Pollution management and environmental health Secondary Secondary E. Bank Staff

Positions At ICR At Approval Vice President: James W. Adams Jemal-ud-din Kassum Country Director: David R. Dollar Yukon Huang Sector Manager: Ede Jorge Ijjasz-Vasquez Jitendra N. Bajpai Project Team Leader: Shomik Raj Mehndiratta Edward B. Dotson ICR Team Leader: Shomik Raj Mehndiratta ICR Primary Author: Georges Bianco Darido Graham Smith

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F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) OVERALL OBJECTIVE: Foster a multi-modal urban transport system [in Urumqi] which is planned, designed and used for the safe, efficient and healthy movement of people and goods. SPECIFIC OBJECTIVES: 1) Develop and manage the urban road network to support land use, transport and economic development plans; 2) Increase the safety and efficiency of the road network; 3) Develop public transport as a viable and sustainable alternative to private car use; 4) Protect and improve the environment; and 5) Strengthen local institutional capacity and integration within the urban transport sector. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 :

Cross-town travel speeds on key north-south corridors and CBD links in non-peak and (AM peak) periods Youhou Lu (N-S)(Xinyi road--Xinhua North Road) 4.55km Yangzijiang-Changjiang Lu (N-S) 2.8 km Guangming-Qingnian Lu (E-W)3.85 km Mingzhu Lu(E-W)0.91km

Value quantitative or Qualitative)

a. 37.8 km/hr (28.9 km/hr) b. 26.8 km/hr (24.4 km/hr) c. 28.8 km/hr (25.4 km/hr) d. 13.60 km/hr (7.5 km/hr)

a. +15.0% b. +12.0% c. +13.0% d. +20.0%

a. 39.2km/hr or +4%; (29.8km/hr or +3%) b. 27.1km/hr or +1%; (25.5km/hr or +5%) c. 29.3km/hr or +2%; (25.6km/hr or +1%) d. 13.6km/hr or 0%; (7.8km/hr or +4%)

Date achieved 12/31/1999 12/31/2004 12/31/2006

Comments (incl. % achievement)

Target was partially achieved as the opening of the Ring Road diverted some traffic and peak and non-peak speeds increased by 1%-5%, which probably would have decreased without the project because of economic growth and increased traffic volumes.

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Indicator 2 : Total road maintenance area Value quantitative or Qualitative)

6 million sq.m. +7% 13 million sq.m.

Date achieved 12/31/1999 12/31/2004 12/31/2006 Comments (incl. % achievement)

The indicator has more than doubled, surpassing the target.

Indicator 3 : Total road maintenance expenditure Value quantitative or Qualitative)

164 million RMB/year +110% 418 million RMB/year


This indicator target was surpassed. The definition includes only routine maintenance and engineering costs, not new road construction.

Indicator 4 : Costs for government administration Value quantitative or Qualitative)

14 million RMB/year +136% 30.3 million RMB/year


The indicator has largely achieved its target with an increase of 116%.

Indicator 5 : Percent of roads in fair condition in observed year Value quantitative or Qualitative)

70% 86% 86%


This indicator target was fully achieved.

Indicator 6 : Person-trip throughput across screenlines in (peak) and non-peak period Value quantitative or Qualitative)

2.58 (2.76) person-trips +7% 3.12 (3.37) person-trips


This indicator recorded a 21-22% increase, surpassing the target.

Indicator 7 :

Total traffic accidents (fatalities) for the city and by district: a. City-wide b. Tianshan Distruct c. Shayibake d. Xinshiqu e. Shuimogou

Value quantitative or

a. 1148 (297) b. 380 (67)

For all: -18% (-25%) a. 776 (177)

b. 178 (30)

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Qualitative) c. 222 (56) d. 333 (78) e. 131 (25)

c. 125 (34) d. 135 (37) e. 96 (10)


Targets for this indicator were fully achieved as accidents were reduced by 27-59% and fatalities by 39-60%.

Indicator 8 : Accidents (fatalities) per 1000 registered motor vehicles Value quantitative or Qualitative)

10.5 (2.72) -18% (-25%) 4.1 (0.96)


The targets for both indicators were fully achieved. The baseline value for fatalities per 1000 registered motor vehicles in the PAD was mistakenly reported as 0.36, but has been corrected to 2.72.

Indicator 9 : Public transport mode share of motorized trips Value quantitative or Qualitative)

65% 69.6% (increase of 7%) 68% (increase of

4.6%)


This indicator target was mostly achieved, despite being quite ambitious. Strong growth in motorized private vehicle numbers and use in the city limited a higher increase in bus mode share.

Indicator 10 : Operating cost recovery for Urumqi Public Transport Company Value quantitative or Qualitative)

90% 94.5% (increase of 5%) 118% (increase of

31%)


This indicator target was fully achieved. The ratio of operating revenues to operating costs increased by 31%, surpassing the target increase of 5%.

Indicator 11 : Public transport unit cost (operating cost/vehicle-kilometer) Value quantitative or Qualitative)

1.8 RMB/km 1.746 RMB/km (decrease of 3%) 3.5 RMB/km

(increase of 96%)


The target was not achieed due to exogenous increases in fuel costs and inclusion of buss puchases in 2006. In 2004, the indicator was reported as 1.9RMB/km(a 5% increase instead of the desired 3% decrease).

Indicator 12 : Public transport speeds in bus priority corridor (6.8km) in the CBD Value quantitative or Qualitative)

14.8 km/hr 17.8 km/hr (+20%) 17 km/hr (+15%)


This indicator was mostly achieved as average bus speeds increased by 15% in the corridor, mostly as a result of operational improvements.

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Indicator 13 : Government subsidy to Urumqi Public Transport Company Value quantitative or Qualitative)

3 million RMB/yr 0 million RMB/yr (-100%) 0 million RMB/yr

(-100%)


This target was achieved, which is especially significant considering the increases in operating costs (indicator 11) over time. Higher operational efficiency (indicator 12) was a contributing factor.

Indicator 14 : Public transport staff to bus ratio for UPTC Value quantitative or Qualitative)

7.1 staff per bus 5.5 staff per bus 3.9 staff per bus (-45%)


This indicator was fully achieved. The staffing ratio is a rough indicator of the operational efficiency of the bus company.

Indicator 15 : Number of standard buses for UPTC Value quantitative or Qualitative)

2417 +25% 3658 (+51%)

Date achieved 12/31/1999 12/31/2004 12/31/2006

Comments (incl. % achievement)

This indicator target was achieved, although the definition for the indicator was changed from the number of bus seats to number of buses. This change reflects that the number of standard buses is a national reported statistic, whereas bus seats is not.

Indicator 16 : Number of vehicles tested annually for emissions Value quantitative or Qualitative)

70872 85046 (+15%) 97952 (+38%)


This indicator was fully achieved. However, it does not address compliance if all vehicles in the city are required to be tested. A more meaningful indicator would have been the percentage of all required vehicles that were actually tested.

Indicator 17 : Percentage of vehicles tested passing emissions standards Value quantitative or Qualitative)

71.5% 90% 75.8% (increase of 6%)


The target was partially achieved, but the outcome of the component is arguable without complementary information on enforcement and the strictness of the standards over time.

Indicator 18 : Area of landscaping (greening area for built district) Value quantitative or Qualitative)

27.33 million sq.m. +2% 50.02 million sq.m. (+83%)

Date achieved 12/31/1999 12/31/2004 12/31/2006 Comments (incl. %

The indicator target was achieved. The city was very interested in incorporating a #greening# effort as part of the project although the actual environmental

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achievement) benefit of such an output is not clear.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Operational primary road network based on RR with efficient links to local and regional roads

Value (quantitative or Qualitative)

0% 100% 100%


The RR was substantially completed and opened to traffic in November 2004.

Indicator 2 : Effective traffic management and road safety programs Value (quantitative or Qualitative)

0% 100% 95%


Component has been largely implemented, though with delays. The ATC system is scheduled to be completed in 2008 with counterpart funds. All studies have been completed but some recommendations have not been implemented.

Indicator 3 : More efficient and attractive public transport services Value (quantitative or Qualitative)

0% 100% 90%


Component has been largely implemented, though with delays. A study to identify short-term and long-term implementation plans for service and infrastructure improvements will be completed in 2008 with counterpart funds.

Indicator 4 : Active mitigation of Ring Road impacts and mobile source emissions; Greener image of city

Value (quantitative or Qualitative)

0% 100% 85%


Component has been largely implemented, with delays. The institutional arrangements and facilities for the MVEC will be finalized in 2008. Some equipment for the center will be locally funded.

Indicator 5 : Strengthened local institutional capacity and technical capabilities Value (quantitative or Qualitative)

0% 100% 95%

Date achieved 01/01/2001 06/30/2005 12/20/2007 Comments For the most, this component has been implemented. A transport planning and

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(incl. % achievement)

modeling unit was created in the Urumqi Construction Commission (UCC). This concept evolved into an Urban Transport Improvement Office and some capacity enhancement is ongoing.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 03/23/2001 Satisfactory Satisfactory 0.00 2 12/19/2001 Satisfactory Satisfactory 10.88 3 06/25/2002 Satisfactory Satisfactory 28.78 4 11/14/2002 Satisfactory Satisfactory 29.96 5 06/30/2003 Satisfactory Satisfactory 34.74 6 12/31/2003 Satisfactory Satisfactory 47.46 7 06/30/2004 Satisfactory Satisfactory 50.22 8 12/30/2004 Satisfactory Satisfactory 57.53 9 06/21/2005 Satisfactory Satisfactory 65.53

10 12/15/2005 Satisfactory Satisfactory 65.53 11 12/14/2006 Satisfactory Moderately Satisfactory 66.86 12 01/14/2008 Moderately Satisfactory Moderately Satisfactory 84.25

H. Restructuring (if any) Not Applicable

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal 1. The Urumqi Urban Transport Improvement Project (UUTIP) was the Bank’s fifth stand-alone urban transport lending investment in China following two loans to Shanghai, one loan to Guangzhou and one loan to Liaoning Province for three medium-size cities. The project was designed to support the Country Assistance Strategy (February 25, 1997, Report No. 16321-CHA) by promoting growth with economic stability, alleviating infrastructure constraints (particularly in western and inland areas) with integrated transport investments, and safeguarding the environment. 2. The 1990s was a period of rapid urbanization in China. GDP grew at 9-10 percent per year, and motor vehicle ownership and use grew even faster. This also brought traffic congestion in many of the larger cities, jeopardizing productivity and quality of life through increased travel times, higher vehicle operating costs, worsening air pollution, and a high rate of road accidents. The population of Urumqi, the capital of the Xinjiang Uygur Autonomous Region (XUAR) was approaching 2 million. Its vehicle fleet, less than 80,000 in 1997, was predicted to quadruple to 300,000 by 2020, the planning horizon for its transportation system. Private car ownership was just getting started and was expected to grow substantially faster than the vehicle fleet as a whole. 3. As with other medium-sized cities, Urumqi’s urban transport system was under severe pressure to respond to the challenge of motorization. On one hand, the existing road system was inadequate and there was an urgent need for expansion of the network and the development of a functioning road hierarchy. At the same time, there was a need to develop and offer high-quality transport alternatives to the automobile; not just an imperative for the majority of residents without access to cars, but also to support the development of a sustainable, low-impact transport system from a safety and environmental standpoint. The role of the bus and the bicycle, traditionally the dominant modes of transport, was also threatened by a lack of safe and convenient services and facilities. At appraisal, congestion in Urumqi was not yet acute, but city leaders wanted to act ahead of the problem rather than waiting for it to reach a critical level. 4. The project attempted to address rapid urban development challenges by promoting a cost-effective and environmentally-balanced framework for urban transport development. UUTIP was to add needed infrastructure, promote safer and more efficient use of existing road capacity via traffic management and improved public transport, and investments to ameliorate the environmental impact. In addition, the project included the strengthening of the capacity of local institutions to better manage the sector. The project was fully consistent with the Bank’s sector strategy ("Sustainable Transport," 1996), which emphasized the integrity of economic, social, and environmental dimensions of a sustainable transport policy. These priorities were also consistent with the Bank’s urban

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transport strategy for China articulated at a major national symposium in Beijing in 1995.1

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 5. The overall project objective was to foster a multi-modal urban transport system, which is planned, designed and used for the safe, efficient and healthy movement of people and goods. Five sub-objectives and their non-specific performance indicators were agreed to during preparations and were included in the PAD exactly as listed below. These indicators were only defined during negotiations and confirmed with baseline and target values in a supplemental letter by the Urumqi Municipal Government dated February 9, 2001. This final set of specific indicators with definitions, baselines, and targets is presented in Annex 10. 1) Develop and manage the urban road system to support local land use, regional

transport and the city’s overall economic development plans a) Cross-town travel speeds (peak and non-peak) on key north-south corridors b) Travel speeds in the CBD area (particularly for buses) c) Network condition, annual road maintenance program, budget, and unit costs

2) Increase the safety and efficiency of the road network a) Traffic speeds in the CBD and key north-south corridors b) Increased throughput (in person-trips, across screenlines) c) Reduced incidence of traffic accidents and fatalities

3) Develop public transport as a viable and sustainable alternative to private car use a) Operating costs as a percentage of revenue b) Motorized mode share (across screenlines) c) Average bus operating speeds on key corridors

4) Protect and improve the environment a) Pass/fail rate for vehicle emissions inspections b) Proportion of fleet tested c) Landscaped green area

5) Strengthen local institutional capacity and integration within urban transport sector a) Development and implementation of policies, plans and programs

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 6. There were no material changes to the objectives or indicators (as presented above) after project approval. However, the specific definitions and values for the baseline and targets for each indicator did not appear in the PAD. For example, the four key north-south corridors to be monitored for cross-town travel speeds (indicator 1) were only confirmed after negotiations in the supplemental letter. Several indicators were also

1 China’s Urban Transport Development Strategy: Proceedings of a Symposium in Beijing, November 8-10, 1995. (Editors: S. Stares and Liu Z.)

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simplified or refined during implementation for ease of monitoring and reporting (as noted in Section F of the Data Sheet) without degrading their intent or effectiveness. For example, in the place of the annual road maintenance program and unit costs, the final set of road maintenance indicators (indicators 2, 3, 4 and 5) include (i) total maintenance area, (ii) total maintenance cost, (iii) costs for government administration, and (iv) percent of roads in fair condition. Similarly, the indicator for the number of bus seats (indicator 15) was revised as the number of standard buses.

1.4 Main Beneficiaries 7. The project was intended to benefit all residents of Urumqi to some degree, but especially those who lived or worked in the city center. Vehicle operating cost savings were estimated to be 2.5 times higher than travel time savings, with the ratio diminishing over time as the value of time increased with rising wages. The majority of benefits were estimated to accrue to car users, while almost one-third was to accrue to public transport users. Benefits to pedestrians and cyclists were not estimated quantitatively for the Ring Road investment, but were evaluated separately under complementary traffic management investments. The nature of the project components ensured that the benefits would be widely spread, including poorer citizens as well as richer ones. The PAD did not explicitly analyze the impact on other beneficiary subgroups, such ethnic minorities (further described in Section 2.1).

1.5 Original Components (as approved) 8. The components of the appraised project are summarized below (and detailed in Annex 2):

A. Road Network Development (US$222.6 million total, US$84.0 million Bank financing): To maintain and improve the road network, a 31.25 km Ring Road (RR) was to be constructed, 29 km of which was financed under the project. A few short missing links in the downtown network were also to be constructed, and other streets were to be widened or made one-way. Road maintenance systems and equipment were also included. It is important to point out that this component was over 80% of the total project value. B. Traffic Management and Road Safety (US$11.8 million total, US$7.0 million Bank financing): Five programs of investment and technical assistance, including intersection channelization and signalization, were aimed to enhance the efficient use of the existing road space and to improve road safety. C. Public Transport (US$7.5 million total, US$3.6 million Bank financing): The project financed the construction of terminals and depots, procurement of equipment to improve bus services, and studies on network development plans. It was also aimed at strengthening the regulatory and planning capabilities of the Urban Construction Commission and the commercial viability of the Urumqi Public Transport Company D. Environmental Management (US$4.6 million total, US$2.5 million Bank financing): Urumqi’s leadership was active in developing an environmental protection and improvement strategy. The project funded the next stage of those initiatives, including green landscaping, the development of a motor vehicle

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emissions control strategy (MVECS) and a motor vehicle pollution control center (MVPCC) with equipment for an inspection and maintenance program. E. Institutional Development (US$3.5 million total, US$1.9 million Bank financing): Technical assistance, studies and training would be provided to strengthen local capacity and processes for urban transport planning, programming, budgeting and system management.

1.6 Revised Components 9. There were two revisions to the loan’s allocation approved by the Bank’s Country Director in March 2003 and December 2006. The revisions increased the civil works disbursement rate from 48% to 100% to compensate for (i) unused funds from lower than expected bid prices (about US$16 million) that would otherwise have remained unused by the closing date, and (ii) higher than forecast resettlement costs, which increased the cost burden on UMG. These revisions also allowed the borrower to use part of the unallocated portion of the loan to expand the scope of the public transport component by improving a 5 km segment of Xinhua Road.

1.7 Other significant changes 10. Significant schedule delays affected implementation of most non-road components (further described in Section 2.2). As a result, the loan’s closing date was extended once to December 2007.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry 11. Overall, the quality of the project at entry was generally satisfactory and preparation had several features worth noting. First, the comprehensive nature of the project simultaneously responded to the client’s immediate interest in adding capacity to the road network, as well as to broader concerns related to sustainability, safety and equity of Urumqi’s urban transport system. As such, the project design was closely aligned with the Bank’s urban transport strategy (“Cities on the Move”, which was being finalized at the time of appraisal) and previous experience from other Chinese cities (namely Guangzhou and Shanghai) that suggested that urban transport solutions needed to be multi-modal and comprehensive. In response to discussions during the appraisal decision meeting, several suggestions from previous projects were included in the project’s components and development objectives, such as improvement in public transport cost-recovery and adequate provision of pedestrian and cyclist facilities to contain growth in motorized mode share. 12. Second, in contrast to the supply-driven approach and uniform design standards typical in China, the preparation of the Urumqi project tailored the design of various sections of the RR to realistic projections of traffic demand over 20 years. This was a learning experience for the Urumqi Municipal Government (UMG). In the end, only

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two-thirds of the RR was built to expressway standard, while the rest was built with signalized intersections according to the traffic demand forecast. 13. Lastly, the PAD was generally well documented, with the section on performance indicators a weak link (see Section 2.3). The PAD assessed the risks associated with the public transport component as substantial, while all other components were moderate to negligible. The PAD also addressed the issue of whether the safeguards policy on indigenous peoples (OD 4.20 at the time) should be triggered. After extensive internal Bank debate it was concluded that the Uygur, Hui, Kazakh and other ethnic minorities living in Urumqi had migrated there in the last few generations, were fully urbanized, and therefore did not meet several key definitional determinants. A localized exception to this was the need to demolish a downtown mosque to make way for the RR. In consultation with the concerned community, a new and larger mosque was built not far away. The PAD laid out the logic of this conclusion in a special annex. The replacement of the Lanzhou Mosque by a new larger mosque without prompting by the Bank was a praiseworthy achievement and contrasted other resettlement issues described in Section 2.4.

2.2 Implementation 14. Schedule and Delays. Implementation, particularly of the non-road network components, was delayed and the loan’s closing date was extended once, for two years, taking the closing date to December 31, 2007. The Bank team recommended the extension on the grounds that it would allow time for completion of the area traffic control system (ATC), bus dispatching system (APTS), motor vehicle emissions control strategy (MVECS), as well as the study on comprehensive public transport planning and the design of the road maintenance information management system. Consideration of the extension request also created leverage for the Bank to insist on installation of noise barriers along the RR (further described in Section 2.4). 15. Despite Urumqi’s short construction season of six months per year due to extreme winter climate, the RR was substantially completed and opened to traffic as scheduled by November 2004, approximately 4.5 years into implementation. The progress on the construction of the RR slowed when routine construction supervision and contract management uncovered problems, all of which were eventually resolved. The most consequential example of this was in the initial phase of the RR construction, which had to be repaved by a contractor because of poor material quality. On the other hand, there were delays to start most non-road components by more than one year because of the client’s relative inexperience and their initial focus on the RR construction. The progress of implementation of the non-road components accelerated after 2004 once the RR was completed. In this case, a lesson learned from implementation was that the complexity of the project as designed severely taxed the implementation capacity of the local government, thus resulting in implementation delays. Nevertheless, the Bank did a satisfactory job through routine supervision to ensure that capacity building and institutional strengthening were ongoing, even as physical progress of the non-road components was slower than expected.

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16. Resettlement. Involuntary resettlement and compensation became a critical issue after project initiation as some ethic minorities appear to have been differentially impacted, particularly the Project Affected Peoples (PAPs) from Lidaowan and Yamalike. In the case of Yamalike, it was characterized by reluctance on the part of the borrower to fully adhere to Bank requirements. These problems surfaced in 2001, soon after the start of the project, and were resolved in 2005, through considerable Bank intervention, including a visit by the Bank’s Regional Vice President. 17. Project Cost and Components. The components were implemented as appraised. The final cost of the road network component was about US$18 million below appraisal due to (1) bids coming in below estimates, (2) road maintenance units being consolidated allowing the cancellation of US$2.1 million in equipment (including road rollers, maintenance lift, bitumen and concrete mixers), and (3) some subcomponents using other local funds. 18. Technology Subcomponents. The project financed a number of new technology systems including a new traffic signal system, a GPS-based bus fleet management system, and a computerized road and bridge management system. In each case, implementation turned out to be considerably more difficult and time-consuming than the City had anticipated. There were both technical and institutional challenges. On one hand, City agencies were generally unfamiliar with the technological features of the proposed systems. Finalizing technical specifications took longer than planned and in many cases there were complications and delays in the procurement process (such as the equipment procurement for the vehicle inspection and maintenance system). 19. These technical challenges were further compounded by a formidable set of institutional challenges. Implementing the new systems required changes in business procedures, sometimes radical ones as pencil-and-paper was replaced by real-time computer-based systems. Active participation and involvement of senior management was needed to effect the changes in business processes and implementation arrangements needed to use the new systems effectively. Further, these systems need extensive data collection and implementation requires extensive system integration. As a result the implementation process required the active participation and commitment of the end-user, which many end-users had not planned for or anticipated.2

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 20. The set of indicators designed for this project represented a comprehensive and good-faith effort to meet the Bank’s results agenda and standard practices at the time. The indicator data collected were generally appropriate and properly utilized. However,

2 The Bank’s task team is distilling these lessons from technology implementation and related institutional issues in a technical note to be published in the second half of 2008 as “Bus Fleet Management Systems: Improving Public Transport in China.”

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in hindsight the indicators could have been simpler, better structured, and more focused on outcomes. 21. The PAD defines thirteen different kinds of indicators across four out of the five sub-objectives, requiring at least 29 distinct measurements. While comprehensive, this makes for a burdensome implementation effort for the client and supervision effort for the Bank’s task team. Three of the seven of the public transport indicators were related to costs (i.e., operating cost recovery, operating unit costs, and annual subsidy) and could have been made less redundant. Moreover, there were no specific indicators for the fifth objective of strengthening institutional capacity and the five “Intermediate Outcome Indicators” (in Section F of the Data Sheet) were more suitable as PDO indicators. 22. While most of the indicators were appropriate and relevant, it remains difficult to design indicators robust to the range of changes affecting Chinese cities in a typical 5 to 7 year project implementation period. For example,

a) Even as the forecasts of traffic on the RR financed by the project were close to target, traffic volumes on cross-town road links did not decrease as expected. In theory, the RR would alleviate congestion on these roads by providing through traffic alternatives. Over the implementation period, the city center attracted significantly more economic activity (and traffic) than had been forecast. Thus, speeds on cross-town road links (indicator 1 in the Data Sheet) did not increase as much as forecast. A better indicator would have been traffic counts on the RR and the adjacent network, which could have been normalized by the growth in the regularly monitored traffic counts for the city.

b) Comparing public transport unit costs (indicator 11 in the Data Sheet) across years would be meaningful as long as factor unit costs remained stable. But during the project implementation period the price of fuel increased five-fold and labor costs have also increased significantly, thus making the indicator much less meaningful.

23. Some indicators were not technically optimal or more appropriate as measures of “output” rather than “outcomes”. For instance,

a) Indicator 17 measures the percentage of tested vehicles passing emissions standards; a 30% increase in the pass-rate was targeted. However, such a pass-rate depends on a number of factors outside the control of the project including consistency, enforcement, quality control and equipment quality. A higher pass-rate could mean either a good outcome (better quality of auto fleet) or an unintended negative outcome (inconsistent tests or poor enforcement). As it was, the target was partially achieved, but it is difficult to link that outcome in a meaningful way with air quality improvements in Urumqi.

b) The final environmental and road maintenance indicators did not embody efficiency performance criteria but were simple measures of output (i.e., area of landscaping, total maintenance area, total maintenance cost, and costs for government administration).

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24. Finally, the baseline and target values for the indicators were not shown in the PAD, but were confirmed in a supplemental letter following negotiations. With the increased attention given to measurable results in recent years, it would be standard practice to include them in the PAD. In the end, the indicator data were effectively collected and used to inform or reinforce certain decisions, particularly the benefits of the public transport improvements and reforms.

2.4 Safeguard and Fiduciary Compliance

25. Environmental Impacts. The project was rated ‘Category A’ since it involved resettlement, major road construction partly on a new alignment, and increased air pollution and noise, particularly adjacent to the RR. In response to heightened sensitivities on this issue, Bank appraisal and PAD documentation focused significant attention on ensuring sufficient public consultation and disclosure of the environmental and resettlement documents.

26. The Bank required series of public participation activities from August 1998 through December 1999. The first consisted of on-site surveys, telephone interviews, questionnaires, and a public meeting. The second included two telephone hotlines for public input, informational pamphlets, public review of project environmental impact assessment, and a public meeting with the press and local representatives.

27. An EIA was developed and a stand-alone EMP was adopted by the city government. Generally, the EMP was satisfactorily implemented with the exception of the installation of noise barriers. A year after opening of the RR to traffic, only 100 meters of noise barriers had been installed (phase 1 pilot). Many sensitive locations were still filing claims for noise barriers or noise-reduction window treatments and air conditioners. The Mayor had been concerned about the effectiveness of the initial design for the noise barrier and was reluctant to see a particular style of barrier installed because of visual intrusion. The Bank helped arrange a visit by Urumqi representatives to Shanghai, Guangzhou, and other cities using noise barriers of various types, and an acceptable style was found. Successive phases consisting of 1.1 km of additional noise barriers were completed by the end of 2007.

28. Resettlement. Resettlement was identified as a risk in preparation because Chinese government policy did not require equal treatment for project affected people lacking residence permits. The minutes of negotiation recorded that the Chinese delegation accepted the Bank’s resettlement policy, which required equal treatment for squatters. Despite this, complaints were received from people from the Yamalike area of the Saybagh District that the housing to which they had been relocated lacked essential services such as internal roads and household water hook-ups. The majority of Yamalike residents were ethnic minority Uygurs; and according to the Municipality, many did not have legal residence permits. It is likely that the Municipality’s treatment of the Yamalike residents was due to their illegal status rather than ethnicity, but the two issues closely overlapped in this case.

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29. The mission at mid-term review noted that “present living circumstances [of the project affected people] create an unsightly blemish on what is otherwise a successful project.” The Bank supervised the issue closely and also required, internal and external monitoring of resettlement implementation. By December 2004, progress had been made to resettle the people from Yamalike to the Xishan resettlement area, except in relation to the school and the mosque. All utilities had been constructed and buses were provided to transport students to the original school in the Yamalike area while the new school was being planned and build. The approved master plan indicated that a primary school and high school would be built by 2010 about 1 km from the Xishan area. The mission was advised that a mosque could only be built if the population in Saybagh District increased or the old mosque in Yamalike was demolished. The PEO agreed to improve the pedestrian facilities in the resettlement area with sidewalks and lighting. The remaining works were completed in August 2005. In the end, compliance was achieved but only after considerable and close Bank supervision. 30. Fiduciary. All fiduciary and project expenditures issues raised during implementation were successfully resolved. Two financial management audits (in 2005 and 2006) resulted in unqualified (clean) opinions on the project balance sheet, summary of sources and uses of funds by project components, statement of implementation of loan agreement, and statement of special account. Financial management and reporting was in accordance to the loan agreement and the project complied with Bank guidelines. Disbursement was slower than initial projections in part due to delays in implementation, particularly for non-road components. 31. Procurement. The project experienced procurement delays, particularly for technology-related equipment and subcomponents, due to technical difficulties and institutional challenges (described in Section 2.2.). All procurement issues raised during implementation were eventually resolved according to Bank guidelines. An ex-post review in 2006 found no major outstanding issues.

2.5 Post-completion Operation/Next Phase 32. The infrastructure investments financed by the project (including the RR and Xinhua Road) are being successfully funded, operated, and maintained. The overall quality of construction of the road components is very good and on par with Chinese projects. At project closing, the ATC and Road Maintenance Management System were close to completion and operations. The bus fleet management system financed by the project was being successfully operated. The Motor Vehicle Emissions Control Center and air monitoring equipment was to be fully implemented after the closing of the loan. The project also financed several innovations that are being successfully operated, including state-of-the-art noise mitigation, traffic safety improvements, and bus priority measures. 33. Urumqi has expressed interest in a follow-on urban transport project though no official proposal has yet been endorsed by national authorities. The city has also noted its intention of using GEF funds to prepare the public transport component of a new project being proposed for World Bank financing. It was agreed that future operations would

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focus on bus priority measures, training, and integration of proposed BRT/urban rail investments.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation 34. The project remains consistent with the country's current development priorities to relieve infrastructure bottlenecks and develop western provinces (see Section 1.1). It is also consistent with current national policies on public transport prioritization and “people first” transport policies. It is fully consistent with the Bank’s current urban transport strategy (“Cities on the Move,” 2001), and the most recent China urban transport strategy (“China: Building Institutions for Sustainable Urban Transport,” 2006), both of which emphasize that the impacts of rapid motorization can be dealt with on a sustainable basis only by a comprehensive set of actions going beyond new road infrastructure.

3.2 Achievement of Project Development Objectives 35. Considering overall progress and the performance indicators, the project has successfully achieved its PDO to “foster a multi-modal urban transport system, which is planned, designed and used for the safe, efficient and healthy movement of people and goods.” It has achieved this, as described below, through strategic improvements to the road network, public transport services, road safety facilities for pedestrians and cyclists, traffic management systems, and institutional development. (a) Develop and manage the urban road system to support local land use, regional transport and the city’s overall economic development plans -- Satisfactory 36. This objective has been largely met, despite not fully achieving the target improvement of 15% for traffic speeds on cross-town streets. The original logic for the target was that longer-distance traffic would shift to the RR and important cross-town streets would be decongested allowing overall speeds to increase. In actuality, speeds on the four RR segments monitored have remained virtually the same (3 to 4 percent higher). Total traffic volume on the RR was just below the forecast during appraisal, while volumes on local roads varied widely from the forecast reflecting changes in travel patterns and urban structure over a 10-year period. In hindsight, the original speed targets were probably overly ambitious. Given the high level of motorization and economic development during the project implementation period, traffic on these streets has remained heavy despite the successful construction of the RR. It is likely that in the absence of the RR, speeds on these links would have been significantly slower. Additionally, the roads are all operating at speeds that are not unreasonable for major cross-town arterials. From a safety and management perspective, it is not in the city's interest for these roads to operate much faster. 37. The indicators related to “maintenance of the road network” have been met. The portion of the road network in fair condition has successfully achieved the target of 86%, reflecting the outcome of increases in the total maintenance area and expenditures.

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(b) Increase the safety and efficiency of the road network -- Satisfactory 38. This objective has been largely met. The targets for reductions in traffic accidents and fatalities (18-25% by 2004) have been met and largely sustained since 2002. Recommendations made by a road accident study were to be piloted on Xinhua Road, but were not be implemented until the road was reconfigured for bus priority in 2007. Nevertheless, by 2006 the number of traffic accidents in the city had declined by 32% and fatalities had declined by 40%. In the four districts affected by the project, the reduction in accidents and fatalities was as significant or more. This result generally reflects the effectiveness of traffic safety analysis and mitigation measures implemented. (c) Develop public transport as a viable and sustainable alternative to private car use -- Satisfactory 39. The indicators related to public transport have been substantially met. A major planning study being conducted as part of the Bank-financed project has found that the public transport share of all motorized trips has increased from 65% at the start of the project to about 68% at present, while the target at appraisal was 72%. Bus speeds in major downtown corridors have increased by 15%; less than the target increase of 20%, but reflecting a significant and impressive improvement in the level of service nonetheless. Several actions towards institutional reform of bus operations have been undertaken including a bus maintenance program, computerized information system, communications system, and training center. Operations are currently provided without any operating subsidy, surpassing the target and confirming the viability of the mode. (d) Protect and improve the environment – Satisfactory 40. All environmental indicators have improved, but as designed it is difficult to attribute environmental improvements to the project as designed (see discussion in Section 2.3). The area of green landscaping exceeded the projected targets (recording an 83 % increase from 2000 to 2006 despite the harsh climate and initial problems with the vegetation) reflecting the city’s aesthetic improvement priorities. The percentage of tested vehicles passing emissions standards rose from 71.5% in 2000 to 75.8% in 2006 (falling short of the target of 90%) and the number of vehicles tested increased by 38% in the same period (target increase was 15%). However, a higher percentage of vehicles passing the emissions standards is not necessarily a positive outcome without additional information about the quality and enforcement of the tests. Moreover, the increase in the number of vehicles tested is consistent with an increase in the vehicle fleet over the period. (e) Strengthen local institutional capacity and integration within urban transport sector -- Satisfactory 41. This project has strengthened capacity and integration within the sector, although progress at times has been slow (described in Section 2.2). A considerable number of studies and technical assistance efforts, detailed in full in Annex 2, have been completed to support every component of the project. The project has also contributed to at least three considerable accomplishments, which will be instrumental in any potential follow-on project (such as the GEF program discussed in Section 2.5):

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a) A major national policy initiative was issued in 2005 (State Council Decree 46) calling for providing priority to public transport. In response, the Urumqi government issued a 6-page note in September 2005 titled “Implementation Options on Prioritizing the Development of Urban Public Transport in Urumqi.” This note presented sound policies and substantial proposals for actions on all the fronts recommended by the Bank, including: (i) expansion of the public transport networks, (ii) opening the market to private operators under appropriate regulatory and licensing regime, (iii) strengthening the guidance role of the municipal government, (iv) providing bus priority on city streets (trial of bus rapid transit and signal priority at traffic lights, etc), (v) control management system, and (vi) addressing the needs of poor citizens through ‘public service obligations’ compensated by the City. It also identified the City agencies expected to take the lead in implementing the various actions.

b) A permanent (standing) multi-agency body to address urban transport issues has been created. Early on, the City stated its intention to set up a Transport Planning Institute to strengthen the Municipal Government’s technical capacity in urban transport. The concept evolved into an Urban Transport Improvement Office. Plans and policies for public transport development have also improved markedly since project initiation, and are currently being implemented.

c) In July 2007, the UMG issued a circular on establishing a Municipal Leading Group on Public Transport Priority Development (PTLG), which named the Mayor as chairman, directors of 14 agencies as members, and the director of the Urumqi Construction Commission as the secretary-general of the office.

3.3 Efficiency 42. A traditional cost-benefit analysis (CBA) was used by the Bank to evaluate the economic impact of the largest component of the project, the RR, representing more than 80% of the total investment. The economic efficiency measures of the RR (summarized in the table below) were driven by 20-year forecasts of traffic volumes using standard transport modeling techniques described in an annex to the PAD. The evaluation of the RR included sensitivity analysis of key variables including construction costs, travel time and vehicle operating cost benefits, and projected economic growth. The appraisal results confirmed the robustness of the RR’s economic effectiveness.

Ring Road Component PAD ICR NPV (@12%) 1.487 Billion RMB 1.156 Billion RMB

NPV (@12%, US$1=8 RMB) US$185.8 Million US$144.5 MillionEIRR 20.2% 17.9%

43. As shown in the table above, the recalculated NPV and EIRR for the RR at completion are somewhat lower than the appraisal estimates. Details of the economic evaluation at appraisal and completion are presented in Annex 3. There were at least two significant differences between the assumptions at appraisal and completion that, on balance, yielded this result. Other important observations also follow:

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a) The estimate of vehicle operating cost (VOC) savings was considerably lower at completion than at appraisal because the VOC models used different formulations, although both included travel speeds. HDM-3 was used for the PAD estimate, while a model developed by the Shanghai Municipal Engineering Design and Research Institute was used for the borrower’s ICR.

b) The estimate of travel time savings increased considerably between appraisal and completion because (1) average wages and municipal GDP have outpaced earlier forecasts, and (2) the method used to calculate the values of time for work and non-work trips differed from appraisal to completion. Details are presented in Annex 3.

d) Actual traffic volumes in 2007 overall were only slightly below forecast at appraisal. Traffic volumes are lower than forecast in 6 segments, while they are higher than forecast in 4 other segments.

e) Actual investment costs and the appraisal estimate were virtually the same, reflecting the completion of the project within the original budget (including contingencies).

f) Operations and maintenance costs (if combined with the residual asset value) are similar at appraisal and completion.

g) The 20-year forecast of costs and benefits at appraisal end in 2023 because it assumed that the RR would be completed in 2003 (the scheduled end date was later revised to 2004). The actual completion was in November 2004 and is reflected in the economic analysis at completion.

44. A simplified CBA was used in the PAD to evaluate other investment items including the ATC and signalization, intersection channelization, one-way road scheme, and an advanced public transport information and communication system. The analyses of each of these components at appraisal resulted in positive NPVs and EIRR above 19%. Detailed estimates of the benefits for these components were not available at completion. However, certain performance indicators (such as traffic volumes and person-trips) suggest that the forecasts were reasonably accurate and that the EIRR for these components are satisfactory. 45. A financial capacity analysis was performed during appraisal, which included at least the following items as annexes to the PAD: (1) a review of the fiscal impact and counterpart funding arrangements, and (2) a review of the financial management system.

3.4 Justification of Overall Outcome Rating Rating: Satisfactory 46. The satisfactory rating for overall outcome is justified above by (1) the project’s relevance to the objectives of the Bank and client; (2) achievement of PDO and a large majority of the performance indicators; and (3) the confirmation of its economic effectiveness.

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3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 47. In the end, resettlement compliance was acceptable and the city made progress in social development by improving the lives of hundreds of former squatters. Although quantitative poverty impacts were not measured, evidence from the resettlement program suggests that the lives of poor PAPs were greatly improved by newer and more comfortable homes. (b) Institutional Change/Strengthening 48. This project has significantly enhanced Urumqi’s ability to manage and implement large construction projects, particularly their capacity for procurement, financial management, resettlement and environmental compliance. The project called for the creation of a transport planning and modeling unit in the Urban Planning Bureau, which was achieved under the UCC. This concept evolved into an Urban Transport Improvement Office, which was formally set up and continues to be enhanced. Further details are discussed in Section 3.2. (c) Other Unintended Outcomes and Impacts (positive or negative) Not applicable.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops A stakeholder workshop was held in 2005. A summary of the results is provided in Annex 6.

4. Assessment of Risk to Development Outcome Rating: Moderate 49. There is little doubt that the City will continue to give its full support to the operations and maintenance of the infrastructure components of the project. The only areas for doubt are the “softer” components, where actions taken or to be taken are institutional in nature. The recent policy by national and local governments providing “priority for public transport” has been extremely important. The PLG, reconstituted in late 2005, provides the foundation for a multi-agency, holistic approach to transport planning. Thus far, the PLG has been slow to reach decisions on public transport policy and environmental management areas despite the availability of competent technical studies. Nevertheless, one cannot underestimate the significance of the change in urban transport policy in China at the national and local levels in the last 10 years. Where there was previously no interest or capacity to address the relevant sector issues (see Section 1.1), Urumqi today is an illustration of the change in mindset that can occur.

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5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 50. The project design was well articulated and was closely aligned with the sector and country strategies at the time. The PAD makes clear that multiple alternatives were evaluated before decisions were made about which segments of the existing RR should be upgraded and to what standard. The Bank team advised and guided the municipal authorities as they explored every component and examined many alternatives before arriving at final decisions on the design of each. Project preparation took 33 months from identification to loan negotiations (July 1997 to March 2000), including about 6 months spent on the issue of resettlement. The quality at entry largely reflected the state-of-practice at the time, but in retrospect included deficiencies that justify a moderately satisfactory rating. 51. The project design adequately addressed the known risks at the time, but it did not foresee the eventual problems that delayed non-road implementation and institutional development. The Bank made a reasonable effort to incorporate institutional capacity building in the project design and ensure continuing discussions on the non-road components by including in the Project Agreement that, “by April 1 of each year, or such other date as the Bank shall request, Urumqi shall evaluate with representatives of the Bank the progress in the implementation of its strategies for public transport reform and development, motor vehicle emission control, and road maintenance management." In retrospect, the design of the project could have better recognized the slower pace of implementing the “softer” components (as experienced by projects in Guangzhou and Shanghai) with a more realistic schedule. 52. Lastly, the performance indicators were unnecessarily complex and could have been better structured. It remains a challenge for task teams to design a set of relevant, simple, and yet comprehensive indicators within a satisfactory M&E framework. (b) Quality of Supervision Rating: Satisfactory 53. The Bank approved the project in December 2000 and the Project was declared effective in May 2001. Supervision missions were generally conducted at least twice a year, except for a period of reduced activity in 2003-2004 related to the outbreak of SARS in the region. The composition of the mission teams duly reflected the needs of the implementing agencies. Back-to-office reports and management letters were generally comprehensive and action-oriented. 54. The Bank generally acted appropriately and decisively to resolve the resettlement issues. A supervision mission in 2003 rightly drew attention to unacceptable living conditions of Yamalike PAPs. As a result, the Bank withheld approval for use of unused funds until this issue had been resolved. A mid-term review that highlighted the delays in

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non-road components was held in June 2004 as the main infrastructure construction component was nearing completion. This was a natural opportunity to take stock of unused funds that could be reallocated to the non-road infrastructure components. 55. A major workshop in October 2005 clearly reaffirmed the broad agenda and commitments for integrated development of Urumqi’s urban transport system. The Mayor attended the opening session and two Vice-Mayors attended additional sessions. The workshop also brought together all the municipal entities managing the components covered by the project. Annex 6 summarizes the workshop’s conclusions, notably twelve actions, which effectively captured the core reform agenda going forward. 56. The Bank showed flexibility in agreeing to raise the disbursement percentage on civil works to help Urumqi use the full amount of the loan, although only a relatively modest amount of civil works remained to be carried out by the time the percentage was amended. Overall, the quality of Bank supervision was satisfactory considering (1) the continued focus on the development impact of the non-road components, and (2) the supervision of the safeguard aspects including noise mitigation and resettlement. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 57. The Bank’s overall performance was satisfactory based on the quality of the project at entry and during supervision. The project’s objectives and design were aligned with both the borrower’s and World Bank strategies on urban transport. There has been substantial completion of the project without compromising environmental, social, or financial safeguards as outlined in the appropriate plans. The design and implementation also ensured the delivery of a majority of the project development objective. The Bank team was able to effectively guide the design of a large road investment and balance the project with public transport, non-motorized transport, environmental management, and institutional components. Each successful project builds trust with Chinese leaders and allows for growing acceptance of the Bank’s reasoned advice and technical assistance in urban transport.

5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 58. The satisfactory rating is justified by the institutions, policies and programs adopted by local government in support of the project objectives (described in Section 3.2(e)) despite of their slow pace to make these changes and initial reluctance to fully implement the Bank’s resettlement policy (see Section 2.2). The national policy giving priority to public transport was announced in the fall of 2005, at about the same time as a broader policy to “put people first.” Together these developments created a strongly supportive environment for municipal action on public transport. It is also noteworthy that the Xinjiang Region played a proactive role in guiding the City as a vice-governor chaired the reconstituted PLG (see Section 4).

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(b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory 59. The implementing agency’s performance is rated as moderately satisfactory for ensuring that the project was implemented and its development objectives were met, despite delays. The implementing agency had only limited control over government decision-making, and it is difficult to assess if the agency could have done more to ensure timely implementation. 60. The rating is also justified by the progress made to implement a large majority of the components despite implementation issues. Lengthy delays for implementing the noise barriers and the emissions control strategy called into question the initial commitment of the City to these components and to the safeguards they were intended to address. 61. Disbursements were very slow; only about half of the loan was disbursed after three years, and only about two-thirds was disbursed after six years. Delays also resulted from the initial quality of RR implementation (although overall quality was very good as described in Section 2.2), and more importantly, cumbersome internal procedures. The Bank team provided guidance for all implementation and recommended simplification of the document flow. Action on the withdrawal application process was taken after discussions and a training program was put in place in 2006. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 62. The moderately satisfactory rating is reflective of the borrower largely delivering the project as designed and meeting its developmental objectives despite significant delays.

6. Lessons Learned 63. More work is needed to develop appropriate indicators for urban transport projects. Inconsistencies persist between the Bank’s internal requirements for measurement and evaluation (M&E) of results, the ability of the task team to define meaningful and measurable indicators, and the client’s interest and capacity in this area. The focus of the borrower is often on output indicators, while task teams have a difficult time attributing outcomes to project activities. Task teams would benefit from constructive guidance from the M&E community to develop a concise of relevant, comprehensive and straightforward indicators that are integrated with measurements regularly made by the borrower, thus ensuring ownership and data quality. Indicators should also be generally robust to exogenous factors to ensure that they meaningfully reflect the outcomes of the project. 64. The Bank should ensure that project components and schedule consider a natural “learning curve” and other institutional capacity issues. For a first-time borrower like Urumqi, the Bank’s fiduciary and safeguards requirements for a relatively large investment is a challenging prospect. It is usually the case with complex projects with multiple components that they are implemented sequentially starting with the

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biggest investment (such as a Ring Road), which features most prominently on government's agenda. The challenge is designing projects that do not overwhelm, but complement the borrower’s implementation capacity as it improves over time. One approach is to integrate the development of corridors with road, public transport, environmental management, safety and traffic management investments. Where stand-alone infrastructure and institutional components are deemed necessary, there needs to be recognition that they may progress at different rates. 65. Replicating successful urban transport projects is an important and valuable role for the World Bank in China as the country continues to urbanize and motorize. There is much to be learned from international experience and great value in the opportunity to shape the future of fast-growing cities. The high population density in many Chinese cities and shortage of space necessitate urban transportation strategies that give a central role to public and non-motorized modes (and not to space-consuming patterns of car-based urban sprawl) and are supported by appropriate pricing, land use policies and other regulations.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 66. The following are responses to select comments or issues raised by the borrower and summarized in Annex 7. • As addressed by the first lesson above, we recognize the need to develop more

appropriate performance indicators for urban transport that utilize readily available data in each city to ensure the veracity of the baseline and target values and avoid unnecessary data collection and redundancies.

• Borrowers implementing similar World Bank-financed projects indeed may be able to learn a great deal from each other through better communication. The Bank is keenly interested in finding opportunities to bring implementing agencies from similar projects together to share experiences and training. In fact, the World Bank is ensuring this kind of interaction through lending and grants programs that involve multiple cities with similar problems. One example of this is the China GEF Urban Transport Partnership Program made up of 14 cities (including Urumqi) that underwent a competitive selection process.

(b) Cofinanciers (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

ROAD NETWORK DEVELOPMENT 194.8 216.4 111.1%

TRAFFIC MANAGEMENT & ROAD SAFETY 10.6 7.96 75.1%

PUBLIC TRANSPORT* 6.7 15.75 235.1% ENVIRONMENTAL MANAGEMENT 4.1 2.18 53.2%

INSTITUTIONAL DEVELOPMENT 3.3 0.81 24.5%

Total Baseline Cost 219.5 243.1 110.8% Physical Contingencies** 21.0 n/a n/a Price Contingencies** 9.5 n/a n/a

Total Project Costs 250.0 243.1 97.2% Interest during construction 19.0 7.3 38.4% Front-end fee IBRD 1.0 1.0 100.0%

Total Financing Required 270.0 251.40 93.1%

Note: * The cost for Xinhua Road (bus priority) (104.74 million RMB) is included and explains the large variance between appraisal and actual. ** The client provided no data on the actual physical or price contingencies, referring to the table on page 8 of the PAD.

(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower 170.0 153.8 90.5% International Bank for Reconstruction and Development 100.0 97.6 97.6%

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Annex 2. Outputs by Component Planned Outputs at Appraisal (PAD) Actual Outputs at

Completion and Any Variances

Project Component 1 - US$222.60 million A. Road Network Development

Al. Ring Road Construction ($216.3 million). This sub-component includes ring road construction, road maintenance equipment for the ring road, ring road traffic control equipment, environment impact mitigation measures, consultant services for construction supervision and environment monitoring, and land acquisition and resettlement including monitoring activities).

A1.1 Two-thirds of the new construction (19.4 km) will be to expressway standards, with urban arterial standards adopted for the remaining 9.6 km in the north-east, where traffic demand is lower. Over 70 percent of the Ring Road will be built at-grade, with elevated construction for 8.3 km in the inner areas, close to the CBD. A total of 18 pedestrian facilities (16 overpasses and 2 underpasses) and a number of at-grade pedestrian crossings will be constructed to ensure pedestrian access and safety. A1.2 Road Maintenance Equipment. In order to ensure the road condition after the ring road opens, the project will provide road maintenance equipment for the ring road. The major equipment will include: road maintenance monitoring vehicles, snow cleaning vehicles, road cleaning vehicles, a tipper truck, road comprehensive maintenance equipment, cement and concrete road pavement equipment, cement and concrete road maintenance equipment, bridge check and maintenance equipment, road rollers, bitumen pavement, road check, road maintenance lift, underground pipe check equipment, bitumen and concrete mixer, road crack fixed equipment, and other maintenance equipment. A1.3 Traffic control and monitoring facilities. The project will provide traffic control facilities for the expressway sections of the ring road. A1.4 Environmental impact mitigation building works. In order to mitigate noise impacts, the project will provide mechanical ventilation and cooling units to about 5700 households to permit them to keep their windows closed. This is in addition to other mitigation measures including noise barriers which are included in the civil works contracts. A1.5 Consulting services for construction supervision and environmental monitoring. The project will finance both local and international consultants to provide construction supervision services for the construction of the ring road according to international contract practice. Provision is also made for external monitoring in accordance with the EMP. A1.6 Land Acquisition and Resettlement. The construction of the

A1. All Works Completed. • US$2.1 million

in road maintenance equipment was cancelled with merging of maintenance units (including cement and concrete pavement equipment, road rollers, road maintenance lift, bitumen and concrete mixer).

• As part of the traffic control and monitoring center, 48 monitoring videos and 6 traffic information screens were implemented.

• Xinhua Road improvements were completed.

• 1.21 km of noise barriers were installed

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ring road in the city center area will involve land acquisition and the resettlement of people, units, and enterprises. The resettlement action plan (RAP) for the project will guide the implementation and monitoring of the annual land acquisition and resettlement for all phases of the project. The project will finance costs related to resettlement activities and monitoring. (Land acquisition is not Bank financed).

A2. Other Road Network Improvements ($2.8 million) A2.1 Constructing a missing link from Altai to Baoshan Road, Baoshan Road to Huanghe Road as four lanes and improving traffic management and channelization facilities. A2.2 Widening of 0.48 km of Heilongjiang Road from Baoshan road to Nianzigou road from bi-directional 2 and 3 lanes to bi-directional 3 lanes. A2.3 Widening of 0.71 km. of Tuanjie Road (from Shengli Road to Art School) from bi-directional two lanes to bi-directional four lanes. A2.4 Creation of one way pairs (Jiefang Road and Heping Road) and (Zhongshan Road and Minzhu Road). In the north-south direction, the road pairs are North Jiefang Road (0.79 km) and North Heping Road (0.91 krn). This one-way pair will allow one lane of three in each direction to be used as bus-only lanes. In the east - west direction, the road pairs are Minzhu Road (0.91 kin) and Zhongshan Road (completed).

A2. All Works Completed.

A3. Road Maintenance ($3.5 million) A3.1 Road, Bridge and Drainage Maintenance Management System (TA). The TA will review the current road maintenance management problems, and suggest ways to improve the current management by strengthening the institutional structure, improving the road maintenance planning, rationalizing the use of the funds, increasing the source of funds, providing a better information collection system, and providing better information and assistance to decision makers. A3.2 Road Maintenance Equipment. In order to improve the current road maintenance facilities, the project will finance the provision of road maintenance equipment for other non ring road sections. The major equipment is likely to include: milling and planning machine; multi-function road maintenance vehicles; road monitoring vehicle; machine for repairing cracks; vehicle for dredging pipes; 2 heavy-type cleaning-up vehicles; heavy-vehicle snow clearing vehicles; capstan-type plowing vehicles and data collection equipment.

A3.All road maintenance equipment has been procured. • Road

maintenance management center and parking management center have been established (4 out of 15 staff on board).

• Systems and equipment still being tested

Project Component 2- US$11.8million B. Traffic Management and Road Safety

B1. Junction Channelization, Traffic Signals and Area Traffic Control (ATC) ($4.1 million) includes: channelization at 25 intersections, (of which 24 are at grade junctions on the ring road); traffic signals and ATC at 59 junctions (of which 18 are related to the ring road); vehicle actuated signals at a further 23 junctions (of which 12 are on the ring road); new fixed time signals at a further 3 junctions on the ring road; 3 sets of vehicle actuated signals associated with bus terminals; and signs and lane markings. Forty seven of the eighty-eight junctions to be equipped with

B1. 95% of civil works completed. • 139 junctions

have been improved

• Area traffic signal control system (ATC) is

22

traffic signals are existing sites to be upgraded and forty-one are new sites.

being tested.

B2. Pedestrian Facilities ($2.0 million) This builds on existing programs currently being carried out by the Urumqi Municipal Government (UMG) by: enhancing road safety through physical segregation; combining NMV and pedestrian facilities where appropriate, following on from successful European practice; and reflecting the possible downgrading of some roads in the CBD to a lower level in the road hierarchy (as a result of the Ring Road) by aiming to introduce a more human scale to the CBD and a more pedestrian friendly environment. The program includes a pioneering pilot mid-block signaled (pelican) pedestrian crossing, the first in Urumqi; the provision of full signalized phases for pedestrians at traffic-signaled junctions; four overbridges/subways; and foot way improvements 7.6 km

B2. All pedestrian improvements completed and one pilot mid-block signal installed. Part of the sidewalk improvements used local funds.

B3. Parking System Improvements ($0.1 million) includes a Parking Study and signage for 35 parking areas. The parking study will review the current parking problems, establish a parking policy including parking management regulation and policy, and propose further investment in parking system improvement.

B3. Single parking authority endorsed and being implemented.

B4. Enforcement and Road User Education ($3.7 million). Items include: road user education review and pilot; enforcement practices review and pilot; command center; and driver/vehicle information system.

B4. All work completed. Education program endorsed in October 2005 and being implemented. Driver/vehicle information systems used local funds.

B5. Accident Analysis and Road Safety ($0.5 million) includes TA for Accident Analysis Study, accident hot line equipment and accident investigation equipment, analysis software/hardware, and remedial measures schemes.

B5. All work completed.

B6. Design, Supervision and Management (NBF) ($1.4 million). Design, supervision, management and administrative costs of services provided by implementation agencies and PEO.

B6. All work completed.

Project Component 3 - US$7.40 million C. Public Transport

C1. Reform of UPTC ($3.1 million) C1.1 Urumqi Public Transport Company Corporate Planning and Reform Study. C1.2 Bus Maintenance Program including a vehicle diagnostics center, bus painting facility, laser engine reconditioning equipment and modernization of other standard equipment. C1.3 Computer Information System for asset and maintenance management, accounting, payroll and financial reporting and possibly centralized vehicle scheduling and dispatch at a later date. The system includes a network (server and workstations) to link HQ to each sub-company unit and database, statistical, financial and management software.

C1. Maintenance equipment procured and surveys completed. Information and communications systems being tested.

23

C1.4 Wireless Communication System will be operated from the HQ Communications Center and includes 80-100 walkie-talkie units used by HQ and sub-company staff as well as equipment for 20 vehicles. C1.5 Communications and Training Center will be built on 1000 sq. meters of the site of the existing HQ building.

C2. Bus Priority Measures and Passenger Facilities ($3.8 million) C2.1 Public Transport Route Network and Public Transport Priority Study. C2.2 Bus-only lanes. Creation of one-way pairs for Jeifang and Heping Roads will permit bus-only lanes. A bus priority pilot program includes bus-only lanes, and bus bays, on a 6.8 km of Changjiang, Yangzhijiang and Youhao Roads. C2.3 Study of additional bus priority lanes after the initial bus network improvement. C2.4 Passenger transfer facilities (including shelter and seating) encompassing the conversion of four terminals to transfer facilities and improvement of the railway station terminal.

C2. Xinhua Road 4.96 km bus-only lane in operation. Study to identify short- and long-term implementation plans is ongoing.

C3. Public Transport Policy Consultancies ($60,000) to further refine UMGs public transport reform and development policies. They will also address creating a new office in the UCC to act as the public transport regulatory/planning agency of UMG.

C3. Municipal public transport 2007 circular issued and PT Leading Group established in 2005; ongoing public transport reform study.

C4. Design, Supervision and Management ($0.5 million) and administrative costs of services

C4. Provided by implementation agencies and PEO.

Project Component 4 - US$4.60 million D. Environmental Management.

Dl. Greening/Ring Road Landscaping ($2.8 million). Greening of 0.44 million sq. meters of which 0.23 million sq. meters will be outside the right-of-way (red-line) of the Ring Road. D2. Motor Vehicle Emission Control Strategy ($1.5 million) Vehicle Monitoring System - Inspection and maintenance, monitoring and analysis equipment, and database and computer network to link the above systems. Vehicle Pollution Control Research Center - Research including motor vehicle emission control studies and study tours [see Component E]. Environment Law and Regulation Strengthening (NBF) – public education campaign, research. Design, Supervision and Management (NBF) ($0.4 million)

D1. Completed and extended beyond the Ring Road to achieve larger city goals. D2. Pollution Control Center established; Air pollution monitoring equipment procured after loan closing (using local funds) and currently being tested.

Project Component 5 - US$3.50 million E. Institutional Development: Urban Transport System Management

E1. UMG Transport Policy and Planning ($1.1 million) E1.1 Creation of an Urban Transportation Sector Leading Group, comprised of decision makers from the various city agencies with responsibilities for urban transport. E1.2 Establishment of an office for the routine works and selection of

E1. All work completed: PTLG and Comprehensive Transport Planning Research Center

24

permanent and temporary technical experts to provide policy and planning advice to these decision makers. E1.3 Establishment within the Urban Planning Bureau of a transportation planning and modeling unit. E1.4 Strengthening of public involvement in the planning process, including the involvement of stakeholder groups advising on the MVECS. E1.5 A three-year Transport Network Development study to undertake multi-modal analysis and coordination with land use plans in support of the Transport Master Plan. E1.6 Office and model and data collection facilities and equipment. E1.7 Administrative costs for the establishment of agencies.

established and currently studying urban rail plans.

E2. Domestic and Overseas Training ($1.3 million) for all components and agencies. Training to assist the implementing agencies: (1) in the implementation and operation of the components for which they are responsible, and (2) in the collection and analysis of data for the indicators to be used for monitoring the performance of the project in meeting the development objectives. Details are available in the Project file and the PIP.

E2.1 Domestic and overseas training for road network improvement component which will include the agencies of ring road construction company/PEO, municipal engineering construction bureau, and road maintenance management agencies. E2.2 Domestic and overseas training for the traffic management component for the various agencies involved. E2.3 Domestic and overseas training for the public transport component for the public transport company and other government related agencies. E2.4 Domestic and overseas training for the environment component for environmental agencies and the motor vehicle emission control strategy leading group. E2.5 Domestic and overseas training for the institutional development component for the leading group and the transportation planning unit. E2.6 Domestic and overseas training for project management will include the PEO, the Sector leading group, province and municipal finance bureaus, the Urumqi construction commission, and the municipal government. Detailed domestic and international training plans are included in Project Implementation Plan.

E2. Comprehensive Transport Plan adopted in 2006; Future Road Network Plan completed in December 2007.

E3. Technical assistance for Project Management ($0.9 million) E3.1 Administrative costs for project management. E3.2 Equipment and facilities for the PEO. E4. Administrative Costs of data collection for performance indicators ($0.2 million).

E3. Completed 7 domestic and 4 international investigations on topics including traffic management, road maintenance, environmental protection/mitigation, and public transport

25

Annex 3. Economic and Financial Analysis Table A is a summary economic analysis included in the PAD for Ring Road only, while Table B was generated using the benefits and costs presented in the borrower’s ICR in May 2008. The PAD also included a cursory economic analysis of the traffic management and public transport components. The remaining components under the project were far smaller in cost and less amenable to a quantitative cost-benefit analysis. The PAD cites insufficient data available on the benefits of bus priority, pedestrian improvement, enforcement and road user education, and other safety measures for a reliable cost benefit analysis, but international experience had shown that these types of investments are cost-effective nonetheless. Table A: Economic Analysis for Ring Road at Appraisal in 2000 Benefits (million RMB) Costs (million RMB)

Year VOC

savings

Travel time

savings Residual

value Sum Invest-ment

O&M costs Sum

Net Value

2000 - 480 480 (480)2001 - 359 359 (359)2002 - 603 603 (603)2003 - 265 265 (265)2004 252 42 294 (2) (2) 296 2005 263 50 313 (2) (2) 315 2006 274 58 332 (2) (2) 334 2007 286 68 171 525 (2) (2) 527 2008 298 80 378 (2) (2) 380 2009 311 94 405 (2) (2) 407 2010 324 111 435 (2) (2) 437 2011 359 129 488 (2) (2) 490 2012 398 151 549 (2) (2) 551 2013 441 177 618 58 58 560 2014 489 207 696 (2) (2) 698 2015 543 241 784 (2) (2) 786 2016 602 282 884 (2) (2) 886 2017 667 330 997 (2) (2) 999 2018 739 386 1,125 (2) (2) 1,127 2019 820 451 1,271 (2) (2) 1,273 2020 909 527 1,436 (2) (2) 1,438 2021 1,007 616 1,623 (2) (2) 1,625 2022 1,117 720 1,837 (2) (2) 1,839 2023 1,238 842 505 2,585 58 58 2,527 Total 11,337 5,562 676 17,575 1,707 80 1,787 15,788

NPV (@12%) 1.487 Billion RMB

NPV (@12%, US$1=8 RMB) US$185.8 MillionIRR 20.2%

26

Table B: Economic Analysis for Ring Road at Completion in 2007 Benefits (million RMB) Costs (million RMB)

Year VOC

savings

Travel time

savings Residual

value Sum Invest-ment

O&M costs Sum

Net Value

2000 - - - - 576 - 576 (576)2001 - - - - 489 - 489 (489)2002 - - - - 120 - 120 (120)2003 - - - - 463 - 463 (463)2004 15 7 - 22 65 13 78 (56)2005 188 103 - 291 - 27 27 264 2006 200 119 - 319 - 25 25 294 2007 212 138 - 350 - 26 26 324 2008 224 160 - 384 - 27 27 357 2009 238 184 - 422 - 26 26 397 2010 252 213 - 466 - 26 26 439 2011 275 242 - 516 - 27 27 489 2012 299 274 - 573 - 28 28 545 2013 325 310 - 635 - 29 29 607 2014 354 351 - 705 - 29 29 676 2015 386 397 - 783 - 30 30 753 2016 420 450 - 870 - 31 31 839 2017 457 510 - 967 - 32 32 935 2018 497 577 - 1,075 - 32 32 1,043 2019 542 654 - 1,195 - 34 34 1,162 2020 589 740 - 1,330 - 35 35 1,295 2021 642 839 - 1,480 - 36 36 1,444 2022 699 950 - 1,648 - 37 37 1,611 2023 760 1,076 - 1,836 - 38 38 1,798 2024 759 1,024 88 1,871 - 36 36 1,835 Total 8,332 9,317 88 17,738 1,712 622 2,334 15,404

NPV (@12%) 1.156 Billion RMB

NPV (@12%, US$1=8 RMB) US$144.5 MillionIRR 17.9%

Table C: Values of Travel Time Used for Ring Road at Appraisal and Completion

Value of Time (RMB/hour) Year Work Trip Non-work Trip

2010 11.88 2.7 PAD 2020 19.92 4.53 2010 7.13 5.31 ICR 2020 16.5 12.28

27

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Name Title Where Based (HQ or Country Office)

Lending Edward B. Dotson Consultant (Formerly Bank

Staff and Project TL) Washington, DC

Peter Midgley Former Task Team Leader Washington, DC Richard Scurfield Sector Coordinator Beijing, China Yan Zong Transport Specialist Beijing, China Anil H. Somani Consultant Washington, DC Tilly Chang Washington, DC Rodney J. Stickland Consultant Washington, DC Zhefu Liu Senior Social Development

Specialist Beijing, China

Supervision/ICR TL: Shomik Raj Mehndiratta Sr. Transport Specialist Beijing,

China TL since:11/01/2007

Yan Zong Transport Specialist Beijing TL from 2003 through 2007

Graham Smith Consultant Washington, DC Edward B. Dotson Consultant (Formerly Bank

Staff and Project TL) Washington, DC

Rodney J. Stickland Consultant Washington, DC Jitendra N. Bajpai Adviser Washington, DC Christopher R. Bennett Sr Transport Specialist Washington, DC Chongwu Sun Sr Environmental Specialist Beijing, China Samuel L. Zimmerman Sr Urban Transport Specialist Washington, DC Dawei Yang Procurement Specialist Beijing, China Roy L. Sumner Consultant Washington, DC Zhefu Liu Senior Social Development


Boping Gao Consultant Washington, DC Liren Duan Consultant Beijing, China Yi Geng Financial Management


Xuan Peng Team Assistant Beijing, China Jingkang Zeng Consultant Beijing, China Xiaoguang Yang Consultant Beijing, China

28

(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs)Lending

FY96 To be included FY97 To be included FY98 232.03 FY99 5.74

Total: 734.26 Supervision/ICR

FY00 26 93.29 FY01 17 46.30 FY02 16 93.64 FY03 14 52.28 FY04 12 62.14 FY05 19 41.72 FY06 19 58.32 FY07 8 37.59

Total: 131 574.83

29

Annex 5. Beneficiary Survey Results Not applicable

30

Annex 6. Stakeholder Workshop Report and Results

Urumqi Urban Transport Development Challenges Workshop Oct. 25 to 26, 2005

Summary Strategy Statement

A. Achievements of Urumqi’s urban transport development since the project started:

1) Extended road network with completion of Outer Ring Road; 2) Rehabilitated over one thousand local roads; 3) Completed metro study, road accident study, etc.; 4) Began road network improvement, public transport network improvement,

parking studies, etc.; 5) Began development of urban road asset management system; 6) Completed development of motor vehicle emission control strategy; 7) Began study of public transport ITS, implementation of Outer Ring control and

ATC systems; 8) Began public transport reform process; and 9) Change in attitudes away from just new road construction toward more

comprehensive interventions. B. Development objectives:

a) Road construction only cannot solve traffic congestion; building more roads for private cars will lead to traffic paralysis, economic suffering, environmental deteriorating, and life quality reduction.

b) The city’s future competitiveness will be based on its attractiveness to highly qualified and creative professionals. The objective of the city development is to increase its quality of life and this is also the final goal of “putting people first”.

c) Therefore, Urumqi will adopt a radically new model – giving priority to public transport, adopting transit-oriented development, fully integrating all transportation modes including pedestrian and non-motorized vehicles with land use development, developing public transport infrastructure which will be cost effective, environmental friendly, attractive to the needs of all residents, adopted to Urumqi’s characteristics, and sustainable for the city’s long-term development.

C. Future actions:

Implement recommendations of road accident study, including public communication program.

Implement motor vehicle emission control strategy, including public communication program.

Initiate a single on-going, comprehensive, multi-modal planning process, incorporating all transportation modes a) Strong, formal link to land-use/master planning b) Strong, formal link to capital budget development process

31

c) Rational and objective, creating sound technical basis for investment decision-making

Implement public transport institutional reform, strengthening government policy, planning, budgeting, regulation, performance monitoring functions.

Launch public transport priority demonstration/pilot project leading to BRT. Implement action program for traffic management. Implement Road Maintenance Management Information (RMMI) system to

complement urban road system. Create unified, multi-modal, on-going transport asset management and budgeting

process. Develop and implement a parking management strategy. Form an urban parking entity (a single authority including all concerned government

agencies). Initiate a study of transport financing alternatives, addressing all potential sources for

a stable, predictable finance stream. Pursue institutional development and capacity building:

d) Training for government technical staff in traffic and parking management planning and operations

e) Training of traffic police in traffic management and transit priority enforcement

f) Public transport planning/management training in a variety of areas, e.g., BRT, financial planning, concession, ITS

g) Peer reviews and discussions with other Chinese cities on key technical and policy issues, e.g., BRT, traffic and parking management

h) Training for RMMI system staffing i) Training for implementing MVECS

32

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR The following sections paraphrase the main points of the borrower’s ICR and other comments received from the PEO in May 2008. Project Objectives The borrower’s ICR concluded that the objectives of the project were achieved as a result of the following: • Successful completion of urban road construction program and general improvement

in the level of operations and maintenance management • Considerable progress in traffic management and road safety resulting in greater

throughput, fewer accidents and fatalities • Improvements to public transport infrastructure and the quality of services • Positive initial results from environmental improvement programs including air

pollution control, green landscaping, and noise abatement • General capacity improvement and establishment of needed institutions such as

transport planning and modeling unit, road asset information management center, parking management centre, and vehicle pollution control center

Implementation by the Bank • The project management procedures of World Bank (from concept to

implementation) contributed to the project’s success. The World Bank safeguards and requirements for public involvement, environmental mitigation and resettlement were critical for the successful implementation of the project and positive results. In specific, the requirement that “the living standard for the people resettled should be better than before” is worthy of application in local projects.

• The quality of the project at entry was good. The project’s comprehensive approach proposed by the World Bank was appreciated by the borrower. The project included not just road building, but multi-modal components that proved to be very valuable such as traffic management, public transport, environmental management and institutional development.

• The supervision by the World Bank was effective. Many details of the project, procedures, and management knowledge were learned by the borrower through supervision.

• The possibility of revising the loan agreement and the flexibility shown by the World Bank in this regard was helpful in allowing the borrower to maximize the use of the loan.

Implementation by the Borrower • The Ring Road and road maintenance components were completed in accordance

with implementation plan, while other, non-road components were completed with some delay. The main reasons for the slow progress were: (1) at the beginning of the

33

project, the municipal government and the Project Executive Office focused on the Ring Road, (2) the unit and staff lacked experience in management of large projects, and (3) the climate exacerbated delays as the construction season lasted 6 months or less.

• Although lacking implementation experience for such a comprehensive project, the borrower completed the project and achieved the main objectives through hard work. The borrower also gained a great deal of experience in project management, procurement, resettlement, and financial management, and has utilized the experience on other local projects.

• Ring Road was implemented by the RR Executive Office. The project was started in June 2000 and was opened in November 5, 2004. Xinjiang DRC organized the acceptance of the completion of Ring Road in September 2005. The construction quality of all products achieved compliance. Ring Road operation and maintenance work was transferred to the municipal utility bureau in August 23, 2006.

• Several engineering innovations were studied and implemented as a result of the project including anti-skid, low-noise pavement, asphalt pavement cracks control techniques, road tunnel fire retardant, pavement durability measures and others.

• Relevant policies and institution were established to ensure lasting outcomes from the project. The most important of these are summarized in the next sections.

Policy Development

1) Ring Road development policy On March 7, 2006 Municipal People's Government 34th executive meeting adopted the “toll collection and management regulation for road and bridge funded by loan". 2) Public transport priority By decree of national and province government, the Urumqi Government issued a policy note in September 2005 titled “Implementation Options on Prioritizing the Development of Urban Public Transport in Urumqi.” 3) Vehicle emission pollution control policy With the support and endorsement of Urumqi Municipal People's Government, UEPB issued a policy report of “control measures for the prevention and control of vehicle emission pollution." UEPB was tasked with implementing it and also drafting the "Urumqi City vehicle emission control plan" with relevant laws and regulations. 4) Traffic management policy Urumqi in recent years promulgated the "Urumqi City Road Management Ordinance", "Urumqi City temporary parking management plan" (adopted on June 28, 2005), and the notice about “clean-up of illegal road-occupation."

Institutional Development 1) Urumqi Urban Comprehensive Transport Projects Research Center

34

The Centre is an institution under the management of UCC, conducting studies of comprehensive urban transport development strategy, urban transport policy, and specific transport topic studies. 2) Urumqi Urban Road Asset Information Management Center The center main task is analyzing, organizing and monitoring Road asset, evaluating maintenance, and developing a mid and long-term maintenance plan. 3) Vehicle Emission Monitor Center In accordance with relevant laws, regulations and technical standards, the agency introducing scheme of motor vehicle emission control, technical specifications and measures; collecting and analyzing the data of vehicle emission, proposed advice to control motor vehicle emission; supervising and guiding the work of the companies testing motor vehicle emission.

Other Development Effects 1) In accordance with World Bank policy, the scope of the Ring Road resettlement included 551 acres of land, demolition of buildings with an area of 257,505 square meters, 1,187 affected families, and 291 affected units. The scope exceeded the RAP because of design changes. The project also focused on the resolution of several sensitive issues, such as resettlement of YaShan area, the resettlement of Lanzhou Temple, the resettlement of LiuDaoWan public housing and mosque. During relocation, the project hired consultants to monitor and evaluate the work of relocation. The assessment results show that the resettlement targets identified in RAP were achieved, and the living standards and work environment of project affected person/units were improved. 2) The project stimulated the local economy with about 2 billion Yuan in domestic demand for labor and materials. Road-building required a great deal of direct consumption of steel, cement, asphalt, gravel, energy, and equipment, thereby stimulating the development of industries, while the implementation of the project also provided a lot of job opportunities and promoted the coordinated development of the city as a whole.

Overall Lessons Learned 1）The city’s original plan and project design did not consider two important factors in the design of the Ring Road. First, a ZhiZhushan tunnel was not included but was deemed to be necessary after implementation. Second, the land near SuZhou Road section of the Ring Road was used as a logistics and distribution center (rather than the planned industrial park) resulting in severe congestion on this section. 2）High staff turnover had an impact on the efficiency of knowledge transfer. As the project was implemented over many years, many key positions had to be filled more than once. Training and experience did not accumulate as much as it should have. 3）Disbursements were slow because of overly complicated local procedures resulting in delays and loss of information. There were numerous layers for approval including the subcomponent unit, PEO, Construction Investment Company, Municipal Finance Bureau, and Provincial Finance Bureau.

35

Other Comments and Suggestions 1) The Bank’s ICR is well structured and the analysis is deep. 2) Some terms should be explained, such as ISR, QAG, core ICR, SIL, and the different rating should be explained too, such as satisfactory, moderately satisfactory. That is an opportunity for the borrower to learn something as well. 3) PDO indicator 7 seemed redundant considering that indicator 8 reflects same information. It is more suitable for a city with large growth rate of vehicles. 4) The PDO indicator should use the readily available data in the city, avoiding new or extensive data collection effort, thereby ensuring the veracity of the baseline and target values. 5) Borrowers implementing similar World Bank projects could have better communication and learn more from each other. The Bank could provide opportunities for this by organizing annual meeting of various transport project PEOs. 6) World Bank documents should be provided and/or accepted in Chinese, avoiding issues of quality and delay of the translation by the local PEO. 7) The scope of the Bank loan should extend to resettlement, which will lighten financial pressure on borrower and making the implementation of the resettlement more compliant with the requirements of the Bank.

36

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

Not applicable

37

Annex 9. List of Supporting Documents The World Bank, Urumqi Urban Transport Improvement Project (UUTIP): Project Appraisal Document, Report No. 20157-CHA, November 27, 2000. The World Bank, UUTIP Aide-Memoires and Implementation Status and Result Reports the, 2000-2007. The World Bank, UUTIP Minutes of Negotiation, March 23, 2000. The World Bank, Urumqi Urban Transport Improvement Project: Loan Agreement and Supplemental Letters, Loan No. 4590-CHA, February 9, 2001 (revised December 15, 2006). Urumqi UUTIP Office. “Borrower’s Implementation Completion and Results Report.” May 2008. Urumqi UUTIP Office. “Urumqi Project Completion Report (Draft).” 11/2007. Urumqi UUTIP Office. “Urumqi Project Evaluation Report (Draft).” 11/2007.

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Annex 10. Final Set of Performance Indicators, Definitions, Baseline and Targets As updated by PEO on August 14, 2000 and attached to Supplemental Letter by the UMG

Objective Performance Indicators Defined As: Baseline

End-2002

End-2004

Responsible Agency

37.8 km/hr +4.0% +15.0% Youhou Lu (N-S)(xinyi road--xinhua North road) 4.55km (28.9 km/hr)

26.8 km/hr +3.5% +12.0% Yangzijiang-Changjiang, Lu (N-S) 2.8 km (24.4 km/hr)

28.8 km/hr +4.3% +13.0% Guangming-Qingnian Lu (E-W)3.85 km (25.4 km/hr)

13.60 km/hr +5.0% +20.0%

A. Improve and

manage the urban

road network to

support economic

Cross-town Journey (Travel) speeds on key

north-south corridors and

CBD links in both directions of

Non-peak and peak by moving

car method Mingzhu Lu (E-W) 0.91 km (7.5 km/hr) PSB Total maintenance area 6 million s.m +4.0% +7.0%

Total maintenance cost 164 million Y/year +73% +110%

among：the maintenance cost of government

14 million RMB +128% +136%

B. Improve maintenance of road investment

cost and expenditures

% of fair condition in observed year 70% 82% 86% UMEB

Throughput by mode(in person-

trip) with occupancy

Classified screenline vehicle flows by mode with average occupancy to get person-trip throughput across the screenline in peak-period and non-peak-period

2.58/2.76 time/person-

day

+5%

+7%

UCCTPI Total for the city: By district, brigade (Districes below and for Dongshan and Toutunhe) 1148/297 Tianshan Distruct 380/67 Shayibake 222/56 xinshiqu 333/78 Shuimogou 131/25

C.Increase safety

andproductivity of the

road network

Accidents/ Fatalities

Also , Accidents / fatalities per'000 registered motor vehicles 10.5/0.36

-11%/ -17%

-18%/ -25%

PSB

Mode Share(motorized trips)

As determined by classified counts at screenlines and/or home interview surveys

65.0% +5.0% +7.0%

Operating cost-recovery (UPTC)

Operating revenue/operating cost (including depreciation on vehicle)

90% +3% +5%

Unit Costs Operating cost/ vehicle (or seat) operating kilometers 1.8Y/km -2%

-3%

D. Increase

the efficiency

and attractiven

ess of public

transport services

CBD Bus speeds Journey time survey for 6.8 km bus priority corridor

14.8km/hr +11.5% +20%

UPTC

39

(Monitoring Indicators only:)

Annual Subsidy

Negotiated operating/policy subsidy between UMG and UPTC

2-3 million RMB -75% -100%

Staffing Staff to Bus ratio 7.1:1/a 6.0:1 5.5:1

Seat Number UPTC Public Bus Seat Number 69000 +12% +25%

Implementation of the

% of vehicles tested passing standards, by type of vehicle /license

71.5% 80% 90%

MVECS # of vehicles tested, by type of vehicle /license 70872 +10% +15%

E. Protect and

Improve the

Environment Greening of the

city

Area of landscaping (greening area for built district) m^2

27.33 million +1.5% +2.0%

UEPB

Note: These above figures are revised, verified and determined, based on the relevant materials provided by various concerning agents. For objective A, the travel speeds in bracket is the morning peak-period speeds

West Henan Road

East Henan Road

Qiantangjiang Road Tuanjie Road

Baos

han

Road

Nanliangpo Road

Tunnel

Jinyin

gda

Dong

huan

Ro

ad

Wux

in R

oad

Qid

aow

an R

oad

Nanhu Road

Altay Road Suzhou Road Suzhou Road

West G

uojing Road

West G

uojing Road

Road

Suzhou RoadFlyover

Qiantangjiang Road Flyover

Wuchang RoadInterchange

XishanInterchange

Wuchang Road

Beijing Road

Beijing Road

Wes

t Ka

shi

Road

Tianjin Road

Liyus

han

Roa

d

Altay Road

Xinyi Road

Youhao Road

Nanhu Road

East Kararay Road

West Karamay Road

Xishan Road

W

umin

g Ro

ad

Xihong Road

Hongshan Ro

ad

Qinnian Road

Heinongjiang Road

Qitai Road

Renmin Road

Han

ghe

Road

Cha

ngjia

ng R

oad

Xinhua Road

Jiefang Road

Tuanjie Road

Dawan

Roa

d

Yuejingjie Road

Xingfu Road

Liudaowan Road H

etan Expressway

Hetan Expressway

HEISHANTOU

YEJIAN

HangjinHospital

JIUJIAWAN

SouthRailwayStation

Fifth BusRepair Facility

Liudaowan Coal Mine

LIUDAOWAN

Coal MineSlope Area

MUCAICHANG

DONGHOUJIE

YAMALIKE

Urumqi

B a y o fB e n g a l

East

China

Sea

Yel lowSea

BEIJING

HEILONGJIANG

JILIN

LIAONING

NEI MONGOL

HEBEI

BEIJING

TIANJIN

SHANXI

SHAANXIGANSUQINGHAI

XINJIANG

XIZANG

NIN

GXI

A

SHANDONG

HENAN

ANHUI

JIANGSU

ZHEJIANG

SHANGHAI

SICHUAN

CHO

NGQIN

G HUBEI

GUIZHOU

HUNAN JIANGXIFUJIAN

GUANGXIGUANGDONG

TAIWAN

HAINAN

YUNNAN

HONG KONGMACAO

RUSSIANFEDERATION

MONGOLIA

KAZAKHSTAN

PHILIPPINES

VIETNAM

REP. OFKOREA

D.P.R. OFKOREA

LAOP.D.R.

KYRGYZREP.

National CapitalProvince BoundariesInternational Boundaries

This map was produced by the Map Design Unit of The World Bank.The boundaries, colors, denominations and any other information shown on this mapdo not imply, on the part of The World Bank Group, any judgment on the legal statusof any territory, or any endorsement or acceptance of such boundaries.

0 1 2 3 4

KILOMETERS

RING ROAD:

ELEVATED EXPRESSWAY

SURFACE EXPRESSWAY

TUNNEL EXPRESSWAY

URBAN ARTERIAL

LOCAL ROAD WORKS

NEW GRADE SEPARATED INTERCHANGE

NEW FLYOVER OR OVERBRIDGE

XINHUA ROAD PUBLIC TRANSPORTPILOT IMPROVEMENTS

OTHER ROAD IMPROVEMENTS

EXISTING:

ROADS

RAILROADS

INTERCHANGE

IBRD 30808R1

JULY 2008

CHINAURUMQI URBAN TRANSPORT IMPROVEMENT

PROJECTRoad Network Improvements