013 PRC PCR

Completion Report
Project Number: 35339

Loan Number: 2051
August 2012
People’s Republic of China: Yichang–Wanzhou

Railway Project
CURRENCY EQUIVALENTS
Currency Unit – yuan (CNY)
At Appraisal At Project Completion

(18 November 2003) (22 December 2010)
CNY1.00 = $0.1208 $0.1501
$1.00 = CNY8.2770 CNY6.6630
ABBREVIATIONS
ADB – Asian Development Bank
EIA – environmental impact assessment
EIRR – economic internal rate of return
EMP – environmental management plan
FIRR – financial internal rate of return
FSDI – Fourth Survey and Design Institute of China Railway
FCTIC – Foreign Capital and Technical Import Center
MOR – Ministry of Railways
PRC – People’s Republic of China
SEPP – soil erosion protection plan
TA – technical assistance
WACC – weighted average cost of capital
YWR – Yichang–Wanzhou Railway
YWRCH – Yichang–Wanzhou Railway Construction Headquarters
WEIGHTS AND MEASURES

km – kilometer
m2 – square meter
m3 – cubic meter
mu – a Chinese unit of measurement (1 mu = 666.67 m2)
NOTES
(i) In this report, "$" refers to US dollars, unless otherwise stated.
Vice-President S. Groff, Operations 2

Director General R. Wihtol, East Asia Department (EARD)
Director H. Sharif, People’s Republic of China Resident Mission, EARD
Team leader F. Wang, Senior Project Officer (Financial Management), EARD

Team members W. Zhu, Senior Project Officer (Resettlement), EARD
Z. Niu, Senior Project Officer (Environment), EARD
Y. Gao, Project Analyst, EARD
In preparing any country program or strategy, financing any project, or by making any
designation of or reference to a particular territory or geographic area in this document, the
Asian Development Bank does not intend to make any judgments as to the legal or other status
of any territory or area.
CONTENTS
Page
BASIC DATA i
I. PROJECT DESCRIPTION 1
II. EVALUATION OF DESIGN AND IMPLEMENTATION 1
A. Relevance of Design and Formulation 1
B. Project Outputs 3
C. Project Costs 5
D. Disbursements 5
E. Project Schedule 6
F. Implementation Arrangements 6
G. Conditions and Covenants 7
H. Related Technical Assistance 7
I. Consultant Recruitment and Procurement 8
J. Performance of Consultants, Contractors, and Suppliers 8
K. Performance of the Borrower and the Executing Agency 9
L. Performance of the Asian Development Bank 9
III. EVALUATION OF PERFORMANCE 9
A. Relevance 9
B. Effectiveness in Achieving Outcome 10
C. Efficiency in Achieving Outcome and Outputs 11
D. Preliminary Assessment of Sustainability 12
E. Impact 12
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14
A. Overall Assessment 14
B. Lessons 14
C. Recommendations 15
APPENDIXES
1. Project Framework 16
2. Chronology of Major Events 20
3. Project Cost and Financing Plan 21
4. Projected and Actual Contract Awards and Disbursements 22
5. Appraisal and Actual Implementation Schedule 23
6. Organization Chart 24
7. Compliance with Loan Covenants 25
8. Contract Packages Financed by the Asian Development Bank 34
9. Technical Assistance Completion Report for Strengthening Involuntary Resettlement
Practices 37
10. Technical Assistance Completion Report for Ensuring Safeguard Practices 39
11. Economic Reevaluation 41
12. Financial Reevaluation 47
13. Social Impact and Poverty Reduction in the Project Area 50
14. Land Acquisition and Resettlement 57
15. Environmental Impact Analysis 63
BASIC DATA
A. Loan Identification
1. Country People’s Republic of China

2. Loan Number 2051
3. Project Title Yichang–Wanzhou Railway Project
4. Borrower People’s Republic of China
5. Executing Agency Ministry of Railways
6. Amount of Loan $500 million
7. Project Completion Report Number PCR: PRC 1332
B. Loan Data
1. Appraisal
– Date Started 17 July 2003
– Date Completed 11 August 2003
2. Loan Negotiations
– Date Started 5 November 2003
– Date Completed 8 November 2003
3. Date of Board Approval 15 December 2003
4. Date of Loan Agreement 27 May 2004
5. Date of Loan Effectiveness

– In Loan Agreement 25 August 2004
– Actual 26 July 2004
– Number of Extensions 0
6. Closing Date
– In Loan Agreement 30 June 2010
– Actual 23 December 2011
– Number of Extensions 2
7. Terms of Loan
– Interest Rate London interbank offered rate (LIBOR) based
– Maturity 26 years
– Grace Period 6 years
8. Terms of Relending
– Interest Rate London interbank offered rate (LIBOR) based
– Maturity 26 years
– Grace Period 6 years
– Second-Step Borrower Ministry of Railways
ii
9. Disbursements
a. Dates
Initial Disbursement Final Disbursement Time Interval
26 July 2004 23 December 2011 89 months
Effective Date Original Closing Date Time Interval
26 July 2004 30 June 2010 71 months
b. Amount ($)
Original Last Revised Amount Net Amount Amount
Category Allocation Allocation Canceled Available Disbursed
Civil works 349,000,000 382,077,567 0 382,077,567 382,077,567
Equipment 77,180,000 27,012,740 0 27,012,740 27,012,740
Materials 45,820,000 87,936,233 0 87,936,233 87,936,233
Consulting services and training 1,300,000 473,460 0 473,460 473,460
Front-end fee 2,500,000 2,500,000 0 2,500,000 2,500,000
Unallocated 24,200,000 0 0 0 0
Total 500,000,000 500,000,000 0 500,000,000 500,000,000
Source: Asian Development Bank.
C. Project Data
1. Project Cost ($ million)

Cost Appraisal Estimate Actual
Foreign Exchange Cost 1,085.40 573.76
Local Currency Cost 1,278.10 3,551.32
Total 2,363.50 4,125.09
2. Financing Plan ($ million)

Cost Appraisal Estimate Actual
Implementation Costs
Borrower Financed 1,693.20 3,334.90
ADB Financed 497.50 497.50
Total 2,190.70 3,832.40
IDC Costs
Borrower Financed 170.30 290.19
ADB Financed 2.50 2.50
Total 172.80 292.69
ADB = Asian Development Bank, IDC = interest during construction and commitment charge.
Sources: Asian Development Bank.
iii
3. Cost Breakdown by Project Component ($ million)
Appraisal Estimate Actual

Foreign Local Total Foreign Local
Total Cost
Component Exchange Currency Cost Exchange Currency
A. Base Costs
1. Civil Works 787.20 849.10 1,636.30 443.73 2,510.03 2,953.76
2. Railway Materials 45.80 34.40 80.20 93.39 118.57 211.96
3. Signaling, Communications, 17.80 21.30 39.10 0.00 94.71 94.71
MIS
4. Electric Power and 17.50 58.70 76.20 0.00 182.36 182.36
Electrification
5. Operational, Safety, and 41.00 12.20 53.20 33.56 34.74 68.30
Maintenance Equipment
6. Land Acquisition and 0.00 42.00 42.00 0.00 95.67 95.67
Resettlement
7. Environmental Protection, 0.90 3.00 3.90 0.00 18.06 18.06
Mitigation, and Monitoring
8. Administration, Consulting 1.30 32.00 33.30 0.58 207.00 207.58
Services, and
Miscellaneous Cost
Subtotal (A) 911.50 1,052.70 1,964.20 571.26 3,261.14 3,832.40
B. Contingencies
1. Physical 77.30 79.60 156.90 0.00 0.00 0.00
2. Price Escalation 32.30 37.30 69.60 0.00 0.00 0.00
Subtotal (B) 109.60 116.90 226.50 0.00 0.00 0.00
C. Front-End Fee 2.50 0.00 2.50 2.50 0.00 2.50
D. Interest During 61.80 108.50 170.30 0.00 290.19 290.19

Construction
Total 1,085.40 1,278.10 2,363.50 573.76 3,551.32 4,125.09
MIS = transport management information system.
Sources: Asian Development Bank and the Ministry of Railways.
4. Project Schedule
Item Appraisal Estimate Actual
Date of Contract with Consultants Jul 2004 Mar 2008
Completion of Engineering Designs Aug 2003 Aug 2003
Civil Works Contract
Date of Award Aug 2004 Sep 2004
Completion of Work Dec 2008 Oct 2010
Equipment and Supplies
Dates
First Procurement Jun 2006 Jan 2005
Last Procurement Jun 2009 Jul 2007
Completion of Equipment Installation Jun 2009 Oct 2010
Start of Operations Jan 2010 Dec 2010
iv
5. Project Performance Report Ratings

Ratings
Development Implementation
Implementation Period Objectives Progress
From 1 Dec 2003 to 31 Mar 2004 Highly Satisfactory Satisfactory
From 1 Apr 2004 to 31 Aug 2005 Satisfactory Satisfactory
From 1 Sep 2005 to 30 Sep 2007 Satisfactory Highly Satisfactory
From 1 Oct 2007 to 31 Dec 2011 Satisfactory Satisfactory
D. Data on Asian Development Bank Missions

No. of No. of Specialization
a
Name of Mission Date Persons Person-Days of Members
Fact-finding 19 Nov–6 Dec 2002 5 44 a, b, c, d, e
Appraisal 17 Jul–11 Aug 2003 7 66 a, b, d, e, f, g
Loan Negotiation Mission 5–8 Nov 2003 3 9 a, e, g
Inception Mission 7–13 Dec 2004 2 12 h, i
Review Mission 1 6–11 Nov 2005 3 15 h, i, d
Review Mission 2 28 Nov–1 Dec 2006 3 4 h, i, d
Midterm Review Mission 26–29 Nov 2007 4 8 h, i, j
Review Mission 3 7–14 Oct 2008 4 28 i, k, l, m
Review Mission 4 9–12 Nov 2009 3 9 i, k, l
Review Mission 5 1–3 Nov 2010 3 6 i, k, l
Project Completion Review 21–29 Mar 2011 4 30 i, k, l, m
a
a = financial specialist, b = resettlement specialist, c = transport engineer, d = environmental specialist or
consultant, e = project specialist, f = program officer, g = counsel, h = transport specialist, i = project analyst, j =
project management officer, k = financial management officer, l = resettlement officer, m = environment officer.
I. PROJECT DESCRIPTION
1. Railways play an important role in transportation in the People’s Republic of China (PRC)
due to the large land area and population size. The Government of the PRC has been
increasing the railway transport capacity to meet economic and social development needs.
During 2001–2010, the rail network expanded by 30%, from 70,057 kilometers (km) to 91,000
km. The total capital investment in the sector was CNY2,431 billion during the Eleventh Five-
Year Plan (11th plan) period covering 2006–2010. There have been substantial increases in
both passenger and freight traffic. From 2001 to 2011, passenger traffic increased by 101.6%,
from 476.7 billion passenger-kilometers (p-km) to 961.2 billion p-km, and freight increased by
100.5%, from 1,469.4 billion ton-km to 2,946.5 billion ton-km. Despite such growth, railway
capacity still seriously lagged behind demand. The government’s plan for railway development
gives priority to expanding the railway network and constructing new lines in the central and
western regions. The Yichang–Wanzhou Railway (YWR) was initially proposed in the Tenth
Five-Year Plan, 2001–2005 (10th plan) of the Ministry of Railways (MOR) and was then
included in the 11th plan.
2. The YWR provides a new rail link in the national network, connecting Yichang in Hubei
Province with Wanzhou in Chongqing Municipality. The 377-km railway was the last missing
section of the east–west railway connection between Shanghai and other economic centers on
the east coast and Chongqing and Chengdu in the western region. It reduced the travel distance
significantly compared with other railway routes and alleviated serious network bottlenecks. The
railway traverses eight counties and districts in a mountainous region in three prefectures which
are less developed due to poor accessibility and expensive motorized transport. The project’s
objective was to remove transport barriers, reduce transport and logistics costs, and promote
pro-poor economic and social development. The YWR is the first railway link in the region and
constitutes a strategic link in the central PRC railway corridor. Its connection to the national
network has improved traffic maneuverability, reduced transportation constraints on other parts
of the national railway network, and lowered network transportation costs. The project
framework is in Appendix 1 and the chronology of major events is in Appendix 2.
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
3. The strategy of the Asian Development Bank (ADB) for the railway sector in the PRC
focuses on helping to (i) expand the railway system by constructing new lines in unserved and
less-developed areas, (ii) modernize and increase the capacity to improve efficiency on key
routes of the national railway system, (iii) commercialize railway operations to sustain efficient
operations, and (iv) increase railway competitiveness in the transport sector through
restructuring and reform. This strategy remained unchanged at the time of appraisal and project
completion. ADB has provided a series of assistance programs and projects in the development
of railways in poor and less-developed inland provinces to promote sustainable economic
growth and reduce poverty. The government’s Western Development Strategy aimed to narrow
development disparities between the western and coastal regions, and this was also the key
theme of the 10th and 11th plans. The project supported the government’s strategy and was
consistent with ADB’s country operational strategy.1
1
ADB. 2002. Country Strategy and Program Update (2003-2005): People’s Republic of China. Manila.
2
4. ADB provided project preparatory technical assistance 2 (TA) to review alternative

alignments, assess the project’s feasibility, and strengthen arrangements for ensuring
compliance with safeguard requirements. In addition to construction of the railway, the project
included elements that added value and corresponded to ADB’s strategic priorities, such as
providing consulting services to strengthen the capacity of MOR, providing track maintenance
equipment, developing container terminals, and improving capacity of railways connecting to the
YWR. Recognizing the complexity of project implementation, project design included additional
measures for strengthening land acquisition, monitoring resettlement, and mitigating key
environmental risks.3 Through the TA for strengthening involuntary resettlement practices,4 the
capacity of the project counterpart institutions, including the local government dealing with the
land acquisition and resettlement, was enhanced; ADB's resettlement and social safeguard
good practices were disseminated; and a computer-based management information system for
resettlement reporting was developed. Through the attached TA for ensuring safeguard
practices5 an independent environmental panel was engaged to oversee compliance with ADB’s
safeguard polices with regard to potential disturbance of the Chinese sturgeon breeding
grounds and other sensitive species due to bridge construction over the Yangtze River. 6
5. The YWR was originally designed as a single-track, electrified, standard-gauge Class I

railway. In September 2006 the government approved the proposal to double-track the 288-km
section from Yichang to Liangwu (close to Lichuan). The double tracking was considered
necessary for the rapid development of the railway network in the PRC.7 The YWR forms part of
the Shanghai–Chongqing–Chengdu Railway corridor, which connects the major cities of
Shanghai, Nanjing, Wuhan, Chongqing, and Chengdu. The YWR is connected at the eastern
end with the Wuhan–Yichang railway, and at the western end with the Chongqing–Lichuan
Railway8 at Liangwu, and with the Daxian–Wanxian Railway9 at Wanzhou. The Wuhan–Yichang
and Chongqing–Lichuan railways, as well as the rest of the sections of the Shanghai–Chengdu
corridor, are double-track electrified lines, which required the double tracking of the YWR to
ensure consistent specification of the corridor. The original design had anticipated the double
tracking,10 and therefore the foundations of bridges and tunnels had been designed to allow for
double tracking. Simultaneous construction of the double-tracked section, instead of double
tracking at a later stage, was justified because it reduced the impacts on the environment by
utilizing the same spoil disposal sites, work camps, and construction access roads, and reduced
the need to remobilize construction equipment and vehicles, and thus reduced the cost
significantly.
2
ADB. 2002. Technical Assistance to the People's Republic of China for Preparing the Yichang–Wanzhou Railway
Project. Manila.
3
The major environmental risk identified was potential adverse impacts on habitats of Chinese sturgeon due to the
construction crossing the Yangtze River at Yichang city.
4
ADB. 2002. Technical Assistance to the People’s Republic of China for Strengthening Involuntary Resettlement
Practices for the Yichang–Wanzhou Railway Project. Manila.
5
ADB. 2003. Technical Assistance to the People’s Republic of China for Ensuring Safeguard Practices for the
Yichang–Wanzhou Railway Project. Manila.
6
ADB. 2006. Ensuring Safeguard Practices for the Yichang–Wanzhou Railway Project. Consultant’s report. Manila.
The panel remarked that “This all demonstrates that, with adequate care, even a major bridge can ‘step lightly’
across the natural environment”.
7
In 2004, the State Council of the PRC approved the railway development plan for the period up to 2020, which
seeks to expand the railway network to 100,000 km.
8
ADB. 2008. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the
People’s Republic of China for the Chongqing–Lichuan Railway Development Project. Manila.
9
People’s Republic of China for the Daxian–Wanxian Railway Project. Manila.
10
People’s Republic of China for the Yichang–Wanzhou Railway Project. Manila (para. 25).
3
B. Project Outputs
1. Yichang–Wanzhou Railway
6. The YWR comprises 324 km in Hubei Province and 53 km in Chongqing Municipality.

Due to the difficult terrain, the project involves a large number of bridges (including two over the
Yangtze River) and tunnels; 74% of the total length is bridges and tunnels, which is the highest
percentage among railways constructed before 2010 in the PRC. Construction commenced
during September–December 2004. By the end of 2007, subgrades, bridges, most tunnels, and
culverts were completed. Overall progress was prolonged by the construction of the 10.5 km
Qiyueshan Tunnel, which was at the point with the most difficult terrain. During its construction,
about 200 caves, 3 underground rivers, and 15 geological faults were encountered, which
required special treatments and mitigation measures. The tunneling works caused the overall
construction schedule to be extended by almost 1 year. Track laying was completed in August
2010. Buildings and ancillary facilities were implemented simultaneously to match the
implementation schedule of subgrade works. Electrification, signaling, and telecommunication
works were completed in October 2010.
7. The YWR was recognized as the most challenging railway project of the period given the
complex topographical, geological, engineering, and hydrogeological conditions. Located in the
western region of Hubei Province, it passed through the Yungui Highlands at an elevation of
700–1,500 meters, and the watershed of the Yangtze and Qing rivers. Limestone is distributed
throughout the entire geological area, and 70% of the route is on karst topography.11 Faults and
folds, underground caves, landslides, underground rivers, methane, and high ground stresses
are among the prominent problems encountered. Of the 159 tunnels, 32 are longer than 3 km, 3
are longer than 10km, and the longest one is 13.84 km. There are 253 bridges, the highest of
which has 135-meter high piers, and the largest concrete span is 275 meters. Track laying on
sections with continuous long slopes with the maximum gradient of 18‰ also posed high risks.
In overcoming these technical challenges, the MOR has gained valuable experience in
constructing complex railways in mountainous areas.
8. Equipment and facilities for power supply, signals and telecommunication, and train
control systems were installed and commissioned. Thirteen traction substations were built and
the power supply station anticipated at appraisal was not needed because of power supply
facilities established under another project in the region. Overhead contact wire of 923 km was
installed. Several key design standards and specifications were upgraded, including use of
ballastless embankments in tunnels longer than 3 km, seamless track along the whole line,
computerized interlocking, synthetic lightning protection, computerized signal control, enhanced
tunnel lighting and ventilation, cable trough in subgrades, safety fences, and fire-fighting design.
Recognizing the potential risks of the mountainous environment to operational safety, specific
measures were incorporated in the design, including using advanced fiber-optic sensor
technology to monitor and report natural disasters such as landslides, rockfalls, and rock mass
failures, and installing video monitors to monitor key bridges and tunnels. The structure gauge
of the YWR permits operation of double-stack container trains, the first national railway to
incorporate this requirement in the design. Double-stack container transport operation on
electrified track reduces land use; increases carrying capacity by 60% on the same track;
improves energy and environmental efficiency by 40%–60%; and allows cargo to move more
quickly, safely, and efficiently.
11
Karst refers to porous limestone containing deep fissures and sinkholes and characterized by underground caves
and streams.
4
9. The MOR issued its provisional acceptance in November 2010 after completing the
check on construction quality and the transportation safety assessment. Public safety
campaigns were conducted to familiarize the local people with safety issues related to the
electrified railway. The local governments also established offices to assist the safety efforts.
Trial operation of the YWR started on 22 December 2010 for both passenger and freight
operations. Responsibility for operation of the YWR has been assigned to the Wuhan Railway
Administration for the Yichang–Liangwu section, and to the Chengdu Railway Administration for
the Liangwu–Wanzhou section. The design speeds of 160 kilometers per hour (km/h) for the
double-tracked section and 120 km/h for the single-tracked section have been achieved. Five
pairs of freight trains and 17 pairs of passenger trains were operated on the YWR for the initial
stage. Telecommunication, signaling, electrification, and traffic control system equipment were
found in good condition at project completion review.
2. Stations, Freight Yards, and Industrial Sidings
10. The number of new stations was reduced from 24 as originally planned to 10. In addition,
Yichang East and Wanzhou stations were expanded from existing stations. Freight yards were
established at these stations. The reduced number of new stations was due to the double
tracking of the Yichang–Liangwu section, which eliminated the need to construct passing
stations. All stations are fully operational with appropriate equipment and facilities. Main station
access and link roads have been completed, and public bus services provided. One industrial
siding of 5.9 km with an annual capacity of 500,000 tons was constructed in Enshi. Construction
of several industrial sidings is planned in Yichang. In addition, 600 km of access roads were
constructed and handed over to the local governments; most of these roads have become the
main roads in remote mountainous areas, benefiting the local communities.
3. Operational Equipment and Environmental Protection Facilities
11. ADB financed a package of equipment for mechanized track maintenance. Compared
with conventional manual methods, the mechanized track maintenance reduces the interruption
to operations by 50% for major track repairs and by 60%–80% for routine maintenance; it also
improves maintenance quality. The operating speed of the first train after track maintenance has
increased from 15 km/h to 45 km/h. The track machines are based at track maintenance depots
and are being efficiently used and well maintained. Sufficient rolling stock has been provided by
the Wuhan Railway Administration and Chengdu Railway Administration. Environmental
protection facilities established under the project included wastewater treatment facilities
installed in all stations and sound barriers at sensitive sites. In addition, solar or electric heaters
were adopted to replace the originally proposed oil-burning boilers for specified stations and
residential quarters. The use of ballastless embankments and seamless track has greatly
reduced the noise impact during operation. In particular, shock absorbers were installed on the
bridges over the Yangtze River to alleviate the vibration impacts of railway carriages on the
habitats of aquatic animals, such as the Chinese sturgeon.
4. Consulting Services and Institutional Strengthening
12. Ten national supervision companies and five consulting firms and/or institutes with a
total contract value of CNY155.59 million were engaged for (i) supervision of the civil works
contracts, electrification and signaling engineering, and environmental protection measures; and
(ii) independent monitoring of resettlement implementation, impacts on Chinese sturgeon
habitats, and special monitoring of soil erosion. In view of the geotechnical complexity of the
5
terrain along the alignment, the MOR also employed national experts on tunnels and bridges to
evaluate the detailed structural designs and selection of construction methods, and conduct
onsite consultation on and diagnosis of technical problems encountered during construction.
The use of national expertise effectively helped to overcome the technical challenges.
13. ADB financed the international consulting services to develop the guidelines for
appraisal of railway investment projects.12 The guidelines introduced international best practices
in economic and financial appraisal methodologies that have been applied in the MOR
investment approval process. This component improved the MOR’s capacity to use quantitative
methods in project appraisal and decision making. Other consulting components—such as for
establishment of the financial system for line-based profitability and investment returns, and
diversifying financing sources and improving the utilization of foreign capital—were not
undertaken mainly due to the postponed reform timetable under the MOR’s institutional
framework. The component for increasing the business development and marketing capacities
for the YWR was also canceled, following MOR’s decision that the operating railway
administrations will separately develop business development and marketing options for the
YWR to enhance its financial viability.
C. Project Costs
14. The project cost at completion was CNY27,490 million, a significant increase from the
appraisal estimate of CNY19,563 million. The additional cost due to the double-tracked section
of the alignment (para. 5) accounted for 30% of the total cost. Modification to the original design
due to the complex topography and geological conditions for construction, upgrading of key
design standards, and additional considerations to improve operational safety standards are the
main reasons for the cost increase. Other factors are (i) increased land acquisition and
resettlement costs because of incremental compensation for building relocation and temporary
land use, and relocation of electricity and telecommunication lines; (ii) significantly increased
investment for environmental protection; (iii) significantly higher actual costs for administration,
consulting services, and miscellaneous expenditures as a result of increased supervision and
consulting services (para. 12); and (iv) higher interest during construction. The project cost in
US dollars increased from $2,364 million to $4,125 million as a result of the substantial
appreciation of the yuan against the US dollar during the implementation period.
15. The financing plan envisaged at appraisal included an ADB loan of $500 million
representing 21% of the project cost, a loan from the China Development Bank of $725 million
representing 31% of the project cost, and equity inputs from the MOR of $1,138 million
representing 48% of the project cost. ADB actually financed $500 million, representing 12% of
the project cost. Actual counterpart funds comprised MOR equity investment of $1,429 million
(35% of project cost), railway bonds of $698 million (17%), and loans from the China
Development Bank of $1,498 million (36%). The project costs and financing plan are in
Appendix 3.
D. Disbursements
16. The ADB loan proceeds of $500 million were fully disbursed from July 2004 to
December 2011. An imprest account was utilized. The average annual turnover ratio of 2.34
indicated efficient utilization of the imprest account. Direct payment and commitment
12
ADB. 2008. Economic and Financial Appraisal of Railway Investment Projects. Consultant’s report. Manila (Loan
2051-PRC).
6
disbursement procedures were also used. Of the loan proceeds, $382.08 million were used for
civil works, $27.01 million for equipment, $87.94 million for materials, $0.47 million for
international consulting services, and $2.50 million for front-end fee. The loan closing date was
extended from 30 June 2010 to 31 December 2011. The loan account was closed on 23
December 2011. The executing agency applied appropriate disbursement procedures and
ADB’s disbursement process was efficient. The projected and actual contract awards and
disbursements are in Appendix 4.
E. Project Schedule
17. The project was envisaged to be implemented over 6 years from 2004 to 2009.
Prequalification and bidding started on schedule following the advance actions modality, but
were completed 5 months later than the planned schedule. Civil works construction started in
January 2004 and was completed in October 2010, 22 months later than envisaged at
appraisal. Technical difficulties caused by geographic and topographical complexity were the
main reasons for the significant delay (paras. 6–7). Track laying could not start until June 2008
due to the construction of tunnels, and was completed in August 2010, 17 months later than the
original schedule. Equipment installation for telecommunications, signaling, and electrification
was completed in October 2010. Land acquisition and resettlement activities began in late 2003
and were largely completed by the end of 2005, however rehabilitation took much longer due to
delay in construction of the resettlement sites. Trial operation commenced on 22 December
2010, which was 1 year later than the original schedule. The appraisal and actual project
implementation schedule is in Appendix 5.
F. Implementation Arrangements
18. The implementation arrangements were appropriate. The MOR was the executing
agency for the project. A project coordination office consisting of key divisions under MOR’s
steering committee was established to provide overall guidance during project implementation.
The Zhengzhou Railway Administration Bureau and Chengdu Railway Administration Bureau
were the implementing agencies until 2007 when the MOR’s Railway Construction Management
Center started to supervise the implementation through the onsite YWR Construction
Headquarters (YWRCH). The Foreign Capital and Technical Import Center (FCTIC) coordinated
the project management office's tasks and was responsible for the procurement of ADB-
financed contracts, withdrawals of ADB loan proceeds, and reporting to ADB. The organization
chart is in Appendix 6.
19. The MOR assumed lead accountability for the land acquisition and resettlement, and the
institutional responsibility for implementing the resettlement plan rested with the local
governments in the provinces, prefectures, and counties traversed by the YWR. The
resettlement office under the YWRCH had overall responsibility for coordination, fund raising,
and internal monitoring and evaluation for land acquisition and resettlement implementation.
Railway support offices were established under the Enshi, Wanzhou, and Yichang municipal
and/or prefecture governments, which were responsible for implementing land acquisition,
house demolition, and relocation. The Fourth Survey and Design Institute of China Railway
(FSDI) was engaged to conduct external monitoring and submitted annual reports to the MOR
and ADB.
20. The YWRCH was responsible for environmental management and supervision during
the implementation period. Effective institutional arrangements were established to implement
the environmental management plan (EMP), which is part of the summary environmental impact
7
assessment (SEIA) and the soil erosion protection plan (SEPP) for the project. At the beginning
of the project, the YWRCH issued the Implementing Rules for Environment Protection and Soil
and Water Conservation to regulate and assess the performance of contractors in implementing
the EMP. Monitoring and mitigation measures were included in the covenants of the civil works
contracts. Local environmental monitoring stations were engaged to undertake onsite
monitoring of surface water and air quality, and noise. The Soil and Water Conservation
Monitoring Station of the Yangtze River Commission was contracted to monitor soil erosion as
per the SEPP. The FSDI was engaged as the environmental supervision engineer to supervise
implementation of the EMP and SEPP. The Yangtze Aquatic Institute of the Chinese Academy
of Aquatics monitored the impact on Chinese sturgeon from bridge construction over the
Yangtze River. During construction, the Beijing OASIS Environmental Protection Technology
Company was engaged to oversee the overall project environmental monitoring and submit
monitoring reports to the MOR and ADB. Contractors and construction supervision companies
had designated staff in the site management team to deal with environmental issues.
G. Conditions and Covenants
21. The loan covenants were considered adequate and major covenants were complied with.
The MOR completed the preparation for the trial operation within 2 months after the physical
completion, demonstrating strong capacity in operational organization and administration.
Adequate wagons and locomotives were provided and specific measures were taken to ensure
operational safety. The capacity of connecting lines was significantly expanded during 2003–
2010 through electrification of existing railway lines and construction of new lines. Container
terminals were completed in Chongqing (December 2009), Chengdu (May 2010), and Wuhan
(August 2010). National railways passenger transport tariffs have been applied on the YWR.
Freight tariffs for the YWR are CNY0.24/ton-km for local traffic and CNY0.16/ton-km for transit
traffic, which are higher than the national level of CNY0.12/ton-km. The only exception relates to
the operating ratio of the MOR of not higher than 75%. The actual values of the ratio fluctuated
in the 72%–93% range during the implementation period. Compliance with loan covenants is in
Appendix 7.
H. Related Technical Assistance
22. ADB provided two associated TA projects to ensure compliance with ADB’s safeguard
policy (para. 4). Under the TA for strengthening involuntary resettlement practices (footnote 3) ,
a resettlement training workshop was conducted for municipal and county resettlement officials
in the project area, a computer-based resettlement management information system was
established, and two international engineers with expertise in railway tunnels and bridges
conducted structural engineering review to identify technical risk factors. The TA strengthened
the resettlement practices and was rated successful (the TA completion report is in Appendix 9).
Under the TA for ensuring safeguard practices (footnote 4), the consultants carried out
independent review and gave a professional opinion on the project’s compliance with ADB's
safeguard policy, particularly with regard to the mitigation measures for endangered species in
the Yangtze River. The independent opinion, which was based on observations at site visits,
interviews with relevant agencies, and analysis of information, confirmed the adequacy of
preventive measures to protect endangered species. Potential issues and risk factors were
identified, and precautionary and mitigation measures were taken. Good practices were
introduced through specific recommendations and dialogue with MOR officials, contractors,
design institute, and monitoring agencies, which improved their capacity to implement the
project following international standards. The TA was also rated successful (the TA completion
report is in Appendix 10).
8
I. Consultant Recruitment and Procurement
23. An international consulting firm was recruited under the loan. The recruitment followed
the quality- and cost-based selection method in accordance with ADB’s Guidelines on the Use
of Consultants (2007, as amended from time to time). The consultants were fielded in April 2008
and their services were completed in December 2008. ADB-financed procurement packages
followed the international competitive bidding method and ADB's Procurement Guidelines
(1999, as amended from time to time). In the bidding documents and contracts, relevant
sections of ADB's anticorruption policy were incorporated and implemented. The FCTIC was
responsible for procurement of ADB-financed contracts. Four domestic procurement agents
were engaged by the FCTIC to assist with procurement activities. In May 2003 ADB approved
advance procurement action for civil works. Procurement was initiated in October 2003 and
ADB approved the prequalification of contractors in February 2004. Twenty five civil works
contracts were awarded in two batches—in September 2004 (2 months after loan effectiveness)
and December 2004 (5 months after loan effectiveness). The advance action was efficiently
utilized in view of the large and complex nature of these contracts. Two packages for track
materials (12 contracts) and one package for track maintenance equipment (7 contracts) were
procured under ADB loan financing. Because of the substantial increase in metal prices and the
appreciation of the yuan against the US dollar, the material contracts were significantly higher
than estimates, resulting in the ADB loan being insufficient to procure all the planned
equipment. As a result, some equipment was procured using counterpart financing. Seventeen
civil works contracts and 123 contracts for materials and equipment followed the national
competitive bidding process, and these contracts were fully financed by the borrower. All the
bids were processed on time within the project implementation schedule. The ADB-financed
packages are listed in Appendix 8.
J. Performance of Consultants, Contractors, and Suppliers
24. The project substantially used national consultant expertise. The national experts were
engaged not only for the supervision of civil works contracts but also for the supervision of
electrification and signaling engineering, environmental protection measures, independent
monitoring of resettlement implementation, the impacts on Chinese sturgeon habitats, and soil
erosion impacts. The national experts were also engaged to undertake onsite consultation and
diagnosis as well as panel meetings on key technical issues, all of which contributed to
overcoming the construction challenges. The international consultants delivered a final report of
high technical quality, which detailed the internationally accepted economic and financial
appraisal methodologies for the government to follow to improve the feasibility analysis of
railway investment projects.
25. Civil works contractors performed well and successfully constructed the difficult tunnels
and bridges. With advanced equipment and experienced managers and engineers, these
contractors overcame the challenges of complex geological conditions. Many innovative
construction methods were utilized, and quality control was strictly exercised. Risk management
was exercised and systematic measures were taken to ensure worker safety at construction
sites. Equipment suppliers also performed well and all equipment was installed and
commissioned as required. The YWR is now fully operational for freight and passenger
transport and the design speed has been achieved. The overall performance of consultants,
contractors, and suppliers was highly satisfactory.
9
K. Performance of the Borrower and the Executing Agency
26. The MOR successfully addressed the major technical and engineering challenges of
constructing railways in mountainous regions. It effectively mobilized the resources of design
institutes, contractors, supervision engineers, and foreign and national experts with specific
expertise to tackle the difficulties of constructing complex tunnels and bridges. The innovation
created and experience gained in overcoming the technical challenges were significant,
particularly in the areas of (i) tunnel construction in karst topography, dealing with high ground
stress, caves, underground rivers, and flammable and poisonous gases; and (ii) large bridge
construction, including high bridges over deep valleys and long bridges spanning the Yangtze
River. For the first time in the railway subsector, a risk management system was introduced in
project management. Geological detection technology was utilized to forecast characteristics of
rock formations and faults, as well as distribution of underground water. To ensure construction
safety, a monitoring system was established to provide real-time information about
hydrogeological situations and structure changes, with which disaster alarm systems were
connected. The MOR is also to be commended for ensuring mitigation of key environmental
risks and compliance with ADB’s safeguard policies (para. 20). The design was also optimized
to reduce environmental disturbance, improve the capacity for water and soil conservation, and
increase the ability to resist natural hazards and the level of operational safety. The
performance of the borrower was considered highly satisfactory in promptly processing the loan
signing and effectiveness, endorsing the requests of the MOR in a timely manner, and providing
guidance on overall project implementation. Overall, the performance of the borrower and the
MOR was highly satisfactory.
L. Performance of the Asian Development Bank
27. ADB’s performance was satisfactory. The processing team included social dimensions in
the project, incorporated rigorous safeguard monitoring arrangements, assessed major risks,
and designed appropriate loan covenants. During implementation, procurement was processed
efficiently and the loan proceeds were disbursed in a timely manner. Eight review missions,
including a midterm review, were fielded during implementation. The review missions and ADB’s
frequent communications with the MOR resolved problems encountered during implementation.
The MOR expressed appreciation for ADB’s efficiency in procurement and disbursement
processing and in resolving other implementation issues. ADB effectively strengthened the
safeguards supervision during project implementation. The resettlement database system
provided useful information for resettlement management, and benefited other projects through
experience learning and system replication. ADB closely monitored the project impact during the
construction period as well as the impact of the railway on the local economy beyond project
completion.
III. EVALUATION OF PERFORMANCE
A. Relevance
28. The project was assessed highly relevant. The project is located in the mountainous
area in Hubei Province and Chongqing Municipality, where poverty incidence is much higher
than the national average level. The project removed transport barriers and reduced transport
and logistics costs, and thereby promoted pro-poor economic and social development in this
poor area. The government listed the project as a priority in both the 10th and 11th plans. With
the completion of the YWR, the railway trunk corridor connecting major economic centers in the
east and west of the PRC was established. Under the government’s program, the capacity of
10
several connecting lines has been significantly improved, reaffirming the relevance of the YWR.
In 2008, ADB approved two projects in the same region, the Chongqing–Lichuan Railway
(footnote 7) and the Lanzhou–Chongqing Railway,13 both double-track electrified railways. The
double tracking of the section between Yichang and Liangwu, a change that significantly
improved the capacity of the YWR, further improved its relevance in the vital role that the YWR
plays in connection with these lines. The project was in line with ADB’s country strategy and
program for the PRC, both at the time of approval (footnote 1) and for the current period,14
which has prioritized inclusive growth and balanced development.
29. The project proved to be extremely challenging given the large number of tunnels and
bridges, many of them of world-class complexity for construction. ADB anticipated those
associated risks and provided much-needed technical support through the project preparatory
TA and two related TA projects. Recognizing the challenges in ensuring safeguard compliance,
ADB also made special arrangements, including an independent panel of environmental experts
and a management information system (MIS) for land acquisition and resettlement monitoring
(para. 22), which was the first time such an approach was adopted in ADB funded projects in
the PRC. The project adopted advanced technology for signaling, communications, train control
system, and mechanized track maintenance. Special designs and facilities were also
incorporated to ensure safe operation considering the mountainous environment. Consistent
with the target of promoting containerized transport, the YWR was constructed to allow for the
operation of double-stack container trains, the first time this has occurred in railways in the PRC.
B. Effectiveness in Achieving Outcome
30. The project is considered highly effective in achieving outcomes because it significantly
promoted economic growth in the project area, reduced transport bottlenecks on the national
network, increased transportation capacity of the corridor, and lowered transport costs.
31. The direct benefit of the project to the local economy was the increased incomes through
direct and indirect employment opportunities. The YWR provided direct job opportunities of
790,830 person-days of unskilled labor, of which 620,660 person-days (78%) came from the
local labor market. Of the jobs created locally, 404,750 person-days (65%) of work went to
laborers from poor households. A total of CNY13.74 million was disbursed to local poor
households during the construction period, contributing greatly to poverty reduction in the
project area. Since the YWR began operation, 193 local laborers have been recruited for track
maintenance and security. As railway traffic increases, more employment opportunities will be
generated for the local labor market, and particularly for the poor. Significantly, the YWR
contributed to economic growth in the project area, particularly Enshi Prefecture, by boosting
tourism development and attracting 493 enterprises with CNY9.7 billion investments in four
counties of the prefecture. Tourism and manufacturing industries are booming, which play an
important indirect role in employment of local surplus laborers. This leads to increased fiscal
revenues, which in turn increases the capacity of local governments to improve social welfare
for the people in the project area.
32. The YWR greatly increased the transportation capacity of the corridor. Completing the
last section of the east–west railway corridor between the coast and the heart of the western
region, the YWR removed the major bottleneck in the existing railway network. The YWR
13
People’s Republic of China for the Lanzhou-Chongqing Railway Development Project. Manila.
14
ADB. 2012. Country Partnership Strategy (2011-2015): People’s Republic of China. Manila.
11
connects with the Chongqing–Lichuan Railway and provides the most direct connection with
Chongqing and Chengdu. Once the Chongqing–Lichuan Railway becomes operational in 2014,
travel by train between Wuhan and Chongqing will take about 5 hours, compared to the current
22 hours. Alternative railway routes also benefit through shifting passenger trains to the YWR,
thus releasing line capacity for freight transport. The number of trains on the YWR will grow
from 17 in 2011 to 50–60 pairs per day in 2020 for passenger transport, and from five in 2011 to
18–20 pairs per day in 2020 for freight transport.
33. The YWR demonstrates obvious competitive advantages over other transport modes for
its low cost, shorter travel time, better safety and more reliable performance. Waterway
transport on the Yangtze River is restricted by the capacity of the five-level lock system of the
Three Gorges Dam and Gezhouba Dam, which requires additional 4–6 hours over the journey,
and is also affected by the high loading and unloading charges and cargo damage costs. The
parallel Yichang–Wanzhou Expressway, a section of the national trunk highway between
Shanghai and Chengdu, is constrained by its high toll level, speed limits for tunnels, continuous
long slopes with high gradient, and interruptions due to bad weather. With the completion of
container terminals in Chongqing, Chengdu, and Wuhan, there is great potential for the YWR to
develop container traffic. Passenger traffic on the YWR is growing rapidly. About 70% of the
road passenger traffic and 60% of the airline passenger traffic has diverted to the YWR since its
opening. The cost advantage of the YWR over other transport modes makes it the preferred
transport mode for local people, particularly for the poor and migrant laborers.
C. Efficiency in Achieving Outcome and Outputs
34. Economic and financial reevaluation rated the project efficient.
35. The reevaluated economic internal rate of return (EIRR) is 15.6%, higher than the 14.4%
estimated at appraisal. Benefits from passenger traffic are the major source of economic
benefits (32.9%), followed by benefits from tourism (31.6%), freight traffic (18.7%),
environmental and safety benefits (9.6%), and network benefits (7.2%). The higher EIRR is due
to the significantly higher than anticipated passenger traffic and the tourism benefits. The project
is considered economically viable. Sensitivity analysis was carried out to test the impacts of (i) a
decrease in forecast traffic, (ii) an increase in operation and maintenance costs, and (iii) a
decrease in benefit valuation. According to this analysis, the project will continue to be
economically viable under these conditions. With the worst-case scenario of a 20% increase in
operation and maintenance costs and a 20% benefit reduction, the EIRR falls to 13.5%. The
economic reevaluation is in Appendix 11.
36. The financial internal rate of return (FIRR) was recalculated at 3.9%, lower than the 5.8%
estimated at appraisal. The variance is mainly due to the substantially higher capital costs,
lower passenger tariff, and shortage of freight traffic at the early stage of operation. The after-
tax weighted average cost of capital (WACC), in real terms, was calculated using the actual
capital mix and costs of various financing sources. The WACC was recalculated as 2.5%, which
is much lower than the appraisal estimate, mainly because of the preferential interest rate
granted by the China Development Bank and the comparatively low interest rate of the railway
bonds. The FIRR is higher than the WACC, and the project is considered financially viable.
Sensitivity analysis conducted to test the impacts of variation in operation and maintenance
costs and revenues indicated that the project remains financially viable under the sensitivity
scenarios. The financial reevaluation is in Appendix 12.
12
D. Preliminary Assessment of Sustainability
37. The project is rated likely sustainable. The YWR forms a link of the Shanghai–
Chongqing–Chengdu Railway Corridor, a major east–west corridor connecting the cities of
Chongqing, Chengdu, Nanjing, Shanghai, and Wuhan which are all regional economic centers.
The strong economic ties between the eastern and western regions will continue to provide
robust freight and passenger traffic. The YWR’s competitive advantages over other transport
modes in the region make it the preferred mode for passengers and for containerized freight
traffic. The capacity of connecting lines at both ends has been increased to remove constraint
on the traffic flow of the YWR. The operation of the YWR is integrated into the national railway
network through established regional railway administration bureaus, which have demonstrated
the capacity to maintain assets in good condition, provide adequate rolling stock, and ensure
continuous operations for both freight and passenger transportation. The MOR consistently
pursues improvement in operational efficiency along with expansion of network capacity. Its
operating efficiency has further improved as measured by a series of indicators, e.g., per day
locomotive productivity increased by 22% and turnover days for wagons improved by 9.8% from
4.92 days to 4.48 days from 2005 to 2010. Labor productivity, excluding the price impact, has
been improved by 35% over the same period. The national freight tariff for railways was
increased by 10% in May 2012, which will significantly improve MOR’s financial situation. All
these factors provide a reasonable assurance on the sustainability of the YWR.
E. Impact
38. The project has significant impact on regional socioeconomic development. A total of
CNY27.5 billion of project investment in the project area from 2005 to 2010 has strongly
stimulated local industrial development, particularly in construction materials, energy, and the
services sector. The statistical data show that socioeconomic conditions in the project area have
improved rapidly in recent years. From 2002 to 2010, per capita gross domestic product
average annual growth rates in project areas ranged from 12% to 24%. With the project area’s
rapid socioeconomic growth and the increased fiscal revenues of the local governments, the
standard of livelihood and incomes of local people have been significantly improved, particularly
for the poor. From 2002 to 2010, the average annual growth of farmers’ per capita incomes
ranged from 7% to 17% in counties and cities along the railway alignment. The poverty
incidence in project counties and districts along the alignment decreased by 5.8–18.6% during
the same period.
39. With the rapid socioeconomic growth and increased fiscal revenues of the local
governments, the welfare of local communities and local people have been significantly
improved, including access to health care, rural roads, education, telecommunication, and
broadcasting. Taking Enshi prefecture for example, from 2002 to 2010, (i) the number of
hospital beds increased by 101%, and the number of doctors and nurses increased by 62%, (ii)
highway density increased by 18% and the number of villages with highway access reached
100%, (iii) the primary school enrollment rate reached 100% and the middle school enrollment
rate reached 98.5%, (iv) telecommunication development boomed as the number of telephones
increased by 269% and the number of mobile phones increased by 1,088%, and (v) television
coverage increased by 6%. Moreover, as one of the byproducts of railway construction, 600 km
of access roads to construction sites were built. These access roads and bridges are now being
used by local communities, greatly improving the local transport conditions in remote
mountainous areas, and the access to local markets, schools, hospitals, and the highway
network.
13
40. The YWR directly increases competition among local freight forwarders and
wholesalers, which benefits local farmers with lower delivery costs of local products. Wanzhou
District is one of the largest orange plantation bases with annual production of around 180,000
tons. After the YWR was opened to traffic in December 2010, the price of oranges increased
markedly, from CNY0.4–CNY0.6 per kilogram (kg) to CNY2.0/kg, which significantly boosted the
income of local farmers. Rail transportation also reduces the prices of commodities brought from
elsewhere, which reduces living costs for local people, particularly the poor. With more railway
freight services being provided and multi-modal logistics chains established, it is expected that
the transport costs of commodities and materials such as fertilizers will be further reduced.
41. The YWR provides a more affordable, safer, faster, and more comfortable transport
service for local people as well as migrant laborers. A large number of surplus rural laborers
work outside the region, and most of them return home during the Spring Festival each year.
Travel costs from Enshi city to regional cities or counties by train are 70%–80% lower than bus
fares. The railway has improved local mobility and consequently changed the lifestyle and social
behavior of local people. The project area is rich in tourism resources which were not tapped
before the project due to poor transport conditions. The Enshi Prefecture attracted 16.6 million
tourists in 2011, the first year after the opening of the YWR, which is 56% more than that in
2010, and the tourism revenues increased by 70.8%. In addition, local governments and the
YWRCH took measures to mitigate adverse impacts and ensure minority communities equally
received the project benefits in a culturally appropriate manner. The operation of the YWR
provides opportunities for ethnic minority communities in remote mountain areas to further
develop. A detailed assessment of the social and poverty reduction impacts is in Appendix 13.
42. Land acquisition and resettlement activities began in late 2003 and were largely
completed at the end of 2005. In total, 15,498 mu of land were permanently acquired, which
was 5% less than estimated in the resettlement plan.15 A total of 628,748 square meters (m2) of
buildings were demolished, which was 40% more than estimated in the resettlement plan. The
number of displaced persons was 12,336, which was 31% less than the estimate. A total of
10,264 mu of land were temporarily used during construction. A total of CNY637.48 million of
land acquisition and resettlement costs were disbursed, 89% more than estimated in the
resettlement plan. Although the number of people resettled was significantly less than the
estimate, the costs increased mainly because many affected households had to be resettled in
concentrated resettlement sites because of the limited availability of resettlement sites due to
mountainous terrain. Increased building demolition, temporary land use, and the relocation of
electricity and telecommunication lines also contributed to this cost increase. The YWRCH and
railway support offices consulted extensively with local communities and affected people,
worked proactively to solve the issues during project implementation, and made great efforts to
improve the income of the affected households. ADB also provided additional resources to
strengthen the management of land acquisition and resettlement. The resettlement monitoring
completion report indicates that the level of production and income of affected people are not
lower than before land acquisition and resettlement implementation, and that these households
have improved living conditions and livelihood opportunities. The detailed evaluation of land
acquisition and resettlement activities is in Appendix 14.
43. The environmental management plan (EMP) and monitoring program were adequately
implemented during construction and adverse environmental impacts mitigated effectively.
Borrow pits and disposal sites have been restored and rehabilitated through retaining structures,
drainage systems, and vegetative measures. Cutting surfaces, subgrades, and embankment
15
A mu is a Chinese unit of measurement (1 mu = 666.67 square meters).
14
slopes were generally stabilized through appropriate vegetative and structural measures to
prevent soil erosion. Twelve environment monitoring reports were prepared and submitted to
ADB, including one summary report for environmental management and one summary report for
the Chinese sturgeon conservation program. The monitoring results showed that impacts were
mitigated. During operation, potential water pollution will be mainly from domestic wastewater
from railway stations and living quarters and partially from wastewater with oil from train
maintenance. About 4,170 tons of wastewater will be produced daily when the railway and
stations are in full operation. Wastewater treatment facilities were constructed effectively
according to the EIA requirements. In particular, the conservation program for the spawning bed
of the Chinese sturgeon performed well. The Yichang Extra-Large Bridge was designed and
constructed across the Yangtze River and disruption of the riverbed and fish population was
minimized. Monitoring reports show that the Chinese sturgeon population is stable, which
indicates that mitigation measures were implemented adequately and that the project has not
had negative impacts on the population and spawning habitats of Chinese sturgeon. The
environmental impact analysis is in Appendix 15.
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS
A. Overall Assessment
44. The project is rated successful. The project is evaluated (i) highly relevant with the
government’s and ADB’s development strategy, (ii) highly effective in achieving outcomes, (iii)
efficient in achieving outcomes and outputs, and (iv) likely to be sustainable. The project was
successfully implemented and has achieved its main objectives of removing transport barriers
and reducing transport and logistics costs, and thereby promoting pro-poor economic and social
development in the project area. Recognized as the most challenging railway project in the PRC
to date, the YWR established the missing link in one of the most important national transport
corridors. The MOR gained significant experience in constructing complex mountainous
railways, which has benefited other construction projects. The project had a significant social
impact, and contributed to economic growth, poverty reduction, and improving welfare of local
people. The reevaluated FIRR of 3.9% and EIRR of 15.6% confirmed the financial and
economic viability of the project.
B. Lessons
45. Three years after loan approval, the government made the decision to double track a
section of the YWR which connects to the subsequent ADB-financed Chongqing-Lichuang
Railway. During project implementation, the MOR made the investment to increase the capacity
of the congested alternative railway routes, which changed some key assumptions made at
appraisal. This highlights the importance of incorporating the overall planning of the sector into
the appraisal of a specific project. Moreover, the actual freight traffic in the initial years of
operation was significantly lower than the appraisal estimates. Similar to several other
completed railway projects in the PRC, the appraisal estimates for freight traffic were
overestimated, while passenger traffic was somewhat underestimated. This is mainly because
local manufacturing and mining industries, as the main sources for generated freight traffic, take
longer time to develop and adjust their shipping patterns.
46. A few factors contributed to the success of the project in mitigating the diverse
environmental impacts of the highly complex and challenging construction. A strong institutional
establishment ensured effective implementation of the project environmental management plan.
Sound environmental management practices were adopted throughout the project design,
15
construction, and operation. For example, shock absorbers were installed on the Yichang Extra-
Large Bridge to minimize the vibration impacts of railway carriages on the aquatic habitats of the
Chinese sturgeon. Long spans (para. 7) were adopted for bridges over the Yangtze River to
minimize the number of piers, so that construction impacts were minimized. The design was
also improved to control gas emissions by adopting solar or electric boilers at stations.
C. Recommendations
1. Project Related
47. The YWR needs to strengthen its marketing efforts, especially with regard to container
traffic. The quality of service should also be improved. Special attention should be paid to
developing the double-stack container service along the Shanghai–Chongqing–Chengdu
corridor, for which strong cooperation is needed among the container terminals at Shanghai,
Wuhan, Chongqing, and Chengdu and the related railway administration bureaus. Scheduled
container trains should be provided to meet the market need for high-speed, reliable, and
frequent container transport services. The YWR needs to improve freight handling facilities at
stations and coordinate with roads, ports, and inland waterways to formulate multi-modal
logistics chains. More industrial sidings should be established to capture local freight traffic from
major industry customers in the project area. More passenger trains shall be scheduled,
considering the high demand.
48. It is recommended that the project performance evaluation be conducted in 2016. This is
because the connecting railway line currently under construction will be operational in 2014,
which will significantly increase the traffic of YWR. By 2016 it should be possible to make an
accurate assessment of YWR’s traffic situation.
2. General
49. Railway projects tend to have large land acquisition and resettlement impacts. The
resettlement costs should be adequately budgeted for and fully incorporated into the project
budget and overall financial management. The MOR should also increase the budget for
engaging an independent resettlement monitor and continue the strengthening of resettlement
monitoring and evaluation. Many affected households have to be resettled in concentrated
resettlement sites because of the high level of house demolition for railway stations and the lack
of resettlement sites due to mountainous terrain. Given the complexity of the process, the
planning and preparation of concentrated resettlement sites should commence as early as
possible, particularly for those close to large railway stations.
16 Appendix 1
PROJECT FRAMEWORK
Design Performance Indicators/Targets Monitoring Assumptions (A)

Summary At Appraisal At Completion Mechanisms and Risks (R)
Goal
Pro-poor economic Major socioeconomic GDP grew by 108%–299% in Annual economic (A) Economic
growth indicators project areas from 2002 to reporting at the growth will improve
2010. local, provincial, the welfare of
regional, and people living in the
Growth of local Per capita GDP grew by national level project area,
economy 266%–446% in project particularly the
counties from 2002 to 2010. poor.
Per capita rural income
increased from CNY1,210– (R) Inequitable
CNY4,027 in 2002 to distribution of the
CNY3,243–CNY6,990 in 2010. development
impact and
Poor population Poverty incidence decreased widening of the
by 5.80–18.58 percentage income gap
points from 2002 to 2010.
(A) Complementary
Change of quality of Quality of life improved social services are
life for the significantly as measured by in place.
project area major welfare indicators for
population medical condition, education,
roads, and
telecommunications as well as
broadcast coverage.
Purpose/Outcome
Promote economic Direct and indirect Employment of 790,830 PPMS and PCR (R) Associated
growth in the project employment is person-days was provided statistics of local developments not
area provided. during project construction. governments undertaken
193 local laborers have been
recruited for YWR operation. (A) Public works
and infrastructure
Increase production 493 enterprises with CNY9.7 development will
of local goods billion investments were stimulate the local
established during 2006–2010. economy.
Transport costs Travel costs fell from

CNY0.53/km to CNY0.15/km
for passengers and from
CNY0.85/km to CNY0.22/km
for freight transport.
Reduce transport Volume of traffic Passenger volume increases PCR (R) YWR fails to
bottlenecks on the from about 12.26 million compete
national network, passengers in 2011 to 18.05 intermodally to
increase transportation million in 2015 and 28.11 attract traffic.
capacity of the million in 2025. Freight traffic
corridor, and lower grows from 0.59 million tons in (A) Diversion of
transport costs 2011 to 5.15 million in 2015 traffic to YWR
and 18.45 million in 2025.
Access to wider YWR operation directly PPMS results (A) Village roads
markets increases the competition will serve as
among local forwarders and essential channels
wholesalers, reduces the to spread the
prices of commodities, and project benefits
improves living standards for from each station.
local people, particularly for
the poor.
Appendix 1 17

Complementary Over 600 km of constructed Social and (A) The project
roads are developed access roads have been poverty reduction line, together with
in the project area. handed over to the local impact monitoring the ongoing Loan
governments, and have reports 1439-PRC, will
become the main roads in be part of the
remote mountainous areas backbone of the
benefiting local communities. national
All villages have road access network.
in 2010.
Improved operating Per day locomotive PPMS and PCR (A) Connecting
efficiency of productivity increased by 22% lines between
the existing railway from 2005 to 2010, and Shanghai and
system in the turnover days for wagons Chengdu will be
east–west corridor decreased by 9.8% from 4.92 completed on time.
days to 4.48 days. Labor
productivity, excluding price
impact, improved by 35% over
the same period.
Financial Operating ratio fluctuated Statistics of MOR
performance of MOR between 72% and 93% during and the reports of
the implementation period regional railway
administration
bureaus
Outputs
1. 377 km of railway Final bill of quantity YWR is fully operational for PPMS (R) Delay
constructed between against original passenger and freight Cost overrun
Yichang and Wanzhou bill of quantity transport Loan review
missions and Environmental
Contract variations Physical completion was MTR liability
achieved on 22 December
Physical completion 2010. The final acceptance is PCR Workers’ safety
date not conducted yet.
Quarterly Social risks
Final acceptance of 377 km long electrified, progress report (resettlement,
the facilities by MOR standard-gauge, class 1 ethnic
railway, of which 288 km is Resettlement minorities,
double track and 89 km single monitoring reports vulnerable
track. population)
Environmental
monitoring reports
2. Track laying and Tracks with rails, Tails, accessories, concrete PPMS and PCR
electrification sleepers, ballast, sleepers, and stone ballast
associated fittings fully installed. 13 traction
and fixings; 14 substations and 923 km of
traction substations catenary line were installed.
and, one power The power supply station was
supply station, and not needed.
install power lines
3. Freight yards Freight yards and Established in 12 railway Progress reports

established associated facilities stations. and PCR
4. Train control system A train control system Equipment for PPMS and PCR
installed telecommunication, signaling,
and traffic control system
installed. A centralized train
control system was
established and operating;
command is provided in
18 Appendix 1

Wuhan Railway Administration
and Chengdu Railway
Administration.
5. New stations and 24 new stations and Ten new railway stations were PPMS and PCR
expansion of the 2 expanded stations constructed; the existing
existing stations Yichang station and Wanzhou
constructed, with station were expanded.
complete facilities
6. Equipment of Supply of operation Sufficient operation and Statistics of MOR

operation and maintenance maintenance equipment, and the reports of
equipment for including rolling stock, have regional railway
signaling and been provided by Wuhan administration
communication, Railway Administration and bureaus
electrical facilities, Chengdu Railway
transportation and Administration.
financial information
system, freight and
container yard
operation,
maintenance of
tracks, tunnels, and
bridges
7. Environmental Supply equipment Wastewater treatment facilities Environmental
protection facilities and facilities for and sound barriers were monitoring
environmental installed. Solar or electric reports, ADB
mitigation and heaters were adopted. The review missions,
protection use of ballastless independent
embankments, seamless review by
track, and shock absorbers on international
bridges over Yangtze River consultant
reduced adverse impact
during operation.
8. Institutional Institutional An international consulting firm Consultant’s
strengthening of MOR strengthening was engaged to develop the report
performance to be Guidelines for the Appraisal of
assessed by MOR Railway Investment Projects;
and ADB against the training was provided for
standards application of the guidelines.
Activities/Inputs
Construction of the Construction 377 km main line constructed PPMS, (A) Estimates and
project railway progress, actual ADB review arrangements
(including construction performance against 600km access roads missions in prequalification
of service roads and PAM constructed of civil works
station access roads) contractors are
accurate, fair, and
a
Land acquisition and Actual performance 15,498 mu of land were Resettlement adequate.
Resettlement against resettlement permanently acquired, 5% less monitoring reports
plan; grievances, than the resettlement plan ADB review (A) Local
2
disputes, complaints estimate; 628,748 m of missions governments have
buildings were demolished, adequate capacity
40% more than the to deal with
resettlement plan estimate; resettlement.
12,336 persons were
displaced, 31% less than (A) ADB's loan
resettlement plan estimate; administration
CNY637.48 million of land capacity and
acquisition and resettlement capability are
Appendix 1 19

costs were disbursed, 89% adequate.
higher than resettlement plan
estimate (R) Unavailability of
counterpart
Civil works, Tendering quality of Civil works included 25 ICB prequalification offunds from the
procurement of service; contracts and 17 NCB civil works local government
materials, responsiveness to contracts; 12 contracts for contractors for
equipment, and ADB requirements; track materials and 7 contracts civil works (R) Unfavorable
locomotives quality of for track maintenance contracts, investment
specifications of the equipment were procured with bid evaluation and environment
bidding documents ADB financing; 17 civil works contract award
contracts and 123 contracts procedures,
for materials and equipment disbursement
were fully financed by the procedures
borrower. Rolling stock was
provided by MOR separately
from the project.
Consulting services for Construction quality; Ten national supervision Monitoring

construction supervision companies and five consulting reports,
supervision, quality firms or institutes were consultant’s
environmental engaged for the supervision of reports
supervision, tendering, civil works, environmental
quality assurance, and protection, and monitoring of
monitoring resettlement implementation.
An international consultant
reviewed compliance with
ADB's safeguard policy,
particularly the mitigation
measures for the endangered
species in the Yangtze River.
Implementation of Mitigation measures 26 borrow pits and 197 Environmental

environmental impact from the disposal sites were employed. monitoring
mitigation measures in environmental impact They were restored and reports, ADB
project design and assessment and rehabilitated adequately. review missions,
construction environmental Domestic solid wastes from independent
management plan stations during operation are review by
collected and disposed of international
according to domestic consultant
regulations. Wastewater
treatment facilities are
operated in all stations. Soil
erosion protection plan and
Chinese sturgeon
conservation programs were
implemented effectively.
ADB = Asian Development Bank, GDP = gross domestic product, ICB = international competitive bidding, km =
2
kilometer, m = square meter, MOR =Ministry of Railways, MTR = midterm review, NCB = national competitive
bidding, PAM = project administration manual, PCR = project completion review, PPMS = project performance
management system, YWR = Yichang–Wanzhou Railway.
a 2
A mu is a Chinese unit of measurement (1 mu = 666.67 m ).
20 Appendix 2
CHRONOLOGY OF MAJOR EVENTS
Date Events
8 November 2002 Approval of PPTA (Preparing the Yichang–Wanzhou
Railway Project)
11 November 2002 Approval of PPTA (Strengthening the Involuntary
Resettlement)
19 November–6 December 2002 ADB fact-finding mission
12 May 2003 Management review meeting held
Advance procurement action approved
17 July–11 August 2003 ADB appraisal mission
15 September 2003 Staff review meeting held
15–21 October 2003 Prequalification documents submitted
31 October 2003 Environmental impact assessment approved by State
Environmental Protection Administration
5–8 November 2003 Loan negotiations
7 November 2003 Feasibility study approved by National Development and
Reform Commission
15 December 2003 ADB Board approval
27 May 2004 Signing of loan agreement
26 July 2004 ADB loan effectiveness
20 September 2004 First batch of civil works contracts awarded
7–13 December 2004 ADB inception mission fielded
12 January 2005 First batch of equipment contracts awarded
6–11 November 2005 ADB review mission fielded
24 April 2006 First batch of materials contracts awarded
28 November–1 December 2006 ADB review mission fielded
26–29 November 2007 ADB midterm review/handover mission fielded
31 March 2008 Consulting services contract for economic and financial
evaluation of railway investment project awarded
7–14 October 2008 ADB review mission fielded
9-12 November 2009 ADB review mission fielded
30 December 2009 First reallocation of loan proceeds and first extension of
loan closing date from 30 June 2010 to 31 December 2010
approved
3 September 2010 Second extension of loan closing date from 31 December
2010 to 31 December 2011 approved
1–3 November 2010 ADB review mission fielded
26 November 2010 Second reallocation of loan proceeds approved
22 December 2010 Trial operation started
21–29 March 2011 ADB completion review mission fielded
23 December 2011 Final disbursement date and loan account closed
ADB = Asian Development Bank, PPTA = project preparatory technical assistance.
Appendix 3 21
PROJECT COST AND FINANCING PLAN
Table A3.1: Project Costs

($ million)
At Appraisal At Completion
Foreign Local Total Foreign Local
Total Cost
Item Exchange Currency Cost Exchange Currency
A. Base Cost
1. Civil Works 787.20 849.10 1,636.30 443.73 2,510.03 2,953.76
2. Railway Materials 45.80 34.40 80.20 93.39 118.57 211.96
3. Signaling, 17.80 21.30 39.10 0.00 94.71 94.71
Communications, MIS
4. Electric Power and 17.50 58.70 76.20 0.00 182.36 182.36
Electrification
5. Operational, Safety, and 41.00 12.20 53.20 33.56 34.74 68.30
Maintenance Equipment
6. Land Acquisition and 0.00 42.00 42.00 0.00 95.67 95.67
Resettlement
7. Environmental Protection, 0.90 3.00 3.90 0.00 18.06 18.06
Mitigation, and Monitoringa
8. Administration, Consulting 1.30 32.00 33.30 0.58 207.00 207.58
Services, and Miscellaneous
Costs
Subtotal (A) 911.50 1,052.70 1,964.20 571.26 3,261.14 3,832.40
B. Contingencies
1. Physical contingencies 77.30 79.60 156.90 0.00 0.00 0.00
2. Price Contingencies 32.30 37.30 69.60 0.00 0.00 0.00
Subtotal (B) 109.60 116.90 226.50 0.00 0.00 0.00
C. Front-End Fee 2.50 0.00 2.50 2.50 0.00 2.50
D. Interest during Construction 61.80 108.50 170.30 0.00 290.19 290.19
and Commitment Charge
Total 1,085.40 1,278.10 2,363.50 573.76 3,551.32 4,125.09
a
Cost for slope stabilization, ecological rehabilitation, embankment protection, and spoil revegetation is included in
the cost of civil works.
MIS = transport management information system
Table A3.2: Financing Plan

($ million)
At Appraisal At Completion
Foreign Local Total Foreign Local Total
Source Exchange Currency Cost Exchange Currency Cost
Asian Development Bank 500.00 0.00 500.00 500.00 0.00 500.00
China Development Bank 0.00 725.00 725.00 0.00 1,498.42 1,498.42
Ministry of Railways 585.00 553.00 1,138.00 73.76 2,052.91 2,126.67
Total 1,085.00 1,278.00 2,363.00 573.76 3,551.32 4,125.09
Sources: Asian Development Bank and Ministry of Railways.
22 Appendix 4
PROJECTED AND ACTUAL CONTRACT AWARDS AND DISBURSEMENTS
Table A4: Projected and Actual Contract Awards and Disbursements

($ million)
Contract Awards Disbursement

Actual/Projected Actual/Projected
Year Projected a Actual (%) Projected a Actual (%)
2004 120.14 141.83 118 2.50 26.05 1,042
2005 399.80 452.23 113 397.80 180.34 45
2006 444.80 471.01 106 444.80 320.59 72
2007 465.62 497.50 107 465.62 374.00 80
2008 475.80 497.50 105 475.80 414.99 87
2009 475.80 497.50 105 475.80 452.95 95
2010 475.80 497.50 105 475.80 472.95 99
2011 475.80 497.50 105 475.80 500.00 105
Total 475.80 497.50 105 475.80 500.00 105
a
Projected contract awards or disbursement do not include the unallocated amount of the loan.
Figure A4.1: Projected and Actual Contract Awards

600
500
400
Amount ($ million)
300
200
100
0
2004 2005 2006 2007 2008 2009 2010 2011
Year
Projected Actual
Figure A4.2: Projected and Actual Disbursement
600
500
Amount ($ million)
400
300
200
100
0
2004 2005 2006 Year
2007 2008 2009 2010 2011
Projected Actual Disbursements

APPRAISAL AND ACTUAL IMPLEMENTATION SCHEDULE
2003 2004 2005 2006 2007 2008 2009 2010 2011
O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M JJA S O N D
A. Land Acquisition and Resttlem ent

1. Land Acquisition and Resettlement
2. Rehabilitation
B. Civil Works
1. Prequalification (ICB)
2. Bidding (ICB)
3. Mobilization and Construction
C. Track Laying
D. Testing
E. Equipm ent and Supplies

1. Bidding
2. Delivery and Installation
F. Consulting Services
1. Shortlisting Selection
2. Services and Training
G. Project Milestones
1. Provisional Acceptance (Physical *
Completion)
*
2. Trial Operation
3. Loan Account Closing *

*
Appendix 5
Appraisal
Actual
ICB = international competitive bidding.

23
24 Appendix 6
ORGANIZATION CHART
Organization Chart for Yichang–Wanzhou Railway Project

Yichang–Wanzhou Railway Steering Committee
Vice-Minister, Ministry of Railways
Yichang–Wanzhou Railway Project Coordination Office
Infrastructure Development and Foreign Capital Technical

Department Program Department Import Center
Railway Construction Finance

Management Center Department
Hubei Provincial and Yichang–Wanzhou Chongqing Municipality

Local Governments Railway Construction and Local Governments
Railway Construction Headquarters Railway Construction
Support Office and Support Office and
Environmental Protection Environmental Protection
Bureaus Bureaus
Beijing OASIS Environmental Fourth Survey and Design

Protection Technology Institute for Environment
Company Supervision and Land
Acquisition and Resettlement
Monitoring
Soil and Water Conservation

Monitoring Station of Yangtze River
Commission
Local Environmental Protection

Bureau Monitoring Stations
Yangtze Aquatic Institute, Chinese

Academy of Aquatics

Appendix 7 25
COMPLIANCE WITH LOAN COVENANTS
Covenants Reference Status of Compliance

1. (a) The Borrower shall cause the Project to be Loan Complied with. The project
carried out with due diligence and efficiency and in Agreement, was designed according to
conformity with sound administrative, financial, Article IV relevant standards of the
engineering, environmental and railway practices. 4.01 railway sector.
(b) In the carrying out of the Project and operation

of the Project facilities, the Borrower shall perform,
or cause to be performed, all obligations set forth in
Schedule 6 to this Loan Agreement.
2. The Borrower shall make available, promptly as Loan Complied with. Counterpart
needed, the funds, facilities, services, land and Agreement, funds were provided in a
other resources which are required, in addition to Article IV timely manner.
the proceeds of the Loan, for the carrying out of the 4.02
Project and for the operation and maintenance of
the Project facilities.
3. (a) In the carrying out of the Project, the Borrower Loan Complied with. All ADB-
shall cause competent and qualified consultants Agreement, financed contracts were
and contractors, acceptable to ADB, to be Article IV reviewed and approved by
employed to an extent and upon terms and 4.03 ADB. Information requested
conditions satisfactory to the Borrower and ADB. by ADB was provided
satisfactorily.
(b) The Borrower shall cause the Project to be
carried out in accordance with plans, design
standards, specifications, work schedules and
construction methods acceptable to ADB. The
Borrowers shall furnish, or cause to be furnished, to
ADB, promptly after their preparation, such plans,
design standards, specifications and work
schedules, and any material modifications
subsequently made therein, in such detail as ADB
shall reasonably request.
4. The Borrower shall ensure that the activities of its Loan Complied with. The
departments and agencies with respect to the Agreement institutional arrangements for
carrying out of the Project and operation of the Article IV project implementation were
Project facilities are conducted and coordinated in 4.04 effective.
accordance with sound administrative policies and
procedures.
5. The Borrower shall enable ADB’s representatives Loan Complied with. ADB reviewed
to inspect the Project, the goods financed out of the Agreement, the project annually.
proceeds of the Loan, and any relevant records Article IV
and documents. 4.06
26 Appendix 7

6. The Borrower shall ensure through MOR that the Loan Complied with. Operation of
Project facilities are operated, maintained and Agreement, the project railway is
repaired in accordance with sound administrative, Article IV assigned to Wuhan and
financial, engineering, environmental, railway 4.07 Chengdu railway
construction, and maintenance and operational administration bureaus which
practices. follow uniform operation and
maintenance requirements of
the sector.
7. Implementation Arrangements. MOR shall be the Loan Complied with. The

Executing Agency for the Project, responsible for Agreement, arrangements were followed
overall implementation of the Project and assume Schedule 6.1 as described.
the responsibility under the Project related
agreements. The steering committee established
by MOR shall provide overall guidance for Project
implementation. The project coordination office
(PCO) established by MOR, consisting of key
departments of MOR, including, among others,
departments for planning, construction, financial
and technical matters, and FCTIC, shall coordinate
the two Implementing Agencies. FCTIC shall,
among others, undertake the procurement of the
components financed by the Loan, monitor
utilization of the Loan and maintain liaison with
ADB.
8. Zhengzhou Railway Administration Bureau (ZRAB) Loan Complied with. ZRAB and
and Chengdu Railway Administration Bureau Agreement, CRAB were the implementing
(CRAB) shall be the Implementing Agencies. Schedule 6.2 agencies until 2007 when
ZRAB, through its Xiangfan Sub-Administration MOR’s Railway Construction
Bureau, shall be responsible for operation of the Management Center, with
portion of the Project railway located in Hubei ADB’s concurrence, started to
Province and CRAB, through its Chongqing Sub- supervise the implementation
Administration Bureau, shall be responsible for through the onsite YWRCH.
operation of the portion of the Project railway Operation of project railway is
located in Chongqing Municipality. assigned to Wuhan Railway
Administration Bureau for the
Yichang–Liangwu section,
and CRAB for the Liangwu–
Wanzhou section.
9. Separation of Container Businesses. MOR will Loan Complied with.

ensure that its Container Center will be separated Agreement,
and be legally and commercially independent by Schedule 6.7
the end of 2005.
10. Container Traffic. The Borrower shall cause MOR Loan Complied with. Container
to complete the construction of the large container Agreement, terminals were completed in
terminal in Chongqing and Chengdu by the Schedule 6.8 Chongqing (December 2009),
commencement of the commercial operation of the Chengdu (May 2010), and
Project railway. Wuhan (August 2010).
Appendix 7 27

11. Financial Covenant. Except ADB shall otherwise Loan Not complied with. The actual
agree, the Borrower shall cause MOR to maintain, Agreement, ratio fluctuated in the range of
for each of its fiscal years commencing from the Schedule 72%–93% during the
commercial operation of the Project railway, a ratio 6.24 implementation period, and
of total operating expenses to total operating remained at 85% in recent 3
revenues not higher than 75 per cent. years. The national freight
tariff was increased by 10% in
May 2012, and this will
significantly improve the
situation.
12. The Borrower shall cause MOR to (i) maintain Loan Complied with. Audit reports
separate accounts for the Project during Project Agreement, were submitted annually; by
implementation period; (ii) have such accounts and Schedule the end of 2011 seven such
related financial statements audited annually, in 4.05 reports were submitted.
accordance with appropriate auditing standards
consistently applied, by external auditors whose
qualifications, experience and terms of reference
are acceptable to ADB; (iii) furnish to ADB, as soon
as available but in any event not later than nine (9)
months after the end of each related fiscal year,
certified copies of such audited accounts and
financial statements and the report of the auditors
relating thereto (including the auditors’ opinion on
the use of the Loan proceeds and compliance with
the covenants of this Loan Agreement as well as
on the use of the procedures for imprest account),
all in the English language; and (iv) furnish to ADB
such other information concerning such accounts
and financial statements and the audit thereof as
ADB shall from time to time reasonably request.
13. Tariffs. The Borrower shall ensure through MOR Loan Complied with. Current tariffs
that the tariffs for the Project railway are set at Agreement, will be reviewed and adjusted
levels sufficient to ensure the financial viability and Schedule if necessary.
sustainability of the Project railway. 6.25
14. The Borrower shall ensure that MOR carry out a Loan Complied with. The tariff
tariff study 6 months prior to trial operation of the Agreement, applied to the project railway
Project railway and will advise ADB of the tariffs Schedule was reported to ADB in time.
applied to the trial operation of the Project railway. 6.25
15. The Borrower shall, and shall cause MOR to, Loan Complied with. Passenger
ensure that the tariffs applicable to the Project Agreement, tariffs of national railways and
railway will not be lower than the currently Schedule freight tariff of
applicable standard tariffs for the national 6.25 CNY0.2409/ton-km for local
railways in real terms. traffic and CNY0.1600/ton-km
for transit traffic (higher than
national level of
CNY0.1200/ton-km) are
applied.
28 Appendix 7

16. Material Institutional and Policy Changes. The Loan Complied with. ADB has been
Borrower shall through MOR advise ADB of any Agreement, updated on MOR’s
institutional and/or policy changes, including, but Schedule institutional and policy
not limited to, organizational changes, tariff policy, 6.33 development in preparation of
which may affect the construction and/or operation new projects.
of the Project railway and seek ADB’s concurrence
if such changes will in a material manner affect the
construction and operation of the Project railway
and performance of the obligations of the Loan
Agreement.
17. Construction Quality. The Borrower shall ensure Loan Complied with. The project
through MOR that the Project railway is constructed Agreement, passed MOR’s check on
in accordance with the national technical Schedule 6.3 construction quality and
standards, and that construction supervision, transportation safety
quality control, and contract management is to be assessment before the trial
performed satisfactorily. operation started.
18. Electrification of Dazhou-Wanzhou (Dawan) Loan Complied with. Electrification

Railway and Yaqueling-Yichang (Ya Yi) Line. Agreement, of Dazhou–Wanzhou Railway
The Borrower shall ensure through MOR that the Schedule 6.4 and Yaqueling–Yichang
electrification of Dawan Railway and Ya Yi Line be Railway was completed.
completed by the commencement of commercial
operation of the Project railway.
19. Connecting Railway Lines. The Borrower shall Loan Complied with. In addition,
ensure through MOR that the ongoing and planned Agreement, the new double track and
railway lines (Tongling-Guichi-Jiujiang and Schedule 6.5 electrified Wuhan–Yichang
Changjiangbu-Jinmen) be completed by the Railway was operational in
commencement of commercial operation of the July 2012; Chongqing–
Project railway. Lichuan Railway is being
constructed.
20. Capacity Constraint on Connecting Lines. The Loan Complied with. With the
Borrower shall ensure through MOR that the Agreement, above development, there is
capacity constraint on Ya-Yi Line and/or Dawan Schedule 6.6 no capacity constraint on
Railway, once identified during the operation of the connecting lines.
Project railway, be resolved through, among others,
increasing the size of a train formation, shortening
block section and/or increasing train speed.
21. Supply of Rolling Stock and Electricity. The Loan Complied with. Sufficient
Borrower shall ensure that MOR provide sufficient Agreement, rolling stock and electricity
rolling stock and adequate supply of electricity for Schedule 6.9 have been provided.
the Project railway operation.
22. Safety. The Borrower shall ensure through MOR Loan Complied with. Safety
that the safety of passengers and freight will be Agreement, requirements are integrated
ensured in accordance with the Borrower's relevant Schedule in the operational procedures
laws and regulations. 6.10 of railway administration
bureaus and are closely
monitored.
Appendix 7 29

23. Safety Dissemination. The Borrower shall ensure Loan Complied with. Public safety
that MOR, in cooperation with the local Agreement, campaigns have been
governments, will carry out appropriate public Schedule conducted through
safety campaigns through media, public 6.11 newspapers, TV, and public
announcements, household contacts and schools announcements. The whole
to familiarize people living along the Project railway alignment has been fully
route with safety issues related to the electrified fenced off for operation.
railway.
24. Worker's Safety at Construction Sites. The Loan Complied with. Tunnel and
Borrower shall ensure through MOR that (i) the Agreement, bridge construction posed
safety of workers employed by contractors is Schedule significant challenges;
protected and the necessary measures are taken in 6.30 construction safety was
accordance with the Borrower's Labor Laws and systematically managed
the relevant regulations; and (ii) the sufficient through a combination of a
number of clinics, appropriately equipped monitoring system on the
particularly against epidemic, will be established in hydrological situation,
the construction sites in order to ensure the health disaster alarm system, and
of workers. monitoring system on
structure safety; clinics were
equipped at construction
camps.
25. Industrial Sidings. The Borrower shall ensure Loan Complied with. One industrial
through MOR that potential major shippers along Agreement, siding of 5.9 km was
the Project railway will be encouraged and assisted Schedule constructed in Enshi with
as necessary to construct and operate industrial 6.13 annual capacity of 500,000
sidings. tons. Several industrial
sidings are planned to be
constructed in Yichang.
26. Station Access and Link Roads. The Borrower Loan Complied with. Station
shall cause, through MOR, the local governments Agreement, access and link roads have
to construct the station access roads and carry out Schedule been completed and public
the improvements on link roads in a timely manner 6.12 bus services are provided at
prior to the commencement of commercial all the stations. In addition,
operation of the Project railway. 600 km of construction
access roads have been
handed over to the local
governments.
27. Local Road Network. The Borrower shall cause Loan Complied with. All railway
through MOR the local governments on the Project Agreement, stations were connected to
railway alignment to implement the local road Schedule local road network.
network development plan as it is planned in 6.14
conjunction with Project railway construction.
30 Appendix 7

28. Land Acquisition and Resettlement. The Loan Complied with. Local
Borrower shall ensure that the institutional Agreement, governments along the
responsibility for implementation of land acquisition Schedule alignment were responsible
and resettlement is properly carried out by the 6.16 for implementation of land
concerned local governments, on the basis of prior acquisition and resettlement;
arrangements with MOR, which include, among railway construction support
others, setting up of railway construction support offices were set up and
offices in the concerned administrative areas. The played important roles in
Borrower shall ensure that MOR, and shall through implementation of
MOR ensure that the concerned local resettlement plan. Civil works
governments, will implement the RP in accordance contracts incorporated social
with its terms, all applicable laws and regulations, safeguards requirements.
and ADB's Policy on Involuntary Resettlement and
Policy on Indigenous Peoples. The Borrower shall,
through MOR, advise ADB if there are any
substantive changes of the project scope or
implementation arrangement with respect to the
implementation of the RP, and submit such
changes to ADB for concurrence as necessary.
The Borrower shall ensure through MOR that civil
works contracts include requirements to comply
with the RP and ensure that MOR supervise the
contractors to comply with requirements of the RP,
applicable law of the Borrower and ADB policy.
29. The Borrower shall ensure through MOR, Hubei Loan Complied with, A total of
Provincial Government and Chongqing Municipal Agreement, CNY637.48 million of land
Government, the timely provision of funds for land Schedule acquisition and resettlement
acquisition and resettlement as determined in the 6.17 costs were disbursed, an
RP and meet any unforeseen obligations in excess increase of 89% on the
of the resettlement budget. The Borrower, through CNY336.63 million estimated
MOR, shall ensure that all affected persons (AP) in the resettlement plan.
are compensated and assisted prior to
displacement from their houses, land and assets in
accordance with the RP such that they will be at
least as well off as they would have been in the
absence of the Project, and that the resettlement
funds for compensation and entitlements as set out
in the RP are fully provided to AP through the local
governments and the relevant village organizations.
30. The Borrower shall ensure through MOR that the Loan Complied with. YWRCH, local
concerned local governments place priority on the Agreement, railway resettlement support
vulnerable households as set out in the RP. Schedule offices, and local
6.18 governments provided
various forms of assistance
for vulnerable groups affected
by the project.
Appendix 7 31

31. The Borrower shall cause through MOR the Loan Complied with. Same
concerned local governments to ensure that ADB’s Agreement, compensation policies
Policy on Involuntary Resettlement and Policy on Schedule applied to associated
Indigenous Peoples will be applied to the 6.19 facilities.
associated facilities such as the station access
roads and construction service roads.
32. The Borrower shall ensure, through MOR that Loan Complied with. Progress
adequate staff and resources are committed to Agreement, reports reflected land
supervision and internal monitoring of the Schedule acquisition and resettlement
implementation of the RP and quarterly reports on 6.20 information; a resettlement
such implementation are submitted to ADB. The completion report was
Borrower shall cause MOR to ensure that the submitted to ADB.
adequate supervision, internal monitoring and
reporting requirements for land acquisition and
resettlement will be fulfilled, namely, (i) land
acquisition and resettlement progress in the
quarterly progress reports during implementation,
(ii) notice of the completion of land acquisition, and
(iii) a resettlement completion report.
33. The Borrower shall cause MOR to contract an Loan Complied with. The Fourth
external domestic monitoring agency, in Agreement, Survey and Design Institute
accordance with procedures acceptable to ADB, to Schedule of China Railway (FSDI) was
carry out systematic monitoring in the contractual 6.21 engaged as the external
framework and forward reports to ADB. External agency to conduct external
monitoring shall include a baseline socioeconomic monitoring and evaluation for
survey of households before the land is acquired. the project. The FSDI
The external monitor shall conduct investigations prepared and submitted its
and prepare reports annually during the period of first resettlement monitoring
land acquisition and resettlement, including report to ADB in March 2005,
households to be surveyed once after resettlement and it subsequently submitted
or until economic rehabilitation has been the second resettlement
completed. monitoring report in May
2006, the third in August
2007, and the fourth in June
2008.
34. The Borrower shall cause through MOR the Loan Complied with. County
concerned local governments to ensure that all AP Agreement, governments along the
are provided adequate information and regularly Schedule alignment disseminated
consulted in advance of signing household 6.22 resettlement booklets in the
compensation agreements and making other Chongqing section in October
decisions that will affect their livelihoods and living 2003 and in the Hubei section
conditions as a result of the Project. The Borrower in July 2004.
shall cause MOR to ensure through the concerned
local governments that the railway construction
support offices maintain records of consultation and
grievances.
35. The Borrower shall ensure, through MOR and the Loan Complied with. Consultative
concerned local governments, that the AP are Agreement, meetings were held during
provided adequate opportunities to participate in Schedule implementation with local
32 Appendix 7

resettlement planning and implementation, 6.23 railway support offices, village
particularly in income restoration measures, as set committees, and the
out in the RP. representatives of affected
people.
36. Sexually Transmitted Diseases. The Borrower Loan Complied with. Clinics were
shall ensure through MOR that the information on Agreement, established in all construction
the risks of sexually transmitted diseases, inter alia, Schedule camps where such
HIV/AIDS, will be disseminated to those employed 6.31 information is distributed.
for the Project railway's construction. The Borrower Local governments
shall ensure that MOR, in collaboration with the conducted various programs
local governments, will ensure that the information for disease prevention,
dissemination of sexually transmitted diseases, particularly regarding
inter alia, HIV/AIDS will be conducted in the local HIV/AIDS.
communities of the Project area around the
construction sites.
37. Welfare Policy Emphasis. The Borrower shall Loan Complied with. Quality of life
cause through MOR the local government of Agreement, improved significantly as
Yichang, Enshi and Wanzhou Prefectures to place Schedule measured by major welfare
a priority on welfare, social security, health care 6.32 indicators for medical
and education, and special measures for the condition, education, roads,
economic rehabilitation of the vulnerable people and telecommunication as
affected by the Project railway’s construction. well as broadcast coverage.
38. Environment. The Borrower shall ensure through Loan Complied with. The EIA
MOR that the design, construction and operation of Agreement, report was approved by the
all Project facilities comply with the national and Schedule State Environmental
local environmental laws and regulations and 6.26 Protection Administration
ADB’s procedures, policy and guidelines on (SEPA), and the SEPP was
environment. The Borrower shall cause MOR, approved by the Ministry of
together with the environmental protection bureaus Water Resources. The
of Chongqing Municipality and Hubei Province and updated EIA was approved
the concerned prefectures and counties, to ensure by the SEPA in August 2006
that the station access and construction service for the double-track section.
roads are constructed in accordance with the
national environmental requirements and ADB’s
policy and guidelines on environment.
39. The Borrower shall ensure through MOR that any Loan Complied with. All the
adverse environmental impacts arising from Agreement, contractors fulfilled their
construction and operation of the Project railway Schedule obligation to protect the
will be minimized by implementing the mitigation 6.27 environment and to
measures and monitoring program recommended implement mitigation
in the EIA and the Summary EIA. measures in their
construction schemes. During
operation, the impacts on the
ambient environment are
minor. The project will gain
environment benefits from
emission reduction.
Appendix 7 33

40. The Borrower shall cause MOR to incorporate the Loan Complied with. The
recommendations in EIA into the bidding Agreement, construction schedule was
documents, the construction contract and related Schedule strictly arranged according to
documentation in an appropriate manner, so that 6.28 the EMP and conservation
the mitigation measures for the Chinese Sturgeon program. Mitigation measures
will be fully implemented within the contractual were implemented
framework and in accordance with the conditions adequately. Monitoring
set forth in the notice of approval on the reports concluded that the
construction issued by Hubei Provincial Yichang bridge construction
Government. crossing the Yangtze River
had no impacts on the
population and spawning
habitats of Chinese sturgeon.
41. Environmental Supervision Scheme. The Loan Complied with. Environmental

Borrower shall cause MOR to apply the Agreement, supervision has been strictly
environmental supervision scheme to the Project Schedule undertaken.
during construction of the Project railway. 6.29
42. Monitoring and Evaluation. The Borrower shall Loan Complied with. Monitoring
cause MOR to undertake the implementation of Agreement, reports have been submitted
Project Performance Management System (PPMS) Schedule on time.
as agreed on with ADB to ensure that the objective 6.15
of the Project is achieved and the Project facilities
are managed efficiently. The Borrower shall cause
MOR to collect the necessary information on
Project performance as agreed to by ADB.
ADB = Asian Development Bank, LA = loan agreement, PRC = People’s Republic of China, MOR = Ministry of
Railways, EIA = environmental impact assessment, YWRCH = Yichang–Wanzhou Railway Construction
Headquarters.
CONTRACT PACKAGES FINANCED BY THE ASIAN DEVELOPMENT BANK
34
Cat PCSS Contract ADB Financing
Contract Description PM Contractor Currency Contract Amount
No. No. Date Amount ($)
I Civil Works
Appendix 8
1 Construction of Section W2 0001 ICB 20-Sep-04 China Railway 16th Bureau Group CNY 226,209,317.00 13,486,611.73
Co., Ltd.
2 Construction of Section W7 0002 ICB 20-Sep-04 China Railway Shisiju Group CNY 190,499,063.00 11,468,855.40
Corporation
3 Construction of Section W8 0003 ICB 20-Sep-04 China Railway Tunnel Group Co., CNY 233,320,796.00 14,281,718.09
Ltd.
4 Construction of Section W13 0004 ICB 20-Sep-04 China Tiesiju Civil Engineering CNY 174,076,282.00 9,912,551.31
Group Co., Ltd.
5 Construction of Section W17 0005 ICB 20-Sep-04 China Railway 13th Bureau Group CNY 264,181,118.00 16,040,531.57
Co., Ltd
6 Construction of Section W18 0006 ICB 20-Sep-04 China Railway Erju Co. Ltd. CNY 116,616,546.00 6,882,407.37
7 Construction of Section W20 0007 ICB 20-Sep-04 China Railway Engineering CNY 79,861,816.00 4,709,574.88
Corporation
8 Construction of Section W21 0008 ICB 20-Sep-04 China Railway 11 Bureau Group CNY 156,655,188.00 9,384,222.66
Corporation
9 Construction of Section W22 0009 ICB 20-Sep-04 China Railway 19 Bureau Group CNY 197,623,979.00 11,843,806.30
Corporation
10 Construction of Section W23 0010 ICB 20-Sep-04 China Railway First Group Co., CNY 211,588,708.00 12,591,661.37
Ltd.
11 Construction of Section W25 0011 ICB 20-Sep-04 The Third Engineering Group Co., CNY 100,005,584.92 6,564,037.63
Ltd of China Railway
12 Construction of Section W1 0012 ICB 28-Dec-04 China Tiesiju Civil Engineering CNY 697,327,393.42 46,231,761.28
Group Co., Ltd.
13 Construction of Section W3 0013 ICB 28-Dec-04 China Railway Engineering CNY 103,888,328.00 6,199,164.29
Corporation
14 Construction of Section W4 0014 ICB 28-Dec-04 The Third Engineering Group Co., CNY 336,369,085.83 20,479,985.41
Ltd. of China Railway
15 Construction of Section W5 0015 ICB 28-Dec-04 China Railway Erju Co., Ltd. CNY 225,590,000.00 13,816,825.18
16 Construction of Section W6 0016 ICB 28-Dec-04 China Railway Bureau 15 Group CNY 431,262,270.00 25,365,575.89
Co., Ltd.
17 Construction of Section W2 0017 ICB 28-Dec-04 China Railway Shiqiju Group CNY 207,362,633.00 12,624,913.99
Corporation
18 Construction of Section W10 0018 ICB 28-Dec-04 China Railway 12th Bureau Group CNY 368,887,549.00 22,591,201.63
Co., Ltd.
19 Construction of Section W11 0019 ICB 28-Dec-04 China Railway 18th Bureau CNY 362,032,776.00 22,661,606.80
(Group) Co., Ltd.
20 Construction of Section W12 0020 ICB 28-Dec-04 The Third Engineering Group Co. CNY 350,295,681.00 21,615,421.30
Ltd of China Railway
21 Construction of Section W14 0021 ICB 28-Dec-04 China Railway First Group Co. CNY 379,815,961.00 23,128,714.76
Ltd.
22 Construction of Section W15 0022 ICB 28-Dec-04 China Railway 20 Bureau Group CNY 310,322,838.00 19,487,085.43
Corporation
Corporation
24 Construction of Section W19 0024 ICB 28-Dec-04 China Railway Tenth Group Co., CNY 103,993,643.00 6,184,809.64
Ltd.
Corporation
Sub-total 382,077,566.79
II Equipment
1 Lot 1: On-Track Full Section 0026 ICB 12-Jan-05 China Railway Large Maintenance USD 7,800,000.00 7,800,000.00
Undercutting Ballast Cleaning Machinery Co., Kunming (China)
Machines (3 Sets)
2 Lot 2: Track Lifting Lining 0027 ICB 12-Jan-05 China Railway Large Maintenance USD 2,160,000.00 2,160,000.00
Leveling And Tamping Machinery Co., Kunming (China)
Machine (2 Sets)
3 Lot 3: Continuous Action Track 0028 ICB 12-Jan-05 China Railway Large Maintenance USD 6,480,000.00 6,480,000.00
Lifting Lining Leveling And Machinery Co., Kunming (China)
Tamping Machine (4 Sets)
4 Lot 4: Heavy Duty Swift Lifting 0029 ICB 12-Jan-05 China Railway Large Maintenance USD 3,960,000.00 3,960,000.00
Lining Leveling And Tamping Machinery Co., Kunming (China)
Machine (2 Sets)
5 Lot 5: Dynamic Track 0030 ICB 12-Jan-05 China Railway Large Maintenance USD 4,900,000.00 4,900,000.00
Stabilizer (5 Sets) Machinery Co., Kunming (China)
6 Lot 6: Ballast Regulating 0031 ICB 12-Jan-05 China Railway Large Maintenance USD 714,154.00 714,154.00
Machine (2 Sets) Machinery Co ., Kunming (China)
7 Lot 7: Fixed Rail Welding 0032 ICB 12-Jan-05 Yardway Ltd. USD 998,586.00 998,586.00
Machine (1 Set)
Appendix 8
Sub-total 27,012,740.00
III Materials
1 Lot A1: Concrete Girder, 702 0033 ICB 24-Apr-06 Beijing Golden Fuli Electro- CNY 133,440,349.00 18,304,161.23
Span + 62 Pieces mechanics Development Co., Ltd.
2 Lot A2: Concrete Girder, 434 0034 ICB 24-Apr-06 China Railway Beijing Fangshan CNY 32,675,160.00 4,494,707.46
Span + 59 Pieces Bridge Co., Ltd.
35
3 Lot A3: Concrete Girder, 647 0035 ICB 24-Apr-06 China Shandong International CNY 117,096,806.00 16,771,503.30
Span + 81 Pieces Economic & Technical
Cooperation Corp.
36
4 Lot B1: Steel Bearing, 733 0036 ICB 24-Apr-06 CCECC International Trading CNY 14,719,010.00 2,104,435.83
Spans Company Ltd.
Appendix 8
5 Lot B2: Steel Bearings, 1151 0037 ICB 24-Apr-06 China Railway Materials Import CNY 23,618,895.00 3,444,597.92
Spans and Export Co., Ltd.
6 Railway Materials, Lot 101- 0038 ICB 15-Jun-07 Consortium Beijing Golden Fuli CNY 19,658,607.90 2,852,032.05
Contrete Sleepers (121,510 Electro- mechanics Development
th
Pieces) Co., Ltd. and the 6 Engineering
Company Limited of China
Zhongtie Major Bridge
Engineering Group Co., Ltd.
7 Procurement Of Railway 0039 ICB 15-Jun-07 China Railway Materials I/E Co., CNY 12,658,479.68 1,798,848.10
Materials (Lot 102,Concrete Ltd.
Sleepers, 333,905 Pieces)
8 Railway Materials (Lot 201= 0040 ICB 15-Jun-07 China Railway Turnout Bridge, Inc CNY 57,888,680.00 8,371,586.32
Turnout - 269 Sets)
9 Railway Materials 0041 ICB 15-Jun-07 China National Electric Import & CNY 4,429,774.43 641,563.48
(Lot301fastenings & Fish Plate Export Corp.
328470 Sets)
10 Railway Materials (Lot 302- 0042 ICB 15-Jun-07 China National Electric Import & CNY 11,341,987.24 1,644,729.54
Fastenings And Fish Plates Export Corp.
812,402 Sets)
11 Railway Materials (Rail 17165 0043 ICB 15-Jun-07 World Tender Industrial Ltd. CNY 71,464,625.68 10,272,378.22
Ton+20 Pieces)
12 Railway Materials (Rail 28,428 0044 ICB 15-Jul-07 China Railway Materials I/E Co., CNY 119,896,484.16 17,235,689.76
Ton+38 Pieces) Ltd.
Sub-total 87,936,233.21
IV Consulting Services
1 Consulting Services 0045 QCBS 31-Mar-08 Poyry (Beijing) Consulting USD 521,160.00 473,460.00
Company Limited
Sub-total 473,460.00
Total 497,500,000.00
Cat No. = category number, PCSS = procurement contract summary sheet, PM = procurement mode, ICB = international competitive bidding, QCBS = quality and
cost-based selection.
Appendix 9 37
TECHNICAL ASSISTANCE COMPLETION REPORT

Division: EARD/EAOD
TA No. and Name Amount Approved: $250,000

3983-PRC: Strengthening Involuntary Resettlement Practices Revised Amount:$227,567
Executing Agency: Source of Funding: TA Amount Undisbursed TA Amount Utilized
Ministry of Railways TASF $22,433 $227,567
Date Completion Date
Approval Signing Fielding of Consultants Original Actual
4 Dec 2002 31 Jan 2003 31 Jan 2005
14 Jan 2003 Closing Date
11 Nov 2002 18 Nov 2002 12 Jan 2004 Original Actual
20 Feb 2004 31 Jan 2003 30 Sep 2005
Description
The technical assistance (TA) was provided to complement the ongoing project preparatory TA for preparing the
Yichang–Wanzhou Railway Project in order to ensure the refinement of the resettlement plan and compliance with the
social safeguard policies of the Asian Development Bank (ADB).
Objectives and Scope

The purpose of the TA is, as a complement to ongoing project preparatory TA, to (i) ensure that involuntary
resettlement under the project will fully comply with ADB policy and guidelines in a sustainable manner; (ii) improve
the efficiency and accuracy of processing, recording, and reporting of the land acquisition and resettlement, reduce
complaints from affected people and the future administrative costs to the local government, the executing agency,
and ADB; (iii) increase the capacity of the project counterparts including the local government dealing with the land
acquisition and resettlement for compliance with ADB's safeguard policy and practices; and (iv) assess the impact of
the change of the alignment from the structural engineering viewpoint compared with the initial technical review. The
outputs of the TA will vary from one component to another and will be designed, as a value-added product of the
ADB-financed consulting services, under the concept of enhancing monitorability, durability, replicability, and
implementability.
Evaluation of Inputs
There were separate terms of reference (TORs) prepared and consultants engaged for four components: (i) preparing
village rehabilitation plans and assessment of ethnic minority issues, (ii) resettlement training workshop facilitator, (iii)
preparing the resettlement management information system (MIS), and (iv) structural engineering technical review.
The TORs were adequate and each consultant generally performed their tasks effectively. The inputs were
coordinated by the Ministry of Railways, which provided excellent support and showed good commitment to the
outputs. The ADB mission leader and resettlement specialist provided inputs on several review missions. The majority
of inputs were for the resettlement MIS and this component took much longer than anticipated, and the efforts
provided by the consultant—the Fourth Survey Design Institute of MOR (FSDI)—exceeded the amount covered by the
TA.
Evaluation of Outputs
Village rehabilitation plans and assessment of ethnic minority impacts. Two reports were submitted to ADB in
2003 which helped form the basis for social safeguard compliance prior to loan appraisal. The methodology for
formulating six village rehabilitation plans included a participatory process which can be utilized during project
implementation to refine the plans. Through the involvement of county resettlement officials, this process can also be
applied in other seriously affected villages.
Resettlement training workshop. In December 2003, a 2-day resettlement training workshop was conducted in
Yichang for municipal and county resettlement officials from the project area. The workshop provided good exposure
to ADB safeguard policy requirements and permitted detailed discussion on the resettlement plan. Many officials
recognized that more detailed implementation documents would need to be prepared to implement the resettlement
plan. The MOR agreed to coordinate these activities through the Railway Construction Support Offices.
Resettlement management information system. The outputs included: (i) design and preparation of a resettlement
MIS, (ii) collection of survey data and input to the MIS to form the baseline database, (iii) capacity building and training
of local officials in use of the resettlement MIS, and (iv) preparation of sample output tables. This work was conducted
38 Appendix 9
by FSDI professionals with experience in resettlement and socioeconomic assessment. The MIS was developed using
PRC software so as to facilitate training and use by local officials.
The design of the system was rather complex due to requirements to meet the needs of local officials and ADB.
Consequently, the quantity of data to be collected and input was quite high, but fortunately it was decentralized by
county. Nonetheless, this required significant effort from the FSDI for training and stronger-than-expected commitment
from local officials. Computers were provided to each county to store the database and maintain the MIS locally.
However, the MIS was designed to aggregate the data and results for reporting to MOR and ADB. Although the MIS is
good, its regular use in operational monitoring and supervision is still uncertain due to traditional reliance on paper
reporting. This concern will be monitored by ADB during project implementation. Even if the MIS has limited
application for management of resettlement, the database still provides an excellent baseline for subsequent
monitoring and evaluation of resettlement results. In June 2005, final reports for the MIS were submitted to ADB;
these include (i) a description of the MIS, and (ii) a user manual and formats for data inputs and output tables.
Structural engineering technical review. Two international engineers with expertise on railway tunnels and bridges
conducted a technical review mission in the project area in November 2002. The focus was to assess the impact of
change of the alignment from the structural engineering viewpoint compared with the initial technical review. A report
was submitted to ADB which confirmed the feasibility of the project design, but raised some technical risks that should
be addressed during design and implementation.
Overall Assessment and Rating

The TA is rated successful. Three of the components involved relatively short inputs and well-defined outputs. The
main component to prepare the resettlement MIS met the basic requirements but it was considered a pilot test for
large infrastructure projects in the PRC. Consequently, more time is needed to determine the applicability of this
particular MIS. Nonetheless, good progress was achieved in preparing this first MIS; subsequent projects may
consider further refinements to make it more applicable in the PRC. In terms of the overall objective to strengthen
resettlement practices, the TA has had a significant positive impact.
Major Lessons
The TA goal of preparing a comprehensive resettlement MIS was quite ambitious for such a large project.
Consequently, significant time and effort was spent collecting a comprehensive database and training local officials in
eight counties and districts. In hindsight, it may have been better to focus on two pilot counties; however, this would
not have achieved the comprehensive baseline data.
Significant efforts were made to get ownership from local officials, since the MIS was designed to benefit them.
However, given the reliance on traditional paper systems that already meet their requirements, they saw little value in
a system that primarily benefits the MOR and ADB. Such an MIS can still have advantages but, until the regulations
require a computerized system, widespread use of MISs for resettlement implementation is unlikely.
Recommendations and Follow-Up Actions

ADB will monitor the use of the resettlement MIS for this project and will have further discussions with the MOR
regarding its applicability for future projects. However, increased use of resettlement MISs will eventually be decided
by local government, since they are responsible for implementation. The resettlement MIS could have application for
other transport projects, and perhaps urban resettlement projects. The World Bank has also experimented with
resettlement MISs, so there can be further collaboration.
Prepared by: Scott G. Ferguson Designation: Senior Social Development Specialist (Safeguards)
In preparing any country program or strategy, financing any project, or by making any designation of or
reference to a particular territory or geographic area in this document, the Asian Development Bank does
not intend to make any judgments as to the legal or other status of any territory or area.
Appendix 10 39
TECHNICAL ASSISTANCE COMPLETION REPORT

Division: EARD/PRCM
TA No., Country and Name Amount Approved: $150,000.00
TA4255-PRC : Ensuring Safeguard Practices Revised Amount: $56,082.64
Executing Agency: Source of Funding: Amount Undisbursed: Amount Utilized:

Ministry of Railways TASF $0.00 $56,082.64
TA Approval TA Signing Fielding of First Consultants: TA Completion Date Actual: 30 Sep 2008
Date: Date: Original: 31 Dec 2007
15 Dec 2003 30 Mar 2004 Account Closing Date Actual: 30 Sep 2008
Original: 31 Dec 2007
Description
The Yichang Extra-Large Bridge constructed under the Yichang–Wanzhou Railway Project is located in an
environmentally sensitive area on the Yangtze River, which required specific actions during construction. The
environmental impact assessment (EIA) for the project identified potential disturbance due to bridge construction to
the Chinese sturgeon breeding grounds and other sensitive species in the Yangtze. The Chinese sturgeon is a Class
1 protected species. The EIA concluded that the adverse environmental impacts could be mitigated, and
recommended appropriate measures. The Yichang Bridge construction was approved with three conditions: (i)
construction methods must minimize disruption to the riverbed and fish population, (ii) no foundation work is allowed
from 15 September through 30 November (the sturgeon spawning season), and (iii) the construction contractor(s)
will have strict liability for any ecological damage caused by construction. Implementation of environmental
management and mitigation and monitoring programs included in the EIA will ensure compliance with the
environmental guidelines and procedures of the Asian Development Bank (ADB) and the government.
Expected Impact, Outcome, and Outputs

The technical assistance (TA) was provided to establish an independent environmental panel to ensure compliance
with ADB's safeguard policy, particularly with the mitigation measures for the endangered species in the Yangtze
River. The TA was expected to make recommendations on the environmental protection and management of the
project with respect to the endangered species in a manner consistent with ADB’s safeguard policies. The
consultants were engaged to (i) review the relevant documentation including the project EIA, ADB environmental
guidelines, and the provincial government's conditional approval of the construction of the bridge; and (ii) visit the
project area, especially the bridge construction site; and discuss and review findings with the executing agency, the
independent monitoring agency, the provincial environmental bureaus, and relevant institutes.
Delivery of Inputs and Conduct of Activities

The TA formulation and terms of reference (TOR) are appropriate and adequate. The consultants carried out
independent review and gave an objective and unbiased professional opinion on top of the environment monitoring
arrangements established under the project, which contained the following layers: (i) the Hubei Province
Environmental Protection Bureau, as the primary environmental regulatory authority for the area, supervised the
environmental mitigation measures; (ii) the Hydrobiology Institute of the Chinese Academy of Sciences, which has
specific expertise on the Chinese sturgeon, provided monitoring services; and (iii) the external monitoring agency,
the Beijing Oasis Environmental Protection Technology Company, conducted periodic environmental monitoring. The
consultant conducted periodic environmental reviews of relevant documentation, including monitoring reports to
identify actual and potential problems; visited the project area; held discussions with the concerned executing
agency officials, contractors, and affected persons; and provided recommendations and suggested actions to be
taken.
The consultant team consisted of one international and one national consultant providing a total of 7 person-months
of services from January 2004 to December 2007. The timing of the fielding of the consultants was in accordance
with the construction schedule, particularly the schedule of the Yichang Extra-Large Bridge. Three field reviews were
conducted by the consultant. Reports reflecting the evaluation of the independent panel were provided at each
fielding of the consultants. Performance of the consultants is rated satisfactory.
Evaluation of Outputs and Achievement of Outcome

The TA outcome has been achieved. The consultant reviewed environmental monitoring reports, identified
information gaps, and advised on measures for improvement. The institutional arrangement for environmental
40 Appendix 10
management was also discussed. The independent professional opinion was established based on observations at
site visits, interviews with relevant agencies, and analysis of information, which provided a supplementary and
objective assessment of the compliance status regarding ADB safeguard policies. Potential issues and risk factors
were identified and precautionary measures were taken in a timely manner. Good practices were introduced through
dialogue and specific recommendations with executing agency officials, contractors, design institute, and monitoring
agencies, which improved their capacity to follow international standards.
Overall Assessment and Rating

The TA is rated successful. The expected impact has been realized. The consultant remarked in his report that “This
all demonstrates that, with adequate care, even a major bridge can ‘step lightly’ across the natural environment.” The
consultant’s independent opinion, which was based on observations at site visits, interviews with relevant agencies,
and analysis of information, confirmed the adequacy of preventative measures to protect endangered species. The
China Railway Fourth Survey and Design Institute concluded that the Yichang Extra-Large Bridge constructed
across the Yangtze River had brought about no impacts on the population and spawning habitats of Chinese
sturgeon. The continuing monitoring by the Yangtze Aquatic Institute of the Chinese Academy of Aquatics also
shows the Chinese sturgeon population to be stable.
Major Lessons
The consultant should have conducted more field reviews, for which better coordination among the executing agency
and other relevant agencies are needed.
Recommendations and Follow-Up Actions

With completion of the project, no follow-up action is needed.
Prepared by: Wang Fang Designation: Senior Project Officer (Financial Management)
In preparing any country program or strategy, financing any project, or by making any designation of or
reference to a particular territory or geographic area in this document, the Asian Development Bank does
not intend to make any judgments as to the legal or other status of any territory or area.
Appendix 11 41
ECONOMIC REEVALUATION
A. General
1. The project at completion comprises a 377 kilometer (km) standard-gauge electrified

railway between Yichang (324 km in Hubei Province) and Wanzhou (53 km in Chongqing
Municipality). Different from the original design of a single-track rail, the 288 km Yichang–
Liangwu section of the Yichang–Wanzhou Railway (YWR) was constructed as double-track line.
Ten new railway stations were constructed and the existing Yichang and Wanzhou stations
were expanded under the project. The YWR started freight and passenger operation on 22
December 2010. The operation of the YWR is assigned to the Wuhan Railway Administration
for the Yichang–Liangwu section and the Chengdu Railway Administration for the Liangwu–
Wanzhou section. The design speeds of 160 km per hour (km//h) for the double-track section
and 120 km/h for the single-track sections were achieved from the start of operation. The
reevaluation is undertaken using with- and without-project scenarios in accordance with the
Guidelines for the Economic Analysis of Projects1 of the Asian Development Bank (ADB). In the
without-project case, the existing roads and waterways in the project corridor and alternative
longer railway routes, mainly the Xiangyu Line (Xiangfan–Chongqing), would be relied upon.
That would result in growing traffic congestion, higher transport costs, and longer travel times. In
the with-project case, the YWR would be used so as to take advantage of its lower transport
costs, shorter travel distances, and improved service levels. Capacity of alternative railway
routes will also be released due to traffic being diverted to the YWR. The evaluation period
covers the implementation period from 2003 to 2011 and the operation period from 2011 to
2043, which is consistent with the evaluation at appraisal.
B. Costs
2. The project costs consist of capital costs, operation and maintenance costs, and the
costs for equipment replacement and infrastructure rehabilitation to be undertaken during the
evaluation period. The incremental cost of rolling stock is annualized and forms part of the unit
operating costs based on the experience of the Wuhan and Chengdu railway administration
bureaus which are responsible for operation and maintenance of the YWR. Financial costs were
converted to economic costs following the same methodology at appraisal.
C. Traffic
3. Significant multimodal transport development has taken place in the project corridor
during the implementation period, including completion of the Yichang–Wanzhou Expressway
which forms part of the expressway trunk connecting Shanghai and Chengdu, and completion of
Three Gorges Dam which affects the navigation capacity of the Yangtze River. The traffic
forecast is based on the actual performance of the YWR in 2011, and the impacts of all
transport modes in the YWR catchment area, i.e., the expressway and the national highway, the
Yangtze waterway, and the airline services available in the region. The impact of the capacity
expansion of the Xiangyu Line, which carried the railway traffic before the opening of the YWR,
and the completion of the Wuhan–Yichang Railway and the status of connecting the
Chongqing–Lichuan Railway, 2 are also considered. Other factors include expected economic
growth, local investment plans, and the prospects for tourism development.
1
ADB. 1997. Guidelines for the Economic Analysis of Projects. Manila.
2
People’s Republic of China for the Chongqing–Lichuan Railway Development Project. Manila.
42 Appendix 11
4. Passenger demand is promising according to the actual performance in 2011 and

surveys which indicated that passengers wanted more trains in service, particularly trains that
travel to prosperous areas such as Guangzhou, Hangzhou, Ningbo Nanjing, Shanghai, and
Xiamen, where more job opportunities are available. About 2.4 million people from Wanzhou
Prefecture work in the coastal provinces. It was found that Wuhan and Enshi stations sold out of
allocated tickets several days in advance, especially during tourism seasons and holidays. This
indicates that the YWR has been well received and that project area residents are making good
use of the rail service. The opening of the Wuhan–Yichang Railway in July 2012 and the
expected opening of the Chongqing–Lichuan Railway in 2014 will have a dramatic impact on
YWR passenger traffic levels. The volume will grow rapidly as a result of the diversion from the
associated railway lines, road, waterway, and airlines. It is estimated that 70% of the
expressway and national highway passenger traffic is diverted to the YWR. The number of
trains on the YWR will be increased from 17 train pairs per day in 2011 to at least 25 train pairs
per day in 2012 and to 50–60 train pairs per day in 2020. Passenger volume is expected to
increase from about 12.26 million passengers in 2011 to 28.11 million passengers in 2025,
representing a 3.9% annual increase.
5. Actual freight traffic in 2011 was far below expectations mainly due to two factors: (i) the
generated traffic was low; and (ii) the capacity of the Xiangyu Line has been increased and
accommodates more freight traffic than anticipated. Local traffic on the YWR will grow gradually
from a low level, considering that the primary products to be transported by the railway are coal,
iron ore, construction materials, and gold mine products, which are still in the process of being
developed. Most local traffic was forecasted to originate in Enshi and Yichang prefecture and be
shipped to other provinces of the People’s Republic of China (PRC). Substantial traffic is
expected to be diverted from roads and waterways. Based on the survey conducted by the
Transport Administration Department of Hubei Province, the current road corridor traffic was
about 20–30 million tons in 2011 and has been increasing by 15%–20% annually since 2000.
The growth rate will remain at a high level given the strategic location of the corridor, linking the
west and southeast PRC. Total freight traffic is forecast to reach 5.15 million tons in 2015 and
18.45 million tons in 2025, representing an annual increase of 5.8%.
6. The YWR is the first national railway to incorporate in the design the dimension
requirement for operating double-stack container trains. Container terminals were completed in
Chongqing (December 2009), Chengdu (May 2010), and Wuhan (August 2010). The double-
stack container transportation network will be further expanded with the completion of the
Wuhan–Yichang and Chongqing–Lichuan railways. Experience in other countries has shown
that double-stack container transport operation increases carrying capacity by 60% and
improves energy efficiency by 40%–60%. Interviews with the Yangtze River Shipping Group
Company, Yichang and Wanzhou port authorities, and several logistics companies indicated
that at least 1 million twenty-foot equivalent units (TEUs) were transported from Chongqing to
Shanghai along the Yangtze River in 2011, in addition to a large number of roll-on-roll-off ships
which mainly transported automobiles. Water container traffic has been increasing by 15%–20%
annually since 2000. Moreover, the throughput of Chongqing port alone will reach 2.5 million
TEUs in 2015. Given the competitive advantages of double-stack container trains and the traffic
demand along the corridor, containerization of transportation is expected to develop rapidly.
7. These growth rates are considered reasonable given that the YWR forms one link of the
Shanghai–Chongqing–Chengdu Railway Corridor, a major east–west corridor which connects
the major cities. The strong economic ties between the eastern and western regions will
continue to provide robust freight and passenger traffic. Freight traffic in the initial years has
been substantially lower than the appraisal forecast, however it will accelerate in later stages
Appendix 11 43
and is expected to exceed the appraisal estimates by around 2031. The passenger volumes
have been substantially higher than the appraisal forecast from the very beginning. The updated
traffic forecasts are presented in Table A11.1.
Table A11.1: Traffic Forecast at Project Completion

Item 2011 2015 2025
Freight Traffic (million tons) 0.59 5.15 18.45
Diverted from Road 0.41 3.60 12.92
Diverted from Waterway 0.12 1.03 3.69
Generated 0.06 0.52 1.84
Freight Traffic (million ton-km) 119.68 1,779.43 5,658.18
Diverted from Road 83.77 1245.60 3,960.72
Diverted from Waterway 23.94 355.89 1,131.64
Generated 11.97 177.94 565.82
Passengers (million passengers) 12.26 18.05 28.11
Diverted from Road 4.63 6.50 9.62
Diverted from Air 0.50 0.77 1.23
Generated 2.90 3.93 5.58
Diverted from Existing Railways 3.00 5.05 8.88
Passenger kilometer (million passenger-km) 3,084.31 4,770.31 7,756.81
Diverted from Road 976.48 1,433.63 2,205.40
Diverted from Air 140.36 221.67 365.20
Generated 527.69 734.93 1,064.51
Diverted from Existing Railways 1,131.35 1,903.05 3,346.01
km = kilometer.
D. Benefits
8. The reevaluation quantified the economic benefits of (i) operating cost savings of
diverted freight traffic from roads; (ii) operating cost savings for passengers, estimated as the
difference between traveling on the project railway and traveling by bus; (iii) time savings of
passengers diverted from the Xiangyu Line, roads, and waterways based on the time value
estimated following the average wages in the region; (iv) environmental and safety benefits; (v)
network benefits; and (vi) tourism benefits attributable to the YWR. Benefits of generated freight
and passenger traffic were estimated as half of the benefits of diverted traffic. Unlike in the
appraisal, the net economic value of generated freight traffic and time savings of freight traffic
were not included in the benefit calculation.
9. The benefits from environmental and safety improvement, network capacity increase,
and tourism development were not anticipated at appraisal but turned out to be important
benefits of the project. With the diversion of freight and passengers from road to rail, there will
be benefits due to reduced pollution from trucks, buses, and cars as well as fewer accidents.
This value is included in the benefit stream as environmental and safety benefits. Such
44 Appendix 11
estimations are considered relevant, taking into account the mountainous topography and foggy
weather in the project area, which result in higher energy consumption and more road accidents.
10. The network benefit is justified as the YWR released the capacity on the alternative
Xiangyu Line for freight transport by shifting its passenger trains. According to the experience of
the Ministry of Railways, one pair of passenger trains will take the line capacity of two pairs of
freight trains. Five pairs of passenger trains were shifted from the Xiangyu Line to the YWR in
2011, which generated net revenue of CNY252 million on the Xiangyu Line. This benefit could
increase as more capacity of the Xiangyu Line could be released for freight traffic by shifting
more passenger trains to the YWR.
11. The tourism benefits are significant. The project area is rich in tourism resources which
were not tapped before the project due to the poor transport conditions. Opening of the YWR
brought 16.6 million tourists Enshi prefecture in 2011, 56% higher than the previous year;
tourism revenues in 2011 were CNY8.6 billion, 71% higher than the previous year. Surveys
showed that more than 40% of the tourists in Enshi prefecture and Wanzhou prefecture used
the YWR. The value added of the tourism sector was based on the net of output at economic
prices less the cost of production (sum of all intermediate input costs, wages, and annualized
investment costs). It was estimated that 36% of the incremental value added of the tourism
sector is attributable to the railway.
E. Economic Internal Rate of Return Reevaluation
12. The reevaluated economic internal rate of return (EIRR) is 15.6% (Table A11.2), higher
than the 14.4% estimated at appraisal. Benefits from passenger traffic are the major source of
economic benefits (32.9%), followed by benefits from tourism (31.6%), freight traffic (18.7%),
environmental and safety benefits (9.6%), and network benefits (7.2%). The higher EIRR is due
to the significantly higher passenger traffic and the tourism benefits that were not anticipated at
appraisal. Excluding the network benefit will lower the EIRR to 14.9%, or excluding both the
network benefit and environmental and safety savings will lower the EIRR to 14.0%. Despite this,
the reevaluated EIRR is higher than the cutoff rate of 12% and the project is considered
economically viable.
13. Sensitivity analysis was carried out to test the impacts of (i) a decrease in traffic forecast,
(ii) an increase in operation and maintenance costs, and (ii) a decrease in benefit valuation
(Table A11.3). According to the results of the sensitivity analysis, the project will continue to be
economically viable under these conditions.
Appendix 11 45
Table A11.2: Economic Reevaluation

(CNY million)
Environment
Capital O&M Freight Passenger and Network Tourism Net
Year Cost Costs Benefits Benefits Safety Benefits Benefits Benefits Benefits
2003 202 0 0 0 0 0 0 (202)
2004 1,797 0 0 0 0 0 0 (1,797)
2005 3,334 0 0 0 0 0 0 (3,334)
2006 4,530 0 0 0 0 0 0 (4,530)
2007 3,326 0 0 0 0 0 0 (3,326)
2008 3,035 0 0 0 0 0 0 (3,035)
2009 2,639 0 0 0 0 0 0 (2,639)
2010 3,460 0 0 0 0 0 0 (3,460)
2011 1,048 396 54 1,142 141 252 853 999
2012 0 430 83 1,420 170 329 1,035 2,607
2013 0 450 153 1,515 207 358 1,256 3,037
2014 0 483 381 1,775 301 389 1,525 3,887
2015 95 538 886 2,095 496 424 1,852 5,119
2016 0 560 985 2,227 541 458 1,763 5,414
2017 0 584 1,097 2,370 591 494 2,028 5,996
2018 1,403 611 1,223 2,527 648 535 2,332 5,250
2019 0 640 1,365 2,697 711 579 2,682 7,395
2020 95 664 1,527 2,803 779 604 3,084 8,037
2021 0 690 1,711 2,871 856 629 2,827 8,204
2022 0 719 1,921 2,984 943 656 3,110 8,895
2023 0 751 2,162 3,102 1,043 685 3,421 9,662
2024 188 786 2,439 3,226 1,156 714 3,763 10,325
2025 367 825 2,759 3,356 1,287 746 4,139 11,095
2026 1,403 847 2926 3,440 1,357 765 4,139 10,377
2027 0 871 3,104 3,528 1,431 786 4,139 12,116
2028 0 896 3,295 3,617 1,510 807 4,139 12,472
2029 0 922 3,498 3,709 1,594 828 4,139 12,847
2030 95 949 3,716 3,804 1,684 850 4,139 13,150
2031 0 967 3,849 3,875 1,738 865 4,139 13,499
2032 0 985 3,987 3,947 1,793 881 4,139 13,763
2033 0 1,004 4,133 4,021 1,852 897 4,139 14,038
2034 1,403 1,024 4,286 4,096 1,913 913 4,139 12,920
2035 571 1,044 4,446 4,173 1,977 929 4,139 14,050
2036 0 1,053 4,511 4,214 2,004 938 4,139 14,752
2037 0 1,063 4,577 4,256 2,031 946 4,139 14,886
2038 188 1,072 4,644 4,297 2,058 955 4,139 14,834
2039 0 1,082 4,713 4,340 2,087 963 4,139 15,160
2040 367 1,092 4,783 4,383 2,115 972 4,139 14,934
2041 0 1,102 4,854 4,426 2,145 981 4,139 15,443
2042 14 1,112 4,927 4470 2,175 990 4,139 15,575
2043 (13,114) 1,124 5,001 4,531 2,206 1,003 4,139 28,870
EIRR = 15.6%
NPV = 8,155
( ) = negative, EIRR = economic internal rate of return, NPV = net present value, O&M = operation and maintenance.
46 Appendix 11
Table A11.3: Sensitivity Analysis

NPV
Change by EIRR Switching Value at 12%
Scenario (%) (%) Sensitivity Indicator (%) (CNY million)
1.Base Case 15.6 8,155
2. Benefits –20 13.7 2.92 –34.30 3,400
3. Cost +20 15.5 0.25 402.80 7,750
4.Freight Traffic –20 15.2 0.74 –134.27 6,940
5.Passenger Traffic –20 14.9 1.04 –96.27 6,461
6.Combined 2+3 13.5 2,995
7.Tourism Benefits –20 15.0 0.92 –108.47 6,651
EIRR = economic internal rate of return, NPV = net present value.
Appendix 12 47
FINANCIAL REEVALUATION
A. Basic Assumptions
1. The financial internal rate of return (FIRR) for the Yichang–Wanzhou Railway (YWR)
project was reevaluated on the basis of financial and operational information obtained from the
Wuhan Railway Administration and several revenue and cost assumptions. Capital cost was
based on actual expenditures incurred for the project, excluding interest and other financial
charges during construction. All revenues and expenses were expressed in 2010 prices for the
financial reevaluation. The calculation period covered the construction period and the operation
period from 2011 to 2043, which is consistent with the evaluation at appraisal. Costs of
equipment replacement and infrastructure rehabilitation to occur during the calculation period
were included. Residual value was calculated based on the economic life of civil works.
2. Project revenues consisted of freight, passenger, and other revenues. Other revenues
were assumed to be 10% of freight and passenger revenues, which is consistent with the
current situation of the Ministry of Railways (MOR). Business tax and income tax were excluded
from the net benefits. The YWR has a freight tariff of CNY0.24 per ton-kilometer (km) for local
traffic, CNY0.16 per ton-km for transit traffic, and CNY 0.18 per ton-km for container traffic. On
average, the YWR’s freight tariff of CNY0.22 is about 2.0 times the prevailing national freight
tariff. The national passenger tariff is applied on the YWR—CNY0.15 per passenger-km for
conventional trains, and CNY0.35 per passenger-km for high-speed trains. These compare
favorably with the appraisal estimates for freight but less so for passengers, which assumed
tariffs of CNY0.10 per ton-km for freight and CNY0.30 per passenger-km for passengers at the
initial stage and CNY0.20 per ton-km for freight and CNY0.40–CNY0.60 per passenger-km for
passengers at later stages. No increase in the current tariffs in real terms has been assumed in
the reevaluation.
3. The YWR’s operating cost is higher than ordinary railways given the large part of track
on long slopes with a maximum gradient of 18‰ and that 74% of the alignment is in tunnels and
bridges. Based on the first year of operational experience of the YWR and on the experience of
similar railways, the operating costs including rolling stock costs were estimated as follows:
fixed costs excluding depreciation of CNY794,000 per route-km for double-track line and
CNY397,000 per route-km for single-track line, freight variable cost of CNY0.040 per ton-km,
and passenger variable cost of CNY0.0524 per passenger-km.
B. Financial Internal Rate of Return
4. The FIRR after tax was recalculated at 3.9% (Table A12.1), compared with the 5.8%
estimated at appraisal. The variance is mainly due to the substantially higher capital costs,
lower passenger tariff, and lower freight traffic in the early stage. The after-tax weighted average
cost of capital (WACC), in real terms, was calculated using the actual capital mix and costs of
various financing sources, including (i) the applicable 10-year fixed swap rate plus a provision
for the spread of 0.4% as used for Asian Development Bank (ADB) loans, (ii) the interest rate of
3.98% for the domestic loan from the China Development Bank and 4.8% for the railway bonds,
and (iii) the cost of equity of 8%. The WACC was recalculated as 2.5%, which is much lower
than the appraisal estimate, mainly because of the preferential interest rate rendered by the
China Development Bank and the comparatively low rate of the railway bonds. The FIRR is
higher than the WACC, and the project is therefore considered financially viable.
48 Appendix 12
Table A12.1: Financial Internal Rate of Return

(CNY million)
Capital Working Freight Passenger Other Taxes Net Cash
Year Costs Expenditures Revenue Revenue Revenue Paid Flow
2003 220 0 0 0 0 0 (220)
2004 1,953 0 0 0 0 0 (1,953)
2005 3,624 0 0 0 0 0 (3,624)
2006 4,924 0 0 0 0 0 (4,924)
2007 3,615 0 0 0 0 0 (3,615)
2008 3,299 0 0 0 0 0 (3,299)
2009 2,868 0 0 0 0 0 (2,868)
2010 3,761 0 0 0 0 0 (3,761)
2011 1,139 430 27 463 49 17 (1,048)
2012 0 467 38 624 66 24 237
2013 0 489 64 710 77 28 334
2014 0 526 145 770 92 33 448
2015 104 585 324 875 120 43 587
2016 0 609 362 932 129 46 768
2017 0 635 405 994 140 50 853
2018 1,525 664 454 1,061 152 54 (577)
2019 0 696 510 1,135 165 59 1,055
2020 104 722 575 1,180 176 63 1,042
2021 0 750 650 1,285 194 69 1,309
2022 0 782 736 1,337 207 74 1,425
2023 0 816 836 1,392 223 79 1,556
2024 204 854 953 1,449 240 86 1,498
2025 399 897 1,090 1,509 260 93 1,470
2026 1,525 921 1,160 1,547 271 97 436
2027 0 947 1,236 1,587 282 101 2,059
2028 0 973 1,318 1,628 295 105 2,162
2029 0 1,002 1,406 1,671 308 110 2,272
2030 104 1,032 1,500 1,714 321 115 2,285
2031 0 1,051 1,546 1,747 329 117 2,454
2032 0 1,071 1,595 1,780 337 120 2,522
2033 0 1,091 1,646 1,814 346 123 2,592
2034 1,525 1,113 1,700 1,849 355 126 1,139
2035 620 1,135 1,756 1,884 364 130 2,119
2036 0 1,145 1,779 1,903 368 131 2,773
2037 0 1,155 1,802 1,921 372 133 2,808
2038 204 1,165 1,825 1,940 377 134 2,638
2039 0 1,176 1,849 1,960 381 136 2,878
2040 399 1,187 1,874 1,979 385 137 2,515
2041 0 1,198 1,899 1,999 390 139 2,950
2042 15 1,209 1,924 2,019 394 141 2,972
2043 (14,254) 1,222 1,950 2,045 400 142 17,285
WACC = 2.5%
FIRR = 3.9%
( ) = negative, FIRR = financial internal rate of return, WACC = weighted average cost of capital.
Appendix 12 49
5. The analysis is conservative as there was no increase in the current tariffs in real terms
assumed in the evaluation. If the passenger tariff can be increased from CNY0.150 per
passenger-km to CNY0.195 per passenger-km, which is equivalent to about 35% of the road
tariff, the FIRR will rise to 4.65%. Sensitivity analysis (Table A12.2) was conducted to test the
impact of variations in traffic, in operation and maintenance costs, as well as in revenue levels.
The project will still remain viable under different sensitivity as the FIRRs are higher than the
WACC.
Table A12.2: Sensitivity Analysis
Switching
Change FIRR Sensitivity Value
Scenario (%) (%) Indicator (%)
1.Base Case 3.9
2. Passenger Traffic Decrease –20 3.4 0.74 –48.24
3. Freight Traffic Decrease –10 3.7 0.63 –62.87
4. Working Expenses Increase +10 3.7 0.59 61.89
5. Revenue Decrease –10 3.3 1.85 –20.27
6.Container Traffic Decrease –20 3.5 0.53 –55.05
FIRR = financial internal rate of return.
50 Appendix 13
SOCIAL IMPACT AND POVERTY REDUCTION IN THE PROJECT AREA
A. Introduction
1. Construction of the Yichang–Wanzhou Railway (YWR), with a total length of 377

kilometers (km), commenced in February 2004, and it opened to traffic in December 2010. The
YWR traverses eight counties and districts in Hubei Province and Chongqing Municipality that
are situated in a mountainous area that is less developed and poor. The poverty impact analysis
conducted during project preparation indicated that construction of the YWR would (i) promote
economic development and indirectly reduce poverty as a result of induced development in the
project area; (ii) increase household income through job creation; (iii) improve basic
infrastructure, education, and social services resulting from economic growth; (iv) provide the
poor with safe and affordable mobility by access to a national network; and (v) increase the
competition among local freight forwarders and wholesalers between villages and stations, and
benefit poor farmers with increased outputs and fair pricing.
B. Sustainable Socioeconomic Growth
2. Construction of the YWR has significantly contributed to regional socioeconomic

development. A total of CNY27.5 billion project investment in the project area within 6 years
from 2005 to 2010 has strongly stimulated local industrial development, particularly in
construction materials, energy, as well as the services sector. The statistical data shows that
socioeconomic conditions in the project area have improved rapidly in recent years. From 2002
to 2010, per capita gross domestic product growth rates in project areas ranged from 142% to
446% (Table A13.1).
Table A13.1: Per Capita Gross Domestic Product Growth in the Project Areas
(CNY/person)
Chongqing
Hubei Province
Municipality
Item Wujiagang Dianjun Changyang Badong Jianshi Enshi Lichuan Wanzhou
2002 11,993 5,532 5,725 3,237 2,020 2,119 2,385 6,155
2010 43,925 26,067 13,834 11,503 9,117 11,578 7,862 32,350
Growth
266% 371% 142% 255% 351% 446% 230% 426%
(2002–2010)
Annual
18% 21% 12% 17% 21% 24% 16% 23%
Growth Rate
Sources: ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to
the People’s Republic of China for the Yichang–Wanzhou Railway Project. Manila, ; Yichang Municipality Statistics
Yearbook, 2010; Enshi Prefecture Statistics Yearbook, 2010; and Wanzhou District Statistics Yearbook, 2010.
C. Increased Rural Income and Poverty Reduction
3. With the rapid economic growth and the increased fiscal revenues of the local
governments, the standard of livelihood and income of local people have been significantly
improved, particularly for the poor. According to statistics of the county governments, the growth
of farmers’ per capita incomes ranged from 74% to 255% in those counties and cities from 2002
to 2010 (Table A13.2). The incidence of poverty in the project area has been reduced
Appendix 13 51
significantly. The poverty incidence in project counties and districts along the alignment
decreased by 5.80 to 18.58 percentage points1 from 2002 to 2010 (Table A13.3).
Table A13.2: Rural Per Capita Income in Project Area

(CNY/person)
Chongqing
Hubei Province
Municipality
2002 4,028 2,755 1,808 1,214 1,225 1,220 1,210 1,501
2010 6,993 5,922 3,611 3,244 3,243 3,250 3,250 5,332
Growth (2002–2010) 74% 115% 100% 167% 165% 166% 169% 255%
Annual Growth Rate 7% 10% 9% 13% 13% 13% 13% 17%
Source: ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to
the People’s Republic of China for the Yichang–Wanzhou Railway Project. Manila, Yichang Municipality Statistics
Yearbook, 2010, Enshi Prefecture Statistics Yearbook, 2010, and Wanzhou District Statistics Yearbook, 2010.
Table A13.3: Poverty Incidence in Project Area
Chongqing
Hubei Province
Municipality
2002 14.40% 23.50% 34.90% 49.50% 47.50% 40.70% 45.90% 21.20%
2010 ... 14.06% 29.10% 36.66% 39.98% 33.41% 27.32% 10.90%
Reduction
(pp)
... 9.44 5.80 12.84 7.52 7.29 18.58 10.30
... = not available, pp = percentage point.
Sources: ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed
Loan to the People’s Republic of China for the Yichang–Wanzhou Railway Project. Manila, and railway
support offices along the railway alignment.
D. Improved Welfare of Local Communities
4. In addition to increased rural income per capita, with the project area’s rapid
socioeconomic growth and the increased fiscal revenues of the local governments, the welfare
status of local communities and local people have been significantly improved, including health
care, rural roads, education, telecommunication, and broadcasting (Table 13.4).
5. Project implementation directly contributed to local infrastructure and community

facilities through provision of access roads, schools, and water supply facilities. As one
byproduct of railway construction, a total of 600 km of access roads to construction sites were
either constructed or upgraded during construction of the YWR. Those access roads and
bridges are now being used by local communities along the railway alignment. The roads have
significantly improved the local transport conditions in remote mountain areas, and enabled the
local people to have access to local markets, schools, and hospitals through access roads
linked with the highway network. For example, the contractor constructed 7 km of access road
from Luobutang village and Sanchahe village to Chexi town in Dianjun District, which is the first
paved road for these two villages. In Lichuan City, the Railway Support Office proposed to
incorporate rural roads network improvement into construction access roads, and 52 km of local
roads were constructed at a cost of CNY4 million, which directly benefited about 100,000
1
A percentage point is the unit for the arithmetic difference of two percentages.
52 Appendix 13
villagers in four townships. The water wells and pump stations constructed by contractors also
improved the water supply of local communities in the mountainous area. Luobutang village is
located at an altitude of 570 meters and frequently suffers from lack of drinking water during dry
seasons. A pump station with a head of 110 meters and a water pool with a capacity of 500
cubic meters were constructed to supply water to both construction site and village. Similar
water supply facilities were also constructed in 13 locations in the villages of Huangjiapen,
Shuangxi, and Tanjiahe in Dianjun District. In addition, the staff of YWR headquarters and
contractors donated CNY650,000 to construct a primary school to enable those children from
poverty households to enjoy equal education opportunity.
Table A13.4: Improved Welfare of Local Communities in Enshi Prefecture

Growth
Indicator Unit 2002 2010 (%)
A. Health
A1.Hospital beds bed 6,259 12,583 101.0
A2.Doctors and nurses person 10,169 16,444 62.0
B. Roads
B1.Density of highway km/100 km2 64.59 76.42 18.0
B2.Villages access to highway % 90.00 100.00 11.0
C. Education
C1.Enrollment rate of preliminary school % 99.60 100.00 0.4
C2.Enrollmentrate of middle school % 93.29 98.50 6.0
D. Telecommunication
D1.Telephone 10,000 households 11.83 43.69 269.0
D2.Mobile phone 10,000 sets 22.24 264.25 1,088.0
E. Broadcast Coverage
E1.Radio % 91.00 97.13 7.0
E2.Television % 92.00 97.43 6.0
2
km/100 km = kilometers per 100 square kilometers.
Sources: Enshi Prefecture Statistics Yearbook, 2010.
E. Increased Rural Development and Reduced Living Costs
6. Operation of the YWR directly increases competition among local freight forwarders and
wholesalers, which benefits poor farmers with fair pricing. Wanzhou District is one of the largest
orange plantation bases with annual production of around 180,000 tons. Due to high
transportation costs, oranges could be sold in time resulting in deterioration in quality and
consequent low market price. After the YWR was opened to traffic in December 2010, the local
prices of orange increased markedly from CNY0.4–CNY0.6 per kilogram (kg) to CNY 2.0/kg,
which significantly increased the income of local farmers.
7. According to the social and poverty monitoring completion report prepared by the
external monitor, local governments improved the infrastructure for horticulture and livestock
business during construction and after opening of the YWR. For example, (i) Wujiagan district
allocated a total of 375 mu of land for village development in storage, business, hotels, and
markets for those villages close to the railway, the annual revenues from which are expected to
reach CNY2 million; 2 (ii) the Dianjun district government organized the famers to plant
2
Appendix 13 53
vegetables, including 300 mu of kidney beans and cucumbers, and 500 mu of potatoes in
Luobutan and Sanchakou villages; (iii) Changyang County developed six production bases for
mountain vegetables, Boer goats, Qingjiang fish, high-grade fruit, tea, and herbs; and (iv)
Lichuan City and Wuqiao district also enhanced development in fruit, animal husbandry, high-
grade tea, and vegetable production. These production activities induced by the construction
and opening of the YWR have increased rural development in the project area.
8. Operation of the YWR has also reduced the prices of inbound commodities, which has
improved the living standards of local people, particularly the poor. Wu Minzhen, a clothes
wholesaler in Wanzhou, said that the opening of the YWR has reduced his costs by at least 10%
since it only takes 22 hours by train from Wanzhou to Guangzhou. With the further development
of freight transportation on the YWR, it is expected that the transport costs of commodities and
materials such as fertilizers will be further reduced.
F. Job Creation
9. Local employment was promoted during construction of the YWR. According to the
external monitor, construction provided work for 790,830 person-days of unskilled labor, of
which 620,660 person-days (78%) came from the local labor market (Table A13.5). Among the
local employment, 404,750 person-days (65%) of work went to laborers from poor households.
With daily wages at CNY29–CNY42, a total of CNY13.74 million was disbursed to local poor
households during the entire construction period, contributing greatly to poverty reduction in the
project area. According to a survey conducted by the Enshi Railway Supporting Office, the
average annual per capita income of villagers in Gaokanzi village, Lichuan City has increased
by CNY2,030 since construction of the YWR.
10. Locally procured construction materials and supplies also provided a great many
employment opportunities in the project area. According to the social and poverty monitoring
reports, construction of 1 km of railway requires at least 560 tons of cement; 10,000 cubic
meters (m3) of macadam and sand; and 3,300 m3 ballast, bricks, and prefabricated parts. For
construction of the YWR, large quantities of such construction materials were purchased from
local markets. This therefore also created a large amount of indirect employment opportunities
for the local labor market.
11. Since the YWR opened to traffic in December 2010, local laborers have been hired to
load and unload freight cars, as well as to work as security guards and maintenance staff for the
stations and railways. A total of 193 local laborers had been recruited in Enshi and Wanzhou
sections by March 2011. With the growth of railway traffic, more direct, indirect, and induced
employment opportunities will be generated for local workers, and particularly for the poor.
12. Due to labor shortages and rising land prices, increasing numbers of enterprises and
investments from the coastal areas have been gradually transferred to inland areas.
Construction and operation of the YWR has greatly facilitated such transfer in the project area.
The YWR has given the local governments a significant opportunity to attract external
investments. New industrial parks have been constructed close to the YWR, and more
enterprises have started operations along the railway alignment. According to the Enshi
Prefecture Railway Support Office, from 2006 to 2010, 493 enterprises with CNY9.7 billion of
investments started operations in four counties along the YWR alignment. The booming
industrial parks play an important role in providing employment to local surplus labor.
54 Appendix 13
Table A13.5: Job Creation during Construction of the Yichang–Wanzhou Railway
Average Wages
County/ Number of laborers Local laborers Local poor laborers (CNY/person-day)
Province District (person-days) (person-days) (person-days) Min. Max.
Hubei Wujiagang 33,210 26,418 12,478 35 42
Dianjun 103,301 79,480 43,848 35 42
Changyang 77,453 63,627 43,303 31 36
Badong 81,913 64,449 43,305 29 35
Jianshi 102,237 79,836 58,356 29 36
Enshi 117,849 87,572 60,616 31 38
Lichuan 147,017 121,168 82,064 30 35

Chongqing Wanzhou 127,850 98,110 60,780 29 38
Total 790,830 620,660 404,750 29 42
Sources: Poverty Reduction Impact Assessment Report of Yichang–Wanzhou Railway Project, Fourth
Survey and Design Institute of China Railway, 2010.
G. Safe and Affordable Mobility
13. The opening of the YWR provides safe mobility for local passengers including migrant
labor. The local economy has long lagged behind those of other regions in the PRC. Agriculture
made up the largest share of the local economy, and the proportion of secondary and tertiary
industries was quite low. Thus, there were limited opportunities to absorb the surplus rural labor,
and a large number of laborers worked outside the region. Although some migrant laborers
have been recruited by local enterprises in recent years, there are still large numbers of surplus
rural laborers working outside the region; in Enshi prefecture it is estimated that 700,000
laborers are working elsewhere. Most return home during the Spring Festival every year, and
road accidents due to the poor road conditions have been a big concern.
14. The YWR has provided a cheaper, more affordable, and much safer transport service for
migrant labor as well as local people, particularly the poor. The cost of train travel is much lower
than that of travel by bus. Table A13.6 shows that travel costs from Enshi city to regional cities
or counties by train are 70%–87% lower than travel by bus.
15. Improved transport service has greatly improved local mobility and consequently
changed the lifestyle of local people as well as their social behavior. It was noted that many
young people take the train from Enshi to Yichang to watch IMAX movies, and old people visit
their relatives more frequently by train. In addition, the project area is rich in tourism resources,
and the opening of the YWR attracts foreign and domestic tourists. According to the Enshi
Prefecture Tourism Commission, 16.6 million tourists visited Enshi prefecture in 2011, the first
year after the opening of the YWR, compared to 10.6 million in 2010. The tourism revenues hit
CNY8.64 billion, which was an increase of 70.8% compared to CNY5.06 billion in 2010.
Appendix 13 55
Table A13.6: Comparison of Travel Costs by Train and Bus from Enshi City to Regional
Cities and Counties
Price by Price by Price

Distance Hours Train Bus Reduction
Destination (km) (by train) (CNY) (CNY) (%)
Wuhan 586 7.0 70.0 280 75
Chongqing 562 8.0 39.0 250 84
Chengdu 694 10.0 94.0 310 70
Wanzhou 163 2.0 13.0 70 81
Dazhou 320 5.0 47.0 150 69
Yichang 214 2.0 17.0 130 87
Jingmen 323 4.0 29.0 150 81
Lichuan 61 0.6 7.0 50 86
Jianshi 35 0.4 4.5 30 85
Source: Train Ticket Booking System of China Railway, March 2011.
H. Gender Development
16. The construction and operation of the YWR has promoted gender development in the
project area. A significant number of laborers working on the YWR were women, typically
engaged in cleaning and maintaining trucks and other equipment, cooking for construction
teams, and sanitation work at the construction sites. Female employees enjoyed wages
equivalent to those of male employees for similar job types. The YWR has facilitated rapid
improvement in local socioeconomic conditions, and increasing numbers of girls and women are
working in nearby enterprises. In addition, rail travel also enables women to be engaged as
migrant laborers to work outside the region and increase their income. Meanwhile, it is
convenient for them to return home by train to look after their families in case of emergency.
I. Ethnic Minority Development
17. Ethnic minorities accounts for 39% of the total population in the YWR project area. Tujia
is the major minority, accounting for 92% of the total minority population. The project
preparatory technical assistance (TA) study indicates that most minorities have been integrated
with Han people without any discrimination and enjoy a series of preference policies issued by
the Government of the PRC. The socioeconomic status of minority people is similar to that of
Han people. During construction of the YWR and implementation of the resettlement plan, local
governments and the YWR Central Headquarters took the following measures to mitigate
adverse impacts and ensure that minority communities received equal project benefits in a
culturally appropriate way: (i) construction of shops close to railway stations to improve the
income of minority households who were affected by land acquisition, (ii) investment in
converting sloped land to terraces to increase agricultural output, (iii) engagement of minority
laborers as unskilled construction workers for the YWR to increase their incomes, (iv) public
investment and railway construction to improve the infrastructure and minority community
facilities, and (v) enhancement in protection and promotion of minority culture to sustain self-
recognition in the region. For instance, the Enshi railway station was designed by considering
many Tujia minority features, such as Tujia hanging houses and totems of white tigers. In
general, the operation of the YWR creates development opportunities for those minority
communities in remote mountain areas.
56 Appendix 13
J. Monitoring and Evaluation
18. The Fourth Survey and Design Institute of China Railway (FSDI) was engaged as the
external agency to conduct monitoring and evaluation of social impact and poverty reduction for
the project. The FSDI prepared and submitted the first social and poverty monitoring report to
ADB in March 2005, and it submitted subsequent reports in May 2006, August 2007, and June
2008. In August 2010, the FSDI submitted the social and poverty monitoring completion report
to ADB. These reports concluded that the construction and operation of the YWR have greatly
contributed to regional socioeconomic development, poverty reduction, and gender
development.
K. Conclusions
19. Recognized as the most difficult railway line ever constructed in the PRC, the YWR has
a very special history3 and represents the realization of a 100-year dream for millions of local
people in the project area. Its construction and opening has had significant impacts on regional
socioeconomic development and poverty reduction, including
(i) significant regional gross domestic product growth;
(ii) reduced poverty incidence in project areas;
(iii) improved welfare of local communities and local people;
(iv) increased agriculture income and reduced living costs as a result of reduced
transport costs;
(v) job creation during railway construction and operation as well as booming
industrial parks and tourism;
(vi) safer, faster, and more affordable mobility for local people and migrant labor; and
(vii) improved gender development and ethnic minority development.
3
Construction of this railway commenced as early as 1909 by Qing Dynasty Government but had to stop after only
18 months due to the Railway Project Crisis, which subsequently triggered the Revolution of 1911. Dr. Sun Yat-sen
also proposed this railway in his ambitious and romantic The International Development of China (1922).
Appendix 14 57
LAND ACQUISITION AND RESETTLEMENT
A. Scope of Land Acquisition and Resettlement
1. The resettlement plan for the Yichang–Wanzhou Railway (YWR) Project was prepared
by the Ministry of Railways (MOR) in 2003. The resettlement plan showed that the railway
project would involve land acquisition, demolition of buildings and houses, and resettlement of
affected persons. Total land acquisition was estimated to be 1,087 hectares (ha) (16,309 mu1),
which includes land required for constructing the railway line and for railway stations. Building
demolitions were estimated to total 449,169 square meters (m2) and would require the
relocation of an estimated 17,752 people. In addition, the temporary land acquired for
construction purposes was estimated to be 203 ha (3,047 mu).
2. According to the Yichang–Wanzhou Railway Construction Headquarters (YWRCH),

most resettlement activities began in late 2003 and were largely completed by the end of 2005.
In total, 15,498 mu of land was permanently acquired, which was 5% less than the estimate in
the resettlement plan. A total of 628,748 m2 of buildings were demolished, which was 40% more
than the estimate in the resettlement plan. The number of displaced persons was 12,336, which
was 31% less than estimated. In addition, 10,264 mu of land were temporarily used during YWR
construction. Table A14.1 presents the actual project impacts as compared to those estimated
in the resettlement plan.
Table A14.1: Project Land Acquisition and Resettlement Impacts

Item Unit Hubei Chongqing Totala
A. Permanent Land
Acquisition RP mu 15,052 1,257 16,309
Actual mu 14,447 1,051 15,498
Actual vs RP % 96 84 95
B. Temporary Land Use RP mu 2,691 356 3,047
Actual mu 9,202 1,062 10,264
Actual vs RP % 342 298 337
C. Building Demolition RP m2 361,405 87,764 449,169
Actual m2 560,459 68,289 628,748
D. Displaced Personsb RP persons 14,888 2,864 17,752
Actual persons 10,883 1,453 12,336c
2
m = square meter, RP = resettlement plan.
a
The original estimate made provision for double tracking.
b
The number refers to physically displaced (relocated) persons. The number of economically displaced affected by
land loss was not available because the narrow alignment affects a large number of households to a small
degree. Nonetheless, resettlement implementation focused on station areas, where land loss was most serious.
c 2
An estimate was made due to lack of a census. The estimate was one household per 100 m , and the average
2
size of households was 200 m , which accounts for the decrease in the number of displaced persons, even when
demolitions were increased.
Source: Yichang–Wanzhou Railway Construction Headquarters, Ministry of Railway.
3. Compared with the single-tracked design in the feasibility study report, the change of
163.15 km to double-tracked design did not require additional land acquisition because this
future provision was included in the original resettlement plan. In addition, the number of railway
stations was reduced from 39 to 12, which reduced the amount of actual permanent land
1
58 Appendix 14
acquisition. Consequently, the actual amount of permanent land acquisition was slightly less
(5%) than that estimated in the resettlement plan. The changes in the amount of temporary land
use, building demolition, and displaced persons were mainly due to estimation in the
resettlement plan on the basis of the feasibility study report, and the lack of a census of affected
persons.
B. Resettlement Policy and Compensation Rates
4. Land acquisition and resettlement was implemented based on the resettlement plan, the
1998 Land Administration Law, and the following government rules, regulations, and
agreements: (i) agreements on construction of the YWR among the MOR, Hubei provincial
government, and Chongqing municipal government; (ii) circular no. 18 supporting Yiwan
Railway construction issued by the Hubei provincial government in 2004, circular no. 4 for land
acquisition and resettlement guidance for the Enshi section of the Yiwan Railway issued by the
Enshi prefecture government in 2004, and circular no. 55 for implementation guidance on land
acquisition and resettlement for the Wanzhou section of the Yiwan Railway issued by the
Chongqing Wanzhou municipal government in 2003; (iii) circular no. 97 for adjustment of land
acquisition and resettlement compensation rates issued by the Chongqing Wanzhou municipal
government in 2005, as well as relevant circulars issued by local government during
implementation of land acquisition and resettlement. Table A14.2 compares the actual land
compensation rates under the project with the rates estimated in the resettlement plan.
Table A14.2: Land Compensation Rates

(CNY/mua)
Actual
Item RP Hubei Chongqing
A. Permanent Land Acquisition
Paddy land 10,000 8,000–48,400 16,000–47,500
Dry land 8,000 4,550–36,000 16,000–47,500
Vegetable land 12,000 8,000–48,400 16,000–47,500
Orchard land 7,000 8,000–36,000 16,000–47,500
Fish ponds 8,000 6000–48,400 16,000–47,500
Forest land 5,000 4,500–18,000 16,000–47,500
Housing plots 5,000 6,660–36,000 16,000–47,500
Waste land (hilly area) 1,000 1,080–9,600 ...
B. Young Crop Compensation
Paddy land 500 400–1,000 700
Dry land 400 400–1,000 300–400
Vegetable land 600 600–1,200 900
Orchard land 350 300–800 300–700
... = no data available, RP = resettlement plan.
a
A mu is a Chinese unit of measurement (1 mu = 666.67 square meters).Sources: Local governments’ implemented
resettlement and compensation policies.
5. In general, the implemented land compensation rates are much higher than those
estimated in the resettlement plan due to rapid increase in land prices during project
construction, and some local governments made adjustments in land compensation rates during
implementation. Moreover, the rapid increase in land prices also induced significant disparity in
land compensation rates in different locations along the YWR alignment. Consequently, the
Appendix 14 59
uniform land compensation rates are no longer applicable during implementation of land
acquisition and resettlement. Compensation rates for land occupied temporarily by the project
included funds for both compensation and for restoring land to its original use. In formulating
compensation rates, consideration was given to the length of occupation, the average annual
output value of the land, as well as damage to the land.
6. The implemented compensation rates for house demolition are provided in Table A14.3.
The implemented compensation rates were similar to those estimated in the resettlement plan.
Local governments formulated more detailed compensation rates on the basis of local context.
In addition to policy-based compensation, local government also provided subsidies and
assistance in house rebuilding. For example, the Enshi municipal government took a series of
measures to help affected households construct their new houses in concentrated resettlement
sites, including (i) increasing house compensation rates by around CNY160/m2, (ii) allocating a
house plot of 120 m2 for each affected household without additional payment, (iii) constructing
new apartments for those new households separating from parents, (iv) subsidizing construction
of groundwork at CNY30,000 per household on average, (v) providing a uniform design drawing
for new houses and financing wall painting at CNY20,000 for each household, and (vi) spending
CNY80 million on land leveling and construction of common infrastructure facilities for
concentrated resettlement sites.
Table A14.3: Building Compensation Rates

Actual
Item Unit RP Hubei Chongqing
A. Building Compensation
Frame Structure CNY/m2 ... 190–400 ...
Brick and Concrete CNY/m2 280 160–350 208–247
Brick and Timber CNY/m2 180 130–230 143–195
Earth and Timber CNY/m2 100 100–180 117–143
B. Relocation Subsidy CNY/HH 200 300 300
... = no data available, HH = household, m2 = square meter, RP = resettlement plan.
Sources: Local governments’ implemented resettlement and compensation policies.
7. The project compensation rates for land acquisition and house relocation were generally
higher than those in local infrastructure projects but lower than those in real estate development
projects. Considering the railway’s contribution to the public interest, the affected people
strongly supported its construction and were generally satisfied with the compensation
payments received.
C. Resettlement Measures and Income Restoration
8. All relocated households received compensation for buildings and attached properties
from local railway resettlement support offices. Payments were made by local government. The
MOR disbursed the funds to government on the basis of the signed agreement. Displaced
persons moved into new houses constructed either by themselves in the villages or by local
governments in the concentrated resettlement sites. In addition to cash compensation for lost
houses and properties, the affected households were provided with new housing plots in (i) their
same villages, or (ii) in the case of railway stations, nearby concentrated resettlement sites with
public facilities constructed by local governments. Affected households also received relocation
subsidies, transition allowances, and additional assistance in rebuilding new houses. Most
affected persons moved into concentrated sites in 2005–2007. A few concentrated resettlement
60 Appendix 14
sites, including Enshi station, were delayed until the opening of traffic. Most of the new houses
are multi-storied brick-concrete buildings that are much better than those before relocation.
Although construction of some concentrated resettlement sites was delayed due to the time-
consuming process for consultation and determination of resettlement locations, the displaced
persons were satisfied with their new houses and better living conditions. According to the
external monitoring report, more than 95% of new houses are brick-concrete buildings as
compared with those less than 35% before relocation.
9. All affected villages were aware of the land compensation rates that had been
implemented, and they received the full compensation according to resettlement policies. For
those villages that still had sufficient land, the remaining lands were readjusted for all farmers
within the village; thus the affected persons owned the same land areas as others. These
villages used land compensation funds and resettlement subsidies for collective purposes or
distributed the funds equally to all villagers. For those villages not able to readjust farmlands or
where impacts were lower, the land compensation was paid directly to those farmers who lost
land.
10. Local governments and affected villages formulated economic development plans and
took various measures to help affected households to restore their income. The measures
mainly include (i) promoting cash crops or fruit plantations and animal husbandry, (ii) developing
a service industry for those affected communities near railway stations, (iii) engaging affected
persons in constructing the Yiwan Railway, (iv) engaging villagers in migrant labor after
providing skill training, and (v) formulating an insurance policy for farmers who lost land. The
external resettlement monitoring report concluded that the levels of production and income of
affected people are not lower than those before land acquisition and resettlement
implementation.
11. The YWRCH, local railway resettlement support offices, and local governments provided
various forms of assistance for vulnerable groups affected by the project. For example, Zhu
Dongxiang, an old woman in Chunfang village, was resettled in a rest home financed by the
Sanli township government; and Zhang Xueshan, a poor man in Qiugui village, was moved into
a resettled house by the Hongyansi town government. According to the Enshi Prefecture
Railway Support Office, CNY1 million was used for subsidies for vulnerable affected people,
either in cash or in kind, that enabled them to rebuild their houses and restore their livelihood.
D. Land Acquisition and Resettlement Cost
12. According to the YWRCH, CNY637.48 million of land acquisition and resettlement costs
were disbursed, an increase of 89.4% on the CNY336.63 million estimated in the resettlement
plan. The main reason for the increase was the increased compensation costs for building
relocation, temporary land use, and electricity and telecommunication line relocation and
increased land compensation rates. Table A14.4 provides details of the actual land acquisition
and resettlement costs. In addition, the local governments claimed to have spent another
CNY473 million on resettlement (e.g., concentrated site development) but this amount is not
reflected in the MOR project budget.
Appendix 14 61
Table A14.4: Land Acquisition and Resettlement Cost

(CNY million)
Item Hubei Chongqing Total Est. Variation
1. Permanent Land
100.22 7.43 107.65 106.26 1.3%
Acquisition
2. Temporary Land Use 65.27 11.58 76.85 0.96 7,905.2%
3. Building Demolition 275.62 55.62 331.24 147.23 125.0%
4. Ground Attachments 25.54 0.90 26.44
5. Electricity and
Telecommunication Lines
... ... 95.30* 82.18 16.0%
Relocation and Other
Costs
Total 466.65 75.53 637.48 336.63 89.4%
... = no data available.
* The relocation of electricity and telecommunication lines was implemented by Yiwan Railway Construction
Headquarters.
Source: Yichang–Wanzhou Railway Construction Headquarters, Ministry of Railways.
E. Institutional Arrangement
13. The resettlement office under the YWRCH had overall responsibility for coordination,
fund raising, and internal monitoring and evaluation for land acquisition and resettlement
implementation. In addition to the railway support offices established under the Yichang, Enshi,
and Wanzhou municipal or prefecture governments, eight county or district railway support
offices and 39 township railway support groups were also established. The resettlement support
offices under the governments at various levels along the alignment were responsible for
implementing land acquisition, house demolition, and relocation.
F. Monitoring and Evaluation
14. The Fourth Survey and Design Institute of China Railway (FSDI) was engaged as the
external agency to conduct external monitoring and evaluation for the project. The FSDI
prepared and submitted the first resettlement monitoring report to ADB in March 2005, and
submitted subsequent resettlement monitoring reports in May 2006, August 2007, and June
2008. In August 2010, the FSDI submitted the resettlement monitoring completion report to ADB.
G. Participation and Information Disclosure
15. Consultation and participation activities have been conducted extensively through the
entire process of land acquisition, house demolition, and relocation. Representatives from
affected villages, local governments, and the YWRCH participated in the process of formulating
the resettlement plan. During the detailed measurement survey, the affected households
participated in measuring affected lands and properties, and they endorsed the final inventory.
Before implementation of land acquisition and house demolition, the county governments along
the alignment disseminated resettlement booklets in the Chongqing section in October 2003
and in the Hubei section in July 2004. In addition, many consultative meetings were held during
implementation among YWRCH, local railway support offices, village committees, and
representatives of affected households to discuss issues regarding the selection of
concentrated resettlement sites, house plot allocation and house rebuilding, disbursement and
distribution of compensation funds, restoration of community facilities, etc. These timely
information disclosures and consultation activities ensured a transparent process of land
62 Appendix 14
acquisition and resettlement implementation. During implementation, it is common to have

numerous small complaints from affected persons around the construction sites and
concentrated resettlement sites; however, these issues were handled in a proper manner and
no serious complaints were formally submitted to the local government.
H. Conclusions and Lessons
16. The YWRCH and railway support offices under local governments at various levels
consulted extensively with local communities and people affected by land acquisition and house
relocation, worked proactively to solve the issues reported by affected communities and
individuals during project implementation, and made great efforts to improve the income of the
affected households. ADB also provided additional resources through attached TA and
individual consultants to strengthen management of land acquisition and resettlement
implementation. The resettlement monitoring completion report indicates that the level of
production and income of affected people are not lower than those before land acquisition and
resettlement implementation.
17. The resettlement costs were not adequately budgeted for. Given the underestimation of
building demolition and relocation costs and increase in land compensation rates, the
resettlement costs increased by CNY300 million (89%). Fortunately, the YWRCH and local
governments took prompt action to raise funds to ensure timely completion of land acquisition
and resettlement. It is suggested that the costs of land acquisition and resettlement should be
budgeted adequately in future railway projects and fully incorporated in the project budget and
its overall financial management.
18. Construction of some concentrated resettlement sites was delayed. Due to concentrated
house demolition in railway stations and difficult mountainous areas, many affected households
had to be resettled in concentrated resettlement sites. Given the complexity of preparation and
construction of concentrated resettlement sites, construction at some sites was seriously
delayed and the transition period of affected households was prolonged. It is suggested that the
planning and preparation of concentrated resettlement sites should commence as early as
possible in future railway projects, particularly for those sites close to large railway stations.
Appendix 15 63
ENVIRONMENTAL IMPACT ANALYSIS
A. Introduction
1. Under the Yichang–Wanzhou Railway Project, a 377 kilometer (km) railway was
constructed, comprising a 288-km double-track section from Yichang to Liangwu and an 89-km
single-track section from Liangwu to Wanzhou. Other activities under the project include laying
of tracks with rails, sleepers, ballast, associated fittings, and fixings, and construction of (i) 13
traction substations and installation of power lines; (ii) 10 new stations and expansion of two
existing stations; and (iii) freight yards and associated facilities.
2. The project was classified as Asian Development Bank (ADB) environment category A.
The summary environmental impact assessment (SEIA) was prepared based on the domestic
environmental impact assessment (EIA) and soil erosion protection plan (SEPP) in June 2003.
The SEIA concluded that the project would have environmental benefits through reduced air
pollution and soil erosion. Potential environmental impacts would be minimized to acceptable
levels through adequately funded mitigation measures and monitoring programs.
3. The EIA report was approved by the State Environmental Protection Administration
(SEPA) in October 2003. The SEPP was approved by the Ministry of Water Resources in March
2003. The updated EIA was approved by the SEPA in August 2006 to reflect the change in
scope that the single-track railway in the original design was to be replaced with double-track
line for the Yichang–Liangwu section. The completion technical review for the SEPP was
undertaken by the Soil and Water Conservation Monitoring Station of the Yangtze River
Commission (YRSMS) in November 2010. The completion technical review for the EMP was
undertaken by the Environment Assessment and Engineering Center of the China Academy of
Railway Sciences in November 2010.
B. Environmental Protection and Management
4. The Yichang–Wanzhou Railway Construction Headquarters (YWRCH) was responsible

for coordinating environmental management for the project. The environmental management
plan (EMP) and monitoring program were implemented during construction and adverse
environmental impacts mitigated effectively. Particularly, the conservation program of the
spawning bed of Chinese sturgeon has been successful.
5. The YWRCH established effective institutions to implement the EMP, as part of the SEIA,
and the soil erosion protection plan (SEPP) during construction. At the beginning of the project,
the YWRCH issued the Implementing Rules for Environment Protection and Soil and Water
Conservation to regulate and assess the contractors’ performance in implementing the EMP.
During construction, Beijing OASIS was engaged to oversee overall project environment
monitoring. Local environment monitoring stations were engaged to undertake onsite monitoring
of surface water quality, air, and noise. The YRSMS was contracted to monitor soil erosion as
per the SEPP. The FSDI was engaged to supervise implementation of the EMP and SEPP. This
is the first time in the development of the railways that a qualified entity has been engaged to
supervise implementation of the EMP.
6. Four training workshops were held for contractors and project managers on
environmental management. The training included soil and water conservation, biodiversity
conservation, and good environmental management practices. The environmental awareness of
64 Appendix 15
contractors has been improved significantly through training, and this contributed to
strengthened implementation of the EMP.
7. At appraisal, it was estimated that the total cost of environmental protection and
mitigation measures would be about CNY1.9 billion. According to the YWRCH’s completion
report, the actual total investment for environmental protection was CNY1.1 billion, which
included investments for slope stabilization, ecological rehabilitation, embankment protection,
and spoil revegetation and compensation payments for soil and water conservation.
C. Environmental Monitoring
8. Environmental monitoring was conducted adequately according to the monitoring

program as stipulated in the SEIA. Environmental monitoring was undertaken at two levels: daily
environmental monitoring by contractors and construction supervision companies, and periodic
environmental monitoring by environment experts, who took samples for analysis in accordance
with environment standards and technical codes.
9. During implementation, the YRSMS was engaged to carry out monitoring for soil erosion
and of the ecological environment. Three local environmental monitoring stations—in Yichang,
Enshi, and Wanzhou—monitored noise pollution, ambient air quality, and surface water quality
along the alignment. Monitoring of the Chinese sturgeon spawning beds and population was
undertaken by the Yangtze Aquatic Institute of the Chinese Academy of Aquatics. Based on site
visit findings and sampling testing, 12 environmental monitoring reports were prepared and
submitted to ADB, including one summary report for environmental management and one
summary report for the Chinese sturgeon conservation program. The monitoring results showed
no significant environmental damage occurred.
D. Environmental Impacts and Mitigation Measures
1. Noise
10. Noise impacts during construction were limited due to the remote locations of major
construction activities. Noise from blasting machinery and earthmoving equipment were
mitigated through utilization of low-noise equipment and designated working hours. Mitigation
measures for potential noise from passing trains during operation have been fully adopted, and
include (i) deployment of seamless tracks, noise reduction fasteners, and shock absorbers; (ii)
integral concreted subgrades in tunnels longer than 3 km; and (iii) noise barriers at sensitive
locations.
2. Ambient Air
11. During construction, dust was mitigated through frequent wetting of roads as required in
the EMP. The EIA identified that there would be minimal impacts from the five diesel shunting
locomotives scheduled for operation at Yichang and Enshi stations and five oil-burning boilers
for specified stations and residential quarters. However, according to the final design, solar and
electric heaters were adopted to replace the proposed boilers. Thus, project-related air pollution
as envisaged in the EIA has been reduced significantly because of the utilization of cleaner
technologies.
Appendix 15 65
3. Surface and Ground Water
12. During construction, adverse impacts on surface water were limited and were mainly
from siltation and waste from construction sites and workers’ camps. All proposed mitigation
measures have been undertaken appropriately. During operation, potential water pollution is
mainly from domestic wastewater from railroad stations and living quarters and partially from
wastewater with oil from train maintenance. About 4,170 tons of wastewater will be produced
daily when the railway and stations are in full operation. Wastewater treatment facilities have
been constructed effectively according to the EIA requirements. The wastewater will be
discharged after treatment and meeting the discharge standards.
4. Solid Wastes
13. During construction, the main solid wastes were from construction disposals. Twenty six
borrow pits were employed to provide 3.39 million cubic meters (m3) of earth materials. Twenty
two disposal sites were employed to store 3.25 million m3 of excavation materials from subgrade
and embankment construction. Fifty five spoil sites were built for disposal of 17.67 million m3 of
excavation materials from tunnel construction. Other construction spoil and wastes were
disposed of at 117 other controlled sites. The borrow pits and disposal sites have been restored
and rehabilitated through retaining structures, drainage systems, and vegetative measures.
Domestic solid wastes from stations during operation are collected and disposed of according to
domestic regulations.
5. Ecological Environment
14. The project had no negative impacts on protected areas of primary forests. During
construction, the contractors carried out the environmental protection provisions in their
contracts. All sites temporarily occupied during construction were restored. Cutting surfaces,
subgrades, and embankment slopes were generally stabilized through appropriate vegetative
and structural measures (i.e., retaining walls, antiskid piles, rock bolts, and side ditches) to
prevent soil erosion. Spoil banks were covered with vegetation to control erosion.
15. During construction, six ficus and holly trees older than 100 years were found and have
been specially protected through fencing and marking. All contractors were required to report
observation of rare and endangered animals. Local animal and tree species management
authorities were consulted regarding flora and fauna conservation.
16. The project permanently occupied 1,033 ha of land and temporarily occupied 684 ha. All
targets for soil and water conservation have been met according to national regulations.
6. Chinese Sturgeon Conservation
17. The Hubei Provincial Environmental Protection Bureau approved the construction of the
Yichang Extra-Large Bridge crossing, providing the special permission under three conditions: (i)
construction methods must minimize disruption to the riverbed and fish population, (ii) no
foundation work would be allowed from 15 September through 30 November (the sturgeon
spawning season), and (iii) the construction contractor(s) will have strict liability for any
ecological damage caused during construction.
18. During preconstruction, the Yichang Extra-Large Bridge was designed with three piers in
the Yangtze River, thus minimizing disruption to the riverbed and fish population. Bridge
66 Appendix 15
construction started in February 2004. During construction, the construction schedule was
strictly arranged according to the EMP and conservation program.1 Mitigation measures were
implemented adequately. The summary report by the CRFSDI concluded that the Yichang
bridge construction crossing the Yangtze River had had no impacts on the population and
spawning habitats of Chinese sturgeon. Continued monitoring by the Yangtze Aquatic Institute
of the Chinese Academy of Aquatics also shows the Chinese sturgeon population to be stable.
7. Access Roads
19. A total of 600 km of access roads to construction sites were constructed during
implementation. These access roads have been handed over to the local governments and are
being used as main roads by the local communities. The access roads were included in the
project environmental management plan. All proposed mitigation measures have been
effectively implemented to minimize adverse impacts due to construction of these roads
according to the project environmental management plan. The environmental management
measures are being undertaken for maintenance and operation according to the government
regulations and laws.
E. Conclusions
20. During construction, all the contractors fulfilled their obligation to protect the environment
and to implement mitigation measures at their construction schemes. The adverse effects of the
project on the surrounding environment were thus minimized. No rare natural resources were
affected as a result of the project. During operation, the impacts on the ambient environment are
minor. During its operations, the project will generate environmental benefits from emission
reduction and improved soil and water conservation.
1
The conservation program refers to the government management programs for Chinese sturgeon conservation in
the Yangtze River, which set certain requirements for compliance in case of construction activities.

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Completion Report

Project Number: 35339

People’s Republic of China: Yichang–Wanzhou

Currency Unit – yuan (CNY)

At Appraisal At Project Completion

WEIGHTS AND MEASURES

Vice-President S. Groff, Operations 2

Team leader F. Wang, Senior Project Officer (Financial Management), EARD

1. Country People’s Republic of China

3. Date of Board Approval 15 December 2003

4. Date of Loan Agreement 27 May 2004

5. Date of Loan Effectiveness

26 July 2004 23 December 2011 89 months

Effective Date Original Closing Date Time Interval

26 July 2004 30 June 2010 71 months

1. Project Cost ($ million)

2. Financing Plan ($ million)

3. Cost Breakdown by Project Component ($ million)

Appraisal Estimate Actual

C. Front-End Fee 2.50 0.00 2.50 2.50 0.00 2.50

D. Interest During 61.80 108.50 170.30 0.00 290.19 290.19

5. Project Performance Report Ratings

D. Data on Asian Development Bank Missions

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

4. ADB provided project preparatory technical assistance 2 (TA) to review alternative

5. The YWR was originally designed as a single-track, electrified, standard-gauge Class I

6. The YWR comprises 324 km in Hubei Province and 53 km in Chongqing Municipality.

2. Stations, Freight Yards, and Industrial Sidings

3. Operational Equipment and Environmental Protection Facilities

4. Consulting Services and Institutional Strengthening

G. Conditions and Covenants

H. Related Technical Assistance

I. Consultant Recruitment and Procurement

J. Performance of Consultants, Contractors, and Suppliers

K. Performance of the Borrower and the Executing Agency

L. Performance of the Asian Development Bank

III. EVALUATION OF PERFORMANCE

B. Effectiveness in Achieving Outcome

C. Efficiency in Achieving Outcome and Outputs

34. Economic and financial reevaluation rated the project efficient.

D. Preliminary Assessment of Sustainability

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

Design Performance Indicators/Targets Monitoring Assumptions (A)

Transport costs Travel costs fell from

Design Performance Indicators/Targets Monitoring Assumptions (A)

3. Freight yards Freight yards and Established in 12 railway Progress reports

Design Performance Indicators/Targets Monitoring Assumptions (A)

6. Equipment of Supply of operation Sufficient operation and Statistics of MOR

Design Performance Indicators/Targets Monitoring Assumptions (A)

Consulting services for Construction quality; Ten national supervision Monitoring

Implementation of Mitigation measures 26 borrow pits and 197 Environmental

CHRONOLOGY OF MAJOR EVENTS

PROJECT COST AND FINANCING PLAN

Table A3.1: Project Costs

Table A3.2: Financing Plan

PROJECTED AND ACTUAL CONTRACT AWARDS AND DISBURSEMENTS

Table A4: Projected and Actual Contract Awards and Disbursements