Project Name: China-National Highway Project
Region: East Asia and Pacific
Sector: Transport operations
Project ID: CNPA3504
Implementing Agencies:
Ministry of Finance, World Bank Department
Date Prepared: February, 1994
Projected Board Date: May, 1994
Available Project Documents

1. Country and Sector Background. China has consistently achieved strong economic growth since structural reform commenced in the late 1970s, which has placed severe pressure on the transport sector and revealed serious capacity constraints limiting development and trade in important corridors. Past transport investment, limited to a low 1.5 percent of GDP, concentrated mainly on railways leaving highway networks underdeveloped. Railway capacity constraints coupled with emergence of a strong, diverse rural industry sector as well as growing interprovincial trade and mobility has greatly accelerated demand for road transport facilities, which are gaining prominence in recent investment plans. This pattern in true of Hebei and Henan Provinces, which contain 151 million people, applying especially in the heavily traveled north-south corridor along National Highway 107 (NH107) connecting Beijing and Hong Kong.

2. Investment in and operation of China's highway network is chiefly a responsibility of provincial and local governments guided by the central State Planning Commission and Ministry of Communications. In addition to improvement and maintenance of local networks, the government's current highway planning and investment strategy centers on the phased development of a national trunk highway system (NTHS). In the long term, 12 interprovincial trunk roads totaling 30,000 km would be upgraded in stages to bring early relief to bottlenecks in congested corridors serving heavy demand, including this proposed bi- provincial undertaking by Hebei and Henan for NH107. To date, only a tiny fraction of the NTHS program has been addressed under the Eighth National Development Plan (199195) but investment is expected to accelerate sharply during the Ninth Plan period. Issues slowing the modernization and expansion of China's highway infrastructure, and being addressed through the Bank's assistance program, include institutional reform, financial constraints and inexperience in planning and construction of intercity expressways.

3. Both Hebei and Henan Provinces, in addition to ensuring adequate road maintenance, have given priority to Improving their trunk road systems as well as expanding their interconnecting and rural road networks to provide better access and thereby stimulate economic activity and personal mobility. Importantly, to ensure more efficient planning and utilization of their highway investments, they are also giving attention to removing administrative and physical barriers to interprovincial trade as well as improving their highway planning capabilities and interprovincial coordination of highway construction works.

4. Project Objectives. The project has been designed to (a) relieve transport congestion and improve the integration of interregional commerce by assisting in the development of a key element of the NTHS in the principal North-South transport corridor; (b) facilitate access within the area of influence, ensuring that the benefits of improving the trunk road extend to a wide area by rehabilitating and expanding the critical sections of the major roads interconnecting with the section of National Highway 107 concerned; (c) strengthen the interprovincial coordination of trunk road operations and promote the free flow of goods and travelers between Hebei and Henan by imple- menting a coordination program and providing technical assistance for interprovincial traffic facilitation; and (d) improve road investment planning, by improving highway capacity guidelines, and construction management and maintenance by strengthening the provincial highway agencies and providing technical assistance.

5. Project Description. The project comprises (a) the construction of the 340 km Shijiazhuang-Xinxiang four-lane divided, access- controlled highway, of which 216 km are in Hebei Province and 124 km in Henan Province; (b) an Interconnecting Roads Improvement Program (IRIP) in Hebei and Henan for upgrading 14 provincial highways (160 km) interconnecting at interchanges with the Shijiazhuang-Xinxiang highway; (c) construction supervision of the highway and the IRIP components; (d) the coordination of the interprovincial highway operations and a study of facilitation of interprovincial traffic flows; (e) a study of highway capacity; (f) staff training; and (g) purchase of equipment for highway operation and maintenance, road laboratories, road data bank, and pavement management system.

6. Project Implementation. The proposed project would be carried out by Hebei and Henan Provinces.

7. Project Costs and Financing. The project cost is estimated at $894.7 million equivalent, with a foreign exchange component of $390.0 million equivalent (44 percent), excluding taxes and duties of about $12.4 million equivalent. Taxes and duties would not be financed from the proceeds of the loan. The Bank would finance $380.0 million equivalent (97 percent of the foreign exchange and 42 percent of the total cost), of which $240.0 million would be for Hebei Province and $140.0 million for Henan.

8. Environmental/Resettlement Aspects. The Environmental Assessments (EAs) have been prepared for Hebei by the Highway Research Institute and for Henan by the Henan Provincial Environmental Protection Institute. Both BAs were completed in 1993. The assessments indicate that the highway will not affect ecologically sensitive areas and, if appropriate actions are taken, the project will result in no adverse environmental impacts. Based on the findings of the EAs and discussions between representatives of the Hebei and Henan Provinces and Bank staff, Environmental Action Plans (EAPS) have been prepared that specify the measures and organizational monitoring arrangements required to mitigate potential adverse effects on the environment during the construction and operation of the highway. The EAPs have been reviewed by Bank staff and found to be satisfactory. Major preventive measures are incorporated in the bid documents for execution under the civil works contracts for both provinces and include actions to mitigate social disruption and potential impacts on air quality, noise, water management and control of traffic. The highway construction may also affect areas of archaeological significance. Comprehensive cultural relics surveys of these areas have been conducted and programs to find and excavate those relics have been implemented (including 1 million borings at the 13 potential sites) to avoid adverse impacts. Approximately 19,2 persons are expected to be affected by the construction in Hebei, and 9,699 persons In Henan, taking the right-of-way of both the expressway and the interconnecting roads into account. Temporary land use will affect 10,589 persons in Hebei and 344 persons in Henan. All affected by the construction of the highway will be adequately compensated and, when necessary, resettled in accordance with Resettlement Action Plans that have been submitted to the Bank and found to be satisfactory.

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