ENVIRONMENTAL IMPACT ASSESSMENT (DRAFT) Project No.: 44020 February 2012

People’s Republic of China: Gansu Urban Infrastructure Development and Wetland Protection Project This is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website.

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CURRENCY EQUIVALENTS

(Inter-bank average exchange rate as of December 2011)

Currency Unit - Yuan (CNY)

CNY 1.00 = US$ 0.1575

US$ 1.00 = CNY 6.34

ABBREVIATIONS

ADB Asian Development Bank AP Affected Person ASL Above Sea Level BCA Bureau of Civil Affairs BLM Bureau of Land Management BOD5 Five days Biochemical Oxygen Demand CEIA Consolidated Environmental Impact Assessment CO2 Carbon Dioxide CNY Chinese Yuan COD Chemical Oxygen Demand CSC Construction Supervision Company DI Design Institute DMG Dingxi Municipal Government EA Executing Agency EHS Environment, Health and Safety EIA Environmental Impact Assessment EMP Environmental Management Plan EMS Environmental Monitoring Station EMU Environmental Management Unit EPB Environmental Protection Bureau FB Forestry Bureau FSR Feasibility Study Report FYP Five-Year Plan GDP Gross Domestic Product GHG Green House Gas GPG Gansu Provincial Government GRM Grievance Redress Mechanism HDPE High Density Polyethylene LAP Land Acquisition Plan LARO Land Acquisition and Resettlement Office LB Labor Bureau LED Light-emitting Diode LIEC Loan Implementation Environmental Consultant MEP Ministry of Environmental Protection NDRC National Development and Reform Committee NGO Non-Governmental Organization NH3-N Ammonia Nitrogen NO2 Nitrogen Dioxide NOx Nitrogen Oxides OHS Occupational Health and Safety OPF Operator of Project Facilities PAM Project Administration Manual

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PCG Project City Government PHB Public Health Bureau PLG Provincial Leading Group PM10 Particulate Matter smaller than 10 micrometers PMO Project Management Office PRC People’s Republic of China PPTA Project Preparatory Technical Assistance PCB Public Security Bureau SO2 Sulfur Dioxide SPS Safeguard Policy Statement, ADB TA Technical Assistance TMB Traffic Management Bureau TN Total Nitrogen TP Total Phosphorus TSP Total Suspended Particulates US EPA United States Environmental Protection Agency WCB Water Conservation Bureau WHO World Health Organization WPC Wetland Protection Component WSC Water Supply Company ZHWNNR Zhangye Heihe River Wetland National Nature Reserve ZMG Zhangye Municipal Government ZWP Zhangye Wetland Park

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WEIGHTS AND MEASURES

cm centimeter dB(A) A-weighted sound pressure level in decibels ha hectare kg kilogram km kilometer kWh kilowatt hours m meter mm millimeter m/s meters per second m2 square meter m³ cubic meters mg/l milligrams per liter mg/m3 milligrams per cubic meter mg/Nm3 milligrams per standard cubic meter Nm3 standard cubic meter 0C degrees Celsius

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TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ........................................................................................... 1

A. BACKGROUND .......................................................................................................................................... 1

B. PROJECT OBJECTIVE, OUTCOME AND OUTPUTS .............................................................................................. 2

C. ENVIRONMENT SAFEGUARDS CATEGORIZATION AND ENVIRONMENTAL DUE DILIGENCE.......................................... 3

D. MAJOR PROJECT BENEFITS ......................................................................................................................... 4

E. MAJOR ENVIRONMENTAL RISKS AND ANTICIPATED IMPACTS ............................................................................. 5

F. PUBLIC CONSULTATION AND GRIEVANCE REDRESS MECHANISM ........................................................................ 8

G. CONCLUSION ........................................................................................................................................... 9

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ........................................... 10

A. LEGAL FRAMEWORK OF PRC..................................................................................................................... 10

B. LEGISLATIVE AND POLICY FRAMEWORK RELATED TO NATURE RESERVE MANAGEMENT ......................................... 13

C. INTERNATIONAL AGREEMENTS .................................................................................................................. 14

D. APPLICABLE ADB POLICIES ....................................................................................................................... 15

E. INSTITUTIONAL FRAMEWORK FOR ENVIRONMENT MANAGEMENT IN THE PRC ................................................... 15

F. APPROVAL AUTHORITIES AND EIA INSTITUTES .............................................................................................. 16

III. DESCRIPTION OF THE PROJECT ............................................................................ 18

A. PROJECT RATIONALE ................................................................................................................................ 18

B. PROJECT COMPONENTS AND SUBCOMPONENTS ............................................................................................ 22

IV. DESCRIPTION OF THE ENVIRONMENT .................................................................. 39

A. DINGXI CITY .......................................................................................................................................... 40

B. ZHANGYE MUNICIPALITY AND GANZHOU DISTRICT ........................................................................................ 50

C. ZHANGYE HEIHE WETLANDS AND THE ZHANGYE WETLAND PARK ..................................................................... 60

D. ASSESSMENT BOUNDARIES AND ENVIRONMENTAL SENSITIVITIES...................................................................... 80

V. ANTICIPATED IMPACTS AND MITIGATION MEASURES .......................................... 83

A. POSITIVE IMPACTS AND ENVIRONMENTAL BENEFITS ...................................................................................... 83

B. ENVIRONMENTAL SCREENING AND SCOPING ................................................................................................ 85

C. IMPACTS ASSOCIATED WITH PROJECT LOCATION, PLANNING AND DESIGN ......................................................... 86

D. IMPACTS TO PHYSICAL RESOURCES DURING CONSTRUCTION............................................................................ 90

E. IMPACTS TO BIOLOGICAL RESOURCES ....................................................................................................... 103

F. IMPACTS TO SOCIO-ECONOMIC RESOURCES ............................................................................................... 105

G. ENVIRONMENTAL IMPACT AND MITIGATION MEASURES DURING OPERATION................................................... 106

H. CUMULATIVE IMPACTS DURING BOTH CONSTRUCTION AND OPERATION ........................................................... 135

VI. ALTERNATIVE ANALYSIS .................................................................................... 138

A. WITHOUT-PROJECT ALTERNATIVES .......................................................................................................... 138

B. ALTERNATIVES FOR URBAN INFRASTRUCTURE COMPONENTS (ROADS) ............................................................ 139

C. ALTERNATIVES FOR WATER SUPPLY COMPONENT ........................................................................................ 142

D. STORM WATER AND SEWER COLLECTION PIPE MATERIAL ALTERNATIVES ........................................................ 143

E. ALTERNATIVES RELATED TO WETLAND PROTECTION COMPONENT .................................................................. 143

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VII. PCONSULTATION, PARTICIPATION AND INFORMATION DISCLOSURE ................. 144

A. INFORMATION DISCLOSURE .................................................................................................................... 144

B. QUESTIONNAIRE SURVEY........................................................................................................................ 145

C. CONSULTATION ON ZHANGYE WETLAND PARK COMPONENT ........................................................................ 148

D. PUBLIC CONSULTATION ON GRIEVANCE REDRESS MECHANISM ...................................................................... 150

E. FUTURE CONSULTATION ........................................................................................................................ 151

VIII. GRIEVANCE REDRESS MECHANISM .................................................................... 152

A. CURRENT PRACTICE............................................................................................................................... 152

B. PROPOSED GRIEVANCE REDRESS MECHANISM FOR THE PROJECT ................................................................... 153

C. TYPES OF GRIEVANCES EXPECTED AND ELIGIBILITY ASSESSMENT .................................................................... 153

D. GRM PROCEDURE AND TIMEFRAME ........................................................................................................ 154

IX. ENVIRONMENTAL MANAGEMENT PLAN ............................................................ 157

A. RATIONALE .......................................................................................................................................... 157

B. IMPLEMENTING ORGANIZATIONS AND THEIR RESPONSIBILITIES ...................................................................... 157

C. ENVIRONMENTAL MONITORING, INSPECTION AND REPORTING ...................................................................... 160

D. MECHANISM FOR FEEDBACK AND ADJUSTMENT ......................................................................................... 162

X. CONCLUSIONS ................................................................................................... 163

A. PROJECT BENEFITS ................................................................................................................................ 163

B. ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES ............................................................................. 164

C. PROJECT RISKS AND ASSURANCES ............................................................................................................ 166

D. OVERALL CONCLUSION .......................................................................................................................... 169

APPENDIXES

Appendix I – References

Appendix II – Environmental Management Plan (EMP)

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Map 1: Gansu Urban Infrastructure Development and Wetland Protection

Project Location Map

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Map 2: Dingxi Urban Infrastructure Component

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Map 3: Zhangye Infrastructure and Wetland Protection Components

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I. EXECUTIVE SUMMARY

A. Background

1. This Consolidated Environmental Impact Assessment (CEIA) report was prepared for the proposed Gansu Urban Infrastructure Development and Wetland Protection Project (the project) in Gansu province, People’s Republic of China (PRC). The CEIA is prepared in accordance with the requirements of the Asian Development Bank’s (ADB) Safeguard Policy Statement (SPS 2009) on the basis of two domestic environmental impact assessments (EIA), project level feasibility study reports, PPTA's social and economic assessments, special study reports, and project policy dialogue discussions.

2. Despite buoyant economic growth in recent years, Gansu still remains the second poorest province in the PRC in terms of gross domestic product per capita. Poor infrastructure and distant location from the coast act as barriers for the province's economic growth. As part of the PRC’s Western Development Strategy, the government has focused on developing basic urban infrastructure and services to stimulate and sustain economic growth in the province.

3. The project aims at promoting balanced and environmentally sustainable urbanization, and to improve living conditions in two sites in the province: Dingxi City and, Ganzhou District in the municipality of Zhangye. Dingxi is nicknamed the “Eastern Gate of Lanzhou,” and connects Tianshui and Pingliang in the east, Longnan in the south, and Gannan in the west. It is a transportation hub for the area east of Lanzhou. Due to unfavorable natural conditions and a basic lack of industrial and service sectors, the economic development of Dingxi lags behind in comparison to other cities in the province, and the living conditions are well below the average of other cities. Dingxi faces serious urban development challenges including insufficient basic services and road network infrastructure.

4. Ganzhou District town is located within Zhangye municipality. The municipality is located in the middle section of the “Hexi Corridor” along the second longest inland river in the PRC, the Heihe River. Zhangye is an ‘oasis’ in the otherwise arid and dry plains of the region. In recent years, the municipality has experienced rapid population growth and subsequently, a growing challenge to balance urban development and environmental protection. National studies have confirmed that water resources in the area are declining, due to unsustainable levels of consumption – especially in the agriculture sector - and increasing human populations and levels of industrial production. This has resulted in the decline of natural wetlands in the municipality. Promoting wetland protection and sustainable management in combination with urban infrastructure development are now priority goals for the municipality.

5. The project will support (i) the rehabilitation and construction of urban roads and bridges with the associated stormwater, water supply and wastewater pipe networks in Dingxi; (ii) wetland restoration and protection at a single wetland park adjacent to Ganzhou District town in Zhangye municipality; (iii) the construction of roads and bridges as well as the associated stormwater, water supply and wastewater pipe networks for a new district, ‘Binhe New District’, in Ganzhou District town; (iv) a new water supply plant in Ganzhou District town, and (v) a capacity development program in both project sites.

6. The project complies with the two main development agendas of environmentally sustainable growth and inclusive economic growth promoted in ADB’s long-term strategic framework 2020. It is also in line with and supports the draft PRC country partnership strategy

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(2011-2015) which will support the Government's over-arching strategic goal of building a “comparatively well-off” society by helping to foster inclusive growth and promote environmental sustainability. The project supports Millennium Development Goal 7 by reducing biodiversity and habitat loss, providing sustainable access to safe drinking water and wastewater collection and treatment services, and improving urban environment and transport services.

B. Project Objective, Outcome and Outputs

7. The expected project impact is improved urban environment, quality of life, and higher economic growth in Dingxi City and Ganzhou District town, as well as improved wetland protection and management in the latter. The project outcome is improved and affordable municipal services delivered efficiently and reliably by the local municipal bodies. The proposed components will provide much-needed assistance for environmental protection and local social and economic development. The project includes four main components as follows:

i. Dingxi urban infrastructure component - The component includes the widening of one road and construction of six roads in a new urban area in Anding District, with a total length of 13.6 km. The component will include the construction of associated facilities, including 6 bridges and 46 culverts, 22.25 km of stormwater pipeline, 11.09 km of sewer pipeline, street lighting, landscaping, and traffic management facilities. All roads will include pedestrian sidewalks on both sides. The urban main roads (9.47 km) will include non-motor vehicle lanes on both sides. The sewer will be connected to the proposed No. 2 wastewater treatment plant (WWTP), which will be completed by 2015.

ii. Zhangye urban infrastructure component (Binhe New District) – The component includes: (a) urban road construction, including construction of eight Class II urban main roads, eleven Class II urban secondary roads, and two Class II urban branch roads with a total length of 39.1 km in Binhe New District; (b) a new water supply plant with a capacity of 40,000 m3/day and piping network; and (c) sanitary piping network connected to the existing Zhangye wastewater treatment plant (WWTP).

iii. Zhangye wetland protection component – the proposed wetland protection component will cover the Zhangye Wetland Park (ZWP), a small park adjacent to Binhe New District, Ganzhou District town. The park is partly in the experimental zone of the Zhangye Heihe River Wetland National Nature Reserve, and supports a range of wetland vegetation communities, at least 1 amphibian species, 15 animal species and 100 bird species, including migratory waterfowl. It functions as a buffer between development in Ganzhou District and wetlands downstream. The park includes 1,733 ha of wetlands (38% of total park area), comprising 1,581 ha natural wetlands and 152 ha artificial wetlands. The component will support the implementation of the ZWP Master Plan (2009-2018), with the stated objectives to protect the wetland and improve its ecological function; to promote scientific research and education; and to promote sustainable wetland use. The component has three subcomponents: (a) wetland protection – comprising the construction of four protection stations, a police station, a research/monitoring station, an education centre, three watch-towers, park boundary demarcation, patrol facilities, associated equipment for all services, and an comprehensive education and capacity building program; (b) wetland rehabilitation – comprising the restoration of wetland and woodland habitats at six sites with a total area of 1,480 ha; and (c) wetland sustainable use – comprising a range of activities

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and facilities designed to promote sustainable tourism and public education in the park, including construction of small infrastructure, paved park roads and boardwalks, pedestrian bridges, landscaping, and installation of lighting at park entrances and around buildings.

iv. Capacity development component –The component will assist the project cities to develop and implement advanced project management systems and enhance the EA and the PMOs’ project management capacity. The component will also include a series of capacity building and training activities related to urban planning, environmental management, management and maintenance of urban infrastructure, public transportation, non-motorized traffic planning, management and control of urban transport, and stormwater pollution control. A special capacity building and training program was defined for Zhangye municipality to increase public awareness on wetland protection and restoration, and enhance wetland management and monitoring capacities of the wetland management agency. Wetland specialists will work with the wetland management agency to develop a wetland management and monitoring system. The specialists will also provide assistance to develop training and education and awareness-raising programs for local residents, farmers, schools and government agencies to reduce agricultural pollution and promote wetland protection, and assist the Zhangye PMO and relevant agencies in carrying out the wetland training and education programs.

C. Environment Safeguards Categorization and Environmental Due

Diligence

8. The project was classified as environmental category A for the purpose of environmental impact assessment under the ADB Safeguard Policy Statement (2009). A scoping exercise was carried out for the EIA of each individual subproject at the beginning of the EIA process, through a number of techniques such as the Leopold matrix, site visits, community interviews and web posting, to identify the potential impacts, both positive and negative. Domestically, all components were classified as category A in accordance with the Guideline on EIA Classification for Construction Projects (MEP, 2008), requiring an Environmental Impact Statement (EIS).

9. The environment safeguards categorization A was mainly triggered by the Zhangye wetland protection component, which will involve physical interventions in the experimental zone of a national nature reserve (the Zhangye Heihe River Wetland National Nature Reserve). Other major environmental sensitivities identified at screening stage included the potential impact of the water supply component in Ganzhou District town on the region’s limited water resources; significant earthwork and related spoil disposal; and community and occupational health and safety risks during construction.

10. Domestic EIAs have been prepared for all subprojects by two national grade-A EIA institutes in accordance with the PRC Law on Environmental Impact Assessment (2003), the Technical Guidelines for Environmental Impact Assessment (HJ/T 2-93) and other domestic environmental policies, regulations and standards, as well as ADB’s Safeguard Policy Statement (SPS 2009). The domestic EIAs for all subprojects were reviewed and approved by relevant environmental authorities (the provincial environmental protection bureau for the Zhangye components; the municipal environmental protection bureau for the Dingxi

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component). Given the environmental sensitivity of the Zhangye wetland protection component with potential impacts on the national nature reserve, a special study for this component was conducted by the EIA institute, reviewed by an expert panel, and approved by the provincial EPB.

11. The CEIA was prepared in accordance with the requirements of the Asian Development Bank (ADB) Safeguard Policy Statement (2009). The CEIA contains the relevant parts of the domestic EIAs, and draws on project level feasibility study reports (FSR), PPTA's social and economic assessments, special study reports, and project policy dialogue discussions. The report contains the following chapters: (i) executive summary; (ii) national policy, legal and administrative framework; (iii) description of the project; (iv) description of the environment; (vi) anticipated potential environmental impacts and mitigation measures; (v) analysis of alternatives, (vi) information disclosure, consultation and participation; (vii) grievance redress mechanism; (viii) environmental management plan; and (ix) conclusion. A full environmental management plan (EMP) is presented in Appendix 2. The EMP entails a summary of the anticipated impacts and mitigation measures, environmental monitoring program, public consultation program, responsibilities for implementation and supervision, institutional strengthening and training plan, reporting and supervision arrangements, and mechanism for feedback and adjustment.

D. Major Project Benefits

12. The project will bring significant benefits to 300,000 urban residents in the cities of Dingxi and Ganzhou District by improving urban infrastructures and supporting environmentally sustainable wetland protection and development. The project will create significant employment opportunities, and provide the project cities with an opportunity to establish, build up, and strengthen their institutional capacity for project implementation, environmental management and wetland protection. The proposed institutional development and capacity-building program under the project will help the cities to achieve this target.

13. The project will contribute to climate change mitigation and adaptation. The greenhouse gas emission reduction benefits of the project are derived primarily from the implementation of energy-saving measures, including lighting and transport. The application of LED lights is expected to save 3.365million KWh per year of electricity, resulting in a reduction of CO2 emissions of 3,350 tons per year

as compared to conventional street lighting. Resilience to climate change will be strengthen by installing high-capacity drainage pipelines and culverts (with a flood protection standard of 1/100 years), and by aligning roads away from unstable areas with high erosion potential. The wetland protection subcomponent will also contribute to addressing climate change, through the restoration of 1,480 ha of wetlands, which will improve water retention and maintenance and presumably improve carbon storage capacity. The protection and maintenance of natural habitats is recognized by the Intergovernmental Panel on Climate Change as an important approach to reducing vulnerability to climate change, because larger and more diverse areas of natural habitat are thought to be more resilient to change than smaller, degraded areas.

14. The road components will reduce traffic congestion, and help the project cities establish efficient, safe, sustainable and environmentally friendly urban transport systems, including public transportation facilities, pedestrian crossings, traffic management facilities and landscaping. The road and bridge constructions will also provide opportunities to

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complete and expand municipal services through the provision of pipelines and conduits for water supply, sewer collection, and stormwater drainage, which will benefit the local environment, economies and residents’ health and safety. The water supply component in Ganzhou District town will treat supply an additional 40,000 m3/d of drinking water, benefiting nearly 200,000 people. With the provision of safe, clean, and sustainable water supply, the urban residents’ health and living standard will be improved.

15. For the Zhangye wetland protection component, proposed project activities will directly contribute to the improved management of Zhangye Wetland Park (ZWP), and address the main wetland management issues identified by relevant authorities in the framework of the consultation process (see Section VII). The project component will result in the restoration and protection of 1,480 ha of wetland habitats. It will also strengthen the management capacity of staff in the park and the national nature reserve through training programs, improved facilities for scientific research and monitoring, and public awareness-raising. In addition to these direct results, strengthening management in the ZWP will indirectly contribute to protection of water supplies to wetlands and communities downstream of Ganzhou District.

E. Major Environmental Risks and Anticipated Impacts

16. The major safeguards issues during construction include: permanent and temporary acquisition of land and population resettlement, earthwork and soil erosion, noise pollution, air pollution, surface and groundwater pollution, solid waste disposal, effects on legally protected habitats (wetlands), and occupational and community health and safety.

17. During operation, the main potential adverse impacts include: traffic noise and air quality at some sensitive areas including schools, hospitals, residential areas; surface water pollution from stormwater, wastewater and solid waste; possible effects on wetland habitats and fauna through noise and water pollution from increased tourism activities; potential impact of the water supply component in Ganzhou District on the region’s limited water resources.

18. Mitigation and monitoring measures were defined for all identified impacts, and are included in the environmental management plans (EMP) of the domestic EIAs and the CEIA. The EMP sets out the procedures and plans to carry out mitigation measures and monitoring requirements during sequential stages of the project (pre-construction, construction and operational phases). It consists of two plans, one for implementing mitigation measures and the other for carrying out environmental monitoring. For each impact, appropriate mitigation measures are described. Internal, external and compliance monitoring and supervision will be undertaken to ensure that environmental impacts will be minimized to acceptable levels.

19. The domestic EIAs and this CEIA conclude that all identified impacts can be mitigated to acceptable levels if the measures defined in the EMPs are carefully implemented and monitored. The environmental mitigation measures will be incorporated in the bidding documents and bill of quantities of the civil works contracts. International and domestic environment consultants will be recruited under the project management consultancy services to prepare and supervise the implementation of the environmental management plan, monitor the environmental and social impacts, and prepare related reports. Local environmental protection bureaus (EPB) will support the PMOs, contractors and CSCs in undertaking the environmental management plans. Capacity building in environmental management, a detailed training program for which has been developed in the EMP, will be provided for the

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PMOs, contractors, CSCs and operators, to ensure adequate institutional capacity in managing the environmental impacts.

20. Major environmental issues identified at screening stage were successfully addressed through improved project design at feasibility study stage. The components’ scope, project sites, road alignments and pipeline routes were adjusted to minimize land acquisition, resettlement and earthwork, and avoid impacts on local water resources, and critical and protected habitats.

21. Earthwork could be minimized to acceptable levels at feasibility study stage through project planning meetings and discussions. Main design adjustments to reduce the unbalanced earthwork included the re-alignment of Xihuan Road in Dingxi 90 m eastwards, requiring 1.4million m3 less earth work; and a vertical re-alignment of roads in Binhe New District. Suitable spoil disposal sites were identified and approved by relevant authorities.

22. An independent review of the draft feasibility study for the Zhangye wetland protection component by national and international wetland experts indicated that the originally proposed activities placed little emphasis on wetland protection, and did not contribute to the stated objectives of the park as defined in the park’s master plan. Instead, the component would have resulted in the direct loss of at least 68 ha of habitat, representing almost 10% of the park’s inner area.

23. Through project planning meetings and discussions, and support by an international wetland expert, the project scope was significantly adjusted to balance environmental and economic needs and avoid over-development of infrastructure within Zhangye Wetland Park. The proposed construction footprint has been reduced (from 68 ha originally to 8.5 ha) by (i) excluding the dredging and construction of lakes and canals from the project scope (43 ha); (ii) consolidating all management stations into one building; (iii) removing a proposed resort and wharf from the project scope; and (iii) reducing the number of parkways. The loss of some wetland area - approximately 1.4 ha - will not be avoidable for construction of parkways and other features. Field surveys indicate that affected areas are not habitats of legally protected species, and no loss of biodiversity is anticipated. Part II of the wetland protection component will rehabilitate 1,480 ha of wetland habitats. The overall impact of the component on wetland habitats will be positive.

24. The project will have significant land acquisition and resettlement impacts. The Project will affect sixty-two (62) village groups, sixteen (16) village committees, two (2) towns, and the two (2) districts in Dingxi City and Zhangye City. A total of 245 h of land will be acquired permanently, while 8 ha of land will be occupied temporarily during project implementation. A total of 3,327 households and 12,264 persons will be affected due to the land acquisition. A total of 215,829 m2 of houses and buildings will be demolished, which will affect 698 households, 2,527 persons, and 51 enterprises or institutions. Two resettlement plans (RPs) have been prepared for the Dingxi urban infrastructure component and the Zhangye urban infrastructure component. The land acquisition and resettlement for the Zhangye wetland protection component has been completed prior to the start of the project. In accordance with ADB’s requirements, a due diligence report has been prepared by the ZPMO and submitted to ADB. The RPs will be implemented in accordance with all applicable PRC laws and regulations, and ADB’s Safeguard Policy Statement (2009). No impacts on livelihood through environmental media were identified during the social impact and resettlement survey and the environmental impact assessment. The RPs will be updated based on census of affected persons (APs) and detailed measurement survey and submitted to ADB for review

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and approval prior to award of civil works contracts.

25. The consideration of environmental health and safety combined with occupational health and safety of staff/workers at the subcomponent construction sites and facilities, and community health and safety of people living nearby or potentially affected by failures or poor operation of facilities. The considerations of environmental health and safety in this CEIA include (i) a risk assessment of spillages of transported substances into waterways and emergency response planning; (ii) the on-site formulation, storage and handling of disinfection chemicals at the water treatment plant, including staff emergency procedures; (iii) appropriate alignment of roads away from geologically hazardous areas and wetlands; (vi) the requirement for contractors to develop and implement environment, health and safety management plans.

26. In Ganzhou District, Zhangye municipality, the increase in water demands as a result of the projected establishment of 300,000 new residents at Binhe New District, will add pressure on the city’s limited freshwater resources and the wetland ecosystem downstream. The total increase of water withdrawal as a result of the water supply component, assuming no off-set measures are implemented, would amount to 3.9% of the city’s water consumption. Local authorities are aware of this problem, and are implementing a series of measures to improve water use efficiency and reduce water use in the municipality. Specifically, the Ganzhou District government has recently defined the Ganzhou District 12th Five Year Water Conservation Plan, mainly focusing on the agriculture sector. The municipal and district governments have also included water saving considerations in a wide range of urban planning documents. All plans promote domestic and industrial water saving measures, such as adoption of water saving technologies and appliances in households and industries, water saving awareness-raising, and wastewater reuse. For the Binhe New District, the following additional water saving measures will be implemented: (i) installation of dual-flush toilets in all apartments and offices; (ii) installation of water-saving toilets and hand basins in public toilets; and (iii) public sensitization through installation of interpretive signs/notices in public bathrooms, guesthouses/hotels to be built in the new district. Furthermore, the Zhangye municipal government will ensure that the proposed groundwater exploitation scheme is assessed and approved in accordance to the PRC’s relevant regulations and standards, and that an EIA for the groundwater source and transmission pipeline will be conducted and approved by the relevant authorities prior to implementation of the water supply component.

27. Project risks were assessed during the PPTA. The majority of environmental risks relate to design features and operational plans which will avoid or mitigate impacts, but which rely on the PMOs’, CSCs, and contractors’ commitment and capacity to implement and consistently follow-up. The remaining relate to the likelihood of unexpected negative impacts. More specifically, the main project risks include: (i) low institutional capacity for environmental management and the possibility that the PMOs and CSCs will fail to monitor the environmental impact and implement the EMP during the implementation of the project; (ii) the timely completion of project associated facilities, including the extension of the wastewater treatment plants in Dingxi City and Ganzhou District town, and the confirmation of the water source for the water supply component in Ganzhou District (including the delineation of water source protection zones); (iii) unforeseen land acquisition and resettlement issues, which could constrain the efficient implementation of the project works and restoration of livelihoods of the APs; (iv) inadequate construction site management, resulting in occupational and community health and safety concerns, and negative impacts to the wetland ecosystem; and (v) the potential risk of over-development of infrastructure within Zhangye Wetland Park. Several measures have been identified to mitigate the project risks: (i) appointment of project

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implementation and monitoring consultants, including the local EMSs; (ii) clear definition of roles and responsibilities for EMP implementation, performance indicators, and mechanisms for feedback and adjustment; (iii) EMP environmental management training; (iv) comprehensive capacity building component with strong focus on wetland management and monitoring; and (v) specific assurances from Gansu provincial government (GPG) and the project cities’ governments.

28. Specialists will be contracted to assist the Zhangye PMO and the wetland management agency to establish a wetland monitoring and management system to assess the sustainability of the protected wetland area. Wetland specialists hired under the loan implementation consultant services will work with the relevant agencies to develop a monitoring system for the wetland area and to develop a wetland management system to effectively track the changes of the wetland and take necessary actions to keep the wetland sustainable. The specialists will also provide assistance to develop training and education programs for park staff, local residents, farmers, schools, government agencies on wetland protection, restoration, and sustainable use.

F. Public Consultation and Grievance Redress Mechanism

29. Information disclosure and public consultation for each subproject have been conducted during preparation of the domestic EIAs and the CEIA in accordance with the PRC Interim Guideline on Public Consultation in EIA (2006) and ADB’s SPS (2009). Information disclosure and public consultation included: two rounds of internet/newspaper disclosure; numerous meetings with key stakeholders, including representatives of the affected public, local authorities and sector specific organizations; informal visits to communities and households in the project areas; two questionnaire surveys; and a wider stakeholder meeting attended by affected people and other concerned stakeholders. The project team participated in consultation meetings and informal visits. The last round of consultation primarily focused on the setting up, refining and dissemination of the Grievance Redress Mechanism (GRM) developed for the project. Consultation aimed at ensuring that the project affected peoples were aware of the GRM and agreed on the redress procedure. The meeting was also used to present the main anticipated impacts and the proposed mitigation measures, as defined in the draft EIAs and the CEIA. Those people affected by land acquisition and resettlement were consulted throughout the process of resettlement planning and social and poverty impact studies. The total number of people consulted amounted to approximately 1,000.

30. The consultation results revealed that the stakeholders were familiar with the project. Most people fully support the components, and no one categorically opposed. An overwhelming majority believes that the project will improve living conditions and economic development, and protect the local environment. Major concerns expressed by the public relate to the construction phase and include: (i) noise, air and surface water pollution; (ii) negative impacts on the wetland’s ecology during construction; (iii) resettlement and compensation; (iv) community health and safety and traffic disturbance during construction; (v) timely completion of project facilities; and (vi) quality of construction works. The concerns and suggestions expressed during the consultation process have been summarized and provided to the design institutes and PMOs. These concerns and suggestions have been considered in FSRs revision, and mitigation measures were defined in the domestic EIAs, this CEIA, and the EMP.

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31. A grievance redress mechanism (GRM) was established in each project city in compliance with ADB’s SPS (2009) requirement to prevent and address community concerns and assist the project to maximize environmental and social benefits. The GRM was presented and discussed with potentially affected persons during public consultation. In addition to serving as a platform to resolve grievances, the GRM has been designed to help achieve the following objectives: (i) open channels for effective communication, including the identification of new environmental issues of concern arising from the project; (ii) prevent and mitigate any adverse environmental impacts on communities caused by project implementation and operations; (iii) improve mutual trust and respect and promote productive relationships with local communities; and (iv) build community acceptance of the project. The GRM parallels the GRM established for resettlement and land acquisition, and complies with the existing PRC legislative framework. Each city will establish a Project Public Complaint Unit (PPCU), coordinated by the environment management units (EMU) of the PMOs. The PPCUs will instruct contractors and construction supervisors if people complain about the project. The PPCUs will coordinate with the local government and EPBs, if necessary, and will be supported by the environmental consultants of the loan implementation consultancy services.

32. Dialog will be maintained with the affected public and stakeholders throughout the project implementation by continued consultation. Such dialog will ensure that public concerns are understood and dealt with in a timely manner. A consultation and participation plan during construction and operation has been developed, which is presented in the attached EMP. Future consultation will be undertaken via questionnaires surveys, household visits, workshops, and public hearing (consultation meeting). Future consultation and participation will also include involvement of affected people during inspection and monitoring of EMP implementation during construction and operation phases; participatory evaluation on the environmental and economic benefits and social impacts; and consultation with the public after the project completion.

G. Conclusion

33. The EIA concludes that the project will generate socio-economic and environmental benefits by improving basic urban services, promoting environmentally sustainable wetland protection and development, and contributing to climate change adaptation and mitigation. Negative environmental impacts with regard to noise, air, water and solid waste are expected, especially during construction. In general these impacts will be temporary and localized. Mitigation measures are prescribed in the EMPs of the CEIA and the component EIAs. These measures will be included into detailed designs, and the EMPs will be updated prior to construction. The EMPs will be implemented by the contractors and PMOs, monitored and supervised by professional environmental management agencies and the municipal monitoring stations, and regularly reported to the PMOs, the EA, the provincial and municipal EPBs and ADB.

34. Any adverse environmental impacts and risks associated with the project be prevented, eliminated, or minimized to an acceptable level, through implementation of the EMPs proposed under the EIAs and this CEIA. The project will promote balanced and environmentally sustainable urbanization and development in the two project cities.

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II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

A. Legal Framework of PRC

35. The environmental protection system in the PRC consists of a well-defined hierarchy of regulatory, administrative and technical institutions. At the national level, the People’s Congress has the authority to proclaim national environmental laws; the State Council promulgates the national environmental regulations; and the Ministry of Environmental Protection (MEP) issues the environmental guidelines. The provincial and local governments can also issue provincial and local environmental regulations and guidelines in accordance with the national ones. In addition, the local ordinances, national and local environmental standards and national and local five-year environmental protection plans form an important part of the legal framework. 36. The EIA management procedure has been established in the PRC for over 20 years. Domestic EIA studies are undertaken within the PRC national and local legal and institutional framework. The primary national laws and regulations that govern the EIA study of the project are provided in Table 2-1 and Table 2-2, respectively. Table 2-3 shows the relevant local laws and regulations.

Table 2-1 National Laws

No. Law Year

1 Water Pollution Prevention and Control Law 2008

2 Urban and Rural Planning Law 2008

3 Solid Waste Pollution Prevention and Control Law 2005

4 Wild Fauna Protection Law 2004

5 Environmental Impact Assessment Law 2003

6 Water Law 2002

7 Cleaner Production Promotion Law 2002

8 Air Pollution Prevention and Control Law 2000

9 Noise Pollution Prevention and Control Law 1999

10 Land Administration Law 1999

11 Forest Law 1998

12 Water and Soil Conservation Law 1991

13 Environmental Protection Law 1989

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Table 2-2 National Administrative Regulations

No. Regulation Year

1 Regulation on EIA of Plans and Programs 2009

2 Regulation on Further Strengthening Nature Reserve Management 2004

3 Directive on Strengthening Wetland Protection and Management 2004

4 Regulation on Environmental Protection Management for Construction Projects

2003

5 Regulation on Culture Heritage Protection 2003

6 Environmental Protection Supervision Rules for Construction Projects 1998

7 Regulation on Protection of Wild Flora 1997

8 Regulation on Nature Reserves 1994

9 Regulation on Pollution Control for Drinking Water Resource Protection Area

1989

10 Administrative Measures of Nature Reserves of Forest and Wild Fauna Protection

1988

Table 2-3 Local Laws and Regulations

No. Law and Regulation Year

1 Regulation on Gansu Provincial Environmental Protection (2

nd

Revision) 2004

2 Decisions Made by Gansu Provincial Government Regarding Several Environmental Protection Issues

1997

3 The Approval of Gansu Provincial Government Regarding Gansu Water Function Zoning

2007

4 Interim Regulation on the Implementation of Preparing the Chapter of Public Consultation for the Environmental Impact Assessment for Gansu Construction Project

2001

5 Gansu Provincial 11th Five-year Plan for Environmental Protection 2008

37. The implementation of environmental laws and regulations is supported by a series of associated management and technical guidelines, and those applicable to the project are summarized in Table 2-4.

Table 2-4 Applicable Environmental Guidelines

No. Guideline Year/Code

1 Guideline on Standard Construction and Management of National Nature Reserves (Trial)

2009

2 Guideline on Jurisdictional Division of Review and Approval of EIAs for Construction Projects

2009

3 List of Construction Projects Subject to Environmental Protection Supervision

2008

4 Guideline on EIA Classification of Construction Projects 2008

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5 Interim Guideline on Public Consultation for EIA 2006

6 Guideline on Supervision and Inspection of National Nature Reserves

2006

7 Circular on Strengthening EIA Management to Prevent Environmental Risks

2005

8 Circular on Issues Related to Enhancing Nature Reserve Management

2004

9 Circular on Several Issues Related to Environmental Management in Construction Projects Involving Nature Reserves

1999

10 Technical Guideline on EIA: Surface Water Environment HJ/T 2.3-1993

11 Technical Guideline on Environmental Risk Assessment for Construction Project

HJ/T 169-2004

12 Technical Guideline on EIA: Acoustic Environment HJ 2.4-2009

13 Technical Guideline on EIA: Atmospheric Environment HJ 2.2-2008

14 Technical Guideline on EIA: Ecological Assessment HJ 19-2011

38. The environmental quality standard system that supports/evaluates the implementation of the environmental protection laws and regulations in the PRC is classified into two categories by function, i.e. pollutant emission/discharge standards and ambient environmental standards. The relevant main standards applicable to the project are shown in Table 2-5.

Table 2-5 Applicable Environmental Standards No. Standard Code

1 Urban Ambient Acoustic Quality Standard GB 3096-2008 2 Noise Limit of Industrial Enterprises GB 12348-2008 3 Noise Limit for Social Activities GB 22337-2008 4 Domestic Drinking Water Quality Standard GB 5749-2006 5 Surface Water Quality Standard GB 3838-2002

6 Standard on Pollutant Discharges from Municipal Wastewater Treatment Plants

GB 18018-2002

7 Ambient Air Quality Standard GB 3095-1996 8 Integrated Emission Standard of Air Pollutants GB 16297-1996 9 Integrated Wastewater Discharge Standard GB 8978-1996

10 Soil Quality Standard GB 15618-1995 11 Groundwater Quality Standard GB/T 14848-1993 12 Noise Limit for Construction Sites GB 12523-1990

13 Control Standards for Pollutants in Sludge for Agricultural Use

GB 4284-1984

39. Other applicable laws, regulations and sector specific standards, along with applicable provincial and local ordinances, are fully listed in Appendix I.

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B. Legislative and Policy Framework related to Nature Reserve Management 40. The PRC has a comprehensive regulatory framework for nature reserve management. In 1994, the State Council proclaimed the Regulation on Management of Nature Reserves. The regulation sets forth the rules and procedures for the establishment and management of nature reserves. Article eighteen (18) and twenty-seven (27) stipulate that a nature reserve may be divided into three zones: core zone, buffer zone and experimental zone. The core zone contains the intact natural ecosystems and rare and endangered animals and/or plants, and no organization or individuals are allowed to enter, except for the purpose of scientific research for which a prior approval from the responsible national authority under the State Council is required (for national nature reserves). Article 26 prohibits tree cutting, animal grazing, hunting, catching, herbal gathering, reclamation, burning, mineral mining, quarry mining and sand mining, except for being allowed under the law. Article twenty-eight (28) prohibits tourism and production and operation activities in the buffer zone. Article 32 prohibits the construction of any production facilities in the core and buffer zones of a nature reserve, and the construction of production facilities that cause pollution, and damage to natural resources and landscape. 41. The National Wetland Protection Program of Action (NWPP, 2004-2030) was jointly developed by nine ministries and agencies with State Forestry Administration (SFA) as the lead and approved by the State Council1. It was officially launched in 2006. The NWPP set forth a number of objectives as follows: (i) establishment of wetland nature reserves and pollution control so as to maintain the ecological characteristics and essential functions of the country’s wetland ecosystems and prevent the further decline of natural wetland areas; (ii) allocate and manage water resources in a rational fashion and restore and rehabilitate degraded wetlands so as to enlarge the area of wetlands and improve the health of wetland ecosystems; (iii) demonstrate the sustainable use of the wetland resources and strengthen wetland monitoring, public awareness, training, scientific research and management systems, so as to conserve and utilize the functions and services of wetland resources. 42. In October 2004, the State Council issued a Directive on Strengthening Wetland Protection Management. The directive instructed the preparation of an implementation plan for the short-term. It pointed to underlying causes of wetland degradation and destruction in the country, including: (i) weak regulatory and policy framework; (ii) slow establishment of wetland nature reserves; (iii) weak management capacities, particularly lack of personnel and poor infrastructure, and weak monitoring and research capabilities; (iv) weak scientific research and technological development supportive system; (v) low awareness; and (vi) lack of financing. 43. The capacity building activities proposed in the directive cover: (i) management

1 More than ten different ministries or administrations now manage national nature reserves ("NRs") in the country.

However, two agencies have primary responsibility for nature reserve management: Ministry of Environmental Protection (MEP) is the supervisory authority for all national nature reserves, but at the same time is responsible for managing some national nature reserves. The State Forestry Administration (SFA) is the management authority for all forest and wildlife conservation NRs (also many wetland nature reserves). About 70% of the country’s nature reserves are managed by SFA.

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infrastructures, including management / patrol stations, fences, border markers and wildlife rescue centers, patrol paths and vehicles, communication equipment, fire watch towers, fire-fighting routes, fire trucks, and preparation / update of management plans; (ii) public awareness and education infrastructures, including exhibition centers, specimens, audio/video equipment, signs, boards and pamphlets; (iii) monitoring and scientific research infrastructures, including laboratory, field survey and sampling equipment and information system; (iv) administrative infrastructures, including office building and auxiliary facilities. 44. The Guideline on Supervision and Inspection of National Nature Reserves (2006) listed thirteen (13) aspects for periodic (every five years) assessment of national nature reserves: (i) administrative organ and staffing level; (ii) patrol and protection facilities; (iii) area and the appropriateness of the division of zones, scope, boundary and land ownership; (iv) formulation and implementation of management rules and plans; (v) resource inventory, protection and utilization; (vi) scientific research, monitoring, record-keeping; (vii) management of construction projects in the nature reserve; (viii) tourism and other human activities; (ix) relationship with local communities; (x) awareness and outreach, training, exchanges and cooperation; (xi) management of funds; and (xii) others. C. International Agreements

45. The PRC is signatory to a number of international agreements, including all major international agreements dealing with biodiversity and wetland protection, Climate Change etc. Those with direct implications for the project are listed in Table 2-6.

Table 2-6 Applicable International Agreements

No. Agreement Year Purpose

1 Ramsar Convention on Wetlands of International Importance Especially as Waterfowl Habitat

1975 Preventing the progressive encroachment on and loss of wetlands for now and the future

2 Convention on Biological Diversity

1993 Conservation and sustainable use of biological diversity

3 United Nations Framework Convention on Climate Change 1994

Achieving stabilization of greenhouse gas concentrations in the atmosphere

4 Kyoto Protocol to the United Nations Framework Convention on Climate Change

2005 Further reduction of greenhouse gas emissions

5 Montreal Protocol on Substances That Deplete the Ozone Layer

1989 Protection of the ozone layer

6

United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification

1996

Fighting against desertification and mitigating the effects of drought

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D. Applicable ADB Policies

46. ADB’s Safeguard Policy Statement (SPS, 2009) provides the basis for this project EIA. All projects funded by ADB must comply with the SPS. The purpose of the SPS is to establish an environmental review process to ensure that projects undertaken as part of programs funded under ADB loans are environmentally sound, are designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, health, or safety hazards. 47. The PRC domestic EIAs are prepared initially for the PRC approval processes, which are required to adopt PRC standards for the quality of water, air, and noise, etc. SPS promotes good international practice as reflected in internationally recognized standards such as the World Bank (WB) Group’s Environmental, Health and Safety Guidelines (EHS Guidelines)2. The principles and standards of World Bank’s EHS Guidelines are adopted by the ADB’s SPS. The general guidelines, in company with the sector guidelines, will provide the context of international best practice, and contribute to establishing appropriate targets for the environmental performance. The sector guidelines referenced include General EHS Guidelines (covering occupational EHS and community EHS), EHS guidelines on Waste Management Facilities, and EHS guidelines on Water and Sanitation. The water, air and noise quality standards in the EHS guidelines will also provide the justification for the use of related PRC standards. 48. This project has been classified “A” for environment in accordance with SPS categorization criteria, requiring the conduct of a full EIA. Compared with PRC EIA requirements, the SPS requires a number of additional considerations, including (i) project level GRM including documentation in the EMP; (ii) definition of the project area of influence; (iii) assessment of direct, indirect, induced and cumulative impacts; (iv) due diligence of project associated facilities; (v) protection of physical cultural resources; (vi) climate change mitigation and adaptation; (vii) occupational and community health and safety requirements (including emergency preparedness and response); (viii) impacts on livelihoods through environmental media; (ix) biodiversity conservation; and (x) ensuring that the EMP includes an implementation schedule and (measurable) performance indicators. These requirements, which are usually not covered in PRC EIAs, have been included in domestic EIA reports to the EIA institutes’ best knowledge and capacity. This project EIA complies with SPS requirements. E. Institutional Framework for Environment Management in the PRC 49. In the PRC, the enforcement of environmental laws and regulations rests with the environmental protection authorities within each level of government. At the national level, the Ministry of Environmental Protection (MEP) is the regulatory, enforcement and supervision authority. Each province has an environmental protection department (EPD). The environmental management authority at the municipal and county level is the environmental protection bureau (EPB). These authorities are supported by environmental monitoring centers and environmental protection research institutes.

2 “World Bank Group Environmental, Health, and Safety Guidelines”, April 30, 2007, Washington, USA. http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines

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50. There is a well-developed environmental monitoring network across the country. There is an environmental monitoring center each at the national, provincial and municipal level. The national and provincial environmental monitoring centers are responsible for, amongst others, setting up and supervising the implementation of environmental monitoring standards and protocols, and compiling and publishing environmental quality statistics at the national and provincial level respectively. The regular monitoring of ambient environmental quality and the compliance monitoring of pollution sources rest with the municipal (prefecture) and county (or county-status city) environmental monitoring stations. Moreover, five regional environmental inspection and supervision centers were set up across the country in 2008, with the responsibility to oversee environmental law enforcement, investigate serious pollution cases, and mediate cross-regional environmental disputes. F. Approval Authorities and EIA Institutes 51. Article Sixteen (16) of the PRC EIA Law (2003) stipulates that an Environmental Impact Statement (EIS) is required for any capital construction project producing significant environmental impacts, so as to provide a comprehensive assessment of these potential environmental impacts. On 2 September 2008, the MEP released the Guideline on EIA Classification for Construction Projects, which came into effect on 1 October 2008. According to this guideline, a project is classified into one of the following three categories:

(i) Category A: Projects with significant adverse environmental impact, an Environmental Impact Statement (EIS) is required.

(ii) Category B: Projects with adverse environmental impacts which are of lesser degree and/or significance than those of Category A; a Tabular environmental Impact Assessment Report (TEIAR) is required.

(iii) Category C: Projects unlikely to have adverse environmental impact; an Environmental Impact Registration Form (EIRF) is required.

52. The EIS and TEIAR under PRC EIA regulations are similar to the project EIA and project IEE, respectively, under the ADB Safeguard Policy Statement (2009). Under PRC EIA Law (2003), public consultations are not required for TEIARs and EIRFs. 53. The Guideline on EIA Classification for Construction Projects (2008) is an amendment to the Management Guideline of Environmental Protection Categories of Construction Projects (2002). The new guideline provides detailed classifications of the EIA study, including 23 general categories and 198 subcategories based on the project’s nature (e.g., water resources development, agriculture, energy, waste management, etc.); scale; and environmental sensitivity (e.g., protected nature reserves and cultural heritage sites). In accordance with the guideline, the project has been classified into the categories of (i) urban infrastructures and transport infrastructures; (ii) water source development; and (iii) nature reserve protection (see Table 2-6). 54. MEP’s Guideline on Jurisdictional Division of Review and Approval of EIAs for Construction Projects (2003) provides two prescribed lists of projects for which EIAs must be reviewed and approved. The guideline was amended in 2009 to include a list of construction

17

projects for which EIAs require MEP’s review and approval, and a list of projects for which EIAs will be delegated to the provincial EPB. Gansu Provincial EPB (GEPB) was authorized by the MEP to review and approve the EIA for the project components in Zhangye municipality. For the EIA of project components in Dingxi City, Dingxi Municipal EPB is the approval authority according to the current regulation. 55. The two EIA reports were prepared by the two EIA institutes holding class A certificates in accordance with the Management Guideline on Qualification of EIA Institutes (MEP Ministerial Order No. 26, 2005). Gansu Provincial Environmental Science Institute (GPESI) and Environmental Quality Assessment Institute of Lanzhou University (EQAILU) were entrusted to prepare the EIAs for the components of Dingxi and Zhangye, respectively. 56. Since the Zhangye components encroaches on the experimental zone of ZHWNNR, a specific EIA study report (SSR) on the nature reserve had to be prepared and approved before the approval of the project EIA, in accordance with the Circular on Strengthening the Management of Nature Reserves, issued by the MEP in 2004. The SSR was prepared by EQAILU, and approved by GEPB on August 18, 2011. 57. The EIA institutes and approval authorities for the subprojects are summarized in Table 2-7. The Project Preparatory Technical Assistance (PPTA) consultants assisted the finalization of the domestic EIAs and the domestic feasibility study reports (FSRs). The three domestic EIAs prepared for the components in Zhangye municipality and Dingxi City received approval by the Provincial EPB and Dingxi Municipal EPB in November and December 2011, respectively.

Table 2-7 Domestic EIAs, EIA institutes and approval authorities

Component Environment Classification

Report Type

EIA Institute

Approval Authority

Approval Date

Wetland Protection Cat. A; nature reserve protection

SSR EQAILU Gansu Provincial EPB

18 August 2011

Zhangye Components

Cat. A; urban infrastructures and transport infrastructures

EIS EQAILU Gansu Provincial EPB

29 November 2011

Dingxi Component Cat. A; urban infrastructures and transport infrastructures

EIS GPESI Dingxi Municipal EPB

22 November 2011

Note: SSR: Special Study Report; EIS: Environment Impact Statement; EQAILU: Environmental Quality Assessment Institute of Lanzhou University; GPESI: Gansu Provincial Environmental Science Institute

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III. DESCRIPTION OF THE PROJECT

A. Project Rationale

55. The project will be implemented in Dingxi City and Ganzhou District town of Zhangye municipality in Gansu province (see Map 1). Despite buoyant economic growth in recent years, Gansu still remains the second poorest province in the PRC in terms of gross domestic product per capita. Poor infrastructure and distant location from the coast act as barriers for the province's economic growth. As part of the National Strategy for Development of the West, the government has focused on developing infrastructure (transport, municipal infrastructure, communication, and water resources) to stimulate and sustain economic growth in the province.3 ADB has been actively supporting the government's initiatives and efforts aimed at stimulating Gansu's economic development. This project, together with other ADB-financed technical assistances and loan projects in the province, fully supports the above strategy.4 56. The project aims to promote balanced and environmentally sustainable urbanization, and to improve living conditions in Dingxi City and Zhangye municipality. It will support (i) the rehabilitation and new construction of urban roads and bridges with the associated stormwater, water supply and wastewater pipe networks in Dingxi City; (ii) wetland restoration and protection in Ganzhou District, Zhangye municipality; (iii) the new construction of roads and bridges as well as the associated stormwater, water supply and wastewater pipe networks in Ganzhou District town; (iv) a new water supply plant in Ganzhou District town, and (v) a capacity development program in both cities. 57. The project complies with the two main development agendas of environmentally sustainable growth and inclusive economic growth promoted in ADB’s long-term strategic framework 20205. It is also in line with and supports the draft PRC country partnership strategy (2011-2015) which will support the Government's over-arching strategic goal of building a “comparatively well-off” society by helping to foster inclusive growth and promote environmental sustainability (including through climate change mitigation and adaptation)6. The project supports Millennium Development Goal 7 by reducing biodiversity and habitat loss, providing sustainable access to safe drinking water and wastewater collection and treatment services, and improving urban environment and transport services. 58. Screening of the components was undertaken based on pre-selection criteria at fact-finding stage and during the PPTA. The components are designed to improve the

3 The State Council of PRC. 2000. The National Strategy for Development of the West. Beijing.

4 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 Gansu Clean Energy Development Project. Manila; ADB. 2006. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of China for the Gansu Heihe Rural Hydropower Development Investment Program. Manila; 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 Southern Gansu Roads Development Project. Manila; 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 Lanzhou-Chongqing Railway Development Project. Manila; ADB. 2011. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the People’s Republic of China for the Gansu-Tianshui Urban Infrastructure Development Project. Manila; etc.

5 ADB 2008, Strategy 2020, The Long-Term Strategic Framework of the Asian Development Bank 2008-2020. Manila.

6 ADB (draft), Country Partnership Strategy, People’s Republic of China 2011-2015. Manila.

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conditions of infrastructure and public amenities, increase employment and reduce the incidence of poverty, support tourism development, promote economic growth, and protect the environment in Dingxi City and Zhangye municipality. It is also designed in line with PRC’s development priorities for the Western Region, the PRC’s 12th Five-Year Plan (FYP)7, Gansu’s 12th FYP, and the cities’ Master Plans to improve local living conditions.

(1) Rationale and justification of the Dingxi Component

59. As the east gate of Lanzhou, the capital of the province, Dingxi City is at a very important location, serving as the gateway for the vast western area to the more developed coastal and large metropolitan areas in the east. To meet the economic development challenges, the city has the following resources and advantages:

(i) Favorable geographical location – Dingxi City is located within the “Lanzhou One-hour Economic Development Zone.” The city can take advantage of the favorable location condition and develop its economic development planning with close ties to the economic and industrial development in Lanzhou.

(ii) Transportation hub – Dingxi City is only about 100 km away from Lanzhou. All major national highways such as G312 and G310 from central PRC and G321 and G316 from southwest PRC meet and run through Dingxi. The national expressways include Lan-Ding (Lanzhou-Dingxi), Lan-Lin (Lanzhou-Lintao), Ping-Ding (Pingliang-Dingxi), Tian-Ding (Tianshui-Dingxi), and Wu-Guan (Wudu-Guanzigou) make the city an important connection point. In addition to roadway traffic, the national railway line, Longhai Railway, and the national high-speed railway line from Xi’an to Xinjiang (which is under construction) runs through the urban area of Dingxi. The city has the potential to become an important transportation hub in Gansu province.

(iii) Local potato and Chinese medicinal herb industries – Dingxi City is nicknamed “Chinese Potato City” and “Chinese Medicinal Herb City” due to its high-quality potato farm production and Chinese medicinal herb production. These are two major local industries with considerable contribution to the local economy. The production and processing industries can be expanded and enhanced not only for the raw material production, but also for high-end products with better economic returns.

(iv) Government support for poverty alleviation – Dingxi City is one of the poorest cities not only in Gansu but also at the national level. As a result, both central and provincial governments have provided financial and policy support for poverty alleviation and economic development.

(v) Abundant labor force – Dingxi City has a relatively dense population in comparison to other parts of the province due to its close location to Lanzhou. There is an abundant labor supply available for various industrial and production development.

7 PRC’s 12th FYP supports the Government's long-term goal of building a harmonious and moderately prosperous

(xiaokang) society through livelihood improvement, and regionally balanced and environmentally sustainable growth.

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60. Project rationale and justification. The proposed components in Dingxi City will provide much-needed assistance to local economic development. The objective of the project component is to improve urban environment, quality of life, and sustainable economic development. The outcome of the project component is improved and affordable municipal services delivered efficiently and reliably by the local municipal bodies; improved urban transportation services with an emphasis on public transportation and non-motorized traffic. The rationale and justification of the subproject includes:

(i) Economic development – The project will provide necessary urban infrastructures and associated municipal service facilities to promote local economic development, which is in line with the PRC and provincial government strategies and policies to stimulate the economic development in the western area.

(ii) Urbanization – The state government initiated a policy to speed up the urbanization process. It is expected that the urbanization rate will reach 75% by 2050. During this process, rural workforce will migrate to the urban areas, requiring the expansion and upgrading of urban infrastructure and services.

(iii) Urban road network – The proposed urban roads will provide the missing links between the newly-completed urban area in the south and the recycling economic development zone in the north to complete the urban road network for the new urban district.

(iv) Upgrade urban municipal facilities – The component will provide the new urban roads with the associated stormwater and wastewater piping systems. Urban wastewater will be collected and sent to a new wastewater treatment plant (WWTP, to be built under a separate project). Currently in Dingxi urban areas, there are parts that are not covered by urban sanitary sewer system. The subcomponent of wastewater piping network will increase the sanitary coverage for the urban area and help to gradually reduce the uncovered areas.

(v) Urban transport improvement – With support of the capacity development component, the new urban infrastructure will provide an integrated urban transport system consisting of urban roads, public transportation, pedestrian and bicycle traffic, and traffic control and management facilities.

(vi) Urban environmental improvement – The subproject will build urban infrastructure in the new urban area. The planning and engineering of the urban infrastructure and facilities will consider not only the infrastructure but also the associated municipal service facilities, landscaping, and environmental protection. The new urban area will have better municipal services and be more environment-friendly.

(2) Rationale and justification of the Zhangye Component

61. Located in the middle section of the “Hexi Corridor,” Zhangye municipality is an ‘oasis’ in the otherwise arid and dry plains of the region. The municipality and its main urban area, Ganzhou District town, can be characterized as follows:

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(i) Increasing water scarcity – The Hexi Corridor is characterized by an arid

climate, with low annual rainfall and high rate of evaporation, and the water resources of the region are naturally vulnerable. Zhangye municipality supports some of the largest water resources in the region, and as a result, is one of the principle agricultural regions of the PRC. The municipality is located along the second longest inland river in the PRC, the Heihe River. The population of the municipality is directly dependant on water supplies from the Heihe River, which comes from snowmelt in the Qilian Mountains, rainfall, and surface and groundwater flows. The river basin provides abundant ground and underground water for Zhangye. This is a unique natural condition in the middle of northwestern PRC. Over the past decades, national studies have confirmed that water resources in the area are declining, due to unsustainable levels of consumption, increasing human populations and levels of agricultural and industrial production, and possibly also climate change. This has resulted in the decline of natural wetlands across the Hexi Corridor.

(ii) Tourism – Ganzhou District town was an important city on the historic “Silk Road.” The area is home to many historical and cultural sites such as the Sleeping Buddha Temple, the remains of historic Heishui Country, the Mati Temple Sculpture, etc. The area also has lots of natural scenery spots such as Danxia Landform, Zhangye Wetland Park and the ZHWNNR, and tourism spots in Qilian Mountain, etc. The city has major potential for tourism development.

(iii) Abundant labor force – Similar to other cities in the northwest, Ganzhou District town has a relatively dense population. There is an abundant labor supply available for various industrial and production development.

62. Project rationale and justification. The proposed component in Zhangye municipality includes two subcomponents: (i) urban infrastructure development in Binhe New District in Ganzhou District town and (ii) protection and development of the Zhangye Wetland Park. The proposed component will provide much-needed assistance for environmental protection and local social and economic development. The objectives of the component are to improve the environment, local economic development, and urban residents’ living conditions. The outcome of the component is the protection and sustainable development of the wetland park, improved urban infrastructures and environment-friendly urban areas, and improved urban transportation services with an integrated public transportation and non-motorized urban transportation system. The rationale and justification of the subproject include:

(i) Wetland protection, restoration, and sustainable economic development – The project component will support management efforts for the wetland park, including wetland protection, restoration of degraded wetlands, conversion of farmlands to wetland, and tourism development. One of the key actions of this sub-component is a USD2.5 million package for environmental education, community outreach, and training of staff from the park and the Zhangye Heihe Wetland National Nature Reserve (ZHWNNR). This will help improve wetland and water management in the Hexi Corridor, and increase public awareness of the wetlands. Although the wetland park is relatively small (4,602 ha, with only 690 ha allowed for tourism), it is strategically important for wetland management in the Heihe River system, because it is situated at the top of the middle reaches of the Heihe River. It provides a buffer between the activities of

22

200,000 residents in Ganzhou District town and the populations of five counties downstream of the park. The sections of the Heihe River that flow through the park, as well as its reed beds, contribute to the maintenance of water retention, regulation, and quality.

(ii) Economic development – The component will provide necessary urban infrastructure and associated municipal service facilities to promote local economic development, which is in line with the PRC and provincial government strategies and policies to stimulate economic development in the western area.

(iii) Urbanization – The PRC initiated a policy to speed up the urbanization process. For the long-term plan, it is expected that the urbanization rate will reach 75% by 2050. During this process, more and more rural workforce will migrate to the urban areas, requiring the expansion and upgrading of the urban infrastructure and services.

(iv) Upgrade urban municipal facilities – The component will provide new urban roads with associated stormwater, water supply, and wastewater piping system connecting to an existing WWTP, which will increase the service coverage in the urban area.

(v) Urban transport improvement – With the input of capacity development subcomponent, the new urban infrastructure will provide an integrated urban transport system consisting of urban roads, considerations for public transportation, pedestrian and bicycle traffic planning, and traffic control and management facilities.

B. Project Components and Subcomponents 63. The proposed project includes four components, i.e. (i) Dingxi urban infrastructure; (ii) Zhangye urban infrastructure; (iii) Zhangye wetland protection; and (iv) Capacity development and institutional strengthening.

(1) Dingxi Urban Infrastructure Component

64. The component includes construction of seven roads with a total length of approximately 13.6 km in the new urban area, linking the old urban area in the south and the recycling economic development zone in the north (see Map 2). The component will include construction of associated facilities, including 6 bridges and 46 culverts, 22.25 km of stormwater pipeline, 11.09 km of sewer pipeline, street lighting, landscaping, and traffic management facilities. All roads will include pedestrian sidewalks on both sides. The urban main roads (9.47 km) will include non-motor vehicle lanes on both sides. The sewer will be connected to the proposed No. 2 wastewater treatment plant (WWTP), which will be completed by 2015. The scope of the subcomponent is described in Table 3-1, and Table 3-2 shows the design parameter of each road to be built.

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Table 3-1 Scope of Dingxi Infrastructure Component

No. Road Road

Length (m) Length of Stormwater

Pipeline (m) Length of Sewer

Pipeline (m) Bridge

(m2/No.)

1 Jiaotong Rd

(Phase I) 4,035 7,774 2,403 2,006/2

2 Xihuan Rd (Phase I)

3,856 6,923 2,355 1,806/2

3 Xincheng Rd

(Phase III) 1,579 2,195 1,889 3,446/1

4 Bei’an South Rd 792 1,008 845 -

5 Bei’an Middle

Rd 769 996 838 -

6 Bei’an North Rd 725 954 793 - 7 Dingxi North Rd 1,812 2,398 1,967 361/1

Total 13,568 22,248 11,090 7,620/6

Table 3-2 Design Parameters of Proposed Road in Dingxi

No. Road Class Design Speed (km/h)

Width of Red Line

(m)

No. of Lanes

(Two-way)

Non-motorized transport

lanes

1 Jiaotong Rd (Phase

I) Class II

Urban Main

40 40 4 Y

2 Xihuan Rd (Phase I) 40 36 4 Y

3 Xincheng Rd (Phase III)

40 40 4 Y

4 Bei’an South Rd Class II Urban Branch

30 18 2 N 5 Bei’an Middle Rd 30 18 2 N 6 Bei’an North Rd 30 18 2 N 7 Dingxi North Rd 30 18 2 N

65. The following figures (3-1, 3-2 and 3-3) show the standard cross-sections of Jiaotong Road (Phase I), Xincheng Road (Phase III) and Dingxi North Road, respectively.

Figure 3-1 Standard Cross-section of Jiaotong Road (Phase I)

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Figure 3-2 Standard Cross-section of Xincheng Road (Phase III)

Figure 3-3 Standard Cross-section of Dingxi North Road

(2) Zhangye Urban Infrastructure Component

66. The component will be implemented in the Binhe New District in Ganzhou District town, and consists of three subcomponents: (i) urban roads; (ii) associated sewer pipeline network; and (iii) a water supply system, including water treatment plant and distribution network (see Map 3). The road subcomponent includes construction of twenty one (21) new urban roads in the Binhe New District, with a total length of 45 km. Table 3-3 summaries the design parameter of each road to be constructed. Figures 3-4 to 3-10 show the standard cross-sections of the proposed roads. All urban main and urban secondary roads will include pedestrian sidewalks and non-motorized transport lanes on both sides.

Table 3-3 Design Parameters of Proposed Road in Zhangye

No. Road Class Road

Length (m)

Design Speed (km/h)

Width of Red Line (m)

Non-motorized transport

lanes

1 North Third

Ring Rd

Class II Urban Main

2,465 40 45 Y

2 North Linze

Rd 3,170 40 45 Y

3 Huota Rd 2,838 40 45 Y

4 North Second

Ring Rd 5,956 40 45 Y

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5 Zhaowu Rd 2,854 40 45 Y 6 Juyan Rd 1,799 40 45 Y 7 Xuanhua Rd 1,089 40 45 Y

8 South Third

Ring Rd 3,114 40 45 Y

9 North Gaotai

Rd

Class II Urban

Secondary

1,885 30 40 Y

10 East Yonggu

Rd 1,095 30 30 Y

8

11 North Minle

Rd 3,681 30 30 Y

12 Xuefu Rd 1,841 30 30 Y

13 North Su’nan

Rd 1,365 30 30 Y

14 North

Xincheng Rd 298 30 30 Y

15 South

Xincheng Rd 874 30 30 Y

16 Liaoquan Rd 1,955 30 30 Y

17 West Minghai

Rd 1,100 30 30 Y

18 East Minghai

Rd 1,370 30 30 Y

19 Banqiao Rd 1,684 30 30 Y 20 Yongkang Rd Class II

Urban Branch 1,770 25 25 Y

21 Wulan Rd 2,961 25 25 Y

Figure 3-4 Standard Cross-section of North Third Ring Rd

8 Combined lanes for both motorized and non-motorized transport are adopted for roads No. 10-21.

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Figure 3-5 Cross-sections of Huota Rd and Linzebei Rd

Figure 3-6 Cross-section of Zhaowu Rd, Yihua Rd, Juyan Rd and North Second Ring Rd

Figure 3-7 Cross-section of South Third

Ring Rd Figure 3-8 Cross-section of North Gaotai

Rd

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Figure 3-9 Cross-section for the Rds of Banqiao, Minghai, Liaoquan, Yonggu, Sunanbei, Xincheng, Minle and Xuefu.

Figure 3-10, Cross-section for the Rds of Wulan and Yongkang

67. The associated sewer pipeline network (50 km) will