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Xi’an Urban Road Network Improvement Project (RRP PRC 43032)

Project Number: 43032 October 2011

People’s Republic of China: Xi’an Urban Road Network Improvement Project

The project administration manual is an active document, progressively updated and revised as necessary, particularly following any changes in project costs, scope, or implementation arrangements. This document, however, may not reflect the latest project changes.

Project Administration Manual

Table of Contents

Abbreviations

I. Project Description ............................................................................................................................ 1

A. Rationale, Location and Beneficiaries ................................................................................. 1 B. Impact and Outcome ........................................................................................................... 3 C. Outputs ................................................................................................................................ 3

II. Implementation Plans ........................................................................................................................ 5

A. Project Readiness Activities ................................................................................................ 5 B. Overall Project Implementation Plan ................................................................................... 7

III. Project Management Arrangements ................................................................................................. 8

A. Project Stakeholders – Roles and Responsibilities ............................................................ 8 B. Project Organization Structure .......................................................................................... 12

IV. Costs and Financing ....................................................................................................................... 13

A. Financing Plan .................................................................................................................. 13 B. Contract and Disbursement S-curve ................................................................................. 20

V. Financial Management ................................................................................................................... 22

A. Financial Management Assessment ................................................................................. 22 B. Disbursement .................................................................................................................... 23 C. Accounting, Auditing, and Reporting ................................................................................. 24

VI. Procurement and Consulting Services ............................................................................................ 25

A. Advance Contracting and Retroactive Financing .............................................................. 25 B. Procurement of Goods, Works and Consulting Services .................................................. 25 C. Procurement Plan ............................................................................................................. 26 D. Consultant's Terms of Reference ..................................................................................... 30

VII. Safeguards ...................................................................................................................................... 35

A. Environment ...................................................................................................................... 35 B. Resettlement ..................................................................................................................... 36

VIII. Gender and Social Dimensions....................................................................................................... 38

IX. Performance Monitoring, Evaluation, Reporting and Communication ............................................ 39

A. Project Design and Monitoring Framework ....................................................................... 39 B. Monitoring ......................................................................................................................... 42 C. Evaluation ......................................................................................................................... 46 D. Reporting ........................................................................................................................... 46 E. Stakeholder Communication Strategy .............................................................................. 46

X. Anticorruption Policy ....................................................................................................................... 48

XI. Accountability Mechanism ............................................................................................................... 49

XII. Record of PAM changes ................................................................................................................. 50

Appendixes

1. Financial Management Assessment 2. Procurement Capacity Assessment Report and Recommendation 3. Terms of Reference for Consulting Services 4. Environmental Monitoring Plan 5. Social Action Plan

Project Administration Manual Purpose and Process

The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The Xi’an Municipal Government and the Project implementing agencies are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by Xi’an Municipal Government and the Project implementing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. At Loan Negotiations the borrower and ADB shall agree to the PAM and ensure consistency with the Loan agreement. Such agreement shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of the Loan Agreement shall prevail.

After ADB Board approval of the project's report and recommendation of the President (RRP) changes in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.

Abbreviations

AADT = annual average daily trafficADB = Asian Development Bank ADF = Asian Development Fund AFS = audited financial statements CCTV = Closed Circuit TelevisionCQS = consultant qualification selection DMF = design and monitoring framework DRC = Development and Reform CommissionEA = executing agencyEARF = environmental assessment and review framework EIA = environmental impact assessment EMP = environmental management plan ESMS = environmental and social management system FFA = framework financing agreementFIRR = financial internal rate of return FNPV = financial net present valueFSR = feasibility study reportFYP = Five-Year PlanGACAP = Governance and Anticorruption Action Plan GAP = gender action planGDP = gross domestic product GHG = greenhouse gasIA = implementing agencyICB = international competitive biddingIEE = initial environmental examinationIPP = indigenous people plan IPPF = indigenous people planning framework ITS = Intelligent Transport SystemsLAR = land acquisition and resettlement LDI = Local Design InstituteLIBOR = London interbank offered rateMLSG = Minimum Living Social GuaranteeMOF = Ministry of FinanceNCB = national competitive biddingNDRC = National Development and Reform CommissionNGOs = nongovernment organizations NMT = nonmotorized transport O&M = operation and maintenancePAI = project administration instructions PAM = project administration manualPFR = periodic financing requestPIU = Project Implementation Unit PLG = Project Leading GroupPMO = Project Management OfficeQBS = quality-based selection QCBS = quality- and cost-based selection RF = resettlement frameworkRP = resettlement planRRP = Report and Recommendation of the President to the Board

SBD = standard bidding documents SGIA = Second Generation Imprest Accounts SOE = Statement of Expenditure SPG = Shaanxi Province GovernmentSPRSS = Summary Poverty Reduction and Social Strategy SPS = Safeguard Policy Statement TDM = Traffic Demand ManagementTEAM = Technical and Economic Assessment ModelThe Project = Xi’an Urban Road Network Improvement Project TISS = Traveler Information Service SystemTOR = Terms of Reference TV = Television XDRC = Xi’an Development and Reform CommissionXIIG = Xi’an Infrastructure Investment GroupXMEPB = Xi’an Municipal Environmental Protection BureauXMFB = Xi’an Municipal Financial BureauXMG = Xi’an Municipal GovernmentXMLRB = Xi’an Municipal Land Resources BureauXMPB = Xi’an Municipal Planning BureauXMTPB = Xi’an Municipal Traffic Police BrigadeXMURCC = Xi'an Municipal Urban and Rural Construction Commission

Xi’an Urban Road Network Improvement Project (RRP PRC 43032)

I. PROJECT DESCRIPTION

A. Rationale, Location, and Beneficiaries

1. Xi’an is the provincial capital and the political, economic, and cultural center of Shaanxi Province. As one of the most important growth poles in the western region of the People’s Republic of China (PRC), the city is expanding and developing rapidly. Its population was 8.4 million in 2009, with 72% categorized as urban. During 2000–2007 the population rose at an annual growth rate of 1.85% and gross domestic product grew at 13.5% per annum. The number of registered vehicles increased by 12.2% per annum from 2003–20007, with passenger vehicles growing at 21.8% per year.1 The city is experiencing a range of urban transport problems. These include traffic congestion; an under-developed strategic road network, especially for arterial roads to serve urban expansion between the Second and Third ring roads; a poorly integrated transport system that does not adequately serve the needs of all in the community; low levels of road safety; and deteriorating local air quality as a result of vehicle emissions.

2. The city is trying to address these problems. It is expanding the road network, using its own financial resources and with support from Asian Development Bank (ADB)2 and World Bank. 3 However, this is not enough to provide the necessary transport infrastructure and transport services to meet the city’s growing travel demands. The lack of space in the historic walled city and increasing need for additional public and private sector offices, commercial developments and services such as schools and hospitals, has led to rapid urban growth between the Second and Third ring roads, much faster than the transport capacity to serve the increasing travel demand and changes in travel patterns. In these areas of the city, limitations in connectivity are a bottleneck for further economic growth and efficiency. The city master plan has identified the need to complete missing sections of the strategic road network to provide access to these emerging growth poles and to do so in a way that provides for all road users encompasses pedestrians, public transport, and private transport modes.

3. The increasing demand for transport is making it difficult for the government to effectively manage the transport system. The city has a traffic control center but its coverage is currently limited to areas primarily inside the Second Ring Road. The lack of equipment and coverage of the new urban growth poles is resulting in (i) poor system management, (ii) policing and enforcement issues, (iii) conflicts between vehicles and pedestrians, and (iv) lack of priority for public transport or emergency vehicles. The traffic control system requires improved operations and management.

4. As vehicle numbers rise, the city is struggling to regulate vehicle standards, driver behavior and emissions due to a combination of lack of suitable equipment, capacity and enforcement. Additional equipment is required to enable comprehensive checking of the vehicle fleet for compliance, and to monitoring and reporting on vehicle related emissions as required by the law. The increasing impact of vehicle related emissions, now accounting for 50% of poor ambient air quality in Xi’an reflects the need for capacity development to better manage and police the traffic.

1 China Statistics Press. 2007. Xi’an Statistical Yearbook. PRC. 2 ADB. 2003. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the

People’s Republic of China for the Xi’an Urban Transport Project. Manila. 3 World Bank. 2008. Project Appraisal Document: Xi’an Sustainable Urban Transport Project. Washington, USA.

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5. The city is undertaking a significant expansion of its public transport network. This is needed in order to provide a more balanced range of travel choices, and limit reliance on private vehicles. It is currently constructing two metro lines, with four other metro lines under development. The World Bank is assisting in the development of 13 bus priority corridors, primarily inside the Second Ring Road. However, the attractiveness of public transport is reduced by the lack of integration between public transport modes and by the poor standard of the public transport connecting with the surrounding areas.

6. Weaknesses in inter-agency coordination compound the urban transport problems contributing to the lack of integration of the various transport modes, especially nonmotorized (NMT) and public transport, coupled with over-reliance on road infrastructure and over-emphasis on serving private vehicles at the expense of other road users, which are key modes used by the poor.

7. The complexity of the inter-related issues influencing urban transport, such as rapid urban development, a dramatic increase in the number of vehicles and trips, coupled with the need to better manage transport flows, system integration, and to address the negative aspects of transport such as road crashes and emissions, requires a concerted effort over a number of years. There is no single solution for improving urban transport. The Xi’an authorities recognize that a comprehensive, holistic approach is required, one that can balance conflicting pressures and demands, building upon the progress made with previous ADB and World Bank assistance. Lessons learnt from the past assistance have been incorporated into the project design, notably the need for enhanced coordination between relevant line-agencies and greater emphasis on managing the transport system operations as opposed to pure infrastructure delivery.

8. The city needs help to introduce suitable tools for coping with the high demand for urban transport and to support pilot projects to demonstrate effective approaches. This includes both improving transport infrastructure and, perhaps more importantly, improving the system management, integration and sustainable operation. It is the system performance, combining environment friendly, safe and inclusive transport that is the key value of any support that can be provided. The traditional approach of relying on infrastructure construction alone has proved insufficient for overcoming congestion. A more balanced approach is needed that manages travel while addressing the broader social and environmental impacts. Closely aligned with this approach is the need for capacity development to complement ongoing measures to support sustainable urban transport and to enable replication of these in Xi’an and more broadly across the PRC.

9. Well managed urban transport systems are one of the major challenges facing urban centers across the PRC. While considerable investments are being made in infrastructure for both private and public transport modes; the development of capacity and policies to manage travel more efficiently is at an early stage. The proposed project is intended to support the objectives of the PRC to find suitable and sustainable solutions to its urban transport problems and in so doing is directly supportive of the emerging urban transport priorities of the Twelfth Five-Year Plan, 2011–2015 and also of the PRC Country Partnership Strategy (CPS). It is also well aligned with the pillars of ADB’s Strategy 2020,4 focusing on inclusive and environmentally sustainable development. In addition, having a focus on urban transport, it addresses one of the focus areas of ADB’s Sustainable Transport Initiative Operational Plan (STI-OP).5

4 ADB. 2008. Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank 2008–2020.

Manila. 5 ADB. 2010. Sustainable Transport Initiative Operational Plan. Manila.

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B. Impact and Outcome 10. The project impact will be an inclusive economic and environmentally-friendly growth promoted in Xi’an by facilitating the movements of goods and people. By contributing to a comprehensive and holistic solution for integrated urban mobility and enhanced system management, the project will promote the sustainable economic growth of the city. The project outcome will be an efficient, safe and environmentally sustainable integrated urban transport system developed in Xi’an city.

C. Outputs

11. Although only 10% of current trips in Xi’an are made by car, the rapid growth of private vehicle ownership and use poses a great challenge on the sustainability of existing transportation system. The proposed project will introduce bus prioritization, NMT routes, pedestrian safety, advanced traffic management, vehicle emission control, and parking strategies. This will support better road use and transport access for all. The project includes five interlined outputs: (i) Output 1: road network improvements; (ii) Output 2: pedestrian crossing and safety improvements; (iii) Output 3: multimodal interchange facilities; (iv) Output 4: ITS and road user safety program; and (v) Output 5: environment protection enhancement. The design and monitoring framework (DMF) in Section IX summarizes the main features of the project.

(i) Output 1: Road Network Improvements. The output will include construction/rehabilitation of 12.92 kilometers (km) of urban roads along Keji 2nd Road (6.2 km), Kunming Road (4.39 km) and Dazhai West Road (2.33 km) in the southwest part of the city, between the Second and Third ring roads. These roads will include 21.57 km of bus priority corridors, 21.57 km of NMT lanes and a 4.39 km linear green park along Kunming Road. This output will also include six urban interchanges to provide suitable size and configuration at these critical bottleneck points for the approaching road network and thus provide sufficient access to the new civic development and growth center to the north of the city between Second and Third ring roads. The proposed bus priority corridors will include exclusive bus lanes, bus signal priorities, station improvements, and traffic management measures, which will significantly improve travel conditions for bus passengers. The roads will include facilities for cyclists and pedestrians and thus provide street design and operation for all road users. The road network improvements will enhance the functionality and connectivity of the existing Second and Third ring roads, connecting two growth poles of the city, the commercial business area in the southwest and the government offices to the north of the city, both between the Second and Third ring roads. The roads will form an integral part of the strategic road network, connecting the two growth areas with the current road network.

(ii) Output 2: Pedestrian Crossing and Safety Improvements. The output includes improvement of 110 urban intersections and 15 mid-block crossing facilities, pedestrian crossing signals, and improved visibility and safety for pedestrians. Advanced information technology safety equipment, enforcement and other changes will also be introduced. This output will promote the use of nonmotorized transport that is safe and caters for those segments of society that are less likely to have access to private modes of transport and therefore rely on walking, in particular the poor, children and women.

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(iii) Output 3: Multimodal Interchange Facilities. This output will include construction of (i) four multimodal interchange facilities (Xi’an North Train Station, Xi’an National Civil Aerospace Industrial Base, Xi’an Yuhua Zhai, and Xi’an International Logistics Park) to provide easy connections between metro, bus, taxi, car, motorcycle and/or bicycle, thus linking the surrounding areas to these key public transport hubs and staging or control facilities for public transport vehicles; (ii) five multi-level parking facilities, providing spaces for 2,249 vehicles in off-street facilities, as well as provisions for motorcycles and bicycles, two at multimodal interchange facilities (Xi’an Yuhua Zhai and Xi’an International Logistics Park) to promote mode share and the use of public transport by providing park and ride facilities for private vehicles, motorcycles and bicycles, and three parking garages on the edge of the old walled city (Leju Chang, South Guoshang Village and Xizhan Community) which will act as traffic demand management measure to avoid motorized trips entering the walled city by providing alternate parking locations outside the city walls. The garages will also incorporate parking management and enforcement on the surrounding streets and address the series issue of illegal parking on sidewalks; and (iii) five new compressed natural gas (CNG) stations, four incorporated in each of the multimodal interchange facilities and one close to the Third Ring Road at Mujiangwang to facilitate the efficient fueling access of buses, taxis and private vehicles, and to encourage further switching to this more environmentally sustainable fuel source. Electric charging stations will also be provided at the multimodal interchange facilities to cater for the future expected growth in electric vehicles and for the current large fleet of electric motorcycles.

(iv) Output 4: Intelligent Transport System and Road User Safety Program. This output will extend the existing ITS beyond the Second Ring Road to the Third Ring Road to provide ITS coverage of these important sections of the strategic road network and urban growth poles; developing an implementation plan for improved use and management of the ITS system; improvement and enhancement of traveler information dissemination for both private and public transport modes; and implementation of a public road safety education program to support the pedestrian crossing safety project output. This output includes capacity development components to more effectively operate the ITS system for improved traffic and pedestrian crossing, information dissemination, and policing and enforcement for improved safety. The output will include equipment comprising 20 variable message signs, 140 microwave detectors, 66 close circuit televisions, 31 red-light cameras, and 10 speed violation cameras.

(v) Output 5: Environmental Protection. The output will (i) enhance the vehicle emissions inspection program by providing random inspection capacity and equipment (5 emission regulation enforcement vehicles, 10 black smoke stations and 4 mobile emission enforcement equipment). These enforcement stations can check all vehicles as they pass the stations, automatically record the violation vehicle’s license plate number, and report them to the police, an emission regulation enforcement vehicle can check 5,000 vehicles per day. Xi’an Environmental Protection Bureau (EPB) has authority to issue on the spot tickets to vehicles that violate the emission regulations; (ii) improve air quality monitoring by establishing 4 sub-monitoring stations along the Third Ring Road equipped with air quality and noise monitoring systems connected to the environment information center, and remote sensing data receiving system in the environment

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information center to monitor the city wide air quality. Information obtained from monitoring stations will be integrated with remote sensing information to provide area-wide air quality status; and (iii) establish an environment and vehicle emission control information sharing system, a computer software for environment information sharing, emission regulation violation information sharing system, public sector vehicle management, obsolete vehicle scrapping enforcement administration assistance, and environmental information disclosure, and (iv) establish an environmental information center. This output will support more effective management and enforcement of vehicle standards. It will help identify heavily polluting vehicles, improve the efficiency of vehicle emission control and enforcement, as well as reduce on road vehicle emissions.

II. IMPLEMENTATION PLANS

A. Project Readiness Activities

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Table 1: Project Readiness

Indicative activities

MonthsWho

responsible 2011 2012

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 Establish project implementation arrangements

EA, PMO, IA

Domestic processing:

Draft Resettlement Plan – approval by ADB

EA,PMO,ADB

Draft Resettlement Plan – endorsement by XMG

XMG

EIAs approval by ADB

EA

Feasibility Study by Government

EA

Foreign fund utilization:

Advance procurement actions

XMG, EA, IA

Retroactive financing actions

ADB

Application

MOF,EA,PMO

Approval of application

NDRC

Final approval – state Council

MOF

ADB Board approval

ADB

Loan signing ADB, MOF,

EA

Government legal opinion provided

MOF, EA

Government budget inclusion

XMG,PMO,EA

Loan effectiveness MOF,EA,PMO,

ADB

ADB = Asian Development Bank, EA = executing agency, IA = implementing agency, MOF = Ministry of Finance, NDRC = National Development and Reform Commission, XMG = Xi’an Municipal Government.

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B. Overall Project Implementation Plan

Table 2: Overall Project Implementation Plan

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4Design and Monitoring Framework (DMF)

Roads

Resettlement

Bidding and Contract Awarding

Civil Works - Foundation Works and B idCivil Works - Interchange

Pavement works

Landscaping

Equipment Installation

Pedestrian Crossing Safety


Civil Works

Equipment

Multimodal Interchange Facilities

Resettlement

Civil Works


Transport Hubs

Multi-level parking facilities

CNG stations

Equipment


CNG stations Equipment

Intelligent Transport System


Delivery and Installation

Environmental Protection


Delivery and Installation

Management Activities

Consultant selection procedures

Project Management

ITS Consulting Services

Others

Annual/Mid-term review

Project completion report

2015 2016Activities 2011 2012 2013 2014

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III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Stakeholders – Roles and Responsibilities

12. The executing agency (EA) for the project will be the Xi’an Municipal Urban and Rural Construction Commission (XMURCC) which will have overall responsibility for project. The implementing agency (IA) will be the Xi’an Infrastructure Investment Group (XIIG) which will be responsible for all project outputs and day-to-day project implementation. The EA has established and staffed a project management office (PMO) comprising of suitable staff reporting to the EA to coordinate and oversee project implementation and in doing this will: (i) ensure that the project activities to comply with safeguard requirements; (ii) supervise procurement; (iii) monitor utilization of the ADB loan and the counterpart funding; (iv) prepare and submit reports to ADB and the Government; (v) ensure that the complaints received from the project stakeholders are addressed adequately; (vi) submit progress, audit, and other reports to ADB and retain copies of supporting documents; and (vii) coordinate with ADB review missions.

13. Xi’an Municipal Government (XMG) has established a project leading group (PLG) with responsibility for project oversight and to ensure coordination across the various agencies that have responsibility for urban development and urban transport in Xi’an. The PLG will be chaired by the Vice Mayor of XMG with heads of concerned municipal agencies as members. The vice mayor will chair PLG meetings, to be held every 3 months or more often if necessary, to review implementation, resolve coordination issues, and ensure timely completion of the project.

Project implementation organizations

Management Roles and Responsibilities

Project Leading Group Chaired by Vice Mayor; Comprising of representatives of all concerned

provincial and municipal agencies; Providing policy and institutional guidance to EA, IA and

concerned government agencies during the implementation;

Overseeing overall project implementation progress; and

Ensuring interagency coordination and resolving institutional issues which may affect project viability or project implementation.

Xi’an Municipal Urban and Rural Construction Commission (XMURCC),

A project management office

(PMO) will be set up in XMURCC handling all matters pertaining to project implementation.

The Executing Agency responsible for the overall project implementation;

Ensuring project’s sustainability and reporting to ADB on agreed development outcome and impacts;

Monitoring and evaluating project activities and outputs, including periodic review, preparation of review reports reflecting issues and time-bound actions taken (or to be taken);

Providing guidance to IA on project implementation; Preparing and securing project budget approval by Xi’an

Development and Reform Commission;

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Obtaining and provision of agreed counterpart funds for project activities through Shaanxi Financial Provincial Bureau;

Establishing strong financial management system, submitting withdrawal applications to ADB through Shaanxi Financial Provincial Bureau, conducting financial audits as per agreed timeframe and taking recommended actions;

Overview the procurement activities; Involving beneficiaries and civil society representatives

in all stages of project design and implementation; Complying with all loan covenants; and Preparing regular periodic progress reports, monitoring

reports, and project completion report, and materializing actions agreed and their timely submission to ADB.

Shaanxi Provincial Finance Bureau (SPFB)

Signing the Onlending and/or Relending Agreements for the project;

Timely provision of agreed counterpart funds for project activities, allocating and releasing counterpart funds;

Endorsing to ADB the authorized staff with approved signatures for disbursement of loan proceeds;

Processing and submitting to ADB, through the Ministry of Finance, any request, when required, for matters pertaining to Loan or Project Agreements; and

Monitoring of the project implementation and providing coordination and facilitation as needed.

Xi’an Municipal Finance Bureau

Signing the Relending Agreement for the project; Timely processing matters pertaining to utilizing of loan

proceeds and/or Relending Agreement, and provision of agreed counterpart funds for project activities, allocating and releasing counterpart funds; and

Monitoring of the project implementation and providing respective coordination and facilitation as needed.

Xi’an Infrastructure Investment Group

the Implementing Agency responsible for day to day implementation of all project components;

Ensuring achievement of the project’s development impacts and their sustainability

Coordinating with concerned provincial and municipal agencies;

Preparing and updating the project implementation plan; procurement plans for the entire loan period and detailed procurement plan for the next 18 months; annual projections for contract awards and

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disbursement; Undertaking procurement actions and consultant

selection, including preparation and securing approval by ADB of bidding documents, bid evaluation reports and contract awards;

Preparing withdrawal applications; Operating imprest account; Coordinating preparation of surveys, preliminary and

detailed design documents; Ensuring the approval of land acquisition and

resettlement plans by the Government and ADB, and implementing them;

Conducting the construction supervision with the assistance of the PMC, validating the quantities and quality of civil works, and equipment;

Preparing regular periodic progress reports, monitoring and evaluation reports, and project completion report and their timely submission to ADB; and;

Involving beneficiaries and civil society representatives in all stages of project design and implementation;

Public disclosure of project outputs; Complying with all loan covenants

Ministry of Finance (MOF) Supervising the XMURCC in the implementation of the project; and

Guiding XMURCC on ADB documentation requirements, such as legal opinion and fulfill loan effectiveness conditions when needed.

Asian Development Bank (ADB)

Providing the EA and IA guidance to ensure smooth project implementation and achieving the desired development impacts and their sustainability;

Conducting regular loan review missions, a mid-term review, and project completion review;

Reviewing and approving of procurement actions; Processing the withdrawal applications; Monitoring the status of compliance with all loan

covenants including safeguards; Reviewing the annual audit report and following up on

the audit recommendations; Regularly update the project performance review reports

with the assistance of EA and IA; and Regularly updating the project information documents

for public disclosure at ADB web site, including the safeguards documents.

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Key Persons Involved in Implementation

Executing Agency Xi’an Municipal Urban and Rural Construction Commission

Mr. Gai Wenfeng Deputy Director General Xi’an Municipal Urban and Rural Construction Commission Xi’an Municipal Government Tel: +86 29 87436613 Fax:+86 29 8723 4665 Email: [email protected] Address: No. 51, Houzaimen Street, Xi'an City, Shaanxi Province, PRC

Implementation Agency Xi’an Infrastructure Investment Group

Mr. Chen Jingan Director, Investment Department Xi’an Infrastructure Investment Group Tel: +86 29 8835 4682 Fax: +86 29 8832 0934 Email: [email protected] Address: 27/F, Tower B, Pioneering square No.48 Keji Rd., Xi'an 710075, Shaanxi Province, PRC

Asian Development Bank Division Director Mr. Tyrrell Duncan

Director, Transport Division East Asia Department (EARD) Tel :+63 2 632 6376 (direct); + 63 2 632 6383 (local) Fax:+ 63 2 636 2426 Email address: [email protected] 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines

Mission Leader Mr. Jamie Leather Principal Transport Specialist Tel: +63 2 632 6364 Fax :+ 63 2 636 2426 6 ADB Avenue, Mandaluyong City,1550 Metro Manila, Philippines

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B. Project Organization Structure

Project Management Organizational Chart

Project Leading Group Xi’an Traffic Police Detachment

Xi'an Environmental Protection Bureau

Xi’an Municipal Government

Xi’an Municipal Urban and Rural Construction Commission (Executing Agency/PMO)

Xi’an Infrastructure Investment Group

(Implementing Agency)

Xi'an Public Transport Company

Other concerned agencies

Planning and Investment

Division

PMO

Financial Department Investment and Development Department

(Foreign Loan Utilization Office)

Engineering Department

Supervision

Disbursement Auditing Fund Collection

Procurement Contract Management

Works Management

Investment audit, Reimbursement

Environment Resettlement Social

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IV. COSTS AND FINANCING 14. The project investment cost is estimated at $558.06 million, including taxes and duties of $17.54 million. The total cost also includes physical and price contingencies and financing charges during implementation. The indicative project investment plan is summarized in Table 3.

Table 3: Project Investment Plan ($ million)

a In February 2011 prices. b Includes taxes and duties of $17.54 million. The ADB loan will be used to finance taxes and duties on items

financed by ADB, pursuant to paragraph 28 of the "Staff Instruction on Cost Sharing and Eligibility of Expenditures for ADB Financing.

c Physical contingencies computed at 3% of base cost excluding resettlement. The RP includes 10% contingency to allow for increasing land costs.

d Price contingencies computed at an 0.4% for foreign exchange costs and an average of 4.0% for local currency cost, and including provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

e Includes interest and commitment charges. Interest during construction for ADB loan has been computed at the 5-year forward London interbank offered rate plus a spread of 0.4%. Commitment charges for the ADB loan are based on 0.15% per year to be charged on the undisbursed loan amount.

Note: Numbers may not sum precisely due to rounding. Source: ADB Estimates. A. Financing Plan 15. The Government has requested a loan of $150 million from ADB’s ordinary capital resources to finance 26.9% of the project cost. The loan will have a 25-year term including a grace period of 5 years, an interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per annum, and such other terms and conditions set forth in the draft loan and project agreements. The loan will cover civil works, equipment, project management consulting services, capacity building, the

Items Total Cost a % of Total Base Cost

A. Investment Costs b 1 Civil Works 282.32 58.9% 2 Goods/Equipment 25.48 5.3% 3 Consulting Services 1.50 0.3% a. Project Management 0.90 0.2% b. Capacity Development 0.60 0.1% 4 Land Acquisition and Resettlement 150.43 31.4% 5 Survey, Research, Design and Services 19.33 4.0% 6 Road User Safety Program 0.30 0.1% Subtotal (A) 479.36 100.0% Total Base Cost 479.36 100.0%B. Contingencies 1 Physical c 9.24 1.9% 2 Price d 52.82 11.0% Subtotal (B) 62.06 12.9%C. Financing Charges During Implementation e 1 Interest During Implementation 15.93 3.3%

2 Commitment Charges 0.71 0.1% Subtotal (C) 16.63 3.5%Total Project Cost (A+B+C) 558.06 116.4%

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road user safety program, and taxes and duties on the expenditures financed by ADB.6 The Government will finance civil works, resettlement, design, surveys and research, and contingencies. The domestic bank loan will finance civil works, contingencies, resettlement, design, surveys and research, and financing charges. The indicative financing plan is summarized in Table 4.

Table 4: Financing Plan ($ million)

Source Amount % Asian Development Bank 150.00 26.9 Xi’an Municipal Government 174.05 31.2 Domestic Bank (China Construction Bank) 234.01 41.9 Total 558.06 100.00

16. The Borrower of the loan is the PRC. The Government will make the loan proceeds available to the Shaanxi Provincial Government, which will onlend the proceeds to Xi'an Municipal Government. XMG will then relend the loan proceeds to Xian Infrastructure Investment Group. XMG will assume the foreign exchange and interest rate variation risks for the ADB loan. The Government of the PRC has provided ADB with (i) the reasons for its decision to borrow under ADB’s LIBOR-based lending facility based on these terms and conditions, and (ii) assurances that these choices were its own independent decision and not made in reliance on any communication or advice from ADB.

17. In addition to the $150 million loan requested from ADB, XMG confirmed that it will contribute counterpart funding for the Project. XMG further confirmed that their counterpart funds will be sourced from fiscal revenues or general budget and borrowings from domestic banks. The detailed cost estimates are in Tables 5 to 8. The allocation and withdrawal of ADB loan proceeds is in Table 9. The annual projections for contract awards and disbursements for the ADB loan is shown graphically in Figure 1. The funds flow mechanism is in Figure 2.

6 The following principles have been used to determine the amount of taxes and duties to be financed in the project:

(i) the amount of taxes and duties financed by the ADB loan does not represent an excessive share of the project investment plan, (ii) the taxes and duties apply only with respect to ADB-financed expenditures, and (iii) the financing of the taxes and duties is material and relevant to the success of the project since the percentage of some financed expenditures needs to be 100%.

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Table 5: Detailed Cost Estimates by Expenditure Category

Items (CNY million) ($ million)

% of Total Base Cost

Foreign Local Total Foreign Local Total Costa Exchange Currency Cost Exchange Currency

A. Investment Costsb 1. Civil Works 652.17 1,211.17 1,863.34 98.81 183.51 282.32 58.9% 2. Goods/Equipment 60.54 107.63 168.17 9.17 16.31 25.48 5.3% 3. Consulting Services 5.54 4.36 9.90 0.84 0.66 1.50 0.3% a. Project Management 2.38 3.56 5.94 0.36 0.54 0.90 0.2% b. Capacity Development 3.17 0.79 3.96 0.48 0.12 0.60 0.1% 4. Land Acquisition and Resettlement 0.00 992.82 992.82 0.00 150.43 150.43 31.4% 5. Survey, Research, Design and Services 0.00 127.58 127.58 0.00 19.33 19.33 4.0% 6. Road User Safety Program 0.99 0.99 1.98 0.15 0.15 0.30 0.1% Subtotal (A) 719.24 2,444.55 3,163.79 108.98 370.39 479.36 100.0% Total Base Cost 719.24 2,444.55 3,163.79 108.98 370.39 479.36 100.0%B. Contingencies 1. Physicalc 13.87 47.13 61.00 2.10 7.14 9.24 1.9% 2. Priced 79.25 269.35 348.60 12.01 40.81 52.82 11.0% Subtotal (B) 93.12 316.48 409.60 14.11 47.95 62.06 12.9%C. Financing Charges During Implementatione 1. Interest During Implementation 61.59 43.52 105.11 9.33 6.59 15.93 3.3% 2. Commitment Charges 4.67 0.00 4.67 0.71 0.00 0.71 0.1% Subtotal (D) 66.25 43.52 109.78 10.04 6.59 16.63 3.5%Total Project Cost (A+B+C) 878.61 2,804.55 3,683.16 133.12 424.93 558.06 116.4%

a In February 2011 prices. b Includes taxes and duties of $17.54 million. The ADB loan will be used to finance taxes and duties on items financed by ADB. c Physical contingencies computed at 3% of base cost excluding resettlement. d Price contingencies computed at an average of 0.4% for foreign exchange costs and an average of 4.0% for local currency costs, and including provision for

potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. e Includes interest and commitment charges. Interest during construction for ADB loan has been computed at the 5-year forward London interbank offered rate plus

a spread of 0.4%. Commitment charges for the ADB loan are based on 0.15% per year to be charged on the undisbursed loan amount. Note: Numbers may not sum precisely due to rounding. Source: PPTA Consultant’s estimates.

16

Table 6: Detailed Cost Estimate by Financier ($ million)

Items ADB Domestic Bank Government

Total Costa Amount

% of Cost Category

Amount % of Cost Category


A. Investment Costsb 1. Civil Works 112.68 40% 161.50 57% 8.14 3% 282.32 1.1. Road Network Improvements 67.31 29% 161.50 71% 0 0% 228.81 1.2. Multimodal Interchange Facilities 41.88 100% 0.00 0% 0.00 0% 41.88 1.3. Pedestrian Crossing & Safety

Improvements 3.49 30% 0.00 0% 8.14 70% 11.63

2. Capital Goods & Equipment 25.48 100% 0.00 0% 0.00 0% 25.48 3. Consulting Services 1.50 100% 0.00 0% 0.00 0% 1.50 a. Project Management 0.90 100% 0.00 0% 0.00 0% 0.90 b. Capacity Development 0.60 100% 0.00 0% 0.00 0% 0.60 4. Land Acquisition and Resettlement 0.00 0% 1.51 1% 148.91 99% 150.43 5. Survey, Research, Design, and Services 0.00 0% 14.60 76% 4.73 24% 19.33 6. Road User Safety Program 0.30 100% 0.00 0% 0.00 0% 0.30 Subtotal (A) 139.96 29% 177.61 37% 161.79 34% 479.36 Total Base Cost 139.96 29% 177.61 37% 161.79 34% 479.36B. Contingenciesc 0.00 0% 49.80 80% 12.26 20% 62.06C. Financing Charges During Implementationd 10.04 60% 6.59 40% 0.00 0% 16.63 Total Project Cost (A+B+C) 150.00 27% 234.01 42% 174.05 54% 558.06

% Total Project Cost 26.9% 41.9% 31.2% a In February 2011 prices. b Includes taxes and duties of $17.54 million. The ADB loan will be used to finance taxes and duties on items financed by ADB. c Physical contingencies computed at 3% of base cost excluding resettlement. Price contingencies computed at an average of 0.4% for foreign exchange costs

and an average of 4.0% on local currency costs, and include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

d Includes interest and commitment charges. Interest during construction for ADB loan has been computed at the 5-year forward London interbank offered rate plus a spread of 0.4%. Commitment charges for the ADB loan are based on 0.15% per year to be charged on the undisbursed loan amount.

Numbers may not sum precisely due to rounding. Source: PPTA Consultant’s estimates.

17 Table 7: Detailed Cost Estimates by Outputs/Components

($ million)

Items Total Costa

Road Network Improvements

ITS and Road Safety Program

Transport Interchange

Facilities

Pedestrian Crossing and Safety

Improvements

Environmental Protection

Enhancement






A. Investment Costsb

1. Civil Works 282.32 228.81 81.0% 0.00 0.0% 41.88 14.8% 11.63 4.1% 0.00 0.0%

2. Goods/Equipment 25.48 7.91 31.0% 5.00 19.6% 3.97 15.6% 3.94 15.5% 4.66 18.3%

3. Consulting Services 1.50 0.81 54.3% 0.06 3.8% 0.50 33.1% 0.08 5.4% 0.05 3.4%

a. Project Management 0.90 0.49 54.3% 0.03 3.8% 0.30 33.1% 0.05 5.4% 0.03 3.4%

b. Capacity Development 0.60 0.33 54.3% 0.02 3.8% 0.20 33.1% 0.03 5.4% 0.02 3.4%

4. Land Acquisition and Resettlement

150.43 139.00 92.4% 0.00 0.0% 11.43 7.6% 0.00 0.0% 0.00 0.0%

5. Survey, Research, Design and Services

19.33 14.60 75.5% 0.25 1.3% 2.97 15.4% 1.25 6.5% 0.26 1.4%

6. Road User Safety Program 0.30 0.00 0.0% 0.30 100.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%

Subtotal (A) 479.36 391.14 81.6% 5.60 1.2% 60.75 12.7% 16.90 3.5% 4.97 1.0%

Total Base Cost 479.36 391.14 81.6% 5.60 1.2% 60.75 12.7% 16.90 3.5% 4.97 1.0%

B. Contingencies

1. Physicalc 9.24 7.10 13.4% 0.15 0.3% 1.38 2.6% 0.47 0.9% 0.15 0.3%

2. Price 52.82 42.70 68.8% 0.53 0.9% 7.63 12.3% 1.51 2.4% 0.44 0.7%

Subtotal (B) 62.06 49.80 80.2% 0.68 1.1% 9.01 14.5% 1.98 3.2% 0.59 1.0%

C. Financing Charges During Implementationd

1. Interest During Implementation

15.93 11.71 1656.5% 0.45 63.0% 2.53 357.8% 0.82 115.5% 0.42 59.1%

2. Commitment Charges 0.71 0.38 2.3% 0.02 0.1% 0.24 1.5% 0.05 0.3% 0.01 0.1%

Subtotal (C) 16.63 12.09 2.2% 0.47 0.1% 2.78 0.5% 0.86 0.2% 0.43 0.1%

Total Project Cost (A+B+C) 558.06 453.03 81.2% 6.76 1.2% 72.53 13.0% 19.75 3.5% 6.00 1.1%

Note: Exchange rate is US$1 = CNY6.6. a In February 2011 prices. b Includes taxes and duties of $17.54 million. The ADB loan will be used to finance taxes and duties on items financed by ADB. c Physical contingencies computed at 3% of base cost excluding resettlement. Price contingencies computed at an average of 0.4% for foreign exchange costs and an

average of 4.0% on local currency costs, and include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and commitment charges. Interest during construction for ADB loan has been computed at the 5-year forward London interbank offered rate plus a spread

of 0.4%. Commitment charges for the ADB loan are based on 0.15% per year to be charged on the undisbursed loan amount. Numbers may not sum precisely due to rounding. Source: PPTA Consultant’s estimates.

18

Table 8: Detailed Cost Estimates by Year – ADB-Financed

Items ($ million)

Total Cost 2012 2013 2014 2015 2016

A. Investment Costs 1. Civil Works 112.68 6.42 16.50 37.00 32.48 20.282. Goods/Equipment 25.48 0.00 9.23 12.14 3.16 0.953. Consulting Services 1.50 0.00 1.00 0.50 0.00 0.00

a. Project Management 0.90 0.00 0.40 0.50 0.00 0.00b. Capacity Development 0.60 0.00 0.60 0.00 0.00 0.00

4. Land Acquisition and Resettlement 0.00 0.00 0.00 0.00 0.00 0.005. Survey, Research, Design, and Services 0.00 0.00 0.00 0.00 0.00 0.006. Road User Safety Program 0.30 0.00 0.00 0.09 0.21 0.00

Subtotal (A) 139.96 6.42 26.73 49.73 35.85 21.23Total Base Cost 139.96 6.42 26.73 49.73 35.85 21.23

B. Contingencies 0.00 0.00 0.00 0.00 0.00 0.00C. Financing Charges During Implementation 10.04 0.58 1.27 2.27 3.15 2.77

Total Project Cost (A+B+C) 150.00 7.00 28.00 52.00 39.00 24.00% Total Project Cost 100.00% 4.67% 18.67% 34.67% 26.00% 16.00%

a In February 2011 prices and exchange rate of $1 to CNY6.6. b Includes taxes and duties of $17.54 million. The ADB loan will be used to finance taxes and duties on items financed by ADB. c Physical contingencies computed at 3% of base cost excluding resettlement. Price contingencies computed at an average of 0.4% for foreign

exchange costs and an average of 4.0% on local currency costs, and include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

d Includes interest and commitment charges. Interest during construction for ADB loan has been computed at the 5-year forward London interbank offered rate plus a spread of 0.4%. Commitment charges for the ADB loan are based on 0.15% per year to be charged on the undisbursed loan amount.

Numbers may not sum precisely due to rounding. Source: PPTA Consultant’s estimates.

19

Table 9: Allocation and Withdrawal of Loan Proceeds

Category Amount Allocated (US$) ADB Financing

No. Item Category Subcategory Percentage and Basis for Withdrawal from

the Loan Account 1. Civil Works 112,680,550 1.1. Road network improvements 67,311,550 29 percent of total expenditure claimed 1.2. Multimodal Interchange Facilities 41,880,000 100 percent of total expenditure claimed 1.3. Pedestrian Crossing & Safety Improvements 3,489,000 30 percent of total expenditure claimed 2. Goods & Equipment 25,480,985 2.1. Road Network Improvements 7,908,515 100 percent of total expenditure claimed 2.2. Intelligent transport system 5,000,000 100 percent of total expenditure claimed 2.3. Multimodal Interchange Facilities 3,970,000 100 percent of total expenditure claimed 2.4. Environmental Protection Enhancement 4,662,470 100 percent of total expenditure claimed 2.5. Pedestrian Crossing & Safety Improvements 3,940,000 100 percent of total expenditure claimed 3. Road User Safety Program 300,000 100 percent of total expenditure claimed 4. Consulting Services and Capacity Building 1,500,000 4.1. Consulting Services 900,000 100 percent of total expenditure claimed 4.2. Capacity Building 600,000 100 percent of total expenditure claimed 5. Interest and Commitment Charge 10,038,465 100 percent of total amounts due

Total 150,000,000

20 B. Contract and Disbursement S-curve

1 Of the proposed ADB loan amount of $150 million, $140 million is projected for contract awards as $10 million is allocated for interest during construction.

Figure 1: Contract Awards and Disbursements Projections1 ($ million)

Disbursement Contract Awards

Year

21

Figure 2: Fund Flow Diagram

PRC/Borrower Ministry of Finance

Xi’an Municipal Government

Shaanxi Financial Provincial Bureau

Flow of funds

Repayment

Xi’an Municipal Finance Bureau

Xi’an Municipal Urban and Rural Construction Commission

Xi’an Infrastructure Investment Group (IA) Counterpart Funding

(Xian Municipal Government and Domestic Bank)

Imprest Account

Asian Development Bank

Loan Agreement

Onlending Agreement

Flow of documents (W/A, Claims)

Contractors Consultant

W/A

Claims

W/A

22

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

18. Financial management assessment (FMA) has been conducted for the Project in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects1 and the publication Financial Due Diligence – A Methodology Note.2 The FMA considers the Xi’an Municipal Urban and Rural Construction Commission (XMURCC) and Xi’an Infrastructure Investment Group (XIIG) in their role as the executing agency (EA) and implementing agency (IA) for the Project, respectively. The FMA includes review of the accounting and reporting system, internal and external auditing arrangements, fund disbursement procedures, and information systems. The instrument used for the assessment was Asian Development Bank’s (ADB) financial management assessment questionnaire (FMAQ). A detailed financial management analysis is in Appendix 1.

19. The assessment concluded that the financial management capacity of the EA and IA are adequate for the implementation of the Project, and training in ADB procedures will be required in procurement, disbursement, and project management. Issues or risks/deficiencies associated with the entity’s financial management systems are identified and the necessary capacity development measures are recommended to ensure that the IA is able to meet the project’s accounting and reporting requirements. The actions proposed include: (i) clear definition and description of the responsibilities of all IA staff, and (ii) recruitment of additional financial staff. The actions proposed to be undertaken during the implementation of the Project include: (i) close liaison among the EA and IA and the ADB to ensure that ADB guidelines are followed; (ii) regular inter-agency coordination at all levels to discuss the project implementation progress and performance; (iii) regular training on ADB’s disbursement policies; (iv) separate accounts maintained for all project components financed by ADB and the Government, and to be duly audited; (v) semiannual and annual progress reports on project implementation and operation prepared; and (vi) close monitor of loan covenants compliance status, including submission of audited project accounts.

20. The IA will be responsible for implementation of the components. The IA will be required to adhere to sound financial management requirements during the implementation of the Project. The IA will be required to maintain separate project records and accounts adequate to identify the: (i) goods and services financed from loan proceeds, (ii) financing resources received, (iii) expenditures incurred on the components of each project, and (iv) counterpart funds received and expended.

21. The assessment identifies that technical assistance could be provided in the following areas: (i) budget preparation and oversight; (ii) establishing the internal audit function; (iii) establishing safeguard system to ensure the safety of data; and (iv) development of a financial policies and procedures manual to guide financial management, reporting, and related administrative activities.

1 Financial Management and Analysis of Projects. ADB. 2005. 2 Financial Due Diligence A Methodology Note. ADB. 2009.

23

B. Disbursement

22. ADB loan proceeds will be disbursed in accordance with the ADB’s Loan Disbursement Handbook (2007, as amended from time to time),3 and detailed arrangements agreed upon between the Government and ADB, if any.

23. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS),4 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. Financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list to the components financed by ADB.

24. To facilitate project implementation through timely release of loan proceeds, XIIG will establish and operate an imprest account promptly after loan effectiveness at a commercial bank acceptable to ADB, the account will be in US$.5 The maximum ceiling of the imprest account will not at any time exceed the estimated ADB financed expenditures to be paid from the imprest account for the next 6 months or 10% of the respective loan amount, whichever is lower. The request for initial advance to the imprest account should be accompanied by an Estimate of Expenditure Sheet6 setting out the estimated expenditures for the first six (6) months of project implementation, and submission of evidence satisfactory to ADB that the imprest account has been duly opened. For every liquidation and replenishment request of the imprest account, the borrower will furnish to ADB (a) Statement of Account (Bank Statement) where the imprest account is maintained, and (b) the Imprest Account Reconciliation Statement (IARS) reconciling the above mentioned bank statement against the EA’s records.7

25. The direct payment procedure will apply for large works contracts. If the government initially funds eligible expenditure from its own resources, the reimbursement procedure will be used. To expedite flow of funds and simplify the documentation process, the ADB statement-of-expenditure (SOE) procedure will be used for liquidation and replenishment of the imprest account, and for reimbursement of eligible expenditures not exceeding $100,000 per individual transaction. The payments in excess of the SOE ceiling will be reimbursed, liquidated, or replenished based on full supporting documentation. SOE records should be maintained by XIIG and made readily available for review by ADB's disbursement and review mission or upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit.8

26. Before the submission of the first withdrawal application, the Borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the Borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is $100,000, unless otherwise approved by ADB. The Borrower is to consolidate claims to meet this limit for

3 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf. 4 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf. 5 The bank charges on the imprest account will be financed from the proceeds of the loan. 6 Available in Appendix 29 of the Loan Disbursement Handbook. 7 Follow the format provided in Appendix 30 of the Loan Disbursement Handbook. 8 Checklist for SOE procedures and formats are available at:

http://www.adb.org/documents/handbooks/loan_disbursement/chap-09.pdf http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-100-Below.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-Over-100.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Operating-Costs.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Free-Format.xls

24

reimbursement and imprest account claims. Withdrawal applications and supporting documents will demonstrate among other things that the goods and/or services were produced in or from ADB members, and are eligible for ADB financing.

C. Accounting, Auditing, and Reporting

27. The EA and IA will maintain separate project accounts and records by funding source for all expenditures incurred on the Project. Project accounts will follow international accounting principles and practices.

28. The EA and IA will cause the detailed consolidated project accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB. The EA will submit the audited accounts in the English language to ADB within six months of the end of the fiscal year. The annual audit report will include a separate audit opinion on the use of the imprest accounts and the SOE procedures. The Government has been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the Project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. For revenue generating projects only, ADB requires audited financial statements (AFS) for each executing and/or implementing agency associated with the Project.

29. The EA, PMO, and IA will make satisfactory arrangements for reporting the progress of Project implementation to ADB by submitting quarterly progress reports to ADB through PLG as well as a completion report within 6 months of the end of the Project.

25

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

30. Advance procurement and retroactive financing for (i) one road (package C03 Kunming Road), (ii) two interchanges (package C04 Zhuhong Road and North Second Ring Road interchange and package C09 Fengcheng 8th Road and Taihua Road interchange), (iii) consulting services, and (iv) capacity development. Any advance contracting will be undertaken in accordance with the ADB’s Procurement Guidelines and Guidelines on the Use of Consultants. Advance contracting will include bidding, bid evaluation, posting the consultant selection recruitment notice, shortlisting, requesting and evaluating proposals. The Government has been advised that approval of the advance contracting and retroactive financing does not commit ADB to finance the Project. The expenditures for retroactive financing must have been incurred before loan effectiveness but, generally, no earlier than 12 months before the date of signing of the Loan Agreement and subject to a maximum amount equivalent to 20% of the total loan amount.

B. Procurement of Goods, Works and Consulting Services

31. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (April 2010, as amended from time to time).

32. An assessment of the capacity of the EA and IA to procure the goods, works and consulting services have been conducted. Both agencies had an experience with ADB-funded procurement under the previous ADB-funded project. The IA has a procurement division comprising 3 staff, who however lack knowledge of ADB procurement guidelines. Similarly to the arrangements existed under the previous ADB-financed project, this will be addressed through engaging a professional procurement agent. The procurement capacity assessment report and recommendation is in Appendix 2.

33. International competitive bidding (Single-Stage: One-Envelop) procedures will be used for civil works contracts estimated to exceed $10 million, and supply contracts estimated to exceed $1 million. Contracts for goods and for works estimated to cost less than the above ICB threshold values, but more than $100,000 for goods and $200,000 for works, will be procured on the basis of national competitive bidding (NCB) procedures in accordance with the PRC Tendering and Bidding Law (1999), subject to modifications agreed upon with ADB.

34. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section C.

35. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants.15 The terms of reference for all consulting services are detailed in Appendix 3.

36. An estimated 134 person-months (34 international and 100 national) of consulting services are required to facilitate (i) project management and implementation, (ii) implementation of intelligent transport system component, and (iii) implementation of environmental protection component. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) and single source selection (SSS) method with a standard quality- 15 Checklists for actions required to contract consultants by method available in e-Handbook on Project

Implementation at: http://www.adb.org/documents/handbooks/project-implementation/.

26

cost ratio of 80:20 simplified technical proposal. The SSS method will be used for one of the four outputs of the intelligent transport component (paras. 52–53), which is the road safety education program. The traffic police bureau had been running a similar program for 10 years. Most of the people and firms involved in such program will be the staffs from the traffic bureau.

C. Procurement Plan

37. Project Procurement Thresholds. Except as ADB may otherwise agree, the following process thresholds will apply to procurement of goods and works.

Table 10: Procurement of Goods and Works Method Threshold ICB for Works >$10 million ICB for Goods >$1 million NCB for Works <$10 million but more than $200,000 NCB for Goods <$1 million but more than $100,000 ICB=international competitive bidding, NCB=national competitive bidding. 38. ADB Prior or Post Review. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the Project.

Table 11: Procurement of Goods and Works Procurement Method Prior or Post CommentsICB Works Prior ICB Goods Prior NCB Works The EA should submit each first NCB bidding documents for civil works and goods for

ADB’s prior review and approval; subsequent NCB will be reviewed post contract award. NCB Goods Limited Tender Works Prior ICB = international competitive bidding, NCB = national competitive bidding.

Table 12: Recruitment of Consulting Firms and Individual Consultants Procurement Method Prior or Post Comments

Firm QCBS a Prior QBS Prior Other selection methods: CQS, LCS, FBS, and SSS Prior Individual Consultants Individual Consultants Selection (ICS) Prior CQS = consultants qualification selection, FBS = fixed budget selection, LCS = least cost selection, QBS = quality-based selection, QCBS = quality- and cost-based selection, SSS = single source selection. a A fixed quality-cost ratio of 80:20 will be used.

a. Goods and Works Contracts Estimated to Cost More than $1 million 39. The following table lists goods and works contracts for which procurement activities are expected to commence within the next 18 months.

27

Table 13: Goods and Works Contracts

General Description Contract

Value ($ million)

Procurement Method

Procurement System16

Expected Date of

Advertisement

ADB Review

A. Roads 1. Subgrade and Bridge works

Road-C01 R1-Keji 2nd Road 21.79 ICB 1S1E Jul 2012 Prior Road-C02 R2-Dazhai Road 10.20 ICB 1S1E Jul 2012 PriorRoad-C03a

R3-Kunming Road 43.74 ICB 1S1E Apr 2012 Prior

Road-C04a

R4-Interchange Connecting Zhuhong Road and North Second Ring Road

17.53 ICB 1S1E Jan 2012 Prior

Road-C05 R5-Interchange over Fengcheng 4th Road

12.05 ICB 1S1E Apr 2012 Prior

Road-C06 R6-Hongmiaopo Interchange


Road-C07 R7-Xinghuo Road Interchange


Road-C08 R8-Interchange connecting Fengcheng 8th Road and Beichen Road

21.31 ICB 1S1E Oct 2012 Prior

Road-C09a

R9-Interchange connecting Fengcheng 8th Road and Taihua Road


2. Pavements Road-C10 Pavement works 22.30 ICB 1S1E Jan 2013 Prior

3. Greening works Road-C11 G1-Keji 2nd Road 2.86 NCB 1S1E Jan 2015 PostRoad-C12 G2-Dazhai Road and

Kunming Road 2.78 NCB 1S1E Aprl 2014 Post

Road-C13 G3-Zhuhong Road 1.95 NCB 1S1E Apr 2013 PostRoad-C14 G4-Interchange

Fengcheng 8th road and Beichen Road

2.57 NCB 1S1E Apr 2014 Post

4. Equipment Road-G01 Light Signaling

Systems 1.59 ICB 1S1E Apr 2013 Prior

Road-G02 Road Lighting 6.32 ICB 1S1E Apr 2013 PriorB. Pedestrian Traffic Safety

(PTS)

1. Civil Works PTS-C01 General civil works 8.15 NCB 1S1E Jan 2012 Post PTS-C02 Road Furniture 3.48 NCB 1S1E Jan 2012 Post

2. Equipment PTS-G01 Traffic Signal Control

System 2.59 ICB 1S1E Jan 2012 Prior

PTS-G02

IT Enforcement System


C. Multimodal Interchange Facilities (MIF) 1. Transport Hubs

MIF-C01 T1-Xi'an North Train Station Transport Hub

8.37 NCB 1S1E Oct 2012 Post

MIF-C02 T2-Xi'an National Civil 7.29 NCB 1S1E Oct 2012 Post

16 Procurement is likely to follow the single stage, one-envelope method (1S1E).

28


Value ($ million)

Procurement Method

Procurement System16

Expected Date of

Advertisement

ADB Review

Aerospace Industrial Base Transport Hub

MIF-G03 T3-Xi'an Yuhuazhai Transport Hub

1.85 NCB 1S1E Jul 2012 Post

MIF-C04 T4-Xi'an International Logistics Park Transport Hub

2.39 NCB 1S1E Jul 2012 Post

2. Multi-level Parking Facilities

TIF-C05 T5- Parking Garage 19.25 ICB 1S1E Jan 2012 Prior3. CNG Stations

TIF-C06 CNG Stations works 2.73 NCB17 1S1E Jan 2013 Post TIF-G01 CNG Stations goods 3.97 ICB 1S1E Jan 2013 Prior D. Intelligent Transport System

(ITS)

ITS-G01 ITS Equipment Lot 1: Dynamic traffic information collection and release system; Lot 2: Traffic video monitoring system; Lot 3: Camera enforcement system

4.02

ICB 1S1E Jan 2012 Prior

1S1E = Single-Stage: One-Envelope, CNG = compressed natural gas, ICB = International Competitive Bidding, NCB = National Competitive Bidding. Source: PPTA Consultants. a Contracts will be procured by advance contracting and retroactive financing.

b. Consulting Services Contracts Estimated to Cost More Than $100,000 40. The following table lists consulting services contracts for which procurement activities are expected to commence within the next 18 months.

Table 14: Consulting Services Contracts


Value ($ million)

Recruitment Method

Advertisement Date

(quarter/year)

International or National Assignment

Comments

Project Management and Environmental Managementa

1.50 QCBS (80:20)

1st 2012 Both

QCBS = quality- and cost-based selection. a Contracts will be procured by advance contracting and retroactive financing.

c. Goods and Works Contracts Estimated to Cost Less than $1 million 41. The following table groups smaller-value goods, works and consulting services contracts for which procurement activities are expected to commence within the next 18 months.

17 For CNG station installation bidding documents to specify bidders must have a valid license under PRC legislation.

29

Table 15: Goods and Works Contracts General Description Contract Value

($ million) Procurement

Method Expected Date of

Advertisement ADB Review

Roads Road-C15 G5-Greening - Interchange

Fengcheng 8th Road and Taihua Road

0.94 NCB Apr 2014 Post

Road-C16 R16-Road furniture for all road sections and interchanges

0.62 NCB Jul 2013 Post

Intelligent Transport Systems (ITS) Component ITS-G02 Dynamic traffic information

release system 0.98 NCB Jan 2012 Post

Environmental Protection (EP) EP-G01 Air quality and noise monitoring

equipment for environment monitoring station

0.65 NCB Jan 2012 Prior

EP-G02 Environmental monitoring communication software for monitoring stations

0.24 NCB Mar 2013 Post

EP-G03 Environmental management remote sensing system


EP-G04 Remote vehicle emission inspection


EP-G05 Vehicle emission regulation enforcement station and vehicle

0.88 NCB Dec 2011 Post

EP-G06 Vehicle emission control center 0.12 NCB Mar 2013 Post EP-G07 Roadside air quality monitoring 0.61 NCB Mar 2013 Post EP-G08 Software for environmental

protection and enhancement 0.79 NCB Dec 2011 Post

EP-G09 Vehicle emission control center facility and outdoor valuable sign board

0.57 NCB Dec 2013 Post

1S1E = Single Stage: One Envelope; ICB = International Competitive Bidding; NCB = National Competitive Bidding. Source: Executing Agency.

d. Goods, Works and Consulting Services Contracts Estimated to Cost Less

than $100,000 42. The following table groups smaller-value goods, works and consulting services contracts for which procurement activities are expected to commence within the next 18 months.

Table 16: Consulting Services Contracts Estimated to Cost Less than $100,000

General Description Contract Value

($ million) Recruitment

Method Expected Date of

Advertisement

International or National Assignment

ITS implementationa 0.256 QBS 4th 2012 Both ICS = individual consultant selection, ITS = intelligent transport systems, QBS = quality-based selection. a Contracts will be procured by advance contracting and retroactive financing.

e. Indicative List of Packages Required Under the Project 43. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the Project.

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Table 17: Indicative List of Packages Required Under the Project ($ million)

General Description

Estimated Number of Contracts

Procurement Method

Domestic Preference Applicable

Comments

Works 13 NCB NA 11 ICB Yes Goods and equipment

10 NCB NA

8 ICB yes

Consulting Services

2 QCBS/QBS NA Includes consulting services for project management, ITS implementation, environmental protection

ICB = international competitive bidding, ICS = international consultant selection, ITS = intelligent transport systems, NCB = national competitive bidding, QCBS = quality- and cost-based selection, QBS = quality-based selection. D. Consultant's Terms of Reference

44. Scope of Services. Xi’an PMO will be responsible for engaging consultants to assist in project implementation and management as well as provision of training to the EA and the IA for the Xi’an Urban Road Network Improvement Project (the Project).

45. The consulting services will involve international and national experts, with an international project manager and national deputy project manager. The consultants will assist the Xi’an PMO and IA in liaising and coordinating with ADB, assist with establishment of project performance monitoring system (PPMS) procedures and preparation of quarterly reports to ADB; assist with monitoring as per the Project’s DMF; assist with implementation of the social action plan (SAP), and resettlement plan (RP), environment management plans (EMPs), and promote the adoption of international standard practices for project management and monitoring systems. Capacity building and training activities on all of the foregoing aspects will be provided to strengthen the Xi’an PMO and IA’s design and supervision, and operation and maintenance (O&M) procedures.

46. Xi’an PMO will recruit the consultants in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers. The consultants will work with the XMG, Xi’an PMO, IA and local government agencies, as may be necessary, to provide assistance and advice on the tasks outlined below. The consultant will be recruited under the Project Package – Project Management, Capacity Building and Training through quality-and-cost-based selection (QCBS).

1. Consulting Services for Project Management and Capacity Building and Training

47. Consulting Services for Project Management. The consultant will assist and support the Xi’an PMO and IA at the start and during the Project with:

(i) Review of project organization, operation and systems of monitoring and reporting procedures, in accordance with ADB guidelines

(ii) Assist in contract bid documentation, bidding and evaluation procedures, and appointment of contractors

(iii) Assist in facilitating required approval procedures and financial administration, planning and management

(iv) Assist in the finalization of RP(s) based on final design and approved village reconstruction plans

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(v) Finalize the Project Performance Management System (PPMS) and implementation for effective safeguards monitoring and reporting

(vi) Assist in technical, managerial, institutional, coordination and financial activities as appropriate for project completion

(vii) Develop a detailed framework for the PPMS, including overall system design; refinement of indicators, targets and goals, and design of report format.

(viii) Provide training to the PMO, operators, and contractors’ representatives on environmental laws, regulations, and policies, and basic environmental management

(ix) Provide training to PMO and contractors on environmental monitoring plan (EMP) implementation: (a) responsibilities and duties for the project construction, management and environmental protection; (b) task of environmental protection in project construction; (c) key environmental protection contents in project construction; (d) various environmental monitoring; and (e) EMP improvement and corrective actions

(x) Provide training to PMO and operators on environmental monitoring, inspection, and reporting: monitoring and inspection methods, data collection and processing, interpretation of data, and reporting system.

48. Consulting Services for Capacity Building and Training. The capacity building will include an appropriate mix of formal and informal training delivery including workshops, seminars, study tours and on-the-job training, to be provided directly by the specialist consultants, under locally arranged training contracts, or through approved in-country or overseas study activities.

49. Consulting Inputs and Costs. Summary of consultancy and associated costs are set out below, with further details in the annex. Consultant inputs (months) are summarized below.

Table 18: Schedule of Consulting Services Capacity Building and Project Management Institutional Strengthening International National Team Leader – Project Management Specialist 12 Deputy Team Leader – Project Management Specialist 34 Construction Management Specialist 3 8 Road, MIF and PCS Safety Specialist 2 8 ITS Specialist 2 4 Environment Specialist 3 8 Financial Analyst 3 8 Institutional and Training Specialist 1 2 Social/Gender Specialist 2 6 Resettlement Specialist for RP updating and training 2 6 Resettlement Institute for RP external monitoring and evaluation 0 15 Total 30 99 50. Table 19 provides a provisional outline budget for the proposed consulting services.

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Table 19: Consultancy Services Budget (Provisional) Item Budget

($ million) Consultancy (including fees, per diems and airfares/local transportation costs) 0.90 Provisional Sum: Study Tours and Training 0.50 Office Equipment 0.03 Environmental Management and Resettlement Monitoring Report 0.05 Contingency 0.02 Total 1.50 51. Implementation and Reporting. The overall consultancy will be provided over a five-year implementation period. The Consultant will prepare and submit the project Inception Report, quarterly progress reports, Project Semiannual Reports, Project Annual Report and Project Completion Report, which confirm the status of the Project for discussion with ADB at related review missions. The reports will also include an assessment on the Consultant’s progress against program, an indication of key outstanding issues, and an updated development program (if relevant) for key project activities. Three copies of each report will be submitted to PMO in English for onward transmission to ADB. A tentative schedule of major reports to be delivered is as follows:

Table 20: Report Delivering Schedule No. Report Name Due Time 1. Inception Report Within 2 months after commencement of

consulting services 2. Comprehensive PPMS Procedures Within 6 months after commencement of

consulting services 3. Quarterly Progress Reports Every quarter within 2 weeks after the

end of each 3 months 4. Project Semiannual Reports Semiannual, with 1 month after the end of

each 6 months 5. Project Annual Reports Annual, with 1 month after the end of

each 12 months 6. Institutional Development Action Plan Within 6 months after commencement of

consulting services 7. Training Program Within 6 months after commencement of

consulting services 8a. External RP Monitoring Report

(Construction Phase) Twice a year

8b. External RP Monitoring & Evaluation Report (Operation Phase)

Annual report for two continuous years

9. Resettlement Completion Report Within 3 months prior to loan closure 10a. External Environment Monitoring Report


10b. External RP Monitoring & Evaluation Report (Operation Phase)

As ADB may require

11. Project Completion Report Within 6 months after physical completion of the Project

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2. Consulting Services for Road Safety Education Program

52. Xi’an PMO will be responsible for engaging consultants to assist in road safety education program of the project. The ultimate goal is to reduce crashes and injuries on the roads. Campaigns target people and generally aim to change behavior, either directly, or by providing information to influence attitudes and thus impact on behavior. The key purposes of a publicity campaign are one or more of: (i) to educate, (ii) to inform, (iii) to change attitudes, and (iv) to change behavior. 53. Combined with enforcement, road safety publicity campaigns improve road user behavior and reduce road crashes. The road safety education program is part of a set of activities which aim to promote safe road use amongst the general public. Mass media advertising is often the most visible component of a campaign, and to be combined with visible government and/or community support, particularly law enforcement. Targeting children is particularly important, as they are the road users, not only of the present, but of the future. Instilling good road sense at an early age can pay large dividends in the future. Xi’an PMO will recruit the Consultant in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers.18 54. Consulting Inputs and Costs. Summary of consultancy input (months) and associated costs are set out below. Table 21 shows indicative staffing levels for the consulting services.

Table 21: Schedule of Consulting Services

Road Safety Education Program International National International Road Safety Education Specialist 5 0 National Road Safety Education Specialists (4) 0 20 Total 5 20 55. Table 22 provides a provisional outline budget for the proposed consulting services.

Table 22: Consultancy Services Budget (Provisional)

Item Budget ($ million)

Consultancy (including fees, per diems and airfares/local transportation costs) 0.07Provisional Sum: Education Material and Booklets 0.16Contingency 0.02Total 0.25 56. Deliverables and Reporting. The overall consultancy will be provided over a one year period. The Reports to be submitted are as follows:

(i) inception report within one month of commencement of the consulting services submitted for the PMO’s review and approval and for submission to ADB;

(ii) prepare training manuals, instructions, and relevant training materials; (iii) mid-term review report within six months of commencement of the consulting

services; and

18 ADB. 2006. Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers. Manila.

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(iv) project completion report within one month after the completion of the consulting services, submitted for the PMO’s review and approval and for submission to ADB.

57. The Consultant will assist the PMO and IA to prepare and submit the project inception report, mid-term review report and project completion report. The reports will include an assessment on the Consultant’s progress against program, and an updated development program (if relevant) for key project activities. Three copies of each report will be submitted to PMO in English for onward transmission to ADB.

3. Consulting Services for Review and Supervision of Design

58. ADB, through the Xi’an project preparation technical assistance (PPTA) budget will be responsible for engaging consultants to assist in the design peer review of project outputs 1, 2, 3, and 4. The Consultant in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers. 59. Summary of consultancy input (months) and associated costs are set out below. Table 23 shows indicative staffing levels for the consulting services.

Table 23: Schedule of Consulting Services Road Safety Education Program International National International Transport Specialist 2 0 National Transport Specialist/s 0 5 Total 2 5 60. Table 24 provides a provisional outline budget for the proposed consulting services.

Table 24: Consultancy Services Budget (Provisional) Item Budget ($)Consultancy (including fees, per diems and airfares/local transportation costs) 67,500Contingency 7,500Total 75,000 61. Deliverables and Reporting. The overall consultancy will be provided during the preliminary and detail design stages of the project. Reports to be submitted at key stages of the preliminary and detail design of the 5 project outputs. The reports will be submitted to ADB and key finding provided to the PMO for enhancement in the design process.

35

VII. SAFEGUARDS

A. Environment

62. The project environmental impact assessment (EIA) in compliance with the ADB’s Safeguard Policy Statement (2009) was prepared by the PPTA consultants on behalf of the Xian Municipal Government (XMG) on the basis of the following documents: (i) feasibility study reports of five project outputs, (ii) the government’s environmental impact assessment report (the government EIA) for the project, and (iii) cultural relic survey report.

63. The Project Agreement requires the government to observe the requirements of the EIA and EMP (Appendix 4). To ensure all potential adverse environmental impacts of the Project are mitigated, the IA will implement the EMP as specified in the EIA. The EMP will be incorporated into the bidding documents and contracts for civil works; they will be monitored and semiannual reports submitted to ADB. Also, a tailored grievance redress mechanism for this project was proposed and agreed with the EA and IA.

64. Implementation Arrangements. On behalf of the Xi’an Municipal Government (XMG), Xi’an Municipal Urban and Rural Construction Commission (XMURCC) will be the Executing Agency (EA) for the Project. XMG has established a project leading group (PLG) with directors from a total of 28 municipal government agencies and district governments. The deputy mayor of Xi’an will chair PLG meetings as required, to review implementation, resolve coordination issues, and provide guidance for the timely completion of the Project. Under the PLG, a project working group (PWG) has also been established with working staff from the 28 agencies. The PWG has set up its office at the Planning Division of XMURCC. The XMURCC has established and staffed a project management office (PMO). The PMO will (i) coordinate project management; (ii) supervise the procurement of works, goods, and services financed under the Project; (iii) monitor the utilization of the ADB loan, domestic bank funding, and government funding; and (iv) prepare and review the reports to be submitted to ADB and the government. XMURCC has appointed a project manager for the day-to-day management of project implementation. The implementation of the EMP will be primarily the responsibility of the IA and contractors. However, during project preparation and implementation, various stakeholders with different environmental management responsibilities have been involved and will continue to be involved in the EMP. 65. Mitigation Measures. The mitigation measures will be incorporated into tender documents, construction contracts, and the contractors’ site management plans. Contractors and the project IA will implement these measures. The effectiveness of these measures will be carefully monitored to determine whether to continue them or to make improvements.

66. Monitoring Management. Internal monitoring during the construction and initial operating period will be conducted by the contractors and the IA, and will be reflected in the periodic construction reports. The IA will employ or contract environmental supervisors to perform the task. External monitoring during construction and the initial operating period will be conducted by Environmental Monitoring Centers (EMCs). EMCs will be authorized to carry out compliance monitoring on behalf of the Environmental Protection Bureau (EPB) during construction and operation. The contractors, operators and IA will pay for EMCs services as appropriate. 67. Monitoring Costs. Environmental monitoring costs are included in Table 7, Appendix 4. These are to be included in the construction contracts and counterpart budgets. Before

36

implementing the monitoring plans, responsible parties will need to refine and confirm a detailed breakdown of the estimated budget. It should be noted that the IA will pay for external, or compliance monitoring although carried out on behalf of the EPB. During implementation, the cost required can be adjusted based on actual requirements. If there are unpredictable environmental impacts found during the environmental monitoring, the EIA and EMP should be updated in a timely manner and mitigation measures will be adopted to reduce the environmental impacts. 68. Grievance Redress Mechanism. Public participation, consultation, and information disclosure undertaken as part of the local EIA process, assessment and development of resettlement plans, and consultations undertaken by the project consultants have addressed major community environmental concerns. Major grievances are not expected. However, unforeseen issues may occur. To settle such issues, an effective and transparent channel for lodging complaints and grievances has been established, in parallel with the mechanism developed under the resettlement planning process. The IA will establish a mechanism to receive and resolve affected peoples’ concerns, complaints, and grievances about the Project’s environmental impacts. The grievance mechanism should be scaled to the risks and potential adverse impacts of the project. It should address affected people’s concerns and complaints promptly, using an understandable and transparent process. It should also be readily accessible to all sections of the community at no cost and without retribution. 69. Public Consultation Plan. Future plans for public involvement during the detailed design and construction and operating phases were developed during project preparation. These plans include public participation in (i) monitoring impacts and mitigation measures during the construction and operating stages, (ii) evaluating environmental and economic benefits and social impacts, and (iii) interviewing the public after the outputs are complete. Public participation plans are part of the project implementation and management plan. The IA is responsible for public participation during project implementation. Costs for public participation activities during construction are included in the project budget. The IA will cover costs for public participation activities during operation.

70. EMP Reporting. The PMO will submit EMP progress reports and information on project implementation and the environmental performance of the contractors, operators, and IA to ADB. These reports will include (i) semi-annual environmental reports on EMP implementation, and (ii) environmental compliance monitoring and audit report of the completion of each major component. ADB may request that further environmental mitigation actions be taken as necessary, and may determine further mitigation measures for different stages, if necessary. B. Resettlement

71. The Project will acquire a total of 1,578 mu19 of land, comprising of 697.94 mu of rural collective land, of which 137 mu is cultivated land, and 880.05 mu of state-owned land. In addition, 340,607 m2 of buildings will be demolished, including 73,350 m2 (20.6%) of rural housing and 267,257 m2 of urban housing, enterprises and institutional buildings. The Project will affect a total of 1,119 rural persons in 277 households and 8,457 persons employed in 21 enterprises and institutions.

72. The total cost of land acquisition and resettlement is expected to be CNY992.82 million. The EA has assured that adequate counterpart funding will be made available for land

19 15 Chinese mu = 1.0 hectare.

37

acquisition and resettlement in line with the annual funding requirements as stipulated in the RP.

73. Since the present RP has been prepared based on the feasibility design, the RP must be updated once the detailed design is finalized. The updated RP, based on a detailed measurement survey and approved village reconstruction plans, will be submitted to ADB for approval. Prior to ADB approvals, the RP will be disclosed to all affected households.

74. A resettlement specialist(s) will be engaged to assist the PMO in updating the RP and to provide training to local officials. In addition, a resettlement agency/institute will be engaged to monitor, evaluate and report progress of the RP implementation and compliance to ADB semiannually during construction and annually for 2 years thereafter. The PMO staff will supervise resettlement implementation and report progress in the Quarterly Progress Reports of the Project, and prepare a Resettlement Completion Report to ADB prior to loan closure.

C. Indigenous Peoples

75. The project is classified as category “C” for indigenous peoples. Han Chinese comprise 99% of Xi’an’s population. Most of the remainder is Chinese-speaking Muslim Hui. Hui minority people will be beneficiaries of the project. There will be no intrinsic difference in the way ethnic groups will benefit from the project. No construction activities will occur within the vicinity of a mosque. No ethnic minority people have been identified whose assets will be adversely affected by the project. Social measures to enhance the participation of the Hui people are included in the social action plan.

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VIII. GENDER AND SOCIAL DIMENSIONS

76. A social and poverty analysis was carried out by the PPTA. This indicated the project would be very beneficial to many stakeholders. The poverty rate in Xi’an Municipality is quite low. However, all segments of road users, especially the elderly, have safety, accessibility and other concerns about the Xi’an transport system. Therefore, the Project has identified a number of social measures to improve project design, construction and operation, especially for the women and the elderly. A social action plan (SAP) has been formulated, based on public consultation and discussions with the EA and relevant Xi’an Municipal Government agencies that will participate in its implementation (Appendix 5). The EA has agreed to ensure that SAP measures will be included in project design, and will monitor implementation and effectiveness of these measures, including dissemination of information about HIV/AIDS awareness and prevention. The EA will nominate a qualified staff member, within the PMO, to be responsible for the implementation and monitoring of the SAP and other social indicators in the PPMS. The Summary Poverty Reduction and Social Strategy is included as Appendix 14 of the RRP.

77. The Project Implementation Consultant (PIC) will appoint at least one social/gender specialist, who will be allocated sufficient hours to be able, amongst his/her performance of other duties, to support the safeguard staff from the EA and IAs in their overseeing of the implementation and monitoring of the social safeguard plans. If necessary, this specialist will mentor the safeguard staff, providing informal and on-the-job training as required. 78. In the course of the consultation with community members, residents will be asked about the processes through which they would feel most comfortable receiving and conveying information about the Project. Depending on the responses received, the staff of Community Offices (including Hui community leaders), the All China Women’s Federation and /or some other organization/s will be asked to provide a link between the residents, and the County PMO social safeguards staff. They will also assist with any Project-related community meetings, facilitating, in particular, the participation of women and vulnerable households. Additionally, they will provide a link between the community and the contractors with respect to helping the latter meet targets set for the employment of women and people from poor households. 79. Other agencies will be involved in implementing the SAP, including the Department of Civil Affairs, the Labor Management Committee and the Center for Disease Control. 80. Internal monitoring of SAP implementation and other socio-economic indicators in the PPMS will be coordinated by the social/gender staff in the PMO. The PMO will be assisted by the social/gender consultant to supervise and submit annual progress reports on SAP implementation to ADB.

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IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

A. Project Design and Monitoring Framework

Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting

Mechanisms Assumptions and Risks

Impact Inclusive and environment-friendly economic growth promoted

Xi’an GDP growth of 5%–8% per annum up to 2020 Development envisaged in the city’s land use master plan achieved by 2020 Annual number of days of air quality of grade IIa and above increased in Xi’an from 280 to 311 by 2020 2010 levels of vehicle emissions reduced by 10% by 2020

Annual socioeconomic statistical reports Municipal statistics Project performance management system conducted by the executing agency at inception, completion, and 3 years after completion

Assumptions Long-term PRC growth remains robust Local government emphasis on sustainable and integrated multimodal urban transport system development maintained and its institutional and governance requirements across transport modes and for integration with land use effectively coordinated Other pollutant emission source control programs implemented as programmed Risk More than expected pollutant source increase, associated with economic growth and environmental factors

Outcome An efficient, safe, and environmentally sustainable integrated urban transport system developed in Xi’an city

Average project corridor speeds increased to 20 km/h in 2016 (2011 baseline: 14 km/h) Average bus speed along bus priority corridor increased from 14 km/h to 20 km/h and predictability of trip travel time improved Traffic accidents (fatalities and serious injuries) in the project area reduced by 10% in 2016 from 2011 level Pass rate in annual vehicle emission test increased to 80% from 70% by 2016 Public satisfaction with pedestrian-crossing facilities (including that of such vulnerable groups as women, children, the poor, the elderly, and the disabled) increased to 75% after project completion in 2016 (2010 baseline: 20%)

Cross-town traffic speed and commuter surveys Police accident records and statistics Emission test data in Xi’an vehicle mission control center and public security bureau data Before and after household surveys for pedestrian facilities

Assumptions Efficient transport system management implemented and operated Public awareness of road safety effectively delivered At least 50% of vehicles detected for emission violations comply with the emission requirements within 1 month of detection Risks Delay due to unexpected and unexplored archeological sites at construction sites Failures to engage stakeholders in communications

Outputs 1 Road network

improvements

1.1. Construction of three roads

(12.92 km) and six interchange projects by 2016

1.2. Provision of 21.57 km of bus priority measures

ADB review missions and progress reports, and executing agency and

Assumptions Availability of counterpart funding sufficient and timely Coordination between XMG, executing agency, and

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Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting

Mechanisms Assumptions and Risks

2 Pedestrian crossing

and safety improvements

3 Multimodal

interchange facilities 4 ITS and road user

safety program 5 Environmental

protection enhancement

1.3. Provision of nonmotorized transport facilities on 21.57 km of roads

2. Safety improvements at

110 urban intersections and 15 mid-block pedestrian crossing facilities improved by 2016

3. Construction of four multimodal

transport hubs, five multilevel parking facilities, and five CNG fueling stations by 2016

4.1. Expansion of existing ITS

infrastructure to the Third Ring Road by 2016

4.2. Implementation of road safety education programs by 2016, with a minimum of 50% participation of women as community facilitators or participants

4.3. Transport user information system established by 2016

5.1. Environmental monitoring

stations and remote sensing system established by 2014

5.2. Roadside vehicle emission regulations enforcement stations and vehicles in operation by 2014

5.3. Environment and vehicle emission control information system established by 2014

consultant reports Construction supervision inspection records Project completion and acceptance records Quarterly progress reports, including findings of environmental monitoring

implementing agency smooth and effective The executing agency and implementing agency fully utilize and share the knowledge accumulated through the completed Xi’an Urban Transport Project and its experienced human resourcesb Risks Difficulties in complying with ADB procurement procedures Lack of long-term sustainable O&M experience for physical outputs

Activities with Milestones 1. Road network improvements 1.1. Land acquisition and resettlement

1.1.1. Zhuhong Road–second ring road interchange (by September 2012) 1.1.2. Fengcheng Road–Taihua Road interchange (by September 2012) 1.1.3. Kunming Road (by March 2013) 1.1.4. Hongmiaopo interchange (by December 2012) 1.1.5. Keji Road (by June 2012) 1.1.6. Dazhai Road (by June 2012) 1.1.7. Fengcheng Road–Beichen Avenue interchange (by June 2013)

1.2. Design, bidding documentation, and contract award 1.2.1. Zhuhong Road–second ring road interchange (by September 2012) 1.2.2. Fengcheng Road–Taihua Road interchange (by September 2012) 1.2.3. Kunming Road (by March 2013) 1.2.4. Hongmiaopo interchange (by March 2013) 1.2.5. Xinghuo Road interchange (by December 2012) 1.2.6. Keji Road (by June 2013) 1.2.7. Dazhai Road (by June 2013) 1.2.8. Zhuhong Road–Fengcheng Road interchange (by March 2013) 1.2.9. Fengcheng Road–Beichen Avenue interchange (by September 2013) 1.2.10. Pavement works (by December 2013)

1.3. Civil works 1.3.1. Zhuhong Road–second ring road interchange (October 2012–March

Inputs ADB loan: $150 million Item Amount ($ million) 1. Civil work 112.68 2. Equipment 25.48 3. Project management 0.9 4. Capacity development 0.9 5. Financial charges during implementation 10.04 Government: $174.05 million Item Amount ($ million) 1. Civil work 8.14 2. Land acquisition 148.92 3. Design 4.73 4. Contingencies 12.26

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Activities with Milestones Inputs

2014) 1.3.2. Fengcheng Road–Taihua Road interchange (October 2012–September

2014) 1.3.3. Kunming Road (April 2013–September 2015) 1.3.4. Hongmiaopo interchange (January 2013–June 2014) 1.3.5. Xinghuo Road interchange (January 2013–June 2014) 1.3.6. Keji Road (July 2013–December 2015) 1.3.7. Dazhai Road (July 2013–March 2015) 1.3.8. Zhuhong Road–Fengcheng Road interchange (April 2013–September

2014) 1.3.9. Fengcheng Road–Beichen Avenue interchange (October 2013–March

2015 1.3.10. Pavement works (October 2013–September 2015)

1.4. Greening works 1.4.1. Zhuhong Road (April 2014–September 2014) 1.4.2. Fengcheng Road–Taihua Road interchange (October 2014–March 2015) 1.4.3. Dazhai and Kunming Roads (April 2015–September 2016) 1.4.4. Keji Road (January 2016–June 2016) 1.4.5. Fengcheng Road–Beichen Avenue interchange (April 2015–September

2015)

2. Pedestrian crossing and safety improvements 2.1. Design, bidding documentation, and contract award

2.1.1. Civil works (by September 2012) 2.1.2. Equipment (by December 2012)

2.2. Civil works and street furniture works (October 2012–September 2015) 2.3. Equipment installation (January 2013–December 2015) 2.4. Implementation of the social action plan (2012–2015) 3. Multimodal interchange facilities 3.1. Land acquisition and resettlement

3.1.1. Parking garages (by September 2012) 3.1.2. CNG stations (by September 2013)

3.2. Design, bidding documentation, and contract award 3.2.1. Parking garages (by September 2012) 3.2.2. Transport hubs (by September 2013) 3.2.3. CNG stations (by September 2013)

3.3. Civil works 3.3.1. Parking garages (October 2012–March 2016) 3.3.2. Transport hubs (October 2013–March 2016) 3.3.3. CNG stations (October 2013–March 2016)

3.4. Installation 3.4.1. CNG stations (October 2013–March 2016)

4. ITS and road user safety program 4.1. Design, bidding documentation, and contract award (by December 2012) 4.2. Installation works (January 2013–June 2015) 5. Environmental protection enhancement 5.1. Design, bidding documentation, and contract award (by September 2012) 5.2. Installation (September 2012–June 2014)

Domestic bank loan (China Construction Bank): $234.01 million Item Amount ($ million) 1. Civil work 161.50 2. Land acquisition 1.51 3. Design 14.60 4. Contingencies 49.80 5. Financial charges during implementation 6.59

ADB = Asian Development Bank, CNG = compressed natural gas, ITS = intelligent transport system, km/h = kilometers per hour, O&M = operation and maintenance, PMO = project management office, XMG = Xi’an Municipal Government. a Grade II is defined as ambient air quality suitable for residential, commercial, education, general industrial, and

farming areas. Government of the PRC, State Environmental Protection Agency and State Standard Administration Agency. 1996. Ambient Air Quality Standard. Beijing (GB3095-1996).

b ADB. 2003. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Xi’an Urban Transport Project. Manila (Loan 2024-PRC).

Source: Asian Development Bank.

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B. Monitoring

81. Project performance monitoring. The PPMS indicators, their relevance, and monitoring practicalities will be discussed with the PMOs, IAs and other project beneficiaries during project implementation. Disaggregated baseline data for output and outcome indicators gathered during project processing will be updated and reported quarterly through the executing agency's quarterly progress reports and after each ADB review mission. These quarterly reports will provide information necessary to update ADB's project performance reporting system. At the start of implementation of the Project, the Xi’an PMO and the Project management teams, with the assistance of the Project implementation consultant, will develop comprehensive PPMS procedures to generate data systematically on the inputs and outputs of the components, as well as the indicators to be used to measure the Project impact taking into account the sub-components’ scope. The Xi’an PMO will (i) refine the PPMS; (ii) confirm achievable targets; (iii) finalize monitoring, recording and reporting arrangements; and (iv) establish systems and procedures, no later than 6 months after loan effectiveness. Xi’an PMO will be responsible for monitoring and reporting on the performance of the Project. The basis for performance monitoring will be the DMF. The DMF identifies the performance targets for the impact, outcomes and outputs of the Project. By collection of data from the sources identified in the DMF, the Xi’an PMO will be able to report on an annual basis the performance of the Project. Specific reporting requirements will be set out in the agreement between the ADB and the Government. The Xi’an PMO will collect the data, calculate the indicators, analyze the results, and prepare a brief report describing the extent to which the Project is generating the intended outputs and outcomes in the project area, as well as the overall impact on the development sector in Xi’an. 82. To monitor the progress of the project in achieving the planned outcome and outputs, the Xi’an PMO will coordinate IA to establish and maintain the PPMS which will permit adequate flexibility to adopt remedial action regarding project design, schedules, activities, and development impacts. In addition, risk management for the Project shall be incorporated in the PPMS. With assistance of the international consulting services, a framework of PPMS will be established within six months after the project inception based on the DMF of the Project, which should include the baseline data of all indicators. The consulting firm selected will assist PMO in regular monitoring and reporting. The monitoring will cover all indicators listed in the DMF and the indicators reflecting the development results contributed by the Project. 83. Compliance monitoring. The compliance status of loan and project covenants will be reported and assessed through the semi-annual progress reports and verified by ADB review missions. 84. Grievance and Redress Mechanism. Within 60 days from the loan effectiveness, EA will cause IA to establish a complaint and problem management mechanism to (i) review and address grievances of project stakeholders, in relation to either the Project, any of the service providers, or any person responsible for carrying out the Project; and (ii) set the threshold criteria and procedures for handling such grievances, for proactively responding to them, and for providing the stakeholders with notice of the chosen mechanism/action. 85. Counterpart Funding. XMG will ensure that all counterpart financing necessary for project implementation will be provided in a timely basis to enable the completion of project activities, which will include: (i) providing additional counterpart financing for any shortfall of funds or cost overruns, and (ii) allocating in each fiscal year adequate funds for O&M of the

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project facilities in order to allow for such facilities to be operated and maintained in accordance with sound engineering practices. 86. XMG will ensure that the IA maintains a minimum debt service coverage ratio (defined as free cash flow divided by annual debt service) at a level exceeding 1.2, the minimum level allowed under ADB policies. In any year during the loan repayment period that the debt service coverage ratio falls below 1.2, the XMG will provide a sufficient annual subsidy to the IA to maintain the ratio at 1.2 or above. 87. Financial Management System. XMG will ensure that the IA will maintain a sound financial management system in accordance with ADB’s Guidelines for Governance and Financial Management of an ADB Investment Project, including the establishment of separate bank accounts and the maintenance of minimum balances to ensure smooth cash flow and the timely settlement of project construction liabilities and future debt servicing. The financial management system will comprise (i) financial planning, budgeting, and budgetary control; (ii) accounting consistent with applicable PRC standards; (iii) internal control; (iv) data processing; and (v) financial reports. 88. Construction Quality. The EA, and the IA will ensure that all the civil works under the project are designed and constructed in accordance with national standards and specifications, and that the construction supervision, quality control, contract management, and completion inspection and acceptance comply with applicable national laws and regulations. 89. The EA and the IA, will furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request. 90. Road Safety. Prior to the construction of the road network improvements under the project, XMG, through the EA, will (i) submit the road network improvements technical proposal and detailed design for ADB review and concurrence, and (ii) carry out an independent road safety audit of the detailed design of the road network improvements. Prior to operation of the road network improvements, XMG, through the EA, will carry out another independent road safety audit of the completed construction. XMG, through the EA, will ensure that the recommendations of these audits will be taken into account during the construction and operations of the road network. 91. Pedestrian Safety. XMG will cause the EA and IA to coordinate with Xi’an Municipal Communication Bureau, Xi’an Municipal Public Utility Bureau, Xi’an Municipal Traffic Police Brigade to plan and implement 110 urban intersections and 15 mid-block crossing facilities, including pedestrian crossing signals, vehicle speed control, IT safety equipment, enforcement and other related measures, in order to ensure improved safety for pedestrians. Prior to the construction of the pedestrian crossing facilities, the IA will submit the pedestrian crossing facilities technical proposal and detailed design for ADB review and concurrence. 92. Intelligent Transport System. XMG, will cause the EA and IA to coordinate with Xi’an Municipal Traffic Police Brigade, Public Transport Group and Xi’an Municipal Communication Bureau to ensure that the upgraded ITS will provide (i) the ability to gather, organize, analyze, use, and share transportation information systems; and (ii) vital support for operating transportation systems, including traffic management, oversight of system maintenance, and more effectively and reliably manage public transport.

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93. Bus Priority Corridors (BPC) and Nonmotorized Vehicle Corridors (NMVC). XMG will cause the EA and IA to coordinate with Xi’an Municipal Communication Bureau, Xi’an Municipal Public Utility Bureau, Xi’an Municipal Traffic Police Brigade, and Public Transport Group to plan and implement BPCs and NMVCs on the project road network improvements as separated and exclusive corridors for bus and nonmotorized traffic in order to increase the quality and efficiency of operation. Prior to the construction of the BPC and NMVC, the IA will submit the road network improvement, including BPC and NMVC technical proposal and detailed design for ADB review and concurrence. 94. Parking Plan. XMG will cause the EA and IA to coordinate with Xi’an Municipal Public Utility Bureau, Xi’an Municipal Traffic Police, Planning Bureau, Pricing Bureau, and Traffic Police Brigade to implement a Parking Plan in areas surrounding the project multimodal interchange facilities and parking facilitates. Prior to the construction of the multimodal transport facilities and parking facilities, the IA will submit the technical proposal and detailed design of the multimodal transport facilities and parking facilities for ADB review and concurrence. 95. Air Quality Monitoring (AQM). XMG will cause the EA and IA to ensure that Xi’an Municipal Environmental Protection Bureau, in coordination with other related agencies such as Xian Pricing Bureau, and Traffic Police Brigade will (i) establish an overall AQM system, and (ii) implement a motor vehicle emission control plan and related enforcement measures. Prior to the establishment and implementation of the AQM system, the IA will submit the technical proposal of the AQM system and motor vehicle emissions control plan to ADB for review and concurrence. 96. Capacity Development. Prior to the implementation of a training activity under the project, XMG, through the EA, will prepare and submit the training plan for ADB’s review and concurrence. XMG, through the TA, will also ensure that the selection of the training institutes to conduct training activities under the project will be done in accordance with procedures acceptable to ADB. Following each training activity, the concerned training institutes will submit a training completion report to the PMO for consolidation and transmission to ADB. 97. Project Assets Sustainability. XMG, will cause the EA, and the IA will at all times operate and maintain their road assets, equipment and other property and equipment, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound administrative, financial, engineering, environmental, construction, maintenance and operational practices. 98. Social Aspects. XMG through the EA and in collaboration with the Xi’an Labor and Social Security Committee will ensure that the construction contractors (i) provide timely payment of wages and safe working conditions to all workers; (ii) provide women’s employment, where appropriate, and pay equal wages to the female and male employees for equivalent work; and (iii) will not employ child labor as required by the relevant laws and regulations of the Borrower. 99. XMG through the EA will (i) ensure that the Project be designed and implemented in accordance with the SAP; and (ii) monitor the effects of the project on women and vulnerable groups through collection and compilation of sex-disaggregated data, where relevant. 100. Anticorruption. The EA and the IA will comply with ADB’s Anticorruption Policy (1998, as amended from time to time). EA and IA agree: (i) that ADB reserves the right to investigate any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project; and (ii) to

45

cooperate fully with, and to cause the EA, IA, contractors and suppliers to cooperate fully with, any such investigation and to extend all necessary assistance, including providing access to all relevant books and records, as may be necessary for the satisfactory completion of any such investigation. 101. The EA and the IA will: (i) conduct periodic inspections on the contractors activities related to fund withdrawals and settlements; and (ii) ensure that all contracts financed by ADB in connection with the Project include relevant provisions of ADB’s Anticorruption Policy in all bidding documents for the Project specifying the right of ADB to audit and examine the records and accounts of IAs and all the contractors, suppliers, consultants, and other service providers as they relate to the Project. 102. Resettlement. XMG, through the EA, will ensure that (i) prior to the commencement of construction works, all land and rights-of-way required by the project will be made available in a timely manner in accordance with (a) ADB’s Safeguard Policy Statement (2009), (b) PRC laws and regulations, including obtaining land use approvals from the municipality and written agreements with the affected persons, and (c) the RP; (ii) the RP will be implemented promptly and efficiently in accordance with their terms; (iii) all affected persons will be given adequate opportunity to participate in resettlement planning and implementation, and will be at least as well off as they would have been in the absence of the Project; (iv) counterpart funds will be provided in a manner that would allow for timely land acquisition and resettlement activities; and (v) any amounts in excess of the RP budget estimates will be provided. 103. Prior to any physical or economic displacement of the community and affected persons of the selected villages within the project area that will undergo transformation from rural to urban, XMG, through the EA, will ensure that (i) the relevant village reconstruction plans have been finalised, and (ii) the agency responsible for the reconstruction has been identified. 104. Prior to the award of each civil works contracts, under the road network improvement output, XMG, through the EA, will ensure that, the updated RP based on final detailed design and detailed measurement survey will be submitted to ADB for its concurrence and disclosed to all affected households. 105. XMG, through the EA, and the IA will (i) ensure that adequate staff and resources be allocated to supervise and internally monitor the implementation of the RP; (ii) provide ADB with semi annual reports on progress of resettlement implementation; (iii) promptly advise ADB of any substantial changes in the resettlement impacts and, if necessary, submit a revised RP be to ADB for its approval; and (iv) ensure construction contract specifications include requirements to comply with the RP and compensate affected persons for any temporary project impacts. 106. Environment. XMG, through the EA, and the IA will ensure that the construction, operation, maintenance, and monitoring of the project facilities will be conducted in accordance with (i) all relevant national and provincial environmental laws and regulations; (ii) ADB’s Safeguard Policy Statement (2009); (iii) the measures outlined in the government’s project environmental assessment; and (iv) the measures prescribed in the project consolidated environmental impact assessment, including the environmental management plan and grievance redress mechanism contained thereto. 107. XMG, through the EA, and the IA will ensure that sufficient resources, including the allocation of adequate number of full-time personnel, are provided to monitor the

46

implementation of the environmental monitoring program, under the guidance of the Xian Provincial Environmental Protection Bureau, Xian Municipal Environmental Protection Bureau or other environmental monitoring stations. 108. XMG, through the EA, will ensure that the PMO review any changes to the project design that may have potential negative environmental impacts, so that environmental monitoring and mitigation measures are adjusted accordingly in consultation with ADB. 109. XMG, through the EA, will ensure that the IA submit regular monitoring reports to the PMO, which will then prepare and submit to ADB semi-annual environmental reports in a format acceptable to ADB, until the loan completion date. C. Evaluation

110. ADB, the Government, and XMG will undertake a semi-annual review mission to evaluate the progress of Project implementation. ADB, the Government, and XMG will undertake a comprehensive midterm review 2 years after the start of project implementation to have a detailed evaluation of the scope, implementation arrangements, resettlement, achievement of scheduled targets, and progress on the agenda for policy reform and capacity-building measures. Feedback from the PPMS activities will be analyzed. Within 6 months of physical completion of the Project Xi’an PMO will submit a project completion report to ADB.20 D. Reporting

111. The XMG will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions, (c) updated procurement plan, and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 6 months of physical completion of the Project. To ensure projects continue to be both viable and sustainable, project accounts and the executing agency AFSs, together with the associated auditor's report, should be adequately reviewed. E. Stakeholder Communication Strategy

112. Extensive consultation will take place on those aspects of infrastructure design which will affect public usage. 113. In the consultative meetings, participants—including male, female, and poor and vulnerable residents, and other significant stakeholders—will also be asked:

(i) how they would feel most comfortable raising any concerns or complaints they might have in the course of Project implementation,

(ii) the issues on which they would like to be further informed and consulted in the course of Project design and implementation, and

(iii) the process through which they would like to be further informed and consulted in the course of Project design and implementation.

20 Project completion report format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-

Sector-Landscape.rar.

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114. The responses to these topics will form the basis of the communication strategy to be developed. This strategy will include a mixture of public meetings intended to keep residents and businesses informed of what is happening in their neighborhood and of consultative sessions in which stakeholders will have the opportunity to have an input into decision-making throughout the project cycle. In addition, the communication strategy will outline a process whereby residents can provide feedback, directly or indirectly, to IAs, if they have any concerns regarding project implementation or its impacts. 115. The RP also describes how project information has been and will continue to be disseminated among the affected persons, the consultation approach, and how affected people’s (AP’s) feedback has been incorporated into the draft RP, or included in the updated RP. The RP includes a grievance redress mechanism outlining the procedure for resolving conflicts and appeals. 116. With the progress of project preparation and implementation, the County PMO, communities, entities, commercial stores and village collectives will be involved in further public participation, including discussion of resettlement housing construction, area and layout; scope of training for the affected people; issues arising from construction and solutions; listening to the affected people’s opinions and expectations during implementation; disclosure of compensation rates and means of appeal; understanding the implementation of the RP and the livelihood restoration of the affected people.

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X. ANTICORRUPTION POLICY

117. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Project. 21 All ADB-financed contracts shall include provisions specifying the right of ADB to audit and examine the records and accounts of the EA, IA, and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the Project.22 118. To support these efforts, relevant provisions will be included in the loan agreement and the bidding documents for the Project. The ADB's Anticorruption Policy (2000, as amended to date) was explained to and discussed with the XMG and EA. Consistent with its commitment to good governance, accountability and transparency, ADB reserves the right to investigate directly any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project. To support these efforts, relevant provisions of ADB’s Anticorruption Policy will be included in the loan covenants and the bidding documents for the Project. In particular, all ADB-financed contracts shall include provisions specifying the right of ADB to audit and examine the records and accounts of the EA, IA and all contractors, suppliers, consultants, and other service providers related to the Project. 119. For the Project, PLG, EA, and IA will undertake the following anticorruption actions: (i) establish a supervisory body to prevent undue interference in business practices with adequate resources made available for its effective operation, (ii) involve the agencies responsible for oversight of bidding processes and supervision of construction to enhance construction quality control, (iii) undertake briefing between EA and the Prosecutor's Office on a regular basis to share information on or warnings about any corrupt practices detected, (iv) introduce a dual-signing system in which the civil works contract winner also signs an anticorruption contract with the employer, and (v) periodically inspect the contractor’s activities related to fund withdrawals and settlements.

21 Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf. 22 ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp.

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XI. ACCOUNTABILITY MECHANISM

120. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.23

23 For further information see: http://www.adb.org/Accountability-Mechanism/default.asp.

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XII. RECORD OF PAM CHANGES

121. All revisions/updates during course of implementation should retained in this Section to provide a chronological history of changes to implemented arrangements recorded in the project administration manual.

Dates PAM Changes

31 December 2010 First draft completed 04 July 2011 draft completed

Appendix 1 1

FINANCIAL MANAGEMENT ASSESSMENT A. Summary 1. Financial management assessment (FMA) has been conducted for the Project in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects1 and the publication Financial Due Diligence – A Methodology Note.2 The FMA considers the Xi’an Municipal Urban and Rural Construction Commission (XMURCC) and Xi’an Infrastructure Investment Group (XIIG) in their role as the executing agency (EA) and implementing agency (IA) for the Project, respectively. The FMA includes review of the accounting and reporting system, internal and external auditing arrangements, fund disbursement procedures, and information systems. The instrument used for the assessment was Asian Development Bank’s (ADB) financial management assessment questionnaire (FMAQ). The completed FMAQs are in Table 3 and Table 4. 2. The assessment concluded that the financial management capacity of the EA and IA are adequate for the implementation of the Project, and training in ADB procedures will be required in procurement, disbursement, and project management. Issues or risks/deficiencies associated with the entity’s financial management systems are identified where necessary capacity development measures are recommended to ensure that the IA is able to meet the project’s accounting and reporting requirements. 3. The overall FM risk-rating of the Project at is medium. The identified risks in financial management will be closely monitored during project implementation. Besides the risks mentioned below, no other significant weaknesses are identified. B. Implementation Arrangements

4. XMURCC will be the Executing Agency (EA) for the project. The EA has established a Project Leading Group (PLG) comprised of representatives from the city agencies with responsibility for the implementation of the Project. The Deputy Mayor is the Director of the PLG and will review implementation, resolve coordination issues, and to provide guidance for timely completion of the project activities. The primary function of PLG is to lead and coordinate the preparation, construction and operation of proposed Project. XIIG will be the implementing agency (IA). The IA will coordinate the project management activities, supervise the procurement of the works, goods and services to be financed under the Project, monitor utilization of the ADB loan, the domestic bank funding and the Government funding, and prepare and review the reports to be submitted to ADB and the Government.

1 Financial Management and Analysis of Projects. ADB. 2005. 2 Financial Due Diligence A Methodology Note. ADB. 2009.

2 Appendix 1

C. Executing Agency

5. The Xi’an Municipal Urban and Rural Construction Commission (XMURCC) will be the Executive Agency (EA) and will be responsible for project preparation. XMURCC has 77 personnel. The different divisions of the Commission is shown below:

Appendix 1 3

D. Implementing Agency

6. XIIG is the Implementing Agency of the Project. XIIG is a state-owned company and will be responsible for fund management, construction supervision, project operation and management of the Project. XIIG is established in July 2000 with a registered capitalization of CNY8.5 billion and a total asset of CNY36.0 billion. XIIG is directly under the administration of the Xi’an Municipal Government. The company’s business scope covers urban infrastructure construction, project investment and financing, real estate operation and management, preparing enterprise development strategies, development plans, and annual plan. The offices and divisions of the company are as follows:

7. The evaluation of the IA includes review of its licenses, company charters, existing organizational structure, current business management regulations and institutional arrangements to undertake the Project.

8. XIIG has extensive experience in project implementation. XIIG has invested and implemented the Xi’an Second Ring Road, six (6) interchanges crossing in the First Ring Road, more that forty (40) urban streets rehabilitation and expansion, new twenty (20) interchanges

4 Appendix 1

crossing in the Second Ring Road, river protection project, elevated and expressway trunk road, Third Ring Road, and waste water treatment project. The estimated investment totaled CNY24.7 billion over the period 2005 to 2009.

9. For the Project, the Investment and Development Division of XIIG will be responsible for the overall project planning, contract management, procurement, supervision, coordination with other related agencies 3 and subsidiary companies and reporting. The Financial and Audit Division will be responsible for overall financial management, including acquiring of domestic loans, managing all funds from different sources, disbursement and internal audit. The Land Affairs Division will be responsible for land acquisition and resettlement. The Engineering Management Division will be responsible for construction supervision and monitoring of environmental protection and social mitigation plan.

10. XIIG will enter into agreements with other related agencies to assist XIIG in project implementation, including preparation of bidding documents and bid evaluation. XIIG and a qualified tendering company will be responsible for procurement.

11. Financial management assessment (FMA) was carried out using the financial management assessment questionnaire (FMAQ) for the implementing agency. FMA was conducted for XMURCC and XIIG. The financial management assessment is to determine whether or not the financial management arrangements of the executing or implementing agency are considered capable and adequate for recording all transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the assets of the company, and are subject to audit. The guidelines describe the approach prescribed by ADB in undertaking a financial management assessment which involves the following steps:

use a standard questionnaire to assess the financial management of the relevant agency;

based on the results of the questionnaire, identify issues for future review; and identify appropriate financial covenants to monitor financial conditionalities of the project

for which the agency would be responsible.

12. The FMA also includes the review of the accounting and reporting system, internal and external auditing, fund disbursement, and information system of the proposed executing and implementing agencies of the Project. The instrument used for the assessment was Asian Development Bank’s (ADB) financial management assessment questionnaire (FMAQ). The completed FMAQs are in Table 3 and Table 4 below.

Table 1: Risk Analysis – Xi’an Municipality Urban and Rural Construction Commission (XMURCC)

Particulars Risk

Assessment Remarks

1.Executing Agency

Low

XMURCC is a municipality level Government institution under the Xi’an Municipal Government. XMURCC has experience in managing and implementing urban transport projects financed by ADB and other international funding institutions.

2. Funds Flow Medium XMURCC has no knowledge and working experience in ADB’s funds flow arrangements.

3 Related agency for the road component is Xi’an Municipal Civil Administration Bureau, for ITS component is the

Traffic Police Brigade of the Xi’an Municipal Public Security Bureau, for TDM component is the XMUIIGC; for Intersection component is the Xi’an Municipal Urban Facility Management Bureau, and for Environment Protection component is the Xi’an Municipal Environmental Protection Bureau.

Appendix 1 5

Particulars Risk

Assessment Remarks

3. Staffing Medium

XMURRCC has adequate and experience staff, but have not been involved in ADB-funded project. The finance staff should be trained in ADB financial management and disbursement procedures.

4. Accounting Policies and Procedures

Low XMURCC accounting policies and procedures is based on generally accepted accounting standards. A financial management manual and procurement manual is available to XMURCC staff.

5. Internal Audit

Low An internal audit section is in place in the XMURCC.

6. External Audit

Low

XMURCC project accounts are audited by an independent external auditor on an annual basis. The audit is done in accordance with the Chinese accounting and auditing system and complies with the requirements of Municipal Finance Bureau (MFB).

7. Reporting and Monitoring

Low The project operation and financial reports comply with the reporting requirements of MFB. Financial reports are regularly submitted to MFB.

8. Information Systems

Low XMURCC uses an automated accounting system.

Table 2: Risk Analysis – Xi’an Infrastructure Investment Group (XIIG)

Particulars Risk

Assessment Remarks

1. Implementing Agency

Low XIIG will be responsible for the implementation of the Project. Subsidiary companies and some units of XMG will be responsible for operation and management. XMUIIGC has experience in managing and implementing projects foreign-funded projects, including projects funded by ADB.

2. Funds Flow Low The staff has knowledge and experience in other ADB funded projects, i.e. Xi’an Urban Transport Project.

3. Staffing Medium The IA has adequate and experienced staff. However, the finance staff will still require training in ADB financial management and disbursement procedures.

4. Accounting Policies and Procedures

Low The IA will adopt an accounting policy that is based on Generally Accepted Accounting Standards (GAAS).

5. Internal Audit Medium An internal audit section will be in placed when project is fully operational. 6. External Audit Low The project accounts will be audited by an independent external auditor on an

annual basis. The audit will be done in accordance with the Chinese accounting and auditing system and will comply with the requirements of ADB.

7. Reporting and Monitoring

Low The project operation and financial reports will comply with the reporting requirements of similar corporation in PRC.

8. Information Systems

Medium The IA proposes to use accounting system software for financial reporting for the Project.

13. Therefore, the overall FM risk-rating of the project at appraisal stage is medium. The identified risks in financial management will be closely monitored during project implementation. Besides the risks above-mentioned, no other significant weaknesses are identified.

6 Appendix 1

E. Disbursement

14. ADB loan proceeds will be disbursed in accordance with the procedures set out in ADB’s Loan Disbursement Handbook (2007, as amended from time to time), 4 and detailed arrangements agreed upon between the Government and ADB. 15. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS),5 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to the components financed by ADB. 16. To facilitate project implementation through timely release of loan proceeds, the XMURCC will establish an imprest account promptly after loan effectiveness at a commercial bank acceptable to ADB.6 The XMG Finance Bureau will administer the imprest account. The initial amount to be deposited in the imprest account will not exceed the estimated expenditures for the succeeding six months to be funded from the imprest account, or 10% of the loan amount, whichever is lower. An Estimate of Expenditure Sheet 7 setting out the estimated expenditures for the first six (6) months of project implementation, and submission of evidence satisfactory to ADB that the imprest account has been duly opened, should accompany the request for initial advance to the imprest account. For every liquidation and replenishment request of the imprest account, the borrower will furnish to ADB (a) Statement of Account (Bank Statement) where the imprest account is maintained, and (b) the Imprest Account Reconciliation Statement (IARS) reconciling the above mentioned bank statement against the EA’s records.8 17. To expedite flow of funds and simplify the documentation process, the ADB statement-of-expenditure (SOE) procedure will be used for liquidation and replenishment of the imprest account, and for reimbursement of eligible expenditures not exceeding $200,000 per individual transaction. The payments in excess of the SOE ceiling will be reimbursed, liquidated, or replenished based on full supporting documentation. SOE records should be maintained and made readily available for review by ADB's disbursement and review mission or upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit.9 18. Before the submission of the first withdrawal application, the Borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the Borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is $100,000, unless otherwise approved by ADB. The Borrower is to consolidate claims to meet this limit for reimbursement and imprest account claims. Withdrawal applications and supporting documents

4 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf 5 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf 6 The bank charges on the imprest account will be financed from the proceeds of the loan. 7 Available in Appendix 29 of the Loan Disbursement Handbook. 8 Follow the format provided in Appendix 30 of the Loan Disbursement Handbook. 9 Checklist for SOE procedures and formats are available at:

http://www.adb.org/documents/handbooks/loan_disbursement/chap-09.pdf http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-100-Below.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-Over-100.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Operating-Costs.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Free-Format.xls

Appendix 1 7

will demonstrate among other things that the goods and/or services were produced in or from ADB members, and are eligible for ADB financing. F. Accounting 19. The EA and IA will maintain separate project accounts and records by funding source for all expenditures incurred on the Project. Project accounts will follow international accounting principles and practices. G. Auditing 20. The EA and IA will cause the detailed project accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB or by the government State Auditor. The EA will submit the audited accounts in the English language to ADB within six months of the end of the fiscal year. The annual audit report will include a separate audit opinion on the use of the imprest accounts and the SOE procedures. The Government has been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the Project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. For revenue generating projects only, ADB requires audited financial statements (AFS) for each executing and/or implementing agency associated with the Project. H. Staffing 21. XIIG finance staff are experienced in the accounting and disbursement procedures and complies with ADB minimum standards for project accounting and financial management. It is proposed finance staff that will be assigned to the Project will be trained in ADB disbursement guidelines and procedures. I. Accounting Policies and Procedures 22. XIIG uses an automated accounting system and an excel-based electronic spreadsheet. Subsidiary ledgers are adequate for the reconciliation of accounts with the general ledger. All reports and supporting documents on all transactions are stored and retained by the accounting officer, and are available. XIIG has implemented a clear segregation of the account management duties. J. Internal Audit 23. XIIG has no internal audit department. An internal audit department will be established

before project implementation. A loan covenant is proposed to ensure that the PMO be included within the normal program of activities of the XIIG internal audit department. K. External Audit 24. XIIG accounts are audited annually by an independent external auditor. Audit is carried out in accordance with International Standards on Auditing by an auditor acceptable to ADB or by the government State Auditor. XIIG will submit to ADB certified copies of audited annual consolidated project accounts as well as the auditor’s report in English within 6 months of each financial year-end during implementation.

8 Appendix 1

L. Reporting and Monitoring 25. XIIG prepares project reports. The project reports are prepared using an excel-based electronic spreadsheet and are submitted on a monthly, quarterly and annual basis. The reports highlight the physical and financial progress of projects being undertaken. For this Project, XIIG will prepare and submit to ADB quarterly progress reports for individual outputs, which will include: (i) a narrative description of progress made during the reporting period; (ii) changes in the implementation schedule; (iii) problems or difficulties encountered; and (iv) activities to be undertaken in the next reporting period. XIIG will prepare and submit to ADB a project completion report within 6 months of the completion of each project, and an investment project completion report after completion of all outputs under the proposed Project. M. Information Systems 26. XIIG will get a software for financial reporting. The monitoring system should be capable of generating project reports for both external and internal use. In addition, staff will be trained trained and should be familiar with the system. Regular backups of all accounting systems and appropriate security measures over backed-up data should be put in place. N. Other Financial Controls 27. Budgeting System. XIIG prepares annual physical and financial targets. The budgets presented a comparison between budgeted and actual amounts, and show variances in accounts. The project budgets are prepared annually by the Budget Officer. The Director approves the final budget. 28. Payments. Processing of the project payment invoices involves comparison of quantities, prices and terms in purchase orders and those reported in the receipts. All project payments are made using bank checks or bank transfers. All cash is deposited to the project accounts leaving minimal amounts necessary for the office operations. A cashbook is maintained and bank reconciliation is undertaken at the end of each month. 29. Cash and Bank. The accounting officer ensures the existence of controls when preparing the payment for all project transactions. For the Project, two separate accounts will be maintained – one account for ADB funds and one account for counterpart funds. The Director is the duly authorized signatory to all project-related bank transactions. 30. Safeguard over Assets. XIIG has sufficient controls over project assets, and safeguards are undertaken to protect assets from fraud, waste and abuse. During project implementation, XIIG Property Officer will maintain the record of completed roads and structures, office equipment and project vehicles procured. After project commissioning will conduct annual physical inventory of all assets in place. O. Action Plan 31. This section summarizes the actions identified throughout the assessment for managing the risks to the proposed Project.

Appendix 1 9

32. The following are the proposed actions: To be undertaken during the implementation of the proposed Project:

(i) Regular liaison between the EA/IA and the ADB to ensure that ADB guidelines are followed;

(ii) Regular interagency coordination at all levels to be put in place to discuss the portfolio performance of the loan;

(iii) Regular training on ADB disbursement policies to be provided; (iv) Separate accounts to be maintained for all project outputs financed by ADB and

the Government, and to be audited by an independent auditor or State Auditor; (v) Accounting duties to be rotated, where feasible; (vi) Annual project accounts and underlying working papers prepared on a timely

basis in preparation for the annual financial statement audit; (vii) Prompt reporting to stakeholders after the period-end; (viii) Quarterly and annual progress reports on project implementation and operation

prepared; (ix) Compliance with loan covenants monitored, including submission of audited

project accounts; (x) Regular backup of all accounting systems and appropriate security measures

over backup data to be put in place; (xi) Complete financial policies and procedures manual developed in order to guide

staff activities and ensure staff accountability; and (xii) Regular training plan for accounting staff and training policies developed.

Table 3: Responses to the Financial Management Assessment Questionnaire

(Xi’an Municipal Urban and Rural Construction Commission) Topic Response

Background Information

Name of Organization Xi’an Municipal Urban and Rural Construction Commission

Subcomponent and projects for which the organization is responsible

Xi’an Urban Roads Network Project

Name of individual completing this questionnaire Mr. Kan Kai and Ms.Wang Donghai 1. Implementing Agency / Executing Agency EA 1.1. What is your organization’s legal status / registration? Government agency

1.2. Has your organization implemented a foreign-financed project in the past? (If yes, provide detailed project name)

Yes. 1. JSF Xi’an Environment Improvement

Project (Phase I) 2. JSF Xi’an Environment Improvement

(Phase II) 3. ADB Xi’an Urban Transport Project

(Phase I) World Bank Xi’an Sustainable Urban Transport Project

1.3. What is your organization’s governing body? Xi’an Municipal Government 1.4. What is the governing body’s relationship to the … Government?

Government

1.5. What are the legal financial reporting requirements for your organization?

Financial report requirement for Administration Unit

1.6. Is the organizational structure appropriate for the needs of the project?

Yes

2. Funds Flow Arrangement

10 Appendix 1

Topic Response

2.1. Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government, and other financing sources.

Three fund resources: 1. counterpart will be provided by

Government 2. $150 million will be ADB loan 3. The balance will be Domestic Bank

Loan 2.2. Are the (proposed) arrangements to transfer the proceeds of the loan (from the government/ Finance Ministry) to the entity (your organization) satisfactory?

Yes

2.3. What have been the major problems in the past in the receipt of ADB funds by the entity?

2.4. In which bank will the Imprest Account be opened? China Construction Bank 2.5. Does the (proposed) project Implementing Unit have experience in the management of disbursements from ADB?

Yes

2.6. Does the entity have/need a capacity to manage foreign exchange risks?

Yes

2.7. How are the counterpart funds accessed? Finance budget 2.8. How are the payments made from the counterpart funds Based on contract and invoices 2.9. If part of the project is implemented by communities or NGOs, does the PIU have the necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies

Yes

2.10. Are beneficiaries required to contribute to project costs? No If the beneficiaries have an option to contribute in kind are proper guidelines formulated to record and value the contribution?

Yes

2.11. How are payments made from counterpart funds? When applying for reimbursement, copy of approved contract and invoice must be attached

3. Staffing

3.1. What is your organization’s structure for accounting or finance department? (Attach an organization chart.)

Director of Division |

One chief accountant, two accountants |

One cashier.

3.2. Identify accounts staff,(including name, job title, responsibilities, educational background, and professional certification). Attached job descriptions and CVs of key accounting staff.

1. Mr. Yan Ming, Division Director, Principal, bachelor degree and 15 years of work experience

2. Ms. Wang Haidong, Chief accountant, bachelor degree and 18 years work experience

3. Mr. Gu Zhi, accountant, bachelor degree with 8 years work experience

4. Ms. Xu Hongxia, accountant, Junior college degree with 25 years experience

5. Ms. Zhang Hong, cashier, Junior college degree with 15 years experience

3.3. Is the project finance and accounting function staffed adequately?

Work division is reasonable but work load were heavy for the past several years

3.4. Is the finance and accounts staff adequately qualified and experienced?

Yes

Appendix 1 11

Topic Response 3.5. Are finance and accounting staffs trained in ADB procedures?

No. They need training on ADB disbursement procedures

3.6. What is the duration of the contract with the finance and accounts staff?

Cashier is on a contract basis and others are government officials

3.7. Indicate key positions not contracted yet, and the estimated date of appointment.

No

3.8. Does the organization (the project) have written position descriptions, which clearly define duties, responsibilities, lines of supervision, and limits of authority for all officers, managers, and staff?

Yes. There is clear personnel duties and responsibilities for all staff

3.9. At what frequency are personnel transferred? Not applicable 3.10. What is training policy for the accounting staff? Annual training is carried out 4. Accounting Policies and Procedures General 4.1. Does the entity have an accounting system that allows for proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and source of funds? Will the project use the entity accounting system?

Yes, detailed work will be done by the Accounting Division

4.2. Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained?

Yes, there are rules and procedures being followed in the Finance Section

4.3. Is the chart of accounts adequate to properly account for and report on project activities and disbursements categories?

Yes, current chart of accounts are adequate to be used for the project.

4.4. Are cost allocations to the various funding sources made accurately and in accordance with established agreements?

Yes

4.5. Are the general ledger and subsidiary ledgers reconciled and in balance?

Yes

4.6. Are all accounting and supporting documents retained on a permanent basis in a defined system which allows authorized users easy access?

Accounting documents are kept for 15 years and financial and accounting reports are kept permanently

Segregation of Duties 4.7. Are the following functional responsibilities performed by different units or persons: 1. Authorize transactions； 2. Record transactions； 3. Maintain custody of assets involved in transaction

Yes, an internal control system is in place

4.8. Are the functions for ordering, receiving, accounting for goods and services segregated?

Yes, the functions are segregated

4.9. Are bank reconciliations prepared by someone other than those who make or approve payments?

Yes

Budgeting System 4.10. Do budgets include physical and financial targets? Yes 4.11. Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance?

Yes

4.12. Are actual expenditures compared with the budget with reasonable frequency, and explanations required for significant variations from the budget?

Conducted every year from June to November. Significant variations are approved based on reports and supporting documents.

4.13. Are approvals for variations from budget required in advance or after the fact?

Approvals are required in advance

12 Appendix 1

Topic Response 4.14. Who is responsible for preparation and approval of budgets?

Compiled by the Chief Accountant and approved by Finance Bureau.

4.15. Are procedures in place to plan project activities, collect information from the units in charge of different projects, and prepare budgets?

Yes

4.16. Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals?

Yes

Payments 4.17. Do invoicing processing procedures provide for: 1. Copies of purchase orders and receiving reports be obtained directly from issuing departments? 2. Comparison of invoice quantities, prices, and terms with those indicated on the purchase order and with records of goods actually received? Comparison of invoice quantities with those indicated on the receiving report? 4. Checking accuracy of calculations?

Yes

4.18. Are all invoices: 4.18.1. Stamped PAID? Yes 4.18.2. Dated? Yes 4.18.3. Reviewed and approved? Yes 4.18.4. Marked for account code assignment? Yes

4.19. Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized? What controls exist for the preparation of payroll?

Personnel Division prepares, Human Resources and Social Council approves, and Finance Division prepares payroll tables and Finance Bureau conduct audit

Policies and Procedures

4.20. What is the basis of accounting (e.g. cash or accrual)? Actual basis, including cash, bank transfer and government official card.

4.21. What accounting standards are followed? Government Administration Unit Accounting System

4.22. Does the organization have adequate policies and procedures manual to guide activities and ensure staff accountability?

Yes.

4.23. Is the accounting policy and procedure manual updated for project activities?

Yes, will always be adjusted/updated based on new government policies

4.24. Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy, or procedure to be used by the organization?

Yes

4.25. Are there written policies and procedures covering all routine financial management and related administrative activities?

Yes, there is one book, the Xi’an Municipal Urban and Rural Construction Commission Rules and System Compilation

4.26. Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization?

No

4.27. Are manuals distributed to appropriate personnel? Ye Cash and banking 4.28. Indicate names and positions of authorized signatories of the bank accounts.

Ms. Wang Haidong, Chief Accountant

4.29. Does the organization maintain an adequate up-to-date cashbook, recording receipts and payments?

Yes, daily cashbook is maintain

4.30. Do controls exist for the collection, timely deposit and recording of receipt at each collection location?

Yes

4.31. Are bank and cash reconciled on a monthly basis? Yes

Appendix 1 13

Topic Response 4.32. Are all unusual items on the bank reconciliation reviewed and approved by a responsible officer?

Yes

4.33. Are all receipts deposited on a timely basis? How quickly are receipts deposited?

Yes

Safeguarding Assets 4.34. Is there a system of adequate safeguards to protect assets from fraud, waste and abuse?

Yes. There is asset information management system

4.35. Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts?

Yes

4.36. Are there periodic physical inventories of fixed assets and stocks?

Yes, assets are checked at end of each year

4.37. Are assets sufficiently covered by insurance policies? No Other Offices and Implementing Agencies 4.38. Are there other implementing agencies participating in implementation?

No

4.39. Has the Project Management Office (PMO) established controls and procedures for flow of funds, financial information, accountability, and audits in relation to other offices or implementing agencies?

It will be established during project implementation

4.40. Does information among different implementing agencies flow in an accurate and timely fashion?

It will be established during project implementation

4.41. Are periodic reconciliations of financial information performed among the different implementing agencies?

Other 4.42. Has the PMO (project) advised employees to whom to report if they suspect fraud, waste, or misuse of project resources or property?

Yes, reports to Director in charge

5. Internal Audit 5.1. Is there an internal department in the organization? Yes

5.2. What are the qualifications and experience of the internal audit department staff?

The Budget and Audit Office was established in 2004 and has experience in internal auditing process

5.3. To whom does the head of internal audit report? Leader in Charge 5.4. Will the internal audit department include this project in its work program?

Yes

5.5. Are actions taken on the internal audit staff’s findings? All recommendations are followed and actions are rectified

6. External Audit

6.1. Is the entity financial statement audited regularly by an independent auditor? Who is the auditor?

Periodic audit is conducted by the Fixed Asset Investment Division of the Municipal Audit Bureau and other audit is also conducted by the National Audit Bureau and Shaanxi Provincial Audit Bureau.

6.2. Are there any delays in audit of the entity? When is the audit report issued?

No, usually audit is done every end of spring and beginning of summer. Audit report is issued afterwards

6.3. Is the audit of the entity conducted according to International Standards on Auditing?

It is based on Government Administration Unit Audit criteria

6.4. Were there any major accountability issues brought up in the audit reports in the last three years?

None

6.5. Will the independent auditor audit the project accounts or will another auditor be appointed to audit the project’s financial statements?

The Audit bureau will carry out the audit for the proposed project

14 Appendix 1

Topic Response 6.6. Are there any recommendations made by the independent auditors in prior audit reports or management letters that have not been implemented?

6.7. Is the project subject to an audit from an independent governmental entity in addition to the external audit?

External audit is independent of government audit

6.8. Has the project prepared acceptable terms of reference for an annual project audit?

Yes

7. Reporting and Monitoring 7.1. Are financial statements prepared for the entity? In accordance with which accounting standards?

Yes

7.2. Are financial statements prepared for the implementing unit?

Yes

7.3. What is the frequency of the financial statements’ presentation? Are the reports prepared in a timely fashion so as to be useful to management for decision making?

Annually

7.4. Does the reporting system need to be adapted to report on the project components?

Yes

7.5. Does the reporting system have the ability to link the financial information with the project’s physical progress? If a separate system is used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data?

Yes, based on contract and actual schedule.

7.6. Does the project have established financial management reporting responsibilities that specify which reports are to be prepared, what they are to contain, and how they are to be used?

It will be established before the start of project implementation

7.7. Are financial management reports used by management? Yes 7.8. Do the financial reports compare actual expenditures with budgeted and programmed allocations?

Yes

7.9. Are financial reports prepared directly by the automated accounting system or are they prepared by spreadsheets or some other means?

Yes

8. Information Systems 8.1. Is the financial management system computerized? Yes 8.2. Can the system produce the necessary project financial reports?

Yes

8.3. Is the staff adequately trained to maintain the system? Yes 8.4. Does the management organization and processing system safeguard the confidentially, integrity, and availability of the data?

Yes

Table 4: Responses to the Financial Management Assessment Questionnaire

(Xi’an Infrastructure Investment Group) Topic Response

Background Information Name of Organization Xi’an Infrastructure Investment Group Subcomponent and projects for which the organization is responsible

Xi’an Urban Road Network Project

Name of individual completing this questionnaire Chen Jing’an, Director of Investment and Development Division

9. Implementing Agency / Executing Agency IA 9.1. What is your organization’s legal status / registration? State-owned company

Appendix 1 15

Topic Response

9.2. Has your organization implemented a foreign-financed project in the past? (If yes, provide detailed project name)

Yes. 4. JSF Xi’an Environment Improvement

Project (Phase I) 5. JSF Xi’an Environment Improvement

(Phase II) 6. ADB Xi’an Urban Transport Project

(Phase I) 7. World Bank Xi’an Sustainable Urban

Transport Project 9.3. What is your organization’s governing body? Xi’an Municipal Government (XMG) 9.4. What is the governing body’s relationship to the … Government?

Government

9.5. What are the legal financial reporting requirements for your organization?

State-owned Construction Unit Accounting System

9.6. Is the organizational structure appropriate for the needs of the project?

Yes

10. Funds Flow Arrangement

10.1. Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government, and other financing sources.

ADB will finance about 65% of the investment cost while XMG will finance 35% sourced from budget. The balance will be financed by loan from domestic commercial bank.

10.2. Are the (proposed) arrangements to transfer the proceeds of the loan (from the government/ Finance Ministry) to the entity (your organization) satisfactory?

Yes

10.3. What have been the major problems in the past in the receipt of ADB funds by the entity?

Experienced in processing of payments using reimbursement procedures is slow

10.4. In which bank will the Imprest Account be opened? China Construction Bank 10.5. Does the (proposed) project Implementing Unit have experience in the management of disbursements from ADB?

Yes

10.6. Does the entity have/need a capacity to manage foreign exchange risks?

Yes

10.7. How are the counterpart funds accessed? 35% of total investment cost will be appropriated in the Xi’an municipality budget

10.8. How are the payments made from the counterpart funds

According XMUIIGC’s fund disbursement management guidelines

10.9. If part of the project is implemented by communities or NGOs, does the PIU have the necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies

Yes

10.10. Are beneficiaries required to contribute to project costs?

Yes

If the beneficiaries have an option to contribute in kind are proper guidelines formulated to record and value the contribution?

Yes

11. Staffing

16 Appendix 1

Topic Response

11.1. What is your organization’s structure for accounting or finance department? (Attach an organization chart.)

Director |

Deputy Director |

Director Assistant |

1. Cashier 2. Accountant Auditor 3. General Ledger Accountant 4. Bookkeeper

11.2. Identify accounts staff, including name, job title, responsibilities, educational background, and professional certification). Attached job descriptions and CVs of key accounting staff.

Ms. Sun Ping, Director of Finance and Audit Department with 40 years of work experience. Ms. Li Jing, Director Assistant of Finance and Audit Department with 20 years of work experience Mr. Han Chenxi, Medium-level professional title with 10 years of work experience Mr. Yang Hongyan, Medium-level professional title with 20 years of work experience.

11.3. Is the project finance and accounting function staffed adequately?

Yes

11.4. Is the finance and accounts staff adequately qualified and experienced?

Yes

11.5. Are finance and accounting staffs trained in ADB procedures?

Yes

11.6. What is the duration of the contract with the finance and accounts staff?

Staff have permanent status

11.7. Indicate key positions not contracted yet, and the estimated date of appointment.

No

11.8. Does the organization (the project) have written position descriptions, which clearly define duties, responsibilities, lines of supervision, and limits of authority for all officers, managers, and staff?

Yes

11.9. At what frequency are personnel transferred? Not applicable, no transfer of personnel

11.10. What is training policy for the accounting staff? Trainings are periodically organized by the Xi’an Municipal Finance Bureau

12. Accounting Policies and Procedures General 12.1. Does the entity have an accounting system that allows for proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and source of funds? Will the project use the entity accounting system?

Yes

12.2. Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained?

Yes

12.3. Is the chart of accounts adequate to properly account for and report on project activities and disbursements categories?

Yes

Appendix 1 17

Topic Response 12.4. Are cost allocations to the various funding sources made accurately and in accordance with established agreements?

Yes

12.5. Are the general ledger and subsidiary ledgers reconciled and in balance?

Yes

12.6. Are all accounting and supporting documents retained on a permanent basis in a defined system which allows authorized users easy access?

Yes

Segregation of Duties 12.7. Are the following functional responsibilities performed by different units or persons: 1. Authorize transactions； 2. Record transactions； 3. Maintain custody of assets involved in transaction

Yes

12.8. Are the functions for ordering, receiving, accounting for goods and services segregated?

Yes

12.9. Are bank reconciliations prepared by someone other than those who make or approve payments?

Yes

Budgeting System 12.10. Do budgets include physical and financial targets? Yes 12.11. Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance?

Yes

12.12. Are actual expenditures compared with the budget with reasonable frequency, and explanations required for significant variations from the budget?

Yes

12.13. Are approvals for variations from budget required in advance or after the fact?

Approval of variation orders are done in advance

12.14. Who is responsible for preparation and approval of budgets?

Finance Division compiles and Finance Bureau checks and approves

12.15. Are procedures in place to plan project activities, collect information from the units in charge of different projects, and prepare budgets?

Yes. According to Xi’an Municipal Government Infrastructure Investment Plan

12.16. Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals?

Yes

Payments 12.17. Do invoicing processing procedures provide for: 1. Copies of purchase orders and receiving reports be obtained directly from issuing departments? 2. Comparison of invoice quantities, prices, and terms with those indicated on the purchase order and with records of goods actually received? Comparison of invoice quantities with those indicated on the receiving report? 4. Checking accuracy of calculations?

Yes

12.18. Are all invoices: 12.18.1. Stamped PAID? Yes 12.18.2. Dated? Yes 12.18.3. Reviewed and approved? Yes 12.18.4. Marked for account code assignment? Yes

18 Appendix 1

Topic Response

12.19. Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized? What controls exist for the preparation of payroll?

Personnel department provides work targets and record. Finance department prepares engineering bill according to Engineering Management Guidelines. Finance principal audits and Company principal checks and approves

Policies and Procedures 12.20. What is the basis of accounting (e.g. cash or accrual)?

Accrual basis.

12.21. What accounting standards are followed? State-owned Construction Unit Accounting System

12.22. Does the organization have adequate policies and procedures manual to guide activities and ensure staff accountability?

Yes

12.23. Is the accounting policy and procedure manual updated for project activities?

Yes

12.24. Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy, or procedure to be used by the organization?

Yes

12.25. Are there written policies and procedures covering all routine financial management and related administrative activities?

Yes

12.26. Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization?

Yes

12.27. Are manuals distributed to appropriate personnel? Yes Cash and banking

12.28. Indicate names and positions of authorized signatories of the bank accounts.

Mr. Zhang Zhiwen, General Manager Ms. Sun Ping, Director of Finance and Audit Department

12.29. Does the organization maintain an adequate up-to-date cashbook, recording receipts and payments?

Yes

12.30. Do controls exist for the collection, timely deposit and recording of receipt at each collection location?

Yes

12.31. Are bank and cash reconciled on a monthly basis? Yes 12.32. Are all unusual items on the bank reconciliation reviewed and approved by a responsible officer?

Yes

12.33. Are all receipts deposited on a timely basis? How quickly are receipts deposited?

Yes

Safeguarding Assets 12.34. Is there a system of adequate safeguards to protect assets from fraud, waste and abuse?

Yes

12.35. Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts?

Yes

12.36. Are there periodic physical inventories of fixed assets and stocks?

Yes

12.37. Are assets sufficiently covered by insurance policies?

Yes

Other Offices and Implementing Agencies 12.38. Are there other implementing agencies participating in implementation?

No

Appendix 1 19

Topic Response 12.39. Has the Project Management Office (PMO) established controls and procedures for flow of funds, financial information, accountability, and audits in relation to other offices or implementing agencies?

Yes

12.40. Does information among different implementing agencies flow in an accurate and timely fashion?

Yes

12.41. Are periodic reconciliations of financial information performed among the different implementing agencies?

Yes

Other 12.42. Has the PMO (project) advised employees to whom to report if they suspect fraud, waste, or misuse of project resources or property?

Yes

13. Internal Audit 13.1. Is there an internal department in the organization?

Yes

13.2. What are the qualifications and experience of the internal audit department staff?

The auditors have been working in the division for a long time and have gained experience in their work

13.3. To whom does the head of internal audit report? Directorate and Board of Supervisor 13.4. Will the internal audit department include this project in its work program?

Yes

13.5. Are actions taken on the internal audit staff’s findings?

Yes, corrective and remedial measures are undertaken

14. External Audit 14.1. Is the entity financial statement audited regularly by an independent auditor? Who is the auditor?

Yes. Auditor is Xi’an Xigema Certified Public Accountant Firm Limited

14.2. Are there any delays in audit of the entity? When is the audit report issued?

There are no delays. Audit reports are submitted at end of March each year

14.3. Is the audit of the entity conducted according to International Standards on Auditing?

No, according to National Standards on Auditing

14.4. Were there any major accountability issues brought up in the audit reports in the last three years?

No

14.5. Will the independent auditor audit the project accounts or will another auditor be appointed to audit the project’s financial statements?

Yes

14.6. Are there any recommendations made by the independent auditors in prior audit reports or management letters that have not been implemented?

None

14.7. Is the project subject to an audit from an independent governmental entity in addition to the external audit?

Yes

14.8. Has the project prepared acceptable terms of reference for an annual project audit?

Yes

15. Reporting and Monitoring 15.1. Are financial statements prepared for the entity? In accordance with which accounting standards?

Yes

15.2. Are financial statements prepared for the implementing unit?

Yes

15.3. What is the frequency of the financial statements’ presentation? Are the reports prepared in a timely fashion so as to be useful to management for decision making?

Yes

15.4. Does the reporting system need to be adapted to report on the project components?

No

20 Appendix 1

Topic Response 15.5. Does the reporting system have the ability to link the financial information with the project’s physical progress? If a separate system is used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data?

Yes

15.6. Does the project have established financial management reporting responsibilities that specify which reports are to be prepared, what they are to contain, and how they are to be used?

Yes

15.7. Are financial management reports used by management?

Yes

15.8. Do the financial reports compare actual expenditures with budgeted and programmed allocations?

Yes

15.9. Are financial reports prepared directly by the automated accounting system or are they prepared by spreadsheets or some other means?

Prepared through an automated accounting system

16. Information Systems 16.1. Is the financial management system computerized?

Yes

16.2. Can the system produce the necessary project financial reports?

Yes

16.3. Is the staff adequately trained to maintain the system?

Yes

16.4. Does the management organization and processing system safeguard the confidentially, integrity and availability of the data?

Yes

Appendix 2 1

PROCUREMENT CAPACITY ASSESSMENT REPORT AND RECOMMENDATIONS

Proposed Project Name: Xi’an Urban Road Network Improvement Project

Proposed Amount US$: $150 million

Implementing Agency: Xi’an Infrastructure Investment Group

Source of Funding: ADB's Ordinary Capital Resources

Assessor: Valerie Tian, Transport Specialist, EATC Date: 10 March 2011 A. Expected Procurement 1. The proposed project will finance partly the construction of the Xi’an urban roads with components, including bus prioritization, NMT routes, pedestrian safety, advanced traffic management, vehicle emission control, and parking strategies. The project includes five interlinked outputs: (i) Output 1: road network improvements; (ii) Output 2: pedestrian crossing and safety improvements; (iii) Output 3: multimodal interchange facilities; (iv) Output 4: ITS and road user safety program; (v) Output 5: environment protection enhancement, and consulting services for capacity building and institutional strengthening in urban Transport management. The project involves the procurement of Goods, Civil Works and Consulting Services. 2. The Goods component has an estimated value of $25.48 million, to procure a road light signaling systems and road lighting equipment, pedestrian traffic safety works, transport hubs works, multi-level parking facilities works, CNG stations equipment, ITS equipment, and environmental protection equipment and ancillary electromechanical equipment. ADB will fully finance eighteen (18) packages of the five outputs. All goods under ADB financing will be procured through ICB and NCB. Eight (8) packages will be procured through ICB: (i) light signaling systems package, (ii) road lighting package, (iii) traffic signal control system package, (iv) IT enforcement system package, (v) CNG stations goods package, (vi) dynamic traffic information collection system package, (vii) traffic video monitoring system package, (viii) camera enforcement system package; Ten (10) packages will be procured through NCB: (i) ITS dynamic traffic information release system, (ii) air quality and noise monitoring equipment for environment monitoring station, (iii) environmental monitoring communication software for monitoring stations, (iv) environmental management remote sensing system, (v) remote sensing monitoring vehicles, (vi) vehicle emission inspection vehicle, (vii) vehicle emission regulation enforcement station and vehicle, (viii) roadside air quality monitoring station, (ix) software for environmental protection and enhancement, (x) vehicle emission control center facility and outdoor valuable sign board. 3. The Civil Works component has an estimated value of $282.32 million, with twenty-four (24) packages covering (i) construction of 3 roads and 6 interchanges with ten (10) ICB packages and six (6) NCB packages, (ii) construction of 125 pedestrian crossing safety with two (2) NCB packages, (iii) 4 transport hubs, with four (4) NCB packages (iv) 5 parking garages with one (1) ICB package, (v) 5 CNG stations civil works with one (1) NCB package. ADB will finance fully the one (1) ICB package (for parking garages) and five (5) NCB packages( for transport hubs and CNG stations), and finance partially the ten (10) ICB and eight (8) NCB civil works packages, and namely (i) the construction of the three (3) roads and six (6) interchanges, and (ii) the construction of 125 pedestrian crossing safety. 4. The Consulting Services component has an estimated value of $1.76 million, covering capacity building and the selection of a panel of experts. There will be two packages: one for the capacity building and institutional strengthening through the quality- and cost-based selection (QCBS) method (estimated value of $1.50 million), and one for the public education program to be procured also through QCBS method (estimated value of $0.26 million). In addition, ADB will undertake a technical peer review during design stages of the project, financed from ADB resources. B. Assessment of the National Environment 5. The following aspects of the general procurement environment in the People's Republic of China (PRC) tend to increase the procurement risk assessment level for this project, because they are inconsistent with both ADB's procurement policies and internationally accepted practices or standards:

(i) There are actually two national procurement laws—the Tender and Bidding Law (1 January 2000) and the General Procurement Law (1 January 2003).

(ii) Consulting Services are not clearly addressed in the two national procurement laws. (iii) The national procurement laws are not clear with respect to the participation of state-owned

enterprises (SOEs). (iv) As a general rule, domestic goods, construction or services are preferred for all government

procurements. (v) The national procurement laws do not provide a national standard for quality control purposes. (vi) General exceptions from the application of the national procurement laws are given to military

procurements, urgent procurements and those with security and confidentiality implications. The

2 Appendix 2

latter exceptions are not qualified, and so there appears to be much room for the exercise of discretion and varying interpretations.

(vii) It appears that systematic procurement process audits are not being undertaken. (viii) There are no current national procurement manuals, guides, and standard bidding documents. (ix) Consolidated historical procurement data are not readily available to the public. (x) There is no comprehensive training program that is linked to a procurement accreditation or

professionalization program in PRC.

6. Fortunately, the above items are generally addressed by either:

(i) The modifications listed in the NCB Annex to the Procurement Plan, which provides additional assurances with respect to items 5.a, 5.c, 5.f and 5.g above; and

(ii) Existing practices under ADB-financed projects in PRC and assurances by the PMO on the use of ADB's Standard Bidding Documents (SBDs) which provides additional assurances with respect to items 5.b, 5.d, 5.e, 5.f and 5.h above.

7. This leaves three major concerns, namely:

(i) It should be ensured that ADB's SBDs are actually adopted and used by the Project Management Office (PMO) of the Executing Agency (EA) for this project;

(ii) The absence of consolidated historical procurement data that is readily available to the public, which can be linked to the records management issues and recommendations for this project; and

(iii) The lack of a comprehensive procurement training and professionalization program, which can be linked to the capacity issues of the PMO staff and the appropriate recommendations.

C. General Agency Resource Assessment 8. The Implementing Agency (IA) for this project will be the Xi’an Infrastructure Investment Group (XIIG). It was established in 2000 to implement the Xi’an Comprehensive Urban Transport Improvement Projects of WB-funded (2008–2015), Xi'an Urban Transport Project (Xi'an Third Ring Road System) of ADB-funded (2005–2010 partly staffs attended), Shaanxi Water Environmental Improvement Project of JBIC-funded (Two projects 2002–2007, 2005–2011). XIIG is a State Owned Enterprise operating under the Xi’an Municipal Government. XIIG will have responsibility for the management of this project including the supervision the procurement of the Goods, Civil Works and Consulting Services to be financed under this project. The actual procurement for all packages financed by ADB will be carried out by a Procurement Agent (PA) while the technical specifications/requirements will be provided by the Design Institute and XIIG technical departments. 9. XIIG has a staff of about 60 staff to manage three international projects namely Xi’an Comprehensive Urban Transport Improvement Projects and two Shaanxi Water Environmental Improvement Projects, which were financed by the WB and JBIC, respectively. About 25 Staff are assigned for the construction of the proposed Xi’an Urban Road Network Improvement project. XIIG has a Procurement Unit with currently three fulltime staff all having experience of procurement of goods and works. The Procurement Unit will carry out all procurement until contract award. After award of contract, the management of contract will be devolved to the construction management department with the assistance of supervision consultants on the site. The procurement team will be the same as for the Xi’an Comprehensive Urban Transport Improvement Projects financed by the WB. Other project management staff at XIIG has experience in procurement of civil works and goods. 10. The organizational structure appears to be strong and conducive to an optimal procurement. It is noted that procurement unit and technical department work in close coordination with construction management and technical departments (all were part of the assessment) which gives comfort on the adequacy and reliability of procurement planning and that the technical aspects are adequately incorporated in procurement documents. 11. However, the following risk factors are noted:

(i) None of the staff involved in the procurement has undertaken any training; (ii) The PMO has no procurement training program; (iii) The staff involved in the procurement do not have experience in ADB procurement nor have they

received any training on ADB procedures (through Country Project and Implementation seminars or other) or WB procurement;

(iv) English language proficiency is relatively weak. D. Agency Procurement Processes: Goods and Works 12. The IA has had solid procurement experience both for national and foreign-assisted projects (WB and JBIC). However, it should be noted that, the projects under foreign financing are generally undertaken by accredited

Appendix 2 3

Procurement Agents (PA) in line with PRC's national procurement laws. Procurement for packages financed by EA will be conducted directly by the procurement unit without the assistance of a PA. 13. It is noted the while XIIG has no experience of procurement under ADB financing, they have ongoing and past experience with similar projects financed by the World Bank which appear to have been implemented in timely manner without significant difficulties to be reported. XIIG raised concern on whether award of the contract to the lowest evaluated responsive bidder is applicable. They mentioned difficulty in World Bank procurement in the application of the awarding the contract to the lowest evaluated responsive bidder explaining that often the lowest bidder does not have the capacity and qualification to execute the contract. It was confirmed that the same principle applies for ADB bidding which procedures are harmonized with those of World Bank. It was also advised that the risk can be mitigated by preparing quality bidding documents with adequate provisions for capacity and experience requirements. 14. XIIG indicated that the selection method for Procurement Agent was through a competitive process. The responsibilities of PA are as follows: (i) finalization and issuance of bidding document, (ii) organize bid evaluation, and (iii) prepare bid evaluation report (BER). 15. Bid Evaluation Committee is composed of a representative from each of (i) XIIG, (ii) Procurement Agent, and (iii) a randomly selected expert from an officially maintained roster of specialists. 16. The following gaps were noted with ADB procedures:

(i) For NCB, evaluation is based on scoring; and (ii) Use of “bracketing” whereby bids that do no fall within price range are disqualified.

E. Agency Procurement Processes: Consulting Services 17. While XIIG has experience in procuring consulting services (primarily Procurement Agents and Design Institutes) under local financing, similar experience under foreign financing appears to be limited (although some experience selecting consultants based on WB Guidelines under the Xi’an). Discrepancy is noted with ADB Procedures is the fact that the assignment for consulting services were not advertised. 18. XIIG indicated that although they are required to provide an assessment of the performance of the consultants this is not done through a formal process. F. Process Control and Oversight 19. Oversight of the bidding by the Government is exercised by the Government Bidding Office (BO) of the Xi’an Municipal Government. BO is responsible for registering bidders, review qualification of Procurement Agents and bidders, review bid evaluation procedure, monitor bid opening and contract awards among others. The Ministry of Commerce and Ministry of Finance, PRC are responsible for the monitoring of the ICB Bidding procurement of Equipment through review of Bidding Documents and BER prior to submission to ADB to ensure compliance with government policies. In addition, review and approval by Xi’an Project Leading Group of bidding documents and BER is required. While oversight is seen as fostering integrity of the bidding process, the multiplicity of approval layers is viewed as risk that this may considerably lengthen the procurement. 20. The national procurement laws of PRC provide procurement-related sanctions for both bidders and government staff. Moreover, Article 59 of the Government Procurement Law requires the supervision of procuring personnel to ensure ethical performance. The Government requires that XIIG staff involved in the project abide by the highest ethical standards. G. Records Keeping and Audit 21. XIIG has excellent facilities with a separate and secure filing room for filing of project documents including procurement documents. Documents are also filed onsite. Security of the facilities is provided by electronic access control and video surveillance system. A dedicated staff is assigned for filing which follows the requirements of the State Archive Bureau. The IA keeps essential procurement documents, supported by a rigorous referencing system. SUMMARY ASSESSMENT AND RECOMMENDATIONS22. Although XIIG has successfully implemented two WB projects similar to the proposed project, they do not have experience of ADB Projects. None of their staff have attended training neither on ADB Procedures nor on WB’s which compounds the risk for implementation. 23. Some weakness is perceived regarding the capacity and experience of XIIG for the procurement of consulting services which may adversely affect the timeline and quality of selection. Fortunately though, this is not critical for the

4 Appendix 2

Project implementation. It may however impact adversely the capacity building component of the project. 24. There is concern about the English language proficiency of staff assigned to the implementation of the project which will limit to effectively communicate with international consultants and ADB. It is recommended that translator/interpretation services be provided at critical stages of the implementation of the project. 25. In this context, it is viewed favorably that a Procurement Agent will be hired to undertake Procurement on behalf of the EA. Although involvement of PA would mitigate risk to some extent, the lack of specific experience with ADB procedures may limit the ability of IA to adequately supervise the PA. This shortcoming may be addressed through training of IA’s key staff on ADB Procurement procedures. The PA should have adequate qualifications, substantive experience with ADB or WB projects and good track record of ADB or WB procurement. It is also viewed favorably that the same staff who implemented the WB financed projects will be maintained for the procurement and management of the proposed project. 26. With substantive expertise in similar projects, strong experience in procurement in general and experience with WB procurement in particular, solid processes in place, it is concluded that the EA has the capacity to undertake the procurement for the proposed project subject to the recommendations formulated in the capacity assessment report. SPECIFIC RECOMMENDATIONS Capacity Constraint Recommended Action Responsibility and commentIA has no specific ADB Project experience. Lack of knowledge of ADB specific procedures for Procurement and Consulting Services. Gaps with ADB procedures in procurement Internal Capacity to handle procurement under ADB financing may be weak Gaps with ADB Procedures for consulting services and limited experience of the same Internal procedures for procurement and consulting services English language skills

IA should arrange for training of key staff on ADB procurement and consulting services before start of Project implementation through CPIA.

If calendar for such training does not allow participation of IA, a specific training may be organized at inception stage which may be more effective given IA’s prior experience with WB Procurement. This would also allow Xi’an Government Bidding Office, Procurement Agent and other relevant departments involved in procurement oversight to participate.

To complement internal resources and build practical capacity in ICB procurement, IA should seek the services of a qualified Procurement Agent with ADB and/or WB experience Trainings on ADB's Consulting Guidelines and the use of ADB's standard Request for Proposal documents should address these unacceptable practices. IA to develop a separate internal project procurement manual IA should consider English language training for its Procurement staff. IA may also provide for translation/ interpretation services

IA and ADB IA IA and ADB IA IA

Appendix 2 5

GENERAL RECOMMENDATIONS, PROCUREMENT ENVIRONMENTCapacity Constraint Recommended Action Responsibility and commentCompliance with ADB Guidelines Gaps noted in procurement and

consulting services stem from undue application of local procedures to externally financed bidding. It should be ensured that ADB's Guidelines are complied by IA. For ICB this should be through the use of ADB SBDs. Most importantly for NCB, IA should become aware of the provisions of the NCB annex.

IA

Appendix 3 1

TERMS OF REFERENCE FOR CONSULTING SERVICES

A. Introduction

1. The Xi’an Urban Road Network Improvement Project (the Project) is the second Asian Development Bank (ADB) loan to support the Xi’an Municipal Government (XMG) urban infrastructure development initiative. The Project will provide a better integrated urban transport system and improved road connectivity to the new XMG subway system to be commissioned in 2012. The Project includes five interlinked outputs: (i) Output 1: road network improvements; (ii) Output 2: pedestrian crossing and safety improvements; (iii) Output 3: multimodal interchange facilities (MIF); (iv) Output 4: intelligent transport systems (ITS) and road user safety program; (v) Output 5: environment protection enhancement. 2. Output 1: Road Network Improvements. This output will include construction rehabilitation of 12.92 kilometers (km) of urban roads along Keji 2nd Road (6.2 km), Kunming Road (4.39 km) and Dazhai West Road (2.33 km) in the southwest part of the city, between the second and third ring roads. These roads will include 21.57 km of bus priority corridors, 21.57 km of NMT lanes as well as a 4.39 km linear green park along Kunming Road. This output will also include six urban interchanges to provide suitable size and configuration at critical bottlenecks on the road network and thus provide sufficient access to the new urban growth centers between ring roads 2 and 3. The proposed bus priority corridors will include exclusive bus lanes, bus signal priorities, station improvements, and traffic management measures, which will significantly improve travel conditions for bus passenger. The roads will include facilities for cyclists and pedestrians and thus provide street design and operation for all road users. The road network improvements will enhance the functionality and connectivity of the existing Second and Third ring roads and connect the two growth poles of the city, the commercial business area in the southwest and the government offices to the north of the city, between the second and third ring roads. 3. Output 2: Pedestrian Crossing and Safety Improvements. This output includes improvements to 110 urban intersections and 15 mid-block crossing facilities, pedestrian crossing signals, improved visibility and safety for pedestrians. Advanced information technology safety equipment enforcement will also be introduced. The output will promote the use of nonmotorized transport that is safe and caters for those segments of society that are less likely to have access to private modes of transport and therefore rely on walking or public transport, in particular the poor, children and women. 4. Output 3: Multimodal Interchange Facilities. This output will include construction of (i) four multimodal interchange facilities (Xi’an North Train Station, Xi’an National Civil Aerospace Industrial Base, Xi’an Yuhua Zhai, and Xi’an International Logistics Park) to provide easy connections between metro, bus, taxi, car, motorcycle and/or bicycle, to link the surrounding areas to these key public transport hubs and also to provide staging and control facilities for public transport vehicles; (ii) five multi-level parking facilities, providing spaces for 2,249 vehicles in off-street facilities, as well as provisions for motorcycles and bicycles, two at multimodal interchange facilities (Xi’an Yuhua Zhai and Xi’an Internaitonal Logistics Park) to promote modal interchange and the use of public transport, and three parking garages on the edge of the old walled city (Leju Chang, South Guoshang Village and Xizhan Community) to provide a traffic demand management measure by avoiding motorized trips entering the walled city by providing alternate parking locations outside the city walls. The garages will also incorporate parking management and enforcement on the surrounding streets and address the series issue of illegal parking on sidewalks; (iii) five new compressed natural gas (CNG) stations, four incorporated in each of the multimodal interchange facilities and one close to the third ring road at Mujiangwang to facilitate efficient fueling access of buses, taxis and private vehicles, and to encourage further

2 Appendix 3

switching to this more environmentally sustainable fuel source. Electric charging stations will also be provided at the multimodal interchange facilities to cater for the future expected growth in electric vehicles and for the current large fleet of electric motorcycles. 5. Output 4: Intelligent Transport System and Road User Safety Program. This output will extend the existing ITS beyond the second ring road to the third ring road to provide ITS coverage of these important sections of the strategic road network and urban growth poles; developing an implementation plan for improved use and management of the ITS system; improvement and enhancement of traveler information dissemination for both private and public transport modes; and implementation of a road safety education program to support the pedestrian crossing safety project output. This output includes capacity development components to more effectively operate the ITS system for improved traffic and pedestrian crossing, information dissemination and policing and enforcement for improved safety. The output will include equipment comprising 20 variable message signs, 140 microwave detectors, 66 close circuit televisions, 31 red-light cameras, and 10 speed violation cameras. 6. Output 5: Environmental Protection Enhancement. The Output will (i) enhance the vehicle emissions inspection program by providing random inspection capacity and equipment (5 emission regulation enforcement vehicles, 10 black smoke stations and 4 mobile emission enforcement equipment), (ii) improve air quality monitoring by establishing 4 sub-monitoring stations along the third ring road equipped with air quality and noise monitoring systems connected to the environment information center, and remote sensing data receiving system to provide area-wide air quality status, (iii) establish an environment and vehicle emission control information sharing system, a computer software for environment information sharing, emission regulation violation information sharing system, public sector vehicle management, obsolete vehicle scrapping enforcement administration assistance, and environmental information disclosure, and (iv) establish an environmental information center. This output will support more effective management and enforcement of vehicle standards. It will help identify heavily polluting vehicles, improve the efficiency of vehicle emission control and enforcement, as well as reduce on road vehicle emissions. Xian City government has committed to increase the number of days with air quality better than standard II to more than 300 days per year by reducing total pollutant emissions from industry, household, and vehicles. This output will help achieve the government commitment. B. Scope of Services

7. Xi’an project management office (PMO) will be responsible for engaging consultants to assist in project implementation and management as well as provision of training to Xi’an PMOs (XPMO) and the implementing agency (IA) for the Project. 8. The consulting services will involve international and national experts, with an international project manager and national deputy project manager. The consultants will assist the XPMO and IA in liaising and coordinating with ADB, assist with establishment of project performance management system (PPMS) procedures and preparation of quarterly reports to ADB; assist with monitoring as per the Project’s design and monitoring framework (DMF); assist with implementation of the social action plan (SAP), and resettlement plan (RP), environment management plans (EMPs), and promote the adoption of international standard practices for project management and monitoring systems. Capacity building and training activities on all of the foregoing aspects will be provided to strengthen the XPMO and IA’s design and supervision, and O&M procedures.

Appendix 3 3

9. XPMO will recruit the consultants in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers. The consultants will work with the XMG, XPMO, IA and local government agencies, as may be necessary, to provide assistance and advice on the tasks outlined below. The consultant will be recruited under the Project Package—Project Management, Capacity Building and Training through quality-and-cost-base selection (QCBS)

I. TERMS OF REFERENCE FOR CONSULTING SERVICES FOR PROJECT

MANAGEMENT AND CAPACITY BUILDING AND TRAINING

10. Consulting Services for Project Management. The consultant will assist and support the XPMO and IA at the start and during the Project with:

(i) Review of project organization, operation and systems of monitoring and reporting

procedures, in accordance with ADB guidelines. (ii) Assist in contract bid documentation, bidding and evaluation procedures, and

appointment of contractors. (iii) Assist in facilitating required approval procedures and financial administration,

planning and management. (iv) Assist in the finalization of RPs based on final design and established safeguards

monitoring and evaluation system. (v) Finalize the PPMS and implementation for effective safeguards monitoring and

reporting. (vi) Assist in technical, managerial, institutional, coordination and financial activities as

appropriate for project completion. (vii) Develop a detailed framework for the PPMS, including overall system design;

refinement of indicators, targets and goals, and design of report format. (viii) Provide training to the PMO, operators, and contractors’ representatives on

environmental laws, regulations, and policies, and basic environmental management.

(ix) Provide training to PMO and contractors on EMP implementation: (a) responsibilities and duties for the project construction, management and environmental protection; (b) task of environmental protection in project construction; (c) key environmental protection contents in project construction; (d) various environmental monitoring; and (e) EMP improvement and corrective actions.

(x) Provide training to PMO and operators on environmental monitoring, inspection, and reporting: monitoring and inspection methods, data collection and processing, interpretation of data, and reporting system.

11. Consulting Services for Capacity Building and Training. The capacity building will include an appropriate mix of formal and informal training delivery including workshops, seminars, study tours and on-the-job training, to be provided directly by the specialist consultants, under locally arranged training contracts, or through approved in-country or overseas study activities. A. Detailed Tasks by Areas of Expertise

1. Project Manager/Project Management Specialist (International, 12 person months)

12. The international project management specialist will be the Project Manager. As the Project Manager, he/she will coordinate the activities of all consultants. He/she must have at least

4 Appendix 3

15 years of international working experience in similar projects and 10 years of management experience and at least 5 years of working experience in projects of similar nature in PRC. He/she should have had at least one previous assignment as the Project Manager of the consultant services in similar, or relevant, project and have good skill and ability to communicate with XPMO and IA. He/she should have a Bachelor’s degree in civil engineer or urban transport, preferably at postgraduate level or its equivalent. 13. The Project Manager will, based on the knowledge and the experience of previous projects, establish the working arrangements, take overall responsibility for team performance, provide ongoing support to the XPMO and IA and monitor project implementation. He/she will also assist the XPMO and IA in communication with ADB to ensure smooth project implementation, attend the meetings held by ADB missions for the Project and undertake the following:

(i) Oversee and coordinate the work of consultants engaged to assist with Project implementation.

(ii) Develop and help implement project implementation plans and procedures for monitoring and control.

(iii) Recommend a practical and effective design supervision system. (iv) Review designs drawings and bidding documents, including the identification of

potential technical problems and suggest means to resolve these, and also include the incorporation of environmental mitigation measures where appropriate.

(v) In consultation with the XPMO, develop a detailed framework for the Project PPMS including overall system design; refinement of indicators, targets and goals; and design of report formats. Develop comprehensive PPMS procedures. These tasks must be completed within first 6 month of the contract.

(vi) Produce the first PPMS report in consultation with the XPMO. (vii) Train the staff of PMO to use and maintain the PPMS framework and advise as

needed in the preparation of periodic PPMS reports following the first report. (viii) Advise on the development of reporting procedures to the Bank, including those

covering withdrawal and payment. (ix) Provide advice and assistance on start-up, commissioning and testing of the newly

constructed facilities. (x) Review the IA operation, maintenance and asset management programs and

recommend improvements to these to help assure effective and sustainable service delivery.

(xi) Provide advice to the IA on performance improvements. (xii) Provide training and on-the-job guidance on the above items. (xiii) Prepare project relevant reports required by ADB, including inception report,

quarterly reports, semi-annual report, annual report, and Project Completion Report.

(xiv) Develop the format of monthly construction progress report. (xv) Any other tasks which may be assigned by the XPMO or IA.

2. Deputy Project Manager/Project Management Specialist (National, 34 person

months)

14. As the Deputy Project Manager, he/she will closely with the Project Manager and will be responsible for ensuring that the overall work program is completed efficiently and effectively within the time concerned. He/she should hold a degree in civil engineering or urban transport with good English skill. He/she shall have at least 10 years of working experience in similar projects or fields. He/she will report to the Project Manager and XPMO on a daily basis.

Appendix 3 5

(i) Review designs drawings and bidding documents, including the identification of potential technical problems and suggesting means of resolving these, and also include the incorporation of environmental mitigation measures where appropriate.

(ii) Assist the Project Manager in the development of the Project PPMS framework, procedures, and PPMS operational manuals.

(iii) Train the staff of PMO to use and maintain the PPMS framework and advise as needed in the preparation of periodic PPMS reports following the first report.

(iv) Advise on the development of reporting procedures to the Bank, including those covering withdrawal and payment.

(v) Provide advice and assistance on start-up, commissioning and testing of the newly constructed facilities.

(vi) Review the IA operation, maintenance and asset management programs and recommend improvements to these to help assure effective and sustainable service delivery.

(vii) Provide advice to the IAs on performance improvements. (viii) Work closely with the IAs and EA and assist in undertake construction supervision

and management including construction methods, compliance with contract specification, and control over construction quality.

(ix) Develop the format of monthly construction progress report. (x) Conduct field visits to review the project progress. (xi) Provide training and on-the-job guidance on the above items. (xii) Assist international Project Manager as required.

3. Procurement and Contract Management Specialist (International, 3 person

months)

15. The international Procurement and Contract Management Specialist shall have at least 15 years international working experience in the civil engineering or urban transport fields, and is familiar with the FIDIC Clause and ADB’s Contract Management Procedure and national regulations on contract management, preferably in international project management experience, with knowledge of ADB’s Contract Management. He/she shall have a proven record of successful management of works in PRC of similar countries. He/she should have excellent ability in on-site training and conducting workshops:

(i) Manage and update procurement plan if needed. (ii) Take overall responsibility in the review of bidding documents, bid evaluation

reports, contracts, contract variations and other documents. (iii) Assist in procurement activities and participate in bid opening. (iv) Evaluate as observers and assist addressing ADB’s comments to all bidding

documents. (v) Conduct trainings on ADB procurement procedures. (vi) Review and Introduce document control and contract management systems. (vii) Advise on the implementation of international competitive bidding, local competitive

bidding and international shopping contract procedures in accordance with the Bank's Guidelines on Procurement; advise on the development of reporting procedures to the Bank, including those covering construction progress.

(viii) Advise on management control of construction supervision and construction quality; adherence to contract work programs and recovery of slippage; site health and safety procedures; record keeping systems to protect client interests in event of claims; and claims assessment and determination.

(ix) Any other tasks which might be assigned by the XPMO or IA.

6 Appendix 3

4. Procurement and Contract Management Specialist (National, 8 person

months)

16. The national Procurement and Contract Management Specialist shall have at least 15 years working experience in the civil engineering or urban transport fields and be able to work in both English and Chinese. He/she should have sound and sufficient experience in contract negotiation and controlling procurement processes. He/she should have prior experience in similar projects and in a management position. The national specialist should assist his/her international counterpart to perform tasks as above.

5. Road, MIF, and PCS Safety Specialist (International, 2 person months)

17. The international Road, MIF and PCS Safety Specialist shall have at least 15 years international working experience in the civil engineering or urban transport fields, and have a Bachelor’s degree in civil engineer or urban transport, preferably at postgraduate level or its equivalent. He/she shall be familiar with the ADB or World Bank funded project experiences and have a proven record of successful management of works in PRC or similar countries. He/she should have excellent ability in on-site training and conducting workshops.

(i) Review relevant engineering designs, drawings, bill of quantities and other technical documents for outputs of Road Network Improvements, Pedestrian Crossing and Safety Improvements, and Multimodal Interchange Facilities, including addressing potential technical issues and proposing feasible solutions.

(ii) Assist XPMO and IA on the start-up, testing and commissioning of newly constructed facilities.

(iii) Review the IAs operation, maintenance and asset management programs and prepare operating and maintenance manuals for relevant project outputs.

(iv) Provide training and on-the-job guidance on operating and maintenance of relevant project outputs.

(v) Any other tasks which might be assigned by the XPMO or IA.

6. Road, MIF and PCS Safety Specialist (National, 8 person months)

18. The national Road, MIF and PCS Safety Specialist shall have at least 10 years national working experience in similar projects and be able to work in both English and Chinese. He/she should be a major in civil engineering or urban transport and have sound and sufficient experience in urban transport. The national specialist should assist his/her international counterpart to perform tasks as above.

7. Intelligent Transport System Specialist (International, 2 person months)

19. He/she shall have at least 10 years working experience in the design, application and operation of Intelligent Transport Systems and shall be familiar with, and have experience of, ADB or World Bank funded projects. They shall have a proven record of successful management of works in PRC or similar countries and should have excellent ability in on-site training and conducting workshops:

(i) Review relevant engineering designs, drawings, bill of quantities and other technical documents for the ITS Output, including addressing potential technical issues and proposing feasible solutions.

(ii) Review the proposed integration of the equipment into the existing and developing ITS infrastructure.

Appendix 3 7

(iii) Review locations and effectiveness of ITS site equipment to ensure that their effectiveness is maximized.

(iv) Assist XPMO and IA on the start-up, testing and commissioning of newly constructed facilities, including preparing operating and maintenance manuals for relevant ITS components.

(v) Any other tasks which might be assigned by the XPMO or IA.

8. Intelligent Transport System Specialist (National, 4 person months)

20. He/she shall have at least 10 years working experience in the design, application and operation of Intelligent Transport Systems and shall be able to work in both English and Chinese. He/she shall have excellent ability in on-site training and conducting workshops and assist his/her international counterpart to perform tasks as above.

9. Environment Specialist (International, 3 person months)

21. He/she shall have at least 15 years international working experience and fully understand both ADB requirements and Chinese national regulations on environmental management issues. He/she shall have at least 10 years working experience in the design, application and operation of Vehicle Emission Monitoring Systems. He/she shall have a proven record of successful management of works in PRC or similar countries and should have excellent ability in on-site training and conducting workshops.

(i) Review relevant engineering designs, drawings, bill of quantities and other technical documents for the Environmental Protection Enhancement Output, including addressing potential technical issues and proposing feasible solutions.

(ii) Review locations and effectiveness of equipment of Vehicle Emission Monitoring Systems to ensure that their effectiveness is maximized.

(iii) Assist XPMO and IA on the start-up, testing and commissioning of newly constructed facilities, including preparing operating and maintenance manuals for relevant Environmental Protection Enhancement Output.

(iv) Review the Project environmental management plan (EMP) and develop detailed plans and procedures for implementation. Revise the EMP as needed to account for changes in engineering design to overcome any apparent deficiencies. Review the EMP and implementation plans and procedures with the XPMO and IA for all sub-components and ensure that these are all fully understood.

(v) Develop the format of the EMP reports for the IA based on ADB specific requirements and conduct training in environmental monitoring, reporting and corrective actions.

(vi) Review environmental monitoring reports prepared by the IA and construction contractors and confirm that reporting requirements and other EMP procedures are being followed.

(vii) Conduct semi-annual inspections at Project construction sites to monitor the implementation of mitigation measures and the residual impacts of construction activity. This monitoring will serve to assess and confirm the findings of the routine ongoing environmental monitoring which is the responsibility of the XPMO and IAs.

(viii) Confirm that agreed EMP mitigation measures are implemented. Determine whether the measures effectively minimize adverse environmental effects. Advise on modifications to mitigation measures where residual adverse impacts violate standards or are otherwise deemed to be unacceptable.

(ix) Prepare mission reports to document the findings of EMP investigations.

8 Appendix 3

(x) Develop formats for semi-annual EMP reports submitted to the ADB and prepare the initial EMP report. Train the PMO staff to prepare subsequent EMP reports for the ADB and advise as needed in the preparation of further subsequent reports.

(xi) Prepare inputs on environmental impacts to the first PPMS report. Train PMO staff to prepare inputs for the subsequent PPMS reports.

(xii) Review the operation and maintenance program for project facilities to ensure environmental sustainability of the Project.

(xiii) Assist with the development and implementation of environmental impact components of the PPMS. Develop implementation plans and procedures for water quality, air quality of project areas in consultation with the local environmental Protection Bureau and other responsible agencies within the project cities.

(xiv) Any other tasks which might be assigned by XPMO or IA.

10. Environment specialist (National, 8 person months)

22. He/she shall have at least 15 years or working experience in Environmental Engineering, including at least 10 years in similar assignments in PRC. He/she shall fully understand both ADB requirements and Chinese national regulations on the environmental management issue, with good English skills. The national specialist shall assist his/her international counterpart to perform tasks as above.

11. Financial Management Specialist (International, 3 person months)

23. He/she should have bachelor or master degree in finance management and at least 15 years international experience in similar projects and assignments. He/she must be good at project accounting and familiar with ADB requirements in compiling reports. He/she must be capable of providing on-the-job training for staff from PMO and IA and be able to develop and deliver training courses for senior and middle managers.

(i) Assist in overall financial management, e.g. disbursement management, review of withdrawal applications, monitoring and projection of use of loan proceeds and counterpart funds.

(ii) Review arrangements made by the XPMO and IA for Project budgeting, accounting, internal control, financial reporting and auditing. Assure that these arrangements are adequate for purposes of the financial management of ADB loan funds. Recommend improvements as required to these systems.

(iii) Compile and prepare the Project financial statements as required by ADB. (iv) Prepare the first annual work plans and budgets and monitor project expenditure. (v) Develop or introduce financial management software for the Project. (vi) Plan and implement training programs for XPMO and IA accounting and finance

staff dealing with: (a) ADB procedures for disbursement, procurement, reporting and related matters; (b) Internal financial control including, among others, separation of functions, conflict of interest and other anti-corruption safeguards; (c) management of foreign exchange funds. He will provide training on ADB procedures. Suitably qualified specialists selected in consultation with the PMO and the ADB must provide training programs for items (b) and (c).

(vii) Evaluate the year by year compliance with ADB loan covenants dealing with counterpart funds, tariff reform, financial management, and the financial performance of revenue generating components.

(viii) Any other tasks which might be assigned by XPMO or IA.

Appendix 3 9

12. Financial Management Specialist (National, 8 person months)

24. He/she should at least have a bachelor degree in finance management and 10 years national work experience in similar projects and assignments. He/she must be good at project accounting and familiar with ADB requirements in compiling reports. He/she should be able to work in both English and Chinese. The national specialist shall assist his/her international counterpart to perform tasks as above.

13. Institutional and Training Specialist (International, 1 person months)

25. He/she shall have 15 years working experience at management level with extensive experience in institutional development of the urban transport sector, including organizational structure assessment, strategic planning, human resources development, organizational reform, and performance monitoring. Experience in similar projects funded by ADB or World Bank as institutional strengthening specialist and relevant training program preparation are required.

(i) Conduct an initial assessment of the organizational structure and performance of the IA and O&M entities. Review any existing strategic plans or organization development plans. Identify any existing organizational goals and objectives. Review existing administrative systems and procedures. Review existing human, financial, and other resources. Assess the ability organizations to achieve their institutional goals and objectives under existing conditions. Identify constraints and shortcomings. Complete an Institutional Development Action Plan (IDAP).

(ii) Prepare a training program which includes training workshops, on-the-job training, overseas and domestic study tours to strengthen overall management of the Project.

(iii) Provide advice and guidance to senior management of the IA and O&M entities for defining institutional goals and objectives and the strategies for achieving them.

(iv) Make recommendations for the development of human resources with a view to improving the skills and performance of the workforce. Review the processes of staff appraisal and performance measurement, and identifying training needs, and reward mechanisms and levels.

(v) Any other tasks which might be assigned by XPMO or IA.

14. Institutional and Training Specialist (National, 2 person months)

26. He/she shall have at least 10 years experience at management level with experience in institutional development of the urban transport sector. He/she should be familiar with relevant Chinese PRC laws or regulations related to the urban transport sector. He/she should be able to work in both English and Chinese, with experience in relevant training programs. He/she shall assist the international counterpart to perform tasks as above.

15. Social/Gender Specialist (International, 2 person months)

27. He/she shall have at least 15 years international working experience, including at least 10 years in similar assignments in PRC or similar countries. He/she shall fully understand both ADB Policies on Social Dimensions and Gender and Chinese regulations on the social issues. Experience in similar projects funded by ADB or World Bank as social and resettlement specialist is required.

10 Appendix 3

(i) Review the social impact of the Project through the social impact indicators. (ii) Assist the XPMO and IA in conducting independent monitoring of the progress and

effectiveness of Social Action Plan implementation. (iii) Recommend any measures to improve the implementation of the SAP. (iv) Any other tasks which might be assigned by XPMO or IA.

16. Social/Gender Specialist (National, 6 person months)

28. He/she shall have at least 15 years working experience, including at least 10 years in similar assignments in PRC. He/she shall fully understand both ADB Policies on Social Dimensions and Gender and Chinese regulations on the social issues, with good English skills. The national specialist shall assist his/her international counterpart to perform tasks as above.

17. Resettlement Planning and Training Specialist (International, 2 person months)

29. He/she shall have at least 15 years international working experience, including at least 10 years in similar assignments in PRC or similar countries. He/she shall fully understand both ADB’s Safeguard Policy Statement and Chinese laws and regulations with respect to resettlement issues. Experience in similar projects funded by ADB or World Bank as social and resettlement specialist is required.

(i) Assist the EA and IA to update the RPs. (ii) Provide training to EA, IA, and local officials on ADB requirements. (iii) Assist the XPMO and IA in conducting internal monitoring of the progress and

effectiveness of RP implementation. (iv) Prepare the internal monitoring report which should include: (a) conclusion of

investigation and evaluation; (b) major existing and potential problems; (c) recommended mitigation or prevention measures which will be incorporated into a revised plan if necessary; and (d) assessment of previous follow-up actions.

(v) Prepare Resettlement Completion Report within 3 months prior to loan closure. (vi) Any other tasks which might be assigned by XPMO or IA.

18. Resettlement Specialist (National, 6 person months)

30. He/she shall have at least 15 years working experience, including at least 10 years in similar assignments in PRC. He/she shall fully understand both ADB’s Safeguard Policy Statement and Chinese laws and regulations with respect to resettlement issues, with good English skills. The national specialist shall assist his/her international counterpart to perform tasks as above.

19. Resettlement External Monitoring Institution (National, 15 person months)

(i) Carry out tasks as specified in the RP terms of reference for external monitoring. (ii) Review and monitor the progress in resettlement to ensure that implementation is

in accordance with the Resettlement Plan (RP). (iii) Evaluate the income restoration and post-resettlement conditions of the APs, AHs

and communities. (iv) Assess if the land acquisition and resettlement is implemented in accordance with

the RP and if the goals and principles of the RP are achieved. (v) Recommend any measures to improve the implementation of the RP. (vi) Any other tasks which might be assigned by XPMO or IA.

Appendix 3 11

B. Consulting Inputs and Costs

31. Summary of consultancy inputs and associated costs are set out below. Table 1 shows indicative staffing levels for the consulting services.

Table1: Schedule of Consulting Services Capacity Building and Project Management Institutional Strengthening International National

Team Leader – Project Management Specialist 12 Deputy Team Leader – Project Management Specialist 34 Construction Management Specialist 3 8 Road, MIF and PCS safety specialist 2 8 ITS Specialist 2 4 Environment specialist 3 8 Financial Analyst 3 8 Institutional and Training Specialist 1 2 Social Impact Assessment 2 6

Resettlement Specialist for RP updating and training 2 6

Resettlement Institute for RP external monitoring and evaluation 0 15

Total 30 99

32. Table 2 provides a provisional outline budget for the proposed consulting services.

Table 2: Consultancy Services Budget (Provisional)

Item Budget ($ million)

Consultancy (including fees, per diems and airfares/local transportation costs) 0.90Provisional Sum: Study Tours and Training 0.50 Office Equipment 0.03 Environmental Management and Resettlement Monitoring Report 0.05Contingency 0.02Total 1.50

C. Implementation and Reporting 33. The overall consultancy will be provided over a five-year implementation period. The Consultant will prepare and submit the project Inception Report, quarterly progress reports, Project Semiannual Reports, Project Annual Report and Project Completion Report, which confirm the status of the Project for discussion with ADB at related review missions. The reports will also include an assessment on the Consultant’s progress against program, an indication of key outstanding issues, and an updated development program (if relevant) for key project activities. Three copies of each report will be submitted to PMO in English for onward transmission to ADB. A tentative schedule of major reports to be delivered is as follows:

12 Appendix 3

Table 3: Report Delivering Schedule No. Report Name Due Time 1 Inception Report Within 2 months after commencement of

consulting services 2 Comprehensive PPMS Procedures Within 6 months after commencement of

consulting services 3 Quarterly Progress Reports Every quarter within 2 weeks after the end of

each 3 months 4 Project Semiannual Reports Semiannual, with 1 month after the end of

each 6 months 5 Project Annual Reports Annual, with 1 month after the end of each 12

months 6 Institutional Development Action Plan Within 6 months after commencement of

consulting services 7 Training Program Within 6 months after commencement of

consulting services 8a External RP Monitoring Report (Construction

Phase) Twice a year

8b External RP Monitoring & Evaluation Report (Operation Phase)

Annual report for two continuous years

9 Resettlement Completion Report Within 3 months prior to loan closure 10a External Environment Monitoring Report


10b External RP Monitoring & Evaluation Report (Operation Phase)

As ADB may require

11 Project Completion Report Within 3 months after physical completion of the Project

II. TERMS OF REFERENCE FOR CONSULTING SERVICES FOR ROAD SAFETY

EDUCATION PROGRAM

34. The Xi’an Urban Road Network Improvement Project (the Project) is the second Asian Development Bank (ADB) loan to support the Xi’an Municipal Government (XMG) urban infrastructure development initiative. The Project will provide a better integrated urban transport system and improved road connectivity to the new XMG subway system to be commissioned in 2012. In order to maximize the effectiveness of the road traffic and transport improvements being implemented during the course of this project, it is essential to enhance road safety of the city through the Road Safety Education Program. 35. Xi’an project management office (PMO) will be responsible for engaging consultants to assist in Road Safety Education Program of the Project. 36. The ultimate goal is to reduce crashes and injuries on the roads. Campaigns target people and generally aim to change behavior, either directly, or by providing information to influence attitudes and thus impact on behavior. Key purposes of a publicity campaign are one or more of: (i) to educate, (ii) to inform, (iii) to change attitudes, and (iv) to change behavior. 37. Combined with enforcement, road safety publicity campaigns improve road user behavior and reduce road crashes. The road safety education program is part of a set of activities which aim to promote safe road use amongst the general public. Mass media advertising is often the most visible component of a campaign, and to be combined with visible government and/or community support, particularly law enforcement. Targeting children is particularly important, as

Appendix 3 13

they are the road users, not only of the present, but of the future. Instilling good road sense at an early age can pay large dividends in the future. 38. XPMO will recruit the Consultant in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers.1

A. Detailed Tasks by Areas of Expertise

1. Road Safety Education Specialist (International, 5 person months)

39. The international Road Safety Education Specialist shall have at least 10 years relevant experience with demonstrated track record of delivering similar road safety training programs, particularly for children and shall be familiar with, and have experience of, ADB or World Bank funded projects. He/she shall have a proven record of successfully advising, directing, managing and implementing adult and child road safety education programs and campaigns in developing countries like China and should have excellent communication ability. The appointed specialist shall:

(i) Review international best practice for road safety education of school children and other affected groups, including vulnerable road users.

(ii) Review international and PRC road safety awareness campaigns. (iii) Assess current situation in Xian with respect to road safety, road user

understanding and education. (iv) Review current capacity for road safety development and management within

respective line agencies. (v) Assist in developing and reviewing road safety education initiatives. (vi) Assist in developing and testing pilot training programs for school education. 5

schools (2 kindergartens and 3 primary schools) will be used in the pilot program with children of age 12 or under at kindergartens and ages 6-12 at primary schools.

(vii) Assist in developing and testing pilot road safety awareness campaign(s) (to be distributed through newspapers over a 3 month period).

(viii) Undertake consultation with government and interest groups to assess the road safety program and needs for training of trainers in road safety.

(ix) Advise on processes and practices which are required and which can achieve the desired outcome.

(x) Assist in implementing the road safety education program in 20 to 30 schools for children of age 12 or under at kindergartens and ages 6-12 at primary schools.

(xi) Assist in implementing media road safety campaigns undertaken for 24 months using TV, radio, newspaper, and internet, including training or education campaigns.

(xii) Other tasks which might be assigned by the XPMO or IA.

2. Road Safety Education Specialists (National, 20 person months)

40. The national Road Safety Education Specialists shall have at least 10 years relevant experience with demonstrated track record of delivering similar road safety training programs, particularly for children and shall be familiar with, and have experience of, ADB or World Bank funded projects. He/she shall have a proven record of successfully advising, directing, managing and implementing adult and child road safety education programs and should have good English


14 Appendix 3

skills. The national specialists should assist their international counterpart to perform tasks as mentioned above. B. Consulting Inputs and Costs

41. Summary of consultancy input (months) and associated costs are set out below. Table 4 shows indicative staffing levels for the consulting services.

Table 4: Schedule of Consulting Services

Road Safety Education Program International National

International Road Safety Education Specialist 5 0

National Road Safety Education Specialists (4) 0 20

Total 5 20 42. Table 5 provides a provisional outline budget for the proposed consulting services.

Table 5: Consultancy Services Budget (Provisional) Item Budget

($ million) Consultancy (including fees, per diems and airfares/local transportation costs) 0.07Provisional Sum: Education Material and Booklets 0.16Contingency 0.02Total 0.25

C. Deliverables and Reporting

43. The overall consultancy will be provided over a one year period. The reports to be submitted are as follows:

(i) Inception report within one month of commencement of the consulting services submitted for the PMO’s review and approval and for submission to ADB.

(ii) Prepare training manuals, instructions, and relevant training materials. (iii) Mid-term review report within six months of commencement of the consulting

services. (iv) Project completion report within one month after the completion of the consulting

services, submitted for the PMO’s review and approval and for submission to ADB. 44. The Consultant will assist the PMO and IA to prepare and submit the Project Inception Report, Mid-term Review Report and Project Completion Report. The reports will include an assessment on the Consultant’s progress against program, and an updated development program (if relevant) for key project activities. Three copies of each report will be submitted to PMO in English for onward transmission to ADB.

III. TERMS OF REFERENCE FOR CONSULTING SERVICES FOR REVIEW AND

SUPERVISION OF DESIGN 45. The Xi’an Urban Road Network Improvement Project (the Project) is the second Asian Development Bank (ADB) loan to support the Xi’an Municipal Government (XMG) urban infrastructure development initiative. The Project will provide a better integrated urban transport system and improved road connectivity to the new XMG subway system to be commissioned in

Appendix 3 15

2012. In order to maximize the effectiveness of the integrated outputs of the project it is proposed to recruit a review and supervision consultant to assist in the design process. The consultant will provide peer review at each of the design stages and act on behalf of ADB to ensure the designs are optimized to meet the expected outcomes of the project. 46. ADB, through the Xi’an project preparation technical assistance (PPTA) budget will be responsible for engaging consultants to assist in the design peer review of project outputs 1, 2, 3, and 4. The Consultant in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers.2 A. Detailed Tasks by Areas of Expertise

1. Transport Specialist (International, 2 person months)

a. Guidance on Road Network Improvements

(i) Review of bus priority corridor design and NMT lanes design advise: (a) data collection and analysis; (b) station number, size, location, dimensions, architecture, and configuration; (c) bus priority corridor detailed engineering design and construction; and (d) bus priority corridor modal integration.

(ii) Interchange design advise: (a) layout of interchange ramps in relation to surface roads and intersections, and (b) check the operational problems and identify necessary design modifications.

b. Pedestrian Crossing and Safety Improvement

(i) Observation of road users (drivers, pedestrians, cyclists). (ii) Pedestrian crossings (physical design) - review of standard designs of different

intersection types and crossings and advice. (iii) Safety Improvement (operational): (a) traffic signal design for intersections and

crossings, and (b) locations and types of traffic safety facilities.

c. Multimodal Interchange Facility and Parking Facilities

(i) Multimodal Interchange Facility: (a) advice on data collection and analysis for Multimodal Interchange Facility component selection and optimizing layout of sub components of the multimodal interchanges, (b) advice on locations and design of entry/exit points of the multimodal interchanges, and (c) advise on pedestrian/cycle paths within interchanges and connectivity to outside facilities.

(ii) Parking Facility: (a) advice on data collection and analysis for parking facility component selection and optimizing layout of sub components of the multimodal interchanges, (b) advice on locations and design of entry/exit points of the multimodal interchanges, (c) advise on pedestrian/cycle paths within interchanges and connectivity to outside facilities, and (d) advice on parking management and enforcement around parking facility area.


16 Appendix 3

d. Intelligent Transport System (ITS) and Road User Safety Program

(i) ITS: (a) advise on data collection for locating vehicle detectors and VMS (Variable Message Signs), (b) advice on VMS design to help strategic route choices by drivers along 2nd ring road, and (c) advise on maintain information connectivity between VMS.

(ii) Road User Safety Program: (a) advise on designing target group and (b) advise on incorporating safety education into existing curriculum.

2. Transport Specialists (National, 5 person months)

47. He/she shall have at least 15 years working experience, including at least 10 years in similar assignments in PRC. The domestic specialist shall assist his/her international counterpart to perform tasks as above. B. Consulting Inputs and Costs

48. Summary of consultancy input (months) and associated costs are set out below. Table 6 shows indicative staffing levels for the consulting services.

Table 6: Schedule of Consulting Services Road Safety Education Program International NationalInternational Transport Specialist 2 0Domestic Transport Specialist/s 0 5Total 2 5 49. Table 7 provides a provisional outline budget for the proposed consulting services.

Table 7: Consultancy Services Budget (Provisional) Item Budget ($)Consultancy (including fees, per diems and airfares/local transportation costs) 67,500Contingency 7,500Total 75,000 C. Deliverables and Reporting

50. The overall consultancy will be provided during the preliminary and detail design stages of the project. Reports to be submitted at key stages of the preliminary and detail design of the 5 project outputs. The reports will be submitted to ADB and key finding provided to the PMO for enhancement in the design process.

Appendix 4 1

ENVIRONMENT MANAGEMENT PLAN A. Introduction 1. The environmental management plan (EMP) covers all phases of implementation from preparation through commissioning and operation, and it aims to ensure the monitoring of environmental impacts and activation of environmental mitigation measures. Relevant parts of the EMP will be incorporated into the construction, operation, and management of each output. Environmental protection measures will (i) mitigate environmental impacts, (ii) achieve compliance with national environmental regulations, (iii) provide compensation for lost environmental resources, and (iv) enhance environmental resources. 2. Environmental monitoring programs will be carried out and the results will be used to evaluate the extent and severity of actual environmental impacts against the predicted impacts and the performance of the environmental protection measures or compliance with related rules and regulations. B. Performance Indicators 3. Before the construction, performance indicators, targets, or acceptance criteria will be specified for the EMP to describe the desired outcomes as measurable events. These indicators will flag the successful (or unsuccessful) pre-construction positioning of the IA which show that environmental commitments are being carried through and environmental systems and pre-requisites are in place before construction commences. The following performance indicators listed in the Table 1 will show how well the EMP is being implemented.

Table 1: Performance Indicators of Environmental Management prior to Construction

Indicator Measurement Methods MeasurementPublic involvement effectiveness

The completion and agreements to Resettlement plans before the construction. Appropriate rounds of public consultation completed. Grievance Redress Mechanism established with contact points.

Yes No Yes No Yes No

Environmental Supervision Arrangements in place

Independent Environmental Supervisor (individual or firm) engaged by IA

Yes No

Bidding documents and contracts with environmental safeguards

Bidding documents and contracts incorporating the environmental activities and safeguards listed as loan assurances

Yes No

Bidding documents and contracts incorporating the impact mitigation and environmental management provisions of the EMP

Yes No

Cultural heritage values covered Construction Control Plans prepared, submitted and approved by Shaanxi Provincial Bureau of Cultural Relics Trained Environmental Supervisor and site supervisors

Yes No Yes No

EMP financial support The fund from ADB has been used to support the EMP measurement according to the financial plan. The fund from Xi’an government has been used to support the EMP measurement according to the financial plan

Yes No Yes No

Contract documents Environmental requirements of EMP included in contract documents for construction contractors.

Yes No

Note: ADB = Asian Development Bank, EMP = environmental management plan. Sources: PPTA Team and PMO. 4. During the construction and operation, negative impacts might occur to the environment and appropriate mitigation measures have been defined to avoid or minimize these potential impacts. Construction management performance indicators are defined to measure the

2 Appendix 4

effectiveness of mitigation measures, including air quality; noise; and relevant public health indicators. Table 2 below is a list of indicators that measure the environmental performance of the Project.

Table 2: Monitoring Indicators of Mitigation Measures and their Relevant Standard

Period Indicators StandardConstruction SO2, CO, and NOx Grade II, Ambient Air Quality Standard (GB3095-1996) Asphalt flue gas Class II Atmospheric Pollutant Emission Standard (GB16297-1996). noise Category 1 Construction Noise (GB12523-90) soil loss (erosion) Class II Control Standards for Soil and Water Loss on Development and

Construction Projects (GB50434-2008) Operation CO and NO2 Grade II, Ambient Air Quality Standard (GB3095-1996) Noise Class II standard of Noise Environment Quality Standards (GB3096-2008)

Sources: PPTA Team and EIA Institute. C. EMP Implementation 5. On behalf of Xi’an Municipal Government (XMG), Xi’an Municipal Urban and Rural Construction Commission (XMURCC) will be the Executing Agency (EA) for the Project. XMG has established a project leading group (PLG) with directors from a total of 28 municipal government agencies and district governments. The deputy mayor of Xi’an will chair PLG meetings as required, to review implementation, resolve coordination issues, and provide guidance for the timely completion of the Project. Under the PLG, a project working group (PWG) has also been established with working staff from the 28 agencies. The PWG has set up its office at the Planning Division of XMURCC. 6. The XMURCC has established and staffed a project management office (PMO). The PMO will coordinate (i) project management; (ii) supervise the procurement of works, goods, and services financed under the Project; (iii) monitor the utilization of the ADB loan, domestic bank funding; and (iv) Government funding; and prepare and review the reports to be submitted to ADB and the Government. XMURCC has appointed a project manager for the day-to-day management of project implementation.

Table .3: Project Implementation Organizations—Roles and Responsibilities

Stakeholders Management Roles and Responsibilities XMURCC (Executing Agency) Overall project planning, management and implementation

Provide PMO group PMO (from XMURCC) Providing overall guidance for the project

Monitoring project progress and project impacts Submit withdrawal applications Retention of supporting documents Maintain a sound Project financial management system Providing ADB with (i) quarterly progress reports,(ii) land acquisition and resettlement reports, (iii) environment monitoring reports, (iv) audit reports, (v) project completion report, and (vi) other reports as required.

Xi’an Infrastructure Investment Group (Implementing Agency)

Procurement Contract Management Works Management Investment Audit and Reimbursement Environmental Management Resettlement Management Social Impact Issues

Sources: PPTA Team and EIA Institute.

Appendix 4 3

7. The implementation of the EMP will be primarily the responsibility of the IA and contractors. However, during project preparation and implementation, various organizations with different environmental management responsibilities have been involved and will continue to be involved in the EMP. Key organizations are (i) Shaanxi Provincial Environmental Protection Bureau (EPB), (ii) the PMO, (iii) IA’s EIA team, and (iv) IA’s Design Institute. The table and figure below shows their environmental responsibilities in different stages of the Project. 8. The IA and contractors will nominate full-time trained and qualified environmental specialists to undertake a range of environmental management activities for effective implementation of the EMP.

Table 4: Environmental Responsibilities

Phase Responsible Agencies Environmental Responsibilities

Preparation IA (EIA Team) Preparation of EIA for components.

PMO, Shaanxi EPB Review and approval of the EIA

Design IA (Design Institutes) Incorporation of mitigation measures into engineering designs and contracts

PMO, IA Review and approval of environmental measures

Tendering Contractors, IA Incorporation of EMP clauses into the bids

Construction IA Advise on implementation of mitigation measures

Contractors Implementation of mitigation measures and internal monitoring

Shaanxi EPB, IA Implementation of compliance monitoring

Shaanxi EPB, IA Supervise implementation of mitigation measures and monitoring

Operation Shaanxi EPB Advise on compliance monitoring and internal monitoring requirements

IA Implementation of mitigation measures and internal monitoring

Shaanxi EPB, IA Implementation of compliance monitoring

IA, Shaanxi EPB Supervise implementation of mitigation measures and monitoring

EIA = environmental impact assessment; EMP = environmental management plan, EPB = Environment Protection Bureau; IA = implementing agency, PMO = project management office. Sources: PPTA Team and EIA Institute. 9. To implement the Project, the IA will engage civil works contractors. Each construction contractor will have a designated environmental representative to co-ordinate with the IA’s environmental team. The Environment group within the IA has only two (2) officers. In order to implement the many EMP activities the IA will additionally engage the following extra entities: (i) IA’s Environmental Supervisors, (ii) Independent Environmental Supervisor, and (iii) Environmental Monitoring Center 10. The IA’s environmental supervisors are hired by IA as part of construction supervision consultancy contract. They will supervise daily construction activities to ensure the environmental measures implementation on sites. The Independent Environmental Supervisor will be an independent position which is not part of the IA’s in-house environmental team, or part of the construction supervising engineer’s team. The general role of the position will be to ensure the high environmental performance of the IA (through its environmental team) and the construction supervising engineers. Terms of Reference for the Independent Environmental Supervisor are prepared in Section D of this appendix. The Independent Environmental Supervisor will also be responsible for implementing procedures for chance finds of cultural relics during construction. The Independent Environmental Supervisor will be trained by the Shaanxi Cultural Relics Bureau (or their nominee) for this purpose. The semi-annual environmental monitoring report to ADB will be verified by the Independent Environmental Supervisor.

4 Appendix 4

11. A qualified Environmental Monitoring Centre with certification from the EPB will be engaged by the IA to conduct environmental quality monitoring based on the monitoring plan listed in the EMP. 12. Each construction contractor will have a designated environmental representative who will be responsible for coordinating with the Independent Environmental Supervisor.

Table 5: Mitigation Measures and Monitoring Supervision

Organizations ResponsibilitiesCivil Works Contractors

Implementing construction contracts Implementing environmental mitigation and management measures as part of construction contracts

Independent Environmental Supervisor

Ensure environmental performance (on behalf of IA) Assist IA and PMO to prepare semi-annual reports Implement procedures for cultural relics protection and chance finds Verify the PMO’s environmental monitoring report to ADB

Environmental Monitoring Center (EMC)

Conduct environmental quality monitoring during construction and operation Prepare environmental monitoring report to ADB on behalf of PMO.

Sources: PPTA Team and EIA Institute. D. Terms of Reference for the Independent Environmental Supervisor 13. General Requirements. This position could be either a firm or an individual engaged by the IA. This is an independent position which is not part of the IA’s in-house environmental team, nor part of the construction supervising engineers team. The general role of the position is to ensure the high environmental performance of the IA (through its environmental team) and the construction supervising engineers. This position should combine familiarity with ADB project management requirements with sound knowledge of PRC environmental management procedures. 14. Role of the Independent Environmental Supervisor and its tasks are as follows:

(i) Before construction commences, arrange and undertake training of construction contractors and site supervisors in: (a) Environmental laws and regulations, (b) Environmental policies and plans, (c) Basic environmental management, (d) Responsibility and duties for the project construction, management and environmental protection, (e) Task of environmental protection in the project construction, (f) Key environmental protection contents etc. in project construction, (g) EMP improvement and corrective actions, and (h) Crisis handling methods.

(ii) Assess IA progress against project EMP Performance Indicators. Provide checklist of performance progress.

(iii) In collaboration with the IA’s design team, update mitigation measures defined in the EMP and incorporate them into detailed design documents.

(iv) Assist in interpreting and clarifying the application of mitigation measures and the monitoring of their outcomes.

(v) Facilitate the implementation of internal and external environmental monitoring activities.

(vi) Assist the PMO to prepare semi-annual progress reports to the ADB during construction.

Appendix 4 5

(vii) Assist the PMO to prepare semi-annual progress reports to the ADB during the first 3 years of operation.

(viii) Verify the investigation of results of any non-compliance issues. (ix) Verify the environmental monitoring report prepared by PMO for ADB.

E. Summary of Potential Impacts and Mitigation Measures 15. The EMP table at Table 6 summarizes the potential impacts of the outputs during construction and operation as identified by the environmental impact assessment, as well as corresponding mitigation measures designated to minimize those impacts. The mitigation measures will be incorporated into tender documents, construction contracts, and the contractors’ site management plans. Contractors and the project implementing agency (IA) will implement these measures. The effectiveness of these measures will be carefully watched via the environmental monitoring to determine whether to continue them or to make improvements. Costs have been identified for each mitigation measure. Total environmental management costs are estimated at CNY4,047,000: CNY630,000 for the pre-construction phase, CNY680,000 over the construction period, and CNY2,737,000 in the initial operation phase. 16. Resettlement plans have been prepared to ensure proper resettlement of any affected persons and avoid deteriorating their quality of life. Details of required actions are in the resettlement plans.

Table 6: Summary of Potential Impacts and Mitigation Measures

Item Environment

al Impacts and issues

Mitigation Measures and/or Safeguards Who Implements

Who Supervises

Budget (CNY1,000)

1. Pre-Construction Phase 1.1 FS stage Site/alignment

selections

The recommended sites for construction were selected from various alternatives to minimize adverse impacts on the environment.

IA, DI and PPTA team

IA, EPB Included in the FS Stage

Consolidated EIA report

As required by law, ensure EIA has been prepared for each subcomponent.

DI and PPTA team on behalf of IA

IA, EPB 15

Public consultations

Rounds of public consultations conducted in each area of influence on environmental issues, poverty, resettlement and the Grievance Redress Mechanism during the project design and CEIA preparation.

IA, PPTA team

IA, Included in the FS Stage

Resettlement Plans

As required by law, prepare RPs for the Project in each county to required ADB and PRC standards. i. Establish a resettlement office comprising

local government officials to manage the resettlement process.

ii. Conduct community consultation programs and ensure information is disseminated about entitlement based on the Land Administration Law.

iii. Ensure that all relocation and resettlement activities are reasonably completed before construction starts on any component.

iv. Include provisions for households suffering economic displacement through new landfill controls.

DI, IA and PPTA team

PMO Included in the RP

1.2 Design Stage

Environmental supervision arrangements

Independent Environmental Supervisor (individual or firm) engaged by IA

IA PMO 600 (included in construction costs)

Updating EMP

Mitigation measures defined in this EMP will be updated and incorporated into the detailed

DI, IA IA, EPB Included in the Detail

6 Appendix 4

Item Environmental Impacts and issues


Who Supervises

Budget (CNY1,000)

design to minimize adverse environmental impacts.

Design Stage

Land-take confirmation

RP will be updated and incorporated into the detailed design.

DI, IA IA, EPB Included in the Detail Design Stage

Cultural Heritage Protection

Preparation of Construction Control Plans for output components in Construction Control Zones of state protected historic relic sites.

DI, IA Shaanxi Provincial Bureau of Cultural Relics

Included in the Detail Design Stage

Submission and approval of Construction Control Plan and design documents by Cultural Relic Agency

DI, IA Shaanxi Provincial Bureau of Cultural Relics

Included in the Detail Design Stage

Training of environmental supervisor and site supervisory staff

IA, Shaanxi Cultural Relics Protection Bureau

IA 5

1.3 Construction preparation

Contract documents

i. Prepare environment section in the terms of reference for bidders.

ii. Prepare environmental contract clauses for contractors, namely the special conditions (e.g., reference EMP and monitoring table).

Environmental consultants or companies contracted by IA

IA, County EPB

Included in the Detail Design stage

Traffic Management Planning for construction phase

i. Before bidding document preparation for construction work at intersections, the IA will develop detailed traffic management plan after consulting with traffic police, community people, and utility operators. After contractors are selected, and before the construction commences, the IA will organize public consultations to explain the construction method to the affected community and elicit their views on the plan.

ii. Preparation of detailed phased construction plans which plan traffic flow during each stage of construction.

DI, Contractors

IA, Xi’an Traffic Bureau

Included in the Detail Design stage

Environmental Protection Training

Environmental specialists and/or officials from County EPB will be invited to provide training on implementation and supervision of environmental mitigation measures to contractors.

IA EPB 10

Sub-Total 630 2. Construction Phase 2.1 Water Wastewater

from washing aggregates, pouring and curing concrete, machinery repairs

i. Settling ponds, oil-water separators. ii. Recycled water will be used to spray for dust

control. iii. Surplus water and runoff directed to city

drainage system after meeting standard.

Contractors IA, EPB 20

Handling of hazardous and harmful materials

i. A construction materials handling and disposal protocol that includes spill responses will be prepared and applied to prevent soil and surface/ground water pollution.

ii. Construction of storage facilities (including fuel and oil storage), with bunds and clean-up equipment.

iii. Fuel supplier is properly licensed and follows the proper protocol for transferring


Appendix 4 7



Who Supervises

Budget (CNY1,000)

of fuel and in compliance with JT 3145-88 (Transportation, Loading and Unloading of Dangerous or Harmful Goods).

iv. Vehicles and equipment are properly parked in designated areas to prevent contamination of soil and surface water.

v. Fuel storage and refilling areas will be located at least 300 m from city drainage structures.

vi. Oil traps will be provided for service areas, and parking areas.

2.2 Air Generation of dust by construction activities

i. Vehicles carrying materials to and from the sites must be covered.

ii. Materials storage sites must be 300 m from residential areas and covered with canvas or sprayed with water.

iii. Water will be sprayed on construction sites and access roads each day.

iv. All roads and tracks used by vehicles of the contractors or any subcontractors or supplier will be kept clean and clear of all dust, mud, or extraneous materials dropped by their construction vehicles.


Air emission from vehicles and equipment

i. Vehicle emissions must be in compliance with PRC-GB18352-2005, GB17691-2005, GB 11340-2005, GB3847-2005, and GB18285-2005.

ii. Equipment and machinery will be maintained to a high standard to ensure efficient running and fuel-burning. High-horsepower equipment will be installed with tail gas purifier to ensure emissions be in compliance with PRC-GB16297-1996.

iii. A regular inspection and certification system must be initiated.

Contractors IA, EPB Included in contractor’s operating costs.

2.3 Noise and Vibration

Noise from Vehicles and construction machinery

The following safeguards will be implemented: i. Noise levels from equipment and machinery

to conform to PRC-GB12523-90. ii. Install portable noise barriers near sensitive

receptors such as schools, hospitals and residential areas.

iii. At construction sites, noise-generating construction work will be stopped between 2000 and 0600 hours.

iv. In cases where construction noise needs to continue into the night, the construction unit must reach an agreement with APs and provide compensation


2.4 Solid wastes

Domestic waste from construction sites

i The contractors will provide appropriate waste storage containers.

ii Wastes will be regularly hauled to municipal waste transfer stations

Contractors IA, County EPB

8

Construction and demolition wastes could have adverse impacts on surrounding environments.

Construction wastes will be regularly transported off-site for disposal, and not allowed to accumulate on site over long periods.


2.5 Soil erosion and ecology

Erosion from construction sites

The following safeguards will be implemented: i. Construct intercepting ditches and drains to

prevent outside runoff entering construction sites, and divert runoff from sites to existing


8 Appendix 4



Who Supervises

Budget (CNY1,000)

drainage system or ponds. ii. Stabilise disturbed areas at completion of

construction (paving or landscaping). 2.6 Social Resettlement

of affected persons

All affected persons will be resettled in a timely and adequate manner, in accordance with the Resettlement Plan.

IA IA, PMO, communities

Included in the RP

Compensation of lost assets

All affected persons will be compensated in a timely and adequate manner, in accordance with the Resettlement Plan.

IA IA, PMO, communities

Included in the RP

Traffic management

The following safeguards will be implemented: i. Implementation of phased construction plan

and traffic management. ii. Selecting haulage routes to reduce

disturbance to regular traffic (where possible).

iii. Diverting or limiting construction traffic at peak traffic hours.

iv. Blocking and reinstating interim tracks to original condition on completion of construction.

v. Maintain pedestrian and non-vehicle access

Contractors, IA

IA, Traffic authorities

110

Work camp health and hygiene

i. Contractors will be required to safeguard environmental hygiene in the construction camps, including the quality of water supplies.

ii. All construction sites must provide the necessary personal protective equipment and other resources to create a safe working environment.

iii. Construction site operations must comply with PRC’s State Administration of Worker Safety Laws and Regulations.

Contractors, IA

IA, Local and/or Provincial Health Bureau

12

Cultural heritage protection

i. Inspections at all stages of excavations ii. Cultural heritage values will be preserved

where identified. In accordance with PRC regulations, no person shall destroy, damage, deface, conceal, or otherwise interfere with a relic.

iii. In case an important site is unearthed, work should be stopped immediately and the matter promptly referred to the county, city, autonomous region, or state level agencies for evaluation and decision on appropriate actions.

IES, Contractors

IA, Provincial Cultural Relics Protection Bureau

Included in construction costs

2.7 Unexpected environmental impacts

If unexpected environmental impacts occur during project construction phase, the IAs will update the EMP, and environmental protection measures will be designed and resources will be utilized to cope with these impacts

IA, PMO PMO Included in construction costs and contingency

Subtotal 380 3. Operational Phase 3.1 Air Exhaust

emissions from predicted traffic volumes on roads and intersections

i. Roadside air pollution monitoring ii. Vehicle inspections, compliance stickers,

maintenance and scrapping programs

IA and Operators

EPB Included in other Project components

3.2 Noise Noise from increasing traffic volumes on Project roads

Noise monitoring at regular intervals to check compliance

IA and Operators

EPB Included in operational costs

Noise impact Implementation of mitigation measures, IA and EPB 552

Appendix 4 9



Who Supervises

Budget (CNY1,000)

from traffic on sensitive receptors

including noise barriers and noise-proofing of buildings, where levels exceed PRC standard

Operators

3.3 Emergency preparedness and response

Spills of hazardous materials in road accidents

i. Establishment of a road accident emergency command organization;

ii. Establishment of an emergency response plan;

iii. Preparation of emergency equipment and training.

IA and Operators, local Security Bureau

100

Fire and explosion hazard at filling stations

Regular inspection of storage tanks and record-keeping; Control of ignition sources; Preparation of emergency equipment and awareness training.

Operators Office of Public Security

Operating costs

3.4 Ecology Roadside and medium strip planting

Planting and maintenance of trees and shrubs along roads and around interchanges, especially where screening is required.

IA and Operators

EPB, PMO 2065

3.5 Environmental capacity

Insufficient environmental management capacity

Conduct training for environmental management and develop facility and staff setup.

IA and Operators, EPB

EPB, PMO 20

3.6 Unexpected environmental impacts

If unexpected environmental impacts occur during project operation phase, the IA will update the EMP, and environmental protection measures will be designed and resources will be utilized to cope with these impacts

IA and Operators, PMO

PMO Included in operational costs

Total 2737 ADB = Asian Development Bank, APMO = Altay Prefecture Project Management Office, EIA = Environmental Impact Assessment, EPB = Environment Protection Bureau, FB = Forestry Bureau, IA = Implementing Agency, DI = Design Institute, PMO = Project Management Office, RP = Resettlement Plan. Sources: PPTA Team and EIA Institute. F. Monitoring Program 17. The Project monitoring program will focus on the environment within the project’s area of influence. A detailed consolidated environmental monitoring program is summarized in Table 7. The program considers the scope of monitoring, monitoring parameters and frequency, data processing, and quality control requirements. 18. Internal monitoring. The IA will, at the outset of sub-component implementation, prepare detailed internal monitoring programs to be implemented by the contractors and Environmental Supervisors (under IA) during construction and operation phases. These will be carried out more frequently than the (external) compliance monitoring programs. These monitoring programs and budgets will be included in the Project tendering documents and budgets, as well as in the construction and operation contracts. 19. External (compliance) monitoring. Licensed Environmental Monitoring Centers (EMCs) will carry out external monitoring on behalf of the Environmental Protection Bureau (EPB) during construction and operation. The external monitoring program is to ensure that the IA and its contractors and operators are in compliance with PRC environmental standards and regulations. The Independent Environmental Supervisor (IES) has an important role in coordinating these activities. The LIEC will also assist in interpreting and clarifying the application of mitigation measures, the monitoring of their outcomes and reporting environmental performance. 20. Monitoring Management. Internal monitoring during the construction and initial operational period will be conducted by the contractors and the IA, and will be reflected in the

10 Appendix 4

periodic construction reports. The IA will employ or contract environmental supervisors for the task. External monitoring during construction and initial operational period will be conducted by Environmental Monitoring Centers (EMCs). EMCs will be authorized to carry out compliance monitoring on behalf of the EPB during construction and operation. The contractors, operators and IA will pay for their services as appropriate. 21. Monitoring Costs. Environmental monitoring costs are included in Table 7 below. These are to be included in the construction contracts and counterpart budgets. Before implementing the monitoring plans, responsible parties will need to refine and confirm a detailed breakdown of the estimated budget. It should be noted that the IA will pay for external, or compliance, monitoring although carried out on behalf of the EPB. During implementation, the cost required can be adjusted based on actual requirements. If there are unpredictable environmental impacts found during the implementation of the environmental monitoring, EIA and EMP should be updated in timely manner and mitigation measures will be put forward to reduce the impacts to the environment.

Table 7: Environmental Monitoring Program

Item Parameters Location Implementing Agency

Supervise Agency Time and Frequency Budget

(CNY1,000)

1. Construction Phase 1.1 Work camp domestic wastewater quality

pH, SS, DO, NH3-N, TP, BOD5, CODCr, Total coliform, oil

Internal monitoring will be conducted at all construction sites and domestic wastewater discharge areas. External monitoring will be conducted at selected camp sites.

Internal monitoring: Contractors, IA / ES

IA Random spot check of the domestic wastewater effluent sites (at least monthly)

2

External monitoring: Licensed EMC

EPB Twice per year 2

1.2 Construction wastewater and wastewater pollution mitigation measures

pH, SS, Oil Internal monitoring will be conducted at all construction sites. External monitoring will be conducted at selected sites


IA Random spot check of the wastewater effluent sites

4


EPB Twice per year 4

1.3 Air Air pollution prevention measures

Use of dust shrouds, water spraying. Maintenance and condition of vehicles and equipment. TSP, SOx, NOx

Internal monitoring will be conducted at all of the construction sites and sensitive receivers External monitoring will be conducted at work sites and sensitive receivers


IA Spot check the construction sites

15


EPB twice per year during construction period, two samplings one day at each location each time

15

1.4 Noise Noise pollution control measures

Leq (dB[A)) Same locations as air quality monitoring


IA Random, but at least once monthly, one day each time and two samples each day: Once during daytime, once during night time

4


EPB Random, but at least twice per year, a day each time and two samples each day: Once during daytime, once during night time

4

Appendix 4 11

BOD5 = 5-day biological oxygen demand, CCl4 = carbon tetrachloride, CODCr = chemical oxygen demand, DO = dissolved oxygen, EMC = Environmental Monitoring Center, EPB = Environment Protection Bureau, ES =Environmental Supervisor, FB = Forestry Bureau, IA = Implementing Agency, Leq = noise unit, NOx = nitrogen oxides, SOx = sulfur oxides, TP = total particles. Sources: PPTA Team and EIA Institute.

G. Reporting 22. Internal Monitoring Reports. During the construction period, results from the internal monitoring conducted by the contractors and the IA will be reflected in the periodic construction reports (see Table 10). The reports will summarize (i) environmental issues during construction; (ii) mitigation measures taken, if any; and (iii) consequences of the impacts on the environment and/or surrounding communities. The contractors will be trained and mandated to take immediate actions to remedy unexpected adverse impacts or ineffective or inefficient mitigation measures. The IA will also respond to these reports in order to ensure that contractors have taken appropriate and timely action. Additional measures may be taken, if needed, to ensure that all issues raised by the reports are appropriately addressed. 23. Results from the detailed internal environmental monitoring program and mitigation actions for the construction phase will be submitted weekly to IA, monthly to the EPB, and two times a year to the PMO. The EPB may request that further environmental mitigation actions be taken, as they deem necessary, and may determine further mitigation measures for different stages, if necessary. During the operational phase, internal monitoring of the functioning or performance of the outputs will be an integral part of responsible operational management.

1.5 Soil Erosion control measures

Topsoil stockpile, detention ponds construction, intercepting ditches, rehabilitate construction sites

All spoil disposal sites and construction sites


IA Random spot check, in rainy season and at least four times a year

6

External monitoring: Licensed soil erosion monitoring unit

County EPB

Quarterly 6

1.8 Hygiene and disease

Health status Hygiene status Availability of clean water, and medical advice HIV/AIDS awareness

Construction sites and work camps and resettlement areas

Internal monitoring: Contractors, IA

IA Random spot check 2

External monitoring: County Epidemic Prevention Departments

County EPB

Once a year 2

Subtotal per year 64 2. Operational Phase 2.1 Air and noise

TSP, CO, SO2, NO2


County EPB

four times per year 60

Leq dB(A)


County EPB

Four times a year 100

2.2 Soil and vegetation

Inspect vegetation survival and coverage rate.

Re-forestation sites (spoil disposal sites and construction sites)

Internal monitoring: Contractors, IA

County EPB

Spot check, once a year

10


County EPB/FB

Spot check, every second year

10

2.3 Traffic flow Vehicle numbers – road use (against predictions)

roads IA, Township governments

Operator, TB

Road traffic monitoring program

Operational cost

Subtotal per year 180

12 Appendix 4

Monitoring of environmental parameters will be part of this and internal monitoring reports during operations will be used to adjust operations and will be forwarded to the EPB. 24. External (Compliance) Monitoring Reports. Environmental Monitoring Centers (EMCs) will be authorized to carry out compliance monitoring on behalf of the EPB during construction and operation. The contractors, operators and IA will pay for their services as appropriate. The compliance monitoring reports will include (i) project background, (ii) construction and operation activities, (iii) environmental conditions, (iv) measurement or sampling locations, (v) analytical results, (vi) interpretation and implication of the monitoring results, (vii) determination of the compliance status with regard to applicable regulations and standards, and (viii) recommendations for improvement. These reports will be submitted 4 times per year to the EPB with a copy to the PMO. 25. Reports to ADB. The PMO will submit to ADB the EMP progress reports and information on Project implementation and the environmental performance of the contractors, operators and IA. These reports will include (i) semi-annual environmental reports on EMP implementation, and (ii) environmental compliance monitoring and audit report of the completion of each major component. ADB may request that further environmental mitigation actions be taken, as they deem necessary, and may determine further mitigation measures for different stages, if necessary. 26. Reporting Plan. Table 8 is a summary of the reporting plan. The Independent Environmental Supervisor (IES) will have an important role in the reporting process. The IES will (i) assist the PMO to prepare semi-annual progress reports to the ADB during construction; (ii) assist the PMO to prepare semi-annual progress reports to the ADB during the first 3 years of operation; and (iii) verify the environmental monitoring reports prepared by the PMO for ADB. Additionally, the IES will assess the IA’s progress against project EMP Performance Indicators and provide a checklist of performance progress in the reports.

Appendix 4 13

Table 8: Reporting Plan

Reports From To FrequencyConstruction Phase Internal monitoring and inspection

Weekly internal monitoring reports by construction contractors

Contractors IA Weekly

Monthly internal monitoring reports by IA (or through environmental supervision consultants contracted by IA)

IA EPB Monthly

Semi-annual internal and external environmental monitoring and inspection reports based on the monthly reports

EPB PMO Twice a year

External monitoring and inspection

Semi-annual external environmental monitoring and inspection reports based on the monthly reports

EPB PMO Twice a year

Reports to ADB

Semi-annual progress reports based on all the internal and external reports

PMO in conjunction with IES

ADB Twice a year

Operation Internal monitoring

Routine environmental monitoring reports IA/Operators EPB and PMO

Monthly

External monitoring and inspection

Environmental compliance reports EMCs on behalf of EPB

PMO Quarterly

Reports to ADB

Semi-annual reports based on all the internal and external monitoring inspection reports during operations

PMO in conjunction with LIEC

ADB Yearly (for 3 years following commencement of operation)

ADB = Asian Development Bank, EMC = Environmental Monitoring Centers, EPB = Environment Protection Bureau, IA = Implementing Agency, IES = Independent Environmental Supervisor, PMO = Project Management Office. Sources: PPTA Team and EIA Institute. H. Public Consultation Plan 27. Future plans for public involvement during the detailed design, construction and operation phases were developed during the project preparation as in Table 9. These plans include public participation in (i) monitoring impacts and mitigation measures during the construction and operation stages, (ii) evaluating environmental and economic benefits and social impacts, and (iii) interviewing the public after the outputs are completed. Public participation plans are part of the project implementation and management plan. The IA is responsible for public participation during project implementation. Costs for public participation activities during construction are included in the project funding. The IA will cover costs for public participation activities during operation.

Table 9: Public Consultation Plan

Organizer Approach Times/Frequency Subjects ParticipantsConstruction IA, PMO Public consultation

and site visits At least once a year Adjusting mitigation

measures if necessary, construction impacts, comments and suggestions

Work staff within construction area; Residents within construction area

Expert workshop or press conference

As needed, based on public consultation

Comments and suggestions on mitigation measures, public opinions; adjusting mitigation measures accordingly

Experts from various sectors, media

14 Appendix 4

Organizer Approach Times/Frequency Subjects ParticipantsPublic workshop At least once a year Adjusting mitigation

measures if necessary, construction impacts, comments and suggestions

Representatives of residents and social sectors

Operation IA Public consultation

and site visits At least once Effects of mitigation

measures, impacts of operation, comments and suggestions

Residents adjacent to project sites

Public workshop As needed based on public consultation

Effects of mitigation measures, impacts of operation, comments and suggestions

Representatives of residents and social sectors

Public satisfaction survey

At least once Comments and suggestions

Project beneficiaries

EIA = Environmental Impact Assessment, IA = Implementing Agency, PMO = Project Management Office, TA = Technical Assistance. Sources: PPTA Team and EIA Institute. I. Institutional Strengthening and Training 28. Environmental specialists in the PMO, IA, operators, EPB and contractors will receive training in environmental management, environmental monitoring and supervision, mitigation planning, emergency response, environmental policymaking, and other environmental management techniques as in Table 10. The IA and EPB will be offered EMP training that is specific to their roles on the Project. However, the main training emphasis (>50% of training budget) will be to ensure that contractors are well versed in environmentally sound practices and are able to undertake all construction with the appropriate environmental safeguards (see Table 10 below).

Table 10: Institutional Strengthening and Training

Training Attendees Contents TimingEnvironmental laws, regulations and policies

PMO, IA/Operators, Contractors

(i) Environmental laws and regulations (ii) Environmental policies and plans (iii) Basic environmental management (iv) Emergency preparedness and response

Prior to Project implementation

EMP implementation IA, Contractors (i) Responsibility and duties for the project construction, management and environmental protection (ii) Task of environmental protection in the project construction (iii) Key environmental protection contents etc. in project construction (iv) Various environmental reporting (v) EMP improvement and corrective actions

Prior and during Project implementation

Crisis handling IA/Operators, contractors

(i) Crisis handling methods Prior to Project implementation

Sub-total CNY150,000 (see Item 1.3 in Table IX.6) Environmental monitoring, inspection and reporting

IA/operators, contractors, County EPB

(i) Monitoring and inspection methods, data collection and processing, interpretation of data, reporting system (ii) Environmental reporting requirements

Prior to Project implementation

Sub-total CNY200,000 (see Item 3.4 in Table 6) Total CNY350,000 EPB = Environment Protection Bureau, IA = Implementing Agency, PMO = Project Management Office. Sources: PPTA Team and EIA Institute.

Appendix 4 15

J. Cultural Relic Protection 29. The significance of potential impacts to cultural heritage sites has been assessed in a report by the Northwest University Cultural Relics Conservation Center and Shaanxi Provincial Bureau of Cultural Relics entitled “Assessment of Xi’an Urban Road Network Improvement Project’s Impact on Cultural Relics”. The assessment method followed was a qualitative assessment of the degree to which Project components physically impinged upon the protection and management zones of the cultural site. As in Table 11, the impact categories assigned in the report were: A - potential for significant impact; B - potential for some impact; C - minor potential impact; and D - negligible impact. No Project components were ranked as A - potential for significant impact. However, four components are ranked B or C.

Table 11: Impact Categories for Cultural and Historical Sites

Impact category

Output component Construction type Relevant cultural and historical relics

Relation between project and cultural and historical relic locations

B The 2nd Ring Road-Zhuhong Road Flyover

Flyover of the urban arterial road

The Ruins of Chang'an City of Han Dynasty

Construction site is in the Construction Control Zone

The 4th Fengcheng Road - Zhuhong Road Flyover

Flyover of the urban arterial road

The Ruins of Chang'an City of Han Dynasty

Construction site is in the Construction Control Zone

C Bus parking area in the Base of Aerospace

Land for urban public transport and parking

Duling (including tombs of Jian and Qing Kings)

Construction site is in the Environmental Coordination Zone

Kunming Road Reconstruction Project

Reconstruction of urban arterial road

The Ruins of A’fang Palace

Construction site is about 50m away from the Construction Control Zone

Sources: Northwest University Cultural Relics Conservation Center and Shaanxi Provincial Bureau of Cultural Relics. 30. Two proposed intersections on Zhuhong Road are located outside the Protection Zone of the Ruins of Chang’an City but are within its Construction Control Zone. The planned 2nd Ring Road-Zhuhong Road flyover is 490m from the nearest significant relic, the Ba City Gate site, which is northwest of the intersection on the far side of a reconstructed moat. The planned 4th Fengcheng Road - Zhuhong Road flyover is 200m from the nearest significant relic, the Qingming Gate site, which is directly west of the intersection and separated from it by a busy road and small commercial premises. The implementation of these components therefore requires (i) approval by the appropriate Cultural Relics Bureau; and (ii) the preparation and implementation of a Construction Control plan for cultural relics protection which includes measures to ensure that construction has no effect on identified cultural relic sites in the vicinity, and procedures to be followed in the event of the discovery of chance finds during construction. 31. The Xi’an Aerospace Base Transport Hub is located within the Environmental Coordination Zone of the Dulong Mausoleum complex. This is the lowest level of the protection zones. The planned development is 540m distant from the Prince Jian Mausoleum and 345m from that site’s Construction Control Zone. It is also 700m from the Prince Qin Mausoleum and 240m from that site’s Construction Control Zone. From its western boundary, the development site is 250m from the Construction Control Zone of the main Duling Mausoleum complex. Within the Environmental Coordination Zone, no approval for construction is necessary but the design of the component must not detract from the landscape amenity and environmental context of the Dulong Mausoleum complex. To maximize safeguards, construction at this site should also be in line with a Construction Control Plan which addresses the landscape amenity and environmental setting.

16 Appendix 4

32. Part of the Kunming Road construction is in the vicinity of the Afang Palace complex, but outside any legislative protection or control zone. The section of Kunming Road planned for reconstruction under the Project is separated from the boundary of the Construction Control Zone of the site by a distance of 400 meter. The area between the Kunming Road section and the Construction Control Zone boundary is densely built up with a mixture of light industrial, commercial and residential developments. Accordingly, the only requirement for cultural relics protection is the management and organization of the construction site to prevent waste water, exhaust gas and solid waste damaging the ecological environment and landscape around the relics. 33. A cultural relic expert recommended by the Shaanxi Cultural Relics Bureau will be engaged by the IA to provide training in awareness and recognition of archaeological deposits for the IA’s construction team, focusing on the Independent Environmental Supervisor (person or firm), the Construction Supervising Engineers and the Construction Chief Engineer. 34. The procedures to be followed in the event of chance finds of cultural relics will apply to all civil construction activities in the Project regardless of their location in relation to known heritage sites. All site workers will be made aware of the importance of cultural heritage values in Xi’an and their responsibilities under the PRC and Shaanxi provincial legislation on cultural relics protection. In particular, workers should be made aware of the potential for chance discoveries during construction work and the need for care and observance of procedures. The role of the Independent Environmental Supervisor in relation to cultural relics protection will comprise the following:

(i) Arrange for the initial and ongoing training of construction workers and site supervisors in cultural relics awareness and protection measures.

(ii) Carry out inspections of exposed soil and subsoil surfaces and cut surfaces (excavation sides) at key stages of construction excavation. These will include (a) at removal of topsoil; and (b) regularly during excavation at 1 m, 2 m, 3 m depths.

(iii) Arrange for temporary stop-work around area of interest and reporting of finds to the Shaanxi Provincial Cultural Resources Bureau in the event of: (a) physical relic finds; (b) noticeable soil texture change; (c) noticeable soil color change; or, (d) other indicators as advised by the Shaanxi Provincial Cultural Resources Bureau.

(iv) Ensure fencing of area of interest and covering of exposed soil surface for protection.

(v) Obtain and implement directions from the Cultural Relics Bureau. (vi) Take lead role in all liaison between contractor, IA and Cultural Relics Bureau

during stop-work, reporting, inspections and any required site treatment work. K. Grievance Redress Mechanism 35. Public participation, consultation and information disclosure undertaken as part of the local EIA process, assessment and development of resettlement plans, and consultations undertaken by the project consultants have discussed and addressed major community environmental concerns. Continued public participation and consultation has been emphasized as a key component of successful project implementation. As a result of this public participation and safeguard assessment during the initial stages of the project, major issues of grievance are not expected. However, unforeseen issues may occur. In order to settle such issues effectively, an effective and transparent channel for lodging complaints and grievances has been established, in parallel with the mechanism developed under the resettlement planning process (refer to output resettlement plans).

Appendix 4 17

36. The IA will establish a mechanism to receive and facilitate resolution of affected peoples’ concerns, complaints, and grievances about the Project’s environmental performance. The grievance mechanism should be scaled to the risks and adverse impacts of the project. It should address affected people’s concerns and complaints promptly, using an understandable and transparent process. It should also be readily accessible to all sections of the community at no cost and without retribution. 37. In case of problems during the construction, affected persons usually complain to the contractors first if they believe the construction is the source of issues. If the contractors' responses are unsatisfactory, they then go to local government. If they refer their complaint to the local EPB, the EPB will need to consult with the EA or environmental supervision engineer to develop project understanding. Therefore, it is usual for the EA, who is familiar with the project, to take the lead role in complaint investigation. 38. The following proposed mechanism for grievance redress of environmental matters in construction and operation of the project’s infrastructure components uses existing village administrative structures (affected persons/ village committees/ village groups), any of which can be complainants. It may use diverse complaint media that are culturally appropriate, including self-identified, confidential, or anonymous procedures such as professional letter writers, suggestion boxes, mail-in forms, hotlines, and electronic submission through a website. 39. This system also mirrors the approach of the grievance redress mechanism for the Project’s resettlement and asset compensation. The mechanism will be accessible to diverse members of the community, including more vulnerable groups such as women and youth. Multiple points of entry, including face-to-face meetings, written complaints, telephone conversations, or e-mail, should be available. Opportunities for confidentiality and privacy for complainants should be honored where this is seen as important. 40. The IA will establish a Project Public Complaints Centre (PPCC) prior to construction to deal with complaints from affected people during implementation of the Project. People will be encouraged, should any issue occur, to contact the PPCC with confidence that it will handle the problem until a solution is found and implemented. For this purpose, the PPCC’s phone number, fax, address, email address will be publicized through notice boards at the project sites and within nearby communities. The Terms of Reference for the PPCC also cover mechanisms for the referral of complaints made through other government agencies and the statutory time limits which these actions entail. 41. The PPCC will investigate the complaint, identify appropriate corrective measures and instruct the Contractor to implement corrective actions. The PPCC will review the Contractors response and undertake additional monitoring and verification to ensure that the cause for any complaint does not recur. During the complaint investigation work, the PPCC will work in close consultation with the Contractors, Construction Chief Engineer, and the Construction Environmental Supervisor. 42. Finally the PPCC will report the investigation results and subsequent actions to the complainant, and record the complaint, investigation, and subsequent actions and results in the monthly EMP reports. The activities and responsibilities of the PPCC are set out below, in procedural order:

18 Appendix 4

(i) The PPCC will be within the Investment and Development Department under the Xi’an Urban Infrastructure Investment Group (IA). At least 2 persons from the department should be designated to deal with public complaints and directly report to the department director.

(ii) PPCC’s phone number, fax, address, email address will be publicized through notice boards at the project sites and within nearby communities. People will be encouraged, should any issue occur to contact the PPCC with confidence that it will handle the problem until a solution is found and implemented.

(iii) The PPCC will instruct contractors and construction supervisors to refer any complaints which they have received directly to the PPCC. Similarly, the PPCC will coordinate with local government or EPB to “capture” complaints made directly to them.

(iv) The PPCC will log complaint and date of receipt onto the complaint database and inform the Construction Chief Engineer and Construction Environmental Supervisor.

(v) The PPCC will investigate the complaint to determine its validity, and to assess whether the source of the problem is due to project activities, identify appropriate corrective measures and advise the Contractor for implementation.

(vi) The PPCC will review the Contractors response on the identified mitigation measures, and the updated situation.

(vii) If complaint is transferred from government agencies such as EPB or Xi’an Municipal Public Complaint Centre (XMPCC), the PPCC will submit interim report to the EPB or XMPCC on status of the complaint investigation and follow-up action within the time frame assigned by the above agencies.

(viii) The PPCC will undertake additional monitoring and verify the situation if necessary as well as review that any valid reason for complaint does not recur.

(ix) The PPCC will report the investigation results and subsequent actions to the source of complaint for responding to complainant.

(x) The PPCC will record the complaint, investigation, and subsequent actions and results in the monthly EMP reports.

(xi) During the complaint investigation work, the PPCC should work together with the Contractors, Construction Chief Engineer, and the Construction Environmental Supervisor. If mitigation measures are identified in the investigation, the Contractors will promptly carry out the mitigation. The Construction Chief Engineer will ensure that the measures have been carried out by the Contractors.

43. In the construction period and the initial operational period covered by loan covenants the PMO will be reporting progress to the ADB, and this will include reporting complaints and their resolution. The tracking and documenting of grievance resolutions within the county PMOs will include the following elements: (i) tracking forms and procedures for gathering information from project personnel and complainant(s); (ii) dedicated staff to update the database routinely; (iii) systems with the capacity to analyze information so as to recognize grievance patterns, identify any systemic causes of grievances, promote transparency, publicize how complaints are being handled, and periodically evaluate the overall functioning of the mechanism; (iv) processes for informing stakeholders about the status of a case; and (v) procedures to retrieve data for reporting purposes, including the periodic reports to the PMO and the PMO’s report to the ADB. L. Major Activity Milestones 44. The following are the major activities of the Design and Pre-construction Phase of the Project in the implementation of environmental safeguards and management:

Appendix 4 19

(i) detailed design including environmental impact mitigation and management measures;

(ii) construction contracts incorporating environmental responsibilities; (iii) training of stakeholders in environmental management; (iv) training of stakeholders in cultural relic protection and chance finds procedures; (v) appointment of Independent Environmental Supervisor (firm or individual); (vi) appointment of Environmental Monitoring Center; and (vii) Preparation of Construction Control Plans for cultural relic protection.

45. The following are the major activities of the Construction Phase of the Project in the implementation of environmental safeguards and management:

(i) establishment and publicizing of the Grievance Redress Mechanism and Project Public Complaints Center contacts;

(ii) implementation of environmental impact mitigation measures as per Civil Construction Contracts;

(iii) implementation of construction site management and “housekeeping” including public awareness measures;

(iv) implementation of traffic management measures; (v) inspections by the Independent Environmental Supervisor; and (vi) monitoring of air, noise and water quality by EMC.

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SOCIAL ACTION PLAN

Part 1: Policy Actions to Enhance the Urban Transport Services and Safety Note: These actions involve discussion only, so no budget is required from the Project

Action Outcomes Sought from Discussions with Other Agencies

Target Groups for Discussions

Responsibility for Discussions

Target Beneficiaries

Timing

1.1 Policy dialogue issues 1. Discuss with appropriate authorities the possibility of making it mandatory for bus companies which receive government subsidies to conduct public consultation prior to making any major service provision changes

(i) Public consulted about major changes to bus routes etc (ii) Buses provide more accessible and convenient transport to users (iii) Transport mode shift to public transport encouraged

Bus companies, Traffic Management Bureau, and other relevant authorities

PMO, social staff member to be responsible for organizing discussions

All bus passengers 2012-2013

2. Discuss with key transport-related bureaus the establishment of a permanent Community Relations Office, with agreed procedures for receiving comments from the public personally, by the hot-line 9600135 phone and/or by internet, and for providing timely feedback

(i) Encouragement of ongoing public participation – public participation being important in establishing and maintaining a sustainable urban transport initiative (ii) Avoiding public getting disillusioned by lack of response to their involvement (iii) Consult with public prior to commencement of any construction work

All transport-related bureaus and agencies


Xi’an population 2012-2013

3. Discuss with the City Construction Planning Commission, and relevant bureaus, the formulation and implementation of: (i) a policy for public participation with respect to public transport provision, and (ii) mechanisms for community consultation that can be implemented in relevant areas whenever consideration is being given to either the construction of some major new transport infrastructure, or the development of new transport-related policies.

(i) Policy formulated and implemented to ensure effective public participation in the planning of the Xi’an transport system (ii) All relevant agencies and staff briefed on policy, and, where appropriate, mechanisms whereby this policy can be implemented

City Construction Planning Commission, and other relevant transport-related bureaus


Xi’an population 2012-2013

1.2 Other dialogue to enhance Project benefits 1. Conduct workshops with the Traffic Management Bureau, schools and parents regarding traffic arrangements near kindergartens and elementary schools and

(i) Reduce congestions, improve safety at peak times for children coming to and going from school

Traffic Management Bureau, kindergartens and elementary schools, parents

PMO, social staff member to be responsible for organizing & facilitating

Young school children and their parents, especially mothers

2012-2013

2 A

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Action Outcomes Sought from Discussions with Other Agencies

Target Groups for Discussions

Responsibility for Discussions

Target Beneficiaries

Timing

improvements around the times children are coming to and from the school.

workshops

2. Discuss with bus companies regarding increasing the bus routes and services: (i) along the roads improved by the Project, and (ii) to relevant new facilities

(i) Increased frequency of buses, provision of more bus services at later hours, increased number of bus routes, including routes servicing transport hubs and other metro stations

Companies responsible for running buses to the more newly urbanized areas of Xi’an


Residents, especially women, of areas where recent urban expansion has occurred

2012-2013

3. Discuss with bus companies and Traffic Management Bureau, to improve safety at bus stops, especially for elderly.

(i) Enable buses to stop right at kerb, and ensure that drivers do so at all stops (ii) Buses to stop briefly at station even if already stopped and picked up passengers further back while unable to reach station because of other buses (iii) Consider ways of encouraging queuing at crowded stops

Traffic Management Bureau, main bus companies


All bus users, but especially the elderly

2012-2013

4. Discuss with bus companies how catching a bus late at night can be made safer for women (eg locating bus stops close to factory gates etc)

(i) Buses to pick up passengers from near gates of large factories etc

Main bus companies PMO, social staff member to be responsible for organizing discussions,

Women who work late in factories etc in new industrial areas

At time of discussion on service extension

5. Discuss with the Police Bureau whether to conduct campaigns to enforce behavior targeted in the road safety education in order to enhance the sustainability of the impact of this education

(i) Campaign to rigorously enforce regulations linked to road behavior advocated in any particular road safety campaigns, during and immediately after that campaign (ii) Ensure that everyone knows (media announcements etc) that this enforcement will take place

Traffic Police PMO, social staff member to be responsible for organizing discussions. Those implementing road safety education, to participate in discussions.

All pedestrians and other road users

2012and throughout road safety campaign

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Part 2: Actions to be Part of Project Design and Implementation, Intended to Enhance Benefits and Mitigate Risks

Activity Target and Indicators Responsible Party Budget and Cost Timing

2.1 Project Management

1. Project Implementation Consultant to include a social/gender specialist on Team

(i) PIC records of number of hours and Xi’an visits allocated to the Social/gender specialist in the PIC contract arrangements(ii) PMO staff members satisfied that they can receive specialist advice as and when needed in the performance of their responsibilities with respect to the SAP/ RP

PIC Cost included in budget of Project Implementing Consultant (PIC)

Jan. 2012 to Dec. 201X

2.EA to ensure that at least one PMO staff member is allocated responsibility for overseeing social/gender issues (hereafter referred to as ‘social staff’ member)

(i) At least one person appointed to this role and sufficient time and priority allocated to his/her fulfillment of this responsible to enable it to be performed adequately and in a timely manner (ii) The proportion of this staff member’s work time it is formally agreed will be allocated to performance of this responsibility (iii) No delays in implementation of ‘social’ activities that are attributable to the priority that social staff member requires in the performance of duties not related to implementation of SAP.

PMO Included in administrative budget of PMO

Jan. 2012 to Dec. 201X

3. Undertake informal training needs assessment with social staff member, and, if necessary, provide him/her with informal training and mentoring in: (a) gender sensitivity and main-streaming, and (b) gender and development in transport projects (c) value and methods of public participation

(i) Informal training needs assessment undertaken and documented (ii) Informal gender and public participation training provided with respect to any gaps that emerge in assessment conducted

PIC Social/gender specialist To be undertaken as part of the TOR of the PIC Social/gender specialist and therefore cost included in PIC budget

2012

4. Workshop held for all PMO / PLG members on (i) gender mainstreaming; (ii) gender in development and (iii) value and methods of public participation

(i) In-house workshop conducted (II) Number of participants as proportion of eligible participants, disaggregated by sex (iii) Participants’ assessment of usefulness and relevance of workshop content

To be facilitated by PIC social / gender specialist, in collaboration with ACWF

No costs anticipated – part of PMO administrative budget

Mid 2012

4 A

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2.2 Maximization of Infrastructure Benefits 1. Ensure appropriate secure parking area provided for electric bikes / bikes at all multimodal transport facilities.

(i) Number of secure parking spots suitable for electric bikes at hubs (ii) Occasional spot checks to determine frequency with which all electric bike parking places are full

PMO to ensure this issue is addressed as part of the Multimodal Interchange Facilities Output

Part of cost of constructing multimodal interchange facilities

2012 - Incorporate in Multimodal Interchange Facilities design

2. Provide adequate street lighting on project roads widened to enhance the safety of pedestrians, especially women, late at night

(i) All roads improved have lighting that clearly illuminates the pavements along the whole length of the improved stretch of road

PMO to ensure that this forms part of the Road Network Improvement

Part of construction budget of Road Network Improvement Output

Incorporate in road network improvement design in line with pedestrian facilities FSR

3. Community road safety meetings held in all communities bisected by road improvements that will result in heavier traffic volume. Meetings to discuss how to ensure safety of residents needing to cross the road to reach schools, shops, etc in the same community (At least 50% of participants to be women.)

(i) Community input into strategies and designs for safe road crossing ensures safety of children, elderly and other slow walkers are taken into account (ii) Number of communities in which meetings held, as proportion of number of communities affected in this way (ii) Number of women participating in discussions in each community

PMO, with assistance from PIC social / gender specialist if necessary. Pedestrian Crossing and Safety Improvements Output specialist/s to participate in meetings

Part of PMO administrative budget

Prior to finalizing designs for road works to extend / widen roads in project areas (2012-14)

4. Ensure a permanent safe means of road crossing (e.g. signalized crossing), together with measures to slow traffic approaching any crossings, will be provided at a place agreed by community, in any community bisected by road improvements that will result in heavier traffic volume on roads that residents are required to cross to reach schools, shops, relatives etc in the same community. (Note: This refers to after project implementation, not just to temporary measures to be provided during construction.)

(i) Mini-survey or FGD, including women and elderly, in the affected communities regarding ease and safety of crossing the dividing road after widening/extension has taken place (ii) Number of speed control measures introduced near non-signalized or signalized crossings on relevant roads. (iii) Mini-survey of traffic speed at designated pedestrian crossings including as part of monitoring process

PMO in conjunction with City Construction Planning Commission, Pedestrian Crossing and Safety Improvements Output specialist/s and contractor

If zebra or signalized crossings are to be constructed during project implementation, the cost of doing so will be included in contractors’ contract.

Decisions on measures to be adopted to be decided upon prior to road widening/construction

5. If opportunities for small-scale private business ventures occur at hubs or around new multi-storey parking or gas stations, and/or employment opportunities arise in these facilities, with active encouragement of women in respect to taking up these opportunities

(i) Number and proportion of small-scale private businesses run by women that are established in association with hubs (ii) Number and proportion of women employed in new jobs associated with operation of new parking facilities, gas stations etc

PMO, agency responsible for management of hubs / parking stations

No additional costs - Part of PMO administrative budget

On completion of hubs/parking stations (2013-14)

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2.3 Capacity Building 1. Ensure that the number of women attend-ing any staff capacity building carried out as part of the project is at least proportional to the number of women in relevant positions in the particular organizations

From training records: (i) Proportion of female employees attending every institutional capacity building session. (ii) Comparison of course evaluations made by men and women participating in capacity building

PMO, in conjunction with trainers and agencies participating in institutional capacity building exercises

No additional cost Throughout life of Project

2.4 Community Consultation and Participation 1. Conduct community meetings in areas where hubs, parking stations and gas stations are constructed, once this infrastructure is operational, to determine benefits delivered to the community, and, if so, what action can be taken to mitigate this impact. (At least 50% of participants to be women and Hui community.)

(i) Number of meetings conducted (ii) Number of participants at each meeting, disaggregated by age and sex (iii) MSC analysis carried out as part of monitoring shows no unexpected negative impacts as result of new infrastructure, or if such impacts occur, these are mitigated

PMO, in collaboration with PIC, with assistance sought from Xi’an Social Design Institute to set up meetings, if necessary

No costs anticipated – if any expenses occur, these will be derived into PMO administrative budget

Several months after each new infrastructure constructed becomes operational

2. Conduct workshops with community members to discuss and contribute to the plans for the improvement of pedestrian crossings (At least 50% of participants to be women and Hui community)

(i) Number of workshops conducted (ii) Number of participants at each group workshop, disaggregated by age and sex (iii) Survey carried out as part of monitoring shows residents, especially women and elderly, feel safe crossing the road

PMO, in collaboration with PIC and Output 4 specialists, with assistance sought from Xi’an Social Design Institute to set up meetings, if necessary

CNY2,500 per FGD - to be derived from PMO administrative budget (allows for 5 workshops)

2012

3. Conduct FGDs with community members to refine approaches to educating the public about ITS, pedestrian crossing and other project changes to be introduced. (At least 50% of participants to be women and Hui community)

(i) Establishment of a Community Committee to advise on road safety education / promotional activities (ii) Figures on breakdown of social composition of group (ii) Based on meeting records, the number of new recommendations made by Community Committee (iii) Extent to which community recommendations adopted in Action Plan (see below)

PMO, with assistance sought from Xi’an Social Design Institute to set up meetings, if necessary, and participation of relevant specialists, to brief FGD participants and facilitate meetings

CNY2,500 per FGD - to be derived from PMO administrative budget (allows for 5 FGDs)

2012

6 A

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4. Work with community members to help plan community road safety educational campaign and other road safety promotion activities, focusing on: (i) most effective means of motivating behavioral change; and (ii) ensuring that pre-testing prior to implementing plan occurs across a fully representative range of Xi’an residents (At least 50% of participants to be women and Hui community.)

(i) An action plan developed, identifying target groups, and, for each target group: (a) behavior change to be advocated (b) educational topics to be addressed (c) media to be used for educational and promotional activities (ii) Records of participants in pre-testing, showing that: (a) at least 50% of participants were women (b) elderly citizens were included in pre-testing (c) participants included people who used different transport modes as their main means of transport

PMO in association with Traffic Police Bureau with assistance sought from Xi’an Social Design Institute to set up meetings, if necessary, and participation of relevant specialists, to brief FGD participants and facilitate meetings

CNY20,000 to be allocated from the road safety education budget to community involvement

Within first year of Project

2.5 Information Dissemination, Public Road Safety Education and Promotion of Behavioral Change 1. Ensure that all road safety campaign materials and activities are gender sensitive and that at least 50% of those on whom the materials are pre-tested are women

(i) Records of composition of groups with which campaigns and IEC materials are pre-tested, disaggregated by age, occupation and sex

PMO to ensure materials are reviewed by gender specialist/ACWF

No additional costs 2012 Prior to initiating education

2. Undertake campaigns to ensure that all Xi’an residents, including women and Hui community are fully aware of, and fully understand, road traffic, pedestrian and ITS changes generated by the relevant Project outputs.

(i) PMO records of: (a) Number of campaign activities carried out, and (b) Estimated coverage of campaigns carried out, based on: (1) number of people likely to have been reached by media used, and (2) type of populations (e.g., males, females, employed, elderly etc) likely to have been reached by the media used (ii) Traffic police assessments of extent to which road users are following required changes

PMO to ensure relevant departments carry out information dissemination

Cost to be determined, to come from relevant output budgets

Prior to any changes being made, and then throughout remainder of Project implementation

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3. Ensure that all materials and activities intended to educate the public about ITS project generated changes with respect to ITS, pedestrian crossing etc are gender sensitive and targeted both men and women (Pre-testing of any IEC materials used should be with at least 50% of women.)

(I) All materials reviewed by PMO social staff member (ii) Records of composition of groups with which campaigns and IEC materials are pre-tested, disaggregated by age, occupation and sex (iii) Record of media used to educate the public (iv) Estimates of likely number of people reached by chosen media, dis-aggregated by sex (v) Mini-survey of comprehension of ITS and TIS, results dis-aggregated by sex

PMO to ensure materials are reviewed by gender specialist/ACWF

No additional costs As part of campaign to educate public

4. Work with the Department of Education to ensure that road safety programs are implemented in schools in the vicinity of the Project’s road improvements and any of the hubs that could increase local traffic flow around the school or the residential area of the children

(i) PMO records of: (a) Number of schools in which road safety sessions are carried out, as a proportion of the number of affected schools (b) Number of children participating in sessions, dis-aggregated by sex (ii) Teachers’ observation of extent to which children practicing what was taught/ promoted

PMO in conjunction with Traffic Police and Department of Education

CNY5,000, to come from road safety education budget

Prior to local completion of any road works or hub development in vicinity of schools

5. Ensure that road safety education reaches, among others, residents of all neighborhoods in which major road upgrading or construction will take place ( Note: To be held at a time and place convenient for the attendance of both men and women and/or to utilize media likely to reach equal numbers of men and women)

(i) PMO records of: (a) Number of campaign activities carried out (b) Estimated coverage of campaigns carried out, based on: (a) number of people likely to have been reached by media used, and (b) type of populations (e.g., males, females, employed, elderly etc) likely to have been reached by the media used (ii) Traffic Bureau records annual records of changes in number of accidents attributable the behavior campaigns have sought change, compared to changes in accidents from other causes. (i) Mini-survey or FGD to determine whether activities are reaching at least 75% of the target groups neighborhoods in which major road upgrading or construction will take place

PMO to ensure plan developed for road safety education will mean that these residents are reached

Cost to be part of road safety education budget

Immediately before or during road construction activities

8 A

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2.6 Monitoring and Evaluation

1. Ensure that the monitoring and evaluation undertaken: (i) collects data on community participation in trainings, meetings, and any other community activities, dis-aggregated by age, sex, occupation, ethnicity and residential and work location (ii) properly analyzes sex-disaggregated data and includes this analysis in project progress reports; (iii) involves regular field visits of PIC social specialist and social staff to review progress and to support Community Office staff responsible for helping with consultative and information dissemination meetings etc

(i) All monitoring reports have a carefully analyzed section on progress of implementing social actions prescribed in the SAP and RP

Social staff member to assist with co-ordination of community facilitators for internal monitoring, and with External Monitoring Agent efforts. Social staff also to be responsible for ensuring (i) that records are kept by COs, etc, (ii) that post training evaluations are carried out, and (iii) that attendance records are kept for all meetings /trainings/ briefings etc. Social staff to routinely collect and store copies of these documents for future use

Cost of work of social staff to be absorbed into routine administrative costs of PMO External monitoring costs to be part of the RP budget, but an additional CNY50,000 will be set aside in the M&E budget for the specific purpose of monitoring the SAP and socio-economic indicators

Throughout Project, Eternal monitoring to extend beyond Project cycle

Social Action Plan, Part 3: Actions to be Taken by PMO Regarding Project Construction

ACTIVITY TARGET AND INDICATORS RESPONSIBLE PARTY BUDGET AND COST TIMING

1. Work with Labor and Social Security Committee to ensure that contractors conform to national and provincial labor regulations regarding minimum wages, equal pay for equally wok, non-employment of child labor, OH&S requirements, provision of written contracts, etc and that no verbal agreements are reached after signing of written contracts that contradict what is in the written contract

Records kept by contractors in accordance with Project assurances indicating: (i) Equal pay paid for equal work (ii) No child labor employed (iii) At least minimum wages, as stipulated in local regulations, paid to workers (iv) all workers have written contracts

Contractors, under supervision of Committee for Labor and Social Security, compliance closely monitored by PMO

Any expenses incurred to be met by contractors

Throughout construction (2012-15)

2. Work with Labor and Social Security Committee to assist contractors to employ local labor for unskilled work and to meet targets set for employment of poor households (at least 30% unskilled jobs) and women (at least 30% of jobs), with no discrimination on the grounds of age against women over 40

Records kept by contractors in accordance with Project assurances indicating: (i) Number of local people employed in skilled and unskilled temporary construction jobs (ii) Proportion of skilled and unskilled workers who are local people (iii) Number of unskilled laborers recruited from poor households

Contractors, assisted by Committee for Labor and Social Security, in conjunction with PMO


(2012-13)

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ACTIVITY TARGET AND INDICATORS RESPONSIBLE PARTY BUDGET AND COST TIMING

(iv) Age structure of workforce

3.If Hui are employed on a site, ensure that if the contractor has an on-site canteen or eating facilities, appropriate arrangements exist for Hui workers to be able to eat without disrespecting Hui dietary customs.

(i) Muslim Hui eating places accessible to all Hui workers on construction sites

Contractors and Hui employees to agree on arrangement


Throughout construction

4. Facilitate the provision for contractors’ workforces of separate, gender-sensitive HIV/AIDS/STIs awareness and prevention training for men and women by the Department of Health (and ensure that condoms are readily accessible near construction sites)

Records kept by contractors, in accordance with Project assurances, indicating (i) disaggregated number and percentage of male and female workforce employed by contractors attending HIV/AIDS awareness and prevention training

Contractors to organize, with courses and IEC materials supplied by Department of Health and facilitated by PMO

Any expenses incurred to be met by contractors in consultation with PMO

(2012-15) At time any workforce mobilized or when new work teams are engaged

5. All construction to be publicized prior to commencement, and notice boards erected at every construction site that display objectives of the project, construction timeline and contact details of the hotline 12319 to contact regarding concerns or grievances.

(a) Number of media announcements made of construction about to start, & segments of community likely to hear announcements, based on timing and media used (b) Existence of notice board with requisite information on each site (c) Spot checks on availability of person nominated as responsible for hotline (d) Records kept by person responsible for hotline regarding: (a) number of queries/concerns/complaints received from public; (e) numbers to which a response was made; and (f) average time between public contact and making of response

PMO, in agreement with contractors Any expenses incurred to be met by contractors


6.Contractors to ensure safety of construction site, including storage of materials off roads/pavements wherever possible

Fencing, dust control measures, signs regarding traffic/pedestrian diversions, safety warnings etc erected by contractors.

Contractors, supervised by PMO if necessary



7. Ensure contractors provide appropriate sanitary arrangements (latrines, washing facilities etc) for the female as well as male workforce recruited for construction work

Adequate sanitary facilities for women employees on all construction sites

Contractors, monitored as part of EMP monitoring



ACWF = All China Women’s Federation, CNY = Chinese yuan (RMB), EA = executive agency, EMP = Environment Management Plan, IA = implementing agency, ITS = Intelligent Traffic Systems, MSC = Most Significant Change, PIC = Project Implementation Consultant, PMO = Project Management Office, TIS = Travellers’ Information System.