Technical Assistance Consultant’s Report

Project Number: PPTA 4839-PRC
December 2007

People’s Republic of China: Lanzhou-Chongqing Railway Project
Financed by the Asian Development Bank

MAIN REPORT

Prepared by TERA International Group, Inc.
Sterling, Virginia, United States of America
In association with
TERA Beijing Consulting Co. Ltd., Beijing, China and
First Survey and Design Institute, Xi’an, China

For: Ministry of Railways

This consultant’s report does not necessarily reflect the views of ADB or the Government
concerned, and ADB and the Government cannot be held liable for its contents. All the views
expressed herein may not be incorporated into the proposed project’s design.

Asian Development Bank

CURRENCY EQUIVALENTS
(as of November 2007)
Currency Unit

yuan (CNY)
CNY1.00
=
$0.1333
$1.00
=
CNY 7.5
The exchange rate of the yuan is determined under a floating exchange rate system. In this
report, the rate used is the rate prevailing at the above date.
ABBREVIATIONS
AAOV
ACWF
AOLS
ATC
ADB
CCB
CCEC
CDB
CLR
CO2
Contract
CPI
CR
CR-TEM
CRCC
CRCI
CRCTC
CREC
CRMS
CRMSC
CRTSC
CSY
CWR
DECO
DFR
EA
ECS
EIA
EIP
EIRR
EMM
EMP
EMU
ERP
RCF
FCTIC
FIRR
FR
FRA
FYP
GDP
Ha
HIV/AIDS
IA
ICB

average annual output value
All China Women’s Federation
assets operation liability system
automatic train control
Asian Development Bank
China Construction Bank
China Civil Engineering Corporation
China Development Bank
Chongqing-Lichuan Railway
carbon dioxide
contract for PPTA consulting services
consumer price index
China Railway
CR Transport Evaluation Model of TERA
China Rail Communications Co. Ltd.
China Railway Construction Investment Company
China Railway Container Transport Company
China Railway Engineering Corporation
customer relations management system
China Rail Materials and Supplies Co. Ltd.
China Railway Telecom and Signaling Corporation
China Statistical Yearbook
continuous welded rails
diversified economy companies
draft final report
executing agency
economic contract system
environmental impact assessment
information program-website of enterprise
economic internal rate of return
economic marketing management system
environmental management plan
electric multiple unit
economic resources programming system
Railway Construction Fund
Foreign Capital and Technical Import Center
financial internal rate of return
final report
Federal Railroad Administration
five year plan
gross domestic product
hectare
human immunodeficiency virus/acquired immune deficiency
implementing agency
international competitive bidding

IDMIS
IRR
IS
JBIC
JVC
Km
LCR
LIBOR
LOC
LORIC
LPG
M2
MOR
Mu
NAO
NDRC
NPV
NTSB
OAS
O-D
OHL
PFS
PIA
PKM
PMIS
PPTA
PRS
PSA
PSIS
PSO
PRC
RA
RIS
RIS-TAM
RP
RSO
SARS
SASAC
SCE
SDAP
SEIA
SEPA
SERF
SIA
SOE
SP
SPRSS
STI
Sub-RA
TA
TERA
TEU
TKM
TMIS
TOR
TSDI
TU

integrated dispatching management information system
internal rate of return
international shopping
Japan Bank for International Cooperation
joint venture company
kilometer
Lanzhou-Chongqing Railway
London interbank offered rate
lines of communication
China Railway Locomotive and Rolling Stock Industry Corporation
leading preparatory group
square meter
Ministry of Railways (PRC)
unit of land measurement; 15 mu=1 ha
National Audit Office (PRC)
National Development and Reform Commission (PRC)
net present value
National Transportation Safety Board (United States)
office automation system
origin-destination
overhead lines
preliminary feasibility
project impact area
passenger kilometer
passenger-ticket management information system
project preparation technical assistance
project resource statement
poverty and social analysis
passenger service information system
public service obligations
People’s Republic of China
railway administration
railway investment strategy model (MOR)
railway investment study—traffic assignment model
resettlement plan
Railway Support Office
severe acute respiratory syndrome
State Owned Assets Supervision and Administration Commission
standard coal equivalent
social development action plan
summary environmental impact assessment
State Environmental Protection Administration (PRC)
shadow exchange rate factor
social impact assessment
state-owned enterprise
Southern Pacific Railroad (United States)
summary poverty reduction and social strategy
socially transmitted infection
railway sub-administration
technical assistance
TERA International Group, Inc.
twenty-foot equivalent unit (for containers)
freight ton kilometer
transportation management information system
terms of reference
Third Survey and Design Institute (Tianjin)
traffic unit

g.. FY2007 ends on 31 December 2007. “$” refers to US dollars. (ii) In this report. e. .TVE TZR UIC UP US VR WACC WTO ZXR town and village enterprise Taiyuan Zhongwei Railway Union Internationale Des Chemins De Fer (France) Union Pacific Railroad (United States) United States of America Variation Request weighted average cost of capital World Trade Organization Zhengzhou Xi’an Railway NOTES (i) The fiscal year (FY) of the Government and its agencies ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends.

...................................................................................... B.... B.... A............................................................... 50 INTRODUCTION.............................................. 14 DESIGN AND MONITORING FRAMEWORK ...............................9 EXTERNAL ASSISTANCE TO THE RAILWAY SECTOR..................................................................................................................... 53 PUBLIC CONSULTATION AND INFORMATION DISCLOSURE ..................................................... C................ 1 OVERVIEW OF THE TRANSPORT SECTOR........................ A................................................. D.................................................................... B........................... 55 VI..... B........................................................ D.. 87 INTRODUCTION..................................... 43 ASSOCIATED FACILITIES ............................................. 30 TRAIN OPERATIONS AND CAPACITY CONSIDERATIONS ....... 59 POVERTY ANALYSIS AND VULNERABLE GROUPS . 28 INTRODUCTION.................................. 77 RAILWAY SAFETY ENHANCEMENT ................................................................................ RESETTLEMENT ................... C.......................................... 59 INTRODUCTION...... B................................................. E....................... A............. 44 COST ESTIMATING APPROACH.................................................................................................... 26 IV.. TECHNICAL CHARACTERISTICS .......................................................................................................................................................................... 16 III. PROJECT FRAMEWORK AND RATIONALE ..................... E. BACKGROUND ............ A......................................................................................................... ENVIRONMENTAL ASSESSMENT ............................................... 13 PROJECT RATIONALE ...................................................... 21 FREIGHT TRAFFIC PROJECTIONS...............................28 TECHNICAL CHARACTERISTICS ..... C.................................................................................................... D......... D.............................. FINANCIAL ANALYSIS .............................................................. D.................. 87 WILLINGNESS TO PAY ............................................................................................................................ F.................................. TRAFFIC FORECASTS ................ 1 DESCRIPTION OF THE PROJECT......................................17 APPROACH TO TRAFFIC FORECASTING ........................................... 22 PASSENGER TRAFFIC PROJECTIONS ............................................................................................................59 MAIN CHARACTERISTICS OF THE PROJECT IMPACT AREA................................................................CONTENTS I........................... 73 VII.................... 50 ALTERNATIVES.................................. A............ 55 ENVIRONMENTAL MANAGEMENT PLAN ............................................................................................................................................................................. 1 STUDY OBJECTIVES AND SCOPE... C............... 76 GOVERNMENT’S PROGRAM OF ECONOMIC REFORM ............................. 73 VIII................. E........ B....... D............ A......................................................................................................................................................... F.. C................... 77 REFORMS IN THE RAILWAY SECTOR ....... C...................................... 98 ............................... C............... 4 RAILWAY SECTOR..................................................................................... 76 OVERVIEW OF RAILWAY REFORMS ....................................... 70 STAKEHOLDER PROCESS AND MONITORING AND EVALUATION.......................................................................................... POVERTY AND SOCIAL ANALYSIS...............................................................87 FINANCIAL INTERNAL RATE OF RETURN........................................................ INSTITUTIONAL CONSIDERATIONS ...... 44 IMPLEMENTATION ARRANGEMENTS..50 DESCRIPTION OF THE PROJECT..................... 45 V............................................................... A...... 13 DESCRIPTION OF THE PROJECT.... A........... 86 IX.............................................................. 13 II..... C....... B........................................................................................................................................................................................................... 17 INTRODUCTION................................................ B.......................................................................................... 52 ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES .................................... E............................................... 61 THE POTENTIAL IMPACT OF LCR ON POVERTY ...............

....... 108 SENSITIVITY AND RISK ANALYSIS . ECONOMIC ASSESSMENT ....................... D........................................................................................................................... C.................................... B............................ 98 PROJECT RESOURCE STATEMENT.............................. A........................................ 2......................... 98 WITH AND WITHOUT PROJECT CONDITIONS..X................ APPENDIX 1: SOCIAL DEVELOPMENT ACTION PLAN ............98 GENERAL ASSUMPTIONS ......................................................................... 109 1............................................................................... 115 APPENDIX 2: SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY (SPRSS) 119 .............................. E........................................................ 98 INTRODUCTION................

(ii) encouraging joint ventures with local governments and other establishments to promote the development of local economies. The Foreign Capital and Technical Import Center (FCTIC). PRC is the Executing Agency (EA). 5.000 km of dedicated passenger lines). and (iv) increasing operating speeds on 5.000 km of main line routes. followed by Project framework and rationale in Section 2. Section 8. 3.438 route-km as of the end of 2005). (TERA) pursuant to the terms and conditions of the Contract for Consulting Services (Contract) dated 18 January 2007 (Contract No. This Report includes a discussion of the Project’s background in Section 1.I. technical assessment. land acquisition and involuntary resettlement. 2. providing more detailed information and analysis in support of the topics covered in the Main Report.000 km. and 3.000 km of existing lines to increase capacity. Government’s Policy on Railway Development 4. 2. Inc.438 route-km by 2010 (from 75. Section 5. Description of the Project 1. Ltd. Priority will be given to railway development to alleviate congested lines with high traffic density. Ministry of Railways (MOR). In August 2006 and updated in October 2006 and in July 2007. B. poverty and social assessment. the FSDI and SSDI prepared a Feasibility Study Report for the LCR project. (v) implementing institutional and structural reforms to increase MOR’s autonomy and accountability. financial evaluation. This Main Report is prepared by TERA International Group. Supplementary information is provided in the Consultant’s Supplementary Final Report Volumes 1. Section 9. and (vi) encouraging non-government investment in infrastructure and related services. 2. (iii) double-tracking 8.400 km to 100. including railway development. (iv) reducing operating subsidies through appropriate pricing and commercialization of services. Section 7. Sections 4 through 10 cover each functional area of the Consultant’s evaluation: Section 4. The Plan envisages (i) constructing 17. between the Asian Development Bank (ADB) and TERA in association with the Second Survey and Design Institute (SSDI). (ii) electrifying 15. dated October 2006. 1. with the total network length reaching 92.000 km. BACKGROUND A. with the total length of higher speed network reaching 20. The First Survey and Design Institute of China Railway. Section 6. areas not yet served by rail. Environmental Impact Assessment and Resettlement Plan both prepared in August 2006.2 This Report is based on the updated design of October 2006 and July 2007. environmental impact assessment. Study Objectives and Scope 1. The Government’s policy on railway development focuses on (i) removing constraints and expanding the system. and in regions with low levels of economic development. PRC and TERA Beijing Consulting Co. In 2004. and Section 10. The 3 volumes of the Supplementarty Final Report serve as a compendium to the Main Report. as a priority. a Project Environmental Impact Assessment (EIA) and Resettlement Plan (RP) have also been prepared. .COS2/70-009). The Government’s 11th Five-Year Plan (FYP) from 2006 to 2010 identifies transportation. 1 Funded by the MOR. institutional assessment. (TERA-B). (iii) improving efficiency by using new technology and modern management tools in planning and operation.000 km of new lines (including 7. economic evaluation.000 km of single-track lines. and traffic forecast in Section 3. The First Survey and Design Institute and the Second Survey and Design Institute prepared the Feasibility Study Report. the Government approved the Railway MidTerm and Long Term Development Program for 2020 (2020 Plan) that will expand the railway network from the 2004 level of 74.

in some areas lacking even paved two-lane roads. serve as a critical link between western and southwest and southeast areas of China. The proposed project is the construction of the Lanzhou-Chongqing Railway starting from the east Lanzhou station and ending at the North Beibei station in Chongqing (Figure 1-1).000 km by 2020. 200km/hr passenger trains. This corridor will provide improved rail service. 7. Current funding sources include the Railway Construction Fund which is generated by a surcharge on freight tariffs. the railway will also connect to the high speed passenger and container freight route from Chengdu to Shanghai. 12. The rationale for the Project reflects (i) completing the needed link in western China. 9. 10. 799 km is new line.000 km by 2010 and 12. LCR will provide double stack clearance for container trains and will form one of the main double stack container corridors. National Bonds for western development. The plan calls for more than quadrupling annual investment. According to the 11th FYP covering the period from 2006 to 2010. LCR will save the rail network over 6 billion traffic units (TUs=tkm+pkm) per year. a number of mineral and energy resources have not been developed. providing the needed link in service to/from intermodal hubs at Lanzhou and. LCR will contribute significantly to the overall efficiency of the CR network. The Project 8. The double-track electrified line will be constructed to MOR’s Class 1 standards. (iii) promoting development in west China. This represents a substantial savings to the network and a considerable reduction in greenhouse gas . In Chongqing. The first source will be the transport cost savings for transit traffic between Lanzhou and points west and north to Chongqing. (ii) creating passenger service in an area not now well served by trains or by highway. as well as lower speed express passenger train service (160 km/hr) and double stack container freight trains at 120 km/hr. some 250 billion CY is needed for railway investment every year compared to 60 billion CY annually invested during the 10th FYP (2001-2005). There will be two primary sources of benefits resulting from the Project. and (iv) promoting pro-poor economic growth in an area which has not enjoyed the robust growth. Chongqing. the current lines will have greater ability to handle the increasing freight volumes. it is part of the national dedicated passenger railway network and is designed for a maximum speed of 200 km/hr and will be a critical element of MOR’s policy of increasing speeds of passenger trains on major routes throughout the country. national retirement funds. and will be an important contributor to the development of the western region. local and provincial governments and their enterprises. 11. While the LCR is designed as a mixed passenger and freight railway Project.94 km of mainline of which. loans from domestic and multilateral banks (World Bank. By providing a more direct and higher speed line. Some of the counties and districts along the alignment especially in southern Gansu Province are among the nation’s poorest areas. 2. This line segment will provide the critical link in the between northwest China and southwest and southeast China. The route length of the passenger-dedicated network will reach 8. This will free up line capacity on the congested single-track portions of the railways from which the trains will be diverted. The new line consists of 832.2 6. Its carrying capacity is designed to provide high speed. and high speed passenger service between these areas. Chengdu and Kunming and other points south and east. By so doing. Most of the projected freight traffic will be transit including on double stack container trains. As a key link in western China. ADB) and bilateral assistance. The 2020 Plan identifies the need to have separate passenger and freight-dedicated lines on the busy trunk routes in order to mitigate the endemic capacity constraints. A second source will be the generated traffic in the Project Impact Area. many trains will be diverted from the routes now being used. As a result. While the northern terminus at Lanzhou and the southern section from Guangyuan to Chongqing already have a developed infrastructure network. private sector. the areas between Lanzhou and Guangyuan have been relatively undeveloped. reduced transit times.

14.2 billion traffic units (TUs=tkm+pkm) per year. south and east of China (Figure 1. and promotion of regional cooperation (the international corridor): (i) The national transport corridor – linking the west. Volume I). but technology needs to be taken to higher levels through innovations. 15. By utilizing new technologies such as high speed and double-stack trains and promoting the establishment of a new joint venture railway company (JVC) based on market-oriented tariffs. (ii) Resource Effectiveness and Environmental Sustainability – Resources should be utilized in the most appropriate manner (whether mineral. hardware or software resources). and thereby alleviate poverty (Figure 1. inclusive development and growth (the national corridor and the economic corridor of the region). The construction of the LCR is consistent with ADB’s COS and will support the Government’s strategic policy objective of greater developmental emphasis on the interior and in areas not served by adequate rail service. As noted. 16. Volume I). LCR is fulfilling the requirements of the third pillar. 17.676 km (via Baoji and Chengdu) to 833 km. (iii) Promoting Reforms. LCR will save over 6.4 hours to about 5 hours. Under its draft Country Partnership Strategy. and providing an example of reform and socioeconomic development that will benefit neighbouring countries that are directly or indirectly linked with China.5 in the Supplementary Report. including impacts on Greenhouse Gas and environmental sustainability.2 to 30. Strategic Concept of the Project 13. via Kunming to Southeast Asia. ADB has established four pillars for projects in China.4 in the Supplementary Report. LCR provides three corridors that promote resource effectiveness and environmental sustainability (the national corridor leading to reduced travel distances and lower TUs). and to the eastern ports of Shanghai and through Guanzhou to other eastern ports (Figure 1. (iv) Promotion of Regional Co-operation – Development at the national level has reached the point where China has become an important global leader.6 in the Supplementary Report. introduced technology and lessons learned from other countries. ADB’s strategy for the PRC includes (i) expansion of the railway network in less developed areas that do not have rail access. Travel time by rail between Lanzhou and Chongqing will be reduced from the current 27. (iii) modernization to increase capacity on key routes and improve efficiency. and (iv) increased railway competitiveness through restructuring and policy reform. 3. (ii) development of commercialized rail operations to sustain efficient operations. and the distance will be reduced from 1. Volume I). Innovations and Technology – Chinese technology is best at the conventional level. In line with the four pillars.3 (GHG) emissions. (ii) The international corridor – connecting onwards to Central Asia to the west. The Lanzhou-Chongqing Railway (LCR) is unique in that it can demonstrate that all four pillars are reflected in the project design. (iii) The economic corridor for the region – providing the means to increase production and growth. This represents a substantial savings to the national network and a considerable reduction in . The four pillars are as follows: (i) Inclusive Development and Growth – The disparity between rich and poor is increasing. thus projects should be more inclusive and participatory.

Development in poverty areas requires an efficient transport infrastructure effectively serving the needs of businesses for low-cost access to raw materials and product markets. to achieve these goals. . For example. An efficient transportation infrastructure is necessary. Beijing. 123.300 km of navigable inland waterways. LCR will contribute significantly to the overall efficiency of the CR network. Inadequate transport infrastructure will increase cost of moving goods and people. and will be an important contributor to the development of the western region. which will be rerouted to the new line. By so doing. The capacity and transportation efficiency of this corridor would determine. This will free up line capacity on the congested single-track portions of the railways from which the trains will be diverted.775 km local railways). Overview of the Transport Sector 21.462 km joint venture railways. 23. As of the end of 2005. 8. Exports will be less competitive and inefficient passenger travel will constrain people’s effective participation in the activities needed to promote the economy and social welfare. C.000 km “Green Corridor” network that will be developed during the 11th FYP that will utilize “environmentally friendly” technologies and practices in order to reduce transport impacts on the environment. to a large extent. It also requires sufficient human and natural resources to achieve sustainable growth. the competitiveness of goods produced in western regions in major domestic markets in the east as well as for export. and local roads. and 4.000 km of petroleum and gas pipelines. China Statistics Press. p. 2 million km of civil aviation routes. 1.93 million km of paved and unpaved state. By providing a more direct and higher speed passenger line many trains will be diverted from the routes now being used. The LCR will be an important and strategic transportation artery providing connectivity between the western/central regions of the country and the more prosperous eastern and coastal regions. and 44.200 km CR. but not sufficient in itself. MOR has designated LCR as part of the 30. either through the high cost of uncompetitive transport or the macroeconomic burden of inefficient railway operations.438 route kilometers (km) of the railway network (62. These include trains transporting passengers between Lanzhou. Chengdu and Chongqing to central and eastern China that now move via Baoji. further industrial and economic development in the poverty areas is a prerequisite to reducing inequalities in living standards. The primary objectives of the transport sector in PRC are to help enhance economic growth. serve as a critical link between the east and central west of China. and the citizens will pay more for locally produced goods as well as for imports and for travel. For supporting economic growth and effectively participating in the world economy.3 3. Complementing the reduction in GHG. and reduce inequalities in living standards throughout the nation. The Government recognizes transport infrastructure to be an important driver of economic development. 22. increase PRC’s ability to compete successfully in world markets. National Bureau of Statistics of China.4 greenhouse gas (GHG) emissions. China Statistical Yearbook 2006. it is imperative that goods and passengers move rapidly and economically. The consequent logistics advantages will foster economic growth in western regions for improving the incomes and the lives of people in those regions. 632. The overall impact will be to reduce the country’s well-being. There is an increasing awareness that the cost of transport inefficiency can threaten the economy of the country. September 2006. the current lines will have greater ability to handle the freight volumes. the PRC’s transport infrastructure comprised 75. 20. provincial. 18. 19.

5 Figure 1-1: Lanzhou-Chongqing Railway Project 118° 00E to Z hon gwe i 108° 00E Lanzhou N SHANDONG 0 Zhengzhou Luoyang 34° 00N Xinyi HENAN Xingong Shangqiu Jiangzhou Xi'an Huxian Baofeng SHANXI BaoCheng Line Quxian Chengdu Shanghai Neijiang Lichuan 28° 00N Jiang'an Gaotiepu ANHUI Tongling Changxing Xuancheng Hangzhou Ningbo Jingzhou Kangtong Huangshi Qimen Shexian ZHEJIANG Shouchang Shimen Jinhua JingGuang Line Dayong Shangrao Hengfeng Nanchang Yiyang Xiangtang HUMAN Wanzhou Yongping Changsha Ningxiang Jiehou Fengxian Anqing Wuhan YiWan Line Chongqing-Lichuan Railway Project Luzhou Macheng SHANGHAI Changjiangfu Yaqueling Fuling Chongqing ChengYu Line Wuhu Huanyan Anli Yichang Changzhou Jiajiang Shucheng HUBEI Jinmen Wanzhou SuiYu Line Suining Nanjing Hefei Xinyang Xiangfan DaWan Line Dazhou Nantong Qidong Huangzhou XiangYu Line DaCheng Line Hai'an HanYi Line Suizhou SICHUAN Dafeng Huainan Yunxian Baishui JIANGSU Fuyang Nanyang Ankang Maohaguan Zhoukouzhen Benghu Yangpingguan Guangyuan 34° 00N Huaiyin Suixi Sundan Lanzhou-Chongqing Railway Project Yibin Xuzhou Xuchang GANSU 28° 00N Yingtan Xinyu Zhuzhou Gongxi YUNNAN ChuanQian Line YuHuai Line Liupanshui Pingxiang Hushuo Hongyang Fu'an JIANGXI Shaoyang GUIZHOU Weiming Wenzhou FUJIAN Shunchang Fuzhou Yongzhou Anshun Provincial Capital City/Town Provincial Boundary 108° 00E Source: Consultant. Nanping Chaling Guiyang Duyun Existing Railway-Double Track Existing Railway-single Track Project Railway 200 Yellow Sea Liangyungang Shanyuan Baoji 50 100 Kilometers Railway under construction ADB financed project Boundaries are not necessarily authoritative 118° 00E South China Sea .

respectively. as the share of the service sector in the overall economy increases. while pipelines and civil aviation account for a negligible share of total freight traffic.8% as shown in Table 1-2. the load on China’s freight transportation infrastructure has grown from 2. however. 5. (ii) alleviating capacity bottlenecks.6%.6 billion TKM. Throughout this report ”ton” is used to designate a metric tonne of 2240 lbs.45 billion to 18.64 billion TKM in 2005) averaged 5. compared with the previous years and might reflect the railways’ capacity constraints. Recent years have seen more robust growth rates. During the more recent years.170. There have been freight transportation mode shifts during the last 13 years. The 13-year trend shows only modest growth in TKM when compared to the growth in GDP. the total freight TKM per $ of GDP.018. It illustrates that the growth rate in railway has not been keeping pace with inland waterway and coastal freight transport during most of the period since 1992. for the 27year period. Transportation infrastructure improvements will be best achieved by establishing a framework whereby customers can satisfy their transportation service requirements at a cost that will allow them to maintain their competitive advantage in the marketplace. 6. however the average is heavily influenced by the economic slowdown in 1997. .35 billion TKM in 1992 to 4. (freight intensity) is decreasing (Table 1-2). respectively as shown in Table 13. This represents an annual 7.6% increase.692 billion in 1992 to CNY 18. increased on average every year by 4. From 1992 to 2005. Growth in waterway transport was dramatic in 2004 and in 2005. the growth in rail traffic has been constrained by PRC railways’ capacity to transport freight.170. Freight intensity is expressed in ton-kilometers per CNY of current GDP. It appears that railways will maintain a stable market share of around 15% in tons and 50% in TKM. railway TKM growth exceeded inland waterways (in 2002) and roads (in 2003 and 2004). During this period the average length of haul increased from 734 km to 770 km. Despite this overall decline. 1.23 TKM per CNY of GDP. and (iii) implementing institutional reforms that improve the efficiency and responsiveness of individual modes and of the transport sector as a whole.6 24. This overall decrease in freight intensity is expected. Also.2% and 4. the railway sector still contributes twice as much to the formation of China’s GDP as either the waterway or road transport sectors. Bringing this about will require: (i) removing constraints on competition. as the increase in the service sector impacts the GDP. 26. however. Between 1978 and 2005. During the same period. or by an annual average of –8. One main reason is that for most of the period between 1992 to the present.9% per year.7% whereas current GDP growth (from CNY 2. 27. with road and waterway modes showing a generally upward trend.308 billion in 2005) averaged 15. not by demand for rail transport. 4. 28.6 Rail freight traffic from 1992 to 2005. freight intensity5 declined from 0. the annual growth rate in total freight transportation (which increased from 2. 1998 and 1999. it still accounts for a negligible share of total freight traffic. Freight Transportation 25. expressed in tons and TKM.7% and 6.14 billion tons 4 and from 734. The annual growth trend from 1992 to 2005 in GDP and freight TKM for different modes is shown in Table 1-1. even though the rail freight share of the total transportation market has gradually decreased from 57% to 50%.3 billion ton-kilometers (TKM) to 4. Table 1-1 compares the growth rates of freight transport by mode with growth in GDP. Although civil aviation traffic has increased substantially.75 to 0.

9% in 2003 along with the decline in other modes due to SARS.1% and as measured by PKM increased by 19.7% 4.6% 6.6% 17. p.6% -1. respectively during the 13 year period from 1992 to 2005.7% 5. however. On the other hand the volume of passenger transport increased at an average annual rate of 1.6% 8.3% increase over 2004 (0.9% per year.7 Table 1-1: Freight Transport versus GDP Period 1992 1993 1994 1995 1996 1997 Annual Average Growth Rate Waterway Total Freight Rail Freight Freight Growth in Growth in Growth in Growth in TKM TKM TKM Current GDP 23.0% 36.2% in terms of PKM. Due to increased competition from the airlines and the bus companies. This represents a 16% increase over 2003 (0.1% 4. With 1.0% 4. At an average 13.3% 56. Since 1992.1% 3.2% 12.9% 15. Growth rates for transport modes computed from data reported in Appendix 1.7% 14.7% 12.2% 2.6% 7.3% 3.8% 9.2% 5.5% 31.7% 6.2% 10.9% -5.7% 6.4% 7.9% and in 2005 increased by another 6.6% -6.5% 43.1% 21.8% 7.9% 5.5% 15. Despite the increased competition from the airlines and bus companies.7% 11. Beijing: September 2006.0% Highway Freight Growth in TKM 9.9% 12. 31.7% 17.1% in terms of passengers and 5.9% 11.2% 1.9% 6.6% 7. the rail passenger ridership increased by 14. The annual growth rate in passenger traffic (all modes) between 1992 and 2005 was 5.8% -23.86).3% 7. The number of passengers declined by 7.2% 5.5% 11.156 million passengers and 606.6% 6.1% 6.76) and 2.5% 3.4% 6.6% 26.3% 12.2 billion PKM. still remains lower than other countries. In 2004.9% 3. 30.A.5% 6.6% 2.4% 10.9% -1.0% 4.3% in 2004 and another 3.7% Source: Growth rates for GDP computed by Consultant from China Statistical Yearbook 2006. and afterwards declined until 1997.6% 1.5% 9.2% 4.1% 3. particularly for rail lines that serve the less developed provinces and as the dedicated high speed passenger network is completed.4% 7. although growing at a modest rate. PRC’s 2005 rail passenger trips per capita were 0. mobility in PRC.0%.3% and -2.4% 10.88.5% 17. The railways’ market share in passengers and passenger-kilometers (PKM) decreased by an annual average of -4.2% 1998 1999 2000 2001 2002 2003 6. 57. . As shown in Table 1-2.4% 1.2% 14. This is in contrast to data from other nations that shows that typically overall passenger traffic grows faster than the economy as a whole. PRC railways’ passenger traffic has not been increasing with the total passenger market.7% 2004 2005 Average Growth Rate 1992-2005 17.4% in 2005.60% compared to current GDP growth for the same period of 15. published by the China Statistics Press. it appears that railway passenger traffic will continue growing in the foreseeable future in absolute terms.6% 10. the number of rail passengers increased to the highest level of the decade in 1994.4 trips per capita for all modes of transport.5% -5.2% 10.2% -34. 2.6% 4. the 2006 traffic represents a historical record. Passenger Transportation 29.1% 11.0% -7.

In fact. 32. This was accomplished largely due to significant reform and restructuring measures implemented by MOR in order to create an efficient market-oriented railway. faster travel times.11 1.307. compared to the average trip length on railways of 524 km. computerized passenger ticketing and reservation system. During the same 13-year period.1% annually and traffic volume in passenger-kilometers (PKM) increased by 5.2% annually.29 Modal Distribution (%) 100.9% to 6. 35.180 By Rail 1. PRC railways have successfully abated the declining general trend in passenger transport. railway originated passengers increased by 1.9 percent for freight revenues. passenger revenues recorded an average annual growth of 14. reflecting the increasing competitiveness of railway transport with increasing use of higher speed and more comfortable trains.5 percent compared with 9. This relatively low figure reflects the local nature of the road passenger transport.15 0.0% 6.270 Annual Trips per Capita 13. Table 1. The national statistics for road transport by both Ministry of Communications (MOC) and non-MOC operators indicate. A closer analysis of recent trends shows that. with roads accounting for over 91% of the overall passengers transported in 2005.2: Population and Passenger Trips.44 0. which only increased from 44 km since 1992.25% to 91. which reached its peak in 1988 and decreased by 64% since then. particularly since 1998. improved value added on-board services and comfort. and lower operating expenses. In the intermediate to long distance passenger transport market (200 km and above) the railway is the predominant mode of transport with an estimated market share of approximately 70%. which is due to an increase in the average length of haul from 316 km to 524 km. mainly due to a decrease in the average trip length from 75 km in 1992 to 34 km in 2005.073. which enhances the competitiveness of road transport due to flexible service.48% during the last three years and the railway’s share increased from 5. From 1992 to 2005. excepting the unusual decline in 2003 due to SARS.270 By Air 138.5% 0. . that average length of haul for passenger road transport is 58 km.3 provides a comparison of the development of MOR’s revenues from freight and passenger transportation business. A similar trend is also observed in PKM.6% 91.B in Supplementary Final Report.560 17.155. where the flexibility and frequency of service provided by other modes are more important criteria than price.810 By Waterway 202. Such improvements as speed increases on high density passenger lines. this trend confirms the lack of preference to this mode of transport by passengers. This is mainly due to the significant road construction efforts going on in the PRC. 34.88 12. 2005 Passenger Population Trips (000) (000) Description Total PRC 1.830 By Road 16. Passenger transport on inland waterways and coastal ships reached its peak level in 1987 and has decreased by over 36% since then. road passenger traffic increased by 132% (passengers) and 191% (PKM). Contrary to freight transport.2% 0. which is more responsive to passenger needs and requirements. the road share of passengers decreased from 92. 12-hour and 24-hour service between large city pairs have resulted in increased ridership and passenger preference for the railways.8% Source: Appendix 1. 33.3%. During the 20-year period from 1985 to 2005.570. and providing 8-hour.8 Table 1. however.

B in Supplementary Final Report. and containerized freight.8) 0.57 583.61 2001 46.11 1995 20.34 14.647. In the PRC.8% for unit freight revenue.829.56 2004 59.4) 0.2 1. the propensity of goods that attract low tariffs is increasing on the national railway.67) 0.0566 (292) (9.80% Source: Financial data from MOR. Railway Sector 39.67 78.9) 0. combined with economic growth and technological improvements for the railways.1) 0.16 68. Traffic data from Appendix 1.0) 0.060.55 15. passenger revenues were 36.0996 (527)(19.to long-distance intercity transport. D.4) 0. From 1985 to 2005.6) 0. With rapid growth of passenger traffic and higher average unit revenue per PKM. In 2005. The railway has been unable to accommodate some higher tariff traffic. However. longdistance passenger traffic.507.47 480.81 110.66 1.0425 (225)(17.0279 (144)(4. This buoyancy in passenger revenues reflects the impact of increased demand for improved value-added rail passenger services provided by MOR.09 27.0467 (241)(-3.6% of total freight and passenger revenues.7) 9.0425 (219)(8.66 441. compared with 22.0476 (245)(1. 36.26 1.50 2005 63.82 2003 47. The PRC railways are essentially a freight-predominant operation although passenger transport remains an important line of business. and 1.68% compared to 5.0194 (100)(%/Y) 0.424.A. the gap between freight and passenger revenues is fast closing.8) 0.15 35.40% Average Annual Growth Rate (19852005) Average Unit Revenue (CNY) Per PKM Per TKM (index)(growth) (index)(growth) 0.3) 0. MOR needs to adapt rapidly to competitive conditions.1031 (545)(-0.0189 (100)(%/Y) 0. During the period from 1985 to 2005.1076 (569)(4.953. ensures a continuing role for railway transport in the future. the railways remain the preferred mode of medium.0) 0.4% in 1985.29) 0.333.76 354.3 811.31 1.68 70.1094 (579) (1.50% 9.86 463. A reverse trend is seen for freight traffic.1034 (547)(3. 38.0483 (249)(13.90% 4. the growth rate of average unit passenger revenue was 9. .9 Table 1.0516 (266)(8. This trend shows that in rail freight business.37 551.8) 0.76 241.8) 0.8%.0837 (443)(8. thus eroding overall rail profitability. improve the quality of rail freight services and adopt demand sensitive pricing in rail freight transport services.283.0257 (132)(5.6) 0.93 56.60 2000 36. the growth rate of average unit freight revenue was only 5.47 1.21 261 1. This will have important implications for planning future expansion of rail transportation services and investments.98 2002 49.16 1990 11.68% 5. The railway's competitive advantage is in the transport of bulk and semi-bulk commodities over medium to long distances.4 462.0569 (301)(14.28 1.3: Growth of National Railway Freight and Passenger Revenues and Traffic Revenue (CNY billion) Year Total Traffic (billion) Passenger Freight PKM TKM 1985 4. This. 37.29 94. the gap between passenger revenues and freight revenues is expected to narrow further.3 1.40% 4.

Inc.1% of the trunk lines.679 billion traffic units (TU)10. Total transport volume was 2.12 7. TERA International Group. 9.8 As a result of MOR’s modernization efforts.497 route-km (or 39.11 With an average traffic density of 35. 8.073 billion TKM and 606. This volume of freight throughput together with an additional 606 billion passenger-km. published by the China Statistics Press. The railway system in the PRC encompasses a nationwide standard gauge (1. was a significant achievement. The traffic density on PRC’s railway network is about three times the density of traffic on the US Class 1 railroads and seven times the traffic density on important European railways such as the French and the German railways. p. some 19.632 and MOR-furnished data. China Statistical Yearbook 2006. 43.2% of the national network) were electrified routes. As traffic increases with economic growth. . According to a comparative analysis made by the Consultant from international railway data for 2003. Thus both the Chinese economy and life style is highly dependant on the railway’s availability and its efficient operation. Local Railways are operated by enterprises independent of MOR.965 route km. The comparison with U. On March 18.5% and 6. China’s railway sector is the densest network in the world. or 2. including three new administrations for Taiyuan. a new record). the Local Railways are financed and constructed by the provincial governments. Final Report prepared for the Asian Development Bank and the World Bank under Contract No.776 km of local railways.408 routekm (or 31. double tracking covered 24. and 4.506 billion TKM). Sterling. MOR implemented a reform assigning direct management of stations and depots to the Regional Railway Administrations (RA). and electrified and dieselized routes comprised more than 97% of the total route length. Rapid economic growth has induced strong growth of freight and passenger traffic. p. 2005. Class I railways is not intended to imply that the railways between the two countries are similar. 47. National Railways are principally funded and constructed by the Central Government and managed by MOR. and the Joint Venture Railways are financed and built in partnership between MOR and provincial governments. it is becoming more difficult to accommodate both freight and passenger traffic on saturated rail infrastructure. Xi’an and Wuhan plus the Qinghai–Tibet Railway Company. Sometimes referred to as converted ton-kilometers. were laid with continuous welded rail. or the autonomous regions. autonomous regions or enterprises. With a railway network approximately 1/3 the size of the USA network. An important characteristic of the PRC railways is its high modal share (almost one-half in freight TKM and more than one-third in PKM).7 This includes 62.69 billion tons of freight and 1. The PRC’s railway network (in terms of route length) ranks third worldwide after the US and Russian Federation.5 million TUs per route-km in 2005. VA.9 41.S. 11. 42. September 2006. municipalities. the PRC railway sector faces 36 times the need to expand its network length compared to the average world railway. but their success largely depends on MOR routing decisions and train paths.10 40.394 km in the US. 8. 12. 31. PRC railways handled 2. there were 14). It is intended to show only the relatively high railway traffic density in PRC.438 route-km at the end of 2005.16 billion passengers in 2005. The Government through MOR administers the state-owned national railway. which is going beyond the capacity of the network. municipalities. In this background MOR is facing new challenges as the country rapidly progresses to a market economy (in 2005 the private sector of the national economy contributed to more than 50% of GDP. Capacity Constraints 44. 77. These routes accounted for over 99. the traffic unit is the sum of TKM and PKM.1% over 2004. The average length of haul for freight was 770 km compared with 1. 7133241.435 meter wide) rail network totaling 75.200 route-km of the state-owned national railway. The freight volume handled was 83% of that on US Class 1 railroads (2. 10.6% of the total gross TKM hauled.2 billion PKM in 2005 or an increase of 7. There are now a total of 18 RAs (formerly. as at the end of 2005.462 route-km of joint-venture railways. 31 July 2006. Best Practices for Private Sector Investment in Railways. The 41 railway sub-administrations were therefore disbanded.4% of the national network). 1. Beijing.

According to MOR officials. it is indicative of the relative scarcity of railway infrastructure. 47. Since the 1990s. 49. These efforts appear to be adequate for alleviating congestion particularly on the high density east-west and north-south routes (Figure 1-2). In this background the proposed Project is a step in the right direction. and secondly. the investment program for railway’s development needs to be greatly expanded. Some RAs carry more traffic than the largest European Railways. then the efficiency of the whole network including the new investments will be adversely affected. 13. both overall economic growth and the wider sharing of the benefits of that growth. The 11th FYP (2006-2010) envisages an annual investment of $ 37 billion in the national railway. Reducing railway transport distance means delivery of the same amount of traffic (freight tons and passengers) at a reduced cost to the freight shippers and passengers. to remove capacity constraints. http://www.13 During the 10th FYP (2001-2005) about 1. and there are already indications that transport capacity is becoming a binding constraint on further growth. The goals should be: firstly. resulting in increasing strains on the domestic transport infrastructure. it seems that the railway network is insufficiently developed. developing a dedicated high speed passenger network. LCR will provide the shortest railway route between northwestern and southwestern and southeastern China. which is also environmentally less sound and considerably less energy efficient. Shippers are forced to use the high cost highway transportation. China is in the middle of the biggest rail build-out since Europe's great expansion in the years before World War I. Considering that the main traffic flows are directed north-south and east-west. 50. If this is not done. a track-laying performance on par with North America's in the 19th century.000 cars per day.com/time/asia/features/journey2002/chinaboom. In view of the large scale capacity constraints that have become endemic on the national railway trunk lines network. It may be mentioned that expansion of the rail network in the west will invariably need capacity enhancement on the busy trunk routes.500 kilometers of new lines have been added each year at an annual cost of about $ 7 billion. which represents a more than 4-fold increase over the last 5-year period. Railway Development Plans 48. thus resulting in significant national productivity benefits. the system capabilities and capacity must stay ahead of the demand for transportation. The Government and MOR is undertaking a program for accelerated expansion of railway capacity on the high density routes with constructing a dedicated passenger railway network and other infrastructure and operational improvements in the national railway system. or only 37% of the demand. improving existing lines with double tracking and electrification. increasing containerization capacity. the average number of daily requests for freight cars increased to nearly 300.time. The railway network currently is operating close to or at capacity in many segments. To insure this. to ensure that the line capacity stays ahead of the transportation demand on the main corridors.000 cars. 46. yet the railway system can only provide around 110. It must be ensured that railway capacity and capability are contributors to. and upgrading locomotives and rolling stock. Railway’s capacity constraints result in loss of production and increased logistics costs. 2. so that there is enough capacity on the existing network to carry the traffic generated on the new lines.html . MOR is in the process of expanding capacity by constructing new lines. rather than constraints on. Further liberalization under the WTO regime is expected to increase China’s international trade. While the high density underscores a good record of performance and asset utilization.11 45.

. Source: Consultant from MOR train timetable and utilization data. Note: Map is not drawn to scale.12 Figure 1-2: Congested Railway Lines as of April 2005 L in e s w ith c a p a c ity u tiliz a tio n o f m o re th a n 9 0 % .

1 million for 13 TA projects. and buildings. This corridor will provide improved rail service. Insulation measures will be used between the vertical and horizontal rebar to prevent electronic induction from occurring and interfering with track signal circuitry. geological and climatic conditions are present. PROJECT FRAMEWORK AND RATIONALE A. Fasteners will be elastic strip with anti-corrosion treated ironware. 55. In Chongqing. signals.894 km) and tunnels (178 with a total length of 506. External Assistance to the Railway Sector 51. Borrowing from PRC lenders is planned for CNY 28. Since 1989 ADB provided grants totaling $6. Appropriate transitional sections will be used between the different track sections as well as between diverging lines and connections. Given the length of the alignment. From Lanzhou. and the ADB have been active supporters of the railway sector in PRC since 1980. II. and high speed passenger service between these areas.13 E.87 billion CNY or US$ 4. including the longest railway tunnel in China. of which 799 km will be newly built. land acquisition.82 billion) with an equity share of 50 percent (30. materials. and interest during construction.94 km railway. the World Bank Group. Description of the Project 52. of which MOR will provide 55 percent.6 billion. reduced transit times. Broken stone ballast will be used with a minimum depth of 30 cm below the bottom of the sleepers. The total estimated cost of the Project is 61. The Japan Bank for International Cooperation (JBIC). electric power.3 km) account for 73. This line segment will provide the critical link in northwest China and southwest and southeast China. During the last 15 years ADB loans totaled $ 2. engineering and construction. subgrade. The alignment emerges from the mountains into the rolling hills and valleys of northeastern Sichuan Province before entering the Chongqing urban area. In the long tunnels of over 6 km in length. ADB is preparing the Project with a contemplated loan of $300 million.23 billion) inclusive of physical and price contingencies.62 billion (US$ 3. Bridges (285 with total length of 103. Elastic fastening with insulating properties will be used on the bi-block construction. bridges and tunnels. The LCR alignment presents many challenges. bi-block ballastless track will be laid. 53. . The alignment through the mountains utilizes a considerable number of bridges and tunnels. The Project is the construction of a 832. and also includes all parts.25 percent of the total mainline length of LCR. External assistance mainly focused on expanding the capacity of the railways. installation. 29 km in length. 56. a range of geographical. General track construction will utilize 60 kg/m continuously welded rail and Type III concrete sleepers spaced at 1667 per km. Since 1984 the World Bank provided 11 loans totaling $ 2. Estimated cost of construction of LCR is included in Table 2-1. starting from the east Lanzhou station and ending at the North Beibei station in Chongqing. and then enters mountainous areas that have been relatively isolated from China’s economic dynamism (linked only by a two-lane road that is unpaved in some sections). the railway will also connect to the high speed passenger and container freight route from Chengdu to Shanghai. and the remaining equity to be contributed by Gansu and Sichuan Provinces and Chongqing Municipality. The line will be constructed to National Railway Class I standards. JBIC’s assistance ended in 1997 and totaled 578 billion Yen for 15 railway projects mainly to expand capacity in principal coal transport corridors. the alignment transverses loess areas.12 billion). Line clearance will accommodate double stack container trains. 54. Costs include track.75 CY billion ($ 8.94 billion. Design speed for passenger trains is 200 km/h.

and bridge erection.624.985.135.28 1.8% on foreign exchange costs and 1.18 531.313.060. ballast.14% for field research and development.469.83 60. but costs associated with their use by LCR are included in financial and economic evaluation.50 0.588 Source: Compiled and adjusted by Consultant from data provided by MOR and ADB.913.98 104.00 34.96 million). includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. The rationale for the Project reflects (i) railway network development.940 253. The first source will be the transport cost savings for transit traffic between Lanzhou and points west and north to Chongqing. thereby reducing poverty. The proposed LCR will provide low-cost rail transport for commodities and manufactured goods as well as passengers linking western regions with the eastern coastal markets and ports.89 388. Initial cost of vehicles is not included in the Project costs since these are associated facilities.27 677.62 2.17 167.153. and (iv) promoting pro-poor economic growth along the line and in the region. Toward the above stated rationale. (e) Physical contingences computed at 6.93 1.88 2.02 3121.232.447. 58. (iii) meeting the objectives of the 11th FYP and the 2020 Plan consistent with the western regional development strategy.35% of loan drawdown.53 51. training.746. For domestic loans interest rate used is 7.14 Table 2.43 749.329.588% for CCB.14% of base cost on average for civil works and 6.28 2.047% for ICBC and 6. track laying.74 818.75 326.710.50 361.96 451.50 389.62 8. Commitment fee is based on 0. mitigation. (c) Including rails.02 6. (ii) capacity enhancement. and studies (this estimate is based on assumed contingency rates for specific components ranging from 3% to 10%).19 61.72 5.33 0.408. While the .897.79 2.93 1.16 23.253. (f) Interest during construction for ADB loan has been computed on the five-year forward London interbank offered rate plus a spread of 60 basis points and a rebate on spread of 20 points. A second source will be the generated traffic in the Project Impact Area.8% for 2008 and 3.10 90.24 million ($ 108. Project Rationale 57.82 53.16 401. Front end fee of 1% is waived. and monitoring Temporary facilities and transitional works Other expenses Consultants-Construction Supervision Subtotal (A) Contingencies(e) Physical Contingency Price Contingency Subtotal (B) Financing Charges During Implementation(f) Total (A+B+C) CNY Million $ Million Estimated Cost(a) 832.652.00 261. sleepers. Price contingencies computed at 0. bridge beams.52 3.51 8.94 47. there will be two primary sources of benefits resulting from the Project. B.32 786.1: Estimated Project Cost Item A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 B 1 2 C Cost Components Route Length (km) Base Cost(b) Land acquisition and resettlement Subgrade Bridges and culverts Tunnels and cut & cover tunnels (c) Railway trackwork Communications and signaling Electric power and traction (d) Vehicles Safety components Buildings Other equipment and facilities Environmental protection. surveys.85 3.00 441. (a) Includes import taxes and duties of CNY 817. In mid 2007 prices.37 274. (b) (d) Vehicles will be purchased by MOR under separate funding and will be leased to LCR on a fixed charge per trainkm basis based on full cost recovery.39 6. Chengdu and Kunming and other points south and east.0% per year thereafter for local costs.

In addition. in some areas lacking even paved two-lane roads. the current lines will have greater ability to handle the freight volumes in their primary origin-destination markets. 66. The current travel time by rail from Lanzhou to Chongqing is between 27. This will help provide improved railway passenger services that will effectively compete with other modes. both international and domestic. 60. 63. This route is longer. Collectively. The new electrified double line to be built under the Project will be designed for operation of passenger trains at speeds of up to 200 km/hour. 61. and golden monkeys. Representatives of leading manufacturers in the Chongqing and Sichuan areas such as motorcycle and automobile plants are already looking forward to the completion of LCR and the prospect of increasing their trade with Central Asia and the Greater Mekong Region. and Germany. the areas between Lanzhou and Guangyuan have been relatively undeveloped. containing pandas. The Project places special emphasis on safety during railway construction and operation. the inter-modal hubs at Lanzhou. By providing a more direct and higher speed line. Chongqing and Chengdu will be served by more efficient and cost competitive double stack trains. serve as a critical link between western and southwest and southeast areas of China. without the LCR. The LCR with a direct line connection will be 833 km and will take slightly over 5 hours. it is likely that LCR will lead to a dramatic increase in tourism to the PIA. technological advancement in the railway sector will benefit the domestic manufacturing base and create opportunities for new businesses to implement cutting edge technologies and pursue technically advanced production methods. these same areas have a number of the most scenic and unique nature reserves in China. Moreover. Currently. This will reflect upgrading of railway technology in line with achievements in more advanced countries. LCR will greatly facilitate traffic between Urumqi including connections to the Eurasian Land Bridge and southwest and southeast China. many trains will be diverted from the routes now being used. leopards. the Project will lead to substantial job creation in the PIA. and will be an important contributor to the development of the western region. New industries and manufacturing establishments will follow efficient. This will free up line capacity on the congested single-track portions of the railways from which the trains will be diverted. The development of a transport corridor through the PIA will be a positive addition to developing western China. As experience in other countries has shown. 59. 65.7 and 30. 62. Safety will be enhanced through the introduction of safe and reliable technology and installation . and is key to alleviating poverty in one of China’s poorest regions. By so doing. The economic development of western China under the Government’s “Go West Policy” is an important national policy objective. By facilitating the integration of the poor and underdeveloped western provinces and regions with the developed parts of the PRC.676 km. Given China’s rapidly expanding tourism industry. dependable transportation. France.15 northern terminus at Lanzhuo and the southern section from Guangyuan to Chongqing already has a developed infrastructure network. With the completion of LCR. a number of mineral and energy resources have not been developed. and the line from Baoji south to Chengdu along a single track (that cannot be doubled because of topographic and geologic limitations as its alignment follows narrow winding river valleys). such as Japan. slower and has lower service quality. PIA residents will also benefit through reduced transport costs not only as passengers but also in lower cost goods and services. 64. LCR will contribute significantly to the overall efficiency of the CR network. trains from Lanzhou to Chongqing are on congested along lines around Baoji. the Project will play an important role in supporting the Government’s strategic objective of accelerating economic development in western China.4 hours over a distance of 1. As a result. Not all rail lines in China will be cleared to handle double stack container trains.

Train Acoustic Detector System (TADS). including the freedom to set tariffs for full cost recovery. 67. In due course. Removal of the transportation constraints and bottlenecks will help in the rapid development of the natural resources and industries. Train Coach Diagnostics System (TCDS). State-ofthe-art wayside defect detecting devices are planned to guard against accidents. at select locations TADS (Train Acoustic Detector System) will be installed. Automatic Train Protection (ATP) will be in use on all locomotives on LCR. Ltd. 69. which represents a serious constraint to increased transportation of goods and passengers vital for further economic development of western China. On board crew monitoring. and monitors speeds and signal aspects. Lanzhou-Chongqing Railway Co. This system has been in use in China since 1998 and was upgraded in 2000 and again in 2003.000 of the 16. the LCR will open these very poor areas to development opportunities including tourism. State-of-the-art technology will assure safety of operations. This state-ofthe-art system includes a screen in the cab to depict train and grade profile. As of May 2006. thereby helping to diversify sources for financing railway development. the joint venture shareholding company may be listed on the stock exchange. and Train Performance Detection System (TPDS). The joint-venture company will have national and provincial ownership and will have substantial managerial and financial autonomy. These detectors protect against failed and broken axles that result in derailment. Other safety equipment and systems. over 8. generate employment. This will provide an opportunity for the operating company to interact with investors and raise future investment capital through market mechanisms. fails to heed a restrictive signal indication or exceeds the allowable speed the system will set the train brakes and stop the train. (LCRC) will be responsible for construction of the project and Chengdu and Lanzhou Railway Administrations will manage operations after the Project is completed. The primary goal of the Project is to create the conditions that would foster economic growth particularly in the less developed and poorer regions in west China. and reduced travel costs and time for those journeying for employment in other parts of China. Enabling movement of costeffective double stack trains will increase the region’s ability to move goods to/from eastern cities . As indicated above. The Project railway will be built and operated by an autonomous joint venture company (JVC) established under the Chinese Law. display upcoming speed restrictions. Design and Monitoring Framework 72. LCR is a component of the new phase of institutional development of CR. 70. A new era of market based investment financing is expected to be ushered. increased agricultural production. 71. and will stimulate a service sector. increase peoples’ incomes.606 locomotives have been equipped with the upgraded versions. designed to be suitable for high-speed freight and passenger service. and help reduce poverty. exploitation of mineral resources. and reducing dependence on self-generated financing and financing from government sources and lenders. 68. Throughout the route Train Hotbox Detector Systems (THDS) and hot bearing detectors will be located every 30 km and at 8 stations. The LCR line passes through rural areas that are not well served by railways and most local transport is by road. some road sections in the PIA are unpaved. In addition to THDS..16 of technically advanced safety monitoring equipment and appropriate training of staff. C. wayside speed monitoring and recurrent rules training are planned during Project implementation and operation. Thus. fails to slow for a speed restriction. It is thus predictive of imminent bearing failure and allows the defective bearing to be removed from the train and to have a new axle and bearing set applied. In the event a train exceeds the limits of its authority. This very advanced system uses wayside acoustic detectors to analyze internal conditions within the axle bearing. Train control and signaling will be newest technology. This goal will be achieved mainly by developing network capacity in a region where existing rail routes in nearby regions are being operated at or beyond design capacity. which will be installed include Train Fault Detection System (TFDS).

it has lacked adequate transport. Passenger and freight transport intensity in Gansu is 83. rail service to several counties and districts which have substantial rural population and untapped industrial and tourism potential. Shanghai in the south-east. The Project will importantly provide. III. outcomes. which in turn leads to longer-term objectives or goals.1 percent of the national GDP.7 percent of the national GDP formation. . The capacity and transportation efficiency of this corridor would determine to a large extent the competitiveness of goods produced in western regions in major domestic markets in the east as well as for export markets. TRAFFIC FORECASTS A. The consequent logistics advantages will foster economic growth in the region for improving income and the life of people in the PIA. outputs and activities (or inputs). Providing high-speed passenger train service will increase tourism and will open job markets to rural residents. It also allocates measurable and/or tangible performance indicators.17 and ports. 75. As such the LCR corridor will provide an important link in PRC-Eurasia trades through gateways in Yunnan and Xinjiang to China’s neighbors.4 percent of PRC’s population and contributes to 1. 76.8 percent. The Design and Monitoring Framework for the Project is presented in Table 2. Introduction 74. It will also affect the competitiveness of goods produced in the south-west and south-east in domestic markets in the north and north-west as well as in Central Asia and Europe. The LCR will be an important and strategic transportation link connecting to Kunming and Guanzhou in the south. and when complete will provide improved access to some of the poorest areas of the PRC. At present. Shaanxi and Sichuan GDPs are also relatively lower than the national average. Implementation of the proposed LCR Project will allow a short–cut for transit traffic between the major cities of south-eastern/south-western China and the existing main rail lines linking western China. for the first time. As shown in Table 3. and Urumqi in the north-west.1.2. respectively of the national average. It provides the basic design of the Project in terms of its intended macro and micro impacts. the north-south rail lines such as Lanzhou-Baoji-Chengdu and Baotou-Xi’an which connect Chongqing to the north and north-west follow indirect and congested alignments. The framework clearly identifies the goals and purposes of the Project. Chongqing City represents 2. which has constrained economic development. The project area has large natural reserves as well as a significant tourism potential. While the area is rich in resources. Gansu represents 2 percent of PRC’s population and contributes to 1. Passenger and freight transport intensity in Chongqing is 73 percent and 32. respectively of the national average.2 percent and 53. The proposed LCR Project is a critical missing link in the national railway network. The historical lack of accessibility has constrained the development of this region in spite of its rich natural resources. The framework also identifies the outputs of the Project and the necessary activities that will enable achievement of the proposed immediate purpose. 73.1 percent.

Foodstuffs. 2. Water wells and water storage facilities. Provincial and county/city statistics offices. The Government is committed to reducing poverty in the western region. In some locations there may not be a sufficiently skilled pool to be trained. Rock crusher facilities. Lime mines to be developed by local enterprise. In some places labor market may be near fully utilized 2. Increase in GDP per capita in principal beneficiary areas: Southern Gansu Province Counties and Districts by 12 percent per year from 2010 to 2020. Rentals for workforce. Some aggregate and other material might not be locally available. Northeastern Sichuan Province and Northwestern Chongqing Counties and Districts by 10 percent per year from 2010 to 2020. Vocational training will be provided prior to beginning of construction for semiskilled positions such as brick masons. 1. 2. Risk 1. Construction materials to be locally sourced where possible. Complementary activities are implemented.18 Table 2-2: Design and Monitoring Framework Design Summary Impact (Macro) Improved transport system in the region supporting socioeconomic development and the development strategy of western China. 3. 1. 3. Improve economic conditions of residents during planning and construction phase 1. 3. Women to make up 15 percent of workforce on all civil works. 2. Records maintained of all temporary facilities suitable for donation Risks Construction may be delayed due to complexity of tunnel and bridgework. Assumptions and Risks Assumption 1.). Risk Inequitable development impact and widening of income disparities. Services (barbers etc. construction access roads). and from 64 villages to 0 by 2020 in Chongqing. Credit to small enterprises increased by 10 percent annually from 2010 to 2020. Temporary construction facilities to be given to local governments at completion of project (worker housing. 2. Annual reporting by the Project Company. with emphasis on socioeconomic improvement impacts. Investments by MOR and Gansu and Sichuan Provinces and Chongqing Municipality are implemented according to plans. Utilities improved by leaving construction facilities in place at completion of project (Electric power lines. 4. 2. 5. 3. based on development strategy of western China. construction offices. Records maintained of all utilities suitable for donation 2. Performance Targets/Indicators 1.309 villages to 200 by 2020 in Sichuan. 3. Enterprises furnishing consumables during four year construction period to be tracked 6. 4. Sand mines. 2. Contractor to maintain records of hours of training. Official poverty incidence for villages in the project impact area reduced from 1. construction manager housing. Enhance capacity building of locals through vocational training for railway construction jobs. Impact (Micro) 1. Contractor to maintain records of source of all materials. MOR and contractors to maintain records of make up of labor force. Water ponds). Living consumables of work force to be locally sourced (Vegetable markets. 2. Local workers will comprise 60 percent of workforce for all civil works. 4. PPMS at inception. 1. .524 villages to 500 by 2020 in Gansu. 3. from 1. completion and 3 years thereafter. Government investment projects implemented as planned. Micro-credit programs made available for small enterprises Impact (Micro) Improve economic conditions of residents during planning and construction phase. Data Sources/Reporting Mechanism 1.

Chengdu and Chongqing) and other areas to increase to 1. Local government statistics 5. MOR and RAs re-route trains as planned. Number of accidents reduced by 10 percent in 2015 and another 10 percent by 2020. 3. Post evaluation surveys and reports from MOR 8. Progress reports 6. Kunming. the number of shops. Double stack container trains enabling increased trade between the interior and the eastern ports and cities. (ii) tourists visiting the project area. affordable transportation available for rural residents seeking employment in urban areas. 3. 7. safe and affordable railway transport system is developed in the region. Statistics of: (i) trade between western China provinces and eastern cities and ports (ii) railway container traffic 4. Rural residents make use of trains to obtain employment in the urban areas. MOR statistics and operating data before and after the Project 5. Number of tourists visiting the project area increased by 100 percent in 2020 compared to 2010. Assumed economic growth rates and traffic growth rate for LCR materialize. 5. Rural residents have low-cost transportation to seek employment and income. Technological advancement in the railway sector. 2. no major cost overruns. 3. Develop the freight and passenger train operating pattern as per the train paths projected by FSDI on the LCR. tourist centers. hotels.203. Local economic development with emphasis on tourism is implemented. from present 27 to 30 hours to 5 hours. 2. Risks Local governments may not have sufficient financial resources to implement the tourism and local area developments. Achieve passenger projections by 2020. 2. MOR statistics and operating data before and after the project implementation (i) Passenger PKM meets plan. Risk Auto usage on the upswing as a result of the opening of the expressway Assumption Local governments undertake the planned tourism and local area development. Performance Targets/Indicators 1. in particular originations and terminations in southern Gansu and northeastern Sichuan.89 percent. Project administration missions and project completion report 7. 3. Operate 78 passenger train pairs and 46 freight train pairs by 2020. Accident statistics from Public Security Bureau and hospitals 9. By 2020. 4. Container traffic between western China terminals (e. 8. Urumqi. 2. Data Sources/Reporting Mechanism 1. An efficient.g. . Passenger and freight operators realize the benefits of using the new railway. Reevaluate the EIRR at mid-term review and at project completion.19 Design Summary Outcomes 1. Demand forecasts materialize. Travel time reduced from Lanzhou to Chongqing. Lanzhou. Maintain the Project’s economic rate of return of approximately 16.. 6. 4. and businesses established in the vicinity of station areas increased by 80 percent compared to 2010. 4. Assumptions and Risks Assumptions 1.750 TEUs in 2020.

• MOR. Area geology and lithology could result in unexpected construction difficulty. Track Laying: Started by November 2011 and completed by November 2013 6. Performance Targets/Indicators 1.82 billion .5 million tons by 2020 and 133. of which the poor. Assumption Mitigation measures are adequate to address environmental impacts. 8. Transport a total of 26. 2. PAMs and PCR Assumptions and Risks Risks Construction may be delayed due to complexity of tunnel and bridge works. Materials and Equipment: Procurement completed by July 2014. Project administration missions (PAM) and Project Completion Report (PCR). 2. Physical completion of the Project railway complete (799 track kilometers 833 route km) with facilities as per the implementation schedule and adhering to the physical completion date and date of start of commercial operations. Resettlement: Completed by May 2011.20 Design Summary Outputs 1.826 mu temporarily required during construction.5 billion PKM in 2020. Environmental monitoring reports. Data Sources/Reporting Mechanism 1. 3. A total of 12. children. Civil Works: Award of contracts to commence by May 2008 and completed by February 2014. Mitigation measures included in the civil works’ contracts. The poor are qualified for job opportunities 7.072 households will lose buildings on their property on account of the LCR construction. Activities with Milestones: 1. Monitoring reports of the social development action plan. Equipment procured and assigned to service on LCR by March 2014.694 mu of land will be required for the construction of the LCR with an additional 20. capture 50% of unskilled labor jobs 9. Regular resettlement monitoring by an independent institute engaged by the Project Company 5. 4. thus reducing poverty. Commitment of MOR/Project Company and contractors to implementation of mitigation measures.75 million passengers in 2020. and ethnic minorities are minimized by implementation of the social development action plan. Assumptions Completion of equipment procurement and installation by project opening. 12. A total of 24..5 billion TKM and 14. MOR statistics and operating data before and after the project implementation. Source: Consultant. 10. 6. PAMs. Employment opportunities are generated for poor and vulnerable groups to increase incomes and living standards. Railway infrastructure and associated facilities along the LCR alignment are implemented.9 million in 2030. including women. 3. 2. Transport capacity to increase to 51.3 million tons in 2030. 5. Mitigation measures are adequate to address social impacts 11. women. Passenger Stations to be constructed. Risks Relocation may not be done satisfactorily. Telecommunications and signaling completed by February 2014. Procure necessary equipment and facilities to enable efficient operation and management of the line. Viable alternative employment may not be found for affected people. Implementation of the land acquisition and resettlement plan. number of patients. 686. Control of HIV/AIDS and health risks for construction workers and service providers (indicators include number of clinics. and number of testing facilities). Environment at the project site is protected and adverse environmental impacts minimized through mitigation measures as included in the environmental impact assessment (EIA) and summary EIA. and 47. 2. 4.12 billion • China Development Bank $3.000 person-years of construction-related employment are generated. Inputs • ADB $300 million for Railway Development. Gansu and Sichuan Provinces and Chongqing City $4. physically impaired. and PCR. Transport a total of 89. Any adverse impacts on the poor. 5. Assumption Adequate land for new house sites is available within villages for resettlement. number of posters. 3.

1% 1.1% 2.2% Billion 85.269.4 367. Both economic and financial analyses depend heavily on traffic forecasts. A large number of passenger trips on LCR will be for tourism.9 27.039.0 100.2% Billion 71.307.025. Chongqing is already a tourist destination of national importance with substantial growth prospects.0 738.908 4.0% PKM/Person 1.4 Passenger travel % of PRC 83. China Statisatical Yearbook 2006. Chongqing Statisatical Yearbook 2006. Such changes occur by diversion of traffic from other railway lines and from other modes of transport.200 464 100. Sichuan Statisatical Yearbook 2006.0% 1.6 1.5 111.0% 6.8% 27.1 30.0% 1.5 55.0 % of PRC 174.4% 6.21 Table 3-1: Selected Transport Indicators.971.772.0% 76.7% 4.0% 1.8% 2.0% 2.746.8 TKM % of PRC 1. most traffic will be using the Project rail as part of a much longer trip itinerary.017. Therefore.8% 161. B. The economic analysis requires a forecast of all the traffic flow changes that will result from the existence of the Project. For passenger traffic. Service to passenger stations at cities which are to be served along the alignment will generate new trips as well as cause some diversion from existing road transport to rail use.4 Freight transport % of PRC 53.5 89.8% 48.3% 1.6 100.8 100. transit and interline traffic.2 2.2% 114. its potential to generate passenger traffic is significant.9% 73.8 57.8 1.112.6% CNY Billion 193.6 100.2 31.0% 8. The following general approach has been used to forecast freight and passenger traffic associated with the operation of LCR: a.8 90.9% Million 17.0 1.435.3 Rail TKM TKM/Person 2.7 100.137.0% Source: China Statistics Press. b.7 86.9 974. i.8% 32.0% Billion 28. The financial analysis requires a forecast of traffic on the Project line.5 236.e.9 37. The railway is one of the lines that will carry double-stacked container trains with nation-wide origins-destinations (O-Ds).6 307.3 1.0% 2.9 PKM % of PRC 1.1% 16. Gansu Statisatical Yearbook 2006.8% 1.301.5 Gross Regional Product (current) % of PRC 1.6 640.9 87.0% 18. Shaanxi Statisatical Yearbook 2006.335.395.1% TKM/Person 3.6% 3.7% 14. . Since Chongqing City is a provincial level municipality with the largest population among municipal administration units in China.5% 38.5 62. use will also be primarily for trips with O-Ds beyond the cities served by LCR. Project future passenger and freight traffic separately.6 7. Approach to Traffic Forecasting 78.8 100. diverting to and transiting this line.6 1.585.0% 606.534.9% 153.300 Rail PKM PKM/Person 667 750 127 177 % of PRC 143.4% 0.072.4 Population % of PRC 2. 77. project national transport demand based on broad economic parameters. For freight traffic. 2005 Unit Gansu Shaanxi Chongqing Sichuan Million 25.8 100.8% 5. September 2006.037 15.9% 40.2 2.997.4% Indicator PRC 1.

. The earlier RIS version of the model has been updated in 2004 by the Consultant under a contract with MOR.14 Project local and interline freight and passenger traffic using results of field surveys. In addition to generated traffic in the PIA. The unmet demand for rail freight transport is endemic in the capacity constrained CR network. The CR-TEM incorporates passenger traffic (including high speed trains on the dedicated passenger railway network) into the network optimization module. reaching 1. Final Report Volume 1: Railway Investment Study (RIS) Model Version III.050 km in 2020 and 1.0 percent for tons and 4. Ltd. 2003KFEQA13005US. The additional capacity created by LCR combined with the lower distance it provides to transit shippers in the national and international markets (see Figures 1. respectively in national transport demand from 2006 to 2034. The projections summarized in Table 3. Detailed information on CR-TEM is provided in TERA Beijing Consulting Co. (iii) Traffic that would not move at all in the absence of LCR (generated traffic) based on field market research regarding the nature and extent of economic. Using TERA’s China Railway Traffic Evaluation Model (based on an updated version undertaken by TERA of MOR’s Railway Investment Strategy (RIS-III) Model) as a tool for projecting future transit traffic on the LCR. Air transport diversion for passenger transport is considered viable between Lanzhou and Chongqing as LCR provides an attractive service between the two cities. .4 percent for tons and TKM.3 percent and 4. This reflects the overall impact of commercial and industrial development in inland China particularly in central and western PRC. A lower growth rate in freight transport sector demand is expected as it reflects the increasing importance of the tertiary sector in PRC’s GDP. commercial. Project future traffic in three categories. Overall PRC Freight Transport Projections 79. (ii) Traffic that would move by road and air (for passenger only) in the absence of the Project (diverted traffic) based on an assessment of the relative service and cost competitiveness of and passenger/shipper preferences for the LCR.8 percent for TKM.22 c. and industrial development in the Project Impact Area (PIA) and in outlying areas that is clearly attributable to the LCR. 2004.5 in Section 1) will result in increased generated traffic from outside of PIA.4 and 1. These rates are somewhat lower than the government’s estimate of GDP growth of 7. A summary of CR-TEM’s key features is presented in Appendix 3-A. 14. transit traffic along the LCR corridor is significant. accounting for distinct economic impacts depending on the type of traffic: (i) Diverted rail traffic from other rail lines to LCR. and substantially improves the objective function and constraint equations in the overall optimization algorithms. The higher growth rate in TKM compared to tons implies that the average rail length of haul (which increased from 514 km in 1980 to 770 km in 2005) will continue to increase. prepared for MOR under Contract No. treats trains rather than tons and passengers as traffic inputs. with equal or less time of door-to-door travel at significantly lower cost. May 14.5 percent per annum during the period 2006 to 2020 and between 4 percent and 5 percent thereafter. d.2 imply an annual growth rate of 4. C. Freight Traffic Projections 1. The annual growth in rail sector transport demand shown in the table is 3. It also reflects the need for improved productivity in the sector in order to maintain PRC’s competitiveness in export markets since higher distances would escalate transport cost.262 km in 2034).

240.552.96 9.36 3. 83.28 4.07 45.84 26.804.14 7.065.65 48.56 39.045.32 12.95 14.045. there is a comprehensive transport network of railways.61 57.515.579.299.48 3.76 4.86 5.779.15 14.865.268.827.174.699.18 42.27 6.61 3.92 55.159.14 56.91 20.68 6.429. expressways and an airport.923.192.22 47.50 53.729.71 3.98 11.06 58. Table 3.31 2.725.67 13.87 2024 19.18 11.89 59.300.69 57.75 57.58 11.99 10.288.92 5.10 2007 6. LCR begins in Lanzhou which is a major transport hub in western China with a comprehensive network of railways. Of the 483 zones.709.84 2027 21.50 13.62 3.76 4.580.985.037. The TERA CR-TEM searched all of MOR rail traffic for 2005 moving over all CR O-D pairs in 483 zones throughout China for traffic that would possibly be diverted to LCR. local/interline traffic diverted from road and (iii) generated local/interline traffic.946.09 55.945.26 4.240.422.84 2.945.290.110.51 4. 2006-2034 Year Constant GDP (CNY Billion) 2006 6. compared with PRC averages.171.655.938.903.85 12.097.15 2009 7.06 10.965.74 50.26 2032 26.123.139 O-D pairs.60 2014 10.93 54. The freight traffic forecast for the proposed LCR line is composed of: (i) transit traffic diverted from other railway lines.21 5.84 7.711.89 2018 13.527.714.779.76 81. expressways.256.52 23.097.355. km of area.789.87 3.813.41 2012 9. There is an expressway that will be constructed over the next 5 years but otherwise.358.476.74 8.658.38 2019 14.82 61.12 3.86 12.42 4.048.41 4.461.84 5.26 55.574.27 3.26 9.10 11.09 2.29 5.79 11.40 2029 23. In terms of population density both Chongqing and Hubei show a higher concentration of people per sq.48 2.280.510.03 21.415.76 5.03 11. Transit diverted traffic from rail was estimated using the TERA CR-TEM and interline/local diverted and generated traffic was estimated using results of our industry surveys conducted under this project.09 2.935.37 57.848.592.87 2033 27.87 3.452.54 5.81 10.34 Source: Consultant estimates PRC Transport (Million Tons) Rail Tons (Million) Rail Share of Tons (%) PRC Transport (Billion TKM) Rail TKM (Billion) Rail Share of TKM (%) 18.438.60 3. Existing Transport Infrastructure and Traffic Conditions in the Project Area 80.571.32 14.76 4.59 2.490.827.34 5.78 12.586.21 61.85 57.305.26 11. The diverted freight flows consisted of 2.94 37.182.24 6.241.408.226.80 4.843.14 2017 13.504.60 8.03 5.37 57. In a second run of the CR-TEM the LCR project was included to analyze changes in CR traffic patterns under “with LCR” assumptions.303. transport infrastructure is limited.574.77 2026 20.50 6.90 31.660.58 2013 10.29 24.774.539.772.22 5.202.23 11.462.56 11.94 km alignment between the two termini.05 3. each also has a comparatively low density of railway lines per sq.63 5.244.304.19 2011 8.88 2023 18.484.20 7.96 2028 22.44 13.04 58.37 3.44 7.691.68 11.164.223.428. the Yangtze River and an airport.51 2015 11.195. Table 3-2: Freight Tons and TKM Projections for PRC.78 57.803.903. Freight Traffic on the Proposed LCR 82.02 2034 28.77 2008 7.30 2020 15.51 12.073.11 56.611.115.873.340.59 36.63 55.42 8.35 3.338.828.619.002.95 52.026. Similarly at the southern end in Chongqing. .59 22.10 55.174. km than the national average.22 30.064.017.150.16 4.70 60.69 12.64 6.76 7. 3.22 2.50 2021 16.76 4.958. For roughly 600 km along the 832.403.49 57.77 40.49 61.62 44.858.75 9.614.516.94 6.646.482.32 60.54 6.69 33.872.04 5.09 12.354.27 10.805.806. these areas are dependent on a narrow winding rough 2-lane road which is unpaved in some sections.26 34.67 61.645.78 10.76 4.92 8.04 56. 117 zones were identified which would originate or terminate traffic that would use LCR.05 13.33 55.647.26 2010 8.3 provides transport statistics in the Project area.365.875.28 11.23 4.112.80 13.44 55.221.89 3.538.631.58 5.132.21 54.18 6.40 5.89 6.08 2.33 6.90 10.902.03 4.096. This analysis provided a representation of the traffic pattern under “without LCR” assumptions.437.12 2025 20.85 54. The trips per person are lower.58 4.63 2031 25. As described earlier.360.709.614.60 2016 12.65 4.064.13 11.07 2. (ii).847.951.79 55.791.31 13.928.144.88 11.93 28.12 3.81 19.189.217.03 4.23 2.58 2.08 2022 17.50 27.621.61 14.95 59.70 7.42 11.475.809.353.49 2030 24.

94 1. Sichuan and Chongqing.230 334.11% 0. 84. phosphate rock. China Statistical Yearbook 2006.100 485.430 32.31% 3.013 1.810 202. asphalt.2 2. construction and decorative stone and marble.470 n/a 0.400 1.81% 414 278 1.96% 391.703.04% 2.49% 1. The respondents were asked the effects on production and modal preference if the LCR were constructed.780 Waterways 2.171 (1000) 35.24 with an average density of 4.00 2.39% 1.67% 3.52% 5.240 605.22% 1.7 percent for outbound traffic and 22.696 2. and 10.43% 9.000 n/a 18.05% 1.01% 1. This underlies the importance of LCR as a transit corridor in PRC as well as for China-Eurasia trades.600 869.722 1.km) 9. bricks.440 3.973.007 178.871 1.800 tons km) Railways 2.96% 8. Absent the LCR.196.046 0.36% 4.2 2.61% 28.531 1.39% 0.39% 89.240 121.951 4.220 29.08% 0.654 58 457.86% 5.37% 2.030 12.20 2.960 Highways 13. Table 3.000 280.5 million tons per km in the up direction (Chongqing to Lanzhou).5 percent of the diverted traffic is containers. current (without LCR) and future (with LCR) transport modes used for shipping output to clients and raw materials to the plant.250 3.46% 1.543 123.139 O-D pairs for diverted traffic.330 n/a 2.78% 692 1.71% 2.930.91% 3.749 n/a 4.38% 2.775 38.576 20.670 passenger km) 606. which is considerably higher than the national CR average of 2.270 10.0 million tons from 2006 to 2010.000 2.000 3.48% 9.860 2.800 3.46% 4.906 40.417. the respondents indicated average annual growth rates of 21.307.57% 6.33% 2.200 n/a 2.85% 1.08% Length of Transportation Routes (km) Railways in Operation Electrified Railways Highways Navigable Inland Waterways Total Civil Aviation Routes Petroleum and Gas Pipelines 75. coal and coke.11% 14.43% 4.78% 2.500 44. Tables 16-26 and 16-27 of CSY 2006.908 20.3: 2005 Basic Transport Statistics in PRC.98% 1.200 Railways 929.175 391.498 14.06% 0.72% 4.65% 57.3 million tons to 27.270 Waterways Total Passenger-Kilometers (million 1.6 percent.64 million tons per km in the down direction (Lanzhou to Chongqing) for 2005. Gansu. Most of the increase in outbound and inbound traffic is concentrated in less than 15 commodities including sand.98% 37.77% 17.41% 193 136 0.880 13.117 n/a 36.830 1.160 3.11% 2.58% 90.42 6.300 55.21% 0.180 Total Passenger Traffic (1000 persons) Railways 1.8 million tons during the same period.601.5 percent for inbound traffic.97% 687 265 1.164 Passenger Vehicles Trucks 14.50% 2.470.963 0.14% 3. Two separate surveys were conducted by the Consultant in March 2007.880 1.200 2.210 Highways 6.300 162. Overall.5 million tons to 34.56 25.200 Number of Road Transport Vehicles 49. chemical products. The purpose of the shipper survey was to identify current production and for expansion of production capacity if LCR is constructed.490 0.76% 2.5 5.60% 2. Shaanxi.000 10.140 2.42% 3.11% 3.365 2.12% 1.620.200 n/a 2.800 1. .84% 86.000 347.350 600.756 13.5 5.67% 952 1.71% 0. Outbound traffic of products in the PIA is estimated to increase from 15.27% 87.94% 1.67% 2.300 38.89% 971 394 2.780 Waterways 18.96% 36.692. 207 companies responded and provided information. Sichuan and Chongqing National Percent of Percent of Percent of Percent of Description Gansu Shaanxi Sichuan Chongqing Total PRC PRC PRC PRC Population (million) 1. Shaanxi.492 1.78% 71.22% 634.03% 30.731 n/a 3. the primary route used is the Baoji-Chengdu line which is heavily congested. and current and future employment levels.967.22% 0. Note: Number of vehicles is the sum of civil and private vehicles.13% 27.14% Area (million sq. bottled water.47% 1. About 6. and crude oil and petroleum products.06% 3.220 1.300 Highways Waterways 4.36% 1.746.55% 0. salt. cement. 85.480 Total Freight Ton-kilometers (million 8.998 19.754 41.000 300 703.430 0.509 1.900 5. aluminum products.640 73.50% 0.660 Total Freight Traffic (1000 tons) Railways 2.830 1.00% 55.072.07% 111.6 0.45% 17.77% 1.785 29 4. and 2006 provincial statistical yearbooks for Gansu.438 19. The model searched the existing and proposed routing “without” and “with” LCR assumptions to determine the savings in distance and cost and identified 2.81% 329 0.86% 2.82% 0.300 31.90% 10.214 333.18% 1.830 Highways 16.155.740 225. grains.43% 28. Inbound traffic of raw materials and intermediate goods is estimated to increase from 12.21% 0.70% 51.43% 19.037 22.12% 62.140 4.92% 4.57% 0.05% 15.000 n/a 115.998.98% Source: China Statistics Press.00% 12.263 1. September 2006.013 54.06% 7.95% 1.67% 9.89% 24. The first survey was focused on shippers in the PIA along the alignment of LCR.222 n/a n/a 1.025.830 1.489 n/a 258.68% 85.

90. Due to the lower cost transport offered by LCR in an area where railway service currently exists at the two ends and two intermediate points of the alignment all principally in the east-west direction. 23 percent of the diverted traffic from road is inter-line (either originating or terminating but not both on LCR) and 77 percent is local traffic (both originating and terminating on LCR).5 percent for inbound traffic) were much higher than the national growth rates of CR traffic. these costs are 5 to 12 times higher. 91.66 million tons. was undertaken during early March 2007 along the National Road No. In particular oil refineries. Of this traffic 46 percent is interline with an average length of haul on LCR of 423 km and 54 percent local with an average length of haul of 298 km.9 hours (approximately 60 km/hour). Growth rates for iron & steel are 5 percent during the period 2005-2020 and 4 percent per year after 2020. fuel consumption. The generated traffic consists of 10. While we used much of the information provided by these industry surveys to estimate future diverted traffic from road (as well as generated traffic).84 for a 10-ton truck.7 percent for outbound traffic and 22. 87. tolls. Tabulation of the 2006 traffic diverted from road transport consists of 2.94 million tons of inbound raw materials or a total of 20. Due to the difficult terrain medium and large size trucks are not common in the PIA. by commodity.59 for a 25-ton truck to CNY 0. and coal mining companies indicated a strong growth as a result of the opening of LCR. The respondents were asked to estimate their production and raw material input levels if LCR were to operate by 2010. power plants.3 axles. ¾ The average age of trucks is 3. operating costs of truck transport in the region have been estimated. The second survey of 472 truck drivers (and bus drivers).25 86. Some trucks in the sample are overloaded by as much as 3 times their capacity.3 years and the average usage per year is 76. 10 percent are medium size of 3 axles.53 million tons of inbound (raw material) shipments for a total of 5.53 million tons. growth rates used were those of the total nation-wide CR freight traffic. For example. The average length of haul on LCR of the interline traffic diverted from road is 448 km and of the local traffic 356 km.735 km. respectively. ¾ 59 percent of the trucks are owned by the driver. 89. odometer reading. Due to lack of strong enforcement of axle weight controls trucks in general tend to overload in PRC. etc. and particulars about the vehicle such as ownership. national CR growth rates are 3. We consider our use of the national CR traffic growth rates to be a more appropriate method reflecting a conservative approach to traffic forecasts.97 million tons of outbound (product) shipments and 2. ¾ 95 percent of trucks are diesel powered. 2-axle vehicles. This information included the load carried. Based on the information provided in the survey of truck drivers and other publicly available information. ¾ The average distance for the trip is 591 km and the travel time 9. Guang’an and Tanchang. . age. 6 percent by another person. The ton-km truck cost ranges from CNY 0. the generated traffic potential of LCR is significant.71 million tons of outbound products and 9. type of vehicle and engine.5 percent and 1 percent during the periods of 2005-2020 and beyond 2020. On average trucks in the sample have 2. and 35 percent by a company. The data provided by truck drivers gave the following general characteristics of truck transport in the region: ¾ 82 percent of the trucks are small. 212 at Cangxi. The implied growth rates from 2006 – 2010 as provided in the industry surveys (21. 88. and 8 percent are large (more than 3 axles). ¾ Average capacity of trucks is 8 tons and average load is 9.2 tons. Compared to the base railway tariff.

26 14.09 26.56 55. Interline traffic has either an origin or destination on LCR. The higher growth rate for PKM after 2020 assumes the improved competitiveness of the dedicated high-speed railway network after the national passenger network is completed.91 10.30 2031 60.08 19.68 Total 40.79 33.37 33.77 percent of the total volume in the 105 traffic zones.53 36.69 14.50 10.10 72.60 35.11 122.56 84.26 92.93 12.07 63.05 113. The selection of the zones was made from the 2005 output file which shows traffic to/from points within the PIA served by rail.10 41.41 42.46 22.80 2022 43.55 32.19 43.78 13.62 35. the passenger traffic volumes in Chengdu.88 2018 37.35 2020 40.11 70.28 53.59 10.49 15.63 82.30 11.63 76. transit and local traffic.37 4. for the 2010-2020 period.32 46.53 18. rising to 157 million tons in 2034.71 2026 50.83 100.82 109. Generated traffic is traffic that would not otherwise move in the absence of LCR. This traffic is either local or interline.96 39.53 2027 52.49 61. Following is a description of the approach and assumptions used to project each type of traffic.95 128.10 4.52 30. 12 zones account for 84.44 8.5%. no diverted passenger traffic from inland waterway is expected.86 14.71 22.67 63.23 54.92 2025 48. This traffic is diverted from other CR lines.94 7.73 6. Some 105 traffic zones have been identified by the model. The population begins declining after 2017.65 8.12 46.93 67.88 85.70 57.53 68.61 6.20 36.67 23.41 18.96 5.79 21.01 43. respectively.4 presents the summary freight traffic projections for LCR from 2015 to 2034.28 46.02 58. 94.59 48. Passenger Traffic Projections 93.29 7.55 37.66 58.1% for passengers and PKM.77 104.72 42.85 15.33 21.50 64.70 11.96 72.62 50. LCR passenger traffic projections are made for interline.82 16. thereafter.94 60.33 60. This traffic is either diverted from rail (from existing traffic to/from Chongqing or Lanzhou) or road and air.28 20.81 17.29 19.77 51.31 40.78 68.98 44.16 2021 42. Therefore.30 49.98 38.37 2032 62.31 19.94 56.03 48.57 56.68 45.90 9.2% and 6. Results show significant modal shifts from road to rail transport and generated traffic with the completion of the LCR.61 76.31 9. About 69 million tons will be transported in 2015.66 4.29 13.47 16. Among the 12 zones.46 70.90 35.89 89.05 65. Urumqi and Lanzhou are . Diverted passenger traffic from other CR lines is forecast using the TERA-CR-TEM traffic assignment model.01 133. 95.85 4.97 24.09 63.03 8.09 58. Many towns along the LCR line are far from railway lines and typically rely on high cost road transport to move their products.91 32.60 2016 33.17 89.45 53.15 13.01 6.77 43.48 118. Transit traffic represents passenger movements which do not have either an origin or destination on LCR.18 11.17 62.70 45.68 56.47 2023 45.62 3.16 88.65 52.13 56.19 29.57 54. Currently passenger movement by inland waterway is virtually non-existent in the Project area and is mainly localized to short shore-to-shore trips rather than lateral longer distance travel.03 38. This type of traffic is not conducive to railway passenger movements.83 61.32 47.40 2028 54. 41.39 9.37 47.28 37.50 53.80 50.05 33.36 25.86 144.47 80.31 138. The passenger and PKM growth rates after 2020 are assumed at 5% and 5.50 40.17 44.22 2017 35.32 51.39 52.21 5. The passenger traffic projections for PRC summarized in Table 3.63 13.53 45.66 150.4: Diverted and Generated Freight Traffic Million Tons Billion TKM Diverted Diverted Generated Total Generated Truck Total Rail Truck Total 2015 32.56 79.93 28.13 10.86 75.49 30.98 51.95 Source: Consultant estimates. respectively.31 26.47 93.92 20.95 12.87 9.79 30.58 17. These growth rates in passengers and PKM are somewhat similar to the government’s estimate of GDP growth of 7% per annum during the period 2005 to 2020 and 5%.58 D.92 48. Year Rail Table 3.50 2033 64. Among these.09 31.45 65.07 96.59 2019 38.13 16.75 81.12 15.73 157.12 3.30 6.81 73.66 93.83 86.5 imply an annual growth rate of 7.32 2029 56.14 42.69 2034 67.28 2030 58.46 5.38 48.18 2024 47. Table 3.74 78.87 40.98 28.

54 2014 1.965.04 33.00 2.315.778.344.04 19.35 3.32 631.90 20. 99.34 1.493.206.532.12 billion.47 2017 1.35 24.44 5.90 26.878.578.48 21. The sample size was 400 each bus and rail passengers 384 and 390 valid responses.13 14.16 29.73 9.056.731.50 23.994.23 32. Lanzhou.1 percent of the total TKM diverted from other CR lines.80 2032 1.189.25 2018 1.43 3. assuming LCR was an operating line. and Nanchong in March 2007.18 5. whereas it is ranked low among bus passengers (18.35 17.46 34.67 1.81 27.22 884.85 12.93 3.36 29.319.00 4.807.342.07 .862. What is different from the freight transport is that.333.600.730.209.551. 2005-2034 Projected Year Population (Million) 2005 1.27 30.482.445. If LCR was operating in 2005.326.03 995.40 34.29 2.350.90 36.35 7. This represents 0.00 1.64 30.74 20.89 2007 1.99 6.98 1.18 18. The 1.098.55 2. information was obtained regarding travel routes.93 583.56 2006 1.655.29 2030 1.00 1.129.13 4.93 PRC PKM (Billion) CR PKM (Billion) 1.420.95 10.38 35.091.313.30 15.03 2.93 24.76 18.738. the CR-TEM runs show that there are 1.143.462.243.71 24.29 1.99 23. Wudu.04 31.97 4.249.77 2009 1. Based on these interviews. The most important factor among both bus and rail passengers in selecting a mode of transport is safety and the second ranked factor for both passenger groups is comfort.344.056.55 96.00 4.00 8.518.08 2016 1.65 22.83 32. On average the distance saved by LCR is 296 km with some O-D pairs showing as high as 619 km.65 14.548.36 22.200.78 2.974. the same number of passengers in 2005 would have been transported by CR with 0.438.044.22 1.979.000 passengers.485.24 3.43 3.269.84 1.297.03 2.10 682.652.38 37.27 22.56 2027 1.455.29 6.07 15.03 29.721.38 1.061.61 2012 1.06 23.78 1.63 7.72 799.45 2022 1.67 36.03 billion TKM or 83.25 20.874.55 2.45 21.24 3.17 17. PRC Passengers CR Passengers CR Share (Million) (Million) (%) 18.590.38 28.18 27.249.183.51 7.873.309.26 31.33 15.14 2.75 35.00 4.99 19.75 CR Share PRC of TKM (%) Trips/Person 33.031. Due to the reduced distance on LCR the total system-wide PKM savings on CR is 1.234.32 11.470.93 2034 1.13 30.63 2008 1.639.86 22. Lanzhou. respectively.48 8.343.341.168.04 27.385. the largest flows are from Chengdu to Urumqi (329 thousand) and from Urumqi to Chengdu (289 thousand).00 3.55 4. Speed is an important factor for rail passengers.86 6.61 Source: Consultant estimates.27 22.94 17.88 34.53 35.96 6.67 3. some passing through as transit traffic and some as interline traffic.40 19. the originating and terminating volumes of the traffic zones are nearly balanced.25 19.11 2015 1.34 8.402.94 7.15 2.261.01 3.55 9.78 million passengers from other CR lines.61 37.297.144.11 30. it would divert 3.04 2020 1.00 4.70 2. preferences.58 1.40 10.22 20.5: Passenger Traffic Projections for PRC and CR.733.91 24.04 21.278.06 9.01 5.12 2.27 2.79 14.336.982.13 23.12 16.37 2013 1.14 36.329. economic and employment status.14 25.21 35.641.76 18. The Consultant conducted passenger surveys at bus stations in Chongqing.04 2.780.12 1.65 31.000.327.14 28.51 1. and Nanchong and at three railway stations in Chongqing.114.66 2033 1.500 in the up direction.302.330.776.48 2024 1.43 32.732.81 20. 98.30 34.61 6.72 11.10 22.63 21.25 6.37 1.324.31 37.688.340. Based on the actual passenger transport O-D table of 2005.950.53 16.26 2023 1.92 35.41 13.83 1.26 2011 1.041.74 7.19 percent of the nationwide CR PKM.39 billion PKM on LCR.40 2.58 18.58 8.98 35.339.11 2.66 19.04 2021 1.34 2031 1.73 25.67 26.696.70 1.68 23.10 16.12 1.396.680.02 2.24 25.10 2025 1.746.48 14.431.50 2.332.334.64 2029 1. There are 37 O-D pairs with a flow of over 20. In other words.49 2.20 5.37 10.38 19. This represents the productivity improvement of LCR in the national railway passenger transport.09 23.84 36.245.176.037.00 938.507.217.65 3. Diverted passengers between Urumqi and Chongqing are also high: 142 thousand in the down direction and 113.44 7.287.514.91 5.120.97 9. 97.25 4.924.84 31.344.08 14.077.293.321.937.66 31.957.828.27 all above 1 million.20 3.375 O-D pairs of passenger traffic diversion add up to 7.307.339.01 13.52 30.839.19 percent less PKM.930.509.259.79 1.57 5.15 3.40 2028 1.385.60 16.63 33.99 21.363.337.220.880.883.295.89 15.672.75 5.44 2019 1.893.344.546.13 2026 1.343.98 1.83 11.71 16.663. The 90 O-D pairs which show traffic diversion of more than 1 million TKM collectively account for 5.578.106.307.263.90 30. Table 3.32 24.000.432.720.91 2.44 36.79 738.527.44 5.31 2010 1.17 18.60 31.885.375 passenger O-D pairs diverted from other CR lines.62 17.

773.51 15.086. Volume 1.503. and local).28 percent versus 6.070.34 24.69 6.039.73 22.15 8.58 10.63 4.24 3.854.721.47 11.937.24 13. 101.75 percent).245. The route of the proposed Lanzhou-Chongqing railway (LCR) has been divided between two institutes.970.228.36 6.14 35.203.254.59 15.85 7.064.72 19.76 14.69 11.36 16.15 15.998.09 6.68 25.67 3.49 13.04 42. Section 3.401.48 19.50 22.24 5.46 8.194.27 4.21 9.25 12.084.80 7. The First Survey and Design Institute (FSDI) has been responsible for the . The availability of direct service is ranked equally at 19.281.959.39 8.40 20.20 16.73 4.280.54 16.70 23.22 9.016.65 10. however.651. Cost is a more important factor among bus passengers (19.48 50. Table 3. Introduction 1.85 17.46 2.01 40.170.192. It also reflects the safety and comfort factors which are ranked high by bus passengers in modal choice. In both groups however.00 18.15 6.29 10.11 5.53: Summary Passenger Traffic Projections PKM (million) Passengers (million) Interline Local Transit Interline Local Total 6. Interline traffic will be roughly equally divided between EMUs and express passenger trains of 160 km/hr and all local traffic will use roughly equally express passenger trains and local service trains of 120 km/hr. Considering that safety and comfort are ranked 1st and 2nd by both groups.796.06 6.52 6.864.58 60.79 4.64 9.87 5.624.45 6.8 percent) would opt for bus for trip distances of 501 to 800 km and none would choose bus for trips of more than 800 km. In terms of travel distance as a factor of modal choice.48 31.411.257.438.46 4.68 4.93 3.571.90 3.18 6.73 17.60 18.44 25.07 23.785.60 8. and 3-52 in Supplementary Final Report.327.70 10.69 8. This reflects the bad condition of roads in the PIA.71 30. the potential modal shift from bus to LCR in both high speed and conventional rail is evident.98 13.75 5.45 2.25 7.62 18.42 5.697.46 19.543.815.625.16 34.43 8.705. LCR’s potential in serving the mobility needs of the people in the PIA is underscored.034.81 8.35 percent) than rail passengers (12. Considering that the average distance traveled by bus passengers in the survey sample is 259 km.32 21.113.74 6.60 11.14 57.36 percent).82 5.152.12 45.558.15 9. Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Transit 4.53 19.11 11. interline.94 12.164.06 12.23 8.30 22.081.716.44 5.86 14.50 3.080.500.81 5.336.50 10.83 6.588.29 20.89 4.512. 3-47.544.003.108.32 26.687.51 9.50 9.170.70 18.20 9.78 7.728.19 4.07 Source: Table 3-40.10 28.90 11.881.03 15.566.83 11. road transport (bus and car) has a distinct advantage among bus passengers over high speed rail service for distances of up to 200.464. 4th in importance among bus passengers and 5th among rail passengers.34 9.96 10. Very few bus passengers (0.11 10.661.019.14 30.05 37.35 8.724.6 presents a summary of all passenger traffic projections by type (transit.374.64 9.38 5.84 7.09 11. cost is ranked low.88 14.87 13.95 10. 100.008.851.70 11.12 3.453.459.77 53.506.03 12.96 21.95 8. 66 percent of bus passengers prefer conventional (regular) train service for distances of less than 200 km and minimum 75 percent prefer high speed train service for distances of more than 200 km.089.91 32.43 3.523.44 26.26 47.12 4. IV.440. General Evaluations of LCR 102.34 4.793.49 12.86 6.546.06 8.557. Surprisingly.03 Total 10.453.65 5.15 7.25 6.79 7.66 12.89 14.93 17.287. All transit traffic will be on EMU trains of 200 km/hr.99 28.770.56 12.69 3. Even in long distance (more than 1200 km) trips the preference of bus passengers is rail (81 percent) than air (19 percent).783.898.29 33. TECHNICAL CHARACTERISTICS A.18 25.46 Table 3.5 percent by both groups.23 7.99 9.84 6.99 4.93 9.67 12.91 10.62 8.181.91 5.79 10.38 7.42 7.699.446. 3-45.24 12.373.78 5.

historical sites. While this does not approach the 350 km/hr design speeds of the dedicated high-speed passenger lines in China. The design of bridges. and high speed passenger service. MOR has a comprehensive series of railway design standards that cover a full range of infrastructure and operating criteria. conventional and express freight and double stack trains. reduced distances. land acquisition and resettlement. Basic Approach to LCR Design 106. In addition. Should the design organization determine a need to deviate from these standards.. will appeal to the general passenger transport needs of the region. The basic route location. The principal requirements of the LCR include the following general characteristics: ¾ High-Speed. land use.4. i. These mild transitions will provide a comfortable as well as safe ride for passengers without compromising transit time. Train operations will utilize automatic block systems incorporated . The design speed is also more than adequate for the needs of freight service and freight trains will be more impacted by slower speeds on the upgrade portions of the route. subgrade. wetlands. The maximum design speed for LCR will be 200 km/hr. bridges. ancient trees. In its design approach FSDI has complied with MOR design standards as well as national government regulations for environmental and cultural protection. preservation of agricultural land. These standards are used by all MOR design institutes and by any organization that is designing track over which CR trains will operate. reduced transit times. the speed descending the grade will be lower due to braking and stopping distance requirements. track alignment and design standards take into account the importance of integrating LCR train operations with other railway lines in the region. These alignment alternatives are discussed in detail in Section 4. and tunnels. ¾ Safety and Reliability. The 200 km/hr design speed also applies uniformly to the various categories of track support structures. This corridor will provide improved rail service. The line is being designed to MOR Class I Railway Standards for a maximum design speed of 200 km/hr with line clearance to accommodate double stack container train operation. The track geometry will have long. including such factors as cultural relics. when combined with frequency of service and relatively low cost. As part of the dedicated passenger rail network and the container rail transport network. 104. environmental and socio-economic considerations.29 northern section between Lanzhou and Guangyuan. The Second Survey and Design Institute (SSDI) has been responsible for southern section between Guangyuan and Chongqing). the LCR in conjunction with a portion of the ChongqingLichuan and the YuHuai Line form will form a critical link of the corridor between the northwest and the southeast of China. These standards are updated on an “as needed” basis and are based on current PRC railway technology. access to mineral resources.e. 103. 2. 107. The corridor will serve to provide improved service on other rail lines in the area that are currently capacity constrained. 105. and resettlement impact. it nevertheless will be sufficiently high that. tunnels. The design institutes examined numerous route alignments and selected the proposed alignment based on construction cost. and stations will allow for passenger trains to operate at the maximum speed of 200 km/hr on most of the route but grade conditions in the mountainous region will result in some up-grade operations with below design speed. The technical design takes into consideration that the LCR traffic will be a mix of passenger. there is an exemption process for obtaining a waiver. This design speed will apply to all route segments. sweeping curves both horizontally and vertically with moderate super-elevation favorable to operating both freight and passenger trains on the same track. The Feasibility Study (FS) report was prepared in October 2006.

The terrain through which the LCR must traverse includes the watersheds between the Yellow and the Yangtze Rivers. it is important that LCR is designed not only for optimum line capacity but also for train meeting and passing capability to keep the overall traffic flow fluid while maintaining the schedules for high-priority trains. of which the elevations are between 1. and the relative height differences are between 200 and 350m. With this in mind. 108.500 and 3. The proposed route has widespread unfavorable geology that includes landslides. this line will pass through three large geomorphic units of Loess Plateau. with a broken series of natural terraces.000m. a description of these features are as follows: 199. Topography: From the north to the south. Technical Characteristics 1. Loess Plateau is composed of valley terraces. The bedrock is mostly exposed and the altitude above sea level is generally between 250 and 500m. Double crossovers at each station will facilitate this movement. the medium-high mountain areas of the Qinling Mountains and Sichuan Basin.500 and 2. The Chengdu-Chongqing-Shanghai corridor is one of the nation’s most important rail links. As a result the topographical and geological conditions are of major significance when surveying and designing the railway. B. In the valley along the Bailong River to the south of Qinling Mountains. the ravines ridges interspersed with hills. These are key east-west and north-south routes connecting northern and western China with the southwest and southeast. Engineering Geologic Features 109. hills and valleys. This will enable passing via the other main line in situations where one line is blocked by a disabled or slowly moving train. There is a low mountain area located between Guangyuan and Chongqing and it gives prominence to a tectonic denudation landscape. Topography and Land Forms 197. with relative height differences between 600 and 1.500m. The area is interwoven with ravines. loess plateau forms. A discussion of these conditions follows: . 200. Sichuan basin is composed of sub-geomorphic units of low mountains. the CTC and automatic block signal system will be signaled for movement in both directions.30 within a CTCS command and control system. two mountain ranges of which the Qinling creates a major obstacle. mudrock flow and rock piles. express and double stack container trains. Train traffic on LCR will be high-speed passenger. the rise and fall in the north is smaller than those in the south. the elevations of which are mostly between 1. With this purpose in mind. ¾ High Capacity for Mixed Operations. The valley along Taohe River in the north of Qinling Mountains is crooked and narrow. including major lines from Lanzhou. The general landscape in the north is higher than that in the south. ridges.200m. ¾ Adjacent Railway Lines. Wayside infrared axle temperature detectors will be installed every 30 kilometers and at eight stations. loess hills and single island shape bedrock hills. there are scattered fluvial terraces. The landscape in the north is higher than that in the south. Chongqing and Chengdu. 198. Medium-High Mountain Area of the Qinling Mountains is composed of the subgeomorphic units of medium-high mountain areas. There are a series of heavily populated alluvial plains along the Jialing River 2. unavoidably. The LCR design integrates smoothly with the operations of adjacent rail lines in the region. The railway alignment crosses.

The standards and measures planned for the LCR Project will be suitable to ensure the safety of the infrastructure. the railway route will be where possible. weirs. It developed in the heavy-layer limestone in the Carboniferous system and it is a level water-eroded cave. Soft soil is mainly silt and clay with weak mechanics. 118. LCR passes through moderate to active seismic zones requiring measures to ensure that bridges and embankments are constructed to withstand potential earthquakes. The thickness of the compressible layer of soil is between 5 and 25m and the compressibility is between 1 and 4. water-eroded groove and water-eroded cave are found. This: is mainly Q4. Wanxiangdong at the opposite of Hanwang Town in the southeast of Wudu District is the largest water-eroded cave in the northwest. Landslides and rockfalls. In the locations where the landslide and rockfalls are common. There are coal beds or coal streaks in the stratums in the Jurassic and Triassic systems. For example. The road surface will be muddy and deformed when it is rolled. There is also natural gas under the stratum in the Triassic system and the natural gas overflows along the cracks. MOR and the design institutes (FSDI and SSDI) possess considerable experience in the design and construction of railway infrastructure in the whole range of seismic activity zones. Shimen and Liangshui have blocked up Bailong River on several occasions. Bailong. The heavy-layer carbonate type stratum in the Carboniferous and Triassic periods is well developed at Wudu and in the Huaying Mountains where the karst phenomena of watereroded gutter. 112. the aeolic. The unpredictability of the overflow of the gas and natural gas is very large. Soft soil and spongy soil. They are also common along the banks of the Taohe. and MOR could consider using such technology in the areas of LCR with the highest potential for seismic activity. by tunnelling or high bridge. Collapsed loess. Methods to protect the railway include circling the area of activity. The topography from Guangyuan to Chongqing is devoid of landslide or rockfall activity. but landslides and rockfalls in the deep gorges of the Qinling Mountains. Coal bed gas. rock falls and rock piles. The rock masses are under the tectonic process and are developing joint fissures. mainly the landsides of loess and tertiary bedrock and are distributed along the edge of the plateau. Soft soil is mainly distributed over the paddy field. but it is easily removed. 117. From Lanzhou to Weiyuan spongy soil is mainly distributed and is primarily sandy and viscous loess. In Loess Plateau. More than 100 separate mud-rock flows exist among these rivers. Seismic Activity. and Baishui Rivers. . Expansive rock and soil are mainly distributed in the Tertiary and Cretaceous systems and have weak expansibility. ponds. Landslides. Karst. rockfalls and rock piles. natural gas and worked-out areas. or on both sides of very large ravines. 116. Mud-rock flows are mainly distributed along the Taohe River within Minxian County and along Min River between Tanchang and Wudu and along Bailong River. 113. alluvial and proluvial loess in Quaternary system with deadweight or non-deadweight compressibility and distributed over the banks of rivers. This results in landslides. There are safety technologies available today that automatically stop trains in the event of an earthquake. The steep Qinling Mountains are one of the main areas for landslides and rockfalls. Flows near Jiaogong.31 110. of which the thickness is about between 10m and 15m. The tectonic movement gives priority to differential uplift. Problems exist not only with riverbanks. the rivers erode leaving the hillside high and steep. 111. and where necessary in the potentially very destructive areas. so small coal pits and salt deposits should be avoided. detoured or other protective measures taken. Min. terraces in ravines and ridges. 115. 114. and through valleys between hills in Sichuan Basin.

viii. The above rivers flow throughout the entire year. Hydro Geologic Features 119.850 km and shortest distance between stations is 4. and a minimum 100m in particularly difficult sections. The length of a specific grade section will be greater than or equal to 600m. Fu. vii. the longest distance between stations is 48. except in stations and tunnels where other specifications may apply. The distance between centers of tracks in tangent track will be 4. iv. The average distance between stations is 27. and detouring to avoid unfavorable geology. The station distribution is shown in Table 4. streams and ditch-water comprise the major types of surface water. The watertable can be as high as 40cm below ground level. and 100m lengths. Qu. ix. 60kg/m. Length of grade section. . type III with elastic fastening and gluedinsulated joint. and continuously welded. The gradient in tunnels will be greater than or equal to 3‰. The whole railway will be fenced and grade separated. of which 15 intermediate stations (inclusive of existing East Lanzhou. Bailong. with a circular curve of 15. and the Jialing Rivers and their tributaries. and fissures. The route will be as short and straight as possible. Guangyuan East Nanchong Nanchong and Hechuan). Distance between centers of tracks.475 km. The water level is varied with seasonal rainfall. The shortest length between two curves will be greater than or equal to 140m. Radius of curve will be 4500~7000m. Vertical curve and algebraic difference between adjacent gradients. There are a total of 31 stations including 5 existing ones. except in the Qinling Mountains and in Sichuan. vi. Two consecutive grade sections with of 400m will not be allowed. based on station and tunnel clearance requirements. 5. with a single-heading grade of 6‰ between Guangyuan and Chongqing. When the algebraic difference between adjacent gradients is greater than or equal to 1‰.1. The minimum radius of curvature will be 3500m in the favorable geological sections and 2800m in the unfavorable geological sections.32 3. The double-heading (2 locomotives) grade of 13‰ will be made between Lanzhou and Guangyuan. Salt water is widely distributed at the sector from Guangyuan to Chongqing. The groundwater is limited. x. Circular curve and intermediate straight line. v. Main Technical Standards The main technical standards governing the design of LCR are as follows: i. iii. 4. and the gradient in cut will be greater than or equal to 2‰.4m. Rivers. Ruling grade. 122. 2 junctions (Laizibu and Lianghekou) and 14 overtaking stations. The prevailing type of the groundwater is pore water from the loose rock. The design of track plan will conform to the principles of accommodating the natural topography.764 km. ii. the radius of curve will be greater than or equal to the vertical curve. 120. natural conservation areas and important buildings.000m. The large water systems are the Taohe. except in difficult geological terrain where 400m will be permitted. Stations and Segment Lengths 121. The rails will be head hardened U71 manganese steel.

33 Table 4.994 Intermediate station 6.75 Intermediate station 21.15 Overtaking station 40. Name of Station 1 East Lanzhou 2 Laizibu 3 Jinya 4 Zhangjiazhuang 5 Yangjiachuan 6 Weiyuan 7 Dacaotan 8 Minxian 9 Hadapu 10 Tanchang 11 Shawan 12 Liangshui 13 Longnan 14 Luotanghe 15 Yaodu 16 Yangmu 17 Guangyuan 18 Lianghekou 19 Luojiazui 20 Yongningpu 21 Cangxi 22 Langzhong 23 Nanbu 24 Longgui Length of Access Road Existing Existing 400m 500m 143m 1286m 1000m 1771m 1286m 500m 500m 4429m 557m 500m 1571m 500m 750m Type of Station Distance Between stations (km) Intermediate station 19.633 Intermediate station 43.475 Overtaking station 32.85 Intermediate station 35.48 .429 Intermediate station 48.3 Overtaking station 33.45 Overtaking station 33 Intermediate station 20.6 Intermediate station 33.1: Locations of Existing and Future Stations for LCR and length of station access roads No.85 Overtaking station 29.93 Overtaking station 30.5 Overtaking station 44.971 Junction 4.7 400m 350m 350m 150m 150m 100m Overtaking station 33.8 Overtaking station 17.62 Intermediate station 22.5 Overtaking station 38.45 Intermediate station 38.1 Overtaking station 26.25 Junction 14.5 Intermediate station 22.

The total route length of new construction included in the investment cost of the LCR project is 832. as well as at tunnel entries and exits.0 km between Guangyuan to Chongqing. 125. The 285 bridges total 103.. Line 123. xiii.94 km Source: FSDI and SSDI. Communities along . xvi. The total length of the track will be 1732. EMU/SS7E for passenger trains. Train operation method: Centralized Traffic Control (CTC) with Automatic Block Signals (ABS). the remaining 478. with the exception of certain tunnels. There will also be 730 turnouts. bridges and tunnels constitute 73.000 tons.7 km will be slab track. Type of locomotive: SS7 and SSJ3 for freight trains.7 km. of which ballasted track will be 1253. xviii.35 Overtaking station 33. and tunnels of more than 6.026 Overtaking station 34. There will be transition zones to account for the difference in track stiffness between the ballasted track and slab track. fills and cuts. These transition zones will also be used at bridge abutments. xi.3 km.57 Intermediate station 35. xiv. Maximum train length will be 850 m. xvii. xv. will be conventional ballasted track.0 km between Lanzhou to Guangyuan. Station and yard track will be 167.94 km.g. a. in tunnels and bridges) or fenced as a protection for the general population. Design traction tonnage is 4. xii. Design Traction Power: Electric AC 27.568 km 832.25 percent of the length of the total alignment.34 25 East Nanchong 26 Nanchong 27 West Nanchong 28 Ji’an 29 Sanmiao 30 Hechuan 31 North Beibei 550m Existing Existing 200m Total 550m 75m Existing Intermediate station 9.3%). All tracks.44 Overtaking station 18.5 KV (peak load).2 km. Axle loading will be 25 tons. There will be no at-grade crossings and the entire alignment will either be closed off (e. 124.794 Intermediate station 20. Effective length of station arrival/departure tracks: 850 m and 880 m in the grade territory where two locomotives will be required. there will be slab or ballast-less track. xix.894 km and the 178 tunnels total 506. culverts. Maximum design speed: 200 km/h.48 Intermediate station 6.1 km (72. Combined. In tunnels of more than 9.

75. 129. Insulation measures will be adopted between vertical and horizontal rebar within the track bed plate to prevent the electromagnetic induction occurring from wire mesh in track bed plate and track circuit. The ballast bed under sleepers will be 30 cm thick. The metal of the fasteners will be anti-corrosion treated. the top surface of bed will be at the same level as the middle sleeper. For sections with crotch sleepers or bridge sleepers the top surface of bed will be 3 cm lower than the top of the sleeper.6 m.667 sleepers per kilometer (600 mm center to center sleeper spacing). 350mm for track bed thickness of sections of bridges. . Track 128. 132. (iii) ballasted track in tunnels. LCR mainline track will be constructed with 60 kg/m porous-free continuously welded rail (CWR) with cut lengths of 50m and 100m. slab track is relatively maintenance free even though the initial construction cost is greater. (ii) ballasted track on bridges. Bi-block ballastless track will be laid in the tunnels with a length over 6km. The length is 2. For single line railway. For track sections with type III sleepers. Construction standards call for a single layer track bed laid with Class I broken stone ballast with 350mm for top width of single-track bed. Superelevation of curve sections of ballastless track will be set compromising the operational requirements of shortterm and long-term and to accommodate both passenger and freight operations. In tunnels where bi-block ballastless track is laid elastic independent fasteners with insulating properties that meet the track circuit design requirements will be used. Regional Railway Administration officials have indicated that testing has been on-going and that results to date indicate that the technology can be successfully implementd. large radius spirals. 131. Track Bed. and (iv) non-ballasted slab track in tunnels over 6km in length. 127. tunnels as well as in hard rock cuts. longer grade lengths. thus influencing the transmission distance of track circuit. 300mm for track bed thickness of common sections. the top width will be 350 cm with a shoulder 15 cm high and a slope of 1:1. Elastic strip fasteners matching the type III sleepers will be used in ballasted track. The reasoning for the use of slab track in very long tunnels is that obtaining sufficient track time to perform maintenance of ballasted track under high-frequency train operating conditions is very difficult and results in greater costs. On the other hand. and minimum track super-elevation.75. To satisfy the maximum train running speed of 200 km/h and improve passenger comfort. Sleepers will be spaced at the rate of 1. Sleepers will be type III reinforced concrete with backing shoulder. 130. 134. Ballast. The mainline route will consist of (i) Class I ballasted track on subgrade.35 the alignment will also receive public education campaigns regarding safety in proximity to rail lines. At the height required to clear double stacks the pantograph is much longer than a typical pantograph. Sleepers. Track super-elevation will accommodate both the passenger trains and the slower moving freight trains. The Consultant has questioned experience of electrified railways with double stack line clearance. Materials shall meet the national standard “Crushed Stone Ballast on Railways” (TB/T2140) and “Crushed Stone for Bedding of Railways” (TB/T2897). The bed of the railway shall meet the following requirements: Material will be Grade I broken stone. b. the plan and profile of LCR are designed by using large radius curves. Side slope of the track bed is 1:1. Fasteners. Ballastless track. particularly in long tunnels where a great amount on “head pressure” is developed. This was thought to possibly lead to problems in engaging the catenary. Rail. 133. The top width of double line railway will be designed as two singles. 126.

there will be 285 bridges with a total length of 103. a special transition section will be installed between the slab track and ballasted track. Within this section two 25 m long rails will be placed between the running rails to serve as guard rails for derailment protection. The largest proportion of the LCR line is located in mountainous areas with much of the line being in tunnels and on bridges.3m thick of improved soil (expansive soil section excavated and filled with 0. For overpass highway bridges.1m medium coarse sand.3 km. Table 4. .6 812. The surface course of subgrade bed of soft rock and earth cutting sections will be excavated 0.60 226. Fill material of subgrade bed will be chosen as per regulations of Temporary Specification for 200km/hr and Subgrade Code. Turnouts and Crossovers 136. Just beyond the end of the transition slab will be a full-depth ballast section of 350 mm. and there are no high-speed turnouts. As noted above. Passing tracks at stations will emanate from both main lines. No. d. All mainline turnouts will be 60 kg/m.12. divided into surface course and base course. a support slab of reinforced concrete. will be constructed under the ballast section. Subgrade 137.0% 27. There are no intermediate crossover tracks between stations.6m and 1. Crossover tracks between double-track main lines will be located at both ends of all stations.5 Track on Subgrade Km 64. No. c.0% 51.894 km.9 316.5m.5m thick improved soil). One layer of complex geo-textile membrane will be laid for the entire section of the bottom of the surface course of replaced subgrade bed. Subgrade bed has a designed thickness of 2. Within this section the ballast will gradually vary from 0 mm at the ballast-slab track interface to 150 mm at the end of the concrete transition slab. All bridges and culverts will be designed to meet the requirements for a 100 year flood. Bridge clearance will permit the use of double-deck container trains that are powered by electric traction. representing 27. The subgrade of the line is 226.36 135. The top surface of the base course will be replaced with 0.2: Use of Subgrade Unit Lanzhou~ Guangyuan Guangyuan~ Chongqing (Junction at Hechuan) In total (Junction at Hechuan) Total Length Km 495.3 Km 13. the thickness of which is 0.9m. 15 m in length. respectively. At the ends of long and super-long tunnels using the slab-track construction method. at the boundary between the ballasted and slab track. Transitional sections of track rigidity will be used between different track structures.7 161.8% of the mainline. Transitional Section. or about 12. to 200 mm at the ballasted end of the section. For railway bridges the standard design specifications listed under Technical Standards will apply.8% Project Main Line track Percent Subgrade Source: FSDI.9 turnouts. road live load based on the class of road will be used.5m and replaced with graded broken stone (Group A filling for the section 160km/h and below) +0. The thickness of this concrete structure will gradually vary from 350 mm. e. Marshalling yards and non-mainline station tracks will utilize 60 kg/m. Bridges and Culverts 138.5 percent of the alignment. Within the transition section.

Name of Tunnel 1 Humaling Location of Tunnel Entrance km 68. The distribution of tunnels along the route is shown in Table 4.620 km 379. 120 km/ph freight and .700 km 295.310 km 621. some of the junction and bypass tunnels will be single tracks.37 f.180 km 310.960 15920 Muzhailing km 171. Table 4.770 12680 9 Jugan * km 366. construction and operation of tunnels.332 14022 Total 12 tunnels.790 16670 5 Tianchiping km 281. 506.4.329 km in total length Source: FSDI.480 29710 11 Longchishan km 443. some of the shorter tunnels will be two bores and single tracks. The following considerations will be included in the design.770 km 409.4: Super Long Tunnels No. For geological reasons. When the double and single track tunnels are added together there will be a total of 210 separate tunnels.260 18460 4 Mazichuan km 215. Additionally.040 km 454.252 km in total length Source: FSDI. and the list of super long tunnels is shown in Table 4. essentially making the tunnel 42 km long. 182. Note: The Jugan and West Qinling tunnels are separated by a 230m bridge.090 km 334.800 km 190.040 km 99.005 12825 7 Shawan km 310. with a combined length of 506.175 11135 12 Meilingguan km 607. Tunnels greater than 15 km will be two single bores with interconnecting galleries.3. 141. Tunnels 139. Most of the tunnels that are shorter than 15 km in length will be double tracked. 140. there will be 178 tunnels on LCR.880 13380 km 84.120 km 231.150 km 320. The structural gauge of tunnels required will be for a double track electrified railway that is capable of handling 200 km/ph passenger.900 14200 6 Huama km 297.500 2 Heishan 3 Location of Exit Length(m) km 81. Table 4.480 10330 8 Jiaogongshan km 322. Due to the difficult terrain and the high train operating speed required.540 12920 10 West Qinling * km 379.3: Tunnel Distribution along LCR Length Categories of Tunnels (m) Number Combined Length (m) L≤1 km 3 km≥L>1 km 6 km≥L>3 km 10 km≥ L>6 km 15 km≥L> 10 km 20 km≥L > 15 km Single Track Single Track L>20 km Double Track Single Track Double Track Single Track Double Track Single Track Double Track Double Track 83 10 29 7 20 1 16 8 3 1 101492 51050 - 29710 37893 4326 57872 Total 11825 85528 4370 122263 178 tunnels. Structural Gauge of Tunnel.3 km. The interconnecting galleries or tunnels are for airflow and for emergency escape purposes.

Portal Location. which in all but the most difficult locations will provide the necessary waterproofing. Generally to mitigate air pressure and train noise. Waterproofing and Drainage. the subgrade will be progressively strengthened toward the entrance. the initial tunnel support will be ‘shotcrete’ and mortar rock bolts. There will be additional lighting that can . Construction Methods. and ballasted track will be used for other tunnels. Track Structure. According to the tunnel length. and hydrology. sound absorbing or deflecting walls will be constructed near the portals when there are nearby buildings or if there are any special environmental considerations. In the sections with groundwater. 143. Auxiliary Tunnels. The ballasted track will use type-III pre-stressed concrete sleepers. the slab track with double-block sleepers encased in an elastic boot that has been reinforced for 200 km/ph trains. side ditches will be constructed and in the double-track tunnels there will be an additional central ditch that will be integrated with the drainage system inside and outside of the tunnel. The grade of concrete for the secondary lining will be not less than C25. Tunnel sections along these areas will be specifically strengthened by the use of additional steel reinforcing and extra thickness of concrete. 148. Cut and cover. The waterproofing layer will be used in the outer perimeter of lining. Tunnel illumination will be provided as per standards and codes listed above specifically. an anti-water pressure lining will be used. and shed tunnels will be constructed in sections where soil conditions and depth permit. 142. The tunnels will be lined with three layers of concrete lining. Lighting and Attached Structures. Tunnels lower than 30m from the surface are considered safe. the construction schedule. In the sections of tunnels that have a corrosive environment. 147. Geological conditions at specific sections will dictate the lining structure’s durability and building materials to be used to meet the requirements of the appropriate standard or code. topography. In the single track tunnels. and fixed illumination will be provided for tunnels over 2 km. Tunnel boring machines will be used primarily where the tunnel is on critical paths for project completion. Curved wall lining will be used for all bored or drilled and blasted tunnels. The cross section’s effective clearance area above the top of rail of single and double track tunnels will be 53. The operational requirements such as relieving the aerodynamic effects. In the sections with high water pressure. In sections where there will be gas emissions from the rock. at this level of seismic activity whereas those above this level are subject to disturbance in an earthquake. Types of Tunnel Lining. geology. Some tunnels will need additional lining as described above. The location of tunnel portals will be determined by the conditions of topography and geology.4m2 respectively. 145. ventilation. Withstanding Earthquakes. maintenance and accident rescue will also be considered in the need for and design of auxiliary tunnels. The new continuously welded 60kg/m rail will be used.2m2 and 88. The majority of the tunnels will be constructed using drilling and blasting methods and the tunnels walls will be stabilized with rockbolts and then lined with shotcrete. The secondary lining will use an anti-corrosion material.’ whereby the tunnel will be cut in multiple passes. but because of the size of the tunnels many sections will be ‘bench cut.38 the clearance required for double stack container trains. To ensure a smooth transition between the track adjacent to the tunnel entrance and the track in the tunnel. and operational ventilation will determine the need for auxiliary tunnels. 146. It will be laid either on ballasted or slab (ballast-less) track. Ballast-less track will be used for the tunnels with a length of more than 6 km. 144. Data indicate that LCR passes through moderate to active seismic zones.for tunnels of 500m-2 km: plug sockets for tools and lightning will be provided. and for reinforced concrete not less than C30. grouting will be used to fully seal the lining. Full-face excavation method will be used where the geology permits. an air-entrained concrete with high anti-permeability will be used. the requirements of constructing drainage.

and monitoring. the whole tunnel will be marked with emergency evacuation direction signs and emergency phones will be available at regular intervals. Attached structures will be constructed according to the above codes and standards. sound reducing walls will be constructed on one or both sides of the railway line as dictated by environmental conditions. These access tunnels will also serve as emergency exit routes both during construction and for commercial operation.39 be turned on. There will be also an inter-tunnel communication system. Where possible the spoil surface will be restored for farmland or re-planted. Due to unfavorable geologic conditions in most areas requiring tunnelling. Tunnels more than 8 km will be equipped with fan ventilation in accordance with the air change operational requirements and accident rescue. if necessary. commercial areas. g. 150. In the event of an accident. The tunnel is a low-gas tunnel.0 meters high and 0. Construction Methods. Combined type lining will be adopted for the whole tunnel and fully closed combined type lining will be set for the coal strata section. 149. Curtain grouting will be adopted for the section of ground water development to confine ground water to prevent water and soil bursting. constructed of synthetic sound-absorbing materials. For this purpose. CR has several successful slab track designs. and emergency communications equipment. and institutional areas such as schools and hospitals. There will be fire sensing alarms and extinguishing systems inside and outside of tunnel and on the trains. Environmental Protection and Spoils Handling. every 420 to 500m there will be a gallery or tunnel that connects the two tunnels at an angle of at least 40 degrees. 151. The exits and entrances of the access tunnels will be equipped with fire prevention equipment. buildings will be constructed at each end of the tunnels and these building will be equipped with emergency equipment such as fire extinguishers. Rescue and relief systems will be provided for tunnels over 10 km. The walls. 153.2 meters thick. These connecting galleries are for air movement and emergency evacuation. Each location will be engineered to ensure stability and adequate drainage. Super-long and long tunnels will have secondary access tunnels (inclined to the surface) to remove spoil materials and expedite the overall tunnel construction schedule. In locations where the LCR line passes near residential areas. The spoil landfills will be placed on wasteland wherever practical to minimize the need to use farmland. For dual single track tunnels. and Regulations for Coal Mine Safety. Water and Gas Leakage. alarms. CR non-ballasted slab track design will be used in long tunnels over 6 km in length. ventilation and sensors for gas will be provided for long major tunnels. Fully closed anti-hydraulic pressure lining will be set for the section with hydraulic pressure. Mechanical operating ventilation with longitudinal effusion mode will be set according to ventilating and rescue requirements and 22 type SLFJ-100 fans will be set at points near the entrance and exit. Use of Slab Track. . Tunnels will be excavated using one of two types of equipment: the TBM (tunnel boring machine) and standard tunnel drilling machines (similar to underground mining machines). for maintenance crews and emergencies. corresponding anti-corrosion concrete will be used for support and lining. Design and construction will be performed following Technical Specification for Railway Gas Tunnels. 154. The other waste will be treated as per environmental protection and sanitary regulations. Tunnel spoils will be placed in landfills except for those spoils that are suitable and available to be used as fill material or concrete aggregate. 152. Operational Ventilation and Disaster Prevention and Rescue. Emphasis on improving disaster prevention will entail a system of inspection. emergency lighting. will be 3. the drill and blast method of tunnel excavation will not be used. Tunnels longer then 15 km will be manned 24 hours a day by guards and emergency staff. A monitoring system for lights. For the section with aggressive water. Sound Barriers 155.

It will consist of 6 electric locomotive servicing tracks. Electrification 157. Guangyuan East Nanchong Nanchong and Hechuan).. Rolling Stock Inspection and Maintenance 159. A new locomotive inspection depot will be constructed at North Lanzhou. an EMU washing track. the need for fast trains to pass slower trains.5 km of station and freight yard track and 1. 202. will require 384. The railway will continue to utilize the standard AC 27. 15 intermediate level and 14 overtaking stations. i. each substation will have at least two feeds.247 sets of turnouts. These facilities will have the capacity to handle the LCR EMUs. Lanzhou-Chongqing Railway intersects Baoji-Chengdu Railway and Dazhou-Chengdu Railway in Sichuan Province. Given the length of the tunnels.5 kV electrification technology. There will be a total of 29 stations. 156.764 km. To assist in determining the location of stations. The location and sizes of the stations has been determined by a market study. The passenger car servicing depot in Lanzhou and Chongqingxi will continue to be used. the Guangyuan and Chengdu facilities will be utilized. and an under-floor wheel lathe. Consideration was given to actually constructing a station in a tunnel but has not been planned due to cost. Space for an 8 storage tracks. The station distribution is shown in Table 4. 2 inspection shed tracks and 2 departure tracks will be kept vacant for future needs. from two totally separate sources. with 31 stations. the railway must use electric traction.9 km. A new EMU inspection and maintenance facility has been planned for the Lanzhou Terminal to handle trains that will operate on the Lanzhou to Xi’an dedicated passenger railway. 2 inspection shed tracks. j. 160. which in total. At North Chongqing.40 h. The special equipment for inspection and repair of SS7 and SS7E type electric locomotives will be added to the Chongqing Locomotive depot. It will provide storage capacity for 18 EMU train sets. and 1 diesel locomotive servicing track. Electric Traction Locomotives: Operation and Maintenance 158. Stations and Marshalling Yards 201.850 km and shortest distance between stations is 4. To improve power reliability. and where possible. Faciliites at these depots are being upgraded to accommodate the increased numbers of coaches. The railway also will be responsible for constructing the traction substations. a computer operations simulation model has been used. The total length of East Lanzhou~North Beibei section on Lanzhou~Chongqing Railway is 832. k. and the locations available for construction. In addition. A three track electric locomotive periodic inspection and repair workshop will also be constructed at this location. and finally enters into the Chongqing terminal across SuiningChongqing Railway. 2 junctions (Laizibu and Lianghekou) and 14 overtaking stations. a new EMU depot will be constructed in the near future for LCR. The average distance between stations is 27. There is an extensive power grid system that covers the area through which LCR will be constructed.475 km. the longest distance between stations is 48. . and space for an additional two tracks. a temporary repair siding. Freight car repair and maintenance will be done at the existing Lanzhou and Chongqingxi repair depots. There are 15 intermediate stations (inclusive of existing East Lanzhou. but is relying on the power companies to construct the power lines necessary to feed the substations.19. particularly the overtaking stations.

Water Supply and Treatment 169. such as wheel flats. Visual devices help to detect any hanging. This system uses images and pictures of wagons to diagnose potential problems in freight cars in real time. flattened bearings and the like. 168. including wheel faults. 166. The Consultant recommends also installing a derailed equipment detector at all THDS locations. empirical data and experience demonstrate that higher speeds will allow safe stopping distance within the signal system design parameters. and missing parts of the wagon so that the movement of the damaged wagon may be controlled as necessary to ensure operation safety and plan appropriate mitigation action(s). GB5749-85 and Standards for Drinking Water Resource Water Quality (CJ/T3025-93). An infrared “hot box” detection system protects against the overheating of rolling stock wheel bearings and journal boxes. preventive and is state of the art. The acoustic detection system helps to identify defects in roller bearings at an early stage. This plan includes the following systems: 162. Given the long downgrade and projected double stack train operation with heavier axle loads. train schedules. 164. Passenger Inquiry Service. This helps to plan repair actions before the failure of the defective bearing. This system is based upon the unique acoustics of bearings with internal spalls. It also monitors the dynamic situation of the freight wagon. Rolling Stock Safety Systems 161. the train stopping distance must be carefully evaluated. Grade Conditions and Train Speed. (iii) air conditioning. TCDS monitors in real time and provides documentation for undertaking repair when the coach reaches the maintenance depot. The axial temperature information will be transmitted to the infrared axial temperature monitoring center of Chengdu Administration. 167. . an infrared axial temperature detection station will also be installed in 8 stations. On the line the infrared axial temperature detecting system will be installed every 30 km. 165. Allows a passenger to inquire about purchase of tickets. dragging. The monitoring helps to take pre-emptive action before the defect or the situation develops in to a failure that may cause an accident. The system has helped to reduce derailments attributed to wheel defects and loading irregularities. various on-train services. The TADS detects these bearings before they begin to fail. (ii) electric circuit problems. broken.41 l. All stations with depot or passing loop buildings will be supplied with potable water meeting the National Standards for Drinking Water Quality. A comprehensive plan for safety and passenger convenience will be installed as part of the LCR line project. m. The cost of constructing and operating water treatment facilities and the civil works associated with water supply to station buildings is the responsibility of MOR. This system helps to detect and provide diagnostic checks on passenger cars for (i) fire. Train Performance Detection System (TPDS). (iv) braking system. which improves the safety of operation and also reduces the interference to traffic caused by in-service bearing failures. Thus this system is predictive. and in addition. During initial testing speeds should not exceed 40 km/h until testing. Train Hotbox Detector System (THDS). and (v) dynamics of the situation. status of arrivals and departures. The Consultant recommends that MOR exercise an abundance of caution when setting downgrade speeds. Train Coach Diagnostics System (TCDS). If a defect is detected it is also immediately transmitted to the train crew. This equipment helps to detect unbalance and overloading in freight cars. Train Acoustic Detector System (TADS). etc. Train Fault Detection System (TFDS). It has helped to reduce potential derailments arising from failure of freight wagon components. 163.

204. portable high pressure fire fighting equipment and water tanks are used for fire fighting at station platforms or freight yards with warehouses. Wrong main movements (the opposite direction to that signalled) will only permit one train at a time in the block between two stations. The signal and switch alignment will be displayed in the centralized dispatchers office and will be monitored by computers to ensure safety.5 km to 3 km) between passing loops. or farm. Low pressure fire fighting systems and common water supply systems are used at most stations. maintenance or other facilities that generate industrial-type wastewater containing oils and petrochemicals will be equipped with oil-water separators. and red. This devise will also display the track and speed characteristics for the track over which the locomotive is traveling. ¾ Track Signal System. The stations will use the CTC command (via radio) and control (train protection) system with Automatic Block Signalling (ABS).. ¾ Station Signaling. Fire Fighting Systems 171.e. ¾ Cab Signals. ditch. repair. Command control will be centralized at Chengdu and Lanzhou. and will automatically reduce trains speed if required. yellow-green. Signaling and Train Control 203. p. the switch machines will not be remotely operated by the central dispatchers but by the station staff. . This system requires intermediate wayside signals (every 1. All types of sewage will be collected into treatment stations. lake. yellow. o. The track will be fully track circuited and will have 4-aspect wayside signals: green. The double track ABS system will be fully automatic with 4-aspect signals that allow more than one following train within a block between two stations. In addition. Locomotives with a speed over 160 km/h will be designed with an Automatic Train Protection (ATP) system to continuously monitor speed. Septic tanks will be used for domestic sewage. and treated according to where the treated water is discharged. communication and signaling will be located in expanded dispatching centers in Chengdu and Lanzhou. The new LCR stations will be equipped with the latest computer-monitored CTC interlocking system. and the sanitary zone requirements where the treatment plant is located. 70 protective fire-fighting water supply points will be constructed in the vicinity of bridges and tunnels and will be constructed according to the “Code for railway engineering fire design”. The locomotives or EMUs will also be equipped with a train operation monitoring and recording device. which together with wayside signals will control the locomotive’s operation and protection. river. i. Stations that have inspection. A train command system or “centralized traffic control” (CTC) system with centralized monitoring of train movement. Portable high pressure fire fighting equipment and 300 m³ water tanks are also used at tunnels longer than 5 km. At stations with no water tower. but communication systems are utilized to instruct local station operators to push manually-activated control buttons that actuate the signals and the electric switch machines. Domestic Sewage and Industrial Wastewater Disposal 170. All signal equipment will be lightning-proof according to the latest standards for electromagnetic and lightening protection. Locomotives with a speed below 160 km/h will be equipped with 4 aspect cab signals. Electric power-operated switch machines will be installed on all double-track mainline and siding turnouts. All discharges will conform with Integrated Wastewater Discharge Standard (GB8978-1996). The LCR signal system will conform to MOR Class II design standards. However.42 n. The signalling systems will consist of the following primary components: ¾ Train Command System.

LCR will relieve pressure on rail lines. At a later stage the 8 minutes will be reduced to 7 minutes.0 East Nanchong~Nanchong 53 41 94 211.4 Jinya~Longnan 20 33 53 115.4 171. Carrying Capacity – All Trains 174.0 240.8 171. Connecting Railway Lines 175. LCR Train Operations 172.0 East Lanzhou~Jinya 12 3 15 41.4 Longnan~Guangyuan 27 44 71 156. especially the route between Lanzhou and .0 171. at the planned Min County Station and the existing Guangyuan Station.0 240. Lanzhou and Chengdu Administrations will manage the train operations through their respective dispatching centers.5: Required and Design Capacity for Passenger and Freight Trains for 2020 and 2030 (Train Pairs/day) Route Segment In 2030 In 2020 East Lanzhou~Jinya Passenger Train Freight Train Total Trains Required Capacity Design Capacity 23 3 26 72. 2.4 Langzhong~East Nanchong 32 33 65 141.0 Guangyuan~Langzhong 18 27 45 96.0 Langzhong~East Nanchong 22 27 49 107. Passenger train crews will work continuously for about 8 hours and the crew of freight trains will work continuously for 10 hours. 2 crew changes will be required.0 240.0 171. 3.0 East Nanchong~Nanchong 68 54 122 263.4 150.4 Jinya~Longnan 28 44 72 158. Train Operations and Capacity Considerations 1. In accordance with the traction calculation for train working diagrams.4 285.0 Nanchong~West Nanchong 58 40 98 223.0 171.43 C.4 390.0 150.0 150. In addition.0 West Nanchong~Hechuan 29 27 56 122 Hechuan~North Beibei 94 49 143 258 Source: FSDI and Consultant Note: Some time between 2020 and 2030 the dedicated Lanzhou Xi’an High Speed passenger railway is expected to open.8 171.0 West Nanchong~Hechuan 21 21 42 93.4 171. 173.0 171. As currently proposed. One crew rests/sleeps while the other is on duty.4 Longnan~Guangyuan 20 33 53 115. Freight crews will operate with two crews on board.4 Guangyuan~Langzhong 24 33 57 120. this will reduce the need for passenger trains on this route segment. the overall route capacity will be increased between 2020 and 2030 with the construction of additional tracks between East and West Nanchong and Hechuan and North Beibei. The time interval between trains set by the automatic block signals will be about 7 minutes between Lanzhou and Guangyuan and 8 minutes between Guangyuan and Chongqing.9 171. Based on the required capacity in 2020 and 2030 designed capacity has been set at a higher level to allow for the long-term future.0 Nanchong~West Nanchong 74 53 127 277 390.0 Hechuan~North Beibei 89 39 128 233. Table 4. The LCR will form part of a major network and corridor with other rail lines as shown in Figure 1-1.

quantities of materials.1 82 51% 83. Construction access roads will be built for the purpose of ingress and egress to the construction work areas of the Project. and total investment costs provided by FSDI compare reasonably with other evaluations of MOR railway projects. Table 4.5: Capacity of Existing Lines that will be Linking with LCR Capacity by Current Percent Line Section Schedule(pair/day) Pairs Utilization LanzhouWuwei South to 180.9 Qinghai Hekou South 37 90% Liangyungang Lanzhou Hekou South to Lanzhou East Lanzhou East to Tianshui Tianshui to Baoji Baoji to Guozhen Guozhen to Xianyang Xianyang to Xi’an West Xi’an West to Xinfengzhen Baoji to Yangpingguan Yangpingguan to Guangyuan Baoji-Chengdu Guangyuan to Jiangyou Jiangyou to Chengdu Source: FSDI and Consultant 157.6 km. Once the project is completed these roads will be turned over to the local and provincial governments to use as they see fit. Table 2-1 (see Section 2) provides a summary of investment costs for the LCR.8 132 68% 192.8 115 60% 192. connections between lines will be seamless and fully integrated.44 Chengdu. For example.0 58 32% Xinjiang Hekou South Xining Freight LanzhouStation to 40. 177. Station access roads to the nearest existing local road and/or municipal area will be built by local governments up to the railway station boundary. Unit costs. E. Associated Facilities 176. The length of these roads will total 18. while the LCR has an average cost of $ 9.88 million/km. the ZXR dedicated passenger line has an average cost of $ 9 million/km.7 80 47% 192.7 36 98% 61 73% 161. material and equipment can be brought to and from the work site.8 119 62% 36. but those that are selected for use will require long-term maintenance by the local governments.1 81 50% 161. .5 105 67% 165. FSDI has provided both an investment cost summary and a detailed line-item project cost estimate.0 79 48% 168.1 D. Given the technical standards that have been utilized in the design of LCR. and the investment levels accurately reflect the MOR standards selected for the LCR. Cost Estimating Approach 178.8 111 58% 192. These roads are the means by which labor. Not all of these access roads are expected to be used by the local communities. This seems reasonable in light of LCR’s high design standards of 200 km/hr speeds and the very challenging terrain over which the railway must be constructed.

However. 181. general construction supervision. For ensuring adequacy of technical design standards and satisfactory quality control. The total construction period is 6. MOR will be the Executing Agency (EA) responsible for overall management and implementation of the Project. JVC should take part and be responsible for all decisions that affect its future operations and should also be accountable for the same to its shareholders. The Leading Group will invite proposals from qualified domestic consulting companies for providing consulting services for undertaking review of detailed design engineering. . 2. The LCR Joint Venture Company (LCRC) will be the Implementing Agency (IA). including building subgrade. route alignment. However.5 years. monitor utilization of the proposed ADB loan. The Project implementation schedule is shown in Figure 4-1. 15. and/or route length are changed. and supervising trial operation of the Project railway. and be completed by March 2014. responsible for marketing and financial management. Trial operations will begin in July 2014 and commercial operations will commence in 2015. it does not form a part of the Ministry of Railways which is an arm of the Government. monitoring and construction of site construction units. unless design standards.2) for construction management of the project. MOR also gained experience with the construction of technologically upgraded fast speed railway lines. Since the second half of 1990s. MOR has a wealth of experience in all facets of railway construction. They are subject to change based on new findings and actual cost experience. the costs given in this report should not be viewed as final. Since the detailed engineering design is on-going. The IA and the general consulting company will engage site supervision consultants. tunnels. is important for Project ownership and future success of the enterprise. Project Supervision Arrangements 184. F. supervise the procurement of the goods and services to be financed by the ADB under the Project.45 179. Project Management. Based on experience with previous railway projects. MOR proposes to hire consulting services for review of the final design. Implementation Arrangements 180. MOR expects to establish the Chongqing Lichuan Railway Leading Group (Figure 4. it is expected that final cost estimates will not be substantially altered. supervision of all aspects of Project construction and trial operation. The Foreign Capital and Technical Import Center (FCTIC)15 under MOR shall coordinate the project management activities. FCTIC has well-qualified and experienced staff who have undertaken similar tasks satisfactorily in the past. 183. bridges. 1. and review the reports to be submitted to ADB. FCTIC is an entity that is wholly owned and administered by MOR. Upon completion of the line the operation will be handed over to the Chengdu and Lanzhou Railway Administrations for management with LCR established as a joint venture between MOR and Gansu and Sichuan Provinces and Chongqing Municipality. and associated works. establishment of an autonomous JVC sooner rather than later. Implementation Schedule. Joint Venture Company for Project Construction and Operation 182. The construction of LCR will start by May 2008.

2015 J F MA MJ J A S O N D J F MA MJ J A S O N D J F MA MJ J A S O N D J F MA MJ J A S O N D J F MA MJ J A S O N D J F MA MJ J A S O N D J F MA MJ J A S OND J F M A M J J A S O N D J F MA MJ J A S O N D In 2014 . and Documentation 2 Prequalification and Tendering 3 Land Acquisition and Removal 3a Resettlement Planning and Preparation 3b Disclosure of RP and RIB 3c Implementation of RP 3d External Monitoring (External Monitoring Reports=R) Staking Updated RP to ADB External Monitor Contracted R R R R R R R R 4 Subgrade (Earthwork) 5 Bridges and Culverts 6 Tunnels 7 Track Laying 8 Environmental Protection Works 9 Electrification and Power Supply 10 Signaling and Communications 11 Operational Buildings and Associated Works 12 Operating Equipment 13 Safety Monitoring System 14 Testing 15 Trial Operations 16 Commencement of Commercial Operations Source: Consultant.46 Figure 4.1: LCR Project Implementation Schedule Item 2007 2008 2009 2010 2011 2012 2013 2014 1 Preliminary & Detailed Design. Engineering.

Comprehensive Division .2: Organization of LCR Project Leading Group Group Leader Managing Group Leader Deputy Group Leader Deputy Group Leader Deputy Group Leader Deputy Group Leader Engineering Management Division Safety and Quality Division Planning and Finance Division Technical and Equipment Division Source: MOR/FCTIC.47 Figure 4.

48 3.000. Disbursement Arrangements. The statement of expenditure procedure will be used for reimbursement of eligible expenditures for any individual payment not exceeding $ 100. Table 4. (iii) environmental supervision and management. .000 and less than 1 million Shopping Goods Less than 100.000 ICB Goods Equal or more than 1 million NCB Goods Equal or more than 100. ADB-Funded Components. will handle the international bidding. All disbursements under the ADB loan will be carried out in accordance with ADB’s Loan Disbursement Handbook. and safety and operational equipment. Note: ICB = international competitive bidding. Tendering companies.000. Since most of the payments will be made for large contracts well above $ 100. Consulting Services.000 and less than 10 million Shopping Works Less than 100. and (iii) supervision of trial operation on the Project railway. (ii) international procurement. no need for advance procurement action is envisaged. a list of project components is proposed for financing out of the $300 million loan from ADB but the contract packages have not yet been formulated as shown in Table 4-6.000 Exceptional Methods Not applicable Source: Ministry of Railways. selected by the EA on a competitive basis. direct payment and commitment procedures will be used to withdraw the loan funds. Qualified domestic consultants will be engaged and financed by MOR for (i) preliminary and detailed project design. ensuring comfort. safety and environmental protection. This list may need refinements based on the review of engineering design to be done by the general supervision consultants. The ADB threshold for tendering is shown in Table 4. The list of ADB components includes modern materials and technical equipment that will help meet the technical performance requirements for operation of trains at speeds of 200 km/hour. The hardware list detailed in Appendix 4-E has been grouped by general technology categories into bidding packages. The materials and equipment will be procured under international competitive bidding (ICB) or international shopping (IS) procedures.7. The ADB–financed contract packages consist of various packages of materials. evaluation of poverty reduction. In addition. Procurement 185. (iv) monitoring and evaluation of the resettlement plan. 188.7: Threshold for Procurement Procurement Method Threshold (US$) ICB Works Equal or more than 10 million NCB Works Equal or more than 100. and project performance monitoring. which will need to be procured after the MOR-financed civil works make progress. and (v) socioeconomic impact assessment. In consultation with MOR. In view of the composition of the contract packages to be financed under the ADB loan. (ii) construction supervision and construction quality assurance. 186. 187. qualified domestic consultants will be engaged and financed by MOR for (i) review of detailed design engineering. NCB = national competitive bidding. All ADB-financed procurement will follow ADB’s Guidelines for Procurement.

Within the Project company (LCRC) an internal audit unit will be established to ensure that an effective internal control system and a checks and balances mechanism are put in place. and (ii) an assessment of compliance with loan covenants that may be agreed under the Project and ADB's requirements on Project Management. sleepers (various packages) 7 Price contingency Total Source: Consultant from information provided by FSDI ICB = International competitive bidding.Financed Contract Packages Amount (US$ Item No. power supply panel. IS = International shopping 3 Procurement Method ICB/IS 10. The indicators will be measured at Project inception. The audit of such financial statements will include: (i) an assessment of the adequacy of accounting and internal control systems with respect to Project expenditures and other financial transactions. catenary components. Description Million) Telecommunication equipment and installation. including fiber optic cables.0 ICB/IS 130. outputs the following set of indicators and conditions will be used. turnouts and bridge 6 beams. purposes. (vii) access to social services.0 receiving equipment. The unit will independently test financial transactions to ensure the safe custody of the Projectfinanced assets and will report directly to LCRC’s management/board of directors and external auditors.49 Table 4.0 189. Accounting. microcomputer interlocking.0 ICB/IS 3. completion. For evaluating Project performance in relation to the Project’s goals. The Project EA will maintain separate accounts for the Project and have such accounts and related financial statements audited annually by an independent auditor and in accordance with auditing standards that are acceptable to ADB. (v) financial sustainability.0 300.sound barriers 5 Operation maintenance and safety equipment Rail and beams. monitoring and protection system (various packages) Power supply equipment. including traction and transformers. (vi) county/village incomes.6: ADB . and (viii) jobs created in construction and operation. (iii) transport services offered and transport charges. UPS. Auditing and Reporting. and power supply (various packages) 4 Environment . and radio equipment and cables (various packages) 2 Signaling equipment of various types. a baseline and target values for the indicators will be established. At the beginning of Project implementation. and .0 ICB/IS 15. transmission and 1 15. all in English. and Project Review 190. including rail. Project Performance Monitoring and Evaluation. (iv) accident rates. (ii) transport costs and times for passenger and freight services. The indicators will be reviewed at the start of Project implementation and include (i) economic development and socioeconomic indicators. 4.0 ICB/IS ICB/IS 124.0 3. instruments. transmission and receiving devices. including cables. The EA is also required to submit to ADB within 6 months after the end of each fiscal year certified copies of such audited Project accounts and financial statements and auditor's reports. and 3 years later. FCTIC will make satisfactory arrangements for reporting the progress of Project implementation to ADB by submitting quarterly progress reports.

194. The LCR passes areas located at the central and upper reaches of both the Yangtze and Yellow Rivers. B. Description of the Project 192. numerous economic resources provide rich potential for development: (i) mineral resources such as lead.250 m. is available on the ADB website. phosphate ore and natural gas.2. the impressive karst cave at Wanxiangdong in Wudu.816 km². including potatoes. (ii) household socioeconomic sample survey. with a population of 10.50 compared with the baseline.5 years. A new EIA has been prepared to reflect additional alignment alternatives and approval is expected in early 2008. The full Summary Environmental Impact Assessment (SEIA) Report that describes the physical environment and includes the environmental monitoring budget and program. The Project consists of an electrified double track. LCR will strengthen northsouth connections. A total of 31 new stations will be constructed. and (iii) participatory rapid appraisal. zinc. Shaanxi. and (iii) well-known tourism sites including memorials to the Red Army’s Long March at Hadapu. and Sichuan Provinces and Chongqing Municipality.97 million.25 percent is tunnels and bridges. The length of subgrade is only 26. Where relevant. Design will be based on double-deck container transport and a speed of 200 km/h for passenger traffic. ENVIRONMENTAL ASSESSMENT A. There are 12 super long tunnels with lengths above 10 km and 28 long tunnels. herbal medicines. MOR shall require qualified consultants for monitoring and evaluation to help establish the monitoring and evaluation system. The tunnels along the line have a total length of 506. rock salt.1 and 5. prickly ash. indicators will be disaggregated by gender. (ii) agriculture. The estimated construction period is 6. The traffic catchment area of the Project is 40. and will accelerate the economic development of western China while alleviating endemic poverty in the area. Earthwork quantities are a major work item and are detailed in Tables 5. The maximum elevation of the LCR alignment as it cuts through the mountain passes is 2. The main sources of data include (i) secondary data from government sources. cereals.94 km including about 799 km of new line construction. This Section presents the key potential environmental impacts and mitigation measures resulting from LCR construction and operations. and the remaining 73. and train staff of the LCRC in its use. There are 285 bridges with a total length of 103.75 percent of the total length of main line plus auxiliary lines. The railway alignment will have a total length of 832. The SEIA was prepared by the Consultant based on an Environmental Impact Assessment (EIA) developed by the FSDI in August 2006. Introduction 191. Within the impact area.894 km. By linking the regional northwest center of Lanzhou in Gansu Province with the populous manufacturing hub of Chongqing to the south. and oil seeds. and more or less parallels national Highway 312 as it crosses 27 counties. and the historic Old Town at Langzhong. 193. each with a minimum length of 6 km. .3 km. Class I railway connecting population centers within Gansu. V.

163.668.8 2103.40 5.210.40 Affiliated earthwork 10³ masonry m³ 296.446.2 78.547.90 3.60 1.8 1.51 Table 5.9 10³m³ 137.50 71.8 152.5 114. LCR=proposed Lanzhou-Chongqing Railway. m³=cubic meter. Lanzhou to Guangyuan Description Quantities Unit LCR Railway LCR Railway connecting Major Lanzhou connections Terminal Section m³ Fill Total of Gansu Shaanxi Sichuan Total 10³m³ 3.8 Graded broken stone Group A fill materials Improved Soil Group C fill materials Cut Gansu Source: First Survey and Design Institute.40 Stone 10³m³ 810.4 756 Retaining Wall 10³ masonry m³ 613. .1 356.70 652.90 51.311.80 44.5 4.262.40 3.2 Improved Soil 10³ section m³ Seepage soil 10³ section m³ 6.40 10³ section m³ 9.60 2.7 795.9 10³ section m³ 28.4 39.660.60 Seepage soil 10³ section m³ 542 175. August 2006.3 3.2: Subgrade Quantities.1 317.481.4 Earthwork 10³ section m³ Stonework 10³ section m³ Graded broken stone Subgrade affiliated works Where Sichuan Stonework Group AB filling materials Graded broken stone Station and yard Where Unit 10³ masonry m³ 1.5 860.6 217.024.7 10³ section m³ 946.481.527.1: Subgrade Quantities.30 15.50 1.5 410. August 2006.8 254. Table 5.6 1.60 10³m³ 745.157.10 12.901.80 826 1.095.90 593.60 Earthwork 10³ section m³ 8.3 280.668.70 655.5 11.9 11.10 7.925.2 191.322.80 0 0 3. Proposed Lanzhou-Chongqing Railway.1 1.60 34.290.30 61.1 338 442.512.3 10³ section m³ 212.40 10³ section m³ 2.4 2.755.90 11.3 136.1 8.1 801.443.1 70.997.6 1.2 10³m³ 82.8 Source: First Survey and Design Institute.5 294.8 1.969.3 184.118.90 673.10 6.4 326.782.1 31.8 18. Guangyuan to Chongqing Description Interval earthwork Subgrade Where Chongqing Chongqing Terminal Total 10³ section m³ 21.148.60 17.903.684.733.123.449.4 64.3 473.60 2.9 62.8 211 103 927. Preliminary Report on the Environmental Impact Assessment.390.376.7 182.30 3.6 2.3 469.443 5.8 1.677.595.20 3.10 13.557.30 2.90 1.053.9 0 0 152.40 3.70 10³m³ 0 104. Preliminary Report on the Environmental Impact Assessment.708.490 Improved Soil 10³ section m³ 2.3 11.80 Soil 10³m³ 1.7 Reinforcement and protection 10³ masonry m³ 238.879. Proposed Lanzhou-Chongqing Railway.1 126.188.50 362.70 2.90 3.602. m³=cubic meter.7 3.7 3.4 2.

Although the construction of controlled access highways. For freight transport in the PRC. although cheaper than rail. (iii) Pollution. 197. total hydrocarbons. and other facilities will be utilized by the contractor . expanded electrified railways are preferable to road networks for the following reasons: (i) Improved safety. offers a transportation alternative. Railway networks require significantly less land area than road networks. Rail transport is considerably more energy efficient than truck transport. Using electrified freight trains. several different options were considered.10 MJ/ton-km. (iv) land with lower economic productivity was used as much as possible. Do-Nothing Option. archaeological. Emissions from coal-fired electricity generation are progressively being reduced to meet tightening emissions regulations. 196. (ii) Land conservation. and (v) the areas designated for future stations. which is proceeding at a rapid pace. an estimated 300 people are killed on PRC highways every day. the designers used a number of guidelines in assessing alternative alignments so that (i) known historical. the energy intensity of rail is 0. yards. and tunnels were selected in preference to deep cuts. Air freight service involving large volumes of bulk freight is not economically viable. because of the mountainous terrain throughout the alignment. is slower and requires more transshipment.39 MJ/km. Alternatives 195. Given that the current transport network is severely overloaded. Alternative Alignments.52 C. Alternative Transport System. as opposed to an equivalent freight volume transported by road. Urban development from rail systems is concentrated at railway stations. causes considerably less air pollution. and cultural sites were avoided where possible. In addition to reducing the total cost. while urban sprawl tends to occur along road networks. (iv) Energy efficiency. the energy intensity for rail is 0. Prior to designing the Project. Transporting freight in barges on the major river systems. Even though private car ownership is a growing trend in China. and the highway death toll per 10. The expansion of the rail system in the PRC is preferable to expanding the road network and is the safer transport option. Trucks also generate significantly more oxides of nitrogen (NOx).000 automobiles is eight times that of the United States. and carbon dioxide (CO2). air service may be risky and unreliable.3 megajoules per passenger km (MJ/km) and for road passenger transport 0. It is estimated that trucks generate 420 times as much carbon monoxide per freight ton-km than electrified trains. For passenger transport in the PRC. including the “do nothing” option. the “do nothing” option was not considered viable. The number of deaths and accidents attributable to rail transport in the PRC is a fraction of that of roads. (ii) environmentally sensitive sites were avoided where possible. The World Health Organization estimates that the highway traffic accidents will rank as the third greatest cause of death in the PRC by 2020 (it currently ranks ninth). (iii) bridges were preferred to high embankments.35 megajoules per ton-km (MJ/ton-km) and for truck transport 2. Moreover.

Details of two alternatives are summarized as below: (i) Alignment Alternative No. The three alternatives have similar very limited environmental impacts. including hydrocarbons. The major differences take place with the first 14 parks. Tables 5. 200. tunnels. this is the more interesting of the two comparisons of alternatives. During operation. solid wastes. seismic activity. This section presents only soil and soil erosion. and flora and fauna because of their significance. The decision was based on the advantage of using the existing facilities at Hechuan Station. To prevent impact from large-scale random deposition of spoil. Soil and Soil Erosion. The second comparison is between 3 alternative routes in the Nanchong area and is based on a detailed inventory of land use. bridges and earthwork for each of the three routes. has a higher percentage of bridge and tunnels. potential impact to soil could result from spillage of hazardous wastes and materials. However. land acquisition and resettlement. was selected even though it is more expensive. provincial and national conservation parks in areas in the vicinity of the alignment. excess dirt. noise. From an environmental viewpoint. county. Nanchong to Hechuan Station. During construction there is a potential for adverse impact on the soil from (i) disposal of excess earthworks. air.1 – Languangyu Scheme vs. water. and muck will be used in embankments where possible. There are 28 municipal. another option via Guang’an is now being considered as well.53 for temporary storage of materials and equipment. and requires more permanent land acquisition. rock. and residual spoil will be disposed at storage areas appropriately designed to prevent erosion. Lanmianyu. and (vi) contamination by fuel and lubricants. The preferred option. electromagnetic radiation. Baishui is considered a much more important site because giant pandas are known to live within its confines.2 delineate the massive amount of earthwork required in this Project. but passes 5 km from the boundary of the Baishui River National Conservation Zone. The following anticipated environmental impacts and mitigation measures are fully elaborated on in the EIA and the SEIA: soil. and induced impacts. Loss of topsoil will be avoided by stripping and storing topsoil prior to construction and then reapplying it for site rehabilitation. The alternative option. 199. (ii) Alignment Alternative No. (iii) damage to temporarily acquired land. flora and fauna. Limiting construction traffic to designated access roads will minimize . vibration. (iv) failure to rehabilitate borrow areas. which hosts giant pandas as well as the endangered golden monkey.1 and 5. The preferred option. length. (v) soil erosion and siltation. 10 of which are in Gansu and 4 in Sichuan. (ii) loss of topsoil. passes in tunnels beneath the core and buffer zones of Baishui but is distant from Yuhe and Maozhai (this option was rejected). Anticipated Environmental Impacts and Mitigation Measures 198. hazardous materials. public safety and health. D. FSDI analyzed many alternative alignments for the Project. and the savings that will accrue in the future when the double track construction is needed. Lanmianyu Scheme.2 Nanchong Area. Languangyu crosses both Yuhe and Maozhai Provincial Conservation Areas.

The proposed mitigation measures to prevent erosion are summarized in Table 5. it will be buttressed at the toe by Soil disposal a retaining wall. Flora and Fauna. When the project is Topsoil from borrow pits completed. will consist of two rows of shrubs and one row of trees on each side of the railroad. Pile driving in the construction of the bridge substructures will also impact the fishery resources by increasing the noise level in the . Steep cuts All steep cuts will be flattened and benched. Spoil disposal Spoil will be spread on the lowest yield/least productive land available When soil is spread on slopes for permanent disposal. In the Yuhe and Maozhai. Further discussion of erosion control is provided in Section V-F. During construction of bridges. Topsoil from the borrow pits will be removed and set aside. pits historic. and the area reseeded. placing of geosynthetics. The surface of the slope will be stabilized by shotcreting. August 2006. Most of the alignment passes through hilly and mountainous terrain which is very susceptible to large scale erosion. these areas will be passed by tunnels and bridges In the mountainous stretches. will be 2 m. Use of cofferdams will minimize the amount of the sediment from the pier foundations entering the river. residential. where possible. the areas will be regraded. Watercourses will not be blocked and temporary soil and rock stockpiles will be Natural watercourses designed so runoff will not induce sedimentation of waterways. 201. and embankments before borrow pits are excavated. Tunnel muck Muck will be spread and dried before it is used for embankments. Locating borrow pits Borrow pits will be centrally located to serve more than one site. Dumping of spoil into the river is forbidden. It is anticipated that the total amount of soil and water (mud) to be lost to erosion during the entire period (until the vegetation has recovered) will be 1. however the Project will not obstruct any known wildlife migratory passageways. and ecological sites. sediment basins. as will regrading and rehabilitating borrow pits. the topsoil replaced.8 million tons. fiber mats. and the spacing of the trees. as necessary. appropriate compaction. and there will be some loss of habitat. Intercepting ditches will be constructed on the high side of the restored pit to minimize erosion. There are endangered flora and fauna located in the area’s nature reserves. As noted in the discussion on flora and fauna. Of this quantity. stations. Use of spoil/borrow pits 202. where applicable.54 the impact on temporarily acquired land. There are no known spawning areas where the bridges are proposed to be built. dikes. Soil erosion and siltation will be minimized by prevention measures implemented on a case-by-case basis.7 percent will take place during the actual construction period. there may be some temporary impacts on the fluvial biota caused by pile driving leading to increased sedimentation.3. so these impacts are anticipated to be temporary and relatively minor in scope. the subgrade will pass through some regrowth areas. and drainage channels. Source: First Survey and Design Institute (FSDI). Location of spoil/borrow Sites for spoil and borrow pits will be a long way from industrial. 203. these include the Golden Monkey. or laid rubble prior to seeding. agricultural. and constructing berms. Landscape measures. Soil contamination will be prevented by installing oil separators at washdown and refueling areas and installing secondary containment at fuel storage sites. Table 5-3: Erosion Control Procedures Potential Erosion Problem Mitigation Measures All available spoil will be used for structural fill for access roads. The spacing of the shrubs will be 1 m. riprapping. 1 m outside of the row of shrubs. 89. Existing access roads will be used.

g. Crane barges and other vessels involved in bridge construction can also impair water quality by leaking oil. Minxian County of Dingxi City. Yuzhong County of Lanzhou City. The officials were generally supportive of the Project and did not perceive significant environmental impact resulting from the Project. SSDI personnel conducted a series of environmentally focused meetings to elicit input from stakeholders. Dingxi. Guang’an. Tourism. including the summary EMP. In view of the fact that the residents of the mountainous regions of Gansu and northern Sichuan have waited decades for this railroad. The EA will translate the SEIA. Tanchang County.55 river. During April 2007. into Chinese and provide copies to relevant parties. Post-EIA Consultations with Officials and Stakeholders. The impact from vibration decreases rapidly with increasing distance from the source. and the people indicated that they supported the Project. 206. local officials presented a detailed description of the Project. 207. Water Resources Bureaus) along the length of the alignment in Lanzhou. small community consultation meetings were held in 8 villages along the line to discuss the results of the EIA. Public Consultation and Information Disclosure 204. F. Longnan. Analysis of the results indicates that: (i) 43 percent believe it can promote local economic development. During the meetings. In April 2007. Meetings were held and questionnaires were distributed in An’ning District. E. Guangyuan. In conformance with ADB guidelines. High levels of vehicle maintenance and inspection monitoring will minimize oil leakages. and (iii) 97 percent of the people were familiar with this project. and Hechuan County and Beibei District of Chongqing Municipality. Weiyuan County. numerous meetings were held with the environmental and related officials (e. and Chongqing. it is not surprising that 95 percent of the public are strongly supportive of this Project. Cultural Relics. Guangyuan City and Nanchong City of Sichuan Province. prior to the completion of the Draft EIA. 205. Environmental Management Plan 208. (ii) Ranking the adverse impacts. These meetings targeted rural areas and towns as well as districts of smaller cities impacted by the Project. followed by noise (27 percent). There were no adverse comments voiced regarding environmental impacts. Pre-EIA Public Meetings. the lower case is land acquisition (33 percent). and then questionnaires were issued to the public. Ningqiang County of Hanzhong City in Shaanxi Province. Forestry. Nanchong. . mainly from television and word of mouth. including officials and affected persons. following publication of the EIA. Wudu District of Longnan City in Gansu Province. and vegetation destruction (18 percent). Chengguan District. A summary EMP is presented in Table 5-4.

• The concrete batching plants and crushing plants shall be sited at least 500m from the nearest habitation and fitted with dust extraction units in compliance with PRC and local standards. equipment and machinery used for Throughout Project Corridor construction shall be regularly maintained and correctly operated (including the use of dust filters or hoods). appropriate compaction. During Construction Contractor EPMO. Contractor EPMO. Throughout Project Corridor at all construction sites. agricultural land Failure to rehabilitate Borrow Pits All borrow pits shall be rehabilitated after use. Topsoil will be used for revegetation works. measures will include. sites temporarily acquired and all borrow areas. All vehicles. Access to adjacent Impact to temporarily acquired All temporarily acquired land will be rehabilitated after completion of construction. etc. construction of berms. Residual spoil will be disposed according to the Erosion Prevention Plan (ErPP).56 Table 5. Equipment and Machinery Discharge will meet national emission standards. WRB Loss of Topsoil Throughout the Project Corridor. All spilled materials and contaminated earth shall be collected and Throughout Project Corridor Water RESOURCES Siltation into Water Bodies Disposal of septic waste and maintenance workshop wastewater into waterways Contaminated runoff from inappropriately stored hazardous material and solid waste Maintenance Workshops and Construction camps EPMO and local EPB’s (Budget Item 4) Contractor EPMO and local EPB’s • The sewage system for the construction camps shall be properly designed. Construction vehicles. wastewater will be discharged to municipal treatment systems. During Construction. built and operated to prevent pollution to ground or adjacent watercourses. Contractor Solid hazardous and non-hazardous waste shall be appropriately stored to prevent contaminated Storage areas for hazardous During Establishment. WRB Soil Erosion and Siltation On embankment slopes. The topsoil from all areas to be permanently covered shall be stripped and stored in stockpiles. WRB During Construction and Operation. materials and solid wastes Operation and Dismantling (hazardous and non hazardous) storage areas EPMO and local EPB’s • Material storage site should be 300m away from residential areas. on a case by case basis.. During Construction and operation Contamination by hazardous • Oil separators shall be installed at wash down and refuelling areas. WRB Throughout the Project Corridor During Construction. During Construction. Contractor EPMO. Contractor EPMO and EPB’s AIR QUALITY Generation of Dust Throughout Project Corridors. dikes. slopes of cuts. soil erosion mitigation and siltation prevention Within construction corridor and During Construction. waste and materials. Residual spoil will be placed in earthworks storage areas with containment walls. planting shrubs and grass. all During Construction access roads. Contractor EPMO with assistance from local EPB’s Erosion prevention measures will be conducted in accordance with the ErPP and the EIA. all construction and work sites placement of geo-synthetics. Contractor EPMO and EPB’s • Water will be sprayed on the construction sites and major feeder roads to reduce dust. runoff to adjacent waterways. During Construction . sedi Contractor EPMO. all borrow and spoil areas. During Construction Contractor • Maintenance workshop wastewater will treated to PRC discharge standards. WRB All borrow areas. including Throughout Project corridor construction of settling ponds. machinery and equipment shall move or be stationed in designated areas.4: Outline of Environmental Management Plan (EMP) Environmental Impact/Issue Mitigation Measures Location Time Frame Responsibility Implementation Supervision CONSTRUCTION PHASE Soil Disposal of excess excavated Earthworks cut will be used in embankments where possible. Where possible. Contractor EPMO. Emission from Construction Vehicles. including hydrocarbons • Fuel storage and hazardous waste/materials storage sites shall have adequate secondary containment to contain spills.

minimize increases in suspended solids minimize blasting. additional land will be seeded for grass. • During Construction.). rock During blasting activities Contractor quarries. • Hazardous waste will be removed from site to approved hazardous waste disposal facilities by licensed contractors. Blasting schedules shall be publicly disseminated in areas where residences will be • impacted by the blasting noise. The trees to be • planted will be selected for adaptability to the local soil and climate. Contractor SOLID WASTE AND HAZARDOUS MATERIALS Storage and disposal of hazardous and nonhazardous waste and hazardous materials Disposal of domestic waste (hazardous and non-hazardous) and construction waste will occur • regularly to approved municipal disposal sites. All Blasting Sites (Cuts. construction camps. Construction Contractor EPMO and WRB Construction Contractor EPMO and EPB Construction Contractor Forestry Bureau and EPB ENVIRONMENTALLY SENSITIVE AREAS Yuhe and Maozhai • Construction monitoring will be conducted by the local Forestry Bureau and EPB in the outside the two nature reserves to ensure identification of protected species. Rehabilitation of Throughout the Corridor. and intercepting drainage systems will be constructed to prevent rainstorms from excessive erosion in the grasslands. sites temporarily acquired and all borrow areas. Appropriate safety measures will be implemented. stations and maintenance workshops. Within 200m of the nearest habitation. • Along the alignment. Construction Construction and operation sites. Noise from vehicles. mechanical compaction. Loss of habitat Bridge sites Minimize habitat clearance during construction operations. Training will be provided to construction workers in the vicinity of the • nature reserves to raise awareness of environmental protection requirements. Hazardous waste and hazardous materials will be stored on-site in approved facilities according to • relevant standards. etc. Trees will be planted at all station and depot areas. Contractor (construction period) and IA (operation period) EPMO and local EPB’s IMPACT ON FLORA Loss of or damage to vegetation Entire Project Site. tunnels etc. • On-site landfills will not be developed. in particular the temporarily occupied sites. Vicinity of parks . mountainous areas. EPMO and EPB’s Throughout Project Corridor. IMPACT ON FAUNA Impact to aquatic biology at Mitigation measures will include appropriate engineering design to bridge construction. Trees or shrubs will only be felled or removed if they impinge directly on the permanent works or necessary temporary works. construction work such as rock crushing. • concrete mixing and batching. will be stopped between 20:00 and 06:00 hours. plant and earthmoving equipment Plant and equipment used in construction shall strictly conform to the PRC and local • noise standards.. • Environmental training of construction staff will include training on limitations and penalties on cutting of firewood and poaching as well as restrictions to accessing the nature reserves.57 NOISE AND VIBRATION Noise and vibration from blasting operations • Blasting shall be carried out according to relevant PRC safety standards. Contractor EPMO and local EPB’s A greenbelt will be developed on both sides of the railway. • All works shall be carried out in a manner such that damage or disruption to vegetation is minimized. During Construction all access roads. EPMO and EPB’s • Potential structures which may be impacted from blasting vibration will be identified prior to blasting and monitored during blasting. including secondary containment.

• Overhead catenary system will be well maintained to minimise impact. Noise from operation of the • Noise control measures will be installed for noise railway sensitive points within 60m either side of the tracks. • Sound barriers. Maintenance workshops Operation IA Local EPB’s At identified noise sensitive sites Operation IA Local EPB’s Residential areas Operation IA Local EPB’s SOCIAL IMPACT Accidents due to unfamiliarity with railways OPERATION PHASE • Fuel storage and hazardous waste/materials storage sites shall have adequate secondary containment to contain spills. cultural or archaeological be encountered during construction.880m of sound barriers will be installed. Wastewater disposal from maintenance facilities and stations • Wastewater will be treated to appropriate PRC discharge standards. Preliminary Lanzhou-Chongqing Railway Environmental Impact Assessment.58 HISTORICAL. Source: First Survey and Design Institute. • All wastewater will be directed to municipal treatment where possible. Maintenance Workshops and stations Operation IA Local EPB’s Noise from maintenance workshops • Noise from maintenance workshops shall strictly conform to the PRC and local noise standards. all activities will halt and an established action plan will be enacted. Throughout Project Corridor Construction Contractor EPMO and Relics Bureau Along the majority of the alignment there are no existing railways and the Throughout Project Corridor public is unfamiliar with safety issues associated with railway crossings. • Monitoring will be conducted during the operational phase to confirm modeling results. waste and materials storage areas Operation IA Local EPB’s.195m² of sound insulation windows and 13. All spilled materials and contaminated earth shall be collected and disposed off according to EPB guidelines. Washdown and refuelling areas. August 2006. • Approximately 34. Electro-magnetic radiation • Affected residents will be assisted in obtaining cable impact on TV reception TV. EPB Environmental Protection Bureaus at county level EPMO Environment Protection and Management Office (part of Joint Venture Company) PMO Project Management Office WRB Water Resources Bureau (at county level) . A public education campaign will be undertaken to minimize accidents at grade crossings and other locatio Construction Contractor PMO Contamination by hazardous waste and materials. CULTURAL AND ARCHAEOLOGICAL Encounter sites during construction Should a historical. including hydrocarbons • Oil separators shall be installed at washdown and refuelling areas. 3m in height with high absorbing capacity or sound insulated windows will be installed in noise sensitive communities where appropriate.

The EMPO will be responsible to ensure that the EMP is updated periodically during the construction period. There are a number of relatively isolated communities in the PIA. This is reflected in the number of villages without access to a highway or national road such as Lanzhong (Nanchong.612 million live in the PIA. For the purpose of the PSA. 178 tunnels totaling 506.5 percent of the alignment will be on bridges. . The LCR’s alignment will extend from the Lanzhou in southern Gansu through the southwest of Shaanxi. traverses seven prefectures. The EPMO will be responsible for reviewing and approving the comprehensive EMP. The SEIA is based on the Draft EIA which is currently under review by SEPA. Minorities. and improved access to social services. 94 townships and 275 villages before reaching Chongqing Railway Terminal and will provide a strategic link between the northwest and southwest of the country that will create greater ease of movement between provinces in western PRC. and in each case social and environmental impacts have important considerations. and terminate in Chongqing Municipality. and about 70 percent live in rural areas. The proposed Lanzhou-Chongqing Railway (LCR) originates at Lanzhou Railway Terminal in the north. In the four provinces/municipalities. 16. and that railway projects act as key catalysts for induced benefits that often exceed the direct benefits. 12.8 percent of the entire length have resulted in greatly reduced resettlement. Introduction 210. market access.15 million people. account for about 1 percent of the PIA population. based on the summary EMP. The PIA includes seven prefectures. VI. This is significant because the LCR and associated facilities will enable increased access for rural populations and also facilitate improved communications and other services in the PIA.3km or 60. MOR and IA will ensure that the summary EMP is included in all bidding documents and operating contracts. and in these areas tunneling is extensive. The alignment will pass through mountainous terrain. B. For example. 22 counties or districts.59 209. It will also provide access to international trade routes through Southeast Asia and Central Asia. In total. Viet Nam is a major market destination for motorbikes manufactured in Chongqing. services and markets for areas that have largely been excluded from PRC’s economic expansion. Sichuan) where 49 per cent lacked road access.25 percent of the alignment in tunnels or on bridges. Sichuan) where 36 per cent lacked access and Qingchua (Guangyuan. The EA will ensure that any changes required by SEPA are reflected in the Project Final Design. Main Characteristics of the Project Impact Area 211. 214. Volume 4 on Poverty and Social Analysis. skills development. phones. 212. including local authorities and bidding contractors. there were a total of 173. POVERTY AND SOCIAL ANALYSIS A. 213. and ensuring that the contractors comply with the provisions of the EMP during the construction and operation phases. and enable access to goods. In addition. Villages without electricity. 22 counties. of which 11.16 Experience from other recent railway projects indicates that there will be significant opportunities for local communities to directly benefit from the LCR through job creation. 94 townships and 275 villages. This section presents a summary of the separately bound Supplementary Final Report. resulting in the current alignment. A number of alternatives have been considered for the alignment. The successful contractor will be responsible for preparing a comprehensive EMP. relieve traffic congestion along key transport corridors. northeastern Sichuan. poverty alleviation. There are no ethnic minority villages along the alignment. the PIA is defined as the districts though which the alignment passes. and safe drinking water were also concentrated in several areas such as southern Gansu and northern Sichuan. amounting to 73.

In 2005. Yingshan. Chongqing has an area of 82. 218. 220. the only female emperor. and in 2005.6 million people. the prefecture’s GDP reached CNY 14. it is the hometown of Chenshou. Nanchong City is located in north-east Sichuan on the middle reaches of Jialing River.04 million of which 81 per cent are rural.345 villages and a total population of 2. Agriculture will remain the key activity for the rural population in the PIA. Gaoping.7 billion and per capita GDP was CNY 18.300 km2. synthetic rubber. 195 towns. Langzhong Town. and 3.6 million were urban residents (accounting for 45 per cent). Agricultural production has grown steadily. Longnan is located in the south-east of Gansu on the upper reaches of the Jialing River. is an important tourist location and has considerable potential for tourism development based on historical sites and scenic areas. it is the birthplace of Wu Zetian. Lanzhou’s economy has been characterized by rapid growth.60 215.1 per cent. road and water) hub of PRC’s southwest.771. electrolytic aluminum. water. the lack of adequate transportation has constrained development. petrochemicals. GDP was CNY 7. Qingzhou) and three districts (Shizhong. the population was 31. energy generation. In 2005. or rail transportation and one third of its villages do not have road access.5 billion and represented and increase of 12. In 2005 the total population was some 3.400 km2 and governs 40 districts and counties. some 13 per cent higher than 2004 (based on real prices). The PIA counties are discussed below. The PIA includes areas that contain abundant mineral resources and farming.4 billion. The following paragraphs provide highlights of the economic characteristics of the prefectures of the PIA. Tourism could become another future growth engine and LCR will assist with its development. The area has numerous tourism resources including ecological sites. It has an area of 12. oil drilling and extracting equipment.5 billion. the Shu Road of the Three Kingdoms. Red Army sites. The city governs three districts (Shunqing. Longnan is a city with a long history and according to one tourism assessment has a total area of 2. There are 1.8 per cent. Yuanba and Chaotian). It has become one of PRC’s leading non-ferrous metal. the prefecture does not have air. was called Lizhou in ancient times. 216. Hechuan City . 217. but industry has only recently started to develop with non-ferrous metal smelting. Pengan and Yilong) and 487 villages and towns.500 km2 and a population density of 567 persons per km2. LCR will enable increased access to markets. the birthplace of the female emperor. It comprises one urban district (Wudu) and eight counties. automobile parts. Lanzhou. Xichong. nitric acid. with sections of the ancient Silk Road. Chongqing is a large municipality and is the transportation (rail. located in Sichuan. Lanzhou is the capital of Gansu. food and beverage production. and over the past ten years has had an average annual increase of over 8. Nanchong boasts rich tourism resources. and electrical machinery. and the birthplace of the Three Kingdoms culture. Guangyuan is relatively under-developed in terms of its economy. five counties (Nanbu. The municipality’s 2005 GDP was CNY 306. medicine and chemical production. and rural incomes will increase as a result. ferro-alloys. While Longnan has some of the richest mineral resources in Gansu. The population is in the order of 3. Jiange. The prefecture’s GDP in 2005 was CNY 33. and construction material and machinery production accounting for the main industries.9 billion. In 2005.11 million. of which two-thirds were living in urban areas.046 large-scale industrial enterprises in Lanzhou including producers of lubricating oil.440 km2 of tourist attractions of which only 55 km2 (two per cent) are currently accessible. the author of The Three Kingdoms Story. The prefecture has abundant mineral and energy resources such as coal and natural gas but an inadequate transportation system has meant that the resources have not been developed. petro-chemical and heavy chemical industry centers. 219. machinery and textiles. Wangcang. and Jialing). all of which will become accessible with the LCR.72 million. Lanzhou’s GDP was CNY 56. The city governs four counties (Cangxi.296 (representing 12 per cent annual growth). of which 12. Nanchong is an important production base for agricultural products. Guangyuan City. and per capita GDP was CNY 4. and covers an area of 16.

safe drinking water. some areas in the PIA are arid and receive little rain or moisture required for productive farming.083 or 13 percent above the official poverty line for the county as a whole. Poverty Analysis and Vulnerable Groups 221. hail storms and frosts. and poor soil quality. and rural net income per capita is CNY 1. limited industrial production and trade in goods and services is further constrained by lack of transport to larger markets. 222. it also has a low per capita GDP of CNY 1.17 percent. ¾ Low levels of economic development that do not provide an environment for job creation or diverse industry. this does not reflect the concentrations of poverty in southern Gansu and northern Sichuan. small areas of productive land. It should be noted that the population based poverty rate for the PIA of 9. ¾ Many households are still highly geared toward subsistence and lack the ability to accumulate produce or savings which can act as a buffer in times of economic hardship or calamity. and its rural net income per capita is only CNY 1.503. households are largely dependent on an income source which is vulnerable to both natural calamities (and weather) and market fluctuations. in Minxian (Gansu) the poverty rate is 25. many of these areas are considerable distance from key social services. In addition. and nearly three-quarters of its villages are designated poverty villages. ¾ As a direct consequence of above.653. ¾ Natural disasters that include periodic droughts.2 percent. C. For example.61 is one of the six regional cities in Chongqing that by 2020 will be transformed into a major city with manufacturing and tertiary industries leading its development. However. The primary causes of poverty in the PIA include the following: ¾ Low intensity agriculture and low levels of production as a result of inadequate irrigation water. ¾ Unsuitable environment for cultivation. where it is not uncommon to find over one-fourth of the population living in poverty. . ¾ Undeveloped infrastructure in many isolated areas in the PIA means lack of access to highways. ¾ Limited technology and access to information caused by isolation means that farming households may not be aware of or able to implement practices that could increase yield and improve productivity. ¾ Low levels of education and skills further forcing dependence on unskilled work and agriculture. periods of high rainfall and flooding. Tangchan is the county with the largest proportion of its villages being poverty villages (98 percent) and some 22 percent of its population is poor. In addition to the natural calamities described above. electricity. and communication and information exchange. Its per capita GDP is the second lowest in the PIA (CNY 1.892). all of which produce extreme weather conditions that are destructive to agricultural production and rural incomes. Livelihoods are restricted to farming or migratory labor in isolated rural areas. and ¾ Households with members that experience health problems or are disabled or chronically infirm which means that in addition to incurring higher health-care and medical expenses these households have fewer productive or income earning members.

4 97.18% 1.3 17.1 20.62% 27.230 Source: FSDI & SSDI (2006) and local governments (2007).75% 7.5 64 2.1 54.34% 1. of the total number of households by province.6 64 56.9 35.5 72.69% 16.8 14. 15.2 31.8 75.8 percent of all surveyed households in Sichuan.8 16.897 8.4 percent of the surveyed households have annual net incomes per capita less than 1..2: Designated Poverty Households Location Poverty household (percent) No Yes Chongqing 85. 20 percent are in the CNY 959 to CNY 1. Number of poverty villages 159 7 225 72 78 134 519 326 1.60% 25.3 45.6 52.71% 4. .7 45. and 5 percent of all surveyed households in Chongqing have net incomes per capita less than 1.71% 3.87% 17.11% 25.2 54.33% 13.17% 9.4 2.7 Source: PPTA Household Socio-Economic Survey (March/April 2007) Sichuan 224.5 23.2 2. For example.3 46. those near Lanzhou (e. 24.309 50 Percent poverty villages 59.99% 2. A total of 17.8 Total 54.000 CY.9 43. The designation of poverty households is not necessarily reflective of either income or households that are poor (as derived from the poverty line).524 120 109 30 5 17 137 170 118 80 86 1.g.601 per year. As the data by county incidate.45% 1. Table 6.95% 33. of the designated poverty households identified in the survey only 42 per cent are below the official poverty line.13% 11.6 9.4 percent of all surveyed households in Gansu.29% 783 PIA 1066 9.62 Table 6. some 26 per cent are low income households but do not fall below the poverty threshold. Chengguan and An’ning) and Chongiqing (Beibei and Jianbei) have higher income levels.45% 9.2 Gansu 53.380 214 199 185 211 726 457 1053 571 254 363 6.38% 6.7 21.18% 32.067 527 Chongqing 50 3.3 30 16.29% 268 40 310 136 217 306 688 334 2.65% 20.1: Poverty Data for the PIA County/District Yuzhong Chengguan Minxian Zhangxian Weiyuan Anding Wudu Tangchan Gansu Chaotian Qingchuan Shizhong Yuanba Cangxi Langzhong Nanbu Jialing Shunqing Gaoping Sichuan Hechuan Poor (000) Poverty rate (percent) Number of villages 60 10 102 65 89 64 150 64 604 42 43 9 12 80 70 101 19 28 8 412 50 14.96% 21.7 31.000 CY.600 yearly income group and another 12 percent earn more than CNY 1.4 223.

9 Cangxi 48 0 0.9 Weiyuan 49 25 51.6 Huaying 36 1 2. These two comments reflect the limitations of smaller surveys.4 3.8 Chaotian 49 9 18.0 2.825 6.2 3.0 4.3 Yuanba 48 7 14.8 PIA Net Income per capita (CY) 1. More poor households (54 percent) have between four and five income sources compared with some 45 percent across all other income groups.5 Chengguan 41 0 0.0 0 3.1 4.1.4 Gaoping 49 6 12. While the data for the counties and the household surveys are not entirely consistent. 42 are designated poverty households.4 3.465 5.0 159 8 5.329 3.517 2.1 3. Of the 60 female-headed households. 226.6 Anding 29 17 58.8 3.7 Qingchuan 31 1 3.3 Jiangbei 98 3.453 4.119 7.7 3. 21 are designated poverty households.0 4.9 3.5 3.256 2.9 3.601 or more have only 1 source of income.44 Guangyuan 38 13 34.6 3.297 2. they reflect that there are poor areas through which the alignment passes as well as those with higher average incomes.6 4.3 3.0 3. there are higher levels of poverty households recorded amongst the surveyed households.989 1. 3 are designated poverty households and have net incomes per capita below CNY 1.1 414 101 24.000. Other poverty characteristics include the smaller number of income sources for poor and low income households compared with households in other income groups.8 Shizhong 9 0 0.708 6.289 1.7 3.431 7.0 3.020 Source: Consultant. Of the 48 households with a disabled member.6 Minxian 41 2 4.5 4.0 Hechuan 45 6 13.2 3. The number of households dependent on one income source is small (2 percent of poor and low income households and 1 percent of vulnerable households have only one income source) while no households with per capita income of CNY 1.8 Sichuan 558 88 15.9 Gansu Yuechi 43 11 25.639 4. 227. Out of 5 households (totaling 11 persons) surveyed with ethnic minorities. it should also be noted that smaller surveys such as the household survey can indicate that poverty is more severe and widespread than as shown in aggregate samples.1 3.8 4.7 4. While the surveyed households have higher net incomes per capita than shown for the counties in Table 6.000.200 4.643 6.9 4.3 3.942 6.2 Langzhong 57 0 0.0 0 4.072 4.8 2.109 3.0 4.4 Zhangxian 30 14 46.0 3.3 3.7 3.482 7. and have net incomes per capita below CNY 1.0 3.1 1 1.933 3.135 3.0 2.589 1.8 Chongqing 1.8 Beibei 16 1 6.1 Nanbu 52 2 3.6 4.471 1.6 4.0 4.2 3.277 4.9 Wudu 50 5 10.0 3. However.138 7.851 1.0 0 3.131 197 17.0 0 4.8 3.4 3.5 Xigu 20 0 0.067 5.0 0 3.190 2.0 3.5 4. Households with per capita income of CNY 3.2 Jialing 50 38 76.2 1.0 4.2 Tangchan 52 30 57.63 Table 6.2 An’ning 38 1 2.8 3.9 Shunqing 48 0 0. 225.000 or .3: Household Surveys in the PIA Poor % Poor Persons/Poor Households Persons/HH County/District Households HHs HH (#) (#) Yuzhong 64 7 10.7 4.0 3.0 0 4.712 2.

or cash income is too seasonal to make any longer term assessments.9 23.601 or more have eight or nine sources of income.1 14.958 959 .3 0.4 0. The table below provides a data disaggregated by poor.5 41. 229. They have small land-holdings (between 1.5: Ownership of Goods by Poor and Non-poor Households Household ownership (%) Household Car M'bike Bicycle Washing machine Fridge Colour TV Computer Poor 0.3 7.9 12. 231.5 7.3 Non-poor Source: PPTA Household Socio-Economic Survey (March/April 2007).2 8.6 8.64 more (15 percent) have seven sources of income while 7 percent have eight sources of income.8 8 1.2 mu and 3.2 25.4: Number of Household Income Sources by Income Group Households in per capita income group (%) No. Income can provide some insights into poverty and household vulnerability.9 10.3 9.4 26.9 45. Assessment of ownership of other assets helps in rounding out the picture. of income sources < 693 694 .4 5.5 14. Table 6.1 1.2 24. or have had. excess cash to purchase such items or have not had to sell or barter items that might have been gifted to them.4 0.6 5.7 11. while ownership of consumer and household appliances or vehicles can also be a useful gauge in determining whether households have moved beyond subsistence in that they have. Poor households derive their main income from agriculture (rice.9 46. with most of these households raising up to five animals.4 0.3 9 Source: PPTA Household Socio-Economic Survey (March/April 2007) 1.0 1.1 2.7 3 17.0 0.9 1. Table 6.constructed from .0 5. soya bean. potato and herb medicine) supplemented by income from members who are working outside of the household’s village.0 27.0 0.3 22. with the maximum being 42 animals (households in Gansu). 230.0 14.1 Low income 1.8 16.6 9. Anecdotal evidence gathered during field visits generally confirms the distribution of ownership.6 22.2 24.7 20.6 mu) and live in small houses – with floor areas in the order of between 80 m2 and 150 m2 .8 2.4 4 29.0 13.1 6. One-third of households raise livestock.0 8.8 19.9 228. Households falling below the poverty line (2 percent) compared with six percent of low income households and 18 percent of households with per capita income of CNY 1.3 21.0 1.1 4. although in rural areas it is not always the best indicator as so many households operate with very little cash income.0 2 3.1 18.4 3.5 8.6 7 5.0 20. for example.3 11. Only small proportions of households raise larger numbers.3 0.1 5 23.8 1.1600 1601 – 3000 > 3001 1 1.7 26. low income and non-poor (as defined by the poverty line and low income line for 2007). livestock are considered valuable assets for rural households and credit is often taken up to purchase buffalo and pigs.0 2.2 6 16.

Usually a request is received from another city and training is done based on the requests. Some have a few livestock (cattle and pigs) while other households must borrow cattle from better-off neighbors to assist with plowing. for example. ¾ The highest infant mortality rate. 234. Geographic location along the proposed alignment is also a significant poverty determinant. A World Bank project between 2002 to 2006 provided US$ 44 million for infrastructure improvement.433 villages included in the national poverty alleviation program.overall.000 people each year go east or south to work. ¾ Lowest life expectancy. This includes provision of training for people who migrate for work. and ¾ Largest proportion of villages without adequate electricity or safe water supply. 237. From the current labor force approximately 200. but most people travel south for work.5 million people were trained to work outside the city. Micro-credit and small loans through various social donors and ACWF are provided. Based on the 2007 poverty line half of households are poor and a further 22 per cent are low income. There are specific measures aimed at increasing the production of potatoes. Dingxi is a designated poverty prefecture. They go to many locations such as Beijing and Urumqi. In the prefecture’s 11th FYP some 13 villages have been identified that will be relocated to urban areas. The plan includes a range of measures for improving agricultural productivity through encouraging the use of new and higheryielding rice and grain seeds and introduction of improved farming and cultivation techniques. Even including the relatively better off counties and district’s in the provincial capital – Lanzhou . construction. 233. at the northern end of the alignment. capacity building and micro-credit while Longnan received . Registration of trainees is on a volunteer basis. as security guards and as maids. Training is given to men and women in such industries as. as reflected by: ¾ Largest proportion of households living in earth and wood. Highest poverty rate and number of poverty villages. are considered to be the most disadvantaged and poor in the PIA. They may also be given supplementary living expenses. There is an overall development plan that includes the urbanization of a number of villages through relocation of households in some villages and major infrastructure improvements for others. as opposed to brick and concrete or brick and wood houses. 0. Houses have smaller per capita floor area.65 earth and wood. Education implemented in Lanzhou is compulsory for nine years. Longnan: In Longnan there 224 townships and 2. Subsistence allowances and exemption of school fees (books and tuition fees) are provided to designated poverty households. Lanzhou: To help alleviate poverty in Lanzhou. ¾ Lowest average urban and rural net incomes. The northern parts of the alignment are less developed and substantially poorer. There are actions taken to help poor women and female headed households that suffer from poverty or disability. there are plans to relocate people from poor and isolated areas to urban areas or even other prefectures and districts. 235. women are also given assistance to buy agricultural products and receive training. Special measures are implemented for poor women including the provision of training and up-skilling for 95 per cent of urban women and 85 per cent of rural women. 232. in 2006. The following section provides a brief description of the programs being implemented along the proposed rail alignment. The counties and districts along the alignment have a comprehensive range of poverty alleviation programs as components of their 11th FYPs. than the more southerly parts of the alignment which have access to both non-farming and wage-earning opportunities and consequently higher incomes. 236. The local government has been implementing poverty alleviation measures since the late 1990s and is very close to solving the problem of insufficient clothing and food in poverty households. Poverty reduction has been achieved through central government and international donor funding. the counties and districts in Gansu. based on a range of factors. textiles.

Also within the PIA are two counties (Xichong and Gaoping) which are included in the provincial poverty reduction and development program which covers 382 designated poverty villages and 178. and mushrooms. 238. encourages the cultivation of higher value products such as vegetables. Once the village is relocated the land is returned to forest. and include. restaurants.900 people were resettled from remote mountainous locations. skills for work in textiles and other industries. Zhongqu and Yuanba (provincial poverty counties). An important poverty alleviation program includes a ten-year joint local government and village funded measure. Each year approximately 100 villages are selected to participate in the development and implementation of locally prepared village poverty reduction plans. Around 40. improving irrigation systems. and encouraging supplementary activities such as fish and water products farming. Social subsidies are provided through the minimum living insurance standard. This is a form of social pension that “tops up” a household’s monthly income to ensure that each member receives at least CNY 170/month. upgrading of school and health clinic buildings and improvement of health-care and education services. as well as specialized agricultural activities such as animal husbandry (raising pigs. In this prefecture there is also a program to relocate people from remote areas and high mountainous regions. The ACWF has a target to train 40. A number of additional villages will be integrated into the ongoing village demonstration program for infrastructure reconstruction and peach planting. conversion of mountainous agricultural land to forest. rabbits. improving cooking skills including how to work as a chef. There are also several programs and training initiatives. such as the poor mothers program. the threshold is established in Longnan at CNY 170 person/ month. In 2006 some 110 villages were selected and received financial support in the order of CNY 700 million. some prefecture funded and some through ACWF.000 women per year are trained in the service sector (tailoring. This is also a coordinated effort between the prefecture government and village administrations with the government identifying suitable alternative land for relocation and providing the funds for rehabilitation programs while the village administrations cover the direct expenses incurred during resettlement.000 people. Training includes agricultural methods and techniques. this program is limited to those people who. The program introduces alternative and new technologies and practices. Similar to other locations along the alignment. 241. Nanbu. fruit. Jialing). provides skills and training for households to move from subsistence to market-oriented production.000 women to then act as trainers for other women in rural areas. However. implementation of activities for maintaining watersheds to assist in water and soil conservation. ducks. and ox). Guangyuan: Since 2000 the development plans of Guangyuan have included a raft of projects and measures aimed at improving the standard of living and general socio-economic conditions.66 a total of CNY 115 million from central and provincial government poverty reduction funds and a further loan of CNY 8 million loan was given at low interest in 2006. The government has made great efforts in poverty reduction in Guang’an. Guang’an: In Guang’an the proposed railway traverses Cangxi and Chaotian (nationally designated poverty counties) and Qingzhou. The city has a number of measures for the health-care of women and girls from poor families. hairdressers etc). In Tanchang a total of 200 households (800 people) were resettled from rural to urban locations in 2004 while in 2005 some 1. 239. increasing the coverage of rural electricity network. Nanchong is implementing agricultural restructuring which includes transition from subsistence to cash crops and high-value products. do not have the means to support themselves in urban areas or have different traditions or customs. including a poverty reduction program that has implemented a range of measures including road construction in . construction of roads connecting villages. The plans to 2010 cover 310 villages and aim to steadily increase the incomes and living standards of 418. if relocated.770 poor people. The ACWF also calls for the community to assist and support poor and vulnerable female headed households through donations and payment of fees for girls from poor households in remote areas to attend school. An agricultural restructuring program is being implemented. to support women living in poverty.000 women per year in Guangyuan and includes a “training of trainers” program for 1. 240. Nanchong includes a number of designated poverty counties which are located on the alignment and are recipients of national level support (Langzhong.

000 poverty villages (accounting for 20 per of the villages in the municipality) but none are located along the alignment. The ACWF’s Spring Bud program provides tuition for girls. and hotels that spring up to accommodate the needs of the work camps as well as jobs such as selling food and providing services (such as laundry) and basic supplies to the work crews. and being less able to negotiate condom use etc) it is critical that specific outreach to women along the alignment communities . as indicated in the SDAP. as this is a sector that opens up many opportunities for women. and pig raising (a CNY 200 subsidy for raising female pigs available under an agricultural funding program). and skilled jobs if they are qualified.000 people are living in poverty. ¾ Women will be encouraged to be actively involved in the planning for further tourism. Chongqing Municipality includes 14 national poverty counties and four municipal poverty counties and 2. Local governments will be encouraged to fully involve women and other vulnerable groups in the planning process for development around the station. ¾ Women will be provided information on how to apply for small loans and receive counseling and training to set up businesses that serve the construction sites during the construction phase and in the railway stations for the operation phase. ACWF or Poverty Alleviation Office loans or credit can assist female entrepreneurs to set up small businesses in the station or area adjoining it. food and other items. ¾ The LCR Company should be encouraged by MOR to hire at least 25 per cent women for operations and provide training as required. ¾ Women. ¾ Women will be provided the full opportunity to generate sustainable incomes so that businesses formed by women are transitioned for the long-term and income generated is turned into sustainable assets for poor or vulnerable households.000 for poverty villages to improve access and communications. As women can be more at risk from men (as CSWs. poor and non-poor. As most of these jobs are flexible in their timing they will allow women to earn money while caring for children and elder relatives. along with other community representatives. ¾ An STIs and HIV/AIDS public awareness program that reaches women and men will be implemented under the project. who would otherwise drop out of school due to lack of tuition fees and related expenses. cafes.67 villages. ¾ Women will be encouraged to seek jobs in restaurants. ¾ Female heads of poor households should receive assistance with school fees to enable their children to remain in school while at the same time freeing women to seek employment. production of local olives and vegetables. The target of 25 per cent should be included in the construction contracts. the following recommendations are made to ensure that women fully benefit from the construction of LCR: ¾ Female heads of household will receive priority treatment in obtaining suitable unskilled jobs. 243. ACWF has some micro-finance loans and provides a business mentor program for women entering business. ACWF should insure that this goal is achieved through their resources or drawing in local government or other NGOs. 242. will be involved in the design of the stations and set aside special areas for sale of handicrafts. during the construction. There are signal programs in poverty reduction to diversify and restructure agricultural production including. The Poverty Alleviation Offices also have a credit program that may be used or county governments can set up specific loans that support the poverty alleviation sustainability program as well as women. With respect to gender development. development of agriculture. planting fruit trees. providing clean water. and improving healthcare and village education. so that opportunities are generated for both men and women. In Hechuan City some 57. and the government has responded through programs to improve city infrastructure including funds of CNY 200.

including medical services. A service system for the rural disabled has been established. The Hui have a long tradition of integration with the majority Han population. 251. 250. it is anticipated that the Hui and other minority groups will be beneficiaries of the project through increased income and employment opportunities. Service stations for the disabled were established in 2. thus affordability should not be a critical issue affecting people’s livelihood. micro-finance credit has been used extensively for poverty reduction at the household and even individual basis. Poverty reduction for the disabled is seen as a key part of the overall poverty reduction effort. and that APs will include only some Hui. 248. Along the alignment the Hui are inter-mixed with the Han and have a long tradition of integration with the majority population. the Government developed the Poverty Reduction Program for the Disabled (1998-2000) which included a series of policies and measures such as a Poverty Reduction Loan for Recovery of the Disabled (to the value of CNY 800 million in 2000) to help the disabled with food and clothing. and improved access to goods. These households will be identified and mitigation strategies developed. almost all of whom are Hui.742 townships (60 per cent) of the PRC. The Resettlement Plan concludes that most of the households to be affected by land acquisition for the alignment and stations are Han. 245. The labor impact is. 244. and Man are also present. and ¾ Women farmers will be encouraged to participate in the TA assessing the needs of farmer associations. only a small proportion are ethnic minorities (1. The Government has also improved the service capacity of the Society for the Disabled through supporting the building of a grass roots service system. indirect and induced effects both during construction and operation. 246. The disabled represent a small. The disabled and chronically infirmed persons may become Project beneficiaries through increased employment opportunities and improved access to social infrastructure.68 and work camps be included in the program. but significant proportion of the total poor population.06%). 247. The Project should result in reduced transport costs for goods and services both for those utilizing the railway as well as from the ensuing competition between rail and road transport modes for customers. therefore. In recent years. In 1998. Specific attention for those affected by resettlement will be given to those households with disabled or chronically infirmed persons. establishing new farmer associations or expanding existing ones. Testing and counseling for work camps and local communities will be established under the program and implementation of the program will be monitored. There are ethnic minorities scattered throughout the PIA. The Project will generate considerable local employment opportunities through direct. 249. Miao. they or their households could also become vulnerable if not provided with resettlement assistance if their household is poor or lacking sufficient labor to build a new house or prepare land for farming. which provides an organizational guarantee for poverty reduction of the disabled. considered to be positive and will be strengthened through the involvement of the . and has become a major tool for poverty reduction for the disabled. ¾ Women will also be targeted by the human trafficking component of the awareness and prevention program. and female farmers will be encouraged to seek agricultural extension and training opportunities. The efforts of the project to provide sustainable income sources that are an alternative to migration will assist in protecting local communities and women in particular from trafficking.129 counties (80 per cent) and 27. services and social infrastructure to the same extent as the rest of the population. The Project will utilize tariffs that will serve to benefit the entire PIA. reduced transport costs. Tujia. As noted above. However if they are affected by resettlement. Based on the forgoing. improved access to markets.

it will be important to have an awareness program within the camps. Monitoring their adjustment is carried out in the monitoring process for the resettlement plan. The introduction of a railway into a previously isolated area will have substantial benefits by improving access to markets. and nongovernmental organizations to recruit workers from poverty villages for the Project and to provide training if necessary for members from poor households. When planning is done for developing commercial centers in the vicinity of the train stations. For example. The monitoring will describe public awareness raising activities undertaken. 258. employment opportunities. To monitor social protection. but should also be integrated into the monitoring program for the socioeconomic and poverty impact recommended in this assessment.g. they should also be given an opportunity for work during construction as well as during the operation of the train service. Construction work sites always require careful monitoring both for food safety and sanitation and for safe operating practices. All counties and districts have active public information programs for HIV/AIDS awareness. They distribute leaflets and posters and feature radio and TV ads. other government agencies. However. 252. a train running through an area poses a danger to livestock and people if they cross the tracks. Although the alignment will be fenced and there will be no at-grade crossings. 255. the Chengdu Railway Administration has successfully implemented effective community awareness programs (e. services. Local health officials in conjunction with the Project railway will have to develop appropriate strategies to minimize the risks posed by HIV/AIDS/STI and other communicable diseases as well as by the possible introduction of human traffickers into the PIA. They should also be given access to the advisory group recommended above and the resources made available to the workers who choose to take part in the participatory program. These are outlined below. 257. towns and cities near the construction site. and social infrastructure. it may also increase health risks to PIA residents if they are not aware of issues to which they could become vulnerable. In addition to these ongoing awareness programs. This requires a community safety awareness program by the railway. This has been done for previous MOR . with the result that there have been no accidents involving residents in two years of operation. 253. 256. It is critical that they are consulted regarding their interests in adapting to a new location or means of earning a living. and schools have also have awareness and prevention programs. The same active HIV/AIDS awareness program will need to be conducted in the villages. 254. land or both during resettlement. Food and sanitation are the responsibility of the county health department in the jurisdiction where construction is taking place. the contractors will be required to confirm that their workforce has attended an HIV in the workplace seminar and the associated facilities (HIV/AIDS awareness and prevention posts at each camp) have been installed and are functioning. Health department inspectors are required to visit the work camp site on a regular basis to insure that basic health and sanitation regulations are being followed. testing and counseling programs related to HIV/AIDS and other communicable diseases conducted at the work camps and in what manner they have made condoms available to workers and to local residents in the vicinity of work camps. Since they are facing loses as a result of the construction. there are still many people who are relatively unaware of the dangers of AIDS and how to prevent its spread. This should include health workers coming to the camp to talk with workers in their work teams and to offer testing and counseling as requested.69 Poverty Alleviation Offices. This will be verified by both internal (MOR) and external monitoring (IMA). they should be offered an opportunity to participate as workers or business owners. HIV/AIDS and other communicable diseases may also be introduced as a result of improved access to other areas as well as by the construction workforce that temporarily moves into the PIA. Dawan Railway). Despite a fairly major nationwide awareness program.. The most vulnerable groups during the transition are households that lose housing. and improved access to goods.

Europe. Poor families are at risk of any natural disaster. however. During construction and as the trains begin operating. they are not easy to enforce. from which an action plan has been prepared and submitted to People’s Congress for approval. communication and other infrastructure has not been fully developed. Trafficking in Persons Report. There are laws in place protecting minors and women from this abuse. State Dept. Thailand and Viet Nam resulted in the Coordinated Mekong Ministerial Initiative Against Trafficking (COMMIT). 259. the Middle East. there were 3. In 2004 an agreement between China. The very fact that many of these households rely heavily on less productive agricultural resources condemns them to a very low standard of living and limits their opportunities for rising above poverty. The system of team leaders organizing labor from their home area makes the leaders more aware of providing adequately for the team. 262.018 traffickers were arrested. Cambodia. 2006) . The death penalty is imposed for traffickers who coerce girls under 14 into prostitution. Asia. Latin America. the Chinese Government investigated 20. would allow the family member to maintain ties and non-monetary responsibility to the family while he/she he is able to bring in income. While the police report a 27% decline in investigations in 2003. Money flowing to local governments is used for the kinds of direct benefits needed to provide a safety net and reduce the likelihood of the elderly and vulnerable falling into poverty. China Country Report (June. Some of the railway construction will require highly skilled and moderately skilled workers with railway experience. If passed. but there is also international trafficking of Chinese citizens to Africa. which could lead to human trafficking becoming a problem.17 260. and children trafficked for purposes of sexual exploitation and forced labor.215 women and children were rescued and 22. U. lured through promises of legitimate employment. kidnapping of women and coercion into prostitution. The PIA includes parts of China that have been well developed such as the Chongqing urban area as well as the national poverty areas in the poor Gansu Province. Malaysia.999 suspects arrested and 774 traffickers punished. Construction jobs also bring revenue to the community for reinvestment either to generate further economic development and jobs or to invest in education. D. The Potential Impact of LCR on Poverty 261. however. Most of the poverty is in the more isolated areas where productive land is scarce. It is estimated that approximately 60 per cent of the jobs will be unskilled and that it 17. and destination country for women. MOR has a set of safety regulations that apply to the work site. MOR and the construction company monitor these sites. 263.S. County governments have had to provide many of the social services previously provided by the communes and collectives in rural areas. men. resources are relatively undeveloped.70 projects. and Japan. Between 2001 and 2003. there will bring more outsiders coming into the area. serious illness or other challenge to their precarious survival-balancing act.360 cases in which 43. Thailand. Law 1992 on the Protection of Rights and Interests of Women specifically outlaws trafficking. health care and the social/cultural life of local people. and transportation. The majority of trafficking in PRC is internal. Laos. The PRC is a source. There is. There also are cases involving Chinese men and women smuggled into destination countries and then forced into commercial sexual exploitation or exploitative labor to repay debts to traffickers. These positions will be provided by the contractor. Myanmar. LCR construction jobs created within the Project area. water may be limited. are forced into commercial sexual exploitation in Taiwan. soil is poor. the plan will help to clarify the responsibilities of all relevant ministries in combating human trafficking. and North America. Women. transit. a considerable amount of work that is unskilled and can readily be done by members of the local community. Access to job opportunities is essential to poor households and preferably job opportunities that do not require traveling to another part of China.

support and small loan funds. This ensures that a level of this impact will be pro-poor and the county ACWF can help to organize women to carry out this function. In addition. Each worker will be able to seek other construction work based on the experience and skills acquired on the LCR job. construction access roads to be built. 268. local governments work with team leaders who recruit from local areas and handle the living arrangements for their team. If hiring preferences (50 per cent) are given to the workers from poor households. These companies will provide the skilled labor and hire unskilled workers from among those recommended by the local government. cement and steel will be used to construct LCR. unskilled jobs. For workers who are not from the immediate area. A total of 467. PAOs have indicated that they can tailor some of their programs to follow-up with those households that get employment during LCR construction to help ensure the long-term gains from employment to each household. These will not exclusively be “designated” poverty households because as shown in the analysis in Section 5. In the vicinity of the work camps. 265. MOR will contract a railway construction company for each civil works package. and can potentially yield CNY 2. this results in 233. Actual rates and days worked may vary but this is indicative of the considerable benefits that LCR can potentially provide to poor households within the PIA. workers can find a place to stay near the work site. For the purpose of making an estimate of the potential area development and poverty impact. through providing advice. and based on the skill composition of railway civil works. rock. 269. ballast. It should be possible for the county PAO to identify those households for whom a 12 to 18 month job can make a significant difference in helping raise the household out of poverty. and quarries for stone and sand to be established. Alternatively. brick. An additional benefit of construction employment is the training that comes with it. to capture both job and business opportunities for women. gravel. these will also generate employment. Construction benefits include both income during construction and assets that remain after the construction work is completed.957 person years of employment for the poor. 266. It is. it is important that some of the direct jobs go to poor households from more remote villages. The households to be given preference will be identified by the PAOs and ACWFs. . The practice of construction companies contracted by MOR is to request that county governments provide the unskilled workers for the railway construction work units.000/year.105 million to poor households based on wage rates of CNY 9. To ensure that the benefits of the project can reach those most in need and assist in reducing pockets of intransigent poverty within the PIA. neither unusual nor difficult for the construction units to request that a minimum number of poor workers be included in the work crew. 18. Major quantities of sand. In addition to the direct unskilled construction jobs. designated poverty households do not necessarily fall below the official poverty or low income lines. 267. it is estimated that 50 per cent of the jobs will be local hire.18 264.71 will be possible to hire about half of the unskilled workers from the community. the demand creates an opportunity for the ACWF which has become increasing involved in assisting women in starting small businesses. restaurants and hotels are built to accommodate contractor staff. with preference being given to poverty households.913 person years of unskilled labor will be required over the construction period 2008 to 2013. The local or prefecture governments can authorize poor households to organize the food service to the work camps. LCR construction will also need wells to be drilled. therefore. it is common for the construction units to provide temporary housing. a substantial number of unskilled jobs will be created in the industries that will supply the construction materials for LCR. and these materials are produced by industries in the PIA. Generally. Provision of food and other necessities to the construction work-force is another jobcreating and income-generating benefit to the people of the PIA.

Passengers to and from a train require services such as taxis. 271. At an annual average of CNY 10.388 million in wages will produce a huge boost to the local economies. a significant number of the operations jobs and train station jobs can be filled by women. The LCR will enable domestic tourists to reach remote locations by their preferred means of travel. 276. All of these activities provide opportunities for poor families to generate income for the household. Bringing jobs to the counties on the alignment mean that households can remain intact.653 person years of unskilled work generated with wages of CNY 716. hotels. errands. It will further the national goal of micro-urbanization which makes it possible for poor families to move away from unsustainable. Tourism development historically. and a range of other activities. about one-quarter (3. While many of the construction jobs tend to be filled by men. has been relatively limited because of the lack of access.72 270.8 million for the poor. Expanding job availability within the local context will enable more people from marginal rural areas to find employment and markets for their agricultural products or to supplement/replace low incomes. This trend can already be seen in the relatively small number of workers that go outside the area for employment or to start a business. and a variety of retail sales outlets. selling food and other necessities. The counties and districts along this section of the alignment are amongst the poorest in the PIA.304 person years of unskilled work generated with wages of CNY 1. 274. while international tourism in the PIA is increasing. providing food and other services to passengers. The number of jobs under LCR will total about 13.6 million in 2015 and increases to CNY 50. and therefore the potential contribution of CNY 1. this equates to generated wages of CNY 34. 79. Activities include for example. They provide an opportunity for women to add to family income and particularly assist women head of households who depend on paid employment to provide for education. The Lanzhou – Guangyuan section will generate the most jobs and this is a factor of the number of tunnels along this section of the alignment. jobs are created for operating the new train service. cleaning. Many communities in planning for new railway or road facilities have built market areas with stalls that people can rent for retail or small scale manufacturing in the vicinity of the stations.388 million for the poor.499 jobs in 2034. Station areas generally become job creation centers. carrying luggage. 273. Chinese are very active tourists within PRC and generally prefer the train to other means of transport. and this largely contributes to the 154. The alignment has been divided into two sections and the unskilled jobs and potential wages for each is summarized below: ¾ Lanzhou – Guangyuan section. Tunnel boring machines will only likely be used for tunnel sections which are on the critical path. In addition to permanent station jobs including management and supervision. All of these businesses require workers. selling and collecting tickets. 154.667 in 2015 when the railway is anticipated to commence service and 21. 272. with large numbers of tourists . 275. Of these jobs. medical care and all the other expenses incurred in operating a household alone.460 in 2015) are for low and unskilled workers such as for maintenance. Transportation is a tremendous enabler of job creation and economic opportunity. otherwise manual labor will be used. many of them unskilled.6 million in 2030. It will also continue the process of moving development westward by strengthening the transportation corridor and services along what will become a very important east-west route. selling newspapers and magazines.304 person years of unskilled work generated over the construction period. The multiplier effect from these developments will bring about exponential growth and opportunity in the region. mountainous farmlands and build a sustainable future in new centers of economic activity in rural areas. restaurants. From this a considerable number of poor households in the PIA will have the opportunity to permanently escape poverty. Following construction of the railway.000. and ¾ Guangyuan – Chongqing section. there are many jobs that poor household members can do.

240 m2 of structures will be affected. A list of consultations including surveys. Numerous alternatives have been considered for LCR alignment.3 km.667 16.586 223.6: Total Job Creation by LCR 2015 2024 13. and 10.452 159. 43. The Project railway line is an electrified double-track that is 832.7 percent are residential units and other farm structures. This suggests that tourism development has considerable potential for development and job creation.94 km in length from Lanzhou to Chongqing. 279. during the preparation for the LCR Project is in the PSA report and a total of 8. 2. 0. The LanzhouChongqing Railway (LCR) Project will cross 3 provinces.136 138 974 113.8 percent is garden/orchard).676 E.000 in 2034. and 275 villages. and 285 bridges totaling 103.4 percent residential land. Table 6. Thus. LCR Direct Jobs Multiplier Jobs Generated Freight Jobs Tourism Jobs Total Jobs Source: Consultant. Job creation increases to over 223.8 percent is farmland (51 percent cultivated dry land.25 percent of the alignment is in tunnels or on bridges) have resulted in greatly reduced resettlement impacts. VII. and in these areas tunneling is extensive. Moreover.545 persons have participated. cheaper. 22 counties and districts. 6. The LCR will pass through mountainous terrain.439 23. An estimated 24. with most (89. 281. resulting in the current alignment. and result in further of job creation.894 km (or. The stakeholder process has been well developed during the initial field work carried out by SSDI and by the PPTA team during its project preparation work. 7 prefecture level cities.189. 73. This section summarizes land acquisition and resettlement.416 89. and this creates additional jobs.3 percent are factory buildings. About 45. 283.73 visiting Xi’an in Shaanxi as well as the Silk Road route in Gansu and Sichuan.955 15. and these expenditures will create jobs.7 percent wasteland.3 percent in Shaanxi.801 2034 21. and in each case land acquisition and housing demolition have been paramount variables considered. and 6. LCR will generate about 113. and other industrial structures.5 percent of the land is in Gangsu.000 jobs in 2015. 5. and easier travel.662) of these resulting from increased production relating to generated freight traffic. 277. In total.119 1.662 127. tourism development opportunities need to be assessed and exploited 278. Overall. 0.8 percent woodland. Tourism could also become a priority growth industry in some of the PIA areas because LCR will provide the vehicle to safer. The induced impacts of LCR will be spread throughout the Chinese economy. 31 percent paddy land. Based on the . of which 82. The generated freight increases result from investments in other sectors that increase their output in order to take advantage of increased railway capacity.694 mu of land will be permanently acquired. 1 municipality. An estimated total of 1. of which 93.533 177. Stakeholder Process and Monitoring and Evaluation 280. The Project will also temporarily acquire 20. Further consultations will occur as the Project is developed.9 percent in Chongqing.826 mu for LCR construction activities and access. A comprehensive monitoring and evaluation regime is presented in the PSA report that complements the monitoring and evaluation activities listed in the SEIA and Resettlement reports. 178 tunnels totaling 506. and 1 percent school buildings.275 9. the generated freight traffic reflects the development and growth of companies that take advantage of the construction of LCR. workshops. The revenues from generated freight revenues will result in expenditures by LCR in other economic sectors. RESETTLEMENT 282.3 percent in Sichuan.

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Chinese standard for impact assessment, the equivalent of 3,843 households would lose all their
land and agricultural livelihoods and 12,072 would have their houses demolished. However, due
to the corridor type impact of the alignment, most land impacts will be partial, resulting in more
affected households with lesser impact. However, land holdings along the LCR are low, so
impacts of land losses are significant. Land acquisition and resettlement impacts will be lessened
by aligning the railway away from the most densely populated areas, and avoiding villages,
cultivated land, and facilities where possible, based on consultations with communities.
284. The Ministry of Railways (MOR), in consultation with provincial and local governments,
prepared the initial Resettlement Plan (RP) with the assistance of the First and Second Survey
and Design Institutes (FSDI and SSDI) in August 2006, including a survey of 1,565 potentially
affected households. In April 2007, the PPTA Consultant conducted surveys of 355 villages, and
1,167 additional household surveys. About 11.9 percent of the total surveyed households had net
incomes per capita below CNY 1,000. However the geographic variation in poverty incidence is
considerable, with poverty higher in Gansu at 16.6 percent poverty, Sichuan 10.5 percent and
Chongqing only 6.7 percent. Special measures are included in the RP for the poor and other
vulnerable groups to ensure they are adequately rehabilitated and their living standards improved.
Ethnic minority households constitute 1% of the population in the Project area; most are Hui living
in cities and towns, while others include Manchu, Tibetan, Yi nationalities. However, the LCR will
not cross any minority townships or villages; no affected villages have more than 20 percent of
their populations from ethnic minorities. The Hui have been politically and economically integrated
into Chinese society and their customs and practices are respected and protected.
285. The resettlement objective is to ensure that compensation and entitlements provided to
AP are adequate to at least maintain their "without-project" standard of living, with prospects of
improvement, in line with the Land Administration Law (amended 2004) of the People's Republic
of China (PRC) and with ADB's Policy on Involuntary Resettlement (1995) and Policy on
Indigenous Peoples (1998). In addition, affected people that are poor or vulnerable should be
made better off, either as direct beneficiaries or through special measures to safeguard and
enhance their living conditions. People losing land, housing, other assets, or other means of
production will be compensated at replacement cost and assisted in restoring their incomes and
living standards. In 2004, the PRC Constitution was amended to ensure that people are
compensated according to law for land expropriated for public projects. The State Council (SC),
China’s highest policy making body, issued its Decision on Further Reform to Strictly Implement
Land Administration, State Document No.28 (2004), which requires public consultation with all AP
prior to approval of projects, maintenance of the living standard of AP, strengthened monitoring
procedures, and public accounting of the receipt and distribution of resettlement funds.
Payments for land will be made to the village collectives, and they will determine the allocation of
funds in conjunction with AP and local government officials. . Village rehabilitation plans
(including relocation and income restoration) will be prepared for 12 stations that cause serious
impacts on affected villages; these plans will be integrated with station area development plans.
286. The RP stipulates eligibility/entitlement provisions for AP. The Project will ensure that land
compensation will not be less than 16 times average annual output value. Compensation for
temporary land loss will be paid directly to the AP and the land will be restored to its original state
after use. Compensation for rural housing losses will be paid directly to the AP at replacement
cost, free of depreciation, demolition expenses and salvaged materials. In general, rural
households will either rebuild their own houses within the same village or integrated with the
centrally planned suburban housing. Better road access and provision of site leveling, water
supply, electricity, telephone, and cable will be provided. Urban households will have the options
of (i) allocated replacement housing based on a swap of property rights for properties of
equivalent size and quality, or (ii) cash compensation at market price to purchase replacement
housing in the real estate market, and for urban freestanding properties. Crop and tree losses will
be directly paid to the AP. Factories, schools and other institutions and enterprises will be
compensated based on a process of negotiation. Local government will finance the improvement
of affected schools.

75
287. Each village and/or AP will utilize the land compensation and resettlement subsidy for
income restoration. Compensation for loss of land will be principally distributed to AP although the
method of distribution will be determined by the village committee and villagers. In this process
the AP will be consulted through consultative meetings to obtain their preferences. Local officials
have indicated that schools, factories and enterprises will rebuild locally and that these
organizations and their employees will be fully compensated for any and all losses and costs
associated with relocation. Although the Project will displace a large number of people,
resettlement compensation may be an opportunity for APs to restructure their agricultural and
income production into more valuable crops or into more non-farm based income generation, a
trend that is current and necessary to reduce the vulnerability of rural households. Affected
households will receive training and skills development assistance that will facilitate incomegenerating activities. An income restoration budget has been included to meet the costs of
extension of services to AP and others in affected villages in areas such as agricultural extension,
cooperative marketing and organization for agricultural produce, agricultural and enterprise credit,
and other needs that arise during detailed resettlement planning and implementation. Other
assistance such as preferential hiring of AP by construction companies and access to capital will
also be provided. Local poverty alleviation programs provide a valuable source of additional
assistance to vulnerable groups and they will be targeted.
288. APs have been informed and consulted about project impacts and resettlement policies
and entitlements at various stages. APs will continue to be consulted and are encouraged to
participate in resettlement activities, including the detailed measurement survey, location of
underpasses, new housing sites, and grievance redress. During implementation, the AP or
affected enterprise can appeal any problems or grievances regarding land acquisition, housing
demolition and relocation, compensation and resettlement to five levels: the village committee,
the RCSO, local government, the LCR Company, the independent monitor, and/or the courts. A
resettlement information booklet has been provided by MOR to all affected villages in October
2007. The RP will be updated based on the inventory of losses and the final alignment by March
2008. The updated RP will be disclosed to AP and submitted to ADB for concurrence.
289. Local government railway construction support offices (RCSOs), set up under the local
Development & Reform Commissions, will be responsible for implementing resettlement; the
offices at the county or district level will coordinate the administrative LAR activities, with
assistance from township officials and village committees. MOR will monitor the LAR activities
and supervise the contractors with respect to temporary impacts. MOR and the local
governments have extensive experience with resettlement. Local government will provide training
to local officials who will be involved in implementation. The training will focus on ADB
requirements, as specified in the RP, and new domestic procedures.
290. Excluding various land fees that are covered by local governments, the total resettlement
cost for the Project is CNY 2.057 billion, (US$ 274.3 million) including taxes and contingencies.
The resettlement budget will be adjusted based on the actual measurement of physical losses.
Each provincial level local government19 will be responsible for resettlement costs which will be
considered as part of their equity in the Lanzhou-Chongqing Railway Company. The local
governments have assured ADB that they will supplement the resettlement budget, as may prove
necessary, to meet any shortfall. The implementation schedule has been prepared based on the
proposed project construction timetable. Land acquisition would commence in April 2008 and
some demolition would commence thereafter; the land acquisition and demolition work for the
new stations does not have to be finished until early 2008. The Project will be completed in 2014.
291. MOR and the LCR Company, in collaboration with the RCSOs, will be responsible for
internal supervision and monitoring of resettlement. Progress reports will be prepared by MOR
and submitted to ADB on a quarterly basis, until resettlement is completed. MOR will then

19.

The exception is Shaanxi province, where there is less than 25 km of LCR, and only two villages are affected. In this
case, although the local government will implement resettlement, costs will be financed by the Project.

76
prepare a resettlement completion report for submission to ADB. In addition, an independent
monitor will be contracted by MOR to carry out the external monitoring and evaluation work. The
tasks include: (i) conduct baseline survey; (ii) review and verify the compensation payments,
status of land acquisition, and compensation payments; (iii) assess grievance redress procedures,
APs’ opinions and level of satisfaction; (iv) assess the restoration of AP livelihoods, incomes and
living conditions; and (iv) compile lessons learned for future resettlement planning. The external
monitor will prepare monitoring reports for submission to MOR and ADB every 6 months until
completion of resettlement activities; thereafter, annual evaluation investigations will be
conducted for at least 2 years and reported to MOR and ADB.
VIII.

INSTITUTIONAL CONSIDERATIONS

292. This Section summarizes the reforms in China’s railway sector since the 1980s. The
Consultant’s Supplementary Final Report, Volume 2, Section 8 includes a comprehensive review
and analyses of these reforms. Reform is a continuing process, and every reform or change
highlights additional aspects that need to be further addressed in a rapidly growing and
liberalizing economy. Supplementary Final Report, Volume 1 presents a detailed discussion on
current safe practices and recommended safety enhancements, which are summarized in the
final part of this section.
A. Overview of Railway Reforms
293. Since the opening up and liberalization of the economy, the situation in China has been
one of continuous change. It is widely recognized that one of the key determinants of China’s
ability to continue its economic growth into the Twenty-first Century and to distribute the benefits
of that growth to a broad spectrum of the population will be the further development of its railroad
system. CR has long been dominated by a monolithic organization that has been traditionally
administering the national railway as a government department, performing responsibilities in
pursuance of policy mandated by the government, which may invariably not make good
commercial sense. This is affecting the sustainability of operations of the national railway.
294. The MOR is in the process of expanding capacity by constructing new lines, improving
existing lines with double tracking and electrification, increasing container transport capacity, and
upgrading locomotives and rolling stock. Most new line constructions are aimed at addressing
regional disparities in development. Whereas these efforts must continue for implementing basic
capacity improvements, systemic and structural reforms need to be continued with a view to
further improving productivity and efficiency.
295. Because of China’s size and spatial distribution of resources, manufacturing facilities and
commercial/trading centers, rail transport is critical for the country’s economy and social
interaction of the people. There may be problems and difficulties in making rapid changes without
the risk of severe social disruption. Therefore, the government through MOR has been engaged
in a continuous and gradual process of economic reform touching all aspects of railway operation
and management.
296. The objectives of railway reform are to modernize and improve the efficiency of the
railway system and to compete effectively by improving the quality of service to meet the
demands of a market economy. The main thrust of the reform efforts has been to: (i) improve
productivity; (ii) lower costs and increase transparency of operations by unbundling or divesting
non-transportation activities from transportation functions; (iii) commercializing of operations; (iv)
improving service quality; (v) separation of social and staff welfare activities; (vi) introducing
flexibility in setting tariffs, particularly for new investments; (vii) packaging of railway services that
may be operated as independent businesses with private sector participation, such as
transportation of containers, transportation of special heavy goods, and transportation of parcels
and luggage.

the swift development of air. At that time the Chinese economic system was based on traditional central planning for all segments of the economy and direct government financial management of major institutions. but also was directly responsible for operating these entities. whereas during the 23 years from 1981 to 2004 the corresponding figure was 9. embarked on a course of economic reform. which under government control remained largely insulated from market pressures.3 percent per year.77 297. in a context of general transportation capacity scarcity could put at risk the rapid economic development of the country. such as wages. any mismanagement of the reform. operating practices. a continuation of the reform process is inevitable. and management tools of market economy railways. although it has remained a slow and generally gradual process because of certain characteristics some of which are as follows: . The objective of railway reforms is to modernize and improve the efficiency of the railway system and to compete effectively by improving the quality of services to meet the demands of a competitive market economy. During the 20-year period from 1959 to 1978. Policy development and institutional restructuring of the railway sector are necessary to respond better to emerging market needs.6 percent at constant prices (15. 303. GDP growth averaged 5. and capital equipment. This sustained high level performance is unparalleled by any other country on this planet. The results of economic reforms implemented since 1979 have been impressive. Concurrent with the Government’s program of economic reforms. A fundamental decision was made to introduce the concept of establishing separate state-owned enterprises (SOEs) responsible for managing institutions of economic production that were previously managed by the government. By 1978. 299. This was done under policy guidelines established by the State Council and monitored by the State Planning Commission (now renamed National Development and Reform Commission-NDRC). materials. China began opening its doors to the outside world in the second half of the 1970s. Though desirable. thereby meeting demand and improving financial results. In addition. The rapid economic growth and transformation to a market economy has changed the ground rules for the railways. road. 300. In the last few years the pace of reform has accelerated. In order to keep pace with the rapid economic growth envisaged in the future and the changing market conditions. which also provides funding for all expenditures. As a result. and as a result. All revenue produced by these entities flowed to the Government. the reform is not always without its problems. C. such as CR. The Government not only owned all the economic entities. Because of the high modal share of CR for both passengers and freight and its vital economic role. and CR’s success in abating the declining trend in market share of rail have shown the success of MOR’s reforms.6 percent in current prices). Reforms in the Railway Sector 302. the Government became generally dissatisfied with the speed and level of economic development. 304. B. PRC began introducing a wide range of institutional and economic policy reforms. Government’s Program of Economic Reform 298. MOR has been engaged in a process of gradual economic reform touching all aspects of railway operation and management. MOR has participated in these reform programs by introducing many of the institutional and structural approaches. 301. and water transport has led to competition with rail. Improved performance of CR operations in the past few years. It became increasingly apparent that the state-managed entities (particularly the factories) were not producing the desired results to support economic growth.

and 5600 hospitals and clinics. Wagon and passenger coach utilization also exceeds. 305. CR transports almost the same amount of freight traffic and more than 16 times the amount of passenger traffic as all of the railroads in the United States combined. Labor productivity in terms of traffic units per employee compares favorably with leading railways in Europe and Asia. the traffic density of the UP-SP is small compared to CR. Operation on all routes of the national railway is by electric and diesel-electric locomotives.78 ¾ CR is the largest railway under one management in the World. because of restructuring mistakes in the UP-SP merger. and a shortage of capital to address these problems.5 times greater than on US Class 1 railroads (13. or compares favorably with. Based on the lessons learned on other railway systems a pilot tested and graduated approach is considered more appropriate than a rapid change. CR and the Chinese economy can ill-afford to repeat these mistakes and cause the national economy face consequent problems. CR will continue to experience transportation constraints. In sum. ¾ CR is faced with the problems of extreme shortages of rail transport capacity in terms of fixed infrastructure (railway lines and facilities) and rolling stock. but is still substantially below the railways in North America. MOR had 3. 306.0 million TUs per route-km in 2004)20 was about 2. Divestiture of all these entities was an arduous process. Yet. because of the size of the organization and CR’s critical importance to the overall economy of China. CR will experience heavy transportation demands while being constrained with limited railway capacity. in the foreseeable future. including commuter lines. their implementation status and the results or lessons learned. there were significant economic dislocations – particularly in the southwest US that took more than a year to rectify. The experience of the merger of the Union Pacific Railroad (UP) and the Southern Pacific Railroad (SP) in the US illustrates the intrinsic danger of introducing rapid change to a rail network. Traffic Unit = Ton-kilometers + Passenger kilometers. 140 technical schools. Thus. Also. other railways. The matrix gives a brief description and purpose of the major reforms initiated by MOR. TU is also referred to as Converted TKM. ¾ The national railway has a high turnover of traffic and is among the world leaders in terms of track and equipment utilization rates for both passenger and freight transport. MOR management has implemented major reforms after extensive study and numerous pilot programs.7 million TUs per route-km). Less than half of these employees worked on the transportation business. The remaining worked in or were associated with several major construction companies. ¾ Prior to the divestiture of non-rail transport entities (non-core establishments) in 2000. about 40 large and hundreds of small manufacturing companies. The matrix in Table 8-1 presents an outline of the reforms undertaken by MOR since 1978. . design institutes. 10 major universities. Traffic density exceeds all other major railways in the world. and the changes that were implemented following the UP-SP merger were minor compared to the fundamental changes in the structure of CR that have been implemented or are planned for the next several years.2 million employees. The relative importance to the US economy of the combined UP-SP railroad is small compared to the economic importance of CR to the Chinese economy. Experiences with reforms on the erstwhile British Rail and New Zealand Railway have not been without major problems. 20. which are likely to affect future economic development. ¾ As in the past. CR’s traffic density per route kilometer (32.

The Government entered into annual contracts with MOR to provide specified amounts of freight TKM and PKM. . MOR entered into contracts with RAs to meet a 1986 variety of productivity targets. Replaced by Assets Operation Liability System in 1999 Very successful in the early years. reduce operating costs and increase profitability.4% over 2001). As the Chinese economy became more market-oriented. Implemented. better pay. Staff for railway transport decreased by 3. or (ii) line would be closed or operation stopped. MOR Document No. Implemented.g. RAs established productivity targets for subRAs and field units. Continuing Highly successful. In turn.6% compared with 2001. DECOs paid back their loans within a few years. materials purchase to Railway Administrations (RAs) MOR was allowed to retain all CR profits and pay a business tax to the Government.21 Structural Reforms 1991-2006 Branch Line Reform covering 100 lossmaking branch lines to increase revenues. or profitability. As of end-2003. (See Appendix 8-B) Status Results Implemented and replaced in 1981 This was the first experiment with the principle of better work. Meeting these targets formed the basis for an incentive compensation system. Implemented and expanded since 1982 Decentralizing of management was implemented successfully. produced RMB69. Structural Reforms 1986-1990 Economic Contract System (ECS).603 diversified enterprises were set up which provided employment to 407. Based on this commitment. MOR was allowed to retain up to 21% of 1981 CR profits (in stead of wages) in a fund for employee bonuses and welfare programs.4% to 38.. Deficit was reduced by 6. At end of 2002. Tiezhengfa 64(2002) titled ‘Suggestions for Innovative Reform of Branch Lines’ provided various options for experimental diversification of branch line assets: (i) all assets were to be transferred to local governments free. or (iii) line would be operated as joint venture with local government or a local enterprise. operating revenue of 100 branch lines increased to CNY 1. Replaced in 1986 by the Economic Contract System. (See Appendix 8-A) Diversified Economy Program (DEP). Continuing with considerable success. or market demand. some 6. Initial experiment of treating CR as a separate enterprise from a financial viewpoint. The state-owned Louding Railway Co.172. The retained profits would 1983 not only be used for employee bonuses and welfare programs but also for regular capital expenditures. although many management decisions required government approval.79 Table 8-1: Outline of Reforms on the Chinese Railway Year Brief Description and Purpose Started Structural Reforms 1978 – 1985 The Government allowed MOR to retain up to 5% of total wages of CR and other 1980 MOR-managed entities in a fund to be used for employee bonuses and welfare programs. wage setting. The sale of the first state-owned railway took place in August 2006.766 billion (an increase of 16. operating the Chunluo Railway in Guangdong province was sold to a private company (more details are given in Appendix 8-J). to provide productive employment for redundant railway employees. shortcomings appeared since ECS was production oriented and did not focus on quality. with seed capital from MOR. (See Appendix 8-C). Under this program small diversified economy companies (DECOs) were set up for legally and financially sustainable 1986 businesses.36 billion in revenues and RMB2.000 surplus staff of CR. Government and MOR are encouraging participation by nonpublic capital in railway construction and operation. Transfer of assets of some branch lines has been under consideration. Delegating 53 MOR management functions. In modification of the 1980 fund system. 19932006 21. human 1982 resource management. Its aim was to increase CR transportation productivity. e. Implemented and replaced in 1983 This was the first time that CR was treated as a quasi-profit center rather than as a cost center.35 billion in profits.

Results These pilot reform programs provided valuable lessons that helped to structure future reform in institutional areas. however it does not compare with market based systems. AOLS was extended to joint venture railway companies and transportation enterprises with state-owned railway capital. The performance of all RAs was rated as excellent. Completed Continuing In August 1998. the Guangshen Railway Company was reorganized into a limited liability company. 1998 1999 Safety of operation has been made a determining factor for integrated performance assessments under AOLS. This system replaced the earlier ECS. Staff reduction reforms for reducing traditional overstaffing in CR. and in 1996. AOLS was extended to all RAs in 1999. The assessment under AOLS in 2003 shows that all RAs had achieved integrated rating varying from 91. RAs are very heavily penalized for railway accidents. the Guangzhou Railway Administration was organized on pilot basis into Guangzhou Railway (Group) Corporation (100% owned by MOR). 1994 Pilot Reform Programs.600 were employed in railway operation. and other outside companies who need employees. (see Appendix 8D). for example in 1995. MOR has focused on staff reduction in CR mainly through: normal attrition. and staff from 809 to 400. introducing an early retirement program for employees falling within 2 to 3 years of retirement age. The number of departments and bureaus was reduced from 23 to 16. (See Appendix 8-E).77 points (Harbin and Guangzhou) to 106. transferring personnel to existing or new diversified economy companies (DECOs). In all seven pilot reform programs were initiated.36 points (Urumqi). Although an improvement over ECS.80 Year Started Brief Description and Purpose 1993. and encouraging employees to return to school to increase their professional capabilities. Given the socio-economic conditions and to avoid increasing general unemployment. MOR had to come up with approaches for reducing transportation staffing levels that would be socially acceptable. MOR streamlined its internal organization by separating its regulation and enterprise functions. Starting as a pilot program in 4 RAs in 1998. In 1991 there were more than 342. the Dalian Railway Branch Administration was reorganized into the Dalian Railway Limited Liability Company. Status Completed. Of these about 203. level AOLS has been successful for organizations. performance assessment and accountability of RAs.000 employees of the national railway including the production units. To that extent the pilot programs were successful. Assets Operation Liability System (AOLS). division level structures from 133 to 74. 1998 1998 – 2004 MOR Administrative Reform This was focused at curtailing the administrative functions under the direct responsibility of MOR and at reducing staff at MOR’s Headquarters. . and was their deficits and the remaining 9 extended to field increased their profits. The staff of manufacturing units was separated from MOR when the facilities were divested by MOR in 2000. MOR initiated a number of pilot reform programs to evaluate alternative approaches for managing RAs and sub-RAs. Assessment is done on the basis of rate of return on joint railway static assets (capital). In 1993. Out of 14 RAs. 5 reduced Implemented in all RAs.

(ii) 2000.8 billion in assets and 84. and North LORIC (CRN). Transferring the administration of CR’s social security and retirement plans to local social security organizations. MOR transferred six nontransportation entities along with their associated assets and debts to the State Large Enterprises Working Committee: China Railway Engineering Corporation (CREC). China Civil Engineering (Group) Corporation (CCEC). China Railway Telecom and Signaling Corporation (CRTSC). (iii) China Railway Container Transport Company Ltd. Ltd. North LORIC and South LORIC (re-named CRN and CRS subsequently).. 22 In accordance with MOR’s directive. CRCC and CRMSC function as independent entities with budgets allocated by MOF. and baggage and luggage (iv) 2004: Transfer of China Railway Communications Co. and Qiqihaer Rolling Stock Factory became a limited liability company.. special goods. China Railway Special Goods’ Transport Co. including performing the functions of car maintenance and management of passenger stations.81 Year Started Brief Description and Purpose 1998 – 2004 Separation of non-transportation entities from MOR. (i) 1998. Company.e. Ltd.000 employees. i. which issued shares on the domestic stock market in 1999. MOR reorganized several companies within its system. internal passenger transport companies were set up in all RAs. and China Rail Baggage and Luggage Express Co. including the nd th 2 and 12 Engineering Bureaus which became limited liability companies known as the China Railway Second Bureau (Group) and the China Railway Twelfth Bureau (Group). China Railway Construction Corporation (CRCC). (iii) 2004: Setting up three specialized companies for transportation of containers. South LORIC (CRS). Guiyang Rolling Stock Factory became South Huitong Ltd. Ltd. passenger transport companies were established in four RAs under a pilot program. and was extended to other RAs in stages. (ii) 2000: Establishment of 6 major non-rail companies as independent enterprises and publicly listing the shares of one. were set up under Chinese Law. Initially. Reform of RA’s internal management of passenger transport. China Railway Locomotive and Rolling Stock Industry Corporation (LORIC) became two competitive companies. Ltd. (CRCC) and China Rail Materials and Supplies Co.. The maintenance of passenger cars and management of passenger train operation were handed over to the Car and Traffic departments. The reorganization of companies was successful. (iv) In Jan. CRCC and CRMSC were transferred from MOR to SASAC together with RMB 46. The absence of specialized management by the car maintenance and traffic departments of the respective assets created operational problems. The passenger transport companies in RAs were made responsible for management of station passenger services and marketing passenger transport services only. Status (i) to (v) Completed The pilot program started in 1999. This reform process was revised in 2003. Initially the passenger transport companies were set up as self sufficient units. A percentage of the wages is now paid to local social security organizations for carrying out social security functions. Guiding Suggestions for Perfecting Reform of the Passenger Transport Companies within the Railway Administration’ . By Oct 2002.. the earlier concept of separation of passenger transport was revised in 2003. Completed Results (i) 1998. (CRMSC). 2004. 1999 – 2004 1999 22.

MOR is further expanding and improving TMIS to meet the changing needs. . medium term investment plan that minimizes the cost of satisfying railway demands. Transportation Management Information System (TMIS) initial feasibility study to evaluate whether CR could use this type of system. Because of the different service requirements for passenger and freight transport. thereby laying the groundwork for separation of passenger and freight transportation. The RIS analysis system has helped MOR identify a multi-period. It is a major service improvement for passengers. Completed Development of a new computerbased passenger ticketing system.Railway Investment Study – Traffic Assignment Model (RIS-TAM) was developed for analysis of railway investment proposals (See Appendix 8-F). Based on a joint study by MOR and World Bank a computerized decision support system . expansion of TMIS to cover all RAs was completed in 2001. or support. The development of ‘Point-to-Point’ freight and passenger traffic costing models will permit an analysis of all of MOR’s traffic to identify traffic where tariffs and fares are below variable cost. Introduction of New Management Tools 19891991 – 2004 1992 1994 – 2001 1996 1994 – 2000 Reform of Railway Investment Analysis. MOR has decided that the PDLs will be managed by entities separated from MOR. mixed operation of both on the same lines reduces overall efficiency and productivity of the system. Followed by extensive development effort and field test pilot testing. Status In process Results Under the Railway Network Development Plan 2020. (See Appendix 8-F) Successful as a first attempt to install a computer based management information system– particularly as a precursor to the development of TMIS. Since 2004. These will be built largely parallel to the existing lines on the national network and will operate only high speed passenger services. The intention is to segregate passenger and freight operations on to their own exclusive tracks in the main corridors. RIS-TAM (1992) and its successor versions RIS-ND (1999) and RIS III (2004) have been in continuous use Experience with the RIS-TAM (1992) analysis tool led to the development of Phase 2 version RIS-Network Design Model (RIS-ND) in 1999. (See Completed Appendix 8-F) The system is being used for booking and issuing passenger tickets using computers. It will also provide an estimate of the impact of commercialization on MOR’s or Government’s performance. duly considering the cost of unsatisfied demands.82 Year Started 2004 Brief Description and Purpose Separation of Passenger and Freight transportation networks. construction of several PDLs has been started. (See Appendix 8-F) After the success of pilot implementation of first phase of the system in Shanghai RA. Implemented (See Appendix 8-F) Traffic Costing Reform through implementation of an extensive Pointto-Point Costing System. The analysis will also help to identify services that might be able to bear an increase in charges without reducing traffic demand consistent with social policies and objectives. and thus be eligible for an increase in tariff. A pilot management information system was implemented on Harbin RA to gain experience with collecting Completed accounting data using PC-based network. This was followed by development of improved RIS III in 2004. TMIS provides a set of tools that have helped in the efficient management of rail transportation. On the major trunk routes of CR that carry high volume of freight and passenger traffic the Government has decided to segregate passenger and freight traffic.000 km of passenger dedicated lines (PDLs) by 2020. MOR has planned to build 12.

Tariff reforms have made the revenues buoyant. e. These include: (i) general construction surcharges for nearly all freight traffic (1991). Completed FMIS was installed as a parallel system for the management of financial information. Five rounds of speed increases have been implemented.000 km. (iii) an additional surcharge for freight shipments moved on electrified lines (1993). while the growth in revenue was on average 12. (See Appendix 8-H) 23. This will provide a more equitable system for apportioning 23 freight and passenger revenues among RAs. Several reforms were introduced to increase revenue and to compensate CR for special services.g. Continuing Consequent to the five rounds of speed increases on the existing lines of the national network. .5%. The new system is expected to be completed in 2005.100 km of tracks to 120 km/hour. Experience has shown that it is possible to raise passenger train speeds to 140–160 km/hour on existing lines with marginal improvements in infrastructure and operational strategy. on 14. This increased the competitiveness of rail passenger transport. Essentially all tariff changes must be approved by the State. Between 1996 and 2005.6 to 14.2% per year. (See Appendix 8F) Reform of Passenger Ticket and Freight Waybill analysis system for improving information and analysis.370 km of tracks to 200 km/hour. The speed of freight trains on the above mentioned tracks has been raised to 120 km/hour. (iv) a 30% increase in passenger fares during vacation periods such as the Spring Festival (1995). a reduction by 237hr-53m or 30. Completed MOR is giving consideration to upgrading and integrating the existing Passenger Ticket and Freight Waybill Data Analysis Systems.6/ton depending on the commodity class. new tariff concept for freight traffic on the Da-Qin line (1993). The five rounds of speed increases implemented during 1997-2004 have reduced travel times. (See Appendix 8-F) Improving service quality by increasing train speeds. and on 5..1% per year. a lot more needs to be done to make tariffs MOR is considering the setting up of a transparent system for financial clearings within the railway industry. (See Appendix 8-F) A new computer-based Financial Management Information System (FMIS) to support enterprise decision-making.83 Year Started Brief Description and Purpose Status Results Other Major Reforms 1998 – 2006 2000 2004 1995 – 2005 1983 – 2006 Reform of the Inter-Administration Revenue Settlement System. primarily because of value-added high speed and more convenient passenger services that have helped to meet market demand. The 6th Speed increase is expected to extend the length of tracks to accommodate trains running at 200 km/hour by 6. The railway is now effectively competing with other modes of passenger transport. covering numerous fares and tariff increases. However. as indicated in Appendix H. the new line. Study completed Test results have been positive. This is being exploited by CR.000 km of tracks to 160 km/hour. (ii) a 50% tariff surcharge for fully air-conditioned passenger trains (1992). passenger traffic volume growth was an average of 5. the travel time of trains between Beijing and 33 other major cities was reduced from total of 778hr-58m to 541hr-05m. passenger train speeds have been increased on 22. Under the system investors will be able to get information about their share of revenues from MOR to help them better manage the business and minimize risks. and (v) a separate fixed charge to cover loading and unloading ranging from CNY5. th The 6 Round of speed increase planned for October 2005 has been postponed because of technical reasons. st 1 Round 1 Apr 1997 nd 2 Round Oct 1998 3rd Round Oct 2000 4th Round May 2001 th 5 Round Apr 2004 (See Appendix 8-G) Freight and Passenger tariff Reforms.

the National Peoples’ Congress approved the PRC’s Railway Law. In this manner the number of stations and depots operated were reduced by 30%. MOR is considering to give investors more say in ticket and freight pricing. The goal is to build a transport price management system in which the market is the key determinant. Essentially all tariff changes must be approved by the State. MOR is considering to give investors more say in ticket and freight pricing. (iii) an additional surcharge for freight shipments moved on electrified lines (1993). Continuing to evolve The Railway Law has played a significant role in providing a legal foundation for rail transport and for safeguarding the rights of all concerned parties. Tariff reforms have made the revenues buoyant. Completed Except railway operational institutions. the new line. Continuing RAs have reviewed the utilization and need of assets such as stations and maintenance depots many of which had become nonfunctional because of technological improvements and operational changes. and (v) a separate fixed charge to cover loading and unloading ranging from CNY5. Results 2000 Transfer of educational facilities from RAs to the Ministry of Education and local governments.6 to 14. Various studies are being undertaken to amend the Law to meet the changed requirements of a market-based economic system. all educational institutions formerly managed and financed by the national railway. covering numerous fares and tariff increases. 826 middle schools and primary schools.6/ton depending on the commodity class. MOR completed the transfer of all health and medical units. 2000 – 2004 Transfer of hospitals and medical facilities from RAs to local governments. including ten railway universities. (iv) a 30% increase in passenger fares during vacation periods such as the Spring Festival (1995). Continuing By 2005. new tariff concept for freight traffic on the Da-Qin line (1993). and adult education schools have been transferred to the Ministry of Education or local governments. technical secondary schools. (ii) a 50% tariff surcharge for fully air-conditioned passenger trains (1992). In 1990. Year Started 1983 – 2006 Brief Description and Purpose Freight and Passenger tariff Reforms. as indicated in Appendix H. (See Appendix 8-H) 1989 2000 – 2006 Legal Reforms. some polytechnic schools. including 208 hospitals transferred to local governments. Status Continuing Several reforms were introduced to increase revenue and to compensate CR for special services. a lot more needs to be done to make tariffs substantially market based. These include: (i) general construction surcharges for nearly all freight traffic (1991). The goal is to build a transport price management system in which the market is the key determinant. which became effective in May 1991. Rationalization of Productive Assets with a view to weeding out less productive assets. However. . This process is continuing with a view to increase the efficiency and cost-effectiveness of railway operations.84 substantially market based.

The 2020 Plan lays down an ambitious blueprint of railway network development until 2020. Continuing MOR’s Provisional Regulations provide the conditions for approval and administration of Chinese-Foreign joint ventures who undertake rail freight transportation business. Continuing Underinvestment and incremental growth of the railways network has resulted in a situation of perpetual capacity constraints and bottlenecks on the national railway. This will have far reaching implications in the railway sector (see Appendix 8-L).85 Year Started 2003 – 2005 2004 – 2006 2004 – 2006 20002006 Brief Description and Purpose Reforms in Railway Intermodal Container Transportation. which clearly marked the direction of speeding up the railway investment and financing system reform and establishment of a market oriented financing system. A preliminary agreement has already been signed. (see Appendix 8-J) Reform of Railways’ Development. the Government endorsed a LongTerm Railway Network Development Plan for 2020 (2020 Plan) (see Appendix 8-K) WTO Policy Reform. MOR has developed the guidelines on implementation of the State Council’s decision and facilitating the investment and financing system reform. Reform of Investment and Financing with a view to diversifying investment sources to meet the increasing resource requirements for expanding rail transport capacity to meet demand. 2004 as a domestic company under Chinese Law. because of which CR is unable to meet the demand for rail transport. Under the WTO Accession Agreement the Government is committed to provide market access for rail freight transportation services on the national network. As detailed in Appendix J. Status Results CR container traffic has grown substantially (more than 50%) since 1996 as a result of several marketing. This is impacting adversely on economic growth and competitiveness of inland regions. CRCTC is seeking private participation on a joint venture basis to build and operate the 18 terminals. with responsibilities covering for all aspects of rail container transport(See Appendix 8-I). pricing. . In 2004. This will help the railways to leap-forward in development. On January 2004. the State Council issued State Council 20. Nevertheless. which is expected to grow 300% for passengers and 100% for freight in a rapidly growing economy. which also happen to be less developed and poor. access charges. It will help the national railway to meet the demand for rail transport. less than 2% of the maritime containers handled by the ports are transported by rail. and safety requirements in the Chinese situation need to be prepared and implemented such that the international commitment is fulfilled to the best advantage of the national economy and future growth and sustainability of the national railway. some notable successes have been achieved. Regulations for fully foreign owned operators who will be permitted unrestricted access to the market in December 2007 are still to be issued. In due course CRCTC and associated joint ventures are expected to be listed on the stock market for raising investment financing from market sources. Continuing Continuing Under the 2020 Long-Term Railway Development Plan 18 central container terminals are to be established throughout China. As a first step China Railway Container Transport Company (CRCTC) was established in Jan. The conditions for market access. and management reforms. and to improve overall efficiency of investment utilization. During 2005 and 2006 significant steps were taken to put in place the regulatory framework for facilitating investment in railway infrastructure by quasi-public and private sources. which is the largest state enterprise in the country.

89 Chinac 5 30 35 2536.6 0. a In this Table other categories of accidents have been excluded due to non-uniformity of statistical data in various systems. b Traffic Units = TKM + PKM c For China the number of accidents is for 2005 . The new measures provide important legislation guarantees for creating a stable environment for railway transportation safety. PRC = People’s Republic of China. which came into force on April 1.3 2. 308.9 2. whereas BNSF transports freight only. PDL = Passenger Dedicated Line. under the current Railway Development Project. MIS = management information systems. 2004.64 million tonmiles per route-mile. In 2005.6 4.66 Netherlands 26 10 36 17. The incidence of fatal or serious accidents in 2005 had declined to one-tenth of what it was in 1985. Source: Compiled by TA Consultant from data provided by MOR and CR statistical references. it should also be noted that the rail safety record in China has been steadily improving. Within this context. China’s achievement is even more remarkable considering that it caters to mixed freight and passenger traffic on the same routes.5 0. RIS = Railway Investment Strategy Model.90 JR 0 6 6 263. A comparison of the collisions and derailments on some foreign railway systems is presented in Table 8-2. the average traffic density on CR was 40. which was about one-half of the traffic density of China’s.014 Source: International Railway Union (UIC) Statistics 2003.2 N/A South Africa 10 1343 1353 106.78 million traffic units per route-km. Railway Safety is a very important subject for the successful operation of the railway.6 0.01 France 56 38 94 118. the State Council issued Directive 40 on “Railway Transport Safety Protection Measures”. China has the best record among the railways included in the Table. TMIS = transportation management information system. was 18.8 0. China’s railway network has the highest traffic density in the world. a US Class 1 freight railroad that handled the largest volume of freight traffic in North America. CR = Chinese Railways. 2005. but shoulder 25% of the freight transportation volume in the world.80 Belgium 29 46 75 16.1 0.8 0.52 Germany 80 9 89 143.68 Turkey 21 90 111 14. RA = railway administration. Status Continuing Results On 27 Dec. AOLS = assets operation liability system. Railway Safety Enhancement 307. China's railways account for only 6% of the world's total.7 12.62 Austria 27 49 76 26. By far.08 India NA NA NA 868.02 Korea 1 2 3 39. SASAC = State Owned Assets Supervision and Administration Commission. D.5 7.86 Year Started 2004 – 2006 Brief Description and Purpose Reform of Railway Safety for providing a legislative basis for enhancing safety of railway operations. ECS = economic contract system. It has been covered extensively in a separate ‘Interim Report’ for the Railway Safety Enhancement Component (RSEC). EMU = Electric Multiple Unit. DECO = diversified economy company. The corresponding figure for the Burlington Northern Santa Fe BNSF). Table 8-2: Comparison of Collisions and Derailments on Various Railway Systems (2003)a Number of Accidents Traffic Unitsb Incidence of Accident Per Railway (Billion) Billion Traffic Units Collisions Derailments Total US Class 1 132 1371 1503 1676.

About 99. Introduction 313. ADB is providing a loan and additional technical assistance to support the upgrading of safety equipment including rescue and restoration cranes and skills of operators for the railway network. 325. On February 2. FIRR of LCR is calculated based on financial costs. but to third parties. operating expenses and business and income taxes. Section 9. 310. are covered by the provision of this equipment. During 2005.87 309. The financial assessment of LCR has been undertaken using ADB Guidelines for Preparation and Presentation of Financial Analysis.5-year construction period from 2008 to mid-2014. This will be an important contribution to MOR’s efforts to utilize the best technologies and practices in its operations. Revenues are estimated based on forecast traffic for freight and passenger traffic detailed in Section 3. MOR is committed to further improving the safety record of the Chinese Railways through the introduction of new technologies and best practices in order to provide a sustainable and secure means of rail travel in the country. New railways such as the Zhengzhou-Xian Railway. sixmonths trial operations in 2014. and 20 years of commercial operations from 2015 to 2034. including violations by level crossings users. the remaining railway network still remains to be covered. However.4% were those of unauthorized persons trespassing on railway property. these railways will be provided with new equipment and systems for detecting defects before these develop in to failures which may result in serious accidents. Financial Internal Rate of Return 323. By comparison. some are users of level crossings. there was on average about 1 fatality every 71 minutes on the PRC railways. There were only 43 fatalities or 0. and some are suicides. the majority of railway fatalities are not to passengers or staff. FIRR has been estimated for net cash flows before and after income tax collected by the state on net income. IX. therefore. More detailed analysis is provided in the Consultant’s Supplementary Final Report.4% of the fatalities are to third parties. the last year of the term for the ADB loan. Most of the third-party fatalities are individuals being struck by trains. B.000 fatalities in 2005. Modern equipment and technology are expected to be used to the fullest extent to ensure that safety assurance is achieved at a high level of performance. on the PRC’s road network there were more than 105. LCRC is. Taiyuan-Zhongwei Railway and Chongqing-Lichuan Railway are being designed and constructed to have grade separation at all rail-road crossings as well as fencing along the length of the alignment. The financial analysis covers the 6. averaging 1 fatality every 5 minutes. As noted. 2007 the four prospective shareholders of LCRC confirmed the following (see Appendix 8-P): .6% of the total that involved staff and railway passengers.6% of the total fatalities. 7. including assumptions and findings are presented below. 312.418 railway fatalities reported in China during 2005. 311. which include all capital costs. It is expected that LCR will be owned and operated by a joint venture company (LCRC) to be established with shareholding by MOR and the Chongqing Municipality and Sichuan and Gansu Provinces.260 km. The Financial Internal Rate of Return (FIRR) of LCR and sensitivity analysis are described in this Section. The Chinese railway system is overwhelmingly safer than the alternative road transport.375 fatalities or 99. some are 'trespassers' that are illegally on the railway. Of the 7. Details of the financial analysis. Volume 1. The six busiest main trunk routes of the rail network having total route length of 10. FINANCIAL ANALYSIS A. the Implementing Agency (IA) and MOR the Executing Agency (EA). whereas staff and passengers comprise only 0. 324.. In addition.

¾ A joint-venture company will be set up which will be responsible for LCR construction and operation management. General Assumptions 315. and ¾ The compensation for land acquisition and demolition can be accounted as equity investment by the Sichuan and Gansu Provinces and Chongqing Municipality in accordance with national relevant regulations. it is assumed that the average base freight tariff on LCR will be 12 fen/TKM by 2015 and the RCF surcharge of 3. ¾ The total equity capital of LCRC will be 50% of the total project investment.5 per U. Revenue Projections a.19 of Section 3) at the current average tariff of CNY 1.08 fen/TKM in 2015 (based on operating cost experience indexed with the CPI) and the application of the ‘New Line New Tariff’ concept.8 percent for 2007. 1. 55% will be from the Railway Construction Fund (RCF) arranged by MOR and 45% will be owned by Sichuan and Gansu Provinces and Chongqing Municipality in proportion of the investment each will make. Dollar (October 2007) is used. Given the recommended nationwide average freight tariff of 7. Following are the main assumptions used in preparing the projected cash flow and FIRR estimates: ¾ All costs and revenues are expressed in 2007 constant domestic prices in CNY.1 percent. covering a 6. the LCR rate represents a 6. 2 percent for 2008.6 percent increase per year. An exchange rate of CNY 7. and the Chongqing Municipality. Trial operations is planned to take place in mid-2014 and commercial operations to commence in 2015. A separate FIRR for MOR is not estimated. the average annual increase assumed for the LCR base tariff is 6. and 3. 2. and a 20-year operating period from 2015 to 2034. ¾ The Sichuan and Gansu Provinces and Chongqing Municipality shall be responsible for the work on and cost of land acquisition and resettlement within their respective territory.5-year period for construction. 314.04 fen/TKM in 2005 for CR.10 per TEU (or 8.3 fen/TKM will remain unchanged. It should be noted that approximately 10 percent of LCR freight traffic is containers (see Table 3. 2. Freight Revenue 316.88 ¾ The Project will be built jointly by MOR. An annual increase of .S. This results in an average tariff of 15. Of this equity capital.46 fen per TKM based on the actual average tons per TEU). six-month trial operations and testing.0 percent annual average inflation forecast by ADB for the period from 2009 onwards. The estimation of FIRR and financial feasibility analysis described in this Section are made for LCRC as the owner and operator of the Project. Negotiations between the shareholders of LCRC are currently underway and the company is expected to be established in 2008 as a shareholding enterprise under the PRC Company Law. Construction is assumed to commence in early 2008 with preliminary grounds clearing and setting up of construction camps and preparatory works for the longest tunnel. The last year of the 7-year grace period for the ADB loan is 2014.3 fen/TKM for LCR in 2015. where applicable. ¾ The valuation period for the Project is 27 years. compared to the 1. Sichuan and Gansu Provinces. Compared to the unit freight revenue (including RCF) of 8. ¾ The payment for land acquisition and resettlement to be made by the Sichuan and Gansu Provinces and Chongqing Municipality will be counted as part of their equity in LCRC.

the basic passenger tariff of 3. 2021-2031 Local Transit 0% 100% 33% 0% 67% 0% 100% 100% . Passenger Revenue 317. standard train. Chengdu-Beijing. It has declined in real terms. reflecting the changing life styles and standards of living in China. Table 9.861 fen/PKM (for hard seat. 318.1: Passenger Train Pairs on LCR Speed 2015-2020 Type of Train (Km/hour) Interline Local Transit Very Fast 200 0 0 18 Fast 160 14 7 0 Conventional 120 5 12 Total 19 19 18 Total 18 21 17 56 Speed (Km/hour) Interline Very Fast 200 6 Fast 160 18 Conventional 120 7 Total 31 2021-2034 Local Transit 0 24 10 0 20 30 24 Total 30 28 27 85 Percentage Distribution Speed 2015-2020 Type of Train (Km/hour) Interline Local Transit Very Fast 200 0% 0% 100% Fast 160 74% 37% 0% Conventional 120 26% 63% 0% Total 100% 100% 100% Total 32% 38% 30% 100% Speed (Km/hour) Interline Very Fast 200 19% Fast 160 58% Conventional 120 23% Total 100% Total 35% 33% 32% 100% Type of Train Type of Train Source: Consultant from data reported by FSDI. The basic passenger fare has not kept pace with inflation. Transit very fast trains. sleeping beds. b. This may be compared with the actual growth in passenger revenue of 6.46 percent per year during the 1990-2004 period. Also the base passenger fare has substantially lagged behind the unit transport cost. will be in direct competition with air travel for distances of 800 km or more (for example.2020.89 1% is assumed in the LCR average base tariff after 2015 (with tariff adjustments to take place every 5 years). The passenger tariff is based on multiples of the hard seat rate. Lanzhou-Chongqing.86 percent per year and CPI increase of 5. This amount of adjustment of basic passenger fare during the period 1990 to 2005 reflects an average increase of 2. Since September 1989. which is a matter for concern. Passenger transport cost has been increasing almost four times the rate of increase of the basic passenger fare. 326. Table 9. Chongqing-Urumqi) and with road transport for distances of more than 200 km. The actual revenue to base tariff conversion factor has been increasing. During the initial years from 2015 to 2020 LCR will have 18 pairs of very fast passenger trains per day in transit service. The actual revenue is always higher than this because of the mix of passengers paying a premium for soft seats.82 percent per year. operating at speeds of up to 200 km/hr.2 shows the passenger train pairs on LCR for 2015. and within 200 km) has been increased only once in October 1995 to 5.861 fen/PKM. and 2021-2034. as well as for express train service and travel during the holiday season.

price contingency. Particularly the estimated civil works costs are close to FSDI’s estimates. and working capital. This aggressive pricing strategy will help LCR gain and maintain market share as well as maximize benefits to the people in the PIA. .469. 321. and working capital) is CNY 47. Price contingencies include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. The per-km rate will be based on dry-lease terms and will include depreciation charges and 8% return on investment. and modern mode of transport. It is assumed that the local very fast train service (if introduced in the future) is priced at 12 fen/PKM or 37% lower than the lowest current bus fare. and 2. safe. principally based on data provided by FSDI.746. The fare for intercity long-distance very fast train service on LCR is assumed at 20 fen/PKM for transit traffic where the competition is primarily with air transport. 329. Price contingencies.89 million.5 fen/PKM tariff for soft sleeper express trains is considerably lower than the existing average air fare of CNY 1. The current 39. The estimated cost of dry lease per train-km is CNY 7. 47 percent lower than the lowest bus fare with almost four times faster service than bus transport with considerably higher comfort and safety. In the short distance local transport. This equipment consists of a fleet of locomotives. not included in FSDI’s estimate.60 for passenger trains. For the relatively lower distance interline traffic the fare is assumed at 15 fen/PKM. A tariff of 15 fen/PKM is assumed for fast trains in transit service. telecommunications. Considering the difference in speed between a very fast train and bus (200 km/hr versus 35 km/hr). Project financial costs 320. Fast trains on LCR will be somewhat slower than very fast trains. where the tariff ranges from 23 fen/PKM to 37 fen/PKM. which is significantly lower than the existing bus fares ranging from 19 to 43 fen/PKM. are computed at 1.2% for 2008. MOR will separately finance the procurement of rolling stock and charge a fee based on train-km to LCR and other railways. Train maintenance and operating costs are separately included in the financial evaluation. Land acquisition and resettlement and subgrade are components which will be implemented first.166/PKM.59 million.7% for 2009. inclusive of all costs. and wagons which will not be specifically assigned to LCR. Signaling. LCR should establish an aggressive pricing strategy in direct competition with bus transport. 319. Capital costs during the construction period for FIRR calculation include all incremental outlays related to the Project. These trains will be priced at 10 fen/PKM. The total nominal project cost is CNY 61. The lowfare structure for local service will also substantially benefit the people living in the PIA. These costs are estimated by the TA Consultant. Annual capital cost outlay for civil works during the construction period is assumed at varying rates depending on the cost component. Financial costs of the Project expressed in nominal 2007 prices are summarized in Table 9. a tariff at the lower end of the bus fare for very fast (and considerably safer and comfortable train service is highly competitive. 3.8% per year thereafter. coaches. 328. IDC. IDC during construction is different between the Consultant’s estimate and FSDI estimate because of the differences in rates assumed. and by year. 12 fen/PKM in interline service. but exclude interest during construction.2% on foreign exchange costs and 3. The differences between FSDI and Consultant estimates are mainly in interest during construction (IDC) and contingencies. An aggressive pricing will be used to capture a high share of the market. and 10 fen/PKM for local service. expenditure category. 2. Expense Projections a. This will allow LCR to quickly gain market share and maintain a predominant position as a comfortable.90 327.2 by major project components. At speeds of upto160 km/hr these trains are similar to the current fast train service across CR. The estimated capital costs for evaluation of financial feasibility (excluding price contingency. Rolling stock costs are not separately estimated. Conventional trains at speeds of 120 km/hr will be used in interline and local service.90 for freight trains and CNY 10. and track works will be implemented during the later years of the construction period.

26 351.30 2.223.00 0.14% of base cost on average for civil works and 6.38 Capital Investment (h) Fixed Assets Formulation Civil Works 3.14 101.86 Source: Compiled and adjusted by Consultant from data provided by MOR and ADB.47 331.21 1.18 141.096.03 493.161.64 461.71 5.99 45.00 0.984.00 0.27 0.00 0.56 546.00 0.82 114.939.533.97 95% 112.086.55 20.39 0.104.52 9.57 569.00 0.83 3.00 0.20 2.96 million).24 0.733.364.00 77.24 134.039.30 0.00 0. (f) Interest during construction for ADB loan has been computed on the five-year forward London interbank offered rate plus a spread of 60 basis points and a rebate on spread of 20 points.00 0.95 0.57 2010 Foreign 0.00 1.202.00 0.71 1.12 3.993.00 1.092.617.00 0.57 0.92 84.89 118.26 5.490.23 0.00 0.00 0.049.39 Local 759.49 1.03 2. (c) Including rails.177.00 0.86 Subtotal 3.00 0. Front end fee of 1% is waived.328.30 3.00 0.55 20.263.05 6.82 227.13 114.26 6. (d) Vehicles will be purchased by MOR under separate funding and will be leased to LCR on a fixed charge per train-km basis based on full cost recovery. surveys.71 393.89 5. bridge beams.16 5.43 11.047% for ICBC and 6.00 298.822.626.00 0.00 0.00 77.734.039.00 73.580.38 187.72 112.82 187.73 8.00 0.14 101.40 298. but costs associated with their use by LCR are included in financial and economic evaluation.86 3.99 (g) 0.04 112. Commitment fee is based on 0.00 0.40 0.91 (a) Item No.00 Total 81.69 81.00 1.159.573.00 47.59 3.38 9.00 1.219.99 112. training.01 883.99 112.8% for 2008 and 3.00 0. and monitoring Temporary facilities and transitional works Other expenses 15 Consultants-Construction Supervision 12 B 1 2 C % Domestic 100% 100% 60% 60% 60% 50% 50% 70% 50% 85% 60% Local Table 9.38 1. Price contingencies computed at 0.21 8.34 1.44 159.95 1.072.533.00 0.177.82 9.00 77. For domestic loans interest rate used is 7.96 9.860.69 81.864.00 70.00 932.086.97 569. sleepers.70 520.18 6.219.04 112.067.00 0. A 1 2 3 4 5 6 7 8 9 10 11 Cost Category 13 14 Base Cost(b) Land acquisition and resettlement Subgrade Bridges and culverts Tunnels and cut & cover tunnels (c) Railway trackwork Communications and signaling Electric power and traction (d) Vehicles Safety components Buildings Other equipment and facilities Environmental protection.012.04 5.40 1.16 5.2: LCR Project Cost (CNY Million) 2009 2008 Foreign Total Local Foreign Total Local 2011 Foreign Total 569.34 66. (a) Includes import taxes and duties of CNY 817.94 6.00 0.00 0.439.00 0.12 6.28 1.00 0.00 0.00 0.68 6.71 6.517. (b) In mid 2007 prices.159.51 8.49 1.12 183.00 227.00 30.00 73.27 0.00 0.71 10.8% on foreign exchange costs and 1.22 2.72 112.72 135.01 883.219.14 101.86 215.00 0.00 47.884.03 8.34 3.43 647.71 5.0% per year thereafter for local costs.61 2.24 807.21 6.00 0.85 0.40 765.73 1.00 0.52 18.97 1.05 2.89 118.159.58 4. (g) (h) For FIRR calculation.00 0.47 0.364.40 5.161.67 43.360.52 541.37 0.00 0.38 114.00 0.268.305.00 0.086.161.00 0. and bridge erection.98 168.630.012.18 2.60 8.25 3.85 99.67 433.95 221.712.88 4.42 300.27 0.00 0.00 601. includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.00 0.88 10.90 231.34 3.06 1.89 118.54 362.69 81.177.00 0.984.00 0.70 86.00 0.52 9.104.148. and studies (this estimate is based on assumed contingency rates for specific components ranging from 3% to 10%).62 1.01 680.22 3.00 0.00 30.91 375.733.64 787.00 2.162.325.107.31 3.83 0.447.83 789.49 187.79 4.99 0.00 0.00 0.00 47. Initial cost of vehicles is not included in the Project costs since these are associated facilities. and working capital.16 5.24 million ($ 108.00 0.574.71 325.72 45.35% of loan drawdown.573.305.52 4.00 73.04 112.59 10.26 1.439.77 47.70 0.439.447.14 0.447.00 Subtotal (A) Contingencies(e) Physical Contingency Price Contingency Subtotal (B) Financing Charges During Implementation(f) Total (A+B+C) 759.55 20.00 0.939.86 5.30 2.47 0.26 1.44 4.939.00 0.79 4.630.69 3.21 0.55 20.16 0.00 0.75 5.00 80% 569.00 73.58 2.00 601. price contingency.57 520.59 587.97 0.588% for CCB.733.573.09 8.39 0. excluding IDC.00 0. ballast. .21 7.00 0.52 11.26 1.00 0.82 187.37 103.01 1.984.533.95 315.012.00 30.01 5.325. (e) Physical contingences computed at 6.364.16 5.52 3.13 187.52 0.533.50 387.087.86 70.14 101.188.74 722.021.31 1.21 932.533.00 0.58 0.04 100% 60% 135.89 118.00 0.675. track laying.27 0.91 385.26 1.82 114. mitigation.00 0.62 769. Fixed assets formulated after the project construction.00 0.00 0.21 403.14% for field research and development.96 24.630.

92
Table 9.2: LCR Project Cost (CNY Million)
Local

2012
Foreign

Total

Local

2013
Foreign

Total

Local

2014
Foreign

Total

Local

Summary
Foreign

Cost Category

Total
(b)

0.00
0.00
0.00
2,439.24
807.47
361.86
429.80
0.00
0.00
164.03
47.39

0.00
0.00
0.00
1,573.70
520.95
344.63
409.34
0.00
0.00
28.69
30.57

0.00
0.00
0.00
4,012.95
1,328.43
706.50
839.14
0.00
0.00
192.72
77.97

0.00
0.00
0.00
2,439.24
672.90
361.86
429.80
0.00
0.00
164.03
35.54

0.00
0.00
0.00
1,573.70
434.13
344.63
409.34
0.00
0.00
28.69
22.93

0.00
0.00
0.00
4,012.95
1,107.02
706.50
839.14
0.00
0.00
192.72
58.47

0.00
0.00
0.00
406.54
0.00
0.00
0.00
0.00
133.77
13.67
11.85

0.00
0.00
0.00
262.28
0.00
0.00
0.00
0.00
127.40
2.39
7.64

0.00
0.00
0.00
668.82
0.00
0.00
0.00
0.00
261.16
16.06
19.49

1,897.52
3,313.02
3,729.22
14,228.91
2,422.42
1,055.44
1,253.60
0.00
133.77
341.72
236.96

0.00
0.00
2,405.95
9,179.94
1,562.85
1,005.18
1,193.90
0.00
127.40
59.78
152.87

1,897.52
3,313.02
6,135.16
23,408.85
3,985.28
2,060.62
2,447.50
0.00
261.16
401.50
389.83

112.16

5.89

118.04

112.16

5.89

118.04

74.77

3.92

78.70

747.71

39.25

786.96

45.13
114.27

0.00
73.72

45.13
187.99

0.00
114.27

0.00
73.72

0.00
187.99

0.00
76.18

0.00
49.15

0.00
125.33

451.28
761.79

0.00
491.48

Base Cost
Land acquisition and resettlement
Subgrade
Bridges and culverts
Tunnels and cut & cover tunnels
Railway trackwork(c)
Communications and signaling
Electric power and traction
(d)

Vehicles
Safety components
Buildings
Other equipment and facilities
Environmental protection, mitigation, and
monitoring

451.28 Temporary facilities and transitional works
1,253.27 Other expenses

81.55

20.14

101.69

81.55

20.14

101.69

54.37

13.42

67.79

543.70

134.25

4,602.91

3,007.64

7,610.55

4,411.36

2,913.17

7,324.53

771.14

466.21

1,237.35

31,117.05

16,352.84

47,469.89 Subtotal (A)

677.94

Consultants-Construction Supervision

282.53
534.30
816.84
1,429.66
6,849.41
4,885.45

184.61
96.24
280.86
89.08
3,377.58
3,192.25

467.15
630.55
1,097.70
1,518.74
10,226.99
8,077.70

270.78
639.85
910.63
2,090.74
7,412.73
4,682.13

178.82
116.53
295.34
136.21
3,344.72
3,091.99

449.59
756.38
1,205.97
2,226.95
10,757.45
7,774.12

47.33
134.61
181.94
2,264.49
3,217.57
818.48

28.62
22.38
51.00
222.79
739.99
494.83

75.95
156.99
232.94
2,487.28
3,957.57
1,313.30

1,910.02
2,324.81
4,234.83
8,065.56
43,417.44
33,027.07

1,003.77
385.92
1,389.68
586.62
18,329.15
17,356.61

2,913.79
2,710.72
5,624.51
8,652.19
61,746.59
50,383.68

4,885.45
4,885.45

3,192.25
3,192.25

8,077.70
8,077.70

4,682.13
4,682.13

3,091.99
3,091.99

7,774.12
7,774.12

818.48
818.48

494.83
494.83

1,313.30
1,313.30

33,027.07
33,027.07

17,356.61
17,356.61

(e)

Contingencies
Physical Contingency
Price Contingency
Subtotal (B)
(f)

Financing Charges During Implementation
Total (A+B+C)

Capital Investment (g)
Fixed Assets Formulation (h)
50,383.68
Civil Works
50,383.68
Subtotal

93

322. During the operation period of LCR major line overhaul expenditures are expected on civil
works, particularly for bridges and tunnels. In addition, replacement and upgrading of electrical
systems and signaling would be needed. These costs are expected to recur every seven years (in
year 2022, and 2029) and would amount to 5% of the initial capital investment for civil works
(subgrade, tunnels, and bridges), track, buildings and facilities, signaling and communications
facilities, and electric power (substations, transmission, and catenary) or CNY 2,140.54 million
inclusive of physical contingency.
323. The catenary is assumed to have an economic life of 15 years. Therefore, a replacement
cost for catenary is included at the end of its economic life in 2030 in the amount of CNY 1,022.31
million.
b.

Operating expenses

324. Operating expenses include fixed costs, freight variable costs, passenger variable costs,
and other non-operating costs. The assumptions underlying each cost category are described
below.
i.

Fixed Costs

325. By definition fixed costs are incurred regardless of the traffic volume on LCR. As such
they are a function of time rather than the level of traffic. Fixed costs include fixed labor, fixed
power, fixed maintenance materials, and other fixed costs. Fixed labor costs represent the
staffing at the headquarters and regional offices of LCR for administrative overhead and other
basic support services including the fixed complement of security staff. Fixed labor costs are
estimated for administrative staff at LCR offices, a minimum complement of support staff at
stations, and a similar minimum complement of maintenance crews for civil works (right-of-way,
tunnels and bridges), power lines and facilities, and signaling and communications network. Total
fixed employment at LCR is estimated at 9,048 employees during the initial year of operations.
The fixed portion of administrative labor during the first 8 years of commercial operation from
2015 to 2024 is assumed at 2,500 employees. From 2025 to 2034 the fixed administrative labor
force is assumed to increase to 3,000.
330. Fixed station employees are assumed at 50 per station. Fixed station employees include
guards, cleaning staff for basic maintenance of station buildings and other facilities, office workers,
and station management staff. The minimum maintenance crew size for civil works is assumed at
3,332 employees (4 employees per route km). For fixed maintenance of signaling,
communications, power lines, and other equipment the minimum work force size required is
1,666 (two employees per route km).
331. During the first year of LCR operations the total fixed labor is 9,048 employees or 66
percent of the total work force for LCR. The average annual labor cost inclusive of all taxes,
pension fund payments, and fringe benefits is assumed at CNY 30,000 per employee for 2012.
The average annual labor cost is assumed to escalate at a rate of 3 percent per year.
332. The fixed power requirements of LCR are 120 million KWh. Even without traffic this power
is needed for the catenary and other fixed facilities. The power cost is assumed at 55 fen/KWh.
The fixed maintenance materials cost is assumed at CNY 100,000 per route km per year for the
first four years, escalating at an annual rate of 6 percent for three years thereafter. At the end of
the 7th year, line and facilities overhaul and upgrade will be undertaken at a cost of 5 percent of
the initial capital investment in civil works (subgrade, tunnels, and bridges), track, buildings and
facilities, signaling and communications facilities, and electric power (substations, transmission,
and catenary) or CNY 590.88 million. This large investment will reduce the need for maintenance
materials costs for 4 years to CNY 100,000 per route km. Beginning with the 5th year following
completion of the overhaul and upgrade of fixed facilities, the annual maintenance materials cost
will increase by 6 percent annually until the next overhaul/upgrade.

94
326. Based on the assumptions described above, the fixed costs of LCR are estimated at CNY
1.06 million per route-km in 2015 (compared to FSDI’s estimate of CNY 1.15 million per route-km),
increasing to CNY 1.16 million per route-km in 2021 or by 2.2 percent per year. From 2022 to
2031 the average cost per route km increases to CNY 1.41 million per route-km or by 1.98
percent annually.
ii.

Passenger Variable Costs

333. By definition variable costs are incurred as a result of the traffic carried. As such they are a
function of the level of traffic. The principal assumptions underlying variable cost estimates for
passenger traffic are described below. Variable maintenance costs are separately estimated for
civil works, electric power and facilities, rolling stock (passenger trains), and other facilities. These
costs are estimated on the basis of passenger train km on LCR. The passenger train km
estimates are based on the passenger train diagram included in Section 4, in particular Figure 4.1,
which provides information on passenger train O-D pairs for 2020, and 2030. Based on this data
passenger train km on LCR for 2015, 2020, and 2030 have been estimated as 16.58 million,
22.19 million, and 35.08 million, respectively. Unit maintenance costs per passenger train km for
variable maintenance costs are CNY 3.5 for civil works and rolling stock, CNY 4 for electric power
system including catenary and substations, and CNY 3 for other facilities including signaling and
communications.
334. Variable labor costs for passenger transport also include train crews (locomotive
engineers, safety personnel, conductors, and other on-board staff serving passenger needs),
routine daily inspection/maintenance personnel for trains, train overhaul and service employees
at workshops and depots, and station employees supporting passenger transport services.
335. During the first year of LCR operations the total variable labor for passenger transport
operations is 2,032 employees or 15 percent of the total work force for LCR of 13,670. The
average annual labor cost inclusive of all taxes, pension fund payments, and fringe benefits is
assumed at CNY 30,000 per employee for 2015. The average annual labor cost is assumed to
escalate at a rate of 3 percent per year.
336. Variable electric power cost is assumed as a linear function with a fixed intercept of 691
million KV hours to maintain power at the catenary (included in the fixed cost estimate detailed in
Table 9.7 above) and a slope of 67.95 KV hours per 1000 PKM. When the passenger traffic for
2015 is compared with the train diagram, the average occupancy per train is 55%. Therefore,
variable electric power per passenger train km is 44.85 KV hours for a passenger train of 1200
seats (16 coaches of 75 seats each). In 2020 the occupancy is 65% and variable electric power
use is 53 KV hours per passenger train km. The corresponding figures for 2030 are 70% and 57.8
KV hours.
327. Other variable costs for passenger transport are assumed at 5 percent. Based on these
assumptions, the average variable cost for passenger transport is estimated at 6.88 fen/PKM in
2015 (compared to FSDI’s estimate of 3.75 fen/PKM) gradually decreasing to 6.72 fen/PKM by
2034. These average costs, do not include rolling stock lease costs since they are separately
estimated (see Table 9.5) and included in the financial evaluation.
iii.

Freight Variable Costs

337. The approach used in estimating these costs is similar to the one described above for
passenger transport variable costs. Variable maintenance costs are separately estimated for civil
works, electric power and facilities, rolling stock (passenger trains), and other facilities. These
costs are estimated on the basis of freight train km on LCR. The freight train km estimates are
based on freight traffic projections included in Section 3. Based on assumed 200 TEUs per train
(double-stack operations) and 4,000 tons of non-containerized tons per train, the train kms on
LCR for 2015, 2020, and 2030 have been estimated as 20.57 million, 24.88 million, and 51.86
million, respectively. Unit maintenance costs per freight train km for variable maintenance costs in

city construction tax. including revenues from parcel service.95 2015 are CNY 14 for civil works and other facilities. d. CNY 16 for electric power system including catenary and substations. These estimates are higher than for passenger trains because of the heavier weight for freight trains.5) and included in the financial evaluation. The average annual labor cost is assumed to escalate at a rate of 3 percent per year. and accessorial transportation services represent 4. and fringe benefits is assumed at CNY 30. Other variable costs for freight transport are assumed at 5 percent. Other non-operating costs are assumed at 0. iv. Non-Operating Costs 329.588 employees or 19 percent of the total work force for LCR of 13.000 per employee for 2015. The passenger freight traffic that will go through LCR including generated and diverted traffic is provided in Section 3. LCR also needs to pay business tax. 328. mail.7 above) and a slope of 13. c. baggage. Cash inflows 332. These average costs do not include rolling stock lease costs since they are separately estimated (see Table 9. train overhaul and service employees. freight origin-destination charges. The effective business tax in PRC is 3% of the total revenue. of the amount paid for business tax. Variable electric power cost is assumed as a linear function with a fixed intercept of 691 million KV hours to maintain power at the catenary (included in the fixed cost estimate detailed in Table 9. routine daily inspection/maintenance personnel for trains.59 KV hours per 1000 TKM. and education surcharge.5% of the total LCR freight and passenger revenues. Tariff setting for the new line will be based on the new-line-new-tariff cost recovery principle.07 fen/TKM) gradually increasing to 4. and station and yard employees supporting freight transport services. Variable labor costs for freight transport include train crews (locomotive engineers and other on-board personnel). These costs are increased annually by 3 percent.670. Based on these assumptions. 339. Other revenues. Projected traffic volume 330. pension fund payments. and CNY 12 for rolling stock. The average annual labor cost inclusive of all taxes. Income Tax is imposed on the net taxable profit at 33% with net loss cumulatively carried forward for up to five years from the first year of profit realization. Other cash outflows 331.77 fen/TKM by 2034 as operating costs increase with the traffic growth. the average variable cost for freight transport is estimated at 4. The proposed tariff for very fast and fast trains described above is not yet approved by the Government. During the first year of LCR operations the total variable labor for freight transport operations is 2. e. 340. In addition to the operating expenditures above. 338. . respectively. City construction tax and education surcharge are 7% and 1%.25 fen/TU based on overall MOR costs for these items. Residual value is calculated according to the net book value or economic value whichever is lower.02 fen/PKM in 2015 (as opposed to FSDI’s estimate of 2.

in real terms was calculated based on the capital mix and costs of funds (Table 9-4).0000% 8. a purpose similar to retained earnings or government capital distribution for facility investments.7484% 33.0000% 3. The financial viability of the Project is considered satisfactory. The estimated weighted average cost of capital (WACC). Domestic and international inflation rates of 3% and 1.0000% 0.6847% 16.0000% 4.746.215% is higher than the 2.4500% 33. Financial Internal Rate of Return 334.0000% 4.29% 336.1031% 28. In both cases the net cash flow includes RCF.4771% 0.0000% 8. distinguishing between before and after tax.2% estimated for the Taiyuan-Zhongwei Railway (TZR) Project approved by ADB on 23 November 2006 and the WACC of 3% for the Zhengzhou-Xian Railway (ZXR) Project approved by ADB on 22 September 2005.98 22.8544% 1.8289% 0. It is common practice to perform both calculations.59 100. 4. after tax.3561% 6.623.5214% 3. The FIRR of the Project is higher than the WACC of 3.8544% 1.5000% 8.9%.3350% Equity of 3 Local Gov'ts 13. RCF is collected for the explicit purpose of financing railway construction projects.0000% 3. . The FIRR results are as follows: ¾ After Income Tax: 6.508%.980.0000% 3. Weighted Average Cost of Capital 333.00 3. Table 9-5 presents two calculations of the FIRR.215% Source: Consultant.215%.6439% 5.250.0000% 1.85% ¾ Before Income Tax: 8.5000% 8.29 46.0000% 3. Costs have been considered as follows: (i) ADB debt at 5. (iii) Cost of equity at 8% (based on the opportunity cost of capital for MOR).8000% 2.31 27. 335. Table 9.96 f.892.0000% 4. respectively have been assumed for domestic and foreign currency denominated debt for the share of each source of financing for the Project. The WACC at 3.0922% WACC Total 61.0000% 0.4: Weighted Average Cost of Capital Item Amount (CNY Million) Weight Nominal cost Tax rate Tax adj nom cost Inflation rate Real cost Weighted component ADB Loan Domestic Loans MOR Equity 2. The WACC computation reflects the impact of income tax at 33% on borrowed funds. (ii) Domestic bank loan at 5.6515% 0.45% during repayment period with 1% front end fee.

33 18.00 0.61 0.06% 6.00% 40.00 0.44 6.15% 7.55% 4.00 (2.077.325.056.703.465.71) (9.86% 49. a sensitivity test was made assuming a 100% increase in resettlement costs.795.00 0.73 5.05 12.00% 100.14 4.08 15.00 0.94 900.09 271.00 0.76 538.93 3.033.69% 7.00 (2.12 6.00 0.00 8.20% 6.139.126.03) (1.364. 341.14% 6.29% 6.00 0.13 5.00 19.54) 20. Table 9.30% Switching Values for FIRR Before Income Tax After Income Tax 93.159.388. The sensitivity analysis indicates that the Project’s financial viability would be dependant on the tariff applied and the traffic realized.00 0.81 18.28 4.96 23.86) 0.083.00 0.45 0.326.24 (43.30) 4.108. the Chongqing Municipality and Sichuan and Gansu Provinces finalized their implementation guidelines.00 308.052.21% Sensitivity Analysis 337.48 (160.17 4.06 8.70) (7.774.02 364.08 5. 28.13 634.00 0.471.164.16 33.51 317.71 5.10 295.077.00 0.00 0.50 14.817.00 0.31 7.04 7.00 0.00 0.61 380.820.6: Sensitivity Analysis Sensitivity of FIRR Before Income Tax After Income Tax Scenario Base Case WACC Passenger Traffic Decrease by Freight Traffic Decrease by Passenger Transport Cost Increase by Working Expenses Increase by Resettlement Cost Increase by Project Cost Increase by 3.04 (5.384.223.108.387.53 10.00 0.940.366.634.774.95 589. Under this assumption LCR’s FIRR is reduced to 7.30) 4.513.34 1.20 4.086.533.24 Source: Consultant estimates FIRR NPV @ WACC WACC 5.00 0.22% NPV reduced by 32% NPV reduced by 43% Source: Consultant estimates.54% 6.00 258.313.00 0.27 4. Decrease in the freight traffic by 15% would reduce FIRR to 6.00 0.00 0.253.52 5.21) (10.161.00 0.00 0.00 0.00 0.04 3. respectively.902.722.00 0.00 0.00 0.313.965.58 7.745.66 11.00 0.00 0.204. The new guidelines potentially increase the compensation multiplier.00 0.032.15 11.368.21% 20.697.07 1.00% 15.45% 51.36 11.49 10.28 10.02) (79.74 5.00 0.689.886.93 15.825.71) (9.00 0.83 23.738.29% 7.38) (8.923.64 19.896.24 2.086.38) (8.00 0.05 6.00 0.88 8.85% 5. The results of this analysis are summarized in Table 9-6.00 0.26) (8.00 0.00% 10.00 0.161.159.287.00 0.00 0.73 8.61 8.40 1.164.83 13.89% 4.804.196.318.00 0.52 6.14 21.00 0.48 1.85 674.215%.67 515.61 13. In the former case a decrease in traffic of more than 21.723.42 30.95 4.494.120. 338.39 7.30 26.87 4.565.077.98% 67.12 26.00 3.55%.97% 7.50 2.25 402.48 705.86 6.38) (8.278.622.00 5.218.235. To account for this uncertainty.57 8. Net Cash Flow Before Income Tax After Income Tax (5.00 0.22 1.11% 5.815.41% would make the project infeasible since the FIRR will be lower than the WACC of 3.21) (10.40% 184.811.708.63 493.66 4.25 9.69 1.69 4.12) (1.877.56 206.45 16.90 Working Expenses Operating Revenue 0.5: FIRR Calculations for LCR Tax Year Capital Cost Working Capital 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 (5.00 0.61% 303.627.66 1.255.02 8.70) (7.37 7.96 6.67 7.26) (8.44 12.26 13.00 0.02% 35.834.30% for income before tax and after tax.611.71) (9.12) (1.587.32 8.00 0.30 19.00 0.97% and .79 4.00 0.00 0.102.70) (7.65 3. The final resettlement costs will be fixed when the resettlement census is completed in late 2007.145.91 4.74 15.61 1.15% 21.600.236.364.758.30 15. respectively.76 25.00 0.62% 7.70 0.199.364.26) (8.25% 84.00 7.05 32.14 16.20 2.00 0.462.00 0.284.00 0.2% and 5.00 0.77 286.97 Table 9.21) (10.801.73 3.380.46% 1569.00 0.00 0.00 0.533.00% 10.23 301.46% 56.38 516.85% 46.069.95 4.298.89 9.00 0.161.00 0.83 20.917.306.71 6.661.00 0.305.00 0.938.263.03 5.00 0.95 Net Business & Other Income Tax Residual Value of Fixed Assets 0.40 6.34 8.12) (1.00 0. Sensitivity analyses were performed to test the effects of possible unfavorable scenarios with respect to changes in the key parameters that determine costs and revenues.777.017.31 6.54% 6.14 16.00 0.508.30% 6.313. A 20% decrease in passenger traffic will result in a FIRR of 7.772.00 0.66 644.968.56 452.097.16 18.918. Due to the recent changes in the compensation rates for land acquisition and resettlement under State Regulation No.906.18 3.47 2.264.019.71) 30.00 0.59 6.67 349.00% Delay Implementation by 1 year 8.336.96 398.00 0.026.82 616.39 5.15% and 4.00 0.533.58 472.404.838.31 6.03) 0.00 210.00 0.706.93 3.34 29.89 4.17 3.774.73% 1178.30) 0.505.120.29 197.11 4.159.00 0.11 415.00 0.003.

which corresponds to CNY 1. The LCR Project Resource Statement (PRS) expressed in domestic prices in CNY million is presented in Table 10-1. The passenger surveys conducted by the Consultant included questions on the respondent’s willingness to pay for the very fast.16/PKM. and conventional railway service offered by LCR. speed. Introduction 341. which is considerably more than the average fare for LCR. On the cost side. The PRS consists of the following six parts and are discussed below: . assuming no change in tariff) will reduce the after tax FIRR to 5. The current bus fare in the PIA ranges from 19 to 46 fen/PKM. 339. Considering the same speed on LCR. Section 3. Compared to the passenger preference in 2007. C.06%.4 fen/PKM in 2015. a 40% increase in passenger transport costs would reduce the after-tax FIRR to 6.01 has been used from the RRP for the recently approved ZXR Railway Project (Zhengzhou-Xi’an Railway Project. a 20% decrease in traffic (akin to a decrease of passenger revenue of the same extent. and presented in detail in the Consultant’s Supplementary Final Report. indicating that the Project’s financial viability is more sensitive to traffic variation than to cost variation. The air fare would thus be more than 10 times more expensive. X. B. The shadow exchange rate factor (SERF) of 1. the bus fare in 2015 would be 29 to 58 fen/PKM which is at least 100% higher than the average fare for LCR.30% and NPV by 43%. and cost.98 6. On the other hand. this represents a highly acceptable price structure.11%). 342.5 fen/PKM. tariff setting principles and marketing the new railway are key for the sustained viability of the Project.47/PKM in 2015 assuming 3% inflation. Volume 1. Project Resource Statement 343. comfort. The price level used for all project costs and benefits is constant 2007 prices. however. In the case of LCR passenger operations. C. would reduce the after tax FIRR to 4. the proposed rate structure is considerably more attractive than bus or comparable express train service. Implementation delay of one year.2. This Section describes the economic assessment conducted by the Consultant for the Project railway. The average revenue per PKM estimated by the Consultant based on the proposed tariff structure described in Section 9. Willingness to Pay 343.2 is 14. indicating that the Project’s financial viability is not sensitive to a substantial increase in resettlement costs. Assuming an inflation of 3%. fast. 340. Therefore. respectively. For all quantifiable project costs and benefits. a 10% increase in the Project costs will not pose a potential risk for the Project’s financial viability (after tax FIRR of 6. the unit of account used is the domestic price level expressed in national currency (CNY). The existing air fare is CNY 1.54% for before and after tax. On the average the respondent’s willingness to pay ranges from 18 to 28 fen/PKM for trips between 501 and 800 km. The pricing structure for LCR represents a realistic market price which assures a high market share and customer preference in terms of safety. General Assumptions 342. RRP PRC-37487 approved 10 December 2004) for converting foreign costs to domestic cost equivalents. The approach used follows ADB’s Guidelines for the Economic Analysis of Projects dated February 1997 and is based on the forecast freight and passenger traffic summarized in Section 3.55%. The existing express train service fare between Shanghai and Beijing is 39. ECONOMIC ASSESSMENT A.

In computing the change in annual working capital requirements both operating costs and initial and incremental investments are included. their costs are included in both economic and financial evaluation. station access roads. Part A. 347. The corresponding figures for freight are 24% and 5%. Appendix 10-F presents the detailed computation of annual fixed and variable costs. Initial Investment Schedule.99 ¾ A. All costs are expressed in economic terms and the balance remaining at the end of the Project’s economic evaluation is treated as a residual value 348. Part B. the dry lease cost for freight trains is estimated at CNY 7. Annual Costs. The cost of station access roads will not be borne by the Project. bridges and culverts. 346. completing the detailed design. The Consultant’s Supplementary Final Report. and preparatory works for construction. ¾ B. Initial Civil Works. and ¾ F. Part D of the PRS includes recurring annual costs of the Project. As detailed in Table 9-5 of Section 9 of the Supplementary Final Report. Net Benefits. and communications and signaling facilities). The Consultant’s Supplementary Final Report. electric power and other material inputs are assumed to constitute 42% of the variable cost per PKM and 46% of the variable cost per TKM. of the PRS includes the initial project costs to be incurred during the 7-year implementation period including the 6. Working Capital. Volume 2. Volume 2. their cost is not included in the Project’s financial evaluation. track. Appendix 10-E presents the detailed computation of working capital needs. these activities will mainly consist of obtaining the required government approvals. tunnels. It should be noted that even though MOR may start to implement the project earlier. 345. of the PRS presents the project costs associated with additional investments. Benefits. Part C of the PRS presents the working capital requirements of the Project. since these are considered associated facilities. The construction activities for ADB-funded components will start when the ADB loan is approved. and replacement of fixed assets which reach their economic life (15 years or 2030 for electric power and traction). They are important for generating broad socioeconomic and poverty reduction benefits for all inhabitants in the PIA. Additional Investment Schedule. Environmental Control Costs. Untraded materials for both passenger and freight traffic are assumed to be 20%. This Part lists costs under four categories: Resettlement Costs. Equipment cost for both types of traffic is assumed to be 5%. Volume 1. and Physical Contingency. Additional Investment Schedule.89 per train-km and for passenger trains at CNY 10. residual value of fixed assets at the end of the valuation period (2034). Initial Investment Schedule. The station access roads in nominal CNY are included in the PRS Part B. These facilities are necessary for the attainment of Project objectives. ¾ C. The cost of rehabilitation and overhaul of the fixed facilities will be borne by the Project. For converting financial variable costs to economic costs. respectively.60 per train-km. Therefore. Their cost is included in the economic evaluation. The local governments are undertaking these investments in road transport facilities in the Project Impact Area of LCR as improvements on local transport accessibility and mobility to support the economic and social needs of the people.5 of PRS).5-year construction period from 2008 to 2014 and 6-month trial operations and testing from mid 2014 to 2015. Skilled and unskilled labor for passenger transport are 30% and 3% (cost basis). ¾ D. This cost does not include rolling stock since costs associated with rolling stock are separately accounted for in the PRS (see Part D. 344. however. It consists of rehabilitation and overhaul of fixed facilities every 7 years (2022 and 2029 for subgrade. but by local governments. ¾ E. Therefore. .

85 10 0.00 0.00 B.76 3.00 0.00 Communications and signaling 115. Associated Facilities: A.00 0.54 0.00 0.00 0.110.744.00 0.00 13.00 35.496.40 0.00 0.82 71.43 0.10 - 12.00 0.00 0.009.00 0.00 Building Replacement 463.00 0.90 0.00 Buildings 23.00 0.00 0.00 0.00 Safety components 14.00 30 0.31 65 0.00 0.00 0.61 6.82 0.10 0.119.00 0.00 0.00 0.00 0.30 0.00 0.72 0.00 Other equipment and facilities 22.41 0.00 0.241.08 3.67 292.00 26.00 0.00 84.00 0.16 3. Fixed Assets Overhaul and Renewal 2.00 0.86 71.00 0.16 3.30 17.93 135.34 21.85 0.00 Subtotal 0.00 0.00 0.52 1.00 0.00 0.00 0.24 0.39 8.00 0.00 0.00 0.00 0.36 12.00 0.30 13.82 0.02 453.00 0.00 2.00 0.00 0.00 0.61 6.660.00 0.00 Electric power and traction 137.99 0.589.00 0.85 453.00 0.680.00 0.00 688.00 0.00 0.00 0.00 0.47 13.00 0.95 0.00 0.611.00 0.00 0.00 77.28 0.00 0.154.66 221.00 0.16 3.61 4.00 0.00 0.00 0.00 0.46 0.18 19.42 97.160.230.85 0.02 10.00 0.13 0.00 0.00 0.08 6.57 58.66 221.00 0.00 2) On Environmental Control Costs 44.00 4.29 60.23 0.60 52.41 4.98 54.59 3.00 0.20 11.11 0.00 0.00 0.00 0.00 0.23 21.18 413.25 25.00 47.00 0.00 0.00 0.00 0.00 1.00 0.95 7.00 0.293.29 60.00 0.00 0.00 0.00 0.17 440.25 979.00 0.00 0.00 0. INITIAL INVESTMENT SCHEDULE 1.19 0.647.76 4.08 116. Roads: 1) Station Access Roads Section B Total Additional Investment .00 0.85 362.00 0.00 0.00 0.11 78.72 0.00 183.317.33 346.00 Subtotal 26.00 0.00 0.98 5.00 0.00 0.42 0.08 30 0.00 0.832.00 0.00 0.00 0.00 0.00 0.86 20 0.29 91.00 0.00 0.77 0.169. ADDITIONAL INVESTMENT SCHEDULE 1.48 9.72 807.00 0.86 17.00 0.00 0. Environmental Control Costs: Project environmental control costs Environmental Monitoring .00 0.00 90.00 0.57 4.520.00 0.47 0.41 4.88 0.00 0.00 0.00 Safety components 235.63 20 0.00 0.00 0.00 0.1: LCR Project Resource Statement (Economic Prices).00 0.43 4 461.47 13.00 0.73 48.380.04 363.50 256.00 0.00 0.83 132.00 0.00 45.07 448.11 0.00 0.00 0.065.82 71.00 0.00 0.00 0.00 0.84 0.00 0.12 Subtotal 1.00 0.00 0.00 0.29 60.00 0.77 346.00 0.380.16 3.00 0. Civil Works (Initial): 40.00 0.00 0.380.00 0.15 15.26 21. Residual Value of Fixed Assets 0.30 580.31 1.00 0.00 0.00 779.00 Temporary facilities and transitional works 44.00 0.154. Physical Contingencies: Subgrade Bridges and culverts 338.00 0.75 49.00 0.00 0.66 221.72 88.11 384.55 0.00 344.00 0.00 0.00 3. CNY Million Years 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0.61 0.49 0.41 3.00 0.00 9.87 NPV @ 12% 5.00 0.00 0.00 1.00 Buildings 387.00 0.00 0.11 15 0.00 0.00 0.72 84.00 649.00 0.00 0.49 291.00 13.03 0.00 0.00 0.00 0.00 0.61 6.00 4.17 Subtotal 1.61 6.00 0.12 45 3.43 0.00 Other equipment and facilities 359.00 0.00 Electric power and traction 2.00 0.19 0.46 17.42 97.00 0.26 0.00 0.00 653.55 0.00 0.00 0.986.100 Table 10.00 0.61 25.42 97.00 0.00 0.15 0.00 0.00 0.41 483.00 0.296.00 0.00 0.00 0.00 0.00 0.00 Initial Amount (CNY Million) Replacement Economic Period (Years) Prices Item A.62 1.00 13.00 0.65 454.00 0.00 0.00 0.81 0.94 15 60.00 4.66 221.76 4.98 3.61 6.00 Bridges and culverts 5.85 0.00 0.00 0.99 0.00 0.64 1.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.72 1.04 454.57 77.72 84.76 4.39 0.00 0.01 0.878.19 0.903.93 50 0.57 1.00 0.64 4.00 Railway trackwork(c) 3.00 0.00 0.523.00 0.00 0.00 0.00 0.11 38.00 0.00 0.00 0.00 0.59 0.29 40.29 60.00 0.00 0.98 5.00 0.00 0.00 0.47 0.00 0.23 Tunnels and cut & cover tunnels 21.00 0.47 0.14 6.23 1.00 0.00 0.95 0.00 0.00 0.00 0.164.00 0.00 Railway trackwork(c) 223.00 4.00 0.00 0.611.47 4 Other expenses Consultants-Construction Supervision/Monitoring 97.88 244.80 17.04 0.00 0.00 0.00 39.81 5.00 0.00 0.04 454.00 0.85 0.00 0.00 0.11 0.00 0.00 0.00 40.36 Subgrade 2.00 0.00 0.218.00 0.00 0.47 13.627.00 0.19 0.00 0.00 0.00 26.00 0.611.00 1.82 758.00 0.42 64.00 0.54 7.00 0.00 0.00 0.00 Other Facilities 178.00 0.33 0.76 137.00 0.47 0.00 0.00 0.43 392.37 0.00 0.00 0.380.00 0.00 0.00 0.00 0.00 0.00 0.00 2.00 0.29 60.00 0.00 0.00 0.00 0.00 0.27 89.611.00 0.00 0.00 0.00 107.00 157.981.00 0.04 0.00 0.00 0.00 0.23 42.54 30 91.00 0.66 184.00 0.42 97.00 0.00 0.00 2.00 0.49 30.00 0.00 0.00 0.00 0.00 0.00 0.332.00 573.19 42.93 -894.09 35.44 39.00 0.00 0.00 0.00 0.00 0.65 6.00 0.19 0.00 4.00 0.00 0.43 6.49 1.00 0.04 0.00 0.78 32.61 34.00 0.00 0.00 Tunnels and cut & cover tunnels Consultants-Construction Supervision/Monitoring Section A Total Initial Investment 84.00 0.00 0.00 0.Construction phase only 1.00 0.04 0.98 5.86 28.33 688.00 0.00 0.00 0.00 Other expenses 70.37 31.00 0.31 1.00 0.00 0.00 0.41 4.864.00 0.00 71.00 0.00 Temporary facilities and transitional works 401.57 77.00 0.82 53.00 688.31 0.97 0.00 Communications and signaling 1.85 0.23 1.16 3.00 Compensation for Standing Crops 41.00 86.00 0.85 453.611.82 71.00 0.00 0.00 0.62 8.00 0.00 0.30 17.00 0.00 0.34 448.00 0.00 0.85 48. Resettlement Costs: Temporary Use of Land 164.58 7.00 0.00 0.42 97.98 5.90 10 0.00 0.01 221.93 NPV @ 12% 0.95 0.10 60.66 20 0.00 0.00 0.00 0.23 42.41 140.68 Administration Costs and Other Resettlement Expenses 8.78 1.00 251.00 1) On Land Acquisition & Resettlement 129.12 0.57 77.00 0.98 5.00 0.03 7.00 0.00 0.

00 0.00 0.00 1) On Land Acquisition & Resettlement 2) On Environmental Control Costs Subgrade Bridges and culverts 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -31.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Bridges and culverts 0.80 0.00 0.00 0.00 0.00 0.00 0.00 Subtotal 0.00 0.00 0.87 0.00 0.00 0.00 0.00 0.00 0.00 0. Resettlement Costs: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.101 Table 10.00 0.00 0.00 0.00 0.00 0.00 0.00 Buildings 0.10 Subtotal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other equipment and facilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0. CNY Million 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Item A.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Temporary facilities and transitional works 0.00 0.00 0.00 Consultants-Construction Supervision/Monitoring 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 Communications and signaling 0.00 0.00 0.00 0.00 0.00 0.00 Project environmental control costs Environmental Monitoring .00 0.00 0.00 1.00 0.00 0.00 0.00 Railway trackwork(c) 0.00 0.00 0.00 0.00 0.808.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -31.00 0.00 0. ADDITIONAL INVESTMENT SCHEDULE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1) Station Access Roads Subtotal -31.87 863.00 Other expenses 0.00 0.00 0.00 0.808.808.00 Administration Costs and Other Resettlement Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.Construction phase only 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Safety components 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0. Roads: 0.00 Temporary Use of Land 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 Section B Total Additional Investment .00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Section A Total Initial Investment B.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Facilities 0.00 0.00 Subgrade 0.013.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Consultants-Construction Supervision/Monitoring 0.00 0.00 Electric power and traction 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.1: LCR Project Resource Statement (Economic Prices).00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Electric power and traction 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Safety components 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Railway trackwork(c) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0. Fixed Assets Overhaul and Renewal 2.00 0.00 0.00 0.00 0.00 Tunnels and cut & cover tunnels 0.00 0.00 0.00 0.00 0.808.00 0.00 0.00 Buildings 0.00 0. Residual Value of Fixed Assets 0.00 0.00 0.00 0.00 Temporary facilities and transitional works 0.00 Subtotal 0.00 0.00 Communications and signaling 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other equipment and facilities 0.013.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Building Replacement 0.00 0.00 0.00 0.00 0.00 Tunnels and cut & cover tunnels 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.80 863.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0. Associated Facilities: A.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0. Environmental Control Costs: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 0.00 0.00 0.00 Compensation for Standing Crops 0.00 0.00 0.87 0.00 0.013.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0. Civil Works (Initial): 0.80 1.00 0. Physical Contingencies: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.80 863.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.808.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0. INITIAL INVESTMENT SCHEDULE 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.808.00 0.00 0.00 0.

15 366.880.514.89 90.136.03 b) From Rail 0.12 4.00 0.85 70.00 0.00 0.00 0.81 7.71 17.52 2.41 53.34 G.11 -7.00 0. Avoided Road User Costs due to Railway Competition 0.00 0.28 -7.00 0.00 0.00 0.692.15 2.37 3.00 0.00 1.55 3.614.00 446.19 832.13 1.259.00 0.00 0.00 0.51 1.410.65 3.00 0.284. Change in Working Capital 0.74 12.00 0.00 0.00 695.00 0.75 422.00 0.151.00 0.00 0.12 12.44 47.82 328.00 0.736.61 B.00 0.376.56 371.069.08 15.355.00 0.59 12.389.56 4.00 0.00 0.28 NPV at 12% 66.493.00 0.28 5.43 0.00 308.00 0.125.867.00 0.52 823.00 0.136.00 0.00 0.00 0.13 0.00 0.64 0.00 396.00 0.00 0.00 0.95 891.00 1.72 901.52 1.15 3.54 2.17 33.00 0.19 1.60 6.825.78 12.98 0.615.00 0.08 c) From Air 0.00 0.00 0.00 0.71 35.23 4.444.00 0.86 254.00 0.00 0.00 0.00 32.43 Section D Total Annual Costs NPV at 12% 16.00 0.47 2.00 0.00 3.18 137.312.00 0.99 9.00 0.436.00 0.93 15.00 0.00 0.00 0.00 0.78 647.29 Total Passenger Transport Benefits NPV at 12% 3.17 10.90 3.533.00 4.086.00 0.00 0.392.92 1.00 0.70 D.00 0.00 0.00 0.509.509.00 0.50 5.39 1) From Rail 0. Diverted Traffic Travel Time Savings Total Diverted Freight Transport Benefits NPV at 12% 5.872.00 0. Avoided Road Infrastructure Investment 0.00 0. Variable Costs Freight Transport 0.00 0.28 238.38 340.00 13.93 13.25 4.95 38.79 7.00 0.92 831.33 1.749.00 0.00 0. Avoided Costs and Other Benefits C.00 0.00 0.87 12.00 0. National Railway Productivity Benefits Total Avoided Costs and Other Benefits TOTAL BENEFITS NET BENEFITS 16.037.00 0.719.610.893% 20.63 1.53 3.06 13.00 0.74 210.00 0.00 66.31 2) From Road 0.00 0.97 16.00 0.89 9.77 1.96 72.33 946.00 0.21 2.330.00 0.00 127.00 0.53 12. Energy Savings Benefits 0.00 0.00 0.511.43 0.38 743.00 0.164.00 0.83 2.00 0.00 54.55 544.190.00 0.458.33 50.11 7.00 0.102 Table 10-1: LCR Project Resource Statement (Economic Prices).192.00 0.46 5.17 1.53 4.57 3.00 2013 2014 2015 2016 2017 2018 2019 2020 0.75 D.00 0.966.68 12.00 0.79 0.60 -7.67 10.53 TOTAL COSTS NPV at 12% 45.43 0.16 4.44 60.00 0.13 -4.38 NPV at 12% 20.00 0.67 1.948.00 0.32 0.00 0.91 0.51 8.00 0.07 41.00 0. Other Non-Operating Costs 0.69 39.00 0. Freight Transport Cost Savings to Shippers: A.00 535.60 489.92 b) From Rail 0.00 0.14 67.491.22 510.52 NPV at 12% 36.865.00 0.14 16.00 0.00 0.746.115.00 0.41 63.00 0.872. Train Dry Lease Costs 0. Generated Freight Transport Benefits 4.00 0.21 348. Variable Costs Passenger Transport 0.236.91 5.21 149.00 675.00 0.00 0.712.00 0.00 0.66 765.79 8.50 780.00 0.00 0.00 0.511.59 512.48 782.19 155.00 0.61 13.640.53 12.30 1.00 0.049.09 4.00 0.54 66.45 36. Travel Time Savings: 1) Diverted Traffic (CNY Million): a) From Road 0.00 0.78 1.40 80.00 0. Tourism Benefits 0.56 NPV at 12% 21.24 5. Million CNY (Continued) Item C.80 0.69 F.00 0.32 14.00 881.58 353.00 0.00 0.29 395.89 H.00 0.03 13.38 787.00 6.00 41.00 0.00 0.00 0.00 0.35 34.00 0.00 307.573.640.00 0.03 E.683.00 64. Avoided Road Accident Costs 0.00 0.93 13.72 9.00 0.93 4.00 0.32 10.73 925.00 0.00 0.86 a) From Road 0.89 3.79 -8.65 12.00 0. ANNUAL COSTS 1. Land Opportunity Cost 7.00 2.00 0.00 0.00 0.96 1.01 744.330.00 0.02 76. WORKING CAPITAL Years 2008 2009 2010 2011 2012 Capacity Utilization (%) 0.87 85.88 12.55 143.01 718.00 0.43 0.00 0.00 0.00 0.00 0.499.89 562.207.10 132.00 0.95 2.25 0.71 57.892.00 0.00 0.97 13.66 3.26 E.88 43.62 57.17 11.00 0.99 3.42 0.61 44.00 0.65 4. Diverted Traffic (CNY Million): B.16 327.74 -820.33 40.708.10 688.07 7.52 4.00 0.00 616.58 880.00 0.023.35 815.79 912.67 536.332.68 1.00 0.52 EIRR NPV @ 12% (CNY Million) .00 0.00 0.71 867.821.00 316.97 71. Pollution Savings Benefits 0.17 3.00 0.467.03 13.92 0.372.18 Initial Amount (CNY Million) Replacement Economic Period (Years) Prices NPV @ 12% 1.00 84.00 0.00 0.00 0.00 0.31 80.00 0.00 0.28 7.00 607.00 0.581.00 152.00 0. Fixed and Semi-Fixed Costs 0.00 0.23 3.145.00 2.63 1.00 0. Avoided Road Maintenance Costs 0. Environmental Monitoring Costs 0.286. Transport Cost Savings to Passengers: A. BENEFITS 1.00 0.91 4.160.65 12.00 0.849.00 0.00 0.15 928.01 1.89 479.14 16.00 0.00 0.841.00 0.00 0.00 1.95 733.49 421.45 449.00 197.34 13.259.65 467.00 0.65 4.82 2.12 3.74 12.83 12.00 0.74 820.74 44.816.844.334.75 0.805.077.00 0.145.00 0.00 0.59 224.85 0.00 0.29 868.83 12.72 931.00 0.00 0.19 A.00 0.85 4.38 270.32 -10.00 0.00 0.73 7.06 75.00 0.26 13.00 0.867.12 404.60 7.925.777.22 963. Passenger Cost Savings: 1) Diverted Traffic (CNY Million): 2) Generated Traffic (CNY Million): B.225.

833.18 806.25 7.92 509.21 1.16 11.32 1.16 577.01 D.46 7.147.43 21.018.027.36 477.435.24 25.30 5.23 40.364.58 2.82 A.747.40 3.71 b) From Rail 47.75 707.697.67 13.971.250.498.01 60.10 83.95 39.05 765.84 73.49 107.120.45 955.66 68.76 1.61 231.43 0.81 5.08 874.719.73 8.43 4.048.147.65 1.29 1.09 14.40 699.80 1.84 1.83 3.11 83.566.99 1.58 136.76 13.90 216.76 17.90 6.739.31 128.36 5.59 742.36 2.911.20 8.88 1.37 2.82 666.95 35.43 65.81 19. Environmental Monitoring Costs Section D Total Annual Costs -23.54 1.43 108.031.71 518.30 1.095.758.43 0.03 6.471.997.653.05 1.221.03 173.76 25.60 94.85 94.93 2.32 1.52 4.998.38 2.08 TOTAL BENEFITS 14. Passenger Cost Savings: 1) Diverted Traffic (CNY Million): 288.81 614.87 73.04 114.51 573.69 1.62 6.48 121.602.00 6.091.18 1.752.83 2.742.858.581.34 78.45 239.003.996.98 2.097.23 2.03 2.11 -56.038.82 9.610.60 576.80 206. Diverted Traffic (CNY Million): 583.63 6.737.41 1.765.279.26 14.64 77.145.35 1.50 4. Diverted Traffic Travel Time Savings 1.29 195.041.28 12.645.039. Other Non-Operating Costs 425.260.42 670.435.96 108.67 10.75 9.70 87.07 26.43 3.99 7.29 63.60 1.599.32 1.00 2.54 652.22 101.54 8.46 1.587.02 1.40 1. Avoided Road Maintenance Costs 2.35 1.02 1.13 603.22 446.336.551.59 4.03 c) From Air 2) Generated Traffic (CNY Million): B.46 602.56 5.599.17 2.46 13.478.88 1.95 162.00 697.81 1.42 1.66 6.64 1.63 2.082.77 13.73 112.01 208.09 18.20 50.53 57.10 120.80 1.37 1. Travel Time Savings: 1) Diverted Traffic (CNY Million): a) From Road b) From Rail Total Passenger Transport Benefits 2.74 4.64 248.83 23.03 8.42 107.381.91 28.58 8.69 970.493.992.78 153.21 1. WORKING CAPITAL 18.22 1.68 3.43 615.864.25 348.82 2.008.624.997.19 2.52 7.78 19.10 114.607.16 1.782. Generated Freight Transport Benefits 4.73 1.505.57 1.72 8.74 D.02 12.232.334.245.646.34 152.14 F.28 -64.57 194.88 1.937.87 633.420.52 5.44 144.40 202.93 10.42 82. Land Opportunity Cost 0.116.37 7.82 1.814.71 493.416.44 H.39 1.414.742.137.28 NET BENEFITS 22.330.61 29.18 395.22 8. Change in Working Capital 964.713.494.058.311.20 14.02 4.504.58 101.622.96 69.42 7.067. Avoided Road Accident Costs 90.66 724.634.40 835.32 1.076.762.21 62.20 4.09 1.21 107.018.55 6.14 1.769.51 508.171.473.22 144.43 0.080.95 545.378.953.085.55 136.399.43 6.84 981.127.00 3.51 21.00 1) From Rail 2) From Road B.01 778.30 1. Fixed and Semi-Fixed Costs 1.96 55.35 1.775.81 930.00 171.39 6.71 1.017.517.88 1.81 2.49 33.43 0.10 90.04 675.56 18.935.124.13 1.06 2.147.67 30.623.29 3.360.00 Total Diverted Freight Transport Benefits 38.78 2.23 a) From Road 95.62 44.033.65 1.76 1.17 897.56 74.058.671.89 103. ANNUAL COSTS 7.36 13. Freight Transport Cost Savings to Shippers: A.96 47.629.86 7.82 1.773.63 1.10 829.19 88.32 9.52 87.238.09 1.76 2.80 7.460.530.56 204.288.630.48 1.95 791.61 1.399.068.30 14.98 16.51 13.22 92.28 7.24 1.990.91 37.13 10.07 102.97 2.12 26.680.947.04 2.179.57 922.88 1.88 1.97 731.77 1.88 13.655.28 327.085.16 1.14 5.314.36 42.64 166.10 223.32 3.233.171.71 1.428.70 973.342.94 59.89 636.178.141.00 97.083.56 3.94 20.027.72 11.44 27.214.01 5.201.46 5.72 866.554.18 2.70 885.48 117.021. Avoided Road Infrastructure Investment 60.721.67 128.00 6.97 3.00 183.392.41 5.47 6.20 TOTAL COSTS E.613.95 70.426.287.43 1.210.12 942. National Railway Productivity Benefits 6.27 4.53 4.57 13.978.164.636.057.16 16. Pollution Savings Benefits 980.23 3.26 53.20 4.265.007.32 1.26 13. Tourism Benefits 11.338.93 7.940.703.13 7.43 0.467.445.932.91 C.47 1.987.75 2.928.932. Million CNY (Continued) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Item C. BENEFITS 1.175.34 6.53 307.64 2. Variable Costs Freight Transport 160.90 469.53 66.55 541.779.534. Variable Costs Passenger Transport 1.81 3.38 78.336. Energy Savings Benefits 1.12 9.37 Total Avoided Costs and Other Benefits .910.37 3.49 5.60 15. Avoided Road User Costs due to Railway Competition 573.26 629.00 655.48 4.20 121.771.522.23 1.41 14.371.81 4.108.11 1.294.05 20.224.80 96.215.18 183.18 128.71 802.85 3.36 21.103 Table 10-1: LCR Project Resource Statement (Economic Prices). Transport Cost Savings to Passengers: A.10 1.813.20 2.03 542.43 0.30 654.38 697.068.68 897.064.60 17.52 -158.16 -704.875.25 956.32 22.83 968.60 1.25 20.940.84 2.107.263.85 751.822.14 52.06 745.35 100.10 6.028.96 23.44 1.69 1.055.83 1.76 2.60 177.03 1.45 122.98 14.05 32.86 9.27 3.95 1.74 181.81 1.398.49 2.329.92 23.70 477.60 1.43 0.43 0.72 64.40 20.50 1.65 1.86 1.02 448.12 1.43 0.105.208. Avoided Costs and Other Benefits E.69 73.00 189.560.58 20.31 421.93 29.07 195.118.71 4.89 23.362.69 80.48 1.00 448. Train Dry Lease Costs 13.531.33 2.46 B.43 0.81 7.78 98.36 12.75 6.883.02 1.35 25.17 13.49 2.70 1.56 8.579.07 171.60 10.194.63 163.10 62.48 50.16 1.62 114.01 1.825.05 2.18 7.958.98 192.286.17 2.383.358.665.52 371.52 6.47 786.86 606.03 1.50 5.143.573.75 G.746.473.94 1.935.59 11.23 7.31 31.44 76.89 1.43 0.209.10 5.905.147.013.43 0.084.43 4.20 4.49 6.71 14.43 0.24 842.629.

These assumptions are also included in Appendix 10-B.032/PKM.4%. 354. For air the average fare in 2007 is CNY 1.0437. the unit benefit is the difference in passenger economic cost between road and LCR (CNY 0. 3. which is explicitly treated in the Project’s Summary EIA. The Consultant’s Supplementary Final Report. LCR composite passenger rate for 2015 is CNY 0.6. 351.45%. As described in Section 3. Volume 2. the benefit is the average difference of route distance savings shown in Table 3. passenger transport benefits are grouped under the following two categories: 353. An alternative approach to estimating the generated passenger benefits for tourists attributable to .3.4. Appendix 10-G. interline. Part E of PRS details the benefits of LCR and is separated into the following 5 categories. This is an average rate applying different tariffs to different train classes (very fast. 356. and transit).056/PKM). The latter is a small cost item explicitly treated in the PRS because it is a needed cost of monitoring. and LCR has been reduced by the cost of fuels in order to avoid double counting of benefits associated with improved overall energy efficiency of LCR compared to other modes described below in Section 10. (A) Part E. These coefficients are taken from the Input-Output table of the Chinese economy for 2002 (China Statistical Yearbook 2006. Appendix 10-G includes the detailed assumptions and methodology used for this purpose. the power cost is estimated at 22. Basically.38 (296 km) applied to the economic cost of rail passenger travel (CNY 0. respectively.12/PKM.1% for operating surplus. Fuel nominal cost for road.413/PKM and for CR CNY 0. 352.1. average bus fare for 2007 is assumed at CNY 0. tourists constitute a portion of the generated passenger traffic. For traffic diverted from other CR routes to LCR.3693/PKM). air. air. and 0. Table 3-23). The annual costs included in the PRS also account separately for land opportunity cost and environmental monitoring cost.1708 and for LCR at CNY 0. air. From audited financial statements of MOR for 2003.1271/PKM).1. the corresponding values for rail are 50. Passenger Transport Benefits are based on traffic forecasts summarized in Section 3. These values are multiplied by their respective diverted PKM to calculate the benefit of rail diversion to LCR as shown in Supplementary Final Report Volume 2.038/PKM. These savings are estimated for diverted and generated traffic separately.2% for net taxes and 10. fast. The economic cost of road transport per PKM is estimated at CNY 0.1% of total revenue less 4. and interline traffic. Volume 2. For generated traffic (both local and interline) the estimated PKM savings are multiplied by one-half of the average economic cost savings to passengers of road versus LCR.056/PKM.144/PKM derived from total LCR passenger revenue estimated in Section 9. respectively. and are used to estimate the benefits of the Project for passenger transport for local.79%.38/PKM (based on bus passenger surveys conducted in the PIA). From the Financial Analysis. 358.16/PKM and for CR (based on actual passenger revenue and PKM data for 2005) CNY 0. 350. and rail were CNY 0. For air it is CNY 0. Appendix 10-B and takes into account productivity increases of cultivated land by different types of land use. the unit benefit is the difference in passenger economic cost between air and LCR transport (CNY 0. and other rail versus LCR. To express the nominal costs in economic terms. CR. and conventional trains) and services (local.A: Transport Cost Savings to Passengers. For traffic diverted from road. CNY 0.104 349. and other CR routes. respectively. In the case of diverted passenger traffic from road.2% of the operating cost for LCR. Cost savings to passengers are estimated for diverted traffic from road. The calculation of the economic value (opportunity cost) of land is detailed in the Consultant’s Supplementary Final Report. Part E. transit.331/PKM and CNY 0. 357. value added for road and air transport services is assumed at 48. For traffic diverted from air. These costs are net of fuel/power costs in order to avoid double counting of energy benefits. 355. air versus LCR. The nominal cost for road.

4%. To avoid double counting for national fuel and power savings separately estimated. Based on assumed annual leisure and work time of 12 hours/day.086/TKM. the operating surplus and net taxes portion of the value added is 16. post and telecommunications.1954/TKM versus CNY 0. time savings between road and LCR and other CR routes and LCR were derived. Appendix 10-H includes the detailed assumptions and methodology used for this purpose. These savings are computed only for diverted traffic.68/TKM and CNY 0.1954. A downward adjustment is made to eliminate double counting in generated passenger transport benefits due to separate estimation of tourism benefits for LCR.B: Travel Time Savings. These values are applied to the diverted traffic from road and other CR routes to LCR. (B) Part E. Chengdu. Part E. Based on these assumptions. CNY 4.700/month (2007 value) based on the passenger survey data. No travel time savings is assumed for diverted traffic from air since the door-to-door trip time by air and LCR is roughly equal between the three city pairs of Lanzhou. During the first year of operation. Volume 2. The computational details of the approach used for the period 2015 to 2034 appear in Supplementary Final Report Volume 2. Freight transport benefits are grouped under two categories: 1110. Volume 1).859 per tourist. Tourist trips would be both interline and local. the economic cost of truck transport per TKM is estimated at CNY 0. Appendix 10-K. Shipper cost savings are estimated for diverted traffic from road at CNY 0. Due to frequent stops and congestion. and operating surplus of 0. 360 hours/month. respectively was used as nominal financial value for road and CR.0 billion in 2005 with an average expenditure of CNY 468 per tourist. respectively. net taxes of 3. Supplementary Final Report Volume 2. These figures are derived from MOR’s audited financial statements for 2003 which represents data similar to the 2002 IO tables used for road transport.2. Road transport service value added is assumed as 48. From the direct input coefficient of the input-output table of the Chinese economy. For traffic diverted from trucks.02 for CR. The economic cost of CR freight traffic inclusive of RCF surcharges is estimated at CNY 0.0071 hour/km and 0. This is conservative as it does not provide for the likelihood that real incomes will rise in the future. 2006 Table 16-25) as compared to 140 km/ph for travel on LCR. an average trip speed of 70 km/hr was used for road transport (a composite of speeds on existing provincial roads and future expressway).72/hour is used to represent the economic value of time for each person. the economic benefit is the difference in economic costs between truck and LCR transport (CNY 0. In the Supplementary Final Report. For traffic diverted from other CR .086/TKM (including RCF).2: Freight Transport Cost Savings to Shippers for Diverted Traffic. (A) Part E.10 for trucks and CNY 0. Input-Output coefficients for 2002 for transportation. The average speed of road transport on local roads and on trains on CR has been confirmed by schedule data collected in the Consultant’s rail and bus passenger survey (see Section 3 of the Final Supplementary Report.0082 hour/km. A similar approach was used for diverted traffic from other CR routes. For diverted traffic an average tariff of CNY 0. Appendix 10-H details the estimated shipper cost savings for freight traffic. The corresponding figures for Sichuan are CNY 35. the number of generated tourism passengers is 338 thousand.1598/TKM) with the same distance between truck and LCR. these nominal rates were adjusted downward by CNY 0.0356/TKM or CNY 0. Table 3-22. Tourism earnings in the Chongqing Municipality amounted to CNY 30. 359. The distance saving for LCR over road and CR is 0. Freight traffic forecasts from Tables 3-24 and 3-32 of the Supplementary Final Report Volume 1.5% in the commerce and catering trade sector.1% of total revenue with 4.026/TKM based on nominal financial cost to shippers of CNY 0.9 billion and CNY 2. and 65 km/hr running speed for normal CR services (CSY.734 per tourist and for Gansu Province CNY 6.79%.A: Shipper Cost Savings.1% for operating surplus from China Statistical Yearbook 2006. 361. Section 3 are used to estimate the benefits of the project for incremental freight transport along the LCR. Based on these values.1954/TKM.1. The average earning per tourist for the two provinces and the municipality is CNY 890.2% for net taxes and 10. and Chongqing for which the diverted traffic estimates are made from air to LCR. The median income of train passengers is estimated at CNY 1. value added of 50.68 billion and CNY 1.45%.105 LCR is through use of net economic value. 360.

Volume 2.4 billion for maintaining prc’s road network. The second category is the avoided highway routine and periodic maintenance costs.3: Generated Freight Transport Benefits. was used to estimate the time savings value of diverted traffic from road and other CR routes to LCR. this traffic will be handled by roads. As presented in Supplementary Final Report. The adjusted economic value per ton for containerized and bulk freight. As shown in Supplementary Final Report Volume 2. Multiplying this figure by the value of 5. It is estimated that truck charges in the Project area are going to decrease after LCR commences its operations to stay competitive with the railway. Supplementary Final Report. The third category is the avoided truck shipping charges by freight shippers. wages. wages. The adjusted economic values per ton represent the net economic value.2. For diversion of containers from CR. taxes on production. 362.8 trillion. an annual maintenance cost of CNY 0.e. computed in Supplementary Final Report. percent net taxes.106 routes to LCR. The construction of LCR will help avoid some costs that would not otherwise be possible. 366. These savings are computed only for diverted traffic. this is used as a basis for annualized investment costs). 363. Appendix 10-I presents the details for this estimate.17 billion TUs diverted from road to LCR in 2015 yields an economic benefit of CNY 41. SERF. i. As noted. the government spent CNY 12. (B) Part E. which is estimated by the TERA CR-TEM to be 293 km. the . one-half of the product of per ton value of operating surplus and taxes multiplied by estimated generated freight tons is taken in the computation of the estimated value of the triangle created by the shift in the demand curve. The first one is the avoided highway investment costs. Without LCR. The without project condition assumes that normal investments will be made by both national and local government agencies to accommodate increasing traffic volumes due to the general economic growth. average trip speed of 32 km/hr for normal CR rail is assumed (CSY 2006. non-tax elements. 367. Volume 2. The Direct Input Coefficients of the Input-Output Table of China for 2002 were used in this computation as this is the most recent data. Since generated traffic benefits represent producer’s surplus. There is no container traffic diverted from road because very few containers currently move by truck in intercity transport where rail-truck competition would be expected. For the purposes of the economic analysis. An opportunity cost of capital of 8% per annum was assumed. 365. Some road segments would be congested and additional investments would be needed to relieve congestion and improve safety. the value of output at economic prices less the costs of production (sum of all intermediate input costs.008/tu in 2007 constant terms using an annual escalation of 4%.74 million in terms of avoided road maintenance costs. Volume 2. Appendix 10-K. The value added section of the table separately itemizes fixed asset depreciation (in the absence of better data. Appendix 10-J. Part E. In 2005. Truck container transport is largely confined to local areas (within 50 km) where rail transport would not be competitive. Part E. The cost of road improvements necessary to accommodate the growth of traffic was estimated as an initial investment in the first year and as incremental investments thereafter to handle the capacity increase needed due to the marginal increase in traffic in ensuing years.B: Travel Time Savings.007 per converted km is calculated.0356/TKM. Given that the converted highway TUs in China for 2005 was 1. six categories of avoided costs are included in this part of the PRS. depreciation and operating surplus for each group. the benefit is the rail diverted TKM applied to the economic rate of CNY 0. percent value added.4: Avoided Costs and Other Benefits. For the traffic diverted from other CR routes the freight time difference was based on the difference in the length of haul between the LCR route and the alternative CR routes. 364. significant investments are taking place in the project area. and annualized investment costs). This unit cost is restated as CNY 0. an adjusted economic value added for the six commodity groups was computed based on current financial value. Table 16-25) as compared to 80 km/hr for transport by container trains operating on CR core electrified lines designed for express double stack service. Appendix 10-J. and operating surplus.

however. buses. and cars as well as less energy used by the transport sector. 368.4 tons of CO2 per million PKM and 24 tons of CO2 per million TKM. This figure does not include 360. the accident rate on CR has been declining. or CNY 98. On the other hand. The rate of road accidents with fatalities per 10. Discussion with Qian Yiwen Senior Project Manager.0.07667/TU in constant 2007 values. This saving is applied to 10% of all the local road traffic estimated as beneficiary truck shippers in the PIA. .00007 per TU was calculated for railway accidents. Volume 1. (UK).06816/TU in 2004. In PRC road accidents disproportionately harm low income groups. Based on recent research conducted by the International Energy Agency24. which is restated as CNY 0. road accidents have a significant adverse impact on the poor and on PRC’s use of scarce medical resources. Accident costs have been expressed in terms of highway TUs or CNY 0. Under provisions of the Kyoto Protocol. December 2005. respectively. With the diversion of significant amounts of freight and passengers from road to rail.8 tons and 23 tons. 370. there will be benefits to the country due to reduced pollution from trucks. annual accident cost savings for traffic diverted from highway to railway is estimated at CNY 396.2 and 10. compared with road. and bus passengers. Appendix 10-K. yield a savings of 0. In a dynamic sense. According to data provided by MOR. Using the estimates. TUs diverted from road to LCR. The IEA has worked with the Sustainable Mobility Project to develop a global transport spreadsheet model that is useful for conducing projections and policy analyses.000 injured work days lost. For diversions from CR to LCR the corresponding savings are 11. energy use and other indicators through 2050 for a number of countries (including China) and regions of the world. a financial loss of CNY.3.6. the railway losses in 2005 due to damage to rolling stock and railway installations in large and very large accidents were CNY 34. that the gross economic benefit estimated for diverted and generated traffic described in Supplementary Final Report. 25.and motorcycle riders. the inherent weakness of truck competition in heavy bulk commodities such as coal and iron ore. As shown in Supplementary Final Report. The CR volume for 2005 was 2. which if valued at CNY 150/day. Volume 2. There were 43 fatalities to staff or passengers which at CNY 300. IEA/SMP Model Documentation and Reference Case Project July. Therefore.7 billion during 2004. medical costs as well as estimates of loss of earning potential of the victim(s).6. for a total CNY 173 million. such as pedestrians. 369. Appendix 10-N). It should be recognized. resulting in reduced truck tariffs without a significant shift of rail traffic to trucks. The spreadsheet provides data for all modes and vehicle types. Derivation of these pollution estimates and benefit calculations are described more fully in Supplementary Final Report. Medical costs may be assumed at CNY 200/day or an additional CNY 72 million. Estimates by the ADB indicate the total cost of road accidents in China is on the order of $12. This estimate includes costs of vehicle and property damage. certified emission reductions are presently valued in China 25 at 24. the cross-elasticity of demand for rail transport is relatively high. The fifth is benefits associated with pollution reduction.000 would add 13 million. This is expected to continue as more inexperienced drivers get licensed. Beijing IT Power Ltd. therefore. Using the average length of haul by trucks in PRC of 65 km (average for 2005 reported in CSY 2006). 2004.107 truck TKM tariff is estimated to decrease by a conservative 10%. These savings for electrified LCR.5 billion. Conversely.068 per TU.3. Volume 2.3 above relate only to the incremental and nonincremental output of LCR. bicycle. cross-elasticity of demand for truck transport is low.8 million in 2015. the number of tons of carbon dioxide (CO2) per traffic unit for road and rail were estimated for China. On the other hand. A static general-equilibrium approach is implied in the estimation of avoided truck shipping charges.68/TKM to CNY 0.1 million. Appendix 10-L.700 billion TU. add CNY 54 million. Sections 10. The fourth category is the avoided highway accident costs (see Supplementary Final Report. projects vehicle stocks. Given. this price decrease represents a savings of CNY 4. The real value of incomes will also rise. avoided truck shipping charges estimated in this Section relate to non-LCR traffic in the PIA. 371. from CNY 0. it can be argued that reduced truck charges would reduce demand for LCR.61/TKM in the Project area once LCR starts operating. Volume 2.000 vehicles has been rising at a rate of 10% annually. were found to be 25.42 per ton to the shipper. given the rail’s capability to carry a wide variety of goods. travel.

By the year 2033. 375. By 2025. 9. 372. 26. Applying these figures and the projected reduction in overall CR traffic results in a savings to the country of more than CNY 1. If the LCR is not built. 376. but carried over roads and other CR routes. though not quantified in the benefits stream. the traffic diverted from highway and other CR routes would not be diverted. the EIRR is 16. This value has been included in the benefit stream for the LCR project. Appendix 10-K. Volume 2. is the difference between the total Project costs and total Project benefits. The reduction in volume of CO and NOx have been estimated in Supplementary Final Report. Appendixes 10-A through 10-N.5 billion. hydrocarbons. This productivity savings which represents 0. However. Transport is a critical element for many sectors of the Chinese economy. nitrogen oxides. the savings to the national economy of reduced total energy consumption as a result of diverting traffic from both road and other CR routes to LCR.3 % of manufacturing and 8. Volume 2. Appendix 10-L. . only the CO2 reductions have a readily – identifiable market value and are the only harmful emission included in the Project benefit stream. Unit operating costs for both road and rail transport have been adjusted to exclude fuel cost savings in order to avoid any double counting of this benefit.83 billion PKM. The last part in the PRS is the net benefits. Volume 2.44 billion. As shown in Table 10.12 billion PKM or 0. The computational details are presented in Supplementary Final Report.7% of mining. reducing the transport cost component of their productive inputs and effectively increasing the country’s overall productivity and competitiveness. The Project. This benefit has been computed and included in the benefit stream. National GDP Benefits.6 % of the construction industry. these savings would rise to 40. the absence of LCR in 2015 will mean an additional net burden to the economy in the amount of CNY 9. in part. WITH AND WITHOUT PROJECT CONDITIONS 377.893% and the NPV at the discount rate of 12% is CNY 20. One method to quantify these productivity benefits to the national economy is to calculate the amount of freight and passenger revenue saved by rail transport customers if the LCR is constructed and these productivity savings are realized.Table 2-14 .108 approximately $8 per ton of CO2 reduced. It should be noted that in addition to savings in the emissions of CO2. A summary of this traffic is presented in Section 3 for freight and passenger traffic.1.31% of the CR traffic in 2005 is translated into transport cost savings to each of the economic sectors. The corresponding productivity improvement in passenger transport is 1.1 billion. The average CR revenue in 2005 was CNY 0. this amount increases to more than CNY 29. there are more pollution reduction benefits attributable to the LCR. as well as suspended particles. This. China Statistical Yearbook 2006. The sixth is.19% of overall CR system-wide PKM in 2005. is economically feasible. simply. there will be significant savings in other emissions. 373. Based on the 2000 Input-Output Tables for China26 (most recent data available) the transport component of the economy amounted to 8. such as carbon monoxide. This is a significant productivity saving due to the construction of LCR.109 per PKM. As shown at the bottom of Table 10-1. Clearly. 374. The average distance savings for diverted freight traffic from CR to LCR is 293 km and for passengers 296 km. D. on a strong and efficient transport sector. as described by the conditions outlined above and detailed in Supplementary Final Report. PRS Part F: Net Benefits. continued strong economic growth is dependent.03 billion TKM in moving the same number of tons.056 per TKM and CNY 0.09 billion in 2015. Adding the LCR to the national railway network in 2005 would have reduced total CR system-wide TKM by 6.72 billion TKM and 9.

07 -21.391.96 573.83 4.09 11.22 19.1 are significant.07 E.2 (CNY 20.102.68 13.25 -1.39% 13.18% 5.60 55. .64 1.22 19.81 -11.2: Distribution of Net Project Benefits (CNY Million) Economic Freight Present Difference Passengers Labor Shippers Value 1.58 NPV declines by 3. NPV = net present value at 12%.89 573.47 1.22 -737.355. and national and local economy.13 Government (National/ Local) Economy (National/ Local) 1.58% 52. 379.511.81 5.6 19.540. More importantly.769.60 4. 380.35% 15.22 18.07 -21.17 865.84 N/A 14. Table 10-2 presents the distribution of net project benefits to passengers.41% 15.026.30 -7.121.40%. state and local government. freight shippers.280.99 16. labor.315.25 21.57% 22.45 0.540.92 36.067.07 45.21 -1.22 36.55 5.694.993.774.69 -7.42 66. is the jobs that are expected to be created.103. Financial Present Value 0.92 19. during the 6.55 21.40 4.64 128.13 million) are reconciled with the net benefits included in the economic analysis detailed in Table 10.94% 15.424.436.66% 15.322.81 5. Table 10.230.06 5. these estimates should be viewed as conservative.10% 0. As described in detail in Section 6.89% Source: TA Consultant. if the Project is not built.230.89 -11. Since multiplier effects are not included in the computation of Project benefits.92 19.355.355.511.82 87.102.99% 9.3: Sensitivity Indicators and Switching Values Parameter EIRR Resettlement Costs Civil Works Costs Fixed and Variable Costs Total Costs Generated Freight Benefits Total Freight Benefits Passenger Transport Benefits Delay Implementation by 1 Year Reduce Benefits by 10%.109 378.230. SERF = shadow exchange rate factor.78 128.280.40% -172. The net economic benefits included in Table 10.82 87.436.12 20.42% -24. A 10% increase in total costs reduces the EIRR to 14.581.511.053.78 -737.2 Table 10.56% 14.06 18.48% and for freight transport benefits at -24.17 0.21 7.80 3.06 -2.31 14. Increase Costs by 10% Reduce SERF by 20% Reference Value Change By Revised EIRR Sensitivity Indicator Switching Value (%) NPV @ 12% (CNY million) 100% 10% 20% 10% -80% -10% -50% 15. The switching value for total costs is reached at +22.717.560. which directly relates to the Project’s objectives.879. CNY = yuan.81% 54.769.35%.581. Of more significance.81 Total Net Benefits 1.06 18.641.32 5.06 -442.796.193.069.94% 376. Table 10-3 summarizes the results of selected sensitivity tests made on the data included in Table 10-1.48% -247.81 0.00 4.077.986.91% and a 10% decrease in freight transport benefits reduces the EIRR to 15.158.69 -7.13 15.00 55.315.92 36.14 -26.948.1 67.5 year construction period as well as during operation of LCR significant contribution is expected in terms of jobs creation and poverty reduction.0 40.5 7.102. Description Benefits: Passenger Transport Cost Savings Freight Transport Cost Savings Time Savings Passengers Time Savings Freight Shippers Generated Freight Traffic Benefits Other Benefits Total Benefits Costs: Initial and Recurring Capital Operating and Maintenance Co Taxes Total Costs Net Benefits Source: Consultant.424.22 18.81 14.35% 20.25 29.85 -10%.42 66.06 -2.64 36.581.543.27 3.315.43 19.230.10 0.986.75 4.08 12.78% 28. +10% -20% 13.64 21.29 13.386. the generated benefits will not materialize.06 5.07 -18.540. Sensitivity and Risk Analysis 381.42 66.23 12.925.717.76 -11.315.91% 15. EIRR = economic internal rate of return.348.1.436.2 -67.948.581.053.57 16.322.66% -24.81 1.540. The economic effects of these from Table 10.

385. it is equally unlikely that any risk associated with reduced project benefits would make LCR infeasible. it is unlikely that any risk associated with cost overruns will cause an EIRR of less than 12%.1 for EIRR and NPV. LAR costs.110 382. Following the 500 iterations. A Latin Hypercube type random sampling was used and the simulation run was made with 500 iterations. 384. Past experience of the EA in controlling costs and completing railway infrastructure projects at lessthan-budgeted cost provides sufficient assurance that costs will remain within budget in this Project. A uniform distribution of variability provides a higher probability of the occurrence of a wide range of parameter values than a normal distribution. and avoided costs and other benefits. . As for resettlement costs. the results show that the EIRR would exceed 12 percent with 100 percent probability.465% and the mean 16.123%. and annual fixed and variable costs carry relatively less risk during Project implementation.42% respectively) than total freight benefits (switching value of -24.218% with a standard deviation of 0. the sensitivity indicator shows insensitivity of the EIRR. 386. Given the detailed analysis made by the Consultant benefiting from the experience of the FSDI and other MOR units. A one-year delay in Project implementation reduces EIRR to 14. Costs for resettlement. and annual fixed and variable costs. civil works. Out of the 500 iterations allowing variability in benefits from -15% to +10% and costs from -10% to +15%. Project costs and benefits were assumed to change following a uniform distribution so that variability in parameter estimates will have an equal likelihood of occurrence.35% and -247. 383. The sensitivity tests shown in Table 10-3 indicate that the NPV for these cost categories is positive within the plausible range of variability for these costs.99%.387%. freight and passenger benefits. Given the experience of MOR in constructing large scale rail infrastructure and estimating project costs in a realistic manner. the lowest EIRR was 15. The Project’s EIRR is less sensitive to passenger and generated freight projections (switching values of -172.58% and NPV by 52.40%). the highest 17. The parameters which were allowed to change include civil works costs. A stochastic simulation of variability in key Project parameters was made by use of the @RISK software. The results are summarized in Figure 10.

500 0.1621779 0.5 23 Values in Thousands 5% 90% 15.000 0.1: Simulation Results for EIRR and NPV for LCR @RISK Output Graphs Simulation: 1 / Output: EIRR for LCR Distribution for EIRR for LCR/A101 100 90 80 70 60 50 40 30 20 10 0 0.500 1.000 1.5 18 20.62 2.175 5% .2293 5% 20.1684 Simulation: 1 / Output: LCR NPV @ 12% Distribution for LCR NPV @ 12%/A102 2.1625 0.111 Figure 10.1557 0.15 Mean=0.500 Values in 10^ -4 Mean=17674.1687 90% .1179 .1563 5% 0.000 13 15.

0% 30.0% 60.876.800% 16.844% 20.3.0% 65.207.019684686 2.0% 35.660678422 2.112 @RISK Output Details Report Output Statistics Outputs Simulation Workbook Worksheet Statistics / Cell Minimum Maximum Mean Standard Deviation Variance Skewness Kurtosis Number of Errors Mode 5.126% 16.3.393% 18.218% 17.117.19 17.0% 25.08 16.0% 70.682 0.569% 15.57 16.501% 18.00 16.159% 17.13 16.62 0.882% 16.61 16.048% 16.365.333% 18.0% 80.463. Table 10-1.193.059.987% 16.81 16.33 16.465% 22.0% 20.0% 40.418.57 1.0% 90.27 15.22 16.063.03 16.90 16.270% 17.70 15.49618E-05 2104147.937.39 16.0% EIRR for LCR LCR NPV @ 12% 1 1 Table10-1 AppendixTable10-1 Appendix Table 10-1.0% 85.999.59 15.229.99 15.191.555% 18.89 .933.674.598. $A$101 $A$102 15.213% 17.708% 15.061.450.387% 1.936% 16.0% 45.706.77 15.633% 19.23 16.676.700% 19.20 15.0% 10.0% 55.0% 50.0% 95.024189652 0.63 16.123% 13.0% 75.0% 15.821.731056314 0 0 16.103% 17.433% 18.518.454.84 16.241.

Appendix 1

113

APPENDIX 1 – SOCIAL DEVELOPMENT ACTION PLAN
Proposed Actions
A. Job creation during construction
• Use of local unskilled labor including
those from poverty villages in remote
areas especially the poor, women,
ethnic minorities, and vulnerable groups
• Priority given by local governments to
local sellers in providing services, food
and supplies at service areas and
construction camps
B. Use of local materials for
construction
• Purchase of local construction
materials meeting necessary quality
standards
• Use of workers from poverty
households for sourcing materials
especially women
• Borrow pits and quarries are returned
to their natural state or developed as
fish ponds or other beneficial land use
C. Jobs during operation of railway
• Hiring and training of the poor, women,
and other vulnerable people
• Design of station areas to allow for
handicraft shops, gift shops,
restaurants, etc.
• Local businesses meeting passengers’
needs
• Local governments design commercial
areas adjoining stations for local
businesses
D. Control of HIV/AIDS/STIs and
human trafficking
• Health testing, counseling, and
referrals in construction camps;
availability of condoms
• Awareness and prevention on
HIV/AIDS/STIs and human trafficking
campaigns

Targets
60% of unskilled labor force
hired locally (71,400 12-month
jobs), including women
More than 50% of unskilled
labor from poverty households
Labor recruited from at least 20
remote poor villages

Agencies Involved
MOR, contractors,
poverty reduction
offices, All-China
Women’s Federation
(ACWF), and labor
bureaus

Timing
2008–
2012

Funding Source
Labor costs are
included in Projevct
costs
Recruitment and
training from local
government budgets

Monitoring Indicators
No. of local labor employed by
gender
No. of workers from poverty
households
No. of local sellers provisioning the
work camps by gender
Contract clause

All materials locally available
sourced locally
22,000 person-years sourced
locally in the provision of
construction supplies
11,000 person-years or more
than 50% of workers sourced
from poverty households

MOR, contractors,
and local
governments

2008–
2012

Included in contractor’s
budget for civil works

Amount and source of supplies from
local area
No. of local workers and from poor
households Restoration of lands
used temporarily
Contract clause

poverty households; >25% are
women
650 workers trained and
employed in railway operations,
160 women hired and trained,
40 women-owned small
business,
50 local businesses started

MOR, Project
Company, poverty
reduction offices,
ACWF, and other
local government
agencies

2013
onward

Railway Company for
workers
ACWF for business startups, poverty aspects

No. of workers hired and trained in
total, by gender, ethnicity and poor
No. of workers trained in total, by
gender and poor
No. of women-owned businesses
started

All workers understand dangers
of HIV/STI & human trafficking
Testing and medical referral
service available to workers and
local residents

MOR, contractors,
county health
departments, and civil
affairs bureaus

2008–
2012

Project, contractors and
local health and security
bureaus

No. of health workers
Incidence of HIV/AIDS
No. of posters/pamphlets
Media programs on TV and radio
stations
Number of tested people

Appendix 1

114

Proposed Actions
E. Income recovery for resettlement
affected persons (APs)
• Identification of vulnerable people
• Income restoration measures
• Readjustment of land
• Training and special assistance
G. Village development
• Provision of basic infrastructure and
social services in poverty villages along
the railway alignment

Targets
All APs, with special measures
for vulnerable people, women,
the poor and Tujia (1,000
household with land loss; 200
households to be relocated; and
one seriously affected village
Poverty villages and villages
without access to road, safe
drinking water, telephone

Agencies Involved
MOR, local
government
resettlement offices,
and village
committees

Timing
2008–
2011

Funding Source
Project and local
government (as per
Resettlement Plan
budget

Monitoring Indicators
Income level of APs, by ethnicity
No. of people trained and new jobs,
by gender and ethnicity
Grievances and redressal

EA, provincial and
county governments.

2008–
onward

Local governments with
assistance from
contractors

Number of villages provided with
road access, safe drinking water,
and telephones

F. Construction safety
• Ensure safety guidelines developed
and incorporated into contracts with all
contractors
• Periodic inspections by MOR
H. Protect communities from
construction and operation
disturbances and damages
• Prohibit nighttime construction and
adherence to noise standards
• Building of over/underpasses where
needed
• Reconstruction of damaged irrigation
and drainage systems and local roads
• Avoid or mitigate damage to housing
caused by blasting
I. Sustainability of maintaining
households out of poverty
• Provide assistance in reducing poverty
factors
• Provide counseling on preparing for
transition
• Provide training for further employment
• Assist in preparing a business plan for
starting a business once the
construction work is done

All contractors and construction
workers

MOR, contractors

2008
onward

Project budget

Signed contracts
No. of workers injured
No. of accidents
No. of inspections

All communities in the project
area (84 villages)

MOR and contractors

2008–
2012

Project budget

Working hours
Under- and overpasses
Irrigation and drainage canals and
roads repaired
Housing damages
Grievances and redressal

Workers from poverty
households remain above the
poverty line after construction
period

Local government
agencies concerned
with poverty reduction

2008
onward

Local governments
(using portion of civil
works tax revenue)

No. of workers counseled by gender
and ethnicity
Training offered
No. of poor workers assisted to start
a business

Appendix 1
Proposed Actions
J. Tourism development
• Link local communities with tour
operators and companies to develop
historical cultural package tours
• Develop local handicrafts for sale by
women and poor households at
stations and tourist sites
• Provide start-up funding for restaurants
and guesthouses near scenic and
historical sites
• Develop posters on environmental and
cultural relics protection
• Promote tourism in the region
• Involve local poor, women, and
vulnerable through provision of tourism
skills training

Targets
New tourist-based businesses
Cultural and village tours led by
two poverty villages
Tourism-related employment,
especially for the poor, women,
vulnerable people, and ethnic
minorities:
- Poverty villages
- Tujia villages
Employment for women
Training, of which 50% are
women

Source: Consultant.
* The agency(ies) marked in BOLD designate lead agency(ies).

Agencies Involved
MOR, contractors,
tourism bureaus,
poverty reduction
offices, and women’s
federations

Timing
2008
onward

Funding Source
Tour companies, railway,
local businesses, local
governments

115

Monitoring Indicators
No. of tourists in area
Increase in number of tourist
facilities and revenue
No. of the poor, ethnic minorities,
and other vulnerable people that
participated in tourism services and
handicrafts, by gender
No. of persons trained by gender

The following descriptions match the SDAP as included in the PSA and as appended to this document. .957 person-years of employment) while another 25 percent of jobs will to be allocated to women. the PSC’s team will include social development and resettlement specialists who will assist RSO to: (i) implement the SDAP. and NGOs.). Employment During Construction. (ii) DIRECT PROJECT BENEFITS 5. in addition. Use of Local Materials for Construction. 7. LCR Company. 6. The Poverty and Social Assessment (PSA) completed for the Lanzhou – Chongqing Railway Development Project (LCR) includes a Social Development Action Plan (SDAP) which comprises a number of measures for: (i) mitigating the risks or adverse social impacts associated with the project. 10. 9. The funding for this action is proposed to be included in civil works contracts and no additional funds are required. (iv) assist the RSO in implementing the Communications and Consultation Plan. other vulnerable and ethnic groups. provincial and county/district local governments. 8. 2. and (iv) pre-training by local governments. The RSO will coordinate with existing local government and ACWF programs for to provide information to people in the project impact area (PIA) about how they might access existing poverty alleviation and training programs and assistance. This will include: (i) use of local unskilled labor including those from poverty villages in remote areas especially women. if qualified. Data may also be obtained from the socio-economic baseline survey. (ii) use of workers from poor households for sourcing materials especially women and ethnic minorities. legal wages will paid to workers and equal pay will be given for equal work for men and women. (v) assist RSO to implement the project’s resettlement plan (RP) including the necessary livelihood restoration and rehabilitation measures. and (iii) borrow pits and quarries returned to their natural state or developed as fish ponds or other beneficial use. especially women from poor households or from ethnic minority groups.Appendix 2 116 OPERATIONALIZING THE SDAP (i) INTRODUCTION 1. (ii) identify other agencies to assist or support implementation of the SDAP. (ii) assistance with school fees for children of female headed households to enable women to work on the project. and. (iii) priority given for local sellers in providing services and supplies at the service areas and construction camps. The LCRC will consult with county and district poverty alleviation offices (PAOs). This will include: (i) purchase of local construction materials from local suppliers (rather than from outside middle-men etc. The target for this action is: at least 50 percent of unskilled labor will benefit poor and poverty households (at least 233. and (ii) enhancing the benefits of the LCR project. 4. and AllChina Women’s Federation (ACWF) to identify poor households (over and above designated poverty households). The MOR is the executing agency (EA) of the project while the LCRC is the implementing agency (IA). It is expected that the LCRC will be supported in implementation of the project by a project supervision consultant (PSC). The purpose of this document is to elaborate on the institutional arrangements and process for implementing the SDAP for the main stakeholders including: Ministry of Railways (MOR) and its Railway Support Offices (RSO). The PSC will be responsible for ensuring that relevant and applicable clauses are included in the contract and bidding documents. 3. and there will be no involvement of child labor.

(iii) promote service enterprises that meet passengers’ needs. at least 50 percent of workers will represent poverty. gift shops.. women. The LCRC will be responsible for ensuring that relevant and applicable clauses are included in the contract and bidding documents. Business Development Related to Railway Operations. poor and vulnerable groups with assistance from ACWF) will be established to serve passengers. some 165. and (vi) train workers through LRC.031 female and ethnic minority workers will be employed. generated freight jobs and tourism jobs). the remaining workers will be trained and employed in railway operations. The funding for this action is included in civil works contracts and no additional funds are required. restaurants. The targets for this action include: local sourcing of materials (when possible). and 865 women to be hired and trained. In addition county and district ACWF will provide information to people in the PIA about how to access existing training programs (through PAOs) and seek assistance from existing providers of micro-finance. (ii) design of stations to allow for handicraft shops.Appendix 2 117 11. counseling and . HIV/AIDS (health checks and STI testing). The targets for this action include: (i) by the year 2015 – a total of 113. MOR will encourage the LCRC to engage local people (as appropriate) for unskilled and semi-skilled positions for all aspects of railway operations.100-150 small businesses (by women.680 total workers of which 2. local sourcing of unskilled workers. The LCRC will coordinate with PAOs and ACWF to ensure that people from poor households and female headed households are given opportunities to work in the sourcing of local services and materials. The ACWF will work with poor and ethnic minority women to show them how to apply for micro-finance loans that will enable them to set up small businesses (as providers of goods and services) either in. (ii) by 2017 at stations . 18. (iii) PROJECT SOCIAL SAFEGUARDS 20. (v) generate jobs during operations (induced job creation. This will include: (i) use of the poor. and (iii) by 2025. MOR and LCR Company will coordinate with ACWF and PAOs to identify poor households (over and above designated poverty households) and resource adult members who might work at railway stations or within the LCR Company organization (for maintenance etc. book and newspaper shops. and at least another 1. The funding for this action will come from ACWF’s loan program for business start-ups. 17. (iv) design of commercial areas in a manner that ensures that businesses and small manufacturing units may develop.452 direct jobs including 11730 reserved for workers from poor or vulnerable households. 19. Training will be provided by LCRC to all workers engaged for operations. 15. The LCRC will consult with local government and contractors in the identification of appropriate local sources of materials. and existing PAO programs (including tax revenue of local governments from construction of the project).062 will be sourced from poor households. ethnic minorities and other vulnerable people for railway operations and providing appropriate training. ethnic minority or female-headed households. Control of Communicable Diseases and Human Trafficking: This action includes: awareness and prevention of STIs. The contractor is responsible for making the payment. The LCRC and local government will establish a process for payment of locally sourced materials to the village administration. Such sources must also be in accordance with the project’s environmental management plan (EMP). etc.). 14.. 16. or nearby railway stations. 12. 13.

and LCRC (operations). The contractors will adhere to the project’s environmental management plan (EMP) which also contains a range of health and safety provisions. Any infrastructure or land that is damaged and can not be rehabilitated to its pre-project standard will be compensated by the contractor. 21. 25. 22. HIV/AIDS and human trafficking and safe migration practices. (iii) reconstructing damaged irrigation and drainage systems as needed. The LCRC will be responsible for ensuring that relevant and applicable clauses are included in contract and bidding documents. public meetings. 29. . (iv) rehabilitating land used for borrow pits or materials stockpiles. schools. women. (ii) LCRC will facilitate the implementation and monitoring of community awareness and prevention programs based on an outreach model and the materials and methods developed by existing HIV/AIDS awareness and prevention programs and targeting HRGs. 26. Protection of Communities from Construction & Operation Disturbances. radio and TV messages. and (iii) STI testing and medical referral service will be made available to workers. such as under-passes. (ii) promoting safety measures to area residents through media. Community consultation. The contractors through the RSO (construction). are required. Targets for this action include: (i) all workers will attend training and receive health checks. 31. according to the Communications and Consultation Plan will help to identify whether special measures. through posters in stations and public buildings. and Training for County CDC or Health Dept. The targets of for this action include: (i) a minimum 300 work days of fatality-free construction per year. 30. Construction and Operations Safety. 24. The funding for this action will not require additional costs as during construction it will be identified as a line item in the civil works budget and the cost for the safety campaign during operations will be identified in LCR Company’s internal budget. (iii) monitoring safety measures through periodic inspections by MOR. (ii) building of under-path crossings where necessary.Appendix 2 118 referrals in construction camps and availability of subsidized condoms at work camps or entertainment centers. and local residents (targeting HRGs). workers targeting commercial sex workers (CSWs) and high risk groups (HRGs) in the community. This action includes: (i) ensuring the safety of contractors and camp-sites through the guidelines developed and incorporated into contracts with all contractors. will meet all local and national laws and regulations concerning health and safety. Project monitoring and independent monitoring will ensure that all community infrastructure and land (community or private) used during construction is rehabilitated. communities along the railway. Advocacy (by CDC) aims to garner institutional support for program implementation (such as contractor management and company leaders). HIV/AIDS/STIs and human trafficking awareness and prevention media campaign will include posters and pamphlets at construction sites and service centers. 27. 23. and (vi) implementing all relevant measures in project’s EMP. (v) building of fences along the railway. The RSO and PSC will assist the contractor to comply with the social protection measures included in the SDAP and project’s EMP. 28. and (ii) LCR train operation accident rates less than 60 percent of overall MOR accident rates. and. This action includes: (i) prohibiting night-time construction and adherence to noise standards. (ii) all workers will be informed about dangers of STIs. The implementation arrangements for the program include: (i) LCRC will be responsible for ensuring that relevant and applicable clauses are included in the contract and bidding documents.

and (v) providing tuition assistance to female heads of household or from poor households. The RSO will consult with county and district PAOs and ACWF to identify poor households (over and above designated poverty households).. Funding for special actions such as under-passes will either be included in the civil works budget or county/district budgets. Monitoring will be undertaken by RSO and external monitoring agency. 33. (ii) implementing measures included in project’s EMP for environmental and social impacts.Appendix 2 119 32. Environmental Protection. The implementing agencies include the RSO and coordinating with PAOs. The funding for this action will come from the project’s RP and county and/or provincial budgets for village resettlement prepared during the RP process. NGOS and other project/program implementing agencies to identify existing or potential programs that can be supported by railway development. The target for this action is: full compliance with all actions listed in relevant project documents such as EMP and RP. (iv) special assistance (e. (ii) training for affected people (APs) undertaking new non-farming livelihoods. 35. and. 44. Income Restoration for Resettlement Affected People. and (ii) adverse impacts mitigated to acceptable levels. free labor for households lacking capacity) as needed. (ii) counseling and training for livelihood sustainability. The funding for this action will come from the project’s environmental protection budget (including EMP) and the civil works contracts. The LCRC will be responsible for ensuring that relevant and applicable clauses are included in the contract and bidding documents. The contractors will comply with the SDAP and EMP in terms of meeting targets for local people engaged in environmental protection activities. Enhancing Existing Poverty Alleviation Programs. (iv) assisting in the preparation of business plans for starting businesses once the construction work is completed. and female APs or female heads of AP households. (iii) restoring and rehabilitating livelihoods. The targets for this action (see targets above) will include identification of ethnic minority APs. (iii) training for post-construction employment. the contractor will be liable for payment of compensation for damages. This action includes: (i) providing assistance in alleviating poverty. 42. especially vulnerable APs. The implementing agencies include the RSO. This action includes: (i) hiring poor unskilled workers for planting and other environmental protection tasks. Data may also be obtained from the socio-economic baseline survey. 36. 41. 38. 34. The funding for this action will come from the project’s environmental protection budget (including EMP) and the RP. (v) utizing land reclamation funds for income restoration. 40. RSO/Railway Construction Support Office (RCSO) and village committees. ACWF. 37. . (iv) COMPLEMENTARY ACTIONS TO BE TAKEN BY OTHERS 43.g. and PAO programs. and. 39. This action includes: (i) readjusting land. Compensation for damages will be at the same unit rates as included in the project’s RP. local government. The targets for this action include: (i) 50 percent of unskilled workers hired from poverty households. transition.

Funding for access roads will come from local government infrastructure budget. The targets for this action include: (i) all affected villages rehabilitated. Identification of access roads and/or spur lines will be undertaken by MOR/ RSO. women and vulnerable people. women. The funding for these actions will be the existing local government budget for linking with existing PAO efforts. and encourage local tourism operators and community to provide the services required. schools and clinics). and using a portion of the civil works tax revenue for (3-4 percent) local governments to hire one or two people per county/district to coordinate between the existing programs managed by PAO and other local agencies. schools and clinics will have access. and Chongqing local governments for infrastructure development. (iii) all people/households assisted raise incomes and remain above poverty line. (ii) supporting Government aim for increased rural-urban migration from rural areas along LCR. 53. and ethnic minorities. (ii) develop local handicrafts for sale by women. This action focuses on: (i) encouraging development of new. (iii) provide start-up funding for restaurants and guest houses near scenic and historical sites. safe drinking water. (ii) rehabilitation of villages affected by land acquisition and resettlement through village development plans. 46. 54. Urbanization including micro-urbanization. (ii) 25 percent of women and ethnic minorities hired during construction. (iii) construction of roads that enable station access roads. (iv) develop posters on environmental and cultural relic and site protection. and (iv) installation of village infrastructure (safe drinking water facilities. or expansion of existing. 50. and (v) encourage involvement of local poor. project funds will be used for construction access roads that can be converted into local access roads post-construction. ACWF. Target numbers will be determined after . This action is largely driven by implementation of existing development plans. (v) promote tourism in the region. 49. This action includes: (i) link local communities with international tour companies to develop historical or cultural package tours at existing sites or open new ones. especially for the poor. and. The RSO will work with foregoing agencies to identify potential tourism resources. including ethnic minorities in tourism development. funding for spur lines will come from MOR. Shaanxi. PAOs. LCR Company and the local community. This action will include: (i) construction access roads converted to local roads. (ii) 50 . ethnic minorities and poor households at stations and tourist sites. The targets for this action include: (i) additional international tours to and through PIA linked with access from LCR. enterprises in urban areas along the LCR alignment. 47. 48. will remain gainfully employed. Tourism development. and (ii) all villages without access to road. Sichuan. and Bureau of Minority & Religious Affairs.Appendix 2 120 45. The funding for this action will be generated by tour companies. Village Development. ACWF. especially as potential employment hubs. Targets for this action include: (i) 50 percent of unskilled workers from poor households hired during construction remain above the poverty line. RSO and PSC will be responsible for monitoring of SDAP implementation. local businesses and tax revenue from local governments 51. The funding for this action will be sourced through the RP (village development plans). (iii) village tours let by two poverty villages per county (where relevant). power. telephones. as well as development budgets included for Gansu. 52. 55. telephone. The main implementing agencies for this action are the county/district Tourism Bureaus.75 new tourist based businesses. the specific development plans prepared for villages affected by land acquisition (as identified in the RP) and county/district government.

Funding for this action will initially come from the project’s SDAP and will include implementation of human trafficking awareness and prevention (as part of the STIs. to support MOR in applying for the grant. (ii) support to existing farmer associations. The PSA recommends that the Government request ADB to provide a TA. (iii) identification of mechanisms for largerscale import and export of agricultural goods. The implementing agencies should be included in MOR’s request for assistance to ADB for TA. Consultation should also be undertaken with CIDA and World Bank. 56. and (iii) promoting safe migration (anti-human trafficking measures). Project specific actions are linked to providing safe migration during construction and increasing awareness. This action is part of a larger goal of Government to encourage rural-urban migration. The Government will be expected to finance the remaining local currency cost by providing in-kind contributions of counterpart staff. funded by the Government of Japan or Japan Fund for Poverty Reduction. 59. This action includes: (i) assessment of the needs and capacities of farmer associations or co-operatives. This TA action requires development of sufficiently detailed costs. Establishment of Farmer Associations in the PIA. Following approval of the TA by ADB. and workshop facilities. 61. funding will need to link affected persons with Government programs encouraging relocation. . or alternatively suggests that financing could be sought from the Japan Special Fund. (iv) negotiation with LCRC for reduced rates. The targets for this action include: (i) preparation and approval of the TA. HIV/AIDS awareness and prevention campaign). and (iv) improvement in farming livelihoods and food security. (ii) promotion of new or expansion of existing associations or cooperatives.Appendix 2 121 approval of local 5-Year Plans. and (iv) diversification of cash crops. including rural people and households. (iii) facilitation of farmer’s access to benefits from LCR (freight and import/export). either temporarily or permanently. 60. office space. organizations that are active in this area. Beyond the measures associated with the project. Further assistance would be required from the PSC or person/group with a similar role. 57. provincial and county/district government agencies and farmers will be involved. 58.

Most of the villages along the alignment are isolated and have not been recipients of development. education and medical facilities. such as freight carriers. Project/Sector/Multitrache Financing Facility/ PolicyBased. and (v) poor health. (ii) facilitating access to key social services. The most predominant livelihood sector. employment. more than 12 times the official poverty line of CNY 693 per capita/year. 15 are nationally-designated and there are also 2. The railway will serve a as key transport link for the Western Development Region of the PRC. Design Features.8 million people in the PIA. The project will benefit about 16. construction workers. and (vii) removing one of the constraints on development of poor and rural communities. and enabling information exchange. Half of the unskilled work will target the poor. new knowledge and information. About 467. (iv) promoting trade. A. SOCIAL ANALYSIS AND STRATEGY Findings of Social Analysis A Poverty & Social Assessment (PSA) has been prepared for the project. (v) improving a key component of regional and rural infrastructure and reducing widening gaps in living standards and economic opportunities between the western and coastal areas.693 person-years of local unskilled jobs . during the construction. topography. Poverty Analysis Targeting Classification: General Intervention 1.957 person years at total wages of 2. Economic conditions along the alignment range from relatively well-off to some of the poorest in PRC. The links between poverty. including women and the poor. People living in the mountains or in isolated areas lack fertile land and sufficient means of livelihood. In addition. Out of the 28 counties/districts in the PIA. Better railway transport will provide an enabling condition for poverty reduction through improved access to markets. and (ii) indirect beneficiaries who do not necessarily rely on the railway but may derive some benefits including those in public sector employment. Construction and operation of the railway generates significant employment in local communities.105 million or CNY 8. of whom 72 percent live in rural areas and 8 percent are designated poor (using the official absolute poverty line in China of CNY 693 person/year).Project Department/ Division: EATC POVERTY ANALYSIS AND STRATEGY A. (iii) supporting and stimulating agricultural production. and transport systems are apparent in the PIA. erosion and uncertainty. (vi) uneven economic development. Incoming passengers and tourists spawn additional demand for locally produced goods and services. operators of small businesses such as shop owners and traders.913 unskilled person-years of work will be created during the construction of LCR. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy Contribution of the sector or sub-sector to reduce poverty in People’s Republic of China (PRC): This Project is consistent with the CPS which aims to enhance pro-poor economic growth through transport infrastructure development. and vulnerable people. and passengers. and secondary sources. (ii) lack of infrastructure. Improved access to markets opens up opportunities for new enterprises and expansion of existing ones. and other social and economic services that facilitate economic development. The main causes of poverty in the project areas are: (i) natural calamity. which is one factor contributing to the relatively high incidence of poverty in some areas. people engaged in daily labor.Appendix 2 122 APPENDIX 2: SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY Country/Project Title: PRC: Lanzhou-Chongqing Railway Development Project Lending/Financing Modality: I. accounting for 80 percent of all working household members.not applicable II. Key Issues Development in the project impact area (PIA) has been constrained by limited transportation infrastructure. consultative field work. which will be targeted at local communities including poverty villages. tourists visiting or transiting the PIA. Beneficiaries can be broken down into: (i) direct beneficiaries i. C. B. encouraging livelihood diversification. totalling 233.897 designated poverty villages. or 31 percent of all villages in the PIA. Hiring priority will be given to women. is agriculture. frosts. Vulnerable households are above the poverty line but are susceptible to economic shocks that could force them below the poverty line. families working or studying in other regions. (iii) very limited and unsustainable sources of livelihood. farmers and farmers associations or cooperatives. 80. This includes a poverty profile of beneficiaries and clientele groups and a social assessment. Construction access and connector roads for the railway will directly benefit poor villages will help to extend the project benefits and opportunities to the poor communities. and other transport users who might shift to rail.e. resettlementaffected people. Few households have regular non-farm income. existing rail users. Based on survey data.997 per-person year. whether on a regular or irregular basis. The beneficiaries of the project have been identified through survey. Overall it is expected that the Lanzhou-Chongqing Railway (LCR) project will contribute to equitable economic growth by: (i) improving access to marketing and employment opportunities. Poverty Impact Analysis for Policy-Based Lending . They also live in areas prone to drought. 2. Station area development will encourage small business development for local people. 17 percent of households are poor and vulnerable (with annual incomes of below CNY 1000). Others (please specify) .

.902 household surveys.Appendix 2 123 will be created in the provision of construction materials with total wages of CNY 605. indirect and generated impacts will provide conditions to meet the PRC goal of micro-urbanization for poor families by: (i) moving poor households away from unsustainable. Since the commencement of feasibility studies some 14. beneficiaries provided information on their perceptions of the project: overall. The local county and township governments and communities will assist the EA in land acquisition. farmer-based rural tourism. ethnic minorities and other vulnerable people. health services and physical infrastructure improvement. Consultation and Participation 1. while 5 percent per cent were indifferent and 1 percent opined that the project would also create some adverse impacts. A participation and consultation plan has been prepared to assist MOR continue consultation with stakeholders and affected communities along the alignment (refer to PSA Section 8. First and Second Survey Design Institutes of China Rail. and help distribute benefits across a broader spectrum of the population throughout the PIA. advanced education and health facilities especially for pregnant women.6 million. The contract documents include clauses specifying targets for local employment. household interviews.460 additional low and unskilled jobs will be created with total wages of CNY 34. Expecting more efficient and cheaper freight transport and business travels on the LCR. with total wages of CNY 302. (ii) providing better access to markets. The PIA of LCR includes seven prefectures and 28 counties in Gansu. and (v) complementing poverty reduction activities by assisting the poor with urban migration. 355 village surveys and 207 industry surveys as well as 774 passenger surveys were completed. surveys. 94 percent considered that the project will bring tangible benefits to their household. Was a C&P plan prepared? Yes No The resettlement and environment safeguard processes also include consultation and participation of the community as a key step in identification of impacts and mitigation measures. Sichuan and Chongqing. relocations. of which 40. Further public consultation occurred during various field surveys among local residents and government officials. mountainous and isolated farmlands. about 35.346 person years will be for the poor. many enterprises in the PIA have been planning to expand outputs and increase labor. MOR is the executing agency (EA) and is responsible for overall supervision and implementation of construction activities. approximately 3.60 million annually. industries in the PIA and other stakeholders. passengers using all modes of transport. The 31 railway stations. local economic development. Provide a summary of the consultation and participation process during the project preparation. LCR will offer a safer means of travel than roads. During the household survey. Shaanxi. When the operation of the new railway starts in 2015.2 million. In addition to providing cheaper transport. agricultural product development. will create various jobs.514 individuals have been consulted about the project. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring? Information sharing Consultation Collaborative decision making Empowerment 3. Ongoing participation of beneficiaries in the project development will be afforded through use of local people. written communications. especially the poor and women. Various Project public consultations and participation activities have been carried out during 2006/2007 and the role of each stakeholder has been identified. Station design will ensure sufficient space in and around the stations for local area development to foster income generation opportunities for the poor. tourists. Ministry of Railway (MOR). (iii) building a sustainable future through new centres of economic activity. All of these direct. Some 3. B. women. the Project Preparation Technical Assistance (PPTA) Consultant and ADB missions have had formal and informal consultations with local communities and government agencies through meetings. and vulnerable people who will be supported by local government agencies to sell local specialties as well as other goods and services. during civil works. employment. implementation of the resettlement plan (RP) and the organization of local labor for the construction and local development including the station areas to ensure the participation benefits the poor.646 jobs have been estimated by PIA companies as a result of LCR.3). Initial issues discussed included the selection of the alignment. women. which will be connected to all levels of road network accessible by all villages. and workshops. 2. Participation has included surveys and community consultation (focus group meetings and interviews with stakeholders).

assets. Plan Other Action (refer to SDAP) No Action Full Plan Short Plan Resettleme nt Framework No Action . The increase in female participation in the labor force will increase women’s net income. The SDAP includes a range of measures including hiring preferences to ensure that women fully participate in. or opportunities and participation in decision-making process: Gender plan Other actions/measures (refer to SDAP) No action/measure Poverty and social enhancement measures have been built into the project design. The project will maximize benefits for the poor and women by promoting local employment and ensuring that all labor laws and regulations are adhered to by contractors. Gender and Development 1. Key Actions. members of the community will collectively decide where schools and other community facilities will be relocated. The PSA concluded that women will be beneficiaries of the project as the project has the potential to create gender specific outcomes. For example.072 households will be relocated. The ethnic minority people and households in the PIA are inter-mixed with Han. benefits and opportunities as all groups. and increasing the status of women. In addition. Female headed households and widows will be eligible for special assistance. Employment provisions are included in contract bidding documents and in the SDAP. General social benefits that could be derived from improved and maintained road access. 12.8% is farmland. Plan Other Action Indigenous Peoples Framework No Action There are no significant labor issues associated with the project. The construction of the LCR will create opportunities for local area development by: (i) facilitating flow of materials and information into the area. could also enhance the participation of women in the commercial sector. during land acquisition and resettlement. of which 82. the project will create significant resettlement impacts . The Project impact on ethnic minorities is not significant. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS Issue Involuntary Resettlement Indigenous Peoples Labor Employment opportunities Labor retrenchment Core labor standards Significant/Limited/ No Impact Strategy to Address Issue Plan or Other Measures Included in Design Overall. which will be monitored during project implementation. will be consulted as schools provide an informal source of day-care for their children. The All China Women’s Federation (ACWF) will provide business management training and financial assistance to women interested in setting up small businesses that serve construction crews. Measures included in the design to promote gender equality and women’s empowerment—access to and use of relevant services. In the PIA ethnic minorities represent 2 percent of the population. The RP and SDAP include measures to ensure that ethnic minorities will receive the same compensation. There are no ethnic minority townships or villages along the alignment.000 households. Women will be given priority for project-generated employment during construction and operation of the railway. III. This includes hiring preferences as appropriate. and special mitigation (or protection) actions have also been included in the SDAP and the resettlement plan (RP). resources.646 ha (24.Appendix 2 124 C. Contracts include clauses to promote local hiring and ensure good labor practices. and (ii) accelerating development of local industries. especially female heads of household. causing partial land loss for about 30. Women. if necessary. Key Issues. they are also likely to be more exposed to risk of communicable diseases. thus improving overall family welfare. 2. mostly Hui people who at not economically disadvantaged. This risk will be mitigated through the HIV/AIDS/STIs and human trafficking awareness and prevention programs that are a component of the Social Action Development Plan (SDAP) to be implemented by the project. Many of the service sector jobs that will be created by the railway and in the tourism sector seek female employees. While women stand to be beneficiaries of the project.1.694 mu) of land will be permanently acquired. and enjoy project benefits to the same extent as men. A RP has been prepared to ensure affected persons are relocated and their livelihoods are fully restored in a timely manner. Compliance will be monitored during project implementation. Contractors maximize local labor because it reduces costs.

EMP and contract bidding documents) No Action MONITORING AND EVALUATION Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and/or social impacts during project implementation? Yes No Source: Consultant.Appendix 2 Affordability Other Risks and/or Vulnerabilities HIV/AIDS Human trafficking Others(conflict. Lack of awareness contributes to the vulnerability of the poor and women. The railway will increase mobility of people along the route could increase the risk for STI/HIV/AIDS and human trafficking during the operation stage of the project. please specify IV. Action No Action The project will utilize the comprehensive programs on STI/HIV/AIDS and trafficking awareness and prevention that have been established by provincial and local governments. The proposed railway will provide an alternative cheap. Workers will be provided with relevant information and access to services. Plan Other Action (refer to SDAP. The major risk will be the influx of workers during construction and controlling the diseases and behaviors of workers. No action is required. political instability. 125 . etc). safe and fast form of transportation and will reduce transport costs for the poor and non-poor alike through lower freight rates and passenger fares as well as time savings.