PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Project Name
Region
Sector
Project ID
Borrower(s)
Implementing Agency
Environment Category
Date PID Prepared
Estimated Date of
Appraisal Authorization
Estimated Date of Board
Approval
Report No.: AB5332
China: Guangxi Yujiang Laokou Navigation and Hydropower
Project
EAST ASIA AND PACIFIC
Ports, waterways and shipping (60%);Power (40%)
P113596
P.R.CHINA
Nanning Transport and Water Conservancy Investment Co. Ltd.
Jiangbeidadao Hediduan 20#
Nanning
China
530021
Tel: 86-771-5689260 Fax: 86-771-5689389
laokoupmo@163.com
[X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined)
February 26, 2010
September 15, 2010
February 23, 2011
A. Key development issues and rationale for Bank involvement
1.
IWT Development in China. China has 123,000 km of navigable waterway, of which
61,000 km is officially classified for commercial navigation purposes. Most of the commercial
waterways are well positioned to connect the nation’s prosperous eastern coastal regions, which
have an increasing demand for raw materials, with the resource-rich but less-developed inland
and western regions. This mutually beneficial relationship helps to achieve the nation’s central
and western development strategies. China’s inland waterway transport (IWT) industry already
handles about the same volume of freight tonnes as the USA and the EU combined. Accelerated
economic growth in China is generating a greater demand for the transport of coal, construction
materials and other materials/goods. Accordingly, IWT has been increasing rapidly in recent
years with an annual average growth rate in tonnes of 8.8 percent during the period 2000-2006
(13.1 percent p.a. in tonne-kms). An analysis carried out for the National Inland Waterways and
Ports Plan to 2020 (NIWPP2020) estimated that the total of cargo traffic in China will increase
from 1.16 billion tonnes in 2006 to 1.6 billion tonnes in 2010 and to 2.35 billion tonnes in 2020.
2.
Despite the fast growth in past years, IWT in China is still under-developed, compared
with other transport modes. Its share in the total freight of the four main inland transport modes
(i.e., road, rail, air and IWT) was only 8.7 percent in tonne-kms in 2006. Given its nature of low
transport cost and high efficiency of energy and land utilization, IWT has significant potential to
expand and capture a higher portion of the increasing transport demand. Currently its main
constraint is weak infrastructure and therefore decisions regarding investments in IWT
infrastructure are therefore critical to realize the mode’s major development potential.
3.
The Government of China (GOC), recognizing the higher energy efficiency, lower
greenhouse gas emissions, and lower use of scarce land resources associated with water
transport, plans to increase the contribution of China’s waterways to its transport needs. The
GOC, through the improvement of IWT, seeks to spread the benefits of development from the
richer coastal belt to the poorer central and western areas. In 2007, China adopted the
NIWPP2020 that aims to develop a ‘high-class’ waterway network (Class IV to Class I) of
around 19,100 km. This waterway network will extend to twenty provinces and serve a
catchment area that contains approximately a quarter of the population of China.
4.
IWT Development in Guangxi. The Guangxi Zhuang Autonomous Region (GZAR or
Guangxi) is located in south China, with approximate 48 million of population and 236,700
square kilometers of land. Guangxi’s per capita GDP ranks it one of the lowest provinces in
China. It is one of the twelve economically underdeveloped southern and western provinces
supported by the China Western Development Strategy. Guangxi aims to optimize its agriculture
dominated industrial structure through enhancing development of its second and third industries.
Transport is one of priorities of the economical development of Guangxi. This region has rich
water and mineral resources that have great potential for IWT development. Guangxi
government has recently given high priority to the development of IWT through a series of plans
and supporting policies.
5.
The Yujiang River, the biggest river in Guangxi, is part of the Xijiang River which is in
turn a main tributary of the Pearl River (China’s second busiest river system after the Yangtze
River) in Guangdong, one of the most prosperous and economically dynamic provinces in China.
The Yujiang River flows from west to east in GZAR and runs through a number of major cities
including Nanning, the capital of Guangxi. The Yujiang River has a long history of waterway
transport. Its hinterland is rich in raw materials like coal and construction materials which are in
high demand in lower reaches such as Guangdong Province. However, the current waterway
transport volume is very low (2 million tons reported in 2005) due to the constraints caused by
insufficient navigation facilities along the River.
6.
Proposed Laokou Dam Complex. The proposed project—the Laokou Dam Complex—is
one of the priority projects under various national and regional development strategies and plans,
including the NIWPP2020, the 11th Five-Year Plan of Guangxi, the Pearl River Basin
Comprehensive Development Plan, the Guangxi IWT Development Plan, and the Yujiang
Waterway System Comprehensive Utilization Plan. The Laokou Dam is one of ten cascade
dams (seven have been completed already) planned for navigation and hydropower development
in the plans. In addition, the Laokou Complex is also one of eighteen major projects listed in the
recent national implementation plan under the China Western Development Strategy. It is
projected that the IWT demand from the hinterland upstream of the Laokou Dam for exporting
coal, cement, and other mineral and construction raw materials could be as high as over 40
million tons by 2010 and over 70 million tons by 2020.
7.
Improvement of Flood Protection. The Laokou Dam will improve the flood protection
capacity of Nanning downstream of the Yujiang River. The Laokou Dam is an important project
for Yujiang River flood protection under the Pearl River Basin Flood Prevention Plan approved
by the State Council in 2002. After a serious flood in Nanning in the early 2000s, the City has
invested heavily in its flood protection systems in high intensity urban areas to upgrade
protection capacity from 1:20-year-floods to 1:50-year-floods. The recent commissioning of the
Baise Dam in the upper reaches of the Yujiang River has further raised Nanning’s flood control
to 1:80-year-flood protection, but this is still below the standard required in national and regional
flood control plans. The Laokou Dam will upgrade the protection capacity to 1:200-year-flood
through a joint regulation with the Baise Dam.
8.
Increase of Hydropower Generation. Guangxi, benefitting from the China Western
Development Strategy, has experienced rapid economic development. This has resulted in a fast
increasing demand for electricity. In addition, Guangxi is also part of the supply base for the
West-to-East Electricity Transmission Program. It is forecast that electricity demand in Guangxi
will be 124,000 GWh and 180,000 GWh by 2015 and 2020, respectively. The Laokou Complex
will generate annually about 663 GWh of clean and renewable hydro electricity, which will
contribute to meeting the growing demand for electricity in Guangxi.
9.
Rationale for Bank involvement. The World Bank has given financial and technical
support to China’s inland waterway development in seven provinces over the past twelve years,
including two other important dam complexes on the Yujiang, the Naji and Guigang rivers. The
Bank has also recently completed a major sector review of IWT in China with the objective of
identifying impediments to its sustainable development. The outcomes of the study are used to
direct the Bank in helping develop IWT in China. Through its involvement in strategic review
and project development, the Bank is the leader among international financial institutions in
supporting China’s IWT sector. In Nanning City, the Bank has been investing in urban and
environmental infrastructure through the Guangxi Urban Environment Project and, more
recently, through the Nanning Urban Environment Project (a FY10 project). The Bank, through
financing the proposed Laokou Dam Complex Project, will help strengthen Nanning City’s
capacity of implementing, operating and managing the waterway infrastructure assets. In
addition, the Project can further strengthen the cooperation between the Bank, the GZAR and
Nanning City.
10.
The Bank’s involvement in the Laokou Dam Complex Project will support two of the five
pillars of the Bank’s FY06-10 China Country Partnership Strategy (CPS).

It addresses the pillar of ‘reducing poverty, inequality, and social exclusion’, by
improving inter-regional transport access and link for the remote and poor north-western
areas of the GZAR with the capital city of Nanning, as well as the cities and ports in the
dynamic Pearl River Delta areas.

It addresses the pillar of ‘managing resource scarcity and environmental challenge,
through reducing air pollution, conserving water resources, and optimizing energy use’,
by improving flood control capacity, and generating clean and renewable hydro energy to
meet the demand for electricity in Guangxi. It also facilitates the use of IWT, a transport
mode that is more energy efficient, generates lower greenhouse gases and uses less land
area than other transport alternatives.
B. Proposed objective(s)
11.
The development objectives of the proposed project would be: (a) to upgrade the
navigation standards on the Yujiang River; (b) to increase the capacity to control flooding on the
middle and lower reaches of the Yujiang River, particularly as it affects the city of Nanning; and
(c) to generate clean and renewable hydro-electrical energy.
12.
The main economic benefits of the Project will be the avoidance of flood damage as a
result of the enhancement of flood control capacity in Nanning, transport cost savings and energy
efficiency due to IWT development, and economic benefits of increased electricity production
and reduced greenhouse gases (GHG) emission associated with the renewable hydro-electricity
generation. Performance indicators for measuring the achievement of the development
objectives will be devised during project preparation and appraisal.
C. Preliminary description
13.
The Laokou Dam Complex Project is located approximately 30 km west and upstream of
Nanning City. It is one of the projects to upgrade the Nanning-Baise waterway section from its
current Class VI (year-round navigable for 100 dwt vessel) to Class III (year-round navigable for
1,000 dwt vessel). The Project is provisionally proposed to include the following components:




Component A – Construction of the Laokou Dam Complex. This is a single integral
infrastructure unit consisting of one Grade III lock accommodating 1,000 dwt vessels,
one powerhouse of about 170 MW installation capacity, 19 sets of sluice gates, one fish
passage ladder and connection dams.
Component B – Treatment works such as dredging and bedrock blasting for a total length
of about 157 km of water channel.
Component C – Flood protection works. This includes the construction of dikes and bank
protection, and restoration of existing structures and facilities.
Component D – Institutional capacity building. This consists of a well-tailored training
program which is aimed at strengthening the institutional, management and technical
capacities of the project implementing entity and Nanning government agencies.
14.
The Feasibility Study estimates that the total project investment is RMB 3.92 billion
(US$ 577 million). The Nanning Municipal Government has requested a US$ 100 million
World Bank loan which accounts for about 17.3 percent of the total investment.
D. Institutional Arrangement for Preparation and Implementation
15.
The Nanning Municipal Government (NMG) is responsible for financing and
implementing the Project. The NMG has established a Leading Group (LG) for the development
of flood control and inland waterway transport projects along the Yujiang River in Nanning. The
Laokou Dam Complex Project is currently the main project of the LG. The LG is headed by the
Executive Vice-Mayor of Nanning and consists of the heads of all relevant municipal
government agencies such as the Development and Reform Commission, Finance Bureau,
Construction Commission, Communication Bureau, and Water Resources Bureau. The LG will
play a leading role in coordinating with the GZAR and neighboring cities on the cross-boundary
issues associated with the Laokou Dam Complex Project.
16.
A Project Management Office (NPMO) has been established under the LG for the
preparation and implementation of the Project. The Nanning Transport and Water Conservancy
Investment Company (NTWCIC), a construction investment company solely owned by NMG,
has been designated the Project Implementing Entity (PIE) responsible for the construction of the
Laokou Complex. The NPMO, led by a Deputy Secretary General of the NMG, has been formed
by representatives of all relevant Nanning government agencies and some senior staff of
NTWCIC. It has five units: general affairs, project preparation, financial management and
procurement, environment, and resettlement.
E. Safeguard policies that might apply
17.
The Bank task team proposes the Project to be classified as Category A. The initial
assessment proposes that Environmental Assessment (OP 4.01), Natural Habitats (OP 4.04),
Physical Cultural Resources (OP 4.11), Involuntary Resettlement (OP 4.12), and Dam Safety
(OP 4.37) will be triggered by this Project. With regard to the Indigenous Peoples (OP 4.10), the
initial assessment found no minority groups other than the Zhuang Nationality. However, it is
noted that the Zhuang Nationality has not been defined as an IP group in other WB-financed
projects in Guangxi. IP related identification and socioeconomic investigation will be further
conducted and reflected in the resettlement planning process.
F. Tentative financing
Source:
Borrower
International Bank for Reconstruction and Development
Total
G. Contact point
Contact: Wenlai Zhang
Title: Sr Transport. Spec.
Tel: +86-10-5861-7737
Fax: +86-10-5861-7800
Email: wzhang2@worldbank.org
Location: Beijing, China (IBRD)
($mil.)
477
100
577