THE WORLD BANK/IFC/M.I.G.A.
OFFICE MEMORANDUM
DATE: January 23, 2004
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TO: Mr. Leonard Good, CEO/Chairman, GEF
FROM: Steve Gorman, GEF Executive Coordinator, ENV
EXTENSION: 35865
SUBJECT: OP10 – China: Hai Basin Integrated Water and Environment Management Project
Submission for CEO Endorsement
1. Please find attached the electronic file of the GEF Project Document for the above-mentioned project for your final review and endorsement. This project was approved for Work Program entry at the November 2003 Council meeting, with a request for Council review of the final project document prior to CEO endorsement. The scheduled Board date for this project is April 15, 2004. We would appreciate receiving your response if possible by March 1, 2004 so that we may finalize the Bank Board submission.
2. The GEF Project Document is fully consistent with the objectives, scope, and overall cost of the proposal approved at the November 2003 Council meeting. GEFSEC, STAP, and Council comments have been addressed in the Project Document. Since STAP comments have been fully addressed during submission for the GEF Work Program, please find below responses to Council members’ comments and the CEO Endorsement conditions by GEFSEC at final Work Program submission (responses in italics):
Comments from Canada:
(a) Canada is aware of internal conflicts between two implementing agencies, namely the Ministry of Water Resources (MWR) and the State Environmental Protection Administration (SEPA), which have caused disruption in two previous projects. We are also aware of an ADB project that faced the same issue. Therefore we are interested in knowing how lessons learned from past experiences will be incorporated into the project.
The Hai Basin and the Bohai Sea are identified as critical high-priority areas for improved water and environment management in the last two five-year plans and the priority has been elevated even higher in consideration of the 2008 Olympics to be held in Beijing. SEPA and MWR have been directed by the highest levels of the Chinese Government to cooperate in integrated water and environment management in the Hai Basin. During Project preparation, Leading Groups, Project Management Officess, and Joint Expert Groups were established that required and have resulted in close cooperation between SEPA and MWR and between their counterparts at lower levels. The October 2002 Chinese Water Law has brought more clarity to the role of MWR and SEPA in water and environment management.
(b) We also recommend that the project design incorporate a prevention-focused approach, specifically in the industrial and urban sector, as well as in the areas of public health and agriculture. In order to further a prevention-focused approach we suggest that industrial plants be encouraged to adopt voluntary measures and good environmental practices by introducing management systems. Finally, we propose that education and sensitization take place in order to protect public health and the health of the Hai Basin ecosystem.
The integrated water and environment management plans (IWEMPs) that will be prepared and implemented in several counties in the Hai Basin will include prevention-focused approaches to pollution including discharge controls, industrial restructuring and voluntary measures/improved environmental practices by industries. The IWEMP process will include a large amount of public participation and awareness raising on the importance of controlling pollution including public and environmental health issues.
Comments from United States:
The outcome indicators lack any measurable projections of changes that are a result of the project. It says decrease water pollution in pilot counties, but does not indicate by how much. It says reduce groundwater overdraft in pilot counties but – again – does not say by how much. We would appreciate more information on how this baseline data will be collected -what time period? What milestones will the results be measured against? The global indicators seem to confuse goals with measurable indicators. “Improved cooperation” is more a process than a measurable indicator. What do we expect to be the result of improved cooperation?
During Project preparation and specifically at the time of the appraisal mission, a special SEPA/MWR team was set up and given the responsibility to come up with preliminary estimates on the amounts of pollution loading and groundwater overexploitation presently occurring in each of the 10 IWEMP counties, in the 3 demonstration counties in the Zhangweinan subbasin, and in the 3 counties in Tianjin that were selected on a preliminary basis for second-phase implementation of the Tianjin IWEMP. The team carried out consultations with each of the counties and preliminary estimates were made based on existing data. From this analysis, total existing annual COD loading, NH4 loading and groundwater overexploitation for all of these counties are estimated to be about 160,000 tons, 19,000 tons and 420,000,000 m3, respectively.
On a very preliminary basis it is estimated that about 60% of these pollution loadings actually make it into rivers and eventually discharge into the Bohai Sea; much of the pollution accumulates behind checks, in reservoirs and in river sediments, and the discharge to the Bohai Sea occurs mainly as a result of extraordinary flooding events that wash the pollution to the Sea. The Project objectives are to put in place the mechanisms necessary to eliminate groundwater overexploitation and substantially reduce pollution loading, over an approximate 10-year timeframe. Achieving these reductions will require much more investment and effort outside the Project but within its framework. Actual reductions, directly attributable to Project actions and during the 5-year Project implementation period were preliminarily estimated by the SEPA/MWR team and by the Project counties to average about 10%, in terms of both pollution loading and groundwater overexploitation. These preliminary estimates will be refined and revised during Project implementation as described below.
The first phase of the IWEMPs and Demonstration Projects, including the baseline surveys will refine and detail these estimates, indicators and reduction objectives. The baseline surveys will be carried in the first year of project implementation. For water quantity, the baseline survey will include evaluation of existing data on groundwater levels and extraction. A water balance analysis will be carried out that will include estimates of recharge, extraction, and overexploitation based on the data. The total groundwater overexploitation for each county will be revised based on this analysis. For water quality, the baseline survey will include evaluation of existing data on water quality, discharge to rivers, lakes, canals, and groundwater. Additional data will be collected where data gaps exist. The total pollution loading for selected parameters will be revised based on this analysis for each county. The IWEMPs will be prepared during the first and second years of Project implementation and will include year-by-year estimated reductions in ground water exploitation and pollution loadings for their implementation periods. Implementation of the IWEMPs will begin in the third year and the year-by-year reductions determined in the plans will be used as milestones during the second phase of Project implementation.
In addition, pollution into the Bohai sea will be reduced by activities under the Tianjin Coastal Component. For each small city, starting with Hangu, these are estimated to result in annual reductions in pollution loadings into the Bohai Sea of 10,000 tons of COD and 500 tons of NH4. The Dagu canal has about 2 million tons of contaminated sediment. The pollution reduction will come from removing the contaminated sediment from the canal, and disposing of it in an environmentally safe, contained landfill site. According to preliminary sampling, oil and zinc are the two major pollutants of concern in the Dagu sediments. Based on pollutant concentrations in the sediment, there will be an estimated one-time reduction of approximately 5,000 tons of nitrogen (as total N), 10,000 tons of oil and grease, and 2,000 tons of zinc from the Dagu canal cleanup. The Dagu canal estimates are the amount of pollution presently stored in canal sediments that would eventually be washed into the Bohai Sea if the canal were not cleaned up. Present discharge of wastewater to the Bohai Sea through the Dagu Canal, estimated at 61,000 tons of COD and 9,400 tons of NH4 annually, will be eliminated due to other actions being taken by the Tianjin government, outside the purview of this Project. These estimates for pollution reductions for both Hangu and the Dagu canal were based on feasibility studies carried out for these Tianjin Coastal Component activities.
Project Document Annex 1 – Project Design Summary – Project Logframe Analysis has been revised to include these measurable indicators.
GEFSEC Conditions for CEO Endorsement:
COUNTRY OWNERSHIP
Country Drivenness - Committed co-financing, in the amount indicated in the concept/full project.
Counterpart funding commitments were provided at appraisal. (See section F in Project Document.) TUDEP2 financing is confirmed.
PROGRAM AND POLICY CONFORMITY
Replicability - Indications of commitment from the Government of China to invest resources in the "replication" effort.
Replicability covenants are included in the draft Grant Agreement and Project Agreement. (See section G of the Project Document)
Monitoring and Evaluation - M & E plan should include that cofinance provided by the 2 loans would be tracked as well as monitoring conducted to characterize improvement in Hai basin water quality from pollution reduction.
The writeup for Component 4 in Project Document Annex 2 addresses how monitoring and evaluation will be carried out to review pollution and groundwater overexploitation reductions in the Hai Basin, as well as progress and effectiveness of Component 3 (Tianjin Coastal Wastewater Management), which will include activities undertaken in TUDEP2 and activities financed by the GEF Grant .
SUMMARY RECOMMENDATIONS BY PROGRAM MANAGER
Firm commitment of co-financing; Establishment of project website.
Counterpart funding commitments were provided at appraisal. (See section F in Project Document.) TUDEP2 financing is confirmed.
The GEF Hai Basin project website is under construction and is currently structured as follows: (i) Project Description, (ii) Project Progress, (iii) Project Achievements, (iv) Contact Information, (v) Related Links, and (vi) Bulletin to Invite Public Bidding. The website will attach to and link with the web of the GEF homepage in China and the IWLearn homepage, and is envisaged to be accessible to the general public by February 15, 2004.
3. Please let me know if you require any additional information to complete your review of the project document. We look forward to receiving your endorsement of the project for Bank Board approval.
Many thanks.Attachment
GEF Project Document
cc: Messrs./Mmes. King, GEF PROGRAM COORDINATION (GEFSEC); Broadfield, Kaber (EASES); Wilson, Garcia-Rivero, Olson, Braedt, Reyes (EASRD); Aryal, Khanna, Wedderburn (ENV); ENVGC ISC, Regional Files