INTEGRATED SAFEGUARDS DATA SHEETRESTRUCTURING STAGE

Note: This ISDS will be considered effective only upon approval of the project restructuring

Report No.: ISDSR16152

Date ISDS Prepared/Updated: 22-Dec-2015o

Date ISDS Approved/Disclosed: 22-Dec-2015

I. BASIC INFORMATION

1. Basic Project Data

Country: China Project ID: P110632

Project Name: Sichuan Small Towns Development (P110632)

Task Team Ji YouLeader(s):

Estimated 20-Jul-2010 Estimated 10-May-2011Appraisal Date: Board Date:

Managing Unit: GSU08 Lending Specific Investment LoanInstrument:

Sector: Urban Transport (60%), Flood protection (20%), Water supply (10%),Wastewater Collection and Transportation (10%)

Theme: City-wide Infrastructure and Service Delivery (80%), Pollution management andenvironmental health (20%)

Is this project processed under OP 8.50 (EmergencyRecovery) or OP 8.00 (Rapid Response to Crises and NoEmergencies)?

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Financing (in USD Million)

Total Project Cost: 145.00 Total Bank Financing: 100.00

Financing Gap: 0.00

Financing Source Amount

Borrower 45.00

International Bank for Reconstruction and Development 100.00

Total 145.00

Environmental B - Partial AssessmentCategory:

Is this a NoRepeaterproject?

2. Current Project Development Objectives

The project development objective is to improve priority infrastructure in participating small townsin Sichuan Province. This will be achieved by supporting in

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frastructure investments in urban roads; water supply networks; storm and sewerage drainage networks; canal and river embankments; and wastewater treatment; aswell capacity building activities to ensure the long term sustainability of theassets created under the project.

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Proposed New PDO (from Restructuring Paper)

The project development objective is to improve priority infrastructure in participating small townsin Sichuan Province. This will be achieved by supporting in

a frastructure investments in urban roads; water supply networks; storm and sewerage drainage networks; canal and river embankments; and wastewater treatment; aswell capacity building activities to ensure the long term sustainability of theassets created under the project.

3. Project Description

The total estimated cost of the project is US$195.76 with IBRD loan of US$100 million. The projectis comprised of two components, which are described below:Component 1: Small Town Infrastructure Development (US$191.46): Construction of selected

urban roads,water supply networks, storm and sewerage drainage networks, canal and riverembankments and a wastewater treatment facility in the Xinjin, Hongya, Pengshan, Miyi, Dayingand Zizhong Counties, and the Jialing and Shunqing Districts in order to promote local economicdevelopment and improve environmental services.Component 2: Institutional Strengthening and Capacity Building (US$4.05): Provision of technical

assistance for: (i) project construction management and supervision (including design review,advisory services, traffic safety audit and engineering supervision), and for traffic managementcapacity development; (ii) on-the-job training for staff of the Project Counties/Districts for operationmaintenance and management of their infrastructure investments; (iii) independent monitoring ofEMPs and RAPs.The proposed restructuring includes: (1) deleting construction of a wastewater treatment facility inXinjin and a sewage pump station in Pengshan; (2) using the resulting loan savings of US$17million to finance additional physical works in (a) Hongchuan Town in Hongya County (includingwastewater interception, moat and embankment improvements), urban roads, storm watermanagement, water treatment plant (2,500 m3/day) in Liujiang Town in Hongya County; and roadrehabilitation in Penglai Town in Daying County; (3) changing the component costs and financingplan; (4) increasing the disbursement percentage for civil works from 92% to 100%; (5) reallocatingLoan proceeds among disbursement categories; (6) revising the Results Framework; and (7)deleting two covenants that are no longer applicable (deleting construction of a wastewater treatmentfacility in Xinjin).

4. Project location and salient physical characteristics relevant to the safeguardanalysis (if known)

The project comprises 8 sub-components in 6 Counties and 2 Districts of Sichuan Province:Xingjin,Hongya, Pengshan, Daying, Miyi and Zizhong counties, and Jialing and Shunqing districts. Townswere identified based on their potential for sustainable economic and social development. Within thecounty/districts under the project, the subcomponents are among some of the largest infrastructureinvestments that these districts/counties have undertaken to date. As such the project aims tocontribute to the Province's own activities by helping to create models "best practices" for sustainablesmall town infrastructure service provision, especially in the area of institutional, operational andfinancial sustainability. The towns selected for this project have been initially selected through theprovince's development strategy screening.

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New project components in the restructuring are located in three towns in two counties , one inDaying and the other two in Hongya. Among three towns, Penglai in Daying County andHongchuan in Hongya County are in the original project, and Liujiang Town in Hongya County is

OU the newly added project town to the project during project mid-term review. Liujiang Town is

located in hilly area, middle part of Hongya County covering 160 km2, with 19300 population.O

5. Environmental and Social Safeguards Specialists

a Chongwu Sun (GENDR)

Jun Zeng (GSURR)

Meixiang Zhou (GSURR)

6. Safeguard Policies Triggered? Explanation (Optional)Environmental YesAssessment OP/BP 4.01

Natural Habitats OP/BP No4.04

Forests OP/BP 4.36 No

Pest Management OP 4.09 No

Physical Cultural YesResources OP/BP 4.11

Indigenous Peoples OP/ NoBP 4.10

Involuntary Resettlement YesOP/BP 4.12

Safety of Dams OP/BP No4.37

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U Projects on International NoWaterways OP/BP 7.50

Projects in Disputed NoAreas OP/BP 7.60

II. Key Safeguard Policy Issues and Their Management

A. Summary of Key Safeguard Issues

1. Describe any safeguard issues and impacts associated with the Restructured project.Identify and describe any potential large scale, significant and/or irreversible impacts:

Environment:The proposed restructuring involves three towns in two project counties with followingsubprojects: 1) Penglai Town of Daying County: 3 roads extension and upgrading with total length2.51 km and associated pipelines, lightning, public transport facilities and landscaping, etc.; 2)Hongchuan Town of Hongya County: 2.24 km river course dredging, 4.04 km river embankmentconstruction and rehabilitation with sewer pipes, and about 6.4 ha wetland construction; and 3)Liujiang Town of Hongya County: 4 new road segment with total length 2.41 km and threebridges, two for cars and one for pedestrians, construction of a new water works with treatmentcapacity 2500 m3/day with associated water intake and 12 km distribution pipes, a new parking lot

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covering 0.8 ha. For Penglai and Hongchuan towns, the environmental impacts are similar to theoriginal project's component on road component, river dredging and embankment and associatedsewer pipes, namely, dust, noise, traffic and business interruption, storage and disposal of spoiland dredged materials, etc. The new EIA reports prepared for the restructuring covers all these

OQ) issues and with the mitigation measures proposed. Therefore, it was agreed with the PMO that the

original Environmental Management Plan (EMP) prepared will still apply to the new subprojects.And for newly added Liujiang Town, the EIA and EMP were prepared according to national andBank??s requirement. There was no large scale, significant and irreversible impacts to be found.Relevant mitigation measures, implementation arrangement, monitoring and training needs wereidentified and included in the EMP report.

The environmental performance for the parent project has been satisfactory. Environmentalmanagement in construction has been carried out largely according to the EMP. The EMPimplementation and environmental monitoring has been included in the semi-annual projectprogress report and submitted to the Bank in timely manner.

Social:While the original RAPs will continue to cover the remaining parts of land acquisition andresettlement of the project. The restructuring in the above mentioned three towns in Daying andHongya counties. But very limited additional land acquisition will be required only in one townwhich is Liujiang Town in Hongya County and there will be no house demolition or any physicalresettlement of affected people. The other two towns (Penglai town in Daying and HongchuanTown in Hongya) will use existing state-owned land for restructured civil works of the project.Hongchuan Town Subproject will use the state-owned river shoal and wetland of 324.45. The restrestructured part of the project in Liujiang Town requires a land of 129.47 mu in total, but only19.7 mu will be newly acquired which will affect 19 households with 83 affected people in YangVillage and Lianghe Village of Liujiang Town. This is because 109.7 mu of collective land inHongxing Village of Liujiang Town was already acquired in 2013, affecting 67 households and237 people. A due diligence review of this land acquired from Hongxing Village was done andconfirmed there was no legacy issue. For the land to be acquired in Liujiang Town, a socialassessment and RAP were prepared according to the Chinese and World Bank's requirements.Relevant mitigation measures for any negative impacts of the land acquisition, implementationarrangement, monitoring and training needs were identified and included in the RAP.

o The overall implementation of old RAPs of the parent project has been satisfactory and incompliance with the requirements of Bank safeguards policy and local government regulations.The PMO team is very experienced in managing Bank supported project. Implementation of theRAPs, monitoring and evaluation has been incorporated in the project progress reports andsubmitted to the Bank on a regular and timely basis. The new RAP for Hongya County had setvarious mitigation measures to compensate affected people and minimize negative impacts onthem and their communities. The new RAP has also been disclosed to the public in project sitesand the Bank InfoShop.

2. Describe any potential indirect and/or long term impacts due to anticipated future activitiesin the project area:

No indirect negative impacts are expected from the proposed project.

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverseimpacts.

Alternative analysis was not carried out, because of small scale investment for each componentand the scattered locations of the proposed activities.

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4. Describe measures taken by the borrower to address safeguard policy issues. Provide anassessment of borrower capacity to plan and implement the measures described.

The borrower engaged EA consultants to prepare the EA reports for all proposed newsubprojects, which satisfy the Bank??s requirements for OP.4.01 and Chinese policies andregulations. The EA & EMP specified appropriate mitigation measures, environmental monitoringplans, institutional arrangements, training and equipment requirements together with budgetestimates for implementation of the mitigation measures and monitoring plans.

Sichuan PMO has experiences of implementation of World Bank projects, as they are currentlyimplementing several Bank financed projects, including Wenchuan ERL. An independentenvironment monitoring unit was be contracted for project implementation and their service willbe expanded to the new subprojects.

The proposed mitigation measures are described as follows: the adverse impacts during theconstruction of the proposed road, water distribution network, wastewater collection system, andwater works include airborne dust, noise, traffic disruption and disposal of spoiled materials.These impacts are short-term and manageable. Contractors will manage the construction siteproperly through watering construction sites during dry and windy seasons, take measures tomitigate noisy construction activities and avoid/ban night time construction, maintain equipmentin good operating conditions, proper handle and dispose dredged materials, and develop temporarytraffic plans to detour traffic around construction sites.

The PMO is also experienced with strong capacity in implementing safeguards instruments inBank financed projects. The PMO has assigned specific responsible staff to take charge of landacquisition and resettlement in this project. The PMO also hired a local professional consultinginstitute to prepare the new RAP. The consulting team is very much experienced in preparingsocial safeguards documents and monitoring the implementation of the social safeguardsinstruments from a number of previous Bank lending projects.

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Efforts have been made to minimize the resettlement impacts during project planning and design.The resettlement impacts have been significantly reduced through optimizing the project designand implementation arrangements. A range of mitigation measures including adequatecompensation for and meaningful consultation with affected people, monitoring and reporting,

* complaint handling mechanism have been reflected in the new RAP for the newly addedsubproject in Liujiang Town of Hongya County.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosureon safeguard policies, with an emphasis on potentially affected people.

Public consultations were carried out during the EIA process. The technique used for the publicconsultations include surveys using public opinion questionnaires, focused group discussions,public meetings with key stakeholders and interviews with some project affected persons. Theissues raised during these consultations have been incorporated in the EIAs/EMPs. Furthermore,feedbacks to the concerns collected in public consultation were provided to the concerned groupsand documented in the EIA documents. The EIA documents and other project related documentswere disclosed locally through various means (e.g., websites, information board of localcommunity, etc.), as required by national and Bank's policies.

Public consultations have been carried out during RAP preparation. The affected residents andlocal governments participated in the census, formulation of compensation package and the

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livelihood rehabilitation strategy, monitoring and grievance redress mechanism. The feedback ofstakeholders has been incorporated in determining the compensation rates and livelihoodrehabilitation measures. The RAP contains a list of major consultation sessions. The final RAPwas disclosed locally in PMO agency's official website, and public information points of project

Otowns and villages on 30 July 2015 and also disclosed at the World Bank InfoShop on July 29,2015.

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B. Disclosure Requirements

Environmental Assessment/Audit/Management Plan/Other

Date of receipt by the Bank 18-Aug-2015

Date of submission to InfoShop 17-Dec-2015

For category A projects, date of distributing the Executive ///Summary of the EA to the Executive Directors

"In country" Disclosure

China 16-Mar-2014

Comments: An EIA and EMP, satisfactory to the Bank, were prepared for the project financedinfrastructure improvements in Liujiang Town and were disclosed locally on March16, 2014

Resettlement Action Plan/Framework/Policy Process

Date of receipt by the Bank 27-Jul-2015

Date of submission to InfoShop 29-Jul-2015

"In country" Disclosure

China 30-Jul-2015

Comments:

If the project triggers the Pest Management and/or Physical Cultural Resources policies, therespective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP.

If in-country disclosure of any of the above documents is not expected, please explain why:

C. Compliance Monitoring Indicators at the Corporate Level

OP/BP/GP 4.01 - Environment Assessment

Does the project require a stand-alone EA (including EMP) Yes [ X] No [ ] NA [ ]report?

If yes, then did the Regional Environment Unit or Practice Yes [ X] No [ ] NA [ ]Manager (PM) review and approve the EA report?

Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ X ]in the credit/loan?

OP/BP 4.11 - Physical Cultural Resources

Does the EA include adequate measures related to cultural Yes [ X] No [ ] NA [ ]property?

Does the credit/loan incorporate mechanisms to mitigate the Yes [ X] No [ ] NA [ ]potential adverse impacts on cultural property?

OP/BP 4.12 - Involuntary Resettlement

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Has a resettlement plan/abbreviated plan/policy framework/ Yes [ X] No [ ] NA [ ]process framework (as appropriate) been prepared?

If yes, then did the Regional unit responsible for safeguards or Yes [ X] No [ ] NA [ ]Practice Manager review the plan?

Is physical displacement/relocation expected? Yes [ ] No [X] TBD [ ]

Provided estimated number of people to be affected

Is economic displacement expected? (loss of assets or access to Yes [ X] No [ ] TBD [ ]assets that leads to loss of income sources or other means oflivelihoods)

Provided estimated number of people to be affected

The World Bank Policy on Disclosure of Information

Have relevant safeguard policies documents been sent to the Yes [X] No [ ] NA [ ]World Bank's Infoshop?

Have relevant documents been disclosed in-country in a public Yes [ X ] No [ ] NA [ ]place in a form and language that are understandable andaccessible to project-affected groups and local NGOs?

All Safeguard Policies

Have satisfactory calendar, budget and clear institutional Yes [ X] No [ ] NA [ ]responsibilities been prepared for the implementation ofmeasures related to safeguard policies?

Have costs related to safeguard policy measures been included Yes [X] No [ ] NA [ ]in the project cost?

Does the Monitoring and Evaluation system of the project Yes [ X] No [ ] NA [ ]include the monitoring of safeguard impacts and measuresrelated to safeguard policies?

Have satisfactory implementation arrangements been agreed Yes [ X] No [ ] NA [ ]with the borrower and the same been adequately reflected inthe project legal documents?

III. APPROVALS

Task Team Leader(s): Name: Ji You

Approved By

Practice Manager/ Name: Abhas Kumar Jha (PMGR) Date: 22-Dec-2015

Manager:

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