People’s Republic of China: Fuzhou Environmental Improvement Project

Horizontal Tabs

Lessons

Urban development projects, because of their complex and multifaceted nature, require careful planning, an adequate and multidisciplinary human resource complement, and close intersectoral collaboration for their successful implementation.

Urban development projects are inherently complex, involving various sectors and agencies, numerous infrastructure works, and significant safeguard requirements. As such, they need to be closely coordinated and provided with sufficient implementation time and staff resources and enough flexibility to respond to the rapid changes in the project context. For example, because there were deficiencies in interagency coordination, this project encountered problems in safeguards implementation despite having a generally adequate management setup and project structure. The challenges brought about by the rapid urbanization of Fuzhou would have been more effectively met through careful risk assessment and mitigation planning; a longer, more realistic implementation period; and the mobilization of adequate staff resources with a mixed skills set in the project coordination institution.

Project Cycle Stage:

Preparation

Implementation

A thorough assessment of the institutional and human resource capacities of executing and implementing agencies (EAs/IAs) is needed to align capacity development to the project needs and context.

There were discrepancies in the actual institutional arrangements set up by the project and those stipulated in the loan and project agreements. These discrepancies made some of the loan covenants inoperable and caused the project’s capacity building program to be mistargeted. Although institutional arrangements were realigned through a change in scope and implementation arrangements and subsequent amendments to the loan and project agreements, the project’s institutional strengthening objectives were not fully achieved. A thorough assessment of the institutional requirements and existing mechanisms and capacities would have made the project’s capacity building initiatives more relevant and effective.

Project Cycle Stage:

Preparation

Implementation

Land acquisition and resettlement (LAR), especially in highly urbanizing areas experiencing unplanned housing development, need to be addressed with greater social sensitivity.

The rapid urbanization and transformation of cities in the People’s Republic of China (PRC) make resettlement safeguards more critically important in the design and implementation of urban projects in the country. This could be challenging and complicated, particularly in eastern coastal cities such as Fuzhou, which have been experiencing unplanned housing development. Experiences under this project provide some lessons that may be useful in addressing the challenges. First, project design and resettlement planning should be synchronized with the relevant government plans and interventions. Second, the government’s land acquisition plan should be prepared well ahead of project approval so that all preparatory administrative procedures are completed prior to project startup. Third, mixing domestically and internally financed development projects can lead to problems and hence should better be avoided. The project’s experience with the LAR requirements of its creek rehabilitation component in the Nantai Island provide insights to these problems. Given that the project formed part of the Fujian municipal government’s wider river rehabilitation program in the island, distinguishing between the project-affected persons and those affected by other domestically funded projects was a challenge and created some confusion and grievances among the affected villages. Fourth, alternative design options to avoid or minimize house demolition and resettlement should be explored thoroughly during detailed project design and implementation, particularly if the project is within a rapidly urbanizing area. In the Fuzhou project, design options were largely limited by technical parameters such as flood discharge flows and gradients. The importance of public awareness, sufficient budget and coordination, and in-depth risk assessment was also highlighted by the project’s LAR experience. But owing to this experience, an enhancement to LAR implementation came about: affected persons could not be displaced before they have signed compensation agreements. This guideline has been strictly applied in Fuzhou and is now a national regulation.

Project Cycle Stage:

Preparation

Implementation

Background

Fuzhou, the provincial capital of Fujian, is a major commercial, industrial, and financial center and one of the high-growth cities in the People’s Republic of China (PRC). Rapid urbanization and economic growth in the city have created serious shortfalls in urban infrastructure services, especially wastewater management. Consequently, large volumes of untreated wastewater were routinely discharged to urban streams. The Min River, an important waterway that passes through the urban heart of Fuzhou and a water source for drinking, irrigation, and industrial processing, became increasingly polluted due to the deterioration in the water quality of upstream local streams and the cumulative effect of numerous point and nonpoint sources of discharge.

The Asian Development Bank (ADB) earlier on helped Fuzhou address the severe water pollution problems by financing the Fuzhou Water Supply and Wastewater Treatment Project, which included the Yangli phase 1 wastewater treatment plant and associated collection networks. However, the capacity of these wastewater collection and treatment facilities was outstripped by the rapidly increasing wastewater generation in the city. In response, ADB approved a loan of $55.8 million for the Fuzhou Environmental Improvement Project in July 2005. The project, together with locally financed initiatives, sought to improve wastewater collection and treatment in the area by rehabilitating and expanding its sewer networks. Its intended impact was improved urban environment and quality of life of the urban residents of Fuzhou. Its expected outcome was reduced environmental contamination in the Fuzhou urban areas and strengthened capacity in water resources and wastewater management.

The project had four components: (i) construction and rehabilitation of Yangli phase 2 sewer networks, (ii) construction and rehabilitation of Lianban sewer networks, (iii) rehabilitation of the inland creeks of Nantai Island, and (iv) development of institutional capacity. Least-cost solutions were incorporated into the design; however, during implementation, the project was affected by changes in the Fuzhou Urban Master Plan and land acquisition and resettlement difficulties, which resulted in sewer network realignments, changes in the number and location of pumping stations, and implementation delays.

Nevertheless, at completion, the project succeeded in achieving its intended results. Project financing of the expansion and rehabilitation of 193 kilometers (km) of new sewers and 2 pumping stations in the Yangli phase 2 network and of 66 km of sewers and 3 pumping stations in the Lianban network significantly helped increase the city-wide wastewater collection and treatment rate to 95% by 2012 from 55% in 2005. Although substantially reduced in scope, the rehabilitation under the project of 5 inland creeks, against an initial plan of 13 creeks, combined with the improvements in the sewer networks to substantially reduce the pollution loads in Fuzhou’s urban water systems and the Min River. Annual average reductions of 10,930 tons of biochemical oxygen demand and 17,960 tons of suspended solids had been achieved, and because of this, the water quality of the urban water bodies had not deteriorated despite significant developments in the area during the project period.

The project’s overall success, notwithstanding the near doubling of its implementation period, from January 2006−December 2009 to July 2006−June 2012, was aided by the improved technical knowledge and project management capacity of the implementing agency staff. Capacity building in project management was largely achieved through consultant support and training programs. However, capacity building in broader sector, technical, operational, and institutional development for related urban services was met to a lesser extent because of discrepancies in institutional arrangements between the actual setup and the one prepared during project design.

The project had the Fujian municipal government as executing agency. It had two implementing agencies: the Fuzhou Water Environment Construction and Development Company for the sewer network components, and the Fuzhou Urban Visual Construction and Development Company for the Nantai Island inland creek rehabilitation component.

Project Information

Project Name:

Fuzhou Environmental Improvement Project

Report Date:

September, 2013

Main Sector:

Water and Other Urban Infrastructure and Services

Country:

China

Project Number:

35340

Report Type: