Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00005687 IMPLEMENTATION COMPLETION AND RESULTS REPORT LOAN NUMBER 8423-CN ON A LOAN IN THE AMOUNT OF US$150 MILLION TO THE PEOPLE’S REPUBLIC OF CHINA FOR THE CHINA-QINGHAI XINING WATER ENVIRONMENT MANAGEMENT PROJECT December 20, 2021 Water Global Practice East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective Jun 30, 2021) Currency Unit = Chinese Yuan (CNY) CNY 6.46 = US$1 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS BOD Biochemical Oxygen Demand CBA Cost-Benefit Analysis CEA Cost-Effectiveness Approach COD Chemical Oxygen Demand CPF Country Partnership Framework CPS Country Partnership Strategy EIA Environmental Impact Assessment ESMP Environmental and Social Management Plan FYP Five-Year Plan GRM Grievance Redress Mechanism ICR Implementation Completion and Results Report IRR Internal Rate of Return ISR Implementation Status and Results Report LA Loan Agreement LID Low Impact Development M&E Monitoring and Evaluation MIS Management Information System NbS Nature-based Solutions NH3-N Ammoniacal Nitrogen NUA New Urban Agenda O&M Operation and Maintenance PAD Project Appraisal Document PAP Project-Affected Person PDO Project Development Objective PEP Project Expert Panel PLG Project Leading Group PIU Project Implementation Unit PMO Project Management Office PMP Pest Management Plan RAP Resettlement Action Plan SDG Sustainable Development Goal SuDS Sustainable Drainage Systems TA Technical Assistance TSS Total Suspended Solids UN United Nations WSUD Water Sensitive Urban Design WWTP Wastewater Treatment Plant Regional Vice President: Manuela V. Ferro Country Director: Martin Raiser Regional Director: Benoit Bosquet Practice Manager: Sudipto Sarkar Task Team Leader(s): Liping Jiang ICR Main Contributor: Shona Fitzgerald TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ..............................................................10 II. OUTCOME .................................................................................................................... 11 A. RELEVANCE OF PDOs ............................................................................................................11 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................................13 C. EFFICIENCY ...........................................................................................................................17 D. JUSTIFICATION OF OVERALL OUTCOME RATING ....................................................................18 E. OTHER OUTCOMES AND IMPACTS .........................................................................................18 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 20 A. KEY FACTORS DURING PREPARATION ...................................................................................20 B. KEY FACTORS DURING IMPLEMENTATION .............................................................................21 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 22 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................22 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE .....................................................24 C. BANK PERFORMANCE ...........................................................................................................26 D. RISK TO DEVELOPMENT OUTCOME .......................................................................................27 V. LESSONS AND RECOMMENDATIONS ............................................................................. 28 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 30 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 39 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 41 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 42 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 44 ANNEX 6. SUPPORTING DOCUMENTS .................................................................................. 46 ANNEX 7. WASTEWATER EFFLUENT AND ENVIRONMENTAL WATER QUALITY CLASSES ......... 47 ANNEX 8. CALCULATION ASSUMPTIONS FOR THE PROJECT INDICATORS .............................. 48 ANNEX 9. RESETTLEMENT IMPACTS ..................................................................................... 52 ANNEX 10. PHOTOS OF SELECTED ACTIVITIES ....................................................................... 54 ANNEX 11. PROJECT MAP .................................................................................................... 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name China-Qinghai Xining Water Environment Management P133116 Project Country Financing Instrument China Investment Project Financing Original EA Category Revised EA Category Full Assessment (A) Full Assessment (A) Organizations Borrower Implementing Agency PEOPLE'S REPUBLIC OF CHINA Xining Municipal Government Project Development Objective (PDO) Original PDO The Project Development Objective is to reduce water pollution and pilot potential sustainable reuse of wastewater in Xining Municipality. Page 1 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 150,000,000 150,000,000 150,000,000 IBRD-84230 Total 150,000,000 150,000,000 150,000,000 Non-World Bank Financing 0 0 0 Borrower/Recipient 96,600,000 53,200,000 53,200,000 Total 96,600,000 53,200,000 53,200,000 Total Project Cost 246,600,000 203,200,000 203,200,000 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 25-Sep-2014 16-Feb-2015 28-Jul-2017 31-Dec-2019 30-Jun-2021 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 31-Dec-2019 101.76 Change in Loan Closing Date(s) Reallocation between Disbursement Categories KEY RATINGS Outcome Bank Performance M&E Quality Highly Satisfactory Satisfactory High RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 10-Dec-2014 Satisfactory Satisfactory 0 02 08-Jun-2015 Satisfactory Satisfactory 0 Page 2 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) 03 07-Dec-2015 Satisfactory Satisfactory 11.00 04 14-Jun-2016 Satisfactory Satisfactory 30.75 05 03-Sep-2016 Satisfactory Satisfactory 34.75 06 17-Feb-2017 Satisfactory Satisfactory 35.25 07 28-Sep-2017 Satisfactory Satisfactory 42.44 08 16-Jan-2018 Satisfactory Satisfactory 52.27 09 31-Jul-2018 Satisfactory Moderately Satisfactory 52.27 10 25-Feb-2019 Satisfactory Moderately Satisfactory 73.71 Moderately 11 20-Dec-2019 Moderately Unsatisfactory 101.76 Unsatisfactory 12 30-Jun-2020 Moderately Satisfactory Moderately Satisfactory 112.03 13 29-Dec-2020 Satisfactory Satisfactory 144.54 14 28-Jun-2021 Highly Satisfactory Satisfactory 149.63 SECTORS AND THEMES Sectors Major Sector/Sector (%) Agriculture, Fishing and Forestry 5 Agricultural Extension, Research, and Other Support 5 Activities Water, Sanitation and Waste Management 95 Sanitation 68 Public Administration - Water, Sanitation and Waste 27 Management Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Urban and Rural Development 19 Urban Development 19 Urban Infrastructure and Service Delivery 19 Page 3 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Environment and Natural Resource Management 81 Environmental Health and Pollution Management 30 Air quality management 10 Water Pollution 10 Soil Pollution 10 Water Resource Management 51 Water Institutions, Policies and Reform 51 ADM STAFF Role At Approval At ICR Regional Vice President: Axel van Trotsenburg Manuela V. Ferro Country Director: Klaus Rohland Martin Raiser Director: Junaid Kamal Ahmad Benoit Bosquet Practice Manager: Ousmane Dione Sudipto Sarkar Task Team Leader(s): Ximing Zhang Liping Jiang ICR Contributing Author: Shona Kate Fitzgerald Page 4 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. At the time of project appraisal, water scarcity and water pollution in China were major challenges for sustainable urban development. China’s per capita water resources amounted to 2,120 m3 per person, one-third of the global average. 1 Water scarcity was exacerbated by disparity in the spatial distribution of water with less available for populations in the north, as well as increasing residential, agricultural, and industrial water demand. Water scarcity was driving water shortage in two-thirds of China’s cities, with a total annual water deficit of 10.5 billion m3. Water scarcity was exacerbated by increasing pollution of rivers, particularly in China’s northern basins. Nearly 40 percent of Chinese rivers were seriously polluted and unfit for drinking water in 2010 and the groundwater quality in more than half of the 200 cities surveyed were classified as ‘bad’ (40.3 percent) or ‘extremely bad’ (14.7 percent). 2 2. Several national plans were focused on water resource conservation and environmental protection. The 12th National Five-Year Plan (FYP) (2011–2015) included water conservation, treatment of sewage, and restoring of environmental health to rivers and lakes. In 2011, the Three-Red Line Policy was set up to control total water use, improve water use efficiency, and control water pollution. This was followed by an action-oriented plan issued in 2012 by the State Council to realize the goals articulated in policy, the guidelines on implementing the stringent water resources management system. Other national plans were also being developed and implemented to manage water challenges, such as the National Water Resource Master Plan, approved in 2010, and the 2010 Decision of the Central Committee of the Communist Party of China and the State Council on Accelerating the Reform and Development of Water Conservancy. 3. Low impact development (LID) was emerging as global best practice for pollution control through stormwater management and its application in China was growing. LID had been in practice in the United States since the 1990s and is based on the principle of using nature as a model for stormwater management, including reducing runoff and preventing waterway pollution. 3 At the time of appraisal, recent directives from the Ministry of Construction recommended the introduction of LID practices. LID was an innovative project design feature, which would increase the experience of LID practices within China for urban stormwater and drainage management and would provide co-benefits, such as appreciation of property values and recreational amenity for beneficiaries within the project area. 4. Xining City, the capital of Qinghai Province in northwestern China, is the project area for the Qinghai Xining Water Environment Project discussed in this Implementation Completion and Results Report (ICR). At appraisal, the municipality had a population of 2.23 million people and severe water shortage and pollution issues. The Provincial Hydrology Bureau data and a water balance analysis showed that the water shortage was worsening; at that time annual deficits were projected to be 550 million m3 1 World Bank. 2013. China Country Water Resources Partnership Strategy 2013–2020, Washington, DC: World Bank. 2 “China’s Underground Water in Poor Condition.” Gov.CN (Chinese Government’s Official Web Portal), May 10, 2012. http://www.chinadaily.com.cn/china//2012-05/10/content_15263283.htm. 3 Prince George's County (Md.). Department of Environmental Resources. Programs and Planning Division. 1999. Low-Impact Development: An Integrated Design Approach. https://www.epa.gov/nscep. Page 5 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) by 2020 and 615 million m3 by 2030. The four rivers in and around Xining Municipality (Huangshui, Nanchuan, Beichuan, and Shatangchuan Rivers), tributaries to the Yellow River, were polluted to different extents by direct wastewater discharge, sediments rich in nutrients, and solid waste disposal into the rivers from local industrial and domestic sources. 5. The Xining Municipal Government was strengthening its efforts to protect water resources. The Municipal 12th FYP required efforts to improve water quality of the Huangshui River and enhance water pollution management overall. The Municipal 12th Environment Protection FYP specifically included indicators to eliminate waterbodies of inferior V class (see annex 7 for classification description) by 2015, realize full wastewater collection system coverage by 2015, and achieve 30 percent of reclaimed water reuse. Moreover, the Integrated Management Plan for the Huangshui River has limited chemical oxygen demand (COD) discharged to the river within 1,310,000 tons by 2020 and 990,000 tons by 2030. The Xining Municipal Urban Development Master Plan (2030) targeted increasing reclaimed water reuse rate to 50 percent, for municipal, landscape, and some industrial purposes. The Qinghai Xining Water Environment Program was proposed to support these aims by focusing on water pollution reduction from both point (domestic wastewater) and non-point (stormwater) sources and increased reuse of wastewater in the Huangshui River basin. Moreover, Xining was an opportunity to gain experience for future application of emerging LID practices. At the time of appraisal, 61 percent of domestic wastewater was being collected, transported through some separate wastewater systems and some combined wastewater and stormwater systems, and treated through six wastewater treatment plants (WWTPs) (No.1–No.6 WWTP). At appraisal, these six WWTPs ranged from fully operational to designed and ready for construction and had a combined capacity of 260,000 m3 per day. However, several existing WWTPs did not have complete wastewater collection networks and were operating below capacity. To reach 100 percent collection and treatment within five years, there were plans to expand the network 4 and augment the treatment system to a total of nine WWTPs to provide capacity to treat 382,5000 m3 per day. 6. The project was aligned with the World Bank-China Country Partnership Strategy (CPS) 2013– 2016 (Report No. 67566-CN). Consistent with China’s priorities, the CPS focused on three main themes: (a) green growth, (b) inclusive development, and (c) mutually beneficial relations with the world. The project contributed to ‘addressing environmental management’ (CPS Outcome 1.2: Enhancing Environmental Services) and ‘demonstrating ways to better manage ecosystems and conserve biodiversity’ (CPS Outcome 1.5: Demonstrating Sustainable natural Resource Management Approaches). World Bank support to China from 2005 to 2012 catalyzed an integrated approach to water and environmental management 5 and the proposed project was aligned with continuing this support in the sector. The design of the project proposed innovative LID interventions and community participatory approaches, which were to benefit from the World Bank’s global knowledge. Theory of Change (Results Chain) 7. In a context of water scarcity, the project aimed to reduce water pollution of rivers in Xining and pilot sustainable water reuse. Figure 1 shows a Theory of Change derived from the project description in the Project Appraisal Document (PAD). Structural measures were key to reduce water pollution and establish pilot-scale water reuse of wastewater using a mix of grey infrastructure 4 Plans for network expansion were included in the Provincial FYP, with some expansion to be met through the proposed project. 5 CPS. Page 6 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) (wastewater, stormwater and recycled water pipes, and affiliated infrastructure) and green infrastructure (LID features and canal and gully bank restoration). The key nonstructural activities included one study on water logging in Xining City and two studies on recycled water.6 The study on waterlogging was to analyze the points in Xining City prone to waterlogging and options to strengthen water logging prevention and control. The two recycled water studies were to analyze (a) the impact of reclaimed wastewater reuse on domestic soil and vegetation and (b) economy and policy schemes for stimulating reclaimed wastewater reuse. These latter two studies meant to analyze the sustainability of the wastewater reuse pilot and form the essential analytical underpinning for future expansion of recycled water schemes to reach the long- term outcome of improved water security. The project activities were enhanced through international and domestic study tours and capacity-building workshops. 8. To achieve the long-term outcomes from the project activities, the project planned to use the existing WWTPs. The project planned to connect the wastewater collection pipes, shown as outputs in figure 1, to No.3 WWTP, No.4 WWTP, and No.5 WWTP and planned to reuse treated wastewater from No.5 WWTP for the pilot-scale water reuse. The wastewater collection networks for these WWTPs were incomplete (paragraph 5); financing this network was a cost-effective way to achieve the project outcomes. These WWTPs had treatment-level classifications of 1B, 1A, and 1A, for No.3, No.4, and No.5, respectively (see annex 7). These three treatment plants were not financed through this project. No.5 WWTP was still under construction at appraisal and was considered an associated project subject to the environmental and social policies of the World Bank. Figure 1. Theory of Change 6Note that throughout the ICR ‘recycled water’ refers to the product from the reuse of wastewater and is used interchangeably with ‘reclaimed wastewater’. Page 7 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Project Development Objectives (PDOs) 9. The PDO as stated in both the Loan Agreement (LA) and the PAD was “to reduce water pollution and pilot potential sustainable reuse of wastewater in Xining Municipality.” Key Expected Outcomes and Outcome Indicators 10. The PDO captures two expected outcomes: (a) reduced water pollution and (b) piloted potential sustainable reuse of wastewater in Xining Municipality. 11. Achievement of the PDO was assessed through the following PDO-level outcome indicators: (a) direct project beneficiaries, (b) volume (mass) of Biochemical Oxygen Demand (BOD) pollution load removed by treatment plant under the project 7, (c) volume (mass) of Chemical Oxygen Demand (COD) pollution load removed by treatment plant under the project, (d) reduction of Total Suspended Solids (TSS) load flowing into the river systems, and (e) volume of treated wastewater reused. Components 12. According to the LA and further detail in the PAD, the project included the following components: 13. Component 1: Construction of Stormwater and Wastewater Collection Systems (estimated at appraisal: US$139.8 million, including IBRD US$100.6 million, counterpart funding US$39.2 million; Final cost: US$134.0 million, including IBRD US$102.8 million, counterpart funding US$31.2 million). Construction of stormwater and wastewater collection pipes (including affiliated access roads and other urban facilities in Beichuan Area) along selected rivers and urban wastewater distribution networks. The PAD proposed this would include the following: (a) Construction of 34 km of stormwater and wastewater collection pipes (DN800–DN1000) from Datong WWTP to Ningda Road toll gate along Beichuan River for No.5 WWTP (b) Construction of 16 km of stormwater and wastewater collection pipes from Yangjiawan Village to Duoba along Xichuan River for No.4 WWTP (c) Construction of 34 km of six wastewater collection pipes for No.3 WWTP (d) Construction of 44 km of stormwater collection pipes in Beichuan Area (e) Construction of affiliated access roads and other urban facilities. 14. Component 2: Comprehensive Stormwater Management and River-bank Environment Restoration (estimated at appraisal: US$35.9 million, including IBRD US$25.8 million, counterpart funding US$10.1 million; Final cost: US$23.4 million, including IBRD US$23.4 million, counterpart funding US$0.0 million). The PAD proposed this would include the following: (a) Development and implementation of LID 8 stormwater management in Beichuan Area 7 As described in paragraph 5 and the Components section, the existing WWTPs (No.3, No.4, and No.5) were used for removal of BOD and COD. 8 Typical LID features mentioned in the PAD and LA included increased vegetation covers, vegetative swales, bio-retention basins, permeable pavements, water reuse, and rainwater harvesting. Page 8 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) (b) Riverbank environment restoration9 along the banks of the Beichuan River. 15. Component 3: Integrated Gully and Canal Improvement (estimated at appraisal: US$28.7 million, including IBRD US$20.6 million, counterpart funding US$8.1 million; Final cost: US$21.1 million, including IBRD US$21.0 million, counterpart funding US$0.1 million). The PAD proposed this would include the following: (a) Integrated improvement of 10.4 km Chaoyangdian Canal with wastewater collection pipes, access road, affiliated structures, and environment sanitation facilities (b) Integrated improvement of 0.9 km Liujia Gully with channel normalization, slope protection, and box culvert construction (c) Integrated improvement of 0.9 km Shengou Gully with canal normalization, slope protection, wastewater collection pipe construction, and environment sanitation facilities. 16. Component 4: Wastewater Reuse (estimated at appraisal: US$1.80 million, including IBRD US$1.50 million, counterpart funding US$0.30 million; Final cost: US$1.4 million, including IBRD US$1.4 million, counterpart funding US$0.0 million). This component piloted the sustainable reuse of treated wastewater and, as proposed in the PAD, consisted of the following: (a) Construction of treated wastewater pumping station and affiliated monitoring facilities with a capacity of 5,000 m3 per day at No.5 WWTP (b) Construction of approximately 5 km of water transmission pipes (c) Technical assistance (TA) for a study on economy and policy schemes for stimulating reclaimed wastewater reuse (d) TA for a study on impact of reclaimed wastewater reuse on domestic soil and vegetation. 17. Component 5: Project Management and Capacity Building (estimated at appraisal: US$31.30 million, including IBRD US$1.20 million, counterpart funding US$30.10 million; Final cost: US$14.7 million, including IBRD US$1.0 million, counterpart funding US$13.7 million). The PAD proposed this would include the following: (a) Construction supervision (b) Establishment of a management information system (MIS) (c) TA on waterlogging (d) Provision of consulting services for monitoring and evaluation (M&E) and technical support on, integrated water and environmental management, reclaimed wastewater policies, regulations and technical issues, and technical and management workshops (e) Domestic and overseas training and study tours. 9Typical riverbank restoration work mentioned in the PAD and LA included residue soil cleaning; planting of diversified native vegetation along stream banks; construction of porous walk paths, access roads, and green byways; installation of lighting systems and environment sanitation facilities; and greening of the water supply catchment areas and other environmental amenities. Page 9 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) B. SIGNIFICANT CHANGES DURING IMPLEMENTATION Revised PDOs and Outcome Targets No changes. Revised PDO Indicators No changes. Revised Components 18. The investments under Component 1 were proposed to include 16 km stormwater and wastewater collection pipes from Yangjiawan Village to Duoba along Xichuan River for No.4 WWTP (Paragraph 13.b). This 16 km of pipeline was removed from the project scope (see paragraph 22). Other Changes 19. The project had a Level II restructuring approved by Country Director decision on December 31, 2019, and included changes in loan closing date and the disbursement categories as follows: (a) Project closing date extension by 18 months, from the December 31, 2019, to June 30, 2021. (b) Reallocation between disbursement categories with categories (1) for civil works and categories (2) and (3) for goods, consultant’s services, non-consulting services, training, and workshops reallocated with their respective disbursed amount. (c) Creation of a new disbursement category (4) and allocation with the undisbursed amount for all project activities under categories (1), (2), and (3). (d) Increase of disbursement rate of loan proceeds under civil works category from 88 percent to 100 percent (retroactively from July 15, 2015). Rationale for Changes and Their Implication on the Original Theory of Change 20. Paragraph 19, change (a) was necessary to allow sufficient time to achieve the PDOs. There were some project delays caused by an upgrade to the technical standards for bridges in line with the Government’s updated 13th FYP (2016–2020). The standards upgrade occurred approximately two years after project implementation began and necessitated the redesign of the six bridges under Components 1 and 4, which formed part of the affiliated urban facilities to transport wastewater and recycled water pipelines. The updated time line for the completion the bridges was April 30, 2021, 16 months after the original closing date. Given the necessity of bridge completion for recycled water to be transferred from the No.5 WWTP located on the east bank of the Beichuan River to landscaping and irrigation areas on the west bank, the pipeline and TA studies under Component 4 were also delayed. The Project Management Office (PMO) prepared a time-bound action plan for the remaining activities at the time of restructuring, which was followed until project closing. The extension of closing date allowed achievement of all the PDOs. Page 10 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) 21. Paragraph 19, changes (b), (c), and (d) were necessary to accommodate cost savings and maximize the use of IBRD financing. The project achieved loan savings due to competitive bidding processes, appreciation of US dollar against the Chinese yuan, and Government financing of Component 1, activity (b) (paragraph 13) through its own funds. Specifically, the competitive bidding process reduced the costs by 10–15 percent against estimates in the PAD, and appreciation of the US dollar against the Chinese yuan resulted in the weighted average exchange rate increasing from 6.1 at appraisal to 6.5 at the midterm review. The province requested to make a full use of these savings from loan proceeds for the existing activities by increasing the disbursement percentage for civil works. The described changes in the disbursement categories allowed the IBRD loan to be 100 percent disbursed. 22. The change in paragraph 18 was prompted due to a change in Government investments following the 13th FYP (2016–2020). This plan outlined a comprehensive pipe gallery project to accelerate essential infrastructure construction around Doba City. The 16 km of pipeline described in paragraph 18 was included in the scope of the Government project and therefore removed from the World Bank- financed project. This change was not processed in a formal restructuring as it did not (a) result in any change to the component as described in the LA or (b) affect the ability to achieve the PDO. The achievement of results despite the exclusion of this 16 km of pipeline is discussed further in paragraph 30. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating Rating: High 23. The PDOs are aligned with the World Bank’s Country Partnership Framework (CPF) (FY20–FY25, Report No. 117875-CN), contributing to Engagement Area 2: Promoting greener growth. Specifically, under Objective 2.2: Reducing Air, Soil, Water, and Marine Plastic Pollution the project is aligned to reducing pollutant discharge into freshwater as one of its two PDOs. Under Objective 2.4: Strengthening Sustainable Natural Resources Management, the project is aligned with the aim of ‘demonstrating integrated water resource management’ and through the pilot and studies on water reuse provides analytical underpinnings to help ‘implement market approaches to water scarcity and pollution challenges’. 24. The PDOs are consistently aligned with the national challenges and priorities outlined in China’s 12th (2011–2015), 13th (2016–2020), and 14th (2021–2025) FYPs. The 12th, 13th, and 14th FYPs include aims for water conservation and environmental protection, with the 13th and 14th FYPs including a specific indicator for improved surface water quality. The 14th FYP, adopted before project closing in March 2021, aligns with the PDOs and project activities in its objectives to (a) Strengthen the construction of water conservancy including “management and protection of rivers” and to “restore the aquatic ecosystem to provide clear waters and green banks;” (b) Continue to improve environmental quality including to “improve the water pollution prevention,” with particular reference to reductions in COD and ammoniacal nitrogen (NH3- N) discharge to waterways; Page 11 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) (c) Comprehensively improve the level of environmental infrastructure including to “increase the utilization rate of wastewater resources in water-scarce cities;” and (d) Comprehensively increase resource use efficiency including to “encourage the use of recycled water.” 25. Recent research shows the Xining’s water resources deficit has decreased since 2013 but remains a challenge, and the PDOs remain aligned to provincial and municipal priorities and aspirations as expressed in several planning documents. Recent studies showed that Xining’s water resource deficit had decreased since a peak in 2015 until 2018, 10 but sustainable water resource use was still a challenge, with recommendations to focus on optimizing industrial sector use, in part, through optimizing use of recycled water. 11 The need for increased use of recycled water is also supported by the recent Implementation Plan of Qinghai Province to Promote the Utilization of Wastewater Resources (2021), which aims to increase wastewater reuse to 25 percent by 2025 and establish a market mechanism and economical wastewater reuse by 2035. Similarly, water quality and water logging issues in parts of Xining City persist. The Xining Urban Development Master Plan (2030) includes a water resources development plan and water pollution control plan to raise the quality of the rivers in and around Xining City. The Qinghai Province’s 2nd FYP and Xining City’s 12th FYP aim to strengthen pollution management and governance of Huangshui River and its tributaries and create a green riverside landscape. 26. Addressing urban water pollution in China has become embedded in contemporary water management practices through the Sponge City Program. A program to better manage stormwater quantity and quality by adopting and further developing LID approaches in China, called Sponge City Program, started emerging in 2014 and the Construction Guidelines of Sponge City in China - Low Impact Development of Stormwater System (trial) 12 were developed. The Sponge City Program is widely cited as the beginning of the formal adoption of LID principles into urban water management in China. 13 The Sponge City Program selected 30 pilot cities across China, including Xining in 2016, and aimed to (a) adopt and develop LID concepts, which improve effective control of urban peak runoff, to temporarily store, recycle, and purify stormwater; 14 (b) upgrade the traditional drainage systems using more flood-resilient infrastructure; and (c) integrate natural waterbodies, such as wetlands and lakes, and encourage multi- functional objectives within drainage design such as provision of green space and enhancing of ecosystem services. 15 The Qinghai Province provided guidance on the Xining pilot through the Implementation Opinions of the General Office of Qinghai Provincial People's Government on Promoting the Construction 10 Chen, Z., B. Gong, J. Jiang, Z. Liu, and K. Chen. 2021. “Dynamics of the Urban Water Footprint on the Tibetan Plateau: A Case Study of Xining, China.” International Journal of Environmental Research and Public Health 18: 45–66. 11 Dong, H., Z. Feng, Y. Yang, P. Li, and Z. You. 2021. “Sustainability Assessment of Critical Natural Capital: A Case Study of Water Resources in Qinghai Province.” China. Journal of Cleaner Production 286: 125–532. 12 Ministry of Housing and Urban-Rural Development. 2014. Construction Guidelines of Sponge City in China - Low Impact Development of Stormwater System (trial). 13 Radcliffe, John. 2018. “History of Water Sensitive Urban Design/Low Impact Development Adoption.” In Approaches to Water Sensitive Urban Design: Potential, Design, Ecological Health, Urban Greening, Economics, Policies, and Community Perceptions edited by A. Sharma, T. Gardner, and D. Begbie. Woodhead Publishing. 14 According to Prince George's County (Md.). Department of Environmental Resources. Programs and Planning Division, 1999, LID features to manage stormwater include bioretention areas, swales, infiltration trenches, reduced impervious area, and revegetation 15 Chan, F. K.S ., J. A. Griffiths, D. Higgitt, S. Xu, F. Zhu, Y. T. Tang, Y. Xu, and C. R. Thorne. 2018. “’Sponge City’ in China—A Breakthrough of Planning and Flood Risk Management in the Urban Context.” Land Use Policy 76; 772–778. Page 12 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) of Sponge City (2015). 16 The PDO of reduced water pollution is therefore strongly aligned to the guidance, goals, and contemporary practices in urban water management in China. Moreover, the project activities provided an early example and paved the way for further adoption of these contemporary practices in Xining. 27. The PDOs contribute to achieving several United Nations (UN) Sustainable Development Goals (SDGs) and commitments in the UN Habitat New Urban Agenda (NUA). The PDOs are directly linked to SDG 6 (ensure availability and sustainable management of water and sanitation for all) and SDG 11 (make cities and human settlements inclusive, safe, resilient, and sustainable). The PDOs align strongly to Goal 6.3 ‘improve water quality by reducing pollution’, Goal 6.6 ‘protect and restore water-related ecosystems’, and Goal 11.6 ‘reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management’. Moreover, the project activities support Goal 6.2 ‘access to adequate and equitable sanitation’, and Goal 11.7 ‘provide universal access to safe, inclusive and accessible, green and public spaces’. The NUA, endorsed by the UN General Assembly in 2016, outlines commitments to achieve environmentally sustainable and resilient urban development. The PDOs and project activities are directly linked to commitments to “promoting the conservation and sustainable use of water by rehabilitating water resources within the urban, peri-urban and rural areas, reducing and treating wastewater, minimizing water losses, promoting water reuse” and “the creation of… multipurpose, safe, inclusive, accessible, green and quality public spaces.” 28. The relevance of the PDOs is rated High, considering the close alignment of the PDOs with national and local development priorities, the World Bank CPF at appraisal and closure, and global agendas such as the UN SDGs and NUA. B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome Rating: High 29. The assessment of the achievement of the PDO is unpacked into two outcomes: (a) reduced water pollution and (b) piloted potential sustainable reuse of wastewater in Xining Municipality. There are five PDO outcome indicators as shown in table 1. The first four indicators provide a measure of outcome (a) and the fifth a measure for outcome (b). Table 1 demonstrates that all outcome indicator targets were exceeded, and intermediate results indicator targets were achieved according to annex 1. Information on the assumptions and calculation methodology of indicator values is contained in annex 8. Table 0.1 Achievement of the PDO Outcome Indicators Indicator Baseline Target Actual Achieved 1. Direct project beneficiaries (1,000 person) 0.00 319 365 2. Volume (mass) of Biochemical Oxygen Demand (BOD) pollution 0.00 727 1,202 load removed by treatment plant under the project (Ton/year) 3. Volume (mass) of Chemical Oxygen Demand (COD) pollution 0.00 1,767 2,862 load removed by treatment plant under the project (Ton/year) 16For example, guidance included “strengthen the protection of urban natural water system and ecological restoration,” “channelized river channel shall be reconstructed in a planned way,” “comprehensive treatment of pollution in key river basins shall be implemented… Take measures such as source control, sewage interception.” Page 13 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Indicator Baseline Target Actual Achieved 4. Reduction of Total Suspended Solids (TSS) load flowing into the 0.00 985 1,096 river systems (Ton/year) 5. Volume of treated wastewater reused (1,000 Ton/year) 0.00 868 1,289 Outcome (a): Reduced water pollution 30. PDO-level Outcome Indicator 1 shows that at project closure, 365,000 people benefited from reduced water pollution, defined as those residing in areas benefiting from sewerage networks connected to WWTPs, riverbank restoration, and gully and canal improvement, based on annual population statistics from Xining City and project district counties. As shown on the project map in annex 11, the beneficiaries are residents in Chengbei District, Chengxi District, and Chengdong District, and some towns in Datong County, including 50 percent women. The target number of beneficiaries at appraisal was set based on the population growth in the project areas in line with the Xining 13th FYP; however, the population growth rate was higher than expected. Higher growth rates have been attributed in part to the improved amenity and connectivity because of the project interventions, particularly the LID features and environmental restoration (see paragraphs 50 and 51). Given the innovative nature of the LID features, it was not possible to foresee the increased population growth rate at appraisal. The beneficiary data therefore exceeded the target and had follow-on impacts on PDO-level Indicators 2 and 3, which rely on population data for their calculation (see annex 8). 31. PDO-level Outcome Indicators 2 and 3 measure the BOD and COD pollutant load removed through the constructed stormwater and wastewater networks and associated WWTPs, No.3 and No.5, which have respective treatment levels of 1B and 1A (annex 7). The average volume of stormwater collected was 1,400 m3 per day (Intermediate Indicator 9) and the average volume of wastewater collected was 80,600 m3 per day (Intermediate Indicator 6). The volume of wastewater was delivered to WWTP No.3 and No.5 represents 62 percent of the combined WWTP capacity. The wastewater was treated to remove 1,202 tons of BOD per year, 2,862 tons of COD per year, and 251 tons of NH3-N per year (Intermediate Indicator 7). 32. PDO-level Outcome Indicator 4 measures the reduced TSS load flowing into the river systems, defined as the reduction in TSS transport in stormwater runoff directly to the river due to increased runoff infiltration with LID infrastructure. The calculated result of 1,096 tons per year is based on an assumed TSS load removal rate of 30 percent 17 and annual runoff reduction of 45 percent (Intermediate Indicator 9,531,000 m3 runoff reduction per year). 18 While pollutant removal and runoff reduction rates vary depending on basin and rainfall characteristics, literature generally supports the assumptions underpinning Indicator 4. For example, a study of TSS load removal rate across four bioretention units in Australia and the United States showed an average load removal of 61 percent (± 24 percent) for rain events after short dry periods. 19 A study of runoff from two bioretention basins showed average reduced peak runoff of 49 percent and 58 percent across 49 rain events. 20 Water quality data from Beichuan River, Chaoyang Bridge show concentration reductions from 2017 to 2020 of 53 percent for BOD, 68 percent for 17 Based on Ministry of Housing and Urban-Rural Development. 2014. Construction Guidelines of Sponge City in China - Low Impact Development of Stormwater System (trial). 18 Based on literature and subject matter expertise. 19 Mangangka, I.R., A. Liu, P. Egodawatta, and A. Goonetilleke. 2015. “Performance Characterisation of a Stormwater Treatment Bioretention Basin.” Journal of Environmental Management 150: 173–178. 20 Davis, A.P., 2008. “Field Performance of Bioretention: Hydrology Impacts.” Journal of Hydrologic Engineering 13 (2): 90–95. Page 14 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) COD, and 84 percent for TSS. 21 These data further support the assumptions underlying the project TSS load reduction calculations. The TSS load reduction is also supported by the decreased soil erosion flowing into the river system (Intermediate Indicator 8), which was calculated to be 3,072 tons per year at project closing. 33. Intermediate Indicators 10 and 11 measured the percentage completion of gully and canal improvement (Intermediate Indicator 10) and environmental and sanitation facilities installation along gully and canal (Intermediate Indicator 11) and were both measured at 100 percent at project completion. These indicators provided a means to measure progress toward the achieving outcome (a), particularly the reduction of pollution from stormwater runoff. 34. Outcome (a) ‘reduced water pollution’ has been successfully achieved as demonstrated by Outcome Indicators 1–4, all exceeding the targets by project closing. The Indicator 1 target is exceeded due to sharper-than-projected increase of population in the project areas (see paragraphs 50, 51). Higher population in the target areas resulted in higher wastewater volumes, combined with improved performance of WWTPs for pollutant removal, resulted in Indicators 2 and 3 exceeding the targets. The baseline of Indicators 2 and 3 is 0.00 ton per year, and without the project interventions sewage in the target areas would have been released directly to the environment. Indicators 2–4 clearly demonstrate reduction of point and non-point source pollution loads from sewage and rainfall runoff respectively, thereby achieving the objective of reduced water pollution. The impact on water pollution is also reflected in the Beichuan River water quality monitoring data where data from 2012 show the water quality upstream of project interventions at Xining Bridge (Datong) was Class III (see annex 7 for class definitions) and the water quality downstream at Chaoyang Bridge was Class V with key pollutants listed as NH3-N and BOD. River water quality measurements at the same locations in 2021, showed upstream water quality of Class III (no change) and downstream water quality of Class II. For this river section, the project therefore contributes to the Municipal 12th Environment Protection FYP target to eliminate Class V waterbodies. Improved water quality increases the water security in Xining, through increased availability of surface water. Outcome (b): Piloted potential sustainable reuse of wastewater in Xining Municipality 35. PDO-level Outcome Indicator 5 measures the volume of treated water reused, which at project closing was 1,289,000 m3 per year. Treated wastewater (‘recycled water’) is pumped from No.5 WWTP by the constructed pumping station with a capacity of 5,000 m3 per day (equivalent to 1,825,000 tons per year). Two studies on the use of recycled water were completed (Intermediate Indicator 12) and provided analysis of (a) the impact of recycled water on soil and vegetation and (b) the economic, policy incentives mechanisms for reuse of reclaimed water. 36. Outcome (b) ‘piloted potential sustainable reuse of wastewater in Xining Municipality’ was successfully achieved as demonstrated by Outcome Indicator 5 exceeding the target by project closure. The use of recycled water has been demonstrated at pilot scale (3,500 m3 per day), and recycled water is being used for diverse purposes including Beichuan River Wetland Park irrigation, municipal water trucks, village irrigation, and No.5 WWTP dosing water. There was no project indicator to measure the reuse sustainability as the impacts and potential of wastewater reuse were not known at project appraisal. 21 Environmental quality monitoring undertaken during project construction by environmental quality monitoring unit, Qinghai Branch of Sichuan Guohuan Environmental Engineering Consulting Co. Ltd. Page 15 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Therefore, key factors underpinning the sustainability were assessed through two studies (a) the environmental impact of using recycled water and (b) future potential recycled water demand and supply targets, quality requirements, pricing system, risk management, incentives, and supporting legislation and policies. The first study showed no significant negative impact on soil or vegetation. The latter study put forward three key recommendations: (a) strengthening water resources management by incorporating reclaimed water use into the annual water use plan and undertaking stringent water resources management assessment, (b) introducing a price difference between tap water and recycled water, and (c) constructing the pattern of utilization of domestic sewage as a resource by establishing and improving the safe operation and supervision system of recycled water use. The Implementation Plan of Qinghai Province to Promote the Utilization of Wastewater Resources (2021) was recently introduced and provides a framework for implementation of these recommendations, therefore ensuring sustainability of this pilot and future recycled water schemes. The activities under the project successfully achieved Outcome (b) and produced the analytical underpinning for future expansion of sustainable recycled water use, which will enhance the water security in Xining. 37. The successful achievement of both Outcomes (a) and (b) was underpinned by consistent institutional strengthening as measured by the number of PMO staff trained (Intermediate Indicator 13). As reported at project closing, 170 PMO staff were trained throughout the project through 29 domestic training activities and two overseas study tours, with many individuals benefitting from attending multiple workshops and training sessions. The content of training activities included procurement and financial management; project management; contract management, including inventory pricing, and measurement; land acquisition, resettlement, and social impact evaluation; urban stormwater and sewage collection and treatment; and M&E. Domestic and overseas study tours included inspection of water utilization and operations in Xi’an City, integrated water and environment management in Austria and Germany, urban stormwater collection and treatment in Germany, and integrated water resources management in the United Kingdom. As reported in the client’s ICR, this training improved the quality of project management and effective use of the MIS and allowed successful achievement of implementation requirements. This training will prove essential to effectively complete the project asset handover to responsible organizations for ongoing operation and maintenance (O&M) (see paragraph 82 for more information on O&M) and management of future donor-funded projects. 38. The project achievements drew attention from media and were well regarded across Government authorities. The project activities and achievements were detailed in media stories 22 (see newspaper clippings annex 10). Several core staff members of the Xining PMO participated in institutional building initiatives and were later promoted by the organization and assigned to leadership roles in provinces, cities, and towns. Moreover, Xining Municipality has received visits from peer municipalities to inspect implementation of innovative features of the project and results have been well received by the line ministries. 22 On October 4, 2018, the 4th edition of Qinghai daily featured Beichuan River Wetland Park: "The Story of Beautiful Qinghai, the ‘Reform Force’ of Clear Water and Green Banks". On November 27, 2020, the 12th edition of Xining evening news reported "World Bank Loan Project to Improve River Basin Governance Capacity". On December 16, 2020, the Qinghai Daily featured a full page on “World Bank-Financed Project Contributing to Building a Happy Xining.” Page 16 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Justification of Overall Efficacy Rating 39. The overall efficacy is rated High. Achievement of both outcomes, as measured by the PDO-level and intermediate indicators, have been met or exceeded. Furthermore, the results show a demonstrable contribution to ensuring Xining’s water security. C. EFFICIENCY Assessment of Efficiency and Rating Rating: Substantial 40. Cost-effectiveness approach (CEA). The economic analysis follows the approach adopted at appraisal. For components of wastewater collection, integrated gully improvement and stormwater management and riverbank environmental restoration, a least-cost analysis or CEA was adopted to compare alternatives and select the best design options to achieve the objective (details provided in annex 4). The competitive bidding-based procurement also contributed to the achievement of the least costs (paragraph 75); the final costs were 82 percent of the appraised cost estimates which also resulted in reduced cost to the counterpart from their funding (annex 3). 41. Cost-Benefit Analysis (CBA) for Demonstration of Water Reuse for Reclaim Water Component. The cost for this component was less than 1 percent of the total project cost, but the CBA was used to engage the Government in exploring and adopting the cost recovery approach for sustainable operations of the WWTPs. The analysis included the investments and O&M of the demonstration of water reuse for recycled water. The CBA was adopted to set the water reuse tariff level to ensure that the internal rate of return (IRR) was at par with the expected profitability. The recommended recycled water tariff is CNY 3.5 per m3 if the IRR is at 10 percent, which is assessed as reasonable and affordable as indicated in the TA study on water reuse. The recommended pricing level is likely to be gradually adopted by the Government according to the implementation plan to increase the use of recycled water and establish a market mechanism for economical wastewater reuse by 2035 (see paragraph 25). 42. Fiscal impact analysis. The Xining Municipal Government is responsible for the debt repayment and additional O&M costs of the infrastructure works built under this project. According to the current Government regulations and practices, wastewater treatment tariffs are embedded in the water use tariff, 23 and are substantially lower than the recommended pricing level for cost recovery and are set by the local government agencies. The state-owned enterprises operating the WWTPs are not involved in the tariff setting or collecting process, and their O&M costs are fully covered by the local budget allocation. There is no provision for users to pay for works under Components 2 and 3 and their O&M costs are fully funded by the Government budget. The annual fiscal revenue of the Xining Municipal Government for debt repayment and additional O&M costs is less than 1 percent of the total annual fiscal revenue. The O&M of the sewage collection pipes and rainwater collection pipelines financed by the project are being transferred to the relevant asset owners for O&M, which is financed by the municipal government fiscal allocations. 23Xining Water Supply (Group) Co. Ltd. 2021. Water Tariffs and Their Compositions for Drinking and No-drinking Users. http://www.8112112.com/a/kehufuwu/shuijiaxinxi/20121223/38.html. Page 17 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) 43. Implementation efficiency. All project activities were completed at costs below the appraisal and restructuring estimates, mostly due to bidding savings (annex 3). The reason for project extension was well justified to achieve the PDOs (paragraph 20); however, a delay of this magnitude in large-scale infrastructure schemes in Xining is not unusual as the construction season is only six months every year on the Qinghai-Tibetan Plateau for its long and harsh winter. Furthermore, the targets related to the first PDO had already been largely reached at the time of restructuring. 24 Implementation progress improved substantially after the restructuring with the World Bank financing 100 percent of the construction costs (see paragraph 21), and all project activities were completed before the revised closing date. 44. The project complied with the World Bank fiduciary and safeguard policies (see section IV.B). 45. Overall, efficiency is rated Substantial. As seen in paragraph 40, the least cost was achieved by selecting the least-cost technical packages and was further complemented by cost savings in the bidding process. According to paragraph 41, the CBA recommended tariff for recycled water, which is essential for the economic viability of the operation, depends the uptake of the Xining authorities (paragraph 82). The project extension did not have a serious effect on implementation efficiency. D. JUSTIFICATION OF OVERALL OUTCOME RATING 46. The overall outcome rating is Highly Satisfactory, considering the High relevance of the project’s objective to global, national, local, and World Bank priorities at appraisal and at closing; the High efficacy of the project as all PDO-level and intermediate indicators have been met or exceeded at closing; and the Substantial efficiency of the project. E. OTHER OUTCOMES AND IMPACTS Gender 47. The project implemented activities to restore or improve the livelihood of the female people affected by the associated projects. The social assessment at appraisal found that women were overrepresented in the household responsibility for disposing of wastewater (87 percent) and solid waste (73 percent). An action plan was developed with the PMO, Project Implementation Units (PIUs), and women’s federation and activities included to promote women’s participation and development. For example, trainings were provided for women as part of the implementation of the livelihood restoration measures, including dedicated training courses such as gardening, cooking, hotel service, sewing, and embroidery, and employment support was provided. In addition, focus group discussion with the female participants were arranged during the project design phase consultation, to solicit opinions of women. Institutional Strengthening 48. Several institutions supported the delivery of the project, according to figure 2. The capacity of municipal agencies was strengthened across project management, information management, M&E, and 24(a) direct project beneficiaries in number had reached 112 percent of the end target, (b) the volume of BOD pollution load removed by treatment had reached 130 percent of the end target, (c) the volume of COD pollution load removed by treatment had reached 114 percent of the end target, and (d) the reduction of TSS flowing into the river had reached 94 percent of the end target. Page 18 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) implementation of innovative LID interventions. At project closing 170 people had participated in 29 capacity-building training sessions, exceeding the target of 158 people (Intermediate Indicator 13). Project and information management capacities were built through training and workshops as well as implementation of the MIS. The project MIS integrates investment planning, project progress monitoring, contract management, withdrawal application and payment, capital budget control, financial management, and other project management functions. The MIS was the backbone for embedding the institutional strengthening and is seen as having been fundamental to good project and data management in this and future projects. The PMO intends to continue the use of the MIS for future work. M&E capacity was strengthened through the hiring of a consulting firm to support the PMO. Capacity for design and implementation of innovative LID interventions was supported through workshops, study tours, and a research project on waterlogging in Xining City. A total of four study tours over three years to Germany and the United Kingdom built an understanding of best practice approaches to integrated water and environmental management. In addition, the research project comprehensively analyzed the urban hydrological cycle and recommended options for managing waterlogging, including LID interventions. The combination of practical workshops, training, hands-on support from consultants, study tours, and a research study has strengthened the PMO and other municipal authorities and will be of great benefit to their future work. Figure 2. Implementation Arrangements Mobilizing Private Sector Financing 49. Not applicable. Private sector financing was not mobilized under the project; however, as described in paragraph 51 private sector financing for urban development was incentivized through the outcomes of the project. Poverty Reduction and Shared Prosperity 50. The project results of reduced water pollution and implementation of LID interventions to create urban green space directly contribute to shared prosperity. Without the project, wastewater would have continued to be discharged untreated to waterways. In addition, the wastewater infrastructure affiliated roads and bridges has increased connectivity of the project areas to other parts of Xining, thereby improving employment opportunities and income of residents. The increased amenity Page 19 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) of public space has resulted in increased rates of urbanization and an increase in the price of real estate (paragraph 51). Through the implementation of social safeguards measures, for example, replacement apartments and employment training, the living conditions of project-affected persons (PAPs) were improved. See an evaluation of social safeguards in section IV.B. Other Unintended Outcomes and Impacts 51. The success of LID and environmental restoration interventions has encouraged private investment, population growth, appreciated land value and facilitated peer-to-peer learning between municipal institutions. As cited in the client’s ICR, more than 2,100 acres of land on the right bank of the Beichuan River has been developed and used by four real estate development companies, with an additional eight companies expected to carry out further large-scale development. This has quickened the urbanization rate, for example, in Seongbuk where the real estate development is expected to result in an urbanization rate increase from 50 percent to 63 percent. Moreover, the value of the land in this region has increased from CNY 200,000 per mu 25 to CNY 4.5 million per mu. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 52. The project leveraged advanced international concepts and best practices, which helped improve the project design to make it comprehensive and responsive to the national and local needs. Inclusion of LID and other green infrastructure interventions was aligned with international best practices in LID in the United States, Sustainable Drainage Systems (SuDS) in the United Kingdom, and Water Sensitive Urban Design (WSUD) in Australia. It also aligned with the emerging Sponge Cities practice in China, which has subsequently been recognized in China’s 13th and 14th FYPs. In line with SuDS and WSUD practice, Component 3 was also designed with a participatory approach, promoting active stakeholder participation in the design and implementation of improvements in the Chaoyangdian Canal, Liujiagou Gully, and Shengou Gully through a combination of meetings, door-to-door interviews, and site visits. The project design ensured support for implementation of the innovative approaches through World Bank global expertise and capacity-building study tours to the United Kingdom and Germany as discussed earlier. 53. The project design included realistic objectives and appropriate implementation arrangements. The project design was focused and technically sound with well-defined components that linked logically to achieving the PDOs. Client ownership was strong from the outset, with the selection of components and subprojects to meet the PDOs led by the PMO (see Identification Mission Aide Memoire). The objectives and indicators aimed to address and measure the key causes and impacts of water pollution and aligned with water pollution reduction goals in the national FYP (COD load reduction). The design leveraged available wastewater treatment infrastructure to maximize the water quality outcomes from wastewater and stormwater network investments. Although several agencies were involved, the implementation arrangements were designed with clear leadership from the Project Leading Group (PLG) and division of responsibilities between the PMO, Project Expert Panel (PEP), and PIUs. Division of responsibilities between the PIUs, one based in Xining Municipal Drainage Development and Construction Company and the other based in Xining Municipal Huangshui Investment Management Co. Ltd., was 25 mu is a Chinese unit of area equivalent to 0.0667 ha. Page 20 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) arranged according to their sector mandates, which was appropriate for project implementation as well as the long-term O&M of project-financed assets. 54. The risk assessment at appraisal adequately identified risks and mitigation measures. The overall risk rating at appraisal was Substantial, with key risks identified as delay in land acquisition and resettlement, delay in provision of counterpart funding, inexperience with LID design and implementation, ineffective cross-sector coordination, and low capacity of PMO for implementation and compliance requirements. The risk of possible changes to infrastructure design standards, which later caused project delays, was not identified at appraisal. However, the mitigation measures to manage risks relating to inexperience with LID design and ineffective cross-sector coordination proved successful in managing the changes to infrastructure design standards when they occurred. These mitigation measures included monitoring implementation according to the approved design by government agencies and the World Bank task team, adjusting the design if necessary, and maintaining ongoing dialogue with government agencies. 55. The project had a good level of readiness for implementation. Environmental and social safeguard instruments were prepared and published as required. The PLG, PMO, PEP, and PIUs were established by appraisal. Some procurement activities were advanced at the time of approval, which allowed for four contracts to be signed and commitments to reach 34 percent of the loan value within the first six months of implementation. B. KEY FACTORS DURING IMPLEMENTATION 56. Changes to guidelines and plans during project implementation required adapting the project activities. Changes to the Xining City Road Construction Guidance required bridges supporting the sewerage network to be redesigned. The PMO acted in a timely manner to redesign the bridges and complete construction within the 18-month project extension. Changes under the Municipal 13th FYP included some investment in wastewater and stormwater pipework including along Xichuan River between Yangjiawan Village and Doba, which necessitated removing some pipework from the scope of Component 1 as this was covered under the scope of the FYP and financed by the Government. Delays in demolition of the Qinghai-Tibet old railway line and construction of a new railway line within the project area necessitated delay of some of the planned sewage collection pipework under Component 1. This will be completed later with Government funding. In the meantime, the PMO arranged for a temporary pipeline to be connected to the wastewater network. COVID-19-related travel restrictions affected the ability to carry out planned international study tours over 2020, which were replaced with domestic study tours. These changes did not compromise the ability to deliver the project objectives and demonstrated the project team’s flexibility to adapt to the changes in government requirements. 57. Government commitment and institutional strengthening supported successful implementation. The Government showed strong commitment to the project by early staffing of implementation agencies and steering groups (PLG, PEP, PMO, and PIUs). Several Government staff in the PMO were present from appraisal to completion, which provided continuity. PMO and PIU capacity was clearly building over time. Early project coordination delays included slow uptake of the MIS and slow recruitment for replacement of the PMO deputy director in 2017, which contributed to delayed disbursements and weak contract management. However, strong uptake of the MIS by midterm review and engaging a consultant to support M&E saw steady and significant capacity improvements, and in the end the MIS was listed as a key success of the project in the client’s ICR. While replacement of the Deputy Page 21 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Director took some time due to approval requirements from the Vice Mayor’s office, once the replacement was in place it significantly improved the pace of implementation. 58. Communication between the World Bank team and the project implementing partners was strong. The World Bank task team supported implementation through regular supervision and trainings. In addition to implementation support missions every six months, the task team undertook short (two days or so) status review missions to address specific project implementation constraints, such as meeting with the Vice Mayor to address the slow recruitment of a PMO Deputy Director (paragraph 57). Documentation was consistent, with actions clearly tracked and support provided to help overcome implementation challenges. Project cost savings, as described in paragraph 21, were identified and communicated early, and restructuring options to maximize the use of the IBRD loan were first discussed with counterparts already in mid-2016. The project delays described in paragraph 20 and the resulting risk to achieving the PDO caused the project performance and likelihood of achieving the development objective to be downgraded to Moderately Unsatisfactory in December 2019; however, these issues were addressed through the restructuring. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 59. The Results Framework was designed in a logical manner to measure the achievement of the two outcomes. Outcome (a) is captured by Indicators 2, 3, and 7 on point source pollution reductions and Indicator 4 on non-point source pollution. Two of these indicators measure water pollutants, which have reduction goals articulated in the 14th FYP, 26 thereby aligning measured project outcomes well with national priorities. Outcome (b) piloted sustainable wastewater reuse, which is measured by the amount of wastewater reused (Outcome Indicator 5). At project appraisal, because no wastewater reuse was available in Xining, the PDO was set only to pilot sustainable water reuse in Xining by providing the essential infrastructure system and two TA studies to understand the impact and potential of wastewater reuse. The level of sustainable wastewater reuse could not be known at appraisal and therefore sustainability was not linked to a specific indicator. The Results Framework has some minor shortcomings. For example, the wording of Indicators 2 and 3 could have been clearer to clarify that this project only financed wastewater collection systems and not the WWTPs. 60. At the intermediate indicator level, indicators were designed to adequately track project progress to achieve the PDOs and therefore could support informed decision-making throughout the project. Stormwater and wastewater collection, reduction of erosion, and reduction of stormwater runoff (Intermediate Indicators 6, 8, and 9) directly correlate to the reduction of the key pollutants (BOD, COD, and TSS) measured at the outcome level. Percentage completion of gully and canal improvement and environmental and sanitation facilities (Intermediate Indicators 10 and 11) as measured by percentage of contract amount disbursed, are effective measures for tracking the physical completion of assets, which lead to the achievement of Outcome (a). Percentage completion of TA (Intermediate Indicator 12) 26“We will improve the water pollution prevention and control basin coordination mechanism, strengthen the comprehensive management of key river basins, key lakes, urban water bodies, and coastal waters, promote the protection and construction of beautiful rivers and lakes, reduce chemical oxygen demand and total ammoniacal nitrogen emissions by 8% each.” Page 22 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) measured the percentage of contract amount disbursed for the three TA activities. In the case of the two recycled water TA studies, these correlate to understanding the sustainability of the recycled water pilot and therefore this is a sufficient progress measure to achieving Outcome (b). The progress of the third TA under Component 5 and measuring the number of PMO employees who have received training (Intermediate Indicator 13) allow insight into the capacity building of the PMO, a key enabling factor for the achievement of the PDOs. M&E Implementation 61. The results were collected on time according to the original Results Framework. The results data were recorded as part of the MIS, which tracked project management, contract management, accounting and financial reporting, and M&E. Early in project implementation, data inconsistencies between the M&E reports and MIS outputs were reported, which were caused by the time lag between the actual implementation progress and the belated data entry into MIS. However, this was resolved by the PMO by late 2016. M&E capacity building and support was provided by consultants to consolidate data and report through annual M&E reports and semiannual implementation progress reports. The reports showed the methods for data collection and progress against the Results Framework and against the safeguards instruments. 62. The design of the Results Framework was not revised during the project restructuring. The target values and dates were based on the Qinghai 13th FYP (2016–2020). According to paragraphs 30, 50 and 51, there was unexpectedly high population growth in the project areas, which is somewhat attributed to the outcomes of the project and resulted in exceeding the project targets. At the time of restructuring, a decision was taken not to revise the Results Framework because (a) the FYP data had not been updated and (b) given the unprecedented population growth and innovative nature of the project interventions, there was no basis of assumption for revising the targets. It is also noted that the reported unit of measurement according to annex 1 for Indicators 5 and 6 was incorrectly entered in the World Bank’s online tracking system (operations portal) and should read 1,000 m3 per year and m3 per year, respectively; however, this cannot be changed retrospectively. M&E Utilization 63. The M&E data, in addition to information recorded in the MIS, were used effectively to inform project implementation and support decision-making. In addition to the reporting listed in paragraph 62, as of mid-2018, the PMO provided the World Bank team with an updated Results Framework before each implementation support mission. This allowed for in-depth discussion of results and resolution of project implementation issues on a regular basis. The improved contract management and disbursement performance as the project progressed is somewhat attributable to the effective utilization of the M&E data because the data tracked and showed the PMO the areas where implementation had to be improved. Justification of Overall Rating of Quality of M&E 64. The overall quality of M&E is rated High. Although it took some time to build implementation capacity for effective quality control of data, it was resolved early in implementation. Overall, the M&E design was effective, implementation arrangements for M&E were adequate, and data were effectively used to inform project implementation and support project management decisions. Page 23 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 65. The Environmental risk rating of this project was appropriately classified as Category A (full assessment), triggering OP/BP 4.01 - Environmental Assessment and OP/BP 4.09 - Pest Management. A full set of environmental assessment documents was prepared at the appraisal stage, including the environmental assessment summary, Environmental Impact Assessment (EIA), Environmental and Social Management Plan (ESMP), and Pest Management Plan (PMP). The documents were disclosed on the Xining Municipal Government’s website on December 5, 2013, and the World Bank InfoShop on December 24, 2013. Throughout project implementation, the environmental performance of the project maintained a Satisfactory rating due to the strong commitment and good capacity of the client. All safeguards policies were complied with, per details presented in the paragraphs that follow. 66. Compliance with OP/BP 4.01 - Environmental Assessment. The EIA included the analysis of alternatives, cumulative impact assessment, risk assessment, mitigation measures, and monitoring plan. The ESMP listed practical actions for mitigation, institutional capacity building, monitoring and reporting schemes, and budgets. The ESMP was implemented by the client with satisfactory track records, with mitigation measures incorporated into designs and contracts. There are no pending environmental safeguard issues after the project closing. In addition, the regular monitoring for effluent quality from the WWTPs indicates that it meets the required standard. 67. Compliance with OP/BP 4.09 - Pest Management. This policy was triggered because of the likely use of pesticides in the planted areas. The PMP was prepared by local experienced experts for plant protection, and it proved adaptive and effective to local situations during project implementation with satisfactory rating of implementation. 68. Compliance with OP/BP 4.12 - Involuntary Resettlement. This policy was triggered because permanent land acquisition and temporary land acquisition were involved for the project construction. The Resettlement Action Plan (RAP) for the new resettlement and due diligence report for the resettlement under the two associated projects were prepared at the project preparation stage and disclosed on the Xining Municipal Government’s website on January 22, 2014. The land acquisition resettlement for project activities and associated activities was implemented satisfactorily and completed in compliance with the RAP. 69. Overall resettlement impact. According to the RAP, only one component (#1, stormwater collection works) out of four involved 0.16 ha of permanent land acquisition and 7.95 ha of temporary land occupation at the Xichuan River site, while construction of the other three components were all on land acquired or under acquisition by two associated projects: (a) the No.5 WWTP and (b) the Integrated Treatment Project of Beichuan River (Core Section). The RAP for the new resettlement and due diligence for the resettlement under the two associated projects were prepared. At the midterm review, the proposed stormwater collection works of Component 1 at the Xichuan River site was dropped (paragraph 22), and, therefore, all the project construction was carried out on the land acquired or under acquisition of the two associated projects. The final resettlement impacts were 223.8 ha of land acquisition and 1,207,539.86 m2 of physical displacement (including 1,181,600 m2 of residential houses and 25,939.86 m2 of nonresidential houses). See annex 9 (Table 9.1) for the comparison of the resettlement impact between the RAP and actual implementation. Page 24 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) 70. Compensation and restoration. The compensation and livelihood restoration for PAPs were implemented in compliance with the RAP and related regulations. For example, the compensation standard of permanent land acquisition was implemented by following the Integrated Annual Value and Regional Land Price of Qinghai Province (QZ No. 2,2010). On the other hand, the price of house demolition was subject to market evaluation. By the end of 2012, all resettlement-related compensation payments were made. Except for cash compensation, PAPs affected by land acquisition were also entitled to enjoy other livelihood restoration measures. For example, more than 150 people joined the social endowment insurance, 2,246 people received free employment training, and 410 of those trained were employed by local entities. Of the 1,343 households affected physically, 1,335 households chose to resettle in the new replacement apartments, and 8 households chose cash compensation. People who were physically affected were entitled to enjoy the profit sharing of the community assets such as hotels and stores. As the evaluation result of the ICR, the livelihood restoration measures ensured that the livelihood status of PAPs was restored to the pre-project level, or better for some people. Because the construction was all carried out on previously acquired land, there were no resettlement costs for the project. Therefore, the final resettlement cost of CNY 17,249,600 was lower than estimated in the RAP. 71. Consultation and public participation. Consultation was fulfilled throughout the project preparation and implementation stages. For example, consultation with the affected people in the early stages was carried out during preparation of the RAP, and the compensation and resettlement plan was disclosed to solicit opinions of the affected people, for example, at the site of the Integrated Treatment Project of Beichuan River (Core Section). Information related to the project was also disclosed and published on websites or through media, including a project introduction on the website of the Ministry of Environment Protection on April 22, 2015, and Xining Evening Paper on October 23, 2015. During implementation, the design of project facilities involved the community people to fully consider the needs of the users, for example, the community advice on safety consideration and access convenience were incorporated into the design of Chaoyang gully, and the needs of long-term livelihood restoration measures were considered during design of the replacement apartments and public facilities. 72. Grievance redress mechanism (GRM). A four-stage GRM was established under the project for safeguarding transparent, timely, and effectively redressing of the grievances. According to the PMO, complaints raised during the resettlement process were addressed by the GRM, without any legacy issues. However, there was inadequate documentation of the GRM operation, which is therefore an area that could be improved. 73. Compliance with OP/BP 4.10 - Indigenous Peoples. In the project preparation stage, it was identified that in some project areas there are ethnic minority villages, which might have been impacted by the project. This triggered OP/BP 4.10, so an Ethnic Minority Development Framework was prepared to manage any issues if any specific minority village or community was found in the implementation process. The actual design and implementation of the project did not find any minority village or community in the project activity area, therefore an Ethnic Minority Development Plan was not prepared. The issue was monitored by the external monitor and the supervision by the PMO and World Bank. 74. The project had extensive procurement requirements. There were 22 contracts in the final implemented Procurement Plan, of which 17 contracts were for civil works with a total contract value of approximately CNY 1,184 million; four were for consulting services with a total contract value of approximately CNY 8 million; and one was a non-consulting services contract, which was for CNY 0.45 million. Most of the contracts were procured and signed before 2017 with implementation completed by Page 25 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) end 2019, while several were signed later in 2018–2019. Early in implementation, some procurement problems occurred due to lack of procurement management capacity, differences between the Bank’s and domestic bidding policies and practices, unfamiliarity with the Bank’s bidding process and ineffective communications among various parties. However, improvements were achieved over time and close and frequent supervision by the World Bank resulted in overall satisfactory compliance with the World Bank’s procurement policies. 75. Bidding for works attracted many construction firms and consequently resulted in a much lower price due to effective competitiveness. Overall, the final awarded contract price was discounted by –10 percent to –20 percent of the average of bids, and by –25 percent to –35 percent of the pre-bid estimations. 76. Procurement post reviews were carried out regularly and identified long delays and numerous cost variations for most contracts. The delays and variations were a consequence of substantial changes in design (paragraph 20), slow progress reportedly due to low contract price and price increments of construction material, and interruptions or suspensions due to various time schedules and progress of different contractors in one working area. All issues were handled and processed appropriately in accordance with the conditions of the contract. No major quality issues were reported. The procurement assessment carried out throughout the project was Moderately Satisfactory in all Implementation Status and Results Reports (ISRs), except the last one, which was upgraded to Satisfactory. 77. The project had an adequate project financial management (FM) system that provided, with reasonable assurance, accurate and timely information that the loan was being used for the intended purposes. The project accounting and financial reporting were in line with the regulations issued by the Ministry of Finance and the requirements specified in the LA. No significant FM issues were noted throughout project implementation and the financial management-related issues or weaknesses raised during FM implementation or in audit reports could be resolved on time. The project audit reports were all with unqualified audit opinions. In addition, the withdrawal procedure and funds flow arrangement were appropriate. The loan proceeds were disbursed on time. C. BANK PERFORMANCE Quality at Entry 78. The project was strategically relevant, and the design was focused and effective to address national and local priorities for reduced water pollution and improved water security (see section II A and section III A). During project preparation, the World Bank mobilized a task team with a comprehensive mix of expertise and skills to support the client to include global best practices on LID and green infrastructure in the project design. Moreover, lessons learned from the Xining Flood and Watershed Management Project and Odra River Basin Flood Protection Project in Poland were applied to incorporate the participatory approach for gully and canal management. The feasibility studies were complete and bidding documents were ready for some contracts by project approval. 79. According to the borrower’s report, the World Bank performance was Highly Satisfactory during preparation, with reference to the value of the expert and technical guidance. This included support for the establishment of project leadership, management, and implementation agencies (figure 2); Page 26 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) international expertise and advice on river restoration and LID components; feasibility study; preliminary design; and project implementation plan. Quality of Supervision 80. Quality of supervision was maintained through regular support missions, adequate training opportunities, and expert advice. Implementation support missions were carried out at least twice a year, except for 2020 when only one mission was conducted due to COVID-19-related travel restrictions. Missions included high-level discussions, technical work sessions, and field visits. Aide Memoires presented information in a consistent manner and provided comprehensive evaluation of project performance and dictated clear action plans. The task team reviewed, on an ongoing basis, the project’s implementation progress, quality of works, technical issues, fiduciary compliance, and environmental and safeguards compliance and provided guidance constantly throughout project implementation and provided candid and thorough reporting in the ISRs. The World Bank team offered opportunities for the PMO to join procurement and safeguards training and workshops. The task team provided appropriate support for the adaptation to changing project conditions, (for example, advising on the procurement of consultants to improve the quality of M&E in 2018) and resolution of implementation issues (for example, restructuring to provide extension of time to meet project objectives). Two different task team leaders were assigned by the World Bank for project supervision and support. According to the borrower’s report, the World Bank performance was Highly Satisfactory during preparation, Satisfactory during the initial stages of implementation, Highly Satisfactory from 2018, and Highly Satisfactory at project closing. Justification of Overall Rating of Bank Performance 81. The overall rating of World Bank performance is Satisfactory. D. RISK TO DEVELOPMENT OUTCOME 82. The two key risks to the development outcome are the timely handover of O&M plans and level of uptake of TA study policy and planning recommendations. Legislation provisions for O&M dictate the asset owner responsibilities and specify requirements for public funding of O&M costs. O&M plans, including funding plans, have been approved by the relevant industry departments for all assets built under the project. Most O&M plans have been handed over from the PMO to the asset owners; those more recently completed assets are temporarily operated by one of the PIUs until formal handover can take place. Their adequate transfer to asset owners and subsequent implementation will require some follow-up from the PMO. The PMO will mitigate this risk by continuing to apply the MIS to follow up in an efficient and effective manner. 83. One of the recycled water TA studies provided policy and planning recommendations for increasing and sustaining future recycled water use. Some of the follow-up actions outlined to implement the recommendations (see paragraph 36) may prove challenging, including enforcing surface water and groundwater withdrawal limits for some recycled water users, ensuring required government subsidies to establish a price difference between recycled water and tap water, improving infrastructure such as augmentation and improvement of wastewater treatment, and expanding recycled water distribution and associated monitoring facilities. The risk of poor implementation is mitigated through the strong alignment of the recycled water pilot with the national and provincial plans to increase water recycling. In particular, the Implementation Plan of Qinghai Province to Promote the Utilization of Wastewater Page 27 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Resources (‘Implementation Plan’, 2021) shows a clear commitment increasing recycled water use and highlights the need for policy changes. The PMO continues to advocate for the uptake of recommendations in line with the Implementation Plan and has reported that recycled water will be included in the water resource allocation plan for Xining City. 84. The water logging study under Component 5 helps direct future efforts on implementation of hybrid gray-green infrastructure (for example, further implementation of LID interventions) through mapping and characterization of waterlogging in Xining. The selection of Xining as a pilot Sponge City and ongoing support for the implementation of the Sponge City Program will mitigate the risk that these recommendations might not be adopted. 85. Given the mitigation measures in place, it is unlikely that the O&M and policy and planning recommendation risks will be realized. V. LESSONS AND RECOMMENDATIONS 86. The project showed that localized activities can have broad impact and influence when taking an integrated approach to water management and supporting a citywide program. The project included activities to manage water pollution (point and non-point), water scarcity, and water logging and was underpinned by both green and gray infrastructure and institutional measures. The direct environmental benefits were clearly demonstrable (paragraph 34), as were the co-benefits (paragraph 50 and 51). However, the impact and influence were seen to be broader than this, for example, the early adoption of LID contributed to the implementation of the Sponge City pilot in Xining in 2016 (paragraph 3), and the TA work completed will influence key future actions to build Xining’s water security (paragraph 25). 87. Urban development should be designed in a way so that it is supported by both public and private financing. This case showed how public financing for water management in turn allowed the entry of commercial financing for other developments. For example, the benefits from collection of wastewater and improved ecological environment resulted in increased land value in the project area and subsequent development area (paragraph 51). This ecological development by the Government using public resources, in this case international development financing, had dual benefits: (a) it attracted private sector investment in the area, through housing and retail, and therefore improved the growth rates, economic vitality, and standard of living and (b) sale of land provided revenues to the Government which then allows counterpart funds to be used for further development of essential infrastructure and provision of public services. This therefore shows the benefit of Government investing early in public services provision, such as a good ecological environment, to stimulate commercial financing and development of vibrant communities with high standard of living. 88. Strong client ownership, consistent institutional strengthening and focused design enables effective implementation and achievement of project objectives. Client ownership was evident from the outset (paragraph 53). Moreover, LID interventions and the demonstrable project outcomes in reducing water pollutions drew the attention and commitment of leaders at all levels of Government, as evidenced in requested for tours of the project-financed infrastructure (paragraph 51). Consistent capacity building throughout implementation transformed the PMO from paper-based to digital project management, allowing for greater effectiveness (paragraph 48). Although there was initial slow uptake and quality issues with the MIS as described in paragraph 56 and 62, in the end, the MIS was the backbone of this capacity Page 28 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) transformation. The ownership, commitment, and capacity of the client combined with the focused and realistic design (paragraph 53) were an essential combination for smooth implementation and achievement of all objectives despite project delays. Moreover, these aspects ensured project sustainability in terms of embedded capacity for O&M of assets. 89. High level of implementation readiness and close project implementation support allows a consistent pace of implementation showing results. Implementation readiness (paragraph 55) allowed for the early launch of some procurement processes. Moreover, the short status review missions described in paragraph 58 strengthened regular contact and support quickened the pace of implementation. Moreover, this evident support from the World Bank encouraged the provincial government authorities to build trust and confidence in the project, resulting in the Government’s strong commitment and support. . Page 29 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: PDO Indicators Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 1. Direct project beneficiaries Number 0.00 319000.00 365,000.00 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcome (a) and shows the number of people who benefited from reduced water pollution. The target was exceeded at project closing. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 2. Volume(mass) of BOD Tones/year 0.00 727.00 1,202.00 pollution load removed by treatment plant under the 31-Dec-2014 31-Dec-2019 20-Jun-2021 project Comments (achievements against targets): Page 30 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) The indicator measures progress against outcome (a) and demonstrates reduced water pollution by collection and treatment of wastewater to remove BOD. The target was exceeded at project closing. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 3. Volume(mass) of COD Tones/year 0.00 1767.00 2,862.00 pollution load removed by treatment plant under the 31-Dec-2014 31-Dec-2019 20-Jun-2021 project Comments (achievements against targets): The indicator measures progress against outcome (a) and demonstrates reduced water pollution by collection and treatment of wastewater to remove COD. The target was exceeded at project closing. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 4. Reduction of TSS flowing Tones/year 0.00 985.00 1,096.00 into river system per year 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcome (a) and demonstrates reduced water pollution by reduction of stormwater runoff and erosion. The target was exceeded at project closing. Page 31 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 5. Volume of treated Tones/year 0.00 868.00 1,289.00 wastewater reused 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcome (b) and demonstrates pilot-scale reuse of treated wastewater. The target was exceeded at project closing. Note that the unit of measurement is 1,000 tones/year based on the annual mean. A.2 Intermediate Results Indicators Component: Construction of Stormwater and Wastewater Collection Systems Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 6. Rainwater and wastewater Cubic 0.00 29730000.00 29,960,000.00 collected by the completed Meter(m3) collection system per day (annual mean) 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): Page 32 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) The indicator measures progress against outcome (a) and demonstrates reduced water pollution by collection of stormwater and collection and treatment of wastewater. The target was exceeded at project closing. Note that the unit of measurement is m3/year based on the annual mean. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 7. Reduction of NH3-N load Tones/year 0.00 151.00 251.00 flowing into the river systems 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcome (a) and demonstrates reduced water pollution by collection and treatment of wastewater to remove NH4-N. The target was exceeded at project closing. Component: Comprehensive Stormwater Management and River-Bank Environmental Restoration Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 8. Decrease of soil erosion Tones/year 0.00 2880.00 3,072.00 flowing into river system per year 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): Page 33 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) The indicator measures progress against outcome (a) and demonstrates reduced water pollution by reduction of erosion. The target was exceeded at project closing. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 9. Decrease of storm run-off Tones/year 0.00 390000.00 531,000.00 per year 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcome (a) and demonstrates reduced water pollution by reduction of stormwater runoff. The target was exceeded at project closing. Component: Integrated Gully and Canal Improvement Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 10. Percentage of gully and Percentage 0.00 100.00 100.00 canal improvement 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcome (a) and demonstrates reduced water pollution by implementation of gully and canal improvement. The target was met at project closing. Page 34 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 11. Percentage of Percentage 0.00 100.00 100.00 environmental and sanitation facilities installation along 31-Dec-2014 31-Dec-2019 20-Jun-2021 gully and canal Comments (achievements against targets): The indicator measures progress against outcome (a) and demonstrates reduced water pollution by implementation of environmental and sanitation facilities along gullies and canals. The target was met at project closing. Component: Wastewater Reuse Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 12. Percentage of TA Percentage 0.00 100.00 100.00 progress 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcomes (a) and (b) and demonstrates completion of studies related to reduced water pollution by addressing water logging and recommendations for sustainable wastewater reuse. The target was met at project closing. Page 35 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Component: Project Management and Capacity Building Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion 13. Number of PMO staff Number 0.00 158.00 170.00 trained 31-Dec-2014 31-Dec-2019 20-Jun-2021 Comments (achievements against targets): The indicator measures progress against outcomes (a) and (b) and demonstrates institutional strengthening underpinning achievement of outcomes. The target was exceeded at project closing. Page 36 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1: Reduced water pollution 1. Direct project beneficiaries 2. Volume (mass) of BOD pollution load removed by treatment plant under the project Outcome Indicators 3. Volume (mass) of COD pollution load removed by treatment plant under the project 4. Reduction of TSS load flowing into the river systems 1. Rainwater and wastewater collected by the completed collection system per day 2. Reduction of NH3-N load flowing into the river systems 3. Decrease of soil erosion flowing into river per year Intermediate Results Indicators 4. Decrease of storm runoff per year 5. Percentage of gully and canal improvement 6. Percentage of environmental and sanitation facilities installation along gully and canal 1. 365,000 beneficiaries 2. 104.2 km of stormwater and wastewater pipe constructed 3. 34 km access road constructed Key Outputs by Component 4. 14 bridges constructed (linked to the achievement of the 5. 490,523 m2 riverbank area restored on east and west banks of the Beichuan River Objective/Outcome 1) 6. 363,323 m2 green area on the east and west banks of the Beichuan River 7. Three channels reconstructed 7. 118,300 m2 green area in gullies/canals Objective/Outcome 2: Piloted potential sustainable reuse of wastewater in Xining Municipality Outcome Indicators 1. Volume of treated wastewater reused Intermediate Results Indicators 1. Percentage of TA progress Page 37 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) 1. Transfer pumping station and auxiliary monitoring facilities with a processing Key Outputs by Component capacity of 5,000 m3/day (linked to the achievement of the 2. 5 km recycled water pipeline constructed Objective/Outcome 2) 3. Two TA studies completed Page 38 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Ximing Zhang Task Team Leader(s) Xiaokai Li Sr. Water Resources Management Specialist Jingrong He Procurement Specialist(s) Yi Geng Sr. Financial Management Specialist Songling Yao Sr. Social Specialist Yongli Wang Environment Specialist Feng Ji Sr. Social Specialist Yan Sun Social Specialist, Consultant Qingtao Xie Sr. Environment Specialist, Consultant Dan Xie Team Assistant Xueming Liu Sr. Economist, Consultant Supervision/ICR Liping Jiang Task Team Leader(s) Hongkun Yang Sr. Procurement Specialist(s) Jingrong He Sr. Procurement Specialist(s) Fang Zhang Sr. Financial Management Specialist Violeta Wagner Team Member Songling Yao Sr. Social Specialist Yongli Wang Environmental Specialist Xiawei Liao Water Resources Management Specialist Dan Xie Team Member Shona Fitzgerald ICR Author, Water Supply and Sanitation Specialist Xueming Liu Sr. Economist, Consultant Zongchen Lin Sr. Social Development Specialist, Consultant Guoxin Zhou Social Development Specialist, Consultant Page 39 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY13 8.525 48,844.21 FY14 22.455 201,463.93 FY15 11.387 66,253.06 Total 42.37 316,561.20 Supervision/ICR FY14 0 1,607.89 FY15 1.600 14,327.29 FY16 6.875 41,354.21 FY17 9.875 85,019.03 FY18 7.120 74,762.75 FY19 10.185 84,455.85 FY20 13.040 94,129.26 Total 48.70 395,656.28 Page 40 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 3. PROJECT COST BY COMPONENT Components Amount at Approval Actual at Project Closing (US$, Percentage (US$, millions) millions) of Approval Total World Bank Counterpart Total World Bank Counterpart Financing Financing Financing Financing 1. Construction of 139.8 100.6 39.2 134.0 102.8 31.2 96 Stormwater and Wastewater Collection Systems 2. Comprehensive 35.9 25.8 10.1 23.4 23.4 0.0 6 Stormwater Management and River-Bank Environmental Restoration 3. Integrated Gully and 28.7 20.6 8.1 21.1 21.0 0.1 74 Canal Improvement 4. Wastewater Reuse 1.8 1.5 0.3 1.4 1.4 0.0 78 5. Project 31.3 1.2 30.1 14.7 1.0 13.7 47 Management and Capacity Building Total Component Cost 237.5 149.6 87.8 194.5 149.6 44.9 82 Interest During 8.7 0.0 8.7 8.3 0.0 8.3 95 Construction Front-end Fee 0.4 0.4 0.0 0.4 0.4 0.0 100 Total 246.6 150.0 96.6 203.2 150.0 53.2 82 Page 41 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 4. EFFICIENCY ANALYSIS Introduction 1. The PDO of the project is to reduce water pollution and pilot potential sustainable reuse of wastewater in Xining Municipality. The PDO will be achieved by (a) construction of an expanded stormwater and wastewater collection systems, (b) comprehensive stormwater management and river- bank environment restoration, (c) integrated gully and canal improvements, (d) the demonstration of treated wastewater reuse, and (e) TA and capacity building in integrated water resources and environmental management. 2. The direct beneficiaries of the project are some 320,000 residents in the suburban areas of Xining Municipality, of whom about 50 percent are women. Integrated gully and canal improvement, LID for stormwater management, and riverbank environment restoration and management benefited the general population of the Xining Municipality. The restoration of degraded areas has led to an appreciation in property values and increase in commercial activities, providing increased employment opportunities for the local population. Indirectly, through reduction of pollution, the entire municipal population of 2.5 million Xining urbanites have benefited from the macro improvements in the urban environment. Methodologies for Economic Analysis 3. CEA. The economic analysis follows the approach adopted at appraisal. For components of wastewater collection, integrated gully improvement, stormwater management, and river-bank environmental restoration, a least-cost analysis or CEA was adopted to compare alternatives and select the best design options to achieve the objective. In addition, the competitive bidding-based procurement also contributed to the achievement of the lease costs. The following paragraphs detail the alternatives for each component. 4. Construction of stormwater and wastewater collection systems. There were two alternatives: separate rainwater and sewage system and combined rainwater and sewage system. For each option, the investment and its operation costs were calculated and discounted by 12 percent (as an average discount rate). The whole cost present value of the separate rainwater and sewage system and the combined rainwater and sewage system were CNY 156.06 million and CNY 230.74 million, respectively. The separate rainwater and sewage system was therefore selected. 5. Comprehensive stormwater management and river-bank environmental restoration. LID was adopted to reduce the TSS flowing into the river. There were two alternatives: LID scattered layout scheme and centralized layout scheme. For each option, the investment and its operation costs were calculated and discounted by 12 percent. The whole cost present value of LID scattered layout scheme and centralized layout scheme were CNY 41.45 million and CNY 46.96 million, respectively. The LID scattered layout scheme was therefore selected. 6. Riverbank environmental restoration. There are two options for riverbank environmental restoration. The local plant program and flowering shrubs program. For each option, the investment and its operation costs were calculated and discounted by 12 percent. The whole cost present value of the Page 42 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) local plant program and flowering shrubs program were CNY 11.21 million and CNY 11.53 million, respectively. The local plant program was therefore selected. 7. Integrated gully improvement. There were two alternatives: open channel program and culvert program. For each option, the investment and its operation costs were calculated and discounted by 12 percent. The whole cost present value of the open channel program and culvert program were CNY 27.97 million and CNY 33.01 million, respectively. The open channel program was therefore selected. 8. CBA. For the Demonstration of Water Reuse for Reclaim Water component, CBA was adopted to set the water reuse tariff level to ensure that the IRR was at par with the expected profitability. The costs included the investments and O&M of the demonstration of water reuse for reclaim water. Benefits were derived from the tariff multiplied by the quantity of reclaim water supplied for reuse. The recommended tariff is CNY 3.5 per m3 if the IRR is at 10 percent. The project provided TA for a study on economy and policy schemes for stimulating reclaimed wastewater reuse and a study on impact of reclaimed wastewater reuse on domestic soil and vegetation. 9. Fiscal impact analysis. The Xining Municipal Government is responsible for the debt repayment and additional O&M costs of this project. The annual fiscal revenue of the Xining Municipal Government for debt repayment and additional O&M costs is less than 1 percent of the total annual fiscal revenue. The O&M of the sewage collection and rainwater collection pipeline financed by the project have been transferred to the Xining Municipal Drainage Development and Construction Company for O&M, which is financed by the municipal government fiscal allocations. Implementation Efficiency 10. All project activities were completed at costs below the appraisal and restructuring estimates (annex 3), mostly due to bidding savings. The reason for project extension was well justified to achieve the PDO of piloting potential sustainable reuse of wastewater in Xining Municipality (see section III.B); however, a delay of this magnitude for a large-scale project in Xining is not unusual as the construction season is only six months every year on the Qinghai-Tibetan Plateau because of its long and harsh winter. Implementation efficiency improved substantially after the restructuring, and all project activities were completed before the revised closing date. The project complied with the World Bank fiduciary and safeguard policies (see section IV.B). Page 43 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Feedback on China-Qinghai Xining Water Environment Management Project ICR World Bank Financed Xining Water Environment Management Project Management Office World Bank Beijing Office After reviewing the ICR of the World Bank-financed Qinghai Xining Water Environment Management Project shared by the World Bank task team, we fully agree with the contents of the ICR and the evaluation of the project implementation and management, outcomes achieved, and impacts generated. We have no further comments. Since the World Bank financed Qinghai Xining Water Environment Management project came into effect on February 16, 2015, under the technical guidance and supervision of the World Bank task team, in accordance with the relevant requirements of the loan agreement, the project agreement, and the PAD, the Chinese and World Bank sides have collaborated closely and worked together to effectively implement the project, which has achieved the expected results and impacts, as well as the PDOs. According to the MIS, project investment reached CNY 1.322 billion by the end of September 2021, accounting for 93.54 percent of the total investment plan of the project after restructuring of CNY 1.414 billion, of which the World Bank loan contributed US$150 million, accounting for 100 percent of the total loan amount. The rainwater and sewage collection pipe networks, comprehensive rainwater management and riverbank environment restoration, comprehensive ditch treatment, reclaimed wastewater reuse, project management and institutional capacity building, and other indicators have either reached or exceeded the target values. Both the China and the World Bank assess the completion of the project results as ‘Highly Satisfactory’. At the same time, the investment of the World Bank-financed Water Environment Management Project in Xining City, Qinghai Province, further leveraged investments in improving the Beichuan River’s (core area) ecological environment with a total investment of over CNY 2 billion, which achieved comprehensive benefits during the same period. Through the implementation of the abovementioned project, the Chengbei District of Xining City is finally transformed into a ‘Water City on the High Plateau’ and is positioned as a new water ecological urban area of ‘Garden and Cultural Corridor of the Summer Capital’. A large number of talents have been trained by the World Bank-financed Xining Water Environment Project, who have taken up important roles and responsibilities in different relevant entities, including the Huangshui investment company. The World Bank project task team has given valuable technical guidance to the project during project preparation and implementation and provided important suggestions for project design and target positioning, which laid the foundation for successful implementation of the project. The preparation and implementation of the World Bank-financed Xining Water Environment Management Project in Xining City, Qinghai Province, is fully aligned with the relevant development priorities of China, Qinghai Province and Xining City, and is highly consistent with the current economic and social development strategies of China, Qinghai Province and Xining City, especially with the ‘Yellow River Ecological Protection and High-Quality Development’ national strategy put forward by the President Page 44 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Xi Jinping on September 18, 2019. Therefore, we will duly and systematically summarize, publicize, and promote the advanced concepts, technical, and management methods of the project and make efforts to continuously improve the management of water resources and water environment in Xining City, Qinghai Province. World Bank-financed Xining Water Environment Management Project Management Office (Stamped) November 25, 2021 Page 45 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 6. SUPPORTING DOCUMENTS 1. Project Appraisal Document (2014) 2. Loan Agreement (2014) 3. Project Agreement (2014) 4. Project Restructuring Paper (2019) 5. Implementation Status and Results Reports (14 ISRs) 6. Interim Financial Reports 7. Project audit documents 8. PMO Progress Reports 9. Government Implementation Completion Report and Annexes (2021) 10. Final M&E Report (2021) 11. Chinese stamped version of Borrower Comments (November 25, 2021) Page 46 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 7. WASTEWATER EFFLUENT AND ENVIRONMENTAL WATER QUALITY CLASSES Table 7.1. Key Parameters of China’s River Water Quality Classification System 27 Parameter Unit Class I Class II Class III Class IV Class V Maximum weekly °C ≤1 ≤1 ≤1 ≤1 ≤1 temperature rise Minimum weekly °C ≤2 ≤2 ≤2 ≤2 ≤2 temperature rise pH pH 6–9 6–9 6–9 6–9 6–9 Dissolved oxygen mg/L 7.5 (or 90% 6 5 3 2 saturation) COD (tested using mg/L 2 4 6 10 15 manganese reagent) COD ≤ COD (tested mg/L 15 15 20 30 40 using chromium reagent) BOD mg/L 3 3 4 6 10 NH3-N mg/L 0.15 0.50 1.00 1.50 2.00 Table 7.2. China's Wastewater Effluent Discharge Standards 28 Parameter Unit Class 1A Class 1B Class 2 COD mg/L 50.0 60.0 80.0 BOD mg/L 10.0 20.0 30.0 TSS mg/L 10.0 20.0 30.0 NH3-N mg/L 5.0 8.0 15.0 Total nitrogen mg/L 15.0 20.0 25.0 Total phosphorus mg/L 0.5 1.0 1.0 27PAD, annex 2 Detailed Project Description. 28Smith, K., S. Guo, Q. Zhu, X. Dong, and S. Liu. 2019. “An Evaluation of the Environmental Benefit and Energy Footprint of China's Stricter Wastewater Standards: Can Benefit Be Increased?” Journal of Cleaner Production 219: 723–733. Page 47 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 8. CALCULATION ASSUMPTIONS FOR THE PROJECT INDICATORS 1. The stated assumptions for the calculation of each indicator are detailed below according to the client’s ICR. Indicator 1: Direct project beneficiaries (1,000 persons) 2. The project direct beneficiaries are taken from the population statistics from areas where people have benefited from each subproject. The statistical data of this indicator mainly include the beneficiary populations of some towns and communities in Chengbei District, Datong County, and Chengxi District that have benefited from the construction of sewage collection pipe network projects, canal treatment projects, and the improvement of river ecological environment. Indicator 2: Volume(mass) of BOD pollution load removed by treatment plant under the project (ton/year) 3. This indicator measures BOD pollution removed through the project-financed wastewater pipeline and treated at one of the existing WWTPs. The load is calculated by multiplying the wastewater flow with the concentration of BOD. 4. The calculation assumptions: • Flow = The amount of sewage collected and treated within the service area of the project (m3/d), based on number of people served by the sewage collection pipe network and the per capita water consumption • Cin = raw sewage in the BOD concentration (mg/L), based on average monthly water quality monitoring data of influents to No.1, No.3, No.4, and No.5 WWTPs • Cout = BOD concentration (mg/L) in the sewage treated by the sewage treatment plant, based on average monthly water quality monitoring data of effluents from No.1, No.3, No.4, and No.5 WWTPs. Indicator 3: Volume(mass) of COD pollution load removed by treatment plant under the project (ton/year) 5. This indicator measures COD pollution removed through the project-financed wastewater pipeline and treated at one of the existing WWTPs. The load is calculated by multiplying the wastewater flow with the concentration of COD. 6. The calculation assumptions: • Flow = The amount of sewage collected and treated within the service area of the project (m3/d), based on number of people served by the sewage collection pipe network and the per capita water consumption • Concentration (in) = raw sewage in the COD concentration (mg/L), based on average monthly water quality monitoring data of influents to No.1, No.3, No.4, and No.5 WWTPs Page 48 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) • Concentration (out) = COD concentration (mg/L) in the sewage treated by the sewage treatment plant, based on average monthly water quality monitoring data of effluents from No.1, No.3, No.4, and No.5 WWTPs. Indicator 4: Reduction of TSS load flowing into the river systems (ton/year) 7. This indicator measures TSS pollution removed through the project-financed LID features through reduced runoff to waterways. This is calculated by Reduction of TSS load flowing into the river system = runoff of the project area × TSS concentration before project implementation × TSS removal rate 8. The calculation assumptions: • Runoff in the project area = annual runoff coefficient × rainwater collection area × precipitation in the current year • Annual runoff coefficient is developed by authorities based on type of surface of the area • TSS removal rate is taken from the ‘Sponge City Construction Technical Guide - Low Impact Development Rainwater System Construction (Trial)’ issued by the Ministry of Housing and Urban-Rural Development, the pollutant removal rate of individual LID facilities is combined with the construction content of this project, and the TSS removal rate is assumed to be 30 percent. Indicator 5: Volume of treated wastewater reused (1,000 ton/year) 9. This indicator measures the volume of recycled water used in the pilot and is based on recorded data of the amount of recycled water used in the pilot project of the No.5 WWTP. Indicator 6: Rainwater and wastewater collected by the completed collection system per day (million m3/day) 10. This indicator measures the volume of rainwater and wastewater collected in pipelines constructed under the project. The amount of collected rainwater is taken as the runoff reduction, which is calculated based on the runoff and runoff reduction rate of the area covered by the project (see Indicator 4). The amount of sewage is calculated based on the water consumption of the area served by the pipe network (see Indicators 2 and 3). Indicator 7: Reduction of NH3-N load flowing into the river systems (ton/year) 11. This indicator measures NH3-N pollution removed through the project-financed wastewater pipeline and treated at one of the existing WWTPs. The load is calculated by multiplying the wastewater flow with the concentration of NH3-N. Page 49 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) 12. The calculation assumptions: • Flow = The amount of sewage collected and treated within the service area of the project (m3/d), based on number of people served by the sewage collection pipe network and the per capita water consumption • Concentration (in) = raw sewage in the NH3-N concentration (mg/L), based on average monthly water quality monitoring data of influents to No.1, No.3, No.4, and No.5 WWTPs • Concentration (out) = NH3-N concentration (mg/L) in the sewage treated by the sewage treatment plant, based on average monthly water quality monitoring data of effluents from No.1, No.3, No.4, and No.5 WWTPs Indicator 8: Decrease of soil erosion flowing into river per year (ton/year) 13. This indicator measures the reduction in soil erosion from areas with LID features and environmental restoration. It is calculated by the erosion per square kilometer multiplied by the area of the project interventions. 14. The calculation assumptions: • Soil erosion of 4,800 tons/km2 (according to the Xining Water Resources Bureau, Water Conservancy Yearbook). Indicator 9: Decrease of storm runoff per year (1,000 m3/year) 15. This indicator measures the reduction stormwater runoff in the areas with LID features and environmental restoration. It is calculated using the average annual rainfall of Xining City, adjusted for the volume in the area of the project interventions, then multiplied by the runoff reduction rate after the project is implemented. 16. The calculation assumptions: • Based on literature and expert opinions, the runoff reduction rate is taken as 45 percent. Indicator 10: Percentage of gully and canal improvement (%) 17. This indicator measures the implementation progress of the gully and canal improvement contracts. It is calculated based on the proportion of the contract amounts that have been completed. Indicator 11: Percentage of environmental and sanitation facilities installation along gully and canal (%) 18. This indicator measures the implementation progress of the environmental and sanitation facilities installation along the restored gullies and canals. It is calculated based on the proportion of the contract amounts that have been completed. Indicator 12: Percentage of TA progress (%) 19. This indicator measures the implementation progress of the studies on ‘Research on Economic Policy Incentive Mechanism for Reclaimed Water Reuse,’ ‘Research on the Impact of Reuse of Reclaimed Page 50 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Water on Soil and Plants in Xining City,’ and ‘Reconstruction of Pond Water in the Old City of Xining City’. It is calculated based on the proportion of the contract amounts that have been completed. Indicator 13: Number of PMO staff trained (persons) 20. This indicator measures the number of staff members who attended technical training across various topics. The data are taken from the project’s MIS. Page 51 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 9. RESETTLEMENT IMPACTS Table 9.1. Comparison of Resettlement Impact between the RAP and Actual Implementation Subprojects Scope of Construction Comparison of Resettlement Impact between the RAP and Actual Implementation RAP Implemented Areas of Changes Construction of Construction of 128 km of • Permanent land • Permanent The pipeline of wastewater wastewater and acquisition: 0.16 ha land Xichuan River collection rainwater collection • Temporary land acquisition: was dropped systems pipes, including 34 km of use: 26.5 ha 0 (see paragraph wastewater collection • Affected people • Temporary 22), as a result: pipes from the Datong and households: 91 land use: 0.16 ha of WWTP to the Ningda households, 414 18.5 ha permanent Road toll gate along the people • Affected land acquisition Beichuan River, 16 km of people and and 7.95 ha of wastewater collection households: temporary land pipes from Yangjiawan 69 use were Village to Duoba along households, reduced. the Xichuan River, 34 km 296 people 48 households of wastewater collection with 138 pipes in the Beichuan people avoided area, and associated being affected. roads and 44 km of World Bank-financed Project rainwater collection pipes Municipal Construction of the No.5 It will occupy 0.78 ha Same as the No changes wastewater WWTP reclamation plant of land within the site RAP reclamation and associated reclaimed of the No.5 WWTP, and reuse wastewater transfer involving neither land pipes, with a capacity of acquisition nor house 5,000 m³ per d, demolition; the purchasing monitoring associated network equipment, and will be laid along with conducting reclaimed road construction in water research Beichuan New District, involving no additional land acquisition and house demolition. Beichuan River (a) Construction of the Using land of the Same as the No changes embankment LID rainwater collection Beichuan River RAP improvement system: permeable Project (Core pavement, habitat Section), involving establishment, vegetation neither land planting, and rainwater acquisition nor house collection barrels; (b) demolition. embankment See detail below in environmental the associated rehabilitation: project. Page 52 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Subprojects Scope of Construction Comparison of Resettlement Impact between the RAP and Actual Implementation RAP Implemented Areas of Changes embankment, slope, and vegetation rehabilitation; (c) permeable footways; and (d) lighting and sanitation facilities, landscaping water supply system, signboards, and so on. Integrated Integrated improvement Involving neither land Same as the No changes gully and canal of 10.4 km Chaoyangdian acquisition nor house RAP improvement Canal, 0.9 km Liujia Gully, demolition; occupying and 0.9 km Shengou Gully 0.43 ha of state- owned land temporarily No.5 WWTP With a design capacity of Acquiring 4.27 ha of Same as the No changes 30,000 m³ per d rural collective land RAP permanently, affecting 34 households with 135 persons in Shuangsubao Village, Ershilipu Town, and Chengbei District Beichuan River Ecological rehabilitation Acquiring 223.8 ha of Same as the No changes Project (Core and infrastructure rural collective land RAP Section) construction (85.3 ha of housing Associated Project land and 138.5 ha of irrigated land), and demolishing residential houses totaling 1.1816 million m2, affecting 1,348 households with 6,495 persons in Beixingyuan, Taojiazhai, Taoxin and Shitoulei Villages; demolishing nonresidential properties and attachments totaling 25,900 m2, affecting 38 entities Page 53 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 10. PHOTOS OF SELECTED ACTIVITIES Qinghai Daily Feature on ‘World Bank-Financed Xining Evening News Report on ‘World Bank Loan Project Contributing to Building a Happy Xining’ Project to Improve River Basin Governance Capacity’ (December 16, 2020) 29 (November 27, 2020) West Bank of the River West Bank of the River 29 Source: Newspaper clippings provided by the PMO Page 54 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) West Bank of the River, Beichuan Area (before) West Bank of the River, Beichuan Area (after) East Bank of the River East Bank of the River Page 55 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Recycled Water Holding Tank Recycled Water Irrigation Site Chaoyang Canal Restoration (before) Chaoyang Canal Restoration (after) Page 56 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Canal Restoration Canal Restoration Jinyi Road Inner River Bridge Jinyi Road Inner River Bridge Liujiagou Bridge Liujiagou Bridge Page 57 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) Weier Bridge Binhe West Road Bridge Binhe West Road Weier Road Page 58 of 59 The World Bank China-Qinghai Xining Water Environment Management Project (P133116) ANNEX 11. PROJECT MAP Page 59 of 59