Document of
The World Balik
FOR OFFICIAL USE ONLY
cr. rzoqi- cys
Report No. P-5219-CHA
MEMORANDUM AND RECOMMENDATION
OF THE
PRESIDENT OF THE
INTERNATIONAL DEVELOPMENT ASSOCIATION
TO THE EXECUTIVE DIRECTORS
ON A PROPOSED DEVELOPMENT CREDIT
OF SDR 23.4 MILLION
(EQUIVALENT TO US$30.0 MILLION)
TO THE
PEOPLE'S REPUBLIC OF CHINA
FOR THE
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
JANUARY 18, 1990
Tlis donusent bas a restrited distribution and may be used by recipients only In the performance of
dteir oficial dutes. Its contents may not otherwise be disclosed witout World Bank authorization.



CURRENCY EQUIVALENTS
CURRENCY UNIT  =  Renminbi (RKB)
US$1.00  =  RMB 3.71
RMB 1.00 = US$ 0.27
(On December 16, 1989 the Renminbi was devalued
to a new rate of US$1-RMB4.71)
WEIGHTS AND MEASURES
1 meter (m)   =   3.28 feet (ft)
1 cubic meter (cmb)        35.31 cu feet
1 hectare (ha)   =   2.47 acres
1 kilogram (kg)   =   2.20 pounds
ABBREVIATIONS AND ACRONYMS
HPG           Hebei Provincial Government
IDNDR         International Decade for Natural Disaster Reduction
MCA           Ministry of Civil Affairs
'OC           Ministry of Construction
MOF           Ministry of Finance
PRC           People's Republic of China
RMC           (World Bank) Resident Mission in China
SPC           State Planning Commission
SPG           Shanxi ProviTlcial Government
SSB           State Seismological Bureau
YCG           Yangyuan County Government (Hebei Provinze)
YPG           Yanbei Prefecture Government (Shanxi Province)
FISCAL YEAR
January 1 to December 31



FOR OMCIAL USE ONL'
CHIN;
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
CREDIT AND PROJECT SUMMARY
Borrowers                         People's Republic of China (PRC)
Amount:                           SDR 23.4 million (US$30.0 million
equivalent)
Termst                            Standard, with 35 years maturity
Relending terms:                  MOF will relend part of the proceeds of
the credit in Renminbi to Shanxi Province
(SDR 16.76 million) and Hebei Province
(SDR 4.68 million) interest-free with a
1 percent annual service charge, for 25
years, including 10 years of grace. MCF
will bear the foreign exchange risk.
Flow of Funds:                    On-lending for housing reconstruction and
repair, at 1.3 percent per year, for up to
15 years depending on the income of the
beneficiaries, including a one-year grace
period in Hebei and a two-year grace
period in Shanxi; and for enterprises, at
prevailing interest rate and maturity
period for similar loans from relevant
financial intermediaries sucb as the
Agricultural Bank of China. Budgetary
allocation for schools, clinics and other
public facilities; for irrigation and
water supply works; and to the State
Seismological Bureau.
Financing Plan:                   PRC                     US$ 0.5 million
Shanxi Province/
Yanbei Prefecture         5.5
Hebei Province/
Yangyuan County           1.2
Beneficiazies               8.1
IDA                        30.0
TOTAL              US$45.3 million
Economic Rate of Return:          Not calculated: least-cost solutimns have
been adopted for reconstruction and repair
using local materials and designs with
simple, earthquake-resistant features
Maps                              IBRD 22045, 22086
This document has a restrkted distribution and may be used by recipients only in the performance
of their offcial duties. Its contents nmay not otherwise be diclosed without World Bankr atitha!utlon.



MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT
OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION
TO THE EXECUTIVE DIRECTORS ON A CREDIT
OF SDR23.4 MILLION (US$30.0 MILLION EQUIVALENT;
TO THE PEOPLE'S REPU3LIC OF CHINA FOR
THE NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
1.       The following memorandum and recommendation on a proposed emergency
credit to the People's Republic of China for SDR23.4 mill:. (US$30.0 million
equivalent) is submitted for approval. The proposed credit would be on standard
IDA terms with 35 years maturity. It would help finance accelerated earthquake
reconstruction operations in affected areas in Shanxi and Hebei provinces, and a
small national program of technical assistance for earthquake prediction,
mitieation and preparedness.
Earthquake Disaster
2.       China has experienced some of the most severe recorded earthquakes in
the world.  Since 1900, there have been 662 earthquakes with magnitude over 6 on
the Richter Scale, of which 106 registered over 7 or around thirty percent of
world earthquakes over that intensity.  Sixty percent of China's land area is in
seismic zones over vulnerability 6, and seventy percent of metropolitan areas of
over 1 million population are in seismic zones over 7. The death toll from
earthquakes in China in the twentieth century exceeds 600,000, accounttrg for
over 5OX of the world total. Chinese earthquake specialists have predicted
that, after a decade of relative calm, China is entering a period of high seis-
mic activity which is likely to last for 12 to 15 years.
3.       Earthquakes rocked part of Northern China at the junction of Shanxi and
Hebei provinces and Nei Mongol Autonomous Region west of Beijing on the night of
October 18, 1989 and early the next morning. Five of the quakes registered more
than 5.0 on the Richter Scale, the peak shock just after midnight registering
6.1. There were many aftershocks in the following weeks, including one on Octo-
ber 23 which registered 5.2. This Datong-Yanggao earthquake was one of the
worst to hit Northern China since 1976 when a major quake (registering 7.8 on
the Richter Scale) killed over 400,000 people and substantially destroyed the
city of Tangshan in Hebei Province (about 5 hours journey by rail east of
Beijing). The epicenter of the Datong-Yanggao earthquake lay near Bu Cun vil-
lage, in Yanbei Prefecture of Shanxi Province. This is an impoverished rural
area (1988 per capita income of RMB331 (US$89) in Yanbei and RHB446 ($120) in
Hebei's adjacent Yangyuan County) located on the Loess Plateau, a windswept,
eroded plain about 1,300 m above sea level. Local employment is mainly in coal
mining and agriculture (largely corn and wheat-growing in the dusty, infertile
soil). Housing in this rural area is mainly mud-brick and stone construction
that is vulnerable to earthquake shocks. The casualty toll in Yanbei and in
neighboring Yangyuan County of Hebei Province (20 dead and less than 200
seriously injured) was mercifully slight due to earlier, less severe warning
quakes but property damage was severe. Some 25,000 mainly privately-owned hou-
sing units and over 3,000 rooms in schools, clinics and community facilities
*ere destroyed and 46 local industries as well as various infrastructure
(bridges, power and telecommunications lines) were badly damaged. Many more
were partly destroyed. Estimates by the Shanxi Province Seismological Bureau
indicate that direct losses in Yanbei exceeded US$100 million. Total damage in
Yangyuan, further from the epicenter, was less, but has not been quantified.



-2-
Very few of the assets were insured. Indirect production losses, mainly by
industry and commerce, are estimated at about US$15 million in the first year
and about 1.500 workers have been idled. Relief expenditures totalled
84B26.4 million (US$7.1 million), of which about three-quarters yere for tempo-
rary housing. As of early December, 1989, about 15 percent of the households in
the affected area of Shanxi (about 32,000 families or 125,000 people) and a
smaller proportion, about 9,000 families, in Yangyuan County, further from the
quake's epicenter and thus less seriously affected, were in temporary shelter
for the winter, and 325 schools were operating in tents or other interim
facilities.
ProJect Obiectives and Rationale for IDA Involvement
4.       While not a major disaster by Chinese or world standards in terms of
value of physical assets destroyed, the Datong-Yanggao earthquake has signifi-
cantly affected the regional eronomy, with the estimated cost of reconstruction
of villages, economic assets and infrastructure at around US$150 million. About
150,000 people were rendered homeless, their barns and stables destroyed and
their stored winter food and animal feed lost or exposed to the elements. In
response to a message from IDA's senior management, the Government of China
expressed interest in assistance for a possible emergency earthquake rehabilita-
tion credit. China once before received assistance from the Association after a
major natural disaster: recovery and salvaging operations after a major forest
fire in northeastern China are being supported under the Da Xing An Ling Forest
Fire Rehab3iitation Project (FY88, US$56.9 million equivalent), which is being
implemented satisfactorily. The proposed project would assist in normalizing
economic activity in the earthquake-affected area by undertaking reconstruction
operati3ns in Yanbei Prefecture of Shanxi province and Yangyuan County in Hebei
province through a village reconstruction prosgram, replacement and reequipping
of essential social and economic infrastructure, and rehabilitation of facili-
ties of productive rural enterprises. The mbain rationale for IDA involvement in
the proposed operation would be: to encourage and facilitate the use of cost-
effective earthquake resilient construction standards for housing and infra-
structure; to help implement reconstruction of housing, essential infrastructure
and economic assets in a much shorter time than could otherwise be the case with
the limited local financial and material resources available to the provinces;
and, by a modest technical assistance component, to help China's managers of
earthquake forecasting and preparedness to make their already-impressive work
more effective. The project is viewed as a pilot exercise which could serve as
a model for responding to similar situations in the future.
Project Description
5.       The project would support a program to be carried out in 1990 and 1991
consisting of: a) a village reconstruction program for about 80 villages in the
four counties of Shanxi Province's Yanbei Prefecture (including about four vil-
lages to be relocated) and about 70 villages in Hebei-Province's Yangyuan Coun-
ty, including reconstruction of about 24,000 collapsed dwelling rooms, and reha-
bilitation, repair and reinforcement of about 49,500 others, reconstruction of
about 1200 public facility rooms (village classrooms, health centers, village
storehouses and other community buildings) and repair and reinforcement of about
1200 others, reestablishment and repair of critical village infrastructure of
power lines and water supply and repair of damaged buildings of about a dozen
rural enterprises in the five counties; and b) a national component of assis-
tance for earthquake prediction and disaster preparedness, including upgrading
and reinforcement of the State Seismological Bureau's (SSS) national seismic



-3-
monitoring network for monitoring and prediction and the drawing up of a model
emergency preparedness plan for Yanbei prefecture. Improvements in planning and
design to be introduced through the project includes planning and design crite-
ria to minmize village reloration and emphasize building rehabilitation instead
of reconstruction; phasing of construction (provision, initially, to each family
of two improvedlstrengthened rooms instead of the pre-earthquake four traditio-
nal and earthquake-vulnerable rooms); introduction of a new rural housing tech-
nology to China--the reinforced vaulted adobe house--which would be subject to
prior engineering field tests to demonstrate its resistance to earthquake
conditions.
6.       Implementation.  The village reconstruction components in the affected
areas of Shanxi and Hebei provinces would be implemented by the Yanbei Prefec-
ture and Yangyuan County governments, respectively, while the national component
would be Implemented by SSB. Suitable organizational arrangements to implement
the project have been established. Shanxi Province would draw up the disaster
preparedness plan for Yanbei Prefecture.
7.       The project would finance reconstruction and rehabilitation of housing,
buildings, classrooms, rural health facilities, village water supplies, and
purchase of modest school and health center equipment. Given the emergency
nature of the project and the small and scattered works in many villages,
conventional ICB or LCB procedures are not suitable; hence, modified local
procurement procedures are proposed, to ensure competition and efficiency.
These procedures were examined and found satisfactory to the Association. Con-
struction materials to be procured in bulk (timber, steel) would be purchased
from established existing suppliers after at least five quotations. Housing
reconstruction would be undertaken by respective villages through force account
with assistance of rural construction units selected through competition. Con-
struction of public facilities and infrastructure would be undertaken through
competition among local construction units. Goods for the village reconstruc-
tion program would be procured through local procedures involving at least three
quotations, while computers, communications and scientific equipment for the
national component would be procured through limited international shopping.
All contracts above US$500,000 for materials or civil works and US$50,000 for
goods and equipment would be subject to prior review by the Association. Retro-
active financing of up to SDR 3.1 million (US$4 million equivalent) is proposed
to expedite purchase of materials and immediate rehabilitation of production
enterprises. Disbursement would be made against statements of expenditure using
procedures satisfactory to the Association. Funds would be made available to
beneficiaries in accordance with usual government procedures for the construc-
tion of housing and for the reconstruction of enterprises, namely through loans
for up to 15 years, at 1.3 percent annual interest for housing, and at market
rates for enterprises.   Funds for construction of schools, clinics and other
community facilities would be made available by the respective counties as a
grant. Financing for irrigation and water supply works would also be through
budgetary allocation, and water charges would be adjusted to recover investment
costs plus operation and maintenance expenses. Funds for the national component
would be made available to SSB as a budgetary allocation. The project is expec-
ted to be completed by December 31, 1991.
Agreed Actions
8.       The Government of the People's Republic of China and the Governments of
Shanxi and Hebei provinces have agreed: (a) to follow appropriate planning and
design standards for village reconstruction and repair, and for village reloca-



4-
tion; (b) to make available to beneficiaries materials and loons for the recon-
struction of housing and small businesses and grar.ts for the reconstruction and
reequipping of village classrooms, clinics and other public buildings damaged in
the earthquake, on terms and in accordance with procedures agreed with IDA; and
(c) to exchange views regularly vith 1;A on the information obtained from the
seismic data collection network for earthquake monitoring and prediction, an1
their experience in its use.
Benefits
9.       Although the impact of the emergency is small relative to the Chinese
economy, destruction and damage of over $150 million in five poor rural counties
is substantial. The economic and social benefits of rapid recovery in an impo-
verished agricultural area (e.g. Yanbei Pr-dfecture has total annual revenues of
only about RMB100 million ($27 million) and depends on annual provincial and
central government subsidies of RMB125 million ($34 million)) would be conside-
rable. The total population to benefit from this project is estimated at
175,000, most of whom are poor. IDA involvement through this operation has also
helped refine the design and planning standards, organization and financing of
the reconstruction program and thereby reduce the implementation period from
four years to under two. It has already resulted in agreement on testing and
use of new, cost-effective ea &hquake resistant building techniques which have
not been used in China before   The enhancement of SSB's national seismic moni-
toring netvork and its data analysis capacity should improve SSB's ability to
predict earthquakes in the coming expected period of high seismic activity in
China.
Risks
10.      The only significant risk is the possib'  use of inappropriately high
standards for housing reconstruction that oould    ay the program and make it
more expensive and less affordable for the benetf  uries.  Accordingly, the
Association has obtained an assurance from the local, provincial and central
authorities on village reconstruction planning aid design standards which empha-
size rehabilitation and repair of affected buildings rather than the wholescale
reconstruction that was initially proposed. In addition, IDA has agreed to
simplified procurement and disbursement procedures to expedite project implemen-
tation, while competition among local corstruction units should result in lower
unit costs. Frequent supervision by IDA missions in the first year of implemen-
tation is planned so that any adjustments to the agreed reconstruction program
can be made as needed.
Recommendction
11.      I am satisfied that the proposed credit would comply with the Articles
of Agreement of the Association and recommend that the Executive Directors
approve the proposed credit.
Barber B. Conable
President
Attachments
Washington, D.C.
January 18, 1990



-5-
Schedule A
CHINA
North China Earthquake Reconstruction Project
Estimated Costs and Financing Plan
Estimated Costs              Local        Foreign         Total       IDA
^----------- (USS million) -------------
Shanxi Component           21.1          9.0         30.1        19.5
Hebei Component            5.9          2.5           8.4        5.3
National Component            0.5          2.0           3.0 1/     2.5
Base Cost                 27.5         14.0         41.5        27.3
Physical Contingencies 2/       2.6          1.2           3.8        2.7
Total Project Cost        30.1         15.2         45.3        30.0
Financing Plan               Shanxi         Hebei       National
Component    Component    Component    Total
Central Government              -                          0.5         0.5
Shanxi Province                 5.5          -             -           5.5
Hebei Province                   -           1.2            -          1.2
Beneficiaries                   6.1          2.0            -         8.1
IDA                            21.5          6.0           2.5       30.0
Total                     33.1          9.2           3.0       45.3
11    Includes US$500,000 unallocated.
2/    As the bulk of materials to be procured, and civil works, completed, in
the first year of project implementation, no provision has been made for
price contingencies.



- 6 -  -                               Schedule B
CHINA
North China Earthquake Reconstruction Project
Procurement Method
Project Element          International   Local        Force        Other       Total
Shopping   Procedures   Account
----------------------(USs$ million)----------------------
Land                                                             0.6         0.6
(0.0)       (0.0)
Civil Works                            30.3        10.5                     40.8
(20.0)       (6.9)                   (26.9)
Goods and equipment        2.0          0.5         0.9                      3.4
(2.0)       (0.0)       (O06)                    (2.6)
Consultants, Training                                            0.5         0.5
and Technical Assistance                                       (0.5)       (0.5)
Total                  2.0         30.8        11.4          1.1        45.3
(2.0)      (20.0)       (7.5)        (0.5)      (30.0)
Note:  Figures in parentheses indicate the respective amounts financed by the
Association. Force account would include competitive bidding among local
construction units.
Estimated IDA Disbursements
IDA Fiscal Year
1990            1991             1992
-US---- $- US$ million -----------
Annual                         5.0            20.0              5.0
Cumulative                     5.0            25.0             30.0
Disbursements
Amount
Category              Million SDR                Percent
Civil Works: Shanxi               11.52     )
Hebei                3.11      )
Construction Materials: Shanxi    5.00      ) 652 of local expenditures
Hebei     1.33     )
Goods: Shanxi                      0.24     )
Hebei                      0.24
Communications, computer and
satellite equipment for SSB       1.48     10OZ of foreign expenditures
Consultants, Training and
Technical Assistance             0.80     100%
Unallocated                        0.40
Total                      30.00



-7-
Schedule C
CHINA
North China Earthquake Emergency Reconstruction Pro3ect
Timetable of Key Project Processing Eventss
(a)      Time taken to prepares                Two months
(b)     Prepared by:                           Government, with IDA help
Cc)     First IDA missions                     November 9-11, 1989
(d)     Appraisal Mission Start:               November 30, 1989
te)      8eginning of Negotiations:            December 15, 1989
(f)     Planned Date of Effectiveness:         March 31, 1990
8g)     List of relevant PCRs and PPARs:       None



-8-                                   Schedule D
Page 1 of 3
STATUS OF LARK GROUP OPERATIONS IN THE PEOPLE'S REPUBLIC OF CHIA
A. STATEMENT OF BANK LOANS AND IDA CREDITS a/
(as of September 30, 1989)
Loan/                                                                    Aount (US$ million)
Credit      Fiscal                                                      (net of cancellations)
Number      Year     Borrower           Purpose                    Bank     IDA    Undisbursed bi
Four loans and nine crvditq ha"e been fully disbursed            408.57    471.02        -
2231       83       PRC    Petroleum I (Daqing)               162.40      -          12.16
2252       83       PRC    Petroleum II (Zhongyuan-Wenliu)  100.80        -          16.S2
226111S47    63       PRC    State Farms I (Heilongjiang)        25.30     45.00        0.19
1411       84       PRC    Polytechnic/TV University            -        85.00       18.11
1417       84       PRC    Rubber Development                   ^       100.00       12.94
2382       84       PRC    Lubuge Hydroelectric               145.40      -          34.05
2394       84       PRC    Railway                            220.00      -          14.56
1472       84       PRC    Rural Health & Medical Educ.         -        85.00       17.70
2426       84       PRC    Petroleum III (Karamay)             92.50      -          13.31
2434/1491    84       PRC    Industrial Credit II (CIS II)    105.00       70.00       19.06
2444/1500    84       PRC    Agricultural Education II           45.30    (23.50)1/    9.78
1516       85       PRC    Agricultural Research II             -        25.00        9.01
1551       85       PRC    University Development II            -       145.00       49.22
2493       85       PRC    Power I1                           117.00      -          26.52
2501       85       PRC    Changcun (Luan) Coal Mining        120.50      -          99.74
1577       85       PRC    Seeds                                -        40.00        9.53
1578       8S       PRC    Rural Water Supply                   -        80.00       27.98
2539/1594    85       PRC    Highway I                           42.60    (30.00)1/   19.09
2540       85       PRC    Railway II                         23S.00      -         172.51
2541       85       PRC    Fertilizer Rehabilitation &         97.00      -           9.10
Energy Saving
1605       85       PRC    Forestry Development                 -        47.30       26.29
2579/1606    85       PRC    PiShiHang-Chadhu Area Development 17.00       75.00       33.66
2580       85       PRC    Weiyuan Gas Field Technical         25.00      -           9.80
Assistance
1642       86       PRC    Rural Credit I1                      -        90.00        3.73
2659/1663    86       PRC    Industrial Credit III (CIB III)   75.00       25.00       15.43
1664       86       PRC    Technical Cooperation Credit II    -          20.00       19.79
1671       86       PRC    Provincial Universities              -       120.00       36.13
2678/1680    86       PRC    Third Railway                      160.00     70.00      185.06
2689       86       PRC    Tianjin Port                       130.00      -         104.66
1689       86       PRC    Freshwater Fisheries                 -        60.00        8.26
2706       86       PRC    Beilungang Thermal Power           225.00      -          76.26
2707       86       PRC    Yantan Hydroelectric                52.00                 25.23
2708       86       PRC    Liaodong Bay Petroleum Appraisal  15.00        -           1.00
2723/1713    86       PRC    Rural Health & Preventive Med.    15.00       65.00       65.59
1733       87       PRC    Red Soils                            -        40.00       12.39
2775       87       PRC    Shuikou Hydroelectric              140.00      -         80.74
2783/1763    87       PRC    Industrial Credit IV (CIB IV)    250.00       50.00      124.40
2784       87       PRC    Shangpai Machine Tools             100.00      -          97.19



- 9 -schedule D
Page 2 of 3
Loan!                                                                   Amount (US$ million)
Credit      Fiscal                                                     (net of cancellations)
Number      Year     Borrower           Purpose                    Bank     IVA    Undisbursed £1
1764       87       PRC    Xinjiang Agricultural Developwent  -          70.00       43.63
2794/1779    87       PRC    Shanghai Sewerage                   45.00    100.00      131.77
2811/1792    87       PRC    Beijing-Tianjin-Tanggu Ixpresaay 25.00    125.00         120.46
281211793    87       PRC    Gansu Provincial Development        20.00    150.50      132.62
1835       87       PRC    Planning Support & Special Studies -          20.70       18.33
2838       87       PRC    Fertilizer Rationalization          97.40      -          90.86
2852       87       PRC    Wujing Thermal Power               190.00      -        162.30
1871       88       PRC    Rural Credit III                     -       170.00      60.96
2877/1845    88       PRC    Huangpu Port                        63.00     25.00       78.37
2907/1875    88       PRC    Dalian Port                         71.00     25.00      83.84
1885       88       PRC    Northern Irrigati6n                          103.00      80.46
292411887    88       PRC    Coastal Lands Development           40.00     60.00       63.22
1908       88       PRC    Teacher Training                     -        50.00      36.68
2943       88       PRC    Pharmaceuticals                    127.00      .        121.89
295111917    88       PRC    Sichuan Highway                     75.00     50.00     114.67
2952       88       PRC    Shaanxi Highway                     50.00      -         47.01
1918       88       PRC    Dazing An Ling Forestry              -        56.90      38.46
2955       88       PRC    Beilungang II                      165.00      -        120.95
2958       88       PRC    Phosphate Development               62.70      -         62.70
2968       88       PRC    Railway IV                         200.00      -        193.90
1984       89       PRC    Jiangxi Provincial Highway           -        61.00      49.92
1997       89       PRC    Shaanxi Agricultural Dev. 21         -       136.00     100.53
2006       89       PRC    Textbook Development                 _        57.00      53.33
2009       89       mC    Intaegrated Reg. Health 2/            -        52.00      50.26
3006       89       PRC    Ningbo & Shanghai Ports             76.40      -         68.61
3007       89       PRC    Xiamen Port 2/                      36.00      -         36.00
3022       89       PRC    Tianjin Light Industry             154.00      -        154.00
306012014    89       PRC    Inner Mongolia lailway 21           70.00     80.00     144.76
2017       89       PlC    Shandong Agriculture Dev. 21         -       109.00     103.25
3066       89       PRC    Hubei Phosphate 21                 137.00      -        137.00
307312025    89       PRC    -:andong Prov. Highway              60.00     50.00     ;09.50
3075       89       PRC    rifth Industrial Credit            300.00      -        300.00
Total                             4,777.30  2,858.40
of which hts been repaid          123.10      -
Total now held by Bank and IDA   4,654.20  2,858.40
Amount sold: Of which repaid        -         -
Total Undisbursed                 3,119.63  1,509.30   4,628.93
/ The sttus of the projects listd to Part A is described in * sperate  rpt on *Il gank/10A financed projects
In eecution, wbich Is updated twice yearly and circulated to the Exentive Directrs on AprTiI 80 ad October S.
As  redit. or. d_lnes d In SlIft (aince MA Replenlaiment VI), undlebur_eend 3   redit balaf. ore convert  to
del lore at the current. evehange rati beta.. the del lar and the SO. in s_m cas, therefore, the andiebrse
balanc, Indicates a dollar amt greater then the original principal endit ass_t  preased In dollars.
Nste: 1/ Credit fully disbursed.
!/ ote yet effective.



- 10 -                                  Schedule D
PP3O 3 of 3
B. STATEMENT OF IFC INVESTMENTS
(as of September 30, 1989)
Invest-   Fiscal                                 Type of       Loan  Equity  Total
ment no.   year         Obligor                  business      -_ (US$ million) --
813     1985    Guangzhou and Peugeot          Automobile   15.00  2.00   17.00
974     1987    China Investment Co.           Investment    3.00  0.04    3.04
1020     1987    Shenzhen China                 Bicycle        5.00  -       5.00
Bicycles Co. Ltd.           Manufacture
1066     1988    Crown Electronics              Electronics  15.00  -       15.00
1119     1989    Shenzhen Chronar Solar         Solar          2.00  1.00    3.00
Energy                      Energy
Total Gross Commitments                     40.00  3.04   43.04
Less cancellations, terminations
repayment and sales                        -     -        -
Total Commitments now Held by IPC           40.00  3.04   43.04
Total Disbursed                             38.00  3.04   41.04
Total Undisbursed                            2.00     0    2.00
12/19/89
AS3CO



- 11 -
CHINA
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
TECHNICAL ANNEX 11
Backaro'rnd
1.       Earthquakes rocked part of Northern China at the junction of Shanxi
and Hebei provinces and Inner Mongolia Autonomous Region west of Beijing on
the night of October 18, 1989 and early the next morning. Five of the quakes
exceeded 5.0 on the Richter Scale, the peak shock measuriag 6.1. There were
many aftershocks in the following weeks, including tremors on October 23 (5.2)
and December 13 (4.0). The Datong-Yanggao earthquake was one of the worst to
hit Northern China since 1976 when a major quake (registering 7.8) killed over
400,000 people in the city of Tangshan irn Hebei Province (about 5 hours jour-
ney by rail east of Beijing). The epicenter of the Datong-Yanggao earthquake
lay near Bu Cun village (90 percent destroyed) in Yanbei Prefecture of Shanxi
Province (Map IBRD 22045). This is an impoverished rural area located on the
Loess Plateau, a windswept, eroded plain about 1,300 m above sea level.
Per capita incomes are low, in 1988 only RMB331 (US$89) in Yanbei. Local
employment is provided mainly in coal mining and agriculture (largely corn and
wheat-growing in the dusty, infertile soil). Housing in this rural area is
mainly mud-brick and stone construction that is vulnerable to earthquake
shocks. Casualties in Yanbei and in neighboring Yangyuan County of Hebei
Provifce (20 dead and less than 200 seriously injured) were fortunately slight
due to earlier, less severe warning quakes and prompt evacuation action by
local officials, but property damage was severe. Some 25,000 mainly
privately-owned houses and over 3,000 rooms in schools, clinics and community
facilities were destroyed and 46 local industries as well as various infra-
structure (bridges, power and telecommunications lines) badly damaged. Many
more were partly damaged, but production in coal mines was largely unaffected.
Estimates by the Shanxi Province Seismological Bureau indicate that direct
losses in Yanbei exceeded US$150 million. Very few (about 3-4 percent) of the
assets were insured. Indirect production losses, mainly by industry and com-
merce, are estimated at about US$15 million in the first year and about 1,500
workers have been idled. By early December, 1989 about 15 percent of the
population (32,000 families or 125,000 people) in Yanbei and a smaller propor-
tion in Yangyuan were in temporary shelter, consisting of a small, excavated
mud room or their damaged home with makeshift straw and wood roof repairs.
2.       The most severe quake is estimated to have had a magnitude of 6.1 on
the Richter Scale. Chinese authorities use the New China Intensity Scale,
very similar to the Modified Mercali Scale (MHC), to indicate the relative
damage caused by earthquakes. The MHC Intensity Index at the epicenter in
this case was VIII; damage in this zone was almost total. The extent of
damage indicated by the isoseimic intensity zones rated 'JII, VI and V varied
from severe to slight respectively (Map IBRD 22045). Zones VIII through VI
1! Based on a mission to China from November 30 to December 16, 1989,
comprised of Messrs. Daud Ahmad, Paul Cadario, Paul Stott, Liang Ziqian
and Zhou Yuling and Messrs. Edward Echeverria and Xie Li-Li
(Consultants).



- 12 -                    TECHNICAL ANNEX
Page 2 of 13
were largely located in four counties of Shanxi's Yanbei Prefecture -- Datong,
Guangling, Hunyuan and Yanggao. These counties contain some 876 villages with
about 68,000 families or 250,000 persons. Serious damage (to the extent of
more thim 402 of the housing stock destroyed or structurally impaired)
occurred in about 80 villages, all in Yanbei Prefecture where damage above VI
on the MKC scale was widespread (Table 1). In Yangyuan county, further from
the epicenter, damage was mainly in the zone rated V on an isoseismal map with
only a few areas of level VI damage.
Table 1: Village Damage Statistics
----Villages----  ---Families--  ----------Persons----------
Annual
income
Serious        Seriuus          --Casualties-- Home-Animal   (RMB/
County  Affected Damage a/Total  loss IS/  Total Killed Injured less loss c/  caP)
Datong     168     18      23,422  8,489   89,074    4      11  34,912   977   336
Guangling    202      0      11.481  5,803   35,440    2      21  18,585    21   155
Hunyuan     298     41      14,149  8,160   55,701    1      12  21,667   380   363
Yanggao     140     20      18.902 11,463   67,510   10      36  42,174   395   331
Yangyuan     134       0     22,000      0   79,800    3       3   3,700    na   446
Total     942     79      89,954 33,915  327,525   20      83 121,038    na   3X7
a/ More than 401 of the village housing stock destroyed.
b/ Family's housing completely destroyed (many others suffered partial loss)
c/ Cattle, pigs and sheep
3.       No major urban areas were damaged significantly, in part on account of
their distance from the epicenter and in part on account of the greater resili-
ence of urban building standards. In the rural areas of this region, however,
traditional housing offers little resistance to seismic damage, being primarily
a low-cost, adobe (mud-brick) construction adapted to the harsh conditions of
the Loess Plateau.2/ Public buildings and factories, while incorporating better-
2/ Adobe construction is a technology widely used throughout the world
with varying degrees of sophistication. The Loess Plateau version has
evolved over many centuries. Houses consist of three or more south-
facing rooms and stables constructed in a row, usually adjoining
neighboring structures (Attachment 2b). Each room consists of a
roughly Sm x 3m vault formed under an arched ceiling covered with a
layer of earth to improve insulation. The northern end is closed by a
thick mud-brick wall and the southern face provided with windows and a
door which maximizes passive solar heating effects. Some rooms are
interconnected. These are heated by a coal-fired stove which vents
through an intricate flue located under the family's clay sleeping
platform.



13 _                    TECHNICAL ANNEX
Page 3 of 13
quality materials and standards, also showed themselves vulnerable to moderately
severe earthquakes.
4.       The loss of economic and social facilities in the severely affected
villages (summarized in Attachment 1) has wrecked the fragile local economy.
Yanbei Prefecture is very poor. It has revenues of about RMB100 million ($27
million) per year and obtains provincial and central subsidies of about RMB125
million ($33.7 million) per year. Although local industry and mining is the
major source of cash income, the local economy is agriculture dependent.31 The
earthquake affected 46 local industries in Yanbei Prefecture and destroyed much
of the villagers' accumulated foodetocks. The situation is similar, though less
serious, in Yangyuan County; the area was outside the zone of major seismic
damage and only one enterprise--a flour and feed mill--has had to stop operation
as a result of the earthquake. Yangyuan County's 1988 per capita income was
RMB446 (US$120). Subsidies from provincial and central governments to Yangyuan
amounted to RNB3.35 million (US$900.000).
Government's Response to the Earthquake
5.       Mindful of the onset of winter, the authorities reacted quickly.  The
prefectures prepared a plan for the welfare of the affected villages, including
the temporary restoration of homes, stored foodcrops, and production capabili-
ties until permanent housing and agricultural storage can be restored. These
relief efforts were coordinated by prefectural and county civil affairs offices
and involved non-governmental groups such as the Chinese Red Cross, with assis-
tance from the Governments of France, Japan and Czechoslovakia. They were
largely completed by November 15 and at an estimated cost of RMB26.4 million
(US$7.1 million). Tents were provided to allow the resumption of teaching in
primary village schools where classrooms had been destroyed or made unsafe, and
UNICEF offered US$25,000 for classroom equipment. Detailed planning for the
reconstruction and repair of villages and affected assets got under way during
the first half of November, with the restoration of electricity to most village
centers. The technical resources of the local authorities are being supplemen-
ted by a provincial task force drawn from the architectural, engineering and
town planning institutes, and advised by experts from the Ministry of Construc-
tion (MOC) and the State Seismological Bureau (SS8).
IDA's Response and Strategy
6.       At the government's request, three staff of the Resident Mission in
China (RMC) visited the affected area from November 9 to 11, accompanied by
officials of the Ministry of Finance, to assess damage and recommend an IDA
response. The mission visited the four counties of Yanbei Prefecture and
received information on the situation in Yangyuan country. There are no ongoing
Bank Group projects in the area, and potential savings from other projects in
the rural sector are not available for reallocation. In the absence of any
substantial indication of interest by other donors in financing reconstruction
in the area, the missicn recommended that a small emergency IDA credit would be
an appropriate course of action to help expedite the reconstruction effort. An
31 In Hunyuan county (population 310,000), for example, 1988 revenue from
industry (mining, cement) was about RMB98 million and from agriculture
RMB70 million. However, a drought reduced the county's grain output
from 101,500 tons in 1988 to about 80,000 tons in 1989.



- 14 -                      TECHNICAL ANNEX
Page 4 of 13
advisory group convened under Bank procedures for emergency operations met in
mid-November to examine whether and how IDA should respond. It endorsed the
mission's recommendations and a combined preparation/ appraisal mission visited
China from November 29 to December 16, 1989.
7.       The principles underlying IDA's response and strategy have been tot
(a) advise on affordable and cost-effective reconstruction standards; (b) expe-
dite the mobilization of counterpart funds and beneficiary contributions
required, together with IDA funding to ensure prompt implementation of the
reconstruction program; (c) draw on substantial Chinese expertise in earthquake-
related matters and seismic engineering; and (d) strengthen the national
agencies responsible for earthquake prediction.
Project Description
8.       The project would support an emergency program to be carried out in
1990 and 1991. It consists of:
a) village reconstruction programs,
i) in Yanbei Prefecture (Shanxi Province) reconstruction works in about 80
villages (including about four villages to be relocated), covering
reconstruction of about 21,500 collapsed dwelling rooms and rehabilita-
tion, repair and reinforcement of about 24,000 others, reconstruction
of about 1000 public facility rooms (village classrooms, health
centers, village storehouses and other public buildings) and repair and
reinforcement of about 600 others, reestablishment and repair of criti-
cal village infrastructure (power lines, irrigation channels and minor
structures, and water supply) and repair of damaged buildingp,of about
13 rural enterprises; and
ii) in Yangyuan County (Hebei Province)'reconstruction works in about 70
villages, covering reconstruction of about 2400 dwelling rooms and
rehabilitation, repair and reinforcement of about 25,500 others, recon-
struction of about 200 public facility rooms (village classrooms,
health centers and community buildings) and repair and reinforcement of
about 600 others, repair of critical village infrastructure (irrigation
channels and water supply), and building repair for one seriously
damaged agro-industrial enterprise and one commercial enterprise; and
b)   a national component of institutional development and technical
assistance to support, upgrade and reinforce the State agency
responsible for earthquake prediction (SSB), as well as the drawing up
by Shanxi Province of an emergency preparedness program for Yanbei
Prefecture.
Village Reconstruction Programs
9.       The proposed village reconstruction program is designed to rehabilitate
rapidly the economic and social facilities severely damaged in Yanbei Prefecture
and Yangyuan County. It would assist Yanbei Prefecture Government and Yangyuan
County Government in the reconstruction of private rural housing and public
infrastructure (classrooms, clinics, community centres and offices, stores and
simple agricultural processing plants), power transmission lines, simple
irrigation works and village water supplies. The specific objectives are:



- 15 -                    TZCUNICAL ANNfX
Page 5 of 13
(a) to ensure that all families will have at least two habitable, earthquake-
resilient rooms as accommodation before the next winter season; and (b) to
restore village public services to a reasonable basic needs level. The local
authorities have adopted an affordable, least-cost approach. Villages would
first be surveyed to assess the structural integrity of the remaining buildings
and draw up a detailed reconstruction plan, based on various rehabilitatton
options related to the degree of damage and ability and willingness to pay. In
order to minimize costs and facilitate implementation, priority would be given
to repair and reinforcement of the existing housing stock wherever this is
feasible and cost-effective. Where damage ls more severe and reconstruction
unavoidable, it would be undertaken using various earthquake resilient designs
for traditional and contemporary buildings selected aceording to affordability
criteria. The planning and design criteria as well as estimated unit costs and
affordability for the village reconstruction program are shown in Attachment 2.
A summary of the village reconstruction programs is given In Table 2 below.
Table 2: Proposed Village Reconstruction Program
Shanxi Province       Hebei Province
Number      S        Number       2
Villages                                     79                 68
Population                              67,200              97,300
Families                                18,500              29,300
Dwellings:    Existing Rooms/Stables   79,700       100     78,000      100
Damaged                   54,200      68     28,000       36
Replacement Rooms         19.800      25      2,400        3
Rehabilitated Rooms       21,100      26      25,400      33
Rehabilitation not
-   included in project 1/ 13,300        17        -          -
Public Roomss Existing Rooms             5,850      100      2,000      100
Damaged Rooms              2,050      35         700      35
Replacement Rooms            900      15         100       5
Rehabilitated Rooms        1,700      29         600      30
Relocated Villages                           4                   0
1/ Existing rooms per family (not including stables):.Shanxi, 2.6; Hebei, 2.7
Project will ensure that each family has at least two habitable rooms
10.      During appraisal, IDA agreed with project implementing agencies on
least-cost solutions for the village reconstruction programs. Yanbei Prefecture
and Yangyuan County have agreed to give priority to reinforcement and repair of
damaged housing. Reconstruction using improved, earthquake-resistant techniques
is the next option, and it is expected that community effort will be more easily
mobilized close to the existing undamaged dwellings ar.4 temporary shelter.
Reinforcement of existing buildings, even those with little damage, would be



- 16 -                    TECHNICAL ANNEX
Page 6 of 13
carried out to improve their seismic resilience. Only in those rare cases where
more than 802 of the buildings have been destroyed will relocation of a village
to a new site be considered, generally not more than one kilometer distant from
the destroyed hamlets, particularly where this would favor access to the resi-
dents' current fields and markets and to water supply. Expert assistance would
be provided by the provincial authorities to Yanbel Prefecture in the determina-
tion of new sites for the four villages identified as likely candidates for
relocation. The justification for village relocation and their layout,
infrastructure and land use arrangements would meet specific criteria agree4
with IDA (Attachment 2a). In all other cases in-aitu reconstruction would take
place, because relocation after an earthquake is not advisable unless there has
been serious seismic damage leading to environmental hazards. Shared facilities
such as middle schools, township clinics, grain storage facilities and post
offices would be reconstructed, at or very near existing locations. Significant
labor inputs from the communities, equivalent to about 25-30? of the building
costs are expected.
11.      New buildings and structures would conform to seismic requirements of
State building codes, as well as affordability criteria, and would entail tradi-
tional and modern materials and construction methods which were reviewed by the
appraisal mission and judged satisfactory. Consistent with income distribution
in the villages, about 20 percent of the new dwelling rooms are expected to be
constructed using relatively high cost masonry walls and timber roof; about 60?
using lower-cost concrete framed adobe with timber roof; and about 20? using the
traditional adobe construction with a reinforced mortar shell as shown in
Attachment 2b. It was agreed at negotiations that Shanxi Province would carry
out testing (para. 26) of the seismic resilience measures to be applied to
traditional adobe houses before February 28, 1990. Repair and reinforcement of
existing buildings would be carried out to improve their seismic resilience,
too.
12.      Public facilitiss to be financed under the component would include
rehabilitation and reconstruction oft (a) on-site facilities such as buildings
for primary schools, health posts, community offices, stores and small-scale
agricultural processing facilities; infrastructure such as roads and paths,
drains, water supply (handpumps or wells with electric pumps, owing to deep
water tables) and sanitary facilities; and (b) off-site facilities such as mid-
dle schools, township clinics and access roads, power lines, irrigation channels
and minor structures. The rehabilitation of major buildings would be defined in
accordance with MOC damage assessment guidelines and reconstruction carried out
to national design standards and codes.
13.      Formulation of the Village Reconstruction Program (Attachment 3c).  A
process of consultation with village communities is under way to determine the
scope of the reconstruction program possible within the cost and affordability
ceilings applicable in each case. YPG and YCG project teams would visit each
community to work out with villagers and their leaders the highest-priority
investments needed by the community in light of the available budget, the
schedule for construction and repair, and to help organize the community labor
input. Similarly, householders would be informed of repair and replacement
options open to them and their financial implications. After a written
agreement with the village on priorities and the work to be implemented by force
account and with local construction units or contractors the team would:



- 17 -                    TECHNICAL AMNNX
Page 7 of 13
i) make a detailed estimate of the necessary materials to be provided
for the private housing replacement and rehabilitationlrepair
program, and arrange for the materials necessary to be provided;
ii) help villages invite bids from local contractors or local government
construction units to provide the public buildings and
infrastructure; and
iii)  assist in supervision of the reconstruction.
14.      Enterprise Rehabilitation.  The enterprise rehabilitation component
would finance building repair in a limited number of affected rural enterpri-
ses to restore their original pre-earthquake capacity.   Attachment lc lists
the most seriously affected enterprises, those building repair is included in
the project. In Shanxi, the project would address the rehabilitation and re-
pairs required by about a dozen enterprises which suffered serious structural
damage to their buildings. In Hebei the project would help one major local
agro-industrial enterprise which suffered structural damage make repairs to
its main buildings, as well as a commercial company which suffered damage to
its premises that make the building dangerous to customers and pedestrians.
As careful damage assessment and cost estimates are still being prepared by
the enterprises and county engineers, the project provides a notional sum of
RMB3.3 million (US$0.9 million) for Yanbei and RMB1 million (US$0.3 million)
for Yangyuan. Other enterprises were affected in both provinces but they are
judged able to rely on their own resources or existing credit mechanisms to
rehabilitate their premises. In many cases, enterprise managers plan to take
this opportunity to upgrade or diversify production, particularly for products
in short supply on the free markets.  Therefore, the project will focus only
on rehabilitation of the earthquake damage. Investments to expand capacity or
to change product lines (which is contemplated, for example, by one village
enterprise which plans to change from production of cement to manufacture of
an additive for plastics manufacturing) would be finainced by local financial
intermediaries according to their normal lending criteria, and would not be
included in the project. The Ministry of Finance and Shanxi and Hebei
provinces have agreed to instruct the financial intermediaries covering the
affected arei to give priority to these enterprises in providing credit.
The National Comvonent for Earthquake Prediction and Emergency Preparedness
15.      Damage Assessment.  China has experienced some of the most severe
earthquakes in the world. Since 1900, there have been 662 earthquakes with
magnitude over 6 on the Richter Scale, including 106 which were over 7 in
magnitude 30SZ of the earthquakes in the world over magnitude over 7 have
occurred in China. Sixty percent of China's land area is in seismic
vulnerability zones of over 6, and seventy percent of metropolitan areas of
over 1 million population are in zones over 7. The death toll from
earthquakes in China in the twentieth century exceeds 600,000, accounting for
over 50S of the world total. These seismic activities have been frequent and
widely scattered, with shallow epicenters and consequent grave loss of life
and property.
16.      Earthquake Prediction Methods.  China has a long and rich history in
research efforts to forecast earthquakes. As early as AD132, scientist Zhang
Heng built a bowl device with a central pendulum with eight dragons from whose
mouths a ball would drop indicating the direction of the earth tremor. Since



- 18 -                    TECHNICAL ANNBX
Page 8 of 13
1966, Chinese scientists have made detailed observations of earthquake precur-
sors leading toward earthquake predictions. Prom 1966 to 1976, nine strong
earthquakes with magnitudes greater than seven occurred in north and southwest
China. During this period, some anomalous variations were detected before
these earthquakes from geophysical, geodetic and geochemical observations.
Chinese investigators have observed that some precursors develop continuously
and change slowly while others change rapidly or even suddenly. SSB's
research has demonstrated that different manifestations of precursors may
reflect different stages of earthquake preparation or phases of crustal
movement. which can be monitored with proper instrumentation. Prom these
observations and analysis, the methodology of earthquake prediction has
evolved toward long-term (10-20 years), medium term (1-2 years), short-term
(1-2 months) and imminent (2 to 12 days) predictions. The research and
analysis procedures were formalized with the establishment of the Center for
Analysis of Prediction (CAP) under SSB. Map I8RD 22086 shows SS8's predic-
tions of areas of high seismic risk in the long term.
17.      The ultimate goal of precise predictions should be to achieve a
response through disaster preparedness, mitigation and lowering the earthquake
vulnerability of inhabited areas to serious loss of life and property. The 10
research sections of CAP monitor the seismic precursors and make a mid-term
prediction for strengthening of monitored areas where there are predictions of
earthquake magnitudes greater than 6.3 Richter Scale. They are responsible
for making daily and monthly reports ftor domestic eartLquakes collecting the
data and information obtained from SSB's national network of standard
stations, precursory stations, regional transmission networks and mobile
seismic monitoring units. SSB's Beijing headquarters collects data from with
every province and main city in China. SSB's national computer, database and
satellite communications network, which was established with partial
assistance from UNDP, serves all Chinese institutions involved in earthquake
prediction and research. Among the tools employed is the computer-assisted
Expert System for Comprehensive Earthquake Prediction (ZSC!P). Put into
operation in September, 1988, it predicted six major earthquakes for 1989,
including the Datong-Yanggao Earthquake. For the Datong-Yanggao area, it
forecast a quake of magnitude in excess of 5 on the Richter Scale within one
year.  The computer program is based on 400 rules of earthquake prediction.
These range from seismological factors to changes in color and temperature of
underground water, abnormal animal behaviour, crustal deformation, gravity,
geomagnetic field, resistivity, etc. With data from 1000 seismological
stations across the country, the computer issues a prediction report which is
interpreted by SSB staff in consultation with local and provincial
seismological offices.
18.      Every January, Chinese earthquake specialists assemble to make their
prediction of earthquakes for each region of the country over the coming year.
With their present improved methodology and computerized analysis, they could
have predicted the great Tangshan earthquake (para. 1) and reduced the terri-
ble death toll. However, the predictions and the warnings possible for emar-
gency preparedness are only as good as the data availablet that is a function
of the coverage of the seimological monitoring network and the rapidity and
accuracy of the data transmission to SSB's headquarters to Beijing for analy-
sis. The existing network provides only partial coverage of China's vast
territory, even in the areas of highest seismic risk, and accelerometer data
are only sporadically complemented by other precursory readings. Communica-
tions links between the monitoring stations and SSB's headquarters are a mix-



- 19 -                    TECHNICAL ANNEX
Page 9 of 13
ture of reliable digital equipment (which can be fed directly into the compu-
ters) and analog readings passed o. by voice on short-wave radios.
19.      Earthquake Damage Mitigation.  Imaediate, on-the-spot investigation
of earthquake damage has been organized by the various departments of the
Ministry of Construction (MOC). The investigations include the condition of
the earthquake geology, engineering geology and hydrogeology. earthquake
intensity distribution, subsoil liquification and the detailed damage inspec-
tion of all the major affected structures. In addition, the secondary damage,
the lifeline facilities and the damage to community facilities and equipment
are assessed and an estimate of economic loss is prepared. The damages from
earthquakes over 7 magnitude have been carefully assessed. Analysis of the
results of the 1976 Tangshan strong earthquake have been widely disseminated
and published, and a revised anti-seismic Building Design Code for Industrial
and Public Buildings was adopted in 1978. These regulations were followed by
Design Codes for Water Supply and Drainage Works as well as gas and power/
heating plants, hydraulic structures and railway and highway construction.
20.      As part of China's efforts for the International Decade for Natural
Disaster Reduction (IDNDR), HOC has drawn up a program of studies and research
into earthquake damage mitigation for its Earthquake Resistance Bureau. It
includes techniques for seismic strengthening of existing buildings and life-
line structures (traditional rural housing, high-rise urban apartment buil-
dings and hospitals), earthquake vulnerability assessments of key cities, case
studies of earthquake reconstruction experience in China and abroad and s aff
training into modern design and construction techniques.
21.      Institutional Support for Earthquake Prediction and Mitisation.  The
national component (Attachment 6) supports China's efforts at earthquake pre-
diction and disaster preparedness. It would enhance SSB1's network of
earthquake monitoring stations in identified areas of high seismic risk (the
capital region, Sichuan and Yunnan) and reinforce satellite communication and
computer equipment at SSB's Beijing headquarters to receive and analyze data
from fixed and mobile seismic observation equipment. Also, Shanxi Province
would draw up an emergency preparedness plan for Yanbei Prefecture for
earthquakes ind other natural disasters and other disaster emergencies (e.g.
large chemical spills, disruption of urban water supplies, building collapse,
etc.), a pilot effort at the prefecture level to be replicated by Shanxi Pro-
vince in other prefectures and, maybe, elsewhere in China. Terms of reference
and a work program for the SSB component were agreed at negotiations. The SS1
effort is estimated to cost US$2.5 million, of which IDA would finance the
foreign exchange component of US$2 million. The Yanbei emergency preparedness
plan will be carried out by officials in Shanxi pro-ince, with no financing
from the Credit proceeds. The Association is expected to contribute to this
exercise through its review during supervision missions.
Proiect Cost and Financin8
22.      Cost Estimates.  The estimated costs, in January 1990 prices, of the
Village Reconstruction Programs (Attachment 2c) would be about
RMB122.8 million (US$33.1 million) in Yanbei Prefecture and RMB34.3 million
(US$9.2 million) in Yangyuan County, including villagers' labor inputs
estimated to be worth about RMB22.6 million and RMB7.4 million respectively.
Because of the short (18 month) implementation period expected, no price
contingency allowance has been allowed. Physical contingencies of about lOS



- 20 -                    TECHNICAL ANNEX
Page 10 of 13
of the cost of the village programs, total&ing RMB114.1 million
(US$3.8 million), have been included. The foreign exchange requirement of the
Shanxi and Hebei subprojects is mainly indirect, and totals about
RMb47.1 million (US$12.7 million).4/   The total cost of the 8SB component is
about RMB9.3 million (US$2.5 million), of which the foreign cost is estimated
at US$2 million, which the Association would finance.
23.      Finncing Arrangements.  The project financing plan includes funding
from YPG and YCG and the Association, as wv.1 as cash and kind contributions
from the villages.  The Ministry of Finance (MOF) would be the Borrower and
would onlend the proceeds to Shanxi Province and Hebei Province in local cur-
rency, interest free, for 25 years, including 10 years of grace, with a
one percent annual service charge. MOF would bear the foreign exchange risk.
The sources of the villages' contribution are expected to be cash savings and
very modest insurance refunds (less than 1 percent of the total estimated
losses) as well as labor inputs. The sources of the YPG and YCG contribution
are central and provincial grants, private donations after the earthquake,
insurance refunds and local revenues. The cost sharing is roughly: a) for
housing and village water supplies, 652 by IDA, 25-302 by beneficiaries, and
10-152 by the prefecture/county government; and b) for public facilities, 652
by IDA, 10 by villagers (labor inputs to construction) and 252 by prefecture/
county government. For individual enterprises, the cost-sharing proportions
will vary, since IDA funds would be applied only for 652 of the cost of neces-
sary building repair and minor equipment servicing needed to restart units to
their pre-earthquake levels of output. The enterprises' retained earnings and
insurance settlements and contributions by the county or prefecture govern-
ments that own them would generally finance the remainder. For expansion of
production or change of product output, the enterprises would seek loans from
local financial institutions, which would apply their normal lending criteria
and appraisal methods. The project gives rise to additional annual operating
and personnel costs at SSB for the enhanced monitoring and communications
network of about R3B2.5 million, which is only a small addition to SSB's
current annual budget of RMB130 million. Because the reconstruction works aim
to reestablish conditions before the earthquake, there are no new incremental
recurrent cost'implications for Shanxi and Hebei provinces, or for Yanbei
Prefecture and Yangyuan County. These cost sharing and financing arrangements
are satisfactory.
24.      On-lending Terms and Cost Recovery.  Funding for reconstruction and
repair of private housing would be provided to the beneficiaries as a loan on
very concessional terms: a 1.3 percent annual interest rate and up to 15 year
4) A 20.12 devaluation of the Renminbi took effect on December 16, 1989,
after appraisal and negotiation of the project. Because the bulk of
project expenditures for the village reconstruction program are in
local currency, the impact of this devaluation could be significant,
exceeding 10 of the village reconstruction program costs. Htiwever. it
is difficult to predict the course of inflation during project
implementation. Accordingly, the project costs have not been adjusted.
If during implementation more effective resources become available in
local currency, there are additional reconstruction and rehabilitation
activities in the project area that have been reviewed by the appraisal
mission, are consistent with project scope, and could be financed from
the Credit proceeds.



- 21 -                    TECHNICAL ANNEX
Page 11 of 13
maturity depending on the household's income, with one year of grace in Kebei
and two years in Shanxi. Loans to damaged enterprises for building repair
will be extended for up to 902 of the cost of the repairs, at the prevailing
interest rate and maturity period for similar loans from relevant financial
intermediaries seach as the Agricultural Bank of China, but loans for expansion
of capacity or major renovation of buildings will be obtained through normal
credit channels (para. 14). Costs of reconstruction, repair or reinforcement
of public facilities (classrooms and clinics) will be made available as a
grant from the provincial governments. Funds will be provided to the county
water resources bureaus for irrigation and water supply through budgetary
allocation, but tht. counties plan to recover these costs through adequate
water charges. These on-lending terms and cost-recovery arrangements are
considered appropriate given the emergency nature of the project and the
relative poverty of the beneficiaries.
Proiect Management and Organization
25.      Organizational Structure and Responsibilities.  The village recon-
struction programs would be executed by the local governments in Yanbei
Prefecture and Yangyuan County, and, in keeping with Chinese practice, each
government has set up a separate project management office to manage the
reconstruction activities. These project organizational arrangements are
shown in Attachments 3a and 3b. The village and county teams, responsible for
the bulk of design and construction works, would be assisted by experts from
central- and provincial-level agencies as necessary. A summary of implementa-
tion arrangements is provided In Attachment 3c. The overall project implemen-
tation schedule is shown in Attachment 4a. Key implementation actions
required to launch the project are listed in Attachment 4b. The national
component for earthquake prediction would be implemented by existing units of
SSB, under the direction of an official designated to coordinate the IDA-
assisted effort who would be responsible for procurement and progress repor-
ting tasks. The Shanxi Provincial Seimological Bureau and its Yanbei affili-
ate would coordinate the preparation of the Yanbei Prefecture disaster prepa-
redness plan, with input from other prefecture and provincial units. These
arrangements -re satisfactory. Agreement was reached at negotiations on the
project implementation schedule and organizational arrangements.
26.      ProJect DesiRn and Testing.  During appraisal, construction engineers
and technicians from the project area, the two provicnes and MOC and the IDA
mission examined the most appropriate engineering techniques for building
simple, cost-effective and earthquake resistant buildings to replace the
destroyed or damaged dwellings and public facilities. It was agreed that an
interior-reinforced mortar adobe vaulted dwelliv3, based on local traditional
architecture, village layout and constructicn techniques would be the most
suitable approach for replacing the roughly 20 percent of the building units
that had been totally destroyed, and that the same reinforcement torhniques
would be appropriate for reinforcing those buildings that were damaged but
reparable.  Schematic drawings of the proposed buildings are shwnti in
Attachment 2b. The Shanxi Province technical team, headed by thp Ploputy
Director of the Shanxi Architectural Design Institute in Taiyuan has agreed to
test the design proposals for the reinforcement of existing vault dwellings
and the construction of new reinforced adobe vaulted dwellings for their use
in the project. The Design Institute will prepare the workint. drawings. By
February 28, 1990 the Yanbei Prefecture '.onstruction l;ureau will construct two
or more prototypes to be tested in one of the villages. MOC will approve the



- 22 -                     TECHNICAL ANNEX
Page 12 of 13
project and the Shanxi Design Institute will monitor and supervise. It 'is
proposed that one, three-vault building be built with improved adobe blocks
but without the reinforced mortar internal shell. After curing of the block
and mortar courses, the building would be subjected to simulated earthquake
forces to test its resilience. After appearance of surface cracks, the test
vould be concluded and the vaults strengthened with the internal reinforced
mortar shell. The prototype reinforced building would be subject to the dyna-
mic load tests to exceed the simulated 1976 Tangshan earthquake. A second
building would be built in accordance with the new designs and tested to simu-
late an earthquake of Intensity XI on the M)C scale, or beyond, to verify the
safety margin of the new vault design for earthquake-resistant village dwel-
lings. The testing would be part of a project launch workshop to be organized
by the Ministry of Construction and the two provinces before March 15, 1990 to
train project engineers in this new construction technique and to demonstrate
to the local population the safety and practicality of this improved housing
based on traditional design and construction methods.
27.      Procurement.  Construction materials and goods would be procured
through local procedures (detailed in Attachment 5) which have been reviewed
by the Association and are deemed satisfactory for this operation. In view of
the emergency nature of the project and the small and scattered works in many
villages, corventional IC8 or LCB procedures are not suitable. Instead, modi-
fied local procedures are proposed. Materials available under the State Plan
(State quotas at fixed prices) would be purchased directly. Materials not
available under the State Plan will be purchased in the open market. Timber
and steel will be procured centrally for the two provincial components (by
Yanbei Prefecture for the Shanxi subproject and by Yangyuan County for the
Hebei subproject) after at least five written quotaticns from their estab-
lished suppliers. The respective heads of the two material supply units would
be responsible for reviewing these quotations and for making a recosmendation
to their respective head of the project implementation office. Other mate-
rials (cement, bricks, stone, lime, etc.) would be procured locally within the
respective counties, using competitive bidding wherever possible. Construc-
tion and repair of houses would be carried out by respective villages through
force account with assistance of rural construction units5/ selected through
competition. Construction of public facilities and infrastructure would also
be undertaken through competition among local construction units. Goods for
the reconstruction program would be procured through local procedures invol-
ving at least three written quotations. All contracts above US$500,000 for
works and materials and above US$50,000 for goods and equipment would be sub-
ject to prior review by the Association. Procurement of the initial batch of
materials would proceed early in 1990 in order to permit commencement of con-
struction in the spring, and retroactive financing of up to US$4 million would
be permitted for eligible expenditures incurred after December 15. 1989. Com-
munications, computer and scientific equipment for the national component will
be obtained through international shopping based on at least three written
quotations against a written specification. A consultant is being engaged
under the World-Bank executed UNDP Second Umbrella Technical Assistance
Project to help SSB prepare these procv:ement specifications. Consultants and
experts for SSB will be selected and employed following procedures consistent
with the World Bank's Guidelines for the Use of Consultants.
S/ Yanbei Prefecture has a total of 207 registered construction units: one
Grade 2; 52 Grade 3 and 154 rural construction units.



- 23 -                     TECHNICAL ANNEX
Page 13 of 13
28.      Disbursement.  The project would be implemented over two years with
disbursement extending over three, closing on December 3i, 1992. The proceeds
of the credit would be disbursed against eligible expenditures as follows:
(a) 65 percent of expenditures on civil works undertaken by force account and
local contractors; (b) 65 percent of expenditures for locally procured goods,
materials, equipment and furnishings; (c) 100 percent of foreign costs for
communications, computer and scientific equipment; and (d) 100 percent of
expenditures for technical assistance and training. Disbursements would be
made against Statement of Expenditure (SOB) withdrawal procedures eatisfactory
to the Association. Supporting documentation for the SOEs would be maintained
by the project implementation offices. A Special Account would be established
in the Ministry of Finance. The account would be maintained in US Dollars
with an authorized allocation of US$4 million (equivalent to the estimated
average disbursement over a four-month period). Payments from the Special
Account would be made in Renminbi. The documentation in support of SOEs would
be retained by MOF and made -available to IDA on request.
29.      Accounts and Audit.  Yanbei Prefecture and Yangyuan County would
maintain separate accounts and records for the project and for all SOB-related
expenditures. This documentation would be subject to audit by the State Audit
Administration, and the audit reports would be submitted to IDA by June 30 of
each calendar year (six months following the close of each fiscal year). A
fial audit report and the draft Project Completion Report to be prepared by
th" Ministry of Finance would be submitted within six months of the final
disbursement.
30.      Environmental and Social Impact.  Since the project would finance
reconstruction and rehabilitation, construction would be mostly on original
sites and no significant impact on the environment would be expected. In
nearly all cases in-situ reconstruction would take place, because relocation
after an earthquake is not advisable unless there has been serious seismic
damage leading to environmental hazards. Shared facilities such as middle
schools, township clinics, grain storage facilities and post offices would be
reconstructed, at or very near their existing convenient locations. Reloca-
tion of any community is subject to ratification by the country assembly, and
must meet the planning and environmental criteria agreed with IDA (Attachment
2a). The repair of certain enterprises may allow incorporation of more modern
environmental protection standards, and along with selective reconstruction in
each village, permit better village planning.
31.      Reporting and Evaluation.  The agreed project implementation schedule
is shown in Attachment 4a along with the key project launch activities and the
key project monitoring indicators. Quarterly progress reports will be submit-
ted by Yanbei Prefecture and Yangyuan County according to a format acceptable
to the Ministry of Finance and the Association, to be developed by
February 28, 1990. A detailed work program and budget for 1990 consistent
with the implementation schedule agreed at negotiations is being finalized.
The project quarterly reports, together with contract awards, disbursement
documents and IDA supervision missions would form the basis for routine moni-
toring of progress.



NORTH CHINA EARTSQUACE RECONSTRUCTION PROJECT
Glimpses of Damage
-~~~~~~~~~~i >   _ Ws                                                    +, 
Xi Tuan Buo Village, Yang Gao County (Population 3,400) --  OOS destroyed 
Traditional 'Cave* house                                                        Temporary Shelter



Traditional "cave" house, candidate for                            Mu Chang Village, Guangling County (temporary shelter)
reinforcement during rebuilding
Bu Cun Village, Datong County (at quake epicenter,
100% destroyed)
Cement Factory, Yanggao County (Bu-ilt 1976)
.vXfl v    s I~~~~~~~~



- 26 -
Attachments
la   Socio-economic Data and Damage Estimates for villages in Yanbei
Prefecture
lb   Socio-economic Data and Damage Estimates for villages in Yangyuan
Prefecture
Ic   Summary Information on Selected Public Enterprises
2a  Village Reconstruction Program--Planning and Design Criteria
2b   Schematic Layout of Traditional Adobe Vault House House
2c   Village Reconstruction Program--Estimated Construction Costs
3a   Illustrative Organization Charts
3b   Organization Charts of Project Implementation Offices
3c Summary of Implementation Arrangoments
4a   Implementation Chart
4b   Project Launch Action Timetable
4c   Key Monitoring Indicators
5    Procurement and Disbursement Arrangements
6    National Component--Support for Earthquake Prediction



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- 28 -
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VI I 1,. bt  - 7.bl. IA S.ue1oe-_ Ic Veto oW O_mw  Eltoe - NAo. PFepineo, yaatase Cosp*  Obw.1W
a00  P"Wiettlat       lnmm    Meling   0mm.4. M    PA011e 0o  m"G  ()                NW room
T_tship      sm_ Feune Peallso Y/tw/y    - %brrTe I Typ        rmm4 T, dTe               TAp 1S  Oll lt        .
A. Vam. Caatt                                     |                         I
~~~~~~~~~~~I                                                 I                          I
Al 643 Jis ama       6    7.30    1.11        80     19.641      46    40         0       UN       an  1  1.1,1    0
Al O".la             6   86.0OW   I0.84       4O, I  18.105      41    406 I      0       1s       so I      04    0
AS bhma Llaa         6 4    6.60    1.48      NO 1   7.10        45    406        0       UN       86       1       0
£4 Xi 0.C Ua         6   25.708   4,09         00     O S4       4S    46         0       1U0     a86        11     0
As Vw. Jig Zan       a   19.610   68100       400 1  1.W         i      1s   t    0        a        a  9    101    0
A                                                 I              as      co       0        as       an        0    0
A?                                                               of      an       0        an I               0    0
As                                                I              06      on       0        an       an1       0    0
£9                                                1              0       0as       0       06       an1       0    0
£10                8/0                            1              41    406  1.2000        10       an061      0  200
Ttl - 1hn.         97.174   "29.6      446    78,061       a     an6   1.000        US       261   .388  900
.    maI.lateinltyf sonine based on Chinese Modified oneroall gingl. rtegik
b/ Averwg no. at room/feel ly-       2.7 (not ieeludiag .fmbl..)
a/ Type 1 - requires full r.manstrwatla; Ty"e 1 - require. rewabilitatl.a mad rel"fereseemn
Amt etal_.mte  so followst              Oeli 44aw       P1b8011 buildIJw
mI Tope I Tye 2   Ty_  I _Tpe 2
6      4.069   406    10.06       80
8      1.06    106       0.06      89
J/  alunding rmem  to primary  chool.. dal.t.e_  sad hoitale



Scener Zaemle co Selected Plbe bterb      b
MM :RUrS
wO             _su                                                 WTI                   011mt JIGAM                      673E 16
m00  613r-Ol ITDAL IlNE4tti    CWmACZI                ou          4IAL   N     WAlU  P66Lt   TM    LOS   LOW                              cost    OUSSIuETI  713
ml t   h      SIE              7Itt  tIP  664.                      (TPml (P                -Cr46 .1 Ills.)-      D     Cvm                      now  Oi FROM       C_er   )
am    TOTAL                            4746                                          52.l0  12.41  95.40  2.400, S."   11.62    4.2                           19.10
tUt11AI COLf
OIetlll.,y                 etale-ea.dt 1i4    NO   swOls splo-t         2.400           60   2.96   2.04   2.92  0.060   1.44   2.18    0.25  Partially slpd    0.80   eta.. pr"il Pas seni
pdwatbAu PO  esulda
pow Kil            l       coellectiv   16      6    p5 iaa             S,ODD        8,000    .60   2.S0   6.40  0.018  0.27   1.06    0.295  p.trtlts slappd    1.00   M1d S _ pr-Id  ls
POW5                                                                                                                   linte .146  m  -1 kWap
Chemical PrtIll.r Pet   sta-earnd  1972   6U    s-i.ew  Dlt00                       81.31801S  9.04   8.77   4.67  1.230  1.00   1.1U    0.06       otopped           8.00 _aS. Id tm bSelier rem
bigeboast                                                                                                               Isth a Om saeo-savlag
VWJI    t lila             TE          1966    1061  eltl             10.000        27.000   0.60   0.42   0.6   0.#.0   0.11   0.60    0.e5   talI sa                1.00 _O beIld tb smlpit.
CATO COUWY
Week sd Titl Pint          e* _-tNa.  1969    480   brIdi            40a Om       - a Pee   1.87t   1.18   1.70  0.160  0.14   0.92    0.80  Portia# If lapped    2.10   41d 14  as OMedsMblea
lagremssla (Including am
"D. 2 1151t Poea           stale-ease   19t7    180  brldcs          40 a*Pe      14 a pem   2.07   2.14   0.61  0.060  0.12   0.61    0.25  tale 13slappe            0.00  btela_ o.reo    semI
11es Peas,         F         l leellwe  196     190  d1es          100.000 rso r   44.700 plte  0O.    0.47   1.0  0.060   0.00   0.23    0.23  po5.11. I, slp.   0.110  fbslar -ree  SDa-I W
10titl.l-p re--l)  felbrr   ml leallve   1*1    104  _sepet        180.00,0 Fl I   -          0.27s  0.21   0.2  0.060   0.01   0.18    0.20  seetisIll  stepp        0.80  mmesIre pswirm  er_l 
TANNO CoLury~~4 elryprdwtis
Commas Fseliy              mstsat-eod  1971 _64  ceat           e      25.00e       26.00)   2.6s   2.04   1.l0  0.2S0  0.26   2."         1.66  lalal I.spped        4.60  1bIaSd a am prodIbiv* _
lto* .14  capsltp
lacreeslag Cilacludlmo sea
II IS SWd eaplpma).
%i_tma    Ca_a Ftorr       TW.         1972      90     4a             10.000        8.000   0.0    0.70   0.26   0.00  0.01   0.12    0.18  to" Ity slapped         2.60   Maso late a am r  o. Ic t
elsme (sell, asIdes
C lemtcal Pertllitttr Plet    il-amod  1976    461  _mtea              2S.000       26.000   *.1   4.46   8.92  0.260   0.41   0.39                 st                 1.00  RleIlJ sad rsInftere
bicasboinateS
C_me  FPerjy               TYE         1670    24O  essa               10.000       18.000   0.9    0.86   0.84  0.19   0.17   0.66    0.03, persist  steely    d    1.S0  Re11ld _d risitere
e4rsbepms.
t4eblasrVy te rsol lectis   196                  4t le" predees         -               72 o.a2   0.20   0.40  0.000  0.02   0.18    0.02  aoltepped                  0.S0  Rebuild sorlalupe s tl am
YAalal WdITY. e
Foo A DtlI Po_ 4 Plee pwie    ol"ti    lw       ezS l  floor       l        ,         . D 9.1t        t 8     .0D O.Jt      t     2.40  O.OS  tl rtlFllt - 6eoptlU d .    11,10 dobo  t
a- equipment.
thIll-utrpe   Ca.          ste-ered t16          6   -o                                       0.80           3.00  0.1810          0.60    2.L70  prtaily slapped    0.66  R1laferce sadrtplt
1. Fre, a..  _ es" In 196.
2. tadirsct less s Ir tems of e        "lu Alee (calulsed basd eq lsh period freo Oct. 19. 1969 Io Ibrcd 16. 1990. but tor  eb.) Il.l-purpe Co.. It "a as to ead tovs. 199.
S. All II.. stlastd cosb sad ples fo  recan*tructir  Pre proposed ornly by sabel Prefectur. Nonni or by Yopus Cemo*. Oabel Pbresac.



- 30 -                      tebt 2
past 1 of 3
NORTH CHINA EARTHOUAxE RECONSTRUCTION PgROJECT
Village Reconstruction Program Planning and Design Criteria
The Village Reconstruction Program (VRP) will be carried out as follows:
1. Village Selection:
- Under the leadership of their respective Provincial and Prefectural
authorities the County authorities will manage the VRP.
- On the basis of the official damage assessments carried out to date the
counties will select a list of priority villages, approximately 80 in
Shanxi s Yangbei Prefecture and 70 in Hebei's Yangyuan County. Villages
in MM Zones VI, VII, and VIII would receive top priority. The balance
should be selected from the most heavily damaged villages in NM Zone V.
- The final list of villages included in VRP should be provided to the
Association by December 31, 1899.
2.  illag  Plans:
- Village Reconstruction Plans will be prepared for each village included
in the program. The plans may be prepared in two or more batches. Each
plan will be based on (i) a detailed damage inspection of the buildings
affected in accordance with State earthquake damage inspection pro-
cedures and standards (MOC Standard TJ23-77), (ii) socio-economic
information for the village and families concerned, and (iii) the level
of public services available to the village concerned.
- The plans would indicate in detail the scope (including housing, public
building works and infrastructure works and equipment), costs and
financing plan (including individual family subiowa arrangements) of the
proposed VRP, together with, in the case of relocation plans, details of
the resettlement costs and arrangements.
- Plans should indicate functional responsibilities and implementation
arrangements including materials supplies and procurement plans.
3.       HousiLng.  All families in the villages concerned would have at least
two rooms of permanent accommodation available to them at the end of the
program. Villagers will be informed of the various building reconstruction,
repair and reinforcement options available under the program, including the
costs, material and labour requirements, financing terms and obligations. At
least three options for new dwellings would be offered including those
presented in Table 1 below. The option selected by the family concerned
should be affordable and annual repayments would not exceed 25% of the
family's annual income, subject to the following criteria:



-31-                                      Attab-nz .
Pas 2Ofss
- Repair and reinforcement would be a first option but would be limited to
those dwelling units that require less than about 50% of the roof and
bearing walls to be rebuilt. Units requiring less than about 10%
rebuilding would not be included in the program.
- New dwelling units provided under the program should not exceed three
rooms per family, subject to the above mentioned affordability criteria.
- House furnishings, and repair and reconstruction of animal stables and
*talls would not be eligible for funding under the program.
Table 1 - Bom  Uepla2amt and Repalr Standards
---------------------------------------------__-----------_-----------------------------------------
Floor    Coast     2    Afford-
Type  Description and materials                           area (m2) (YIm2)  Labour abilUty'a
Replacement dwelling rooms:
AA2  Concrete framed, adobe block walls, timber purlin and   21.5   159      48X    400
rafter roof
AAS  Wood framd, masonry walls, timber trues roof         21.5      194      542    488
831  Adobe vault with reinforced thin ahell l1ner         21.5      120      602    900
-   Repaired and renforce  dwelling room                21.5        49      40X    120
Replaement public rooms:
School  Concretelw>od framed, masonry walls, timber truss roof  7    166-173           n/-
Clinic  Conretelhsood framed, masonry wlls, timber trus roof 128      217              n/&
store   Coneretel"wod framd, maonry walls, tLmber truss roof 120      207             anJ
OffLce  Conoretelvood framed masonry walls, titber truss roof  21    200-500           nl-
Agropro- Concretelwood framed, msonry walls, timber truss roof 117     200             nJ-
cessin.g
-   Repaired and reinforced publLe rooms                21          21             nla
Na Affordability criteria based on minimum annual income requIred per apita for a famlly of
four persons In order to servcee repayments over 10 years of principal and IZ p.a. nominal
interest on borrowing for 60X of the costs of two room, wher such repayments would
not ence"d 25X of famlly 8ross income
4.          Basettlement.  In cases of heavy damage and adverse location
relocation of the village concerned, in whole or in part, may be justified.
Adoption of a relocation option would satisfy the following criteria:
- 90% of the dwellings and public buildings should be eligible for recon-
struction
- the villagers concerned must be in full agreement to move to the new
site
- the proposed site should be close to the villagers' fields, and should
have convenient access to water supply, power and telecommunications



- 32 -                          6"zsnImnS.2A
Page 3 of 5
- the proposed site must be geologically safe and free of environmental
hazards
- the relocation costs should be financially feasible including allowance
for land requisition, three years' agricultural production losses, and
removal of the families and their goods.
5.       Public Buildings. The Village Plan should indicate the scope, costs
and financing plan and implementation arrangements for public building
reconstruction. Criteria for replacement and repair of public buildings are
the same as for housing stated in Para 3 above. In addition:
- New buildings should conform to State planning, design standards.
- Furnishing and equipment of new buildings and repaired buildings shall
be in accordance with the relevant State standards.
6.       Infrastructure. The Village Plan should indicate the scope, cost,
financing plan and implementation arrangements for public infrastructure to be
included in the program (e.g. roads, drainage, sanitation, water supply,
power, telecommunications and public address systems, and irrigation).
Investments in new revenue earning infrastructure such as wells and power
supplies should be financially viable taking into consideration the relevant
operating costs, debt service, revenues and available operating subsidies
based on medium term demand forecasts.
7.       Earthguake Resilience. New building plans, private and public, will
be reviewed by the appropriate authorities to ensure that they conform to the
State Building Code and are adequately earthquase resistant. Existing houses
under repair should be reinforced to achieve an adequate earthquake resili-
ence.



Attachmeat 2b
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
Schematic Layout of Traditional Adobe Vault Rural House
PROPOSED REINFORCED ADOBE VAULT                                                           TYPICAL HOUSE LAYOUT
.,~~~~~~~~&a   W ALL.
~~~~~~~~~~~~~~~~FCD- _R_ . __ ~ t 
VA     A ; jo c . 17
$  s 65flnr Ec. _                                                            I   
*~~~~~9A i-                                       Kgtj it   w  ..
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t; eg e   g  i.               "e 
j-'t't   "      i      oooo-Si-
Is- -                -    -    - i         il
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NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
Illustrative Organization Charts                             0,
HEBEI PROVINCE
YANGYUAN COUNlY
I5
Fi anc MMia
9CilFBS~~wea _ _                   CowI18al  118ga   |IelJ 
l l l  _ _~~~~~~~~~~~~~~~~~~w~64



NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
Organization Charts of Prolect Implementation Offices
YANG YUAN.HEDE PRVNCE                 YANDEP RECR, SHAI PROVINCE
Gosi~p                              hY Pt
k    L3 J i                             r     
ftjw Om" 
Wags Level                 P&nG         w
&,,3  Design A  e 
Thdmloal   Funds  3                         ThwnahIpLW
'M 3 '3 153                                   1 m-
I                er~~~~~~~I
badse74b



Attachment 3c
(Page 1 of 4)
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
Summary of Implementation Arrangements
---------------------------_----------
KEY STEP                RESPONSIBILITY           RDMRKS
Identification of       County Government        Respective county governments have Inspected the affected areaF
damaged villages                                 and prepared a list of villages that need reconstruction
assistance. List of villages to be included In this project to
be finalized by 12/89.
Fonmulation of Village Reconsttuction Program
---------------------------------------------
Preparation of plan     County Governmant        Each county has established a plumnng and design (tecbnical)
group to prepare the village rec-ristruction program. Similar
groups have been established at the township and village level.
In Hebei province, the village team  have been asked to prepare
a consolidated county level plan.  In Shauzi province, the
technical teams in the four counties will prepare their                 a
respective plans vie. due consultation and Involvement of the
township and village local teams.
Review of county        Prefecture               Similar steps as at county level.  Prefecture prepares a
proposal and                                     consolidated proposal if more than one county Involved (Shanxi)
preparation of                                   for submission to the provincial governor.
prefecture plan
Approval of the         Province                 Pronviclal governor approves the proposal either through
Reconstruction                                   establishment of a coordinating cosmittee or In a review meeting
Program                                          of all concerned departments.
HOF and SPC             Since there is World Bank financing, MOP and SPC also need to
approve the proposed reconstruction program.



Attachment 3c
(Page 2 of 4)
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
Summary of Implemaentation Arrangements
------------_--------_----.---.-------
KEY STEP                 UESPONSIL.. 'TY          REMARXS
Implementation
Overall Coordination    Prefecture (Shanxi)       Each province has established a project management office under
County (Hebei)           the leadership of the Cormissioner of Yanbei Prefecture and the
First Vice-Governor of Yangyuan County respectively. These
offices will have overall management responsibility. Each office
will be assisted by four already-established groups: technical
supervision, funds management, material supply and
construction.  Counties, townships and villages  Iould have a
similar set-up for implementation of the works in their areas.
Material Procurement    Prefecture (Shan i)       Based on the approved county program, the head of the project
County (Hebei)          management office will issue instructions (a signed contract) to
the material supply grGup for the various materials required.
Quantities, specifications and target prices (based on State
fixed prices for certain materials) are stipulated. i) For
scarce construction materials not readily available within the
county (timber, steel) the material supply group would dispatch
procurement teams to potential markets to seek at least five
written quotations and submit recommendations to the project
management office head for approval. (Under existing
procedures, the leader of the material supply group is
authorized to sign supply contracts, but in this project it is
proposed that the group leader's recommendation be submitted to
the next line superior for approval.) Upon approval, the
material supply group leader would sign the contract with the
selected supplier and deposit the contract amount in a bank
account to be released according to the agreed supply schedule.
Timber, steel and glass are to be delivered to a central point
in the county. Other materials would be shipped directly to the
concerned villages. Li) For materials readily available within
the county (bricks, cement, tile, stone, lime, etc.) current
practice is to seek about 10 quotations. The material supply
group leader would sign a contract with the lowest bidder. It
is proposed that for the large quantities involved, procurement
of these materials should be through local competitive bidding.



Attachment 3c
(Page 3 of 4)
NORTH CHINA EARTHQUAKE RKECONSTRUCTION PROJECT
Suimary of Implementation Arrangements
---_--------------------------------_-
KEY STEP                RESPONSIBILITY           RENARKS
Civil Works
House construction      Village leader           Reconstruction of houses will be undertaken through force
account in accordance with the approved village reconstruction
program. Part of materials (timber, steel and cement) are to be
provided by the county. Village material supply team vould arran
for purchase or production of local materials (bricks). Village
leader to select the contractor through bidding among at least
five construction units in the vicinity. Construction to be
undertaken through a joint arrangement between the village
labor force and the selected construction unit, under a signed            a
contract between the village leader and the county chief.
Public Facilities       Respective head of       School principal, with assistance of county education commission
the facility i.e.,      staff, to develop reconstruction plan which would be part of the
school principal        county reconstruction program. Principal to select a
construction unit after competitive bidding procedures similar
(A similar              to those for housing reconstruction.  School equipment would be
procedure would         procured at prefecture or county level (Hebei) through prudent
apply for other         shopping with a least (3) written quotations against a standard
public facilities.)     specification.
Production              Affected enterprise      Respective enterprise head to undertake repairsIrehabilitation
Enterprises                                      work in accordance with the approved plan.
Collection of Loan      Counties                 Households to pay to their respective counties annually, in
Payments                                         cash, at the time of tax collection (after fall harvest).
Enterprises to repay the county on a monthly basis.



Attachment 3c
(Page 4 of 4)
NORTH CHINA EARTHQUAKE RECONSTRUCTION PROJECT
Summary of Implementation Arrangements
--------------------------------------
KEY STEP                RESPONSIBILITY           REMARKS
Disbursements
Certification of        County                   Construction manager of the vlllage (or other concerned entity)
works completed                                  will prepare the certificate of works completed which would be
endorsed by the respective township and county level officials.
Upon approval of these bills, the finance group in the
respective counties would release funds to the bank designated
by the construction unit or credit depot of the village for
release to farmers.
Disbursement            Prefecture (Shanxi)      Respective county finance team would prepare disbursement
applications            County (Hebei)           applications for approval by prefecturelcounty head.  These
applications would be forwarded to MOF through the respective
provincial finance bureaus.
Management of the       MOF
Special Account
Progress Reporting
__________________
Quarterly Progress      Prefecture (Shanxi)      Technical team in each county to prepare a quarterly progress
County (Hebei)          report according to an agreed format.  Yanbei prefecture to
prepare a consolidated progress report. PRogress reports to be
sent to concerned provinces, MOT and the World Bank.



Atebmnt .
NM CHE OWIt W*DAUE STffW==I PROJECi
Ioplesntatlon Chart
AcOivitlee
1990                     1990                      199                      1991
Doe Jan Feb Nar Apr NW Jun Jul Aug Sep Oct New Doe  Jan Feb Mar Apr May Jun Jul Au Sep Get Nw Doc
M  Prject Proing                            *                        Iii
NagbSlOn.%                                   I.         II                                    II
i"ottam    lef
U Pf.c lvene s                           I                                      _ _ __ _ _  _ _ _ _ _ _  =_ __ __ _  __ _  _ _ _
180 VILLA       61WTMIXN PRIW     ()
lablil.h leadiag Gros o 6 cowties           I- 5
Adobe Prttp t_lf
Plannnlg - 1rop I Wilage". (10)                 I->
opil age cu ontal longemne
wolapleentaio-Ooplilae.(1)1                                    ________
stpwllow Owr"              o"-      t
DIP&B4TATIOP - gollage Pops am-~
Vlllge 1= 14  or Ame I (VA) inglesentteion             ----
Ordrl to ribi e f
Award contrac MAU))
Celiver eaterial. for MAU 
o,* Are 2 Aclivlilee (repeal VAI pocee.)                          I
Villgas,  l0 activilti es
MWCLIN"       - DVt1
Plan       - Grp      1 villega.  (10)I I           -
VtIup1  1alaIb -rup ilaa                     I 1               I t p----- _  _
0e ortamet - GuIage Prome1 I
nil 8-20 lviXts                              ~          ~        ~~~~                               ~    ~      ~~I 'lt I           iI
Pllrowmt - Group 2     IIloge. "   u                                   I u                                I
Proocrean - Grupiil  boa                    |                                                     
Prure Cuat l        -a.    eVuc  8r Ma-erial.                       I            I            I            I
C. Wn " z tt   I                                                      _I-_
S6T xI5  Re1abi I iatn Cone|
Plennn C                     tr
Procuremnt
ZCplesentation                                                                                                                      i
bttiXUen~~~                             ~~ Ie"  i Il       ii                        I                _ _t           
YMO      agEn-cym rparedneeo plan                                      --                       -
Pprrennrr4 X                  I l__>   ~I              i>          I            i            i            I           i______      I~
rpar areouren  une                             I _____                                   I I
oprte antna   esi dtagts                    I         I'------
Ps   omi Z"I =  in#) |
Prouemen (Int'l ohopin)I                              I>                                              
0live* a       ir    mn                      Ii I-11i 
Teig tand callibratio                                                |_  
Trai ning         ti date                                                                   I                              i -11



- 43 -                                 Attachment 46
NORTH CHINA URTA   REKCOSTCON POJECT
Project, Launch Actlon Timetable
Action                  Reeponsiblity           Tars" De"
1. Teting of prototype               SP/YP/KOC                        02/29/90
re nforcd adobe house
2. Village reconstruction plans:l/  Respective counties
concerne
(a) In-situ Housing
- Preparation                Vi I lo/Town htp /
Counties                         02/28/90
- Approval                   Counties/Prefectures             04/80/90
(b) Schools and clinics
- Preparation                School principel/
clinlc head                      04/80/90
- Approvol                   Countles/Prefecture
) Snfrastructur
- prparation                 County Bureaus
concerned                        04/80/90
- Approvel                   Counties
8. Relocation
- Informtion                 Counties                         01/81/10
- Preparation                VI I lnag/Townehips/             OB/81/90
Counties
- Approval                   Counties                         04/80/90
4. Enterprises Rehabil tation
- Prparations                Enterprise concerned             01/15/90
- Approvals                  Counties                         01/81/90
S. Preparation of schedules and      County Materials       Part 1   02/28/90
specifications for materials     Supply Purue           Part 2   04/80/90
to be supplied to villoges
6. Procuremnt of Materials to        County Mtrials         Part 1   06/81/90
be supplied to villoae           Supply Bureau          Part 2   07/81/90
7. Establsh constructlon             Villoge/townships      Part 1   01/81/90
mnagement teams at               concerned               Part 2   08/81/90
townships/village level
S. Selection of construction
subcontractors through local
competition for:
- Dwelling repe rs/              Village leader          Prt 1   05/81/90
reconstruction                                        )
- Public buildings repair/       Local h ead            Part 2   07/81/90
recon                                                 )
- Infrostructure                 County Bureau
concerned
- Site preparation and           County                           07/81/90
development (relocated
vIllagle
9. Detailed proposals and TOR        SSO/IIOD                         08/81/90
for National Subproject
i  VIlIisge reconstruction program wi l be crried out In two phase.
Dates giVon refer to first phase.



- 44-
Attcebment 44
rag 1 of 2
NORTH CHIII E4RTN1UAK6 RECONSRRUTON PROJECT
KIy lonitorlng ndieators - By County
Plannd   Actul X
Aralsd   Reised   Copletion Comletion                 StatusRrk
1. DATONG COUNT
e VIl  logo                           14
- Additlor*l
e Dweling Room - Totl            81,820
- D_*ged (as)                 26,000
- Recontruetion               15,080               09/80/90
Type M2 (201)                8,000               09/01/80
Type AAS ()                  9,080               08/80/90
Type -1 (2=1)                8,000               09/01/90
- RohabilIltatin               8,170               08/15/90
Tpe RCC *e 1I (75)           6,10                07/15/90
Typ Shed Roof (253)          2,040               07/81/90
o Public Room  - Total             1,590
- Damng9d (463)                  760
- Reconstruction (111)           170               08/01/90
- Rehebabi  tt  (873)            590               09/15/90
* VII*ae  Infrastructure                               00/01/90
* VilaI*e Enterprise                                   06/01/90
2. GU1A4N COUIITY
0 VI I ae                              6
- Additional
o Dwelling Rooms - Total           4,179
- Damaogd (451)                1,80
- Reconstruction                 640               06/15/90
Typo AA2 (20)                  170               07/80/90
Type AM  (03)                  500               07/80/90
Typo BB1 (201)                 170               07/01/80
- Rehabilitation                 ego               07/15/90
RCC Shell (753)                470               07/01/90
Shed Roof (259)                1SO               07/01/90
o Public Rooms - Totsl               6o0
- DaMagOd (253)                  160               08/80/90
- Reconstruction (53)             80               06/15/90
- Rehabilitation (201)           180               06/80/90
o Village Infrastructure                               08/80/90
o Village Enterprise.                                  08/0/80



- 45                                       Attachment 4e
Page 2 of 2
NRT  Cmt EARTHUME RECONSTOII PROECT
Kay Monitoring Indcators - By County
Planned   Actta IX
Appraisd   Revisd    Comletion  COpletion             Status/Rmarks
S. HUANOIA COUMT
e VlI I_tw                             9
- Addttional
Dell I Ing Room  - Total         19,710
- Dmd                          7,000
- Reconstruction               5,910               00/01/90
Type IA2 (20)                l,lSo               09/01/00
Type LA" (GM                 8,650               09/01190
TYp 951 (20)                 1,160               06/15/90
-Rabl I Itation               56,20                09/01/90
RCC Sh ll -6                4,140               OS/01/90
Shad Roof  12,500                                06/01/00
o Public Rooms - Total             1,921               07/15/90
- D amagd                        8.
- Reconftrubtion (73)            180               07/15/90
= Rehablitation (273)            520               07/15/90
o VIlla9I   Infrastructure                             06/15/90
o Village Enterprise                                   09/15/90
4. YANGAO COUNTY
e Vilaleo                             14
- Additional
o Ow llIng Room  - Total          87,757
- Damaged                     a0,000
- Reconstructien              16,240               10/15/90
Type AA2 (20g)               8,260               10/01/90
Type "S (OM5)                9,T40               10/15/90
Type 981 (205)               8,250               10/01/90
- Rehabiltation               10,950
RCC Shell (753               6,210               09/00/00
Shad Roof (253               2,740               09/80/90
o Publitc Roome - Total            1.950
- Damagd                         449
- Reconstruction (63)            100               09/15/90
- Rehabilitation (205)           $40               09/15/90
o VII lago Iafrastructure                              06/81/90
o VIllage Enterprises                                  06/81/00



- 46 -                         Attachment 5
Page 1 of 4
NORTH CHINA EARTHQUARE tECONSTRUCTION PROJECT
Procurement and Disbursement Arrangements
Procurement
1.          ShAn i and Hebei Subprolects.  The works to be carried out fall
into four main categories: (a) village reconstruction which is chiefly private
housing works that will be largely carried out by force account, (b) village
public building reconstruction that will be carried out mainly by contractors
(local construction units); (c) county-level public infrastructure that will
be carried out by means of a mixture of contracting and force account, and (d)
enterprise rehabilitatioa which will be carried out by contractors. In most
cases the materials would be procured separately from civil works. Some
materials (not exceeding 30S of the total value of the works) would be
procured centrally by the Prefectures and Counties concerned and supplied to
the villages in accordance with the Village Reconstruction Plan or to the
contractors concerned with public buildings and infrastructure construction.
The procurement arrangements illustrated in the Table below can be summarized
as follows:
(a)         Private HousinR.  Under the village reconstruction program
works would be carried out in about 150 villages and would mainly
include small scale private house building construction and repair
totalling about RM1107 ($22.8). Since residents would be closely
involved through self-help in the work related to their homes and
community facilities, each large village would be directly responsible
to the County for management of the works to be carried out in accor-
dance with an agreed Village Reconstruction Plan and Schedule, and would
implement these with its own workforce and vith subcontractors and
suppliers as necessary in accordance with local practices. Contracts
would be mainly small, averaging less than RMB700,000 (about $180,000 e-
quivalent) and ranging in value from R1B77,000 ($20,000 equivalent) to
RMB4 ($1.1). In the case of small villages the respective supervising
township would take the role of general contractor responsible for a
group of villages. The County authorities would need for the general
contractor concerned and would be responsible for preparation and
approval of the village plans as well as guidance and supervision of the
works. Village Plan contracts exceeding $500,000 in value (1R1B.85)
would be subject to prior review by the Association. The County would
disburse the funds required by the Village Plan (including the su-
bsidiary loan disbursements) in accordance with a schedule of progress
payments that would provide (i) an advance of 302 of the estimated cost
of the works, (ii) interim payments of 202 (based on certified progress)
at monthly intervals up to a maximum of 80 and (iii) a final payment
identical to the outstanding balance required based on the value of
actual works completed.



- 47 -                         Attachment 5
Page 2 of 4
(b)         Village Public Buildings and Infrastructure.  It is expected
that civil works contracts totalling about RMB23 ($6 equivalent) for
site preparation, buildings and infrastructure would be awarded through
competitiim among local construction units. Contracts would be procured
and supervised by the County on behalf of the beneficiary villages.
Payments would include a SOX advance and interim payments based on the
certified amount of work completed satisfactorily. Small works (e.g.
repairs) may be carried out by force account.
(c)         CountX infrastructure consists of small irrigation and water
supply works, rural electrification works, education facilities and
health facilities totalling about RMB18 ($4.9) in value in accordance
with plans prepared the respective line departments and approved by the
County. These works would be carried out by force account in most cases
or, in the case of larger works exceeding RMB2, procured through local
competitive bidding among local construction units.
(d)         Enterprise rehabilitation totalling about RMB3.5 ($0.9)
would be carried out in about one dozen enterprises by local contractors
procured through prudent shopping consistent with normal caomercial
practices. Subsidiary loans would be made by the County to the enterpr-
ises for the expenditures concerned.
(e)         Construction Materials.  Key materials of value not exceed-
ing 302 of the estimated Village Reconstruction Program cost will be
obtained by Yanbei prefecture and Yangyuay County and provided to the
villages and contractors engaged in the program. Materials available
under the State Plan (State quotas at fixed prices) would be purchased
directly. Materials not available under the State Plan will be pur-
chased in the open market as follows:
(i) Timber and steel will be procured centrally for the two
provincial subprojects (by Yangbei Prefecture for the Shanxi
Subproject and Yangyuan County for the Hebei Project).  The
materials purchasing units of the authorities concerned will seek
a minimum of five written quotations from among their existing
suppliers. The respective heads of the purchasing units would
evaluate these quotations and make award recomnendations to their
respective project leaderships.
(ii) Other materials (e.g. cement, bricks, stone, sand, lime,
etc) would be procured or manufactured locally within the respec-
tive counties by the villages concerned. Vhere economies of scale
may be present (e.g. cement) the county level may procure such
materials. In such cases, procurement would be done through
competition among various suppliers in the county and written
offers would be obtained.
(f)   Goods.  Procurement of goods, furnishings and equipment for
schools, clinics and other public buildings would be carried out in
accordance with local procurement procedures.



- 48 -                           Attachment 5
Page 3 of 4
2.           Village Plans and civil works contracts exceeding US$500,000 and
goods contracts exceeding $50,000 in value would be subject to prior review by
the Association. Documentation relating to all awarded contracts and bid
evaluations would be retained by the executing agencies and random reviews of
such contracts would be made from time to time by the Association during
supervision of the project.
Table 1 Procurement Arrangements Sutmary (US$ million)l/
-------------------------------------------------------------__------------
International      Force       Local
Category               Shopping       account   procedures        Other      Total
…----------------------------------------------------------------__---_----
Civil works                            10.5       30.3           0.00        40.8
(6.9)    (20.0)         (0.00)      (26.9)
Goods and                 2.0          0.94        0.00           0.00        3.4
Equipment                (2.0)         0.62)       (0.00)        (0.00)      (2.6)
Consultants,
Training and                                                     0.50        0.50
Technical                                                       (0.50)      (0.50)
Assistance
Land                                                             0.6         0.6
(0.00)      (0.00)
Total            2.0         11.4        30.8                      45.3
(2.0)        (7.5)      (20.0)         (0.5)    (30.0)
--------------------------------_-------------------------------__---------
Note:  Amounts in parentheses are disbursements from the credit proceeds.
11
table 1 Procuremnt Arrangemnts (USS millIon)
atnernational  fore    Locat
Category              Shopping    account procdure.    Other       Total
Village reconstruction             0.88   19.61        0.00         26.1
(4.85)  (12.67)    (0.00)        (17.2)
Construction nrterials             0.00     9.54       0.00          9.5
(0.00)   (6.27)    (0.00)         (0.2)
Fquipmet                           0.94     0.00       0.00          0.0
(0.62)   (0.00)    (0.00)         (0.0)
County tnfrastructur               8.80     0.00       0.00          8.9
(2.U6)   (0.00)    (0.00)         (2.6)
Land                               0.co     0.00       0.88          0.6
(0.00)   (0.00)    (0.00)         (0.0)
Enterpris rdubt lotion             0.00     1.26       0.00          1.2
(0.00)   (0.88)    (0.00)         (0.8)
Nrtlon l Component       2.00      0.00     0.50       8.00          8.00
(2.00)    (0.00)   (0.50)    (2.50)         (2.60)
Total                             11.47    80.80       0.68         45.8
(7.52)  (19.97)    (0.60)        (80.00)
Note: Amount In paronthese are disbu_ursea  frem the credit
proeedo. ToeI a may not ad because of rounding.



- 49 -                         Attachment 5
Page 4 of 4
Disbursement Arrangements
3.          The project would be implemented over two years with disbursements
extending over three, closing on December 31, 1992. The proceeds of the
credit would be disbursed against eligible expenditures as follows: (a) 65Z of
expenditures on civil works undertaken by force account and local contractors;
(b) 652 of expenditures for locally procured goods, materials, equipment and
furnishings; (c) 1002 of foreign costs for communications and information
technology and scientific equipment or 652 of ex-factory costs of locally
procured equipment; (d) 1002 of expenditures for technical assistance and
training (see Table 2). A Special Account would be established in MOF. The
account would be maintained in US$ and an initial disbursement of $4 million
would be made (equivalent to estimated average disbursement over a four month
period). Payments from the Special Account would be made in Renminbi. At the
initiative of the MOP replenishments of the Special Account would be made
monthly or whenever the balance reaches 502 of the initial deposit amount,
vhichever occurs first. Replenishments would be based on Statement of
Expenditure (SOE) withdrawal procedures satisfactory to the Association.
Supporting documentation for the SOEs would be maintained by the Project
Office. Due to the urgency of the reconstruction works these would commence
prior to loan signing and the Association would retroactively finance eligible
expenditures incurred after December 15, 1989 up to a maximum of ITS$4 million.
Table 2 - Disbursement Arrangements
---------------------------------------------------__----_-------
_em            Amount Percentage of expenditures
(US$ m) to be financed from credit
proceeds
Civil works:
Shanxi             14.8         65Z   of local expenditures
Hebei               4.00        652   of local expenditures
Construction Materials:
Shanxi              6.4         652   of local expenditures
Hebei               1.70        652   of local expenditures
Goodss
Shanxi              0.3         652   of local expenditures
Hebei               0.30        652   of local expenditures
SSB                 1.9        1002   of foreign expenditures
Technical assist.       0.1        1002
Unallocated             0.5
Total             30.0
…-     -               - -



- 50 -                       Attachment 6
Page 1 of 5
CHINA
NORTH CHINA   __RTHQUAKE RECONSTRUCTION PROJECT
SupDort for Earthquake Prediction
Outline Work Program and Budaet 11
1.       The proposed technical assistance and institutional development com-
ponent for earthquake prediction and mitigation efforts in China supports
China's program under the International Decade for Natural Disaster Reduction
(tIDNDR). Chinese scientists predict a 12-15 year period of higher seismic
intensity, and have identified areas of particularly high likelihood of earth-
quakes. namely:
(a)   the Capital Circle"--Beijing, the areas to the northwest (Yanqing
County, northern Hebei Province, northern Shanxi province and south-
cen_ral Inner Mongolia) and south (Shandong) and Tianjin;
(b) the juncture area of Sichuan and Yunnan Province, including the
cities of Chengdu and Yunnan;
(c) Ningxia and Gansu; and
(d) the far western area of Xinjiang Autonomous Region
Although the land area covered in Xinjiang is considerable, it is largely
uninhabited.  The first two zones contain large numbers of people, important
transport and energy infrastructure and considerable economic assets; hence it
is important to be able to predict earthquakes with a higher degree of
accuracy than is currently possible. It is also important to assess the
vulnerability of these zones to earthquakes, in order to reduce the loss of
life and property in an earthquake by cost-effective seismic strengthening of
existing life-line structures and dwellings and by preparing for efficient
relief and reconstruction once an earthquake disaster occurs.
2.       Accordingly, the national component would enhance SSB's capacity to
predict strong earthquakes, using its national network of seismic monitoring
stations and drawing on SSB's close working relationships with its counter-
parts, the provincial and regional seismological bureaus. The monitoring and
comaunications equipment would also allow SSB to contribute more effectively
to post-earthquake relief and recovery operations by feeding better informa-
tion to other relevant bodies charged with the short- and medium-term earth-
quake response.
1/ Based on revised proposal by SS8, dated December 12, 1989, technical
meetings held December 12 and 13, 1989, and mission estimateslinput.



- 51 -                       Attachment 6
Page 2 of 5
State Seismological Bureau
S.       The objective of support to SS8 would be to improve SSB's ability to
predict earthquake by upgrading its computer, communications and monitoring
network. This would allow the more rapid transmission of seismic data from
the existing network of over 1,000 sensing stations to SSB's Beijing head-
quarters, for input into SSBs major tool for earthquake prediction, the com-
puter-assisted Expert System for Comprehensive Earthquake Prediction (ESCEP),
which was put into operation in late 1988. It operates on a VAX 7801750
system and peripheral equipment which receives digital data from automated
stations and from analogue (voice and graphic) reports which reach SSB
headquarters by microwave, fax, telephone and short-wave radio. The computer
program is based on 400 rules of earthquake prediction, including
seismological and other factors such as changes in color and temperature of
groundwater, abnormal animal behavior, abnormal meteorological conditions such
as drought, crustal deformation, gravity and geomagnetic measurements,
resistivity, etc. Using the data received, the computer issues prediction
reports which are interpreted by SSB staff in consultation with local and
provincial seismological offices.
4.       The system is only as good as the data it receives.  SSB's existing
network of monitoring stations only partially covers China's vast land area.
Communications links are mixed and do not provide substantial real-time
seismic data. The network is only partially digital, meaning that ESCEP must
rely on slower and less accurate analog interpretations. Stations to collect
important precursory information to supplement the accelerometer data are
Insufficient, even in areas of higher seismic risk. SSB has accordingly
prepared a multi-year program tot
-    upgr%de the quality of field data;
-    expand data coverage of such factors as gas emissions, changes in
water mineral content, etc. which can improve the validity of geo-
logical data as a predictive tool;
-    speed up transmission of this data to provincial bureaus and then to
Beijing, by increasing reliance on digital collection and communica-
tions equipment; and
-    improve communications between regional seismic observation posts In
neighbouring areas, particularly those of higher seismic risk.
SSB also proposes to improve its ability to take ground measurements in areas
where indications for an imminent, serious earthquake are present, and measure
strong ground motion after an earthquake as part of the relief and reconstruc-
tion effort.
5.       SSB's collection of seismic data also allows it to contribute to
coordination of official response after an earthquake disasters moveable
communications equipment would permit rapid and accurate transmission of not
only post-earthquake geological conditions but also information on the
economic, social and physical impact of the earthquake. This system would
support efforts by national and provincial agencies to respond promptly to the
disaster and direct the relief and rescue effort. The following table
summarizes the SSB action program to be supported under the project.



- 52 -               .                Attachment 6
Page 3 of 5
Clvil   Two yeera
lua±l.        woerke   lacrt itl
ZtsmjLoction                            Forien  Local La Lol   o op. coa          Notes is
-                0oo* urS 
A. in8 NaadGUcuarter Selina
Upgrailan  stel lite  oc_tm en                 14       2           73   Table 1. Includs terreetrial dat-
e     _ipnt                                                            link, proteocl "olyzer aN  pwi-
theral-.
B. Small equagat *efor existig             s       -         -         18    Table 2. Main cost t real et
eate lite grood eotlao   atNoa,.                                          GaulIIts chamols for re_l-time da"
Shanghai  Enh  Rnd Chengd,                                                trrnsmissien.
C. Casitel Cirele Li
(a) Roving Coinunlicticn Nl*eork       58     55         -          82   Table S. Combined with *art-ave radio
e_muncatleon  vehicular  _etllit. c_.-
aunication  ystem Vl e    llow repid end
accurat t ren  leion of e"oleic intor-
_ation end dama    _eaement in th
quek. area.
(b) VicraeiemIe Obtervetie,           91    25          _          U    Table-. Al lloe  on-the-spet *eigtic
Analyste end Preoging *yatAm                                       obervetion, *nlygir and pree aing
Oftor en earthquake, to prvide basic
d==-: f ee lz ueting the awb aIe trenda
end te *lle geeterr coevrage of greound
--3 ernatien tn high *aleelc rink *regr
to improe accuracy of tremor location
end d.tcotebility. Intandad prima rily
for  ee 1n loe    heilacall Iactive
gregg. ~ ~   ~    ~    a ref
_f*.
(e)  Meblie Stroneti on bervaten  172         1S         -          67   Table 7.1. After * lrge eerthqueke,
Anelylel  end Proee1on  Systowe                                    to carry cut field etreng-eetieo  M_&-
euremn and real-time da" proceeang,
thereby  etending the megutring ang  of
alregeimic o"ervetion  end detemine
the earthquake paramours more aocr-
eely. Strng mtio  aceleration
records vITi provide ace_ balc da tafr
poterCthut engineering declaim.,
thereby belping mitigate ear
hazrde for future conatructln.
(d) Reiono lNatwork of   *el_-    120          -         -         110   Table e. Hatting of oe a lrerp
atrio l ne_ork. (tinn,                                             rglon tS uPgrade precureor obseev-
Dtong, Hebbet, telysun                                             vetlon networks. to Improve accuray
LUnfeng, ai"dn,  han1, ofet                                              1c  aenitoring and permit
and Jaxiang)                                                       shoring of data that misht prnea  an
* rtquake.
(e) Four Js to improe  leogitics    -         61         -                Table 10
for tield Investietion
Subtotal                                     104        z         842
0. Satel liIte Orod Station In Jinan go            -         5          44   Enhbnce uefalneae of exiatin, inrml
compled regional nework Ino ineog
Province (Iroag" coverage in Caital
Circle).
OP vehicles and oter IWOll        _qVipmnt "ch as goenrtore tht cn be procued lecally.
For civil works associated with lnetetletion of n_ *qipment.
Table refe cs retfe  Sm  _ eqpme* Its% end coat table (In the Proect PIle), agree  with the arleel Gig-
eion.
g     ee  Sm the aree of predi<ed hlgh salmi. risk surrouding Beijing (map SW   M) In *reae of Inner _ogli.
Shamni HNbsil ShntenoO   aswell as B:ing end Tianjin.



_ 53 _                               Attachment 6
Page 4 of 5
Clivl   Two yamre'
____________work.   inorementel
Iten/Location                           Foreign  Leul Le Locl   o ep. coet          Note LI
-                '000 USS
E. Upgrading of .*Itel observation         90      14        5           U2   Imprve  mInmle detectlen ability to
and dat trtneeieeion  qup  n                                              regien of predicted higher ritk.
In Llioning Provinc  nd s telitO
ground sttion In Shenyang              SO       -        S          44
Subtotal                             In       14       12          66
F. Ucoardins of Sichuan Network La
(a) Regional Redle ComunleiClon        s0      14        S          82   Table 4.  utonomoug relgonal networks
Network                                                            el owing ehort  e or ultro-ehortwave
voice end date comunication WIll
upgorad dfte transimion be wn pre-
vincial mimic bureau centses and S ,
(b) Roving Ccsnnleatioe Network        26    6s o                   S2   Table F
(e) Llcroenelem Obeervation,           61      2         -          28   Table 0
Analysis and Preoeeing System
cd) Two Jeep for field Inveetl-         -     tO         -          89   Table 10
gatlon
sfiutet                              210    12           5u
0. Umoradino of Yunnan Network
(a) Snta ll nw *st ellte ground        U       -         5          44   Table S. Port of a long-tern  plan to
station                                                            allo more rapid,   curate and efficient
tranamimlon of dte from are" of high
e"eoed m lc_le riek,  l order to
improve rellabilIlty ef predlctle.
(b) Regional Radlo Ceommunlealefo      go     14         5          82   Table 4
Network
(a) Roving Cem lnce tlon Network       26     C9         -          82   Table 5
(d)  lcroeeimnle Obervatlen,           91      29        _          89
Ane lisle and Proceslsng Syetem
(e) TwO Jes for field Invetiga-         -      2S        -          89   Table 10
tin
Subtotal                    to~U    13        12         IZ
. Shrerd euimnt for Slc u_n
Ond TuYnean
(a) Mobile Strong Motion Obsmva-    117       SO         -          57   Table 7.1
tien Analysie and Sy o_em
(b) Reolenal Network of thre                                       150   Table S. To link Xiebng snd Xliaunn
*iemometric netorke in                                             networke with provincial bedquarter
Sichuan and Tunan                                                  and *ateliIte lIr  at Chat gu nd
Kugnmino. US to deide array pl acemt.
Subtotal                                 
le Refer to note. on'similr table. (above) for summry eqplanation.



- 54 -                            Attachment 6
Page  of 5
Civil  rTwo p1ers
.JsoLw1   . works  Inw e m l.B
Itom/1ocatlo                     foreign Lec Iti  Local   op. cete    t.. e
-- 'e00 US -
Stwe to b allee aad a     Ca.ital
AIrclo. Oleotnf. "Tunna
S. ExpanolonOfteelicol upgadIng for    21r  -       -       200   Tabl- 0.  s to decide on locetion
20 Precursory monitoring sttlone                              for this technical upgrading of etuip-
ment in Capital Circle, Sichuan, 7unnan
to enheace quality of pr ctr.ory infor-
motilo and speed ot tranesisnion to
BsIjinG for analysis.
J. Stal lotion of satellite round   116    14      t0        76  To copets .nd cosplemmt Capital
station and relonal network to                                 Cirelo array. 8S to dtermine
b lebor Shaenui a  ne Monoolia                                 locatlon on beais of 1550 oarthquake
predlcti.o sofefnce.
K. Consultant to advele on proement    0    2           _         To help SS da up written s_eifIC*-
(fees plus trael Ceeot)                                        tiene a"d Identify sources for equipmet
pr eur  nt.
L. Management *ad rear tpralitno    100     -       -         -
Total USUmrain C      _m oest          4JS 
6.         Procurement of the proposed equipment list will take place in the
second quarter of 1990, after preparation of detailed lists and written speci-
fications suitable for international shopping. SSB will obtain at least three
written quotations for each item (or lot)'of equipment on this list fron
reputable international manufacturers land suppliers will specify arrangements
for spare parts and after-sales service, and for the training in China of SSB
personnel who will operate and maintain this equipment. SSB will hire an
appropriate overseas specialist in seismic monitoring systems equipment and
network management to help draw up appropriate specifications for the equip-
ment. The equipment will be selected, delivered, installed, tested and opera-
tional by December 1, 1990. Vehicles and civil works costs associated with
networklequipment installation will be financed by SS3. SSB's operating bud-
get will be Increased from 1991 to support the estimated incremental operating
costs of Rmb 1.25 million annually, and adequate costs for testing and start-
up of the system will be included in SSB's 1990 budget (approximately Rmb
400,000).
7.         In addition to standard reports on project implementation and pro-
curement, SSB will provide to the Bank periodic reports on the results of its
earthquake prediction activities, including on the psrfvnmmnce of the equip-
ment and those operating it and its usefulness to their work before, during
and after any major earthquakes. IDA supervision mlssLons will exchange views
with SSB on their overall work program and earthquake monitorLng atlivitles.
as part of the general supervision of the project and the Bank's Involvement
in IDWDR.



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