Removing Infrastructure Bottlenecks and Improving Urban Functions in Chinese Cities

Challenge

Urbanization has been a key driver of economic growth and poverty reduction in China. Cities and towns generated more than 60 percent of China’s GDP - an economic impact that was expected to become even more important as urbanization intensifies.

In China’s southwest Sichuan Province, urbanization was only 28 percent in 2005 but was projected to reach 40 percent by 2010, representing over 10 million new inhabitants. Second-tier cities have been among the fastest growing urban centers in the province with considerable growth potential.

However, these cities also faced serious bottlenecks that, if not addressed, threatened their future sustainability. These included: (i) high population densities with scarcity of developed urban land; (ii) inefficient, linear development along rivers and inter-city main roads, contrary to city master plans; (iii) underdeveloped peripheral areas; (iv) congestion, poor overall mobility, and inefficient urban transportation systems; (v) environmental deterioration; and (vi) inadequate capacity in urban service delivery and urban planning.

Solution

The Sichuan Urban Development Project targeted four second-tier cities - Mianyang, Suining, Yibin and Panzhihua. It sought to support increased infrastructure investments in the context of upgraded spatial planning efforts and strengthened urban management to develop and consolidate new and existing urban areas, including economic development zones, improve urban transport networks and sewerage systems and enhance scenic public areas.

The project also intended to improve processes for conversion of land from rural to urban use through improved approaches that included: (i) preparing local urban area development and infrastructure investments as an integral part of city-wide comprehensive master plans; (ii) conducting a rigorous demand analysis to ensure that proposed urban area development reflects real urban growth requirements, and that least cost options of various development alternatives were chosen; (iii) developing an innovative framework for resettlement and land compensation; and (iv) providing technical assistance to project municipalities to develop their capacities in urban planning and land management, infrastructure service provision, optimization of current and future infrastructure assets, and information technology in city planning and management. 

Results

Implemented between 2006 and 2013, the project helped the four project cities build or upgrade their urban infrastructure, and also strengthened their capacities related to urban planning, land management, transport planning, and utilities and asset management.  The key outcomes include:

In Mianyang:

• The construction of 22 sections of local access roads and associated sewers and drainage, as well as landscaping activities in the Pioneer Park contributed to relieving its congested core. Consequently the number of new residents on site more than doubled the target, and high-tech enterprises entered the Park, with tax revenue increased significantly.
• In the Southern Economic Development Zone, construction of 10.85 km of local access roads with associated sewers, drainage and landscaping increased its attractiveness to investors. Between 2008 and 2012, it attracted foreign investment of RMB 365 million, and local investment reached RMB 25,785 million.

In Suining:

• Construction of 13.2 km of access and distributor roads and bridges, 3.5 km of river embankments, sewers and landscaping provided a foundation for the further development of an area of 351 ha in the city’s western part for mixed residential, administrative and commercial use.

In Panzhihua:

• Construction a 6.7 km section of the Bing-Ren Road and road improvement on Bin Jiang Road relieved congestion in the downtown area, contributing to a travel time improvement of 85 percent.
• Construction of sewer interceptors and pipelines connecting to wastewater treatment plants.
• Work along the Jinsha River including cleaning up debris, constructing an embankment to prevent slope and soil erosion, and improving landscapes achieved high satisfaction among local residents.

Capacity development:

• In Panzhihua and Yibin, support was provided to the improvement of urban infrastructure information platform, regulation of data collection and management, and setup of an Urban Master Plan Management System, as well as the establishment of a model using GIS basic data and geological disaster data.
• In Mianyang and Suining, an internet service platform and GIS basic data platform were established and information technology training was undertaken.

Bank Group Contribution

The Bank provided a US$180 million IBRD loan, while its experience in infrastructure planning and peri-urban development planning and its work to develop resettlement guidelines and compensation systems for project affected people were considered key reasons for its engagement.

Partners

The Sichuan Provincial Government demonstrated strong commitment to the project during formulation and throughout its implementation. A leading group headed by a Vice Governor designated the Sichuan Construction Commission as the agency responsible for project management. The Commission subsequently appointed the Provincial Project Management Office, which was responsible for preparation and implementation of the project. Notwithstanding the disruption caused by the catastrophic Wenchuan Earthquake which hit Sichuan in 2008, the project closed on time as the provincial and project city governments made every effort to ensure the completion of all infrastructure activities without delay.

Moving Forward

The infrastructure completed under the project is now operated and maintained by experienced entities with adequately knowledgeable personnel, and are funded through budgetary allocations from the municipal governments. All four project cities have developed annual operations and maintenance plans, including budget, for the infrastructure constructed under the project, and continued budget allocations for the works are expected in the future.

The four Project Implementation Units continue to operate as integral parts of their respective municipalities and are expected to implement projects wholly financed with government resources. As their fundamental institutional structure remained in place after the projects closing, a seamless transition to post-completion operation of the investments is assured. Lessons learned from the project are informing development of a new urban development project in Guang’an.

Beneficiaries

The whole populations of the four project cities, totaling 3,340,000, benefited from the project. Moreover, the management capacity of the provincial and city project implementation units was strengthened in areas such as financial management, procurement and contract management, and application of safeguards. Indirect project beneficiaries also included private sector companies in the Economic Development Zones in Suining and Mianyang.