China: Building Rural Roads to Prosperity

Challenge

In 2006, Fujian Province lagged behind the other coastal provinces in transport infrastructure. The density of higher class roads was less than half of that in the neighboring Guangdong and Zhejiang, and the percentage of unclassified and lower class roads was substantially higher. In the 207 poorest villages, the unclassified and lower class roads were often impassable in the rainy season and transport costs were high. 

The Fujian Provincial Government developed an investment strategy to improve the road network to support social and economic development. It aimed to double the expressway network by 2010 and triple it by 2017, upgrade 8,600 kilometers of national and provincial highways to Class II or higher standard to enhance the connections among cities and counties and integrate them with the expressway network, and improve about 35,000 kilometers of non-paved Class III and IV rural roads as part of the Rural Roads Improvement Program in 7,500 administrative villages by 2010.

 Solution

The project adopted the “Sector Wide Approach” for the first time in China. A “Sector-Wide Approach” is an approach to support a country-led program for a coherent sector in a comprehensive and coordinated manner.

Rural roads improvement component was approved based on a databank with to-be-built rural roads, and projects were selected from the databank, withdrawal applications were made in batches after construction was completed, and audit and inspections were carried out. This approach improved the works quality and accelerated progress, as well as simplified the World Bank’s prior review and disbursement procedures. 

Although World Bank financing represented only about 20 percent of the resources required for the rural roads improvement component at preparation stage, the project design sought to build upon and improve the existing framework through employing better practices in social and environmental safeguards, procurement and fiduciary arrangements, and technical engineering quality among counties, townships, and villages. The disbursement approach and the monitoring and financial reporting procedures were designed to apply innovative mechanisms and can be replicated in similar investment initiatives in China.

Result

The Fujian Highway Sector Investment Project supported improvements in several key outcomes:

• Rehabilitation of 1,299 rural roads with a total length of 5,402 kilometers. A sample survey of rural roads found significant travel time reductions for rural residents: 27 percent for work travel; 42 percent to access health services and markets in towns; and 40 percent for student trips to middle schools. Cost of travel by motorcycles and private vehicles reduced more than 50 percent. Rural passenger services are now available to more than 80 percent of Fujian villages. From 2011 to 2014, the number of traffic accidents on rural roads decreased by 15 percent annually.
• Upgraded rural roads provide much improved and lower cost access to markets for both agricultural products and inputs. Better transport access and mobility contributed to modernizing industries in towns and villages, increasing agriculture productivity, and attracting investment and trade. According to the survey results of 64 villages， average household income had increased 23 percent， and the number of low-income households was about halved after the construction of their rural roads.
• Survey results showed that about half of the women in villages have changed from heavy farm work to non-agriculture jobs. Rural roads connection improved accessibility to health care by reducing the time for going to hospitals. The improvement of the travel condition reduces the commuting time of the teachers and students significantly, thus promoting the development of education in rural area.
• Construction of rural roads provided tangible local employment opportunities. For example, more than 160 villagers were hired full-time or part-time for the construction of Bijia-Gaoling road.  Increased incomes have improved the quality of life. Along County Road X775 under the project, about 60 percent of the houses were newly-built or partially renovated because of increased income and reduced cost of construction materials.
• The completion of the 195 kilometers Yong’an-Wuping Expressway has reduced travel time between Yongan and Wuping from six to two hours, and facilitated the transport of agriculture products to markets and delivery of construction materials, fertilizers and other agricultural supplies to centers of economic growth. It also provides an easy entrance to tourist areas along the expressway and other attractions in Fujian and adjacent provinces, with an increase in tourist volumes. Tourism has become a major source of income for local residents. 

Bank Group Contribution

An IBRD loan of US$320 million to the Fujian Highway Sector Investment Project was approved by the World Bank’s Board of Executive Directors on October 12, 2006, and an additional US$50 million loan to the same project was approved on May 19, 2011, bringing the total World Bank financing to US$370 million. The Additional Financing Project added 3,758 kilometers to road rehabilitation in poor mountainous and coastal regions, with an increase in the number of project beneficiaries.

Partners

The total project cost was US$2,395.86 million, of which US$2,027.78 was financed through government budgets and commercial bank loans. Governments at all levels showed strong ownership of the project and provided the requisite leadership and guidance for project implementation, especially on compliance with safeguard policies.

Moving Forward

Counties’ communication bureaus are now responsible for maintenance of the rural roads network applying the knowledge learned through training and project implementation. Technical assistance and pilot contracts in maintenance provided a good base for improving maintenance management. Increased funding through central government and province subsidy programs supplemented the funds for rural road maintenance and safety and provided incentives to maintain the newly improved roads well. The pilot programs on contract maintenance are being expanded to cover an increasing share of the network. Active participation of residents in project selection, funding, and supervision of maintenance enhanced the project sustainability.

Beneficiaries

The Yushangang village in QingYuan, Shouning County is situated on the crest of a hill at an altitude of 820 meters above sea level. In the past, walking was the only way for people to get out of the village. It usually took three hours to get to the nearby village and more than eight hours to get to the county town. All the mountain products had to be shoulder-carried out by villagers across the mountains. After the completion of rural roads in Yushangang, it only takes an hour or less to get from the village to the county town by car.

The Guanzhuang village in Nanping city has provided rural health insurance since 2006. All types of vehicles, including fire engines and ambulances, can get into the village within ten minutes. Previously, it took three hours to the doctor’s office, and because of inaccessible roads most patients could be rescued only at half way to the village. Now it takes less than half an hour to travel to the doctor’s office.

The Wuzhai village in Liancheng County has been growing mushrooms since 1996. Since the traders’ vehicles could not get to the village, farmers had to shoulder-carry their farm products to the market. After the roads to the village were constructed and permitted vehicular access of the traders and buyers, the revenue increase from selling mushrooms was RMB 100,000 a year. Income per capita in the village has risen by more than 30 percent after roads were built.