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Engineering designs for wastewater and water supply subprojects in small cities and towns should consider the limited size and small population of these cities and towns to avoid overcapacity.

Economic reevaluation of the project at completion showed all the subprojects to be economically viable. Although most actual costs decreased from appraisal to completion, most economic viability ratios at completion were lower than envisaged because of design overcapacity and lower demand. For future similar projects, the size and population of small cities and towns must be carefully considered in the engineering designs of subprojects especially in the wastewater treatment and water supply subsectors where potential adverse impacts on human and environmental health are among the greatest.

Effective use of advance procurement contributes to the timely completion of projects.

Advance procurement of the works packages for the core subprojects, approved by ADB during loan processing, enabled early project start-up. Getting onboard a procurement agent, incorporating relevant sections of ADB’s anticorruption policy into the bidding documents and contracts, and coordinating with the disciplinary supervision office when problems arose further helped ensure smooth implementation of the procurement plan. Building on this project’s experiences, future interventions could consider undertaking advance procurement and supporting it with appropriate institutional measures to ensure timely completion of projects. This could be especially relevant for projects with many subprojects scattered in small cities and towns.

Strong leadership and ownership by local governments are central to the success of urban infrastructure and environmental improvement projects.

Upgrading urban public services requires the participation and collaboration of several agencies. This is best done by and through local governments that are at the helm of delivering these services and of making sure that these services respond to the needs of their localities. In this project, the local governments performed highly satisfactorily through the HPPMO and the subproject PMOs. They had sound capabilities as well as strong leadership and commitment to the project, the main reason why most of the subprojects were completed and put into use even before the loan was closed.

Background

Hebei province covers 187,600 square kilometers of northern People’s Republic of China (PRC). It surrounds PRC’s major cities of Beijing and Tianjin and, like most other provinces in the country, has rapidly urbanized over the past decades. For instance, from 38% of its total 69.4 million people in 2006, the province’s urban population swelled to 55% of the total 75.2 million in 2017.

Growth in urban infrastructure and associated services have not kept pace with the rapid urbanization. Resulting challenges have worsened even while Hebei’s economy has remained underdeveloped, with weak urban–rural linkages, underinvestment, poor urban management, and an industrial sector dominated by highly polluting capital-intensive resource processing industries. By 2007, these challenges have become most evident in severe pollution, rising water shortage, poor public utility services, and the deterioration of the environment.

To prevent the challenges from escalating, Hebei's Eleventh Five-Year Plan (11th FYP) called for the development of a more balanced urban system through the growth of medium-sized cities that can serve as economic centers for surrounding towns. Under the plan, medium-sized cities were to strengthen their physical and economic linkages with smaller cities and towns on their periphery. County-level cities and towns were in turn expected to enhance their economic integration with rural areas, create opportunities for farmers to move to urban areas and gain higher-value employment, and provide rural migrants with a higher standard of living through improved urban infrastructure.

In response to Hebei’s 11 th FYP, the Asian Development Bank (ADB) provided a loan of $100 million and a grant of $0.25 million from the ADB-administered Water Financing Partnership Facility (WFPF) for the Hebei Small Cities and Towns Development Demonstration Sector Project. The project was processed as a sector loan and grant to allow the government to flexibly respond to the rapidly changing needs of the province’s small cities and towns.

Starting with core subprojects in 3 counties that addressed a representative mix of the key infrastructure and environmental challenges confronting small cities and towns, the project supported a total of 18 subprojects in 11 of Hebei’s poorer counties north and west of Beijing. Institutional development was undertaken to ensure effective implementation of each subproject and sustainable operation and maintenance of the facilities. Using the WFPF grant, the project also provided corporate management training to implementing agencies of water supply and wastewater subprojects.

Successful completion of all subprojects, 4 for wastewater treatment, 6 on water supply, 5 for district heating, and 3 on solid waste management, directly benefited about 1.2 million people. Other residents also benefited primarily by way of improved public health, and air and water quality. Early positive impacts on tourism, industrial development, and urbanization were noted at project completion.

The project began and closed on time, with no cost overrun. Day-to-day implementation was managed by the Hebei Provincial Project Management Office (HPPMO) together with the project management office in each subproject. With support from the HPPMO and the Provincial Project Coordination Group, the Hebei Provincial Government served as executing agency.

Project Information
Report Date: 
June, 2018
Main Sector: 
Country: 
Project Number: 
Project/Modality: 
Sector Loan
Grant

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