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LESSONS:

Chongqing-Lichuan Railway Development Project: Project Completion Report

sector: Transport | country: China, People’s Republic of

The project costs at completion differed significantly from the processing estimates. Despite various factors during construction and the significant increase in land acquisition and resettlement costs, processing estimates should be updated in accordance with the approved feasibility study and preliminary design. The cost estimates also affected the financial and economic evaluation results. Due to improved project readiness, more precise project cost estimates based on the approved feasibility study or preliminary design are now available during processing.

The project was named the ‘FIDIC (International Federation of Consulting Engineers) Outstanding Project in 2015’, acknowledging its wide application of prevailing international construction and operation technology and more environmentally friendly solutions. The recognition also demonstrated that the project’s innovative and advanced approach achieved cost effectiveness, efficiency, safety, and sustainability.

Sufficient consultation and participation with stakeholders helped promote ownership, responsibility, and the dissemination of project benefits. During processing and implementation, consultation meetings with stakeholders at various levels were held on the project’s design, construction, safeguards, job opportunities, and gender and social impacts. These meetings included hundreds of participants at the village, town, county, and city levels. Local government along the project alignment associated more economic development activities with the project including tourism, urbanization and town zoning, and the creation of more employment opportunities. Extensive, continued consultations during project implementation promoted participants’ sense of ownership and responsibility for the project, and helped to improve the project design further.

The traffic forecast for initial commercial operations was optimistic at appraisal, particularly for freight transport because it requires not only physical infrastructure but also coherent operational arrangements. For example, low-speed break-bulk freight traffic requires increased safety inspections of tracks and facilities when high-speed passenger traffic operates on the same line. In future projects, mixed traffic arrangements for both passenger and freight transportation should be reviewed carefully for efficiency and safety to avoid underutilizing capacity.

The lessons learned from the Chongqing-Lichuan Railway’s (CLR) land acquisition and resettlement activities include the following: (i) land acquisition and resettlement costs, including potential increases in compensation rates, resettlement site construction costs, and adequate contingency for unexpected land acquisition and house demolition impacts should be budgeted adequately; (ii) land acquisition and resettlement funds should be fully incorporated in the project’s overall financial management (local governments currently raise and use land acquisition and resettlement funds directly); (iii) the planning and preparation of concentrated resettlement sites, especially those close to railway stations, should commence as early as possible; and (iv) adequate funds for external resettlement monitoring activities should be provided.

The construction and operation of the CLR significantly contributed to regional socioeconomic development and poverty reduction by (i) contributing to gross domestic product (GDP) and government revenue growth, increased rural income, and reduced poverty incidence in the project area; (ii) creating jobs through the construction and operation of the railway and development of tourism; (iii) providing safer, faster, and more affordable mobility for local people and migrant laborers; and (iv) improving gender and ethnic minority development due to expansion of local economic development.

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