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LESSONS:

Songhua River Basin Water Pollution Control and Management Project: Completion Report

sector: Water and Other Urban Infrastructure and Services | country: China, People’s Republic of

Long-term vision and strategic planning. Strategic prior ADB TA (technical assistance) contributing to the preparation of the SRBPCMP (Songhua River Basin Water Pollution Prevention and Control Master Plan), which was approved by the State Council in March 2006, and ongoing ADB involvement and long-term partnership with local governments in the SRB (Songhua River Basin) is a model for replication. Key inputs to the SRBPCMP through ADB TA established a solid framework for policy and governance reforms and capacity building for pollution control, sustainable urban development, and integrated river basin management. The TA also developed a strategic prioritized portfolio as the basis for future investments by the government, ADB and other development partners, and the private sector. This was featured in the project design and implementation, and was fundamental to ensuring project relevance, and sustained future regional and local-level pollution control actions. In particular, following project preparation, phases 1 and 2 of Songhua River Basin Water Pollution Control and Management Project Private Sector Facilities provided an equity loan to Longjiang Environmental Protection Share Company to complete the project investments by upgrading wastewater and sludge treatment facilities in the SRB. Finally, one key aspect of the strategic planning was to identify cities where ownership and commitment were high, which is very important in situations involving a large number of cities and stakeholders.

Project coordination. The large scale and scope made project design and implementation challenging. Implementation succeeded because key stakeholders were involved in achieving the project goals, from the design stage through implementation. ADB missions served as catalysts to develop strong coordination and commitment between the two provinces and among the project counties and cities. Finally, the very good cooperation between agencies – and especially between provincial development reform commissions and finance bureaus – was essential for this type of project.

Clear cost-recovery mechanism. National regulations on water and wastewater tariffs formulated and promulgated with ADB TA (technical assistance) require full cost recovery; all towns and cities nationwide must implement the regulations. Some project cities and counties have not yet reached full cost recovery, but they are making progress in a phased manner. Effective and sustained policy dialogue on cost recovery and tariff reforms is essential, and must be undertaken first nationally, to support and facilitate tariff reform in towns and cities. ADB’s successful policy dialogue with the government on cost recovery and tariff reforms, and TA to prepare national water and wastewater tariff regulations, helped establish an enabling environment for private sector participation. This helped prepare market conditions for the Longjiang Environmental Protection Share Company and introduce the company for the Private Sector Operations Department-financed project, which contributed to important SRB pollution control objectives.

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