JBIC ODA Loan Project Mid-Term Review 2006
Evaluator: Hiroshi Oita (OPMAC Corporation)
Field Survey: February, 2007
Project Name: People’s Republic of China, Hunan Province Road Construction Project (L/A No.C01-P162)
Outline of Loan Agreement
Loan Amount/Contract Amount/Disbursed Amount
Loan Agreement Signed
Completion Date (Planned)
Final Disbursement Date
Executing Agency
Operation & Maintenance Institutions

Mid-Term Review Selection Criteria: 23,000 million yen / 17,646 million yen / 11,568 million yen (as of end of February 2007): March 2002 (5th year after L/A concluded): October 2007
: October 2009
: The People’s Government of Hunan Province: Main road (highway): Shao-Huai Expressway Construction & Development Co., Ltd.,affiliate of Hunan Provincial Expressway Construction & Development Co., Ltd.
Regional road: Communications Department of Hunan Province: Poverty reduction

Project Objective
To construct a main road (highway) in Hunan Province between Shaoyang City and Huaihua City with a total length of about 160km, together withimprovements to a total of about 100km of regional road between Zhu City (Dongkou county) and Chengbu county, in order to improve access tomarkets and promote regional development, and thereby contribute to improve people’s welfare and reduce poverty in an inland region.
Consultant: Nippon Koei (Japan)
Contractors: (Contractors with total contracts of 1 billion yen or more. Includes J/Vs.)
YUEYANG ROAD & BRIDGE CONSTRUCTION CO. (China), HUNAN CHANGDE ROAD & BRIDGE CONSTRUCTION CO., LTD. (China)
HUNAN HUANDA ROAD & BRIDGE CORPORATION (China), HUNAN PROVINCIAL ROAD MACHINERY ENGINEERING COMPANY (China)
THE 1ST ENGINEERING CO., LTD. OF CHINA TIESIJU CIVIL ENGINEERING (China)
HUNAN ROAD & BRIDGE CONSTRUCTION GROUP CORPORATION (China)

1Overview of Results
Item
Relevance(1) National Policy
Level

Ex-Ante Evaluation Results (March 2002)(1) National policy level
In China, economic disparities are developing between
coastal and inland regions, and the launch of “Great Western
Development” (Note) for the Western Regions which arelagging in development was taken up in the 10th Five Year
Plan (2001 to 2005). This emphasized the importance ofaccelerating infrastructure construction in the Western
Regions. In particular, road development is essential for
economic development of the regions, improvement ofpeople’s welfare, promotion of economic interaction with thecoastal regions, etc. Inland regions comprise about 90% of thenational land area. However, as of the end of the year 2000,
the road density of inland regions was 0.11km/km2, far below
the 0.42km/km2 of coastal regions. This kind of regional
disparity in road development leads to limited access tomarkets and lower transport efficiency, so its improvement isranked as a priority policy.
Hunan Province, which was targeted by this project, had aper capita GDP of 5,639 yuan in the year 2000, below thenational average of 7,078 yuan. It is a poor province, as thisranks it as 17th among the country’s 31 special municipalities,
provinces, and autonomous regions (excluding Taiwan).
(Note) The Great Western Development is a focused mission over the
10 year period from 2001 to 2010, based on the outline in the “StateCouncil Notification on Several Policy Measures for Great Western
Development”, proposed by President Jiang Zemin in June 1999, andannounced in December 2000. It aims to correct the disparities that
arose as a result of the prioritized development of eastern coastal
2

Mid-Term Review Results and Expected Ex-Post
Evaluation Results at the Time of Mid-Term Review(1) National policy level
The 11th Five Year Plan (2006 to 2010) aims at a shift
towards sustainable development, with a particular emphasis
on infrastructure development in rural areas. In this plan,road development as basic infrastructure continues to be
ranked as a priority in order to achieve harmonious
development between urban and rural areas, maintaining
consistency with policies from the 10th Five Year Plan. Thereis also no change in the position of Great Western
Development as a long term development goal.
The level of per capita GDP in Hunan Province was
10,264 yuan in 2005, below the national average of 13,985
yuan. This makes it 20th among the country’s 31 special
municipalities, provinces, and autonomous regions.
As such, the significance of completing this projectcontinues at the national policy level, and the relevance of
project implementation has not been lost.

regions. Infrastructure development, ecological and environmental
protection, agricultural improvements, science and technology
education, etc. are to be implemented in 10 western provinces, 2 central
autonomous regions, and autonomous prefectures in 3 central
provinces.

(2)Policy Measure
Level(2) Policy measure level
Road construction was a priority development target in the10th Five Year Plan. To make road transport the artery for
China’s passenger and freight transport, it set the goal ofpromoting the development of high standard main national
trunk roads which cover the entire territory of China. For
regional economic development, it also raised the goal ofincreasing the percentage of paved roads focusing on
development of national roads and provincial roads, improving
the road network throughout the country.
The “5 Vertical 7 Horizontal” routes criss-cross the entire
country as main trunk roads. Development targeted the partsof this network which pertain to the western regions. The
target of this project was the highway between Shaoyang andHuaihua, which is part of the highway between Shanghai and
Ruili (Yunnan Province), one of the “7 Horizontal”.
Also, Hunan Province created Hunan’s 10th Five Year
Plan. This maintains consistency with national policy, whileaiming at completion of the road network in the province by
2020. Moreover, along the roads targeted by this project lies
the national level poverty-stricken county of Longhui County,
and the province level poverty-stricken counties of Chengbu
County and Zhijiang County, so it contributes to poverty
reduction.
3(2) Policy measure level
Similar to the national plan, the 11th Five Year Plan for
Hunan Province also strongly calls for balanced development
among regions. Completion of the road network by 2020
continues to be a goal, and the road targeted by the Japanese
ODA loan is an important part of this.
Also, Longhui County and Chengbu County which arealong the roads targeted by this project are National
Development Priority Counties. Thus, this road is regarded
as fulfilling an important role in poverty reduction.

(3) Planning Level(3) Planning level(3) Planning level
As described above, these roads are constructed as part ofTraffic volume has grown remarkably fast, requiring
the national and provincial plans. According to domestic urgent development. On this point, relevance at the planning
standards, the main road (Shaoyang to Huaihua) is constructed level was confirmed.
as a highway, with the section between Zhu City and Chengbu
repaired as a secondary regional road. Traffic volume isforecast to grow on the targeted section, and the project isbeing carried out from the perspectives of improving access tomarkets etc., promotion of regional development, improving
the people’s welfare, and poverty reduction.

Effectiveness(1) Operation andEffect Indicators(1) Operation and Effect Indicators(a) Quantitative effects(1) Operation and Effect Indicators(a) Quantitative effects
2000
Ex-anteevaluation

2010
Targetyear

Indicator

Road nameShaoyang to Huaihua
Zhu City to Chengbu

4,520
3,232

12,516
7,030

Shaoyang to Huaihua
Zhu City to Chengbu
Shaoyang to Huaihua
Zhu City to Chengbu
Shaoyang to Huaihua
Zhu City to Chengbu
Shaoyang to Huaihua
Zhu City to Chengbu

6.1
2.4
35
45
7.3
5.0
10.4
10.0

2.1
1.3
80
78
3.7
2.8
16.0
17.0

Shaoyang to Huaihua
Zhu City to Chengbu

–
–

250
–

Shaoyang to Huaihua
Zhu City to Chengbu

3,431
2,624

7,906
5,439

Increase in traffic volume(converted into number ofsmall cars, cars/day)
Reduction in travel time(hours)Increase in travel speed(km/hr)Reduction in time to accessmarket (hours)
Increase in volume ofagricultural produce
shipments (10,000
tons/year)
Employment opportunities
for the poverty group atroad related facilities(people)Increase in per capita GDP

Indicator

Road name

Increase in traffic volume(converted into number ofsmall cars, cars/day)
Reduction in travel time(hours)Increase in travel speed(km/hr)Reduction in time to accessmarket (hours)
Increase in volume ofagricultural produce
shipments (10,000 tons/year)
Employment opportunities
for the poverty group at roadrelated facilities (people)
Increase in per capita GDP ofregions along the roads(yuan/year)

42010
Targetyear

Shaoyang to Huaihua
Zhu City to Chengbu

2006
Midterm
review
8,758
4,016

Shaoyang to Huaihua
Zhu City to Chengbu
Shaoyang to Huaihua
Zhu City to Chengbu
Shaoyang to Huaihua
Zhu City to Chengbu
Shaoyang to Huaihua
Zhu City to Chengbu

6.3
3.3
33.4
32.7
7.5
5.2
11.0
11.5

2.1
1.3
80
78
3.7
2.8
16.0
17.0

Shaoyang to Huaihua
Zhu City to Chengbu

–
–

250
–

Shaoyang to Huaihua

n.a.

7,906

12,516
7,030

Increase in per capita incomeof regions along the roads(yuan/year)

Shaoyang to Huaihua
Zhu City to Chengbu

1,831
1,544

4,006
3,320

(Note) Regarding the traffic volume in the year 2000, the 4,520 cars/day figure forthe main road (Shaoyang to Huaihua) is for National Road 320, which is the current
road. The 12,516 cars/day in 2010 is traffic volume on the highway.

of regions along the roads(yuan/year)
Increase in per capita
income of regions along theroads (yuan/year)

Zhu City to Chengbu

n.a.

5,439

Shaoyang to Huaihua
Zhu City to Chengbu

n.a.
n.a.

4,006
3,320

(Note) There are no changes to the target values or target year.
(Sources) Responses from the Shao-Huai Expressway Construction &Internal Rates of Return: Main road

FIRR: 3.7%
EIRR: 14.9%
EIRR: 16.5%

Development Co., Ltd.,, and the Hunan Communications Department

The highway between Shaoyang and Huaihua is underconstruction, so the traffic volume noted above is for the(Source) Ex-ante evaluation report (however, figures of current road (National Road 320). The target year of 2010
“Employment opportunities for the poverty group at road shows the highway’s traffic volume, not including thecurrent road’s traffic volume. Also, travel time and travel
related facilities” are from JBIC internal data)
speed have not been improved yet because both roads areunder construction so only one side of the roads are being
used, and the road surfaces are worse.
As seen above, traffic volume has approximately doubled
on the main road since the year 2000 (about 11.7% per year
on average), while it grew 24% on the regional road (about
3.7% per year on average). Based on growth of the economy
and population, one can see there is sufficient possibility toachieve the objectives for traffic volume in the target year.
After completion, large reductions are forecast for travel
times, time to access markets etc., and it is thought that there
are no problems regarding this project’s effectiveness.
Regional road(b) Qualitative effects
1) Promotion of regional development
Shorter routes, improvement in the road pavement situation,etc. lead to effects of reduced travel time, distribution cost
reductions, etc. This leads to increased traffic volume which
5(b) Qualitative effects
1) Promotion of regional development
Shaoyang City is comprised of 3 districts, 1 city, and 8
counties, with a total population of 7,440,000 (2005). It isthought that improvements in access after these roads arepromotes increased distribution, resulting in increased
economic activity in the region. Formation of the provincial
road network, improved market access which benefits poor
regions, and associated regional development along the roads
are also promoted.

6

completed will bring large economic benefits, not only
providing counties along the roads with markets for
agricultural produce, but also for the entire region throughexpanded employment opportunities, contributing toalleviation of poverty. Hunan Province is moving forwardwith development of the road network adjacent to the roads
targeted by this project, and future improvements in accessare expected to expand from these routes to cover broad
areas. There are various cities and counties with the half
million range of population in the region targeted by thisproject, including the designated poverty-stricken counties ofLonghui County (population 1,110,000) and Chengbu
County (pop. 260,000), along with Wugang City (pop.
740,000), and Dongkou County (pop. 810,000). Due to theroad development, one will be able to make trips between
cities within about 1 hour each. This kind of improvement inaccess expands business opportunities for producers,
investors, etc., which should lead to improvements for the
lives of the region’s residents in general.
Also, the region stretching from Guilin in Guangxi
Zhuang Autonomous Region to the southwest part of Hunan
Province has great potential for tourism, so one can expect
growth in tourist numbers through road development.
Moreover, regarding regional roads, construction of anindustrial development district is progressing in Wugang
City, which connects to Provincial Roads 219 and 220, withcompletion of the district planned at the end of 2007. Somefactories have already entered the district, and newinvestments are expected to increase.

(2) Analysis of Factors
Influencing
Effectiveness andImpact2) Poverty alleviation
The targeted region is deprived area, with one national level
poverty-stricken county (Longhui County), and two provincial
level poverty-stricken counties (Chengbu and Zhijiang
counties). The following effects are expected throughcompletion of this project:• Through improved market access from poor areas,
increased opportunities to sell agricultural produce etc.,
and accompanying income growth.
• Reduced transport time and decreased shipping damage
etc. enables a shift of cultivation from grains to high value
added commercial crops, resulting in income growth.
• Employment during the construction period, and increased
employment opportunities after completion at service areas
and operation management facilities such as toll stations on
the main road.
• Improved living environment due to improved access toschools and hospitals.

2) Poverty alleviation
Longhui and Chengbu counties are designated as National
Development Priority Counties (refer to attachment).
Zhijiang County ceased to be designated as apoverty-stricken county.
It currently takes over 6 hours to travel from Chengbu
County at the end of the regional road to the provincial
capital of Changsha City, but this is expected to be reduced
to about 4 hours with completion of the road. This kind of
improvement in access does not directly alleviate the poverty
situation, but making the effects noted on the left a certainty
brings income growth. This is also expected to contribute toimprovements in the standard of living, as working inregions away from home becomes easier in winter, obtaining
products for daily life becomes easier, etc.

(2) Analysis of factors influencing effectiveness and impact(a) Poverty alleviation
As mentioned above, improvements in access lead toincome growth and improved ability to obtain social services.

(2) Analysis of factors influencing effectiveness and impact(a) Poverty alleviation
The kinds of results mentioned above can be expected. Also,
regarding the regional road, the road which connects
Chengbu County and Guangxi Zhuang Autonomous Regionis planned to be built during the 11th Five Year Plan. When
this road extends to Guilin of the autonomous region, thisproject’s effectiveness will increase further.

(b) Land acquisition and relocation(b) Land acquisition and relocation
About 940ha of lands are expected to be acquired by this642ha of lands were acquired for the main road by thisproject for the main road, and about 230ha for the regional project, and 212ha for the regional road. 3,591 residents
7

road. Also, an estimate was received that about 5,000 residents were relocated for the main road, and 3,447 residents for theare subject to being relocated for the highway, and about 2,100 regional road. There have been no special reports of
discontent of residents with land acquisition or after being
residents for the regional road.
relocated, but consideration is needed for protecting the
livelihoods of residents who were relocated, such as
performing monitoring, etc.
(c) Consideration for the environment
The effects of air pollution, soil erosion, noise, andwastewater treatment are anticipated, and measures are taken.

(c) Consideration for the environment
In consideration for the environment related toconstruction, proper measures were taken for sprinkling,
planting trees, drainage, and earth disposal areas, and no
special negative impacts can be seen. Construction was
generally in rural areas, so the kinds of problems imagined inurban areas did not arise.

(d) Consideration for social aspects
The following considerations are taken.
• For socially vulnerable people living in areas along the
project route, such as elderly people living alone, andpeople who are poor or disabled, concrete measures will betaken such as providing labor for home construction after
being relocated.
• During construction, about 9,600 people from the poverty
group will be employed as civil construction workers. Aftercompletion, about 250 people from the poverty group will
be employed at operation facilities such as service areas,
toll stations, etc.

(d) Consideration for social aspects
After the relocation, problems regarding elderly people
living alone and disabled people are not arising. Also, there
is frequent employment in the targeted areas during
construction, paying 30 to 50 yuan wages per day. The
response was that over 1,000 people have been employed.
There are also plans for employment once the main road’s
service areas and toll stations are completed.

(e) Construction of facilities similar to “road stations”(e) Construction of facilities similar to “road stations”
On the regional road, facilities similar to Japan’s “roadThe locations have been decided for the two service area
stations” are to be built as service areas. A parking lot, rest locations planned to be built on the regional road, but their8(3) Factors Affecting
Sustainability

area, place to sell local specialty products, tourist information
desk, etc. will be placed together, aiming at promotinginteraction between road users and the local area, andstimulation of the local economy. The local county
governments will manage operations.

significance and roles are being further investigated. As they
will be located in poor areas, items for sale and targetedcustomers should be thoroughly studied to make themattractive facilities for users so that sales by producers ofagricultural produce and local specialties at the service areas
can provide them a reliable livelihood. Providing them withfunctions as multipurpose assembly places for residents
including education and training, as crisis headquarters andrefuge areas during disasters, etc. should also be studied.

(f) Traffic safety measures
There is nothing particular to note at the ex-ante evaluation
stage.

(f) Traffic safety measures
Improving the road surface on the regional road leads tomuch faster driving speeds. As a result, there are fears thatspeeding will lead to an increase in traffic accidents. Traffic
accidents create not only human losses but also large
economic losses, so even more consideration must also begiven to thorough safety education and development ofsafety facilities.

(3) Factors affecting sustainability• Operation and maintenance system
Hunan Provincial Expressway Construction & Development
Co., Ltd. will be in charge of operation and maintenance. Toll
income etc. of this project will be allocated to operation andmaintenance expenses, etc. In case there is a lack of operationand maintenance expenditures, the Hunan Provincial People’s
Government will handle them with a fiscal subsidy. This
company is planning to operate it with 93 staff who have richexperience in road operation and maintenance. It also plans touse foreign consultants, etc. to strengthen the organization of
its operating structure. Thus there are no particular concerns(3) Factors affecting sustainability(a) Operation and maintenance system
Shao-Huai Expressway Construction & Development Co.,
Ltd. will perform operation and maintenance on the mainroad, with operation and maintenance on the regional roaddone by the Hunan Communications Department. There areno particular concerns regarding budgets and sources offunds.

9(b) Overloading of large trucks
As for the main road, problems concerning operation andmaintenance are expected following the increase in trafficregarding operation and maintenance capabilities.

volume. Operation and maintenance will be implemented
based on national standards, but performing timely andproper maintenance is important for smooth traffic, so
attention should be paid to thoroughly implementing weight
limits, securing sources of funds, and making timely
expenditures.
(c) Flood countermeasures
Chengbu County receives a relatively large amount of
rainfall (about 1,500mm per year), so flood damage occurs
frequently. Periodic maintenance such as maintenance of cut
slopes will be required.

Reference Information
Efficiency(1) Outputs(1) Outputs(a) Main road
• Section: From Shaoyang City (Zhouwang Shop, LonghuiCounty) to Huaihua City (Zhutianxi, Zongfang County)[Section targeted by Japanese ODA loan: From Shaoyang City
(Zhouwang Shop, Longhui County) to Shaoyang City (Dashui,
Dongkou County)]• Total length: About 160km(about 60km targeted by Japanese ODA loan)• Road standard and lanes: Highway, 2 lanes each direction• Width: 24.5m to 28m• Center divider: Fixed type (all sections)• Pavement: Asphalt pavement (partially concrete pavement)• Bridges: 223 locations• Tunnels: 19 locations
10(1) Outputs (No changes in items targeted by this project)(a) Main road:• Fundamental construction was already finished at thetime of this mid-term review, and construction work has
now moved to the paving stage.
• No changes except for those shown below• Due to higher crude oil prices, pavement was changed
from asphalt to concrete.
• Regarding the width of the bridge crossing the Zijang

(includes the approximately 7.3km Xuefeng Mountain Tunnel)• Interchanges and toll stations: 9 locations• Service areas: 3 locations• Connecting road: About 13km
(Zhutianxi to Hecheng District, Huaihua City）

River towards Longhui County, a 1.5m pedestrian
walkway was added, widening the bridge from 15m to
18m.

(Access road connecting the main road with central Huaihua City)• Machinery and electrical facilities: toll collection,communications, surveillance control systems, etc.
(b) Regional road:• Section: Zhu City, (Dongkou County, Shaoyang City)
to Chengbu County• Total length: About 100km• Road standard and number of lanes: 2nd class road,1 lanes each direction• Width: 12 – 15m• Pavement: Asphalt• Bridges: 20 locations• Service areas: 2 locations(facilities similar to “road stations”)(c) Consulting services (Foreign consultants: 36 man months)• Environmental measures• Support for road management organization• Report writing assistance, etc.
(2) Period(b) Regional road
• The name of the initial Provincial Road 1865 section waschanged to Provincial Road 220 (Dongkou to Wugang)and Provincial Road 219 (Wugang to Chengbu).
• At the time of the mid-term review, construction work wasat the paving stage.
• No changes except for the one below.
• Due to higher crude oil prices, pavement was changed
from asphalt to concrete.

(c) Consulting services• No changes.

(2) Period(2) Period
From March 2002 to December 2006
From March 2002 to October 2007
(Part of construction has already began using Chinese funding) Construction work began when the loan agreement was
11concluded.
Completion date is delayed because of delayed approval by
the province (Communications Department) related to atechnically very difficult tunnel construction (not part of theJapanese ODA loan), etc.
Lessons Learned andRecommendations

Lessons Learned• Regarding plans to build service areas similar to Japan’s “road stations” on the regional road, the implementation plan must
be studied while recognizing the standard of living differences between Japan and China (in the subject regions) anddifferences in the stages of development of their societies.
Recommendations• For the regional road, in the targeted regions along the road it is necessary to continue to work on thorough safety educationin schools, implementation of activities for raising awareness in traffic safety via bus companies and transportation
businesses, development of safety facilities, etc.

Indicators Establishedfor Use at the Time of
Ex-Post Evaluation

The following were suggested in the project ex-ante evaluation • The operation and effect indicators were established based
report.
on the project ex-ante evaluation report. When these• Increase in traffic volume
indicators were confirmed at the time of the mid-term(converted into number of small cars, cars/day)review, the Chinese parties did not object to following up• Reduction in travel time (hours)on them. On the other hand, in the contents of the Minutes• Increase in travel speed (km/hour)of Discussion (M/D) exchanged in December 2001
• Reduction in time to access market (hours)
between the JBIC ex-ante evaluation mission and the• Increase in volume of agricultural produce shipments
Hunan Province government, and in the Project(10,000 tons/year)
Memorandum (P/M) agreed upon in May 2002 which• Internal rates of return (FIRR, EIRR) (%)
expanded on it, more detailed indicators are shown which
are based on the operation and effect indicators in the
project ex-ante evaluation report. The latest values ofdetailed indicators based on the P/M were sought at thetime of the mid-term review, but figures beyond the
project ex-ante evaluation report were not provided.
12• Regarding follow up on the operation and effect indicators
based on the project ex-ante evaluation report, the Foreign
Affairs Office is the contact point for Hunan Province.
However, when seeking data on items at the level of detailin the P/M, it is necessary to request cooperation inadvance to perform a survey of those items. Particularly
regarding data on areas other than sections targeted by
Japanese ODA loan, one should explain the necessity ofproviding information in advance, and arrange fordirection from the central government to the Hunan
province government. However, further examination isrequired to decide whether such time-consuming effort isnecessary to obtain the level of detail for indicators in the
P/M.
• This project has different executing agencies for the mainroad
(Shao-Huai
Expressway
Construction&
Development Co., Ltd.) and the regional road (Hunan
Communications Department). At the time of the ex-post
evaluation, it will be required to interact with each agency
separately. This point was not considered at the time of theex-ante evaluation.

13

Situation in Areas near the Hunan Province Road Construction Project Site
(Comparison of 2002 and 2006)

Year
LonghuiCountyChengbu
CountyPopulation inpoverty(unit: 10,000)

Primary school
Net
Numberenrolmentof schools
(%)

06

02

06

02

06

02

109.93112.28

21.6

13.8

437

310

25.3

25.8

8.3

5.4

231

162

Per capita
GDP(yuan)

Population(unit: 10,000)

02

06

02

2,674

3,625

4,240

5,270

Middle school

Percentage
receivingwater supply(%)

Numberofhospitals

Infantmortality rate

Percentage
receiving
electricity(%)

Number ofschools

Net enrolment
(%)

06

02

06

02

06

02

06

02

06

02

06

02

06

99

99

100

82

97

98

74.7

77.2

29

32

21

16

100

100

98

99.75

16

27

93

97.2

92.5

98

12

12

12.4

4.19

96

96

(Source: Data via the Hunan Province Communications Department)

14(%)