Revised on 29 August, 2006

External Evaluator: Hiroshi Oita (OPMAC Co., Ltd.)JBIC ODA Loan Projects: Mid-Term Review
Time of Mid-Term Review Field Survey: May 2006
Project Title: People's Republic of China: Changsha Water Supply Project (L/A No. CXXII-P132)[Loan Outline]
Loan Amount/Contract Approved Amount/Disbursed Amount: 4,850 million yen/4,845 million yen/4,016 million yen (as of end May 2006)
Loan Agreement: March 2001
Final Disbursement Date : July 2006
Executing Agency: Changsha Municipal People’s Government (Hunan Province Finance Department, Foreign Trade andEconomic Cooperation Department)/Changsha Water Service Investment Management Co.
[Project Objective]
In Changsha city in Hunan Province the project plans to improve the water supply capacity in Hedong District (population approx. 1.5 million) by building Water Treatment Plant No.
8, which has a treatment capacity of 500,000m3/day with the Xiangjiang river serving as a water resource, and by providing water transmission and distribution mains, and thereby
help to improve the living environment of residents in that area and regional economic development.
Consultants: Hunan Province Construction Design Institute (outside of the ODA loan )Contractors: Hubei International (China)

Item[Relevance](1) National policy level

Results of ex-ante evaluation (July 2000)

Ex-post evaluation results as estimated at time of mid-term review(1) In China, against the background of industrialization and dense
populations, the water demand in coastal metropolises and inland cities
is rising. In the Ninth Five-Year Plan (1996-2000), the provision ofwater supply infrastructure in rural cities was positioned as a major
issue. In the 10th Five-Year Plan (2001-2005), it was also expected toplay a major part.

(1) While the 10th Five-Year Plan (2001-2005) advocated water
conservation, it also treated the expanded capacity of water supply as apriority policy. In particular, the plan set the objective of achieving an urban
water supply reach of 98.5% by 2005. In addition, the 11th Five Year Plan(2006-2010) recognized that there were limitations on the water resources.
The 10th National People’s Congress emphasized in its Fourth Session heldon March 14, 2006 that strengthening infrastructure is as critical foradjusting the industrial structure and that better management of thedevelopment and utilization of water resources is necessary.

(2) Policy level(2) Following on coastal metropolises, in the latter half of the 1990s
urbanization progressed rapidly thanks to rapid industrialization andpopulation concentration in large and medium-sized inland cities. In
inland areas as well, the supply and demand gap due to the increased
demand in water has become a problem.
1(2) In the Hunan Province 10th Five-Year Plan outline, improvement of theurban environment through strengthening of urban infrastructure provisions
have become strategic policies and the water project for drinking in
Changsha is mentioned as a vital project.

Revised on 29 August, 2006

(3) Planning level(3) In Changsha city, the provincial capital of Hunan, rising populationand increased demand for water is causing a serious problem in thewater supply shortage. As of now, the capacity of the facility is short of
200,000m3/day and this gap is expected to grow to a shortage of
510,000m3/day by 2008.

(3) With the completion of Water Treatment Plant No. 8, water supply
capacity has increased by 500,000m3/day to 1,320,000m3/day in the Hedong
district of Changsha city. As a result, it will be possible to cope with
anticipated 1,250,000m3/day demand for Hedong district up through 2008,
and at the time of mid-term review, it can be said that the initial targets havebeen achieved.

The project is building water supply facilities with a capacity of
500,000m3/day in Changsha city Hedong District, and the project is ofhigh priority in terms of addressing the above issue. Moreover, theJBIC has already specified in its policy for country assistance thatactivities to address environmental issues and revising disparity amongregions, especially inland areas, are critical areas. The project meshes
well with the policies of the JBIC.
[Effectiveness](1) Operation and Effect Indicators
1) Quantitative effects
1999(at time of
ex-anteevaluation)
Population served
137.9(tens of thousands)
Water supply
80.5
volume(10,000m3/day)(1 day avg.)
Unaccountedfor
21.2
water rate (%)
Leakage rate (%)
18
Percentage of100
population servedwith water (%)

Yearcompleted(2004)

Targetfigures(2008)

150.9

160.3

93.2

100.8

1616

14100

14100(1) Operation and Effect Indicators
1) Quantitative effects
At time ofmid-term review(2005)
Population served
150(tens of thousands)
Water supply
96.7
volume(10,000m3/day) (1day avg.)
Unaccountedfor
19.3
water rate (%)
Leakage rate (%)
16.7
Percentageof
100
population servedwith water (%)

Target figures(2008)
160.3
100.8

1614100

At the time of the mid-term review, the population served with water andthe water volume in the Hedong district were generally in line with figures
anticipated at the time of the ex-ante evaluation. This project secured
1,320,000m3/day water supply capacity, which will meet the
1,250,000m3/day demand expected for 2008. In addition, the Zhushuqiao
water treatment plant, with a capacity of 300,000m3/day, is expected to be2

Revised on 29 August, 2006

built by 2008. Once it is completed, capacity will rise to 1,620,000m3/day,meeting the demand for 2010.
2) Qualitative effects
In order to cope with rising water demand, the project was expected toprovide the living or social infrastructure, which would yield economic
impact, while ensuring steady supply of safe purified water andimproving the living environment.

2) Qualitative effects
Same as shown at left (In particular, improvements to the urban livingenvironments).

(2) Analysis of factors that affect project effectiveness and impact
1) Land acquisition and relocation of residents
70,000m2 of land was acquired to serve as project construction sites.

(2) Factors which may influence the effectiveness and impact
1) Land acquisition and relocation of residents
No problems in particular.

2) Impact on the environment2) Impact on the environment
・ No particular environmental problems arose during the construction work.
・ There were no problems with the quality of the water source, but after
heavy rain, muddy water from the Xiangjiang river brought anaccumulation of mud near the intake ports. The executing agency is paying
attention to the management of the intake port areas.

3) Landfill site for sludge treatment in Wangcheng county
Sludge produced in the water treatment process was to be reduced to aconcentrated form through mechanical dewatering, and transported to alandfill site currently under construction in the outskirts of Wangchengcounty (The plant is expected to be completed at the end of 2001).

3) Landfill site for sludge treatment in Wangcheng county
・ The sludge treatment facilities are still under trial operation, andfull-scale operation has not yet begun.
・ Once the water has been evaporated from the sludge, it will be buried inlandfills at the treatment plant for solid waste matter in Wangchengcounty, Changsha city (The treatment plant has been completed).
4) Cooperation with Japanese local authorities
Changsha city is a sister city of Kagoshima city. So far, some twenty people
associated with the Changsha city waterworks have visited Kagoshima.
People from Kagoshima have also visited Changsha. This has strengthened
the exchange of personnel and sharing of technical information.

(3) Factors that affect sustainability
The profitability of this project depends heavily on setting up a fair feesystem. An appropriate fee system should be established as follow-upwork.
3(3) Factors which may influence the sustainability
1) Finances
・ Water fees were set in an urban water supply price management policyby the National State Planning Commision and Ministry ofConstruction in 1998. With the prerequisite that water rates be sufficientRevised on 29 August, 2006

to recover costs, a profit ratio of 8%-10% is added on top of the cost.
・ The actual decisions on water fees is made by local authorities, and in
Changsha city, the Changsha City Price Bureau has the final say. The
current fee was revised in June 2002, The water rate includes the water
resource fee, and is collected together with the sewage treatment fees.
2) Present status of the executing agency’s structure(privatization, etc.)

・ The Chinese government continues to introduce competitive
mechanisms. The role of the government and local authorities is shiftingfrom a position of managing state enterprises to one of monitoring themarket.
・ Initially, Changsha city operated and managed the project through theChangsha Water Corporation, but in 2004 the Changsha Waterservice
Investment Management Co., Ltd. was established to split the service
for asset management and for project operations.
・ In other words, assets management is handled by the Changsha
Waterservice Investment Management Co., Ltd. The water supply
service performed by the Changsha Water Corporation was divided intowater treatment and water distribution. The Changsha Waterservice
Investment Management Co., Ltd is in charge of water treatment
service, for which the company established independent subsidiarycompanies for each treatment plants (The recent target project, theWater Treatment Plant No. 8, is to become the Eighth Water
Management Co., Ltd.). Water distribution is handled in the samemanner by its subsidiary company, the Changsha Water Supply Co.,Ltd.
・ At the same time, as part of its new supervisory role, Changsha city
provides laws and ordinances such as the Water Supply Regulations,discloses procedures under its water supply department, publiclydiscloses water quality levels, and conducts public hearings as theoccasion arises.
Information for reference[Efficiency](1) Outputs(1) Outputs
1) Water intake facilities
Intake pipes: 30m × 2
Water intake pump stations(1) Outputs
・There were no major changes to a) water intake facilities, b) aqueduct
facilities, c) water treatment facilities, or d) water treatment facilities.
・As for e) water distribution facilities, following the transfer of the city4

Revised on 29 August, 2006

2) Aqueduct facilities
Aqueduct: roughly 850m × 23) Water treatment facilities (flocculation basin, sedimentation basin,and filtration pond)
Capacity: 500,000m3/day (built in two construction phases, witheach phase accounting for 250,000m3/day)
4) Water supply facilities
Water supply mains: approx. 400m × 25) Water distribution facilities
Water distribution grid: approx. 280km
1 new pressure pump station and one expanded pressure pumpstation(2) Project period

Lessons Learned andRecommendations

government to the southern area, some of the pipe-laying distances werechanged. According to a report from the Chinese side provided at the timeof the mid-term review, the total distance of water distribution grid has
become approx. 250km. In addition, construction of a new pressure pumpstation (one location) and expansion of another (1 location) is being
postponed because there continues to be a surplus in its capacity.
However, deterioration in the pumps means that steps will have to betaken in the near future.

Consulting services
Outside of the scope of the ODA loan

Consulting services
Outside of the scope of the ODA loan

(2) Project period
March 2001-December 2004 (46 months)(2) Project period
March 2001-December 2005 (58 months) (project completed)

Dates completion expected:
First phase: December 2002
Second phase: December 2004

(Reasons for the delay)
One of the factors behind the fact that the initially projected completion date
was delayed by a full year is that time was needed by China to makeadjustments for each bid to purchase materials and machinery. According tothe Chinese executing agency, the first phase of the project (with a capacityof 250,000m3/day) was for the most part completed by September 2000.

(Lessons learned)
The accumulation of information and improvement in capabilities through local-level exchanges between both countries is expected to further
heighten the fruits of the project. In similar projects to be undertaken in the future, it will be needed to confirm the result of participation by Japan’slocal authorities (exchanges in the past through sister city relationships) and possibility of capacity building/transfer through help from Japanese local
authorities and that capacity building/transfer will be effected and information accumulated through such exchanges.

Indicators set for use atthe ex-post
evaluation

Population served (10,000 people)
Water supply volume (10,000m3/day)
Unaccounted for water rate (%)
Leakage rate (%)
Percentage of population served (%)
5(1-day average)

Revised on 29 August, 2006

The indices established at the time of the appraisal are same as the ones
used for regular water services and can be obtained continuously to measure
operational efficiency.

【Reference】
Table 2. Capacities of water treatment plants in Changsha city (unit: 10,000 m3/day)Table 1. Demand forecasts (Hedong district) and facilities capacity(response from the Changsha Waterservice Investment Management Co., Ltdat the time of the midterm review)
1999

2000

2002

2005

2008

2010

Capacity of

Capacity of facilities

Results

Results

Results

Results

Results

Results

facilities

2005

Population served with140

142

145

150

160

170

water (10,000 people)

(185)

(188)

(193)

(205)

(215)

(230)

Year

1999
Water Treatment Plant No. 1

1220(Included: Migratory

Water Treatment Plant No. 3

3030

population)

Water Treatment Plant No. 53030

Demand (10,000m3/day)

93

99

105

115

125

140

Water Treatment Plant No. 722

Capacity of facilities

7499107132

＊162

162

Water Treatment Plant No. 8050

Total for the Hedong district

74132

Water Treatment Plant No. 255(10,000m3/day)

Water Treatment Plant No. 42525*The Zhushuqiao water treatment plant is expected to be built by 2008, providing aTotal for the Hexi district

30

30

capacity of 300,000 m3/day.

Total within Changsha city

104

162

(10,000m3/day)
Shortfall/surplus▲19021737

22

Note: Small-scale water treatment plants not included.

6