  Chongqingzhiye | Credit:: www.bpovia.com
By Taro Ichikawa
IDN-InDepth NewsAnalysis
TOKYO (IDN) - The ongoing support of huge fiscal and monetary stimulus is expected to propel growth in China to 9.6 percent this year. But urban-rural inequality and inadequate infrastructure remain a source of concern, not the least because of paucity of funds. With this in view, China has turned to the Asian Development Bank (ADB) that has agreed to extend two loans of 100 million U.S. dollar each.
The Bank is extending a $100 million loan for rural infrastructure improvement projects in Chongqing municipality in China that will reduce the income gap between urban and rural areas and provide a potential model for national replication.
ADB’s board of directors has approved the Chongqing Urban-Rural Infrastructure Development Demonstration Project, the Bank announced on July 1, 2010. "It will provide new and improved roads and potable water supplies, resulting in improved health and expanded livelihood opportunities for about 377,000 people in eight poverty-stricken districts and counties," according to a media release by the ADB.
"This planned urban-rural transformation will make Chongqing an important growth pole in western PRC (People's Republic of China) and will allow the municipality to become the first provincial pilot area for integrated and equitable urban-rural development," said Theresa Villareal, Senior Urban Development Specialist in ADB’s East Asia Department.
Chongqing's rural areas, particularly the controversial Three Gorges Reservoir catchment area in the northeast and the ethnic minority areas in the southeast, suffer from poor infrastructure. Only 75 percent of villages are accessible by road, and many communities are suffering water shortages, or having limited access to safe, potable water.
According to the ADB, the project will construct or mend around 362 kilometres of roads, and erect and improve nine water supply facilities, including treatment plants and pipelines. The road rehabilitation is considered especially critical after the Sichuan earthquake in May 2008, which underscored the need to improve road access during natural calamities.
The project envisages training for staff carrying out operation and maintenance work, and support for innovative measures such as water tariff reforms to ensure cost-effective services for the poor and climate-proof designs for roads that incorporate drainage, erosion control, and slope protection.
"In addition, a pilot demonstration activity grant of $50,000 will be provided to a women's federation to support and expand a health and hygiene program, benefiting women and children in four villages of Yunyang and Youyang counties, including four schools with 2,300 students," said Villareal.
ADB's Ordinary Capital Resources loan covers about 47 percent of the total project cost of $213.4 million. The loan has a 25-year term, including a grace period of five years, with interest determined in accordance with ADB's LIBOR-based lending facility. District and county governments will provide the balance of the funds.
Chongqing Municipal Government is the executing agency for the project, which is due for completion in December 2015.
ENVIRONMENTAL INITIATIVE
The ADB is also supporting a key urban environmental initiative in Wuhan municipality that could be a model for sustainable management of wastewater sludge in the country. The $100 million loan for the Wuhan Urban Environmental Improvement Project involves the treatment and disposal of sewage sludge, and the rehabilitation of polluted lakes and water channels, benefiting up to 3 million urban residents in the municipality.
Wuhan, the capital of Hubei Province with a population of nearly 9 million people, is successfully treating most of its wastewater with funds provided by the ADB. However, the huge amount of sewage sludge generated by the treatment plants -- estimated at 657 tons a day -- poses growing environmental and health hazards.
The project will incorporate a number of innovative and integrated measures designed to improve the environment and support the government for a more sustainable urban development master plan.
According to the ADB, the project will introduce a decentralized approach by building small on-site sludge units integrated with the city master plan. Sludge from Wuhan’s wastewater plants will be dried and treated using biogas from an ADB-financed wastewater facility and steam from a thermal power plant.
In addition, the dried sludge will be used as a soil conditioner and filler for building construction materials, supporting China's push to create sustainable local economies that reduce, reuse and recycle waste. The project will advocate for beneficiary sludge treatment and utilization.
"This is the first ADB-assisted project to pursue comprehensive sludge management while addressing environmental issues such as developing 'circular economies' and mitigating climate change," said Arnaud Heckmann, Urban Development Specialist, in ADB’s East Asia Department. He added that it will help establish Wuhan as a model for sustainable development in China.
The project will also help restore Wuhan’s polluted lakes and water channels. Sediment dredging and slope protection work will be carried out, while flood control gates and a water pumping station will also be built. A storm water treatment system will be established for Yangchun Lake, artificial wetlands will be created, and lakes will be planted with aquatic plants.
"The measures will help to restore the natural hydraulic circulation between lakes and channels and increase water regeneration and flood retention capacities that will help mitigate climate change impacts, while allowing urban expansion in flood-safe and environmentally clean areas," said Heckmann.
Wuhan’s lakes and rivers, which make up 25 percent of its urban area, have become seriously polluted by agricultural activity and urban construction, with just 38 of 100 lakes in the second half of the 1990s still in existence.
As part of the project, an environmental public awareness campaign targeted at lakeside businesses, communities and schoolchildren will be carried out, while training and other support will be given for wastewater and sludge treatment operation and maintenance.
ADB’s assistance makes up nearly 20 percent of the total project cost of about $501.8 million. The loan from ADB's Ordinary Capital Resources has a 25-year term, including a 5-year grace period, with interest determined in accordance with ADB's LIBOR facility.
The Wuhan Municipal Government is providing counterpart funds equivalent to $125.4 million, while the Agricultural Bank of China is supplying a 10-year loan of $276.3 million. The municipal government is the executing agency for the project which is expected to be completed by December 2014.
The Manila-based ADB's mission is to reduce poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Set up in 1966, it is owned by 67 members -- 48 from the region.
In 2009, the Bank approved a total of $16.1 billion in financing operations through loans, grants, guarantees, a trade finance facilitation program, equity investments, and technical assistance projects. ADB also mobilized co-financing amounting to $3.2 billion. (IDN-InDepthNews/01.07.2010)
Copyright © 2010 IDN-InDepthNews | Analysis That Matters
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