Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD1801 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF US$32,727,523 TO THE PEOPLE’S REPUBLIC OF CHINA FOR THE GEF CHINA SUSTAINABLE CITIES INTEGRATED APPROACH PILOT July 11, 2017 Social, Urban, Rural and Resilience Global Practice East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective, April 14, 2017) Currency Unit = Renminbi (RMB) RMB 6.8830 = US$1 US$0.1453 = RMB 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS BAU Business as Usual COP Community of Practice CO2 Carbon Dioxide DA Designated Accounts EA Environment Assessment EMF Environmental Management Framework FB Finance Bureau FM Financial Management GDP Gross Domestic Product GEF Global Environment Facility GHG Green House Gas GIS Geographic Information System GPSC Global Platform for Sustainable Cities GRS Grievance Redress Services ICLEI International Council for Local Environmental Initiatives ICT Information and Communication Technologies IEG Independent Evaluation Group INDC Intended Nationally Determined Contributions IPF Investment Project Financing LNG Liquefied Natural Gas LVC Land Value Capture M&E Monitoring and Evaluation MOHURD Ministry of Housing and Urban-Rural Development MTR Mid-Term Review PDO Project Development Objective PLG Project Leading Group PMO Project Management Office PPG Project Preparation Grant RPF Resettlement Policy Framework SCIAP Sustainable Cities Integrated Approach Pilot SEA Strategic Environment Assessment SMF Social Management Framework SOE Statement of Expenses SORT Systematic Operations Risk-Rating Tool TA Technical Assistance TCRP Transit Cooperative Research Program TF Trust Funds TOD Transit-Oriented Development TOR Terms of Reference TTL Task Team Leader WA Withdrawal Application WMATA Washington Metropolitan Area Transit Authority Regional Vice President: Victoria Kwakwa, EAPVP Country Director: Bert Hofman, EACCF Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez, GSURR Practice Manager: Abhas Kumar Jha, GSU08 Task Team Leaders: Joanna Masic, GSU09 Wanli Fang, GSU08 CHINA: GEF China Sustainable Cities Integrated Approach Pilot TABLE OF CONTENTS Page I.  STRATEGIC CONTEXT .................................................................................................1  A.  Country Context ............................................................................................................ 1  B.  Sectoral and Institutional Context ................................................................................. 1  C.  Higher Level Objectives to which the Project Contributes .......................................... 3  II.  PROJECT DEVELOPMENT OBJECTIVES ................................................................5  A.  PDO............................................................................................................................... 5  B.  Project Beneficiaries ..................................................................................................... 5  C.  PDO Level Results Indicators....................................................................................... 5  III.  PROJECT DESCRIPTION ..............................................................................................6  A.  Project Components ...................................................................................................... 6  B.  Project Financing .......................................................................................................... 9  C.  Lessons Learned and Reflected in the Project Design .................................................. 9  IV.  IMPLEMENTATION .....................................................................................................12  A.  Institutional and Implementation Arrangements ........................................................ 12  B.  Results Monitoring and Evaluation ............................................................................ 13  C.  Sustainability............................................................................................................... 13  V.  KEY RISKS ......................................................................................................................13  A.  Overall Risk Rating and Explanation of Key Risks.................................................... 13  VI.  APPRAISAL SUMMARY ..............................................................................................14  A.  Economic and Financial Analysis ............................................................................... 14  B.  Technical ..................................................................................................................... 15  C.  Financial Management ................................................................................................ 15  D.  Procurement ................................................................................................................ 16  E.  Social (including Safeguards) ..................................................................................... 16  F.  Environment (including Safeguards) .......................................................................... 17  G.  World Bank Grievance Redress .................................................................................. 18  Annex 1: Results Framework and Monitoring ...........................................................................1 Annex 2: Detailed Project Description .........................................................................................5 Annex 3: Implementation Arrangements ..................................................................................19 Annex 4: Implementation Support Plan ....................................................................................30 Annex 5: Economic and Financial Analysis ..............................................................................33 Annex 6: Framework Approach to Private Sector Participation in TOD..............................39 Annex 7: Project Map..................................................................................................................44   . PAD DATA SHEET China GEF China Sustainable Cities Integrated Approach Pilot (P156507) PROJECT APPRAISAL DOCUMENT . EAST ASIA AND PACIFIC 0000009349 Report No.: PAD1801 . Basic Information Project ID EA Category Team Leader(s) P156507 B - Partial Assessment Joanna Mclean Masic, Wanli Fang Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 28-July-2017 31-Dec-2022 Expected Effectiveness Date Expected Closing Date 30-Nov-2017 31-Mar-2023 Joint IFC GEF Focal Area No Multi-focal area Practice Senior Global Practice Country Director Regional Vice President Manager/Manager Director Abhas Kumar Jha Ede Jorge Ijjasz-Vasquez Bert Hofman Victoria Kwakwa . Borrower: PEOPLE'S REPUBLIC OF CHINA Responsible Agency: Ministry of Housing and Urban-Rural Development Contact: Wenjun Hou Title: Deputy Director, Department of BEEST Telephone No.: 86-10-58934535 Email: houwj98@126.com Responsible Agency: Ningbo Project Management Office in Ningbo Housing and Urban-Rural Development Commission Contact: Haiming Xia Title: Director of PMO Telephone No.: 0574-87206628 Email: nbpmo@hotmail.com Responsible Agency: Nanchang Project Management Office in Nanchang Development and Reform Commission Contact: Ying Chen Title: Director of PMO i Telephone No.: 0791-83883387 Email: ncsfgwghc@163.com Responsible Agency: Guiyang Project Management Office in Guiyang Transport Bureau Contact: Shouguang Ruan Title: Director of PMO Telephone No.: 0851-85806813 Email: gygefpmo@163.com Responsible Agency: Beijing Project Management Office in Beijing Housing and Urban-Rural Development Commission Contact: Fengdong Zhao Title: Director of PMO Telephone No.: 010-59958216 Email: gef_beijing@163.com Responsible Agency: World Bank Financed Project Office of Tianjin Urban and Rural Construction Commission Contact: Wenjie Qi Title: Director of PMO Telephone No.: 022-23303740 Email: tjpmo123@163.com Responsible Agency: Shijiazhuang Project Management Office in Shijiazhuang Municipal Finance Bureau Contact: Yong Shui Title: Director of PMO Telephone No.: 0311-82457686 Email: 706325110@qq.com Responsible Agency: Shenzhen Project Management Office in Shenzhen Development and Reform Commission Contact: Angang Li Title: Director of PMO Telephone No.: 0755-88120479 Email: gef_shenzhen@163.com . Project Financing Data(in USD Million) [ ] Loan [ ] IDA Grant [ ] Guarantee [ ] Credit [ X ] Grant [ ] Other Total Project Cost: 32.73 Total Bank Financing: 0.00 Financing Gap: 0.00 . Financing Source Amount Borrower 0.00 Global Environment Facility (GEF) 32.73 Total 32.73 . Expected Disbursements (in USD Million) Fiscal Year 2017 2018 2019 2020 2021 2022 2023 Annual 0.00 3.00 7.00 7.73 7.00 5.00 3.00 Cumulative 0.00 3.00 10.00 17.73 24.73 29.73 32.73 . Institutional Data Practice Area (Lead) ii Social, Urban, Rural and Resilience Global Practice Contributing Practice Areas Energy & Extractives, Environment & Natural Resources, Transport & ICT Proposed Global Environmental Objective(s) The objective is for participating cities to incorporate transit-oriented development principles in their policies and into future urban and transit plans. . Components Component Name Cost (USD Millions) National TOD Platform, Toolkit, and Policy Support 1.93 City TOD Technical Support and TOD Application 30.80 . Systematic Operations Risk- Rating Tool (SORT) Risk Category Rating 1. Political and Governance Moderate 2. Macroeconomic Moderate 3. Sector Strategies and Policies Moderate 4. Technical Design of Project or Program Substantial 5. Institutional Capacity for Implementation and Sustainability Substantial 6. Fiduciary Moderate 7. Environment and Social Moderate 8. Stakeholders Substantial 9. Other OVERALL Substantial . Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X iii Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency Implementation Arrangements X CONTINUOUS Description of Covenant Provision requiring the Recipient, through MOHURD, and each Project Implementing Entity to maintain: (a) a Project Leading Group at the national level (to be established 1 month after effectiveness); (b) a Project Management Office within MOHURD; (c) a City Project Leading Group at each municipality; and (d) a City Project Management Office at each municipality. (Financing Agreement, Schedule 2, Section I.B/ Project Agreement, Schedule, Section I.A) Name Recurrent Due Date Frequency Annual Work Plans X 31-January Yearly Description of Covenant Provision requiring the Recipient, through MOHURD, and each Project Implementing Entity to submit annual work plans to the World Bank. (Financing Agreement, Schedule 2, Section I.D/ Project Agreement, Schedule, Section I.D) Name Recurrent Due Date Frequency Safeguards X CONTINUOUS Description of Covenant Provision requiring the Recipient, through MOHURD, and each Project Implementing Entity to implement the Safeguards Instruments in a manner and substance satisfactory to the World Bank; and ensure that all studies and technical assistance to be supported under the Project are carried out under terms of reference satisfactory to the World Bank, and that such terms of reference are consistent with, and pay due attention to, the World Bank's Safeguards Policies. (Financing Agreement, Schedule 2, Section I.E/ Project Agreement, Schedule, Section I.C) Name Recurrent Due Date Frequency Mid-term Review 31-Dec-2019 Description of Covenant Provision requiring the Recipient, through MOHURD, and each Project Implementing Entity to prepare, under terms of reference satisfactory to the World Bank, and furnish to the World Bank a mid-term review report for its Respective Part of the Project, summarizing the result of the monitoring and evaluation activities carried out from the inception of the Project, and setting out the measures recommended to ensure the efficient completion of the Project and the achievement of the objectives iv thereof during the period following such date. (Financing Agreement, Schedule 2, Section II.A.2/ Project Agreement, Schedule, Section II.A.2) . Team Composition Bank Staff Name Role Title Specialization Unit Joanna Masic Team Leader (ADM Senior Urban Urban GSU09 Responsible) Specialist Development Wanli Fang Team Leader Urban Economist Urban Economics GSU08 Guoping Yu Procurement Senior Procurement Procurement GGO08 Specialist (ADM Specialist Responsible) Yi Geng Financial Senior Financial Financial GGO20 Management Management Management Specialist Specialist Zhuo Yu Team Member Finance Officer Finance Officer WFALN Garo J. Batmanian Team Member Lead Environmental Lead GEN2A Specialist Environmental Specialist Dafei Huang Team Member Environmental Environment & GEN2A Specialist Climate Change Georges Bianco Darido Peer Reviewer Lead Urban Urban Transport GTI02 Transport Specialist Gerald Paul Ollivier Team Member Lead Transport Transport and GTI02 Specialist TOD Jesse O. Ang Team Member Principal Investment Private Sector CEAR1 Officer Julia Claire Hazelton Team Member Principal Country Private Sector CEAHK Brickell Officer Paul Procee Peer Reviewer Program Leader Urban Sector LCC5C Shomik Raj Mehndiratta Peer Reviewer Adviser Urban Transport GTIDR Songling Yao Safeguards Senior Social Social GSU02 Specialist Development Development Specialist Thalyta E. Yuwono Peer Reviewer Senior Urban Urban Economics GSU08 Economist Valerie Joy Eunice Peer Reviewer Senior Urban Urban GSU09 Santos Specialist Development Xiao Wu Team Member Team Assistant Administration EACCF Xin Ren Safeguards Senior Environment GEN2A Specialist Environmental v Specialist Yi Yang Team Member Operations Analyst Transport GTI10 Extended Team Name Title Office Phone Location Eddie Ke-Siong Hum Senior Municipal Singapore Engineer Felix Leung TOD Expert Hong Kong Oesha Thakoerdin Senior Urban Expert Singapore Rufei Zhang Senior Urban Planner & Shanghai Institutional Specialist Jasmine Susanna Tillu Urban Development Consultant . Locations Country First Location Planned Actual Comments Administrative Division China Zhejiang Zhejiang X Ningbo China Tianjin Tianjin X Tianjin China Jiangxi Jiangxi X Nanchang China Hebei Hebei X Shijiazhuang China Guizhou Guizhou X Guiyang China Guangdong Guangdong X Shenzhen China Beijing Beijing X Beijing . Consultants (Will be disclosed in the Monthly Operational Summary) Consultants Required? Consultants will be required vi I. STRATEGIC CONTEXT A. Country Context 1. China’s recent urban population growth is unprecedented in size – 200 million people joined the urban population between 2000 and 2010, taking the total number of urbanites to 750 million by 2014. Urban population growth, however, has lagged behind the country’s economic growth and physical expansion of its cities. Barriers to migration mean the urban population, at just 57%, is relatively low compared to other countries when they were at a similar level of per capita GDP. Urbanization has relied on rural to urban land conversion and land financing, which together with speculative real estate investments, has resulted in a sprawling, fragmented urban footprint, which is increasingly difficult and costly to serve with transport and utility services. Across China, 22,400km² of new urban land has been added between 2000 and 2010, equivalent in area to building 13 Greater Londons.1 While average population density in China’s cities has dropped by more than 25 percent in the last decade.2 2. Standards-driven urban planning has created a uniform urban fabric characterized by large, single-purpose, enclosed super blocks (of 400 meters or more), which make walking and biking difficult. Urban design has encouraged car-centered cities, which necessitate car use. Municipal governments have oversupplied and subsidized industrial land to attract industry and have built low-cost rental housing in remote locations resulting in land degradation and an increasing disconnect between housing and jobs. Low-wage migrants, excluded from subsidized housing, live in industrial dormitories or subdivided quarters in the rural-urban fringe, shanty towns or city basements. This is all having an increasingly negative impact on cities’ long-term economic prospects, the global and local environment, public health, land, biodiversity, and natural resource use. It is also creating a growing social disconnect between residents, their communities, and job opportunities and negatively impacting on quality of life in cities. B. Sectoral and Institutional Context 3. Global Commitments. China aims to transition to high-income status with an urban population of 1 billion (70%) by 2030 – adding a further 250 million people in the next 15 years. The country has set a goal to peak greenhouse gas (GHG) emissions during the same period.3 By 2009, China’s per capita GHG emissions of 5.8 CO2 metric tons already reached the emission rates of the EU.4 As communicated at the UN climate talks in Paris in 2015, China intends to cut GHG emissions per unit of GDP by 60-65% by 2030 based on 2005 GHG levels. This requires building an economy on renewables and clean technology as well as fundamental changes in the way cities are planned and built. This calls for the development of integrated and coordinated solutions to complex urbanization challenges. 1 World Bank, 2015. East Asia's Changing Urban Landscape: Measuring a Decade of Spatial Growth. 2 World Bank and Development Research Center of the State Council, 2014. Urban China: Towards Effective, Inclusive and Sustainable Urbanization 3 Some cities have committed to earlier dates. Three of the participating cities have joined the US-China Climate Smart/Low- Carbon Cities Initiative, which support cities to make more ambitious targets. Specially, Beijing committed to peak by 2020, Shenzhen by 2022, and Guiyang by 2025 – well ahead of national average of 2030. 4 But lower than that of the USA. 1 4. Reforming China’s urban planning system is not only essential for cities to meet their climate change commitments but also for creating livable, healthy, and vibrant urban environments for a growing urban population. To achieve this, China’s cities require a more compact form of urban development, specifically ensuring efficient land use and urban development is aligned with well-connected transit networks, thus encouraging a shift from private car ownership to public and non-motorized transport. Compact, mixed-use, pedestrian- friendly development organized around transit, often termed Transit-Oriented Development (TOD), is one of the most effective strategies for reversing the trend of automobile-dependent sprawl and is an approach that can be applied at region, city, district, transit corridor, neighborhood, and station area scale.5 5. National Vision. In February 2016, the central government issued new guidelines on strengthening urban planning and construction, which recognize many of the problems of the past and sets out an overarching vision for future urbanization. 6 The guidelines provide recommendations for planning cities from the regional and city level down to streets, blocks, buildings and municipal services. Amongst others, it calls for: (i) comprehensive planning of cities from regional, urban, and rural contexts; (ii) management of the spatial expansion of cities; (iii) narrower roads and denser street networks; (iv) improved access to public space; (v) increased use of public transit; and (vi) urban design and buildings that enhance a city’s unique characteristics. 6. Sector Goals. These new guidelines follow on from a series of sectoral directives and notices, which set out approaches to better integrate urban and transport planning and to prioritize public transport, biking, and walking.7 In 2003, the State Council issued a notice that requires cities to compile dedicated land administration plans during rail transit planning, by which the rail transit plans can be evaluated.8 Until recently, however, there has been a lack of clear planning requirements and technical guidance for the various phases of planning. This has resulted in some serious disconnect between transit planning and urban functions at the region, city, district, transit corridor, neighborhood, and station level. To address this, the Ministry of Housing and Urban-Rural Development (MOHURD) issued guidelines in 2015 on the planning and design of areas along urban rail transit, which are essentially TOD guidelines from an urban planning perspective.9 7. The TOD guidelines cover three levels of planning: (i) urban planning; (ii) route planning; and (iii) station planning and design. The guidelines are recommended best practice rather than compulsory requirements. Since they have only recently been issued they are yet to be substantially implemented in cities. MOHURD is actively seeking effective channels to operationalize the guidelines in cities and draw lessons from TOD application at different scales to feed into future policies, regulations, and guidelines developed at the national level. The main impetus being a lack of a holistic and practical understanding of TOD in China and the need for more effective policies and approaches to integrate urban transit and land use development. 5 World Bank. Transforming Cities with Transit: Transit and Land-Use Integration for Sustainable Urban Development (2013) 6 Guidelines on Urban Development and Management (Community Party of China Central Committee and State Council, 2016). 7 The State Council adopted a directive Prioritizing Public Transport (2012) and reinforced this with one on Air Pollution Prevention (2013).7 MOHURD issued guidelines on Urban Pedestrian and Bicycle Transport System Planning and Design (2013). These have been followed by various city pilots. 8 Notice on Strengthening Administration of Urban Rapid Transit Development (State Council, 2003). 9 Guide on Planning and Design of Areas along Urban Rail Transit (MOHURD, 2015) 2 8. City priorities. Dealing firsthand with the problems of car-dependent sprawl, many cities are investing in metro rail, light rail, bus rapid transit, and commuter and heavy rail transit. As of 2015, 44 cities have approved urban rail plans.10 26 of these cities have urban rail systems in operation with 116 lines, 3618km of rail, and 2236 stations completed. 41 of these cities have urban rail under construction, involving plans for an additional 4448km of rail and 2698 stations.11 China plans to spend RMB4.7 trillion on urban rail in next three years and by 2020 the country expects to have at least 6000km of urban rail and 4000 metro stations in operation. These systems require substantial capital investment, and beyond the upfront construction costs, operation and maintenance needs substantial cross-subsidies because fare revenues are generally insufficient. Such operational deficits are also due in large part to this weak integration of transit infrastructure with urban development. These constraints are beginning to stimulate interest in better integrating transport and land use planning as well as development-based Land Value Capture (LVC) for transit financing and sustainable urban development.12 9. Cities are considering plans to pilot the new urban planning guidelines and TOD guidelines. Major cities and provincial capitals generally lead the way for other cities in piloting new approaches. China’s cities are at different stages of developing their urban transit and have varying levels of experience and exposure to approaches for integrating urban and transit planning and TOD. The new central government framework now calls for an enhanced effort to move these approaches to scale. There is also a critical need to create the right incentives for private sector to invest around transport nodes in ways that create livable communities with affordable housing, local amenities, and job accessibility. There is clear demand from China’s cities for better approaches to integrating urban and transport planning and the financing of transit and urban development and for the lessons from these to enhance national policy and guidelines and feed into future urban and transit plans. C. Higher Level Objectives to which the Project Contributes 10. The project is in line with China’s National Plan on New Urbanization Plan (2014-2020) and the country’s new Guidelines on Urban Development and Management (2016). It fits squarely with the goal of the Global Environment Facility’s (GEF) Sustainable Cities Integrated Approach Pilot (SCIAP) to promote sustainable urban development through better integrated models of urban design, planning, and implementation. The project directly leads on from the World Bank and the State Council Development Research Center Report on Urban China: Toward Efficient, Inclusive, and Sustainable Cities (2014), which set out a reform agenda for the next phase of China’s urbanization, including specific recommendations on reforming urban planning and design and better coordination of land use planning and transport infrastructure. The project supports the implementation of the World Bank Group (WBG) Climate Action Plan (2016), which covers the Bank’s efforts to support countries in delivering on their climate action plans submitted at COP21 in Paris. Specifically, the WBG corporate plan sets a target of 5 cities where TOD should take place by 2020. 11. The Project is consistent with the 2013-2016 World Bank Group’s Country Partnership Strategy (CPS) for China (Report No. 67566-CN), which was discussed by the Board of 10 Urban rail includes metro, light rail, monorail, tram, and others. 11 Annual Report of China Association of Metros (2015) 12 World Bank. Financing Transit-Oriented Development with land values overview (2015). 3 Executive Directors of the World Bank on November 6, 2012. Under this theme the project aligns with three key outcomes: (i) Enhancing Urban Environmental Services: which aims at addressing environmental management, including piloting cutting edge technologies to address environmental challenges in large cities that will be models for cities in China and the world; (ii) Promoting Low-Carbon Urban Transport: through piloting institutional and technological innovations that have potential for scale up in cities throughout China, such as public transport integration, transit-oriented development, travel demand management, and sustainable municipal financing mechanisms; and (iii) Institutional and Financial Mechanisms for Climate Change Strengthening: through improving knowledge on the economics of climate change, through TA and analytical work, including analyzing the costs and benefits of strategies to adapt to projected climate impacts; promoting access to new technologies to address both mitigation and adaptation challenges; and mainstreaming low-cost adaptation measures in sectoral investments across the rural, urban, transport, and energy sectors. 12. Shared prosperity. The project supports the World Bank’s goal of boosting shared prosperity. Good urban and transit planning can help reduce inequality of access to urban opportunities and amenities. The pattern of urban form, and specifically urban sprawl, is a factor that affects the ability of the urban poor to access economic opportunities in cities. Ensuring a spatial match between jobs, retail, public transport, health and education services, recreational areas, and affordable housing is another means of fostering better access. Empirical evidence illustrates that well-planned and developed TOD increases accessibility to jobs and other development opportunities for people with lower incomes, whose mobility largely relies on public transit, biking and walking. For example, a study in the UK identified that public transport improvements in deprived areas have delivered significant improvements in the take-up of new employment, educational opportunities and healthcare visits.13 13. Climate change mitigation. Efficient land use aligned with public transit systems play a key role in cities’ transition to a low-carbon economy. A significant proportion of urban trips in China are taken using high-carbon, energy-intensive private motorized vehicles. Empirical evidence shows a strong negative correlation between the share of green transport (i.e., public transit plus non-motorized transport) and per capita carbon emissions. For instance, in Hong Kong, SAR, China the share of green transport accounts for 89 percent of urban trips and CO2 emissions per capita are about 378kg per year, while in Huston, Texas green transport only accounts for 5 percent of urban trips and CO2 emissions per capita are as high as 5,690 kg per year.14 If cities switch to an urbanization trajectory along TOD principles, there can be enormous savings in carbon emissions from urban transport, as the daily trips can either be absolutely avoided or shifted to low-carbon transport modes. In addition to carbon emission saving from changing travel patterns, TOD is also expected to reduce carbon intensity from energy supply and provision of other public services due to economies of scale associated with compact and connected urban development. 14. City resilience. Improving land use efficiency and better integration of urban development and public transport is one component of making cities more resilient to natural hazards and economic, environmental and social shocks. With critical areas of high human 13 Lucas, K., Tyler S. and Christodolou G.2008. The value of new transport in deprived areas: Who benefits, how and why? Joseph Rowntree Foundation. 14 Bongardt, D. et al, 2013. Low carbon Land Transport: Policy Handbook, Routledge. 4 densities well-identified and connected through networks with in-built redundancy, a strategic approach to resilience is possible.15 This includes locating high density areas in lower risk zones, and systematically addressing risks in those areas, ensuring that peak concentration occurs primarily in areas with high levels of network redundancy and turning those areas into well- connected refuges in cases of emergency.16 II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 15. The development objective is for participating cities to incorporate transit-oriented development principles in their policies and into future urban and transit plans. B. Project Beneficiaries 16. The primary beneficiaries are: (a) people in project cities who suffer from congestion, limited access to job opportunities, long commutes, and urban design that puts pedestrians second to private motor vehicles; (b) people living and working in TOD intervention areas in each city; (c) municipal governments in the seven participating cities, including their concerned agencies or departments, such as Bureaus of City Planning, Transport and Land Resources etc.; (d) providers of public transit services including metro and bus companies and private investors who may be involved in future urban development in TOD intervention areas; (e) national government, particularly the line ministry responsible for urban planning, construction, the built environment, and housing (the Ministry of Housing and Urban-Rural Development), and other line ministries such as National Development and Reform Commission and Ministry of Transportation. C. PDO Level Results Indicators 17. The achievement of the PDO will be measured through the following PDO Indicators: (a) Number of cities incorporating TOD strategies into their future urban and transit plans; (b) Number of cities endorsing a city-level TOD strategy or policy; and (c) Number of cities using the National TOD diagnostic tool. 18. Intermediate indicators include: (a) Development of a National TOD Platform (including policies, guidelines, strategies, and TOD toolkit); (b) Number of training modules under the TOD Platform used by participating cities; (c) Number of person/days in training on TOD modules; (d) number of cities with TOD strategies and related technical guidelines; (e) number of cities using TOD specific databases developed under the Project; (f) Number of citizen engagement session conducted in TOD Planning at city level; (g) Number of Districts 15 Redundancy being the duplication of critical components or functions of a system with the intention of increasing reliability of the system, usually in the form of a backup or fail-safe. 16 For instance, the major earthquake that hit east Japan in March 2011 and led to the Tsunami in Sendai City also resulted in the shutdown of public transport services and electricity shortages in Tokyo. However, Roppongi Hills, a major TOD area in the heart of Tokyo had the facilities to offer support to people to shelter overnight and the area’s high-rise buildings, such as the Mori Tower, were back to normal operation the following day because the complex had its own liquefied natural gas plant, and was even able to provide electricity to surrounding areas. 5 introducing TOD policies and approaches into their plans; (h) Number of corridor level policy guidebooks or manuals produced; (i) Number of cities that adopt TOD-friendly station area planning approaches; and (j) Number of Citizen Engagement sessions conducted in the design of station area plans. III. PROJECT DESCRIPTION 19. GEF SCIAP. As a response to the importance of cities in addressing climate change, GEF is promoting urban sustainability as one of their three Integrated Approach Pilots. The urban pilot consists of two tracks: (i) country-level “child” projects, which include 27 cities across 11 countries with a total grant of US$144 million. Each country is paired with one or several international organizations to oversee project implementation; and (ii) a Global Platform for Sustainable Cities (GPSC), led by the World Bank, with a grant of US$10 million that will promote shared learning among participating cities and develop tools and methodologies for promoting integrated approaches to urban planning, financing and implementation. GEF will fund a Resource Team made up of other actors supporting sustainable city initiatives such as World Resources Institute (WRI), Local Governments for Sustainability (ICLEI), and C40, which is a network of megacities committed to addressing climate change.17 The resource team will help share experiences with cities beyond the 27 involved in the program. 20. GEF China SCIAP Project. The proposed Project will be managed by the World Bank and implemented by MOHURD and seven cities that have been selected to represent the diversity of large cities (between 1 to 10 million people) and mega cities (over 10 million people) in China in terms of the size of their urban population, their development stage, and administrative status. The capital city of Beijing is a megacity with 18.6 million urban inhabitants, which together with the provincial capitals of Tianjin (7.8 million) and Shijiazhuang (2.8 million) form a mega-region known as the Beijing-Tianjin-Hebei (or Jing-Jin-Ji) Region.18 The city of Shenzhen, a megacity of 10.7 million in Guangdong Province, which forms part of the Pearl River Delta, and the city of Ningbo (2.7 million) in Zhejiang Province, which forms part of the Yangtze River Delta, are both relatively developed coastal cities with independent planning status at the Sub-Provincial Level. China’s Pearl River Delta urban area (covering 4,500 square kilometers) and population (over 42 million inhabitants) by 2010 has surpassed Tokyo to become the largest metropolitan area in the world. 19 The cities of Nanchang (2.5 million) in Jiangxi Province and Guiyang (2.6 million) in Guizhou Province are provincial capitals in the less developed central and western regions of China. A. Project Components 21. The Project will place special emphasis on providing guidance and support to integrating land use and transport planning in the form of TOD at regional, city and sub-city level taking into account the current status of urban transit and urban development in each city and the level of exposure to integrated planning and TOD approaches. 17 In China, C40 includes Beijing, Chengdu, Dalian, Guangzhou, Nanjing, Shanghai, Shenzhen, and Wuhan. 18 Beijing-Tianjin-Hebei Coordinated Development Plan aims to bring territorial complementariness to the region through transport integration, sharing water supply and waste disposal facilities, and regional open space planning. 19 World Bank. East Asia’s Changing Urban Landscape: Measuring a Decade of Spatial Growth (2015). 6 22. The Project will also benefit from, and contribute to, the GPSC platform that will be implemented in parallel. The overall project design framework is illustrated in Figure 1 below, followed by a description of the project components. Figure 1. Overall Project Design Framework 23. Component 1: National TOD Platform, Toolkit, and Policy Support (US$1,927,523). This component will finance coordination both at the national level and amongst cities to further develop national policies, guidelines, strategies, and capacity building efforts for integrated urban and transport planning and TOD. The capacities of local governments to plan for sustainability are significantly affected by the relations between municipalities, regional or provincial authorities and national government (vertical coordination) and between different agencies and policy divisions within municipal governments (horizontal coordination). The importance of vertical and horizontal coordination, or multi-level governance, is crucial in reducing the highly fragmented nature of city building. The national platform will provide the opportunity to explore and better understand these coordination needs and develop appropriate approaches to coordination at national, regional, provincial, and city level for the integrated planning approaches necessary for effective implementation of TOD at different scales. 24. Subcomponent 1.1: National TOD Platform, Toolkit, and Policy Support (US$1,492,000). The platform will provide the basis for building coordination between the national, regional, and city levels for the implementation of new urban planning guidelines and ensuring lessons are captured to improve future guidelines. The platform will collect and disseminate international good practice on various aspects of TOD and develop technical training modules and training programs for cities. It will include a comprehensive toolkit with multiple modules to help cities conduct diagnosis of level of TOD and readiness for TOD, develop contextualized TOD strategies, improve zoning and urban design in selected areas, and evaluate the impacts of policy and investment intervention associated with TOD. The modules, which are 7 further detailed in Annex 2, include, but are not limited to, the following: (a) TOD Digital Repository; (b) TOD Dashboard; (c) TOD Diagnosis; (d) TOD Planning; (e) TOD Impact Assessment; (f) TOD Monitor; and (g) TOD Collaborations and Marketplace (including Private Sector Participation module). The national platform will aggregate the outputs of the city level activities and compile indicators for monitoring, evaluating progress and benchmarking across cities. It will also draw experiences from the project implementation and provide inputs for future TOD-related policies, guidelines and regulations. The national platform will be the focal point for sharing lessons from the cities to other cities both in China and in other countries who are participating in the GPSC and receiving support from the GEF-funded Resource Team. 25. Subcomponent 1.2: Capacity Building (US$300,000). This subcomponent includes capacity building to support partnerships at the local, national, and global levels, through knowledge management, training courses, capacity building, peer-to-peer learning and global coordination based on annual work plans. 26. Subcomponent 1.3: Project Management (US$135,523). Project management costs associated with the operation of the project management office in MOHURD and related project management, project reporting, and monitoring and evaluation. 27. Component 2: City TOD Technical Support and TOD Application (US$ 30,800,000). This component would specifically support participating cities in developing strategies and plans to better integrate land use and public transport planning, to create urban forms and space that reduce the need for private motorized vehicles, and increase transport and energy land use efficiencies. In each city, this component will consist of technical assistance, application of the TOD approaches at different scales, and capacity building activities. 28. For technical assistance, common sub-components for all participating cities will be a TOD strategy or policy for the city’s central built-up area (Subcomponent 2.1) and Capacity building (Subcomponent 2.5), and Project Management (Subcomponent 2.6). Depending on the city’s priorities, they will develop a selection of enabling policy and institutional arrangements, conceptual land use plans, development urban regeneration schemes, streetscape and urban design guidelines, parking strategies, non-motorized transport plans, priority infrastructure investments, and sustainable financing mechanisms following TOD principles. Cities will apply the proposed TOD approaches at different scales (See Table 1) depending on their focus and priorities, including sub-district (Subcomponent 2.2), corridor (Subcomponent 2.3) and station or transit hub level (Subcomponent 2.4). Table 1: Application of TOD Approach at Different Scales in Participating Cities Activities Beijing Tianjin Shijiazhuang Ningbo Nanchang Guiyang Shenzhen 2.1 City TOD Strategy √ √ √ √ √ √ √ 2.2 District-level application of TOD strategy √ √ √ √ 2.3.Corridor-level application of TOD strategy √ √ √ √ 2.4 Station-level application of TOD strategy √ √ √ √ √ 2.5 Capacity building 2.6 Project management √ √ √ √ √ √ √ 8 29. Further details on the proposed approach for each subcomponent are summarized in Annex 2. The application of TOD approaches at these different scales would ideally include consideration for housing types and affordability, commercial uses, business attraction and mixes, and job location. However, any plans should be flexible enough to allow for creativity, originality, and affordability. All cities would consider the needs of low-income groups, gender dimensions, and resilience in their TOD approaches and adopt a participatory, data-driven and evidence-based process in preparing, implementing, and monitoring the TOD application. B. Project Financing 30. The proposed project will use an Investment Project Financing (IPF) instrument. Project Cost and Financing 31. The proposed project is a stand-alone GEF project. The project cost is US$32,727,523 million to be financed out of the GEF grant. The Project cost and financing is provided in Table 2 below. Table 2: Project Cost and Financing Project Components Cost GEF % % (US$) Financing of Total Financing (US$) Component 1: National TOD Platform, Toolkit, and Policy Support 1,927,523 1,927,523 5.9 100 1.1 TOD Platform, Toolkit, and Policy Support 1,492,000 1,492,000 4.6 100 1.2 Capacity Building 300,000 300,000 0.9 100 1.3 Project Management 135,523 135,523 0.4 100 Component 2: City TOD Technical Support and TOD Application 30,800,000 30,800,000 94.1 100 2.1-2.4 City TOD Support and Application 26,590,000 26,590,000 81.2 100 2.5 Capacity Building 2,710,000 2,710,000 8.3 100 2.6 Project Management 1,500,000 1,500,000 4.6 100 Total Project Cost and Financing 32,727,523 32,727,523 100 100 32. The World Bank ongoing lending activities in urban rail and TOD in participating cities include an undisbursed loan amount of US$184.3 million (with counterpart funding of US$2,321 million) for the Nanchang Urban Rail Project (P132154) and an undisbursed loan amount of US$100 million (with counterpart funding of US$124 million) for the Tianjin Urban Transport Improvement Project (P148129). The Project will build on these existing investments by developing a coordinated approach for land use planning around transit and applying a framework for private sector participation in TOD (see Annex 6). Potential financial leverage in relation to future investments resulting from the application of TOD approaches will be estimated and monitored as part of project progress reporting for these and all cities. C. Lessons Learned and Reflected in the Project Design 33. This project will leverage and build on the World Bank and GEF’s previous and ongoing work in areas of sustainable urban development, public transport and climate change as well as partnership with MOHURD and the seven participating cities. Relevant projects include 9 Shijiazhuang Urban Transport Project (P056596); GEF Sino-Singapore Tianjin Eco-City (P098915); China GEF City Cluster Eco-Transport Project (P121263); Ningbo Sustainable Urbanization Project (P149485); Developing Low-carbon Strategy for Shenzhen (P150222); and the abovementioned two lending projects in Tianjin and Nanchang, respectively. 34. Main barriers and challenges to implementing TOD. Despite the enabling policy environment for TOD in China, there are still a number of barriers to implementing integrated planning approaches including: (a) lack of regional coordination at the metropolitan level; (b) sector silo behavior and practices at the city level; (c) inadequate policies and regulations for strategically creating ‘articulated densities’ around transit; (d) restrictive national regulations and administrative constraints; (e) inconsistencies in planning instruments and deficiencies in implementation; (f) inadequate policies, and regulations for redeveloping built-up areas; (g) neglected urban design at the neighborhood and street level; and (h) financial constraints. Lesson for project design: Cities need to first establish a strategic vision and build broad-based support for integrating transport and land use planning and follow this up by providing the guidelines and approaches for city planners to apply TOD approaches at various levels and provide related agencies with the skills to leverage private sector involvement. Box 1: Summary of Lessons Learned Strategic Vision: (a) Develop strategic plans (b) Aim for short-term mobility objectives and long-term sustainable urban form goals, in parallel (c) Create a supportive institutional and government environment (d) Provide opportunities and guidance for urban and transport planners to interact (e) Remove restrictive regulations and set appropriate land prices City Level Planning: (f) Create TOD typologies and prototypes and be selective in station area planning (g) Rationalize mainline transit investments and feeder systems (h) Create articulated densities (i) Combine higher densities with diverse land uses and pedestrian-friendly design; (j) Create a supportive environment to leverage TOD (k) Exploit implementation tools (l) Create high-quality urban spaces and amenities for rail plus property projects (m) Combine TOD with transport demand management measures (n) Mainstream social development and resilience in TOD Financing scheme (a) Develop real estate skills in transit authorities (b) Pursue sustainable finance through land value capture (c) Identify mutually beneficial co-development with private sector (d) Explore options to use value capture for environmental, social, and public gains 35. Key requisites and opportunities for implementing TOD. The following are good practices recognized as common in cities with well-integrated urban and transport planning: 10 (a) Visionary plans. The first step in bringing TOD from theory to reality is the formulation of a vision for the future city. Experience from Scandinavia, where TOD is most fully developed, suggests that conceptual plans which developed corridors to channel overspill growth from urban centers were defined early in the planning process, allowing rail infrastructure to be built in advance of demand to steer growth along desired growth axes. 20 This gave rise to regional settlement patterns along transit, which have substantially lowered car dependency in middle-income suburbs and helped create job- housing balance along transit-served corridors. Another example is Japan, where as cities grew in size, transport investments kept pace and access and ridership benefited from increasing population densities along transit routes. With many transit lines now under construction, Chinese cities can take advantage of the same demographic forces to set out a visionary strategy for urban growth along transit. Lesson for project design: Cities must visualize their urban growth along transit corridors. The next 5-10 year period presents a key opportunity to correct the past disconnect between urban growth and transit by introducing policies, guidelines, and approaches that will align future urban growth along transit. (b) Intergovernmental Cooperation. The mechanisms for successfully integrating transit and urban development are complex and TOD projects take a long time to complete. There is also tension between the long-term vision and plan and the tendency to shift attention to projects that produce short-term gains and follow political appointments. This can erode broad-based support for comprehensive land use and transport plans with long time horizons. Furthermore, competition for support and resources may reduce the coordination of, for example, transport and planning agencies, whose separate plans and investments may be duplicative or contradictory and thus reduce the effectiveness of transport investments in supporting TOD principles. Lesson for project design: City leaders must buy in to, and continue to support, any long-term coordinated strategy for integrating urban and transit planning along TOD lines. Cities need to develop clear and specific guidance on cooperation mechanisms between sector agencies in preparing related planning efforts. (c) Flexible zoning, urban design, and selective station area planning. Land use regulations and design guidelines matter. They can either sustain or deflect complementary private investments in land and property that will support a density and diversity of uses. It is important to build in flexibility to guidelines so that they may be adapted to different neighborhoods and economic contexts and are not overly strict or prescriptive. Station area planning needs to be carried out selectively and efforts should be devoted to developing or redeveloping key stations to allow resources to be concentrated effectively. In a recent study of 6 stations in built-up areas of Los Angeles, researchers found that those that have seen substantial increases in housing stock and commercial space were those that had relatively TOD-friendly zoning, moderately dense existing environments, and strong real estate markets, and had benefited from active local government efforts to encourage development at key stations.21 Lesson for project design: 20 For example, Copenhagen’s ‘finger plan’ or Stockholm’s ‘Planetary Cluster Plan’. 21 Schuetz, Giuliano and Shin (2016). Does Zoning Help or Hinder Transit-Oriented (Re)Development? Finance and Economic Discussion Series 2016-020. Washington: Board of Governors of the Federal Reserve System. 11 Specific land use regulations and urban design guidelines are necessary to create the density and diversity of use required for successful TOD but these also need to be flexible and not overly prescriptive. (d) Maximizing social benefits from TOD requires programming. TOD may improve mobility, enhance land values and generate revenue for city governments, but it can also displace or price out poorer residents. Policies must consider these different outcomes, especially how TOD gains can be used to enhance the position of the poor or low-income households through the provision of, for example, affordable housing or close proximity to employment. Lesson for project design: In their TOD planning, Cities need to take into account social policies, in particular, affordable housing to ensure mixed-income communities and job-housing balance. (e) Clear, fair, and transparent rules for land value capture. Given the opportunities for corruption that surround the market value gains TOD provides, it is important to define clear and transparent rules and procedures in the initial stages and to subsequently monitor planning and development over the course of implementation. Lesson for project design: Cities need to ensure that any efforts to create opportunities for land value capture are set out within a clear framework. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 36. The project will be implemented over a period of about five years in seven cities (4 cities and one multi-city region). Coordination and management will be arranged at national and city levels. At the national level, a Project Leading Group (PLG) will be established and chaired by the Minister of MOHURD to supervise the work of the national Project Management Office (PMO), which is housed in MOHURD. The national level PMO which was established on April 20, 2016 will ensure knowledge sharing and synergy among participating cities, and that the lessons learned feed into the national policy formulation process. 37. PLGs have been established in each of the seven participating cities and chaired by the respective Mayor or Vice Mayor. The PLGs are made up of senior officials from relevant government bureaus and agencies, including Finance, Development and Reform Commission, Housing and Urban-Rural Development, City Planning, Environment, Transport, and so on. PLGs will provide high level facilitation to ensure inter-agency collaboration and coordination which is critical to the success of the Project and the implementation of the TOD concept. A PMO has been set up in each of the seven cities. Each PMO will take responsibility for inter- agency coordination to ensure that day to day project activities are carried out smoothly. Guidance and support will be sought from the PLGs if any difficulties are encountered. Details of the institutional and implementation arrangements are in Annex 3. 38. The World Bank Group has built a critical mass of knowledge and experience in TOD globally. In 2015, the Bank established a TOD Community of Practice (COP), led by the Bank’s Infrastructure Hub in Singapore. The project will develop close linkages with the Bank’s TOD COP to ensure lessons are incorporated into the Project. In China, the Bank has established a 12 program of support for TOD and has helped cities including Zhengzhou, Nanchang and Tianjin developing TOD typologies to structure policy attention and investment around stations. The project will build on the work done in Nanchang and Tianjin and aim to scale up to the other cities. The Bank’s urban and transport teams will jointly supervise the project in these cities. B. Results Monitoring and Evaluation 39. The Results Framework describes the PDO-level outcome indicators and the component- specific intermediate indicators, including respective baselines and targets for all cities and all project activities (Annex 1). M&E arrangements and responsibilities are described in detail in Annex 3. Project M&E will be the joint responsibility of the MOHURD PMO at the national level and the seven PMOs in each city. Key information needed for monitoring will be extracted on a regular basis from routine data collection as well as from customized surveys conducted by consultants as needed. During the mid-term review (MTR), target values of all indicators will be reviewed and adjusted as required. C. Sustainability 40. The overall sustainability of this Project comes from the focus on integrated urban and transport planning endorsed by central and municipal governments to develop more sustainable approaches to urban development. At the national level, the City TOD platform will be owned and maintained by relevant department(s) under MOHURD to inform the adoption of the national TOD guidelines across cities and assist peer-to-peer learning and adoption of good practice. At the city level, the selection of project sub-components is in alliance with each city’s own development priorities and trajectory as reflected in the city master plans, five year plans and medium-term capital investment plans. Such a demand-driven project design has been developed to ensure full support and ownership from city leaders, which is a key determinant of the sustainability of project interventions beyond the implementation period of this Project. In some cities (e.g., Tianjin and Nanchang), the technical assistance activities are closely aligned with the Bank’s lending programs to ensure lessons learned from the studies can be internalized in the management of urban rail infrastructure and land development in these cities. V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 41. The overall risk rating is Substantial due to the innovative nature of the technical design, the varied implementation capacity amongst PMO, and the large number of stakeholders at national and local levels. There are three specific risks identified at this stage: (a) Technical Design. The technical design of the project is complex. Not only is the project innovative in terms of TOD design at the city level, but it also calls for interaction vertically with national agencies, cooperation globally, as well as monitoring requirements from GEF. The design risk has been addressed to some extent by developing the project around a coherent topic – TOD. However, this is a relatively new approach to many cities in China. The involvement of MOHURD will help provide an 13 important channel of communication for addressing challenges relating to urban planning policies and regulations that may arise. (b) Implementation Capacity. The capacity to implement the Project and ensure sustainability of the project interventions varies across cities in terms of development stage but also in terms of the agencies directly involved, who have varying experiences and knowledge of TOD and the Bank. This implementation capacity risk is being mitigated by simplifying the project scope and ensuring sufficient opportunities and funding allocated to training, capacity building, and peer learning. A project preparation grant has been mobilized to support the cities and MOHURD in early start-up activities and training. The Bank will provide hands on supervision to the Project and bring on board a senior urban planner (staff consultant) to provide dedicated support to the Project to critically review technical assistance Terms of Reference and their outputs and coordinate approaches amongst cities. The Bank’s supervision team will be backed-up with inputs from experienced TOD practitioners, who will be screened and recommended by the TOD World Bank COP. (c) Stakeholder risks. The project will involve many stakeholders at the city level including government bureaus, private sector, and the public. It also involves multiple cities in China (as well as globally) and a national ministry. Each city has been requested to establish a project leading group at the Mayor or Vice Mayor’s office to ensure there is adequate buy-in and coordination function for the Project. The cities see the project as providing an opportunity to showcase their sustainability approaches on both national and global platforms and each PMO has committed to coordinate across municipal agencies towards an integrated approach led by their respective mayor’s office. 42. The environmental risks are moderate, as the project would focus on technical assistance to build capacity for integrated planning. The social risks are low and generally positive, as the project will mainly bring positive impacts in terms of planning for more efficient commuting and better quality living environments and places emphasis on servicing low-income communities. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 43. Besides the global benefits of reducing GHG emissions, public transit and compact, mixed use urban development near transit hubs and corridors could bring significant co-benefits to local communities. The tentative costs are associated with developing strategies and approaches for integrating plans at city, district, corridor, and station level. For example, reforming zoning codes and technical guidance to incentivize TOD. 44. Economic benefits. With direct impact on urban mobility and the economy, TOD is seen as being capable of addressing a multitude of urban issues, beyond those directly associated with the transit network. TOD will enhance urban resources (land, infrastructure and services) utilization, improve energy efficiency, and boost connectivity between urban nodes. As a result, it will have considerable and lasting impact on the local economy by: (a) reducing costs; (b) 14 saving land; (c) enhancing property value; (d) saving energy and other resources; (e) reducing pollution, improving travel safety and public health; (f) unleashing pent‐up demand for walkable urban neighborhoods; and (g) at the global level, TOD will reduce greenhouse gas (GHG) emissions. Estimates at appraisal suggest that the interventions to be adopted under the Project could result in a lifetime indirect reduction of approximately 600 million tons of GHG emissions. See Annex 6 for more details of all these impacts. 45. Economic analysis. The economic analysis comprises two parts: (i) following GEF guidelines, an incremental cost analysis to assess the incremental costs and global environmental benefits of the Project scenario vis-à-vis business-as-usual (BAU); and (ii) cost-benefit analyses of investment(s) directly leveraged under the Project. 46. The direct incremental cost of the Project is estimated at US$32.73 million. The global environmental impact of the Project will be analyzed in two ways: (i) for Project interventions that will lead to direct and measurable economic impacts, the benefit will be quantified and included in both analyses; (ii) for interventions with only policy outputs that will rely on further investments to materialize the full impact, a tracking framework will be proposed to facilitate long-term monitoring of the effectiveness of the program. The tracking framework will involve the establishment of a set of indicators to help measure each of the aforementioned benefit areas. B. Technical 47. The complexity of technical design comes from two major sources. First, TOD is a multi- faceted concept which requires cross-sectoral knowledge and expertise. The design of the national platform and city level technical assistance and application of TOD approach covers a wide variety of themes ranging from policy, institutions and regulations to physical planning and design at different spatial scales, and from financing mechanisms to impact monitoring and evaluation. Second, understanding of the core concepts as well as policy implementation varies among cities. This might undermine the coherence in project design and the overall quality of project outputs without strong consensus building and capacity enhancement. The project design has benefited from, and will continue to benefit from, technical guidance provided by a carefully selected panel of experts with diversified technical background and in-depth understanding of China’s specific context from both non-government organization partners and the private sector. The overall approach should aim at generating synergy among cities and avoid replication of efforts from conducting studies that are detached from the actual needs of each city. C. Financial Management 48. The GEF Grant proceeds, including overseeing the Designated Accounts, will be managed by MOHURD and various finance bureaus of seven project cities. PMOs have been established or designated in MOHURD and each project city to manage project financial management and disbursement. PMOs in MOHURD, Beijing, Tianjin, Guiyang and Ningbo are existing agencies and the financial staff have experience in managing IBRD loan financed operations. The PMOs in Nanchang, Shijiazhuang and Shenzhen are newly established and the financial staff are new to Bank’s operations. To address such risk, besides training, an action plan to strengthen FM capacity including standardizing reporting format and simplifying 15 disbursement work has been agreed with the implementing agencies. The FM assessment concluded that with the implementation of the proposed actions, project’s FM arrangements satisfy the Bank’s requirements under OP/BP 10.00. D. Procurement 49. There are 8 implementing agencies under the Project, which are respectively housed in MOHURD and the 7 participating cities. The Bank’s procurement capacity assessment has concluded that the overall procurement risk is rated as Moderate. The 8 PMOs have prepared procurement plans, which were agreed upon during appraisal. Based on actual implementation progress, the consolidated Procurement Plan for the Project will be updated and disclosed annually or as required, subject to the Bank’s prior review. E. Social (including Safeguards) 50. Social Impacts and Policy Triggered. The Project supports technical assistance activities financing by GEF. The project outputs are mainly TOD-related policy studies, and area strategic planning in participating cities. The Project will support technical assistance for developing policies and regulations, conceptual area planning, and TOD related planning, which may have downstream implications for land use changes or construction around transit stations, social disturbance, or impacts on urban poor, disabled, and women. There are no civil works, specific land use planning, or investment plans involved in the project implementation. However, the project will support technical assistance for developing policies and regulations, which may have downstream implications for land use changes or construction around transit stations. Therefore, OP 4.12, involuntary resettlement, will be triggered. The project is focused in urban areas and there are no groups of ethnic minority, as such the OP 4.10 is not triggered. 51. Instruments. A social management framework (SMF) was prepared to manage potential resettlement issues and other social issues, in line with the Bank’s social safeguard policies. The SMF describes the proposed activities and develops procedures and key elements of social assessment for the technical assistance and a resettlement policy framework for any potential downstream civil works. The SMF also includes institutional arrangements, consultation processes, monitoring and citizen engagement. In planning or policy preparation, implication on resettlement and land use needs special consideration, so a RPF was prepared as part of the SMF to cover key principals, procedures and other requirements on resettlement and to regulate any resettlement plan preparation, review and approval during the project implementation stage, if any. The SMF was disclosed locally in the project cities on October 24, 2016 and on the Bank’s external website on November 3, 2016 and again locally and the Bank’s external website on December 23, 2016. 52. Relevant elements of the SMF will be incorporated into Terms of Reference (TOR) during project implementation to ensure that social safeguard policy requirements are incorporated into various assessments, development of strategies and plans and the screening process for any downstream investments. 16 53. Gender. Research shows that women and men have different transportation needs, travel behaviors and levels of access to services and infrastructure. Women tend to make more trips for a wider variety of purposes and would potentially benefit more from mixed land uses around transit facilities. Women generally walk more and have less access to motor vehicles and are the main users of public transportation. Women are also more sensitive to safety concerns and tend to self-limit their movements and activities because of perceptions of risk. The project design will identify gender benefits of integrating land use and transport planning and explore strategies for mainstreaming gender in TOD planning, design and evaluation. 54. Institutional Capacity. Implementing agencies have varying levels of experience with Bank safeguards policies ranging from the novice to the expert. Shenzhen and Beijing, although with developed capacity in general, have not had many Bank project in recent years. Guiyang also has not had many Bank projects although does have one ongoing rural roads project. Implementing agencies in Tianjin, Nanchang and Ningbo have comparatively more experience with Bank safeguard policies. As such, capacity building related to Bank social safeguards is needed. Training, by Bank staff or experienced social consultants has been set out in relevant documents, and implemented during the project preparation and appraisal and will continue during implementation. 55. Citizen Engagement and Participation. The project design will incorporate strategies for citizen engagement in each city as part of their TOD plans. Citizen engagement will be sought where it can clearly and meaningfully contribute to improving results. ICT, in particular, would be a key tool for citizen engagement. The design of the citizen engagement activities will be developed during preparation and indicators have been selected to demonstrate the process of beneficiary consultation during the Project and at different scales of intervention in the cities. F. Environment (including Safeguards) 56. The project will finance multi-level coordination both at the national level and amongst cities to further develop policies, guidelines, strategies, and capacity building for integrated urban planning and TOD. The project also supports city level activities in which cities would carry out diagnoses, analysis, and studies on the rules and mechanisms for TOD, and develop planning guidelines and design criteria or standards for implementation of TOD. The cities will also select either future or existing corridors, urban functional areas or subway lines and stations on which to apply these TOD approaches. Given the nature of the project activities, there could be downstream environmental and social impacts. Careful steering of the project activities is needed to ensure positive downstream impacts are achieved. As per OP/BP 4.01, Environmental Assessment, the project is classified as Category B for environment purposes. 57. OP 4.01 Environmental Assessment. Since the project activities are technical assistance in nature, assessment and management of environmental impacts can only be possible during project implementation when the outputs are taking shape. Therefore, an Environmental Management Framework (EMF) has been prepared with the clients and their consultants under the close guidance of the Bank team to address potential environmental issues associated with the technical assistance. All technical assistance activities are grouped into several categories by types of outputs, since environmental impacts are best managed by type of outputs (e.g. policy or 17 plan versus feasibility study). The potential environmental impacts of each type of activity are screened and described succinctly in the EMF. The EMF spells out requirements to assess these impacts by type of activity and output and the ways to integrate environmental considerations in these activities and outputs. The possible instrument to be used for policies, plans and programs is the Strategic Environmental Assessment (SEA). A TOR for requirements on SEA was developed as annex to the EMF. Further details of the EMF are in Annex 3. 58. OP 4.11 Physical Cultural Resources. Although the project will not involve any civil works, the development of technical assistance activities and their application may have implications for physical cultural resources depending on the situation in each city. The EMF includes requirements to take into account the protection of physical cultural resources. 59. Public disclosure and consultation. The brief of potential environmental issues should be based on a scoping exercise involving stakeholder participation appropriate to the nature and scale of the proposed technical assistance. Local disclosure of the EMF has been conducted per the Bank requirement during October-November 2016 at the official websites of the MOHURD PMO and on municipal websites in the seven cities. After disclosure, public consultations were carried out mainly through meetings and at central and city level with local government agencies, academia and experts. Public consultation in each city was conducted in October 2016. The concerns and suggestions from all public consultations have been incorporated in the finalization of the EMF. The English version of the EMF was published on the Bank’s external website on November 11, 2016 and on December 23, 2016. G. World Bank Grievance Redress 60. Communities and individuals who believe that they are adversely affected by a World Bank supported project may submit complaints to existing project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of World Bank non- compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. 18 Annex 1: Results Framework and Monitoring GEF China Sustainable Integrated Approach Pilot Project Development Objectives PDO Statement The objective is for participating cities to incorporate transit-oriented development principles into their policies and into future urban and transit plans. These results are at Project Level Project Development Objective Indicators Cumulative Target Values End Baseline YR1 YR2 YR3 YR4 YR5 Target Indicator Name 2022 2017 2018 2019 2020 2021 2022 (1) Number of cities incorporating TOD strategies in urban and transit plans 0 0 0 0 2 3 3 (2) Number of cities endorsing city-level TOD strategy or policy 0 0 0 2 3 4 4 (3) Number of cities using the TOD diagnostic tool 0 0 0 0 2 4 4 Intermediate Results Indicators Cumulative Target Values End Baseline YR1 YR2 YR3 YR4 YR5 Target Indicator Name 2022 2017 2018 2019 2020 2021 2022 Component 1: National TOD Platform, Toolkit, and Policy Support Y Y (1) Development of National TOD Platform (including policies, guidelines, strategies, TOD Y Y (Version 3 – N N (Final Y toolkit) (Version 1) (Version 2) updated for Version) application) (2) Number of training modules under the Platform used by participating cities N N 1 2 4 6 6 (3) Number of person/days spent in training on TOD training modules 0 0 250 750 1500 3000 3000 Component 2: City TOD Support and Application of TOD Approaches City Level (All Participating Cities) (4) Number of Cities with TOD strategies and related technical guidelines 0 0 0 2 5 6 6 1 (5) Number of Cities using TOD specific databases developed under the Project 0 0 0 2 4 5 5 (6) Number of Citizen Engagement sessions conducted in TOD planning 0 0 0 3 8 13 13 District Level Application (Tianjin, Shenzhen, and Shijiazhuang) (7) Number of Districts introducing TOD polices and approaches into their plans 0 0 0 1 2 3 3 Corridor-Level Application (Beijing, Ningbo, Nanchang, and Guiyang) (8) Number of corridor level policy guidebooks or manuals produced 0 0 0 1 2 3 3 Station-Level Application (Beijing, Ningbo, Nanchang, Guiyang, and Shenzhen) (9) Number of cities that adopt TOD-friendly station area planning approaches 0 0 0 0 2 4 4 (10) Number of Citizen Engagement sessions conducted in the design of station area plans 0 0 0 2 6 10 10 Indicator Description Project Development Objective Indicators Responsibility for Indicator Name Description Frequency Data Source / Methodology Data Collection This indicator will identify city-led plans which have been Annual Progress report and relevant City PMOs developed factoring in the outputs from the analytical tools and plans application at various levels. Cities will develop TOD strategies to (1) Number of cities incorporating TOD inform the revision of master plans and zoning as well as land value strategies in urban and transit plans capture plans. Although 7 cities are participating, given the (cumulative) innovative nature of the project it is not expected that all cities will achieve this indicator. Therefore, the estimate is that at least 3 out of the 7cities could achieve this goal based on the latest status of the preparation timetable for the different city urban and transit plans. This indicator will assess whether the cities have formally adopted Annual Progress report documenting City PMOs 2) Number of cities endorsing city-level TOD the city-level TOD strategies developed with support from the strategies and arrangements strategy or policy (cumulative) Project and have instituted systems to continue to implement and for implementation monitor progress. City-level TOD strategies will include projections and systems for monitoring long-term impacts of urban growth on emissions, land, natural resource use etc. This is the number of cities that have started to use the national Annual MOHURD progress report MOHURD 3) Number of cities using the National TOD TOD diagnostic and monitoring tool introduced by MOHURD. The diagnostic tool (cumulative) toolkit will be available to all cities, including cities beyond the Project, but given the innovative nature of the activity it is not clear 2 that all cities will have the capacity to use the toolkit during the project period. The estimate is that a total of 3 cities will be in a position to effectively use the tool. Intermediate Results Indicators Description Responsibility for Indicator Name Frequency Data Source / Methodology Data Collection This is a qualitative indicator to measures the achievement of Annual Progress report MOHURD PMO (1) Development of National Platform developing a TOD toolkit for China’s cities with the potential for it (including policies, guidelines, strategies, to be scaled up for use beyond the Project Participating cities. The TOD toolkit) tool will be developed incorporating lessons from city level activities over time. (2) Number of training modules under the A series of training modules will be developed under the Platform Annual Progress report MOHURD PMO Platform used by Participating Cities for testing and improvement under the Project. The training modules will cover the different levels of TOD application (city/district/corridor/station) and also different aspects of TOD (planning/design/financing/implementation/citizen engagement etc.) This indicator is calculated based on x number of persons attending Annual Progress report MOHURD PMO (3) Number of person/days spent in training x number of training days (Persons x Training Days). on TOD training modules (4) Number of Cities with TOD Strategies All cities will prepare TOD strategies and related technical Annual Progress Report City PMOS and related technical guidelines (cumulative) guidelines under the Project. These strategies should be informed by consultation with various stakeholders in the form of urban labs, stakeholder meetings, public consultations and outreach activities. (5) Number of Cities using TOD specific Each city will collate a GIS database and analytical framework to Annual Statistic report City PMOs databases developed under the Project better understand the typology and monitor the potential of different (cumulative) transit stations for development. (6) Number of Citizen Engagement sessions This indicator will monitor the number of citizen engagement Annual Progress Report City PMOS conducted in TOD planning sessions and events that have been conducted as part of developing the TOD strategy and policies. (7) Number of Districts introducing TOD Shenzhen and Shijiazhuang will focus on a specific district with Annual Progress Report City PMOS polices and approaches into their plans high potential for new development and the needs for specific plan development. Tianjin will focus efforts on districts in the urban core. 3 (8) Number of corridor level policy This indicator will record the technical outputs resulting from Annual Progress Report City PMOS guidebooks or manuals produced studies on TOD approaches along specific transit corridors. (cumulative) (9) Number of cities that adopt TOD-friendly This indicator will be the result of various station area analytics, Annual Progress Report City PMOS station area planning approaches public space-activity surveys, urban and transit charrettes, and stakeholder and public engagement events. (10) Number of Citizen Engagement sessions This indicator will monitor the number of citizen engagement Annual Progress Report City PMOS conducted in the design of station area plans sessions and events that have been conducted as part of station area planning. 4 Annex 2: Detailed Project Description GEF China Sustainable Cities Integrated Approach Pilot Project Approach and Framework 1. GEF Sustainable Cities Integrated Approach Pilot. As a response to the importance of cities in addressing climate change, the Global Environment Facility (GEF) is promoting urban sustainability as one of their three Integrated Approach Pilots. The urban program, known as the Sustainable Cities Integrated Approach Pilot (SCIAP), consists of two tracks: (i) country-level “child” projects, which include 27 cities across 11 countries with a total of 144 million USD in grant funding. Each country is paired with one or several global organizations acting as implementing agencies to manage the various projects in the participating cities; and (ii) a Global Platform for Sustainable Cities (GPSC), led by the World Bank, with a 10 million USD grant that will promote shared learning among participating cities and develop tools and methodologies for promoting an integrated approach to urban planning, financing and implementation. 2. GEF China SCIAP Child Project. The Project will be implemented by the Ministry of Housing and Urban-Rural Development (MOHURD) and seven cities that represent a range of development stages and challenges. The project places special emphasis on integrating land use and transport planning in the form of TOD at city, corridor or sub-district, and station levels. The integrated TOD approach will be used to incentivize compact, connected and mixed use urban development or redevelopment around stations. Given limited funding, the project will not support any civil works. Goods may be funded on an exceptional basis where there is clear justification as part of technical assistance activities. The focus is on well-targeted technical assistance to address key barriers and opportunities for TOD in each city with an aim of taking the approach to scale through national level activities implemented by MOHURD. The overall project framework is provide in Figure 2-1. The list of participating cities and their profiles is in Table 2-1. Table 2-1. Profile of the Seven Project Cities (2014) Total Total GDP per Urban population of Municipal Municipal Capita of Built-up Area population urban GDP per City Population urban (km²) per km2 of districts capita including districts built-up area including (RMB) migrants (RMB) migrants* Shenzhen 890 12,111 10,779,000 10,778,900 149,495 149,495 Nanchang 262 6,997 2,525,000 2,496,000 70,373 86,837 Guiyang 299 5,567 3,387,000 2,653,600 55,018 57,882 Ningbo 309 5,931 3,141,000 2,668,382 98,362 128,863 Tianjin 797 8,437 10,081,000 7,864,900 105,231 105,231 Beijing 1386 11,585 21,516,000 18,590,000 99,995 102,338 Shijiazhuang 264 6,328 4,678,000 2,817,700 48,970 58,850 * Total Municipal Population including migrants. ** Urban population per km2 of built-up area Source: MOHURD Statistical Yearbooks and National Bureau of Statistics 5 3. The World Bank TOD Community of Practice (COP) defines TOD as: “a planning and design strategy to ensure compact, mixed-use, pedestrian and two-wheeler friendly, and suitably dense urban development organized around transit stations. It embraces the idea that locating amenities, employment, retail shops, and housing around transit hubs promotes transit usage and non-motorized travel. Well-planned TOD is inclusive in nature and integrated considerations of resilience to natural hazards.” An illustration of the comprehensive and integrated goals of TOD are summarized in Table 2-2. Table 2-2. Comprehensive Goals of TOD Environmental Goals Economic Goals Social & Cultural Goals Conserve Resources Local Prosperity Accessibility & Mobility Preserve Open Space Creativity and Innovation Diversity & Integration Mitigate Climate Change Commercial Clustering & Business Niches Neighborhood Identity Improve Air Quality Productivity Affordable Housing Improve Water Quality Housing Diversity Safety & Security Biodiversity Fiscal Sustainability Public Health Source: Adapted from Kansas City, Missouri, TOD Policy (2016) 4. The TOD COP has identified eight parameters for inclusive and resilient TOD including: (a) aligning human and economic densities, mass transit capacity and network characteristics for greater accessibility; (b) creating compact regions with short commutes; (c) ensuring resilience of areas connected by mass transit; (d) planning and zoning for mixed use and mixed income neighborhoods at corridor level; (e) creating vibrant, people-centered public spaces around stations; (f) developing neighborhoods that promote walking and biking; (g) developing good quality, accessible, and integrated public transit; and (h) managing private vehicle demand. 5. National Level Support for TOD. In recent years, TOD principles have been incorporated into China’s national technical standards. For instance, MOHURD has issued guidelines on Urban Pedestrian and Bicycle Transport System Planning and Design in 2013 and Planning and Design of Areas along Urban Rail Corridor in 2015. However, these guidelines are recommended best practices rather than compulsory requirement. MOHURD is actively seeking effective channels to disseminate knowledge on TOD and mainstream good practices at the city level. MOHURD will use the GEF grant to establish a TOD platform and toolkit to support the development and application of TOD policy, technical standards, and management tools for cities and application of international good practices within the China context. 6 6. City-and Sub-City Level Application of TOD. At City scale, technical assistance provided through the Project will focus on: (a) land use policy and strategy; (b) legal and regulatory frameworks; (c) integrated land use and transport planning; (d) modeling of TOD to align human and economic densities, identify station typologies, and create scenarios for urban growth around transit and monitor comprehensive impacts; (e) leveraging of the private sector; (f) improving accessibility around stations; and (g) capacity building and stakeholder engagement. At district and corridor scale, activities will look at: (a) understanding transformation potential of urban rail and urban development investments; (b) integration of urban and transport development; (c) legal and regulatory frameworks; (d) design and planning guidelines; (e) operational guides; (f) financing schemes; (g) citizen and stakeholder engagement; (h) capacity building; and (i) consideration for social and affordable housing. At the station scale, the project would look at: (a) zoning; (b) conceptual designs; (b) accessibility planning; (c) public space; and (d) citizen and stakeholder engagement. The project will take a phased approach to implementing technical assistance activities at these different scales as set out in Figure 2-1. Figure 2-1. Project Phased Approach 7. Phasing of Activities. In the first 12 months all cities will focus on the city-level urban planning level. An overall Terms of Reference (TOR) will be developed in consultation with all cities and will include a detailed methodology and recommendations for city-level analytics, strategies and policies. This will help ensure a coherent approach to coordinating peer-to-peer learning and providing targeted expertise on city-level TOD planning in the first year of the project. This will allow more targeted and clearly selected technical assistance activities and application of the outputs at the district, corridor, and station level in each participating city depending on their priorities and focus. MOHURD will provide critical support through the project preparation grant and early activities to share lessons from global TOD practices, focusing at city-level strategies. 7 Project Components 8. Component 1: National TOD Platform, Toolkit, and Policy Support (US$1,927, 523). This project component will finance coordination both at the national level and amongst cities to further develop national policies, guidelines, strategies, and capacity building efforts for integrated urban planning and TOD. The capacities of local governments to plan for sustainability are significantly affected by the relations between municipalities, regional or provincial authorities and national governance (vertical coordination) and between different agencies and policy divisions within municipal governments (horizontal coordination). The importance of vertical and horizontal coordination, or multi-level governance, is crucial in reducing the highly fragmented nature of city building. The national platform will aggregate the outputs of the city level activities and compile indicators for monitoring, evaluation and benchmarking across cities. The national platform will include a comprehensive toolkit with multiple modules to help cities conduct diagnosis of level of TOD, readiness for TOD, develop contextualized TOD strategies and plans, improve zoning and urban design in selected areas, and evaluate the impacts of policy and investment intervention associated with TOD. In addition, the national platform will collect and disseminate international best practices on various aspects of TOD and develop technical training modules for cities. 9. Subcomponent 1.1: Development of a National TOD Platform (US$1,492,000). The platform will have the following modules: (a) TOD Digital Repository with resources, existing tools, guidelines, manuals, best practices including institutional, policy (legal), technical, financial data, including the TOD Indicators. (b) TOD Dashboard with online city TOD metrics. (c) TOD Diagnosis with GIS-based data analytics which allows a complete and quick assessment of a city’s current level of sprawl and auto-centricity. This tool will compare key indicators across cities or typologies of cities as well as assesses typologies of TOD station (comparing transit orientation and real estate market strength). This would include, but not be limited to, an analysis of spatial expansion, urban form, block size, transit connectivity, pedestrian and bicycle connectivity, land use characteristics, population density, job density, places with amenities et cetera. (d) TOD Planning with projections based on different transit-oriented and compact city development scenarios. Short-and long term strategies for supporting TOD with a prioritization process for interventions or policies that could have the biggest impact on city performance in terms of level of TOD-ness and in terms of benefits. (e) TOD Impact Assessment to compare business as usual versus TOD interventions across hierarchies (regional, city, transit line, district stations, and neighborhoods) and levels of institutional advancement in systems and policies for integrated land- use and transport planning. (f) TOD Monitor, short-term and long-term monitoring of existing and developing TOD, of the environmental, social, and economic costs and benefits of different interventions selected. (g) TOD Collaborations and Marketplace, which provide a collaborative space where parties, from public and private sector, can communicate towards partnerships and 8 approaches to private sector participation can be developed (See Annex 6 for a framework approach to involving private sector in TOD). 10. Subcomponent 1.2: Capacity Building (US$300,000). This subcomponent includes capacity building to support partnerships at the local, national, and global levels, through knowledge management, training courses, capacity building, peer-to-peer learning and global coordination based on annual work plans. 11. Subcomponent 1.3: Project Management (US$135,523). Project management costs associated with the operation of MOHURD project management office and related project management and monitoring and evaluation. 12. Component 2: City TOD Technical Support and TOD Application (US$30,800,000). This component would specifically support the seven cities in developing strategies and plans to better integrate land use and public transport planning, to create urban forms and space that reduce the need for private motorized vehicles, and increase transport and energy land use efficiencies. In each city, this component will consist of technical assistance, application of TOD approaches at different scales, and capacity building activities and project management support. For technical assistance, one common sub-component will be a TOD strategy or policy for the city’s central built-up area. Then depending on the city’s focus and priorities, they will develop a selection of enabling policy and institutional arrangements, conceptual land use plans, development urban regeneration schemes, streetscape and urban design guidelines, parking strategies, non-motorized transport plans, priority infrastructure investments, and a sustainable financing mechanisms following TOD principles. 13. Application of TOD approaches will be conducted at district, corridor and station or transit hub level. Plans would ideally include housing types and affordability, commercial uses, business attraction and mixes, and job location. However, they should be flexible enough to allow for creativity, originality, and affordability. All cities would consider aspects of low- income groups, gender dimensions, and resilience in their TOD approach and adopt a participatory, data-driven and evidence-based process. 14. Subcomponent 2.1. City TOD Strategy. This subcomponent will fund seven TAs in each of the participating city following a standardized structure as illustrated below. The aim is for all cities to focus efforts in the first year of implementation in preparing and starting-up this activity. The TOD strategy would include the following elements below:  Conduct diagnostic analysis, such as, evaluating land development and redevelopment potential for TOD based on land use status quo, City Master Plan and Urban Rail Plan; determine TOD typology and readiness based on job and housing density and spatial distribution to inform investment priority; and identifying policy and institutional barriers for implementing TOD.  Conduct scenario projection (TOD vs. BAU) for future land use efficiency, energy efficiency and carbon footprint, etc.  Design and customize tools to facilitate citizen engagement in TOD planning and construction. 9  Develop financing schemes and guidance for land banking and land auction, etc.  Develop TOD indicators, GIS database and monitoring system,  Contextualize national technical standard to meet the needs of local practice Outputs will be:  City TOD Strategy Reports with five-year Action Plans covering findings from diagnosis, scenario projections, participatory planning tools and financing schemes.  City-specific TOD database (to be fed into the national platform)  City policy and technical guidelines on TOD 15. Subcomponent 2.2. District-level application of TOD strategy: This subcomponent will fund TAs in the existing downtown district of Tianjin; Zhengding New District in Shijiazhuang; and the district of the International Low-Carbon City in Shenzhen. The three districts will choose to carry out some of the following activities based on their policy priorities:  Conduct studies to provide recommendations for developing or revising district-level land use masterplan following TOD principles;  Set up institutions and working mechanisms to facilitate coordination among departments and across different levels of governments;  Harmonize construction plans and operation schedules for better connection and integration of different public transit mode (i.e., Metro, BRT and regular buses)  Improve the planning of non-motorized transport (i.e., walking and biking) networks to improve accessibility of TOD; and  Study business models for parking management under TOD and explore opportunities for private sector involvement Outputs will be:  District-level low-carbon, livable city development master plan and supporting reports  District-level monitoring tools: e.g., walking and biking scores  Thematic reports and action plans on public transit integration and/or parking management (depending on the focus of study) 16. Subcomponent 2.3. Corridor-level application of TOD strategy: This subcomponent will fund technical assistance to promote TOD in zoning regulations along specific metro lines or BRT corridors in Beijing, Ningbo, Nanchang and Guiyang. Project support activities might include:  Review of current zoning along selected public transit lines to identify problems of mismatch between travel demand associated with land use pattern and the availability of public transit service and explore opportunities for improvement;  Revision of zoning regulations along existing or planned public transit lines following the TOD strategy towards better integration of land and public transit (at least in Ningbo); 10 Outputs will be:  Corridor-level policy guidebook/manual on how to harmonize the construction of public transit lines and development of land;  New zoning for specific public transit corridors with main text, supporting documents and maps. 17. Subcomponent 2.4. Station-level application of TOD strategy. This subcomponent will fund technical assistance focusing on selected station areas in Beijing, Ningbo, Nanchang, Guiyang and Shenzhen. Project supported activities could include the following:  Conduct a demand analysis through active citizen engagement, focusing on needs of vulnerable groups;  Analyze potential for utilizing underground space for commercial purposes;  Develop or revise urban design schemes for the core areas around metro stations or other transit hubs (within 500m radius) to improve the physical environment and level of activity in public spaces, and integrate different transport modes toward smooth connectivity and better mobility. Outputs will be:  New urban design schemes and construction plans reflecting needs of vulnerable groups  Technical guidance on underground space utilization  Case study reports on the application of TOD at station-level 18. Subcomponent 2.5. Capacity building (US$2,710,000). This subcomponent includes capacity building to support partnerships for all participating cities at the local, national, and global levels, through knowledge management, training courses, capacity building, peer-to-peer learning and global coordination based on annual plans; and 19. Subcomponent. 2.6 Project Management (US$1,500,000): Project management costs associated with the operation of seven city-level project management offices and related project management and monitoring and evaluation. 20. The detailed project Costs by MOHURD and by each Participating City is provided in Table 2-3 below. Table 2-3. Project Costs by MOHURD and by City Project subcomponent Budget (USD) MOHURD 1. Develop National TOD Platform and Toolkit and capacity building 1,492,000 2. Capacity Building 300,000 3. Project management 135,523 Sub-total 1,927,523 Beijing 1. City TOD strategy 1,700,000 2. Corridor-level and station-level application of TOD strategy (Stations on Metro Line 17, 850,000 11 and the corridor along Pinggu Metro Line) 3. District-level application of TOD strategy (Urban regeneration of Life Science Park near 850,000 Jingzhang HSR and Changping Metro Line). 4. Capacity Building 250,000 5. Project Management 150,000 Sub-total 3,800,000 Tianjin 1. City TOD strategy 1,010,000 2. District-level application of TOD strategy Part A: private sector engagement and parking 1,000,000 management, etc. 3. District-level application of TOD strategy Part B: low-carbon non-motorized transport 1,200,000 system 4. Capacity Building 400,000 5. Project Management 190,000 Sub-total 3,800,000 Shijiazhuang 1. City TOD strategy 1,200,000 2. Study on integration of urban rail transit and city planning in the context of Jing-Jin-Ji 1,200,000 Region 3. District-level application of TOD strategy (Zhengding New District) 1,900,000 4. Capacity Building 450,000 5. Project Management 250,000 Sub-total 5,000,000 Ningbo 1. City TOD strategy 1,300,000 2. Corridor-level application of TOD strategy (A planned metro line to be selected) 1,500,000 3. Station-level application of TOD strategy (Existing stations in operation) 1,080,000 4. Capacity Building 300,000 5. Project Management 220,000 Sub-total 4,400,000 Nanchang 1. City TOD strategy 1,050,000 2. Corridor-level application of TOD strategy (Metro line 2 and a BRT corridor) 1,500,000 3. Station-level application of TOD strategy (Jiulonghu New Town Station area) 1,600,000 4. Capacity Building 600,000 5. Project Management 250,000 Sub-total 5,000,000 Guiyang 1. City TOD strategy 1,620,000 2. Corridor-level application of TOD strategy Part A: Metro Line 3 and Line S2 1,600,000 3. Corridor-level application of TOD strategy Part B: BRT corridors 1,130,000 4. Capacity Building 400,000 5. Project Management 250,000 Sub-total 5,000,000 Shenzhen 1. City TOD strategy 1,350,000 2. District-level and station-level application of TOD strategy: International Low-carbon 1,950,000 City (ILCC) district 3. Capacity Building 310,000 4. Project Management 190,000 Sub-total 3,800,000 Grand total 32,727,523 12 Status of Urban and Transit Plans in Participating Cities 21. Urban and Transit Plans. The seven participating cities are at different stages of revising or updating their respective City Masterplans and Urban Rail Plans as summarized in Table 2-4. Table 2-4. Time horizon of City Master Plans and Urban Rail Plans by city Time horizon 2000 ~ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 GEF SC‐IAP Project Beijing Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan Tianjin Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan Shijiazhuang Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan Ningbo Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan Nanchang Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan Guiyang Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan Shenzhen Time horizon of City Master Plan Time horizon of Urban Rail Plan Timeline for updating City Master Plan Timeline for updating Urban Rail Plan 22. This presents various opportunities for the Project to influence the city’s urban development trajectory. For instance, in Ningbo and Shenzhen where the relevant authorities are working on revising the City Masterplan and the next-phase Urban Rail development plan between now and 2018, the early outputs of the city-level TOD strategy and studies in support of corridor level TOD can readily be used to inform the vision, priority and actions of these plans. For cities that just finished revision of their Master Plans and Urban Rail Plans (for example Beijing and Nanchang), ongoing efforts would focus on updating zoning regulations along certain urban rail corridors or around key metro stations. The outputs of the district, corridor and station level activities can be helpful in integrating the TOD concept in the detailed development schemes. In addition, as all the City Masterplans have a common target year of 2020, it is expected that the next round of City Master Planning will start around or before 2020. Therefore, timing is good for the final outputs of the Project to influence the cities’ post-2020 urbanization agenda. 13 Existing Progress in TOD in Participating Cities 23. Beijing. As of December 2015, the Beijing metro system consists of 18 lines, 278 stations and 554 km of track in operation, with average daily ridership around 10 million passengers. The Second-phase Construction Plan of Beijing’s Urban Rail network (2015-2021) was approved in 2015. According to this plan, there will be 24 lines at a total length of 998 km in operation by 2021. Alongside the rapid expansion of the urban rail network, the city government has conducted initial analysis on integration of urban land use and public transport infrastructure. Planning authorities and state-owned infrastructure investment companies jointly made a comprehensive development plan for Metro Line 15 and optimization plan for land use and transport integration around stations of YanFang Line following TOD principles. Despite these efforts, gaps in policy and practice remain significant due to lack of systematic analysis at the city level, inadequacy of implementable guidelines and mechanism for cross-sector and multi- level coordination as well as lack of capacity in evidence-based decision making. 24. Project Priorities. In Beijing, the grant will fund a city TOD strategy and will place emphasis on a comprehensive diagnosis of urban and transit planning and policy mechanisms and land utilization optimization approaches. Efforts will focus on improving the current guidelines for Beijing planning, a TOD zoning indicator system, assessment system and sustainable development indicator system and monitoring with big data. Beijing will apply TOD corridor principles along the Pinggu Metro Line, which is expected to be in operation by 2020. Station Level application will focus on Dongdaqiao Station (2012) and Ciqu Station (2010) on Metro Line 15, Jingzhang High-Speed Rail station, which will link to Hebei Province (2019), and the Life Science Park station (2010) on Changping Metro Line. These applications will look at TOD in the context of urban regeneration and also integration of city level TOD with broader integration between cities in the Jingjinji Region. 25. Tianjin. As of August 2016, the Tianjin metro system consists of 5 lines, 89 stations and 150km of track in operation, with daily ridership around 0.8 million passengers. Two more lines are scheduled to open in 2016 and a third by 2020. In the past, GEF and the World Bank have been actively involved in promoting TOD in Tianjin through a number of projects including Tianjin Urban Transport Improvement Project (P148129) and GEF Sino-Singapore Tianjin Eco- City (P098915). The current GEF project will build on the achievements of previous projects, primarily focused on improving transit, and placing more emphasis on the urban development aspects of the existing TOD approach. 26. Project Priorities. In Tianjin, the GEF grant will fund a city TOD strategy with a focus on the central district by analyzing land use along urban rail routes, interactions between urban functions and the transit network, strategies for land use around metro stations as well as traffic demand management and parking in the core area. Tianjin will aim to assess financing gaps for TOD projects and private sector opportunities. Application of TOD approaches will focus on the central urban district of Tianjin, linked to Beijing by high speed rail providing further opportunities to review city level TOD within a regional context. 27. Shijiazhuang. Shijiazhuang started construction of its metro system in 2012 and the first line is expected to be in operation in 2017. According to the Revised Construction Plan of 14 Shijiazhuang’s Urban Rail System (2012-2021) approved in 2015, the city will have 3 metro lines at a total length of 80.4 km, connecting 64 stations by 2021.22 The city already conducted land banking around metro stations along Line 1 and 3, especially in the core areas within 200m radius of the stations. Systematic planning for the integration of land use and public transit infrastructure is still to be developed. 28. Project Priorities. In Shijiazhuang, the GEF grant will develop a city-level TOD strategy that will support the city in its integrated planning efforts both in terms of urban and transport planning but also in relation to city development within the broader Jingjinji Region. The city aims to develop TOD models and technical guidelines for application of integrating urban and transit planning in line with the city’s fast expanding metro network. The city aims to look at the specific application of TOD principles and approaches in a new urban district and its integration with the city proper. 29. Ningbo. As of December 2015, there are two metro lines in operation in Ningbo, with a total length of 49 km and daily ridership around 0.2 million passengers. According to the Urban Rail Plan of Ningbo (2013-2020), there will be 7 metro lines at a total length of 271.6 km in operation by 2020. Ningbo has conducted initial scoping analysis for land banking and detailed station area design following MOHURD’s recent Guideline on Planning and Design of Areas along Urban Rail Corridor (2015). 30. Project Priorities. The city-level TOD strategy for Ningbo will look at: (a) TOD priority zones and the preparation of a TOD guided urban expansion plan; (b) financing capacity and needs for investing in TOD projects (including infrastructure needs and zoning regulations); (c) social and environmental impacts of TOD strategy; (d) recommendations for urban expansion with a baseline and city level impact monitoring. At corridor level, Ningbo will select a rail corridor and coordinate multi-sector planning around TOD principles. At the station level, Ningbo will focus on analyzing current urban and transit planning at the station level, including integration with surrounding urban and non-motorized plans and underground space planning. 31. Nanchang. As of October 2016, Nanchang has one metro line in operation. Metro Line 1, at a total length of 28.8 km, connects 24 stations and provides service to about 0.2 million passengers every day. According to the Construction Plan for Urban Rail System Phase II (2015-2021), Nanchang’s metro system will consist of 5 lines at a total length of 197.5 km and 146 stations by 2021. The World Bank has an ongoing lending project (P132154) to finance part of the construction of Line 2 in Nanchang. Nanchang Metro Group has made land development strategies for Line 1 and 2, using land value capture instruments to fund the construction of its metro system. The lessons learned have been captured in the World Bank’s recent case study book titled “Financing Transit-oriented Development with Land Values”. The project will aim to build on this experience in Nanchang and share with other participating cities. 32. Project Priorities. In Nanchang, the GEF grant will support a TOD strategy centered on a TOD-based spatial layout strategy for the city’s growth along a low-carbon trajectory. The aim is to conduct overall TOD planning based on the experiences on Line 1 and 2 and develop city- 22 NDRC approved the revised plan of Shijiazhuang’s Urban Rail system http://www.sdpc.gov.cn/zcfb/zcfbtz/201601/t20160108_770834.html 15 wide TOD policy and design guidelines and a system for monitoring and evaluation of the TOD strategy. Specific studies and guidelines will be prepared for Line 2, for the Bus Rapid Transit Corridor and station areas in the New Jiulong Area. 33. Guiyang. Guiyang started construction of its metro system in 2013 and the first line is expected to be in operation in 2017. According to the Construction Plan for Urban Rail System Phase II (2016-2022), the metro system in Guiyang will consist of 5 lines at a total length of 235 km by 2020. Guiyang Metro Company has developed land use plans along Metro Line 1 and 2. 34. Project Priorities. A city-level TOD strategy will be developed to optimize and ensure land use efficiency concentrated along high-capacity transit. The priority will be on developing a model for high quality transit plus property development with sustainability as a priority. The aim is to support mechanisms and approaches for integrating urban, land use, and transit planning into the research for the new round of masterplan preparation for Guiyang city. At the corridor level, Guiyang plans to focus support on preparing a comprehensive land development plan for areas along the phase 2 (Line 1 and 2) of the Rail Transit plan and BRT corridor with the aim of improving the future planning of transit line and stations along Line 3 and S2. At the station level, the city wants to optimize spatial development around stations and ensure well- designed public space and non-motorized routes. 35. Shenzhen. As of October 2016, Shenzhen has 8 metro and 198 stations in operation. The total length of metro lines reached 285 km and the daily ridership is around 4 million passengers. The Transport Commission of Shenzhen Municipality and the Shenzhen Metro Group have done substantial work on TOD at different levels. See Table 2-5 for details. 36. Project Priorities. Given the depth of experience with TOD in Shenzhen, the project has a great opportunity to build on and leverage Shenzhen’s experiences and share these with other cities. Taking forward its work to date, Shenzhen proposes to develop a city TOD strategy through further review of the planning and construction mechanisms for TOD and related public policy system for multi-dimensional TOD. Shenzhen proposes to study the application of the policy and principles for updating the masterplan of Shenzhen’s low carbon city based on TOD, specifically looking at zoning and urban design around different typologies of metro station and the related development, construction, and management mechanisms. 16 Table 2-5. Summary of Shenzhen’s Progress in TOD Scale Description of activity content Output City level - Summarized three major TOD models adopted by Studies on Urban Land different international cities under different Utilization and Transit-Oriented mechanisms relevant for Shenzhen. Development (TOD) - Explored a specific TOD model suitable for Shenzhen in line with its urban development characteristics. - Proposed safeguard mechanisms for Shenzhen’s TOD macro-development strategy, zoning development guidelines and TOD models. - Surveyed theoretical research on, and practical Shenzhen Public Transport experience of, public transport metropolis both in Planning - transit Metropolis China and internationally, identified objectives, Strategic Planning and routes and a work plan for Shenzhen’s public Implementation Plan for transit transport development, and benchmarked public Integration transport development against other cities. District - Identified potential land lots by conducting a Report for Optimizing and detailed survey of land ownership and property Comprehensive Land Utilization corridor within an 800m radius of stations along line 6 for Properties Along Rail Transit level - Studied the general trend of Shenzhen property Line 6 in Shenzhen market over the past 15 years, and provided data support for financing and investment models based on key land prices. - Based on the aim of developing a “transit Construction Planning for the metropolis”, identified approaches to support and Demonstration Zone of Transit guide compact urban development to realize smart Metropolis in Shekou District, growth based on an efficient, convenient, integrated Shenzhen City and Construction high-quality comprehensive transport system in pilot Planning for Demonstration Zone districts, and realize the harmonious coexistence of of Transit Metropolis in Pingshan transport and city, economy and life. New District, Shenzhen City Station - Design planning for comprehensive development of Completed design proposal level subway upper levels at No.7 Metro Phase 3 - Design proposal for metro plus property Completed design proposal development project on Metro Phase 2 - Proposed comprehensive positioning and general Design proposal: Conceptual development strategy, base analysis, design Design Proposal for Key Lots proposals, city design for node regions, and Along Line 6 (Changzhen station, suggestions for station and hub development. Guanguang station, Lilin station - Conducted an environmental assessment based on and Guangmingbeihe Loucun the design proposal and proposed a development and station implementation strategy. - Developed a plan for Antuo Hill transit Comprehensive Development comprehensive car yard and property development Plan for Antuo Hill Transit project Comprehensive Car Yard 17 37. This GEF project complements TOD work funded by other development partners, as summarized in Table 2-6 below. Most of the listed ongoing TOD works are taking place outside the seven participating cities under this Project. Table 2-6. Summary of Other Development Partner’s TOD Initiatives Name of TOD Initiatives City engagement development agency Asian Development Asia Leadership Program on TOD Multiple cities in Asia Bank Energy Foundation Case studies on Promoting Transit- Chenggong District of Kunming China Oriented Development in China City and Yuelai District of Chongqing City in China World Resources Transit Metropolis Pilots in China; Guiyang, Zhuzhou, Suzhou, and Institute and TOD resource book Kunming City in China C40 The Transit Oriented Development Addis Ababa, Buenos Aires, (TOD) Network Cape Town, Jakarta, Johannesburg, Los Angeles, Moscow, Rio de Janeiro, Seoul and Tshwane ICLEI TOD best practice case studies Tshwane, Mexico City and Bogotá, New Delhi ITDP TOD Standard and Scorecard Beijing, Shanghai, Guangzhou and Hong Kong, SAR, China and dozens of cities around the globe JICA Transit Oriented Development of Ho Chi Minh City and Binh Suoi Tien Terminal Station Area Duong Province; and My Phuoc-Tan Van Highway BRT Development Project; Updates 2040 Plan for Yangon Yangon City. Development following TOD principles Note: The list of TOD initiatives is to illustrate the nature of activities and does not necessarily reflects all ongoing relevant efforts. 18 Annex 3: Implementation Arrangements GEF China Sustainable Integrated Approach Pilot A. Project Institutional and Implementation Arrangements 1. The project will be implemented at national level by the Ministry of Housing and Urban- Rural Development (MOHURD) and at city level by seven participating cities. In order to ensure speedy preparation and smooth start-up of project implementation, a project preparation grant (PPG) of US$300,000, managed through MOHURD, was reserved. The PPG fund is being used for consulting services to: (1) prepare the conceptual design and TORs of the city TOD platform and provide technical guidance to cities, (2) prepare environmental and social safeguard framework of the project, (3) provide technical support on urban Planning and TOD, (4) conduct workshops, training and study tours. Project Administration Mechanisms 2. National Level Project Leading Group. In MOHURD, a Project Leading Group (PLG) will be established and chaired by the Minister and include the Chief Engineer (as Vice Chairman) and the Director Generals for all related departments including urban planning and construction. It will guide and supervise the work of a Project Management Office (PMO) which is housed in the Department of Building Energy Efficiency and Science & Technology. 3. National Level PMO. A National Level Project Management Office (PMO) is housed in the Department of Building Energy Efficiency and Science & Technology within MOHURD. The PMO is responsible for ensuring knowledge sharing and synergy among participating cities, establishment of a TOD platform for data integration and consolidation, and that the lessons learned fed into the national policy formulation process. 4. China Academy of Urban Planning and Design (CAUPD). CAUPD is an urban planning research center at the national level under MOHURD. It is China’s leading planning policy advisor and conducts research and develops policy on urban planning that serves as a guide to China’s planning industry at all levels. CAUPD has an information center, which has existing systems for spatial and scenario planning used in the preparation of national five-year plans. Many other urban planning groups are subordinate to CAUPD, including the Urban Planning Society of China and the National Urban Planning Science & Technology Information Networks as well as dozens of professional academic committees. Based on thorough research into the barriers to TOD across China, CAUPD led the formulation of the Design Guidelines for Planning of Areas along Urban Rail Transit approved in 2015 (TOD Guidelines). It has unparalleled understanding of China’s planning system, the challenges of implementing TOD, and the three levels of planning requirements (overall urban planning, detailed planning for control, and the detailed planning for construction) as set out in the TOD guidelines. CAUPD has clear authority to advice on the implementation of national planning guidelines, has unique ability to provide technical guidance to cities on the new TOD guidelines, and is in a clear position to draw lessons from the application of TOD at the city level to formulate future national TOD policies, regulations, and guidelines. For these reasons, CAUPD will be the 19 consultant for the Project to establish and manage the National TOD Platform. This will ensure that the Platform can be sustainably scaled-up in future to other cities and maintained beyond the Project implementation period. 5. City Level Project Leading Groups. PLGs have been established in each of the seven participating cities and are chaired by the respective Mayor or Vice Mayor. The PLGs include senior officials from relevant government agencies, such as the Finance Bureau, Development and Reform Commission, Housing and Urban-Rural Development Bureau, City Planning Bureau, Environmental Bureau, and Transport Bureau, and so on. PLGs will provide high level facilitation to ensure inter-agency collaboration and coordination which is critical to the final success of the Project and implementation of the TOD concept. 6. City Level PMOs. A PMO has been set up in each of the seven participating cities. Due to historic reasons and institutional interest and priorities in each city, the leading department in which the PMO is housed is different in each city (Table 3-1). However, each PMO will take the main responsibility for inter-agency coordination to ensure day-to-day project activities are carried out smoothly. Guidance and support will be sought from the PLGs if any difficulties are encountered. PMOs’ other major responsibilities are to: (1) manage daily project operations and identify issues and propose actions and solutions; (2) maintain an expert pool to provided necessary technical support and quality enhancement and control for the Project; (3) collect and disseminate information and data; (4) organize training, workshops and study tours for capacity building and knowledge sharing; (5) prepare reporting on project progress and results monitoring and evaluation, (6) make sure the project is implemented in compliance with the Bank’s fiduciary and safeguards requirements. Table 3-1. Location of PMOs in Participating Cities City Name Leading Department Where PMO is Housed Beijing Beijing Housing and Urban/Rural Development Commission Tianjin Tianjin Housing and Urban/Rural Development Commission Shijiazhuang Shijiazhuang Finance Bureau Shenzhen Shenzhen Development and Reform Commission Guiyang Guiyang Transport Bureau Nanchang Nanchang Development and Reform Commission Ningbo Ningbo Housing and Urban/Rural Development Commission Financial Management, Disbursements and Procurement Financial Management 7. The FM capacity assessment of all PMOs at central and city level has identified the principal risk as being that some project staff are new to Bank’s operations, which may impact the efficiency and effectiveness of project implementation. Mitigation measures to address this risk are as follows: (a) the Bank has provided, and will continue to provide, general and well- designed training on financial management and disbursement; (b) the accounting and financial reporting format has been standardized for all project cities to follow; (c) disbursement 20 arrangements have been streamlined to improve efficiency. Overall, the residual financial management risk after taking into account these mitigation measures is rated Moderate. 8. The GEF Grant agreement will be signed between the World Bank and MOF, the subsidiary agreement will be signed between MOF and MOHURD, municipal governments of Beijing, Tianjin, Ningbo and Shenzhen, and provincial governments of Jiangxi, Guizhou and Hebei. The Provincial governments of Jiangxi, Guizhou and Hebei will further sign subsidiary agreements with the municipal governments of Nanchang, Guiyang and Shijiazhuang, respectively. MOHURD and the seven municipalities of Beijing, Tianjin, Ningbo, Shenzhen, Nanchang, Guiyang and Shijiazhuang will use the grant proceeds. 9. Budgeting.The GEF grant budget will be prepared by MOHURD and each project cities in accordance with implementation plans, which will be reviewed by the Bank’s task team. Budget variance analysis will be conducted regularly thus enabling timely corrective actions. 10. Funds flow. For the national component implemented by MOHURD, the grant proceeds will be paid to the service provider directly for the single source selection contract. And reimbursement will be used for capacity building activities and project management, which has been reported to MOF and got its no-objection. Financial Management Manual has been prepared to define responsibilities of concerned agencies, and also standardize the payment and disbursement processing procedures and documentations. For the components implemented by various cities, the grant proceeds will flow from the Bank into the project Designated Accounts (DA) to be set up at and managed by the municipal finance bureaus of Beijing, Tianjin, Ningbo, Shenzhen, and provincial finance bureaus of Jiangxi, Guizhou and Hebei. Reimbursements or payments to service providers are based on funding requests (also referred to as withdrawal applications) submitted by PMOs. The funding requests are supported by contractor and supplier invoices and other necessary documents processed by PMOs. 11. For each city, following the subsidiary agreements and existing fiscal management, project DAs in USD will be maintained as per the following: Table 3-2. Designated Accounts and Ceiling Components Agencies Managing DA Ceiling of DA Beijing Beijing Municipal Finance Bureau USD380,000 Tianjin Tianjin Municipal Finance Bureau USD380,000 Ningbo Ningbo Municipal Finance Bureau USD440,000 Shenzhen Shenzhen Municipal Finance Bureau USD380,000 Guiyang Guizhou Provincial Finance Bureau USD500,000 Nanchang Jiangxi Provincial Finance Bureau USD500,000 Shijiazhuang Hebei Provincial Finance Bureau USD500,000 12. For each city, to request Grant proceeds, the PMO will prepare a payment request with supporting documents and submit it to the respective Finance Bureaus (FB) to review. FBs will review the requests and transfer funds from the DA to service providers or contractors. The Bank may also make payment to contractors when the individual payment amount satisfies direct payment requirements. 21 13. Accounting and financial reporting. Accounting regulations issued by the International Department of MOF and currently used by all TF recipients in China will be followed to maintain project accounting records and prepare project financial statements. The reporting format has been customized to adquately reflect project implementation and use of grant proceeds. All the PMOs will manage, monitor and maintain project accounting records. PMOs will also incorporate DA information maintained by respective finance bureaus to prepare the project financial statements. The unaudited semi-annual project financial statements will be prepared and furnished to the Bank by each PMO as part of the Progress Report no later than 60 days following each semester (the due dates will be August 31 and February 28). 14. Internal Control. The related accounting policy, procedures and regulations have been issued by MOF and will be followed by related implementing agencies. Detail internal controls procedures including segregation of duties, review, approval, and reporting procedures as well as the safeguard of assets have been established and documented. Project Financial Management Manual also clearly defines responsibilites, standardize payment and disbursment work. 15. Audit Arrangements. The annual audit report of the project financial statements will be due to the Bank within 6 months after the end of each calendar year. According to the agreement reached with MOF and China National Audit Office, the audit report and audited financial statements will be publicly available on both the World Bank and official websites of the following audit offices. This requirement is stipulated in the grant agreement. The responsible agency and timing are summarized as follows: Table 3-3. Audit arrangements Audit Reports Issued by Submitted by Due date Project financial statements - Audit Service Center of MOHURD PMO June 30 of each MOHURD China National Audit Office calendar year for Foreign Loan and Assistance Projects Project financial statements – Beijing Audit Office Beijing PMO Beijing Project financial statements – Tianjin Audit Office Tianjin PMO Tianjin Project financial statements – Ningbo Audit Office Ningbo PMO Ningbo Project financial statements – Shenzhen Audit Office Shenzhen PMO Shenzhen Project financial statements – Guizhou Audit Office Guiyang PMO Guiyang Project financial statements – Jiangxi Audit Office Nanchang PMO Nanchang Project financial statements - Hebei Audit Office Shijiazhuang PMO Shijiazhuang 22 Disbursement 16. Three disbursement methods: advance, reimbursement, and direct payment are available for the project. MOHURD will use direct payment and reimbursement. And other cities will use advances to the DA as the primary Bank disbursement method will be advances to the DA. Withdrawal Applications (WAs) will be prepared to request Bank disbursements and to document the use of Bank financing. WAs will include supporting documents in the form of Statement of Expenditures (SOEs), to be prepared on a cash basis, and source documents identified in the Disbursement Letter issued by the Bank. 17. The GEF grant would disburse against eligible expenditures (taxes inclusive) as in the table below: Table 3-4: Disbursement Categories and Percentages Percent of Amount Disbursement Category expenditure (US$) financed 1. Goods, consulting services, non-consulting services, training and workshops, incremental operation cost for 1,927,523 100% Component 1: National TOD Platform, Toolkit, and Policy Support 2. Goods, Consulting Services, Non-consulting services, training and workshops, incremental operation cost for 30,800,000 100% Component 2: City TOD Support and TOD Application TOTAL 32,727,523 18. Retroactive financing will be available for this Project in the amount of US$3.27 million for payments made under the Project prior to the date of the Grant Agreement (GA) but on or after December 30, 2016, for the implementation of goods and consultant services as well as training programs. Procurement 19. The initial procurement capacity assessment has concluded that the overall procurement risk is rated Moderate. The implementing agencies at the central level, in Beijing, Tianjin, Guiyang and Ningbo cities are the existing PMOs housed in MOHURD, Beijing Housing and Urban-Rural Development Commission (HURD), Tianjin HURD, Guiyang Transport Bureau, and Ningbo HURD, and have previous Bank project experience and capacity to carry out procurement of consulting services and goods under the Project. Shijiazhuang and Shenzhen are new PMOs established for their respective part of the Project without previous Bank project experience. Full-time Procurement officers for each PMO have been designated. Those from the existing PMOs have Bank procurement experience, however, those from new PMOs have no such experience. Based on the initial procurement capacity assessment, key risks identified include: (a) possible misunderstanding between the PMOs, the bid evaluators, and the Bank, which could lead to delays in processing procurement and non-compliance with Bank’s procurement policies and procedures; and (b) weak contract management capacity. The 23 following measures have been agreed to further strengthen the PMOs’ procurement and contract management and to mitigate potential procurement risks: (a) The staff of the 8 PMOs have attended, and will continue to attend, workshops on procurement procedures for goods, non-consulting services, and consulting services and contract management for Bank-financed projects; (b) The Bank will continue to provide advice and guidance on all procurement related issues, and training to the 8 PMOs throughout the project implementation; (c) Each PMO will hire technical experts to provide technical support for a smooth project implementation; and (d) The PMO’s representatives and qualified technical experts will be included in the bid /proposal evaluation committee. The PMOs’ representatives will provide an introduction to the Bank’s policies on the evaluation and clarifications as well as the main requirements in the bidding documents/Request for Expression of Interests/Terms of Reference/Request for Proposals before the evaluation starts. If the evaluation experts are identified to have no knowledge or experience in procurement under the Bank or other International Financial Institutions (IFIs) financed projects, they should be trained on the site before the evaluation. 20. Project procurement will be carried out in accordance with World Bank’s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants” dated January 2011 (revised July 2014); “Guidelines: Selection and Employment of Consultants Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011 (revised July 2014), and the provisions stipulated in the Grant Agreement. 21. Single Source Selection. A total of US$1.492 million would be required for services to establish and maintain a National TOD Platform, Toolkit, and Policy Support. The services under the TOD Platform would be directly contracted to CAUPD since it has unique authority to guide cities on the implementation of national urban planning guidelines and, specificially, the recently approved TOD Guidelines. It has a unique role as a policy advisor to MOHURD to be able to draw lessons from the Project to develop future TOD policies, regulations, and guidelines. It has unique ability to scale-up the implementation of the policies and approaches developed under the Project to other cities and to maintain the Platform beyond the project implementation period. The TOD Platform includes the following components: (i) Digital Repository; (ii) Dashboard; (iii) Diagnosis; (iv) Planning; (v) Impact Assessment; (vi) Monitor; and (vii) Collaborations and Marketplace. While CAUPD is a dependent institute of MOHURD, it is not ovreseen by the Department in which the Project PMO is established and it will be the Project PMO that oversees the contract. In addition, the following measures will be taken to mitigate against any potential conflict of interest: (i) the Bank’s standard consulting contract terms and conditions will apply; (ii) payments will only be made against acceptable outputs; and (iii) the PMO will establish an independent committee of experts to review the quality of outputs and issue acceptance of the outputs before payment is made. 22. Procurement Plan. A Procurement Plan acceptable to the Bank has been developed by the 8 PMOs for at least the initial 18 months of the project implementation. It is available in the project’s database and at the Bank’s external website. The Procurement Plans will be updated, 24 reviewed and agreed with the Bank annually, or as required, to reflect project implementation needs. 23. Procurement and Selection Methods and Prior Review Thresholds. The table below indicates the procurement and selection methods and prior review thresholds for goods, non- consulting services, and consulting services to be procured by each PMO under the Project. Procurement of works will not be expected under the Project. Table 3-5: Procurement Methods and Prior Review Thresholds Expenditure Contract Procurement Method Bank Prior Review Category Value (US$) ≥ 10 million ICB >=500,000 NCB All contracts >= US$ 4 million and < 10 Remarks: Where goods million are not normally Goods/IT available within China, Systems and the method of Non- procurement will be Consulting ICB even if the contract Services value is less than US$10 million. < 500,000 Shopping None n.a. DC All DC contracts >= US$4 million ≥ 300,000 QCBS, QBS, LCS, FBS Firms: All contracts ≥ US$2 million; < 300,000 QCBS, QBS, LCS, Firms: All SSS contracts >= US$ 1 FBS, CQS million; Consultants n.a. SSS Individual Consultant: >= US$ 400,000; n.a. IC SSS for individual consultant: ≥ US$400,000 Notes: ICB: International Competitive LCS: Least Cost Selection Bidding FBS: Fixed Budget Selection NCB: National Competitive CQS: Selection Based on the Consultants’ Bidding Qualifications DC: Direct Contracting SSS: Single Source Selection QCBS: Quality- and Cost-Based IC: Individual Consultant selection procedure Selection n.a.: Not Applicable QBS: Quality-Based Selection 24. Post Review. The Bank’s procurement team and/or external auditors will conduct field visits for post review of procurement actions every 12 months. The post review sampling ratio 25 will be at least one out of ten contracts. This ratio will be adjusted periodically during project implementation based on performance of each PMO. 25. Advance Contracting and Retroactive Financing. Retroactive financing will be permitted for the project within the limits specified in the Grant Agreement. It will be agreed during project negotiations that retroactive financing would be most likely used to support IOC and hire consultants as specified in the procurement plan approved by the World Bank. The Procurement Plan sets forth those contracts which are expected to be signed in advance of grant signing together with the relevant Bank review procedures. Only payments made under such contracts procured in accordance with the applicable Bank procurement/consultant selection procedures will be eligible for reimbursement by the Bank. Environmental and Social (including safeguards) Environment 26. As the project supports various technical assistance (TA) activities to achieve sustainable cities and control carbon intensity, overall positive environmental impacts are expected. Since no civil works are involved, there is no direct adverse impacts on the environment. However, the nature of the project activities, centered on transit-oriented development (TOD) and planning, might have long-term impacts downstream. TOD planning and improvements applied under the project could change travel patterns and urban development along the corridors. This could have an impact on energy consumption and associated carbon/air emissions in the long term but generally of a positive nature. The changed urban layout, economic activities and population density might add pressure on resources (e.g. water and cultural), affect flood, drainage and even groundwater, and/or exceed the assimilative capacity of the land for pollution. The planning guidelines, design standards, rules and mechanisms to be developed under the Project could lead to a shift in city forms and transport patterns, i.e. people-oriented versus automobile-oriented and motorized versus non-motorized transport. Consequently, it would result in different energy consumption and associated carbon and air emissions (particulate matters, NOx and hydrocarbons typical of automobile exhaust) as well as different road safety and health impacts. 27. To address the safeguard issues of the TAs that are identified to have possible long-term impacts, two practical ways are outlined in the EMF to integrate environmental considerations. The first is to include requirements in the TOR for these TAs to assess the environmental impacts of the draft output and use the findings to optimize the final output. Such arrangement is less independent, but can be compensated by public and expert consultation of the draft TA output. The second approach is to engage a third party to assess the environmental impacts of draft TA outputs. Such arrangement has the risk of not being able to effectively incorporate the recommendations and findings of such strategic impact assessment (SEA) into the final TA outputs. A combination of the two could be adopted taking into account both Chinese and the WB safeguard requirements and the real situation during implementation. The Terms of Reference (TOR) and requirements for SEA are developed and annexed to the EMF. 28. The project provides a good opportunity to integrate environmental and social objectives as an integral part of the planning process. Activities proposed by cities explicitly include 26 resources and environment as indicators for success. During the implementation and under the guidance of the EMF, this will be further explored with the clients both at national and city level E.g. How to incorporate environmental and social objectives into the detailed TOR for various proposed studies, design guidelines or policy formulation, and how to effectively conserve historical heritage of the cities and physical cultural resources. 29. Since the TA activities essentially promote improved planning, they offer an excellent opportunity to promote broad stakeholder engagement and participation. As appropriate, strategic planning initiatives could include focus groups, citizen consultations, expert panels, public hearings, etc. at all critical phases of the TA. Therefore, a stakeholder consultation and strategic communications plan will be developed as part of the EMF to guide such consultation during implementation, such as who should be engaged for what TA activities and the results as well as the timing and the form of consultations. 30. This TA project also provides an opportunity to build counterpart capacity for integrating environmental and social concerns into city planning work. Beginning with an assessment of the counterpart institutional and capacity assessments, additional measures to strengthen capacity are proposed in the EMF: (a) hiring full time staff or consultants with environmental expertise and relevant background to provide consulting services and technical support; (b) including environmental management training in the TA’s capacity building component of each PMO. The EMF itself, especially its annexes on requirement for SEA, offer guidance for the design and content of such capacity building. These should be integrated in the capacity building (e.g. training activities) for PMOs and other government and non-government agencies with a mandate or strong interest in environmental impact analysis and management. 31. Public disclosure and consultation. Local disclosure of the EMF has been conducted per the Bank requirement during October-November 2016 at the official websites of the MOHURD PMO and on municipal websites in the seven cities. After disclosure, public consultations had been carried out mainly through meetings and at central and city level with local government agencies, academia and experts. Public consultation in each city was conducted in October 2016. The concerns and suggestions from all public consultations have been incorporated in the finalization of the EMF. The English version of the EMF was published on the Bank’s external website on November 10, 2016 and December 23, 2016. Social 32. The Project will support TA activities, which will be solely financed by the GEF grant. There are no other sources of co-financing. The project outputs are mainly TOD-related studies and policies, area strategic planning, etc. in the participating cities. 33. The project focuses on urban areas and there are no groups of indigenous peoples. The project will support TA for developing policies and regulations, conceptual area planning, and TOD related planning, which may have downstream implications for land use changes or construction around transit stations, social disturbance, or impacts on urban poverty, disable and women, etc. There are no civil works, specific land use planning, or investment plans involved in the project implementation. However, the project will support TA for developing policies and 27 regulations, which may have downstream implications for land use changes or construction around transit stations. Therefore, OP 4.12, involuntary resettlement, will be triggered. 34. A social management framework (SMF) was prepared to deal with potential resettlement issues and other social issues. The SMF describes project background and proposed activities, and develops procedures and key elements of social assessment for the TAs and a resettlement policy framework for potential civil work if any. The Framework also include institutional arrangement, consultation, monitoring and citizen engagement, etc. 35. In planning or policy preparation, implication on resettlement and land use needs special consideration, so a Resettlement Policy Framework (RPF) was prepared as part of the SMF to cover key principals, procedures and other requirements on resettlement and to regulate any resettlement plan preparation, review and approval in project implementation stage, if any. 36. The SMF was disclosed locally in the project cities on October 24, 2016 and December 23, 2016 and on the Bank’s external website on November 3, 2016 and December 23, 2016. Relevant elements of the SMF will be incorporated into TORs during project implementation to ensure that environment and social safeguard policy requirements are incorporated into various assessments and development of strategies and plans and the screening process for downstream investments. 37. Implementing agencies have varying levels of experience with Bank safeguards policies from the novice to the expert. Shenzhen and Beijing, although with developed capacity in general, have not had many Bank project in many years. Guiyang also has not had many Bank projects and has one ongoing rural roads project. Implementing agencies in Tianjin, Nanchang and Ningbo have comparatively more experience with Bank safeguard policies. Capacity building related to Bank social safeguards is needed. Training, by Bank mission or experienced social consultants and in other ways, should be prepared in relevant documents, and implemented during the project preparation and implementation process. 38. A grievance redress mechanism has been proposed under the SMF. As part of project activities, The PMOs will work closely with relevant authorities, civil society to solicit inputs of the concerned public and other stakeholders. The grievance redress mechanism under the SMF will assist the public to file their grievances verbally and in writing with the PMOs. Complaints, if any, will be properly recorded and responded accordingly. The Bank will supervise the implementation of the SMF and provide safeguards training, as needed, during project implementation. Role of Partners 39. Each country participating in the GEF Sustainable Cities Integrated Approach Pilot (SCIAP) is paired with one or several global organizations acting as implementing agencies to manage the various projects in the participating countries and cities. The China Project is managed by the World Bank. Through the Global Platform for Sustainable Cities, also supported under the GEF SCIAP and led by the World Bank, there will be opportunities for shared learning among participating agencies and cities for promoting integrated approaches to urban planning, 28 financing and implementation. Broader partners, particularly international non-governmental partners operating at the national and international level will also form a Resource Team support by GEF to play a key role in knowledge sharing at the country level, including the World Resources Institute, Energy Foundation, the International Council for Local Environmental Initiatives (ICLEI), C40 (the Cities Climate Leadership Group, which is a network of the world’s megacities taking action to reduce GHG emissions) to name a few. The Resource Team will support the program and peer-to-peer learning with cities beyond the 27 that are directly involved in SCIAP. 29 Annex 4: Implementation Support Plan GEF China Sustainable Cities Integrated Approach Pilot Strategy and Approach for Implementation Support 1. The strategy for the implementation support plan was developed based on the nature of the Project and the risk assessment through the SORT process. It aims to make implementation support more flexible and efficient; it focuses on the weaknesses of the client, and the implementation of risk mitigation measures. The following risk categories have been rated as “Substantial”: (a) technical design of project or program; (b) institutional capacity for implementation and sustainability; and (c) Stakeholders. a) Technical Design. The technical design of the project is complex. Not only is the project innovative in terms of TOD design at the city level, but it also calls for interaction vertically with national agencies and also has design and monitoring requirements from GEF and the Global Platform for Sustainable Cities. The design risk has been addressed to some extent by developing the project around a coherent topic – Transit-oriented Development (TOD) and the phasing of activities. However, this is a relatively new approach to many cities in China. The involvement of MOHURD at the national level will help provide a channel of communication for challenges relating to urban planning policies and regulations that may arise. The Bank’s team will work closely with each PMO to make sure the TORs for each piece of work is developed with sufficient technical depth and with well-defined outputs so that the studies and analysis are of clear practical use. b) Institutional Capacity. The project preparation and implementation involves 8 project management offices. Their understanding and experiences with the concept of TOD and capacity to implement the project varies significantly. This implementation capacity risk is being mitigated by simplifying the project scope and ensuring sufficient opportunities and funding allocated to training, capacity building, and peer learning. Additionally, during implementation, cities will be paired or grouped based on areas of interest to better share experiences and knowledge. At the city level, the PMOs will be established within relevant leading government department which have the greatest interest and highest capacity to manage the Project and ensure the outputs feed into city-level planning and policy processes. c) Stakeholder. The project involves many stakeholders at the city level including government bureaus, the private sector, and the public. It also involves seven cities in China and a national ministry. Leading groups headed by a Minister and Mayor or Vice Mayor in each city will be established to ensure adequate buy-in and cross-sector coordination for the Project. The level of enthusiasm for the Project is high and cities see the project as providing an opportunity to showcase their sustainability approaches on a national and global platform. During project implementation, the project team will conduct frequent dialogue with city management to report project progress, understand city development priorities and ensure the full impact of the Project can be achieved and the outputs will make a significant contribution to overall city planning and development. 30 2. Procurement Management. Procurement implementation support will include: (a) training to all procurement staff in a timely manner; and (b) advice and guidance on all procurement related issues. 3. Financial Management. Financial Management (FM) support will include support missions to provide timely advice on FM arrangements. FM staff will review FM reports, including IFRs, annual financial statements, and audit reports, and will follow-up on issues identified. 4. Social and Environmental. Social and environmental risks will be mitigated through the development of Social and Environmental Management Frameworks with support from experienced consultants. Bank social and environmental safeguard specialists will ensure that the required safeguard documents are specific, comprehensive yet practical, and are achievable. The Bank will ensure that sufficient training is provided on safeguards, and that adequate resources are allocated for monitoring the implementation of the social and environment safeguard activities. The safeguards team will follow up with meetings at the appropriate level to resolve any issues that are identified. Implementation Support Plan 5. Use of Country-Based Staff. The Bank task team is either based in the China country office in Beijing or has significant prior experience working in China to ensure rapid and effective response to the Borrower's needs for implementation support. 6. Resources and skills required. Formal implementation and site visits covering all aspects of project implementation will be carried out annually, and will be supplemented by need-based visits by small technical groups. An annual workshop on a key topic for the Project will be carried out involving all participating cities, MOHURD and other partners. The supervision team will arrange to participate in supervision missions for lending programs in Nanchang and Tianjin to ensure synergy between the projects in these cities. The team has hired a Senior Urban Planning (Staff Consultant) to provide quality control for project implementation, particularly development of TORS, monitoring of TA implementation, and to provide timely advice to the client. Experience TOD practitioners will be brought in at key points during implementation. These technical experts will be screened with support from the Bank’s Transit- Oriented Development (TOD) Community of Practice (COP). The supervision team will coordinate closely on capacity building activities with the TOD COP. 7. Coordination with the Global Platform for Sustainable Cities (GPSC). The team will explore all possibilities for holding joint TOD workshops with other cities who are implementing TOD related projects under the GEF Sustainable Cities Integrated Approach Program (i.e. Johannesburg in South Africa and Recife in Brazil) to learn from each other and also join other activities of the GPSC. 8. A Mid-Term Review will be carried out no later than December 31, 2019 to evaluate progress and make necessary adjustments. Estimated inputs from different specialists in different stages of project implementation are outlined below. 31 Table 4-1: Implementation Support Plan Time Focus Skills Needed Resource Estimate Partner Role First twelve Team Leadership Strong Leadership TTL and Co-TTL: 2- months and Technical Skills 3 Visits and workshops Planning expertise and Urban planning and Sr. Urban Planning Technical Advisory China policy policy dialogue Consultant (150 by Partners at GPSC knowledge days plus 5 Visits Annual Conference and workshops City-Level TOD City-level urban, 10-20 day inputs Support from local Planning transport, land use from experience partner agencies for planning, financing TOD consultants or technical advice and etc. cross-GP support TOD experience Set up of DAs and FM FM Specialists 3-4 weeks per year capacity building plus 1 visit Preparation of TORs Procurement 3-4 weeks per year and consultant Specialist plus 1 visit procurement activities Continued evaluation Safeguards 2-3 weeks per year of Safeguards Specialist plus 1 visit implications 12-48 months Team Leadership Strong Leadership TTL & Co-TTL: 2-3 and Technical Skills Visits and workshops Planning expertise and Urban planning and Sr. Urban Planning Technical Advisory China policy policy dialogue Consultant (150 by Partners at GPSC knowledge days plus 5 Visits Annual Conference and workshops Sub-District, Corridor, Sub-district, 10-20 day inputs Support from local Station, and Level corridor and station from experienced partner agencies for TOD Planning planning, guidelines TOD consultants or technical advice and and regulations cross-GP support TOD experience from TOD COP FM supervision and problem solving FM Specialists 3-4 weeks per year plus 1 visit Implementation of consultant services Procurement 3-4 weeks per year Specialist plus 1 visit Continued evaluation of Safeguards Safeguards 2-3 weeks per year implications Specialists plus 1 visit 32 Annex 5: Economic and Financial Analysis GEF China Sustainable Cities Integrated Approach Pilot 1. The economic analysis comprises two parts: (i) following GEF guidelines, an incremental cost analysis to assess the incremental costs and global environmental benefits of the Project scenario vis-à-vis business-as-usual (BAU); and (ii) cost-benefit analyses of investment(s) directly leveraged under the Project. 2. The economic impact of the Project intervention will be analyzed in two ways: (i) for Project interventions that will lead to direct and measurable economic impacts, the benefit will be quantified and included in both analyses; (ii) for inventions with only policy outputs that will rely on further investments to materialize the full impact, a tracking framework will be proposed to facilitate long-term monitoring of the effectiveness of the program. The tracking framework will involve the establishment of a set of indicators to help measure each of the aforementioned benefit areas. 3. Economic cost. The tentative costs are associated with developing strategies and approaches for integrating plans at city, sub-district, corridor and station or transit hub level. For example, reforming zoning codes and technical guidance to incentivize Transit-oriented Development (TOD). 4. Economic benefits. With direct impact on urban mobility and the economy, TOD is capable of addressing a multitude of urban issues, beyond those directly associated with the transit network. TOD will enhance the utilization of urban resources (land, infrastructure and services), improve energy efficiency, and boost connectivity between urban nodes. As a result, it will have considerable and lasting impact on the local economy as follows. 5. First, by reducing costs. TOD has the potential to reduce congestion costs, measured in terms of travel time, vehicle operating costs, and maintenance costs at the network-level. Denser and more connected neighborhoods require fewer and shorter daily trips. Studies demonstrate that TOD reduces overall congestion even if drivers are not persuaded to completely abandon use of their vehicles. The mix of land uses within TODs can further reduce vehicle travel. Increases in proximity and convenience also allow residents, workers and visitors of TODs to complete their daily activities within a smaller area, resulting in shorter travel distances and lower average vehicle trip rates. Washington Metropolitan Area Transit Authority (WMATA) estimated that the city’s mass transit system saves all households in the Capital region US$705 million per year in time from being lost to traffic congestion, whether they take the metro or not. 6. Second, by saving land. By creating higher density neighborhoods with diverse mix of land use near transit stations and along transit routes, TOD increases the overall efficiency of urban land use, resulting in less sprawl, fewer greenfield developments and shorter commutes. Studies show that TOD shortens transit distances between origins and destinations. A 2008 Transit Cooperative Research Program (TCRP) report estimated that TOD led to the need for an estimated 188,300 fewer lane-miles of construction. 33 7. Third, by enhancing property values. Studies show that home owners are generally willing to pay a premium to be located near a station in order to reduce commute times. Design features, such as street connectivity, smaller block sizes, even mix of land uses, better pedestrian access to commercial areas, and proximity to light rail stations are linked to higher property values. Several studies also reveal the “synergistic” effect of TOD on property values. For example, Bartholomew and Ewing (2010) found that compact development can generate a premium of 40-100 percent compared to houses in nearby single-use subdivisions; Duncan (2011) found that distance to a transit station could become a significant predictor of property values provided a pedestrian-oriented environment, specifically a favorable intersection density and a considerable amount of practical commercial establishments. 8. Fourth, by saving energy and other resources. Buildings and transportation systems are two main sources of energy consumption in a city. A Brookings study showed that a walkable urban household in the US consumed about a quarter of the energy consumed by a drivable suburban household. 9. Fifth, by reducing pollution, improving travel safety, and public health. Air quality benefits can be derived from reduced motor vehicle travel, which, along with the specific street design standards associated with TODs, such as narrower streets and lane widths, better pedestrian facilities, traffic calming, and other features that tend to slow the speed of vehicles, will also help reduce road injuries and fatalities. In addition, public transit, cycling and walking also promote physical activities with positive health benefits. 10. Sixth, by unleashing the pent‐up demand for walkable urban development in the center cities and transforming many suburban places near transit stations and routes. 11. At the global level, TOD will reduce greenhouse gas (GHG) emissions, particularly those related to people’s daily travel behavior. Carbon emissions per passenger kilometer vary among different urban transport modes but in general a high share of public transport and non- motorized transport is correlated with low levels of carbon emission intensity. In 2012, carbon emission in China’s transport sector was estimated at around 671 million tons of CO2, about 10% of the total emissions.23 Urban transportation in the 7 project cities had contributed to around 40- 60 million tons of CO2 that year. Assuming a 5% reduction in urban transport related carbon emissions, the Project interventions could result in an estimated indirect reduction around 2-3 million tons of CO2 a year related to urban transport, or a lifetime CO2 emissions reduction around 50-70 million tons assuming steady growth over 20 years. An alternative method using per capita carbon intensity as the basis for estimation yields approximately 600 million tons of GHG emissions from all sectors including urban transport, building energy efficiency and industrial production. (See Box 5-1 for calculation method). If we assume transport sector still accounts for 10% of total carbon emissions as it was in 2012, then transport-related carbon emission reduction is about 60 million tons, which is in line with the alternative estimation. 23 The Analysis of CO2 Emissions and Reduction Potential in China’s Transport Sector, Mathematical Problems in Engineering Volume 2016 (2016) 34 Box 5-1. Methodology for estimating the indirect carbon emissions reduction Carbon emissions reduction is defined as the total amount of emission avoided in the seven cities during 2021-2040.24 The basic assumption is that cities will be able to reduce per capita carbon emissions if they follow the trajectory of urbanization guided by transit-oriented development (TOD) principles. TOD can potentially save carbon emissions embedded in energy consumption by transport sector, buildings and industrial production. Carbon emissions reduction, denoted by , is calculated using the following equation: Where is the carbon intensity of city j in year i under the business as usual (BAU) scenario; is the carbon intensity of city j in year i under the transit-oriented development (TOD) scenario; and is the population of city j in year i. Additional assumptions have been made to conduct the calculation: a. Assume population grows at 0.5% per year for Beijing, 1% for cities with population more than 10 million, and 2% for those with population under 10 million. b. Between 2010 and 2020, carbon intensity grows at 0.5% for Beijing and Shenzhen, 1.5% for Guiyang and 1% for other cities. c. After 2020, for the BAU scenario, assume carbon intensity in cities reach the peak as claimed in official documents and remain steady afterwards. (i.e., Beijing 2020, Shenzhen 2022, Guiyang 2025 and others 2030). d. After 2020, for the TOD scenario, assume a 0.3% decrease in carbon intensity each year as compared to the BAU scenario. Carbon intensity will continue to decrease after cities reach the peak. 12. Incremental cost analysis. The direct incremental cost of the Project is estimated at US$32.73 million. (see table 5.1) 13. Tracking framework. For inventions with only policy outputs that will rely on further investments to materialize the full impact, a tracking framework is proposed to facilitate long- term monitoring of the effectiveness of the program. The tracking framework helps establish a set of indicators to help measure each of the aforementioned benefit areas. (see Table 5.2) 24 GEF guidance defines life time as 20 years. 35 Table 5-1. Incremental Cost Analysis Costs Domestic Benefits Global Environmental Benefits Baseline Scenario BAU investment and BAU levels of BAU level of GHG (BAU level efforts expenditure levels - transport-related cost emission reductions envisaged by savings; enabled by existing existing urban - property appreciation; measures taken master plan and - improved land use TOD measures) efficiency - improved energy efficiency - improved efficiency in the use of other local resources, such as water, sanitation, etc. - reduction in local pollutants Alternative National TOD TOD strategies laid out at Greater GHG emission Scenario Platform, Toolkit the national-, project city-, reduction potential development and district-, corridor- and nationwide from transport, (BAU efforts plus capacity building: station- levels to enable building and energy the GEF project) US$1.93 million GEF greater than BAU level of sectors achievements in: Dramatic GHG emission City-level TOD - transport-related cost reduction potential from strategies with detailed savings; the cities directly involved strategies and plans at - property appreciation; in the GEF Program the district, corridor - improved land use and station levels; efficiency capacity building: - improved energy efficiency US$30.8 million GEF - improved efficiency in with additional the use of other local counterpart resources, such as water, contributions sanitation, etc. - reduction in local Equivalent investment pollutants and expenditure levels as BAU Increment US$32.73 million Incremental benefits in the A lifetime reduction of aforementioned areas vis-à- approximately 600 million vis BAU scenario tons of CO2 36 Table 5-2 Tracking Framework a. TOD Tracking Indicators Quality Measures Quantity Measures Density Diversity Design Accessibility Rail Density Population Land Use Street Network Distance to Number of rail Density Mix Density Municipal stations/ Population Mix = number All roads (except Passenger City Area (km2) density within of POIs for highways and Transport Hub 500m buffers land use type expressways) length Distance to the Rail Network within 500m (km)/500m buffer area nearest urban Density Job Density buffer / (km2) passenger transport Length of rail lines/ Number of number of terminal center City Area (km2) enterprises POIs for all Highway Density and land use types Length of expressways Number of Bus Urban Land governments/5 within 500m (km)/500m buffer area Lines Coverage Ratio 00m buffer buffer (km2) Number of bus 500m buffer area of area (km2) routes within 500m stations/ Job Housing Ground-floor Retail buffer Urban Construction Development Imbalance Density Area (%) Compactness Population Number of ground- Number of Bus Number of Density / floor retails/500m Stations Urban Population POIs within Workplace buffer area (km2) Number of bus Coverage Ratio 250m to POI Density – stations within 500m Populations within stations/Numb 1 Number of Parking buffer 800m buffer area of er of POIs Facilities stations/ within 300m- Number of parking Distance to Urban residential 500m to facilities within 500m Municipal population (%) stations buffer Service Distance to the nearest city-level public service facilities 37 b. TOD impact indicators Cost savings Land Utilization & Value Environment Development Commute Population Density GHG emissions Investments costs Population density within 500m Per capita commute Investments within TOD Average buffers related GHG emissions design area (RMB) commute time (kg/day) Job Density Construction Average Number of enterprises and Local pollutant levels Commercial and commute cost governments/500m buffer area PM2.5/ PM10 residential floor space (km2) constructed within TOD Average design area (m2) commute Development Compactness Energy Efficiency distance Number of POIs within 250m to Energy efficiency Employment stations/Number of POIs Per capita energy use in New jobs created within within 300m-500m to stations public space within TOD design area 500m buffer area Property value (kWh/ person/ yr) Tax revenue Residential property price Tax revenue within TOD (RMB/m2) design area (RMB) Commercial property price (RMB/m2) 38 Annex 6: Framework Approach to Private Sector Participation in TOD GEF China Sustainable Cities Integrated Approach Pilot 1. This draft approach has been developed with inputs from IFC team members, peer reviewers, and the Transit Oriented (TOD) Community of Practice (COP). The framework sets out options for involving private sector at different levels and stages of TOD. The aim is to support participating cities to move from central government support, land financing, and off- budget borrowing towards accessing capital markets for funding needs, and securing private sector participation. A. Broad Framework Broad Strategic – Development of Master Plan for relevant areas or districts in the cities: a. Establish specific areas or zones for industrial/commercial development to take advantage of city’s competitive strengths (based on City-Level TOD analytics) b. Establish relevant infrastructure that needs to be in place – transport, roads, power, water, etc. – making sure there is equitable access for all income groups c. Establish affordable housing facilities (and other facilities such as schools and health care) for employees from low income groups Mode of Delivery – Public/Private/Public-Private Partnerships d. Using the Master Plan as framework – determine applicable mode – Public/Private/PPPs – to deliver the TOD components of the Master Plan on a timely and least cost basis e. Public sector to develop terms of reference for private sector involvement – to maximize the use of the private sector for construction and operation & maintenance (O&M) efficiencies but also to direct the private sector to deliver on “less profitable, less margin” parts Financing Support f. Public – Funding or guarantee support from multilaterals and bilaterals; municipal bonds g. Private – Funding or guarantee support from multilaterals, bilaterals, international and local banks, pooled finance, and green bonds B. Specific Framework 2. The private sector makes investment decisions based on specific projects at a specific location, whether it is infrastructure investment or service (operation and maintenance) provision. For this reason, a practical way to promote private sector participation in TOD is to identify all possible areas for private sector involvement and to check if there is the exist enabling environment to encourage private sector participation in that respective area and then detail 39 specific areas for support. The enabling environment consists of government policies laws and regulations, institutional settings and financing schemes, primarily at national level but also at both provincial and city level, depending on the area or issues involved. 3. Provided below is a hypothetical Analytical Framework for Private Sector Participation in TOD in China. This table lists possible areas for private sector participation both in investment and service provision as a first cut (they may not be exhaustive, though they cover most). The columns show the above-mentioned elements of the enabling environment. Column “C” means current conditions and “R” means recommended measures. 4. During project start-up, the task team will further discuss this table to identify promising areas for private sector participation in TOD with team members, participating cities, private sector, financing institutions, and other experts outside the team, with experiences and knowledge on specific areas (transport, housing and energy, etc.) in China. The team will develop the table and identify critical issues to be addressed and to further guide the development of Terms of Reference for the City-level TOD Strategy. 5. The National Government’s policy towards private sector involvement in TOD is the most important issue to be understood, first. TOD components consist of transit infrastructure, transit- related facilities and TOD area properties. Theoretically, private sector participation is possible in all these components, either in the form of physical investment and service provision. How far and how actively the private sector can participate in TOD depends on the strategy and policies of the government as well as their capacities and experiences. 6. In Japan, many private railway companies invest and operate transit, develop commercial and residential properties and sale and manage these properties in the proximity of transit stations and corridors, in the metropolitan areas. In local cities with less demand and economic activities, either national government or local governments construct the transit infrastructure and lease these facilities to private sector or public/private joint sector (called the third sector) to operate and maintain transit services. Most often, these operators are also allowed to explore commercial activities associated with transit such as retails and real estate development. 7. In China, the National Government generally considers that transit should be constructed and owned by public entities. If this is unlikely to change in the near future it would not be feasible to explore private participation in transit investment. The cities will also need to gain a better understanding of the situation on leasing of transit services. Even if this is not the current practice in China, if the government is interested in exploring private sector participation in O&M of transit services, it would be worth conducting studies or TA on enabling environment in this area, diagnostics, regulatory and institutional audit, private sector capacity analysis, private sector demand analysis and collection of the data and information on global best practices on the leasing arrangements for transit services. The analysis should cover, policy, laws and regulations, institutional setting, and financing scheme. The analysis should focus on impeding barriers for private sector participation in TOD components and propose remedial measures to create enabling environment. 8. The actual scope and depth of the activities supported under the GEF project for private sector involvement depends on the interest and commitment of the different city governments 40 and this will be explored as the City-level TOD Strategy work gets underway. The Analytical Framework Matrix for Private Sector Participation in TOD in China will be used during dialogue to identify potential areas to be supported by the Project either at a national, city, corridor, or station area level. Depending on the interest of the participating governments, the spectrum of private sector involvement can be adjusted spatially at corridor, station area, or within station property areas and depending on investment mode or service mode. Depending on the interest of each city, the task team may promote several areas of interest in a standalone mode or in a more integrated mode. The task team and participating government may also choose to support all elements of the enabling environment or selected ones. 9. Using this matrix, the team will work with MOHURD and the participating cities to identify the most promising areas for private sector participation in TOD and the elements to be supported. The initial findings will be taken forward during early project start-up and the development of the activities under the national platform and City-level TOD Strategy TORs as a start. If some cities show strong commitment and interest to the extent that they wish to develop pilot projects or operations, the Bank may be able to help them further develop, the concept plan for a prototype private sector investment project in TOD. If some of the most advanced cities, like Shenzhen, Ningbo, Beijing or Tianjin are interested in developing Green TOD zones together with private sector, supporting such an experiment would be worth exploring. However, this is a quite new area in unchartered waters in China, and the task team will have to further prioritize areas to explore as the Project progresses. 10. The task team will develop opportunities under the Project to ensure the participating cities can better identify possible promising areas by sharing knowledge and information on what is happening in other countries in this effort. The capacity building activities under the project for real estate market analysis will be an important activity in the first year under the national and city-level activities. Growth is slowing in China and at the same time, risks are rising. The economy is undergoing transitions on several fronts. Demographic and economic fundamentals are paramount in the planning and implementation of TOD, particularly in property development and application of development-based land value capture schemes. Helping the National Government develop a solid database of the real estate market and the records of real estate transactions on TOD influenced areas, would be a first step. At city level, some cities, like Shenzhen, have already made efforts in this area. The Project may take this experience to support other cities in this area as real estate capacity is critical for any TOD planning and implementation. 41 Table 6.1 Analytical Framework for Private Sector Participation in TOD in China National Level <------------------> City Level C: Current R: Recommended Components Policy Laws & Institutional Setting Financing instruments Regulations C R C R C R C R CORRIDOR Transit Infrastructure Investment Guided wats (rail and BRT line) Trains and Buses Transit Stations (platform, concourse, ticket office, waiting room) Transit Operation Control & Information Center Transfer Facility to Feeder services (bus, terminal etc.) Feeder Bus or other feeder services Operation and Maintenance of Above Facilities Transit Services Feeder Services STATION AREAS TOD Related Infrastructure Investment Roads /Street Pedestrian Bike Lanes Street Light Amenities (station plaza, park, benches, libraries, monument, etc.) Parking (Cars/Bike) Other incremental public utility investment associated with densification. O&M of above facilities TOD Area 42 Property Development Commercial Properties or spaces inside the Station Commercial Properties in TOD Areas Property Management of the above properties Retail or other business activities in TOR areas Housing Development including affordable housing development Area Scale Property Development including associated infrastructure Green Investment in TOD Area Green Building District Heating/Cooling Renewable Energy Smart Grid Electric Car Use Car Sharing Water Saving/Recycle Solid waste Management Green Roofing, Trees Area or Block based Green TOD District Development 43 Annex 7: Project Map GEF China Sustainable Cities Integrated Approach Pilot 44