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The world bank loan project Workbook

 

The first chapter outlines

 

A, the World Bank

The World Bank (the World Bank) is a specialized agencies under the United Nations, international financial institutions responsible for long-term loans. World Bank is based on the 1944 America Bretton Woods conference "international agreement" bank was established, its purpose is through the production of business investment, Renaissance and development aid members; to promote foreign investment through loans and guarantees or participate in loans and other and investment way, when member states cannot access to private capital in reasonable condition, in appropriate conditions to the bank funds or to raise funds and other funds to give direct loans to member countries, to supplement the lack of private investment; by encouraging international investment, the development of members of the production resources, to provide technical advice and improve production capacity, in order to promote balanced growth a member of the international trade and the international balance of payments situation improvement.

According to the world bank's purpose, its main business activities, to developing country members to provide long-term loans to provide loans to member governments or by government guarantees of private enterprises and technical assistance, to help them build some long construction cycle, low profit rate, but also for the country's economic and social development of the necessary construction projects.

The world bank and the International Development Association (International Development Association, IDA), International Finance Corporation (International Finance Corporation, IFC), the Multilateral Investment Guarantee Agency (Multilateral Investment Guarantee Agency, MIGA), International Investment Dispute Resolution Center (International Centre for Settlement of Investment Disputes, ICSID) five parts of the World Bank Group (World Bank Group). The world bank funding sources: the world bank, the international capital markets to raise funds for development, the International Development Association relies on the wealthier members of government contributions.

The world bank is committed to several main propulsion:

System: to improve the benign clean government management system, effective legal and judicial system, benign and financial system, regulated the social security system and social planning;

Material: solve water supply and sewage, energy,Road, transport and communications, environmental and cultural issues;

The concrete strategy: according to the city and rural, private sector. The relationship between the world bank and China very close, the bank set up the world bank China representative office in Beijing, and to send experts representative offices, help Chinese each city successfully apply for bank loans. In 1981, the world bank's first loan to Chinese, used to support the development of the University Chinese project. Since then, the world bank to provide loans to nearly $39100000000 China, supported 263 projects, of which about 81 projects in the implementation of total loans, China still come out in front in the bank's borrowing country.

 

Two,Strategies and plans of World Bank in China

The world bank's country assistance strategy and China development direction, including transfer the focus of reform from the opening stage to the more difficult the structure adjustment and institutional construction stages are consistent. Country assistance strategy also reflects the relationship of the World Bank Group and Chinese changed in nature, especially for the potential benefits of both sides, because not only China accept Bank assistance, but also more broadly shared their experiences, promote the thoughts on global development issues of mutual concern.

• Improve the business environment, helping to accelerate the transition to a market economy, the main ways for knowledge transfer activities of a series of. To support the focus to strengthen macroeconomic management in helping the central and local governments, to help China integration into the global economy, promoting the reform of the financial system, promote the development of private enterprise, promote the reform of state-owned enterprises, strengthen public sector governance;
• Meet the needs of vulnerable groups and the poor, underdeveloped areas, take the way of loans to support rural development, infrastructure and social projects, as well as the analysis, policy advice and training activities. The goal is to increase employment, strengthen between the under developed region and other regions of the road traffic, the development of human resources, strengthening the social security system, improve the targeted poverty alleviation project benefit.
• The promotion of sustainable development, take the way for development loans, policy support and the mechanism. Support the project mainly in small river basin water resources management, governance, sewage treatment, clean energy, sustainable rural development and city pollution control etc.. The bank is also responsible for global environmental project execution and the global environment facility and the Montreal protocol fund.

In view of the World Bank Group and China cooperation more prominent knowledge sharing, knowledge activities composed of the service, analysis and policy consultation and research and training occupies an important position in the country assistance strategy, the purpose is to promote policy discussions and provide the basis for future lending activities. 2003 - 2005, the bank through the loan program each year for the Chinese provides 12 - 1300000000 dollars in loans, of which about 3/4 will be used to support the poor and underdeveloped areas and the promotion of innovation and transformation project.

International Finance Corporation to play a more active role in aid plan. The International Finance Corporation will provide technical assistance to improve the business environment and investment, development of small and medium enterprises, the financial sector, inland provinces of private enterprises and private enterprises engaged in infrastructure, social services and environmental protection technology development. A typical project in the exemplary role to play at the same time, you can set the standard in the field of corporate governance. To provide service on the Multilateral Investment Guarantee Agency is to China WTO appear guarantee and attract foreign investment.

The Ministry of FinanceIs the main counterparts in the world bank group to carry out business activities in Chinese,The national development and Reform CommissionTo make the cooperation plan also plays a very important role. The world bank and the Chinese government each year on both sides of the rolling three year loan plan for consultations, both sides can put forward project proposals, all loans must be after full technical, economic, financial, environmental and social assessment to submit the decision mechanism of credit and debit for final approval, conduct regular supervision and inspection on both sides of each loan the implementation of the project progress.

The second chapter World Bank loan project work flow

 

A, The project cycle

Simply put, the entire project cycle from the options (project), to complete the project post evaluation, a total of 7 steps, and the project preparatory work is about 2 ~ 3 years, specific as shown below:

 

 

 

Two, detailed working process

1   Option (project)

Each phase of the cycle is to determine the priority for funding, bank, and the bank, the government and the borrower is interested in considering projects. In the past the bank according to the project, mainly put forward to the government and the borrower's suggested answer. In recent years, banks encourage and help countries develop their own ability to plan, and also strengthen the formation of project of its own way. Analysis of economic analysis and the Department of the bank, so that people understand the development potential of the countries concerned, and lay the foundation for policy and evaluation of national and sectoral. Analysis of these economic and sector but also for the world bank or the International Development Association for the loan of the state's "debt credit" to be assessed. This kind of analysis for the banks and between the countries concerned, on the development of appropriate strategies to develop the economy, an important department and its problems, including the policy and institutional change, provides a basis to continue dialogue. Thus, it may be determined with and support consistent development strategy, and is suitable for the objectives of the Department, and the government and banks were considered suitable for the project. Preliminary test -- projects must also withstand the feasibility of cost should be commensurate with the expected benefits, it can be found the solution from the technology and mechanism.

To determine a suitable for the requirements of the project is not easy, maybe still lack the ability to make the right judgments of knowledge. The government and other lending institutions may not agree that banks hold a kind of development goals or department priority view. There may be difficult to choose the scope of the project, should be small (the pilot stage, or from the larger scale but riskier investment start? ) in order to achieve the goals of the project, differences would soon be in need of change in policy or change the surface mechanism problem. To solve these problems, they entered the preparation stage.

Once the project is determined, the project has been included in each of the countries annual loan plan, this plan will become the basis for the future work in this country. The national planning for banks needed for the preparation of business plans and budgets, but also to ensure the necessary resources, so that each project through all the sequential stages of the cycle and forward.

 

The borrower preparations

The first step is to establish the project library options work, it should be noted here several principles:

(1) should choose the larger overall project, avoid contained sub projects in the project, resulting in central goal of the project is not clear, not prominent.

(2) select the project medium-term planning backbone in city planning, close to the world bank loan project requirements.

(3) try to choose less immigration removal project, because the bank does not advocate because of the implementation of the project and lead to a large number of immigration, the world bank loan will not be used for the payment of any fee immigration removal.

(4) to avoid or reduce the bank's policy involves ten projects in the project, reduce unnecessary procedures and work.

The project is selected, the next should focus on the direction of investment in the area of the bank, to determine the basic situation of the project background, necessity, scope, scale, investment and loans, materials will be reported to the local bureau of Finance and development and Reform Commission, the consent by the Bureau of Finance and development and Reform Commission, a report to the local government, to obtain government approval, should contact the design units, the preparation of project proposals, and then in the name of local government by the hair change bureau reported to the provincial development and Reform Commission for approval, so far, the project is complete, the next step is to project approval procedures, which will prepare stage and then described in item.

It should be noted that, in the project phase, the world bank will send the project identification mission to the local related government departments, the project office and the design units to understand the basic situation of the project, to ensure that the project can meet the requirements, therefore, the project proposal, in English version must be prepared for the world bank expert reading. The differential group except for supervision and inspection of project preparation work progress and direction, but also short-term training to the project office and the design of unit personnel, to ensure that the project preparation work is on the right track.

 

2   Get ready

Once the project into the loan program, it will enter the project pipeline. The bank and the borrower close cooperation between the period (usually 1, 2 years) began. Each project must prepare a project outline, to explain its purpose, to identify the main problems, and the timetable for the future process.

The borrower has formal responsibility for. The bank was unwilling to projects ready for help, according to the principle of reason is the banker, such involvement may influence the objectivity of the evaluation. However, experience has shown, the bank must ensure that timely and Everfount are well prepared to play a positive role in the project. This effect has many aspects: to have the ability, have the funds, can prepare their own project borrowers understand the bank's requirements and standards; to help other borrowers seeking funds or technical help for the preparation work; there is incomplete or not fully compensate for the projects in the distance. In exceptional circumstances, the bank's own preparations. The establishment of the world bank delegation in East and West Africa, mainly in order to give added to governments in the region limited ability in identifying and preparing solid projects.
   Preparation phase must be full range needed to achieve the goals of the project's technical, institutional, economic and financial conditions. For example, a resettlement project may need to be studied according to the telemetry data, to determine the arable land, traffic channel, and had planned to settle areas now population. The land must be more detailed investigation on Soil and water resources after determination, according to the available resources and research knowledge, determines the appropriate planting form; select helps improve the necessary crop yield cultivation technology; people settled on the economic and social survey to determine appropriate land use, promotion the service system, the sales system, project management system and other institutional arrangements. Degree and method of government on the cost and the price of agricultural products into the policy, cost recovery, and their influence on the economic status of the beneficiary and the government shall be one one.

Key preparation stage, is the technology and mechanism to achieve the project goals need alternatives to be determined and compared. Most developing countries are characterized with rich and cheap labor force and lack of capital. Therefore, the bank does not seek the most advanced technological solutions, but to find the most suitable for the national resources and its present stage of development solutions. Although the bank has provided funds for the advanced telecommunications preparation and most modern container port facilities, the bank is still considering this problem: crops cattle is more economical than using a tractor; just poor city minimum living conditions, whether the slums to improve or provide the venue and services more suitable than the traditional housing; or water supply, public standpipes than families more appropriate connecting pipe. Therefore, to study the feasibility of the preparation stage, the preliminary design technique and the mechanism to identify and prepare options, and compare their respective costs and benefits, then, the more hope for a more detailed investigation of the scheme, until finally get the most satisfactory solution.

All of this takes time. The world bank loan for some time because of the long criticized. But some countries, each project is a long-term economic life's significant investment, in order to achieve the best technical solutions, in order to establish the appropriate organizations, in order to predict and pre processing sales or other problems, even take several times is worth it.

 

The borrower preparations

The domestic program, in the project approval, the next step is to obtain the approval of the project work through. The project office shall urge the design units to prepare the feasibility study report, the project's environmental impact assessment report and resettlement plan report. It should be noted that: the feasibility study and the EIA report is required the approval process, the resettlement plan is against the bank's program must write. In the hair change bureau will report to the provincial development and Reform Commission, the provincial development and Reform Commission will determine whether the projects submitted to the national development and Reform Commission and the Ministry of finance, if approved, the project will be reported to the State Council by the national development and Reform Commission and the Ministry of Finance, approved by the State Council, the project will ultimately determine and was included in the national multi annual loan plan, foundation this plan is the future work in this country. This project of the domestic approval process is completed, pay attention to one point should be evaluated before the project is completed the domestic approval procedures, avoid evaluation by domestic pass approval caused rework in the bank.

On the other hand, the world bank will prepare phase of project evaluation before sending in project preparation team to the local in the project, understand the project preparation work, and on the feasibility study, environmental impact assessment and resettlement plan report proposed amendments. Prepare clusters by experts the world bank in Chinese Representative Office of the project manager or project manager and the feasibility study, environmental impact assessment, resettlement, institutional, financial and economic aspects. The design unit must according to the group put forward the views of improving the report, and the final draft for government approval report.

At this stage, the bank requires the project office at the international consulting company's help, completed the project preparatory work, so the international consulting company's participation is essential for the world bank project. Consultants Co has experience in the project, feasibility study, environmental impact assessment and immigration reports, Consultants Co has the rights and obligations of examination, the project can do make additions or amendments; can bring forward the adjustment suggestion of planning; can help project office establishment and the financial, economic and social analysis, purchasing plan reporting requirements consistent. Finally, in the project assessment, the bank will require the Consultants Co according to the project office to provide suggestions for the reference material. As the third party, the Consultants Co is not only involved in the loan side -- project office project preparatory work, but also help lenders -- the world bank project after the feedback to the bank, played the role of connecting link.

In the specific operation, the province's office signed an agreement with the international Consultants Co, the agreement includes the scope of services, Consultants Co, World Bank Office of province obligation responsibility and the way of payment. The project application once the work is started, the project office will hold regular project preparation work schedule meetings, understanding the preparation of the report, and the design of units encountered in the preparation of the report problems to help. Consultants Co also take part in the work schedule meetings, real-time and comment on the report and put forward the proposed amendments. In the preparation stage, the Consultants Co to play a more important role, the project financial, economic and social analysis and purchasing plan report mainly by the responsible.

 

3   Assessment

When the project of forming, nearing completion, is ready for the assessment of the project. Evaluation is perhaps best known for work on the project in stages, partly because of direct participation in the bank. It is a key stage in the project cycle, because it is the culmination of preparatory work, all aspects of the project to conduct a comprehensive inspection, and the project execution and completion of the project on the basis of evaluation.

Assessment is purely the task, which is composed of the bank staff to do. Sometimes with the help of individual consultants, they often work in the field of 3, in 4 weeks. If ready to do a good job, evaluation can be relatively smoothly. If not, it may then have to send one or several working groups to the country for this work. Assessment includes four aspects: technology, organization, economic and financial aspects of the project.

Technical aspect: the bank must ensure that the project is reasonable in design, engineering, and conform to the accepted standard of agriculture, education and other standards. Assessment team to conduct the research to the solution of the proposed scheme, the choice of the consideration and the expected effect. More specifically, technology assessment is concerned with specific rules, layout and location of facilities; the use of technology, include the type of equipment or production method; the adaptability of technical standards adopted to local conditions; method of providing services by; realistic execution plans; to achieve the desired production possibility. On a family planning project, technology assessment may be quantity, care and Baojian Railway Station design and location and obstetric medical is to adapt the service population; on the highway project, should be concerned about the width of the road and the road and traffic is expected to adapt, and the initial construction costs and maintenance costs are often to consider how to spend money to pay, in a trade-off between the higher or lower labour intensive construction method; on education project, to care for the number and arrangement of curriculum and classroom, laboratory and other facilities are suitable for the country's education needs. Technology assessment is a key part, is the cost estimate and they rely on as according to engineering or other information for review, to determine their range in the acceptable error in correctly, unexpected and expected in material terms arising during the execution of the price increases the leeway is appropriate. Technology assessment and review the proposed procurement arrangements, make sure that these arrangements are in accordance with the requirements of banks. Engineering, construction or other professional work procedures to review. In addition, technology assessment and review of the project facilities operation and labor costs as well as the possibility of obtaining the necessary raw materials or other inputs. The potential impact of the project on the human and the natural environment has to be checked, make sure to control and minimize the negative effects.

Mechanism: in the bank now use the term, "institution building" may have become the most important goal of the world bank loan. This means, build the transfer of funds allocation and the physical facilities, though they themselves have value, but in the long run, not the end of a set of local "mechanism" the vitality of the more important. From the broad sense, it includes not only the borrower itself, its organization, management, personnel, policies and procedures, but also includes the government a whole series of the agencies can work policy. Experience shows that, the project organization not paying enough attention to the problems occur in the operation process of execution. Evaluated the organization must deal with a series of problems, such as the project entities are well organized, whether its management can bear the negative task, is effective use of local capacity, the need for policy and institutional change from the entity in order to achieve the goals of the project. For the traditional project entities, these problems are very important, but, for those responsible for the preparation and implementation of new projects to benefit the rural and urban poor (there are no ready-made model can follow the entity), these problems are more important and more difficult to answer. Our experience at the moment there is no ready-made solutions, can produce a set of institutions, can effectively and economically for many people (as they often are in remote areas, the government will be beyond one's grasp) to provide goods and services, and to inspire them, change their deportment. From the aspects of the project, institution building is perhaps the most difficult to solve. Part of the reason is because of its success largely depends on the cultural environment of understanding. The bank has recognised the institutional arrangements necessary to study continuously, to absorb new ideas, and willing to take to expand into long-term method of several projects.

Economy: on several design options project cost benefit analysis, then a scheme to choose the most able to meet national development goals. This analysis is generally in the project preparation period successive stages, however, assessment is the final review and the estimated time. The economic evaluation of project department background. The advantages and disadvantages of the sector investment plan, departments and institutions as well as an important policy of the government to be examined.

In transportation, each assessment to consider the whole transport system and its contribution to the national economic development. Assessment to study it and compete with other modes of transportation such as the railway of highway project. The Department of transport policy is subject to examination, and puts forward some suggestions on the reform is needed, for example to those who disturb the rules and practices of traffic assignment. In education, electricity and telecommunications, the world bank's "project" may involve the entire sector investment planning. In agriculture, because it is more varied, and account for a large proportion in economic activity in developing countries, so the more difficult for it to develop a comprehensive strategy for the sector, however, the problems, such as land use system, the government tax, price and subsidy policy and how many public services, shall be note. As long as the current technical conditions permit, to the detailed analysis of the project, analysis of their costs and benefits for the state, accounting results, usually with the economic recovery to represent. This analysis is usually required to solve complex problems, such as how to determine the project material, and how to follow the development goals of the country, the material effect evaluation. Because the estimates of future costs and benefits often have large errors, therefore, sensitivity to the changes of some main ideas and the recovery rate of profit change analysis, to appear less but significant factors of instability, but also to the risk or probability analysis. The most suitable investment of time can be studied with the first year benefit. When the banks to provide funds to the intermediary (development finance company, agricultural credit institutions) to lending to small enterprises, or in the sector loans, methods to assess these institutions themselves should also be satisfactory and acceptable.

Some factors of project costs and benefits, such as pollution control, health care, education or training, may not be measured in number; other projects, such as power and telecommunication, it may be necessary to use such as revenue such alternative things to measure, but it can not fully express the generate electricity and telecommunications services the economic value. In some cases, may need to make a choice between two equally good alternative solutions, and selected the best cost. In other cases, such as education, may have to decide between different benefits, costs for several different options, estimate this would depend on the quality of. Regardless of the quality of estimation or estimates of the number, or economic analysis, always according to the projects on national development objectives to estimate the contribution of the. This is the project selection, project assessment as a fundamental criterion. The distribution effect of the project has received more concern, this reflects the development goals more widely, but this does not mean that the world bank has lowered its assessment criteria. Whether it is "old" or "new project" type projects, all projects must have satisfactory economic benefits. The world bank believes that this standard is consistent with the best interests of the country is also in line with the best interests of the bank's.

Finance: there are several financial evaluation. Another is to ensure sufficient funds to address the implementation of project costs incurred. Banks generally do not lend to the total cost of the project. Generally speaking, it provides money for foreign exchange expenses and hope the borrower or the government can solve the domestic cost of part or all of the. Therefore, an important aspect of assessment, is to ensure that one can obtain funds, make the project according to the schedule of the funding plan. When the funds should be provided by the government, and the government to raise domestic revenue and difficult circumstances, can make special arrangements, such as advance to the revolving fund, or in the tax revenue that designated use.

For the profit of enterprises, the financial evaluation of total care if it have ability to survive financially. It can cover all financial liabilities, including the world bank debt servicing? It has sufficient liquidity? It can make use of the internal assets proliferation funds, for its assets to earn a reasonable profit, and need to make good contribution to its future capital? The financial situation of enterprises through the forecast of the balance sheet, income statement and cash flow situation and scrutiny. All financial accounts is not perfect, can use the loan provided technical assistance funds, help establish a new set of accounting system. To do financial improvement, can take other security measures, including the provisions of debt to equity ratio or to add long-term loans restrictions.

Financial checking often stressed the need to adjust the price level and the structure of the proposed enterprise. By the banks to provide funds to enterprises whether or not belong to the public, they tend to provide basic services and should be carefully examined the public. Because the government is willing to grant this to the public service as a policy, or simply as a guideline, in order to get the minimum resistance, so it may be reluctant to approve in order to ensure the effective use of enterprise products, necessary to complete the goal of financial price measures. However, the appropriate price is the bank to profitable enterprise loan absolutely necessary conditions. Adjustment of the price for the assessment and the implementation is very important.

The financial evaluation is also concerned about the project beneficiaries from recovery of investment and operation cost problem. Irrigation projects, the bank generally expect farmers to after a certain time, the payment of all business expenses from their increased production and at least most of the capital cost. In many cases, the actual recovery should consider the beneficiary income status and many practical problems, for example, it is difficult to implement a system of special, or take on Bank funded projects charge less for high system. Therefore, the bank's policy is to seek the balance in the following three aspects: between the need to effectively use is not much money, fair and reasonable and the need to produce more funds, the project can be repeated indefinitely, let be the beneficiary more benefit. Costs may through many methods to recover by charging for irrigation water, generally through taxes or farmer according to control prices took their food to sell sales agencies of the government. Some countries have been using than the recommended standards for cost recovery standard, low and therefore, to how to, how feasible standard agree with, is one of the more difficult problems of assessment or subsequent negotiation phase.

Assessment working group to prepare a report, put forward its findings and put forward the relevant loan conditions and suggestions. The report was drafted after revision, and before the authorities approve the loan and borrower negotiations, was under scrutiny. The world bank is closely involved in the project identification and preparation work, therefore, there are few deny a project in the evaluation stage. But at this stage, the project may be greatly modified or re designed to correct their shortcomings, otherwise, the project may be denied. In the evaluation report, the bank will make specific arrangements for the loan funds to pay the goods: goods, CIF, ex factory price of 100% to pay, do not pay taxes, insurance and domestic freight; training and investigation, some 100% pay; the remaining funds to consider the project payment, project payment proportion is no uniform standard, in our province in Bank projects, national highway II project to pay 48%, inland waterway project to pay 62%, reclamation project to pay 50%; it should be noted that, the bank loan funds is not to pay the land acquisition costs.

 

4   The negotiations

Negotiation is the world bank and the borrower agreed to necessary measures are taken to ensure the success of the project, phase. Then, these protocols into legal obligations, included in the loan file. For example, the bank may agree to a utility borrowers, in order to earn an adequate return and raise the proportion of its investment funds, the price must be immediately improved, such as 20%, and then increased by 10% in the next 2 years. A financial contract during the negotiations can indicate the total financial goals, determine profit recovery rate is necessary as well as the initial profit margin of time. If you must create a new project to project management or coordination of relevant departments, the loan documents must also define what is and how to establish the mechanism of time and staffing. In fact, all the major issues raised during the pre assessment or assessment in the loan documents to be processed. In this way, legal documents drafting and negotiation is that borrowers and banks, not only in the general goal of the project, but also in the specific schedule to take necessary to achieve these goals in action and project execution, an important part of all can agree.

Negotiating is the process of both sides to compromise. It's said that, must learn to adapt themselves to the general policy of it in specific projects, departments and national situation within reasonable extent. And the borrower, must be aware of its suggestions are made according to the professional knowledge and experience gained from the world, to realize the requirements of the reasonable use of it capital is in the best interest of the project. Despite the difficulties in solving the problems will inevitably will be differences, but at this stage of the project cycle or other stages, the relationship between the bank and the borrower has long development is good. The bank staff know, local conditions is the key to the success of project. Borrowers also began to understand the world bank, method adopted is professional, objective, loans to those thoughtful, well executed project is the bank's duty, which is the only place on the project of interest.

After the talks, to reflect the revised agreement evaluation report, together with the president of the report and the loan documents, submit to the bank's executive board. If the Executive Board approved the task, the loan agreement was signed in a simple ceremony. This marked the beginning of the end of a stage in the project cycle and another stage. In the submission of directors meeting, safety program to the public for 100 days, generally take the form of public information on the internet.

 

5   Go to the board for approval

After the talks, the revised to reflect the agreement with the assessment report, together with the loan documents, submitted to the bank's board of executive directors. If the bank's Board approved the task, the loan agreement was signed in a simple ceremony. This marks the project has been approved, can be formally implemented.

In the twelve months before the bank's Board approved the project, a project has been implemented and with the world bank payment procedures can be traced for reimbursement:

 

	The project negotiations		Board approval		Loan signing		The commencement of loan		The loan account closed
Retroactive accounting period (12 months)	Pay period

Retroactive reimbursement must comply with the following:

A, the highest amount -- less than 10% of total loans;

B, the term -- 12 months before the entry into force of the project;

C, currency -- negotiations commitment of money;

D, the world bank loan program -- follow the normal procedures of payment.

6   Implementation and supervision

The implementation period of the next stage of the project is to build business activities and later. Of course, the implementation is the borrower's responsibility. The bank can give research, personnel such as organization mode according to the protocol of training, dispatch management staff and consultants to help oversee the construction of aid. The world bank is the role of supervision in the implementation of the project.

Supervision is the most beautiful part of the project does not, however, in some ways it is important. As long as a project loan once signed, the borrowing country attention will turn to the new project. This attitude is understandable, especially, it takes a few months or years, "old" the project can begin to produce tangible results. However, to be clear, regardless of whether a project identification, preparation, evaluation of how good, only the implementation of appropriate, project development interests can be achieved. All projects are facing the implementation issues, some of which is not determined in advance. These questions from the inherent difficulty of the development process, or from the specific reasons, such as changes in the economic and political situation, the project management of change, and even climatic changes. The results, although the development goal of the project is generally not change, however, it is the implementation process often and ideas far apart. It is precisely because of these reasons, the bank can decide priority project staff to implement appropriate supervision is. In fact, with the passage of time, for the supervision of funds, compared to other tasks of the absolute number and relative number and project are greatly increased.

The main role of supervision, to ensure that the project can achieve in their development, especially the world bank and the borrower with clear and produced during the implementation problem. Therefore, the supervision is mainly to solve common problems. These years, there has been another supervision become the center of the objective, which is to focus the experience of "feedback" to design and prepare for future projects in, "improved feedback" to the policies and procedures. Monitoring and evaluation unit often together, in order to obtain information, especially in new project. The supervision work summary every year, in order to find out the major problems in implementation, and puts forward some suggestions on the policies or procedures appropriate modification.

Supervision can appear in a variety of ways. During the negotiations, can be proposed project progress report on the borrower's schedule agreement. These reports include actual project implementation, project cost, profit of enterprise's financial situation and the evolution of project income. The progress report by the head office of review. The problems solved by communication, or sent by the working group for each project site to solve. The complexity of these work, sends out the number and project implementation, the number and nature of the problem. On the supervision of the project (there are more than 1300) regular internal inspection, some projects included in the special "problems". This kind of project, usually less than 10% of the total, is especially careful treatment, inspection of 3 ~ 4 times a year.

An important content of project supervision relates to the use of loans to purchase goods and engineering. Procurement is carried out in accordance with the guidelines included in each of the loan agreement, these guidelines are designed to ensure the energy needed to purchase to use the most effective and economical way of goods and works (see John A gold "World Bank investment projects carried out by purchasing" and David M. Sasson's "supervision" procurement process, both see "finance and development", 1975 June). In most cases, the best way to achieve this goal is through international competitive bidding are entitled to all members of the contractor or the manufacturer open. In order to promote the development of local capacity, can be given to domestic suppliers in a certain degree of preferential, under certain conditions, the discount can also be given to domestic contractors. Some are too small, not suitable for international bidding project, competitive bidding local, or even by the borrower to its own power construction, may be more effective and economic. To make the agreed purchase policies -- a loan in practice may include several to hundreds of contract -- is a time-consuming work. The bank is also very serious. Sometimes, this work is quite simple, but in some cases, it has become a major problem. For example, in telecommunication or electric power project, need to choose carefully between several international suppliers, who see evaluation of multi million dollar contracts open bid the lowest. The borrower, rather than the bank, responsible for the preparation of various specifications and the bidding documents and the bid evaluation. The bank's role is to make sure that the borrower accurately, and follow the guidelines, in this way, the bank funds will be paid by the contract. Any suggestions about the dispute will soon attracted the attention.

 

7   Post evaluation

Supervision is in a way the last to learn through experience, it is mainly concerned about the project implementation process in such a period, during this period, the specific part to construction, equipment procurement and installation, new mechanism, new planning and new policy to properly implement. As long as the stage of completion of the total expenditure of funds, the bank, the extent of supervision can reduce. In active supervision period, attention will focus on the problem. Although the project is subject to the supervision and evaluation in the implementation process, but it is clear; it is necessary to evaluate the project with a more comprehensive approach results. About 8 years ago, the establishment of such a kind of evaluation system, as the latest and last stage of the project cycle.

All by the World Bank financed projects will be afterwards now audit. In order to ensure the independence and objectivity of the audit, it consists of "OED" (OED) is responsible for". The agency and the bank's business staff completely separated, the chief executive appointed by the board of directors by the evaluation office directly report to the executive board and president. This system on one hand to ensure full responsibility, also think it can closely supervise the activities of staff, and to make use of. Project staff in the late payment, prepare a report for each project, as the last step in supervision. These reports, to some extent, is self evaluation -- but that does not preclude it is often very frank and critical. Each report must be inspected by the OED. OED re evaluation report. The two report, usually to the executive board. In many cases, evaluation is based on all the material on the project of desk review of. But, if necessary, evaluation personnel on-site examination, its full extent, some of the time, and the initial evaluation stage. Evaluation require the borrower to review business evaluation agency and ask them to prepare their own completion report. Secondly, the bank also encourage borrowers to establish the evaluation system to review the development and investment of their.

Each evaluation and completion report according to the latest data and expected returns the actual execution cost and operating expenses to estimate the economic profit recovery rate. However, the evaluation of the success or failure is not for certain projects to make the final judgment. The economic life of these projects, along with its operating expenses and income, far beyond pay termination time. Now being studied, in the latter stages of the project management further evaluation system, to make up for the gap. In addition, the annual report operation evaluation department summary evaluation of all items. For some project group, special problems or a country department, but also further study.

The evaluation system is proved to be the intelligence treasure, provide a wide range of sources can be added by the project supervision report data. The cost increase and delay the completion of the problem that many projects big nerve racking, particularly in the oil price increases, as well as the world inflation is even more so. Many projects have changed the scale during execution. However, including the evaluation of the service evaluation Bureau of the 109 project (OED) annual review recent shows, more than 91% of the investment is worth it. Among them there are many projects are expected to receive the economic benefits, is estimated to be close to or higher than the evaluation phase number. particularly gratifying, shows that the Bank of experience is a positive attitude. In a department, a project based on previous projects. New policies and procedures are adopted to improve the method, project performance. For example, the project outlines the system will help the government in the early stage of project design to agree on the project objectives and bear the obligation to; rural development plan now to contribute to the realization of small-scale production of various services, continued growth required investment materials and infrastructure are combined together; in the earlier stage of project preparation in order to provide loans, can provide more accurate cost estimate, cost increase and reduce the possibility of delayed execution, now this way to start the. The lessons from this design and prepare for future projects. In other words, the project cycle is in accordance with the bank's intention.

The world bank borrowers can include itself, government member government agency, or private entities with a government guarantee or company. The International Development Association (IDA) credit only for governments, if necessary, can be placed under the responsibility of the project responsible for the implementation of economic entity, in this paper, the economic entity known as the borrower. Loans from the world bank, interest, the interest rate in accordance with the world bank borrowing costs adjusted periodically. The International Development Association (IDA) to provide loans on favorable terms in 50 years, only 0.75% of fee income. Methods two organization of the project is the same. This paper applies to the world bank and all loans, also applies to the International Development Association and credit. International Finance (IFC) is a subsidiary body of the world bank, through the development of production in developing countries have encouraged private enterprise, further economic development task. The project life cycle with the world bank and the International Development Association of different.

 

 

 

 

The third chapterProjectThe necessary documents preparation stage

 

Project reporting once the adoption, the bank will send a delegation to the identification of the project: a) agreed on the project description; b) comprehensive planning review project related; c) a review of the bank details of requirements; d) ultimately determine the feasibility study, environmental evaluation and social evaluation for price and the demolition work plan. With the world bank loan project primary content and form, and puts forward the new project evaluation of work to be done, including the feasibility study report, the project environmental assessment report, the immigration resettlement reporting financial and economic analysis program, etc..

 

A, Project feasibility study report

Before the bank's assessment of the project, the project unit must first complete the feasibility study report, as the project evaluation. The project feasibility study is in the investment decision-making before the project in all aspects of social, economic and technical situation of in-depth investigations and studies, the technical scheme and construction scheme of various possible to make economic analysis and comparisons of serious, scientific prediction and assessment on the project after the completion of the economic benefit. Feasibility study report should note the following points:

And the bank paid special attention to the status of 1 projects in the city of overall planning, clear objectives and effectiveness of project construction, clear method to achieve these goals and productive way and completed a measure of the effectiveness of. Suggestions on the importance and necessity of the feasibility study report of quantitative and qualitative analysis of project, strategic significance to reflect the project in city construction.

2 on the basis the project proposal and feasibility study report, shall adopt the latest, in line with the principles of sustainable development of the city planning as a basis.

3 in general, scheme comparison and selection of not less than three, from the economic, social, environmental, technical considerations and its quantization.

 

 

Report on the environmental impact of two, project evaluation

Effects of 1 World Bank Project on the environment concern, the EIA report is an important basis for the identification of project on the environment, in the assessment of the project, the EIA has "one vote veto", i.e. if the ring assessment report is not up to the requirements, the project will not be approved for a loan. So we should attach considerable importance to the environmental assessment report, compiled in accordance with the requirements of the EIA report.

2 in the environmental evaluation, the bank asked to prepare three kinds of files:

1) the EIA report: report of the scope and level of detail should be corresponding to the potential effect and project;

2) the environmental management plan, put in the legal documents of the project: including mitigation measures, monitoring and institutional capacity building

3) EIA Abstract: briefly discusses important discoveries

 

Three, The resettlement project planning report

The 1 World Bank loan is not used for resettlement, the resettlement plan but also attached considerable importance to. It is reported, the demolition and resettlement plan also take "one vote veto". In does not affect the whole project of foundation on minimizing the demolition, demolition should not exceed 40% of the total investment of the project, in order to reduce the project cost and the influence caused by. In addition, an important factor in how to accommodate immigration is the consideration.

2 resettlement plan report must mention of ethnic minorities and the problem of social vulnerable groups, influence and suggestions considering engineering and demolition of minorities and vulnerable groups and how to resettlement, and reflect the government preferential policies for vulnerable groups in the project proposal (a government document).

 

Four, Financial analysis and economic analysis of the project

Financial analysis and economic analysis is the most important part of the feasibility study report. Different financial analysis and economic analysis are given in the following table:

 

	Financial analysis	Economic analysis
Focus	The net return of capital investment	Net returns to the whole society
Objective	That reason whether the project is adopted	From the economic point of government investment is determined according to the
Price	The market or planned price	The shadow price *
Tax	Production costs	A part of the social total income
Subsidies	Part of the revenue	A part of the social total cost
Loan	Increase the amount of capital that can be called	Transfer payment
Interest	Financial cost	Transfer payment
Discount rate	The marginal cost of capital or market borrowing rate	Capital payment cost or social rate of time preference
The distribution of income	Can be measured by the net return on each factor of production	Can not consider

* Note: Shadow Price: when the market is distorted (factors monopoly, external effect), use it to correct;

              Some things have no market.

 

 

 

 

 

 

 

 

The fourth chapter    Attention should be paid to the world bank loan project work problems

 

1 overall planning should be improved, to link planning and project, the necessity and importance of quantitative and qualitative analysis of the project, the project construction significance, the status and role of construction project should be clear in the overall planning of research report, clear the project construction goals and achievements, clear method to achieve these goals and the effectiveness of the method and completed a measure of the effectiveness of.

2．Control of the total project amount of demolition, as far as possible removal of control within 40% of the total investment, and pay attention to alternatives, and no comparison.

3 when the ten contrary policy and domestic policy, must discuss with the world bank, to work in does not violate the basic principles of two cases.

The 4 international consulting company to participate in the work time, it is best to start the project, it is economic, timely.

5 the bank set up in institutions also have certain requirements, general requirements for the establishment of project office at the local, there should be no less than 6, the project office must consist of professionals, including the English translation, finance, international law, environmental professionals, and the staff of the project office English level has certain requirements, pay special attention to writing and presentation skills.

 

 

 

 

 

 

 

 

The fifth chapter    The ten major policy

Environmental policy

1Environmental assessment

2Natural habitat

3Pest management

4Forestry

5Dam safety

 

 

 

Social policy

6Ethnic minority

7Involuntary resettlement

8Cultural property

9International Watercourses

10 the disputed area

 

A, environmental policy

1      Environmental assessment

Environmental assessment is a method for determining and potential environmental impact assessment of a proposed project, demonstrates the various alternatives, making method of mitigation measures and management and monitoring measures appropriate. Project and sub project needs to use the environmental impact assessment to address the lack of important issues in regional and departmental environmental assessment. Environmental assessment including: evaluating a project potential risk to the environment and to the affected area impact; inspection project alternatives; through the prevention, reduction, mitigation or compensation of adverse environmental impact and enhance the environmental impact of favorable measures, to improve screening, site selection, planning, design and implementation of project activities; take in the whole process of project implementation, to mitigate and manage those adverse environmental impacts. The World Bank funded projects, the requirements of the environmental assessment, to ensure that these projects on the environment and has no problems of sustainability, which helps to make decision. In any feasible, the bank always support preventive measures, the second is the ease or compensatory measures.

Project environmental assessment of the breadth, depth and analysis depending on the type of property, to the project's size and potential environmental impacts. Environmental assessment should also consider different project and the specific circumstances of the country; environmental research; the national environmental action plan; the institutional capacity national comprehensive policy framework, legislation and environmental and social; state responsibility and in the relevant international environmental treaties and agreements applicable to the project activity. Through the environmental assessment, if part of the content of the project and the state responsibility conflict, the bank will not provide support for their. Environmental assessment should start as early as possible in the lifecycle of a project, and with the proposed project's economic, financial, institutional, social and technical analysis together.

The bank should have the requirements of the environmental assessment for the proposed. The world bank through a review of the EIA conclusions and recommendations, to confirm whether they are the World Bank funded project to provide a sufficient basis. If necessary, the bank may require the borrower to make further assessment, including public consultation and information disclosure

 

2      Natural habitat

 Natural habitat refers to: (1) biological community ecology system mainly by the local animal and plant species composition of land and water; (2) human activities basically does not change the main ecological function of land and water.

As with other environmental protection and improvement measures, protection of natural habitat plays a vital role in the sustainable development in the long. Therefore, the bank's economic research, project loans and policy dialogue as the job, support and protection of natural habitats and the function of maintenance and rehabilitation activities. The world bank support and expectation of the borrower to take defensive measures in the management of natural resources, in order to ensure the sustainable development of environment. If the project including the natural habitat, shall arrange relevant environmental experts to participate in the project preparation, evaluation and inspection work, to ensure that the formulation and implementation of mitigation measures in full. The bank will lead the project critical natural habitat for major transformation or degradation does not support.

 

3      Pest management

The working group of the project to ensure that the environmental evaluation of all agricultural and health industry to assess the ability of the borrower in the following aspects: the ability to manage the purchase, use and disposal of pest control products; the ability to monitor pest control accuracy and the use of the impact of pesticides; and formulated and implemented on the basis of ecological pest pest management plan.

In the project identification, project team to evaluate whether the proposed project will involve the pest problem. If the project involving the manufacture, use or disposal of pest control products, and can have a significant environmental impact degree, it should develop pest management plan, carry out the evaluation of plant diseases and insect pests.

 

4      Forestry

The world bank forestry factors to consider in order to reduce deforestation, improve the environmental construction in forest region, promote afforestation, reduce poverty, and encourage economic development. Bank a below the needle to ensure the realization the goal.

The world bank the money not for cutting trade or to buy the use of manufacturing tools primary tropical rain forest. Bank lending behavior in forestry based on government commitment, so as to ensure the completion of protection forest management and orientation of the.

 

5Dam safety   

The bank's focus on its funding have built new and its funded projects under the direct of the built dam safety.

Design, bidding, construction and operation and maintenance of the world bank for borrowers in the dam and building dam in the adoption and implementation of necessary security measures.

The bank will require the borrower to arrange one or more independent dam experts were as follows: (1) involved has built or under construction, its subsidiary buildings and running safety inspection and evaluation; (2) review and evaluate the dam all operation and maintenance procedures; (3) submit a a written report, the evaluation results and the acceptance of the dam can take the safety standards, the need for remedial work or.

 

Two, social policy

6      Ethnic minority

The world bank to treat central goal is to ensure that the ethnic minority in the process of development, especially in the implementation of World Bank funded project process, and not be adversely affected,, can enjoy the cultural characteristics of the social and economic benefits. The bank through the following methods focus on minority issues: 1) national economic research; 2) technical assistance; 3) investment project contents and terms.

And minority issues shall be determined usually by environmental assessment or social impact assessment, and environmental mitigation actions under take appropriate measures. Investment plan. Investment projects of a minority, borrowers should be according to the world bank's policy requirements make the development plan of national minority. Any impact on minority projects should be included in the plan in terms of content and project.

 

7      Involuntary resettlement

The overall goal of the world bank non voluntary immigration policy as follows:

(1) on the design of all feasible project, in order to avoid or reduce the non voluntary immigration.

(2) inevitable if immigration, immigration activity should be a sustainable development plan to design and. Should provide sufficient funds, the immigrants can share the benefits of the project. Should be carefully negotiated with the immigration, so that they have the opportunity to participate in the planning and implementation of the resettlement programme.

(3) should help immigrants to improve the livelihoods and living standards, at least to really make it back to the relocation or higher level before the start of the project.

Therefore, the borrower shall prepare a migrant resettlement plan or resettlement policy framework covering the following contents:

LThe resettlement plan or resettlement policy framework to take corresponding measures, ensure immigrants

(a) told myself in the resettlement issues on the choice right and other rights;

(b) understanding technically and economically feasible solution, in the negotiations, and enjoy the opportunity to choose;

(c) according to the full replacement cost, obtain rapid and effective compensation, direct property loss caused by the project in order to offset.

LIf the effect is included the relocation, resettlement planning should take corresponding measures, ensure immigrants

(a) for help in the relocation period (such as relocation subsidies);

(b) access to housing or land, or according to the requirements for agricultural production. Potential, the location advantage of agricultural production sites and other comprehensive factors should be favorable conditions and the original place of at least equivalent.

In order to realize the policy goal, according to the preparation of project types using different resettlement file:

Unless otherwise specified, otherwise all the causes of involuntary resettlement projects need to prepare a migrant resettlement plan or the resettlement plan. unless otherwise specified, otherwise all may cause involuntary resettlement project resettlement policy making needs immigration. To limit resource, asset use project need programming framework.

In addition, the borrower shall be responsible for the monitoring and evaluation of the full provision of resettlement file activity. The implementation of the regular supervision of immigration, to determine whether the contents of the file and resettlement. At the end of the project, the borrower is evaluated to determine whether the target in the Resettlement Implementation file. The substrate should be taken into account when evaluating the investigation and implementation of the monitoring results of immigrants. If the evaluation indicates that the immigration target may not be reached, the borrower shall propose follow-up measures the bank approval, to the bank to continue its supervision .

The bank may provide financing needs relocation project content as the main body of investment project. The world bank also provides funding for independent immigration program, is the project with another cause immigrant investment projects at the same time, and has defined cross content in the legal documents of the project. The bank even if there is no financing for immigration investment main body project, can also provide funds for migration activities.

Finally it should be mentioned that, the bank does not pay cash compensation and other cash payment of immigrant assistance, or the cost of land (including compensation to buy land). However, the bank can provide funds for land improvement and immigration related activities.

 

8      Cultural property

The bank's overall policy on the heritage of the specific:

(1) the bank usually refused to fund those significant damage and make it unable to repair project, but only by those in the siting and design in consideration of preventing the destruction of the project.

(2) the bank in its funded projects, providing the protection and improvement of the cultural relics, rather than let it emerge of itself and perish of itself.

(3) only in the project expected benefit is very large, and according to the competent agency confirmed the loss of cultural relics and failure is inevitable, not worth mentioning or may be acceptable when, can be allowed to deviate from this. Details about the argument should be described in the project file.

(4) whether the bank on may involve cultural relics project funded or not, this policy applies to any project with World Bank participation.

 

9      International Watercourses

In every international waterway project evaluation report, staff and governors memos and suggestions will talk about international issues of the project, the bank's staff has been scrutinized by the mentioned problems and are satisfied with the following conditions:

(1) protocols benefit China and other waterways ownership countries reached or the agreement includes properly the issues involved;

(2) other channel state to the beneficiary country ownership or the positive reply, agree, do not oppose or support the project, or make sure that the project would not hurt their interests;

(3) in all other cases, according to the bank's staff assessment, the project on other ownership countries will not cause significant harm, serious problems of water because of these countries may not.

Finally, an international waterway project documentation should include a map, clearly marked out the part of the local waterways and project.

 

10 The disputed area

The bank can carry out the project in a controversial area, condition is related to the national government must agree with the premise, in the dispute, shall be without prejudice to the interests of country B case for China proposed project.

In each project the disputed area of nature, world bank staff must consider the controversial nature, controversial, and confirm the bank's staff have to consider, at the same time, the following aspects are satisfied with:

(1) the other rights of the disputed area requirements do not oppose the project execution, or

(2) in all other cases, although other claims are opposed or not to approve the project specific conditions, the project to support the bank to finance the. Including this kind of specific condition: the project without prejudice to any other rights the requirements of interest, or conflicting claims have not been internationally recognized, or have not been positive discussion.

 

 

 

 

 

 

 

 

 

 

 

 

The sixth chapter      Pearl River comprehensive treatment project phase three (Foshan city of world bank loan project)

 

Foshan Pearl River remediation of World Bank Loan Project (the project) a total of 4 sub projects, including: 1) Fenjiang River north shore comprehensive improvement project; 2) Foshan waterway dredging and disposal of sludge environment engineering; 3) the three phase expansion project town sewage treatment plant; 4) Foshan municipal sludge treatment and disposal Center project. The following specific investment:

                  Foshan for World Bank loan project fund plan

Project name	The total investment (million)	Project loan (million)	Government matching funds (million)	Remarks
Foshan Waterway Dredging Engineering	24798.10	2464	5036.82
Fenjiang River north shore shoreline regulation engineering	45577.78	2605	24685.68	2006 has invested 73603700 yuan
An expansion project of sewage treatment plant	27067.43	1056	10683.55 (water industry group self)
Sludge disposal center	13164	1075	4542.5 (water industry group self)
Total	110607.31	7200	44948.55

Note: calculate the dollar and the RMB exchange rate by 1:8.02.

 

 

Pearl River remediation phase three (Foshan city bank loans for a period)Project schedule