WB Loan to Help Improve Public Services in Chongqing

The World Bank's Board of Executive Directors Friday has approved a loan of US$84 million to the People's Republic of China to assist Chongqing Municipality in increasing access of residents in selected counties and districts to improved public services, including roads, water supply, employment training, and primary health care.

China is experiencing rapid urban growth, with 46 percent of the population currently living in urban areas, up from 29 percent in 1995. By the year 2020, urban population is projected to reach 70 percent.

Rapid urban growth is pressuring Chinese cities to expand their public infrastructure, increase municipal services and provide employment for migrants. This is a major challenges facing Chongqing. In recent years the municipality has seen rapid urbanization of its population, with urban rate increasing from 36 percent in 2000 to 50 percent in 2008.

In the meantime, the level of urban-rural disparity is also rising, as average income per capita is almost 3.8 times higher in urban areas than in rural areas. To address the issue, Chongqing Municipal Government is focusing its near and medium-term policies on the expansion of basic infrastructure and social services in lagging rural areas, and supporting rural transportation investments to better connect the rural areas with the urban centers, where employment opportunities and social services are more available.

The World Bank-financed Chongqing Urban-Rural Integration Project aims to assist the Chongqing Municipal Government in achieving these objectives.

"The current project supports the balanced long term growth in both urban and rural areas through the provision of basic services. The convergence of living standards usually occurs through the mechanism of migration from rural to urban areas reducing the surplus of labor on agricultural land and the competition in rural labor markets. The current project enhances such integration," said Paul Kriss, World Bank's Lead Urban Specialist and Urban Sector Coordinator for China who is in charge of the project.

The project consists of five components:

(i) Roads and Water Supply;

(ii) Township and Village Infrastructure Improvement;

(iii) Migrant Workers' Training for Transfer and Employment by expanding access and improving quality of training for rural migrants to enhance their employability;

(iv) Community Health Care Services by improving access to, and enhancing quality of health care services in, rural and peri-urban areas of Chongqing;

(v) Institutional Support and Technical Assistance by facilitating project implementation through the provision of consulting services.

The total project investment is US$190.16 million, with about 44 percent financed by the World Bank. The World Bank and Chongqing Municipality have worked together over the past 15 years. The Bank has been assisting Chongqing in tackling urban environmental problems and improving living conditions in both the center city and in secondary cities and towns through a series of projects and studies.

The more recent projects include the Chongqing Urban Environment Project focused on improving wastewater treatment and solid waste management through the construction of two large treatment plants and a solid waste landfill as well as other urban services, and the Chongqing Small Cities Infrastructure Improvement Project focused on infrastructure development in several smaller districts and counties consisting of water supply schemes, river embankments for flood protection, and secondary roads.

(China Development Gateway June 4, 2010)