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The World BankFOR OFFICL4AL USE ONLY

Report No. 5976-CHA

STAFF APPRAISAL REPORT

CHINA

FRESHWATER FISHERIES PROJWECT

April 7, 1986

Projects DepartmentEast Asia and Pacific Regional Office

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EOUIVALENTS

Currency Unit - Yuan (Y)U'S$1.00 - Y 3.00

Y 1.00 US$0.33

FISCAL YEAR

January 1 to December 31

WEIGHTS AND MEASURES

1 meter (m) - 3.28 feet (ft)1 kilometer (km) - 0.62 miles1 hectare (ha) - 2.47 acres1 mu - 0.067 ha1 ton (t) - 1,000 kg

- 2,205 pounds1 kg - 2.2 pounds

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

ABC - Agricultural Bank of ChinaBAP - Bureau of Aquatic ProductsBFA - Bureau of Fisheries AdministrationBOF - Bureau of FinanceCPO - County Project OfficeFDC - Fisheries Development CorporationFPO - Fisheries Project OfficeGAIC - General Administration of Industry and CommerceICB - International Competitive BiddingILS - International and Local ShoppingMAAF - Ministry of Agriculture, Animal Husbandry and FisheriesMACHIMPEX - China Machinery Import and Export CorporationMPO - Municipal Project OfficePCC - Project Coordinating CommitteeRCC - Rural Credit Cooperative

FOR OMCUAL USE ONLY

FRESHWATER FISHERIES PROJECT

Credit and Project Summary

Borrower: People's Republic of China

Credit Amount: SDR 52 million (US$60 million equivalent)

Credit Terws: Standard

RelendingTerms: 20 years, including 5 years of grace, at 4.5% p.a.

interest, and foreign exchange risk to be borne by theproject cities.

Proi ectDescription:

In support of the Government's program to tripleproduction of freshwater fish by the year 2000, theproposed project would expand and develop intensive pondculture in the vicinity of eight major urban centers. Itwould introduce into each project area an integratedfisheries production, extensior. and marketing systemoperating on a fully commercial basis. Overall, theproject would improve 6,100 ha of existing ponds andestablish 11,100 ha of new ponds on land unsuitable forcrop production. It would provide equipment, vehicles,and support facilities, including 14 feed mills, fourcold storage plants, four overwintering facilities, ahatchery, a vaccine factory, and seven trade centers.The project would strengthen fisheries research andextension services through the provision of teclmicalassistance and training and the construction and/orequipping of eight technical service centers. Thetechnical assistance and training component would also beused to upgrade the qualifications of project staff toimplement the proposed project and further fisheriesdevelopment activities. At full development the projectwould produce annually about 85,000 tons of freshwaterfish and 75,000 tons of fish feed and would provide anadditional 7,100 full-timie jobs in rural areassurrounding the cities. The project faces no significanttechnical or management risks.

This document has a estricted distribution and may be used by recipients only in the performanceof their offcial dutie. Its contents may not otherwise be disclosed without World Bank authorization.

Estimated Cost:Local Foreign Total- - - - - - (US$ m) - - - - - - -

Pond Construction 86.0 20.8 106.8Support Facilities 12.0 5.7 17.7Vehicles & Cons. Equipment 1.5 16.9 18.4Production Mat. & Equipment 5.4 2.2 7.6Training & Tech. Assistance 0.3 0.5 0.8

Base Cost 105.2 46.1 151.3

Physical Contingencies 9.4 3.9 13.3Price Contingencies 23.1 10.0 33.1

Total Project Cost /a 137.7 60.0 19/.7

Financing Plan:

Local Foreign Total- - - - - - (US$ m) - - - _

IDA 0.0 60.0 60.0Provincial Governments 7.6 - 7.6Municipal Governments 63.8 - 63.8County/District Governments 24.4 - 24.4Townships 41.9 - 41.9

Total 137.7 60.0 197.7

Estimated Disbursement:

Bank/IDA FY 1987 1988 1989 1990 1991

Annual 3.0 15.0 18.0 15.0 9.0Cumulative 3.0 18.0 36.0 51.0 60.0

Rate of Return: 28%

/a The project is exempt from taxes and duties.

FRESHWATER FISHERIES PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page

I. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Introduction . . . . . . . . . . . . . . . . . . . . . . .1The Agricultural Sector . . . . . . . . . . . . . . . . . .1The Fisheries Subsector . . . . . . . . . . . . . . . . . .2Sectoral Objectives and Bank Operations . . . . . . . . . .5Project Formulatic- and Rationale . . . . . . . . . . . . .6

II. PROJECT AREAS. . . . . . . . . . . . . . . . . . . . . . . . . .8

Location . . . . . . . . . . . . . . . . . . . . . . . . .8Climate . . . . . . . . . . . . . . . . . . . . . . . . . .8Soils . . . . . . . . . . . . . . . . . . . . . . . . . . .9Water Resources . . . . . . . . . . . . . . . . . . . . . .9Infrastructure and Support Services . . . . . . . . . . . .9

III. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . 12

Project Description . . . . . . . . . . . . . . . . . . . 12Pond Developmen . . . . . . . . . . . . . . . . . . . . 12Support Facilities. . . . . . . . . . . . . . . . . . . . 15Construction Equipment and Vehicles . . . . . . . . . . . 16Production Equipment and Materials . . . . . . . . . . . 17Training and Technical Assistance . . . . . . . . . . . . 17Status of Preparation . . . . . . . . . . . . . . . . . . 17Implementation Schedule . . . . . . . . . . . . . . . . . 18Cost Estimate . . . . . . . . . . . . . . . . . . . . . 18Financing . . . . . . . . . . . . . . . . . . . . . . . . 19Procurement . . . . . . . . . . . . . . . . . . . . . . . 19Disbursements . . . . . . . . . . . . . . . . . . . . . 20Accounts and Audits. . . . . . . . . . . . . . . . . . 22Environmiental Effects . . . . . . . . . . . . . . . . . . 22

This report is based on the findings of a pceappraisal mission to China inMay 1985 ar.d an appraisal mission in September 1985. Members of thepreappraisal mission were Mss. N.K. Hill, P. Harrell (IDA), Messrs. C.L.Chen and T. Cowley (Consultants). The appraisal mission comprised Ms.N.K. Hill, Kr. R. Deshpande, Ms. P. Harrell (IDA), Messrs. C.L. Chen andC. Cronberg (Consultants).

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IV. ORGANIZATION AND MANAGEMET . . . . . . . . . . . . . . . . . .23

Project Organization and Implementation . . . . . . . . . .23Financial Management . . . . . . . . . . . . . . . . . . .26Execution of Project Works . . . . . . . . . . . . . . . .27Monitoring, Evaluation and Reporting . . . . . . . . . . .28

V. PRODUCTION. MARKETING AND PRICES . . . . . . . . . . . . . . . .29

Present Production Practices . . . . . . . . . . . . . . .29Future Production Practices . . . . . . . . . . . . . . . .31Yields and Production . . . . . . . . . . . . . . . . . . .32Marketing and Prices. . . . . . . . . . . . . . . . . . . .33

VI. BENEFITS. JUSTIFICATION AND RISKS . . . . . . . . . . . . . . .35

General . . . . . . . . . . . . . . . . . . . . . . . . .35'inployment and Incomes . . . . . . . . . . . . . . . . . .35Financial and Economic Evaluation . . . . . . . . . . . . .35Risks . . . . . . . . . . . . . . . . . . . . . . . . . . .38

VII. AGREEMENTS REACHED AND RECOMMENDATIONS . . . . . . . 40

TABLES IN THE TEXT

3.1 Distribution of Project Works . . . . . . . . . . . . .3.2 Summary of Project Costs. . . . . . . . . . .3.3 Procurement Arrangements . . . . . . . . . . . . . . . .5.1 Main Species of Fish Cultivated . . . . . . . . . . . .5.2 Pond Area, Yield and Production. . . . . . . . . . . . .5.3 Fish Prices. . . . . . . . . . . . . . . . . . . . . .6.1 Economic Rates of Return For Fish Ponds . . . . . . . .6.2 Economic Rates of Return For Support Facilities . . . .

ANNEXES

1. Background Data

Project LocationsProject Area Statistics

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Project Cost Summary by CityProject Expenditure ScheduleEstimated Disbursement ScheduleMajor Materials and EquipmentCost Estimate and Phasing of Technical AssistanceCost Estimate - Chengdu

3. Financial and Economic Evaluation

Financial Returns to New Fish Farm, BeijingFinancial Returns to Improved Fish Farm, BeijingOperating Costs of Production and Nursery Ponds at Full

DevelopmentFish Stocking and Price StructureFinancial Returns to Feed Kill (Pellet System), NanchangFinancial Returns to Feed Mill (Extruder System), NanchangFinancial Returns to Cold Storage Plant with IceManufacturing, Nanchang

Principal Input and Output Prices and Conversion FactorsKey Data on Per Capita Incomes, Fish Consumption and Prices

4. Guidelines for FDC Operations

5. Implementation Schedule

6. Selected Documents and Data Available in the Proiect File

LIST OF CHARTS

1. Organizational Structure of NAAF2. Organization for Project Implementation3. Channels for Use and Recovery of IDA Credit

MAP

IBRD 19410R - Project Locations

CHINA

FRESHWATER FISHERIES PROJECT

I. BACKGROUND

Introduction

1.01 The Government of China has requested Bank Group assistancein financing a freshwater fisheries development project as part of aprogram to triple production by the year 2000. The proposed projectwould expand and develop intensive pond culture in the vicinity ofeight major urban centers. It would introduce into each project areaan integrated fisheries production, extension and marketing systemoperating on a Zully commercial basis. Overall, the project wouldestablish 11,100 ha of new fish ponds and improve 6,100 ha ofexisting ponds. It would provide equipment, vehicles, and supportfacilities, including 14 feed mills, four cold storage plants, fouroverwintering facilities, a hatchery, a vaccine factory and seventrade centers. The project would strengthen fisheries research andextension services through the provision of technical assistance andtraining and the constructior; and/or equipping of eight technicalservice centers. The technical assistance and training componentwould also be used to upgrade the qualifications oI project staff toimplement the proposed project and to carry out further fisheriesdevelopment. Project activities in support of freshwater culturefisheries in che environs of the eight cities would help augmentfarmers' incomes, increase per capita consumption of fish, andprovide a model of fish pond design, management, and commercialoperations that could be replicated in other parts of China.

The Agricultural Sector

1.02 Agriculture in China, including crops. livestock, forestryand fisheries, provides sustenance to over one billion people, is thesource of income for some 190 million farm families, and accounts forabout 30% of the country's GDP. Only about 100 million ha of China'sland area of 960 million ha are arable. Farming systems areintensive, with large inputs of labor, chemical and organicfertilizer and water. Nearly half of the arable land is irrigated.Foodgrains occupy about 80% of the cropland and account for about 55%of total agricultural output. This intensive system of foodproduction allows China to meet the basic food requirements of itspopulation (about 22% of the world's total) from less than 8% of theworld's arable land. Agricultural production is carried out largelyon household-managed farms within a framework of collective or stateownership of land and major fixed assets. Since 1979, the gross valueof agricultural output has growr. at an average annual rate of about7%, or more than twice the rate achieved over the prev"ious twodecades. Output of foodgrains increased by about 3.8% annually overthe last decade, reaching a record of 407 million tons in 1984despite declines in crooped area and area sown with grains.

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1.03 Demand for agricultural products is expected to increasesteadily over the next two decades in response to increasing percapita income and moderate population growth. If consumption patternsin China follow those observed in other countries, higher incomeswill bring about a substantial restructuring of consumption involvinga marked reduction in direct per capita consumption of grain and acorresponding increase in the intake of meat, eggs, fish, milk,fruits, sugar and vegetables. To meet these expected changes indemand, the Government has posed ambitious production targets for theyear 2000, including a doubling of fisheries production primarilythrough large-scale expansion of freshwater ponds. Success inachieving planned targets will depend on introducing new technology,strengthening extension programs, and providing price and otherincentives to producers.

The Fisheries Subsector

1.04 China's fisheries subsector, including culture and captureproduction from marine and freshwater sources, accounts for about 1%of the gross value of agricultural output. Total fisheriesproduction, essentially all of which is consumed domestically,increased from an annual average of 4.2 million tons in 1974 to 6.2million tons in 1984, an increase of 47%. This increase was duemainly to the rapid growth of freshwater fisheries which over thesame period more than doubled from one to 2.3 million tons whileproduction of marine fisheries rose only 18% from 3.3 to 3.9 milliontons. Despite the overall, steady expansion of fisheriesoutput--China now ranks third in the world in total production--thecorresponding growth in China's population has kept the annual percapita consumption of fish at a constant 5 kg which is less thanone-third of the world average and low by comparison to many otherdeveloping countries, e.g., Bangladesh (8 kg) and the Philippines(35 kg).

1.05 Capture Fisheries. The Chinese expect little change to theyear 2000 in the annual output of capture fisheries, both marine andfreshwater. The mA ine fish catch, which takes place primarily invaters within the continental shelf, is being exploited to thefullest already and there is some evidence of overfishing in coastalareas. Very little fishing takes place beyond the continental shelf;key constraints here are a lack of funds and technical know-how andunattractive financial returns associated with high fuel costs andthe uncertainty of the catch. Output from freshwater capturefisheries is expected to decline somewhat over the next decade and ahalf as a result of overfishing and worsening pollution problems.

1.06 Culture Fisheries. China has some 5 million ha (75 millionmu) of freshwater bodies and 1.3 million ha (20 million mu) ofcoastal waters which are suitable for aquaculture, of which aboutthree million ha (60%) and 170,000 ha (13%), respectively, are atpresent being used. The freshwater bodies comprise river channels andthe shallow parts of lakes, reservoirs, and ponds. In addition, there

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are some 600,000 ha of low-lying land, unsuitable for agriculturalcrop production and presently little utilized, which can be convertedinto fish ponds. The existence of extensive unutilized areas suitablefor culture fisheries and the fact that significant increases inyields may be realized through application of new technology andmanagement methods have led the Government to project a tripling offreshwater fisheries production by the year 2000.

1.07 Freshwater Culture Systems. Freshwater fish culture in Chinais practiced as a primary occupation on collectives and state-ownedfarms and as a secondary or sideline activity in backyard fish pondsand paddy fields. The key characteristics of these various systemsare, first, integration of fish farming with other agriculturalactivities, namely livestock and crop production, and, second, thepractice of culturing various compatible species, mainly carp, withina single pond environment. Within the carp family, the grass, silver,bighead, and common carp are the predominant species stocked. Sincegrass carp is a highly preferred fish commanding a market pricegenerally about twice that of the other carp, stocking ratiosemphasize grass carp wherever the required nutrients--grass andaquatic weeds--are available. In recent years tilapia has become anincreasingly popular addition to carp polyculture because the fishgrows rapidly, adapts well, and is readily marketable. However, sincethe tilapia is a warm water fish, its spread to the temperate andcolder parts of China depends on the ability of the Chinese to devisecost-effective methods te keep the fish fry and fingerlings aliveduring the winter months.

1.08 The Government is encouraging expansion of both paddy fieldand backyard fish farming as a means to increase fish consumption inrural areas. Paddy field culture, a traditional sideline occupationamong Chinese farmers, relies on th't natural nutrients in the waterto sustain the fish whose excreta, in turn, improve soil fertilitythus increasing rice yields. It is estimated that currently about600,000 ha of rice fields are being used for fish breeding. Yieldsfrom this practice are no more than 0.8 tons/ha. In the backyard fishponds, an increasingly popular sideline, the fish are likewise fedmainly on the pond's natural flora and fauna with the farmer onlyoccasionally applying a manure or fertilizer supplement. In additionto this occasional feeding, pond management ideally involves periodicpond cleaning and treating and maintenance of dikes. However, sincebackyard farming, like paddy-field farming, is undertaken mainly tosupply the farmer's own household or neighborhood with fish, laborinput and investment are relatively low with the result that fishyields are also a low 0.8 tons/ha.

1.09 The bulk of China's freshwater fisheries output is producedby collective and state-owned fish farms which have fish as the maincrop. Fish farming is practiced on ponds, lakes, and reservoirs.Ponds account for about one-third of the total three million hapresently cultivated and 75% of total output. Management of thetraditional system of integrated polyculture practiced on small pondshas been developed to a high standard in many parts of China with

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careful attention paid to efficient use and recycling of availableresources. In recent years, the Chinese have introduced mechanicaldevices such as aerators which have had a positive effect on yields.introduction of contract fish farming by specialized households underthe production responsibility system has also contributed to a markedincrease in yields. Some farms in the lover reaches of the Yangtzeand Pearl Rivers currently report yields as high as 7.5 tons/ha andrecent figures for the north (Heilongjiang Province) indicate yieldsof up to 4.5 tons/ha. Such yields are uncommon, however. Due to alack of standardization in design and management practices, widevariation in yields exists with the average about 0.9 tons/ha in thenorth and 2.5 tons/ha in the south. In short, though the introductionof household aquaculture has acted as a spur to increased yields andproduction, further subsector growth of the magnitude presentlyenvisaged by the Government will require, in addition, broaddissemination of known technologies, ensuring market-oriented prices,and strengthening the role of commercially-operated supply andmarketing services.

1.10 Fisheries OrLanizations. At the central level, the primaryresponsibility for the fisheries subsector rests with two bureausvithin the Ministry of Agriculture, Animal Husbandry and Fisheries(MAAF) (Chart 1)--the Bureau of Aquatic Products (BAP) and the Bureauof Fisheries Administration (BFA). The BAP is responsible for a broadrange of fisheries development activities. Major functions includeoverall planning and policy formulation, allocation of funds tonational fisheries organizations, coordination of fisheries research,monitoring of fisheries development at the provincial level, andcoordination of technical assistance. The BFA is charged with thespecific task of administering -mAine fisheries regulations,including regulations for fishing port operations and maritimecommunications and safety. In addition to the two Bureaus, HAAF hasset up special agencies to handle marketing and investments infisheries. The Aquatic Products Supply and Sales Corporation advisesthe Government on fish prices, distribution of fish and supplies, andinvestments in local fish farms, usually experimental farms or farmsin marginal areas.

1.11 Most provincial governments have fisheries agencies--eithera separate bureau, a part of a combined agriculture, animAl husbandryand fisheries bureau, or a unit within the water resourcesbureau--which are administratively responsible to the provincialgovernment and receive technical guidance from MAAF's BAP. A similarstructure of agencies exists at the municipal and county (ordistrict) levels. During the past year, municipal and countygovernments have begun to establish autonomous fisheriescorporations, many of them converted from large, well-establishedcompanies which have long operated as subsidized units under a localfisheries agency. This move is part of a broader effort withingovernment to disengage enterprise management and operations from thegovernment's administrative/regulatory activities thus encouraginggrowth of enterprises which are independent, profit-oriented andeconomically efficient. The new corporations are service companiesdesigned to provide on a commercial basis a comprehensive range of

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support services to fish producers including feed and fingerlingsupply, cold storage, transport, equipment procurement, andextension, marketing, construction and engineering services. Onceregistered with the General Administration of Industry and Commerce(GAIC) or its local affiliates, the corporations are authorized toborrow bank funds, own assets, and enter into contracts and areobligated to account for their profits and losses and to pay taxes.At the production level, township goverDments are encouragingformation of commercial fish farms consisting on average of 75households and 50 ha of ponds. Some of these farms are patternedafter the old fisheries production brigades (now called villages);others are new aggregations of households which cut across villagelines. Like the municipal and county corporations and other townshipenterprises, these commercial fish farms are GAIC-licensed accountingunits which are authorized to borrow, own assets and enter intocontracts. Farm management, appointed by the township, is responsiblefor keeping accounts and purchasing supplies for farmers,distributing profits, and handling tax payments to the townshipgovernment.

Sectoral Objectives and Bank O2erations

1.12 The policies of the Chinese Government since 1979 have greatlyimproved the environment for rapid agricultural growth. Under theproduction responsibility system, farmers have had more flexibilityin determining what crops to grow, how much to produce and where tomarket their output. Major price adjustments in agriculture,including recently announced reforms to eliminate fixed prices andprocurement quotas for most agricultural products, have providedfinancial incentives encouraging producers to expand output. Resultshave been dramatic: sector output has increased by over 7% per yearover the past six years by comparison to an average of under 2.5% peryear in the preceding twenty years. The challenges for China'sagriculture in the future will be to maintain an adequate rate ofgrowth and to accommodate an expected shift in consumption patternsas population and incomes rise and industry expands. In terms of theaverage Chinese diet, Chinese planners project a rapid increase inthe demand for fruits, vegetables, meat, poultry, fish, and dairyproducts with a corresponding decrease in the share of direct grainconsumption. To ensure that the composition of agriculturalproduction adjusts to changing patterns of demand, incentives in theform of price advantages and improved services are being providedrural households specializing in production of specialty crops, fishfarming and pig and poultry raising.

1.13 In the fisheries subsector, the Government aims to doubleoverall output by the year 2000. The culture of freshwater fish isprojected to increase nearly threefold or by 8% per year and toaccount for about three-fourths of the projected increase in totalfisheries output. The Government is encouraging formation of bothsmall- and medium-scale enterprises to produce and market fishproducts and is undertaking programs to strengthen a range of supportservices including research, extension, feed processing, and coldstorage.

1.14 Lending in China's aquaculture subsector is part of theBank's broader efforts to assist the Government in diversifyingagricultural output to meet expected shifts in consumption anddemand. While the proposed Freshwater Fisheries Project is the Bank'sfirst full-scale involvement in the subsector, aquaculture componentshave figured importantly in other Bank-financod projects inagriculture which have had as their primazy focus strengtheningagricultural support services, provision of credit, and areadevelopment. The First Agricultural Educarion and Research Project(Cr. 1297-CHA), the Second Agricultural Education P'oject (Ln.2444/Cr. 1500-CHA), and the Second Agricultural Research Project (Cr.1516-0-CHA) are providing scientific equipment, computers andtechnical assistance and training to expand and upgrade two ofChina's major fisheries colleges, Shanghai and Dalian, and two keyfisheries research institutes, one in Beijing and one at Lake Tai.The ongoing Rural Credit I Project (Cr. 1462-CHA) and therecently-approved Rural Credit II Project (Cr. 1642-CHA) arefinancing investments in Guangxi, Fujian, and Hunan Provinces toconstruct and improve freshwater fish ponds managed by collectives,state-owned enterprises, and individual households. Expansion offreshwater pond culture is also being supported under thePishihang-Chaohu Area Development Project (Ln. 2579/Cr. 1606-CHA)which is strengthening the capacity of about 140 nurseries to supplyfry and fingerlings for new and existing ponds in central AnhuiProvince. In addition to the above-mentioned projects which includesome assistance to aquaculture, Bank lending in agriculture isassisting water resources and land development in the North ChinaPlain Project (Cr. 1261-CHA) and the Heilongjiang Land ReclamationProject (Ln. 2261/Cr. 1347-CHA), special products development in theRubber Development Project (Cr. 141;.-CHA) and Forestry DevelopmentProject (Cr. 1605-CHA), and improvement of agricultural inputs in theSeeds Project (Cr. 1577-CHA). Future project possibilities includesupport for livestock development, agro-industries, andrehabilitation of the arid regions of Gansu and Xinjiang Provinces.The lending program will also continue to support repeater projectsin areas judged to be of key importance in the shift from collectiveto household-managed farms.

Project Formulation and Rationale

1.15 To help meet the expected shift in consumption patterns overthe next two decades, the Government has given priority to expansionof fisheries output, now only 1% of the Gross Value of AgriculturalOutput (GVAO). Development of freshwater culture fisheries,particularly small pond culture, has been made a special targetbecause of the limited prospects for increasing output from capturefisheries, the potential for significant yield increases fromexisting freshwater ponds, and the availability of unused orlow-lying land suitable for conversion into fish ponds. While incertain limited areas, particularly in the south, integrated carppolyculture has been developed to a high technical standard withyields as high as 7.5 tons/ha reported, the vast majority of existing

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fish ponds in China produce yields of less than one ton per ha as aresult of poorly designed pond layout, use of inappropriate breeds offish or stocking rates, and poor feed management. To overcome theseconstraints to planned expansion of production, the Government hasdeveloped a program of increased investments in aquaculturedevelopment. The proposed project, which represents the initialphase of this program, would build 11,100 ha of new ponds and improve6,100 ha of existing ponds. Attention would be given to a range ofactivities specific to development of freshwater fisheries, beginningwith training new farmers, assuring the availability of inputs--fry,fingerlings, chemical fertilizers, fish feed concentrates--,strengthening extension services for guidance in adopting newtechnology, and providing disease control and assistance inmarketing. The major rationale for Bank involvement in the proposedproject would be to assist in putting into place this large-scale,comprehensive system of fisheries production, extension and marketingfacilities; to enable the BAPs and fisheries development corporations(para. 1.11) to gain access to technologies available abroad in feedformulation, feed processing, cold storage and intensive monoculturesystems; and to help the Government create comercial fisheriesenterprises operating on principles of sound economic management.

1.16 Because of the inadequacy of transport and cold storagefacilities, the Government has decided to establish large-scalefisheries operations in the suburban areas of major cities wherethere is a large guaranteed market for fresh fish. The Government,in consultation with Bank staff, selected for inclusion in theproposed project eight cities which have the available land,administrative infrastructure, and investment resources for fish farmdevelopment and where consumer demand is high and increasing. Themajor criterion in site selection for new ponds is that the land below-lying, poorly drained, no more than marginally productive andhave no other economically attractive use. An exchange of viewsbetween the Government and Bank staff and consultants, continuingsince identtfication and preparation of the project, has led toimprovements in the project's design and organizationalarrangements. Standards for pond construction and stocking rates forfish have been developed and adjustments made in the size andlocation of feed mills. To assist in equipment procurement and otheraspects of project preparation, the IDA-financed TechnicalCooperation Credit (TCC) (Cr. 1412-CHA) will be used to finance twopre-project study tours abroad to inspect feed mill equipment andfish breeding operations. Modifications have been made inarrangements fnr cost recovery to accord with the Government'scurrent emphasis on investment efficiency. These arrangementsrepresent major progress in moving from grant to loan financing ofcapital investments.

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II. PROJECT AREAS

location-

2.01 The project areas are located in the vicinity of eight majorcities: Beijing, Chengdu, Chongqing, Hangzhou, Harbin, Nanchang,Shanghai, and Shenyang (IBRD MAP 19410). Represented among thesecities are two municipalities with provincial status (Beijing,Shanghai), and the capitals of the provinces of Sichuan (Chengdu),Zhejiang (Hangzhou), Heilongjiang (Harbin), Jiangxi (Nanchang), andLiaoning (Shenyang). The other city, Chongqing, is one of China'smajor industrial centers and, like Harbin, has recently been givenspecial economic status, entitling it to tax benefits and otherincentives, as a stimulus to accelerated growth. Project sites wouldcomprise 500 fish farms covering 17,200 ha located in 45 counties anddistricts which are generally within a 15-50 km radius of the citycenters. (Annex 1) Project sites are typically located onlow-productivity farm land or wasteland in low-lying areas. Mostsites proposed for Shanghai and Hangzhou are located on land recentlyreclaimed from the expanding river deltas, about half of the Chengdusites are on floodplain land along the several rivers traversing thecity, and all Nanchang sites are on reclaimed land adjacent toPo-yang Lake. In the case of Beijing, Harbin, and Shenyang, projectsites are generally on unproductive swampland. The exception in termsof topography is Chongqing where project fish farms would be locatedin narrow valleys and ravines throughout the hilly districtssurrounding the city.

Climate

2.02 Project cities fall into two distinct climatic zones. Thefive cities on the lower and middle reaches of the YangtzeRiver--Chengdu, Chongqing. Hangzhou, Nanchang and Shanghai--are in awarm temperate zone where summer temperatures average 26 degrees Cand winter frosts are rare. Water temperature in these city areas istypically above 15 degrees C for seven to nine months of the yearproviding a favorable environment for the breeding of the variouscarp species which form the basis of the Chinese polyculture system.Annual mean precipitation ranges from 980 mm (Chengdu) to 1541 mm(Nanchang). The three cities in the north and northeast, Beijing,Shenyang and Harbin, fall into the cold temperate zone. While summertemperatures range from an average of 19 degrees in Shenyang to 25 inBeijing, winters are severe with Beijing and Shenyang recording belowzero temperatures for December through February and Harbin forNovember through March. The water temperature is above 15 degrees Cfor only four to six months a year. Moreover, ponds are covered withice for three to five months a year which means a reduced oxygensupply and therefore a much shorter growing season for fish. Annualmean precipitation in these three cities is around 600 mm.

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Soils

2.03 Soils in the project areas range from heavy clays to bothsandy and coarse alluvial deposits. In general, soil conditions poseno problems for the proposed fish pond development activities. In thecase of three cities, modifications in design would be made to suitparticular conditions. In Hangzhou and Shanghai, the combination ofsandy soils and high winds experienced at the coastal sites wouldrequire slope protection to prevent embankment erosion. In Chengdu,where coarse alluvial deposits (largely gravel and boulders)characterize project sites, pond lining would be required to preventseepage.

Water Resources

2.04 The project areas have abundant water resources. Chongqing,at the southeast edge of the Sichuan Basin, is situated at theconfluence of the Yangtze and Jialing Rivers while Chengdu, thecapital of the province in the northwest corner of the Basin, istraversed by 15 rivers including the Min. Hangzhou, Shanghai andNanchang are supplied with water from the network of rivers in theplains area along the middle and lower reaches of the Yangtze.Shenyang is located in the Pu River basin, Harbin is served by theSonghua River, and Beijing receives its water supply from six riversand two major reservoirs. Existing irrigation systems in all projectareas are extensive and well-developed. Project sites in Hangzhou,Chengdu, Nanchang and Shanghai would be supplied entirely with waterdrawn from these existing systems. In Beijing, Harbin and Shenyang,surface water would need to be supplemented with water from wells tomaintain an adequate supply during the winter months when shortagesoccur. Many of the fish farms planned for Chongqing would alsorequire supplementary water, in this case pumped from adjacentwatersheds. All proposed sites are provided with appropriate floodprotection structures. Coastal and flood plain sites are protected bydikes which have been built as part of regional flood protectionsystems. Water quality in all project areas is satisfactory foraquaculture development.

Infrastructure and Support Services

2.06 TransDort and Power. All project sites are within reach ofrelatively well-developed road networks radiating from major cities.Except for some sites in Shenyang, all proposed farms are linked byrural roads to secondary and main roads providing access to. both townand city markets. Within farm boundaries, however, additional roadsare needed to handle the increased volume of farm to market transportresulting from the project. Existing electrical transmission anddistribution networks serve all project areas. Electric supply isgenerally reliable with outages experienced only once or twice ayear. Some additional distribution lines would be required withinproject fish farms.

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2.07 Education. Four national fisheries colleges--Shanghai,Dalian, Xiamen, and Zhanjiang--and one provincial college-- -ZhejiangFisheries College--provide high level training in aquaculture for thecountry as a whole. Total enrollment in these institutions is about3,500. At the secondary or polytechnic level, there are 13 schoolsnationwide specializing in fisheries with a total enrollment of1,300. Five of the 13 are located in the project provinces. Inaddition, a number of agricultural schools--e.g., SouthwestAgricultural College in Chongqing--have recently added aquaculture tothe curriculum. While enrollments overall are small relative to thenumber of workers in the aquaculture subsector, opportunities forhigh level training are growing and the project cities areincreasingly able to recruit well-trained people for positions intheir fisheries agencies.

2.08 Research. Centrally-funtded research in aquaculture isconducted by HAAF's Fisheries Science Research Institute in Beijingand its nine affiliated institutes, two of which are in Shanghai (theEast China Sea Fisheries Institute and the Fisheries MachineryInstitute) and one in Harbin (Heilongjiang Fisheries ResearchInstitute). With the exception of Chengdu, each project city has itsown fisheries research institute. Chengdu relies on support from theSichuan provincial fisheries institute at Yipin. Some of the cityinstitutes--Chongqing, Nanchang, Shenyang, and Harbin--are newoperations with a staff of only 10-15 who are involved more inextension and demonstration work than in actual research.Others--Shanghai, Beijing, Hangzhou--are well-established centerswith a staff of 150 and more conducting high quality research in suchareas as breeding, disease prevention, and fish nutrition. In theinterests of expanding freshwater pond production, the municipalinstitutes have given attention in recent years to strengthening workin fish nutrition and feed formulation. Under the current governmentpolicy of encouraging financial independence on the part of theresearch establishment, funding for new projects from budgetarysources has been reduced and research institutes are increasinglycommercializing their research activities through contracts withenterprises and other agencies.

2.09 Extension. Fisheries extension services run by local BAPs areavailable in all project cities. Though the scope of services variesfrom city to city, most existing municipal and county stations aresmall-capacity units of 5-10 technicians each which provide technicaladvice and organize short-term training for area fish farmers. In1984, the eight project areas trained from 200 (Nanchang) to 1,300(Chengdu) farmers to the "well-trained farmer" or "farmer technician"level in short courses in basic production techniques, diseaseprevention, and management methods. Use of audiovisual equipment inextension work is limited as is the availability of scientificequipment for laboratory demonstrations. To provide training andservices for the large numbers of new farmers involved in the programto expand fisheries production in the project areas, there is a needto establish additional, well-equipped extension facilities.

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2.10 Rural Ceit. Production credit for fisheries is availablein the project areas from the Agricultural Bank of China's (ABC)extensive network of branches at the municipal, county and townshiplevels. In addition, at the county and township levels, collectivelyowned and managed rural credit cooperatives (RCCs) operate as part ofthe ABC network and play a major role in both deposit mobilizationand provision of short-term credit for agriculture includingfisheries. Recent economic reforms, particularly the shift inemphasis from grant to loan financing, have increased the role of thebanking system in rural development. The ABC and RCCs are thereforeexpected to expand their operations to meet the growing demand forfinancial services including credit. Institutional development of ABCis being assisted by IDA through the ongoing First Rural CreditProject (Cr. 1462-CHA) and the recently-approved Second Rural CreditProject (Cr. 1642-CHA).

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III. THELPQJECT

Project Descrintiotn

3.01 The principal objective of the proposed project is to assistthe Government in developing freshwater fish culture in the vicinityof eight major urban centers. The project would expand the areaunder intensive fish cultivation by improving existing ponds andusing land unsuitable for crops for now pond contruction, providetechniques and equipment for pond management, and strengthen thesupport facilities for production and marketing of fish. Theproject would contribute to increased production of freshwater fishand would serve as a model for the establishment of co_mercial scalefish farms in other parts of the country. The main features are:

a) establishment of 11,100 ha of new ponds and improvement of6,100 ha of existing ponds, including provision of watersupply, drainage, power supply, farm roads and buildings,and where required, pond lining, flood protection, and slopeprotection;

b) construction and equipping of support facilities, including14 feed mills, four cold storage plants, six technicalservice centers, seven trade centers, 20 ha of tilapiaoverwintering facilities, a vaccine factory and a 25 harunning-water hatchery;

c) provision of construction equipment and vehicles to fishfarms and support facilities for production, extension andmarketing;

d) provision of production equipment and materials to fishfarms; and

e) a training and technical assistance program designed toupgrade the qualifications of project staff to implement theproposed project and to carry out further fisheriesdevelopment in the eight cities.

The distribution of project works among the cities is shown in Table3.1.

Pond DeveLopment

3.02 The project provides for construction of new ponds andimprovement of existing ponds according to BAP's guidelines, withimodifications to fit the specific situation in different locations.These guidelines call for 0.66 ha rectangular shaped ponds,surrounded by 3 m high dikes with 2:1 side slopes and provided withproper filling and draining controls. Ponds of uniform size would beconstructed in aggregations of 15-150 ha and organized as fishfarms. Pond improvement, which generally involves deepening,

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reshaping and the provision of filling and drainage facilities, wouldbe carried out on farms already established.

3.03 The lands to be developed are swamps, marshes, or low-lying,poorly drained crop lands which are marginally productive. Otherconditions for selection of sites included proximity to the marketcity, topography suitable for economical construction, ready accessto water, roads and electricity, availability of constructionmaterials in the vicinity, and minimal risk of flooding. Once theseconditions were met, consideration was given to the ability of thetownship to contribute to the proposed investment in establishment orimprovement of fish farms, and the willingness of individual farmersto participate.

3.04 Pond construction would involve, on average, excavation ofabout 10,000 m3/ha for new ponds and 5,000 m3/ha for ponds to beimproved. The vertical setting of the ponds would be chosen so as togive an approximate balance between the amount of earth to beexcavated and that needed for embankments. Any earth not needed fordikes would be used to raise the level of adjacent lands, which couldthen be used for growing grass or other crops. About 20% of theearthworks for new ponds would be carried out with equipment procuredthrough the project, about 25% is expected to be done by localconstruction teams using existing equipment, and the balance would bedone manually. In the case of improved pond earthworks, about 10%would be done by local construction teams with existing equipment and90% would be done manually.

3.05 Generally, there is no need for pond lining, and grassplanted on the embankments is adequate to prevent erosion of the sideslopes. However, linings and slope protection are planned wherelocal circumstances warrant. In Chengdu, about half the new pondswould be built on former floodplain lands, which are covered withgravel and boulders. Here pond bottoms and embankments would be linedvith concrete or a mix of lime, gravel and stone. Slope protectionwould also be required at some sites in Hangzhou and Shanghai tominimize erosion by wind-driven wave action, even though ponds arealigned with the narrow side in the direction of the prevailingwinds.

3.06 All farms would have provision for conveying water to andfrom each pond. The most common arrangement would be to providealternate filling and draining canals with access to each pond. Thesupply canals would usually be small concrete-lined ditches along thetop of the dikes. Drains would be either canals or drainage pipesset in the alternate dike. All the cities, except Chongqing, haveexisting irrigation systems which would be the principal water supplysource; Chongqing would use a combination of natural runoff andpumping from water sources in adjoining catchments. Wells would beprovided in Shenyang and Harbin, for use in winter when irrigationsystems are not in operation, and in Beijing, to supplementdeliveries from irrigation canals where allocations for fish pondsare limited.

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3.07 About 400 km of farm roads would be constructed to connectthe farms to the existing county and provincial road systems. Thesewould generally be 1 - 2 km long and 4 m wide with a gravel surface.About 900 km of distribution lines, with the necessary substationsand transformers, would be provided to connect with the ruralelectrification system already in place in the project areas. About78,000 sq m of offices, dwellings and workshops would be constructedon the farms. To insure manure supplies for pond fertilization,about 120,000 sq m of sheds for poultry and swine would be included.

Support FaciLities

3.08 FeedMills. A 6-8 ton/hr feed mill would be constructed inBeijing, and 13 smaller mills, with capacities of 1.5-2.5 t/hr, wouldbe provided in the other seven cities. These mills would have acombined annual output of 73,000 tons of high-quality, pelletized orextruded feed concentrate (assuming operation 8 hrs/day, 300 days peryear). Initial operations would be for the manufacture of a singletype of feed to fit the carp polyculture system. The mills would beequipped with laboratories for analyzing raw material to determinethe optimal feed composition with respect to nutrients and price andto stimulate development of balanced formulations for feed conversionefficiency. The use of feed concentrates in fisheries is relativelynew in China and proper formulations are under experimentation at anumber of research institutes. Proper feed formulation, includingadding amino acids and vitamins, has been shown experimentally inBeijing to reduce the feed to fish conversion rate from 3.5 to 2.However, conversion rates are sensitive to different climate andtemperature conditions, and to be most economically e2ficient, feedcomponents should be locally produced grains and their by-products.Study tours are planned for observation of feed mills in the UnitedStates and Scandinavian countries, and feed formulation studies wouldbe conducted by local research institutes (para. 3.15).

3.09 Cold Storage Facilities. Two cold storage plants with anominal capacity of 500 tons would be located in Harbin and 1,000 toncapacity plants would be provided for both Shenyang and Nanchang.The Nanchang facility would also have a 25-ton per day ice makingunit. The new plants would utilize rack storage for improvedhandling and space management. In Beijing and Chongqing, cold storagefacilities would consist of 25-50 ton capacity prefabricated unitsincorporated into the trade centers (para. 3.11). The larger plantswould be used for storage of frozen fish to be sold during the mainholiday seasons, and the smaller units would be mainly for overnightrefrigeration of unmarketed fish.

3.10 Technical Service Centers. The project would provide forconstruction and equipping of technical service centers in the eightcities. The technical service centers would have simple laboratories,classrooms and offices, and would be the locus of training andextension activities for project farmers. Each center would be

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staffed with 25-30 persons, most of them fisheries specialists,engaged in conducting training courses for extension staff andproject farmers. From 1,500 to 2,500 fish farmers and aquaculturetechnicians would be trained annually, to achieve a ratio of one"farmer technician" per 8 fish farmers and one aquaculture technicianper 15 farmers.

3.11 Trade centers. Trade centers would be constructed in sixcities. The trade centers would be staffed and equipped to providemarket information to farmers and supply farm materials such as nets,thread, lines, grass seed, fertilizer, and fuel. They would haveretail fish outlets and could, when needed, provide transport of fishfrom farm to market. Cafeteria and dormitory facilities would alsobe included. In Beijing and Chongqing, the trade centers wouldinclude prefabricated refrigeration units.

3.12 Other support facilities. Other support services to beprovided by the project include tilapia overwintering facilities, avaccine factory and an enclosed flowing-water hatchery. Tilapiaoverwintering facilities would be constructed in Chengdu, Chongqingand Hangzhou, where environmental conditions are suitable and amarket for tilapia exists. The facilities would be mainly foroverwintering brood fish so that a supply of fry and fingerlingscould be provided to project farmers. In Beijing, a combination carphatchery and tilapia overwintering facility would be provided. Avaccine factory would be constructed and equipped in Shanghai toproduce a vaccine which can reduce fish mortality due to a viral"bleeding disease". In Shanghai, consumers show a market preferencefor large three-year old fish; however, in the second year, fish showa marked susceptibility to this disease. A hatchery, using powerplant exhaust heat, would be constructed in Harbin. Harbin is thenorthernmost city in the project area and, until now, has had to relyon obtaining fry and fingerling supplies from Guangdong and othersouthern areas. The 25 ha hatchery facility would provide a reliablesupply of better-quality stock through intensive monoculturetechniques.

Construction Eauipment and Vehicles

3.13 The equipment fleets of the project offices, FDCs (para.4.01), support facilities and project area farms would be expandedand replaced through procurement of 2,085 vehicles (Annex 2, Table4). Trucks would be used primarily to transport fresh or live fish(in water or ice) from farm to market; other uses would be fortransport of fingerlings and fry, grasses, manure and other inputs.Trucks would be allocated to farms on the basis of one ton of vehiclecapacity per 6-10 ha. In addition, the project would provide 30bulldozers and 7 excavators for the FDCs' construction units. Thisequipment would be used for construction or improvement of projectponds in Beijing, Harbin, Nanchang and Shenyang.

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Production Eauioment and Materials

3.14 The project includes production equipment such as workboats,nets, aerators, automatic feeders, blenders, and fishing equipment.The project also provides for the initial stocking of fingerlings,the first application of chemical fertilizers to the newlyconstructed ponds, and feed components such as fish meal andvitamins, for the first year's operation (Annex 2, Table 4).

Training and Technical Assistance

3.15 To upgrade the qualifications of local fisheries staff, theproject would provide about 131 man-months of study tours andoverseas training, 144 man-months of local training, and 5 man-monthsof consulting services (Annex 2, Table 5). About five one-monthstudy tours with six to eight persons each would visit feed mills,cold storage plants, fish breeding facilities, and feed intensivemonoculture operations primarily in Northern Europe, the US, Japanand Southeast Asia. Overseas training would consist of (a) two- tosix-week special programs, including visits to equipmentmanufacturers and attendance at international conferences, organizedfor senior project staff; and (b) short-term (one to three month)courses for technical staff in such areas as fish nutrition and fishfarm management. Additional short-term training opportunities inaquaculture technology as well as business management would beprovided under the local training subcomponent. During negotiationsan assurance was obtained that the training component would becarried out in accordance with a program acceptable to IDA. Theproject would also include 5 man-months of consulting services tohelp organize and conduct local training courses in financialanalysis of fisheries projects and computer-assisted data management.Consultants wotld be selected under terms of reference agreed atnegotiations and in accordance with Bank Group Guidelines on the useof consultants. Feed mill equipment suppliers would provide trainingin operation and maintenance as part of the procurement packages.Research institutions in each project city would be commissioned bythe project coordinating committee (para. 4.03) and municipal projectoffice to provide technical advice to the project as necessary and tocarry out studies and experimentation to develop city-specific feedformulations.

Status of Preparation

3.16 The project is in an advanced stage of preparation. Eachmunicipality has established Project Offices at the municipal andcounty levels and appointed key staff; all staff would be in place bymid-1986. The municipal and county Bureaus of Aquatic Products haveselected the sites for farm establishment and improvement, carriedout detailed surveys, and prepared designs in sufficient detail toform a basis for accurate quantity estimates. Construction drawingshave been completed for about 30% of project farms, including farmroads, canals, transmission lines, and farm buildings. Preliminary

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designs for the civil works portion of technical service centers,trade centers, overwintering facilities, the hatchery and the vaccinefactory have been completed. Draft bid documents have been preparedfor vehicles, feed mills and construction equipment, and biddingprocedures are expected to begin by mid-1986.

Im2iementation Schedule

3.17 The project would be implemented over a five-year periodbeginning in mid-1986. Pond construction would start in July 1986.Preparation of bid documents by mid-1986 would allow the feed millsand cold storage facilities ra begin operation by early 1988.Technical service centers would be completed by mid-1987, tradecenters by mid-1988 and overvintering facilities by late 1988. Thehatchery would be in operation by 1989. All project works would becompleted by the end of 1990. A detailed implementation schedule isgiven in Annex 5.

Cost Estimate

3.18 Total project cost in January 1986 prices is US$197.7million, with a foreign exchange component of $60 million, or 30% ofthe total. Unit prices applied to quantity estimates for ponddevelopment and improvement, including transmission lines, watersupplies roads, farm buildings, and the civil works portion ofsupport facilities are based on recent experience with similar workin the vicinity of the cities. Prices for locally availablematerials and equipment are based on data provided to the municipalproject offices by local suppliers. Prices for constructionequipment, vehicles, feed processing, cold storage and importedlaboratory and production equipment are based on list prices obtainedfrom manufacturers. Physical contingencies (10% of base costs) rangefrom 5% for equipment to 15% for civil works. Assumed priceincreases amount to 20% of the base cost plus physical contingenciesand are based on annual price escalation factors for goods andservices of domestic and foreign origin in US dollar equivalents of7.0% in 1986 and 1987, 7.5% in 1988, 7.7% in 1989 and 7.6% in 1990.A summary of project costs is shown in Table 3.2; a breakdown by cityis given in Annex 2, and detailed estimates for each city are in theproject file.

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Table 3.Z SUMMARY OF PROJECT COSTS

Local Foreign Total Local Foreign Total F.E.- - - (Ym) -a - - - (US$ m) -- - - (%)

Pond Development 258.0 62.6 320.6 86.0 20.8 106.8 20

Support Facilities 35.9 17.1 53.0 12.0 5.7 17.7 37

Vehicles & Cons. Equip. 4.4 50.7 55.1 1.5 16.9 18.4 92

Production Mat. & Equip. 16.1 6.9 23.0 5.4 2.2 7.6 30

Training & Tech. Assist. 0.9 1.3 2.2 0.3 0.5 0.8 63

Base Cost 315.4 138.5 453.9 105.2 46.1 151.3 30

Physical Contingencies 28.2 11.8 40.0 9.4 3.9 13.3 30Price Contingencies 69.4 29.7 99.1 23.1 10.0 33.1 30

Total Project Cost /a 413.0 180.0 593.0 137.7 60.0 197.7 30

a! The project is exempt from taxes and duties.

FLnanucng

3.19 Bank Group assistance would be an IDA Credit of SDR 52 million(US$60 million equivalent) and would cover 30% of total project costs.The balance of US$137.7 million equivalent would be met from thefollowing:

(a) provincial governments - US$7.6 million equivalent;(b) municipal governments - US$63.8 million equivalent;(c) county and district gover,ments - US$24.4 million equivalent;

and(d) townships - US$ 41.9 million equivalent.

Procurexent

3.20 Goods worth about US$38 million would be procured throughinternational competitive bidding (ICB) in accordance with Bank Groupguidelines. The main items to be procured would be (1) equipment forcold storage facilities and feed processing plants (US$8.7 million),(2) vehicles and construction equipment (US$ 22.4 million), and (3)steel and other construction materials (US$7.2 million). Qualifieddomestic manufacturers would receive a preference of 15% of c.i.f. bidprice or the applicable customs duty, whichever is less, in bidevaluation. Prior IDA review of contract awards would exclude small

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contracts (less than $200,000) estimated to cover less than 15% of thevalue of all contracts. Working groups, composed of representativesfrom each municipality, have prepared preliminary specifications forvehicles, equipment, and machinery for cold storage and feed mills.Final preparation of bid documents would be carried out by the ChinaMachinery Import and Export Corporation (MACHIMPEX), the main agencyfor machinery procurement in China. Bid invitation and bid evaluationand award recommendations would be the responsibility of MACHIMPEX inconsultation with the FP0 (para. 4.01).

3.21 Laboratoxy and audio-visual equipment (for technical servicecenters, the vaccine factory, and the hatchery, totalling US$0.7million), production materials (chemical fertilizers, fish meal,vitamins and feed additives, totalling US$ 2.7 million), and productionequipment (totalling US$0.2 million) would be procured on the basis ofinternational and local shopping (ILS) (three quotations), inaccordance with procedures acceptable to the Association. Most of theproduction equipment is fabricated locally; production materialrequirements would be spread over the implementation period and be inrelatively small amounts. The FP0 would consolidate, as far aspracticable, the eight cities' procurement requirements into singlepackages.

3..2 Civil works for pond development (US$136.8 million) andconstruction of support facilities (US$11.6 million) would be carriedout by local construction teams. Because these works would be smalland dispersed geographically among eight cities and 45 counties, theywould not be suitable for ICB. Earthworks would be carried out byforce account or other procedures acceptable to IDA. In general, thework would be carried out by a township's own construction bureau, withassistance from the coumty or municipal construction bureaus. However,recently there has been a growing trend toward competitive bidding forlocal construction jobs, with construction teams organized bycollectives or operated by county water conservancy and highwayconstruction bureaus bidding on works of the type included in theproject. Wherever feaaible, the project management would encouragecompetitive bidding. Although procedures vary between localities, bidadvertisement is wide enough to secure numberous bidders, and contractdocuments clearly define the rights and obligations of the partiesinvolved and spell out the terms of payment. Further details of theprocurement arrangements are provided in Table 3.3.

Disbursements

3.23 Disbursements under the Credit against expenditures for feedmills, cold storac,e and technical service center equipment, vehicles,construction equipment and materials, and production equipment andmaterials would be at 100% of the foreign exchange costs of importeditems, 100% of the ex-factory price of locally manufactured items, and75% of local expenditures for imported items procured locally.Disbursements for overseas and local training and technical assistancewould be 100% of total costs. Disbursement for earthworks would be at30% of total expenditures.

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Table 3.3: PROCUREMENT ARRANGEMENTS(US$ million)

ICB ILS Other /a Total

Pond developmentEarthworks 68.9 68.9

(20.7) (20.7)Other construction /b 4.7 /c 67.9 72.6

(4.7) (0) (4.7)Support facilities

Buildings 2.5 /c 11.6 14.1(2.5) (0) (2.5)

Equipment 8.7 0.7 9.4(5.4) (0.7) (6.1)

Vehicles and Constr. EquipmentVehicles 18.0 18.0

(18.0) (18.0)Construction equipment 4.4 4.4

(4.4) (4.4)

Production materials and equipmentProduction materials 6.3 6.3

(2.7) /d (2.7)Production equipment 3.1 3.1

(0.2) (0.2)

Training and technical assistance 0.9 0.9(0.7) (0.7)

Total 38.3 10.1 149.3 197.7(35.0) (3.6) (21.4) (60.0)

Note: Figures in parentheses are the respective amounts financed bythe Credit. All amounts include contingencies.

/a Includes (i) local procedures, including force account and localcompetitive bidding; and (ii) technical assistance and training.

/b Includes slope protection, pond lining, flood protection, watersupply and drainage, power supply, roads and farm buildings.

/c Steel and other construction materials./d Excludes fry and fingerlings.

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3.24 Disbursements for training and contracts for technicalassistance, technical service center equipment, production materialsand equipment, and chemical fertilizers costing less than $200,000,and for earthworks would be made against statements of expenditure(SOEs), the supporting documentation for which would be retained bythe FP0. In the case of earthworks, SOEs vould be supported byprogress reports shoving physical quantities and unit prices whichwould be updated annually by the FPO and reviewed by IDA.

3.25 In order to provide for efficient disbursement of creditproceeds, a special account would be opened in US dollars in a bankacceptable to IDA with an initial deposit of US dollar equivalent ofSDR 3.5 million which represents the average estimated four-monthexpenditures. Applications for replenishment of the special accountwould be submitted quarterly, or whenever the special account isdrawn down to 50% of its initial deposit, whichever comes first.

3.26 The project is expected to be completed by about December1990 and the closing date would be June 30, 1991. The disbursementexperience in China, although short, has been very favorable andbetter than Bank-wide and regional averages. The projecteddisbursement profile is in line vith that for specific investmentloans in China. Estimated schedules of expenditures anddisbursements are given in Annex 2, Tables 2 and 3.

Accounts and Audits

3.27 Records of expenditures on civil works, vehicles andproduction equipment and materials vould be compiled by countyproject offices (para. 4.01) on the basis of accounts maintained bythe township fish farms and county FDCs. These records would beforwarded to municipal project offices which would prepareconsolidated accounts including their own records of municipal levelexpenditures on civil works, equipment, materials, technicalassistance and training. After certification at the municipal level,these accounts would be forwarded to MAAF's Fisheries Project Office(FPO) for review. The FO would in turn compile a complete report ofproject expenditures. Assurances were obtained from the Governmentat negotiations that consolidated project cost accounts would beaudited annually by independent auditors acceptable to IDA and theaudited accounts submitted to IDA within six months of the close ofeach financial year. The audit review would examine and determinethat funds disbursed against statements of expenditure had been usedfor the purpose for which they were provided. It is expected thatthe State Audit Agency of the central government would audit theconsolidated accounts submitted by the FPO.

Environmental Effects

3.28 The project would not have any adverse effect onenvironmental conditions. Water drained from the ponds would have ahigh biological oxygen demand and be deficient in dissolved oxygen;however, drained to irrigation systems, these characteristics wouldnot be detrimental and the water would have value as fertilizer forcrop application.

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IV. ORGANIZATION AND MNfnAGMSN

Prolect Organization and ImRIementation

4.01 General. The proposed project would be executed by the eightcity governments under the overall direction of the Bureau of AquaticProducts (BAP) in the Ministry of Agriculture, Animal Husbandry andFisheries (NAAF). A Fisheries Project Office (FPO), established inBAP, would coordinate project activities in the eight cities andserve as the main link with IDA. Each project city, acting throughits BAP, bureau of finance (BOF) and other technical agencies, wouldbe responsible for carrying out project activities in the countiesand districts under its jurisdiction. City and county (district) BAPswould provide experienced technical and managerial personmel to staffmunicipal project offices (NPOs) and county (district) projectoffices (CPOs) established to manage overall project planning and tosupervise the inputs of local government agencies in the execution ofproject physical works. Commercial fisheries entities--city andcounty fisheries development corporations or other types of entitiesauthorized to engage in commercial activities (hereafter collectivelyreferred to as FDCs), township fish farms and state farms--wouldoperate the support facilities and fish ponds developed under theproject. The Government and each of the project cities would enterinto Onlending and Project Implementation Agreements setting outtheir respective obligations in project implementation. Signing ofthe Agreements with each of the project cities except Shanghai, onterms and conditions satisfactory to IDA, would be a condition ofCredit effectiveness. Signing of the Agreement with Shanghai, aswell as delivery of a satisfactory legal opinion on the Agreement,would be a condition of disbursement for the Shanghai component ofthe project. The organization for project implementation is shown inChart 2.

4.02 Fisheries Proiect Office. The FPO within MAAF would beresponsible for maintaining project accounts and submittinxgdisbursement applications to IDA; monitoring construction schedules;administering local and overseas training programs; supervisingequipment and vehicle procurement; coordinating inter-ministerialactivities; and compiling semi-annual reports on project progress. ATechnical Advisory Group would be formed to assist the FPO in suchmatters as selection of foreign consultants, selection of candidatesfor local and overseas training, and organization of conferences andexchange programs among China's fisheries research institutes. TheGroup would consist of experts drawn from local research and academicinstitutions such as the Shanghai Fisheries College, the Lake TaiFisheries Research Institute and the Beijing Fisheries ResearchInstitute./1 Experts appointed to the Technical Advisory Group wouldserve periodically on short-term assignments as needed during thelife of the project.

/1 These institutions have been supported by two Bank projects, theAgricultural Education and Research Project (Cr. 1297-CHA) and theSecond Agricultural Research Project (Cr. 1516-CHA).

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4.03 Municinal and County Proiect Organizations. Each city hasset up a Project Coordinating Committee (PCC), an interagencyorganization consisting of representatives from provincial andmunicipal level technical and financial agencies involved in theproject. The PCC, chaired by a deputy mayor or a key provincialofficial, would serve as a policy, planning and review board for theproject. To manage the day-to-day aspects of project implementationon behalf of the PCC, each city has established a project officewithin its BAP. Typically, the Municipal Project Office (WPO) wouldconsist of staff from provincial and municipal BAPs, from othermunicipal agencies such as planning and finance, and from the FDCs.By professional background, MPO membership would include engineers,accountants, economists and fisheries experts. The MPOs wouldcoordinate and supervise overall project implementation inparticipating counties and districts; prepare the annual work programand budget for fish pond development and other civil works; secureall government approvals; review site selection and technicalstandards for design and construction of project works; approveconstruction contracts and supervise construction; and arrange fordistribution of equipment and vehicles financed by the IDA Credit.All project disbursements would be made by municipal finance bureauson the recommendation of the MPOs.

4.04 A structure of PCCs and project offices similar to that atthe municipal level would be established for the counties anddistricts in the project. The CPOs would prepare work schedules,construction contracts, and annual budgets for county PCC approval.They would be responsible for site selection based on their review ofproposals for fish farm development submitted by the townshipgovernments. In addition, the CPOs would prepare preliminary surveysand designs and supervise local units involved in construction ofproject works. An assurance was obtained at negotiations that theproject offices at the ministry, municipal and county levels would bemaintained during project implementation and adequately staffed withqualified personnel.

4.05 Fish Farm and FDC Operations. Project ponds, both new andimproved, would be organized by the townships into fish farms ofabout 50 ha and 75 households each. Each farm would operate underGAIC license as a township (i.e. collectively-owned) enterprise withstipulated borrowing, contracting ana ownership rights as well as taxand accounting obligations (para. 1.11). Farmers would be selected tojoin the farm enterprises on the basis of applications screened bytheir own village councils and appropriate township offices. Basicqualifications include a junior middle school education, demonstratedskills in fish farming or another agricultural line, and the capaciLyto contribute 30% of the first year's working capital requirements.Once selected, a contract would be drawn up between the farmer andthe farm specifying the length of the contracting period, the assetscontracted (land, equipment, capital), and the contracting feeincluding the amount of annual repayments on initial investment costsand interest. As of 1985, standard contracts are for a 15-year

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period. The farm management, usually a group of about six including amanager, deputy manager, accountant, cashier, materials supply officerand technician, would keep accounts for individual farmers, arrange forsale of fish, supply transport, provide technical advice, and procurebulk supplies. Salaries of farm management and farm operating expenseswould be covered as part of the farmer's contracting fee.

4.06 Project FDCs (para. 4.01) consist of support facilities--coldstorage plants, feed mills, hatcheries, trade centers, technical servicecenters, and construction units--serving mainly but not exclusivelyfarmers in the project areas. At the municipal level, with the exceptionof Shanghai, the FDCs would be state-owned corporations with chartersprepared and registered with the GAIC, in accordance with State Councilregulations (August 14, 1985). Drafts of the corporate charters for themunicipal FDCs of Beiiing, Chengdu, Chongqing, Hangzhou, Harbin, Nanchangand Shenyang were reviewed and discussed at negotiations. Receipt of thecharters in final form approved by the appropriate office of the GAICwould be a condition of Credit effectiveness. The Shanghai municipalFDC, the Shanghai Aquaculture General Farm, is not a corporationregistered with GAIC; however, under current government arrangements, itis authorized to carry out production and commercial operations,including activities planned under the project, through legaldocumentation issued by the Shanghai Municipal Government. Delivery toIDA of documentary evidence and a legal opinion with respect to the legalstatus of Shanghai Aquatic General Farm, satisfactory to IDA, would be acondition for disbursement of Credit proceeds for the Shanghai component.

4.07 An assurance was obtained from the Government at negotiationsthat FDCs would be operated in accordance with FDC Operational Guidelinesacceptable to IDA. Draft Operational Guidelines (Annex 4) were reviewedand discussed at negotiations. These Guidelines require that FDCsmaintain a debt-equity ratio not greater than 5:1; undertake or financeactivities which have financial rates of return not less than theopportunity cost of capital; recover investments in feed mills, coldstorages and other support facilities generally within 15 years and invehicles within seven years, by appropriate pricing of output andservices; and have accounts prepared and audited annually. The municipalgovernments have already transferred assets to the FDCs and would provideadditional equity to enable them to function during the startup period ofoperations when profits would be inadequate to cover costs. At fulldevelopment, the FDCs would generate sufficient profits from the supportservices to cover operating expenses, depreciation, and repayment ofinvestment costs.

4.08 Although specific arrangements would vary from one project cityto another, in general, FDC feed mills and hatcheries would supplyfarmers directly through retail outlets while the other FDC subsidiaryservices--technical service centers, trade centers, and constructionunits--would operate on the basis of fee-for-service arrangements withfarmers and/or the township farm enterprises. The technical servicecenters would cover their operating costs through fees paid for farmertraining (at about 80 yuan/man-month) and for technical services providedto farm households. The technical services would be offered either on a

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service call basis (at 1-2 yuan/mu) in response to particular problemsor on an annual contract basis (at 5-10 yuan/mu) for periodic testing ofvater quality, monitoring of disease prevention, fertilization andfeeding practices, and general problem solving. Trade centers wouldgenerate income from fees charged for farm-to-market trucking, fishretailing, sale of fisheries supplies and equipment, and overnightaccommodations for farmers involved in sales transactions. Cold storageplants vould offer farmers the choice of storage space on a rental basisor bulk purchase of the fish for storage and eventual sale by the FDC.FDC construction teams would assist in new pond construction inaccordance with contracts drawn up with township farm enterprises.

Financial Management

4.09 Flow of Funds. The proposed IDA Credit would be disbursedagainst expenditures for vehicles, equipment, production materials, andconstruction materials; for earthworks in construction of fish ponds;and for overseas training, study tours, and consulting services. Fundsfor these items would be onlent by the Ministry of Finance (MOF) to theproject cities at 4.5% p.a. interest to be repaid over 20 yearsincluding a five year grace period (Chart 3). The foreign exchange riskwould be borne by the project cities. These terms would be outlined inOnlending and Project Implementation Agreements between the Governmentand each of the project cities to be concluded as a condition ofeffectiveness of the Credit or a condition of disbursement (para.4.01). Most IDA funds would be disbursed directly to vendors understandard ICB arrangements. An additional portion would be used by thecities to cover the costs of technical assistance and training. Theremaining IDA funds and all domestic funds would be channeled throughlocal bureaus of finance and, upon approval of the local projectoffices, would be disbursed for project expenditures incurred by theFDCs and fish farms. The main source of domestic funds would be thecities with additional contributions from counties, townships, and, inthe case of three project cities--Chengdu, Harbin, and Nanchang--fromtheir provincial governments--Sichuan, Heilongjiang, and Jiangxi,respectively. An assurance was obtained at negotiations that the threeprovincial governments would provide in timely fashion the requiredcontributions.

4.10 Cost Recover,. The Government's economic reform policy since1979 has supported a shift from grant to loan financing of developmentprojects. As a first step, funds from budgetary sources, both centraland local, were made available as interest-free loans. More recently,the governments at various levels have begun to charge interest on thesefunds. While these measures represent substantial and rapid progresstowards greater investment efficiency and financial discipline on t)-epart of borrowers, there is not yet in place a uniform interest ratestructure which would apply to both bank loans and loans from budgetarysources. As a result, there is considerable variation in interest ratesfrom one locality to another reflecting differences in local practices.In the proposed project, in order to ensure consistency with other BankGroup-financed agriculture projects in China, recovery of the IDA

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portion of total funding would be at the following rates of interest:(a) for equipment and materials for the trade centers and technicalservice centers, at 4.5% and (b) for all other items, at ratesacceptable to IDA. An assurance to this effect was obtained from theGovernment at negotiations. An understanding was reached that thecriteria for acceptability would normally be rates comparable to the ABCprevailing rates for development loans, and that their acceptabilitywould be reviewed by IDA from time to time. An understanding wasreached with the Government at negotiations that the interestdifferential between MOF's rate to the cities and the cities' rate tothe FDCs and fish farms (ABC rates) would accrue to the cities to coverthe foreign exchange risk associated with the project and to reinvest infreshwater fisheries development. Domestic funds would be recovered onterms and conditions determined by the various local governments. Theseterms provide for full cost recovery but at interest rates somewhatlower than ABC rates.

4.11 The municipal and cotnty project offices would have primaryresponsibility for monitcring the repayment of project costs by thevarious project entities to the finance bureaus. In the case of fishpond development, funds for equipment, vehicles, construction materialsand labor would be provided primarily by cities, counties, and townshipsand also by the IDA Credit. The mechanism for recovery of these fundswould be stipulated in contracts between the farmer and the farm (para.4.05) and between the farm and the GPO. The fish farm management wouldcoordinate collection of contractual payments from individual farmers.Funds thus recovered would be deposited in the farm's account in thelocal ABC branch for transfer to the account of the CPO. Paymentsrecovered by the CPOs would in turn be channeled to the appropriate BOFsin repayment of project costs funded by the counties, cities and IDA.The townships would recover their investment in pond development throughtaxes on profits of project fish farms.

4.12 Funds for development of FDC support facilities would be providedfrom the IDA Credit for vehicles, processing equipment, constructionequipment and materials and from the provinces, cities or counties forother costs, mainly civil works. FDCs' financial obligations and methodsof repayment in respect to the loan funds would be outlined in contractsbetween the FDCs and the cities and counties. The MPOs would beresponsible for recovery from the FDCs of funds originating above thecounty level; the CPOs would handle recovery of county investments.

Execution of Project Works

4.13 Arrangements for execution of project works would vary from cityto city depending on current contracting practices and the size of theavailable labor force. Fish pond construction would be carried outduring the off-season under contracts with county construction teams ortownship work units. Contracts would either be assigned to these teamsor units on terms established by negotiation or awarded on the basis ofcompetitive bidding. Construction methods in Chengdu, Chongqing,Hangzhou, and Shanghai, would be labor intensive. In the three northerncities and Nanchang, seasonal labor shortages necessitate supplementing

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manual with mechanized construction methods. In these cases, themunicipal FDC construction teams, provided with additional equipmentunder the project, would be assigned contracts by the NPOs to assistin earthworks construction. Construction of roads, water and powerlines, and civil works for FDC support facilities (feed mills, coldstorage plants, technical service centers, trade centers) would becarried out for the most part by county level construction companiesattached to specialized agencies (e.g. Water Resources and ElectricPower) at that level. Such contracts are increasingly being awardedthrough competitive bidding. Contracts for fish pond construction andinfrastructure development would be drawn up between the fish farmsand various local construction units. Construction of FDC supportfacilities would be handled through contracts between the concernedFDCs and these units. Contract arrangements and construction wouldbe supervised by MPOs and CPOs assisted, in some cases, byspecially-organized work supervision offices. Once the project isfully operating, the MPOs and CPOs would be reduced to small units ofone or two persons within the BAPs responsible for coordinatingproject accounting and cost recovery with the local BOFs.

Monitoring. Evaluation and ReRorting

4.14 The MPOs in cooperation with the CPOs would monitor andevaluate the project's impact and economic benefits. Each townshipfish farm enterprise and FDC would provide information onconstruction progress on a regular basis to the appropriate CPOs andNPOs. After the construction period, the farms would provide regularand timely reports on their stocking rates, composition and balanceof species overall, feeding rate and feed conversion ratios. TheCPOs and MPOs would also monitor production and productivity bycompiling data on harvest, prices and net earnings of selected farmson a sample basis. FDCs would submit income statements and balancesheets annually to the MPO. The MPOs would be responsible foranalyzing these data and compiling a city progress report. To assistin this process, the project would provide a computer to each MPO andtraining in data management techniques to project office staff. Thecity reports would be forwarded through the municipal BAPs to the BAPin Beijing where the FPO would prepare twice yearly reports on theoverall progress of the project to be submitted to the IDA within twomonths of the close of each project semester.

4.15 At the end of the disbursement period, the FPO, working withthe MPOs, would prepare a project completion report in which projectresults would be compared with appraisal estimates. The PCR woulddescribe the changes in production technology and its adoption innon-project areas, changes in prices in real terms resulting fromlarger marketed volumes in urban areas, changes in earnings andincomes for project farmers, changes in permanent employmentresulting from better pond management, and related cost recoveryissues. The economic and financial rates of return would berecalculated on the basis of actual costs and re-estimated benefits.

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V. PRODUCTION. MQETING AND PRICES

Present Production Practices

5.01 The traditional polyculture system is based on stocking acombination of fish species which are complementary in their feedrequirements and occupy different strata of the pond. Polycultureaims at maximizing the efficient use of feed and nutrients occurringnaturally in the pond and allows higher stocking rates and yieldsthan would be the case under monoculture. Table 5.1 shows the mainspecies, their feeding regimen, and their habitat in the pond.

Table 5.1 MAIN SPECIES OF FISH CULTIVATED

Species Feed type Pond area habitat

Silver carp Plankton feeder Surface area(Hypophthalmichthys molitrix)Bighead carp Plankton feeder Surface area(Aristichthys nobilis)Grass carp Herbivore Middle layer(Ctenopharyngodon idella)Wuchang fish Herbivore Middle layer(Megalobrama amblycephala)Black carp Omnivore Bottom(Xylopharyngodon piceus)Crucian carp Omnivore Bottom(Carassius auratus)Common carp Omnivore Bottom(Cyprinus carpio)Tilapia Omnivore Bottom(Tilapia nilotica)

5.02 The fish stocking combination depends on the availability ofthe nutrient input. The natural fertility of pond water, without anyadditional nutrient input, is usually capable of supporting a yieldof 0.6-1.0 t/ha of silver carp, bighead carp and common carp. Ifadditional nutrient materials such as grasses, aquatic weeds andanimal manure are available, farmers can obtain higher yields byintroducing other species such as crucian carp, black carp, grasscarp and wuchang fish. Since grass carp is a highly preferred fishand commands a higher market price, emphasis is placed on grass carpculture where there is an abundant supply of green matter. Recently,Tilapia nilotica has been successfully incorporated into thepolyculture system. Though this species is indigenous to thetropics, it can be cultivated in most areas south of Beijing. Thespecies exhibits fast growth, low environmental requirements, andflexibility in food demands.

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5.03 Fish yield is determined, within the limit of the biomasscarrying capacity of the pond, by the growth rate of the fish, thelength of the growing season, and the stocking, harvesting and othermanagement practices. The optimal temperature for most warm waterfish lies above 20 degrees C. Fish respond to higher temperatures intheir environment by a faster metabolic rate, increased feed intakeand a more rapid growth rate. At temperatures below 15 degrees C,metabolism slows down and growth no longer takes place. The growingseason in the project areas ranges from 130 days in the northerncities to 280 days in the central areas. During the winter, thebiggest problem is to prevent weight loss as carp can lose over 25%of their weight during this period iii cold climates.

5.04 Each city has hatcheries where artificial propagationactivities are carried out in the spring. Spawning is induced byinjection of hormones and eggs are collected and transferred tohatching pools for incubation in flowing water to simulate naturalconditions. Hatching occurs within 36-48 hours, and fry are heldabout 2-3 days until the egg yolk is absorbed and swim bladdersdevelop. The fry are then ready for transfer to nursery ponds forabout 30 days or until they reach a length of about 3 cm. They canbe distributed to larger ponds or sold to farms which have nurseryponds. It takes another 4-5 months to reach the fingerling stage(10-15 cm and 0.02-0.1 kg), by which time winter conditions haveslowed down fish growth.

5.05 In spring, when the water temperatures have risen to about15 degrees C., farmers stock their ponds with the 1 year oldfingerlings. Stocking densities and feeding practices vary from farmto farm depending on the availability of grass and animal manure.Concentrate feeds are not commercially available, so if farms want topractice semi-intensive culture, small pelletizers can be used to mixa feed which emphasizes using materials available on the farm orfrom nearby rather than the nutritional requirements of the fish.These small on-farm feed making facilities, however, lead toinconsistencies in feed composition and on-farm storage gives rise todeterioration of raw materials, which inhibit growth potential andmay lead to vitamin deficiences and the presence of toxins.

5.06 Harvesting begins in autumn, by which time grass carp willhave reached about 1.3 kg, silver carp about 1.0 kg and other speciesrange from 0.2 to 0.6 kg. It is done mainly by the use of seine netsdragged from end to end of the pond. By the Chinese New Year, most ofthe market size fish have been harvested and the pond stock has beendepleted. Annual yields range from 0.8 tons/ha in Nanchang, whereproduction typically relies on the natural fertility of the pondswithout supplementary feeding to 4.4 tons/ha in Hangzhou, which hasalready developed more advanced production techniques.

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Fu-ture Prod-ucti-on Practices

5.07 In the traditional carp polyculture system, the largevariety of fish species stocked in the system makes full use of thediversity of food types. However, the bioasss of food organisms(including plankton) competes with the pond fish for oxygen and addsto nitrogenous wastes which must be metabolized by nitrifying anddenitrifying bacteria. Thus, the fish biomass carrying capacity in apolyculture system is limited by the balance between fish and foodorganisms.

5.08 Since surplus grains are now available for aquacultureproduction and with pressure for producing higher yields of fish fromlimited water surfaces, the Chinese are endeavoring to move to thenext higher level of technology--development of feed intensivesystems. In a feed intensive system, the pond fish depend onartificial feed for their energy source, and the development of foodorganisms in the system is discouraged. In this type of system, thefish are the only oxygen consumers and the only producers ofnitrogenous wastes; thus, the fish biomass carrying capacity can behigher than in a semi-intensive system. Instead of a variety ofnatural foods, fish would be fed grain based pellets with vitamin andamino acid additives formulated to satisfy the nutritionalrequirements of a particular species. With a feed formulationdesigned for one species, the stocking of additional varieties wouldreduce the feed conversion efficiency.

5.09 The proposed project represents a transitional stage betweenthe traditional carp polyculture and a modern feed intensivemonoculture. While in most of the project ponds, the traditionalcombination of carp species will be stocked and grass application andmanuring will be continued, artificial feeding will be introduced inthe standard pond management practices. The project would supportfeed formulation research (para. 3.15) and the adoption of aerators,automatic feeders and modern water quality monitoring equipment inChinese aquaculture, thus paving the way for the introduction ofintensive monoculture systems.

5.10 Project area farms would receive supplies of fry andfingerlings from centrally located hatcheries. Each farm would havenursery ponds, the total area of which would be roughly in the ratioof 1:4 to the total area of production ponds. Individual nurseryponds range from 0.2 to 1 ha in size. Nursery pond operators wouldgrow the 30-day old fry (2-3 cm long) to the fingerling stage ( 10-15cm and 0.02-0.1 kg). In the lower and middle reaches of the YangtzeRiver, the fry are avilable by late May and the growing season wouldhave a 180-day span, ending in early December. In Northern China,fry would not be available until late June or early July and thegrowing season is limited to 100-110 days, as ice covers the pondstarting in Novenber. In northern areas, nursery operators continueto care for their fingerlings through the winter under the ice.

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5.11 Nursery pond operation, which can be either monoculture orpolyculture, involves grass application, manuring and artificialfeeding. Although grass and autotrophically and heterotrophicallyproduced natural foods are essential in the system, artificialfeeding is especially important. Nursery pond operation is moredemanding than production pond operation--younger fish require higherdaily food rations, more frequent feeding, are more sensitive towater quality and more susceptible to predators. The specializedtechniques for nursery pond operation would be developed throughtraining at technical service centers and frequent visits fromextension workers.

5.12 Production ponds would vary in size from 0.3 ha in Chongqingto 1.6 ha in Harbin. In most cities, each household would operatetwo ponds (either two nursery ponds or two production ponds). Pondswould be stocked with fingerlings of two different size categories:large 0.1-0.4 kg fingerlings, often retained from undersized fishfrom the prior year's production, and 0.01-0.05 kg fingerlings fromnursery ponds, which will grow into either small market fish or largefingerlings for the following year.

5.13 Production ponds in the project areas would continue to takeadvantage of the natural pond nutrients and, where available, grassesand animal manure. Local conditions would be an importantconsideration in selection of the appropriate species and thestocking density. For example, farms in Chongqing lack grass landand the number of grass carp stocked cannot be high. These ponds,however, receive heavy agricultural runoff rich in nutrients andnatural productivity of the ponds is very high. In these systems,plankton-feeding silver carp and bighead would be the dominantspecies stocked. In Chengdu, ponds constructed on former floodplainareas would have a cement lining which would not provide a favorableenvironment for heterotrophic production. Aatural productivity wouldbe poor, ponds would require relatively high inputs of feed, andmanure application would be limited. Common carp would be thedominant species in these ponds. Ponds would be stocked to yield theamounts and species as shown in Annex 3, Table 4.

Yields and Production

5.14 At full development, yields are expected to range from 4.5t/ha in the northernmost city to 7.5 t/ha in the southern cities.These yield increases would be obtained from higher stockingdensities and better growth potential as a result of properlyconstructed and maintained ponds, availability of higher qualitybalanced feed concentrates, and provision of training and extensionadvice on pond management. Though considerably higher than theaverage yields at present in the project areas, the projected yieldsare in line with those already obtained from intensively managedimproved ponds in the respective cities. Assuming that the degree ofexpertise in aquaculture technology would be similar in all eightcities, the main constraint to production would be climate. The

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length of the growing season is more favorable in Shanghai, Hangzhou,Nanchang, Chengdu and Chongqing than in Beijing, Shenyang and Harbinand projected yields reflect this situation. Total annual output atfull development is expected to reach nearly 100,000 t. Present andprojected yields and production for project ponds in each city areshown in Table 5.2.

Table 5.2 PROJECT POND AREA, YIELD AND PRODUCTION

Pond Area Yield ProductionPres./a Full Dev./b Pres. Full Dev. Pres. Full Dev.- - - ha - - - - - - t/ha - - - - - - t - - -

Beijing 1,067 2,133 1.5 6.0 1,600 12,800Chengdu 107 1,280 3.0 6.8 320 8,640Chongqing 367 1,475 2.6 7.5 963 11,060Hangzhou 1,667 2,733 4.4 7.5 7,400 20,500Harbin 267 1,333 2.4 4.5 640 6,000Nanchang 640 1,707 0.8 7.5 480 12,800Shanghai 1,467 2,533 1.8 7.5 2,750 19,000Shenyang - 1,667 - 5.2 0 8,750

Total 5,582 14,861 14,153 99,550

/a Ponds to be improved under the project./b Includes improved ponds and new ponds.

Marketing and Prices

5.15 Recent economic reforms allow fish farms as well as indivi'-!alfarmers to handle marketing directly or to sell through retailers,mainly local aquatic products marketing corporations. The marketingcorporations buy fish in bulk through contracts specifying quantitiesand prices. Contract prices increasingly tend to approximate prevailingmarket prices. Quantities above the agreed amount may be marketee bythe farmer himself. At present, inadequate transport is a constraint tothose farmers who wish to sell their fish directly in urban markers.Vehicles provided to fish farms by the project would facilitate tnemarketing of fish produced by participating farmers. The project wouldalso establish trade centers which would offer market information and,for a fee, handle marketing. Farmers would be encouraged to use thefacilities of the trade centers, but would not be obligated to do so.

5.16 Strong markets for freshwater fish exist in eight projectcities and their surrounding areas. Following sizeable increases inrural and urban incomes during the period 1978-84, per capitaconsumption of fish and fish products increased from 3.5 kg to 4.4 kg

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in rural areas and from about 6.0 kg to 7.8 kg in urban areas.Consumption is even higher- -about 12 kg-- in urban households withannual per capita incomes of Y 600 and over, which account forapproximately 39m of all urban households. In response to increasingconsumer demand, national ireshwater fish production increased from 1million tons in 1978 to 2.25 million tons in 1984 while the averagenominal retail price nearly doubled to Y 1.86/kg (Annex 3, Table 9).Incremental supply of fish from the project is e-timated at about 25%of the existing supply in project cities. This increase in supply offish is not expected to cause any decline in prevailing fish pricessince income elasticity of demand for fish is generally above unity andper capita incomes are projected to increase annually, in real terms,by about 4% in urban areas and 7% in rural areas dtuing 1986-90,assuming a population growth of about 1% p.a. Fish prices, however,vary seasonally, peaking during the five major holidays and dipping tothe lowest point during the late fall-early winter harvesting season.During these periods, prices generally fluctuate about 20% above andbelow the year-round averages. Table 5.3 shows the seasonally-adjustedfarmgate prices for January 1986. In the financial and economicanalyses of the project, these prices are assumed to remain constant.

TABLE 5.3: FISH PRICES

Grass Silver Common Gold- Til- Wu- WeightedCity Carp Carp Carp fish apia chang Aver./a

- - - - - - - - - - - - (Y/kg) - - - - - - - - - - - -

Beijing 2.86 1.66 3.20 2.64 2.64 3.20 2.58Chengdu 2.60 1.90 3.00 3.40 2.40 2.67Chongqing 2.50 1.66 3.20 3.20 2.40 2.35

tangzhou 3.20 1.80 2.40 5.00 2.00 2.37Harbin 2.80 1.70 3.40 2.81Nanchang 2.64 1.54 2.64 2.42 2.20 2.24Shanzhai 3.00 1.81 2.29 3.06 2.99 2.45Sheny ng 2.44 1.75 3.94 2.06 2.58

/a Weighted average based on projected stocking and yield structure.

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VI. BENEFITS, JUSTIFICATION, AND RISKS

6.01 The project would convert existing wastelands and low-yieldlands to productive use, strengthen and expand the production base infreshwater fisheries, and help to fill the growing gap between thedemand for and supply of fish in eight major cities. The projectwould also strengthen the institutional capabilities of localfishwries agencies to promote fisheries development consistent withsound technical standards. The project would directly benefit some15,000 families or about 60,000 individuals involved in fishproduction.

6.02 At full development, the annual incremental output of fishwould amount to about 85,000 tons or about six times the 1985freshwater fisheries production in the rroject areas (para. 5.14).In January 1986 prices, the gross value of incremental productionwould amount to Y 210 million, equivalent to US$ 70 million.Production of fish feed at full development would be about 75,000 t.The availability of balanced fish feed would allow higher stockingdensities, increased yields, higher feed conversion ratios, andfacilitate adoption of monoculture (para.3.08). The sse of vaccineproduced by the vaccine factory would help fish farmers to keep thestocks in ponds for longer periods and allow marketing of thelarger-sized fish now in demand in urban centers.

Eumlovment and Incomes.

6.03 At full development, fish pond operations would create anannual incremental demand for labor of two million man-days,equivalent to 6,600 full-time jobs, in rural areas surrounding tbecities, where there is currently seasonal underemployment. Theproject-assisted support facilities woul: generate about 500full-time jobs. Fish pond construction would require about 5 millionman-days, equivalent to 16,800 jobs during the first four years ofthe project. The per capita annual incomes of the families operatingthe fishponds are expected to range from Y 600 to Y 1100, compared tothe without project income of about Y 300.

Financial and Economic Eyaluation.

6.04. The financial rate of return (FRR) for the project isestimated at 200,and the economic rate of return (ERR) at 28%. Bycity, the financial rates of return are estimated to range between17% and 21% and the economic rates of return between 22% and 36%.The rates of return were calculated by extending the analysis of aseries of typical models for new ponds, improved ponds and supportfacilities to the total estimated investments. In the case of fishponds, the typical models reflect the differences by city ininvestment costs, operating costs and the yield structure. The ratesof return for fish ponds were calculated for a 25-year period and for

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other investments for a 15-20 year period, using January 1986 pricesfor all inputs and outputs. Costs of training and technicalassistance were included for the purposes of calculating the ratesof return for the project. Costs in US$ were converted to localcurrency at the exchange rate of Y 3.0 - $1.

6.05 Financial Analysis. The aggregate rate of return for newfish ponds would be about 17% and for improved fish ponds, about28%. Regional differences in civil works and operating costs accountfor the variations in the rates of return by city, which rangebetween 16% to 18% for new fish ponds and 16% and 36% for improvedfish ponds. F.As for both new and improved fish ponds wouldgenerally remain at about the opportunity cost of capital (12%), withreasonable changes in both the investment costs (+10%) and grossoutput value (-10%). The FRRs, especially for new f'sh ponds in thecities of Beijing, Chengdu, Chongqing, and Harbin, tend to besencitive to major variations in operating costs, mainly relative tofeed and fingerlings which account for about 70% of the totaloperating costs and 40% of the gross output value. The project,therefore, focusses on efficient management of nurseries and improvedfeed conversion ratios through provision of technical assistance tofish farms in fish propagation and feed formulation. Cash flowanalysis indicates that cost recovery would require periods rangingfrom 12 to 15 years for new fish ponds and from 9 to 12 years forimproved ponds. The cost of vehicles would be recovered in sevenyears. Tables 1 and 2, show the typical models for new and improvedfish ponds.

6.06 The investments in feed mills and cold storage plants whichwill be managed by the municipal FDCs on a commercial basis(para.4.07) are estimated to yield FRRs of about 33% and 20%,respectively (Annex 3, Tables 5 to 7). The rates of return for feedmills and cold storage plants tend to be sensitive to variations inboth costs and benefits, and, therefore, FDCs would ensure that theseare operated with cost efficiencies, improved output coth throughgreater capacity utilization and efficient management, andappropriate output pricing. The support services to be provided byFDCs through their various subsidiaries--trade centers, overwinteringfacilities, vaccine factory, hatchery, and technical servicecenters--are expected to be priced at levels sufficient to covercosts with a modest surplus. The benefits of the support serviceswill be reflected in improved pond productivity.

6.07 Economic Analysis. Models used for financial analysis havebeen adjusted for purposes of economic analysis by excluding taxesand by employing economic prices for project inputs and outputs(Annex 3, Table 8). All fish production from the project was treated

- 37 -

as nontraded and valued at the financial prices received at thefarmgate (para. 5.15) 1/. The other project outputs including fishfeed were valued at .he economic prices derived from the economiccost of inputs used.

6.08 The prevailing financial wage rates are Y 2.5-3 per day forunskilled labor and Y3.5-4.5 for skilled labor. The underlyingassumption in deriving the shadow price for unskilled labor (1.5-2.3)was the marginal value product of labor which currently reflects thehigh level of underemployment and low productivity in the projectareas. The shadow price for skilled labor is assumed to beequivalent to the financial wage because other employmentopportunities exist in China's expanding construction industry.Local financial prices for chemical fertilizers, constructionmaterials, and machinery and equipment have been adjusted toapproximate border prices, after making allowance for qualitydifferences. The lands that would be used for the project's fishponds would be mainly wastelands and low-yield swamp lands. Theeconomic cost of these lands has been reflected in the withoutproject situation in both financial and economic analysis.

6.09 ERRs for new and improved fish ponds range between 23% and>50% (Table 6.1). Because economic prices for rural labor and somenontraded inputs are lower than financial values, ERRs are higherthan the FRRs. Sensitivity testing indicates that the ERRs for newand improved fish ponds are fairly sensitive to changes in outputprices though not as sensitive as the ERRs for feed mills and coldstorage (Table 6.2). A decline in output prices, however, is notexpected to occur (para. 5.16). Switching values (a percentage changein a stream that would be required to drive the net present value tozero when all other streams remain unchanged) were calculated at theopportunity cost of capital (12%). No single variant proved crucialto the project's viability. Similarly, the project would remaineconomically viable with an assumed doubling of economic labor coststo equal the financial wage. At a discount rate of 12%, the netpresent value of the project is estimated at Y 675 million (US$225million equivalent).

1/ The consumption conversion factor for fish, estimated at 1.25based on the economic value of foods that would be most likelysubstituted for fish, has not been used for this economic analysisbecause of the difficulty in assessing the quality differences offood items that go into local consumption and the effect of currentprice distortions. The project's economic rates of return areexpected to be about 3% higher if a consumption conversion factor isapplied.

- 38 -

Table 6.1 ECONOMIC RATES OF RETURN FOR FISH PONDS

City Base Revenues Costs Revenues -10Ocase -10% +10%1 Costa +10S

NP IP NP IP NP IP NP IP

Beijing 23 39 18 28 18 30 14 20Chengdu 24 31 20 23 20 24 16 17Chongqing 24 36 20 27 20 28 16 20Hangzhou 35 >50 28 36 29 38 23 24Harbin 25 21 20 15 20 16 15 11Nanchang 30 >50 24 47 25 48 20 35Shanghai 34 46 27 34 28 35 22 25Shenyang 23 a/ 19 a/ 19 a/ 15 a/

NP: New Ponds; IP: Improved Ponds

a/ The project does not include any fish pond improvement in Shenyang.

6.10 The economic rates of return for feed mills and cold storageplants would be about 38% and 25% (Table 6.2). The economic cost of othersupport facilities and services, which are expected to yield an economicrate of return of at least 12%, has been taken into account in calculatingthe project's overall economic rate of return (para.6.04).

Table 6.2 ECeOOMIC RATES OF RETURN FOR SUPPORT FAC_LITIES

Facility ERR(%) Revenues Investment Operating Revenues -10%( Base case) -10% Costs +10% Costs +10% Inv.Cost +10%

Feed Mill 38 18 35 22 16Cold Storage 25 17 23 19 15

Risks

6.11 The project faces no significant technical or management risks.Chinese fish farmers have had long experience with integrated carppolyculture, and aquacultural practices and technology to be introduced bythe project have been proven elsewhere. Managers, technicians, and farmersin the project areas have the requisite incentives and basic skills toapply the improved practices and technology. Moreover, technical servicecenters established by the project would train extension staff and fish

- 39 -

farmers to ensure optimum efflciency ln pond operatLon. Some risk maybe associated with development in timely fashion of foed concentratesspecific to the requiroments of each project city; availability ofbalanced feed is critical to achievement of projected foed conversionfactors and yield levels and ti facilitating introduction ofmonoculture systems. To minimize this risk, local researchinsitutions would be commissioned to carry out feed formulationstudies and feed mills would be established and equipped withlaboratories for analysLi of feod mixes.

6.12 The project mnaDgemnt structure is already in place at thecentral, municipal and county levels with project offlces staffed byexperienced personnel from the SAPs and other agencies involved inthe project. A system of fish farm as township enterprises andcounty- and city-owned FDCs has been organized in order to putfisheries production and support services on a fully commercialfooting in contrast to past practices. Given the fact that theseenterprises have strong backing from local governments includinginitial financial and technical support as well as support foroperational independence, no problems are expected in projectimplementatLon and, therefore, in achievement of projected levels ofproduction.

- 40 -

VII. ENTS RSACHED AND

7.01 At negotiations assurances were obtained from the Government onthe following:

(a) the training component would be carried out in accordance with aprogram acceptable to IDA (para. 3.15);

(b) project coat accounts would be audited annually by independentauditors acceptable to IDA and the audited accounts would besubmitted to IDA within six months of the close of each financialyear (para. 3.27);

(c) the Project Offices at the ministry, municipal and county levelswould be maintained during project implementation and adequatelystaffed with qualified personnel (para. 4.04);

(d) FDCs would be operated in accordance with guidelines acceptableto IDA (para. 4.07);

(e) the three provincial governments would provide in a timelyfashion the required contributions (para. 4.09); and

(e) recovery of the IDA portion of total funding would be at thefollowing rates of interest: (i) equipment and materials for thetrade centers and technical service centers, at 4.5%, and (ii)for all other items, at rates acceptable to IDA (para. 4.10).

7.02 An und& standing was reached with the Government that theinterest differential between MOF's rate to the cities and the cities'rates to the FDCs and fish farms would accrue to the municipalities tocover the foreign exchange risk associated with the project and toreinvest In freshwater fisheries development (pare. 4.10).

7.03 The conditions of effectiveness would be:

(a) State Council approval of the Development Credit Agreement;

(b) conclusion of Onlending and Project Implementation Agreementsbetween the Government and each of the project cities, exceptShanghai, on terms and conditions satisfactory to IDA (pare.4.01); and

(c) delivery of the corporate charters of the municipal FDCs (exceptShanghai) to IDA (para. 4.06).

. 41 -

7.04 The conditions of disbursement for the Shanghai component wouldbe:

(a) conclusion of the Onlending and Project Implementation Agreementbetween the Governmont and Shanghai, on terms and conditionssatisfactory to IDA (para. 4.01); and

(b) documentary evidence and a legal opinion with respect to thelegal status of the Shanghai Aquaculture General Farm,satisfactory to IDA (para. 4.06).

7.05 Subject to the above conditions, the proposed project wouldconstitute a suitable basis for a credit of SDR 52 million on standardterms. The Borrower would be the People's Republic of China.

- 42 -

AN 1Table 1

Pr-ojecl Locations

Project Cities Conties/ Fish hnproed Proposed NeDistricts Fars Ponds (ha) Poancl (ha)

Beijing 5 18 1,333 1,333

chengdu 8 147 107 1,467

Choagqing 7 126 367 1,303

BMngzl9u 4 54 1,667 1,333

Barbln 4 10 333 1,333

msnobmng 5 20 800 1,333

SbzDghai 7 75 1,467 1,333

Shenyang 5 49 0 1,667

Tbtal 45 499 6,074 11,102

-43- ANNEX 1

calm Table 2

FRIUSRMATZR PZgUURiI ViOET

Project Area Statistics (1954)

Beijing Chenb du Chongqing BRangaho garbin lanchang Shbaghai Shenyang

Population ('000)City total 9,332 8,539 13,944 5,330 3,770 3,190 12,048 5,261

City proper 53619 2,539 2,733 1,433 2,592 1,060 6.881 4,135isb farmers 8 10 6 9 7 6 13 5

Project couutiesld.stricts 154 1,156 292 862 20 3,190 1,131 142Labor force 78 559 125 569 7 791 763 41Per capita incom (T) 324 332 330 292 275 293 298 315

AreaCity total (tq ka) 16,809 12,391 22,341 15,596 1,493 - 6,186 8,515Total aquaculture (t000 ha) 17 8 24 55 5 50 27 9Fish pond culture t'000 ha) 2 1 10 4 2 13 4 1

Tields and ConsumptionTotal aquatic products ('000 t) 10 7 24 26 5 20 205 5Avsrgo pond yield (ttha) 1.5 3.6 2.6 4.4 2.4 0.8 1.8 1.8Fresb- ter fish consumption(kglperson) 1.6 1.2 1.9 4.9 1.9 6.0 12.0 5.7

Sources: Bureau of Aquatic Products, KAAFStatistical Yearbook of China, 1985

-44- ANNEX 2Table 1

CH=nMSHUT FISHEInS PRWECT

PUot <t Smy br Cdty

38±JIZ Chwak 0 1:11 H-Miaz Hbzbin Nmchwm SimWm mWiyazi ITal FJ..T Y ltlim - Y a -MSm a- 3-

Pad hu=ia0EurtiLf 20.23 10.69 13.24 31.11 14.26 21.26 25.99 17.70 1!4.37 51.46 20S;qa Pmotiw 0.00 7.82 18.39 1.15 0.00 0.00 9.88 0.00 37.24 32.41 20FI lng 0.00 7.70 0.00 0.00 0.00 0.00 0.00 0.00 7.70 2.57 25Wrt- S41y aM Oah.q. 9.49 3.92 1.62 3.97 5.51 5.64 3.23 3.61 36.99 12.33 25

ioM PLmCO 0.00 00 0.00 0.00 1.00 0.00 0.00 0.00 1.00 0.33 0R S4f1y 2.83 2.72 0.42 1.54 2.74 1.84 2.91 1.U 16.88 5.63 45

3.26 0.73 0.62 1.21 1.72 0.89 2.88 1.81 13.16 4.39 20FaPRA 3z1d1z 3.62 2.55 0.35 0.92 l.95 5.61 2.76 1.26 19.02 6.34 15Lavd O_Umt±a1 pRyu 3.72 2.30 3.52 2.87 2.10 2.15 4.29 2.40 23.35 7.78 0mvir_mug 0.69 0.53 0.56 0.32 0.54 0.35 0.28 0.57 3.8 1.28 0Cmt. It. 1.37 0.70 0.58 0.52 1.36 0.76 0.60 1.35 7.04 2.35 0

Stab1 45.22 39.71 39.20 43.60 31.18 38.10 52.81 30.38 320.59 106.9 20

Suprt PilritimF1md 3.Im 2.W 4.02 2.67 2.68 2.62 2.79 2.74 1.34 20.87 6.96 45QId Sta m 0.53 0.00 0.13 0.00 4.97 2.90 0.00 2.49 11.07 3.69 45-. 1d 1.01 0.00 0.48 2.8 1.72 2.59 0.00 0.40 9.07 3.02 15Tdudm1 S!Vo 0."4 0.75 0.60 0.32 0.32 0.23 0.05 0.07 2.87 0.96 iS

uvandreariq 0.60 0.87 0.35 0.49 0.00 0.00 O0.0 0.00 2.30 0.77 10v .=I !:wz y 0.00 0.00 0.00 0.00 0.00 0.00 0.63 0.00 0.63 0.21 45

0O.0 0.00 0.00 0.00 3.64 0.00 0.00 0.00 3.64 1.21 l1agig1nsen 0.07 0.0 0.07 0.04 0.23 0.07 0.07 0.09 0.7 0.24 0amot. mpt. 0.14 0.10 0.14 0.08 0.53 0.50 0.17 0.38 1.8 0.61 0

subtotal 4.78 5.80 4.58 6.48 1,.03 9.08 3.67 4.56 52.9s 17.66 32

mmx2U 7.22 5.17 4.74 5.73 5.48 4.27 6.66 4.97 44.25 14.75 90BuLldfmace 1.83 0.00 0.00 0.00 3.10 1.34 0.00 3.04 9.31 3.30 300

EM:Rvatoa 0.00 0.00 o.00 0.00 0.33 0.56 0.00 0.64 1.53 0.51 l30

Subtoal 9.05 5.17 4.74 5.73 8.91 6.17 6.66 8.65 s5.08 18.36 92

Prod. Pht-ral S t4=nPLV&Cuicn HJeia1a 2.27 2.20 1.40 2.00 2.55 2.00 2.00 1.00 15.42 5.14 20Pro*zm tp4et 2.01 0.00 1.85 1.37 1.40 .00 0.83 0.07 7.53 2.51 S0

Subtt 4.28 2.20 3.25 3.37 3.95 2.00 2.83 1.7 22.95 7.65 30

TEaniq and Tech. A t 0.28 0.28 0.28 0.28 0.28 0.28 0.28 0.28 2.24 0.75 60

B_ ct 63.60 53.15 52.06 59.47 50.34 56.0 66.25 4.94 453.85 164.63 30

Riya1a c S _ 5.63 4.86 5.20 3.69 6.81 6.10 4.10 3.67 40.05 13.35 30PFr citizq±m 13.88 11.60 IL.36 22.98 32.73 12.23 14.46 9. 99.07 33.02 30Toa "M:P 03c e 83.11 69.62 68.62 76.13 77.88 74.37 .8l 58.43 592.97 397.66 30

- 45 - CH= ANNEX 2Table 2

FRESHWATER FISHERIES PROJECT

Project -pe-ditUbe Scdshule

1986 1987 1988 1989 1990 Ibtal

Fart2J=rks 2.57 12.35 16.47 17.50 2.57 51.46Slops -r-te*#iaon 0.62 2.98 3.97 4.22 0.62 12.41Pand riqin 0.13 0.62 0.82 0.87 0.13 2.57Whtir Spply anr Drainage 0.62 2.96 3.95 4.19 0.62 12.33Flood Etr ±iai 0.02 0.08 0.11 0.11 0.02 0.33Power Sqpply 0.28 1.35 1.80 1.91 0.28 5.6314ads 0.22 1.05 1.40 1.49 0.22 4.39FMan Eiildings 0.32 1.52 2.03 2.16 0.32 6.34Tard Pt <wzuFt-n PaymLnts 0.39 1.87 2.49 2.65 0.39 7.78EnglnasriLn 0.06 0.31 0.41 0.44 0.06 1.28Cart. Ipt. 0.12 0.56 0.75 0.80 0.12 2.35

SUbtotal 5.34 25.65 34.20 36.33 5.34 106.86

Plod Nills 0.35 1.67 2.23 2.37 0.35 6.96C6lA Stm-age 0.18 0.89 1.18 1.25 0.18 3.69Tra3e Center 0.15 0.73 0.97 1.03 0.15 3.02Thdmnical Servick center 0.05 0.23 0.31 0.32 0.05 0.96

0Dvezvditering 0.04 0.18 0.25 0.26 0.04 0.77Vaccimn Patctry 0.01 0.05 0.07 0.07 0.01 0.21HBtdiery 0.06 0.29 0.39 0.41 0.06 1.21Frqise.rizr 0.01 0.06 0.08 0.08 0.01 0.24coot. tmut. 0.03 0.15 0.20 0.21 0.03 0.61

Subtotal 0.88 4.24 5.65 6.00 0.88 17.66

VehiaesTruhic 0.74 3.54 4.72 5.01 0.74 14.75Bulldzers 0.16 0.74 0.99 1.05 0.16 3.10EX avatr 0.03 0.12 0.16 0.17 0.03 0.51

Subtotal 0.92 4.41 5.88 6.24 0.92 18.36

Prd. Materials & EuipuritProductiai materials 0.26 1.23 1.64 1.75 0.26 5.14Prcduct±~Equ.ipI:nt 0.13 0.60 0.80 0.85 0.13 2.51

Subtotal 0.38 1.84 2.45 2.60 0.38 7.65

framing and Tbrh. AssiStarxQ 0.04 0.18 0.24 0.25 0.04 0.75

BB Coot 8.23 39.51 52.68 55.98 8.23 164.63

IqMdaica1 t * eies 0.67 3.20 4.27 4.54 0.67 13.35Priom 0.29 4.23 9.85 15.56 3.10 33.02Total PrOject Cot 8.52 43.74 62.53 71.54 11.33 197.66

- 46 -

ANNEX 2Table 3

CHINAL

FRESHATERFISHERIES P1MWr

Estimated Disbursement Schedule

IDA Disbursements Disbursement Profile / aFiscal Year/ Semestral Cumulative Cbmulative Year/ (%)

Semester - - (uS$ million)- -- (%) Semester

1987 Year 11st 1.2 1.2 2 1st 02nd 1.8 3.0 5 2nd 5

1988 Year 21st 6.0 9.0 15 1st 162nd 9.0 18.0 30 2nd 29

1989 Year 3ist 9.0 27.0 45 1st 442nd 9.0 36.0 60 2nd 61

1990 Year 41st 9.0 45.0 75 1st -2nd 6.0 51.0 85 2nd

1991 Year 51st 6.0 57.0 95 1st2nd 3.0 60.0 100 2nd

/ja Disbursement profile for China - specific investment loans

Cbmpletion date: December 31, 1990Closing date: June 30, 1991

CHINKFWEIinea ILUHaiM 9"Z00

Ihtop Iater6sli nd Eulp_t

(('it - - 4jing- - - - - - Oh u - - -C mgLng - - - - - fhi - - - - R-tslz - - - - t o h - - - - Sh _7 - - -- * - -.Cot oty Cost Oty Cart Qty Cost Oty Cost Qty out Qty Coot OtY Cost oty Cot Qty cowt(U1) (tCo/eul (US W00O) Itan/ed) (MSWI OO t((nd/0e4 (US$ 000) (tOm/la) (Ms *0001 (tonrIsel t U000MtS l Wm ue1 WS O0 I Itons/s OW I '00 (tmu e W '000) ION) a)WI )

rlNOaXIl RLMUSLoorcting steel 50 1,000 0.35 1,0l 0.28 0.0 3,0I 0 0.76 1,500 0.38 1,900 0.48 5,920 1.48 2a,O 0.5 16,470 41.

Structural Steel 0SO 1,000 700 0.11 1200 0.00 0.00 W 00 0.13 1.000 0.25 0 4,400 1.10AlU. wisi e ras 1S0 0o 0.01 0 so 0.01Aum. wre imt. core) 100 so 0.01 0 NO 0.81Zint-plate tub 600 50 0.03 200 0.12 0 250 0.15TDtel 2,000 0.25 1, l0 0.47 1,200 0.30 3,100 0.79 2,000 0.50 3,100 0.815 5,920 1.48 2,000 0.50 31,0 S."9StJPWRTI FPCILitT(S 3QUIW

reed proeasiNg 451.3 910.00 606.67 606.67 606.67 671.67 S71.67 303.33 4.02Cold Storp 183.I 3 60.00 646.67 426.67 323.13 I.64Total 628.67 910.00 666.67 606,67 1,253.3I 1,098.33 I71.47 626.67 .

Tech. 5srvice[arex mneirw 1,000 I 1.00 0.00 0.00 0.00 1 1.00 I 1.00 I 1.00 I 1.00 S 0.01Video reardin set 1,000 1 3.00 1 1.00 I 3.00 1 1.00 2 6.00 1 3.00 1 2.00 1 1.00 9 0.03v and video player 500 20 10.00 10 1.00 14 7.00 20 10.00 I 1.50 S I 7.10 6 3.00 20 10.00 In 0.05C"es, 35 - So0 2 1.60 1 0.80 2 1.60 2 1.60 4 1.20 2 1.60 1 0.80 5 4.00 9I 0.02Slide pojector 300 JO 9.00 0.00 0.00 20 6.00 0.00 0.00 2 0.60 6 1.80 S 0.02t1ro8ru c .ow 2,000 0.00 0.00 0.00 0.00 0.00 I 2.00 0.00 0.00 I 0.00Btnr1i5r mLcrso. 950 19 16,05 9 6.55 20 19.00 20 19.00 1 0.95 I 0.95 I 0.o1 0.00 71 0.07Tursrcular a1crosc. 1,480 1 1.48 1 1.48 2 2.46 1 1.48 4 5.92 1 I." 0.00 0.00 10 0.01Pl(eetLh3 microc. 1.225 23 2.45 9 (1.02 0.00 20 24.50 2 3.41 2 2.41 0.00 0.00 15 0.04DtIl sicroe. 4,310 I 4.10 1 4.10 1 4.10 0.00 0.00 0.00 I 4.10 0.00 4 0.02OxyqI, Fi, twp Ottet 1,800 20 36.00 9 16.20 20 16.00 20 l4.00 6 10.80 5 9.00 0.00 0.00 sO 0.14Micromt 4,000 0,00 0.00 0.00 0.00 0.00 1 4.00 0.00 0.00 I 0.00

Amino cidanal,est 10,670 0.00 0.00 0.00 0.00 0.00 1 10.67 0.00 0.00 I 0.01Spsctrphorc IS000 0.00 0.00 0.00 0.00 1 15.10 0,00 0.00 0.00 I 0.02Mictoo .rter 4,000 1 4.00 0.00 1 4.00 1 4.00 1 4.00 1 4.00 1 4.00 1 4.00 7 o. 0.Watet ,1al. snslyzer 6,O00 0.00 0.00 0.00 0.00 2 17.40 1 e.60 0.00 0,00 1 0.03Electrriic tC 10 30,000 0.00 0.00 0.00 0.00 0.00 0.00 1 30.00 0.00 I 0.02micmto, ultia thin 22,000 0.00 0.00 0.00 0.00 0.00 0.00 1 22.00 0.00 1 0.02xIsc. 3131 1 3.32 0.00 0.00 0.00 0.00 0.00 18.00 0.00 1 0.02total 94.01 SO.16 7I.6S 105.5 6e.42 56.41 17.45 23.00 0.56

VE311CLESor 10,000 if, 100.0 0.0 1.0 0.0 10 100.0 2 20.0 0.0 0.0 23 0.22S1 Tip box 11,000 0.0 0.0 (.0 0.0 10 110.0 0.0 0.0 0.0 10 0.11tS 10,000 40 400.0 30 300.0 9 90.0 a] 030.0 40 400.0 27 270.0 80 600.0 0.0 309 3.092.9I S e6fiyerated 1I,000 0.0 0.0 0.0 0.0 0.0 4 60.0 0.0 0.0 4 0.0O2? Lrve rlsh 11,500 0.0 0.0 0.0 0.0 0.0 2 23.0 6.0 0°0 a 0.021. 7T 6,000 170 1,020.0 (10 780.0 175 1,050.0 a10 660.0 70 420.0 20 160.0 ISO 90060 40 30.0 695 5.171.29I Double Cab 6,000 0.0 0.0 0.0 0.0 0.0 I9 224.0 0.0 100 600.0 3 I 0.82IT 1,800 100 180.0 0.0 a 46.4 20 116,0 0.0 40 233.0 30 116.0 0.0 IU 1.09.5S 5.000 20 100.0 to 400.0 60 200.0 20 100.0 150 7s0.0 66 330.0 s0 400.0 40 200.0 516 2.54spe pacts LA 1 67 0.0 960 204.2 17.0 0.0 in.o O."ToXI 1340 2,366.7 340 1,40lO. 252 1(562.4 233 1,910.2 2t0 1,797.0 210 1,349.0 130 2,216.0 200 1,332.0 2,0O 140.

t W1711 Il tJUl t165t LILnd mO ckast 80,500 4 122.0 0.0 5 402.5 10 1605.0 19 1.5122SW lUend iIldner 103,500 2 207,0 8 526.0 0.0 0.0 10 1.04165W RilIdmier 74,750 0.0 0.0 0.0 1 74.6 1 0.07E cmator 46,400 0.0 0.0 5 322.0 2 92.0 7 0,32Trailer 93,I00 0.0 0.0 0.0 1 91.1 1 0.09Poiklhit 37.000 0.0 1 17.0 0.0 0.0 1 0.04spre parts La 70.4 0.0 67.6 127.4 0 0.27Spreortal ul 6 608,35 9 065.0 10 702.1 14 1,192.5 39 .337

Pertiliser ISO S80 120.00 0.00 257 18.55 0.00 1,057 0.16Fish eal 300 1,450 415.00 1,000 300.00 500 150.00 119 35.70 0.00 1,069 0.92Peed ditive 3,500 200 700.00 0.00 0.00 0.00 0.00 200 0.70Vit_ln 3,500 8 280.00 0.00 5 17.50 0.1 0.35 1000 I5 0.30Poly_lde silk fiber 2.000 SO 150,00 0.00 50 0.15TOtjl 1,415.00 570.00 167.50 74.60 0.00 2.23 °

pznrrIcu 00iiIRWS ZAdretor 420 0.0 0.0 0. 0 0 0,0 0.0 1 4.2 0.0 1 0.0O 3000 0.0 0.0 1 3.0 I 3.0 I 3.0 1 3.0 0.0 I 3.0 5 0.03 X*1wdt 400 400 160.0 0.0 0.0 0.0 4 1.6 0.0 0.0 10 4.0 414 0.17TW 400 160 0 0 1 3 1 3 5 4.6 1 I 1 4.2 11 7 420 0.18 l&

Cnn'nusuvin wiminu uaiuK

Coat Estimate and PFaming of Telchical aaist"iee

Fehe ins of man-meothby Celeedar Tear T.tel Total

Deseciption l__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ m oat Proposad C osatriai" Uea7 17t 1ag zgw mathe (nl 000)

A. study Toere for UPW nO and FM staff1. Iapuctia of fish breedig operations 7 42 NWet Comnay Dessari2. lenpectios of feelill eqnipiat is 1 7 42 U.S. Japa3. 1aintoanee skills for coeatruetioa

mechiuery add cold storaee ui t 5a 0 24 U.S., Jeffs4. naetlp*Cti of feed-iAteatlva uorA1ture

*ystme for catp O e 44 Voet leuntsy5 laopectie ot fesd-liat.slve eeeee.lture

ayatem for tilapis I 0 40 iJa;. lbilippitns. smg Fagg

3. Oversea Training1. lateruatiosal camleranesac ad visits

to reeearcb inatitutioas Sd e"Ipmnt.amlactur.rs (IOC and O aesior staffand nicipal researeh staff) 12 7 0 6 33 It -

2. Viab extritila ead fed formlstial -abort term traiaiog (10 persoes a 3 ma)(Ikeicilpl reaaereb staff) 1i 1$ 30 105 -

3. Viab faoc smmussget - abowt terotraining (10 Pereses a 3 emg)(lie and 0 Staff) 5 10 is Jasf. Feed mill nanageent - abort terntrelinig (10 Fersoes * 2 wee(Fc and 10 staff) 10 10 20 70 -

C. lecel Training lb1* Finaucial nwaagementibusines maasgmat

(Iknicipal dad coenty VW and *0 staff) 18 16 1i Ie 16 s0 242. Senisnrn, eof*eracas on squmcnltnre

tsckotlogy (seeior aquacelture technicians) 4 15 15 15 is 64 19

D. Consulting Servicve1. inanecial analyst to assiat in conductial

locel traisiag proarea in fiancial analysisof fisberies projects (e.g. F10) 2 2 28

2. Comter specialists to conduct trainingfor local T0 staff In data manageent*ad analysis 3 3 39

iryastudy tofus J2 212Overseas training 93 400Local tralnine 14" 43Coasultieg services S 85

Totel 2U0 74

Is To be fianeced by the TMC and reiabuTe e the Project.

40 In a nnaaam99aaaa a c..9.99.UUSOCSUOU9 hr.0 e

|~~~ - a F * _

* ~ ; 4: O 0"CO.00 0 -oci c -0" 2~ -

_---------------_-------------- __ ---- -_ _ _-_ ---.

C1e 11201ee eeO @su Io

4) a A P I IA g m

.0~~~|s be e 8 e.8 X^

VP045 E 0 n A0 00 rmmooooo a 000 goa 003 00 5

_ S hOO3

D ~ ~ ~ ~~p 0 00_________________________________E ~ ~ ~ 3 __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ -n- __ _ _ _

< e ;1 s S:t ^;S ^ Z ^ > ^"g e ^> R' 4*F t^8- Sa-t

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iii ii !1 P i". !0t as As-2 0 0v AN 33 A

Si S Ii U, Ai II i

AN II!.1 I A I 1as .naitIM -in 119

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D FN VN b* > N- S f iii- - - C .- -o-o _O_

___________-------- - - - -- - - - -- - - - -- - - - -- - - - -- - - - I M8-8 ~~~ r r_ ~~~ _ gr ~ ~ ~ ~ ~ ~ |^ ~r M

C.~~ ~ ~~~~~~~~~~~~~~~ I :94 00094 -- 0~~~~~~~~~~~~~-

C oooo coo 000 2oo 02 oo300 0o2 00023o e eeo c ooC co 00e e33------------------------------------------------- _____---------------

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o 0000 eee 000 000lee e00 am ;e00 00 eC o CO: CCC: CCC CCC_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

_ e-- --- Ie,e,e ue- - - - - -'ee p-------------e e -eee---------------

._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _.__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _r

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| @eS-e8400eeOe mmmc a amamamam P. * Peo g

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CHM

FRESHWATER FISHERIES PROJECT

Fuian,ial Fanau to Nw Fish Faw, BUisjii

(Yuan 000)

UrE pPRWC YR YP YR3 YR4 YR5 YR6 YR7 YRB YR9 MO1 YRll-15 MR1-24 Y1025

Pr.OrCM MM AREA (ml) B00 6W 60 BO 600 600 Boo Boo W bO0 600 60W 6WYiald(psr mu) l50 200 250 300 350 400 400 400 400 400 400 400 400Ttk1 Produxtlan(OOOq) 120.0 160.0 200.0 240.0 260.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0

NURSERY PRND AMEk 200 200 200 200 200 200 200 200 200 200 2W 2W 2WYield(per mu) B4 113 141 169 197 225 225 225 225 225 225 225 225Total Procdctmon(Sooorq) 16.8 22.6 28.2 33.8 39.4 45.0 45.0 45.0 45.0 45.0 45.0 45.0 45.0

aroz atpit Vaus a/ (1) 379.3 506.6 633.0 759.5 865.9 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4

coSMS

Ewavatlion an Plooeet b/ 658.0 _ _ _ _ _ _ _ _ _ _ _ -329.0slope PEotactien - - - - - - - - - - - --

Pcnd Lining_ _ _ _ _ _ _ _ _ _ _ _Water Sqpply aM Cminroe b/ 369.0Por Uaply a/ 63.0 _ -31.5FloalI fctt*ctdancmFmlm d/et ti 116.0 _ _ _ _

Farmuai1dii */ 127.0 _ _ _ _ _ _ _ _ _ -63.5land oauaticm Psyus t/ 186.0

Hlec1laas g/ 107.4 _ _ _ _ _ _ _ 1-53.7Vehiolm hV 151.0 - - - - - - - - 151.Oj -2.

Subttal (2) 1777.4 51 0 -720.

OPEP0'DATDS a i/PoItien Panda

F]ipriings 52.8 79.6 95.5 127.4 143.3 159.2 159.2 159.2 159.2 159.2 159.2 159.2 159.2se & fertilizarNUH* oot 6.J 6.8 6.2 10.9 1. '- 13.6 13.1 13.1 13.1 13.,6 13.1 13.1 13.1Fartlizaer 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6Feed 59.2 101.2 121.4 161.9 192.2 202.4 202.4 202.4 202.4 202.4 202.4 202.4 202.4Utilitim 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0ah_icals 8.0 8.0 8.0 8.0 6.0 8.0 6.0 6.0 6.0 6.0 8.0 6.0 8.0

31.2 22.4 26.9 35.6 40.3 44.6 44.5 44.6 44.8 44.6 44.6 44.6 44.6Roplacment 0.0 4.0 4.6 6.4 7.2 6.0 8.0 8.0 6.0 8.0 8.0 8.0 6.0

Mair*wAnce .8.0 8.0 8.0 8.0 8.0 6.0 8.0 8.0 6.0 6.0 6.0 8.0 6.0Mana9int 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0Truaiortatien 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6other 6.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 6.0 'u

Subta1 (3) 203.2 263.6 305.6 389.6 431.6 519.2 519.2 519.2 519.2 519.2 519.2 519.2 519.2 0Q a,

M -i

U_ w

i|im crT -RN11Th PFDM1 VYRI WI YR3 VR4 Y RV __ __ U0 U15 S16-24 Y5

NrMZ PM-dFiJer1ings 6.4 8.0 9.6 12.8 14.4 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0I'hIrS 1.0 1.3 1.6 2.1 2.3 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6Foed 14.4 18.0 21.6 28.8 32.4 36.0 36.0 36.0 36.0 36.0 36.0 36.0 36.0LabOr 10.2 12.8 15.4 20.5 23.0 25.6 25.6 25.6 25.6 25.6 25.6 2S.6 25.6utilities 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.') 10.0Chticals 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0Rplaont 0.6 1.0 1.2 1.6 1.8 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0Mainternnu 2.0 2.0 2.0 2.0 2.0 ' 0 2.0 2.0 2.0 2.0 2.0 2.0 2.0ffsgmont 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0TraznoptatIai 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0Other 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Subtotal (4) 54.9 63.1 71.3 87.8 96.0 104.2 104.2 104.2 104.2 104.2 104.2 104.2 104.2

1TAKE (5) - - - 38.0 44.3 50.6 50.6 50.6 50.6 50.6 50.6 50.6 50.6

Total ost (2+3+4+5) (6) 2030.5 326.7 376.9 515.3 *71.9 674.0 674.0 674.0 674.0 825.0 674.0 674.0 -46.2

N4*t 1 (1-6) (7) -1656.2 179.9 256.1 244.1 314.0 338.3 '38.3 338.3 338.3 187.3 338.3 338.3 1058.6nr*m*a Rutn (8) 10.0 -1666.2 169.9 246.1 234.1 304.0 328.3 328.3 328.3 328.3 177.3 328.3 326.3 1048.6

MsT RBX^ERY )V(a) Paypna~ of IZ Ftmd (y 0.40X)

(i) Vehicles (Y 0.1531) 25.1 32.7 32.7 32.7 32.7 32.7 32.7(ii) Other intints (Y 0,249in 41.4 39.9 39,9 39.9 39.9 39.9 39.9 39.9 39.9

'b) Tom1 ,qwr=M*S (y 1.021) _ 93.5 144.0 144.0 144.0 144.0 144.0 144.0 144.0 144.0 _ _

(c) Twhip (s 0.356) 50.9 50.9 50.9 -

(d) Interest an Iking Capita 2.0 3.0 3.0 4.0 4.0 5.0 5., 5.0 5.0 5.0 5.0 5.0ubttal ("l, 66.5 169.1 219.6 220.6 220.6 221.6 221.6 239.8 239.8 199.9 5.0 5.0 L

Net PevenLe after debt oervio (7-9) 111.4 87.0 24.6 93.5 117.8 116.8 116.8 98.6 -52.4 138.5 333.3 1053.6

FM - 16%-- - 23%

a/ DtPt is valu at en averap priou of Y 2.58/kg fcw PJCi9timi pmd aid Y 4.15/ig fa r urmry pmd.b/ Includ1 eartthmrl (Y 0.8/I3)g .ly cama (y 0.9/u3)1 alUvuVtt and sIluic gate (Y 0.15/r), and a pAp taticrn (Y 34,500).c/ InDu1d pcortinate oot of hiowowltae lira (Y 11,500/ko) 0I oltage line (Y 9,2 oo/k) a i, trartard .mdtatimw (Y 8,050).d/ sil nyc (V 2600/lu), aid, culVortA ard brid9 (Y 9,200 ach).*/ F dire (350 .2) rd iW (700 .2) at Y 15012 and V 106/.2trweotively.f/ 8tila to f r f or d l at Y 16,S00j' and for lc-yield 1 ands at Y 51,000mu.q/ lncl ern t1 i n , mvaticn and ndmW cxat.h/ _ ta psticste at of i tcr ptoject fat.

4/ . am t.icnau, - Anm 3, Table 3.j/ Vehicle in year 10 will ba ftbnhd fhn intnal k,l w .mw*. zqsym at the cloa of the year. Interst alculated an ImA ftuds at 8a p.a., an lol qgauinmt ftn at 4.5S p.a., ardi e dkng apital at 8e p.a.

ThbcuhIp will pzwidL dbn pryuet of up to 30% of the projet cots Ord collect tax in lieu of intaret

H 1n

KMa

FlMHWATUR 1SN1E138 PFOJCCt

Flniuwal l P wuN to Dprcvd ?Pi h ftz, mmijin

rrc PRCC YR YR YR3 YR4 YRRY5 YRB D YR0 wCn-1 YR1J-24 YR5

PRODUCT4 FM AM (ma) goo00 goo00 0 am gm 60 G00 SW0 600 a00 gm O 600 gYield(pw sm) 100 200 300 400 400 400 400 400 400 400 40 40 400 40Tttalo Pma9xtioc(OOOUj) 60.0 160.0 240.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0

N1 RW PN AM 20W 200 200 20 200 200 20W 200 200 20W 20W 200 200 2M0Yield(pt.au) 50 106 167 225 ZS 225 225 225 225 U25 225 225 223 225

TlOtal Pc Uc 0n(OW01) 10.0 21.7 33.3 45.0 45.0 45.0 45.0 45.0 45.0 45.0 45.0 45.0 45.0 45.0

LM OAtp.At vhlul O/ (1) 247.9 502.7 757.5 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4 1012.4

IVwtiaon ad Pln cont 4_ 354.0 _ _ -_ _ - - 177.0slke Pz&ctiA--

faWt r etActj ab - 7OS- ' - - - -. - - - - -2

nPi dl 46.6 --_23.ram i1i~- 54.3 - - -2- 7.2

ZaMi m al ou~ t u1.i _ _ _ _ _ _ _ _ -20.71Vehdclm9/ lS 151.0 -- 0

DA*GW a(2) - 631.5 - - - - 151.0 J/ -340

Otum aII h/

FlingwllUn 40.0 79.7 119.5 159.2 159.2 159.a 159.2 259.2 139.2 Z59.2 113.2 195.2 .13.2 159.12

see a femtniLmw"mum coet 4.6 7.7 10.7 13.19 13.1 13.1 13-1 13.1 13. 13.1 13.1 133.1 13.1- 13.

1fttllz 1.9 3.7 5.6 5.6 5.6 5.6 5.6 5.6 1.6 5.6 5.6 5.6 5.4Fad 27.1 65.6 144.0 202.4 202.4 202.4 202.4 202.4 202.4 202.4 200.4 202.4 202.4 202.4UtXliti. 9.6 19.7 29.9 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0

ChImlc 2.4 4.3 6.1 S.0 6.0 6.0 8.0 8.0 6.0 6.0 6.0 6.0 6.0 6.016.8 24.1 35.5 44.8 44.6 4.8 44.8 44.8 44.6 44.8 44. 44.6 44.6 44.4

_______ nt 2.4 4.3 6.1 6.0 6.0 6.0 8.0 6.0 6.0 0.0 6.0 6.0 6.0 6.04.0 5.2 6.7 *.0 8.0 8.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0

4.0 6.7 9.3 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 U2.0 2a.0

TWmuoztatia~ 1.6 4.3 6.9 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6 9.6

Othw 1.6 3.7 5.9 6.0 6.0 6.0 6.0 6.0 6.0 4.0 6.0 6.0 6.0 6.0S*ta1 (3) 114.4 249.3 344.3 519.2 519.2 519.2 519.2 519.2 519.2 519.2 519.2 52.2 U9.2 529.2

N W

rT I YR1 YR2 YR3 YR4 Y YR7 YS Y 310 311-14 W15-24 S

rlinprlinp 3.2 7.5 11.7 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 1i.0 16.0 16.0tuure 1.6 1.9 2.3 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6rned 6.0 16.0 26.0 36.0 36.0 36.0 36.0 36.0 36.0 36.0 36.0 34.0 34.0 36.0abowr 8.4 14.1 16.9 25.6 25.6 25.6 25.6 25.6 25.6 25.6 25.6 S.6 25.6 2A56Utllitim 5.0 6.7 5.3 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0Cho icel 1.6 2.1 2.5 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 2.0 3.0 2.0

1.2 1.5 1.7 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0=ilSt nano 1.2 1.5 1.7 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0thmug nt 1.6 2.1 2.5 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0

Ttrawortatin 0.6 1.1 1.5 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0Othtr 1.2 1.5 1.7 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Sbtot (4) 31.6 55.6 80.0 104.2 104.2 104.2 104.2 104.2 104.2 104.2 104.2 104.2 104.2 104.2

ImmSS (S) _ _ _ 50.6 50.6 50.6 50.6 50.6 50.6 50.6 50.6 50.6 50W6

Tbtkl COte (2+3+4+5) (6) 146.0 1136.6 464.3 623.4 674.0 674.0 674.0 674.0 674.0 674.0 825.0 674.0 674.0 3332.

Net PVnvW (1-6) (7) 101.9 -633.9 293.3 3U8.9 333.3 338.3 338.3 338.3 338.3 338.3 187.3 338.3 338.3 6fl.6lrcrnmt*l fDvun (a) -735.8 191.4 287.1 236.4 236.4 236.4 236.4 236.4 236.4 65.4 236.4 236.4 576.7

awr -R Y J/(a) of IS IWo (Y 0.400)

(A) =dalem (Y O.1533) 25.1 32.7 32.7 32.7 32.7 32.7 32.7(ii) 0)sth laMlitMEb (Y 0.2490) 39.8 39.8 39.6 39.8 39.6 39.6 39.- 39.1 39.1

(b) T[m, gwmdltnnt (Y 0.181 ) 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 - - -(a) TcuShil (Y 0.25 -4 31.5 31.5 31.5 31.5 31.5 31.S 60.0(d) Intro*it on Nor"q Cpital 2.0 3.0 3.0 4.0 4.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0

Stbtotal (9) 92.9 133.0 133.0 134.0 134.0 135.0 135.0 130.8 70.8 5.0 5.0 5.0

hat FRunu after debt *avios (7-9) 2 200.4 255.9 205.3 204.3 204.3 203.3 203.3 207.5 116.5 333.3 333.3 673.6

iS - 31%- - 40%

o/ Cutpnt is valud at an avea price of V 2.5/lu for apredctiln pnW and Y 4.15/lq tgor unury pon.b/ DmtiUa uezthvornl (Y 0.3/12) I Wly canl (Y 0.9/3)u mulvvrts m aluile gates (Y 0.15h), aid a pap .tiatw (Y 34,500).q/ DIfli paSflatlet c d of t hbidt-lt gop lil (V 11,100/k lu) swltage line (Y 9,20OM) I aid .temtatimu (n 6,050 Gem).d, I e S (V 20,000)ta rtn (Y 9,200 _ic).O/ uow (150 S) tat V I"0 ad Y V 10r%' u tively.1/ f t U ndinut anwm t , n nd y omte.g/ mpeaut ipwollnas mit of v_de tcrgnjs* faa,

h/trw mt_su, _hin 3, itie 3.1/ 'JUtiole layer 10 will bC aStt lz*ensl n.ur:cl .j/ -~uu.fle zwar*_ at Uw elS otf an yar. D*aeet colcolted an UR buS at at p.a., at c l gownn t uds at 4.5% p.a., id a ing capital at S p.a.

Ttln hwp wifl praufA dt py enet of p to 30 of the ptsect cme t d collect tarx in lit eo int.ront.

N N,W

* -56 - Table 3

FRESHWATER FISHERIES PROJECT

(a) Cp.mtli Cuta of a zo&aation atFll atit)ma

Dmii3ln chig anijiz 'rmgZh HIbzn NszboMn SiwAnia 2W,nyan

Fiix1Jzp fa/ 199 159 187 167 143 189 153 200Se& f0tLl 0 9 0 1 0 22 16 01m9m cut 17 12 30 24 a 24 18 18

i1izmu 7 0 15 2 2 2 10 17P%" b/ 253 449 306 376 243 215 405 186utiliti_ 50 3 10 14 11 13.1 5 15ctr eal 10 6 6 10 10 10 10 10

bg"s cz 56 63 88 67 42 53 53 7010 10 10 10 10 10 10 1010 10 10 10 10 10 10 10

IbuztW nt 15 15 15 15 15 15 15 isMmpozxrIaticn 12 15 15 15 10 15 15 11otbmr 10 10 10 10 10 10 10 10

Tbtal 649 761 702 731 514 586 730 572

(b) (tmrating Ct of a NIou.y Ebx at Full I(Y'UMzM)

Beijirg CQUW --- -~n Nangzb Hazbln N&rwMV Sianghai c-mnyurjw

Fr- & fsror1ings a/ 80 15 15 24 14 70 24 8bnzm 13 12 12 18 12 12 15 15

Feed b/ 180 171 198 220 181 250 255 203lbges C/ 128 126 147 126 74 144 110 82utilities 50 3 16 21 16 15 31 21Oinm cals 15 15 15 15 15 15 15 15

E wau me01t 10 10 10 10 10 10 10 1010 10 10 10 10 10 10 10

tmmqement 15 15 15 15 15 15 15 15_ran pr atik 10 10 10 10 10 10 1G 10

Otbr 10 10 10 10 10 10 10 10

TItal 521 397 458 479 367 561 485 399

a/ Stocicddg ratAe and priom v&ry by city. PriLm of fir1ingw of gram. carp rang. ftrY 3.0/qg to Y 6.0/1k; of uilver crp frun Y 1.60/kg to Y 3.80/kg; of ommo carp fram Y 2.to Y 5.60/kg; of goldfish f Y 2.0/kg to Y 4.0/kg; and of tiapia fr Y 0.05/piec.

b/ I-m fiaml, .yabinn cam, r Ip l c and uinals. Fod cIs rangs fra Y 0.4in Wiqng to Y 0.6/kg in Beijing.

c/ wage rati amu auimid at a unifou level of Y 3.50/mn-day fer Prodctim papc arid Y 4.0for ymery paxds.

-57 ANNEX 3Table 4

am3m

FRESHWUTER FISHERIES PROJECT

rih S- and Prie 8Muchwe

Ca> cup Slver cup S p Goldfish Tilapia IAi*tmd2bttal g

Yio'ld K3E=- Yield Prico Yiel ffi~- Yield Prics Yiold Price -YNLF-- Yield Primooba (Y3)O a) (A) 1nA Py/ M ) Pv 0 ) (Y/3)OAg P1 a]vu M

BDijiq 750 2.86 1,800 1.66 2,250 3.20 600 2.64 600 2.64 3.20 6,000 2.51ehmn9ft 750 2.60 1,500 1.90 2,775 3.00 750 3.40 975 2.40 6,750 2.67Oklr1ztblg 750 2.50 3,075 1.66 1,575 3.20 750 3.20 1,350 2.40 7,500 2.35Ebupqzlb 1,500 3.20 2,625 1.80 2,025 2.40 225 5.00 1,125 2.00 7,500 2.37

ubin G6400 2.80 1,350 1.70 2,550 3.40 4,500 2.81Nadznq 1,500 2.64 2,250 1.54 2,325 2.64 525 2.42 900 2.20 7,500 2.24Sbanhai 1,050 3.00 3,000 1.81 750 2.29 450 3.06 2,250 2.99 7,5W0 2.45sbYyngq 1,500 2.44 2,100 1.75 1,500 3.94 150 2.06 5,250 2.58

FRESIWATtR FIS1RIES PROECT

Flwioial RMobu to rod il1 (Feflt Symt), WzSWV

(Y 1000)

m1 lR 51 W4 51 A YR6 YR7 5 5 10 mm11l g1 5a13 14 IIU5

Grow Ou0zt ValimY 462/t (1) - 2716.6 3104.6 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 369.0 366.0 3696.0 36.0 3696.0

armd Ostl an e/ 38.0 - - - - - - - -CivL1 Itrim b/ 342.0 - - - - - - - - - - - - -171.0Ut.llltls qt S0.0 - - - - - - - - - - - - - -25.0

3LII_tt d,/ 640.0 - - - - - - - - - - - - - -160.0Izutallatiat 130.0 - - - - - - - - - - - - - -T~~.Ain1uta'100.0 - - - - - - - - - - - - - -

Klaamlluwmu 100.0 - - - - - - - - - - - - - -

aktttal (2) 1400.0 - - - - - - - - - - - - -356.0 0

OVEATIlh OOMI1 - iva3s e/ - 1941.1 2213.4 2773.0 2773.0 2773.0 2773.0 2773.0 M.0 2m2.0 2773.0 2773.0 2M3.0 M3.0 2m.0"WM - 22.4 25.6 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 22.0 32.0 32.0 32.0FU 1 - 25.9 29.6 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0Poimr - 61.6 70.4 a8.0 88.0 68.0 88.0 U.0 U.0 88.0 U.0 U.0 U.0 U.0 88.0TZjWupat - 28.7 32.8 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0IJntaua"X"wL - 39.2 44.8 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0

9bdk - 11.2 12.8 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0Hbuac Snt - 7.0 5.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0Tax - 77.6 86.7 110.9 110.9 110.9 110.9 110.9 110.9 11.9 110.9 110.9 110.9 110.9 110.9

SUt*otal(3) - 2214.7 2531.1 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.1 316.9

Ittal tt (2+3) (4) 1400.0 2214.7 2531.1 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 2807.9

Net mFvus (5) -1400.0 501.8 573.5 532.1 532.1 532.1 532.1 532.1 532.1 532.1 532.1 512.1 532.1 532.1 868.1

w 'C' I-Iw

trEK YFRI Fa Y3 YM Y U4 m YR6 Y7 Yh Y YlF Yiull YU12 YP3 W4 YR15

Loan psaym* - 100.0 132.0 220.0 220.0 220.0 220.0 220.0 220.0 220.0 220.0Intereat an %brkkwq Cspital t/ - 45.0 50.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0

Subtotal (6) 145.0 182.0 283.0 283.0 293.0 293.0 283.0 283.0 283.0 283.0

Net RFWflMo after Dobt aexvai (5-6) (7) 356.8 391.5 249.1 249.1 249.1 249.1 249.1 249.1 249.1 249.1

FM - 331ER - 43%

a/ Payvirn* to uloinpal fncunit for the uon of lard at Y 5000=/u.b/ Inela.^ torage = = " (Y 160/32) and *odhln hall (Y 200/32).q/ Includes water tower (Y 40,000)).d/ InTludm pelletizer (Y 99,000)1 pwr lines (Y 80.000)1 awd, lahorutory (Y 60,000).e/ Ir=lu4- rqpe scd Cdk (Y 300/tcn) sopa been Wkie (Y 540/tn) ; outton need cake (Y 300/tmn): minead fw wY ll80/ten).f/ Interzt calculated at St p.a. intereat for the fitut thure yxru wmaild be piLd b y the erd of Yr 3. At least 10% of

then inestnt cost is assua to have bean t fti .jdty omotrlbuted by the mu nicipal acmnrt. T loanarount of Y 1.260 uLLU ion u 1d be repaid in eight equal ilntalloenta frcm Yr 4 t hrough Yr 11.

'0

un w

FRESHWATER FISHERIES PROJECT

Flnariial RUnTs to FeSd Hill (!Dctndkr Systm), Narda

(Y '000)

r1124 YR1 YR2 YR3 YR4 YR5 YRY YR YI V MR1O ml YR12 YR13 Y14 UYS

REVENUE

Grms outapt ValueOY 462/t (1) - 2716,6 3104.6 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0 3696.0

axrrs

Lard ioa n a,/ 15.0 - - - - - - - - - - - - - -

Civil Iorka b/ 266.0 - - - - - - -133.0Utilitiei c/ 69.0 - - - - - - - - - - - - - -34.5Eplpit d/ 790.0 - - - - - - - - - - - - - -197.5Izrtallaticn 160.0 - - - - - - - - - - - - -Tech.Auistarm 100.0 - - - - - - - - - - - - _ _MH m1larmm 130.0 - - - - - - - - - - - - - -

Bubt*tal(2) 1530.0 - - - - - - - - - - - - - -365.0 0

OPEPATIM3~IRaw Haterials */ _ 1941.1 2218.4 2773.0 2773.0 2773.0 2773.0 2773.0 2773.0 2773.0 2773.0 2773.0 2773.0 2773.0 273.0Wage _ 22.4 25.6 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0Fuel _ 25.9 29.6 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0 37.0Power - 61.6 70.4 88.0 88.0 88.0 88.0 88.0 88.0 881.0 88.0 88.0 88.0 88.0 88.0Trwa ort - 28.7 32.6 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0 41.0

Haij*esus 39.2 44.8 54.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 54.0 56.0 54.0sad 11.2 12.8 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0Hi_tffit - 7.0 8.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0

TaIX 77.6 88.7 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9

Bubtot.a(3) - 2214.7 2531.1 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9

fltaI CstA (2+3) (4) 1530.0 2214.7 2531.1 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 3163.9 2796.9

Net 1vue (1-4) (5) -1530.0 501.8 573.5 532.1 532,1 532.1 532.1 532.1 532.1 532.1 532.1 532.1 532.1 532.1 897.1

000'

I-X

rim Wu YR2 w3 YR4 Y YR6 YR7 *m Y ViO YRl YR12 M ni V3 Wm14 YR15

Loan Plhpayaint 110.0 165.0 240.0 240.0 240.0 240.0 240.0 240.0 240.0 240.0 240.0 240.0 240.0 240.0nt anWrki Capital / - 45.0 50.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0 63.0

Subtotal (6) 155.0 215.0 303.0 303.0 303.0 303.0 303.0 303.0 303.0 303.0 303.0 303.0 303.0 303.0

Net 1wAme atter debt aevic (5-6) (7) 346.9 35U.5 229.1 229.1 229.1 229.1 229.1 229.1 229.1 229.1 229.1 229.1 229.1 594.1

F * 31%ER - 38%

a/ Payrnts to umlcipal gcmmret for the te of lnld at Y 5000/mu.b/ Irmlud. storgea building (Y 160/in2) offtica ad lab (Y 140/.2); mahine hall (Y 200/m2).c/ Inczi^ h boiler (Y 30,000) ard wmttr iupply systm (Y 29,000).d/ Included extruier (Y 503,000), hxbrnl1ll (Y 52,000) xcnveyor (Y 40,000)i cooler (Y30,000).e/ rnl1deh rape seed cake (Y 300/ton) lowya bean cake (Y 540/ton) I cotton oeei ca (Y 300/tcn) ; misd flour (Y 180/tmn) .f/ Interest calculated at 8t p.a. Intarest for the first three yeamu would be paid bY the wd of Yr 3. At least 10% of

the lwnest¢nt C05t L aa"md to hew been t fro eqpity cntrtibuted by the ma nicipLL gernInt. hs lananM* of Y 1.377 illlion would be rapaid in eight equal ixutal2mnta from Yr 4 t hrugh Yr 11.

m

I0%c

oQ¢

owa

FiZSIwATu 7ESlIRS PlOJECT

ViWo FlPma to Cold Stcm PIN* with Im fmS.2Jcfiq, I9dui

(Y 1000)

frE UR YF Ym Y4 YF IN R7 VA YR YRO Du m law TM 15

Oticn C4rpY1575/t - - 439.9 596.5 598.5 596.5 596.5 596.5 596.5 596.5 596.5 .5 .5 3.5 u9u.5SUlvw C6rp 6Y1050/t - - 527.9 718.2 718.2 718.2 718.2 713.2 718.2 718.2 718.2 728.2 718.2 728.2 712.2Big Humd Y1050/t - - 527.9 718.2 719.2 713.2 718.2 728.2 716.2 718.2 713.2 772.2 712.2 728.2 712.20mm Ctp ar 1470/t - - 575.0 782.3 782.3 782.3 782.3 782.3 782.3 723 2.2 7.2 73 72.3 73.

Ic* eV 105/t - - 578.8 787.5 787.5 787.5 787.5 767.5 737.5 737.1 787.5 737.5 767.5 767.5 767.5Ssbcta1 (1) - - 2649.4 3604.7 3604.7 3284.7 3604.7 3604.7 3604.7 3604.7 3604.7 3604.7 3604.7 3604.7 3604.7

co=m

INlnJISNa coEn=mni C m u tion a/ 19.0 - - - - - - - - -

civil lid bZ/ 1000.0 260.0 - - - - - - - - - - - - -630.0

Utiliti. a/ 100.0 110.0 - - - - - - - - -- -i.OfItmp4 t d 530.0 400.0 - - - - - - - _ _ _ -232.5 0%

Iuta11atimn 90.0 90.0 - - - - - - - - - - - - _

Tanh.t datbun 70.0 10.0 - - - - - - - - - _ _ _ _

HIwsUazm u100.0 130.0 - - - - - - - - - - - - -

&ttoW 1(2) 2040.0 1000.0 - - - - - - - - - _ _ _ 5

PAW ?bttria1. / _ - 1590.4 2272.0 2272.0 2272.0 2272.0 2272.0 2272.0 2272.0 2272.0 2I7.0 227.0 2m.0 227.0

" - - 38.5 55.0 55.0 FS.0 s5.0 55.0 55.0 59.0 55.0 59.0 59.0 55.0 59.0

Ann-AAKw - - 3.5 5.0 5.0 5.0 5.0 5.0 5.0 3.0 5.0 5.0 1.0 5.0 5.0

Pbwar - - 140.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0

ItCWuport - - 3.5 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0

IhindYtau - - 86.1 123.0 123.0 123.0 123.0 123.0 1223.0 223.0 223.0 2.2.0 223.0 2.23.0 2.0

Mblrr nt- - 21.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0

n-. - - 75.7 106.1 106.1 108.1 106.1 106.1 106.1 108.1 108.1 106.1 108.1 108.1 10..1

S*taW (3) - - 1958.7 279. 1 2798.1 2796.1 2796.1 2796.1 2796.1 2756.1 2796.1 26.1 279.1 2m.1 2m7.1

TCka1 CstA (4) 2040.0 1000.0 2958.7 2798.1 2796.1 2798.1 2798.1 2796.1 2798.1 27.1 27.1 2756.1 796.1 2798.1 2830.6

lEt va"no (5) -2040.0 -1000.0 690.7 860.5 806.5 806.5 806.5 806.5 806.5 606.5 806.5 106.5 806.5 06.5 1774.0

P C

4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

- - . -~ ~~~~~~~ fl U7 *M in Uim Wul nu low Nu nu--

con R EOJLoin Fpslm/* - 335.0 302.0 302.0 302.0 302.0 302.0 302.0 302.0 302.0 302.0 302.0 302.0 302.0Irteszt at tbrkdnq Capital f/ - 40.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 16.0 56.0 56.0 56.0 56.0aMbkal (6) 375.0 358.0 358.0 358.0 358.0 358.0 356.0 358.0 325.0 356.0 356.0 356.0 356.0

Not IF1v l after debt omrvic (5-6) (7) 315.7 448.5 448.5 448.5 448.5 448.5 448.5 44.5 448.5 448.5 441.5 448.5 1416.0

IR- 20%t- 25t

a/ laymtmbt to *nmiaipal meuxtt fbr ths ue of lnl at Y 5,000M.b/ ImIAmis,d tcwt qea bd1idig (Y 350/.2) inalatimt costs (Y 450/m3) and fri preprmtIin area (Y 300/X2) .q/ incluaes 1:w sply (Y 150,000) mfd wtr supply (Y 60,000) unitn.dl lnctlzo tg cimn (Y 230,000)I freeer (Y 150,000) cew r (Y 10 , 000) 5 4 cvqxrator (Y 20,000 ech) I ar cdi Cw Y 70,000).*/ Paw cterial.. inolude curp (V 1,300/'tont) I ver map (Y 750/tn) r big heod carp (Y 750/ton) i anil gmr cup (Y 1,200/toan) .t/ ttrnt t alculated at St p.a. Internst tar the first tltm ycu Iald be paid by the ad of Yr 3. At leat 30% ofthe owpital cot is aom d to hwv bwn mt fte the siity Lbtt bAtcd by the mlicijpl ovenm. lt loanwt* of Y 2.28 llian tfad be repa Ln 12 "ml Iitallts fra Yr 4 tiwug Yr 15.

cow

-Jw

- 64 -

ANNEX 3Table 8

CHINA

FRESHWATER FISHERIES PROJECT

Principal Input and Output Prices and Conversion Factors

Unit Financial Price Conversion Factor Economic Prices___________ (Yuan) (Yuan)

Unskilled labor man-day 2.5 - 3.0 0.5 1.2 - 1.5

Skilled labor man-day 4.5 - 1.0 1.0 4.5 - 1.0

Soybean cake mt 460 1.4 644

Fingerlings (10000) 70-140 1 70-140

Manure mt 8 0.5 4

Fish feed mt 374 - 573 0.8 299 - 458

Electricity kwh 0.2 0.94 0.18

Urea mt 600 1.40 840

Grass Carp kg 2.4 - 3.4 1.0 2.4 - 3.9

Common Carp kg 2.4 - 3.9 1.0 2.4 - 3.9

Silver Carp kg 2.2 - 2.64 1.0 1.6 - 1.8

Gold fish kg 2.0 - 5.0 1.0 2.0 - 5.0

Tilapia kg 2.2 - 2.64 1.0

Wu-chang fish kg 3 - 3.20 1.0 3 - 3.20

A conversion factor of 1.3 has been used for major inputs in constructionactivity, machinery and equipment.

-65 A 3Table 9

CHINA

FRESHWATER FISHERIES PROJECT

Key Data on Per Capita Incomes, Fish Consumption & Prices /a

Item 1978 1984 1 Increase(1984/1978)

r Y Y YI.Annual Per Capita Income Nominal Real

(i) Peasant Households 134 355 165 120

(ii)staff and Workers(a)Average wage 614 974 59 32(b)Income available for

living expenses b/ 316 608 92 60

2.Annual Per Capita Consumption(All households) 175 327 87 58

3.Per Capita Consumption ofmajor food items Kg. Kg. I Increase(1984/1978)

Grain 195.0 251.0 29Pork 8.0 13.0 62Beef 0.7 1.5 114Fish(All households) 3.5 4.4 26Fish(Peasant households) 0.8 1.7 112Poultry 0.4 1.3 225Eggs 2.0 3.9 95

4. PricesGeneral Price Index(1978-100) 100 117.7 17.7Average Retail Price Index of 100 116.6 16.6

consumer goods(1978-100)Average retail prices of

principal food items(in current terms)Y/Kg. Y/Kg. I Increase

Grain 2.95 3.58 21Pork 1.62 2.28 40Beef 1.19 2.50 110Fish and fish products 0.95 1.86 96Poultry(per piece) 2.00 3.10 55Eggs 1.67 2.36 41

5.Annual Purchase of Fish andshrimps by staff and workersin cities,by monthly income per capita Kg./per capita

- Average(all bouseholds) c/ 6.0 7.8- Y 25 and below 2.0- Y 25.01-Y35 4.1- Y 35.01-Y50 6.8- Y 50.01-Y60 8.6- Y 60.01-Y70 10.3- Y 70.01 and over 14.3

a/ Source: Statistical Year Book of China,1985. The data are derivedmainly from household income and expenditure surveys.b/ Refers to household income net of expenditure on relatives,

available for dai'.v expenditure.c/ The figure for 1978 is based on mission estimates.

- 66 -

ANNEX 4

CHINA

FRESHWATER FISHERIES PROJECT

ProRosed Guidelines for FDC Operations

1. Except as the Association would otherwise agree, FDCs would operate asindependent economic entities and legal persons, with charters preparedand registered in accordance with State Council regulations dated August14, 1985.

2. FDCs' principal objective would be to support aquaculture resourcedevelopment in areas under the jurisdiction of the concerned cities. Forcarrying out this objective, FDCs would use its affiliated units withappropriate types of organizations including subsidiaries, joint ventures,cooperatives, leasing, and custom service enterprises.

3. FDCs would conduct their affairs with due regard to principles of soundfinancial management. In particular, FDCs would adhere to followingfinancial standards:

(i) Capital. FDCs would have minimum starting capital as shown inAttachment A (to be provided by May 1, 1986). FDCs would itcrease theircapital consistent with financial requirements of activities undertaken sothat ratio of total equity (total capital including uncommitted reserves)to total debt shall be not less than 1:5.

(ii) Investments. FDCs would invest resotrces in any commercialactivity after due assessment of its technical and financial feasibilityincluding a rate of return analysis. Generally, FDCs would undertake orfinance a commercial activity provided it has a financial rate of returnof not less than the oFportunity cost of capital which is currently 12%.

(iii) Accounts. FDCs would prepare as of December 31 of each year, abalance sheet and profit and loss statement for their total operations aswell as individual operations of their affiliated units (para. 2). FDCaccounts would be audited by concerned municipal bureaus of finance andstate audit agency. Distribution of profits after tax would be made aftersufficient provision is made for depreciation of assets, shortfall incollection of dues from enterprises and repayment of borrowings on duedates.

(iv) Cost Recovery. FDCs would recover investments in feed mills, coldstorages and other support facilities generally within 15 years, and invehicles within 7 years, by appropriate pricing of output and services.

4. FDCs would appoint technical and support staff as may be necessary forefficient conduct of their activities including cost recovery ofinvestments in enterprises and support facilities.

- 67 - ANNEX 5

amaFRESHWATER. FISHERIES PROJECT

IMEtat±m schdule

cazsSar Tar 1986 1987 1998 1989 .1990Omits : . 2 3 :4 I:1 2 3 :4 :I1 2 :3 24 ::1 :2 :3 :4 :21 :22 3 24 2

Desigri: 20C:00: : :20U20 : :200C:200: : : :X00:2C: :acwatimi2:n Xn2Oat ::X::200: 2 X::20C:: : X::200C:

ret, Utilitimas & 1t:. 2 :: ::20C:::CC: ::200C : ::X00C:2 2

SwtJ il±tia : :: :

PZwmzubidOainw : : :20C :: :: 2 2 2Dmit±tmntoa bid : 22:X:: 2.Didueva3t.utLai 22 ::X 2 2

Delivery & amibly 2 2 :XX0:200C:XXC:: 2*

Begn =t jn :: .

DM40n ~ ~ 2 2 : 22:200C::20: 2 : 2

qginm qpintim :. X :2 2

Tmdxdial Serw. Ctzu: :s

Sninh qpmat±im .:X ::: .

~~~~~2 : :~~~~~~~:M

amipscim qmpn

irwitat..mEOtoObld :X

Caugt zutiat : d :.X: 2:

Pwbiptiabid d t :nt :X :X)2 2 M

lDitatiatto bid :X:: :: X:*.Bid evaluatic :X 22 2X22: :X: : X 2

ctntnft mm:1: X:: : : X: X: X:Diaivery X :X:1 X2 X:

-68- ANNEX 6

CHINA

FRESHWATER FISHERIES PROJECT

Related Documents and Data Available in the Project File

A. General Re2orts and Studies on the Aauaculture Sector

A.1 FAO, Apuaculture Development in China. FAO Study Tour Report(Rome, 1979).

A.2 FAO, Freshwater Fisheries and Aguaculture in China. FAOFisheries Technical Paper, (Rome, 1977).

A.3 IBRD, China: Long Term Issues and ODtions. Report No. 5206-CHAMay 22, 1985.

A.4 MAAF, China: Agricultural Yearbooks, 1984, 1985.

B. Reports and Studies Related to the Proiect

B.1 Chen Lo-chai. Development of Freshwater Aguaculture in EightMuniciRalities in China. November 8, 1985.

B.2 Cowley, James E. Aguaculture Preaggraisal Report - EngineeringAsRects. July 30, 1985.a. Main Reportb. Annexes 1 - 8 (including maps, drawings, water resource data,

and engineering data, arranged by city)

B.3 Cronberg, C. Aauaculture Project - Feed Mills and Cold Storasre.December 1, 1985.

B.4 FPO, Preparatory Report for the Freshwater Aquaculture Proiectin Eight Cities. March, 1985.

B.5 FPO/Eight Cities. Feasibility Reports on Eight Proiect Cities.March, 1985.

B.6 FPO/Eight Cities. Sunplementary Project Data. October, 1985,including:

Projected fish demand, 1985-2005Fish prices by cityVehicle distributionTraining proposalsTechnical Service Center training planPresent and planned project staff by

technical specialty

D. Selected Working Papers

D.1 Detailed cost estimates (8 cities)

D.2 Financial returns to fish ponds, new and improved (8 cities)

D.3 Economic analysis (8 cities)

CHDIA

FRESHWATER FISHERIES PROJECT

Orpnizational Structure or the Kinistry of AgricultLre, Animal Husbandry *nd Fisheries

Minister

DeputyHiniater

I I I~~~~~~~~~~~~~~

I-Agrotechnical Extension I-Academy of Agricultaral I I II General Station I Sciences I I Agricultural Mechadnizationl I I Animal Husbandry and II I I-I Bueau I I-I Veterirary edicine Buresul I Office of Policy Stu | II-Plant Protection I-Aricultural Engineering II I I I I I II General Sta ion I Reaearch and Design II I Institute Land Kanagement Bueau1-Hational Seed I I I 1

Corporation I-AgricultLral Exhibition I-1 Aqiuatic Products BurmuI Iall I I

I-Animal and Plant I I I Fisheries Adcinistration I I II Quarantire Institute I-Agricultural Film Studio I I and Ports BLreau I I I I Education Bureau 1 1CI I I I I I Aquatic Products I I II-Animal Husbandry and I-Fcreln Technical I Research Center II Veterinary Medicine I Engineering Ccrpam II General Station I I Cnonmue and Bripde I I I Scleno and Teh-log yI I-Agriculttral Scahool I-I Enterprise BLreau I I Bureau -I-Collective Management I of Broadeasting I II I.. State Fars BLreau/ I II Ofrice I I AITC I II I-Cadre School of Riral I II-Corporation of Animal I Econanic Management Veteran Cadre Btreau II I Planning BureauI Husbandry, Industries I I I I I I _I and Camnerce I-Agricultural Publishing I South China Tropical

I House Crops Research Center II-State Farm Tiport and I .1. Agronomy Bureau I I Fimaone BureeuI Export Service I-Gases Research Institute I I i

I-Auatic Products Supply I-Environmental Protection I _I and Sales Corporation I Center 1L. Administration Bureau I I Haterials Bureu

I-Marine Fisheries I-Animal QuarantineI Campary I Research Institute I _

I I _ Personnel Bureau I InfrUation Eureau u |

I-Aiuaculture Camparor I-Agrieultural Medhanization I I IResearch Institute

I-ouwue and Brigade _Enterprises Newspaper 1-1 Foreign Affairs Bureau I

I

-70- CHART 2

CHINAFRESHWATER FISHERIES

ORGANIZATION FOR PROJECT IMPLEMENTATION

mINI5tlTH OFACGRICULTURE.

ANIMAL HUSBANtDRYAND FISHERIES

BUREAU oJ, fISHERIESAQUATIC I PROJECT

PRODUCTS', OFFicE

TECHNICAL( ADVISORtYCROUP

PROVINCIALBUREAUS OF

AQUATIC PRODUCTS

MUNICIPAL PROJECT *GOVERNMENTS _ _ COORDINATINC

COMMITTEES

MUNICIPAL MUMUIIIPPABUREAUS OC_ I FISHERIES

ACUATIC PROJECT DEVELOPMENTPRODUCTSI Ofric 1CO RPORONS

COUNTY, PROJECTDISTRICT COORDINATING

COYERt tlEHTS w ~~~~~~~~~COMMITTEESGOVERNMIENTS C- r1ET

COUNTY *COUNTY(DISTRI"CT COUNTY FISHERIES

_~ ~ ~ ~~~~~~~QAI PRO JET OFCEST DEVfELOPMENTSECTIOtlS V] CORPORATONS

TOWN SHIP COVERNMENTS

4 TOWNSHIP u

FISH FARMSSTATE FISH FAltMS

FISHFARHERS

U.n,horuhlp. eppuated ty municipal powers moat. Ineludemproviial government offliclels.

b to Chena4u. tiherlie. £cNFvtti.. ore toSdiod by thleWotor Resourche Bureau.

State fih form. are dire li under the admlnltrativer, -trI ot the munlclpal d cnty (district) geverfe ate.

WORLD BANK-30391

- 71 - CHART 3

EM~FRESHWATER FISHERIES PROJECT

Qanals icr Use an RP!ezyof i1L credit

~~~~~- -I

Credit r o u td fmsf

inan. 4_5_

BFS

itn w1 'iaea 4.5%.

l ~ABCrate

AB3C raes

/a WPs and COs would not directly barxe fns but wol recmlndiE-semht of fuxs to FDCs and fish :frm arxi mmt-, r

JO ABC rabes ptfor trad cener and telacbigrlaitee vichi are at 4.5%.

U.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

U. S. S. R. _ (_

s~~~~~~~~~~~~~~~~~~~~~~~~* .r'

5. I

fTAN'

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