Sustainability in Infrastructure Projects
as a Fundamental Principle of Responsible Investment by the Chinese
Government
Speech at FIDIC 2003 Annual Conference
Bao Xuding
President, China International Engineering Consulting Corporation
Respected President of FIDIC
Respected Chairman of the Annual Conference
Ladies and gentlemen, and Friends
It is my great pleasure to attend the FIDIC annual conference in Paris
and it's my honor to speak here at the kind invitation of Mr. Mazloum.
China International Engineering Consulting Corporation (CIECC) was
formed in 1982. Over the past 20 years ever since its establishment,
CIECC has completed over 6000 projects of consultancy service, with
the total investment involved amounting to RMB 6,300 billion (US$768.3
billion). Representative projects on which we have provided appraisal
services include such infrastructure mega-projects as the Three Gorges
Project, the South to North Water Diversion, West to East Gas Transmission,
West to East Power Transmission, and the Qinghai-Tibet Railway. Today,
CIECC has come to be the largest multi-disciplinary engineering consulting
company in China.
Now, I'm very pleased to take this opportunity to speak on the sustainability
of infrastructure projects on which CIECC has been involved in providing
appraisal services in the past few years, where sustainability has been
used as a measure of responsible investment.
In the past 5 years, with the economic strength growing steadily and
the scale of the total fixed asset investment and infrastructure construction
achieving historical level, China's economic development has maintained
sound momentum. In particular, the issuance of RMB 660 billion (US$
80.5 billion) worth of long-term treasury bonds for construction, together
with bank loans and funds from other sources, has realized an investment
scale of RMB 3,280 billion (US$400 billion). This pool of funds has
made a lot of long-needed large undertakings possible and quite a number
of extra-large infrastructure projects with paramount significance to
the nation have been undertaken. The total investment in water conservancy
projects in the past 5 years has amounted to RMB 356.2 billion (US$43.4
billion), equivalent to the sum total of the investment from 1950 to
1997. The past 5 years have also seen a total investment of RMB 1234.3
billion (US$150.5 billion) in road construction, 1.7 times the total
investment from 1950 to 1997. Moreover, the sectors such as post and
telecommunication, energy and urban infrastructure facilities have also
been markedly strengthened.
The Chinese government has planned and implemented specific infrastructure
projects based on the correlation between population, environment and
development, and in line with the coordinated development of economy,
society, region, resources, and environment, as well as the overall
strategic requirements of sustainable development.
Firstly, a large number of projects aimed directly at environment protection
and ecology improvement has been initiated. Representative projects
of this nature include converting farmland for re-forestation, protecting
natural forests and containing the sources of sandstorms in Beijing
and Tianjin. The fund input into these projects has amounted to RMB
580 billion (US$70.7 billion), 1.7 times the total investment from 1950
to 1997.
Secondly, improvement and protection of ecological environment, reasonable
exploitation and utilization of natural resources, poverty alleviation
as well as the coordinated development of different regions and urban
and rural areas have been incorporated as important goals to be achieved
in the planning and implementation of water conservancy, transportation,
energy and urban infrastructure projects to ensure sustainability.
Let me take the Three Gorges Project as an example. With its maximum
dam height reaching 181 meters, and the total installed capacity for
hydroelectric power generation amounting to 18, 200MW, the Three Gorges
Project, the world's largest water conservancy undertaking, is actually
a project of sustainable development. Specifically, flood control along
the Yangtse River areas is the primary function of the project. As the
key component of the overall flood control system for the Yangtse River,
the project will, upon completion, protect 1.5 million hectares of fertile
farmland and a large number of cities and towns along the middle and
lower reach of the Yangtse River from the damage of floods. It will
provide safer and better environment for over 15 million residents of
the area, and it will also help to solve the pollution problems of downstream
Dongting Lake. Power generation is another major function of the project.
The clean energy from the Three Gorges Power Station will reduce the
hazardous gas emission and wastewater and residue discharge amounting
to millions of tons, thus dramatically improving the environment in
the Eastern and Central China. Improving the navigability on the Yangtse
River is the third major function of the project. Upon completion, it
will dramatically improve the navigational capability of some section
in the upper reach of the Yangtse River, and thus allow the annual shipping
volume through the dam of the Yangtse River to reach 50 million tons.
Moreover, resettlement of the affected urban and rural people has been
a major issue concerning this mega-project. With a large number of population
needed to be resettled, the resettlement was defined to be an endeavor
of poverty alleviation and life upgrading. 85% of the affected population
in the Three Gorges Dam area were planned to resettle in Chongqing City.
I had been the mayor of Chongqing City for a couple of years. With my
first-hand experience in the resettlement work, I have personally witnessed
that, as the local people were bidding farewell, with a bit of reluctance,
to their hometown, they were actually embarking on the road of starting
a new and better life. The development-oriented resettlement policy
has ensured that the resettlement would be a process of helping the
affected people to improve their life.
The second example I'd like to give you is The South to North Water
Diversion project, the largest water diversion undertaking in the world.
According to the plan of the project, water in the lower reach, the
upper reach and the branch river Hanjiang of the Yangtse River will
be diverted to the Northern areas through the three channels specifically
called the east line, centre line and west line. By 2050, the planned
annual water diversion volume will be 44.8 billion cubic meters, which
is expected to be able to basically ease the water shortage in the North,
lessen the worsening of the ecological environment, and increase the
strategic reserve of underground water resources so as to allow ample
room of development for our future generation.
Other large projects such as West to East Gas Transmission and Qinghai-Tibet
Railway have also been planned and implemented from the strategic height
of sustainable development for the whole country and with specific targets
of sustainability available pertinent to the particular project.
For each specific project, with the goal of sustainability clearly
set in the first place, principles and policies are formulated to guarantee
maximum sustainability. Then, specific measures are made for each and
every section of the project from its components, implementation procedure,
to the supervision and management in the spirit of the set principles
and policies.
Again, take the Three Gorges Project for example. To ensure maximum
sustainability for the mega-project, the important policies such as
the parallel proceeding of project construction and environment protection
and development-oriented resettlement were made in the first place.
Then the Prevention and Alleviation Planning for Water Pollution in
Three Gorges Reservoir Area and Upper Reaches of Yangtse River were
formulated for implementation. Landslide and other geological hazards
were properly handled, full-process tracking and monitoring were conducted
to identify in a timely manner any possible adverse impact of the project
on the ecosystem and countermeasures were promptly taken. Moreover,
for the areas along the upper reach of the Yangtse River, any portion
of cropland on the slope above 25 degrees was required to be converted
for forestation or grass growth. In addition to allocating about RMB
50 billion (US$6.1 billion) for resettlement, the government also made
huge financial input to help with the industrial restructuring of the
project area, aiming to laying a sound foundation for long-term economic
development.
"For the northern area to do a good job in water conservancy,
water pollution treatment and environmental protection before it be
eligible for receiving water diverted from the South" has been
the fundamental principle in the planning and construction of South
to North Water Diversion Project. Water conservancy, pollution control
and ecological environment protection constitute the key components
as well as the prerequisites of the project implementation. The planning
and the corresponding measures of water conservancy, pollution control
and environmental protection were formulated, the specific projects
were identified for the purpose of achieving the set goals in the water-receiving
areas in the North.
With a total length of 1,142km extending on Qinghai-Tibet Plateau, Qinghai-Tibet
Railway is the railway line with the highest location above sea level
in the world. Minimizing the impact on the ecological environment of
the Qinghai-Tibet plateau has been a major principle in the design and
construction of the Qinghai-Tibet Railway Project. For instance, most
of the railway line has been built along the existing Qinghai-Tibet
Highway, and new passage specifically for the railway line has been
kept to a minimum. To protect the natural landscape, detours were made
and bridges were built to avoid trespassing the environmentally sensitive
areas like lakes and wetlands. For the two national nature reserves
of Hoh Xil and Sanjianyuan, routing was made along their outskirts wherever
possible, and 33 special passages were made available for the free migration
of wild animals.
To minimize the adverse and harmful impact of infrastructure projects
on the environment, the Chinese government has recently decided to introduce
the environment supervision system as trial practice in the 13 major
state infrastructure projects such as Qinghai-Tibet Railway and West
to East Gas Transmission whose locations are in the ecologically sensitive
areas and which would be likely to have prominent impact on ecological
environment.
In addition to the foresaid two factors, possessing the capability to
foresee the possible adverse and harmful impact of the project is the
third key component to ensure the maximum sustainability.
In recent years, the Chinese government has stepped up the efforts in
the early-stage work for infrastructure projects. The new leadership
of the central government has placed tremendous stress on the importance
of early stage planning and study for engineering project. For any major
infrastructure project, the project client is required to solicit opinions
from specialists in various fields and conduct scientific and in-depth
evaluation. For those projects to which no effective measures are yet
available to contain the adverse impacts, the government would not grant
its approval for project identification. In the meantime, local government
departments, especially the ones in the western regions are required
to possess the capability of competent foresight and scientific planning
as one of the key prerequisites for the development of infrastructure
projects.
In conducting review and appraisal for the major infrastructure projects
with government investment, CIECC not only assesses the necessity, feasibility
and risk factors in light of its engineering and technical objectives,
but also evaluates its impact on the environment, ecology and society
in light of the sustainability of the project. By doing our best to
foresee the possibility and magnitude of the adverse and harmful impact
of engineering projects and recommend the corresponding countermeasures,
we furnish the approving government authority with a sound base on which
they can make the right decision to ensure the sustainability of engineering
projects.
CIECC frequently engages or works with international and national specialists
in bringing to bear the best international practice principles to the
critical features of these major projects.
Ladies and Gentlemen,
Sustainable development constitutes the common goal of human society.
In June 1992, the Chinese government solemnly signed the Declaration
of Environment and Development at the world Summit Conference held in
Rio de Janeiro, Brazil. China has been one of the earliest countries
in the world to formulate the 21st Century Agendas, proposing an action
plan in light of China's specific conditions. In 1996, the official
integration of sustainable development as a key component into the fundamental
national development strategies won extensive acclaim from the international
community. In the process of its ever accelerating economic development,
China has made continuous effort to explore and enrich the substance
of sustainable development, and has come to formulate the strategy and
action plan of sustainable development in accordance with China's own
situations. With the guidance of the strategy and action plan, we have
made tremendous progress in this aspect.
China is now making great efforts to attain the ambitious objective
of building the society of comfortable life on all fronts within the
century, and the economic development in China is expected to maintain
stable and continuous pace. As we are well aware that China still has
so much to be done to improve its infrastructure development, we sincerely
welcome FIDIC and FIDIC member organizations to initiate or strengthen
cooperations with us in this regard.
