As one of the first batch of comprehensive urban development projects in the PRC (People's Republic of China), lessons were learned with respect to LAR (land acquisition and resettlement) : (i) LAR impacts for urban projects usually are larger due to the high population density in urban or semi-urban areas; (ii) compensation rates could rise during implementation due to increased value of land and affected persons' property; and (iii) LAR implementation is influenced by the pace of urbanization rather than the schedules for individual projects, and that may result in delays which are beyond the project's control. BMG (Baiyin Municipal Government) had to reprioritize its urban infrastructure construction plan including the roads construction plan to better handle the large LAR impacts resulting from the city's rapid urbanization. As a part of the reprioritization, construction of some road sections was removed from the project scope so that LAR impacts would be reduced and the project could be completed within the extended loan period. Despite the reduced LAR impacts, the total LAR cost have increased by 60%. This was mainly due to higher compensation rates resulting from rapid urbanization and increase in land value. BMG had to mobilize additional counterpart funds to cover the cost increase.
Gansu Baiyin Urban Development Project