Cleaning Up China’s Polluted Pearl River

Challenge

The Pearl River Delta in south China’s Guangdong province is among the fastest growing regions in China, averaging above 13 percent since the early 1980s, mostly due to large inflows of direct foreign investment initially in low value-added manufacturing, and more recently in higher value-added manufacturing and, in a few cities, in services.

The high economic growth came at a very heavy environmental cost. Investment in environmental protection failed to keep pace with the rapid economic advances. Consequently, the Pearl River, China’s third longest river, became highly polluted, with many of its tributaries worse than the lowest national surface water quality standard (Class V[1]), and unfit as a drinking water source.

Collected domestic wastewater was discharged to the river systems without treatment, except a few larger municipalities where only a portion of the wastewater was treated. In 2005, about 55 percent of the wastewater in Foshan Municipality was treated, while only 22 percent of the wastewater in Jiangmen Municipality was collected and treated.

Approach

The World Bank supported the Guangdong Provincial Government’s efforts to clean up the Pearl River Delta and improve its water quality, with the first Guangdong Pearl River Delta Urban Environment Project approved in 2004. The project financed wastewater treatment facilities and other investments in the provincial capital of Guangzhou, the most concentrated pollution source area.

Following the first project, the Second Guangdong Pearl River Delta Urban Environment Project, approved in March 2007, focused on Foshan and Jiangmen which together accounted for 15 percent of the pollutants in the Pearl River system. The project aimed to reduce water pollution in the Pearl River system originating from these two municipalities through a package of key initiatives, including wastewater treatment and sludge disposal, water quality monitoring, sediment removal from waterways, and flood protection and river embankment improvements.

The Pearl River Delta area has been identified as possibly the biggest pollution hot spot in East Asia, with major impacts spilling over into the South China Sea. By addressing the largest pollution sources in one of the national and regional pollution hotspots, the series of Pearl River Delta projects represented an important step in assisting China tackle one of the most serious environmental challenges facing the country.

[1] China’s system of environmental standards classify water quality with a series of benchmarks, with “Class I” the cleanest and “Class V” the dirtiest.

Results

Implementer between 2007 and 2013, the Second Guangdong Pearl River Delta Urban Environment Project contributed to the reduction of pollution discharges entering the river system in the region from the municipalities of Foshan and Jiangmen, by supporting improvements in several key outcomes:

In Foshan:

• Foshan’s wastewater collection and treatment rose from 55 percent in 2005 to 88 percent in 2013, partly due to of the capacity expansion of the Zhen’an Wastewater Treatment Plant from 200,000 to 250,000 cubic meters a day and 7.6 kilometers of associated sewer collection networks constructed under the project, serving 1.1 million people in Chancheng District today.  
• The four new sludge treatment facilities with total daily capacity of 220 tons will ensure sludge is properly treated and safely disposed, preventing the contamination of groundwater and adjacent waterways around the disposal site as before the project.
• 6.7 kilometers of embankments along the Fenjiang River were improved by intercepting wastewater and redirecting it to the wastewater treatment plant and elevating the river banks to a height sufficient to protect against a 50-year flood.
• Water quality was improved after nearly 700,000 cubic meters of wet sediments were dredged from the river beds, dewatered and disposed safely. Four automatic water quality monitoring stations and a water environmental management information system were established, including an emergency preparedness system to facilitate rapid reaction from the environmental protection agency towards uncontrolled discharge of pollutants in the river.
• Staff training, an international conference, and study tours to learn from international best practices in sustainable urban development helped strengthen the capacity of the relevant municipal agencies.

In Jiangmen:

• Jiangmen’s wastewater treatment capacity rose from 22 percent in 2005 to 70 percent in 2013, due to the capacity expansion of the Wen Chang Sha Wastewater Treatment Plant from 50,000 to 200,000 cubic meters a day, as well as a pumping station and 22 km of sewers constructed under the project, serving about 500,000 people in the urban area.
• Technical assistance was provided to enhance operational and business management capacities of the newly established Jiangmen Biyuan Wastewater Company which was responsible for the operation of the wastewater treatment plant. 

Bank Group Contribution

The project was built on the first Guangdong Pearl River Delta Urban Environment Project. In addition to financing wastewater treatment facilities and other investments in Guangzhou, the first project also supported policy reforms including pilots on inter-municipal cooperation in the planning and operating of shared wastewater facilities (such an a pilot for Chancheng-Nanhai Districts in Foshan), improvements in water quality monitoring and information dissemination, as well as a study on concessional financing of wastewater services in Jiangmen, supported by grant funding from the Global Environment Facility (GEF). These provided an analytical foundation and alternative options for the designing and implementation of the second project.

The final cost of the second Guangdong Pearl River Delta Urban Environment Project was US$142.2 million, with US$70.92 financed by an IBRD loan. During project preparation, background analysis was conducted, and feasibility studies and site selections for works were assessed. A detailed financial assessment of the two wastewater utilities in the two municipalities included an analysis on cost recovery mechanisms, surveys on willingness to pay, and projected tariffs aiming at full cost recovery.

Partners

The World Bank team developed a strong partnership with the two municipalities, which continued for the whole period of the project and was key to solve problems timely and effectively. The two municipalities demonstrated strong commitment to the project by setting up well-staffed project management offices and by assigning considerable budget for project preparation. Foshan supported an autonomous company responsible for managing water supply and wastewater services in the city, and Jiangmen established a new one responsible for wastewater services in 2006. The two municipalities provided counterpart funding estimated at US$91.9 million to support or complement project activities.  

Moving Forward

A key challenge for both Jiangmen and Foshan is to keep improving the collection networks through sewer rehabilitation, and extension to new city areas where more households can be connected. Foshan Water Group Company has a contract with Foshan Municipality up to 2030. The company plans to expand future investments and operations through PPP arrangements in the form of BOTs beyond Foshan Municipality. Both utilities have clear strategies. Jiangmen Biyuan Wastewater Treatment Company is also in the process of implementing its business and financial plans. The company has set up a center to monitor operations of all the wastewater treatment plants. The increase in wastewater tariffs in 2013 had positive effects on the key financial performance indicators of both utilities, and on the sector in general that can become more financially independent and less dependent on government subsidies.

Beneficiaries

600,000 people in Jiangmen and 1.1 million people in Chancheng district in Foshan are direct beneficiaries of the project. Pollution reduction and water quality improvement in the Pearl River Delta waterways have also contributed to welfare of the people who live downstream of the project area.

Liang Jingzhou, head of village committee, Xiebian Village:

“Sewage water that used to be everywhere in the village is now collected through the sewer system. Our living conditions have improved, and we are all very happy.”