The ADB Board of Directors approved the loan for the Lanzhou Sustainable Urban Transport Project. The centerpiece will be the establishment of a bus rapid transit system - marking the first ADB project to support an urban mass transport service.
Lanzhou, like other urban centers, has seen unprecedented growth over the past 20 years, as the country’s economy has boomed. Private motor vehicle use has surged and brought significant benefits, but also caused serious problems including chronic road congestion and pollution. The PRC is now the world’s largest greenhouse gas emitter, with road transport an increasingly significant contributor.
Taking into account the concerns over rising private motor vehicle use, the Lanzhou municipal government has drawn up an urban development plan, which includes a bus rapid transit system that will link a planned new city center to the original hub, providing a fast, clean, economical mass transport service.
“Public transport helps avoid the vicious spiral of road investment accompanied by ever increasing numbers of private motor vehicles and worsening congestion, and bus rapid transit offers a cost-effective, flexible and environmentally friendly mass transit option,” said Toshiyuki Yokota, Transport Specialist in ADB’s East Asia Department.
Along with establishing 13 kilometers of dedicated bus-only lanes and 22 stations, the project will build or rehabilitate over 33 kilometers of roads, install advanced traffic control and pollution monitoring systems, develop bicycle lanes and bicycle parking facilities to support non-motorized transport, and support a study for traffic demand management. This is also the first ADB transport project to support preparation of an application for certification under the Clean Development Mechanism (CDM) of the Kyoto Protocol, which will provide revenue that can help offset some of the costs of running the transit system. ADB is providing technical support to the Lanzhou government to prepare an application to tap the mechanism.
The project will have wide ranging benefits including shortened travel times, reduced carbon dioxide emissions, lower accident rates and improved services for the disabled and elderly. It is expected to link closely with a planned light rail transit system, and underpins a broader ADB plan to develop ‘green’ sustainable transport options in PRC.
ADB’s loan makes up around 31% of the total project cost of $480.3 million, with Bank of China financing $240.3 million and Lanzhou Municipal Government providing about $90 million. The loan, from ADB’s ordinary capital resources, has a term of 25 years, including a grace period of 5 years, with the interest rate determined in accordance with ADB’s LIBOR-based lending facility.
The Lanzhou municipal government is the executing agency for the project which is expected to be completed by the end of December 2014.