Final Report - Asian Development Bank

TA 4721-PRC: Preparing the Shaanxi-Qinling Mountains Integrated Ecosystem Management Project
Final Report Appendix 7
f. Issues to be Addressed
82. The QBG Design Team completed a conceptual design in less than one month that was
sufficient to meet the requirements of both PRC and ADB. However, because of the limited time
available and the mix of skills, the design, which is based on the conceptual design provided by the
PPTA Team in late April, is still at a conceptual design stage. It does provide a broadscale design of
the Botanic Garden but it is very clear that much more detailed work is now required to develop the
plans into a feasible and workable QBG project.
83. The following Outstanding institutional issues need to be resolved.
� QBG has to be able to use the Capital Construction Accounting Guideline as stated in
the Financial Governance Report.
� QBG’s access to land use rights
� The [proposed term of contract is 50 years from the day of signing the contract. It is
not consistent with the Rural Land Contracting Act of PRC which requires the transfer
of land use right with in the term of the Land Use Contracting Term stated on the Land
User Right Certificate. In case of Dianzhen village, it is from 1998-2027. For forestry
land coming under Land Conversion Program, it is from 2003-2053.
� QBG is proposing shareholder arrangement with local community farmers to gain the
land user right. QBG as a government affairs unit doesn’t have the legal right to have
shareholder arrangement under the QBG legal entity. Only a company as a legal
entity can set up shareholder arrangement following the Company Act of PRC.
� QBG can not be fully replaced by the commercial company because of it’s nature as a
government affairs management institute unless the provincial government approves
a full restructure of QBG to become an enterprises following government guideline.
� The commercialization process of QBG should be undertaken before project start up.
The options of commercialization should be agreed in a discussion between PDRC
SPFB, and QBG and a timetable should be agreed with SPDRC on QBG’s
commercialization.
� The equity structure of the QBG needs to be independently assessed and agreed
including the equity of the QBG and its shareholders
� The institutional capacity for managing a commercial operation
84. The detailed design to be completed after the ADB Loan is approved will require a wide
range of skills, including: tourism design and layout, ancient Chinese architecture, Chinese botanic
gardens, landscape architecture with specialized skills in ecological design of botanic gardens (and
knowledge of GEF requirements), interpretation/visitor education specialist, marketing and promotion,
business development and financial management expertise (at a minimum). Because of the major
design work still to be conducted, the basis for estimating the design cost was increased from 2.5% to
4.5% of construction and engineering costs to enable contracting of expertise on a short term basis.
85. Some of the design issues raised by the QBG FSR and to be addressed in detailed design
include the following.
i. Sections 3.1-3.5 of the FSR: The Gardens:
86. Despite concerns raised by the PPTA Team in the Inception and Mid-Term reports, the use
of plant materials in the specialist gardens still reflects the use of plants which are not native or
endemic to the Qinling Mountains (e.g. the ginko garden and the international gardens). This is a
serious concern. The QBG Team was informed at the Project’s Inception Meeting and many times
since including the briefing meetings with the Design Team (also included in the design brief provided
by the consultant team), that introducing and using alien plants to the north slopes of the Qinling
Mountains was a potential threat to biodiversity and was contrary to the Convention on Biological
Diversity (CBD).
87. The Qinling Mountains rank third in plant biodiversity out of 34 other Biodiversity Hotspots
worldwide. Therefore, care over and above normal expectations should be made to protect this
resource. The Botanic Garden project is linked to the GEF project. The basis of GEF lies within the
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