12.2 National Economy Assessment and Environmental Economic Gains and Losses Analysis of the Phase-II Project of the Third Ring Road 12.2.1 National Economy Assessment
National economy assessment is to consider the economical rationality of the project from the perspective of the nation. Via analysis of benefit after completion of the project and investment for the project construction, predict the feasibility of the project economically. There are mainly three indexes, economic internal return rate (EIRR), economic net present value (ENPV) and economic benefit cost ratio (EBCR) to reflect the assessment.
For the economic assessment indexes of the Phase-II Project of the Third Ring Road , refer to Table 13.2 – 1 (social discount rate 12%).
Table 13.2-1 Economic Assessment Indexes of the Phase-II Project of the Third Ring Road
Assessment
Content
|
Economy Net Present Value (ENPV) (10,000 Yuan)
|
Economy Internal Return Rate (EIRR) (%)
|
Economy Benefit Cost Rate (EBCR)
|
Investment Recovery Period (Year)
|
Calculation
Indexes
|
215720.70
|
23.77
|
1.6
|
8.08
|
The national economic benefit cost flow refers to Table 13.2 – 2.
Table 13.2-2 National Economic Benefit Cost Flow of the Phase-II Project of the Third Ring Road Unit: 10,000 Yuan
Item
|
Cost
|
Benefit
|
Net benefit flow
|
Total Net Benefit Flow
|
Total
|
155581.3
|
1952897.7
|
1738298.1
|
18945534.4
| 12.2.1.1 Sensitivity Analysis
Parameters used for the economic assessment come from either estimation or prediction, thus are not completely accurate. The sensitivity analysis considers the impact of the unfavorable conditions such as increase of financial cost on the economic assessment indexes of the Project in case of decreases of incomes due to certain factors. The statement carries out analysis as per the three conditions of cost increase and benefit decrease. The calculation results are shown in Table 13.2 – 3.
Table 13.2-3 Sensitivity Analysis (EIRR) of the Phase-II Project of the Third Ring Road
Fluctuation of Sensitive factors
|
Cost
|
Benefit
|
-10%
|
25.41%
|
22.21%
|
0%
|
23.77%
|
23.77%
|
+10%
|
22.35%
|
25.25%
|
Seen from the table, on condition that the cost increases by 10% and the benefit decreases by 10%, the internal return rate is higher than the social discount rate of 12%, showing that the Project of the 3rd Ring Road has a relatively high vigilance against risks.
12.2.1.2 Result of National Economy Assessment of the Phase-II Project of the Third Ring Road
It is shown in the economy assessment indexes of national economy assessment that the Project of the Phase-II Project of the Third Ring Road in terms of economy is feasible and has vigilance against risks.
12.2.2 Environmental Economic Gains and Losses Analysis of the Phase-II Project of the Third Ring Road
The main task of environmental economic gains and losses analysis is to weigh the economic protection benefit gained from the necessary environmental protection capital invested for the Project construction. Thus, in analysis of the environmental economic gains and losses, it shall include not only calculation of the investment and cost for controlling pollution, but also the estimation of potential environmental and economical effects. However, losses from the pollution are generally indirect, which makes it difficult to directly calculate in currency, if any, the calculation is hardly accurate. Short of basic indexes for environmental economic effect assessment, it is only possible to make a simple analysis of the environmental economic effect.
12.2.2.1 Environmental Economic Losses Analysis of the Phase-II Project of the Third Ring Road
⑴ Ecological Economic Losses
Along the Nanjiang Binlu is mainly city ecological environment. The direct impact by the project construction on the environment is from the requisition of land, and changing the usage of parts of local land. The ecological economic losses resulted from the Project mainly come from the occupancy of the vegetable plot, timber land, garden plot and dry land etc. According to relative data in the Project Proposal Statement (including Pre-Feasibility Study Statement) of the Phase-II Project of the Third Ring Road of Fuzhou, and with reference to data in the Project Proposal Statement (including Pre-Feasibility Study Statement) of Fuzhou Nanjiang Binlu, the estimated ecological losses from the project is shown in Table 13.2 – 4.
Table 13.2-4 Calculation of Ecological Economic Losses of the Phase-II Project of the Third Ring Road
Land Type
|
Area of Requisition
|
Average Yearly Product (Yuan/mu)
|
Total (Yuan)
|
Vegetable Plot (mu)
|
181.38
|
1768
|
320679.84
|
Dry Land (mu)
|
114.23
|
2918
|
333323.14
|
Other Cultivated land (mu)
|
4.28
|
2263
|
9685.64
|
Timber Land (mu)
|
105.29
|
2389
|
251537.81
|
Garden Plot (mu)
|
1080.76
|
2389
|
2581935.64
|
Pound (mu)
|
23.35
|
1900
|
44365
|
Pothole and unused land (mu)
|
402.97
|
450
|
181336.5
|
Total
|
1912.26
|
|
3722863.57
|
⑵ Medical Losses from the Impact on Residents’ Health Along the Line by the Changes of Environmental Quality
The Project goes by Wanbian Village, Shangqi Village, Yangqi Village, Wushan Village, Wufeng Village, Aoshan Village and Duyuan Village etc. the permanent population of which is approximately 1358, to count as per one tenth of the population, i.e. 136 people are affected. The medical care costs margin between urban and rural areas is calculated as per 94.52 Yuan/person.year in the statistical yearbook (Note: the number is quoted from the Environmental Impact Report of the 2nd Ring Road Phase III of Fuzhou).
To calculate the increased costs of the residents’ medical care by the market value method:
C=N*△E
In the Formula: C――Increased costs of medical care for residents along the line;
N――Number of people affected by the change of environmental quality along the line;
△E――Margin of medical care costs between urban and rural areas (Yuan/person.year).
From the above formula, the annual cost of medical care from the impact on resident’s health along the line by the changes of environmental quality is RMB 12,854.72 Yuan.
⑶ Costs for Environmental Pollution by Noises
During the construction of the project, noises come from construction equipments, mainly the engines of shovel car, shovel loader etc. and the usage of electric saw as well; mechanical noises are mainly the thump of pile driver, the noise of the machinery excavating the earth material, the clash of material in agitator etc. Those will influence the life of the residents to some extent. But appropriate protective measures can minimize the harm.
If we adopt some noise abatement measures during the operation of the Project – installing noise-proof window or wall, the indoor noise condition will meet the relative functional requirements. In this way, costs for noise abatement are somewhat equal to the losses from noises without the noise-proof window or wall. Because of lack of specific design data for the noise-proof means in sensitive points, costs hereof will not be calculated for the moment.
12.2.2.2 Environmental Effect Analysis of the Phase-II Project of the Third Ring Road
Cost for road afforestation and conservation of soil and water of the Phase-II Project of the Third Ring Road is RMB 25,285,000 Yuan, and the afforestation area is 331,535m2.
The construction and operation of the Project will undoubtedly cause some disturbance and harm to the surrounding environment along the line. However, the adoption of environmental control measures shall ease the disturbance and harm, and to some effect shall have some positive effects on the original environment. Refer to Table 13.2 – 5 for this.
Table 13.2-5 Benefit Qualitative Analysis of Environmental Impact of the Phase-II Project of the Third Ring Road
Environmental Measurement
|
Environmental Benefits
|
Construction period environmental control measures
|
Prevent noises from affecting the residents; prevent surface water, ambient air from pollution; and prevent water loss and soil erosion.
|
Regulation if Afforestation and Temporary Ground
|
Beautify the landscape along the expressway; improve the local ecological environment; ameliorate the overall surroundings and prevent water loss and soil erosion
|
Noise Control Project
|
Prevent the traffic noise from constantly disturbing the sensitive points along the line
|
Aquatic Environment Protection Measures
|
Protect the water quality of surface water along the line; maintain the functions of the original water body; and protect the surface water resources.
|
Environmental Control and Monitor
|
Know the condition and change trend of the environmental quality and maintain the environmental quality along the line.
|
It is difficult to make quantitative analysis of some environmental effects after the implementation of the above measures. As follows are quantitative analyses of the effects after the implementation of some measures therein:
⑴ Analysis of Afforestation Benefit of the Phase-II Project of the Third Ring Road
For the afforestation within the scope of the Project, patches of green belt are used, and we plan to use grassland with color shrubs and to care with automatic sprinkling irrigation. Grassland is used for the separation strip in principle, with some shrubbery. For the 10.5m of green protective belts on the outer flanks of road, we plan to use grassland with arbor trees. From the perspective of ecology and health, afforestation has functions like oxygen producing, dust absorbing, disinfections, noise reducing, modifying microclimate etc. In consideration that it is difficult to collect the economic indexes of monetization, we hereby merely calculate the monetized benefit of the production of oxygen and carbon dioxide fixation.
According to the statements of Institute of Botany, Chinese Academy of Sciences, every square meter of herb plant produces 1.76g oxygen every day, and fixes 2.41g carbon dioxide. In this way, every square meter of vegetation produces oxygen 642.4g/a, and fixes carbon dioxide 880g/a. The afforestation area of this road is about 331,535m2, and thus the monetized benefit of its oxygen production is about RMB 36,900 Yuan/a, and the monetized benefit of its carbon dioxide fixation is around RMB 37,400 Yuan/a, totaling RMB 74,300 Yuan/a.
⑵ Analysis of Benefits of Soil and Water Conservation
Benefits of soil and water conservation comprise ecological benefit, social benefit and economic benefit. For ecological benefit, via implementing the soil and water conservation program, the correction rate of water loss and soil erosion can reach 100%. Quantity of soil erosion cut down in the construction period reaches more than 98% of the new water loss and soil erosion, thus the water loss and soil erosion resulted from the project construction will be under effective control. The destroyed vegetation is restored, beneficial to the balance of the whole eco-system. In addition, the execution of the program will stop the earth condition within the project area from deteriorating, reduce the loss of organic matters like nitrogen and phosphor as well as the running off of inorganic salt, and contribute positively to the improvement of the local ecological environment and agricultural production conditions.
In terms of social benefit, the implementation of water and soil conservation program to a large extent stimulates the water and soil maintenance of the local construction project.
As for economic benefit, carrying on the water and soil conservation program effectively controls the water loss and soil erosion, reduces the mud and sand silting up in field and pound, decreases natural disasters and thus brings economic benefit indirectly.
12.2.3 A Brief Summary of Environmental Economic Gains and Losses Analysis of the Phase-II Project of the Third Ring Road
Seen from the above computational analysis, the losses from environmental pollution of the project is RMB 3,735,700 Yuan/a, while the monetized benefit from oxygen production and carbon dioxide fixation of road afforestation is RMB 74,300 Yuan/a.
The construction of the 3rd Ring Road project plays an important role in improving the traffic condition of Nantaidao Island, promoting the development and construction of Nantaidao Island and enhancing the comprehensive traffic capacity of city roads in Fuzhou. Meantime, it brings enormous economic and social benefits. Compared with the losses from environmental pollution, its social benefit is still considerable.
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