Document of The World Bank
Public Disclosure Authorized Report No: ICR2100
IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-46930)
ON A
Public Disclosure Authorized LOAN
IN THE AMOUNT OF US$ 40.39 MILLION
TO THE
GOVERNMENT OF KAZAKHSTAN
FOR THE
NURA RIVER CLEAN-UP PROJECT
Public Disclosure Authorized
June 27, 2013
Sustainable Development Department Kazakhstan Country Unit Europe and Central Asia Region
Public Disclosure Authorized
CURRENCY EQUIVALENTS (Exchange Rate Effective May 13, 2013)
Currency Unit = Tenge 1.00 Tenge = US$ 0.00662 US$ 1.00 = 150.97 Tenge
FISCAL YEAR January 1 – December 31
ABBREVIATIONS AND ACRONYMS
1 Gram (g)= 1000 milligram(mg); 1 mg = 1000 microgram (µg); 1 (µg) = 1000 nanogram (ng)
CAS Country Assistance Strategy CWR Committee for Water Resources EA Environmental Assessment EMP Environmental Management Plan FM Financial Management FMCA Financial Management Capacity Assessment FMR Financial Monitoring Report ha hectare ICR Implementation Completion Report LA Loan Agreement m3 cubic meters MoA Ministry of Agriculture MEP Ministry of Environmental Protection MoF Ministry of Finance MPC Maximum Permissible Concentration NEAP National Environmental Action Plan NPV Net Present Value PAD Project Appraisal Document PCG Public Consultative Group PDO Project Development Objective PMU Project Management Unit QEA Quality of Entry Assessment QSA Quality of Supervision Assessment SOE Statement of Expenditures TC Technical Coordinator of the PMU
Vice President: Philippe H. Le Houerou Country Director: Saroj Kumar Jha Sector Manager: Kulsum Ahmed Project Team Leader: Katelijn van den Berg ICR Team Leader: Craig Meisner ICR Author: Roohi Abdullah
KAZAKHSTAN Nura River Clean-Up Project
CONTENTS
Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph
1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 6 3. Assessment of Outcomes ...... 14 4. Assessment of Risk to Development Outcome ...... 20 5. Assessment of Bank and Borrower Performance ...... 21 6. Lessons Learned ...... 23 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 24 Annex 1. Project Costs and Financing ...... 25 Annex 2. Outputs by Component ...... 26 Annex 3. Economic and Financial Analysis ...... 39 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 41 Annex 5. Beneficiary Survey Results ...... 43 Annex 6. Stakeholder Workshop Report and Results ...... 44 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ...... 45 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ...... 61 Annex 9. List of Supporting Documents ...... 62 Annex 10. Mercury Soil Monitoring – Before and After…...………………………...63 MAP
A. Basic Information Nura River Clean-Up Country: Kazakhstan Project Name: Project Project ID: P059803 L/C/TF Number(s): IBRD-46930 ICR Date: 06/24/2013 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: SIL Borrower: KAZAKHSTAN, MOF Original Total USD 40.39M Disbursed Amount: USD 40.39M Commitment: Revised Amount: USD 40.39M Environmental Category: A Implementing Agencies: Committee for Water Resources Cofinanciers and Other External Partners: Republic of Kazakhstan
B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 11/02/1999 Effectiveness: 06/14/2004 06/14/2004 09/08/2009 Appraisal: 11/11/2002 Restructuring(s): 06/28/2010 Approval: 05/08/2003 Mid-term Review: 06/30/2009 11/06/2009 Closing: 09/30/2009 06/30/2011
C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance:
C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No Satisfactory at any time (Yes/No): (QEA): Problem Project at any Quality of No Moderately Satisfactory time (Yes/No): Supervision (QSA): DO rating before Moderately
Closing/Inactive status: Satisfactory
D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 1 1 General agriculture, fishing and forestry sector 17 17 Irrigation and drainage 30 30 Petrochemicals and fertilizers 36 36 Solid waste management 16 16
Theme Code (as % of total Bank financing) Environmental policies and institutions 14 14 Other human development 28 28 Pollution management and environmental health 29 29 Water resource management 29 29
E. Bank Staff Positions At ICR At Approval Vice President: Philippe H. Le Houerou Johannes F. Linn Country Director: Saroj Kumar Jha Dennis N. de Tray Sector Manager: Kulsum Ahmed Laura Tuck Project Team Leader: Katelijn Van den Berg Piotr Krzyzanowski ICR Team Leader: Craig M. Meisner ICR Primary Author: Roohi Abdullah
F. Results Framework Analysis
Project Development Objectives (from Project Appraisal Document) The development objective of the project is to improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in area adjacent to the
Nura River, providing a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users, and restoring flow control in the river for flood management and ecological purposes.
Revised Project Development Objectives (as approved by original approving authority) N/A
(a) PDO Indicator(s)
Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Dropped Indicator 1: Increased reliance on local water resources by the users in Indicator 1 : the Nura basin. Value quantitative or not defined not defined - - Qualitative) Date achieved 05/08/2003 09/30/2009 07/24/2007 12/30/2012 Indicator was proposed in the PAD but without baseline and target values. Comments Indicator was revised in 2007 to indicators 2 and 3 below, which focus on (incl. % removal of mercury pollution from Nura River bank, riverbed, and flood plains achievement) and surface water quality. Revised Indicator 2: Removal of mercury pollution of Nura River and flood Indicator 2 : plains (from Samarkand reservoir dam to 40 km downstream) of designated polluted areas. Removal of mercury Removal of polluted soil to mercury polluted international soil to international Mercury levels in soil and accepted safe accepted safe levels Value sediments range from 50- levels for upper soils 2.1 quantitative or 1,500 mg/kg, based on n/a for upper soil mg/kg for garden Qualitative) detailed pollution layers: - 2.1 use and 10 mg/kg sampling and mapping. mg/kg for other use of for garden use land. Remote areas - 10 mg/kg for were cleaned to 50 other use of mg/kg. land Date achieved 07/24/2007 09/30/2009 07/24/2007 12/30/2012 Achievement: The removal of mercury pollution was completed per July 31, Comments 2011. All soil after clean-up confirmed accepted safe levels for upper soils 2.1 (incl. % mg/kg for garden use and and 10 and 50 mg/kg for other and remote use of land. achievement) Air targets also met. Revised Indicator 3: Indicator 3 : Nura River water quality downstream of Intumak Reservoir suitable for drinking water preparations with regard to mercury content Value Concentrations (Q2-2007) EC The annual n/a quantitative or of total mercury Framework monitoring program
Qualitative) according to the 19 Water executed by established gauging Directive Kazhidromet shows stations in indicates that for 2012 that all Nura river range between Mercury levels monitoring points 0.0 and 1.1 with an should be 0.07 are below EC average 0.25 (micro micro Framework Water gram/liter). gram/liter Directive of 270 (= 70 ng/liter) ng/liter (70 ng/liter plus the plus background background concentration of concentrations 200 ng/liter) for inland waters Date achieved 07/24/2007 09/30/2009 07/24/2007 12/30/2012 Comments The end target has been achieved. The concentration of total mercury in the (incl. % surface water is below the EC target of 270 ng/liter as well as the Kazakhstan achievement) Maximum Allowable Concentration (for drinking water) of 500 ug/liter. Indicator 4 : Dropped Indicator 4: Increased summer time flows to Kurgaldzhino wetlands. Value 298 mln. m3 (2001 quantitative or not defined Assessment) Qualitative) Date achieved 05/08/2003 09/30/2009 Comments This indicator was proposed in the PAD/LA but since detailed engineering (incl. % assessment was not done at that stage, target values were not confirmed; It was achievement) revised in 2007 to the Indicator 5 as below. Revised Indicator 5: Increase in reservoir volume and regulate flow downstream Indicator 5 : and to Korgaldzino wetlands In accordance with project (Manual Development for Increase Reservoir capacity Intumak reservoir) reservoir increased to 108.9 CWR will initiate capacity to million m3 and the a development of 108.9 million rehabilitation of Current volume is 56 the Complex m3 and Value Intumak dam and million m3 and there are Water Resources repaired quantitative or construction of no means to control Use Scheme for capacity to Qualitative) spillway repaired spillway flow Nura River and control flow capacity to control Tengiz- and apply flow flow and apply flow Kurgaldzhino regime regime downstream wetlands. The downstream of of the dam. main priority will the dam. be ecological needs for wetlands Date achieved 07/24/2007 09/30/2009 07/24/2007 12/30/2012 Reservoir designed capacity increased to 108.9 million m3, and operational Comments capacity to 120 million m3. As a result 253 million m3 would be available (incl. % annually in a constant supply to the Korgaldzino wetlands and summer time flow achievement) increased to 63 mln m3. Indicator 6 : Dropped Indicator 6: Availability of Nura water to meet the additional demand
for the city of Astana. Value quantitative or not defined not defined Qualitative) Date achieved 05/08/2003 09/30/2009 Indicator was proposed in the PAD, but without baseline/target values. Dropped Comments in 2007 revision due to focus on improvement Nura River surface water. (incl. % However, water is available to meet Astana's water demands due to clean-up and achievement) restoration of canal. Revised: Removal of mercury pollution at designated polluted locations at Indicator 7 : Karbide Factory site and adjacent territories Demolition of the former Karbide Demolition of Factory and former Karbide removal of Factory and mercury removal of mercury Mercury levels in soil of polluted soil polluted soil around Karbide Factory range Value around to the factory to from 10 to more than quantitative or n/a international internationally 1,500 mg/kg , based on Qualitative) accepted safe accepted safe levels detailed pollution levels for upper soil layers sampling and mapping for upper soil 2.1 mg/kg for layers - 2.1 garden use and 10 mg/kg for mg/kg for other garden use - use. 10 mg/kg for other use Date achieved 07/24/2007 09/30/2009 07/24/2007 12/30/2012 Comments Achievement: Target was met as of June 6, 2010. All nine (9) structures on the (incl. % Karbide Factory site dismantled and transferred to the landfill. Contaminated soil achievement) excavated and backfilled with clean soil on sites in line with target values. Indicator 8 : Dropped: Availability of additional land area for productive use 6,231 hectares for grazing Value 2.5 hectares for quantitative or not defined not defined agriculture Qualitative) 73.5 hectares for industrial use Date achieved 05/08/2003 09/30/2009 12/30/2012 This indicator was proposed in the PAD, but was dropped in the 2007 revision as Comments it was captured by indicator 2 and 7 above. However, as a result of mercury (incl. % clean-up the project did achieve the availability of additional land area as achievement) specified above. Indicator 9 : New: Safe dam structure and village protection dams Protection The protection dam Value Dam structure for village dam structure structures were quantitative or near Aktobe not safe for not defined rehabilitate to rehabilitated to Qualitative) spring floods provide a provide safety for
safety for the the Aktobe village Aktobe village during the spring during the floods spring floods. Date achieved 07/24/2007 09/30/2009 07/24/2007 12/30/2012 Comments Achievement: Target was met by June 30, 2010. A 5.7 km long flood-control (incl. % protective dam near Amangeldy / Aktobe settlements was completed benefitted achievement) approximately 1,000 people.
(b) Intermediate Outcome Indicator(s)
Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years New: Construction of hazardous waste landfill for polluted soil and sediment Indicator 1 : disposal from designated project sites based on pollution sampling and mapping. All civil works completed and All civil works landfill completed and Value operational to landfill operational (quantitative Landfill not existing. receive to receive mercury or Qualitative) mercury polluted soil and polluted soil sediments and sediments Date achieved 07/24/2007 07/24/2007 12/30/2012 Achievement: First hazardous waste landfill meeting international standards in Comments Kazakhstan has been completed and the facility was operational since November (incl. % 2008 and closed after the disposal of all contaminated materials (2,000,000 tons achievement) were disposed). Indicator 2 : New: Demolition of Karbide Factory Value Old polluted Karbide All buildings All buildings safely (quantitative Factory present with not defined safely demolished. or Qualitative) metallic mercury onsite demolished. Date achieved 07/24/2007 09/30/2009 07/24/2007 12/30/2012 Achievement: All nine building structures of Karbide Factory property have been Comments dismantled, transferred to landfill, contaminated soil excavated (2m-5m depth), (incl. % site backfilled with clay and topsoil, leveled and revegetated. Target met achievement) November 28, 2011.
G. Ratings of Project Performance in ISRs
Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 06/12/2003 Satisfactory Satisfactory 0.00 2 10/30/2003 Satisfactory Satisfactory 0.00 3 02/23/2004 Satisfactory Satisfactory 0.00
4 07/16/2004 Satisfactory Satisfactory 0.40 5 11/30/2004 Satisfactory Satisfactory 1.20 6 06/14/2005 Satisfactory Satisfactory 1.20 7 07/28/2005 Satisfactory Satisfactory 1.20 8 04/10/2006 Satisfactory Satisfactory 1.20 9 05/31/2006 Satisfactory Satisfactory 1.20 10 11/21/2006 Moderately Satisfactory Moderately Satisfactory 1.20 11 07/24/2007 Moderately Satisfactory Moderately Satisfactory 7.03 12 06/05/2008 Moderately Satisfactory Moderately Satisfactory 15.04 13 06/04/2009 Satisfactory Satisfactory 26.56 14 12/05/2009 Satisfactory Satisfactory 32.85 15 06/16/2010 Moderately Satisfactory Moderately Satisfactory 36.26 16 02/09/2011 Moderately Satisfactory Moderately Satisfactory 39.79
H. Restructuring (if any)
ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions A further twelve-month extension of the Project closing date from June 30, 2010 until 06/28/2010 MS MS 37.00 June 30, 2011 was necessary to ensure supervision of completion of all Bank-financed Project activities.
I. Disbursement Profile
1. Project Context, Development Objectives and Design
1.1 Context at Appraisal Upon independence in 1991, the Republic of Kazakhstan inherited a legacy of environmental damages caused by many years of output-focused development, with little regard for economic viability or environmental impact. At the time of project preparation, the Government of Kazakhstan was facing a number of challenges with respect to remediation of environmental degradation, cost-effective supply of potable water to the population, and ongoing protection of environmental resources. Some of the key issues facing the Government were: (i) Environmental Degradation: Nura river basin, data confirmed 3,000 tons of mercury remained in the top soil of the flood plain, river bed, and banks and on the ground of the now defunct industrial plant at the time of appraisal. These environmental hazards, unless remediated, were to act as a constraint on economic development; (ii) High Cost of Water Supply: The Government inherited a costly and elaborate system for water supply from the Soviet times and was responsible for providing water to the population and also irrigation water for agricultural schemes that subsequently proved to be uneconomical; (iii) Sustainability of Water Supply: a large part of the country where significant economic activity was happening was arid, and dependence on ground water was not feasible, while surface water schemes were costly and technically complex. Therefore the Government was looking for sustainable alternative sources of water supply for current and future needs at low costs; (iv) Lack of Effective Integrated Water Resource Management. Integrated planning and management of water resources and water supply systems received limited attention, with past approaches to meet the growing demand dominated by technical solutions without any regard for integrated planning or cost- effectiveness; (v) Inadequate Legal Framework for Basin Management. Kazakhstan’s 1993 water code needed to be updated to provide an overall framework for the regulation of domestic, industrial, and agricultural water use in compliance with environmental regulations; (vi) Effectiveness of Pollution Control Measures. Though legislation existed, many issues hindered its effective implementation.
The Nura River in the northeastern part of Kazakhstan served for many years as a receptacle for a brew of untreated industrial wastes. Of particular concern, the Karbide factory in Temirtau, Karaganda District, discharged large quantities of mercury into the river for about 25 years. Mercury is a very toxic, mobile, persistent, and bioaccumulative pollutant. Discharges ceased when the factory closed in 1997, but various surveys of the factory site, river channel and floodplains conducted by international and Kazakh experts suggested that large quantities of mercury remained in the environment.
The Intumak Dam and Reservoir, approximately 80 km downstream from Temirtau, was built in the early 1980’s mainly for irrigation purposes. However, the regulating gates and spillway of the dam were not completed and flow control was never achieved; as a result, filling the reservoir during the flood season to less than three-fourths of its design capacity. Rehabilitating the dam would offer significant benefits in terms of downstream flood prevention and dry-season supply of water to downstream users, including Kugaldzino wetlands, an internationally-recognized nature reserve with significant biodiversity, as approximately 80% of the annual flow in the river occurs over a two-month period in the spring.
Within this context, the 2001-2004 Country Assistance Strategy (approved on January 16, 2001) included lending to: (i) support the most vulnerable, through improvement in the delivery of municipal and industrial water supply and sanitation; and (ii) protect the environment by addressing environmental degradation. The Bank's strategy concentrated on addressing industrial pollution in the Northeastern industrial area, promoting integrated planning of water resources and addressing the security of water supply and access to clean water for vulnerable population.
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The project was to address the main sector issues of Kazakhstan in relation to the Nura River Basin in the following manner: (i) remediating environmental degradation through mercury clean-up; (ii) ensuring effective management of the landfill site where contaminated soil was contained; (iii) flow and downstream flood management; (iv) enhancing capacity for integrated water resource management of the Nura River by improving the regulatory framework, water resource management, and building monitoring capacity; and (v) ensuring availability of sustainable and cost-effective water supply. It was necessary to take action to resolve pollution of the Nura river, especially since mercury accumulation in the river and reservoir sediments, severely impeded the reservoir to serve as a reliable water source (for consumption and irrigation). The key problem was the leaching of Hg-compounds from sediments especially in a dysfunctional reservoir where water is stagnant for long periods of time which increases the risk of methyl mercury formation 1 and the subsequent contamination of river water downstream. If not addressed, the issue could have taken a turn for the worst, proving to be extremely difficult and costly to treat contaminated water to drinking and irrigation water standards.
In essence, this was an environmental clean-up project, which required substantial international expertise in risk assessment, engineering, and impact assessment, as well as operations, and monitoring and evaluation. Bank involvement was regarded as critical, since it would: (i) introduce international best practice into the design and implementation of environmental remediation and pollution management, water management, regulatory frameworks, and stakeholder involvement; (ii) ensure proper technical standards not only for remediation but also for operation and maintenance; and (iii) strengthen implementation capacity of relevant government institutions.
1.2 Original Project Development Objectives (PDO) and Key Indicators The Project Development Objective (PDO), as noted in the Loan Agreement (Schedule 2, p.12) was to:“(a) improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River; (b) provide a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users; and (c) restore flow control in the river for flood management and ecological purposes.”
According to the Project Appraisal Document (p.2) the PDO was stated differently than in the LA formulation: “to improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River, providing a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users, and restoring flow control in the river for flood management and ecological purposes.” The Implementation Completion Report adopts the LA formulation of the PDO as it is legally binding.
The mercury clean-up as well as the rehabilitation of the reservoir, which provides flow control downstream and functions as a pollution trap of mercury contaminated reservoir sediments, serve as the means for the reservoir to be part of a reliable, safe and cost-effective drinking water and irrigation scheme. The existing problem of leaching of mercury-compounds from sediments, especially in a reservoir where water is stagnant for long periods of time, and the subsequent contamination of river water makes it difficult and costly to treat to drinking water standards at the consumers’ water supply
1 Methylmercury is formed from inorganic mercury by the action of anaerobic organisms that live in aquatic systems including lakes, rivers, wetlands, sediments, soils and the open ocean. This methylation process converts inorganic mercury to methylmercury in the natural environment because it is not readily eliminated from organisms it is biomagnified in aquatic food chains from bacteria, to plankton to herbivorous fish and to predator fish. Acute methylmercury poisoning occurred at Grassy Narrows in Ontario, Canada and an acute methylmercury poisoning tragedy occurred in Minamata, Japan following release of methylmercury into Minamata Bay and its tributaries from a similar type of factory as in the case in Kazakhstan.
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intake points. Cleaning the mercury pollution and providing flow control in the river improves as a result the welfare of the people in the Nura River Basin.
This project was conceived as an environmental clean-up and integrated water resource management of the Nura River and the PAD design and the indicators are linked to such clean-up and flow control rather than a more standard drinking water supply/treatment project and there were no indicators defined directly linked to cost-effectiveness. However, as stated above, as a result of the clean-up and flow control, the water is available and pollution removal at source is a much more cost-effective mechanism.
PDO Indicators. These were: (i) increased reliance on local water resources by the users in the Nura basin; (ii) availability of additional land area for productive use; (iii) increased summer time flows to Kurgaldzhino wetlands; and (iv) availability of Nura water to meet the additional demand for the city of Astana.2
1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The Project Development Objectives were not revised, but the key indicators were revised and realigned in July 2007 based on the request of Bank’s management - as most original indicators did not have quantitative baseline data or target values. This made it difficult to monitor implementation progress and PDO achievements. Most importantly, due to the nature of clean-up operations, establishing baselines and target values requires considerable investment in detailed design assessments which could be realistically done during implementation rather than prior to appraisal. Under the project these assessments were completed in 2007, allowing a revisit to the indicators. However, no formal restructuring of the Loan Agreement and its Supplemental Letter was undertaken due to the lengthy countersignature procedures (and Parliamentary ratification) in Kazakhstan, as a result of which the restructuring would not become effective prior to the closing date of the project. The revised indicators being used for the assessment of project achievements are as follows:
PDO Indicators. These were: (i) removal of mercury concentrations at designated polluted locations at the Karbide Factory site and adjacent territories; (ii) removal of mercury pollution of the Nura River and flood plains of designated polluted areas; (iii) Nura River water quality downstream of the Intumak Reservoir suitable for drinking water preparations with regard to mercury content; (iv) increase in reservoir volume and regulate flow downstream and to the Kurgaldzhino wetlands; and (v) safe dam structure and village protection dams.
Intermediate Outcome Indicators. These were: (i) construction of hazardous waste landfill for polluted soil and sediment disposal from designated project sites based on pollution sampling and mapping; and (ii) demolition of the Karbide factory.
1.4 Main Beneficiaries The project was conceived to benefit: (i) the residents of Temirtau City by increasing their ecological safety as a result of the containment of mercury pollution from the AO Karbide Factory; (ii) rural residents of the Nura River basin whose health was at risk for using the Nura River as a direct drinking water source, for fishing, and crop irrigation; (iii) the residents of Astana City (estimated at 375,000 at
2 One set of indicators were proposed in the PAD, which was followed by another iteration as an outcome of negotiations. The projects were still in the investigation phase, and it was only in 2007 that the project was ready to qualify baselines and target values based on detailed design assessments; it was at this time that the indicators were revisited and realigned as shown in the cover datasheet.
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appraisal) by providing them with a second source of water from the Nura River, that was less expensive than existing arrangements based on the Ishim River and the Irtysh-Karaganda Canal; (iv) the residents of Temirtau and Karaganda (estimated at 600,000 at appraisal), who rely on water from a combination of the Irtysh-Karaganda Canal, groundwater sources and the Nura River, by making available a less expensive and regular source of water as a result of the clean-up from Nura River; (v) recreational visitors, including fishermen and hunters, along the Nura River banks and the buffer zone of the Kurgaldzhino wetlands protected area; and (iv) those members of the community who value biodiversity protection by improving Nura River water quality, which would reduce biodiversity degradation in the Kurgaldzhino wetlands. These target beneficiaries were not revised throughout project implementation.
1.5 Original Components The PDOs, under the Specific Investment Lending (SIL), were to be achieved through four main components.
Component 1: Nura Valley Mercury Clean-Up (appraisal amount US$44.08 million; actual US$58.77 million). This component would include: (i) construction of a secure landfill for proper containment of contaminated soil and materials; (ii) excavation of contaminated hotspots at the AO Karbide plant site at Temirtau (factory building, main drain, and adjacent waste disposal sites); and (iii) excavation of other highly contaminated areas including the Zhaur Swamp, and critical areas of mercury accumulation along the banks and floodplains of the Nura River, as well as the transport of materials to the landfill. The component would also finance the testing of polluted materials being delivered to the landfill, the operation of the landfill until all polluted materials were disposed, closure and vegetation of the landfill. The component was to also include the preparation of a long-term monitoring and maintenance program for the closed landfill (Confined Disposal Facility). Funding would also be provided for elaborate pollution mapping of contaminated areas, inspection and monitoring of landfill construction and soil- excavation processes by independent experts to ensure that selected contractors meet all technical and environmental standards and safeguards.
Component 2: Intumak Reservoir Rehabilitation (appraisal amount US$19.13 million; actual US$33.76 million). This component would finance the rehabilitation of the Intumak Reservoir, including reinforcement of the earth-fill dam and completion of the spillway and gates to allow the dam to operate as a mechanism for flow control at its original reservoir design level. This would allow for development and implementation of an integrated water resources management plan for Intumak and the upstream Samarkand and Sherubianur Dams and reservoirs. However, owing to uncertainty about the effect of raising the operational level at the Intumak Reservoir on mercury methylation, any disbursement for civil works related to this component were to be conditional on the review and agreement by the International Expert Advisory Group. Provisions were to be made in the cost estimate for this component to cover any cost of additional dredging works required, in the event that the results of the monitoring and assessment would indicate a risk of unacceptable levels of mercury methylation associated with increased operating levels; completion of the spillway and gates would be postponed until mercury deposits at the bottom of the reservoir could be removed and transferred to the landfill.
Component 3: Nura-Sarysu River Basin Authority Strengthening (appraisal amount US$1.68 million; actual US$1.67 million equivalent). This component was to finance technical assistance, training and equipment necessary to develop the institutional capacity of the Nura-Sarysu River Basin Authority in resource planning and management, as well as to strengthen the water quality monitoring network, water pollution control system, and regulatory framework (gauging stations in the river as well as laboratory mercury measurement equipment). Supplementary assistance from the Japanese government would provide (with the participation of Japanese experts from the Minamata Institute) technical support in the design and implementation of a program to monitor and assess mercury pollution in the Intumak
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reservoir. Long term support for the development and implementation of comprehensive water quality monitoring program to be provided address the risks associated with occasional recontamination of the river due to residual mercury depositions and/or periodic high flood levels. This component would also fund the participation of the International Expert Advisory Group as well as the development of a mathematical model to estimate the accumulation of bottom sediments in the reservoir and estimation of the sediment flow at the reservoir’s bottom; study tours to review different international dam structures and operational regimes and the operational manual for the Intumak dam and reservoir.
Component 4: Project Management and Monitoring (appraisal amount US$2.53 million equivalent; actual US$3.20 million). This component would cover a number of activities related to project management and monitoring, including the incremental operating costs and technical assistance to PMU, including: (i) training in areas such as procurement, disbursement, and project accounting; (ii) auditing of project accounts; (iii) assistance in the implementation of the environmental management plan, especially with regard to public awareness; and (iv) specialist assistance in areas such as hydrology, social sciences, and environmental management.
1.6 Revised Components Project components were implemented as envisaged. However the institutional organization of Component 3 on the Nura-Sarysu River Basin Authority, under the Committee of Water Resources, and tasked with planning and management function (Dam, reservoir, and spillway), changed during implementation due to Government restructuring and to better align institutional responsibilities. The responsibilities were split between the Nura-Sarysu River Basin Inspection (planning and control) and Karaganda Vodghoz (operation, and management of the Dam, reservoir, and spillway), both of which continue to reside under the Committee of Water Resources (CWR), the implementing agency under the Project. Moreover, the water quality monitoring network of 19 gauging stations on the Nura River was procured under the project and its assets are on the balance sheet of the CWR. An agreement has been made with KazHydromet situated under the Ministry of Environment Protection during early stages of project implementation for mercury monitoring. KazHydromet was tasked with different levels of monitoring (water, ambient and soil) annually and had the unique qualifications and ability to perform specialized work on mercury monitoring under Component 3.
1.7 Other significant changes Projects Costs: The cost of the project was initially estimated at US$67.83 million. At completion project costs were US$ 97.80 million (144% of the original project costs). Such large variations were due to the increased extent of polluted territories and level of discovered pollution in Nura River flood plains during the detailed design and pre-construction excavation phase. More than 140,000 samples were taken to establish the baseline pollution situation. Costs were further increased due to the delays in state approvals for the design, the requirement to update the feasibility study (and the accompanying state approvals) resulting in the delay in construction works. However, the Government financed the escalated costs as well as the remaining costs of works pending at loan closing. Borrower Contribution: At appraisal the Borrower planned to contribute US$27.4 million; whereas the actual contribution was US$57.41 million equivalent or 209% of planned. It should be noted that this large increase in Borrowers’ contribution was due to the reasons explained above under the project costs section, and was fully funded through the Borrower’s own funds after the loan closing in June 2011. Project Effectiveness: It was necessary to extend project effectiveness one time (to June 17, 2004 as the later date), due to a delay in ratifying the Loan Agreement (LA) by Kazakhstan’s Parliament. Consequently, the LA became effective on June 14, 2003 almost 15 months after project approval.
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Project Extension: The Loan closing date was extended twice due to significant delays in project implementation. Initially, the extension was processed as a legal amendment for nine months, establishing June 30, 2010 as the closing date. The second extension was processed as a level-two restructuring and was granted for 12 months, establishing June 30, 2011 as the closing date. Design Changes: An important change occurred to the design of the Intumak Dam. The original design of the dam was to have rubber gates, but gate materials were changed to steel after construction started as it was deemed more suitable to the local climate with long and harsh winters and other conditions. A small hydropower station was also added to the design in the bottom outlet. Based on risk management and costs considerations, the remote areas were cleaned to a standard of 50 mg/kg. Lastly, a road was added on top of the Dam crest of the Intumak Reservoir to substantially shorten the travel distance between nearby villages on both sites of the reservoir. Loan Closing/Project Completion Date: The loan closed on June 30, 2011; however, project completion is assessed as of December 30, 2012. While further extension was discussed with the implementing agency to streamline the Loan Closing Date with the actual completion date of the works, the Ministry of Finance did not want to request such extension in order to save the associated Bank fees. The Implementation Completion Report (ICR) was delayed to comprehensively cover the full impact of the project which was pending at loan closing due to the nature of mercury clean-up, remediation of river bed sedimentation required a settling time before surface water monitoring could appropriately reflect results, and for completion of works on rehabilitation of Intumak Reservoir. Funding Allocation: Funding allocations for the components were changed during negotiations allowing Government of Kazakhstan to finance 100 percent of all technical assistance and incremental operating costs, and the IBRD loan to be used only for works and goods under Components 1, 2 and 3. As the World Bank does not track counterpart financing in its SAP system, this caused the project to show a lack of disbursement for a long time.
2. Key Factors Affecting Implementation and Outcomes
2.1 Project Preparation, Design and Quality at Entry Project Design: The project was to assist Kazakhstan to address water resource management issues in the Nura River basin comprehensively, including mercury pollution management (remediation, containment, and safe disposal), water quality monitoring, flood prevention, securing alternative water sources for future population needs of the basin, and ensuring seasonal water flow to the ecologically important wetlands. Alternative approaches for project design were duly considered, including: (i) doing nothing; (ii) focusing only on the AO Karbide plant site; (iii) focusing only on clean-up; (iv) alternative technical options for remediation; and (vi) landfill siting. From a technical perspective, the project design was relatively straightforward and solid piece of environmental remediation, and the methodology adopted was standard for clean-up operations. A detailed assessment of the level of mercury contamination, monitoring, and detail design was planned to be undertaken during implementation as it was intensive, timely and costly. Moreover, the project design showed due foresight in view of the technical uncertainties especially related to the construction of spillways and gates, and increasing the operating capacity of the Intumak Reservoir. Additional monitoring and expert analysis was programmed, and disbursement of dam civil works was contingent on a panel of experts’ reports.3 The project design did not however plan any beneficiary assessment, to ascertain the project’s welfare impacts. Lessons learnt from previous sector projects were adequately reflected in project design, mainly:
3 Also endorsed by QAG/QAE6 (2003): “The choice of a low-tech approach for clean-up is convincing, and the decision to delay completion of the dam pending research on potential aggravation of mercury contamination in the Intumak Reservoir is also prudent.”
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(i) rigorous economic and environmental criteria should be applied in project planning and design -the project hired international consultants to undertake thorough economic, environmental and social analyses, vetted their conclusions with broad consultations and workshops, and included local consultants in all activities. Moreover, international experts were engaged to provide guidance on technical issues such as mercury methylation processes, toxicology, and dam safety issues; (ii) project scope and design should take into account the difficulties in coordinating among key government agencies – the project made extensive use of the Inter-Ministerial Committee to ensure coordination; (iii) competent and efficient national management staff is necessary and should be recruited prior to project effectiveness to ensure the viability and sustainability of the project – the PMU was adequately staffed before effectiveness; ( iv) timely provision of counterpart funding is imperative - as the loan was ratified under the Government budget, counterpart resources were not a constraint and budget processes were followed; (v) provision of timely and adequate technical assistance is essential; and procurement, financial management and construction quality control need to be given proper emphasis in project implementation - competent training and technical assistance was budgeted and provided for project implementation, procurement, monitoring and supervision; and (vi) local institutions need to be fully involved in project preparation and design - the project integrated local counterparts during project preparation and design, so all stakeholders were included in decision-making meetings of the Inter-Ministerial Committee. 22. Risks: Risks were generally and adequately identified and mitigation measures were provided, including: (i) local and regional water authorities and water users were unwilling to cooperate in the operation of the river basin management system; (ii) local industries were unwilling or financially incapable of complying with environmental standards; (iii) lack of proper long-term operation and monitoring of the landfill to avoid leakage and quickly identify the need for remedial actions; (iv) cooperation between the regional environmental and water management agencies was not forthcoming; (v) monitoring unit not financed for long-term; (vi) mercury disaster; (vii) timely availability of counterpart funding during project implementation; (viii) government capacity and commitment to finance ongoing operating and maintenance costs of the Basin Management System; (ix) mercury clean-up operation proves to be technically and/or financially infeasible; and (x) a lack of adequate implementation capacity within the PMU results in poor project management and/or extensive implementation delays. However, the risk of substantial delay on engineering and State approvals was not included in the critical risk analysis of the PAD, and though understood, were understated.4 Associated risks that may possibly cause project delays were also not fully mitigated, related to: government budget system operation in Kazakhstan, contractor pending payments, increased costs based on detailed site investigations and design, and the risks of delay in construction works due to the size of the clean-up operation required (e.g. 2,000,000 tons of polluted materials were excavated and disposed in the landfill). Quality at Entry (QEA): The project underwent a Quality at Entry Assessment (QEA6) by the Quality Assurance Group (QAG) in 2003.5 The Panel considered the overall quality of project preparation to be Satisfactory, and Bank contribution as a solid piece of environmental remediation. The Panel was of the view that: “benefits from improved urban water supply were highly hypothetical since the project will not address them directly. That said, the remediation of the AO Karbide site at Temirtau and nearby stretches of flood plain heavily contaminated by mercury is well justified.” The Panel acknowledged the strong aspects of the project to be: (i) adequate allocations of the project costs (more than 10%) for monitoring and evaluation of the clean-up and communication with the public; (ii) first project in Kazakhstan to
4 The QEA6 and QSA7 Panels also confirmed this conclusion: “There are some inherent technical risks in clean-up of a heavily polluted site (in the US, remediation in many "Superfund" sites has proven difficult and costly to achieve).” The panel considered that the preparation team has generally understood the risks but tended to understate these in the PAD. 5 The QEA6/QAG point scale comprised: (a) strategic relevance and approach (2), (b) technical, financial, and economic aspects (2), (c) poverty and social aspects (2), (d) environmental aspects (2), (e) fiduciary aspects (2), (f) policy and institutional aspects (1), (g) implementation arrangement (2), (h) risk assessment (2), and (i) Bank input and processes (2). This was evaluated on a 6- point scale from “Highly Satisfactory” to “Highly Unsatisfactory.”
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publicly disclose monitoring data; (iii) establishing useful linkage between the Borrower and international best practice, proactive in anticipating potential risks of clean-up (AO Karbide factory) and plans to complete Intumak Dam (appurtenant structures), and been effective in developing mitigation measures; and (iv) handling of the environmental assessment was exemplary. Handling of poverty aspects was noted as a main weakness by the Panel, to be improved in implementation, and add value to the overall Bank’s contribution. Panel suggestions to the team were: careful monitoring of the Environmental Management Plan (EMP), given the risks inherent in the clean-up of sites contaminated with mercury, including inadvertent exposure of clean-up workers, nearby residents, and improper operation of the secure landfill; and enhancing the already developed plans for raising awareness among local groups with greater attention to poverty-environment linkages.
2.2 Implementation Supervision: Project implementation, from effectiveness, spanned 7 years till loan closing and 8 years till project completion, with regular (average of two to three missions annually, except for 2007 and 2008 when one supervision mission was fielded; however field missions continued after loan closure until project completion). The task team leader (TTL) was HQ based, but country-level staff were responsible for dealing with day to day issues; and with only three TTL transitions over the life of the project. Admittedly, Aide Memoires were not sufficiently detailed and tended to focus on key implementation issues, and as a result the quality of project documentation suffered. The project successfully dealt with several implementation hurdles, for example:
(i) Project effectiveness delayed by 15 months. This created some issues early in implementation support as the Borrower and PIUs had to carry out substantial preparatory work to prepare and issue tender documents for priority contracts for mercury clean-up activities. The design contracts were signed in 2004;
(ii) Early in implementation, as a result of delays and the fact that the loan agreement only financed goods and civil works, while the detailed designs (for the construction of the hazardous waste disposal facility, the clean-up program for the Karbide factory and adjacent territories and the Nura River clean-up as well as the Intumak rehabilitation design) were financed by the government, the project appeared to have a very low disbursement ratio (2003 to the end of 2006 – disbursement stood at US$1.2 million);
(iii) Early in 2006, to reduce costs of civil works, 3 civil works contracts (landfill construction; clean-up of the Karbide Factory site and adjacent territory; and the Nura River clean-up works) were merged into one contract under component 1 for which bidding failed and only one bid was received at a price double the cost estimate; so the Borrower decided to split the contract into two civil works contracts6;
(iv) Findings from the detailed design, pollution mapping and contaminant investigations, lead to an increased total project cost estimate (from the original US$63.24 million to US$97.42 million). Government processes were followed to approve the cost increase of the detailed design and updated feasibility study by all applicable state agencies in Kazakhstan and was subsequently approved by the Republican Budget Commission in order to include the additional costs under the project and financed them from increase government counterpart financing (withdrawal percentages were maintained and paid the last part of the completion of works 100% from government counterpart financing); and
6 (1) landfill construction and clean-up of Karbide Factory site and adjacent territories; and (2) Nura River Clean-up works and rebid again, which was successful; this allowed for the civil works contracts to be signed and saving US$ 60 million compared to the results of the previous failed tender.
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(v) The first civil works contract (development of a landfill and clean-up of the Karbide factory site and surrounding territories) was signed in January 2007. The landfill was completed, operational and able to receive contaminated materials by November 2008. The second civil works contract (mercury clean-up of river beds, river banks, floodplains, and other adjacent contaminated areas) was signed in December 2007, and the third civil works contract (rehabilitation of the Intumak Dam) was signed in April 2008. The project suffered significant delays (almost 2 years) due to rebidding of the contract and thus IP ratings may have been overly optimistic in the ISRs.
It should be acknowledged that legacy pollution remediation is a risky business intrinsically exposed to high levels of uncertainty, and even with the most advanced knowledge and sophisticated technology - inherent delays can be triggered because of the unknown and there is always the case of “learning by doing.”7 Mid-term Review (MTR): The MTR mission took place October 25–November 6, 2009, when actual MTR was planned for May 2006, was extended to October 2008, and then again to June 2009. The Bank delayed the MTR due to the delays in preparation and state approval of the detail designs and the start of the construction works. It was by late 2008 and early 2009 when project implementation was picking up and on the ground that results and implementation progress could be sufficiently monitored. The Bank noted that (i) the first million tons of polluted soil had been disposed in the landfill; (ii) disbursements stood at US$ 30.7 million or 76% of the total funds from the Loan and that the Loan Closing Date had been extended until June 30, 2010. There was no need to restructure components under the project, the main conclusions and key issues raised by the mission were: (i) Procurement Plan required update with a current staffing plan for Bank approval; (ii) Environmental compliance shortcomings were noted the implementation of works under one contract8 supported by complaints received from people living in the vicinity of the works. The PIU agreed and subsequently prepared an action plan to improve the Contractor’s environmental compliance approved by the Construction Supervision Engineer and acceptable to the World Bank; (iii) With regard to the complaints received from Chkalovo village,9 a complaint facility was established under the Construction Supervisor’s office, and an NGO was hired to raise public awareness of the objectives, planning and implementation progress of the project as well as to share the environmental monitoring data; (iv) the need for an immediate decision on the approval of contract addenda to reimburse the construction supervision consultant for the incurred costs from payment of taxes. The issue of taxes was, in the end, resolved through the tax office issuing a tax credit to the construction supervision engineering company; and (v) the Bank would hire a social research firm to strengthen winter supervision to review possible loss of crops and proposed crop compensation.10
7 As contamination involves physicochemical processes governed by complex, multifactor conditions that can lead to extremely irregular distributions, this creates a high probability for unforeseen situations that are uncovered only during remediation works. No amount of up-front information gathering by drilling, sampling and analysis will lead to certainty. There is an inherent riskiness in pollution management projects, and this is reflected in the challenges in design and execution. 8 B2 Contract shortcomings were related to a lack of wheel washing of trucks carrying polluted soil, driving through the Chkalovo village, insufficient demarcation of the working sites and clean-up areas close to the vicinity of the village and no clear delineation between black and working zones. 9 In addition, the villagers wanted more information about the project, the environmental monitoring results of air, dust, surface and underground water, the need to have drinking water well in the village, health facilities and a bus route. The elements which were part of the project were addressed in the action plan which was submitted by the PMU and signed by the contractor and construction supervisor on November 2, 2009. A design for a water-well was provided by the project and financed by the municipality as the provision of drinking water wells was not eligible under loan activities. In addition, a complaint facility was established at the Construction Supervisor’s Office and environmental bulletins were prepared with monitoring results and progress of works. 10 The crop compensation review showed that adequate crop compensation was proposed.
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Quality of Supervision Assessment (QSA): The project underwent Quality of Supervision Assessments (QSA) by the Quality Assurance Group (QAG) in 2006 (QSA7).11 The QAG Panel assessed the project’s overall supervisory quality as Moderately Satisfactory. The Panel’s key concerns were: (a) that the ISR ratings were too generous given the significant delays and issues in project implementation and Management guidance had been uneven; (b) though the project had been effective in a limited set of activities carried out so far (3% of the loan), component 1 bid was expected by October 2006, almost two years behind schedule and component 3 was substantially delayed; and (c) limited progress was seen on water monitoring, specialist assistance and awareness raising in the affected population on mercury contamination; and the MTR (which was delayed and to take place after reception of bids) would offer an opportunity to revise implementation details and take into consideration an earlier suggestion from QAG (QEA6) reviews; which had not been implemented, so far. The Panel’s key lesson was: “When projects are appraised without detailed engineering and sufficient consultation with stakeholders...detailed engineering and technical specifications are likely to change the cost estimates for the project” and “…water monitoring and awareness raising of the affected population by toxic contamination… should be initiated earlier to improve long-term sustainability.” The rejoinder from the region confirmed that sampling and monitoring had been executed as part of the detail design and pre-construction excavation works - which could not be completed during preparation due to the reasons explained above. Despite the above problems and changes, project implementation progressed well with some implementation delays while others were truly exogenous (outside the scope of the project’s influence). The PIU, in conjunction with the Bank, took adequate, timely and proactive actions during implementation in technically complex project which in itself was an exercise of “learning by doing.” As a result the project produced satisfactory outcomes.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E Design: The M&E design depended upon the use of annual implementation progress reports to monitor and evaluate progress of the Results Framework. Several indicators did not have a quantitative baseline or target values, which made it difficult to monitor implementation progress and PDO achievements. In addition, project indicators did not comprehensively cover the scope of the project. The project’s monitoring indicators were revised and realigned in 2007 when baseline data became available from the detail design and extensive pollution mapping, sampling and laboratory analysis (with new mercury monitoring equipment provided under the project). Staffing to undertake project level M&E at the PIU was not defined and neither was the scope of monitoring activities at appraisal. M&E Implementation: As the project was a mercury clean-up operation, pollution mapping was integral, so the project undertook extensive mapping of all sites by reputable international firms, identifying all “hot-spots” for mercury remediation, removal or dismantling. More than 6,000 hectares and 140,000 samples were investigated in grid a of 20x20 meters near villages, 25x25 meters near the river, and 50x50 meters in remote areas, with newly acquired mercury measurement laboratory equipment to establish the baseline pollution situation for the Nura River, Karbide Factory, Zahur Swamp and adjacent areas. In line with international standards, a clean-up criterion of 10 mg/kg was adopted for river bed sediments, river banks, Zhaur swamp, and floodplains and for more remote areas 50 mg/kg. For house gardens growing vegetables and fruits, the clean-up criterion of 2.1 mg/kg was applied. The MPC (Maximal Permissible Concentration) of mercury content in air of 300ng/m3, and MPC for drinking water of 500 ng/l and irrigation water of 300 ng/liter were adopted. Moreover, a quarterly water monitoring program (testing and collecting hydrological, hydro-biological and hydro-chemical data on a monthly basis) also began in 2007 after all water monitoring stations (17 hydro-posts) were installed along the Nura River, and detailed
11 The QSA7/QAG point scale comprised: (a) focus on development effectiveness (3), (b) supervision of fiduciary/safeguard aspects (2), (c) adequacy of supervision inputs and processes (3), and (d) candor and quality of project performance ratings (3). This was evaluated on a 6-point scale from “Highly Satisfactory” to “Highly Unsatisfactory.”
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training of laboratory personnel on mercury analysis was completed. The operational budget (staff and infrastructure) for monitoring (air, water, soil, and fish) was provided to Kazhydromet by the Ministry of Environment Protection since 2007 and a bulletin is published annually for dissemination.12 The outcome indicators of the clean-up operation were measured by a very detailed success control sampling and investigation program using the same sampling grid as prior to the clean-up operations; which provided maps of all the cleaned areas and verified by the international supervising engineer (see Annex 10). As the contractor had a contractual obligation to continue clean-up operations until the target value was reached, detailed success control sampling and investigation was part of its contract as well as the contract of the supervising engineer13. The outcome of the surface water quality monitoring program by Kazhydromet was a series of quarterly and annual reports on the ecological state of the Nura River. Finalization of the rehabilitation of the Intumak Reservoir was reported in annual international supervisor reports. However, the PIU did not monitor the PDO progress nor did the Bank in its supervision mission Aide Memoires; the progress was captured as part of the ISRs. When the indicator revisions took place in 2007, the mission Aide Memoire did not report it, and a review and update of the project indicators was also not undertaken at the Mid Term Review. It was also not documented if the Borrower was formally informed about the changes to the results framework of the project (PDO indicators), though the indicators were integrated in the contracts as outlined above. At project completion, a comprehensive stocktaking of the PDO indicators was undertaken. M&E Utilization: On the one hand, the M&E was clearly integral to the cleanup exercise (soil, air and water for mercury contamination) and was more than effectively employed for project execution (through international consultants for design and implementation); on the other hand, project level indicators (PDOS) were not effectively employed to monitor implementation progress. This was due to: (i) the Bank not updating the indicators as part of Aide Memoires; and (ii) the Borrower not updating it as part of its annual reports by the contractor (as the Borrower did not submit the reports). In sum, limited attention was paid to project indicator monitoring. On the contrary, perhaps the most successful aspects of reporting was Kazhydromet’s annual publication: “Informational Bulletin on Environmental Situation of Nura River Basin,” on water, air, soil, and fish life monitoring. Hard copies were publically available and electronically through their website.
2.4 Safeguard and Fiduciary Compliance Among the Bank’s Operational Policies (OP) for Safeguards, three policies were triggered. These were (i) Environmental Assessment (OP 4.01), (ii) Safety of Dams (OP 4.37), and (iii) International Waters (OP 7.50).
(a) Safeguards Environment: The Project triggered OP 4.01 and was classified as Category A (Full Assessment) at appraisal since it could cause significant environmental impacts affecting an area broader than the sites or
12 This includes analyses of mercury content in fish tissue at four sampling stations along the River and reservoirs and communication to the public regarding recommended fish consumption. 13 A results story was produced about the clean-up operation which can be viewed below, a second one on completion of Intumak Reservoir Rehabilitation is scheduled to be released July 2013: http://intranet.worldbank.org/WBSITE/INTRANET/INTCOUNTRIES/INTECA/INTKAZAKHSTAN/0,,contentMDK:23184428 ~menuPK:361858~pagePK:145897~piPK:147187~theSitePK:361774,00.html
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facilities subject to remediation. A comprehensive Environmental Impact Assessment (EIA) was conducted by a team of international and local consultants, independent of the project proponent (CWR) and the World Bank. A final EIA report was submitted in October 2002, and was made available through the World Bank’s Infoshop in May and again in July 2002. The EIA analyses included, among other things, an in-depth evaluation of three alternative landfill sites, concluding with a strong recommendation in favor of Opan Landfill site option, in view of floods and other environmental risks impacting the other two sites. The EIA also provided an Environmental Management Plan (EMP), which specified the mitigation measures applicable to different stages of mercury clean-up. The EMP covered site management and institutional control, health and safety protection for clean-up workers and nearby residents, contingency planning and emergency response, waste removal from buildings, soil removal and transport, and landfill operation. 14 During project implementation, some non-compliance with EMP was reported from time to time, including the lack of mercury testing of workers and bypassing of trucks past the transfer station, which was constructed to separate the white zones and black zones in transporting contaminated materials; absence of fencing of working areas; and the conduct and wearing of protective clothing by workers. 15 These shortcomings were treated as most serious, diligently handled with immediate corrective actions during implementation, as agreed by the Bank, CWR, and PIU to help improve the environmental performance of the contractor. Environmental safeguard monitoring compliance, if undertaken during supervision regularly, was not always reported in the mission record (Aide Memoires). Dam Safety: Before appraisal, a dam safety assessment at the Intumak Dam was undertaken by international experts, which confirmed the need for priority rehabilitation measures including completion of the spillway and rehabilitation of the main dam (crest and bottom outlet) to allow the reservoir to retain water, particularly during the flood season. The Intumak Reservoir could also act as a sink for residual contaminants coming from the clean-up of upstream river stretches and the industrial and municipal effluents being discharged. Moreover, the integrated water resource focus of the project favored the rehabilitation and up-grading of the reservoir, dam and spillway, so it could play a multipurpose role. A sedimentation management strategy was developed and a year-long monitoring program of mercury levels and the observed methyl mercerization rates in the Intumak reservoir was launched. The findings showed that 5% of all measured sediment samples had a mercury content of higher than 2.1 mg/kg and that the organic mercury formation (methyl mercury) in the sediments was very low, up to a maximum of 0.1% of the already quite low total mercury content. Water analysis showed low mercury concentrations but bio-accumulation in fish, particularly in predator species. Therefore, an accumulation of additional sediments would cover the existing, more polluted, sediments and the rehabilitation design for the bottom outlet would provide retention of the actual sediment layer allowing a controlled drawdown of water and avoiding the discharge of suspended sediments as much as possible. Following the one-year monitoring program of the mercury levels in water, sediments and fish in the reservoir and the evaluation by the International Panel of Experts, it was concluded that the dredging of the bottom and riverbank sediments in the reservoir was not required. Legal Covenant: A legal covenant was embedded in the LA (Schedule 1, 3b) to mitigate uncertain risks associated with mercury methylation in the Intumak Reservoir, making disbursement for civil works under the Component 2 contingent on establishment of an International Panel of Experts (IPOE) and its approval of the proposed work program for removal and management of sediments. A panel (established in 2007) consisting of three international experts (chemical analyst, microbiologist, toxicologist) agreed that the most important risk of the reservoir was associated with fish intake, and recommended this risk to
14 Also endorsed by QAG/QAE6 (2003): “Handling of the environmental assessment was exemplary.” 15 In 2009, during the MTR, the Bank mission found serious shortcomings in the compliance to environment, health and safety requirement in the implementation of works under the B2 contract and that these findings were supported by complaints the Bank received from people living in the vicinity of the works, in particular in the village of Chkalovo.
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be regulated through communication to the public regarding the recommended fish consumption based on the measured mercury levels. International Waters: The Bank’s policy on International Waterways (OP 7.50) was triggered as under the project as the Nura River is connected to Ishim River (which ends in Russia) by a canal near Astana. Compliance with this Bank’s policy was considered as Satisfactory since Kazakhstan met its requirement in terms of notifying the riparian country, and requesting comments. No comments were received, and in absence of objections the project went ahead. Social: At appraisal, Involuntary Resettlement (OP 4.12) was not trigged. However, in 2010, one farmer complained that her land was affected by project’s civil works (construction of temporary channel used for the diversion of main drain channel during its clean-up). The affected land area was estimated to be 1.74 hectares out of a total 11.8 hectares of her land. The team consulted the Regional Safeguards Coordinator and it was confirmed that adequate compensation for the temporary crop loss was paid to the farmer, and restoration of land was planned. However, this issue was not fully resolved as the farmer demanded more compensation instead of restoration works and did not allow the contractor to enter the land to do the restoration works. At completion, the matter rests with the Government of Kazakhstan to resolve. (b) Fiduciary Compliance Procurement: Overall rating of procurement during the project cycle is Satisfactory. At appraisal, a procurement plan for project implementation for all components was developed and prior-reviewed. The overall project risk for procurement was rated Medium to High, considering the lack of Bank procurement experience in the PMU and the prevalent procurement environment in Kazakhstan. It was decided that in order to minimize overall project cost and increase procurement and implementation efficiency - to tender all three civil works contract packages under component 1 into one single contract package. However, this tendering process was not successful as only one contractor submitted a bid with a significantly higher price than the estimate (more than twice the estimate). The implementing agency proposed, with agreement of the Bank, to reject this bid and to go for a re-bidding process by splitting the combined package into two. This re-bidding process was successful, resulting in US$ 60 million cost savings and was in line with estimated costs, however this did cost time (2005 when design packages were completed, 2007 when bids were awarded).Procurement staffing at the PMU was adequate but did encounter some staff turnover (two changes of the procurement staff) during implementation. Financial Management: Overall, Financial Management (FM) for the project components is rated Moderately Satisfactory. This includes project accounting and reporting arrangements, staffing, internal control procedures, planning and budgeting, counterpart funding, and financial manual and external audits. The project was generally in compliance with the financial management requirements of the Loan Agreement, the Interim Financial Reports (IFRs) as well as audit reports. The IFRs were prepared in format and content acceptable to the Bank. At the beginning of project implementation, problems of delayed audit report submission was experienced mainly due to an inadequate budget allocation for audit purposes by the Ministry of Finance; which made the project unattractive to audit firms acceptable to the World Bank. However, submitted reports were unqualified and no major internal control issues were highlighted, including the final one for FY2010.. The CWR/PMU maintained a manual accounting system in Excel, after the system used during preparation became obsolete in 2005. This was mainly due to insufficient technical support by the developer and frequent changes in legislation for governmental agencies in Kazakhstan, as well as lack of allocation for the software update. The FM supervision mission recommended an upgrade but this was never implemented. Nevertheless, the manual accounting system and system back-up was adequate. FM staff turn-over at PMU was high (3 changes over an 8 year period). The FM assessment of counterpart funding was generally considered Satisfactory, as the funds were made available in full and in a timely manner; with the exception of the taxation reimbursement to the firm
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responsible for construction supervision who encountered delays due to government approval - but which eventually got resolved.
2.5 Post-completion Operation/Next Phase
All post completion institutional arrangements were either in place or planned for at completion. The KazHydromet under the Ministry of Environment Protection, strengthened with the provision of analytical equipment and training under the project, will continue to be responsible, and are budgeted by the State (since 2007), to monitor water quality of the Nura River. They will continue to test and collect hydrological, hydro-biological, and hydro-chemical data on a monthly basis from the 19 hydro posts established along the Nura River and reservoirs. The findings will continue to be published annually in “Informational Bulletin on the Environmental Situation of the Nura River,” and also disseminated through the Ministry of Environment Protection website. The Karaganda branch of the CWR (Karaganda Vodghoz) is responsible and budgeted to operate and manage the completed Intumak Dam, Reservoir, and Spillway based on training, operation manuals and guidelines prepared in 2005. The energy generated onsite would be sufficient for the dam operation, as well as supply to secondary users is possible (villages or businesses in the vicinity). Nura-Sarysu River Basin Inspection is responsible and budgeted for planning and inspection of the Dam, Reservoir and Spillway, however, water allocation plans for the Intumak Dam and Reservoir were pending at project completion.
The hazardous waste landfill, constructed under the project, is completed, closed and re-vegetated. The landfill is owned by the Karaganda branch of CWR (Karaganda Vodghoz), and was planned and budgeted to be responsible for guarding, maintaining, and monitoring of the landfill after its closure. The landfill has been designed for minimal maintenance after its closure and a post-closure management and maintenance plan has been prepared. Land is still available in the landfill, which can also be used if required for future containment of hazardous waste. However, the final decision is pending on who will be the future operator of the landfill; responsible for the post-closure management and monitoring. This matter has already been brought to the attention of the Vice Minister at the Ministry of Environment Protection and should be resolved quickly.16 No direct follow up project has been planned, but the Bank is financing the remediation of industrial waste dumps in Ust-Kamenogorsk and preparing a project on POPs waste management in Kazakhstan.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation The project’s objective, design and implementation remain highly relevant to Kazakhstan’s development and environmental priorities. The project’s objectives remain consistent with the Bank’s Country Partnership Strategy (CPS) 2012-2017, and directly responds to two out of three broad areas of engagement mainly: strengthening governance and public services, and ensuring development is environmentally sustainable. Additionally, the project’s objectives also align with the Government’s National Environmental Action Plan (NEAP - 1998) which includes: de-mercurization to prevent loss of water source in the basins of Nura River; and National Development Plan (2007-2010) identifies mercury issues as a high priority. The project is also fully in line with the objectives of the recently approved Green Economy Concept (2013) – that aims to reduce industrial hazardous and toxic wastes.17 In addition,
16 This delayed decision was partly because the Government was debating whether to keep the landfill open for disposing of other hazardous materials or whether to close its operations after completing mercury clean-up under the project. In the end, all the stakeholders agreed to close the landfill. 17 Green Economy Concept for the Republic of Kazakhstan, Astana, May, 2013.
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the project places Kazakhstan in a good position regarding the new United Nations global, legally-binding treaty to address mercury – the Minamata Convention on Mercury (signed in Geneva after four years of negotiations on January 19, 2013).18 Therefore, the objective, design and implementation remain highly relevant to the country context, sector demands, and the results focus is clear.
3.2 Achievement of Project Development Objectives The PDO consists of three parts: (i) improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River; (ii) providing a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users; and (ii) restore flow control in the river for flood management and ecological purposes.
(i) improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River.– Moderately Satisfactory
The primary focus of the project was to clean up a large concentration of mercury that threatened the well-being of the local population both through: direct exposure and contamination of the water supply in the Nura River Basin. All works were fully completed and the direct exposure and contamination of the water supply from mercury has been removed successfully. Clearly, there are welfare gains achieved under the project as a result of clean-up activities both in terms of overall well-being and health but are not quantifiable for which reason the PDO achievement is rated as Moderately Satisfactory. Outputs: To achieve this objective, the focus was on the Karbide Factory Site Clean Up and adjacent territories, the Landfill Construction for safe disposal of mercury contaminated waste and the clean-up of the Nura River and its flood plains.
Karbide Factory Site Clean Up and adjacent territories - Dismantling of the Karbide factory was completed in 2008. This comprised of nine structures in total (including six buildings, a heating plant, sediment pond, etc.) in a 3.5 hectare area on the factory side and 70 hectares of adjacent territories. All wastes, sub-ground structures and contaminated soils (varying from 2m-5m) were transported to the landfill. The sedimentation ponds of the wastewater treatment plant were fully remediated. The site was backfilled with clean clay, compacted, leveled and filled with top soil of 70cm and was covered with green vegetation.
Landfill Construction - The construction of the hazardous waste landfill, meeting international standards, was completed and the facility has been operational since November 2008. The first hazardous waste landfill in Kazakhstan, with a capacity of 2 million tons covering an area of 160 hectares. - A total of 2,142,457 tons of contaminated materials was disposed in the landfill cell for hazardous waste classes I, II, III, and IV (273,548 tons in Cell A2.1 for I class waste,19 1,868,909 tons in Cells A1.1-A1.3 for II-IV class waste20), which were closed, and sealed.
Nura River Clean Up
18 The Minamata Convention on Mercury as the Global treaty is named after a city in Japan where serious health damage occurred as a result of mercury pollution in the mid-20th Century. These damages occurred due to the uncontrolled release of mercury in the bay from an Karbide Factory, the same type of factory which released the mercury in the Nura River in Temirtau in Kazakhstan (http://www.un.org/apps/news/story.asp?NewsID=43963&Cr=mercury&Cr1) 19 Class I waste is all waste with mercury contamination higher than 1,500 mg.kg. 20 Class II-IV waste is all waste with mercury contamination between 10 and 1,500 mg/kg.
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- A 30 km stretch of the Nura River, from the Samarkand reservoir to Rostovka village, was cleaned for mercury deposits, specifically 18km of Nura river bed, 9.2 km of bottom and banks, Zhaur Swamp, and cleaning the riverbed in Sadovoe village (500 m). - In total, 2 million m3 of polluted soil and river sediments were removed from the Nura River, its flood plains and the Karbide factory sites and its adjacent territories and were safely disposed. - Approximately 140,000 samples were undertaken and analyzed for mercury content in the pollution mapping over an area of 6,000 hectares. Outcomes: - Beneficiaries - Six (6) villages between Temirtau and the Intumak reservoir where mercury contamination was removed and contained directly from the river bed, river bank and the flood plains under the project (Molodetskoe, Tegizzhol, Samarka, Volkovskoe, Rostovka, Samarkand villages), a population of approximately 6,000 directly benefited from having availability of service quality water for household needs and agriculture. In addition, there were three villages in the Bukhar-Zhyrau district of Karaganda region, which also benefited from clean up works: Chkalovo, Sadovoe and Gagarinskoe with a population of 1,600, where water samples from the operation boreholes used for household water supply taken after the clean-up works showed that mercury concentrations were less than 500 ng/l (MPC for drinking water preparation). Flood protection works were executed in Gagarinskoe village, with a total population of 750 people benefiting from flood protection. In addition, the population of Temirtau, 170,000 people benefited from clean-up works on the Karbide Factory site and adjacent territories. - Welfare gains - Clearly, the welfare gains were achieved under the project but are not systematically quantifiable. Also not quantifiable, but significant, were the reduced risks associated from exposure to mercury and the accompanying environmental and health risks. - Soil clean-up for mercury - Completed for the Nura River, Karbide Factory, Zhaur Swamp, river beds, flood plains and adjacent areas completed, confirmed accepted safe levels for upper soils 2.1 mg/kg for garden use and 10 mg/kg for other uses of land (Annex 10). - Availability of agricultural and grazing land - Approximately 6,234 ha of land became available for agricultural and grazing purposes after the clean-up works were completed (see the economic analysis section). - Hazardous landfill - 71% (113 hectares) of the hazardous waste landfill is available for future activities. The landfill site also has the potential to operate commercially for revenue generation, but currently legislation to tax industries for hazardous waste are currently not in place in Kazakhstan. - Ambient mercury concentrations - Significant ambient mercury concentration emission reductions were recorded in and around the vicinity of the Karbide factory after clean-up. The air monitoring data confirms that prior to clean-up of the Karbide factory site the ambient mercury concentrations exceeded by far the permissible limit of 300 ng/m³ (ranging from over 6,000 to 140,000 ng/m³). By May 2009, on completion of clean-up activities, the MPC reading of ambient mercury concentration had fallen below 300ng/m3 (Details about the demolition and soil clean-up results are shown in Annex 2 and 9).
(ii) restore flow control in the river for flood management and ecological purposes.– Highly Satisfactory
At the time of ICR completion of the Intumak Dam, Reservoir, and Spillway, 95% of civil works had been completed which includeed the Dam, Spillway, Hydro power unit, transmission line, etc. Cosmetic civil works are pending, such as lighting, road asphalting, clearing the site, etc. The reservoir is already operational, with the newly available capacity, the spring floods of 2013 were retained in the reservoir, a constant supply of water is now available to the wetlands and the flow control as originally foreseen for the Nura River has been successfully restored as a result of the rehabilitation works and construction of the Spillway.
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Outputs: - Reservoir designed capacity increased by 95% from 56 million m3 to 108.9 million m3, and operationally tested to a capacity of 120 million m3 (114%). The achieved operational capacity of reservoir was at least 10% more that the target value of 108.9 million m3. - 118m length of spillway structure constructed with 11 operational gates, a cross bridge, an operation bridge, tower and a spillway with throughput capacity of 3000 m3/sec (once in 1,000-year flood event) was achieved. - Dam rehabilitation and repaired capacity allows for a controlled flow downstream to the wetlands and villages, where in the past the spring flood could not be kept in the reservoir and resulted in downstream flooding. - Upstream – a 5.7 km long flood-control protective dam near Amangeldy / Aktobe settlements was completed. Outcomes: - Flood management - downstream villages (approximately seven villages, and perhaps more smaller settlements) of the Intumak Dam will benefit from the reduction in the incidence of flooding and regulated surface water availability over the year due to flow control. In addition, up-stream villages (Amangeldy / Aktobe settlements) also benefitted. - Ecological purposes - As a result of spillway and flow control a regulated supply of 253 million m3 (based on constant supply of 8m3/second) would be available annually to the Korgaldzino wetlands. Moreover, an operational Intumak reservoir will also allow adapting the discharge in the lower Nura river section to the requirements of Korgalzhyn wetlands, if needed.
Spring Summer Autumn Winter Total (April- (June- (Sept- (Dec- May) Aug) Nov) Mar) Nura river – Romanovskoye village – BEFORE(million m3) 102 6.76 2.47 0.52 112 Nura river – Romanovskoye village – AFTER (million m3) 42.17 63.25 63.25 84.33 253 Source: Before – calculations based on Draft Detail Design Report for the Design of Intumak Reservoir Rehabilitation and Technical Re-equipment. April 2007. After – calculated by the ICR team based on: Constant discharge of 8 m³/s over the entire year can be provided up to a water recurrence probability of P=75%. In a very low water year the discharge will have to be reduced to approx. 5 m³/s
- Water allocation plans – were not completed, by project completion, but the strong institutional structure in the Ministry of Environment Protection and its affiliated institutions will ensure that these are undertaken. - Electricity generated - The hydro power unit in the Intumak Dam will also supply electricity to adjacent village Aktobe with a population of 764, through a power transmission line constructed under the project, in addition to meeting its own needs. - Employment - The reservoir and dam structure provided employment for 12-15 people and staffed 24- 7 in the administrative building. - Accrued health and other benefits – Although this benefit cannot be quantified, accrued health benefits to the communities downstream as a result of cleaner water (i.e. free of mercury), and reduction in the incidence of flooding cannot be refuted. - Recreation and fishing – A functional and guarded reservoir could encourage recreation and fishing while eliminating the injury risk of visitors. The potential of developing a fishing industry can also be explored in the future. The safe dam structure, controlled water regime and clearly defined water level fluctuations could also allow for the development of enhanced recreational facilities such as boat rental or restaurants for the population in the cities of Karaganda, Saran and Shachtinsk. - Beneficiaries – Approximately 7 villages (a.Samarka (968), Akmeshit (Zakharovka) (684), a.Kievka (5,956), Akhmet (Entuziast) (1,396), Shakhtersk (983), Romanovka, Korgalzhyn (1067)), with a total population of 11,054, downstream from Intumak, benefitted directly from the clean-up of the Nura
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River, flow control and flood management. In addtion, 2 villages (Amangeldy / Aktobe settlements) upstream, with an approximate population of 1,000, also directly benefitted.. (iii) provide a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users – Satisfactory Outputs: This objective was more of an outcome of the PDO, as a result of upstream mercury clean-up rehabilitation of the Dam, Reservoir, and construction of the Spillway resulting in a safe and secure alternative source of water supply to meet the growing needs of local water users. The evaluation of the “cost-effective” part is beyond the project’s scope. Outcomes: - Water availability downstream and to Astana – As a result of the reservoir’s retention potential of spring floods to be released throughout the year in controlled manner (i.e. a continuous discharge of 8m³/s over the entire year) – which ensures a constant water supply downstream. Moreover, the rehabilitated reservoir has an higher “pollution trap” efficiency which has further reduced mercury concentrations downstream of the reservoir; and increased dilution of wastewater which still enters the Nura River (the portion of wastewater in Nura River can reach up to 60% of the total water volume upstream of the Intumak reservoir and even as high as 80% in water-poor years). As a result, the wastewater portion downstream of the reservoir will be approximately 35% of the river flow. Besides this dilution effect, the reservoir will improve water quality during natural self-cleaning capacity and sedimentation processes. Finally, water to the City of Astana (785,000 people), can be made available from spring 2013 onwards as a second source through the Ishim channel. - Water quality - The water sampling and analysis program, established under the Project produces quarterly and annual ecological monitoring results which showed a steady decline in mercury levels in surface water after the completion of works. All surface water is now meeting the Maximum Allowable Concentrations standard for drinking water of 500 ng/l as well as the EC Framework Directive standard for mercury levels of 270 ng/liter (see Annex 2). - Irrigation - Irrigation water quality on the 600 km long river stretch downstream of Yntymak reservoir in addition to improving the well-being of the population in this area, would increase irrigated land from the current 3,500 hectares to 20,000 in 2020. - Beneficiaries – Approximately 9 villages upstream (population: 7,600), and 9 villages downstream (population: 12,054), directly benefitted from a safe and secure source of water supply to meet growing needs of local water users. The city of Terimtau (population: 170,000) also indirectly benefitted from the availability of additional clean water. In addition, Astana (785, 000 people), can also benefit from the availability of water downstream of the Intumak Reservoir, its utilization, however, depends on the water needs, if it meets the State water quality standards, and if the required volume is guaranteed for the entire year.
3.3 Efficiency Rating: Moderately Satisfactory
The economic analysis in the original PAD was based on the cost effectiveness of two issues: (i) the need to remove hazardous mercury deposits from the Karbide plant site and from the flood plains of the Nura River, and (ii) the need to provide a secure and safe drinking water supply to residents of Astana as well as communities adjacent to the river. In the ex-post analysis the cost-effectiveness of supplying water to the residents of Astana is not included since, although available, it is only a standby supply option. Flood protection benefits, biodiversity benefits for the Korgaldzino wetlands, health-risk benefits of mercury removal and hydropower benefits are positive, however were not quantified. A more detailed discussion on the inclusion of benefits is contained in Annex 3.
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Benefits included in the ex-post analysis are those associated with water availability for irrigation improved land values as a consequence of mercury removal. This allows the land to be used for more productive uses and hence increases its value. Clean-up of the territories resulted in the following amount of land being available for different purposes:
Upstream territories Hectares Land use availability Karbide factory side 3.5 hectares Industrial purpose Adjacent territories 70 hectares Industrial purpose
Downstream territories Chkalovo gardens 2.5 hectares Agricultural purpose River Banks and floodplains 100 hectares Grazing purposes Zhaur 28 hectares Grazing purposes Hectares investigated and founds 6,103 hectares Grazing purposes suitable for grazing purposes
Based on information from Karaganda land prices, average grazing land values are about USD360 per year. Soil sampling and analysis found that a total of 6,231 hectares became safely available for grazing yielding a total benefit of USD 2.24 million per year..
Approximately 2.5 hectares of land was also remediated to a level suitable for agricultural purposes. Improved agricultural performance can be expected based on increased yields of agricultural products, increased prices of commodities from more sustainable crop patterns with higher value crops, improved soil conditions due to improved irrigation, better quality of water and lower risks of desertification. Using a per hectare land benefit based on agricultural irrigation projects in Kazakhstan, USD 3,600 per hectare, adding this to the grazing benefits and reduce total benefits to 50% as additional investments would be required to realize the irrigation benefits, the total Economic Internal Rate of Return is 12%.
3.4 Justification of Overall Outcome Rating The Project was highly successful in achieving its project development objective of mercury clean-up of the Nura River and the adjacent areas and restoring flow control downstream through the rehabilitation of Dam, Reservoir and Spillway. It also lead to the welfare improvement of the adjacent population, ensuring the availability of a safe and secure alternative source of water for local water users and those further downstream to Astana. The clean-up also resulted in a more secure flood management regime for downstream users and ensured the sustainability and survival of Kurgaldzhino wetlands from a constant water flow. Overall the project benefitted almost 20,000 people directly and around 950,000 indirectly due to availability of mercury-free service quality water. The project did suffer from some delays and increased costs for reasons explained above, but charted a new path for a territory in Kazakhstan that has been subject to severe environmental pollution problems for decades. The project positively dealt with many unknowns and through a process of “learning by doing” resulted in full disbursement, and a successful completion.
Relevance of the objectives is rated Highly Satisfactory, and design is rated Satisfactory. Part one of the objective “improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River” is rated Moderately Satisfactory , Part two of the objective “providing a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users” is rated Satisfactory; and part three of the objective “restore flow control in the river
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for flood management and ecological purposes” is rated Highly Satisfactory. Overall, efficiency is rated as Moderately Satisfactory. As a result, the overall Project Outcome is rated as Satisfactory21.
Rating: Satisfactory
3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development
Inevitably welfare was improved through mercury removal to a level comparable to internationally determined (WHO) standards as safe for public health. Performance indicators were linked to the specified environmental and infrastructure interventions and not to the overall level of the population’s welfare. Thus although welfare gains can be argued to be positive, they were not the focus and were not quantified.
Investments in flood protection under Component 2 benefitted approximately 1,500 people from Aktobe Village (764 people) and Gagarinskoye Village (730 people). These are relatively poor villages, and the poor tends to be affected disproportionately affected when floods occur. So, the flood protection investments are expected to have a positive impact on the poor in these villages. From the total amount of beneficiaries under the project, as identified under section 3.2, half of them are females.
(b) Institutional Change/Strengthening The following institutional changes were a result of the project:(i) The Nura River clean-up is the first Government executed clean-up and realized construction and operation of a hazardous waste landfill outside of the industrial sector; (ii) a definitional update and application of international clean-up norms for soil remediation and hazardous waste land-filling, providing a practical application of ‘theoretical’ (Soviet) environmental soil quality standards; (iii) proper long-term environmental monitoring by a fully- equipped and trained Kazakhstan Laboratory. In addition, the project also provided: (i) detailed design for the first public hazardous waste landfill properly engineered according to international standards, finalized and approved by all respective Kazakhstan institutions and government agencies; (ii) clean-up norms have been defined and all governmental approvals for application of these international clean-up norms have been obtained. Institutions and persons involved in these approvals and consultations were: Ministry of Ecology, Sanitary Department of Ministry of Health, State Committee of Construction for technological review and approval of design, Municipality and Regional Government Authority (Oblast), NGO’s and local experts, Committee of Water Resources under the Ministry of Agriculture, Ministry of Economy and Kazhydromet (the laboratory). Kazhydromet received all equipment and all licenses related to the measurement of mercury, were trained to international standards along with a new monitoring program.
(c) Other Unintended Outcomes and Impacts (positive or negative) - The Government demonstrated its commitment through continual financial support even after costs rose in light of new information gained during implementation. This allowed the project to achieve, and even exceed, several of its primary objectives.
21 The last Implementation Status Report was rated as Moderately Satisfactory as not all works under the Project were completed at Loan Closure and indicators were not yet met and the remainder was to be finalized and financed by 100% Government co- financing. It is for this reason that the ICR was delayed until all works and results were completed with accompanying outcomes and results achieved. It is for that reason that there is a disconnect between the last ISR and the ICR rating.
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- The Committee of Water Resources and the Ministry of Agriculture demonstrated their commitment to engage the World Health Organization to examine mercury exposure and health effects in the burdened areas of Temirtau and Karaganda. Specimens were collected (urine, hair, blood, breast milk) which typically provide clinical effects of chronic elementary mercury burden, the results fortunately showed that it was unlikely that severe mercury intoxication is very frequent in the area.
3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops Not Applicable. A beneficiary survey was not conducted.
4. Assessment of Risk to Development Outcome At project completion, all infrastructure investments and clean-up activities were complete and the assets created were of good quality. The project ensured the sustainability of outcomes, including: (i) all assets created under the project are owned by the Committee of Water Resources (CWR), under the Ministry of Environment Protection (previously CWR was under the Ministry of Agriculture); (ii) Kazhydromet, under the Ministry of Environment Protection, with offices in Karaganda received recurrent state budget allocation since 2007; and has been nationally mandated the responsibility of water, soil, and air, monitoring; (iii) the responsibility of managing the Nura River, Intumak reservoir, spillway and the dam is spilt under two separate agencies: Nura-Sarysu River Basin Inspection and Karaganda Vodghoz, the former responsible for planning and control of water resources in the Nura River, and the latter responsible for the operation, management and implementation of the reservoir, dam and the spillway. The State budget is also available to these agencies for these tasks.
One remaining task at completion, however, is the handing over responsibility of the landfill remains pending, from the contractor to Karaganda Vodghoz. The budget is already available as well as an operations manual for its maintenance. This matter has already been brought to the attention of the Vice Minister at the Ministry of Environment Protection and should be resolved quickly. Therefore, the overall risk to the development outcome is rated Moderate.
Rating: Moderate
5. Assessment of Bank and Borrower Performance
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory The Bank’s performance during preparation is rated Moderately Satisfactory. The project adequately responded to sector and country demands with the objective to help Kazakhstan’s developmental and environmental priorities through the reduction of mercury contamination in the Nura River Basin area and rehabilitation of the Intumak Dam and Reservoir to improve downstream flow control. In addition, project activities targeted priority areas identified in the National Environmental Action Plan. The project was well-designed as a solid piece of environmental remediation, which also encompassed benefits from improved water supply through improved water quality, availability for irrigation, and flow control of the spring floods in the Nura River. While the PDO’s definition differed from PAD to LA it did not influence the design of the project. In instances where the project’s objectives were unclear among some project beneficiaries, this was corrected through a communications campaign. The results framework was appraised without the detailed engineering studies, sampling and pollution investigations and target values, as clean-up operations require a dense grid of sampling and lab analysis.
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Despite this lack of prior information – when the information became available – baseline indicators were established through the risk assessment; the target values were agreed based on international good practice22. The EIA, on the other hand, was complete and provided a pragmatic evaluation of alternatives and raised the right design and implementation issues, including potential health risks. The impacts of implementation delays on engineering, procurement implementation, and Government design approvals could have been better identified at appraisal. Likewise, the project would have benefitted from a beneficiary assessment. But overall, and technically speaking, the project was sound and activities were implemented as designed. (b) Quality of Supervision Rating: Moderately Satisfactory The Bank’s performance during implementation is rated Moderately Satisfactory. Project supervision was adequate during implementation, with the exception of two years when only one supervision mission was fielded (2007 and 2008). Supervision missions continued even after loan closing to provide technical advice to the implementing agency on completing the full project (the last part financed 100% by government). It is acknowledged that for an environmental clean-up project, supervision was challenged on many fronts, and the Bank responded proactively and was vigilant on project progression, such as taking the necessary steps to keep it on track through procurement, technical design, and effectiveness delays. In the early period of implementation, the ISR ratings were too generous and optimistic. The supervision documentation (ISRs, AMs) was rather succinct and brief focusing on the identification of strategic implementation issues rather than a detailed overview of all aspects of project implementation; as they were resolved on a real-time basis (e.g. phone calls, video conferences, etc) rather than only as part of missions. Almost all procurement packages were handled on a prior-review basis, financial management missions were undertaken separately; however the Aide Memoires also did not report on M&E. If countersignature procedures in Kazakhstan would have allowed for a restructuring to become effective prior to loan closing, the PDO and results indicators would have been formally restructured. However, the project successfully achieved its outcomes for each component and in the launch of a successful and sustainable monitoring program for the Nura River. (c) Justification of Rating for Overall Bank Performance The project was well-designed as an environmental clean-up operation. While there were some lapses during project implementation support, they were not significant enough to downgrade performance, as the technical thinking for the project evolved during implementation and the team managed them well. The project not only faced extensive technical challenges inherently linked with pollution legacy and a project of this scale - with 6,000 hectares of soil being investigated and 205 hectares physically cleaned - but also the inherent riskiness of pollution management projects and the associated challenges in design, execution, and associated costs. The Bank responded proactively to issues that arose during implementation and adapted to the unpredictable circumstances in Kazakhstan and inherent to clean-up operations. World Bank support to the Government of Kazakhstan in preparing and implementing the project is rated as Moderately Satisfactory largely due to the impossibility of restructuring. Most importantly, the project responded directly to the Borrower’s needs in a timely and responsive manner.
22 Due to the costs associated with the detail design and detailed environmental site investigations, as well as the need for the local laboratories to obtain modern lab equipment and training to be able to monitor mercury in addition to the need for the investigation program for the Nura river flood plains to be done immediately prior to excavation due to changes in the spread of contamination due to spring floods, the designs and full determination of extent of pollution could not be done during preparation.
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Rating: Moderately Satisfactory
5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory The Government strongly supported the project and its objectives aligned with the National Environmental Action Plan. This was demonstrated by the fact that the Government included this project in its public investment program of 2004. The Government was willing during negotiations to increase its share of overall financing and did so when the detailed sampling and investigations indicated the need for additional financing. At project completion, Government’s contribution to the project was almost twice (209%) the committed amount, a confirmed indicator of its unwavering commitment to the environmental clean-up of the Nura River, its adjacent areas, and the rehabilitation of the Intumak Reservoir. The fifteen months’ initial delay in reaching project effectiveness, as the parliament ratification process of the Loan Agreement had to follow due course of the Kazakhstan legislation, did not majorly impact implementation as the procurement process was happening in parallel. The Borrower continued to support the Bank’s action in dealing with delays during design and implementation and through issues encountered during implementation: regarding treatment of taxes in the contract of the supervising engineer (as the changed legislation required foreign companies to establish registered companies in Kazakhstan and thereby changing their taxation status). Also on the need to update the Feasibility Study and the accompanying State approvals caused some delays, however these issues took time and were resolved during implementation, and additional counterpart financing was made available. On this basis the Government performance is rated Moderately Satisfactory.
(b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory The Committee of Water Resources (CWR) under the Ministry of Agriculture, as the main implementing agency, remained committed to the project and provided satisfactory support and day-to-day project implementation in resolving issues with intra-governmental procedures and supervision of contractors and consultants. There were a few issues - with several changes of CWR’s Chairman and Deputy Chairman CWR which led to delays in signing of procurement and payment documents. Staff turn-over also remained high especially for procurement and financial management. The Implementing Agency/PMU did not take a lead in submitting progress reports, which was adjusted in lieu of the contractor’s annual progress report. Project level M&E of PDO indicators to monitor project progress was not undertaken by the PMU during implementation. Management challenges of the Implementing Agency were also brought to stage when the contractor had to take care and continue security and maintenance of the mercury confined disposal facility after the expiration of the 7-month defect guarantee period.
Counterbalancing this shortfall, the PMU and Implementing Agency were effective in their role to obtain State approvals for updated feasibility studies required to obtain additional budget; needed for the supervision of contractors and to ensure on-target completion of activities for clean-up operations and the rehabilitation of Intumak Reservoir. The PMU should also be commended for their ability in attracting WHO for a Minamata disease investigation in the Nura River basin and Temirtau region.
(c) Justification of Rating for Overall Borrower Performance The overall Borrower performance is rated Moderately Satisfactory based on the Government’s commitment to achieve the Project Completion and Project Development’s Objective, their increased financial contribution, but also taking into account delays in project implementation. Their support remained strong at both the central and local levels of government even though the Committee of Water
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Resources changed Ministries (from Agriculture to Environment) and two independent local agencies were involved (Kazhydromet and Karganda Vodghoz). The project was successfully able to complete its objectives of mercury clean-up of the Nura River, its adjacent areas, construction of the country’s first international hazardous waste landfill and the rehabilitation of Intumak Dam and Reservoir. Rating: Moderately Satisfactory
6. Lessons Learned
Beneficiary assessment should be programmed in some form or manner in an environment clean-up project. The project did not have much planned to assess the beneficiary impact of clean-up activities . Ideally, this should be done at the design stage or during implementation, to better understand the project’s impact on beneficiaries but also on other qualitative aspects related to welfare, poverty reduction, etc. The beneficiary assessment can be a valuable tool in understanding the social gains made under the project.
In pollution clean-up projects, adaptation to local conditions and inherent uncertainties regarding the extent of pollution is largely a process of “learning by doing.” Pollution remediation is a risky business based on its legacy, and exposed intrinsically to a high level of uncertainty, even with the most advanced knowledge and sophisticated technology. When contamination occurs, the involved physicochemical processes tends to be governed by complex, multi-factorial conditions that can lead to extremely irregular pollution distributions and create a high probability for unforeseen situations that are uncovered only during remediation works. And this all has implications on costs. No amount of up-front information gathering by drilling, sampling and analysis will lead to 100 percent certainty and thus there is a need to adapt to these circumstances during implementation.
The project design should factor in the risks associated with recurrent institutional changes and state approval processes in Kazakhstan leading to delays. The project team should be cognizant of the country systems in place and assess whether they pose any apparent risks. Then appropriate mitigation measures should be in place to minimize the impacts of potential delays.
Upfront agreement with counterparts about operation and maintenance for the post closure landfill should be planned. Post completion arrangements of all assets created, especially the landfill, should be discussed and agreed with the Borrower before project completion or loan closing.
Project level M&E should be given due attention during project preparation and implementation. Due to the nature of a clean-up operations, project level indicators need to be given due attention for changes and monitoring during implementation. Since monitoring is complex it should thus be given greater attention and weight during implementation. It is also important to have the client assume these responsibilities to foster a target- and results-driven mindset within the country.
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies Comments will be incorporated after being received.
(b) Cofinanciers
Not applicable.
(c) Other partners and stakeholders
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Not applicable.
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Annex 1. Project Costs and Financing
(a) Project Cost by Component (in USD Million equivalent) Appraisal Actual/Latest Percentage of Components Estimate (USD Estimate (USD Appraisal millions)1 millions)
Component 1: Mercury Clean-up 37.11 58.77 158% Sub-component 1a: Landfill Construction 9.15 Sub-component 1b: Remediation of 34.002 121% 18.94 Karbide Site Sub-component 1c: River Clean-up 9.02 24.77 275% Component 2: Intumak Dam 16.10 33.76 210% Rehabilitation Component 3: Institutional Strengthening 1.41 1.67 118% Component 4: Project Management 2.13 3.20 150% Total Baseline Cost 56.75 97.40 172% Physical Contingencies 5.38 - - Price Contingencies 5.29 - - Total Project Costs 67.42 97.40 Front-end fee PPF 0.00 0.00 - Front-end fee IBRD 0.40 0.40 - Total Financing Required 67.82 97.80 144%
1 This value is different from what has been reported in the under Section 1.5, as this break-up reports contingencies separately. 2 The civil works contract for the construction of the landfill was combined with the demolition of the Karbide Factory
(b) Financing Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Cofinancing Appraisal (USD millions) (USD millions) Borrower 27.43 57.41 209% International Bank for Reconstruction 40.39 40.39 100% and Development Total 67.82 97.80
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Annex 2. Outputs by Component
Component 1: Nura Valley Mercury Clean-Up. This component included comprised of: (i) construction of a secure landfill for proper containment of contaminated soil and materials; (ii) excavation of contaminated hotspots at the AO Karbide plant site at Temirtau (factory building, main drain, and adjacent waste disposal sites); and (iii) excavation of other highly contaminated areas including the Zhaur Swamp, and critical areas of mercury accumulation along the banks and floodplains of the Nura River, as well as the transport of the materials to the landfill. The component also financed the initial operation of the landfill, and the establishment of a long-term monitoring and maintenance program for the landfill. Additionally, funding was also provided for inspection and monitoring of the landfill construction and soil-excavation process by independent experts to ensure that the selected contractors meet all technical and environmental standards and safeguards.
1a - Landfill Construction The Landfill Component involved the development and operation of a hazardous waste landfill, the first one for Kazakhastan, on the Apan site. This site was pre-selected by the Government of Kazakhstan and World Bank during the preparation/financing phase of the project. It is located on a block of state land situated south of the city of Temirtau, approximately 4.0km south of and 2.0km west of the Astana- Almaty Highway. This is bounded in its north east corner by a land tract leased to Asmat-Karmet for use as an above ground land disposal facility. It is bounded on the south by a rural road running west from the Astana-Almaty to the rural settlement of Saratovka and on the east by agricultural land (grain and grazing) along an all weather secondary road running south from the Astana-Almaty Highway to the rural settlement of Saratovka. The specific area allocated for landfill investigation covers 308.68ha and within this an area a 162ha has been selected for development and detailed design work. The site itself was not in use except for low grade pasture although other adjacent areas used for more intensive grazing and grain production.
This Landfill Design was prepared by COWI A/S (the International Consultant) in partial fulfillment of an assignment contracted for by the Committee of Water Resources of the Ministry of Agriculture of the Republic of Kazakhstan (CWR).23 The physical scope of the landfill consisted of and completed included: i) a heavy duty access road entering the site from the east and the south by a rural road running west from the Astana-Almaty Highway/ Saratovka secondary road; ii) gate/reception/weigh scale/waiting area; iii) landfill operational support infrastructure (offices, staff accommodation, maintenance facilities, utilities, water capture treatment facilities, interior roads and security fencing); and iii) the active landfill cells. The landfill consists of two types of cells, the Class I cell for highest mercury concentration of 100 – 1500 mg/kg designed with double layers of the High Density Polyethylene (HDPE) liner and a drainage network. Another type of cell was constructed with a single layer of the HDPE liner for lower concentration of mercury. As of September 2012, the landfill operations have been completed (including all of the above) and the landfill has been closed and vegetated.
Pictures of the construction and re-vegetated landfill can be seen below:
Outputs
23 The International Consultant’s assignment covered the design, acquisition of relevant design approvals, development of tender documents, and provision of procurement technical support services necessary to contract the works required for upstream clean up and landfill components of the Nura River Cleanup Project
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- All works under this component were satisfactorily completed. A Hazardous Waste landfill of 728,700 square meters (160 hectares) was constructed in line with international standards in Opan, just outside of Temirtau City. - The construction of the hazardous waste landfill with capacity 2 million tons on an area of 160 ha fully complete and operational since November 2008. - The first hazardous waste landfill in Kazakhstan. The landfill has been designed and built in accordance with the international standards and with special attention for robustness and limited need for maintenance and monitoring after closure of the cell. - A 7.3 km of road also constructed to the landfill site for private access from the main road. - From November 2008 until end of July 2011, a total of 2,142,457 tons of contaminated materials was disposed in the landfill cell for hazardous waste classes I, II, III, and IV (273,548 tons in Cell A2.1 for Class I waste, 24 1,868,909 tons in Cells A1.1-A1.3 for Class II-IV waste). 25 Closure of Cells A1.1-1.3 commenced in June 2011 and closure of Cell 2.1 commenced in August 2011. Closure of all Landfill cells was completed in October 2011. - 113 hectares or 71% of the hazardous landfill site is still available for future containment of hazardous waste contamination. The project used only 47 hectares or 29% of the total 160 hectares. - The landfill could be operated commercially, however currently legislation is not in place in Kazakhstan to tax industries for hazardous waste disposal. - At completion, the operational arrangement of the landfill are pending, the landfill has been handed over to Karaganda Vodghoz, which has still not accepted. Currently the site is being managed by the contractors and is fully secured with operational management plans and budget already in place.
Landfill – Under construction Landfill – under construction
2a- AO Karbide Site Clean Up
Historically, the mercury contamination of the Nura River and the western parts of the city of Temirtau originated from the AO Karbide factory and specifically the plant area devoted to the manufacturing of
24 Class I waste is all waste with mercury contamination higher than 1,500 mg.kg. 25 Class II-IV waste is all waste with mercury contamination between 10 and 1,500 mg/kg.
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synthetic rubber using a process that involved the hydration of acetylene in the presence of mercury based catalyst. The release of mercury in various forms to the Nura River occurred primarily via wastewater discharges through treatment lagoons and subsequently a combined municipal/industrial wastewater treatment plant (WWTP). Wastewater from the factory had a substantial content of mercury, and uncontrolled distribution of the wastewater and treatment residues were the primary source of the widespread mercury contamination in the surroundings of the factory site and eventually the Nura River and Valley. Additional contamination also reached the river via airborne mercury vapour and contaminated particulate transport, and surface water run-off contamination from materials deposited on the Karbide plant site, in various depositories associated with the WWTP. As a result mercury contamination spread in the vicinity and the city of Temirtau resulting inevitably in exposure of the general population. In response, the overall objective of the upstream clean up and the whole of the Nura River project has been the elimination of mercury contamination threats to the Nura River and enhancement of the general welfare of the population, specifically reduction of public health risks associated with mercury contamination.
This entailed detailed pollution sampling (ambient and soil) analysis and mapping showed mercury levels ranging from 10 mg mercury per kilogram of soil (mg/kg) to more than 1,500 mg/kg. . The air monitoring data confirmed that prior to clean-up of the Karbide factory site the ambient mercury concentrations exceeded by far the permissible limit of 300 ng/m³, ranging from over 6,000 to 140,000 ng/m³.
The Karbide factory and its sub-ground structures were safely dismantled and demolished between November 2008 and May 2009, and the debris were transported and safely disposed off at the new hazardous waste landfill, which was constructed with international standards and became operational in November 2008. Adjacent areas were remediated and contaminated soils around the factory were excavated up to a depth of two meters and transported to the landfill. The total amount of contaminated materials from this factory site (3.5 hectares) was approximately 125,000 tons, and the site was back- filled with clean clays and topsoil of approximately 62,000 cubic meters.
The AO Karbide Site Clean Up Design was also prepared by COWI A/S (the International Consultant). The Upstream Clean up Component design addressed the widespread Hg contamination in the soil and structures located in the western industrial area of Temirtau. For purpose of assessment and ease of design the scope was sub-divided ten sub-components as follows: i) Karbide factory site; ii) Sedimentation ponds; iii) WWTP; iv) Ash Dump; iv) Main drain; v) Areas west and north of the WWTP; vi) Chkalovo Settlement and areas west of the main drain; vii) Other contaminated areas; ix) New collector (new main drain); and x) General surface drains.26 The basis for defining these sub-components and the resulting sub-component specific design approach was the detail site investigations under taken by the Consultant, AIPET and Azumut. These investigations along with the results of previous investigations have been utilized to estimate the extent and levels of Hg contamination, along with assessments of existing ground and surface water contamination, contamination levels in structures and levels of Hg vapour emissions on the Karbide site, and hydrogeological/hydrological characteristic of the sites. The results indicate that contamination in excess of 2.1mg/kg was widespread over much of the area of interest. It generally is highest at the surface but extends to a depth of 4m in some locations. Specific “hot spots” where significant areas of high concentration levels are identified in the Karbide site structures, on the Karbide site itself, as well at the WWTP, in the sedimentation ponds and ash dump. Additionally contamination was identified in the area around the Chkalovo Settlement in garden areas, indicating a high risk of human exposure. Evidence of surface water contamination is found in the main drain, particularly near the Nura
26 The threshold level for removal or clean up criteria was set at 10mg/kg in the preparatory and financing stages, even though the regulatory limit applicable in Kazakhstan is 2.1mg/kg. Similarly, it was assumed that all material in excess of 1,500mg/kg would require pre-treatment prior to land disposal, although methods for doing so were not specified.
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River. Significant shallow ground water contamination was found around the Karbide site and to a lesser degree around the WWTP and upper main drain. However, the assessment the hydrogeology indicates that this should be confined to shallow ground water and that area is underlain by significant natural hydraulic barrier. Furthermore, shallow ground water flows are generally very low, thus limiting transfer of contamination to potentially connected surface water bodies, particularly the Samarkand Reservoir.27
- Karbide Factory Site - This area is the site of AO Karbide which was the original source of mercury contamination. On the site AO Karbide was manufacturing synthetic rubber using a process that involved the hydration of acetylene in the presence of mercury based catalyst. The site area covers approximately 35,000m2. Buildings and other structures of the factory still exist on the site, though some are partial demolished. One of the buildings is an electrical sub-station that is still in use and owned by Alash. Contamination on Karbide is found in soil, groundwater and buildings and structures including sub-ground structures like drains, sewers etc. Metallic mercury was known to be present in buildings and presumably in soil. The whole of Karbide was seen as one hotspot with high concentrations in every media. Pathways of spreading of contamination from Karbide were air in the form of dust and to some degree volatized mercury, surface water and groundwater. Karbide was seen as a source of ongoing spreading of mercury to surroundings. Besides being a hotspot in general Karbide is a major clean up priority for a number of reasons. Buildings must be demolished to eliminate the potential spreading of mercury contaminated dust if or when they simply collapsed due to their poor structural condition. There were expected to be quantities of metallic mercury present which is an ongoing source of air contamination. - Sedimentation Ponds – included 4 operating sedimentation ponds which were used by the WWTP, contaminated to various degrees. The contamination in the sediment and water was found to be relatively high in the 3 smaller ponds (above 1,500 mg/kg), but fairly low in the largest pond. The ponds were seen as an ongoing source for contamination of the Nura River via the continuous water run-off via the WWTP and the main drain and in case of overflow of the ponds. The sedimentation ponds posed special problems for the clean-up project design since they were operational and filled with water. - WWTP - The WWTP was operating as a combined industrial/municipal biological waste water treatment plant for the City of Temirtau and the Alash factory. It was located adjacent to a separate waste water treatment plant that exclusively deals with discharges from the Ispat-Karmet steel complex that is considered outside the scope of the clean up project. Several major hotspots are found in soil and sludge deposits of the WWTP and samples from groundwater are found to be relatively contaminated. In general, the WWTP contains substantial surface contamination and subsurface, but it is particularly concentrated in the areas around the concrete lined drying beds where historical deposits of activated sludge removed from the beds are piled. The sludge now consists of an organic peat like deposit which is potentially flammable. There are also a series of long deserted bio-filters within the WWTP that likely also contain residual Hg contamination, although it was noted that the general population have scavenged the charcoal material from the beds as fuel over the years. The WWTP is seen as a major source of ongoing contamination with pathways of surface water, groundwater and airborne particulate transfer. There are no indications of metallic mercury being present at the WWTP. Contamination from the WWTP area could move relatively rapidly to the Nura River via surface run off and the main drain.
27 The general clean up standard for mercury used in Kazakhstan is 2.1mg/kg. As in many countries, a criterion such as this is considered appropriate when the human use of the contaminated area is of the most sensitive kind like children playing, gardening, farming and intensive recreational activities. However, since the current and historic use of the clean up project areas is largely industrial and not sensitive based on the above uses, a higher intervention clean up criteria is appropriate. Consistent with project preparation approach based on EU practice and that subsequently recommended as a “temporary” clean up criteria by the RSE National Centre of Labour Hygiene and Professional Diseases, a general intervention clean up criteria of 10mg/kg has been chosen.
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- Ash Dump - Activated sludge was also stored in lagoons constructed on the top of a power station ash dump located to the north of the WWTP and connected to it by an above ground small diameter pipe line. These deposits were located in one corner of the ash dump closest to the WWTP. The highly contaminated material in the exposed bed of these lagoons was similar to that noted around the drying beds of the WWTP and understood to periodically ignite. A major hotspot was found on the western edge of the ash dump where concentrations above 1,500mg/kg are found in soil/ash. Contamination is in general found in the western part of the ash dump. The ash dump and especially the hotspot are seen as an ongoing threat to the Nura River. Pathway of contamination is primarily surface water run off. - Main drain - The WWTP discharges into an open drain running north to the Nura River. This drain handles the combined flow of both the WWTP and the separate Ispat-Karmet industrial wastewater treatment facility with the latter accounting for more than 90% of the volume. The main drain was characterised by a high and relatively constant flow rate. The Ispat-Karmet discharges were also responsible for what appears to be the high suspended solids content in the main drain discharges. Contamination with mercury in discharges in the main drain is currently relatively low and generally meets local and international water quality standards. Higher concentrations of discharges were noted at the lower end of the drain close to the river where it takes a 90 degree turn to the west and widens up. Contamination in soil of the banks of the drain is found, particularly upstream the road bridge near Chkalovo. Dredging of the drain has been done occasionally and sediments from the drain have been placed on the banks. Where the main drain runs into the Nura River near the settlement of Chkalovo contamination is found in topsoil of the left bank of the main drain. Here concentrations up to 100mg/kg were found. Contamination is believed to come from the main drain. Lower levels of surface soil contamination are found adjacent to the drain particularly in the sections closest to the WWTP, but are also noted in the area immediately around its outfall to the river within and adjacent the settlement of Chkalovo. The main drain was seen as an ongoing source of spreading of mercury contamination directly to the Nura River especially in spring when water run off is at its maximum. - Areas west and north of WWTP – Higher concentrations of mercury in soil were found in areas west and north to the WWTP. A hotspot in soil with concentrations above 1,500 mg/kg was located directly west of the WWTP. This hotspot must be seen as a part of the western hotspot of the WWTP. These areas must be seen as an ongoing threat of contamination where especially surface water run off will carry mercury contamination to the Nura River via the main drain. - Chkalovo Settlement and areas west of the main drain - In the northern row of gardens in Chkalovo contamination above 2.1mg/kg in the topsoil was found. Additionally, the area west of the main drain was used for gardening by local people. Part of this area was contaminated with high mercury concentrations (above 100mg/kg). The contamination of both these areas was seen as a threat to people using them because of the direct contact with contaminated soil. The threat to the Nura River was of some concern especially for the area close to the river. - Other contaminated areas (New collector/new main drain/ General surface drains) - The original primary path of contamination from the Karbide site, and ultimately that going to the Nura River was the wastewater drain between the overall plant site and the WWTP. This drain remains in service for the Alash factory. Furthermore, the drain within the plant site was understood still to be physically connected to the Karbide Site. Indications were that except on the Karbide site itself, it is unlikely to contain significant levels of contaminated material. However, once the Karbide site has been isolated it should be physically cleaned and access points secured such that surface water access is controlled or stopped. Surveys also found contamination in soil in other areas than the above mentioned. North of the Alash/Karbide site an area of contamination up to more than 100 mg/kg was found. This contamination is believed to be the result of airborne dust from Karbide and Alash. On the route of the plant drain between Alash and the WWTP an area with soil contamination up to 100 mg/kg was found. Leakages on the drain or random dumping of waste at some point are assumed to be the source of this contamination. To the southeast of the sedimentation ponds and the WWTP is an area with soil contamination above 100 mg/kg. The origin of contamination was believed to be waste water or
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surface water from old sedimentations ponds or leakage from the present ones. None of these areas are considered as a major ongoing threat of contamination.
Demolition of the Karbide Factory-exterior Demolition and cleaning of the Karbide Factory-interior
Karbide – design of clean-up excavation 0- Karbide – design of clean-up excavation 1- 1m under terrain 2m under terrain
Karbide – after clay back-filling Karbide – after clay back-filling
Outputs
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- Cleaning the territory and dismantling of Karbide factory and adjacent contaminated territories total area is above 70 ha and reconstruction of the main drain of Temirtau city 3.01 km completed. - Dismantling of Karbide factory completed in 2008. This comprised of nine structures in total (including six building, a heating plant, sediment pond etc.) in a 3.5 hectares area. All wastes, sub- ground structures and contaminated soils (varying from 2m-5m), in total 196,500 tons, were transported to the landfill. The sedimentation ponds of the wastewater treatment plant have been fully remediated. The site has been backfilled with clean clay, compacted, leveled and filled with a top soil of 70cm and is now covered with green vegetation.28 - Excavation and removal of mercury polluted soil/materials was done until international accepted safe levels for upper soil layers - 2.1 mg/kg for garden use (Chkalovo Settlement), and 10 mg/kg for other use. Detailed soil mapping was done with the laboratory analysis before the excavations/containment and then the detailed laboratory analysis after the excavation/containment to determine whether the soil is sufficiently cleaned to the required standards (some illustration can be seen in Annex 3). - Significant ambient mercury concentration emission reductions were recorded in and around the vicinity of the A O Karbide factory after clean-up. The air monitoring data confirms that prior to clean-up of the Karbide factory site the ambient mercury concentrations exceeded by far the permissible limit of 300 ng/m³ (ranged from over 6,000 to 140,000 ng/m³). By May 2009, on completion of clean-up activities, the MPC reading of ambient mercury concentration had fallen below 300ng/m3 (see graph below). Also, during demolishing and temporary storage of the polluted material, access to the factory site was only permitted to authorized personnel sufficiently equipped.
Karbide - Measurement points (red) at Carbide Factory Site (actually performed)
Karbide Air Monitoring 2007-2008 Karbide – Air Monitoring 2008-09
28 Demolishing of the buildings was done between November – December 2007, transport of the polluted material to the landfill site was done from December 2008 to February 2009 and removal of underground structures was completed by July 2009.
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Air Monitoring Karbide Air Monitoring Karbide August 2007 - September 2008 October 2008 - August 2009
160000 30000 140000 25000 120000 20000 KD1 KD1 100000 /m15000 3 KD2 g n /m 3 80000 KD2 10000 KD3 g n 60000 KD3 5000 40000 0 20000 y ly ry ril st 0 er be er Ap Ma Ju ctob nua Augu O o vem Ja Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep N Decemb
MPC (Maximal Permissible Concentration) of mercury content in air is 300ng/m3 Source: Nura River Clean Up Project – Environmental Bulletin 2010 – Committee for Water Resources of the Ministry of Agriculture of the Republic of Kazakhstan.
- Approximately 458,500m3 of contaminated soil was excavated, and almost 959,000m3 of soil was backfilled and contained in the Karbide factory and its vicinity.
3a - Nura River Clean Up
The approach adopted to meet the project objectives was to remove all mercury contaminated material from the section between Samarkand reservoir and Rostovka village showing concentrations higher than the clean-up criteria. Design of the Nura river clean-up consisting of the removal of contaminated river sediments, flood plains, river banks, cleanup of polluted areas at the Zhaur Swamp, and area between Zhaur Swamp and Nura River. All contaminated material was to be deposited at a hazardous waste landfill near Termirtau.
Since the success of the clean-up depended on accurate investigation results and therefore it is necessary to do the investigation immediately prior to the excavation works. A total of approximately 11,000 hectares 19 kilometers along the Nura River, downstream of Temirtau, was investigated for mercury contamination to assess the need for clean-up operations. Based on the 1% probability (100 year) flood of the Nura river during springtime, all possible areas contaminated with mercury were investigated with different degrees of accuracy in the following categories: Villages and near surroundings (455 hectares) Riverbed and floodplains near the river, including the Zhaur Swamp (4,795 hectares) Remote floodplains (5,736 hectares) The sampling was done in villages and their near surroundings on a 20 m x 20 m grid; along the riverbed and floodplains near the river the grid was 25 m x 25 m; and in the remote floodplains the sampling grid was 50 m x 50 m. The sampling and testing of mercury-levels was conducted and used in order to assess the need for clean-up activities. A total of approximately 140,000 samples were taken and analyzed for this purpose. In line with international standards, a clean-up criterion of 10 mg/kg was adopted for the river bed sediments, river banks, Zhaur swamp, and floodplains. For house gardens used for growing vegetables and fruits, the clean-up criterion of 2.1 mg/kg was applied. Consultant conducted a data verification program during summer 2004. Over 700 samples were analyzed concerning their mercury concentration and compared with data available. The total volume to be excavated amounts to 1.96 million m³, whereof approximately 7% is located in the Zhaur swamp, 4% in the river bed as sediment and the major part – 83% - are the ash layers at the river banks. The results of the pre-excavation investigation program were then plotted onto pollution maps (some examples of the pollution maps have
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been provided in Annex 10). These maps provided the data for the excavation details and the areas to be excavated. Finally, all contaminated materials (mercury-contaminated soils, ashes and sediments from the villages, river banks, riverbeds and floodplains) higher than the clean-up criteria were excavated and transported to the landfill. The baseline was determined based on detailed pollution sampling, laboratory analysis and mapping which revealed mercury levels in soil and sediments range from 50- 500 mg/kg. The results of the pollution mapping exercise are shown in Annex 3.
Mercury polluted soil and materials were excavated to international accepted safe levels for upper soil layers: 2.1 mg/kg for garden use and 10 mg/kg for other use of land and 50 mg/kg for more remote areas. In total, more than 2 million tons of polluted soil and materials were excavated and transported to the landfill alongside the Nura River from Temirtau to 19 kilometer downstream. Excavation works were finished in July 2011.
Scope of Works for Nura River, Zhaur Swamp, River Banks, River Sediments, Flood Plains and Area between Zhaur Swamp and Nura River Accepted clean-up criteria: inhabited localities, homestead lands 2.1 mg/kg river banks, flood-plain, river-bed, Zhaur swamp 10 mg/kg Contamination amounts, thousand m2: area of contaminated soils 2 545 area of contaminated banks 1 655 area of contaminated river sediments 290 area of Zhaur swamp contamination 600 Quantity of soil with mercury concentration Hg>10 mg/kg, thousand m3 to be excavated: river banks 1 418 river-bed 1 227 Zhaur swamp 54 137
Outputs: - More than 2 million tons of mercury-contaminated soils, ashes and sediments from the river banks, riverbeds and floodplains were excavated, transported and disposed of at the same landfill. - A 30 km stretch of Nura River from the Samarkand reservoir to Rostovka village cleaned for mercury deposits, specifically 18 km of Nura river bed, 9.2 km of bottom and banks, and rectifying and cleaning the riverbed in Sadovoe village (500 m). - In total, 2 million m3 of polluted soil and river sediments removed from Nura River, its flood plains and the Karbide factory sites and its adjacent territories has been safely disposed to landfill.. - Approximately 140,000 samples undertaken and analyzed for mercury content to determine the level over an area of 6,000 hectares. - Water quality in the Nura River stretch where mercury remediation works was done, in 2012 met or was below MPC (Maximum Permissible Concentration) for drinking water = 500 ng/l, MPC (Maximum Permissible Concentration) Irrigation water =300 ng/liter, EC Framework Directive for surface water = 270 ng/liter – Upstream and Downstream.
Monitoring Data of Mercury Content in Surface Waters 2007‐2012 – Before and After Average concentration of mercury 2007 2008 2009 2010 2011 2012 No. Name of sampling point ng/liter ng/liter ng/liter ng/liter ng/liter ng/liter
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1 Nura River, the city of Temirtau, 1 km upstream of the combined sewage 0 50 20 10 0 10 water discharge of JSC Arselor Mittal Temirtau and JSC TEMIW 2 City of Temirtau, the channel of the combined sewage water discharge of 460 620 650 600 380 250 JSC Arselor Mittal Temirtau and JSC TEMIW 3 Nura River, the city of Temirtau, 1 km downstream of the combined sewage 470 370 560 2540 1200 150
(Nura River Cleaup River (Nura water discharge channel of JSC Arselor Mittal Temirtau and JSC TEMIW 4 Nura River, Mill Dam 310 280 610 5 Nura River, the city of Temirtau, 5.7 km downstream of the combined sewage water discharge channel of JSC 410 200 280 340 420 240 Arselor Mittal Temirtau and JSC TEMIW 6 Nura River, Molodetskoye village 160 140 120 170 160 180 7 Nura River, just upstream of the
UPSTREAM OF INTUMAK 160 30 110 50 70 80 Intumak water reservoir 8 Nura River, downstream of the Intumak 160 40 60 30 30 40 water reservoir 9 Nura River, the Akmeshit village 70 50 80 20 20 30 10 Nura River, the Kievka settlement 100 0 30 40 20 0 11 Nura River, the Romanovka village 0 20 80 10 20 0 12 Nura River, the Sabyndy village 60 40 30 20 20 20 13 Nura River, the Korgalzhin village 120 0 60 0 0 10 14 Sherubainura River, Severozapadny 10 160 10 10 settlement 15 Sherubay-Nura River, Assyl settlement 100 80 20 10 0 0 16 Sokyr River, near the road bridge in the 50 90 10 0 0 0 Karazhar village Korgalzhin Lakes DOWNSTREAM OF INTUMAK Lake Sholak 0 90 90 10 0 Lake Yessey 20 0 0 0 10 Lake Sultankeldy 10 50 50 10 10 Lake Kokay 10 30 30 60 20 MPC (Maximum Permissible Concentration) for drinking water = 500 ng/l MPC (Maximum Permissible Concentration) Irrigation water =300 ng/liter EC Framework Directive for surface water = 270 ng/liter Source: Nura River Clean Up Project – Environmental Bulletin 2010 – Committee for Water Resources of the Ministry of Agriculture of the Republic of Kazakhstan.
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Component 2: Intumak Reservoir Rehabilitation. This component financed the rehabilitation of the Intumak Reservoir, including reinforcement of the earth-fill dam and completion of the spillway and gates to allow the dam to operate as a mechanism for flow control at its original design reservoir level. This would allow development and implementation of an integrated water resources management plan for Intumak and the upstream Samarkand and Sherubianur Dams and reservoirs. However, owing to uncertainty about the effect of raising the operating level at the Intumak Reservoir on mercury methylation, any disbursement for civil works related to this component was conditional to the review and agreement by the International Expert Advisory Group. Provisions were made in the cost estimate for this component to cover any cost of additional dredging works required, in the event that the results of the monitoring and assessment indicates a risk of unacceptable levels of mercury methylation associated with increased operating levels, completion of the spillway and gates would be postponed until mercury deposits in the bottom of the reservoir could be removed and transferred to the landfill.
Rehabilitation of earth fill main dam (1.6 km long and maximum height of 22.5 meters), completion of spillway, refurbishment and adaptation of bottom outlet, installation of a small hydro power plant of 700kw
Completion of Intumak Reservoir rehabilitation, September 2012
Outputs: - Reservoir designed capacity increased by 95% from 56 million m3 to 108.9 million m3, and operationally tested to a capacity of 120 million m3 (114%). The achieved operational capacity of reservoir was at least 10% more that the target value of 108.9 million m3. - Rehabilitation of earth fill main dam (1.6 km long and maximum height of 22.5 meters), completion of spillway, refurbishment and adaptation of bottom outlet, installation of a small hydro power plant of 700kw - 118m length of spillway structure constructed with 11 operational gates, a cross bridge, an operation bridge, tower and a spillway with throughput capacity of 3000 m3/sec (once in 1,000-year flood event) was achieved. - A 1.52 km diaphragm wall for the earth dam of Intumak reservoir was completed to stop seepage through the dam crest (seepage has ceased). As a result, the dam safety issue has been resolved. - Reconstruction of the bottom outlet with a small Hydro Power Plant (750 kw) throughput capacity of 60 m3/sec. In addition a 21.2 km power line to Intumak reservoir was also laid. - Dam rehabilitation and repaired capacity allows for a controlled flow downstream to the wetlands and villages, where in the past the spring flood could not be kept in the reservoir and resulted in downstream flooding. - Upstream – a 5.7 km long flood-control protective dam near Amangeldy / Aktobe settlements was completed.
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- Following a one-year monitoring program of the mercury levels in water, sediments and fish in the reservoir and the evaluation of the International Panel of Experts, the dredging of the bottom sediments in the reservoir was not required.
Component 3: Nura-Sarysu River Basin Authority Strengthening. This component was to finance technical assistance, training and equipment necessary to develop the institutional capacity of the Nura- Sarysu River Basin Authority in resource planning and management, as well as to strengthen the water quality monitoring network, water pollution control system, and regulatory framework. Supplementary assistance from the Japanese government provided (with the participation of Japanese experts from the Minamata Institute) technical support in the design and implementation of a program to monitor and assess mercury pollution in the Intumak reservoir. As well as long term support for the development and implementation of comprehensive water quality monitoring program to address the risks associated with occasional recontamination of the river due to residual mercury depositions and/or periodic high flood levels. Also funded the participation of the International Expert Advisory Group.
Accordingly, testing equipment and analytical reagents were procured for the KazHydromet laboratories, and staffs at the laboratories were trained for mercury analysis. The training and technical assistance, including study tours, related to water resource planning and reservoir operation remained with the River Basin Authority under the Committee of Water Resources who are in charge for the operation and management of the Intumak Reservoir and its new spillways and installed small hydropower station. Also, detailed guidelines for the Operation and Management for the Intumak reservoir were developed for the River Basin Authority.
Under component 3 of the Project, water quality monitoring stations where installed in the Nura River, starting from the main drain where the industrial wastewater used to enter the Nura River until the monitoring point downstream the Intumak Reservoir. The following monitoring points were installed: (i) 1 km upstream of the discharge of industrial sewage water in the main drain; (ii) Main drain channel; (iii) Nura River, 1 km below the main drain at Chkalovo village; (iv) Nura River, 5.7 km below main drain (Tegiz zhol area); (v) Nura River, Molodetskoye village; (vi) Nura River, just upstream of Yntumak Reservoir; and (vii) Nura River, Downstream of Yntumak Reservoir.
The PDO target for water quality downstream of the Intumak Reservoir was defined in line with the EU Framework Water Directive which indicates that Mercury levels should be 0.07 micro gram/liter plus the background concentrations for inland waters. This is equivalent to70 ng/liter. The background mercury pollution (upstream of the pollution source) varies between 50-200 ng/l. The target was therefore set at 270 ng/l; Kazakh regulations specify 500 ng/l as the maximum permissible concentration for mercury.
Additional monitoring was undertaken for groundwater resources used for drinking water along the villages of the Nura River, in particular Chkalovo, Sadovoe, Samarkand and Gagarinskoe villages. Water was investigated for complete chemical analysis (including all heavy metals and mercury) and radiological and sanitary- microbiological investigation were carried out as well and samples were taken from operation boreholes used for household water supply. The analysis showed that general mercury concentration in the boreholes is less than the Maximum Allowable Concentration of 500ng/l. The analysis further showed increased level of pollution in terms of chlorides, nitrate nitrogen, and also total hardness, particularly in Chkalovo village, but that in
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general the selected water samples complied with the Sanitary-Epidemiological Requirements for non-centralized household water supply.
Component 4: Project Management and Monitoring. This component covered a number of activities related to project management and monitoring, including the incremental operating costs and technical assistance to PMU, which included: (i) training in areas such as procurement, disbursement, and project accounting; (ii) auditing of project accounts; (iii) assistance in the implementation of the environmental management plan, especially with regard to public awareness; and (iv) specialist assistance in areas such as hydrology, social sciences, and environmental management. Training in procurement, disbursement, and project accounting provided to the PMU designate staff and implementation of the Environmental Management Plan and implementation of public information campaigns.
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Annex 3. Economic and Financial Analysis
The original PAD based the economic analysis of the benefits on the cost-effective solution of the Project to two issues: (i) the need to remove hazardous mercury deposits from the Karbide plant site and from the flood plains of the Nura River, and (ii) the need to provide a secure and safe drinking water supply to residents of Astana as well as communities adjacent to the river.
With respect to the hazardous mercury deposits, detailed studies were carried out during project preparation as well as project implementation to define an appropriate level of intervention based on an assessment of the costs of adopting alternative standards with respect to cleanup versus the risks that untreated sites would lead to unacceptable dissemination of pollutants. By using international standards for target clean-up values and based on a risk assessment regarding the exposure paths of the pollution to the population and the land use, the international value of 10 mg/kg was used for industrial and grazing land use areas and 2.1 mg/kg for agricultural use which encompassed a much more costs effective solution than the application of the Kazakh standard of 2.1 mg/kg for all areas.
Regarding the need to provide a secure and safe source of water supply, the removal of mercury pollution to drinking water standards and possibility for flow management to retain the spring flood and allow for a regular release of water throughout the year in a controlled manner. This allows for an opportunity for a costs effective manner of providing a second source of water supply for Astana city, the communities adjacent to the Nura River and irrigation land. In addition, the regulated flow regime allows for constant supply to the Korgaldzino wetlands.
The original project evaluated the economic benefits mostly on the basis of the costs savings for water supply for Astana, According to national development plans, Nura water should be used for the water supply of the capital city of Astana or at least serve as an economically feasible standby solution. A canal connecting the Nura and the Ishim river exists and has been rehabilitated and water could be diverted in the Ishim river and be used as drinking water source for the fast growing population of Astana (785, 000 people), presumed the water quality meets national standards and the required discharge can be guaranteed year-round. However at this time, water is foreseen as standby solution only, therefore the benefits of water supply to Astana is not included in the ex-post economic analysis.
The one-year monitoring program to identify the mercury risks, together with the increased water volume in the reservoir allows for the reservoir to serve as a pollution trend and support the purification of the reservoir water body and fulfills the objective of a pollution trap. Due to the regular and controlled flow of water release throughout the year, the reservoir can assist in dilution of wastewater particular in the current low flow period from June to March (after the spring floods). The portion of wastewater in Nura river can reach 60% of total water just upstream of the Intumak reservoir and reach more than 80% in water poor years. Whereas during months of abundant discharge the wastewater is diluted, in the following months - important for irrigation along the river, fishing and recreational activities – the anthropogenic contamination in the river water is quite high. Intymak reservoir will store parts of the spring flood water and provide a continuous discharge of 8m³/s over the entire year. As a result, wastewater portion downstream of Yntymak reservoir will be approx. 35% of the river flow. Beside this dilution effect, Ynytmak reservoir will improve water quality during natural self-cleaning capacity and sedimentation processes. The irrigation water quality on the 600km long river stretch downstream of Yntymak reservoir will therefore be better and improve the well being of the population in this area. This could allow for increase of irrigated land from the current 3,500 hectare to 20,000 in 2020 in accordance with national development plans.
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Therefore it is crucial to have a functional reservoir to even out the discharge in the Nura river in the concerned section according to the water demand. The dilution of the wastewater discharges will allow less cost intensive water treatment before feeding the water supply network of Astana.
In addition the flood protection works executed in Gagarinskoe village and Aktobe village provided substantial flood protection benefits and the dam safety issues of the Intumak Reservoir Dam have been addressed.
Lastly, the reconstruction of the bottom outlet has allowed for installation of small Hydro Power Plant (750 kw) with throughput capacity 60 m3/sec.
The clean-up of the territories resulted in the following amount of land being available for different purposes:
Upstream territories Hectares Land use availability Karbide factory side 3.5 hectares Industrial purpose Adjacent territories 70 hectares Industrial purpose
Downstream territories Chkalovo gardens 2.5 hectares Agricultural purpose River Banks and floodplains 100 hectares Grazing purposes Zhaur 28 hectares Grazing purposes Hectares investigated and founds 6,103 hectares Grazing purposes suitable for grazing purposes
Based on information from Karaganda land prices, grazing land value amounts to USD360 per year, amounting to benefits of USD 2.25 million a year as 128 hectares have been cleaned to grazing status and the extensive sampling and analysis program found that an additional area of 6,103 hectares is also suitable for grazing purposes.
With annual regulated flow from the Intumak reservoir suitable for irrigation standards, based on the government plans to increase the irrigated land from 3,500 hectares currently to 20,000 hectares in 2020, benefits have been determined based on estimated average agricultural return per hectare for irrigated land. Improved agricultural performance can be expected based on increased yields of agricultural products, increased prices of commodities due to cropper patterns into more sustainable patterns with higher value crops, improved soil conditions due to improved irrigation, better quality of water and lower risks of desertification. Based on agricultural projects in Kazakhstan, evaluating incremental benefits attributable to irrigation benefits, USD 3,600 of irrigation benefits are estimated per hectare. Benefits have been taken for 50% as additional investments would be required to realize the irrigation benefits.
This leads to an Economic Internal Rate of Return of 12%. Flood protection benefits, the biodiversity benefits for the Korgaldzino wetlands, the health benefits of removal of mercury pollution and the hydropower benefits are not quantifiable. Even though not quantifiable, the risk of exposure to mercury and the accompanying environmental and health risks have been eliminated with the clean-up to appropriate standards.
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Annex 4. Bank Lending and Implementation Support/Supervision Processes
(a) Task Team members Responsibility/ Names Title Unit Specialty Lending Piotr Krzyzanowski Consultant ECSSD Team Leader Anil Markandaya Economist ECSSD Economics Margaret Wilson Financial Specialist ECSSD Finance Tijen Arin Economist ECSSD Economics Kirsten Olesen Environmental Engineer ECSSD Environment Takao Ikegami Consultant EXTTK Procurement Evgeny Tyrtyshny Operations Officer, Astana ECSSD Operations Kathy Sharrow Team Assistant ECSSD Project Support Kimberly Heuckroth Junior Professional Associate ECSSD Operations Da Zhu Senior Economist SASDU Operations Allen Wazny Sr. Financial Management Sp. ECSSD Finance Rohan Selvaratnam Operation Analyst SASDA Operations
Supervision/ICR Roohi Abdullah ICR Author ECSUW ICR Author Bakyt Arystanov E T Consultant ECSS3 Operations Enis Baris Sector Manager MNSHD Health Irene Bomani Operations Analyst AFTAR Operations Norpulat Daniyarov Financial Management Specialist ECSO3 Finance Ruxandra Maria Floroiu Senior Environmental Engineer ECSS3 Environment Aliya Kim Finance Assistant ECCKA Finance Piotr Krzyzanowski Consultant ECSSD Team Leader Nurbek Kurmanaliev Procurement Specialist ECSO2 Procurement Oxana Miller Program Assistant ECCKZ Project Support Maria Lourdes Noel Senior Program Assistant LCSEN Project Support Jesus Renzoli Consultant ECSO2 Procurement Bulat Utkelov Operations Officer ECSS1 Operations Frank Van Woerden Senior Environmental Engineer ECSS3 Team Leader Katelijn Van den Berg Senior Environmental Economist ECSS3 Team Leader
(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY99 40 153.85 FY00 75 234.42
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FY01 18 83.49 FY02 55 244.11 FY03 45 187.08 FY04 1 0.78
Total: 243 903.73 Supervision/ICR FY99 0.00 FY00 0.00 FY01 0.00 FY02 0.00 FY03 1 8.65 FY04 14 125.25 FY05 21 124.89 FY06 23 105.84 FY07 28 101.02 FY08 23 79.80 FY09 21 80.00 FY10 25 95.00 FY11 20 75.00 FY12 15 65.00
Total: 191 851.80
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Annex 5. Beneficiary Survey Results
Not Applicable – Not required to be undertaken for the project.
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Annex 6. Stakeholder Workshop Report and Results
Not Applicable – Not required to be undertaken for the project.
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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR 1. Project Context, Global Environment Objectives and Design 1.1 Context at Appraisal Brief history and project goals are summarized below. From the 1950s till 1997 the synthetic rubber factory in Temirtau used sulphuric acid and a sulphate salt of mercury as catalyst in its acetaldehyde unit. The original wastewater treatment plant was not designed to remove mercury, resulting in significant releases of mercury to the plant Main Drain, which entered the Nura River. Overflow of the WWTP was discharged to the main drain through an underground collecting channel, and from there into the Nura River. Tank silt that accumulated in treatment tanks was deposited onto sludge drying beds. Sludge of poor quality was discharged into the depression known as the Zhaur swamp and mercury containing sludge was also deposited in the old ash lagoon of the KarGRES-1 thermal power plant, located on the banks of the Nura River. Though the factory complex closed in the late 1990s, several surveys confirmed that the wastewaters of Temirtau entering the Nura River still carry mercury and continue contaminating the river and that mercury contaminated ash deposits can be encountered along the Nura River and its flood plains. In 2004 Law of Republic of Kazakhstan №556-II LRK dated 26.05.2004 was issued about ratification of Loan Agreement between Republic of Kazakhstan and International Bank Reconstruction and Development, as the result was Decree of Government of Republic of Kazakhstan №1254 dated 10.12.2003 about mobilization of IBRD loan for project financing “Nura River Clean-up”. Loan Agreement №4693-KZ was accepted and signed, but on stage of designing and conclusion of contracts about loan from IBRD it was planned, that financing will be done from two sources: from loan part and republic budget with breakdown to 70% of loan and 30% co-financing from republic budget. Later the Government took decision about changes in parity of financing 55% co-financing and 45% of loan part. Project works had been implemented since 2004 and continued to 2012. Loan in amount 40.39 millions dollars USA was approved in 2003. Rationale for Bank involvement At the time of appraisal, the Bank had been very active in supporting Kazakhstan in improving its environmental management capabilities and in incorporating environmental and social concerns into its sector operations. The project’s objectives were consistent with the Bank’s Environment Strategy which focused on improving people’s quality of life, quality of economic growth, and quality of regional and global commons. The Bank’s technical knowledge on mercury management and its experience in the design and implementation of investment projects gave it a comparative advantage. In comparison with World Bank financing the project has suffered from financing part of co-financer Ministry of Treasury. Due to difficulties in complex regulations inside the Ministries and lack of experience in international projects from specialists in Ministry of Finance and Ministry of Agriculture and Committee of Water Resources project works were financed with delays. 1.2 Original Global Environment Objectives (GEO) and Key Indicators (as approved) To protect the environment and human health by safely management of mercury contaminated materials, buried in constructed landfill and prevention of further contamination to downstream of Yntumak reservoir are the main development objective. The global project objective was sustainable landfill management and strengthening of the regulatory and institutional arrangements for long term control of mercury pollution and other toxic substances in line
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with the requirements of the Stockholm Convention and other related conventions and protocols ratified by Kazakhstan. The objectives are summarized below: Rise in living standards of population, dwelling on territory of Nura river basin by cleaning the river and adjacent territories from serious mercury contamination, which will result in safe, effective and less expensive alternative source of water supply for satisfaction of growing needs of local water consumers. Also, another goal is to resume control over water discharge along river for regulation of floods and ecology purposes by: 1) lowering mercury concentration in water, air and earth in project zones (from 3 000 MPC to allowed MPC of Kazakh standards); 2) reconstruction of Yntumak reservoir to achieve possibility of control design volume (240 mln. m3), in present time average annual non-regulated volume is 40 mln. m3; 3) technical re-equipment of 19 hydrological posts on Nura river and 4 laboratories of Karaganda oblasty. 1.3 Revised GEO (as approved by original approving authority) and Key Indicators, and reasons/justification The GEO was not revised. 1.4 Main Beneficiaries: Main beneficiaries of the project are: • population, dwelling in Nura River basin, whose profits will be lowering risks for health and shortening of environmental contamination to acceptable volumes; • Temirtau and Karaganda cities, which are supplied by water from Irtysh-Karaganda channel, underground sources and from Nura river. They will get access to cheaper and regular course of water supply; • Astana city, which would use water from Nura river as additional source of limited drinking water supply in future; • vacationers, including fishermen and hunters along costs of Nura river and buffer zone of natural resort of Korgalzhino; • society members, who appreciate protection of biodiversity with help of improving water quality in Nura river, which will decrease degradation of biodiversity of swamped territories of Korgalzhino. 1.5 Original components (as approved) The project “Nura River Clean-up” is divided into 3 components.
Main project components are located in or around Temirtau city Karaganda oblasty of Central Kazakhstan. Temirtau city is located approximately in 30 km to north-west of Karaganda city.
The part of Nura River, subjected to clean, covers first 30 km from Samarkand reservoir to Rostovka village.
Most distant project component is Yntumak reservoir, located downstream of the river approximately in 90 km below Samarkand reservoir and Temirtau city, and in 60 km to west from Karaganda city. In order to meet these objectives, the detailed design of clean-up works was carried out in recent years based on the findings of the Feasibility study.
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The large scope and diverse type of works of the Nura River Clean-up Project Complex has been broken down into the following works contracts:
1. Contract NRC-B1: Karbide Factory and Associated Sites Clean-up, Landfill Construction and Operation; - the contract includes the following main elements (amount 4,343 billions Kazakhstan tenge, according to new revised F.S. 2012, approved by State Expertise) : a. Demolition and clean-up of Karbide factory and transport of contaminated material to the landfill site; b. Clean-up of other contaminated areas around Karbide factory site and transport of contaminated material to the landfill site; c. Construction of new main drain d. Construction of landfill site e. Operation of landfill site (receiving contaminated materials) f. Closure of landfill site; g. Tegis Zhol monitoring h. Environmental monitoring and public information
2. Contract NRC-B2: Clean-up of Nura River and Zhaur Swamp; - the contract includes the following main elements (amount 2,782 billions Kazakhstan tenge, according to new revised F.S. 2012, approved by State Expertise): a. Pre-excavation investigation program; b. Clean-up of Zhaur swamp and transport of contaminated material to the landfill site; c. Clean-up of the Nura river bed, river banks and flood plains and transport of contaminated material to the landfill site; d. Prepare "contamination map" showing situation after successful clean-up; e. Environmental monitoring and public information;
3. Contract NRC-B3: Reconstruction and Technical Re-equipment of Yntumak reservoir (amount 5,036 billions Kazakhstan tenge, according to new revised F.S. 2012, approved by State Expertise). The Yntymak Reservoir dam was constructed between 1982 and 1984 on Nura river in the Central Kazakhstan for irrigational purposes. It is located approximately 60 km to the west from Karaganda city. AS the program for droughts prevention has ended in 1984, the construction of earth fill dam was not finished, segmental gates and discharge were not built and do not operate.
The dam was designed and constructed for irrigational purposes. On this account there was no need to preserve a constant water amount all year round and, as for the second, the definite filtration velocity (penetration) through the dam and its foundation was considered as acceptable.
The Yntymak Reservoir dam comprises the following elements: earth fill dam 1,520 m long and 22,6 m high on orographic right bank of the riverbed; 17 m wide bottom discharge with 76 m3/sec discharge capacity (partially build); 90 m long earth fill dam section (partially build);
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90 m long discharge with 3,000 mм3/sec discharge capacity (non-constructed); and 130 m long earth fill dam on the left bank of the valley (non-constructed).
In addition to the above mentioned dam elements, it is necessary to take the following measures in reservoir area: • 5,7 km long flood-control dam nearby Amangeldy / Aktobe settlements equipped with pump-station for the seepage water return into the reservoir (not finished).
In total scope of works contract NRC-B3 are: Reconstruction of protection dam of Aktobe settlement 5,7 km long; Construction of power line VL-10 21,2 km long for Yntumak reservoir; Construction of diaphragm wall in earth dam of Yntumak reservoir with length 1,52 км; Reconstruction of Bottom Outlet with small HPP, throughput capacity 60 m3/sec; Construction of the spillway with throughput capacity 3000 m3/sec, and tailwater channel 800 meters long; Construction of the operational settlement.
For repair works of Yntumak main dam was taken the option of construction of internal wall inside earth dam body along its length. This implies the construction of diaphragm wall from hydraulic mixture or concrete through the dam crest. The advantage of the given decision is the compensation of any defect in loam covering and improving of dam’s impenetrability. The construction works can be carried out without reservoir emptying. 1.6 Revised components In contract NRC-B3 the additional works appeared, due to them the decision to revise original Feasibility Study was taken. These works were not foreseen in original design. The additional works are: grouting works of the Spillway; grouting works around tunnel of Bottom Outlet, preparation and supply for diaphragm wall construction, construction of the bridge across the Spillway, technical equipment for safety system. Total cost estimate of additional works is 360 000 117 tenge. Additional works for implementation were instructed by the Client Committee of Water Resources.
During the period construction significant changes appeared in contract NRC-B3, which are reflected by Variation orders and Addendums to the contract. Bases for these variations were additional works for construction of access roads to bottom outlet, reduction of reinforcement for guide walls, cancellation of reinforcement carcass inside diaphragm wall, changes in dislocation of the water supply borehole for the operational settlement and reducing the length of pipeline, change of rubber dam design to regulated steel gated spillway, changes in original design of bottom outlet reconstruction, asphalt along the main dam crest and lighting system is foreseen for completion this year.
Due to changes in three contracts the sums for construction works has been changed. Below the differences are shown (in billions of Kazakhstan tenge).
Contracts Contract Amount by F.S. Contract Amount by F.S. Difference in 2006 in 2012 NRC-B1 5,342 4,343 (-)0,999 NRC-B2 2,357 2,782 (+)0,425 NRC-B3 4,001 5,036 (+)1,035
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1.7 Indicators of project implementation Indicators of direct results in project completion are performance and completion of works for contracts NRC-B1 and NRC-B2. Contract NRC-B3 will be finished approximately in September 2013.
In contract NRC-B1 the construction of the landfill for burial of hazardous contaminations with capacity 2,0 mln. tons on area 160 ha is completed, along with road construction to landfill 7,3 km long. Cleaning the territory and dismantling of Karbide factory and adjacent contaminated territories total area is above 70 ha and reconstruction of the main drain of Temirtau city 3,01 km is finished.
In contract NRC-B2 riverbed of Nura is cleaned (18 km), bottom and banks (9,2 km), rectifying of the riverbed in Sadovoe village (500 m) is constructed.
Indictors for completions of contract NRC-B3 are completion of construction the protective dam of Aktobe village 5,7 km long, and the power line VL-10 21,2 km long to Yntumak reservoir; construction of the diaphragm wall inside main dam 1,52 km long, also, reconstruction of the bottom outlet and the spillway structure with throughput capacity 3000 m3/sec.
Effectiveness of performed project works is obvious in improvement of ecology and sanitary- epidemiology situation in the region.
By the results of industrial ecology monitoring on environment during whole project activities can be seen from dynamics of pollution different substances of environment as result from utilization of contaminated mercury ground in Nura river basin and Zhaur swamp: 1) Mercury concentration in air has decreased on the main drain, Chkalovo village from 416,5 ng/m3 to 10,8 ng/m3, on Zhaur swamp – from 257,4 to 21,28 ng/m3, (maximum permissible concentration (MPC) – 300 ng/m3). After project work completion the mercury concentration in air is lower from maximum permissible concentration of Kazakhstan standards. 2) Mercury concentration in soil has decreased from 100-1500 mg/kg to 10-50 mg/kg. 3) Concentration of total mercury in surficial water in October-December 2011 was lower than MPC, which is 500 ng/liter. In accordance with this project, monitoring of surficial water must be done in following 6 months after work completion for cleaning the riverbed and flood plain of Nura river. Results on monitoring of underground drinking water in Chkalovo, Samarkand, Gagarinskiy and Sadovoe villages in 2008-2010 some quantities of total mercury were found in frames from 70 to 300 ng/liter. After clean-up of river and river banks in all boreholes, used in drinking purpose, total mercury is absent. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Project background analysis was generally adequate. Background preparation benefited from numerous studies done in previous years. First reports dated 1975, but in general stages of studying can be divided in 3 stages:
Stage I: 1986-88 Ecological geo-chemistry evaluation of mercury pollution in Nura river. Study results are published by Yanin in 1997.
Stage II: 1997-99 Study: development for ways in limiting harm and ecology rehabilitation of contaminated zones in North and Central Kazakhstan. Several publications were printed as result of the study.
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Stage III: 2000-01 Stability study for Yntumak reservoir. Technical and economical study for reconstruction. 2001-02 Feasibility Study: Project of Rehabilitation and Management in Nura-Isim rivers basins as part in complex strategy of World Bank in Kazakhstan. 2004 "Monitoring of Nura river", done by Karaganda Kazgydromet 2004-05 Designing to works for Nura River Clean-up, moving off pollution from reiver sediments, flood plains, main drain, Zhaur swamp, ash dump and Karbid factory with construction of the landfill in Temirtau. Implementation of these works is planned in 2007-2009.
2004-05 Mathematic modeling, performed by PROFCONSULT Ltd, Final Report issued on 21st June 2005. 2004-05 Sampling from Yntumak reservoir, final report issued on 18 October 2005. 2005 Developing of manual for Yntumak reservoir in November 2005. 2005 - 06 Design for reconstruction of Yntumak reservoir in December 2005.
A public survey was also undertaken, focusing in affected areas, which revealed clear support for the proposed cleanup activities.
The Project reflected on several lessons learned to be incorporated into its design:
Keep the design of the project simple. The design of contracts NRC-B1 and NRC-B3 was complex and the PMU considered keeping many of these responsibilities, had to arrange the changes to realize project ideas. Therefore there were some delays in the first year of implementation from the Government side due to the lack of experience in developing large, complex Terms of Reference, especially for operations in areas that were new to CWR. This deficient brought to delay in signing and starting the contracts.
Regular changes in CWR management. Problems with several changes of Chairman and Deputy Chairman in 5 years brought to delays in signing some important documents. Poor management of the Client brought to stage when contractor has to take care and continue security and maintenance of the mercury landfill after 7 months of defect guarantee period has expired
Global changes in design. Significant delay in project works has been occurred, also, by changes proposed by CGCOC (Contractor’s company for site 3) and the Client. The operational settlement building, rubber dam and bottom outlet changes had to be approved by the local state construction expertise, what delayed the project to time more than 1 year. Bad experience of this fact leads to understanding that big design changes are not acceptable in stage of implementation according to local regulations, what brings to increasing the budget of construction works.
The rationale for Bank intervention was sound. The World Bank was a logical partner in the project given its relationship with the GEF and previous project experience in mercury management and destruction (e.g. China, Africa, Belarus, among others). There were also positive synergies with ongoing World Bank projects in Kazakhstan such as the Ust-Kamenogorsk Environmental project which supported upgrading of laboratory equipment for identifying underground water pollutions and cleaning works in different pollution dumps.
Project design was generally sound. The project design for Nura River Clean-up was done in right way. Well-developed companies like COWI (Denmark) and Posch & Partners Consulting Engineers - Intergeo (Austria). Changes in design appeared because the contractor could not follow their contractual obligations in providing adequate quality materials and wishes of the Operator to additional benefits in construction period.
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Minor discrepancy in the design can be explained by the problems of management inside Kazakhstan ministries. Ministries (Client) requirements are to start project implementation urgently, sometimes even neglecting necessary studies in planned project zones. The lack of time to prepare well sound design, lack of experience of PMU staff in international regulations brings to difficulties in implementation time. 2.2 Implementation Project targets under contract NRC-B1 Karbide Factory and Associated Sites Clean-up, Landfill Construction and Operation, were achieved with minor delay. The reason was that first year the Contractor was incapable to mobilize sufficient manpower, which leaded to delay and transferring part of the works to contract NRC-B2. Due to the slow progress of the works contractor NRC-B1 and the occurred delay in works implementation, only now in November 2008 the first transport works started to the landfill. As all input for the position of the environmental engineer is spent already, the Resident Engineer required massive backstopping and home office support in controlling all submitted documents and set-up a feasible transport logistic over this winter period. Increased Resident Engineer's presence on site was necessary in the winter months to ensure compliance with all health & safety requirements of the hazardous waste transport and a reliable transport control system had to be set-up to avoid any misuse of the landfill and to keep control where all the contaminated materials were delivered to and deposited. The winter period 2008-2009 was used by NRC-B1 and NRC-B2 Contractors for excavation and transportation of polluted material from contaminated areas to the landfill, as well as for containment of polluted territories. NRC- B1 Contactor transported to the landfill excavated material and waste of Class 1 and Class 2 from Karbide site, Ash dump, Sedimentation ponds 2 and 3. Contractor NRC-B2 transported to the landfill excavated material of Class 1 and Class 2 from Zhaur swamp and Main drain. In following years the Contractor NRC-B1 was successfully done his own part of works. Since November 2008 and up to end of July 2011 at the landfill 2,142,457 tons of contaminated materials were disposed (273,548 tons in Cell A2.1 for I class waste, 1,868,909 tons in Cells A1.1-A1.3 for II-IV class waste). Closure of Cells A1.1-1.3 commenced in June 2011 and closure of Cell 2.1 commenced in August 2011. Closure of all Landfill cells was completed in October 2011. Dismantling of Karbide factory was completed in the winter period 2007-2008. In the period November 2008 till May 2009, all wastes, sub ground structures and contaminated soils up to a depth of 2 meters were transported to the landfill, in total 196 500 tons. The excavated area was backfilled with clean material and grass seeded in the year 2009. In 2009 contaminated water from 4 sedimentation ponds was treated by MRP and discharged to the Main drain. In the year 2010 the Mercury reduction plant was dismantled. Some troubles were happening because of wrong understanding the project objectives from side of governmental institutions; claims in changing the ecology regulations to more strict norms for Kazakhstan were coming from authorities. Also, one of the big problems encountered was that the Contractor for NRC-B2 was delaying his work with transporting materials from contaminated areas to the landfill. Contractor for NRC-B1 was not allowed to start closure of sells before final part of the contaminated materials would be delivered from the project zone.
Project targets under contract NRC-B2 Clean-up of Nura River and Zhaur Swamp were achieved with significant delay. On practically all the sites the works started later than scheduled. On all the areas where works finally were started, the performance i.e. progress of works was far from the necessary pace to reach the envisaged time schedule. With Variation Order No. 1 some important works for the start of the landfill, e.g. Construction of Cell A 1.1 and the roads to the landfill were transferred to B2 contractor. The Contractor fulfilled those works but he was far away from the milestones defined in his main Contract. Pre-excavation investigation
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Pre-excavation investigation was implemented by the Contractor in the year 2009. Zhaur swamp By the end of the year 2010 the excavation quantities that had been started in November 2008 were 344 000 tons of contaminated soil. The weighbridge and other relevant facilities were removed from the site. NWWC and Main drain In 2010 the Contractor completed clean-up of the Main drain. The Main Drain bed was cleaned in 2009, and in 2010 the Contractor carried out containment of Main drain banks with clay. 36,000 tons of contaminated sediments were disposed to the landfill. Landfill and roads Construction of cell A1.1 was completed in 2008. Construction of access road 3.3km and 4km of Saratovka road were completed in 2008. River-bed and river banks Excavation of river banks and floodplains continued over winter period 2010-2011 and was planned to be finished in May, 2011. The Contractor finished success control tests on all areas by the end of July 2011, so the excavation and transportation works to the landfill were approved as completed. In total 1 428 854 tons of contaminated soils, including river sediments, were disposed to the landfill. The Contractor changed designed river bed clean-up technology to wet excavation with draglines, for this new clean-up technology an ecological state expertise was achieved. This situation was caused by the general disappointing performance of NRC-B2 Contractor, especially in terms of: 1. Careful studying the tender documents 2. Work experience of key staff lacking 3. Knowledge of the project language by key staff lacking 4. Poor technical know-how 5. Incompetence in organizing the different works and sites 6. Incompetence in basic reporting requirements 7. Reported budgetary restrictions by the Contractor's headquarter The Contractor had several court investigations about claims from a farmer on destroyed farm land. Final verdict of the court was satisfaction for the farmer by which the company had to pay contribution for the incident. No other violations, contradicting with World Bank regulations exist.
In terms of time schedule project targets under contract NRC-B3 Reconstruction and Technical Re- equipment of Yntumak reservoir were similarly jeopardized. Works under NRC-B3 contract at Yntumak Reservoir site started on 20th May 2008. The site set-up and mobilization which had to be completed within a period of 1 month agreed was significantly delayed. Delay in mobilization and procurement of necessary permits and approvals from the State Agencies adversely affected the progress of the Project Works. From the outset, the Contractor requested changes in the Tender Design for the Operational Staff Settlement (OSS) and replacement of rubber dam original design with a steel gated spillway. The former was accepted by the Employer in principle and construction commenced without delay. Proposal for the gated spillway was submitted by the Contractor and eventually withdrawn in September 2008 was because it was found to be deficient technically, for cost consideration and possible delays in completion. This situation seriously delayed commencement of spillway excavation works. However, testing of rubber dam material during winter 2008-2009 indicated that CGCOC was not able to provide the material for rubber dam as per Tender Design requirements. As a consequence, the gate spillway proposal was redesigned and accepted by Employer. Lack of progress at site seriously affected Contractor’s cash-flow situation during all years. As a consequence of delays and lack of progress mentioned above, it was obvious that the Contractor would miss the deadline for Project Completion (31st December 2009). The Contractor submitted on 24th
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March 2009 a claim for Extension of Time (EOT) based largely on payments delays, delay in land allocation and delay in procurement of permissions and approvals. Engineer evaluated the documentation only submitted in August 2009 and after evaluation granted 7 months of EOT and determined the revised Completion Date as 31st October 2010. CWR unilaterally granted further 2 months extension with the revised Completion Date of to 31st December 2010 on account of spring floods and downstream releases. During 2010, the Contractor did not perform well and blamed non-payment, delay in obtaining State Expertise and design modifications, although initiated by the Contractor and endorsed by Karagandavodhoz. It became obvious at the start of 2010 that the Contractor would not finish the project works within 2010. The main reasons were as follows: 1. Delay in procurement of State Expertise for spillway design modifications. 2. Delayed payments to the Contractor by CWR and non-payment of Spillway equipment because of lack of State Expertise and approved Variation Orders. 3. The Contractor experienced cash-flow problems and shortage of local labour force. In addition to the above factors, there remained serious lack of planning and programming. In consideration to spillway design change and instruction of additional works by the Employer, the Engineer considered Extension of time (EoT) at the request of the Contractor, evaluated and recommended the revised completion date of 31 August 2011. The Employer awarded further Extension of Time for additional works and the revised completion date of 31 October 2011. But in 2011 the works were not finished again. Due to bad financial management of the Client the Contractor started to work in 2012 without proper planning of financing and signed contract prolongation. The contracts were signed in October 2012, only. During construction season 2012 the Contractor did execute work correctly, but blamed the Client for non-payment, delay in obtaining approvals from different authorities for Feasibility Study, which was received in February 2012. From the beginning of the construction in 2012, it was evident for the Engineer that the completion of the project in 2012 would be totally impossible, if budget will not be opened this year in-time. As a result, the project was not completed in 2012. Approximate completion time is June-July 2013. But at the end of the year 2012, it is unclear how remaining works will be financed next year. Budget for technical supervision “Posch and Partners”, which was calculated to be sufficient till end of 2012, now utilized, because works were not finished in time. In addition to incurred delays, the project cost has risen. At present and with design changes and adjustment of materials cost and VAT, the Contract sum including VAT becomes 5 036 298 000 KZT. This represented sum was approved by the State Construction Expertise in February 2012 and will not be changed. For the whole construction period 2012 the Contractor was not paid for his work. Only at the end of December first payments came from the republic budget. But it will not change present situation with works, due to the construction period is over. Some works will not be finished before mid 2013, these are related to road repair works and additional works appeared in the contract 2 years ago, according to the instructions, done by the Client. The total progress achieved so far until the end of 2012 is approximately 95% of works. The Contractor failed to meet deadlines defined in the Contract and damages of delay became applicable at the end of 2008. In view of the revised Time for Completion, the damages of delay have been recalculated and at the end of 2009 damages were 132 million KZT and only approx. 62 million KZT
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were deducted as instructed by the Employer to avoid cashflow problems for the Contractor. However, CWR decided to return the deducted damages of delay in May 2010. The Engineer has not been informed regarding application of further damages of delay because of continuing delays and lack of progress in site operations. Up to now the Engineer did not receive any instruction from the Client regarding deduction for damaged of delay. Main problems adversely affecting the progress of work are the same in past 5 years. They are: (a) lack of proper scheduling; (b) deficiency of resources management, manpower and equipment resources for work to be performed in 2 shifts; (c) difficulties in opening the budget for construction season 2012 which resulted in non-payment during whole year; (d) difficulties in obtaining of state expertise and Ministries approval for Feasibility Study necessary for implementation of design changes and increase the budget for construction works; e) passive attitude of the Client to financial problems in 2012 construction season.
All these facts brought to the relevant delays in construction program and increased budget price for construction works and works are not finalized yet. 2.3 Replicability. The Project was nation-wide, but the lessons and experience learned from the elimination of mercury contaminations can be replicated to address remaining stocks in the country, and there appears to be sufficient internal momentum to do so. Other more recent developments also make this an imperative. New project will be started in Kazakhstan related for utilization of mercury content lamps. The ways, how to utilize the mercury wastages will be raised up in closest future. With remaining capacity of unused areas the landfill is the best option in this matter. Kazakhstan will ultimately face similar compliance issues. The MOE would have a continued agenda of drafting relevant policy documents and action plans for mercury substances, even if future inventorying does not discover presence in the environment. Approaches in project design could also be replicated in other countries.
3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation The Project’s objectives, design and implementation remain highly relevant to Kazakhstan’s development and environmental priorities.This highlights the need to minimize social and environmental risks, human health such as those associated with mercury pollution. One of the main pillars is regional development focusing on the rural poor. The Strategy seeks to promote the development of small towns as “poles of growth”; enhance the performance of the agricultural sector; increase investment in rural infrastructure; and improve the policy framework in the area of the environment and natural resource use. Regulatory reform under the Project provides a solid and sustainable foundation for chemicals management. At the global level, the Project contributed to the fulfillment of Kazakhstan in complying with the Stockholm Convention. 3.2 Achievement of Global Environmental Objectives A review of Project outputs against key performance indicators reveals that the GEO was achieved. A total of 2,142,457 tons of contaminated materials were disposed (273,548 tons in Cell A2.1 for I class waste, 1,868,909 tons in Cells A1.1-A1.3 for II-IV class waste). Karbide factory, which contaminated the environment of Temirtau city, was dismantled. Environmental and human health conditions were improved by these actions since the risk of exposure has been significantly reduced or eliminated. Improvements to trans-boundary (and global) water quality is also ensured through the elimination of these substances and a more sustainable approach to mercury management. Prior to the Project, legislation on chemicals and hazardous waste was vague, sparse or minimal, with a complete absence of mercury pollution in definition or interpretation. Despite this, new legislation would be formed the legal foundation for a modern regulatory system for the management and control of mercury and other toxic
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and harmful chemicals and wastes. Finally, institutional capacity was strengthened through training activities in draft legislation, mercury monitoring and surveillance systems and analytical capacity (lab upgrading) of the State environment department for mercury detection in different media (e.g. soil, water). Prior to the Project no inventory or information system existed in full size and the project has developed knowledge of mercury pollutions and in the case of laboratories, they did not have the full ability to test for the presence of mercury pollution. 3.3 Efficiency An incremental cost analysis (ICA) is not applicable. To calculate economical effectiveness is not possible due to the fact the outgoing of ecological profits is missing, because no direct profit is existing. 3.4 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development
Not applicable.
(b) Institutional Change/Strengthening
The Project built and strengthened capacity at several levels. First, capacity was strengthened at the MOE and CWR in developing regulation and legislation that conforms to the reporting requirements of the Stockholm Convention as well as harmonizing chemical and waste management law. Second, the logistics of hazardous waste disposal has been internalized and the experience can be drawn upon for future operations (important for remaining stocks). Third, support to the Hydrometeorological Service for mercury detection (both training and equipment) better enables authorities to test and monitor toxic substances in different media (important for ongoing mercury inventorying). Fourth, public awareness rose through the continuation of media campaigns on the hazards of mercury, especially among those with a high risk of mercury exposure such as farmers, industry employees. In the same time, Yntumak dam reconstruction can become a good practice for students of construction faculties in universities.
4. Assessment of Bank and Borrower Performance 4.1 Bank (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory
The Bank identified an area of support that was and remains relevant to the Kazakhstan environment, public health, as well as with the global commons (Stockholm Convention on mercury). Outcomes (supported by a design) struck an appropriate balance among three key areas: (i) clean-up/ remediation, (ii) improving institutional readiness and compliance with EU standards, and (iii) public consultation and awareness building. The Bank properly identified regulatory reform as a significant risk at the outset of the Project, and emphasized an early start (2006) would help mitigate some of the concern about slow implementation. Unforeseen political instability and poor internal communications in the MOA CWR ultimately resulted in a Project downgrade to moderately unsatisfactory, not only from slow reform, but also due to the bad implementation of the contract works. The Bank may have set more modest expectations in terms of reform, perhaps stopping short of actual legislative enactment.
(b) Quality of Supervision Rating: Satisfactory
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The Bank closely supervised Project implementation through semi-annual missions, fiduciary review and maintained a constructive dialogue between the PMU, the MOA CWR and other stakeholders. Issues raised were addressed in a timely manner and were candidly reported in official documentation. The contract NRC-B3 was not 100% achieved by Project closing, but still led to the eventual outcome of a modern regulatory framework for chemicals and waste management. The Bank maintained focus on the fulfillment of Project objectives. Since the Project involved the disposal of hazardous materials, constant supervision of safeguard compliance and worker safety was also necessary. No accidents were reported during the entire Project period. The Bank revised targets and developed alternative strategies in light of new information that could only be distilled upon site remediation.
(c) Justification of Rating for Overall Bank Performance Rating: Satisfactory
World Bank support to the Government of Kazakhstan in preparing and implementing the Project is rated as satisfactory largely due to its relative responsiveness to issues and adaptation to unpredictable circumstances. 4.2 Borrower (a) Government Performance Rating: Satisfactory
The Government strongly supported the Project and its objectives. As the project progressed, mercury issues were also elevated to higher priority in the National Development Plan 2007-2010. Operational activities also benefitted from good inter-agency coordination.
(b) Implementing Agency or Agencies Performance Rating: Satisfactory
The Ministry of Agriculture (later Ministry of Environment), as the main implementing agency, remained committed to the Project and provided satisfactory support to the PMU on daily issues and in resolving problems. Some delays were experienced due to governmental changes resulting in several changes of CWR management over the life of the project. Each change required time to become familiar with the Project, its objectives and counterpart commitments. Most critical however was the initial lack of understanding between the MOA CWR and its consultants in charge of Feasibility Study approval activities which led to delays jeopardizing the Project – resulting in a Project delay for 1 year period. However, clarifications and a renewed commitment in the final year of implementation led to draft regulations, laws and legislation. Counterbalancing this shortfall, the PMU was very effective in its fiduciary and monitoring role as demonstrated by the success in meeting mercury destruction targets (and exceeding them in some cases) within budget and without any major issues. A significant determinant of the PMU’s success was their previous experience and involvement in the international projects.
(c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory
Overall borrower performance is rated as satisfactory taking into account the Government’s commitment to achieving GEO. Despite the partial completion of some activities under Contract NRC-B3, actions taken by the CWR and the superior performance of the PMU justify this rating. 4.3 Proposed arrangements for future operation of the project
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Real picture of future operation arrangements includes 2 main points. Use landfill for mercury contamination
After the project completion Republic of Kazakhstan received finished landfill with necessary infrastructure for future possible use, and personnel, which is familiar with the works and safety measures in implementation. The landfill area is not filled 100% and free space is presented. In future implementation of some ecology project for clean off mercury pollutions there is a possibility for re- opening the landfill. These days it is extremely important to name future operator of the landfill, who will be responsible for security, safety and maintenance. Necessary documents for future maintenance were submitted in its time.
Yntumak reservoir use. Main of main features of the reservoir became the structure of HPP, producing sufficient quantity of energy for site needs. Besides of, part of energy can be transduced and transferred to secondary users, for example, villages, located in vicinity of reservoir and possible private business, which can appear on territory in future. Water is wealth of agriculture, which can be used for irrigation of farms with increased productivity. Because, main pollutions, entering into river from Temirtau, accumulate on reservoir bottom, by sanitary norms water will be fit for irrigation. In May 2013 volume of the reservoir is 150 mln. m3. In future Karagandavodhoz plans to increase water to critically acceptable with consideration of safety factors of Yntumak reservoir.
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To Country Manager of the World Bank in Kazakhstan Mrs. Sebnem Akkaya
The Committee for Water Resources of the Ministry of Environment Protection of the Republic of Kazakhstan having considered the draft Implementation and Completion Results (ICR) Report for Nura River Clean-Up Project submitted with Letter No. 13/284 dated June 21, 2013 sends the following comments. Nura River Clean-Up Project is a large scale and long term project. Initial cost of project and terms of its implementation were fixed based on preliminary project evaluation conducted in 2002. As mentioned in the draft report, the structure of project results at the stage of preliminary evaluation was incomplete because of non availability of main and target values as project indicators covered not all works as per the project. Project indicators were revised in updated Feasibility Study in 2006 with repeated examination and appropriation of additional funds for project implementation from the republican budget. In 2012 there was an additional adjustment of Feasibility Study in connection with toughening of safety regulations at strategic sites, increase of project cost due to exchange rate difference and inflation accumulated during the project implementation period of 8 years for construction and consultative contracts. As a result of Feasibility Study adjustment, additional funds were appropriated from the republican budget, and co-financing share to the Loan was doubled, which required thorough analysis of project on the part of the Government of the Republic of Kazakhstan. Legal framework of the Republic of Kazakhstan has changed substantially during the period of project implementation. Enhancement of monitoring of international projects also required additional coordination with state authorities. However, despite the fact that a complex of circumstances made some corrections to the project implementation, we consider that project objectives and tasks are fully achieved. The Committee considers the draft ICR report for Nura River Clean-Up Project in general as acceptable. Head of Projects Implementation Department of “Kazvodkhoz” RSE of the Water Resources Committee of the Ministry of Environment Protection of the Republic of Kazakhstan, Project Coordinator /signature/ M.Kulzhano 27.06.2013
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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders
Not applicable.
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Annex 9. List of Supporting Documents
World Bank documents:
1. Project Concept Document, October 1999 2. Minutes of PCD Review Meeting, November 1999 3. Minutes of Decision Review Meeting, November 2002 4. Agreed Minutes of Negotiations between Kazakhstan and IBRD, February 2003 5. Project Appraisal Document, March 2003 6. Loan Agreement, December 2003 7. Kazakhstan Country Partnership Strategy, August 2004 8. Kazakhstan Country Portfolio Performance Review, April 2008 9. Kazakhstan Country Partnership Strategy Progress Report, May 2008 10. Implementation Status and Results Report (No.1 to 17), from 2003 to 2011 11. Aide-memoires, from 2003 to 2011
Other project-related documents:
Dam Safety Study Report, June 2001 Environmental Impact Assessment Report, April 2002 Final Report for Sampling at the Intumak Reservoir, October 2005 Guidelines for Intumak Reservoir Operation, November 2005 Operational Manual of Intumak Dam Structure, November 2005 Minamata Study Tour Report, August 2006 Blue Ribbon Panel Report (Chemical Analyst), May 2007 Blue Ribbon Panel Report (Microbiologist), June 2007 Blue Ribbon Panel Report (Toxicologist), June 2007 Information Newsletter on Nura River Environment, 2007 Industrial Ecological Monitoring Report, from 2007 to 2012. Committee for Water Resources of the Ministry of Agriculture of the Republic of Kazakhstan. 2005. Design of Landfill and Design of Clean-up of Karbide Factory Site Draft Design Report Part 1 – Landfill. April 2005. Committee for Water Resources of the Ministry of Agriculture of the Republic of Kazakhstan. 2005. Design of Landfill and Design of Clean-up of Karbide Factory Site Draft Design Report Part 2 - Clean-up of Karbide and associated Sites. April 2005 Detail Design Report for Nura River Clean-up Detail Design Report for Intumak Reservoir Rehabiliations
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Annex 10. Mercury Soil Monitoring – Before and After
All before maps are from the pre-excavation investigation program and the after maps are the success control maps which were prepared to measure whether contractor had successfully clean- up the areas. Green color indicates mercury measurements higher than 2.1 mg (mercury) /kg (soil) but lower than 10 mg/kg, yellow color means measurements higher than 10 and lower than 50 mg/kg and red means higher than 1,500 mg/kg. The river clean-up of 18 km was divided into different sections, named Zone A until Zone J.
River Bed BEFORE AFTER
Zone C BEFORE AFTER
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Zone D BEFORE AFTER
Zone EF BEFORE AFTER
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BEFORE AFTER
Zone GH BEFORE AFTER
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BEFORE AFTER
Zone IJ BEFORE AFTER
66 KAZAKHSTAN NURA RIVER CLEAN-UP PROJECT
NATIONAL CAPITAL PROJECT CITIES REGION CAPITALS ROADS MAIN CITIES RAILROADS REGION BOUNDARIES INTERNATIONAL BOUNDARIES
50° 60° To Tyumen 70° 80° 90° 0 100 200 300 400 KILOMETERS RUSSIAN To Kurgan To Chelyabinsk Petropavlovsk To Omsk To Omsk FEDERATION 0 100 200 MILES To Novosibirsk NORTH 90° To Barnaul RUSSIAN FEDERATION To KAZAKHSTAN Ertis Volga Ufa To Samara Kostanai (Irtysh) To Kokshetau Ukal Ob' Saratov (Tobol) Pavlodar To Orenburg Tobyl PAVLODAR 50° AKMOLA 50° Oral KOSTANAI Ekibastuz Chapaevo (Ishim) Zhaiyk Esil Semi Oskemen WEST ASTANA
(Ural) Aktobe Nura Buktyrma KAZAKHSTAN Arkalyk Temirtau EAST Yrghyz Torghai Karaganda Lake To Oiyi KAZAKHSTAN See details at the bottom Zaisan Burqin Volga AKTOBE ATYRAU Embi Ayakos
Ayakos Atyrau Zhem KARAGANDA To Astrakhan Shalkar Zhezkazghan Balkhash Sarysu Aral Lepsi Lake Aksu Alakol Lake Karatal Saryshaghan Balkash Beineu Toretam Taldykorgan To Yining Ile MANGHYSTAU KYZYLORDA ZHAMBYL Korghas Aral Shu ALMATY To Yining Aktau Sea Kzylorda (Chu) Caspian To Nukus Talas Syrdariya Kegen Sea Shu Almaty CHINA Turkistan Shilik Taraz To Bishkek Shymkent K Y R G Y Z R E P. 80° SOUTH
40° KAZAKHSTAN RUSSIAN FEDERATION
UZBEKISTAN 40° To Dzhizak ASTANA
To Dushanbe KAZAKHSTAN TURKMENISTAN TAJIKISTAN Aral Lake Sea Balkash Caspian Sea KYRGYZ REP. AZERBAIJAN UZBEKISTAN ISLAMIC REPUBLIC TURKMENISTAN TAJIKISTAN CHINA OF IRAN 60° 70° AFGHANISTAN ISLAMIC REPUBLIC OF IRAN AFGHANISTAN
This map was produced by the Map Design Unit of The World Bank. 70° Ishim 72° 74° The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank ASTANA Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.
GSDPM Map Design Unit AKMOLA Nura-Ishim Canal
Sabyndy Vishnevka Kurgaldzhino Malinovka Canal Wetlands Nura
Osakarovka Kurgal'dzhinskiy Karaganda
tysh-
r
I
Ozero Tengiz Kiyevka Aktau KARAGANDA Tokarevka Nura
Nura Ulyanovskiy
50° Temirtau 50° Intumak Kopekty Kenzharyk Dam/Reservoir Sohalinskiy Karaganda Saran Aktas Zakharovka Sokur Shakhtinsk 0 50 100 Dolinka
Abay IBRD 31786 KILOMETERS MAY 2013 Karabas
70° 72° 74°