Draft Environmental Impact Assessment

Project Number: 41193 July 2011

Mongolia: Western Regional Road Corridor Development Program–Tranche 1

Prepared by SMEC Asia Ltd.

The environmental impact assessment is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website.

DRAFT

ENVIRONMENTAL IMPACT ASSESSMENT REPORT

TA No. 7449-MON: Regional Transport Development Project

Western Regional Road Corridor Development Program

Bagga – Ulaan – Davaa – Mankhan (103.3km)

CURRENCY EQUIVALENTS (As of July 2011) Currency Unit – Mongolian Tugrug (Tg) 100 Tg = $0.072 $100 = 137,500 Tg

The exchange rate of the Tg is determined under a floating exchange rate system. In this report, the rate used is the rate prevailing at the above date.

LIST OF ABBREVIATIONS USED

ADB Asian Development Bank ADT Average Daily Traffic AMa Absolute Maximum AMi Absolute Minimum о С Degrees of Celsius cm Centimeter EIA Environmental Impact Assessment EMP Environmental management Plan GOM Government of Mongolia GRM Grievance Redress Mechanism ha Hectare km Kilometer km/h Kilometers per hour KUNNP Khar-Us Nuur National Park m Meter MESC Ministry of Education, Science, and Culture MFF Multitranche Funding Facility mg/m3 Milligrams per cubic meter MLEIA Mongolian Law on Environmental Impact Assessments MLEP Mongolian Law on Environmental Protection MNET Ministry of Nature, Environment and Tourism MOF Ministry of Finance MRTCUD Ministry of Road, Transport, Construction and Urban Development NAMHEM National Agency of Meteorology Hydrology and Environmental Monitoring NGO Non-Governmental Organization NM National Monuments NP National Parks NR Natural Reserves NSO National Statistical Office PIU Project Implementation Unit PRC People’s Republic of China RP Resettlement Plan SE Supervising Engineer SPA Specially Protected Area SPIA State Professional Inspection Agency USD US Dollar UNDP United Nations Development Program TA Technical Assistance UB Ulaanbaatar WCS World Conservation Society WRRC Western Regional Road Corridor WWF World Wide Fund for Nature

NOTE: (i) In this report, “$” refers to U.S. Dollars. TABLE OF CONTENTS

1. EXECUTIVE SUMMARY i 1.1 Introduction i 1.2 Critical Facts i 1.3 Significant Findings ix 1.4 Recommendations xvi

2. INTRODUCTION 19 2.1 Background 19 2.2 EIA Preparation 20 2.3 Associated Project Facilities 21 2.4 Report Structure 22

3. POLICY LEGAL AND ADMINISTRATIVE FRAMEWORK 24 3.1 Environmental Policy 24 3.2 Environmental Law 25 3.3 Environmental Impact Assessment Requirements 29 3.4 Administrative Framework 32 3.5 Project Classification 36

4. DESCRIPTION OF THE PROJECT 37 4.1 Type of Project 37 4.2 Description of the Proposed Actions 37 4.3 Bill of Quantities (BOQ) for the Project 39 4.4 Need for the Project 39 4.5 Project Location 44 4.6 Associated Project Facilities 47 4.7 Traffic Projections 48 4.8 Implementation Schedule 49

5. DESCRIPTION OF THE ENVIRONMENT 50 5.1 Environment of Mongolia 50 5.2 Assessment Process 50 5.3 Definition of the Project Area 50 5.4 Physical Resources 50 5.5 Ecological Resources 68 5.6 Biodiversity 68 5.7 Economic Development 78 5.8 Social and Cultural Resouces 80

6. ALTERNATIVES 93 6.1 Alternative Analysis 93 6.2 No-action Alternative 93 6.3 Location Alternatives 93 6.4 Technological Alternatives 93

7. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 95 7.1 Screening of Potential Impacts 95 7.2 Anticipated Environmental Impacts 96 7.3 Physical Environment 97 7.4 Ecological Resources 105 7.5 Socio-Economic Impacts 109 7.6 Climate Change Impacts 111 7.7 Cumulative and Induced Impacts 114

8. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE 115 8.1 Stakeholder Workshops 115 8.2 Other Public Consultations 117 8.3 Consultations within the Project Area 118

9. GRIEVANCE REDRESS MECHANISM 120 9.1 Introduction 120 9.2 Objectives of Grievance Redress Mechanism 120 9.3 Current Practice 120 9.4 Proposed Grievance Redress System 121 9.5 Responsibilities of the PCC 122

10. ENVIRONMENTAL MANAGEMENT PLAN 124 10.1 Environmental Safeguards 124 10.2 Mitigation Measures 124 10.3 Implementation 128 10.4 Implementation Schedule 129 10.5 Environmental Cost Estimate 130 10.6 Institutional Arrangements 130 10.7 Capacity Building 132 10.8 Environmental Monitoring 133

11. CONCLUSION 134

APPENDIXES 1. Environmental Management Plan 2A. Climate Variables and Air Quality Standards 2B. Water Quality Standards 2C. List of Flora and Fauna 2D. Historical and Cultural Heritage

1. EXECUTIVE SUMMARY

1.1 Introduction

1. Purpose of the Project. The Government of Mongolia acting through its Ministry of Roads, Transport, Construction and Urban Development (MRTCUD), has undertaken the upgrading of the Western Regional Road Corridor (WRRC) with several funding arrangements. The 103.3 km road section from Baga Ulaan Davaa to Mankhan (Tranche 1) is an integral part of the said road corridor. The development of the road section Baga Ulaan Davaa to Mankhan (herein after referred to as the Project) has been identified for financial assistance from the Asian Development Bank (ADB) under the Multitranche Financing Facility (MFF) extended for the development of several sections of the WRRC.

2. Scope of work. The scope of work for the preparation of the EIA consisted of; collection of existing information related to the environmental conditions along the proposed road section, assessment of potential location specific environmental impacts, development of preventive/mitigation measures for significant impacts, evaluation of alternative alignments and alternative technologies, economic assessment of environmental benefits and costs, preparing Environmental Management and Monitoring Plans, and public consultations.

1.2 Critical Facts

1.2.1 Legal and Administrative Framework

Legal framework

3. Mongolia’s environmental legal framework is similar to international practices and is structured as shown in Table 1.1 below.

Table 1.1: Key Environmental Legislation in Mongolia Name of the Law Year Adopted The Constitution of Mongolia 1992 1995, revised in 2006 Law on Environmental Protection and 2008 Law of Land Jun 2002 Law on Land Cadastre and Mapping Dec 1999 Law on Land Fees Apr 1997 Law on Land Possession Jun 2002 Law on implementation of regulations related to Land Possession Law Jun 2002 Law on Geodesy and Cartography Oct 1997 Law on Special Protected Areas Nov 1994 Law on Buffer Zones Oct 1997 Law on Water Apr 2004 Law on Water and Mineral Water Resource Fee May 1995 Law on Forests Mar 1995 Law on Fees for Timber and Fuel wood Harvesting May 1995 Law on Prevention of Steppe and Forest Fires May 1996 Law on Reinvestment of Natural Resource Use Fees for Conservation Jan 2000 Law on Natural Plants Apr 1995 Law on Natural Plant Use Fees May 1995 Law on Protection of Plants Mar 1996 Law on Hunting 2000, 2003 Law on Fauna 2000 Law on regulation of export and import of endangered species of flora and fauna Nov 2002 Law on Hunting Reserve Use Payments and on Hunting and Trapping Authorization Fees May 1995 Law on Underground Resources Dec 1994 Law on Minerals 1997, revised in 2006 Petroleum Law 1991 Law on Air Mar 1995 Law on Hydrometeorology Nov 1997 Law on Protection from Toxic Chemicals Apr 1995 Law on Environmental Impact Assessment 1998, revised in 2002

Law on Tourism 1998 Law on Solid Waste Nov 2003 Law on prohibiting export and transportation of Hazardous Waste Nov 2000 Source: UNDP. 2008. Institutional Structures for Environmental Management in Mongolia.

EIA requirements

4. The Project will be subject to the environmental requirements of both Mongolia and those of the ADB. These requirements are as follows.

5. EIA requirements of ADB. ADB Safeguard Policy Statement (SPS) sets out the policy objectives, scope and triggers, and principles for environmental safeguards, involuntary resettlement safeguards, and Indigenous Peoples safeguards. The objective of the Environmental Safeguards is to ensure the environmental soundness and sustainability of projects and to support the integration of environmental considerations into the project decision-making process and requires a screening process for each proposed project, as early as possible, to determine the appropriate extent and type of environmental assessment so that appropriate studies are undertaken commensurate with the significance of potential impacts and risks. Subsequent to the screening process an environmental assessment should be conducted to identify potential direct, indirect, cumulative, and induced impacts and risks to physical, biological, socioeconomic (including impacts on livelihood through environmental media, health and safety, vulnerable groups, and gender issues), and physical cultural resources in the context of the project’s area of influence. Therefore, all projects considered for loans and investments by ADB are subject to classification for the purpose of determining environmental assessment requirements. The determination of the environment category is to be based on the most environmentally sensitive component of the project. Within this system, projects are screened for their expected environmental impacts and assigned to one of the following four categories: (i) Category A: projects with potential for significant adverse environmental impacts - an environmental impact assessment (EIA) is required to address significant impacts, (ii) Category B: projects judged to have some adverse environmental impacts, but of lesser degree and/or significance than those for category A projects - an initial environmental examination (IEE) is required to determine whether or not significant environmental impacts warranting an EIA are likely, (iii) Category C: projects unlikely to have adverse environmental impacts - no EIA or IEE is required, although environmental implications are still reviewed, and (iv) Category FI: projects are classified as category FI if they involve a credit line through a financial intermediary or an equity investment in a financial intermediary - the financial intermediary must apply an environmental management system.

6. EIA Requirements of Mongolia. The EIA requirements of Mongolia are regulated by the Law on Environmental Impact Assessment. The type and size of the planned activity determine whether the responsibility lies with the Ministry of Nature, Environment and Tourism (MNET) or aimag government. There are two types of EIAs defined in the Law: General EIA and Detailed EIA.

7. Figure 1.1 below provides a simplified diagram of the EIA procedure in Mongolia.

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Figure 1.1: EIA Procedure in Mongolia

8. To initiate a General EIA, the project implementer submits a brief description of the project to the Ministry of Nature, Environment and Tourism or local authority, including the feasibility study, technical details, and drawings. The General EIA will lead to one of four conclusions: (i) no detailed EIA is necessary, (ii) the project may be completed pursuant to specific conditions, (iii) a detailed EIA is necessary, or (iv) project cancellation. The General EIA does not inolve any cost to the proponent and usually takes up to 12 days.

9. The scope of the detailed EIA is defined by the General EIA. The detailed EIA must contain the following chapters: (i) environmental baseline data; (ii) project alternatives; (iii) recommendations for minimizing, mitigation and elimination of impacts; (iv) analysis of extent and distribution of adverse impacts and their consequences; (v) risk assessment, (vi) environmental protection plan; (vii) environmental monitoring program; and (viii) opinions of residents on whether the project should be implemented. As per Mongolian Law on Environmental Impact Assessment requirements MNET after a General EIA has determined that the WRRC Project warrants a Detailed EIA which is similar in content and scope to an EIA required for an ADB Category A Project.

Administrative framework

10. Institutional Framework of the Ministry of Nature, Environment and Tourism. The Ministry of Nature, Environment and Tourism (MNET) is the agency primarily responsible for the implementation of environmental policy in Mongolia.

11. MNET operates through the following departments and agencies:

 Department of Sustainable Development and Strategic Planning  Department of State Administration and Management  Department of Environment and Natural Resources  Department of Specially Protected Areas Administration and Management  Department of Tourism  International Cooperation Division  Division of Information, Monitoring and Assessment  Finance and Investments Division  Ecologically Clean Technologies and Science Division  National Agency for Meteorology, Hydrology and Environmental Monitoring  Water Authority  Forest Authority iii

12. Aimag and soum governors are responsible for environmental management issues through individual environmental departments, with the exception of protected areas management. Aimag level inspectors report to the State Professional Inspectors Agency.

1.2.2 Description of the Project

13. Type of Project. The proposed Project is a road upgrading and paving project. The project activities will not include significant realignments or development of long sections of new alignments in previously undisturbed areas.

14. Description of the Proposed Actions. The entire road section between Baga Ulaan Davaa to Mankhan will be developed as a 2-lane road. The following types of road improvement options have been proposed:

 New construction: road upgrading on the existing alignment;  Pavement and shoulders: asphalt concrete overlay with an asphalt concrete regulating course, selected fills, granular material in shoulders;  Blasting works (where required) in limited areas; and  Road safety: road markings, road signs, and guide posts.

15. Total earthwork quantities for the Project are shown in Table 1.2, below.

Table 1.2: Estimated Quantities for the Project No Description Quantity 1.00 General Various 2.00 Site Clearance 167 Ha 3.00 EARTH Works 1,845,537 m3 4.00 Excavation for Structures 2,082 m3 5.00 Pipe Culverts and drainage Works (Culverts and Stone Pitching) 3,063 m 6.00 Passage of Traffic 36 km 7.00 Sub Base and Base 592,985 m3 8.00 Bituminous Pavement Works 36,581 m3 9.00 Concrete and Piling Works 557 m3 10.00 Micellaneous Bridge Works 75 m 11.00 Road Furniture and Traffic Markings Various

16. Need for the Project. The major goal of the Project is to contribute to the economic development and regional trade and cooperation in the Western Region of Mongolia by providing continuity to the Western Regional Road.

17. Environmental Category of the Project. The Western Regional Road Corridor Development project of which the present Project is a component, has been classified by ADB environmental category A.

18. Project Location. The proposed road is within the Western part of Mongolia between Baga Ulaan Davaa to Mankhan (Figure 1.2).

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Figure 1.2: Project Location

19. Implementation Schedule. The proposed implementation schedule is presented below in Table 1.3.

Table 1.3: Project Implementation Schedule 2011 2012 2013 2014 2015 2016 Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 A. Design and Monitoring Framework A1: Road Construction Works Tranche 1 A1.1: Contract Repackaging A1.2: Procurement (3 Packages) A1.3: Contract Award A1.4: Civil Work (Package 1: Km DEFECTS 0 - 25) A1.5 Civil Work (Package 2: Km 25–75) A1.6: Civil Work (Package 3 Km 75-103.3) A2: Establish DOR Road Maintenance Unit Tranche 1 A2.1: Confirm Equipment Requirement

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2011 2012 2013 2014 2015 2016 Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 A2.2: Procurement (for Equipment) A2.3: Contract Awarding A2.4: Equipment take-over by DOR A2.4: Road Maintenance Training to Unit Source: Consultant TA No. 7449-MON.

1.2.3 Description of the Environment

20. Definition of the Project Area. The proposed road traverses Khovd aimag (province) with a total population of approximately 89,240 (2009). The soums within the Project Area include:

 Mankhan soum which includes Botgon bagh,Tugrug gol bagh,Takhilt bagh and Bayangol bagh.  Must soum including Bayankhairkhan bagh and Davst bagh.

Physical resources

21. Topography. The project alignment will primarily follow existing roads that pass through mountain areas, hills, canyons, valleys, and plains with elevations ranging from 1,300 m to 2,900 m above sea level.

22. Geology. The project area is situated in the Mongol Altai high mountainous area. According to the geo- morphological map of Mongolia, the terrain primarily includes excessive rolling ranges, medium rolling ranges and mountains, slight rolling ranges of sloped structure, mountainous ravines, semi-level surfaces of mountain skirts, glacial valleys, mountains with sharp ridged peaks, alluvial lake valleys, delluvial - prolluvial and mountain river valleys.1

23. Soils and Permafrost. In Bodonch Canyon and high-altitude parts of Mongol Altai soils are diverse and range from semi-desert brown, desert gray brown, Govi brown, and light krasnozem (red soil) soils to high mountain steppe raw humic soils, and soils of high mountain tundra. Both perennially and seasonally frozen soils occur in the project area. High altitude parts of Mongolian Altai between exit of Bodonch Canyon and Mankhan, present perennially frozen soil with the annual temperatures of 0 – -50C and an active layer of 1.0 – 4.5 m.

24. Seismic Characteristics. The project area resides in the Mongol Altai and Gobi Altai seismically active zones where earthquakes with the magnitude of about 8 were registered in the past (1931 and 1957).

25. Natural Disasters. Flashfloods (mudflows) and drifting snow are distinctive features of the project area. Flashfloods are widespread near Baga Ulaan Pass. Drifting snow is characteristic of Bodonch Canyon.

26. Climate and Air Quality. The monthly absolute maximum and minimum air temperatures observed at meteorological stations along the road show that July is the warmest month and January or February is the coldest. During the last ten years, the absolute maximum air temperature reached 39 oC at Bulgan soum in Khovd Aimag in 2004 and the absolute minimum air temperature was -44 oC at Mankhan soum in 2005.

27. Some 85.0 - 94.5 percent of annual precipitation falls between May and September. During the cold season snowstorms can occur, causing the road to be closed. The stable snow cover formation date varies from the middle of November to the beginning of December, with snow cover completely clearing up in March. The dominant wind direction is from the west and northwest, with maximum wind speed varying from 18 to 28 m/s. Air quality is good and does not exceed maximum allowable concentrations except local dust pollution

1 Government of Mongolia. 2007. EIA. Ulaanbaatar. vi

caused by vehicles.

28. Hydrology and Water Resources. Water resources in the project area are represented by surface water (rivers, springs and lakes) and groundwater. The largest rivers include Khovd and Buyant. Spring floods in the rivers of the project area generally begin in the middle of April, with peak flow occurring in late June and continuing for 110-150 days. The spring flood flow is 60 – 90 percent of total annual flow of Altai Mountain Rivers. The groundwater resource distribution is uneven. Moving from north to south, groundwater resources become more sporadic and mineralization increases. The water quality of all of the rivers and lakes of the Project Area was assessed as “very clean” and “clean”.

Biodiversity

29. Flora. Dominant flora in the project area is associated with specific conditions of the area. The vegetation zones in the project area are High Mountain, Dry Steppe, Stepped Desert, Grasses-Undershrub Desert. The lists of plants found in each of the zones are given in Appendix IIC (Table 1). Some 86 species of plants listed in the Mongolian Red Book can be found in Khovd Aimag. Among these are Red Goyo, Saussurea Involucrate, and Shining Water Lily.

30. Fauna. The Mongolian Altai region is characterized by its rich fauna diversity. There are 360 species of vertebrates, including 90 species of mammals, more than 250 species of birds, 11 species of reptiles, 123 species of insects, 10 species of fishes, and 1 species of amphibian. Some of the rare and endangered mammals found in Khovd aimag are Asiatic wild dog, Snow leopard and Saiga. Some migrant birds that are rare and endangered and commonly seen in these areas are Damatian pelican, Great white egret, White tailed eagle and Swan goose. Detailed lists of the rare and endangered mammals and birds are presented in Appendix IIC, Tables 2 and 3, respectively.

31. Mankhan Nature Reserve (NR). This reserve (Figure 5.10) was established in 1993 in order to protect the population of Mongolian Saiga. The total area of the reserve is 390,071 ha. It has ecological biodiversity importance and provides the habitat for endangered rare mammal - Mongolian Saiga Antelope (Saiga tatarica mongolica). The population of Saiga within Mankhan NR is decreasing2 – the number was over 130 recorded in 1982, 70 in 1993, 44 – in 1998, and, finally, in January 2007, the total population of this antelope was 15-17 as was reported at the stakeholder meeting in Khovd. This is likely due to migration of the species to Dorgon Khuren steppe located within KUNNP where about 200 Saiga were observed by rangers.

Economic Development

32. Gross Domestic Product. The GDP of Khovd Aimag amounted to 44,033.6 million Tugrug (476,500 Tugrug per capita) in 2005. The most important sectors were agriculture, hunting and forestry (76.0 percent), transport and communication (5.1 percent), and education (5.1 percent). The most important sectors were agriculture, hunting and forestry (71.7 percent), education (6.5 percent), financial intermediation (5.8 percent), and trade (4.5 percent).

33. Agriculture. Animal breeding is the main economic sector in Khovd aimag. The contribution of the sector amounts to 76.0 percent of aimag GDP (33.4 billion Tugrug) in Khovd Aimag. The number of livestock in both aimags is constantly increasing. Crop production is of less importance in the agricultural sector of Khovd.

34. Mining. Mining activity in Western Mongolia is associated with a number of mines operating and other sites that are being planned for coal, gold, silver extraction.

35. Water supply systems. The water supply system in Khovd provides centralized drinking water distribution to office buildings and urban residential area. Daily water supply is 4,600 m3 water from 9 groundwater wells. Traditional dwellings (ger) in Khovd are supplied with water from 8 water distribution stations, 4 deep wells and 3 hand water pumps. The water consumption is 388,300 m3 water per day. Some 2,133 wells are used for water supply in rural areas. Surface water is the main source of water for livestock.

2 Khar Us Nuur National Park Management Plan 2006-2010. KUNNP Administration & WWF, Hovd, p.37, 2006. vii

36. Electricity distribution systems. Khovd aimag is largely served with electricity from Russia, because energy capacity at local level is limited. A 110 kV transmission line links Russia and Olgiy town of Bayan-Olgii Aimag and Miyangad soum of Khovd Aimag. Khovd town, Duut and Erdeneburen soums of Khovd Aimag are connected to this line with a 35 kV transmission line.

37. Land Use. Agriculture has been the dominant land use in the aimag, occupying more than 77 percent of the total land in each aimag. The land used for “transportation and network” occupies 0.31 percent of the total territory in Khovd aimag. The proposed road would follow the existing earthen tracks, thereby slightly reducing the land use for “transportation and network.”

Table 1.4: Land Area by Classification Khovd Aimag Land classification Area Percent of total (,000 ha) (%) Agricultural lands 5,885,0 77 Cities, villages and other settlements 28,405 0.3 Transportation and network land 21,128 0.2 Forest resource land 464,851 6.1 Water resource land 43,117 0.5 State special use land 1,163642 15.2 Total area 7,606,038 100 Source: Land management report of Khovd and Bayan-Olgii Aimags, 2005.

38. Tourism. Ecotourism dominates in the region. There were 19 tourist camp sites, visited by a total of 8,247 international and domestic tourists in Khovd Aimag, in 2006. A recreational center, spa-resort, and children’s camp are attractions for several hundred tourists per year along with biological resources.

39. Health Services. Khovd Aimag: Some 14 medical clinics, 2 intersoum medical clinics, and 6 hospitals for families provide basic service to local residents and herders. A hospital in Khovd city plays a major role as a regional hospital to serve patients from the western region. In total, there are 569 hospital beds. Additionally, there are 16 private hospitals and 6 pharmacies. Some 128 physicians, 11 pharmacists, 235 nurses, and 115 medical assistants work in medical services of the aimag. On the whole, there are 14 physicians, 12 medical assistants, 38 mid-level medical personnel, and 61 beds per 10,000 persons.

40. Noise and Vibration. The road corridor runs largely through a remote area with almost no settlements and the only sensitive area is the Mankhan Nature Reserve which may be affected by high noise levels during construction.

Social and cultural resources

41. Social Resources. The population of Khovd Aimag is 91,687, and the aimag center 32,351. Population density in Khovd is 1.09. Mongols dominate the population in Khovd (82 percent).

42. Historical and Cultural Heritage. Human settlement in the project area can be traced back to as early as the Paleolithic and Neolithic eras as evidenced by the following sites: Petroglyphs, Deer Stones and Khirigsuurs (stone-mound). However, the project road will not traverse across the sites.

1.2.4 Alternatives

43. No-action alternative. Failure to develop the project road section (No Action Alternative) would result in continued impediments to travel and transport of people, goods and a substantial constraint to future improvements in the economy of local communities. Using multi-track earth roads will continue to affect pasture lands and habitats, flora and deteriorate air quality with dust. Improving the accessibility to environmentally sensitive protected areas located close to the road may result in increased poaching and transmission of diseases. However, these adverse impacts can largely be avoided or mitigated by careful planning and implementation of an environmental management plan. Accordingly, it has been determined that the “No Action Alternative” is not a reasonable option. viii

44. Location Alternatives. Although the proposed road traverses through the Mankhan Nature Reserve (MNR) the consultations at the Khovd Aimag Centre with the Deputy Governor, Head of Environmental Department and Supervisor of Environment and Tourism Center and Biodiversity and Specially Protected Area Specialist and the local office of the WWF discouraged the need for considering an alternative alignment that bypasses the MNR. Their concerted view was that an alternative road to bypass the MNR would be a burden considering the cost and it may also have potentially adverse impacts (vide item 9.2 under Section 9: Public Consultation and Information Disclosure).

45. Technical Alternatives. Given the projected traffic flow, sub-grade strength, and extreme climate conditions, two road surfacing alternatives are possible: double bituminous surface treatment (DBST) or asphalt concrete (AC). AC pavement has the advantage of strength and durability, with a longer design life of more than 30 years with appropriate routine and periodic maintenance. DBST pavement is less strong and durable and its application generally has a design life of up to 20 years with appropriate maintenance. DBST pavement is vulnerable to the progressive loss of cover aggregate and the deepening and expansion of potholes. Accordingly, the maintenance costs for DBST is higher than AC pavement.

46. The decision on pavement selection will be made considering costs (capital and recurrent) and in consultation with a cold climate pavement specialist.

1.3 Significant Findings

1.3.1 Anticipated environmental impacts

47. It has been recognized that the most efficient and cost-effective way to ensure that construction works are environmentally sound is to include these requirements in the construction contract provisions.

Physical environment

48. Topographic Characteristics and Soils. Impacts: Impacts of the Project on land will be positive due to reduced land degradation by diversion of traffic from earth tracks to a hard surface road. Provided erosion prevention measures in the construction and operational phases are taken, no substantial adverse impacts on soils are foreseen. No contamination of soil is foreseen during construction. Significant environmental impacts on soils are not anticipated during the operation of the road. Mitigation: No mitigation actions related to potential loss of agricultural soil and contamination of soil are warranted.

49. Impact: Degradation of ice-rich permafrost due to natural causes or anthropogenic activities (road construction) can trigger a process called thermokarst. Activities such as construction of roads and removal/disturbance of vegetation cover in permafrost areas can severely affect the topography leading to subsidence and disruption of engineering structures and modification of drainage patterns. Mitigation: Contracts will contain provisions to avoid adverse impacts due to altered road embankments, borrow pits and provisions for quarry operations. Adequate anti-erosion measures such as minimizing the area of soil clearance, selection of less erodible material and good compaction, placement of gabions and riprap will be implemented, as described below in Table 1.5. A preventive approach will be followed to avoid permafrost degradation where possible. It implies detour of areas with poor cryogenic and hydrogeological conditions and providing good engineering design measures.

Table 1.5: Erosion Control Measures Potential Erosion problem Mitigation Measures Use of spoil and borrow pits All available spoil will be used for structural fill for access roads and embankments before borrow pits are excavated Location of borrow pits Borrow pits will be centrally located to serve more than one site Location of spoil and borrow Spoil and borrow pits will be sited far from industrial, agricultural, residential, pits historic and ecological sites Top soil from borrow pits Top soil from borrow pits will be removed and set aside. When the Project is completed the areas will be regarded, the top soil replaced and the area reseeded. Intercepting ditches will be constructed on the high side of the restored pit to minimize erosion ix

Potential Erosion problem Mitigation Measures Spoil disposal Soil will be spread on the lowest yielding, least productive land available Soil disposal When soil is spread on slopes for permanent disposal it will be buttressed at the toe by a retaining wall. The surface of the slope will be stabilized with shotcrete, riprap or laid rubble as necessary, prior to seeding Steep cuts All steep cuts will be flattened and benched Natural watercourses Watercourses will not be blocked and temporary soil and rock stockpiles will be designed so that runoff will not induce sedimentation of waterways Source: Adapted from EIA 2007.

50. Climate and Air Quality. Impacts: Potential moderate, temporary air quality impacts during the construction stage of the Project can be anticipated due to fugitive dust generation. Minor increases in the level of nitrogen oxides (NOx) and sulphur oxides (SOx) from construction plants and machinery are expected. No significant environmental impacts on air quality are anticipated during operation of the road. Moreover, the improved road would reduce dust emissions caused by driving on the earth tracks. No significant air quality impacts warranting mitigating actions in the operational phase are anticipated. Mitigation: Contracts will contain provisions to avoid adverse impacts on air quality such as: trucks carrying earth, sand or stone will be covered to avoid spilling, operators will be required to install emission controls. Routine air quality monitoring will also be required in areas of high potential impact (asphalt plants, construction camps) during the life of the Project.

51. Surface and Groundwater Hydrology. Impacts: No impacts on water quality or the availability of water for domestic or agricultural use are anticipated. As groundwater in the project area is relatively deep (> 5 m), no impacts on groundwater resources are anticipated in either the construction or operation phases of the Project. No wells / hand pumps are located in the area of potential impact. There will be no net loss of water access points. However, fuel and chemical substances used for road construction could contaminate groundwater and surface water if they are not properly stored and disposed. Mitigation: The Contractor will develop and implement contingency plans for control of oil and other dangerous substance spills (Spill Management Plan); Fuel storage, maintenance shop and vehicle cleaning areas would be stationed at least 300 m away from the nearest water body; Stormwater drainage and retention basins would be constructed and a silt trap (where a river/stream is nearby) would be installed prior to commencement of construction to control runoff water and sediment and prevent entry of contaminants into a water body; Oil and grease are likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater would be directed into an oil interceptor prior to discharge; Mitigation measures for minimizing construction impact should be considered for implementation during road maintenance, especially during major road maintenance.

52. Noise. Impacts: Noise is not a significant problem along the route, since it does not intersect any main town or fixed settlements. However, construction noise could adversely affect the Saiga population in the Mankhan nature Reserve. Significantly high noise will be generated from blasting at Bodonch Canyon. Mitigation: Noise impacts during the construction phase will be mitigated through the use of source controls, site controls, and time and activity constraints.

Biodiversity

53. Flora. Impacts: No threatened or endangered flora species are located within the right of way (ROW). No adverse impacts to such species are likely to occur due to construction activities. Plant species present within the ROW are native species, which are highly tolerant of grazing, compaction, and other physical disturbances. Moreover, construction of the paved road will have moderate positive impact on flora by excluding the use of multiple earth tracks that affect flora. Mitigation: None.

54. Fauna. Impacts: Impacts were assessed in regard to the following issues:

 Habitat Loss and Wildlife Migration Patterns. No significant habitat loss is anticipated; moreover, habitat gain is anticipated as a result of construction of an asphalt road instead of multiple earthen tracks running in parallel throughout the width of the alignment. Potential wildlife crossing zones were identified by experts of Specially Protected Area Administration Department in Bayan-Olgiy, WCS and WWF Mongolia Programme Office as shown in Figure 1.3 below. Discussions with experts of Specially Protected Area Administration Department in x

Ulaanbaatar and Bayan-Olgiy, WCS and WWF and observations during field trips provide evidence that the magnitude of adverse impacts to wildlife patterns will likely be insignificant because: o The road alignment under development is an existing one that has been used for many years. Although the traffic volume is presently low, the existing alignment has multiple earthen tracks with widths up to 500 m which causes disturbance to a larger area than the paved road will. o The projected volume of traffic is quite low: less than 700 vehicles per day by year 2013 and a bit more than 2000 by year 2022. Such traffic intensity will have only minor effects on fauna and migration patterns. o Construction activity will be short-term and mitigation measures will be implemented, there will not be any substantial negative impacts.  Poaching. Poaching presents a threat to wildlife in the project area along with natural factors, such as unfavourable weather conditions (severe winters and drought summers) and food shortage. The WWF representative in Mongolia noted that the network of poachers and illegal wildlife traders in the project area has been terminated. The activity of this network was weakened by a new WWF project aimed at conservation of the Saiga Antelope. This has assisted in arresting the poaching in the area. Currently WWF supports 8 rangers equipped with radio-communication responsible for Saiga conservation. The rangers work in close contact with two anti-poaching brigades also supported by WWF, whose duties include control of poaching. The Customs officials at the Mongolian/Chinese and Mongolian/Russian border reported no illegal trade cases over many years.  Aquatic Fauna. No substantial impacts on aquatic fauna are anticipated.

Figure 1.3: Migration Patterns of Wildlife in the Project Area

Source: Adapted from EIA 2007.

55. Site specific impacts:

 Bodonch Canyon. Potential impacts on fauna in Bodonch Canyon may be linked to construction activities. Intensive cut and fill and blasting operations makes this site a source of physical disturbance for wildlife. Measures have been included in the EMP to mitigate the impact of construction activities.  Mankhan Nature Reserve. The existing road traverses the Mankhan Nature Reserve. Although the Mankhan Nature Reserve (MNR) was delineated to protect the habitat, the Saiga population having moved towards the west of the reserve. The boundaries of the MNR should xi

be updated according to the WWF and Khovd Aimag officers responsible for the reserve. The discussions with the concerned officers (vide item 9.2 under section 9) brought out the fact that a bypass could not be justified as the Saiga are now adapted to motor vehicles since the road has been in existence for a long period and the Saiga population has drifted to other areas. Construction impacts will be temporary and confined to the ROW and operation impacts insignificant due to the low volume of traffic. Further though there are legislative restriction for industrial development which alters the environment road construction has not been specified as a prohibited activity within the nature reserves.

56. Fauna. Mitigation: Mitigation measures are as follows:

 Habitat Fragmentation and Wildlife Migration Patterns. A number of prevention and mitigation strategies have been considered to reduce habitat fragmentation and avoid wildlife migration patterns.  Overpasses, underpasses and at-grade crossings were assessed as expensive or potentially ineffective structures for the Project, at least in the initial stage of the Project operation. The projected volume of traffic is low enough not to recommend these measures. For example, Recommendations on Environment Protection Measures for Highways and Bridges of the Russian Federation (1995) suggests installation of wildlife fencing and corridors in cases where traffic volume exceeds 2,000 vehicles per day, a traffic volume that will be reached on the Project Road after 2020. Therefore, the proposed structure of mitigation measures will include: o Using warning signs and wildlife reflectors in the initial stage of the Project operation phase; o Capacity building of the Administrations of Specially Protected Areas in Hovd and Bayan-Olgiy aimags. They will be responsible for collection of additional information on wildlife migration routes and behavior of animals to provide recommendations on feasible mitigation measures when the traffic increases in close cooperation with WWF and WCS; and o As traffic volumes increase, the database should be sufficient to provide a framework to assess whether additional mitigation measures (e.g., overpasses, underpasses, at-grade crossings) are warranted.  Anti-Poaching. Local environmental protection authorities and international organizations are making a major effort to control poaching in the project area. However, their potential is still limited. Improved accessibility as a result of road construction will require additional measures to be taken. The mitigation measures will include two major options: o Strengthening anti-poaching units. This task is currently addressed by WWF with assistance of other NGO’s. o Preventing illegal trade. The capacity of Customs at the Russian/Mongolian border and especially the Mongolian/China border should be strengthened to not allow poachers and illegal traders to smuggle Saiga horns, skins of rare animals, and similar articles. The training course for customs and border officers should be organized as supplement to CITES and include such issues as the Saiga horn illegal market, identification of Saiga horns, identifying and prosecuting illegal traders and creating awareness.  Mankhan Nature Reserve: Preparation and implementation of a Protected area Management Plan for Mankhan Nature Reserve would assist in mitigating impact of road operation on the Reserve and saiga population in particular.

Socio-Economic impacts

57. Relocation. No permanent structures including houses have been reported from the ROW or close to the ROW. Stone structures that can be disassembled and rebuilt could be located close to the ROW in the interim period between this report and construction. However, the impermanent nature of these structures xii

facilitate these being relocated further back from the alignment without any significant impact.

58. Non-transport Infrastructure. Potential impacts to non-transport infrastructure include:

 Water Supply Systems. The Project will have no direct impact on area water supply systems.  Sewerage Systems. The Project will have no direct impact on sewerage systems.  Energy Systems. The Project will have no direct impact on area energy systems. The coordination with local authorities will be required where construction works can affect power lines close to town areas.  Waste Disposal. Potential waste disposal impacts could occur due to the improper disposal of construction waste, waste oil and solvents, and human waste from construction camps.

59. Mitigation. Mitigation related to potential non-transport infrastructure has been assessed as follows:

 Water Supply Systems. Project contract documents will contain provisions requiring pre- construction monitoring of existing water quality to provide a baseline for the measurement of impacts during the construction period. Routine water quality monitoring will also be required in areas of high potential impact (river crossing sites, construction camps, and other areas with potential to contaminate runoff) during the life of the Project.  Sewerage Systems. None required other than coordination with local officials.  Energy Systems. None required other than coordination with concerned officials.  Waste Disposal. Contractual requirements for the Project will include enforceable provisions for the proper disposal of waste. Implementation and enforcement of the provisions will be the responsibility of the Supervising Engineer.

60. Site-Specific Considerations. No site-specific measures with regard to infrastructure beyond those recommended for incorporation in the Project and detailed above are required.

61. Potential Impacts on Transport Infrastructure. There will be some impact on road transport during the construction period due to detours and traffic inconveniences. After construction, the primary transport impact of the Project will be improving the performance of the transport sector and greatly facilitating the flow of traffic, goods, and travellers.

62. Mitigation. As included in the EMP care will be taken during the construction period to ensure that traffic disruptions are minimized. No mitigation actions related to transport, other than those actions already incorporated in the Project, are required.

63. Potential Impacts on Historical and Cultural Heritage. Some impacts on archaeological and cultural heritage locations could be encountered during the construction period, especially if new sites are encountered during construction.

64. Mitigation. The Contractor will prepare a Cultural Heritage Management Plan to manage any sites that may be encountered during construction. If a historical, cultural, or archaeological relic is encountered along the project alignment, all construction activities will halt and the established action plan will be implemented (notification of soum/district governor, Institute of Archaeology, and local police). Work will recommence only after appropriate measures have been taken as requested by the appropriate authorities and confirmation is received that work may resume.

65. Health Impacts. Human health risks associated with the Project during construction or operation phases can include:

 Facilitation of the transmission of diseases. During construction, there will be an increased risk of work crews spreading socially transmitted diseases such as HIV/AIDS. Improvement of the xiii

road section and the resultant increase in traffic densities would supply improved conduits for the transmission of such diseases.  Contamination of local water supplies. Potential impacts to local water supplies include the possibility of contamination by the water supply and wastewater disposal systems associated with the labour camps during the construction period. Contract provisions to ensure that these facilities are properly sited should be incorporated in all project bid documents.  Air quality decline. No significant impacts on air quality and consequently public health are anticipated from the Project. The construction of the paved road will contribute to decreasing dust concentrations in ambient air.  Noise Pollution. No significant impacts on sensitive receptors with health consequences are anticipated.  Safety. Improved road will result in increased traffic speeds. Engineering efforts has been undertaken to reduce the likelihood of accidents and users will be educated about the risks of high speed. Traffic laws will be enforced.

66. Impact on Livelihoods. It was established that the new road formation would not be a barrier to free roaming of herds in pasturelands.

67. Greenhouse Gas. The low volume of traffic is not expected to generate greenhouse gases to adversely impact climate change.

68. Construction Camp Impacts and Management. Potential effects of construction camps are competition for local sources of water, sewerage facilities, energy systems; solid and liquid waste generation, poaching and illegal trade, spilling of lubricants, hazardous materials, etc. Before the construction activities will commence the Contractor will prepare and submit a Construction Camp Management Plan that will propose preventive/mitigation measures for environmental impacts of the construction camp, construction yard including fuel storage, filling station and vehicle washing sites.

69. Safety. Impacts: The upgraded road will allow for increased speeds, which generally increases the possibility of accidents and fatalities. Mitigation: It is recommended that the three Es be applied – Engineering to reduce the likelihood of accidents, Education of road users on the risks of high speeds, and Enforcement. The road has already been engineered for accident prevention and warning signs and road markers will be used as appropriate.

70. Cumulative Impacts. Cumulative and induced impacts identified are associated with the development of the mining industry and tourism. Synergetic impacts of global warming and anthropogenic effects to permafrost areas such (road construction activities) can pose risks of accelerated permafrost thawing and development of thermokarst processes.

1.3.2 Economic Assessment

Benefits

71. Environmental benefits associated with the Project are related mostly with regaining pastureland, decreasing the occurrence of erosion processes, reducing dust and noise, decreasing the number of vehicle breakdowns, decreasing pollution of rivers due to avoidance of direct crossing of watercourses, and reducing vehicle fuel use and emissions.

72. Pastureland regained. Table 1.6 provides an assessment of the amount of pasture land regained as a result of the elimination of earth tracks. The assessment is prepared for multi track areas of the road section.

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Table 1.6: Assessment of Land Regained with Elimination of Multitrack

Section Length Estimated Average Land Estimate of of average width of all regained total land multi- number of tracks (m) (ha/km) regained, (ha) track tracks Baga Ulaan Davaa - 70 20 100 10 700 Mankhan Note: With the assumption that the width of track is 5 m.

73. Reduction in Erosion. As mentioned above, the presence of earthen multi-track leads to erosion of pastureland and thermal erosion processes especially in areas with rolling topography or permafrost. Olonuur (an area of many lakes between Khovd and Olgiy) is one of the identified areas where the elimination of multi track can stop triggering erosion processes3. However, a quantitative assessment of this benefit has not been attempted due to lack of data.

74. Dust and Noise Reduction. A great quantity of dust in is generated by vehicles traveling on the earth roads. Although, it is difficult to quantify the amount of dust generated by existing traffic, it is anticipated that the paved road will significantly contribute to the reduction of dust generation. It is anticipated also that there will also be some decrease in noise pollution per individual vehicle due to improvement of physical characteristics of road surface and road geometry.

75. Vehicle Breakdowns. It is anticipated that the number of vehicle breakdowns occurring along the project road will decrease as a result of improved road conditions. A smoother road will reduce vehicle operating costs and the availability of rest areas will avoid accidents due to fatigue.

76. Vehicle Emission and Fuel Consumption Reduction. Decrease in vehicle emissions and fuel consumption per vehicle are expected as a result of improving the physical characteristics of road surface and road geometry. Travel times between locations will decrease, thereby lowering the overall amount of vehicle emissions and fuel consumed.

Environmental Costs

77. The environmental costs of the Project have been estimated as US$ 396,100. The costs include mitigation measures, monitoring, collection of detailed information and capacity building.

1.3.3 Public Consultation and Disclosure

78. Two rounds of public consultations have been held for the entire road corridor of the Western Regional Roads Project during the preparation of the EIA in 2007.4 These consultations were conducted for the full 748.4 km length of the Western Regional Road Corridor. They were held mainly in Khovd and Oligii and included public from the project affected area of the present project from Khovd to Buraatyn Davaa.

79. During the preparation of this EIA the Consultants conducted public consultation and information dissemination with stakeholders of the Baag Ulaan Davaa-Mankhan section. Discussions were also held with the PIU, Aimag and local government authorities and WWF local branch.

80. Community around the Mankhan Soum was consulted at a community meeting at the Bayangol Bagh Center where 21 local residents including 06 women participated with Citizen Representative and Khural Head PurevdashTserendorj in the chair. Ger community along the road and herdsmen were also consulted during field visits in May, 2011.

3 Government of Mongolia. 2007. EIA. Ulaanbaatar. 4 Government of Mongolia. 2007. EIA. Ulaanbaatar. xv

81. The view of the community was that while they appreciated the benefits of road development the road impacts on 46 ha of agriculture and pasture land should be avoided. The agricultural land are beside the present alignment and the use of multi tracks has been adversely affecting the lands. It was explained that the road formation narrower that the land take by the mutitracks would avoid the impact on their agricultural lands. Further, as it is better to avoid natural risks such as road closing from heavy snow fall in winter time in the high slopes of Baag Ulaan davaa area.

82. At the meeting held at Khovd Deputy Governor’s Office where the Deputy Governor, Tumendemberel, Head of Environmental Department, Ts.Gantulga, Supervisor in Environment and Tourism Center and A. Nansalmaa Environmental officer and Biodiversity and Specially Protected Area Specialist participated, the following observations were made.

83. When queried the need for a new alternative alignment around the western boundary of the Mankhan Nature Reserve they did not believe that an alternative alignment is required. Although the reserve boundary was delineated for the purpose of protecting natural habitat of Saiga Antelope the Saiga population has moved towards the West of the reserve and do not fully accommodate the current population distribution of Saiga Antelope. Ts.Gantulga has been involved in Mankhan NR boundary defining process in 1993. The Saiga population in the reserve is isolated from other populations in the region and is very small in numbers; roughly estimated as 10-25 individuals. Further, the Saiga are already adapted to traffic movement and noise from unpaved earth road existing in the area over 30 years. Saiga can be observed on both sides of current earth roads. And during their breeding season saiga move to other places Tsagaan Burgasnii Saari and Taliin Khar Uul area located outside of Mankhan NR.

84. At the consultation with the Khovd Branch head of WWF, D.Tseveenravdan, it was pointed out that only about 30 Saiga survive in the Mankhan Natural Reserve area now and they are adapted to crossing the road. However, care should be taken to ensure that the road embankment height will not be a barrier for Saiga to roam across the road freely in this area.

1.4 Recommendations

1.4.1 Environmental Management Plan

85. The main objective in formulating the Environmental Management Plan (EMP) is to recommend a set of environmental safeguard measures to address the adverse environmental and social impacts of the project. In addition to establishing mitigation measures and implementation responsibility the EMP will also include monitoring mechanisms to ensure compliance with EMP requirements and environmental regulations of the country. The detailed EMP is included in Appendix I.

86. Institutional Arrangements. Key players involved in environmental management of the project are as follows:

 The Ministry of Roads, Transportation, Construction and Urban Development (MRTCUD) will be the Executing Agency for the Project and through its Department of Roads (DOR) ensure that environmental management is implemented as required and report to the Steering Committee and ADB.  The Steering Committee will include representatives of different Ministries and Agencies such as Ministry of Finance, Ministry of Health, MNET, and MRTCUD. The Chairperson of the Steering Committee is the State Secretary of MRTCUD.  The Project Implementation Unit (PIU) will reside within the DOR with on-site offices. The PIU through the SE will be responsible for overall contract administration and day-to-day project supervision including environmental management.  The Supervising Engineer (SE) will perform the following duties: o supervise site environmental management system of the contractors, and provide corrective instructions; o review the EMP implementation by the contractors; and xvi

o report EMP implementation status to the PIU/DOR on environmental inspection and monitoring results.  The Contractor. In the technical specification for the civil works contract, activities to protect environment will be described. During construction, contractors will strictly implement the Contractor’s EMP and undertake self-check activities and fully cooperate with the external environmental inspections.

87. Figure 1.4 below presents the implementing and reporting structure for the EMP:

Figure 1.4: Organizational Chart for Implementing the EMP

88. Capacity Building. It was found that the capacity of PIU to undertake responsibilities for carrying environmental management and monitoring is limited. There is little experience in the implementation and management of EMPs and skilled technical staffs are not available at either the national or aimag levels. Thus, it will be necessary to embody a program of institutional strengthening and training through the provision of technical assistance and procurement of laboratory equipment and supplies. This will be considered in combination with a proposal on new organizational structure.

89. Environmental Monitoring. The monitoring framework for the Project is summarized in Appendix I. Monitoring activities include site supervision, verification of permits, monitoring environmental impacts such as noise, air and water pollution as well as wildlife migration routes.

90. It is recommended that construction contracts include that instrumental monitoring of air quality, water quality and noise levels should be carried out prior to commencement of construction to establish a baseline against which impacts can be measured. The locations for baseline monitoring may be determined in consultation with SE and MNET and local government environmental inspectors. Contingency provisions should be included for additional air and water quality, as well as noise monitoring at the request of the SE/MNET if warranted by events.

1.4.2 Grievance Redress Mechanism

91. A grievance redress mechanism (GRM), consistent with the requirements of the ADB Safeguard Policy Statement (2009) will be established prior to construction to prevent and address community concerns, reduce risks, and assist the project to maximize environmental and social benefits.

92. In addition to serving as a platform to resolve grievances, the GRM has been designed to help achieve the following objectives: (i) open channels for effective communication, including the identification of new environmental issues of concern arising from the project; (ii) demonstrate concerns about community members and their environmental well-being; and (iii) prevent and mitigate any adverse environmental impacts on communities caused by project implementation and operations. The GRM is accessible to diverse members of the community, including more vulnerable groups such as women and youth. Opportunities for confidentiality xvii

and privacy for complainants are to be honoured where this is seen as important.

1.4.3 Conclusion

93. The Project will have some negative and positive, direct and indirect environmental impacts on physical, ecological and socio-economic environment during the road construction and operation phases. Most of the alignment traverse on or along existing tracks and it is on these tracks that the road construction will be carried out. Further, the adverse impacts during construction are temporary and could be minimized by proper planning, good construction practices and implementation of the proposed mitigation measures and monitoring programs. Thus, these impacts are not expected to pose any threat to the environment.

94. Assuming effective implementation of the mitigation measures and monitoring requirements as outlined in the Environmental Management Plan (Appendix1), the Project is not expected to have significant adverse environmental impacts.

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2. INTRODUCTION

2.1 Background

95. Mongolia’s landlocked location between the People’s Republic of China (PRC) and the Russian Federation and its remoteness from developed international and domestic markets are major constraints to international development. The Government of Mongolia has identified increasing investment in road construction and rehabilitation as a means to reduce Mongolia’s isolation from world markets and improve the accessibility of isolated communities within the country. This emphasis on road rehabilitation and construction has been included as one of the main issues to be addressed in the Economic Growth Support and Poverty Reduction Strategy.5 The improvement of the Western Regional Road Corridor will be a large step forward in reducing geographical isolation within the region.

96. The improvement of the Western Regional Road Corridor (WRRC) will assist the Government to meet the objectives identified within its Comprehensive National Development Strategy for Mongolia that is based on Millennium Development Goals. Among these objectives are: expanding and developing the auto road network and connecting aimag and regional centers and the capital city by paved roads; improving the care and maintenance of the national and local roads; and reducing the negative impacts of automobiles on the surrounding environment, population, and traffic movements.6 These goals and strategies are also in line with the transportation sector strategy for Mongolia developed with the assistance of the ADB.7

97. The Government of Mongolia, with the objective of improving its internal transport network and increasing trade and transit links between Mongolia and its neighbouring countries, the People’s Republic of China (PRC) and the Russian Federation, has undertaken the upgrading of the Western Regional Road Corridor through its Ministry of Road, Transport Construction and Urban Development (MRTCUD). The 784.4 km WRRC connecting Yarant at the Mongolia/China border and Ulaanbaishint at the Mongolia/Russia border (Figure 2.1) is strategically important for the socioeconomic and regional development of Mongolia, as well as improving relationships with neighbouring countries.

98. The outcome of the proposed project will be an efficient and safe regional transport route that is developed in the Western Region of Mongolia, linking Xinjiang Autonomous Region in the PRC and the Siberia region of the Russian Federation by way of Khovd and Bayan-Olgii aimags of Mongolia. WRRC also includes a section of Asian Highway 4 (AH4), an internationally designated road by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).

99. The total road length of 784.4 km of WRRC has been divided into 9 sections for financing arrangements, as shown in Figure 2.2. The section under consideration for ADB funding and examined in this environmental assessment consists 103.3 km from Baag Ulaan Davaa to Mankhan. The project road section is located within the western aimag of Khovd which has a population of approximately 89,240 (2009). The poverty incidence in this region was 51 percent in 2003, higher than the national average of 36 percent.

5 Government of Mongolia.2004. Economic Growth Support Poverty Reduction Strategy. Ulaanbaatar. 6 Government of Mongolia. 2007. Millennium Development Goals (MDGs)-based Comprehensive National Development Strategy of Mongolia. (Draft) Ulaanbaatar. 7 ADB 2007. National Transport Strategy for Mongolia. Manila.

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Figure 2.1: Western Regional Road Corridor

100. Other sections are to be funded by the Mongolian Government, ADB, Peoples Republic of China and ADB/ Government of Mongolia co financing.

2.2 EIA Preparation

101. This Environmental Impact Assessment (EIA) has been prepared for the proposed road section of 103.3 km from Baga Ulaan Davaa to Mankhan (the Project). The EIA describes the baseline environmental conditions, including physical, ecological and socio-economic resources along the road, assesses the environmental impacts of the intended road development, and provides remedial/mitigation measures. The EIA has been prepared in accordance with ADB’s Safeguard Policy (2009) and Guidelines for EIA, as well as Mongolian environmental impact assessment legislation.

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102. This EIA is a stand-alone document for the Project. The detailed design has been prepared for the Project and is being reviewed by the Consultant.8 The Economic and Financial Analysis and Social and Poverty Impact Assessment are also being updated by the Consultant.

2.3 Associated Project Facilities

103. The total 784.4 km length of the road corridor alignment has been divided to 10 sections of varying lengths and these are at different stages of development as presented in Figure 2.2. All these sections together with the ADB proposed project consist the Western Regional Road Development Project and were considered in the Environmental Impact Assessment9 prepared in 2007.

104. Table 2.1 below presents the road section lengths and funding arrangements for the other sections which are associated with the present Project identified for ADB funding.

Table 2.1: Other Road Sections and Funding Sources Road Yarant next next Mankh Khovd 76km Next Next 40 Last 25.8 Section to 64 section up an to to section section km km to Bulgan km to Baag Khovd Buraatin after of 30 section Ulaanbais 264 km Ulaan 85.3 Davaa Buratiin km hint Davaa km 147.9 km Davaa (north 110.8 km of Olgii) Funded GOM GOM GOM PRC ADB PRC GOM GOM Under by considerati on by ADB

8 Consultant TA 7449-MON: Regional Transport Development Project Component 1-Prparing the Western Regional Road II Project. 9 Government of Mongolia. 2007. EIA. Ulaanbaatar.

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Figure 2.2: Road Sections of the Western Regional Road Corridor

Source: Adapted from EIA 2007.

2.4 Report Structure

105. This Environmental Impact Assessment Report has been prepared by the Consultant on behalf of the Government of Mongolia. It is based on the Environmental Impact Assessment10 of the project for Preparing the Western Regional Road in Mongolia. This project EIA also includes work results of the Consultant and the Detailed Design11 for the Baag Ulaan Davaa to Mankhan section of WRRC development project.

106. The EIA Report has been prepared following the Safeguard Policy Statement (2009), the Safeguard Requirements 1: Environment. It also complies with Government of Mongolia requirements. In addition, the first chapter - Introduction, has been included to provide background information and location of the proposed project section in relation to the total road alignment of 784.4 km, and to establish its importance in association with the development of the other sections of the alignment. Accordingly, the report is organized as follows:

10 Goverment of Mongolia/ADB. 2007. Feasibility Study EIA Ulaanbaatar. 11 MCPC. 2008. Detailed Engineering Design for Olgii-Khashaat Pass Section and Khashaat Pass to Hovd Section. Ulaanbaatar.

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 Executive Summary.  Introduction. Section 2 establishes the location of the Project, the Project Proponent, and an explanation of the purpose of the EIA. It also presents the organization of the EIA, additional background information and an explanation of the extent of the EIA study.  Environmental Legal and Administrative Framework. Section 3 provides information on the current environmental legislation of Mongolia specifically EIA requirements and provides a brief description of the environmental administrative framework.  Description of the Project. In accordance with the ADB Guidelines Section 4 provides the detailed description of the Project, need for the Project, Project location, magnitude of operation, environmental category of the Project, and implementation schedule.

107. Description of the Potentially Affected Environment. Section 5 provides a description of the environment within the area potentially affected by the Project. The description is based on reviews of available documentation, statistical data, meetings with experts in the field and field surveys and investigations. The following four aspects of the environment have been addressed in detail:

 Physical Resources - topography, soils, geological characteristics, air quality;  Ecological Resources – flora, fauna, nature reserves and unique habitats;  Economic Development – industrial and agricultural development, land use, local transportation network, non-transport infrastructure within the potentially affected environment; and  Social and Cultural Resources - issues of health, public safety, recreational resources, cultural resources and aesthetics.

108. Alternatives. Different project alternatives are considered and compared in Section 6.

109. Potential Impacts and Mitigation. Section 7 provides an assessment of potential impacts of the proposed road development in light of the existing conditions, together with recommended actions to prevent and/or otherwise mitigate unavoidable impacts expected to be incorporated as integral parts of the Project.

110. Public Participation. Information on public participatory workshops and consultations with experts and local administration is presented in Section 9.

111. Grievance Redress Mechanism is presented in section 9.

112. Environmental Management Plan is presented in Section 10 along with an Environmental Monitoring Plan.

113. Conclusion. Conclusions are drawn and recommendation made in Section 11.

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3. POLICY LEGAL AND ADMINISTRATIVE FRAMEWORK

3.1 Enironmental Policy

114. Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. It has policies, legislation and strategies in place to manage the protected estate, to satisfy its international obligations, and to protect the quality of the environment for the health and well-being of its citizens. The hierarchy of policies and legislative provisions for environmental management in Mongolia comprises five layers ranging from the Constitution to international treaties, and to environment and resources protection laws.12

115. The main policy documents are the National Environmental Action Plan of 1996, the State Environmental Policy of 1997, the National Plan of Action to Combat Desertification, the Biodiversity Conservation Action Plan, and the National Plan of Action for Protected Areas, all developed under the Ministry of Nature Environment and Tourism (MNET) auspices, as well as the Mongolian Action Program for the 21st Century with subordinated aimag development plans developed by the National Council for Sustainable Development.13 The National Environmental Action Plan was updated in 2000 and the National Action Plan for Climate Change was added in the same year. Several program documents (e.g. National Water Program, National Forestry Program, Program of Protection of Air, Environmental Education, Special Protected Areas, and Protection of Ozone Layer) were also completed at the turn of the decade. State policy on Environmental Impact Assessment was in place in 1998. In addition, other guidance documents with important environmental repercussions were developed under the auspices of other ministries and these include the Roads Master Plan, the Power Sector Master Plan, the Tourism Master Plan, and the Renewable Energy Master Plan.14 Other documents, such as the annual Human Development Reports have increasingly incorporated environmental aspects.

116. A fundamental principle of the Mongolian state environmental policy is that economic development must be in harmony with the extraction and utilization of natural resources and that air, water and soil pollution will be controlled. In April 1996, Mongolia’s National Council for Sustainable Development was established to manage and organize activities related to sustainable development in the country. The country’s strategy is designed for environmentally friendly, economically stable and socially wealthy development, which emphasizes people as the determining factor for long-term sustainable development.

117. The health of Mongolia's natural ecosystems and populations of wild species is of both national and global importance. The country forms an important part of the global ecosystem in the ecological transition zone in Central Asia, where the great Siberian taiga, the Central Asian steppe, the high Altai Mountains, and the Gobi desert converge. In recognition of its global responsibilities, Mongolia has acceded to a number of international environmental conventions and the key ones are tabulated below. Each of these conventions places obligations on signatory governments ranging from the provision of a legislative basis for implementation, to adherence to the requirements and conditions of each convention, to monitoring implementation performance on a regular basis, to reporting on a regular basis and to the conference of parties.

Table 3.1: International Environmental Conventions Signed by Mongolia Convention Year of Accession Convention on Biological Diversity (CBD) 1993 UN Framework Convention on Climate Change (UNFCCC) 1994 Kyoto Protocol 1999 UN Convention on Combating Desertification (UNCCD) 1996 Convention on the Protection of Wetlands of International Importance (Ramsar) 1998

12 UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. Ulaanbaatar and Wellington. 13 Ibid. p15. 14 Ibid. p15.

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CONVENTION YEAR OF ACCESSION Vienna Convention for the Protection of the Ozone Layer 1996 Montreal Protocol (regulating substances that deplete the ozone layer) 1996 Convention on International Trade in Endangered Species of Fauna and Flora 1996 (CITES) Convention on the Transboundary Movement of Hazardous Waste (Basel) 1997 Rotterdam Convention on the Prior Informed Consent Procedure for Certain 2000 Hazardous Chemicals and Pesticides in International Trade Stockholm Convention on Persistent Organic Pollutants (POPs) 2004 World Heritage Convention 1990

3.2 Environmental Law

118. The Government of Mongolia undertook a major environmental law reform in 1990 including the law of the land, protected areas, water, forest, wildlife, and native flora resources. The legislation base is extensive as evidenced by the following table of key environmental legislation.

Table 3.2: Key Environmental Legislation in Mongolia Name of the Law Year Adopted The Constitution of Mongolia 1992 1995, revised in 2006 and Law on Environmental Protection 2008 Law of Land Jun 2002 Law on Land Cadastre and Mapping Dec 1999 Law on Land Fees Apr 1997 Law on Land Possession Jun 2002 Law on implementation of regulations related to Land Possession Jun 2002 Law Law on Geodesy and Cartography Oct 1997 Law on Special Protected Areas Nov 1994 Law on Buffer Zones Oct 1997 Law on Water Apr 2004 Law on Water and Mineral Water Resource Fee May 1995 Law on Forests Mar 1995 Law on Fees for Timber and Fuel wood Harvesting May 1995 Law on Prevention of Steppe and Forest Fires May 1996 Law on Reinvestment of Natural Resource Use Fees for Jan 2000 Conservation Law on Natural Plants Apr 1995 Law on Natural Plant Use Fees May 1995 Law on Protection of Plants Mar 1996 Law on Hunting 2000, 2003 Law on Fauna 2000 Law on regulation of export and import of endangered species of Nov 2002 flora and fauna Law on Hunting Reserve Use Payments and on Hunting and May 1995 Trapping Authorization Fees Law on Underground Resources Dec 1994 Law on Minerals 1997, revised in 2006 Petroleum Law 1991 Law on Air Mar 1995 Law on Hydrometeorology Nov 1997

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Name of the Law Year Adopted Law on Protection from Toxic Chemicals Apr 1995 Law on Environmental Impact Assessment 1998, revised in 2002 Law on Tourism 1998 Law on Solid Waste Nov 2003 Law on prohibiting export and transportation of Hazardous Waste Nov 2000

3.2.1 Law on Environmental Protection

119. The Mongolian Law on environmental protection is the umbrella law for all environmental and natural resource legislation in Mongolia. It governs the land and subsoil, mineral resources, water resources, plants, wildlife and air, and requires their protection against adverse effects to prevent ecological imbalance. The environmental protection law regulates the inter-relations between the state, citizens, economic entities and organizations, with a guarantee for the human right to live in a healthy and safe environment. It aims for an ecologically balanced social and economic development, the protection of the environment for present and future generations, the proper use of natural resources, including land restoration and protecting land and soil from adverse ecological effects. There are provisions that enable the development of state and local rights on environmental protection; environmental protection rights and obligations of citizens; environmental carrying capacity; to specify the maximum level of natural resources use; to provide for ecological training and education; to specify state environmental guidelines and principles and to provide for environmental assessment, databases and research and financing. National policy to protect ecologically significant aspects of the environment and to restore natural resources is prepared under the Law on Environmental Protection.

3.2.2 Law on Air

120. The purpose of this law is to regulate actions in order to protect air quality, particularly with regard to issues related to the health of the country’s population and minimizing greenhouse gas emissions. The following administrative bodies are primarily responsible for the Law on Air:

 The Central Administrative Body responsible for Nature and the Environment: develops an air protection national action plan and submits it to the Cabinet of Ministers for approval; organizes air quality and monitoring measurements; and develops standards and norms related to air protection and submits them to the appropriate institutions for approval.  The Central Administrative Body responsible for Health Care develops the national standards on permissible levels of air pollutants and has these standards approved by the appropriate agency.

121. Article 11 of the Law on Air describes the air protection requirements during construction. Standards for permissible limits on the amount of air polluting substances and hazardous impacts shall serve as the basis for the selection of the site, design and construction, commencement of operations, and expansion or renovation of equipment and technology for any building for industrial, service or other purposes.

122. An Environmental Impact Assessment (EIA) shall be completed prior to construction of an economic entity or organization engaged in activities which discharge air polluting substances or cause hazardous impacts.

3.2.3 Law on Water

123. The main purpose of this law is to prevent water pollution by prohibiting littering and contamination through toxic components near estuaries of water bodies, riverbanks and protection zones.

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3.2.4 Law on Water and Mineral Water Use Fees

124. The Law on Water and Mineral Water Use Fees is designed to regulate fees for the use of water and mineral water and incorporate these fees into the state budget.

125. Mongolian citizens, foreign citizens, persons with no citizenship, economic entities and organizations that use water, mineral water and/or riparian zones in Mongolia for any purposes, are required to pay the fees.

126. Fee rates for water use shall be determined by the Cabinet of Ministers, based on the limits set out in Clause 1 of Article 6 of the law or determined by aimag or Capital City Citizens Representative Khural based on Clause 2 of Article 6 of this law.

3.2.5 Law on Specially Protected Areas

127. The purpose of this law is to regulate the use and procurement of land for state protection, to foster scientific research, and to preserve and conserve the land’s original condition in order to protect specific characteristics, unique formations, rare and endangered plants and animals, historic and cultural monuments, and natural beauty. The law establishes four protected area categories, each managing land for a different purpose under a separate management directive. These include Strictly Protected Areas (SPA), National Parks (NP), Nature Reserves (NR) and National Monuments (NM).

128. Strictly Protected Area is the most restrictive category of the protected areas in Mongolia. Strictly Protected Areas (SPAs) are classified further into three zones: Pristine Zone, Conservation Zone and Limited Use Zone. Only conservational activities and research studies, such as observation, are allowed in Pristine Zones. Activities such as digging, the use of explosives, extracting sand and stone, harvesting wood or constructing a road are prohibited in Conservation Zones. According to Article 12.1 of the Law on SPA, it is not prohibited to construct a road in Limited Use Zones.

129. National Park is the second level of protected areas and has a more user-oriented designation. National Parks (NPs) are classified into Special Zones, Travel and Tourism Zones and Limited Use Zones. According to this law, NPs consist of areas that have “relatively preserved” natural features, historical, cultural, educational and ecological importance. Only conservation activities, research studies undertaken by means that do not negatively impact nature, rehabilitation of soil, creation of conditions to reproduce plants and animals, and an elimination of damage from natural disasters are allowed in Special Zones. Activities such as road construction are prohibited in Special Zones and Tourism Zones. According to Article 17 of the Law on SPA, it is not prohibited to construct a road in a Limited Use Zone.

130. Nature Reserve is the area taken under state special protection for the conservation, preservation, and restoration of natural features, natural resources and wealth. Natural Reserves (NRs) are classified into Ecological Reserves, Biological Reserves, Paleontological Reserves and Geological Reserves. In any NR, it is prohibited to undertake activities for industrial purposes that change the natural original condition or activities which are likely to have a negative impact on the environment such as construction of buildings, excavation of land, the use of explosives, or exploration and mining for any resources.

131. National Monuments consist of land taken under state special protection for the purpose of preserving the heritage of natural unique formation as well as historical and cultural traces in their natural state. Natural Monuments are classified into Natural, Historical and Cultural Monuments. It is prohibited to construct buildings, plow or dig land, use explosives, or mine natural resources within 0.1 km to 3.0 km of Natural, Cultural and Historical Monuments.

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3.2.6 Law on Buffer Zones

132. The purpose of this law is to regulate determination of Specially Protected Area Buffer Zones and activities therein.

3.2.7 Law on Fauna

133. The purpose of the Law on Fauna is to regulate the protection and breeding of fauna, which permanently or temporarily reside in soil, water or on land within Mongolia. Article 7 (Protection of Very Rare and Rare Fauna) lists the very rare fauna as “Asiatic Wild Dog (Cuon alpinus), Snow Leopard (Uncia uncial), Eurasian Otter (Lutra Lutra), Gobi Bear (Uros Arctos gobiensis), Przewalski horse (Equus przevalski), Wild Bactrian Camel (Camelus Bactrianus ferus), Musk deer (Moschus moschiferus), Reindeer (Rangifer tarandus valentinae), Moose (Alces alces pfizenmayeri), Saiga Antelope (Saiga tatarica tatarica), Mongolian Saiga (Saiga tatarica mongolica), Central Asian Beaver ( Castor fiber birulai), Whooper Swan (Cygnus cygnus), Ring-necked Pheasant (Phasianus colchius), Hooded Crane (Crus monacha), White-naped Crane (Crus vipio), Siberian Crane (Crus leucogeranus), Houbara Bustard (Chlamydotis undulate), Dalmatin Pelican (Pelicanus crispus), Relict Gull (Larus relictus), Baikal Sturgeon (Acipenser baeri baicalensis), Amur sturgeon (Acipenser schrenki), Tench (Tinca tinca), Amur Sculpin (Mescottus haitej), and Emperor Moth (Etudia pavonia).15

134. A list of rare and endangered fauna species is provided in the Mongolia National Red Book. The aimag Citizen Representative Khural shall approve measures for protection of very rare and rare fauna within their territory and exercise control over the implementation.

3.2.8 Law on Flora

135. The Law on Flora coordinates activities related to protection, sustainable use and rehabilitation of plants, excluding cultivated plants and forest. As part of this law, the Mongolian Government has created a list of rare and endangered flora species.

136. Article 8 of this law mandates that the use of plants for industrial use within 2 km of an estuary of river, natural springs or riverbank or in the area where vegetation cover is degrading is strictly prohibited.

3.2.9 Law on Forest

137. The Law on Forest regulates actions related to the protection and sustainable use of forest resources. The forest area is classified according to its ecological and economic values as follows:

 Special Forest Zone (alpine forest, pristine and conservation zones of SPA and special zone of national park). Protection and use of this zone is controlled under the law of Specially Protected Areas.  Protected Forest Zone (other forest areas of SPA, green belt area, saxsaul forest and forest growing on 30 degree slope).  Forest Use Zone. Any forest area that is not included in the above zones.

3.2.10 Law on Protection of Cultural Heritage

138. The purpose of this law is to coordinate all activities related to research of cultural heritage, and registration, study and classification, valuing, preservation and protection, advertisement and renovation, and issues related to ownership and use of cultural heritage.

15 Government of Mongolia. 2007. EIA.Ulaanbaatar.

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139. The law identifies a number of heritage relics, places and sites according to their scientific, historical and cultural importance. Some ancient tombs/burial sites and calligraphy are also recognized as heritage items.

140. Article 17 of Chapter 6 of this law states that if subsoil exploration activity discovers any historical and cultural heritage items, operations should stop and the governor and police of the aimag or soum, along with relevant research institutes shall be informed. It is prohibited to move any historical and cultural item without the permission of the Ministry of Education, Culture and Science.

141. The investigation of cultural heritage shall be implemented by the Professional Inspection Agency, state inspectors, or governors of aimag and soum. The State Professional Inspection Agency shall carry out this investigation in accordance with various laws on protection of cultural heritage, norms, regulation and standards.

142. The Ministry of Education, Science and Culture (MESC) is responsible for determining the status of historical, architectural and memorial sites of archaeological significance.

3.2.11 Law on Land

143. The purpose of this law is to regulate the possession and use of land by citizens, economic entities and organizations of Mongolia. The law contains a number of provisions which set substantive and procedural land conservation requirements that prohibit activities that are harmful to human health, environmental protection or environmental balance. The law allows local governments to use an “appropriate part” of land fee revenues for land conservation activities.

3.2.12 Law on Hunting

144. The purpose of this law is to regulate the hunting and trapping of game animals and the proper use of hunting reserves. Hunting requires a special permit and can take place during prescribed seasons. Contact permits and special permits for the hunting and trapping of game animals shall be issued by the State Administrative Central Organization. Article 13 describes these issues. Article 14 lists the prohibited hunting and trapping methods such as the use of chemical substances and explosives, digging pits, placing triggered guns and arrows or other traps on animal paths.

3.3 Environmental Impact Assessment Requirements

145. The Project will be subject to the environmental requirements of both Mongolia and those of the ADB. These requirements are as follows.

3.3.1 Environmental Impact Assessment Requirements of ADB

146. ADB Safeguard Policy Statement (SPS) sets out the policy objectives, scope and triggers, and principles for environmental safeguards, involuntary resettlement safeguards, and Indigenous Peoples safeguards. The objective of the Environmental Safeguards is to ensure the environmental soundness and sustainability of projects and to support the integration of environmental considerations into the project decision-making process and requires a screening process for each proposed project, as early as possible, to determine the appropriate extent and type of environmental assessment so that appropriate studies are undertaken commensurate with the significance of potential impacts and risks. Subsequent to the screening process an environmental assessment should be conducted to identify potential direct, indirect, cumulative, and induced impacts and risks to physical, biological, socioeconomic (including impacts on livelihood through environmental media, health and safety, vulnerable groups, and gender issues), and physical cultural resources in the context of the project’s area of influence. Therefore, all projects considered for loans and investments by ADB are subject to classification for the purpose of determining environmental assessment requirements. The determination of the environment category is to be based on the most environmentally sensitive component of the project. Within this system, projects

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are screened for their expected environmental impacts and assigned to one of the following four categories:

 Category A: Projects with potential for significant adverse environmental impacts. An environmental impact assessment (EIA) is required to address significant impacts.  Category B: Projects judged to have some adverse environmental impacts, but of a lesser degree and/or significance than those of category A projects. An initial environmental examination (IEE) is required to determine whether or not significant environmental impacts warranting an EIA are likely. If an EIA is not needed, the IEE is regarded as the final environmental assessment report.  Category C: Projects unlikely to have adverse environmental impacts. No EIA or IEE is required, although environmental implications are still reviewed.  Category FI: Projects are classified as category FI if they involve a credit line through a financial intermediary or an equity investment in a financial intermediary. The financial intermediary must apply an environmental management system, unless all subprojects will result in insignificant impacts.

3.3.2 Environmental Impact Assessment Requirements of Mongolia

147. The Law on Environmental Impact Assessment stipulates the EIA requirements of Mongolia. The purpose of this law is environmental protection, the prevention of ecological imbalance, the regulation of natural resource use, the assessment of environmental impacts of projects and procedures for decision-making regarding the implementation of projects.

148. The terms of the law apply to all new projects, as well as rehabilitation and expansion of existing industrial, service or construction activities and projects that use natural resources. Type and size of the planned activity define responsibility which may be either MNET or aimag government (Local Government).

149. There are two types of EIAs defined in the Law: General EIA and Detailed EIA. To initiate a General EIA, the project implementer submits a brief description of the project including the feasibility study, technical details, drawings, and other information to MNET (or aimag government). The General EIA may lead to one of four conclusions: (i) no Detailed EIA is necessary, (ii) the project may be completed pursuant to specific conditions, (iii) a Detailed EIA is necessary, or (iv) cancellation of the project. The General EIA is free and usually takes up to 12 days.

150. The scope of the Detailed EIA is defined by the General EIA. The Detailed EIA report must be produced by an authorized Mongolian company which is approved by the MNET by means of a special procedure. The developer of the Detailed EIA should submit it to the MNET (or aimag government). An expert of the organizations who was involved in conducting the General EIA should make a review of the Detailed EIA within 18 days and present it to MNET (or aimag government). Based on the conclusion of the expert the MNET (or aimag government) takes a decision about approval or disapproval of the project.

151. The cost for the Detailed EIA is covered by the project implementer and can amount to $50,000 in the case of large projects. When the development of the detailed EIA is the most likely conclusion of the General EIA then this EIA report can be used as a substantial basis for the Detailed EIA.

152. The Detailed EIA must contain the following chapters:

 Environmental baseline data;  Project alternatives;

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 Recommendations for minimizing, mitigation and elimination of impacts;  Analysis of extent and distribution of adverse impacts and their consequences;  Risk assessment;  Environmental Protection Plan;  Environmental Monitoring Program; and  Opinions of residents on whether the project should be implemented.

153. Figure 3.1 below presents a simplified diagram of the EIA procedure in Mongolia.

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Figure 3.1: Simplified Diagram of the EIA Procedure in Mongolia

3.4 Administrative Framework

3.4.1 Institutional Framework for the Ministry of Nature, Environment and Tourism

National Level

154. The Ministry of Nature, Environment and Tourism (MNET) is the agency primarily responsible for the implementation of environmental policy in Mongolia. The organization chart of the MNET is shown in Figure 3.2. Under MNET, there are several government agencies involved in the protection of the environment in Mongolia as outlined below.

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Figure 3.2: Organization Chart of the Ministry of Nature, Environment and Tourism

Source: Ministry of Nature, Environment and Tourism.

155. Department of Sustainable Development and Strategic Planning is responsible for the elaboration of strategic and sustainable development policies, plans, programs and projects in areas within the mandate of the Minister of Nature, Environment and Tourism. The department’s functions include developing principles and policies and creating a positive legal environment for the preservation of ecological balance, in accordance with sustainable development objectives, by conducting policy research and developing policy options, designing projects and programs, offering policy leadership, and planning and initiating Mongolia's participation and actions with regard to major ecological issues at regional and international levels.

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156. Department of State Administration and Management is responsible for administration and leadership in the Ministry. Its functions include addressing human resource management and development issues, providing legal advice, introducing best practices for administration in the Ministry, developing systems of reporting and accountability, resolving appeals and complaints, and improving organizational management. The department focuses on ensuring the continuity and stability of Ministry operations by way of professional and disciplined departments staffed with capable public servants, and on developing human resource policies and improving the effectiveness of their implementation.

157. Department of Environment and Natural Resources is responsible for the planning and implementation of actions to reduce environmental degradation and adverse environmental impacts, and ensuring the appropriate use of natural resources. Its functions include implementing laws and regulations, policy, programs and activities related to the conservation and appropriate use of natural resources; restoring areas that have suffered from degradation; organizing and coordinating biological conservation activities; conducting environmental assessments and maintaining the Environmental Information Databank; and organizing training and public awareness activities related to environmental conservation. Activities undertaken in this context include:

 Organizing EIAs;  Monitoring the implementation of environmental monitoring programs, environmental protection plans and rehabilitation programs of mines; receiving and reviewing annual reports on the above activities; and issuing professional guidelines and recommendations on required future courses of action;  Conducting environmental assessments and maintaining the State Environmental Information Databank;  Maintaining a unified registry of very toxic, toxic and harmful chemicals, and issuing authorizations for their manufacture and import;  Assuming responsibility for the export of cultivated plants, the gathering of wild plants, and the import of vegetable matter;  Coordinating the implementation of policies on flora, forest and water resource management;  Coordinating household and industrial waste management policy; and  Managing air pollution.

158. Department of Specially Protected Areas Administration and Management has been entrusted with the responsibility of implementing the laws and regulations concerning Specially Protected Areas (SPAs). Its functions include coordinating activities related to the expansion of the SPA network and the implementation of associated programs, projects and actions, as well as providing professional and practical assistance to the administrative authorities of SPAs. It focuses on assuring the integration of policies and actions promoting sustainable natural resource use and ecological balance. These responsibilities are carried out by developing partnerships with all organizations engaged in policy implementation, ensuring the effective allocation of resources, and organizing and coordinating their activities in line with government policy, programs and plans.

159. Department of Tourism. The Department of Tourism provides basic direction and policy to the tourism sector of the country by giving priority to the activities of the National Tourism Center. Implementing the complex objectives of millennium development is the main task of the National Tourism Center established under the Ministry in May 2009.

160. International Cooperation Division. The functions of the division include implementing and coordinating policies for international cooperation in the environmental sector; developing, obtaining funding for and ensuring the implementation of international projects; and implementing and improving the outcomes of environmental-sector conventions and international agreements to which Mongolia is a party.

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161. Division of Information, Monitoring and Assessment is delegated the authority for monitoring and assessing the implementation of laws, government policies and programs. Its functions include monitoring and evaluating the implementation of government programs and resolutions concerning the environmental sector, promoting the use of information technologies in this sector, compiling an environmental information databank and providing data to end users, and establishing a system of reporting and accountability.

162. Finance and Investments Division is responsible for Administration and Finance and the Accounting functions in the environmental sector; planning, allocating and disbursing budgetary funds provided by the Parliament of Mongolia to the Minister of Nature and Environment; preparing financial reports and organizing performance audits; consolidating fees and payments for the use of natural resources; disbursing funds for environmental conservation and natural resource restoration, as well as for the protection of Specially Protected Areas, natural resources and game wildlife; and creating, administering and reporting on the "Environmental Protection Fund" of the Ministry of Nature and Environment.

163. Ecologically Clean Technologies and Science Division is responsible for developing and promoting clean technologies in Mongolia by introducing cleaner production technology to all aspects of production and services.

164. National Agency for Meteorology, Hydrology and Environmental Monitoring is responsible for managing a national, integrated hydrological, meteorological and environmental monitoring network; ensuring preparedness for potential natural disasters or major pollution incidents; establishing conditions to permit the full and complete use of meteorological and hydrological resources; continuously monitoring radioactivity, air and water pollution and soil contamination levels; and providing essential hydrological, meteorological and environmental data to state and government officials, businesses and individuals.

165. Water Authority is the state organization responsible for implementing government policy and decisions related to the sustainable use, protection and restoration of water resources in Mongolia; signing and monitoring the implementation of contracts and agreements, in the name of the Ministry of Nature and Environment, with relevant foreign and domestic organizations, companies and individuals; collecting fees and payments for the use of water resources and allocating these according to the appropriate procedures; and allocating and reporting on the use of funds for the conservation and restoration of water resources.

166. Forest Authority is responsible for the implementation of the National Forests Policy and the "Green Wall" Program, as well as policies concerning forest conservation, reforestation, appropriate forest resource use, the mitigation of insect and disease infestations and the prevention of forest and steppe fires. Its functions include developing and improving forestry policy coordination. This unit's activities focus on assuring an integration of policies and actions promoting sustainable natural resource use and ecological balance. These responsibilities are carried out by developing partnerships with all organizations engaged in policy implementation, ensuring the effective allocation of resources, and organizing and coordinating their activities in line with government policy, programs and plans.

Aimag and Soum Level

167. Aimag and soum governors are responsible for all environmental management at the local level with the exception of protected areas management. They are also responsible for issuing local permits and licenses and for natural resource management. Enforcement of regulations is the responsibility of environmental inspectors at the aimag level and rangers at the soum level. Aimag level inspectors function with guidance from the State Professional Inspectors of the General Agency for Specialized Inspection under the Deputy Premier of Mongolia. Rangers continue to report to the soum government while aimags have their own environmental protection department with about 3 to 5 staff members.

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3.5 Project Classification

168. Through site visits and review of available information the following potential adverse impacts were identified for the Baga Ulaan Davaa to Mankhan road section:

 Likely adverse environmental impacts on local flora and fauna, including potential impact on endangered mammal species e.g. Mongolian Saiga Antelope (Saiga tatarica mongolica) in Mankhan Area;  Extraction of mineral resources (e.g. sand and stone aggregates);  Risk to safety of herders and their livestock crossing the road; and  Increased poaching or hunting of wildlife and risk to wild life in crossing zones.

169. As per Mongolian Law on Environmental Impact Assessment requirements MNET after a General EIA has determined that the WRRC Project warrants a Detailed EIA which is similar in content and scope to an EIA required for an ADB Category 1 Project.

170. As per requirements of Law on Environmental Impact Assessment a Detailed EIA was carried out on the WRRC Upgrading Project by a local company. This EIA was approved on 14 July, 2009, and is valid for 5 years from that date. The road alignment of the 103.3 m section from Baga Ulaan Davaa to Mankhan is the same as considered in the EIA 2009 for this section.

171. Considering the ADB requirements for environmental assessment of the project, ADB has classified Baga Ulaan Davaa to Mankhan road section development (Tranche 1 of the MFF) as Category A requiring an EIA.

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4 DESCRIPTION OF THE PROJECT

4.1 Type of Project

172. The proposed Project, for which this EIA is addressed, is a road upgrading and paving project. As currently proposed, the major activities under TA No. 7449-MON: Additional Works will be:

 Feasibility study and other Project document review;  Complete road design review and due diligence;  Project estimate review and procurement documents;  Update economic and financial analysis; and  Update and prepare project specific EIA.

173. The project specific EIA preparation has drawn from the above reviewing and updating.

4.2 Description of the Proposed Actions

174. The road section between Baag Ulaan Davaa and Mankhan has been designed as a two lane road. The improvements proposed for the project road section are identified as follows:

 The road pavement edge shall be designed 0.6 m above the expected level of snow cover as required for Category III roads;  New earth formations along the currently unformed sections, with geometric characteristics that conform to Mongolian Road Design Standards;  Rehabilitating or maintaining existing bridges and culverts that are suitable to be retained; reconstructing structures that are unfit to be retained and constructing new bridges and culverts where necessary; and  Providing drains and slope stability measures.

175. The Western Regional Road is designed as a part of the Asian Highway No.4 (AH4) and the road section proposed for development under the Project has been designed according to Mongolian Road Design Standards, at the recommendation of the Mongolian government. According to Mongolian standards, the project road section is classified as a Category III Road, as seen in Table 4.1.

Table 4.1: Road Category by Mongolian Standards ROA ROAD NO. OF FUNCTIONAL AADT EQUIVALENT DIVIDED OR D CATEGO LANES CLASSIFICATION PASSENGER CARS UNDIVIDED TYPE RY PER DAY/LEVEL OF SERVICE FREEWAYS MULTI ARTERIAL B DIVIDED EXPRESSWAYS LANE ARTERIAL, B DIVIDED I HIGHWAY REGIONAL C DIVIDED/UNDIVI DED II C UNDIVIDED III TWO- ARTERIAL, C UNDIVIDED LANE REGIONAL & ROADS LOCAL ROADS HIGHWAYS IV REGIONAL & 400-2000 UNDIVIDED

CONVENTIONAL CONVENTIONAL LOCAL ROADS LOW VOLUME 1-2 LANE LOCAL ROADS <200 MIXED TRAFFIC UNDIVIDED ROADS * Level of Service: A – Highest; B – High; C – Average; D – Low ; E - Very Low. Source: Road Design Standard CNR 21-01-00.

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176. Figure 4.1 shows the proposed typical cross sections for the road.

Figure 4.1: Proposed typical cross sections

TYPICAL CROSSSECTION(1)

10.00m

1.50m 3.50m 3.50m 1.50m

-2.00% -2.00% -4.00% -4.00%

1.0m 1.0m

-2.0% -2.0%

-4.0% 0.5m -4.0%

= 2.0m = 2.0m

TYPICAL CROSSSECTION(2)

-4.0% -4.0%

1.0m 1.0m 10.00m -4.0% -4.0% 18.0m 1.0m 1.50m 3.50m 3.50m 1.50m 1.0m -4.0% -4.0% 12.0m -2.00% -2.00% -4.00% 2.0m 1.0m 2.0m 1.0m -4.00% 1.0m 1.0m 6.0m -2.00% 0.5m -4.0% 0.5m -2.00%

0.5m 0.5m

TYPICAL CROSSSECTION(3) 10.00m 1.50m 3.50m 3.50m 1.50m

CL -4.00% -2.00% -2.00% -4.00% 1.0m 2.0m

-2.0% -2.0% 0.5m .5 :1 -4.0% 1

= 2.0m

Source: Department of Roads. 2011. Detailed Design for Road Section from Baag Ulaan Davaa to Makhan.

177. Under the Project, the following types of road improvement options have been proposed:

Improvement Option 1

178. In the section Baag Ulaan Davaa through Har Belchir davaa to Btogon Davaa the improvements will be:

 Blasting works (where required) to widen the existing road;  New construction: road embankment cuts and fills in order to implement the proposed pavement composition; and  Road safety: road markings, road signs, and guide posts are required to be installed.

Improvement Option 2

179. In all of the other sections (improved earth and earth road), the improvements will be:

 New construction: road embankment cuts and fills in order to implement the proposed pavement composition and alignment; and  Road safety: road markings, road signs, and guide posts are to be installed.

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Bridges and Culverts

180. Along the project road section, a total of 2 bridges and 167 culverts were identified from the detailed design. Of the culverts, 165 are pipe culverts (1 m to 1.5 m diameter) and 2 are box culverts (2 m). There are 165 single pipe culverts and 2 twin barrel box culverts. The bridges are located Km 18.7 (30 m) and Km 56.8 (45 m).

Road Maintenance Centers

181. The current road maintenance capability in the Project area is inadequate to cover the requirements for proper servicing of the new road. To remedy this, road maintenance centers will be established along the proposed road in Khovd and Olgii. The major duties of the maintenance centers are the following:

 Routine maintenance including pothole repair, crack patching etc.;  Removal of litter from roadside stopping areas and other locations; and  Emergency response activities such as accidents, snow removal, etc.

4.3 Bill of Quantities (BOQ) for the Project

182. The detailed BOQ for the Project is being prepared and the current estimated quantities for the Project are listed in Table 4.2.

Table 4.2: Estimated Quantities for the Project No Description Quantity 1.00 General Various 2.00 Site Clearance 167 Ha 3.00 Earth Works 1,845,537 m3 4.00 Excavation for Structures 2,082 m3 5.00 Pipe Culverts and drainage Works (Culverts and Stone Pitching) 3,063 m 6.00 Passage of Traffic 36 km 7.00 Sub Base and Base 592,985 m3 8.00 Bituminous Pavement Works 36,581 m3 9.00 Concrete and Piling Works 557 m3 10.00 Micellaneous Bridge Works 75 m 11.00 Road Furniture and Traffic Markings Various Source: DOR Detailed Design 2011.

4.4 Need for the Project

183. The major goal of the development of the WRRC is to promote the regional transport of freight and passengers via the Western Road Corridor and increase economic development and regional trade. The expected outcome of the WRRC Project is an efficient and safe regional transport route that is developed in the Western Region of Mongolia linking the Xinjiang Autonomous Region of the PRC and Siberia in the Russian Republic through Khovd and Bayan-Olgii aimags of Mongolia.

The Economy of Western Mongolia without the Road

184. Mongolia, as a whole, has a low GDP per capita ($724) and the Western Aimags have a GDP per capita that is less than half of the national average ($338 versus $724). This raises issues such as the incidence of poverty given the low average income of all of Mongolia even in purchasing power parity

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terms.16

185. Western Mongolia has been growing more slowly than Mongolia as a whole during the 2002 to 2005 period. This is in spite of the fact since these years represent a recovery from the tough climatic conditions of the 1999 to early 2002 period that resulted in heavy losses of livestock. Agriculture (mostly livestock) makes up just over 20 percent of Mongolia’s economy, but over 60 percent of Western Mongolia’s economy. There is hardly any industry with the exception of meat processing and some mining, but all other industries are on a very small scale. A tourism and hospitality industry exists, but as the aggregate numbers on the service sector show, it can hardly be flourishing.17

186. In a “business as usual” scenario which the “without the road” base case represents, the economic performance of the Western aimags will continue to lag because of structural weaknesses and infrastructure shortcomings. Out-migration will continue both to Ulaanbaatar and to Kazakhstan. Xinjiang (China) and parts of Siberia are also growing rapidly and will attract migrants from Western Mongolia. Consequently, it is hard to see any significant population growth without improvements in infrastructure and related policy, program and project changes. Therefore, the new paved road can be a key that unlocks the development potential of the region.

187. Table 4.3 below shows the “without road” population and GDP projections, which could be optimistic. It is difficult to argue that real annual GDP growth will be higher than the estimated 3 percent achieved in the 2001 to 2005 period when this was a period of economic recovery. However, some other projects are being undertaken such as the small scale hydro power plants and the distribution line from Olgiy City to Tsagaannuur, but it is difficult to see a bright future for the free trade zone (FTZ) there without efficient transportation services.

Table 4.3: Growth Rates Per Year Without Road (%) Period GDP Population GDP/capita 2006-10 3.5 0.0 3.5 2011-15 4.0 0.2 3.8 2016-20 4.5 0.3 4.2 2021-25 4.5 0.4 4.1 2026-30 3.0 0.0 3.0 2031-35 3.5 0.2 3.3 Source: Consultant. TA 4785-MON: Preparing the Western Regional Road, June 2007.

The Economy of Western Mongolia with the Road

188. Once the road is in place, the cost of transportation will be lower, and hence, business costs will be lower, providing an on-going stimulus to the economy. The cost of imported goods will go down and the net realization from exports will increase. In other words, the terms of trade for Western Mongolia will improve. Moreover, as has been shown, this area of the country has very little industry and almost no import competing industry. Hence, very few offsetting losses can be anticipated. As the ADB documents “Central Asia: Increasing Gains from Trade through Regional Cooperation in Trade Policy, Transport and Customs Transit” (2006) and “Routes for Asia’s Trade and Statistical Appendix” (2006) suggest, the quantification of the gains from trade is problematic, but even if the exact magnitude is in doubt, they are very real. Moreover, as models of the economy have shown, the growth rate of GDP and its components (consumption, investment, and exports) will tend to increase.18

16 DOR 2007. Final Report Phase II, Volume 2: Economic and Financial Analysis. TA 4785-MON: Preparing the Western Regional Road, June 2007. 17 Ibid. 18 DOR 2007. Final Report Phase II, Volume 2: Economic and Financial Analysis. TA 4785-MON: Preparing the Western Regional Road, June 2007.

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189. The leakage into imported goods and services could dampen the growth rates of the main economic indicators somewhat, but the major concerns would be the lack of complementary infrastructure (electricity, heat, and water) and the absence of any potential in Western Mongolia’s economic base. In this case, there would still be some stimulus from the new road, notably in services related to transport such as fuel, food and accommodation, but this impact would be quite small although significant given the small size of the Western Mongolian economy and the potential for transit traffic.19

190. In terms of complementary infrastructure, the Ministry of Fuel and Energy has projects under way that will ameliorate the energy situation in the Western aimags. Therefore, the challenges in the electricity sector are more related to distribution (hooking up households and businesses) in a sparsely settled region and the technical and non–technical losses than to power generation per se. Other infrastructure problems can also be overcome.20

191. Like many developing regions of the world, Western Mongolia has relied on local cheap natural resources as the basis for the little industrial activity that exists. Thus, an abundance of land became the source of a livestock industry which in turn led to meat processing, fibre production (cashmere, wool) and hides and skins. It is generally agreed that there is little opportunity for expanding the number of livestock in the future because overgrazing and desertification already present problems. The new road would improve matters somewhat since it would reduce the number of parallel dirt tracks that can reach up to fifty on some stretches of the existing “road” and are highly destructive to vegetation in the sub-alpine environment. Therefore, the challenge in the livestock sector is to move toward higher value-added products and facilitate the development of an industry cluster through strengthening the forward and backward linkages of the sector.21 In itself, the new road will not do this, but it does open up new opportunities by providing access to the large and growing markets in Siberia, Kazakhstan, Xinjiang and beyond.

192. In addition to an industry cluster centred on livestock – actually two clusters, one involving food processing and the other cashmere, including eventually fashion goods – Western Mongolia has the potential for the development of three other clusters: tourism and hospitality; minerals and metals; and construction and building materials.

193. Above facts emphasizes the importance of infrastructure and especially transport infrastructure for Mongolia as a whole, and especially in the case of Western Mongolia. If there is relatively little mining activity in Western Mongolia and the action is taking place in central, southern and eastern Mongolia, then this is partly due to absence of transport infrastructure. Further, it is known that Western Mongolia has significant geological potential in coal, gold, tungsten, silver and perhaps petroleum. In summary, there are significant opportunities to be realized in this and the other industry clusters with the appropriate infrastructure in place.22

194. The projections in Table 4.4 reflect the economic opportunity that exists and that can be realized with the new road. The table should not be interpreted to mean that the new road alone will cause these growth rates to happen, but rather that these growth rates are consistent with the scenario presented and consistent from a modelling point of view. In the 2011 to 2015 period the effects of both road construction and the cost reductions in transport are felt with growth in real GDP reaching 7.0 percent per annum. Needless to say, activities in the industries noted above should also be increasing. As well, because of employment opportunities, out-migration is expected to decline, and there is an annual rate of population increase varying between 1.0 and 1.5 percent.

19 Ibid. 20 DOR 2007. Final Report Phase II, Volume 2: Economic and Financial Analysis. TA 4785-MON: Preparing the Western Regional Road, June 2007. 21 Recently, the ADB and GTZ launched an Agriculture and Rural Development Project whose focus is precisely on higher value added products in this sector. 22 DOR 2007. Final Report Phase II, Volume 2: Economic and Financial Analysis. TA 4785-MON: Preparing the Western Regional Road, June 2007.

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Table 4.4: Growth Rates Per Year Without The Road Period GDP Population GDP/capita 2006-10 4.5 0.0 4.5 2011-15 7.0 1.5 5.5 2016-20 6.5 1.2 5.3 2021-25 6.0 1.0 5.0 2026-30 7.0 1.4 5.6 2031-35 6.5 1.2 5.3 Source: Consultant. TA 4785-MON: Preparing the Western Regional Road, June 2007.

The Economy of Western Mongolia with the Road and Border Improvements

195. In addition to the road development the border control positions at Yarant and Ulannbaishint are expected to be developed to facilitate faster and efficient clearance of vehicles passing through. The new paved road will bring cost savings through lower vehicle operating costs (VOCs) and through time savings. Improvements on the border will also lead to time savings and will be especially important for transit traffic.

196. Domestic traffic benefits will accrue initially to transport operators, private vehicle owners, and commercial and government entities that operate vehicles. The commercial vehicle operators can be expected to pass along the VOC savings accruing to them through the market mechanism, given the interest expressed by many commercial vehicle operators in making more journeys once the road is improved. New entrants to the various travel markets in the PIA can also be expected, also exerting a downward pressure on fares and tariffs. These benefits will likely be fairly evenly split between rural and urban residents of the PIA.

197. Domestic travel time benefits will accrue to companies, workers, self-employed herdsmen and urban dwellers.

198. With regard to induced Western Mongolian international trade, it should be possible for Mongolia to participate equally with the other countries in this trade. Thus one could expect to see this benefit divided three ways, with half accruing to Mongolia by virtue of its participation in all facets of the trade.

199. Generated tourism benefits would initially accrue to tourist operators, but could be reinvested or spent on consumption in the Western Region. There will be some leakage to Ulaanbaatar as tourist firms from the capital play a significant role in the Western tourist trade.

200. At a minimum, approximately half of the benefits will accrue to Mongolia with considerably more possible depending on the nature of the Tripartite Agreement. Regarding the impoverished rural poor, up to 20 percent of domestic traffic benefits would accrue to herding households, potentially raising productivity.

201. There are considerable business and employment opportunities likely to arise because of the increased activity on the road. As well, all rural residents are likely to enjoy an increase in welfare because aimags will find it easier to retain health and education staff in outlying areas. Health and agricultural extension workers will also be able to significantly extend their coverage.

Secondary Benefits

202. The development of trade, tourism, mining and increased agricultural production will lead economic growth in the project area. This will result in further growth in the services sector, which is an important driver of job creation. Table 4.5 shows the result of utilizing the GDP and population growth rates. As the table indicates, the economy will be about 6.7 times larger in 2032 over 2005 levels, and the

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population will increase about 36 percent. As a result, GDP per capita will increase 4.6 times over 2005 levels.

Table 4.5: Forecast GDP, Population and GDP Per Capita 2005-2032 2005 2010 2015 2020 2025 2030 GDP (billion tugrigs) 75.8 99.1 145.6 213.9 307.1 504.7 Population (000s) 187.4 192.1 212.1 228.5 242.6 268.7 GDP per capita 404,482 515,622 686,198 935,919 1,265,837 1,878,372 Source: Consultant. TA 4785-MON: Preparing the Western Regional Road, June 2007.

203. The GDP per capita figure is key to poverty reduction. Currently, as estimated by the National Statistics Office based on household surveys, the minimum subsistence level in the Western region is about 300,000 Tg per year. At the 2005 level, the average GDP per capita was only about 25 percent over that level. In other words, there were many poor or near-poor in the project area. However, as incomes increase, it is clear that by 2032, GDP per capita is well above the minimum subsistence level. This means that poverty would be greatly reduced to the point where it would be more of an isolated problem instead of an impediment to development.

204. The above GDP and population forecasts reflect the secondary impacts resulting from the road upgrading. The upgrading of the road will result in a boost to the project area economy during construction. However, the longer term growth (i.e., post-construction) will be even more impressive as trade and transit traffic increase. This will trigger further investment in other services and production in the project area.

205. As noted above, mining and tourism will play leading roles in economic growth. For both the mining and tourism industries, the western region of Mongolia has considerable resources that have been largely undeveloped because of lack of access.

206. With respect to mining, there is only an open pit tungsten mine (Khovd Gol) currently operating in western Bayan-Olgiy. However, it is likely that this will change in the coming years as a relatively small silver deposit near Tsagaannuur in northeastern Bayan-Olgiy is being evaluated and may be developed within the next several years. The silver mine (Asgat) has a reserve of approximately 2,300 tons, but is located in a remote area that is not easily accessible.

207. Most promising is a coal deposit with an estimated reserve of 300 plus million tons, which is located near Most soum in Khovd Aimag (Khusheet). Reportedly, over 1,000 people are being hired for the construction, with drivers accounting for about half this number. Equipment is being shifted to the site in preparation for development.

208. Tourism is also likely to expand. Currently, there are few facilities and tourism infrastructure remains limited. With improved access, this will likely change as travel becomes easier and more reliable. The Altai eco-region is included in the Worldwide Fund for Nature (WWF) “Global 200” list of virgin or little changed eco-regions in the world. In addition, there are national parks, nature reserves, important bird areas (IBA) and a Ramsar site (Convention on Wetlands) in the project area. Collectively, these resources as well as a range of archeological sites will provide a basis for sustainable and low impact eco-tourism.

209. The uniqueness of the Altai region and the project area will also provide attractions for more conventional tourism that is based on hotels and tour operators. While there are some hotels scattered throughout the project area, most will require upgrading in order to attract tourists.

210. Thus, the upgraded road will directly facilitate development of these key industries, and generally spur economic growth throughout the project area. The upgraded road will benefit the economy by making travel easier and more reliable, and by enabling the reduction in transport costs for imports and exports.

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211. Importantly, the upgraded road is likely to slow emigration and lead to a population increase in the project area as a result of enhanced employment opportunities. This will be a further contribution to economic growth. In addition, road upgrading will enable:

 Quicker responses to the outbreak for crippling animal diseases;  Quicker responses to famine situations such as those that have occurred during the cold winters over the last decade;  Quicker access to hospitals and medical centers for project area residents;  Better access to schools and other social services; and  Improved access to information including agricultural data that could lead to increases in productivity and the value of production.

212. The benefits of the road upgrading will be far greater than the benefits described earlier in this section when all the secondary benefits are considered.

213. To reap the benefits of the WRRC road development all its components will have to be developed to ensure continuity of the road. Therefore, the proposed development of the 103.3 km project road section is essential for the development of the Western Region of Mongolia.

4.5 Project Location

214. The project road section is located in the western part of Mongolia within the Khovd aimag. The proposed road will stretch approximately 103.3 km between Baga Ulaan Davaa and Mankhan as shown in Figure 4.2.

Figure 4.2: Location Map

215. From the exit of Bodonch to Mankhan (Figure 4.3), the road passes through Baga Ulaan and Har Belchir Passes, Tavt hill and very deep valleys. In this section, the road passes through rolling hills and

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mountainous areas. In the mountainous section, vertical gradients along the alignment reach about 12.0 percent, which exceeds allowable longitudinal slopes for Category III Roads. Perennially frozen areas (permafrost) occur at higher altitudes.23

23 Feasibility. Study 2007. Environmental Impact Assessment, Preparing the Western Regional Road. Ulaanbaatar.

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Figure 4.3: Road Alignment

Source: Consultant TA No. 7449-MON. 46

4.6 Associated Project Facilities

216. Other Road Sections. As described in Section 2 (Introduction) there are other road sections which are part of the WRRC from Yarant at the Chinese border to Ulaanbaishint at the Russian border. For the road section from Baga Ulaan Davaa and Mankhan to generate the expected benefits, these other road sections must also be developed. All these sections have funding arrangements (see Figure 4.3 above ) and several of them are in various stages of development. The last section of the Western Regional Road from Tsagaanuur to Ulaanbashint has also been considered by ADB for development assistance.

217. Quarries and Borrow Pits. One of the main issues associated with road construction is exploration of land and extraction of construction material. The locations of quarries and borrow pits and quality and quantities of mineral resources to be extracted (gravel, sand, spoil) are important factors to the project cost and the environment. Quarrying and restoration of quarries is also closely related to natural resource and environmental protection. Only 2 quarries and borrow pits have been identified close to the project alignment.

218. The location of quarries and borrow pits along the WRRC is shown in Figure 4.4 and the 2 borrow pits closest to the Project are shown below in Table 4.6.

Table 4.6: Location of Borrow Pit and Quarries in the Project Area Location of Distance borrow Kilometres from road Location Material of quarries pit/quarry alignment Near the Lightweight loam / clayey BF-2 Baga Ulaan 242.3km 0.3km Buhiin nahis hill gravel pass Beginning the BF-3 Havchigiin 281.5km 0.2km Havchig hill Sandy am valley Note: BF is abbreviation for Borrow Pits & Quarries. Source: Consultant TA No. 7449-MON.

47

Figure 4.4: Location of Borrow Pits and Quarries along the road alignment

Source: Adapted from EIA 2007.

4.7 Traffic Projections

219. Table 4.7 presents average daily traffic projection for the Bulgan-Khovd section which includes the 48

Project road section. The traffic projection has been extracted from the Feasibility Study forecasts of traffic, measured in vehicles per day, in the “with road plus border improvement” case for the whole length of the road corridor.

Table 4.7: Summary of Average Daily Traffic (ADT) Projections Year Car Jeep Light Medium Heavy Minibus Medium/ Tractor Motorcycle Truck Truck Truck Heavy Bus Bulgan – Khovd 2006 28 82 32 27 3 46 0 0 16 2013 62 183 62 52 105 102 0 0 36 2017 107 313 97 82 152 176 0 0 61 2022 205 601 169 143 236 337 0 0 117 2027 371 1087 284 240 361 610 0 0 212 2032 644 1,887 456 385 537 1,058 0 0 368 Source: Adapted from EIA, 2007.

4.8 Implementation Schedule

220. The implementation schedule is based on the amount of project work with due consideration to the following aspects:

 The project will secure the necessary funding subsequent to the completion of the review of the detailed design;

 Asphalt pavement work is limited to 5 months of the year (May to September) and earthwork is limited to 6 months of the year (May to October) because of cold weather; and

 Stockpiling of aggregates, pre-cast concrete structures and other preparatory works are conducted throughout the year.

221. An implementation schedule prepared by the Consultant is presented below.

Table 4.8: Project Implementation Schedule 2011 2012 2013 2014 2015 2016 Indicative Activities 1 2 3 4123412341234 1 2 3 41234 A. Design & Monitoring Framework A1: Road Construction Works Tranche 1 A1.1: Contract Repackaging A1.2: Procurement (3 Packages) A1.3: Contract Award A1.4: Civil Work (Package 1: Km 0 - 25) DEFECTS A1.5 Civil Work (Package 2: Km 25–75) A1.6: Civil Work(Package 3 Km 75-103.3) A2: Establish DOR Road Maintenance Unit Tranche 1 A2.1: Confirm Equipment Requirement A2.2: Procurement (for Equipment) A2.3: Contract Awarding A2.4: Equipment take-over by DOR A2.4: Road Maintenance Training to Unit Source: Facility Administration Manual: Mongolia: Proposed Multitranche Financing Facility for the Western Regional Road Corridor Development Investment Program, June 2011.

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5. DESCRIPTION OF THE ENVIRONMENT

5.1 Environment of Mongolia

222. Mongolia is a land-locked country situated between latitude 420 N and 52oN and longitude 880 E and 120oE and covers an area of just over 1.5 million km2 in North East Asia. The Mongolian environment is harsh and experiences temperature extremes. The soils are poor, the growing season is short and rainfall is low. Its ecosystems are extremely fragile.

5.2 Assessment Process

223. The description of the potentially affected environment is organized under four major headings as given below. The assessment process will consider Mongolian Standards. Mongolian standards on Air and Water Quality are presented in Annex IIA and IIB.

 Physical Resources – climate and air quality, topography and soils, geology and seismic characteristics, noise and vibration, surface and ground water;  Biological Resources - flora (plants), fauna (wildlife), nature reserves and unique habitats;  Economic Development – industries, infrastructure facilities, land use, agricultural development, mineral development, and tourism facilities; and  Social and Cultural Resources – population and communities, health facilities, education facilities, socio-economic conditions, and physical or cultural heritage.

5.3 Definition of the Project Area

224. The potentially affected environment associated with the current Project (generally referred to as the project area) is defined principally in regard to two factors:

 The nature and scale of the proposed action.  The sensitivity and circumstances of the environment in which the proposed action will occur or issues of special concern.

225. The nature of the actions proposed within the context of the current Project ranges from road rehabilitation to new road construction, which includes road construction on the existing alignment including road embankment cuts and fills. Although the physical and biological environment in which these actions will occur will be limited largely to the project road section and immediately adjacent areas, socio-economic impacts may occur over a wide area and not merely along the road itself. In addition, indirect and cumulative impacts could take place over an appreciably larger area and the conceptual limits of the project area must be expanded in accordance with the circumstances of the particular environmental attribute under consideration. The Project area for assessing environmental impacts was an area of 1 km width on either side of the road alignment while for social assessment Khovd Aimag and soums within the Aimag were considered as appropriate.

226. Administratively, Mongolia is divided into 21 aimags (provinces) and the capital city Ulaanbaatar. Aimags are divided into soums which are further divides into baghs. Ulaanbaatar and big cities are sub-divided into districts that are further divided into khooros. The proposed road section traverses through Khovd aimag with a combined population of approximately 89,240 (2009). The soums within the project area include:

 Mankhan soum which includes Botgon bagh,Tugrug gol bagh,Takhilt bagh and Bayangol bagh.  Must soum including Bayankhairkhan bagh and Davst bagh.

5.4 Physical Resources

227. Geo-physical Environment. The Mongolian geo-physical environment is very varied and can be

50

divided into six zones – desert, mountain, mountain taiga, mountain forest steppe, arid steppe and taiga. The northern part of the country is covered by forest and mountain ranges and the southern part by desert, desert steppe, and steppe areas with low mountains. The western part is dominated by the high snow-capped mountain belt of the Mongol Altai and Khangai mountainous regions, with their perpetual snow and glaciers and the eastern part by vast plains and wild heaths. About 81% of the country is higher than 1,000 meters above sea level and the average elevation is 1,580 m. The highest mountain is Tavan Bogd in Bayan-Olgii aimag at 4,374 m and the lowest point is Khukh Nuur in the east at 560 m.

5.4.1 Topography

228. Overview. The project area is located within the Altai Sayan Eco-Region that covers the territory of Mongolia, China, Russia and Kazakhstan. Located in the far west of Mongolia along the Altai Mountains, which stretch approximately 1,500 km, the average altitude of Khovd province is 2,230 m above sea level. The lowest point is 1,350 m in Bayannuur soum, while the highest point is 4,650m, at the peak of the Altai Tavan Bogd Mountain.

229. The proposed Project alignment will primarily follow existing roads that pass through mountain areas, hills, canyons, valleys, and plains, with elevations ranging from 1,300 m to 2,900 m above sea level as seen in Figure 5.2.

230. Multi track. A characteristic feature of the plain and hilly stretches of the road corridor is earth multi tracks. Due to lack of a paved road, drivers have optimized their traffic routes within road corridors throughout virgin lands for decades. After a new track is established by increasing numbers of drivers, it begins to erode as a result of rainfall, snowfall, wind and other natural factors. Therefore, the tracks are constantly degrading and drivers finding it difficult use these, create new tracks. At slopes, erosion processes triggered in this way contribute further to rilling and gullying. In permafrost areas multi track contributes to thermal erosion (thermokarst) of the terrain. The number of tracks may reach 10 and more and can be spread across the width of the plain as seen in Figure 5.1. This leads to degradation of land, damage to flora, triggers erosion and generates substantial amounts of dust.

Figure 5.1: Multi-Track Earth Road (Baag Ulaan Davaa–Mankhan)

231. The project area. Topographic features vary substantially within the project section of the road. From the exit of Bodonch Canyon to Mankhan, the road lies within high-mountain and steppe zones. It continues to ascend at the exit of Bodonch (about 2,300 m above sea level) to the Baga-Ulaan Pass (2,871 m above sea level, the highest point of the Project) and the Har Belchir Pass (2,840 m) and descends slightly to Botgon hutul, with an altitude of about 2,500 m. The landscape changes from forbs – feather grasses steppe to 51

mountain meadow and then back to steppe. Further, the road continues to descend to Mankhan. The altitudes within the section vary from about 1,300 m in Mankhan to 2,871 m at Bagaa Ulaan pass (Figure 5.2).

Figure 5.2: Longitudinal Profile for the Project Road Section

Source: Feasibility Study EIA 2007.

5.4.2 Geology

232. The project area is situated in the Mongol Altai high mountainous area. The geological setting of this territory began to form in the Cambrian Period, when the rocks were folded and faulted as the Mongolian and Siberian cratons collided in the Paleozoic and Mesozoic eras. Granite rocks dominate the high peaks. The Altai Mountains were formed mostly by Paleozoic rocks of intrusive complex, comprised of granite-granodiorite, granite. In Khovd Aimag, gabbro, granite, diorite, granodiorite rock deposits were found, along with a metamorphic massif underlying the Bodonch Canyon Mountains.

233. According to the geo-morphological map of Mongolia, the terrain primarily includes excessive rolling ranges, medium rolling ranges and mountains, slight rolling ranges of sloped structure, mountainous ravines, semi-level surfaces of mountain skirts, glacial valleys, mountains with sharp ridged peaks, alluvial lake valleys, delluvial - prolluvial and mountain river valleys.24

234. The Mankhan steppe area is covered by Kainozoic and quaternary sediments. In this area, the soil contains a wide variety of continental and marine sedimentary rocks, some with fossils: conglomerate, sandstone, mudstone, dolomite and limestone.

5.4.3 Soils

235. The following soil types have been identified in Western Region of Mongolia where the Project is located:

 Mountain tundra ochro, peaty-gleye, and cryoturabated (destructed) soil is mainly spread out in the area of Altai Mountain above 3,000-3,200 m. Sand, gravel and bare rocks mostly cover the soil surface. In areas with sparse vegetation, the soil is dense and is formed by sediment of moraine sand, gravel and cobble stone. The soil is very stony and the concentration of clastic rock increases up to 80 percent at deeper depths.  Mountain meadow and meadow steppe soils are distributed in the humid area of the northern portion of the Mongolian–Altai Mountain and in depths in the Altai Mountains.  Soil forming sediment is eluvial-diluvial gravel sediment and moraine rocky sediment. Thus, the soil content is clastic rocky and plant roots are able to get into the soil between rocks. Because

24 Government of Mongolia. 2007. EIA. Ulaanbaatar. 52

it has moraine sediment, there is heavy loamy soil with huge cobblestones; below 70 cm depth these huge cobblestones are mostly found.  Mountain steppe soils extend in the Altai Mountains area with an altitude between 2,400 m to 2,500 m and 2,900 m to 3,000 m. The soil surface is gravel floored with scattered vegetation cover. From soil surface to a depth of 40-50 cm, the soil is sandy, gravelly, pebbly, and stony.  Mountain desert steppe and desert soils are spread in the southern border of the Altai Mountains with altitudes between 1,500 m to 1,600 m and 2,400 m to 2,500 m. The soils are semi-desert brown soil and desert gray brown soil.

236. The rivers in the project area originate from the Altai Mountains. Thus, the upstream and midstream areas are narrow valleys and canyons; flood plains are not formed in this area, but are clearly formed downstream. Alluvial meadow gleyey soil is formed under the humid conditions of the main floodplain and one of the water sources is permafrost thawing. Ground water is primarily located at soil depths of 90-160 cm, with soil having 100 percent vegetation cover. As a result the mull-humic dominates in the soil.

237. Soil characteristics vary substantially within the project road section and the following presents the general types of soils:

 In Bodonch Canyon and high-altitude parts of Mongol Altai soils are diverse and range from semi-desert brown, desert gray brown, Govi brown, and light krasnozem (red soil) soils to high mountain steppe raw humic soils, and soils of high mountain tundra. Thus, a mixture of forest steppe and steppe and high-mountain and mountain soils are typical for the road that crosses Mongol Altai Mountains.

5.4.4 Permafrost

238. Permafrost is a part of upper layer of the Earth crust that is characterized by negative temperatures of soils/rocks and occurrence or possible of occurrence of underground ice. There are two layers in the permafrost: an active layer with seasonal thawing/freezing and a perennially frozen ground or cryolite zone. Global warming and anthropogenic impacts intensify permafrost warming and thawing. Permafrost degradation can cause substantial change in water hydrology, damage infrastructure and affect ecosystems. Thermokarst is an uneven / hummocky terrain created by thawing permafrost.

239. Khovd aimag is located in the Altai Mountain region, where permafrost is divided into five zones that depend on altitude: (i) continuous, (ii) discontinuous, (iii) widespread island, (iv) rare spread island, and (v) sporadic:

 Continuous permafrost lies predominantly in mountain areas with altitude of more than 3,000 m above sea level. The temperature of the permafrost ranges between -1.5о С and -2.5о С and its thickness is between 80 and 150 m. The minimum temperature of the permafrost drops to -4о С, and in some locations, permafrost thickness reaches 200-500 m.  Discontinuous permafrost is widespread in the Western part of the Mongol-Altai Range and in some upper reaches of the Khovd River. The temperature of the permafrost ranges between - 0.8о С and -1.5о С, with a thickness between 40 and 80 m. The maximum thickness of permafrost is 200 m.  Widespread island permafrost is located in areas with elevations between 2,500 and 2,800 m above sea level. The temperature of the permafrost is between -0.2о С and -0.8о С, with a thickness ranging from 15 to 40 m. The maximum thickness of the permafrost is 100 m.  Rare spread island permafrost occurs throughout valleys of rivers and lakes with elevations of 2,000-2,500 m above sea level. The temperature of the permafrost is between -0.1оС and - 0.2оС, and the thickness between 5 and 15 m.  Sporadic permafrost occurs in the muddy soil of springs. The average temperature of the permafrost is between -0.0оС and -0.1оС, with an average thickness between 0.5m and 5.0 m. 53

240. Minimum temperature of soil surface. The minimum temperature of soil surface should be considered as well, as it is one of the major parameters that will influence road construction. The absolute maximum of soil surface temperature ranged between 160C and 32о С and absolute minimum value between - 40 and -47о С. The monthly absolute minimum value of soil surface minimum temperature is highest (around 0о С) in June or August and the lowest is in February.25

241. More specifically, permafrost characteristics (active layer for perennially frozen ground means depth of thawing, while for seasonally frozen ground – depth of freezing) in the project area (as shown in Figure 5.3) are described below.

242. High altitude parts of Mongolian Altai between exit of Bodonch Canyon and Mankhan, present perennially frozen soil with the annual temperatures of 0 – -50C and an active layer of 1.0 – 4.5 m.

Figure 5.3: Map of Permafrost in the Project Area

25 Government of Mongolia 2007. EIA. Ulaanbaatar. 54

Source: Geographic Atlas of Mongolia. Administration of Land Affairs, Geodesy and Cartography. Ulaanbaatar. 2004.

5.4.5 Seismic Characteristics

243. Mongolia is divided into 6 active earthquake zones based on information on earthquakes that occurred between 1900 and 1972. The area of the proposed project road falls within the Mongol Altai zone.

244. Mongol Altai Zone. This zone includes the Mongol Altai mountain range. The largest earthquake in this zone occurred near the Munhhairhan Mountain in August 1931. Its magnitude exceeded 8.0. Since then, no quake with a Magnitude of 7.0 or greater has been recorded in this zone.

245. Earthquakes in Mongolia have occurred primarily along mountain ranges situated in the west, southwest and northwest of the territory. Figure 5.4 shows the locations of earthquake epicenters around the project area.

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Figure 5.4: Seismic Activity in the Project Area (1900-2000)

Source: Geographic Atlas of Mongolia. Administration of Land Affairs, Geodesy and Cartography. Ulaanbaatar. 2004.

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5.4.6 Natural Disasters

246. The topography and geology of the area, climatic conditions, and hydrologic regime of rivers define the character of natural hazards such as rock falls, flashfloods and winter storms in the project area. Flashfloods (mudflows) are a distinctive feature of the flood regime of the Mongolian mountain streams and rivers. Rockfalls are widespread in canyons at high altitude sections of the road. However, there is no evidence of avalanches or landslides in the project area.26 Table 5.1 below and Figure 5.5 provide an overview of the natural disaster areas within the project alignment.

Table 5.1: Location and Length of Road Sections Prone to Natural Disasters Type of natural Location/Chainage Length Mitigation measure hazard Rock fall Bodonch canyon 6.4km 2mx40cm Retaining Wall Bodonch canyon 200m grouted stone pitching Khavchig canyon 1800m grouted stone pitching Blowing and Baga Ulaan pass 300m earthen fence drifting snow Flashflood 161.1km near Bodonch bag 2.5x2m box culvert 162.4km in Bodonch canyon 2x2m box culvert 164.1km in Bodonch canyon 3x3m box culvert 165.8km in Bodonch canyon 2x2m box culvert 171.5km in Bodonch canyon 2x2m box culvert 172.7km in Bodonch canyon 3x2m box culvert 195.0km in Bodonch canyon 2x2m box culvert Source: EIA, 2007.

247. Among the other natural disasters that Mongolia is susceptible to, is the zud which is primarily the result of weather phenomena and one of the most devastating. Under zud conditions, livestock cannot graze and reach fodder and they die of starvation, often in their millions. The condition can be caused by a layer of ice formed after a warm thaw in winter, through a lack of snow in the waterless regions, through too much snow, or by the trampling and pugging of pasture in areas where there is too high a stock density.27

26 Government of Mongolia. 2007. EIA. Ulaanbaatar. 27 UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. Ulaanbaatar and Wellington.

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Figure 5.5: Location of Natural Disaster ZONES

Source: EIA 2007.

5.4.7 Climate and Air Quality

Climate

248. Mongolia has a severe climate with a low annual precipitation averaging 200-220 mm and ranging from 38.4 mm per year in the extreme south (Gobi desert region) to 389 mm per year in some areas in the north. Most precipitation occurs between June and August, and the driest months are usually from November to March. Droughts in spring and summer occur on average once in every five years in the Gobi region and once in every ten years over most other parts of the country. Mongolia has an average of 3,000 hours of sunshine annually, which is well above the amount received by other countries in the same latitude.

249. In establishing climatic conditions along the project road section, meteorological data from the nearest meteorological stations from 1995 to 2005 have been analysed. Data from meteorological stations in Khovd, Munkhkhairkhan, Mankhan, Must, and Bulgan of Khovd Aimag were used in this analysis.

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250. Climate change. Since 1940, the average annual air temperature in Mongolia has increased by 1.9о С. Locally, the warming trend is slightly higher in the mountainous areas (2.0-3.7оС) and lower in the Gobi desert and steppe areas (0.7-2.0оС).28

251. Due to this warming, surface evaporation has increased by 10 percent in last 40 years (10-12 percent in forest-steppe and steppe areas and 7-9 percent in mountainous and desert areas), the duration of ice cover on rivers and lakes has shortened by 2 weeks, the thickness of ice on rivers and lakes has decreased, the number of days with stable snow cover has decreased, the stable snow cover has started to melt earlier than usual, and glaciers and permafrost have melted. The lengths of cold waves have shortened, while heat wave lengths have increased by 10-12 days in region of Mongol Altai Mountains. The date of soil melting in the spring has moved forward 3-6 days and the date of soil freezing has been delayed by 4-8 days7.

252. In 2003, a census of water bodies was taken. According to the census, there were a total of 5,097 rivers, 9,582 springs and 372 rivers of which 1,158 springs had dried up since last count.

253. Air Temperature. The annual mean air temperature for the last 10 years ranges from -0.2oC to 1.3oC in this region (see Appendix IIA). Monthly absolute maximum and minimum temperature of air, observed at the meteorological stations along the road are shown in Appendix IIA. These figures show that July is the warmest month and January or February is the coldest month. During the last 10 years, the absolute maximum air temperature reached 39оС at Bulgan soum of Khovd Aimag in 2004 and the absolute minimum air temperature was -44оС at Mankhan soum in 2005 (see Table 5.2).

28 WWF. 2004. In Mongolia, Freshwater System of the Great Lakes Basin, Mongolia: Opportunities and Challenges in the Face of Climate Change. Ulaanbaatar. 59

Table 5.2: Meteorological Data Along the Proposed Road Corridor Province Soum Precipitation Average amount, mm Maximum Maximum Average number depth of wind number of days snow speed, of days with MMin Max cover, mm m/s with rain snow

Hovd Khovd 880 229.2 11 26 15 34 Mankhan 660.8 169.2 16 22 11 28 Munkhkhairkhan 445.4 136.4 6 28 14 37 Must 339.1 208.4 5 27 9 37 Bulgan 226.4 128 21 18 10 21 Province Soum Temperature of soil surface 0C Air Temperature 0C AMa AMi AMa AMi Khovd Khovd 25 -44 22 -43 Mankhan 22 -47 24 -44 Munkhkhairkhan 19 -40 21 -35 Must 16 -41 19 -40 Bulgan 32 -45 23 -42 Note: AMa-absolute maximum, AMi-absolute minimum, Min-minimum, Max-maximum. Source: Feasibility study EIA 2007.

254. Precipitation and snow cover. As a consequence of the warming, occurrences of convective phenomena such as thunderstorms, flash floods, and heavy rains have been increasing. The annual distribution of precipitation is shown in Appendix II. The monthly maximum precipitation is commonly observed in August. The majority (85.0-94.5 percent) of annual precipitation falls between May and September. During the cold season, especially in the spring and fall, snowfalls of 5.0 mm per day or snowstorms can occur which may cause the roads to be closed.

255. The stable snow cover formation date varies from the middle of November to the beginning of December, with snow cover completely clearing up in March. Snow cover that forms during the rest of the year is short-lived and disappears due to late autumn warming and wind. The maximum snow cover depth at the observation sites was between 5 and 21 cm in the last ten years.

256. Table 5.3 shows that the number of days with snow is 9 -18 and the number of days with rain is 21-64, meaning that that per month, 1-3 days have snow, while 4-12 days have rain.

257. Wind. The dominant wind direction is from the west and northwest, with maximum wind speed reaches up to 28 m/s in the project area (see Table 4.7). When wind speed reaches more than 12 m/s, dust storms, snowstorms, or other severe weather phenomena are generally observed. The number of days with strong wind (wind speed greater than 16 m/s) and dust/snow storms (wind speed greater than 12 m/s and visibility less than 1,000 m) is seen in Table 5.3. Such phenomena mainly occur during the transitional season, but during summer, dust storms occur prior to the convective phenomena listed above.

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Table 5.3: Number of Days with Strong Wind and Snow, Dust Storms, 1995-2005

Aimag Soum Phenomena 1995 -2001 2002 2003 2004 2005 total

st. wind 4 2 4 4 3 17 Hovd city s.& d. storm 3 2 1 1 7 st. wind 0 Bulgan s.& d. storm 2 2 st. wind 2 1 2 5 Hovd Must s.& d. storm 2 2 st. wind 3 1 5 1 1 11 Munhhairhan s.& d. storm 3 1 4 st. wind 1 1 2 Mankhan s.& d. storm 2 1 1 1 5 Note: st. wind-strong wind, s. & d. storm – snow and dust storm. Source: EIA 2007.

258. Air Pollution. The air quality and SO2 and NO2 concentrations are monitored at stations in each Aimag center. The monitoring data from 2003 to 2005 (Table 5.4) indicate that the air quality has met the national air quality standards.

3 Table 5.4: Annual Mean of SO2 and NO2, mg/M (2003-2005) Khovd Year Sulfur dioxide Nitrogen dioxide SO2 NO2 2003 0.002 0.020 2004 0.002 0.028 2005 0.004 0.034 Source: Ministry of Nature Environment and Tourism, State of Environment 2003, 2005.

259. The air quality at locations away from the towns is expected to be even better, but is affected by large quantities of dust generated by vehicles driving on earth tracks. The large increase in nitrogen dioxide levels from 2004 to 2005 may be due to increased numbers of vehicles in Khovd town.

5.4.8 Hydrology and Water Resources

260. The hydrological environment in Mongolia does not appear unfavourable overall. Mongolia is well endowed with surface and ground water resources. There are some 3,000 rivers in total with a combined length of 67,000 km. There are also over 3,000 large and small lakes, 6,900 springs, 190 glaciers and 250 mineral water springs.

261. The Great Lakes Depression is a large semi-arid depression in the West and Northwest of Mongolia bounded by the Altai, Khangai, and Tannu-Ola Mountains. It has an area over 100,000 km2 and the elevation is from 750 to 2,000 m. It contains six major Mongolian lakes Uvs Nuur, Khar-Us Nuur, Khyargas Nuur, Khar Nuur, Airag Nuur, and Dörgön Nuur, as well as a number of smaller ones. The major rivers are Khovd, Selenge, Kherlen, Zavkhan, and Tesiin. The Great Lakes Depression is also a major freshwater basin of Mongolia and contains some of the important wetlands of Central Asia comprising a system of interconnected shallow lakes with wide reed belts within a generally desert steppe.

262. Water resources are one of the most valuable assets in Mongolia and needs protection and management. According to estimates, the aggregate water resources in Mongolia amount to 599 km³ of which 500 km3 of water is contained in lakes, 62.9 km3 – in glaciers, and 34.6 km3 – in rivers and their underground basins.29

29 Government of Mongolia. 2007. EIA. Ulaanbaatar. 61

263. Water resources of the western part of Mongolia are represented by surface water (rivers, springs and lakes) and groundwater. The project area belongs to the Central Asian Non-Outflow River Basin. Table 5.5 provides details of the water bodies in Khovd aimag identified in the census of water bodies conducted in 2003. Table 5.5: Number of Rivers, Springs, and Lakes in Khovd and Bayan-Olgii Aimags Name of Rivers Springs Mineral water Lakes Province Total Dried Total Dried Total Dried Total Dried Khovd 214 7 468 10 9 201 4 Source: EIA, 2007.

264. The water sources in the project area includes Shuragiin river, Hongio river, Shar lake Khovd river, Buyant river and Uyench river and are shown in Figure 5.6.

Rivers

265. The description of the major rivers in the project area is given below:

266. Khovd River. The length of the river is 516 km and its general width is 100-120 m. The river originates at south-east glacier of the Tavan Bogd, the highest peak of Mongol-Altai mountain, and the dominant source of river flow is melted ice and snow. Within the Khovd watershed area of 58,000 km2, the tributary rivers are the Tsagaan, Sogoot, Sagsai, and further downstream the Buyant River. The main lakes, which discharge their excess water into Khovd River are the Tolbo, Dayan, and Achit. The waters of the Khovd River finally flow through lakes Khar-Us and Dalai and the connecting Chonokharaikh River river into the Khar Lake. The annual mean discharge of the river is 60.1 m3/s in its upper reach (at Olgii), 63m3/s in the middle reach (at Bayannuur), and 90m3/s at its inflow into the Khar-Us Lake (at Miyangad). The absolute maximum discharge was 284 m3/s on 5 May 2002 and absolute minimum discharge -14.2 m3/s on 25 May 1983 (at Olgii). The water level reached 6 m in 1993 at Bayannuur post.

267. Bulgan River. The river originates from southern slope of Mongol-Altai Mountain, crosses Bulgan soum of Hovd aimag and flows into Urungu river of China. The source of river flow is melted ice and snow. The length of the Bulgan River is 268km and its watershed area is about 9,180 km2 in Mongolian territory. The annual mean discharge of the river is 6.13m3/s in its upper reach (at Bulgan soum of Bayan-Olgiy aimag) and 9.57m3/s in the middle reach (at Bulgan soum of Hovd aimag).

268. Bodonch and Uyench Rivers. The rivers originate from slope of Altai Mountain and their water source is ice and snow water. The length of Uyench River is 132 km and the Bodonch River is 167 km. The watershed area of the Uyench is 2,841 km2 and 6,104 km2 for the Bodonch. The annual mean discharge of the Uyench River is 1.24m3/s and the Bodonch – 1.26 m3/s.

269. Seasonal flooding. The rivers in the project area flow from the Mongol Altai Mountains. Spring floods in these rivers generally start in the middle of April, with peak flow occurring in late June and continuing for 110- 150 days. The spring flood flow is 60-90 percent of total annual flow of Altai Mountain Rivers. The summer becomes an overfull period because rainfall runoff combines with the spring flood of Mongol Altai Mountain Rivers. Regardless, the main source of water remains water from melting snow and glaciers. Table 5.6 presents the maximum/minimum and average flow rates for major rivers in the project area.

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Figure 5.6: Surface Hydrology of the Project Area and Monitoring Stations

Source: Adapted from EIA 2007.

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Table 5.6: Flow rates of Rivers in Project Area 2001 2002 2003 2004 2005 Avg. Max. Min. Avg. Max. Min. Avg. Max. Min. Avg. Max. Min. Avg. Max. Min. Khovd- 66.4 260 7.1 56.4 284 5 49.9 204 5 43.5 143 5.1 53.2 249 3.4 Olgiy Buyant- 6.56 25.2 1.9 5.1 19.7 0 6.27 18.4 0 5.1 17.5 0 6.69 2.7 0 Hovd Bulgan- 9.27 72.8 4.2 7.06 35.9 4 8.58 48.6 4.79 8.8 56.8 4.76 7.51 39.3 4.2 Baitag Uyench- 1.06 4 0 0.49 3.81 0 1.31 7.86 0 0.94 5.46 0 1.11 8.2 0 Uyench

2000 2002 2004 2005 2006 Bodonch- 0.71 2.8 0 0.57 3.75 0 1.56 12.9 0 1.22 17.7 0 1.16 9.1 0 Bodonch AvgAvg = = Average, Average; Max Max = Maximum; = Maximum; Min Min= Minimum. = Minimum Source: EIA 2007.

Groundwater

270. The groundwater of the region accumulates in rocks with different ages, and can be classified as granular and fissure. Granular groundwater accumulates in the non-cemented sedimentary rocks and fissure groundwater accumulates in sedimentary, igneous and metamorphic rocks with different ages.

271. Granular groundwater in the Neocene and Paleocene rocks is mainly confined and hydraulic pressure is relatively high, but fissure groundwater is mainly phreatic and is caused by the clastic rocks with different age.

272. The groundwater resource distribution is uneven. Moving from north to south, groundwater resources become more sporadic and mineralization increases. This is primarily due to the climactic changes, including the reduction of precipitation, and increase in air temperature and evaporation in the south. Precipitation, condensation, and tectonic faults all play very important roles in recharging groundwater in the region.

Water Quality Monitoring

273. The water quality of all the rivers and lakes of the project area was assessed as “very clean” and “clean” as reported by the Environmental Laboratory, NAMHEM in 2005.30 Table 5.5 shows water quality in the project area. An expert from the Environmental Laboratory has stated that water quality in this region is very stable and does not change much. The sole exception was one year when the concentration of ammonium in the Buyant River at the monitoring post in Khovd temporarily exceeded the maximum acceptable concentration.

274. In Khovd and Bayan-Olgii aimags, water quality monitoring is being conducted at 14 posts located at 9 rivers and 1 lake. Of these, Khovd, Bulgan and Uyench are located in or close to the project area. Appendix IIB shows the quality of water in these water bodies over the last 5 years.

275. The water quality of water bodies are as presented in Table 5.7 below. The parameters monitored 2+ 2+ + + 3- 2- - include: pH, Ca ,Mg , Na , K , HCO , SO4 , CI , dissolved gases – CO2, O2, biological/chemical oxygen demand, permanganate value, biogenic elements NH4-N, NO2-N, NO3-N, PO4-P, and toxic elements Fe, F, Mn, Cr-6+,Cu, and Mo.

30 Government of Mongolia. 2007. EIA. Ulaanbaatar. 64

Table 5.7: Water Quality of Water Bodies in Project Area in 2005 No River/Lake (monitoring Pollution index Water quality post) Level Class 1 Khovd River (Bayannuur) 0.23 I Very clean 2 Khovd River (Miyangad) 0.30 I Very clean 3 Buyant River (Hovd) 0.66 II Clean 4 Bulgan River (Bulgan) 0.38 II Clean 5 Bulgan River (Baitag) 0.34 II Clean 6 Uyench River (Uyench) 0.51 II Clean 7 Khar Us Nuur (Durgun) 0.45 II Clean Source: EIA 2000.

276. Table 5.8 below presents the quality of water in the major rivers in Khovd Aimag.

277. Mongolian water quality standards have been adopted as the norms in assessing the water quality impacts in the project area. In this regard standards issued by the National Center of Standardization and Metrology has been used and Mongolian standards for ambient water quality, and wastewater discharged into water bodies and soil, respectively, are presented as Annex-11B.

Table 5.8: Concentration Variations of Major Ions and Other Water Quality Substances in Khovd and Bayan-Oligii Aimag Rivers (EC is in ~S/cm; hardness is in me/l; other parameters in mg/I) Buyant-Hovd

pH TEMP EC O2 BOD SS COD-Mn F Si 2003 7.56 182 35.7 2.2 0.50 2.8 2004 7.97 183 18.7 1.7 0.37 3.2 2005 12.6 9.25 1.8 2.3 2006 9.9 9.90 2.6 2.1

Ca Mg Na+K S04 CL HC03 TDS HARD Fe 2002 21.6 3.6 13.3 21.2 5.5 80.8 161 1.42 0.04 2003 21.4 5.1 8.7 28.4 3.4 68.5 134 1.51 0.02 2004 20.4 5.8 7.7 25.7 3.3 67.6 132 1.53 0.06 2005 20.8 5.1 11.4 29.7 5.8 68.9 142 1.46 0.07 2006 23.4 5.6 6.8 21.5 4.1 72.9 134 1.54

NH4 N02 N03 P04 2002 0.20 0.134 0.61 0.006 2003 0.04 0.008 0.39 0.003 2004 0.05 0.003 0.40 0.004 2005 0.18 0.011 0.30 0.064 2006 0.07 0.017 0.15 0.025

Bulgan – Baitag

pH TEMP EC O2 BOD SS COD-Mn F Si 2002 8.16 15.0 168 16.9 1.0 0.28 2.3 2003 7.31 10.4 135 6.9 1.9 0.20 2.5 2004 8.14 16.3 197 14.2 2.1 0.16 2.9 2005 11.9 1.8 2006 13.7 2.3

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Ca Mg Na+K S04 CL HC03 TDS HARD Fe 2002 19.0 2.8 17.4 27.6 4.2 70.7 142 1.18 0.01 2003 21.1 4.2 6.4 21.1 4.5 66.5 124 1.40 0.05 2004 23.5 5.5 15.2 30.5 3.4 89.2 194 1.63 0.05 2005 21.5 4.1 7.1 23.8 5.2 65.3 130 1.41 0.05 2006 20.8 3.2 5.4 13.1 4.3 65.9 113 1.31 0.04

NH4 N02 N03 P04 2002 0.02 0.004 0.24 0.007 2003 0.10 0.007 0.46 0.01 2004 0.11 0.008 0.42 0.038 2005 0.16 0.009 0.34 0.040 2006 0.07 0.011 0.17 0.011 Khar Us-Durgun /lake/

pH TEMP EC O2 BOD SS COD-Mn F Si 2002 7.98 233 12.3 3.6 0.52 1.1 2003 7.84 222 33.8 6.4 0.54 1.0 2004 7.85 222 2.6 5.1 0.56 1.0 2005 0.6 3.3 0.31 2006 10.8 4.5

Ca Mg Na+K S04 CL HC03 TDS HARD Fe 2002 24.0 6.1 17.9 20.1 6.9 114 192 1.70 0.02 2003 25.0 6.4 15.4 25.2 6.2 103 181 1.77 0.03 2004 25.3 6.6 15.0 27.0 6.5 101 181 1.80 0.03 2005 22.8 5.7 13.5 21.6 6.7 98.0 174 1.22 0.06 2006 23.0 5.4 9.2 18.4 6.8 74.1 130 1.59 0.05

NH4 N02 N03 P04 2002 0.05 0.002 0.04 0.007 2003 0.31 0.006 0.46 0.010 2004 0.17 0.005 0.18 0.009 2005 0.69 0.004 0.19 0.037 2006 0.46 0.013 0.17 0.046 0

278. Potable Water. Data on potable water quality in the project area was not available. Tables 5.9, 5.10, and 5.11 provide standards on potable water, namely characteristics, and the chemical composition of potable water. These standards are used to monitor the quality of drinking water in wells and springs, in particular when they may be affected by construction activities.

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Table 5.9: Characteristics of Potable Water Characteristics Unit Acceptable level 1 Taste Score 2.0 2 Smell Score 2.0 3 Color Gradius 20.0 4 Turbidity Mg/l 1.5 Note: When color and turbidity is less than 1500mg/l and hardness is less than 10mg.eq/l, water could be used for a certain period, based on hygiene and sanitary assessment of authorized organization. Source: National Center of Standardization and Metrology.

Table 5.10: Chemical Composition of Potable Water Composition Unit Acceptable concentration 1 Molybdenum (Mo) mg/l 0.07 2 Barium (Ba) mg/l 0.7 3 Boron (B) mg/l 0.5 4 Copper (Cu) mg/l 1.0 5 Calcium ion (Ca2+) mg/l 100.0 6 Magnesium ion (Mg2+) mg/l 30.0 7 Manganese (Mn) mg/l 0.1 8 Sodium (Na) mg/l 200.0 2+ 9 Phosphate ion (PO4 ) mg/l 3.5 10 Flourine (F) mg/l 0.7-1.5 11 pH - 6.5-8.5 12 Selenium (Se) mg/l 0.01 13 Strontium (Sr) mg/l 2.0 2+ 14 Sulphate oxide ion SO4 mg/l 500.0 15 Hardness mg.eq/l 7.0 16 Chlorine ion (Cl-) mg/l 350.0 17 Arsenic (As) mg/l 0.01 18 Hydrogen Sulfide (H2S) mg/l 0.1 19 Chromium (Cr) mg/l 0.05 20 Dehydrated remaining mg/l 1000.0 21 Uranium (U) mg/l 0.015 Source: National Center of Standardization and Metrology.

Table 5.11: Chemical Compositions of Potable Water Contaminated by Households and Industries Compositions Unit Acceptable concentration Non organic substances 1 Beryllium (Be) mg/l 0.0002 2 Cadmium (Cd) mg/l 0.003 3 Mercury (Hg) mg/l 0.0005 4 Cyanide (CN) mg/l 0.01 Organic substances 5 Benzene C6H6 mg/l 0.01 6 Xylene mg/l 0.5 7 Acetic acid mg/l 0.2 8 Methylene chloride CH2CL2 mg/l 0.02 9 2 chloride ethane mg/l 0.03 10 3 chloride ethane mg/l 0.07 11 4 chloride ethane mg/l 0.04 12 Phenol derivatives mg/l 0.002 13 Styrene mg/l 0.02 14 Toluene mg/l 0.7 15 Ethyl benzene mg/l 0.3 Source: National Center of Standardization and Metrology.

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5.5 Ecological Resources

279. Mongolia's geographical position, size and topography have resulted in a range of ecological conditions and a unique assemblage of ecosystems. The country ranges from the super-arid deserts in the south to the comparatively moist taiga forests in the north and the wetlands of the Great Lakes Depression; from the rolling steppe grasslands in the east to the alpine terrain and glaciated peaks in the west. This varied terrain contains a wide array of ecotypes, many exhibiting unique characteristics found nowhere else on the globe. This unique, varied, and substantially undisturbed territory supports a wide diversity of living organisms, many of which are endemic to Mongolia. Each is valuable in its own right and for its contribution to the Mongolian way of life and the well-being of its citizens. Each is considered vulnerable and each merits protection and management.

280. Ecological resources in the project area including flora, fauna and protected areas are presented below focusing on biodiversity of Mongolia in general and Khovd aimag in particular.

5.6 Biodiversity

281. The project area is entirely located within the Altai–Sayan Eco-region. This region is characterized by rich faunal and floral biodiversity ranging from mountain tundra of Mongolian Altai to Gobi Desert.

282. Considering the diversity of fauna: Mongolia's fauna represents a mixture of species from the northern taiga of Siberia, the steppe, and the deserts of Central Asia. There are 360 species of vertebrates, including 90 species of mammals, more than 250 species of birds, 11 species of reptiles, 8 species of fishes, and 1 species of amphibia and numerous invertebrates.31 Mongolia harbours some of the last remaining populations of a number of animal species and sub-species internationally recognized as threatened or endangered. These include the snow leopard, Argali sheep, wild ass, saiga antelope, ibex, Bactrian camel, rock ptarmigan, Altai snowcock, Gobi bear, musk deer, Przewalski's horse, Mongolian jerboa and white-naped crane.

283. Mongolia's diverse and distinctive vegetation includes an important part of Asia's plant life. More than 3,000 species of vascular plants, 927 lichens, 437 mosses, 875 fungi, and numerous algae have been recorded. Many other species, however, remain to be classified. Of those that have been classified, almost 150 are considered endemic and nearly 100 are relict species; and from another perspective, there are 845 species of medicinal plants, 68 species of soil-binding plants, and 120 species of important food plants. There are also over 100 plant species that are listed in the Mongolian Red Book as rare or endangered and these include the dwarf Siberian pine and the white gentian.

31 WWF. 2001. Altai-Sayan Ecoregion: Ecoregion Climate Change Biodiversity Decline. 68

Figure 5.7: Location of the Altai-Sayan Ecosystem

Source: WWF.

5.6.1 Flora

284. Latitudinal and altitudinal belts of vegetation are the most obvious feature of the Mongolian landscape. In Khovd Aimag the vegetation types through which the project road traverses and are directly affected comprises high mountain, dry steppe, stepped desert, and grasses – undershrub desert, vegetation. Table 5.12 and Figure 5.8 present dominant flora species growing in the project area.

285. Some 86 species of plants listed in the Mongolian Red Book can be found in Khovd Aimag. Among these are Red Goyo, Saussurea Involucrate, and Shining Water Lily. Rare plant species growing in Khovd Aimag as shown in Table 5.13 are listed in Mongolian Red Book. Field surveys and consultations with experts established that there are no Red Book species located within the ROW.

Table 5.12: List of Dominant Plants in the Project Area VEGETATION ZONE IN ZONE NAMES DOMINANCE FIGURE 15 Festuca lenensis, Oxytropis oligantha, Potentilla nivea, 3 High Mountain Stellaria pulvinata, Artemisia argyrophylla, Kobresia filifolia Festuca lenensis, Agropyron cristatum, Krylovia 14 Dry steppe eremophylla, Peucedanum histrix, Allium edaurdii, Potentilla sericea Stipa glareosa, Caragana bundei, Euratia certoides, 24 Stepped desert Anabasis brevifolia, Artemisia xerophytica, Agropyron nevskii Anabasis brevifolia, Stipa glareosa, Arthemisia xerophytica, Grasses- 27 A.hanthochroa, Ajania fruticosa, Zygophyllum pterocarpum, Undershrub desert Ephedra sinica Source: EIA 2007.

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Figure 5.8: Flora in the Project Area

.

Source: Adapted from Geographic Atlas of Mongolia. Administration of Land Affairs, Geodesy and Cartography. Ulaanbaatar. 2004. 70

Table 5.13: List of Rare Species of Plants in Khovd Aimag English name Mongolian name Latin name

Juniper Хуурмач хонин 1 Juniperus pseudosabina Pseudosabina Арц 2 Sabina Juniper Хонин Арц Juniperus Sabina 3 Forked Stitchwort Ацан ажигана Stellaria dichotoma L Дєрвєлжин 4 Least water lily Nymphaea tetagona бєлбєє 5 March Saxifrage Ямаан сэрдэг Saxifraga hirculus L 6 Roseroot Алтан гагнуур Rhodiola rosea L 7 Mongolian Milk-Vetch Монгол ортууз Oxytropis mongolica 8 Mongolian Caryoperis Монгол догар Caryopteris mongolica 9 Saussurea involucrate Нємрєгт банздоо Saussurea involucrate 10 Wild onion Алтайн сонгино Allium altaicum Цавцагаан Nymphea candida C. 11 Shining water lily бєлбєє Presl Gueldenstaedtia Ганц навчит Gueldenstaedtia 12 monophylla Сальжир monophylla 13 Prickly Milk-Vetch Шивїїрт ортууз Oxytropis acanthacea Fragile-leaved Milk- Хэврэгнавчит 14 Oxytropis fragilifolia Vetch Ортууз 15 Red goyo Улаан гоёо Cynomorium songaricum 16 Halodendron salt tree Хонхот харгана Halimodendron halodendr Цэнгэлийн 17 Tsengel’s Hedysarum Hedysarum sangilanse шимэрс 18 Squamarina pamirica Памирын тэвгэнэ Squamarina pamirica 19 Ferula ferulacoides Залаархаг хавраг Ferula ferulacoides Source: EIA 2007.

286. Forests. The total forest area of Khovd Aimag is 464,851 ha, of which 199,179.5 ha is forest trees, 37 ha is tree nursery, 13,401.5 ha is a logging area, and 25,138 ha is other forest area. The project road alignment does not pass through the forest area.

287. As the alignment crosses a number of altitudinal belts, flora varies substantially within the project area. The vegetation types in the project area includes high mountain, stepped desert, dry steppe, and grasses – undershrub desert flora: Festuca lenensis, Agropyron cristatum, Allium eduardii, Krylovia eremophylla, Peucedanum histrix, Potentilla sericea, Stipa glareosa, Stipa gobica, Allium polyrrhizum, Anabasis brevifolia, Ajania fruticosa, Lagochilus ilicifolius, Artemisia xerophytica, Caragana bungei, Eurotia ceratoides, Anabasis brevifolia, Agropyron nevski, Artemisia hanthochroa, Zygophyllum pterocarpum, Ephedra sinica.32

5.6.2 Fauna

288. Mammals. The Mongolian Altai - Sayan contains rare and endangered mammals such as Snow Leopard (Uncia uncia), Wild Sheep (Ovis ammon) or Argal, Siberian Ibex (Capra sibirica), Mongolian Saiga (Saiga tatarica mongolica), Musk Deer (Moschus moschiferus) Pallas’ cat (Felis manul) or Manul, Black Tailed Gazelle (Gazelle subgutturosa), Wild Boar (Sus scrofa nigipes), Stone Martin (Martes foina), Marbeled Polecat (Vormela peregusna), Elk (Cervus elaphus) or Red Deer. It is also a habitat for steppe and semi-desert fauna such as wolves, foxes, martens, weasels, marmots, corsac foxes, manul cats, and marbled polecat. There are 44 species of small mammals, including mice, squirrels, hamsters, voles, shrews, jerboas, rabbits, and badgers, that are distributed throughout the area and dependent on the habitat. The Asiatic wild ass is found in

32 Administration of Land Affairs, Geodesy and Cartography. 2004. Geographic Atlas of Mongolia. Ulaanbaatar. 71

the southern Bulgan and Uyench soum areas.

Figure 5.9: Mammals in the Project Area

Source: Adminsitration of Land Affairs Geodesy and Cartography. 2004. Geographic Atlas of Mongolia. Ulaanbaatar.

289. Amphibia and Reptiles. Four families and six species of reptiles including Toad-headed Agama (Phrynocephalus versicolor), Mongolian Agama (Laudakia stoliczkana), Multi-cellated Racerunner (Eremias multiocellata), Gobi Racerunner (Eremias przewalskii), Pallas’s Coluber (Elephe dione), and Central Asian Viper (Aqkistrodon halys) has been reported from the Mongolian Altai - Sayan area. In 1987, sand lizards (Lacerta agilis) were first discovered in Bayangol of the Altai Mountain range in Khovd Aimag, enriching the taxonomy of reptiles in Mongolia.33

290. Birds. There are 258 bird species found in the western region. The majority of these birds are migratory and few are local inhabitants. There are a number of rare and endangered species of birds, including Snowcock (Tetraogallus altaicus) or Altain ular, Cenereous Vulture (Aegypius monachus), Golden Eagle (Aquila chrysaetos), Lammergeyer (Gypaetus barbatus), Spoonbills (Platalea Leucorodia), Dalmatian Pelican (Pelecanus crispus), Great White Egrets (Egretta alba), Whooper Swans (Cygnus cygnus), Greet Blackheaded Gulls (Larus ichthyatus), Black Storks (Ciconia nigra) and Swan Goose (Anser cygnoides). The important bird areas (IBA) close the project area are Bulgan river and Har-Us Nuur which are addressed in the Protected Areas section.

291. Fish. A recent International Bank for Reconstruction and Development (IBRD)/World Bank (WB) report states that a total of 76 native fish species are reliably recorded in Mongolia’s waters. Of them, 5 species are unnamed.34 The project area largely belongs to Great Lakes watershed that is an aggregation of a number of closed inland depressions. Some 10 fish species are reported to inhabit the water bodies and courses of the watershed including endemic genus Oreoleuciscus (O.potanini, O.humilis, O.angusticephalus, O.dsapchynensis,35 Mongolian grayling (Thymallus brevirostris), Siberian grayling (Thymallus arcticus), and Stone loach (Barbatula toni).15

292. Insects. This region is distinguished with the richest diversity of insect species. The dominant species are steppe and semi-dessert insects of Orthoptera and Coleoptera orders. There are also 123 species of 7 orders of insects in the rivers and marshlands. For instance, 5 species of Odonata order, 9 species of Plecoptera order, 18 species of Orthoptera order, 9 species of Heteroptera order, 66 species of Coleoptera

33 Govt of Mongolia 2007 EIA Ulaanbaatar. 34 Government of Mongolia. 2007 EIA. Ulaanbaatar. 35 Ibid. 72

order, 9 species of Lepidoptera order (butterfly), and 7 species of Trichoptera order.36

293. Rare and Endangered Species. The Mongolian Red Book (1997) lists 30 species of mammals, 30 species of birds, 5 species of reptiles, 4 species of amphibians, 6 species of fish, 19 insects, 2 crustaceans, and 4 mollusk species as endangered, vulnerable, or rare. The Mongolian Law on Fauna lists 12 mammals, 8 birds, 4 species of fish, and 1 species of insects as very rare (endangered), and 11 mammals, 21 birds, and 2 species of fish as rare. Additionally, 14 mammals, 71 birds, 8 plants, 2 species of fish, 1 species of insects, and 1 species of reptiles are included in Appendices I and II of the Convention on the International Trade of Endangered Species (CITES). Some endangered and rare species habitats are included in the Protected Area system.

294. Rare and Endangered Species in Mongolian Altai-Sayan include such species as Snow Leopard (Uncia uncia), Wild sheep (Ovis ammon) or Argal, Siberian Ibex (Capra sibirica), Mongolian Saiga (Saiga tatarica mongolica), Musk Deer (Moschus moschiferus) Pallas’ Cat (Felis manul) or Manul, Black Tailed Gazelle (Gazelle subgutturosa), Wild Boar (Sus scrofa nigipes), Stone Martin (Martes foina), Marbled Polecat (Vormela peregusna), Elk (Cervus elaphus) or Red Deer, Snowcock (Tetraogallus altaicus) or Altain ular, Cenereous Vulture (Aegypius monachus), Golden Eagle (Aquila chrysaetos), Lammergeyer (Gypaetus barbatus), Spoonbills (Platalea Leucorodia), Dalmatian Pelican (Pelecanus crispus), Great White Egrets (Egretta alba), Whooper Swans (Cygnus cygnus), Great Blackheaded Gulls (Larus ichthyatus), Black Storks (Ciconia nigra) and Swan Goose (Anser cygnoides).

295. The following rare and endangered mammals are reported from Khovd aimag (Table 5.14).

Table 5.14: Rare and Endangered Species of Mammals in Khovd Aimag Potential occurrence in English name Mongolian name Latin name the Project Area 1 Asiatic Wild Dog* Чоно, цєєвєр Cuan alpinus Bodonch Canyon Southern part of 2 Asiatic Wild Ass Хулан Equus hemionus Bulagan soum 3 Wild Boar Зэгсний гахай Sus scrofa nigripes Khar Us Nuur Mankhan Nature 4 Saiga Соргог бєхєн Saiga tatarica tatarica Reserve, Khar Us Nuur National Park Near Khar-Us Nuur Mongolian saiga 5 Монгол бєхєн Saiga tatarica mongolica and Mankhan Nature antelope* Reserve Mankhan Nature 6 Goitered Gazelle Хар сїїлт зээр Gazella subgutturosa Reserve 7 Wild mountain sheep Алтайн аргаль Ovis ammon Nearby Bodonch river 8 Beaver* Тєв азийн минж Castor fiber birulai Bulgan river Таван хуруут Khar Us Nuur National 9 Satunin’s Jerbao Cardiocranius paradoxus атигдаахай Park Thick-tailed Pygmy Khar Us Nuur National 10 Єєхлєг атигдаахай Salpingotus crassicauda Jerboa Park Note: *-are included on Appendices I and II of the Convention on the International Trade of Endangered Species (CITES). Source: EIA 2007.

296. Table 5.15 presents birds that can be observed in Khovd and Bayan-Olgii aimags and included in Mongolian Red Book.

36 Ibid. 73

Table 5.15: List of Rare and Endangered Species of Local and Migrant Birds in Khovd Aimag

English name Mongolian name Latin name 1 Dalmatian Pelican Борцгор хотон Pelecanus crispus 2 Great white Egret Цасч дэглий Egretta alba 3 Eurasian Spoonbill Халбаган хошуут Platalea leucorodia 4 Black stork Хар єрєвтас Cionia nigra 5 Whopper Swan Гангар галуу Cygnus Cygnus 6 Bar-headed Goose Хээрийн галуу Eulabeia indica 7 Swan Goose Хушуу галуу Cygnopsis cygnoides 9 White tailed Sea Eagle Усны цагаан сїїлт Haliaeetus albicilla бїргэд 10 Altai snowcock Алтайн хойлог Tetraogallus altaicus 11 Ring necked Pheasant Гургуул Phasianus colchicus 12 Japanese White napped Цэн тогоруу Grus vipio crane 13 Houbara Bustard Жороо тоодгой Chlamydotis undulate 14 Great Black-headed Gull Итэлгэн цахлай Larus ichthyaetus 15 Hodgson’a bushchat Єгєєлэй шулганаа Saxicola insignis 16 Euroasian pinduline Tit Уран шувуу Remiz pendulinus 17 Henderson’s Ground Jay Хулан жороо Podoces hendersoni Source: Mongolian Red Book, 1997.

297. Within the project area there are no habitats where rare or very rare species of mammals, birds and reptiles have been reported. However, the possibility of wildlife crossing the road section at some locations is indicated.

298. Hunting. The maximum limits for wild animals hunting for domestic purpose are shown in Table 5.16. These limits are regulated through the issuance of licenses.

Table 5.16: Maximum Limits of Hunting Wild Animals for Domestic Purposes for 2006 Aimag White- Fish Wild pig Roebuck Birds of marsh, forest, Fox and tailed steppe & waterfowl steppe fox gazelle Hovd - 10,000 - - 120 - Source: EIA 2007.

5.6.3 Specially Protected Natural Areas

299. As mentioned earlier, the project area is entirely located within Altai Sayan Eco-Region that is included in World Wide Fund for Nature (WWF) “Global 200” list of virgin or little changed eco-regions in the world, where more than 90 percent of the planet’s biodiversity is concentrated. It occupies nearly 1,065,000 km2 of which about 29 percent is located in Mongolia as shown in Figure 5.7. Since 1998, WWF has been implementing a project for long-term conservation of biodiversity in the eco-region. The establishment of an “ecological network” of protected areas was one of the main tasks of this project.

300. Mongolian Law on Specially Protected Areas (1994) distinguishes four types of specially protected areas:

 Strictly Protected Areas (including pristine zones, conservation zones and limited use zones);  National Conservation Parks (including special zones, travel and tourism zones, and limited use zones);  Nature Reserves (divided into ecological reserves for the purpose of preserving unique virgin ecosystems, biological reserves for the purpose of conserving rare and endangered plants and 74

animals, paleontological reserves for the purpose of preserving in a natural state the remains of ancient animals and plants, and geological reserves – for the purpose of preserving in a natural state the land’s unique formations, signs, and structures); and  Monuments (divided into natural monuments and historical and cultural monuments).

301. National Conservation Parks consist of those areas taken under special protection whose natural original condition is relatively preserved and which have historical, cultural, scientific, educational and ecological importance. Construction activities are not permitted in special, and travel and tourism zones of national parks, however allowed in limited use zones.

302. Nature Reserves consist of areas taken under state special protection in order to create conditions for the conservation, preservation, and restoration of certain natural features, natural resource and wealth. Any activities for industrial purposes that change the natural original condition and likely to have adverse environmental impacts are prohibited.

303. Ramsar Sites. The Ramsar Convention (Convention on Wetlands of International Importance especially as Waterfowl Habitat) defines wetlands as "areas of marsh, fen, peatland or water, whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six meters". Currently there are 11 wetlands in Mongolia included in the Ramsar list.

304. Important Bird Areas (IBA) and Endemic Bird Areas (EBA). Important Bird Areas (IBAs) constitute key sites for conservation identified by IBA Program of BirdLife International. Often IBAs are already part of a protected-area network, but sometimes they are not protected officially. Endemic Bird Areas of BirdLife International are places where unique biodiversity is concentrated. IBAs located in Khar-Us Nuur National Park, Bulgan River and Tolbo Lake are not covered by the Law on Specially Protected Areas. Endemic Bird Areas in Mongolia (Mongolian mountains) is classified as secondary area, i.e. it supports one or more restricted-range bird species. This area is defined by the range of Mongolian Accentor Prunella koslowi, a poorly known species which breeds in juniper scrub and grassland on dry mountain slopes (at approximately 2,000 m) in Mongolia.

305. There are a number of protected areas in Khovd aimag. They include strictly protected area Khokh Serkhiin Nuruu, national parks: Altai Tavan Bogd and Khar Us Lake, and nature reserves: Mankhan and Bulgan River.

306. The only nature reserve inside the project area is the Mankhan nature reserve which is located on either side of the proposed road within Mankhan soum.

5.6.4 Nature Reserves

307. Mankhan Nature Reserve (NR). This reserve (vide Figure 5.10) was established in 1993 in order to protect the population of Mongolian Saiga. The total area of the reserve is 390,071 ha. It has ecological biodiversity importance and provides the habitat for endangered rare mammal - Mongolian Saiga Antelope (Saiga tatarica mongolica). The population of Saiga within Mankhan NR is decreasing37 – the number was over 130 recorded in 1982, 70 in 1993, 44 – in 1998, and, finally, in January 2007, the total population of this antelope was 15-17 as was reported at the stakeholder meeting in Hovd. This is likely due to migration of the species to Dorgon Khuren steppe located within KUNNP where about 200 Saiga were observed by rangers. Typically, Mankhan Nature Reserve is mentioned in association with another nature reserve – Sharga located to south-east of Mankhan, outside the Project Area where substantially larger population of Saiga (over 2,500) inhabit as discussed below.

308. Conservation Society (WCS) has conducted studies of the Mankhan / Sharga populations and their migration patterns using GPS technologies (GPS collars). One of the purposes of this project in 2006 was to evaluate Saiga habitat use and behavioural responses to humans, roads, livestock and plant productivity. In subsequent years, it is planned to provide specific recommendations on reassessment and redefinition of existing protected area borders and new protected areas to include critical sites for Saiga survival if deemed

37 Khar Us Nuur National Park Management Plan 2006-2010. KUNNP Administration & WWF, Hovd, p.37, 2006. 75

necessary.38

309. WCS believes that there is no any clear relationship between populations in Mankhan and Sharga and the range of this isolated population is Mankhan Nature Reserve and Khar-Us Nuur National Park. WWF plans to make a feasibility study on re-introduction Mongolian Saiga to a suitable habitat in the Great Lakes Basin.

38 Convention on Migratory Species. First Meeting of the Signatories to the Memorandum of Understanding Concerning Conservation, Restoration and Sustainable Use of the Saiga Antelope (Saiga tatarica tatarica), Almaty, Kazakhstan, 25-26 September 2006. 76

Figure 5.10: Mankhan Nature Reserve and Existing Road

Source: EIA 2007.

77

5.7 Economic Development

5.7.1 Structure of Economy

310. Khovd Aimag. The gross domestic product of Khovd aimag amounted to 94238.4 million tugrug (1064.8 tugrug per capita) in 2009 as shown in Table 5.17. The most important sectors were agriculture, hunting and forestry (66 percent).

Table 5.17: Gross Domestic Product of Khovd Aimag in 2009 Item GDP, mln. Tug Percent Agriculture, hunting and forestry 62197,3 66,0 Manufacturing 3110 3.3 Services 28931.1 30.7 GDP 94238.4 100 Source: Statistical Division of Khovd Aimag.

5.7.2 Agriculture

311. Animal breeding is the main economic sector in Khovd aimag. The contribution of the sector amounts to 75.2 percent of aimag GDP or 114216,9 million tugrug in Khovd Aimag. The number of livestock in this aimag is constantly increasing. Table 5.18 illustrates the amount of livestock in the project area.

Table 5.18: Number of Livestock in the Project Area (2010) Total Camel Horse Cattle Sheep Goat Khovd 1,639,100 16,339 64,646 81,018 594,179 882,918 Of which: Mankhan 184,073 2,314 5,681 4,483 67,614 103,981 Source: Statistical Division of Khovd Aimag.

312. Crop production is one of important sub-sector in the agricultural sector in Khovd aimag. This Aimag produces crop as can be seen in Table 5.19.

Table 5.19: Crop Production in the Project Area (2010) Hand- Fodder Hey made Aimag Sown Harvest Cereals Potatoes Vegetables crop harvest fodder Ha Ton Ton Ton ton ton Ton ton Khovd 2,654.4 21,583 609.1 12,095.9 7,554.4 1.323.6 67,612 2,661.9 Of which: 360.8 50.0 110.0 20.8 180 4.700 320 Mankhan Source: Statistical Division of Khovd Aimag.

5.7.3 Mining

313. There is some mining activity in the project area related to deposits in Hkusheet coal mine.

314. Husheet coal mine deposit (Khovd aimag). Husheet coal mine deposit is located in a high mountanious area of the Altai mountain range, 210 km to south-east of Khovd City and 35 km West of Tsetseg soum. The mine primarily contains brown coal and exploration began in 1972, but ceased in 1998 with its full privatisation within the framework of Privatization Law. Ikh yam Co., Ltd., holding a 100 percent stake in the mine, began its exploration in 2004 and has supplied 7,000 tons of coal to the local end-users. The company has ambitious plans which includes construction of new coal fired power station with new grid to provide the local end-users with the electricity, establishing cooking coal production plant, and exporting the coal to China.

5.7.4 Infrastructure

315. Water Supply Systems. The water supply system in Khovd provides centralized drinking water 78

distribution to office buildings and urban residential area. Daily water supply is 4,600 m3 of water from 9 groundwater wells. Traditional dwellings (ger) in Khovd are supplied with water from 8 water distribution stations, 4 deep wells and 3 hand pumps. The water consumption is 388,300 m3 of water per day. Some 2,133 wells are used for water supply in rural areas. Surface water is the main source of the water for livestock.

316. Electricity Distribution Systems. Khovd aimag is largely served with electricity from Russia because energy capacities at the local level are limited. A 110 kV transmission line links Russia and Olgiy town of Bayan-Olgiy Aimag and Miyangad soum of Khovd Aimag. Altantsugts, Sagsai, Tsengel, Ulaankhus and Buyant soums of Bayan-Olgiy Aimag, as well as Hovd town, Duut, Erdeneburen soums of Hovd Aimag are connected to this line with a 35kV transmission line.

5.7.5 Land Use

317. In general, agricultural land has been the dominant land use across the aimag, occupying more than 77 percent of the total land in the aimag. The land used for “transportation and network” occupies 0.31 percent of the total territory in Khovd aimag. As the proposed road would follow the existing earthen tracks the land use for “transportation and network” would be slightly reduced.

Table 5.20: Land Area by Classification Khovd Aimag Land classification Area Percent of total (,000 ha) (%) Agricultural lands 5,885,0 77 Cities, villages and other 28,405 0.3 settlements Transportation and 21,128 0.2 network land Forest resource land 464,851 6.1 Water resource land 43,117 0.5 State special use land 1,163642 15.2 Total area 7,606,038 100 Source: Land management report of Khovd Aimag, 2005.

318. Land Degradation. Land degradation is caused by two types of factors: natural and human activities. Natural factors are water erosion, wind erosion, and desertification. Human activity factors are many branches of earth track, overgrazing; and land deterioration due to mining and other similar activities.

5.7.6 Tourism

319. Ecotourism dominates in this region, since Khovd aimag has diverse and distinctive flora and fauna, which represents a mixture of species from the high mountains, steppe, and deserts. Numerous globally threatened and endangered species inhabit this region. In addition to ecotourism, the following types of tourism take place: viewing nomadic culture and lifestyle, visiting historical and cultural sites, fishing, mountain climbing, hunting, bird watching, and adventure tours. Some Russian tourists come directly to Khovd aimag via Ulaanbaishint.

320. Khovd Aimag. There are 19 tourist camp sites, operated by 16 companies and the administration of Khar-us Nuur National Park. The total number of tourists was 8,247 including 909 foreign and 7,338 domestic tourists in 2006 and it is increasing yearly. Bayan Bulag Children’s camp provides services to about 570 children a year.

5.7.7 Health and Safety

Health Services

321. Khovd Aimag. Some 14 medical clinics, 2 intersoum medical clinics, and 6 hospitals for families provide basic clinic service to local residents and herders. A hospital in Khovd town plays a major role as a

79

regional hospital to serve patients throughout the western region. In total, there are 569 hospital beds. Additionally, there are 16 private hospitals and 6 pharmacies. Some 148 physicians, 7 pharmacists, 251 nurses, and 120 medical assistants work in medical services of the aimag. On the whole, there are 18 physicians, 12 medical assistants, 38 mid-level medical personnel, and 61 beds per 10,000 individuals of the population.

Noise and Vibration

322. Mongolian noise standards have been established as indicated by Table 5.21. Excessively high noise levels are a particular concern for “sensitive receivers”, i.e., recipients of sound for whom exposures to excessive sound levels are detrimental – hospitals, schools, or ecologically sensitive areas. In this instance, sensitive receivers along the road corridors (if any) could be a concern during both the construction activities and in regard to future traffic-generated noise.

Table 5.21: Standard on Allowable Noise Levels at Domestic and Public Buildings Noise pressure level (db) at different geometric average frequencies

Location and

time 63 63 125 250 500 1000 2000 4000 8000 and level Noise noise equivalent level /dba/ 1 In rooms of hospital and sanitarium, and surgery rooms Daytime 53 48 40 34 30 27 25 23 35 Nighttime 55 44 35 29 25 22 20 18 30 2 In consulting room of hospitals Daytime 63 52 45 39 35 32 30 38 40 3 In the classroom of all type of schools, lecturers’ rooms, library, and conference halls Daytime 63 52 45 39 35 32 30 28 40 4 In residential area, rest homes, dormitories and kindergartens Daytime 63 52 45 39 35 32 30 28 40 Nighttime 55 44 35 29 25 22 20 18 30 5 In rooms of hotels, and hostels Daytime 67 57 49 44 40 37 35 33 45 Nighttime 53 48 40 34 30 25 25 25 35 6 In waiting halls of hotels, hostels and rest homes Daytime 71 61 54 49 45 42 40 38 50 7 In cafés and restaurants Daytime 75 66 59 54 50 47 45 43 55 8 In shopping centers, public service rooms, and waiting rooms of railway station Daytime 79 70 63 58 55 52 50 49 60 Note: If there is air conditioning, humidifier and air heater in a room, Noise pressure level (db) at different geometric average frequencies must be the noise level less 5db. Source: Standard UST 3826-85. Allowable Noise Levels in Domestic and Public Buildings.

323. The project road section runs largely through a remote area with almost no settlements and there are no sensitive receptors.

5.8 Social and Cultural Resources

5.8.1 Geopolitical Structure and Administrative Divisions

324. Geography and its recent history largely define the current status of Mongolia’s socioeconomic development. The country’s latitude in combination with the distance from the sea, high altitude and proximity to Siberia has made it one of the world’s coldest countries, with mean winter temperatures approximating - 20°C. This has resulted in the average crop-growing season lasting only about 100 days. In addition, it is a very 80

dry country, with water resources abundant only in limited areas of the northern and western regions. The Gobi Desert and adjoining steppe lands constitute a significant portion of the country, which means that nomadic herding (and associated short-term cropping such as hay and other fodder) is the only currently viable agricultural activity in a large portion of Mongolia.

325. The project road is part of the western regional road, which cuts across two aimags (provinces). The Western Regional Road connects the cities of Khovd and Olgii with China in the Southwest and Russia in the North. The region’s proximity to the border of these two large neighboring countries has a big influence to its socioeconomic and cultural conditions.

326. The Khovd aimag neatly brackets the project road section. Located in the far west of Mongolia along the Altai Mountains, which extend over approximately 1,500 km, The western portion of Khovd aimag borders the People’s Republic of China (PRC) and Bayan-Olgii Aimag; the norther portion is adjacent to Uvs Aimag; the eastern border is shared with Gobi-Altai Aimag; and the southern boundary is adjacent to the PRC.

327. Mongolia, which is divided into 22 major administrative units comprises of 21 aimags and the capital city of Ulaanbaatar. Aimag population ranges from 12,500 to 122,000 people. The aimags vary in size with the largest covering as much as 165.4 km2 of territory. An aimag consists of up to 27 'soums' (district), including the aimag centre. Soums in turn are comprised of 'baghs'. In Mongolia there are 329 soums and 1568 baghs. Also the capital city, Ulaanbaatar, is subdivided into 132 districts called 'khoroos'.

328. The aimag centre is the administrative seat of local government, and the home of the aimag's legal bodies, theatres, hospitals, businesses, schools and industry. Most of the aimag population works in light industry, services and small business enterprises. Bagh populations tend to work in agricultural and animal husbandry. Baghs residents mainly lead a nomadic life. They migrate with their herds depending on season and weather conditions. Typically their seasonal camps are located within the borders of their soum and baghs, though droughts, zuds, and other natural disasters, can push them to different areas.

5.8.2 Human and Social Resources

Population and Community

329. Mongolia’s population has increased from 2,735.000 in 2009 to 2,780,000 in 2010. The population density of Mongolia is 1.75 persons per square kilometer, making it one of the most sparsely populated countries in the world. The current natural population growth rate is estimated to be 1.016 percent, which is comparable to the 2009-2010 rate. On the other hand, the population of the Khovd aimag in the project area accounts for 3.2 percent of the national population with a landmass that constitutes 4.9 percent of the total area of Mongolia. While about 63 percent (mostly in the Ulaanbaatar) of the population of the country is considered urban, the situation is reversed in the Khovd aimag of the project area. About 67 percent of the population is classified rural.

Table 5.22: Comparative Population and Household Data, 2006-2010 Total Household Urban Household Rural Household 2006 2010 2006 2010 2006 2010 2006 2010 Mongolia 2,594,800 2,735,800 632,500 742.300 372,300 463,400 260,200 278,100 Khovd 88,500 82,200 19,900 20,300 6,600 7,058 13,300 13,241 Source: Mongolia Yearbook 2007, 2011 Ulaanbaatar.

330. Some 14 different ethnic groups including Khalkh, Kazakh, Zakhchin, Torguud, Uriankhai reside in Khovd aimag; with Khalkh being prevalent. Table 5.23 shows the ethnic population structure in the project area.

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Table 5.23: Ethnic Minorities in the Project Area, 2010

Project area t Population Population Khalkh Kazakh Zahchin Torguud Dorvod Uriankhai Myangad Oold Others Uni Khovd Num 82200 18604 16,700 22,490 7,208 3,124 5,209 3,511 3,588 1,766 % 100 22.6 20,3 27.2 8,7 3,8 6.3 4,2 4,3 2.0 Mankhan Num 4001 3800 201 % 100 95 5 Source: http://www.hovd.gov.mn.

331. In Khovd aimag, birth rate is higher than the national average while death rate is lower; thus the rate of natural increase of the population is higher. Life expectancy is slightly higher in Khovd compared to the national average. The number of female-headed households (approximately 12.1 percent of the total households in Khovd) is lower than the national average.

2 332. The population density in 2010 Khovd was 1.08 people/ km . The gender ratio is shown in Table 5.24. According to the data, women dominate in Khovd. Unemployment in project area was accounted as 1.6 percent of total population.

Table 5.24: Gender Ratio in Khovd Project area Gender Number of Number of Unemployment Man Woman Deaths Births Hovd 49,6% 50,4% 473 2012 1,320 Source: Statistical Division of Khovd Aimag.

Education

333. Based on 2010 Population and Housing Census, the literacy rate in the country of population fifteen years old and above was 98.3 percent with the rate slightly higher for male than female at 98 and 97.5 percent, respectively. The number of students and pupils in all types of educational institutions has reached (excluding pupils studying in pre-primary schools) at 736.8 thousands and increased by 4.2 percent, compared with 2008- 2009 school years. At the beginning of academic year of 2009-2010, the number of pupils in general educational schools reached (excluding students studying abroad and pupils studying in schools with evening classes) 522.1 thousand. The total number of students studying in universities, higher educational institutions, colleges, technical and vocational schools had been increasing over the years and had reached 210.2 thousand in 2009-2010 academic year. Out of these, 63.8 percent studied in public educational institutions while 36.2 percent studied in private educational institutions.

334. The availability of educational facilities and personnel in the project area in comparison to the country as a whole is quite favorable. In school year 2010-2011, the ratio of pupils to teachers and the numbers of schools compared favorably to national averages given the population of the project area as a proportion of the national population. Participation rate for children aged 4-19 in the educational system in the project area is higher than the national rate.

Table 5.25: Selected Education Indicators, Mongolia and Project Area Indicators (2010-2011) Mongolia Khovd No. of general 751 23 education schools 2010-11 Average No. of pupils per teacher in gen ed 29.3 30 school 2010-11 No. of teachers in gen 26.358 944 ed schools 2010-11 General education M F T M F T 82

Gross Enrolment 93.3 97.6 95.4 96.9 98.7 97.8 Ratio 2010-11 Source: Mongolia Yearbook 2010, Ulaanbaatar 2011.

335. The concentration of schools in the aimag centers reflects Mongolia’s increasing urbanization (57 percent of the population lived in urban centers in 2008 with average rate of urbanization (2005-2010) estimated to be 1.2%. In less densely populated areas, as in other parts of the world, schools can be widely scattered and lack a range of facilities and services.

Health

336. The population health status in Mongolia dramatically improved over the years. Infant mortality had decreased dramatically while maternal mortality had experienced an almost 100-fold decline, and communicable diseases such as louse-born epidemic typhus, genital lymphgranulomatosis, smallpox and poliomyelitis were eradicated, contributing to an almost four-fold increase in population number and a general improvement in the health condition. Although such profound changes have been associated with a number of socio-economic factors, they have been undeniably bound to the contemporary science-based health sector development in Mongolia.

337. Despite this improvement, however, the health sector still faces challenging problems related to the deepened marginalization of some of the population, internal migration and the number of homeless people as well as poor living conditions which are causing the increase of poverty-related diseases such as TB and STDs. In addition, there are problems of unequal health status and access to health services between the rural and urban populations, and between different income groups.

338. A large portion of the health budget is still spent on curative services. There are weaknesses in hospital services: inefficiency, patient dissatisfaction, outdated treatment protocols and equipment. Since January 2003 the government started to implement the Public Sector Management and Finance Act, a new phase of health system organization and financing with output-based funding. The successful implementation of the new regulations is an immediate challenge to increase cost-effectiveness and greater responsibility of health organizations in the country. Investment in the medical sector increased and 33 hospitals were built in 2002- 2003 on the state budget.

339. The health sector comprises of 17 specialized hospitals and centers, 4 regional diagnostic and treatment centers, 12 district and 21 aimag general hospitals, 323 soum hospitals, 18 feldsher posts, 233 family group practices, and 536 private hospitals and 57 drug supply companies/pharmacies.

340. Health service provision indicators for the project area show that the population of Bayan-Olgii and Khovd is still poorly served compared to the national average as indicated by the following measures: number of persons per physician and the number of persons per nurse. Table 5.26 below shows the ditribution of physicians per 10,000 people.

Table 5.26: Key Indicators of Health Service Supply in Khovd, 2010 Number of Persons/ Aimag Physicians Physicians Number of Persons/Nurse Khovd 148 592 357 National 7497 368 300 Khovd as a % of 1.97 62 50.2 national Source: Mongolian Statistical Yearbook, 2010.P-366-368.

341. Khovd has 62.6 percent respectively, of its population living in rural areas. It is thus not surprising that the ratio of population to health care providers as well as other services in Khovd is still much lower compared to the national average. Most of the health providers and the facilities and services are concentrated in urban areas. However, there is also a positive sign of improvement as shown by certain indicators as in higher percentage of infants being immunized and lower mortality rate in the project area compared to national average. 83

Social Services

342. Since the 1960’s, urbanization has rapidly taken place in Mongolia. Currently, 57 per cent of the population lives in urban areas mostly in Ulaanbaatar while 43 per cent lives in the rural areas. Around 49.1 per cent of the total population lives in around 265,500 apartments covering approximately 6,878 thousand square meters while 50.5 per cent live in ger districts. The square per capita living in apartment is 6.7 quadrate meters in Ulaanbaatar and 56 quadrate meters in rural areas, which are twice lower than the international standard. Some 81.6 percent of households with apartments live in private houses and 16.6 per cent live in state-owned apartments. Approximately 67.3 percent of the total Mongolian households, comprising 94.5 per cent of Ulaanbaatar households and 34.3 per cent of rural households, are linked to the energy source while 44.4 per cent of the total households who live in an apartment have centralized heating.

343. In 2007, at the national level the housing stock reached at 8105.1 thousand sqm and increased by 13.7 percent compared with 2004, by 10.0 percent compared with 2005, and by 4.7 percent compared with 2006. In 2006, 446.6 thousand sqm of area were allocated with about 95.9 percent of total intended for private houses and apartments.

344. In 2007, the number of houses with plumbing reached 116.4 thousand and increased by 9.0 percent compared with 2006. Likewise in 2007, the number of households, using distributed water reached 313.7 thousands, showing an increase of 5.9 percent households or by 17.5 thousands compared with 2006.

345. In 2006, at the national level there were 393 public baths but in 2007 this number has reached 458 indicating an increase of 16.5 percent. In 2007, at the national level, 878 hotels have been constructed compared to 2006 representing an increase of 10.6 percent.

346. Other data is available to further shed light on the socioeconomic situation of the project area. Table 5.27 presents data on the ownership of various assets by households in the project area.

Table 5.27: Selected Social Indicators of Herdsman Households (2010) Number of Households Owning Electric Engine, Aimag Motor Television Vehicle Motorcycle Tractor

Khovd 7355 6990 1,999 3334 185 National Totals 132.635 120.598 44.578 66.883 2.645 Source: Mongolian Statistical Yearbook, 2010 P-228.

347. Table 5.28 below presents communications data showing a lower rate of connectivity characterizing in Khovd population, when compared with those of Mongolia as a whole.

Table 5.28: Number of Telephones per 1000 Persons (2010) Telephones per 1000 Persons Aimag 2010 Kovd 553 National Totals 910 Source: Mongolian Statistical Yearbook, 2010.p-224.

Customs and Traditions

348. Mongolian customs and traditions are unique traditions formed during the development the central Asian nomadic civilization, which has been passed on from generation to generation of Mongols over the centuries. Mongolian customs and traditions encompassed all aspects of life including morality, ethics, science, education, religious life and family relationships of the Mongols. Mongolian customs and traditions have their own peculiarities and specific features, the likes of which are distinguished from other nations, and have been researched and recorded by both Mongolian and foreign scholars. Since early times, the education and

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upbringing of children in civilized ways have been considered in Mongolia to be an obligation of the state and the people. This is why the linguistic association of the Mongolian word "humuujil" (educate, bring up) is related to the idea of "humuun" (human) or "humuuniig hun bolgoh" (to bring up, make up a man). Along with a healthy and normal physical upbringing, much attention is paid to the intellectual, moral and ethical development of the child since inception. As such, Mongolian tradition strictly follow a code of conduct for dealing with pregnant women to ensure that the unborn child is reared in a conducive environment which is then followed by practices in child rearing which ensures the inculcation of beliefs and practices to foster cultural norms and traditions.

349. Another established norm is the practice of greeting and saluting each other with respect and honor. Elders, distinguished and honored persons are greeted first and the young ones respond to them in well- wishing and respectable manner. Hand shaking when greeting another person is not desirable, as the touching of the hand of an honored and respected person is considered impolite and a violation of tradition. It is considered a rather shameful behaviour and an attempt to make others dirty and impure. The most venerable greeting would involve a person tightly buttoning his clothes, tightening his belt, putting his hat on, extending his right hand while bowing three times and touching his forehead with his fingers.

350. Since ancient times, the Mongols deeply revered combining words of well-wishing with the words of greetings. The traditional ceremony of greeting during the Tsagaan Sar is performed once a year. The ceremony of greeting with a "hadag" (blue silk scarf) is a tradition inherited from ancient times. It is strictly adhered to and is considered the highest and most revered form of greeting.

351. This tradition has been strictly observed by the Mongols for centuries and has become a core value and basis for the education and upbringing of children. For example:

 It is forbidden to look suspiciously at one’s mother, father, grandparents, and familiar or unfamiliar elderly people. The offending person would be treated as a man disregarding the law and considered worse than an animal.  It is forbidden to throw waste into rivers, lakes and spas, the offender would be punished for spoiling the water - the source of all life.  Mongols do not beat horses, dogs and animals; it is equal to beating a close friend.  It is strictly forbidden to throw burning ash from the stove as the burning ambers might become fire and endanger the lives of people and animals and damage nature.  It is forbidden to leave holes for rope and tether fastening unfilled with soil or stones. The soil injured by a stake must be re-covered. Open holes may also injure the legs of animals.  It would be considered shameful to urinate towards the setting or rising sun. This way one respects the holiness of the sun, which shines and illuminates the whole world.  Not feeding a guest is considered as a sign of ignorance and unfriendliness. This person would be considered greedy and stingy who ignores the Mongolian tradition of hospitality.  It is forbidden to be unfair or inhuman, to be arrogant and rude, which insults the reputation of the elders, of ancestors and of one's personal reputation.  The Mongols highly revere their reputation, which is evident from the proverbs "Muu amidyavsnaas ner turtei sain ukh" (Better to die with a good reputation than be alive with a bad one), "Ner khugarsnaas yas khugar n' deer" (Better the bone be broken than one’s reputation).

352. The Mongolian taboos, rules of restrictions and unwritten law, are traditions inherited not only from the ancestors, but also from the teachings of Chinggis Khaan, and contained in the Code of Law of Great Mongolia called "Ikh Zasag", home to customs and traditions of the Mongolian tribes and nationalities.

353. These customs and tradition still predominate in Mongolian society and strongly influence the way of life particularly in predominantly rural areas of aimags like Bayan Ogliy and Hovd.

Economy

354. The economically active population in the project area is shown in Table 5.29. As indicated, the unemployment rate is higher in the project area than the national level. As will be discussed below, the income levels are lower in the project area than the national average. 85

Table 5.29: Economically Active Population and Employed/unemployed Persons

Economically Active Employed Unemployed Unemployed as a % of Population Persons Persons Economically Active Aimag (000) (000) (000) Population (000) Khovd 35.9 32.6 3.3 9.2 National Totals 1001.2 1033.7 113.4 11.3 Khovd as a % of National 3.6 3.2 3.0 N/A Total Source: Mongolian Statistical Yearbook, 2010.

355. Poverty and unemployment has a direct correlation. Around 27.5 - 38.2 percent of the poor population of employment age living in the aimag center is unemployed. In 2010 the number of unemployed people reached 3300, of which 1320 were actively seeking jobs.

356. The proportion of women in wage employment in the non-agricultural sector is close to the proportion of male. While women are better educated than men, they are still under-represented in management and decision-making positions. In 1992, the number of women members of the national parliament comprised 3.9 per cent of total legislators, 9.2 per cent in 1996 and 11.8 percent in 2000 showing a dramatic increase. However in 2004, the percentage dropped to 6.6 percent indicating deterioration in women participation.

357. With a relatively large land mass (about 1.6 million km2) and a small population (3.09 million), Mongolia has one of the lowest population densities in the world, with most of the country having less than 1.6 persons per km2. The low population density means that infrastructure and social services have a higher per person cost because population concentrations are so low. As a result, the domestic market is too low resulting in its inability to support a wide range of industries and services. Thus, aside from herding and some limited industrial and service activities to support the domestic market, economic activity has been linked to exploitation of timber in the north and the exploitation of some mineral resources including coal, copper, iron ore, fluorspar, gold, molybdenum, zinc and oil.

Agriculture

358. Topography and climate are key determinants of economic development in Mongolia, with the high mountains and dry steppe and desert areas limiting the range of agricultural activities to seasonal grazing with some crops grown for personal consumption or sale to local markets. The typically cold dry weather limits the average crop-growing season to about 100 days. While these factors place limits on agricultural development, the project area also includes a nature reserve which is home to a wide range of rare and endangered species, as well as many beautiful vistas and other natural attractions. These characteristics indicate that the project area has considerable potential for ecotourism.

359. In general, agricultural land has been the dominant land use across both aimags, occupying more than 77 percent of the total land in each aimag. However, this should not be taken to mean that all of these areas are arable for permanent agriculture. Rather, most of these lands including those in the mountainous areas are grazing lands that are periodically used. Soils are stony in the mountain areas, with only meadow areas suitable for grazing and limited agriculture. The land used for “the transport network” in Bayan-Olgiy, and Hovd Aimags occupies 0.2 percent, and 0.31 percent of the total territory, respectively.

360. About 60-70 percent of Bayan-Olgii constitutes high mountains and the rest, lowlands and watercourses. Khovd also has a high elevation and stony soils. From the mountain areas to the border with China, desert and steppe become common. Soils along watercourses are suitable for agriculture. Otherwise, there is seasonal grazing.

361. Land use in the project area is shown in Table 5.30. Arable/steppe lands constitute the largest form of land use followed by the special protected areas. The main agricultural activity is livestock herding.

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Table 5.30: Land Use by Classification

Khovd Aimag Area Percent of total Land classification (,000 ha) (%) Arable/Steppe lands 5,885,0 77 Cities, villages and other 28,405 0.3 settlements Transportation and 21,128 0.2 network land Forest resource land 464,851 6.1 Water resource land 43,117 0.5 State special use land 1,163642 15.2 Total area 7,606,038 100 Source: Land management report of Khovd, 2005.

Manufacturing/Industry/Mining Manufacturing/Industry/Mining

362. The processing industry consists of wool, cashmere, leather, wood, metal, textile, and food production. Over the past decade, industrial production has experienced a continuing decline due mainly to the shortage of funds for the procurement of agricultural raw materials.

363. Presently, there are over 1800 small and medium sized business entities engaged in the food industry. Manufacturing and supply of meat, bread, beverages, flour products and salt has increased. Processing of agricultural food products and raw materials is developing in Mongolia. Currently, many small and medium factories and business entities manufacturing milk products are established in the aimag, towns and soums.

364. There is a network of flourmills with a total capacity of more than 300.000 tons of flour per year. There is also a network of 8 larger grain storage facilities with a total capacity of 250.000 tons of cereals. Mongolia is producing one third of the total domestic consumption of flour. The total annual capacity of the ten biggest flour factories is 163.0 thousand tons. Meat and meat product manufacturing has an important place in the food sector and is considered to be the sector with the most potential for future development. There are 22 medium and large slaughterhouses with a total capacity of about 62,000 tons of carcass meat per year. However, they only use 29 per cent of their total capacity.

365. In addition, there are many smaller slaughtering facilities in the aimag and soum centers. There are over 60 small and medium enterprises that produce meat products. As far as food supply to the population is concerned, local meat production meets the domestic demand totally and the extra produce of some meat products are exported. Meat consumption per person has gradually increased up to 120 kilograms per year. In 2000-2003, eight meat-processing factories with an annual capacity of 60,000 tons of meat were established. At the end of 2003 some 11,200 tons of meat and 756 tons of by-products were exported. During the last year, meat- processing factories were certificated and 20 have received export licenses.

366. Khovd is predominantly agricultural with livestock as the major produce, is the primary sources of raw materials and products for the processing industry.

367. Mongolia has rich mineral resources and exploitation of these has been increasing during the transition from state controlled to market economy. There are over 8,000 deposits of 440 different minerals in Mongolia, of which about 600 deposits and outcrops of resources have been determined. A total of 181 gold deposits, 5 copper molybdenum deposits, a lead deposit, 5 tin, 10 steel, iron, 4 silver, magnesium, mica, 3 gypsum, 3 asbect, 3 graphite, 2 bitumen, 42 coal and brown coal, phosphorus, 42 fluorspar, 12 salt, 10 sodium sulphate, 6 semi-precious stone, 9 crystal, about 30 underground water deposits and 205 construction materials, including stone, sand, gravel, limestone, marble, plaster, cement and mineral pigment's raw materials are found. Exploration works were conducted in about 70 percent of the deposits, and the resources of the deposits were evaluated from an industrial mining point of view.

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368. Over 200 of the aforementioned deposits are being exploited now, of which 24 are non-ferrous metal deposits, 111 are gold, 34 coal, 15 salt and about 50 mineral deposits. The joint Mongolian-Russian Monrostsvetmet Company is exploiting four of the biggest mines, which have the capacity to extract 600,000 tons of fluorite a year, seven exploration parts, and a factory with the capacity to enrich and process 500,000- 600,000 tons of fluorite annually. A gold mine with 250 liters capacity in two floating drags, which have a power to wash 1 million tons of sand a year, open mining with the annual capacity to extract 100,000 tons of coal and a geological exploration group are among the operations of the company.

369. However, in Khovd aimag, there are yet very few mining and chemical industries operating to contaminate the water, soil, and air; thus, the natural beauty of the regions are yet preserved.

Household Income, Expenditure and Living Standards

370. As per findings of the 2007 Household Socio-Economic Survey, monthly average income per household has increased by 31.7 percent compared with 2006, including, comparative average income from wages and salaries from 2006 and 2005 by 38.7 and 57.6 percent respectively at the national level and average income from pensions and allowances increased by 76.2 percent in 2007 in comparison to 2006 figures and by 2.3 times compared to 2005 figures.

371. For real increase adjusted by inflation, income from wages and salaries increased by 20.5 percent in 2007 compared to 2006 and 36.9 percent compared with 2005, and income from pensions and allowances have increased by 53.1 percent in 2007 compared to 2006 and increased almost twofold compared to the 2005 figure. The household monetary income has increased by 65.9 percent in 2007 compared with 2004: in salary and wages the increase was about 92.2 percent, in pensions and allowances by 2.6 times, in household business income by 24.3 percent and other incomes increased, by 35.6 percent.

372. At national level, the monthly average cash expenditure per household increased by 33.0 percent in 2007 from 2006 figures. Food is the highest item of expenditure. It increased by 33.5 and 55.9 percent in 2007 compared with 2006 and 2005 respectively, while the non-food expenditure has increased by 34.8 percent in 2007 compared to 2006 and by 57.8 percent compared with 2005.

Poverty and Quality of Life

373. The National Statistical Office had conducted surveys that provide data on poverty including the 2002- 2003 Household Income and Expenditure Survey (HIES) and Living Standards Measurement Survey (LSMS) and the 1998 LSMS.

374. From the results of these surveys, key characteristics of poverty include the following:

 Incidence of poverty is lower in the eastern aimags, where only about one-third are poor whereas in the more remote western aimags, about one-half are found to be poor. Overall, about 43 percent of rural residents are poor, whereas only about 30 percent of urban residents are poor.

 Larger families in rural areas tend to have a higher incidence of poverty and have less access to key social services.

 Household heads with higher levels of education have lower incidence of poverty.

375. Employment in livestock or agriculture is highly correlated with poverty, whereas those employed in the service sectors are least likely to be poor. Employment with public and state companies is associated with better living standards.

376. Households with property generally have lower incidence of poverty. The main asset owned by the population in Mongolia is livestock. The number of livestock owned by the poor is on average less than half of that of the non-poor households. In rural areas, households with livestock experienced lower poverty incidence than those without any livestock.

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377. The type of housing was highly associated with poverty status in urban areas. Those living in apartments are least likely to be poor; while those living in gers are most likely to be poor. In rural areas, those who live in houses are poorer than those living in gers. In urban areas, the poor had significantly less access to water sources, sanitation facilities and electricity; while in rural areas the poor and non-poor had no significant differences in access to these services.

378. According to the findings of the 2006 HIES, 32.2 percent of total population of the country is poor. Urban poverty is less than in rural areas. Poverty headcount is 27.9 percent in urban and 37.0 percent in rural areas. From estimations of poverty indicators based on results of the HIES, the poverty headcount decreased by 3.9 points, poverty gap has decreased by 0.9 points and poverty severity decreased by 0.2 points compared with years 2002-2003. This shows a positive trend on poverty reduction.

379. Table 5.31 shows the main characteristics of poverty households in the project area soums. Approximately one-fifth of poor households is headed by a single parent and about 40 percent of the single parent households is headed by females. According to the data, about 31 percent of the people in the project area soums are poor. This is somewhat unexpected because the western region generally has higher incidences of poverty. For poor households, there are 4.3 persons per household in the project area soums and 5.6 persons per household at the national level.

Table 5.31: Poverty Characteristics in the Project Area Indicator Khovd No. of Poor 23,821 Poverty Households 5,461 No. of person per Poor Household 4.4 Single Parent Poor Household 1,992 Female Headed Poor household 1,079 No. of HH Poor in Agriculture 5,461 No. of HH poor in Livestock 226,321 Livestock per Poor Household 48.5

Cultural/Archeological, Recreational and Touristic Sites and Development

380. The attractions and activities for tourists in Mongolia relate to the natural environment, historic features and cultural heritage. Mongolia has diverse and distinctive vegetation and fauna including some rare species such as the Argali Sheep, Przewalski Horse, Asiatic wild ass, wild Bactrian camels, snow leopard and ibex. The remains of dinosaurs have been found in the Gobi desert. The historic heritage of Mongolia is mainly related to Chinggis Khaan, the warrior-statesman, who in the 13th century united the Mongolian people into a strong nation that controlled much of Asia. The traditional nomadic way of life based on livestock raising and living in traditional gers, is of great interest to overseas visitors. The two major public holidays are Naadam, a traditional festival celebrated each summer and displays three types of traditional games: horse racing, wrestling and archery, and the Tsagaan Sar, the Mongolian Lunar New Year, which marks the end of winter and the beginning of spring. These two festivals are the most visited events by tourists.

381. The capital of modern Mongolia, Ulaanbaatar, is a city with a history over 360 years long. Distinctive and original culture, the old-time hospitality of Mongols, a remarkable variety of scenery, and the rich animal and plant kingdoms of Mongolia exert a fascination for tourists. Since Mongolia's transfer to the market economy in 1990, the tourism sector has evolved into a critical part of the country's development. It has been a major factor in Mongolia's union with the world trend of globalization.

382. Around US$ 150 million is collected each year from travel and tourism, equal to 10% of the country's GDR. The construction of more hotels, tourist camps, restaurants and reliable transportation networks which are up to international standards will draw more tourists to Mongolia and increase the profits of companies operating in the tourism sector. At the same time, Mongolia's transition to the market economy has resulted in the emergence of private sectors that have started to operate in the tourism industry. The number of private tourist companies has mushroomed nationwide. There are 495 tourism companies, 140 tourist camps and over 200 hotels. In accordance with the declaration of 2004 as the Discover Mongolia Year, the numbers of foreign

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tourists have been increasing. As of the first six months of 2004, a total of 107,977 tourists visited Mongolia. At the same time of last year, 74,365 tourists were welcomed to the country.

383. Human settlement can be traced back in the project area as early as the Paleolithic and Neolithic eras. Figure 5.11 and Annex IID provides details of archeological sites in the project area.

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Figure 5.11: Location of Archaeological Sites along the Project Alignment

Source: Adapted from EIA 2007.

384. The following describes evidence of ancient history in the area:

 Petroglyph in Tsambagarav. It is located in the Tsambagarav Mountains of Erdeneburen soum of Hovd Aimag. In the black rock of Tsambagarav mountain, there are many figures, and the one of soldiers, engraved by tools with sharp tips, is the most interesting. Some of the soldiers are wearing full suits of armor; some of them have broad shoulders, slim waists, and no armor. All horses are fully suited with armor as well. Scholar M.Shinekhuu estimates that these range in age from the 4th to 6th century AD.  Petroglyphs of Hongio River. Along the Hongio River, there are two rocky hills, Alag chuluut and Ikher. There are petroglyphs in flat rocks on these hills. These were found by a Mongolian- Russian expedition in 1979. On flat rocks, figures of animals such as a single and herd of ibexes, antelope, wolf, fox, camel, cow, and hunters with bow and arrow, who are walking and 91

riding camels, are engraved. Among them, the figures of two people leading something similar to a plough, harnessed to two cows with big horns, is unique and dates back to the Bronze Age.  Petroglyphs of Khushuut. It is located in Khusuut Mountain, and near the banks of the Hongio River in Erdeneburen soum of Khovd Aimag. In rocks of this mountain, figures of a single and several ibexes, and 9 hunters with arrow and bow, who are riding bareback on horses and wearing boots with a cone-shaped toecap, are depicted. Scholars date it to the Iron Age (7th -3rd century BC).  Deer Stones are Mongolian ancient megaliths carved with symbols. The name comes from their carved depictions of flying deers. Their purpose and creators are unknown. To date, archaeologists have recorded around 700 Deer Stones, of which 550 are located in Mongolia. Deer stones probably were originally erected by Bronze Age nomads around 1000 BC. The deer stone can be divided into three sections, representing the three worlds of ancient Central Asian mythology: the sky, earth, and underground world of the spirits. The top part of the stone is decorated with sun and moon, representing the sky; the center part shows deer or other hoofed animals, representing the world of the living; and bottom part shows bow and arrows, knives, swords, or other weapons, representing death and the underworld. The deer on the monument is represented in silhouette with long snout resembling a bird’s beak, rearing up with its legs folded under its belly. The deer is an important totemic symbol in Mongolian society: ancient Mongols believed themselves to be descended from a deer and wolf, as stated in the opening passage of the Secret History of the Mongols. Later cultures have often reused the stones in their own burial mounds (known as khirigsuurs) and for other purposes. Some rare stones do have a human face carved at the top. The tallest of the stones is 15 feet tall.  Khirigsuur or stone-mound is a type of monument found on Bronze Age sites in Mongolia. Built by mobile pastoralists of Bronze and Iron age, khirigsuurs consist of a stone mound, surrounded by a square or circular fence of surface stones. The khirigsuurs are less studied compared to tombs because artifacts with research value can only be occasionally found, since most of the khirigsuur were built for sacrificial or offering rituals.

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6. ALTERNATIVES

6.1 Alternative Analysis

385. According to ADB Environmental Guidelines alternatives should be compared in terms of their potential environmental impacts, capital and recurrent costs, suitability under local conditions, and institutional, training and monitoring requirements. Accordingly, the alternatives that are to be considered include project alternatives, location alternatives and technological alternatives. And it is imperative that the alternative analysis is carried out very early in the project cycle.

386. In general, the design process has considered the rehabilitation of the road alignment that was recommended by the EIA 2007.39 As needed, minor changes in vertical or horizontal alignments has been designed to improve the roads. Road widening has been considered only where essential to avoid land acquisition and attendant social impacts.

6.2 No-action Alternative

387. The “No Action Alternative” addresses the likely consequences of not undertaking the proposed action. In this instance, failure to develop the road section from Khovd to Buraatyn Davaa would be an impediment to travel and transportation of people along the Western Regional Road. Further, it would render the development of the other sections of the Western Regional Road corridor a profligate exercise which in turn would also be a constraint on future improvements in the economy of local communities.

388. Further more, if the current practice of using multi-track earth roads is allowed to continue it will have adverse impacts on pasture lands, habitats and flora, and deteriorate air quality through generation of dust.

389. Conversely, if the road is improved, the increased accessibility may lead to an increase in poaching, transmission of diseases, and also increase potential risk to safety of herders and their livestock crossing the road. However, these adverse impacts can largely be avoided or mitigated by proper design and planning and the implementation of an inclusive environmental management plan. Therefore, it can be safely determined that the “No Action Alternative” will not be a reasonable option.

6.3 Location Alternatives

390. Mankhan Nature Reserve. Although the proposed road traverses through the Mankhan Nature Reserve (MNR) the consultations at the Khovd Aimag Centre with the Deputy Governor, Head of Environmental Department, Supervisor, Environment and Tourism Center and Biodiversity and Specially Protected Area Specialist discouraged the need for considering an alternative alignment that bypasses the MNR. Their concerted view was that an alternative road to bypass the MNR would be a burden considering the cost and it may also have potentially adverse impacts (vide item 8.2 under Section 8: Public Consultation and Information Disclosure).

391. Nature Reserves consist of areas taken under state special protection in order to create conditions for the conservation, preservation, and restoration of certain natural features, natural resource and wealth. Although activities for industrial purposes that change the natural original condition and likely to have adverse environmental impacts are prohibited there would be no legal barrier to construction of the road on the existing track.

392. No other location alternatives were also considered as the road designs have been finalized along the existing road.

6.4 Technological Alternatives

393. Given the projected traffic flow, sub-grade strength, and extreme climate conditions, two initial surfacing alternatives are possible: double bituminous surface treatment (DBST) or asphalt concrete (AC). For DBST a 30 cm base course and 20 cm granular sub-base supported with a 20 cm non-frost sub grade could be

39 Government of Mongolia. 2007. EIA Ulaanbaatar. 93

used while for the AC a minimum 20 cm base with 20 cm granular sub-base supported with a 20 cm non-frost sub grade would be employed.

394. AC pavement has the advantage of strength and durability, with a longer design life of more than 30 years. DBST pavement is less strong and durable and its application generally has a design life of up to 20 years with appropriate maintenance. DBST pavement is vulnerable to the progressive loss of cover aggregate and the deepening and expansion of potholes. Accordingly, the maintenance costs for DBST will be higher than AC pavement.

395. The Project Area has a climate with a long severe winter and a relatively warm summer where the minimum and maximum temperature range stretches from -40oC to 40oC. Rainfall is low and concentrated during the mid-summer months. The extremely low temperatures during the long winter are a potent cause of damages to the pavement in the form of surface cracking, heaving and spring-thaw break-up. In addition, the large temperature difference between the summer and the winter seasons makes it problematic to select bituminous binders which will not crack during the winter and not become soft in summer. All of these climate- associated pavement damages are common for the existing paved roads in Mongolia. Thus, bituminous pavement will require additional maintenance expenses for filling cracks.

396. The decision on pavement selection will be made considering costs (capital and recurrent) and in consultation with a cold climate pavement specialist.

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7. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

397. Transportation projects, as with all infrastructure development projects, have the potential to cause direct, indirect, and cumulative impacts to the natural and social environments. Likewise, the Project under consideration also will have beneficial and adverse impacts on the environment. The beneficial impacts are related to increased mobility and promoting economic development in Western Region of Mongolia. Manageable adverse impacts are primarily related to effect on permafrost areas, potential facilitation of poaching and illegal trade, and disruption of wild life migration patterns.

398. The Project has employed a threefold approach to minimize adverse environmental impacts:

399. Avoidance. All possible steps have been taken and possible alternatives considered and discussed with stakeholders during the preparation of the EIA to minimize potential adverse environmental and social impacts.

400. Sound engineering. The project has been designed with state-of-the-art engineering which will avoid most sensitive issues such as increase in dust and noise levels, barriers to animal crossings as discussed herein under impact mitigation. The Consultant40 will also incorporate further measures recommended under each impact to alleviate adverse site specific impacts of the project activities.

401. Comprehensive mitigation plans. These include the detailed environmental management plan (EMP), the environmental monitoring plan to check the efficacy of EMP implementation, and best practices in construction management.

7.1 Screening of Potential Impacts

402. Screening is a process that usually start at the very early stages of the project cycle and continued throughout the EIA process to facilitate the consideration of new issues that could emerge. The objective of the screening exercise is to establish the scope of the assessment which assists in avoiding the production of excessively lengthy reports, and also to enable flexibility in regard to consideration of new issues.

403. Comprehensive screening which identified relative significance of potential impacts of the proposed actions of the Western Regional Roads Development Project was carried out during the preparation of the Preliminary Environmental Impact Assessment41 and the EIA: 2007.42 These environmental assessments were conducted for the full length of the Western Regional Roads Development Project of which the present project road section from Khovd to Buraatyn Davaa is only a component part. The present EIA draws from both the Preliminary Environmental Impact Assessment and the EIA 2007 while focusing on the site specific impacts and alternatives of the road section under consideration.

404. Preparation of the EIA for the Project involved defining and delimiting the development activity with regard to associated components and facilities, assessing the alternative sections, and determining the likelihood of impacts (adverse or beneficial) that could occur under each of the relevant environmental parameters. In the process, discussions were held with the PIU, aimag, soum and bagh Governors and officials, and the Public. These consultations were in addition to the public consultation rounds conducted during the EIA 2007 preparation phase.

405. The current environmental assessment is based on the potential sensitive issues and impacts identified in the above environmental scoping exercises as well as new and location specific information obtained during site visits, consultation with PIU and local administrations, and the public. To establish the scope of the present study and identify the significance of the impacts a scoping matrix was prepared as presented in Table 7.1 below.

40 Consultant TA No. 7449- MON: Regional Transport Development Project Component 1 – Preparing the Western Regional Road II Project. 41 ADB TA 4643 Pre-feasibility study of the Western Regional Road Corridor. Draft Final Report. Volume 3. Preliminary Environmental Impact Assessment. 42 Governmetn of Mongolia. 2007. EIA. Ulaanbaatar. 95

406. The screening exercise showed that during construction and operational phases the significant negative environmental impacts are associated with:

 Physical resources: natural hazards, soil erosion, and permafrost.  Biological resources: possible impacts on fauna such as interruption of migratory patterns and increase in poaching and illegal trade.

407. On the other hand, the anticipated positive impacts are:

 Physical resources: improvement of air quality in relation to dust, less degradation of soils from erosion.  Biological resources: less impact to flora and nature habitats due to construction of asphalt road with ROW far narrower than the multi-tracks.  Social and economic resources: Improved access and travel, contribution to reducing unemployment and economic development of region.

Table 7.1: Screening of Environmental Impacts43 Physical Ecological Economic Social & Cultural e g riculture tmosphere & tmosphere g Topography & Topography soils & Geology seismology Surface & water ground A Infrastructure facilities Transportation Land use Population communities Public health Socio- economic Cultural herita climate Flora Fauna Nature reserves & Industries a Constructi -2 -1 -1 -1 -1 -1 -2 0 0 - 0 0 - +1 0 on Operation 0 0 +1 -1/+1 -1 -1 +1 0 +1 +1 0 0 +1 0 0 No impact + Insignificant positive impact -1 Insignificant adverse impact +1 Moderate positive impact -2 Moderate adverse impact +2 Significant positive impact Source: Consultant TA No. 7449-MON.

7.2 Anticipated Environmental Impacts

408. The impacts have been grouped under three general categories: physical, biological and socio- economic. Construction and operational phase impacts are considered separately. The assessment process also considers potential environmental enhancement measures and any additional considerations as warranted. Potential impacts from the Project were considered under the following categories:

 Direct Impacts - those directly due to the Project itself;  Indirect Impacts - those resulting from activities arising from the Project, but not directly attributable to it; and  Cumulative Impacts - impacts which in combination would exert a significant additive influence.

409. Impacts in all three of above categories may be either:

 Short-term – impacts which occur during construction and affect land use, water quality and other factors. Many of these impacts will, however, be short-lived and without long-lasting effects. Even the effects of some relatively significant impacts such as earth excavations, for example, may be eventually rectified if appropriate mitigation action is implemented.

43 Provided no prevention/mitigation measures are taken. 96

 Long-term – road impacts that could, for example, affect regional land use or regional hydrology, and flooding if roads are poorly designed. Long-term negative impacts can also result from loss of agricultural land to other land uses; air and water pollution; and problems associated with scattered borrow pits.

410. Both short-term and long-term impacts may be either beneficial or adverse. Short-term positive impacts could include, for example, the generation of employment opportunities during the construction period. Long- term benefits could include enhanced development opportunities and improved transport services.

411. The most efficient and cost-effective way to ensure that construction works are environmentally sound is to include environmental safeguards in the construction contract documents. The Project will follow the standard specifications and General Conditions of Contract for construction contract purposes. Provisions for the protection of the environment are included in the EMP, and this would be included in the contract documents. In addition environmental protection clauses will be incorporated in to the Contract documents.

7.3 Physical Environment

Impacts on Topographic Characteristics and Soils

412. Construction Phase. Potential impacts on topography are most likely to occur in the construction stage due to:

 Cut and Fill Requirements. Cut and fill activities may occur in most parts of the road section.  Borrow Pit Excavations. Unless properly controlled, borrow pits cause drainage and visual problems.  Quarry Operations. Crushed rock will be required for construction purposes. Considerable changes in topography could result from quarry operations. Potential site-specific sources have been identified for crushed stone.

413. The impacts of the road development on soils include loss of productive soil, erosion, and contamination of soil.

 Loss of productive soil. The land in the project area is mostly used as pasture land. The switch from multi-track earth roads that have moderate effects on soil to the paved road that utilizes an alignment far narrower than the multi-track alignment would be a positive impact. Loss of productive soil in the construction phase is temporary and will be from a limited area. Soil loss will be arrested during the operational phase.  Erosion. Erosion results when soil or rock particles are removed by water or wind. There are different types of erosion including rainfall erosion, sheet erosion, rilling and gullying. Road construction and associated activities contribute to the erosion process through the exposure of large amounts of materials during potential blasting of mountains or cutting of hills, stone quarrying, filling and construction of project-related structures, etc. The factors that are expected to contribute to the acceleration of erosion in the project area are strong winds and sandstorms, especially in the hilly and mountainous terrain, and increased frequency of rainfall especially in May-August. If erosion prevention measures described below in the construction and operational phases are implemented, no significant adverse impacts on soils are foreseen. During the operational phase, as with the productive soil, the use of the paved road when compared to the much wider multi-tracks, will likely reduce soil erosion, especially the dust that is generated as a result of vehicles traveling on the earth road.  Degradation of permafrost. As the road passes through perennially frozen areas of high mountain tundra it can potentially affect the degradation of permafrost and cause triggering of the thermokarst processes. The situation is accentuated by global warming contributing to permafrost thawing. The consequences of permafrost degradation are disintegration of the road infrastructure, change in local hydrology, etc. as discussed in greater detail below.

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 Contamination of soil. Contamination of soil in the construction phase could result from accidental spillages of petroleum products and hazardous materials. These can inhibit the growth of vegetation and finally lead to erosion.  Quarries and borrow pits. The location of quarries and borrow pits in the project area was provided earlier in Table 4.6 and Figure 4.4 in Section 5 of the EIA report. The anticipated impacts of the quarries and borrow pits will be short-term and localized and could be minimized with recommended mitigation.

414. Operation Phase. Heavy metals and oil and grease could be deposited on road sides and reach water bodies and have an adverse impact on fauna. However, such contamination usually occurs in the case of very busy roads. No substantial contamination is foreseen in the case of operational activities of this road section.

415. Land degradation would be reduced or reversed by diversion of traffic from earth tracks to a hard surface road.

416. Therefore, no significant environmental impacts are anticipated during operation of the road.

Prevention/Mitigation Measures

417. Loss of Soil for Agricultural Purposes. Loss of productive soil in the construction phase is of low significance and temporary and an alignment far narrower than the multi-track alignment would be a positive impact. Therefore, no mitigation actions related to potential loss of agricultural soil will be required.

418. Contamination of Soil. Implementation of the Spill Management Plan prepared and submitted by the contractor (as required in Section 10-EMP) would arrest accidental spills of petroleum products and hazardous materials damaging the environment.

419. Erosion. The following remedial measures are recommended for incorporation in the bid documents and construction contracts:

 Prevention: o Soil Erosion Management Plan to be prepared by the contractor and to be approved by the Employer before earthworks; o Minimizing the area of soil clearance; o Selection of less erodible material and good compaction, placement of gabions and riprap particularly around bridges and culverts; o Construction in erosion and flood-prone areas should be mainly restricted to the dry season; and o Replanting will be completed as soon as possible following fill placement to facilitate regeneration of a stabilizing ground cover.  Mitigation: o Using geotextile for erosion control will be limited but might be justified in some locations (for example near Khovd town); o Stepped embankments will be required for embankments greater than 6 m; o Separation of topsoil from subsoil during the excavation works; reuse of topsoil as a superficial layer; o Reshaping the slope surface by notching, blazing and pocking to enhance seedling survivability; o Seeding with a fast growing native species and seed mix, immediately after fill placement; o Stabilization of embankment slopes and road cuts by re-vegetation with grazing resistant plant species; and o Completion of discharge zones of drainage structures with riprap to reduce erosion when required.

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 Borrow Pits and Spoil Sites o Use of borrow pits and spoil sites and their restoration plans to be approved by the Employer; o Pit restoration will follow the completion of works in full compliance with all applicable standards and specifications; o Arrangements for opening and using material borrow pits will contain enforceable provisions; o The excavation and restoration of the borrow areas and their surroundings in an environmentally sound manner will be required before final acceptance and payment under the terms of contracts; o Borrow pit areas will be graded to ensure drainage and visual uniformity; o Topsoil from borrow pit areas will be saved and reused in re-vegetating the pits; and o Additional borrow pits will not be opened without the restoration of those areas no longer in use.

Table 7.2: Erosion Control Procedures Potential Erosion Problem Mitigation Measures Use of spoil and borrow pits All available spoil will be used for structural fill for access roads, stations, and embankments before borrow pits are excavated Locating borrow pits Borrow pits will be centrally located to serve more than one site Location of spoil and borrow Spoil and borrow pits will be sited far from industrial, agricultural, pits residential, historic and ecological sites Top soil from borrow pits Top soil from borrow pits will be removed and stock piled. When the project is completed the areas will be regarded, the top soil replaced and the area reseeded. Intercepting ditches will be constructed on the high side of the restored pit to minimize erosion Spoil disposal Spoil will be spread on the lowest yielding, least productive land available Soil disposal When soil is spread on slopes for permanent disposal it will be buttressed at the toe by a retaining wall. The surface of the slope will be stabilized with shotcrete, riprap or laid rubble, as necessary prior to seeding Steep cuts All steep cuts will be flattened and benched Natural Water courses Water courses will not be blocked and temporary soil and rock stockpiles will be designed so that runoff will not induce sedimentation of waterways

Impacts of Permafrost Degradation on Road

420. Degradation of ice-rich permafrost due to natural causes or anthropogenic activities can trigger a process called thermokarst. Thermokarst is a process of thawing ground ice that result in ground subsidence and formation of uneven thermokarst topography. If thermokarst takes place beneath a road, its structural integrity can be affected. On mountain slopes, degradation of ice-rich permafrost can create mechanical discontinuities, resulting in active-layer landslides.

Impacts of Road on Permafrost Degradation

421. Activities such as construction of roads and removal/disturbance of vegetation cover in permafrost areas can severely affect the topography leading to subsidence and disruption of engineering structures and modification of drainage patterns.

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Mitigation of Permafrost Degradation

422. Preventive measures will be adopted to avoid permafrost degradation where possible. This will include avoiding areas with poor cryogenic and hydrogeological conditions such as areas close to the surface location of ground ice, perennial icing, frost mounds, solifluction-prone slopes, areas with ice-saturated soils, thermokarst areas and thermokarst lakes. This approach has been used in Olonnuur area to bypass degraded areas.44

423. Construction practices and mitigation measures to minimize impacts of the road construction in permafrost areas have been adopted in countries with large northern regions. For example, Construction Regulations of the Russian Federation45 proposes the following general engineering measures during construction to enable the stability of the road structure in permafrost areas:

 Designing of roadbed in embankments;  Erecting the roadbed with rock, coarsely clastic rock and sand soils, and, in case of their shortage, clay materials;  Using natural and artificial heat-insulating materials in subgrade, embankment and road pavement;  Using non-woven synthetic materials (geotextile) in subgrade and embankment; and  Replacement of waterlogged soils of seasonally thawing layer and ice-saturated underlying permafrost with coarsely clastic rock and sand soils, correspondingly.

424. In respect of the design of a roadbed the Construction Regulations recommend the selection of one of two following approaches depending on climatic and permafrost conditions:

 Providing the elevation of the upper boundary of permafrost not lower than embankment bed and keeping it at this level throughout road operation (designed condition of soil in bed – frozen).  Enabling soils in the embankment bed to be thawed over the period of road operation considering allowable subsidence of road pavement.

425. As for the requirements for material of the roadbed the Construction Regulations recommend applying coarsely clastic rock, sand and clay soils in thawed state; clay soils should meet the requirements specified in the regulations.

Impacts of Natural Disasters

426. Natural hazards such as earthquakes and flashfloods (mudflows) and drifting snow may present a challenge for road development. The types and potential locations of natural hazards are shown in Table 7.3 along with mitigation measure to be taken. In addition to these measures warning signs will be used where appropriate.

427. Carrying sediment/stone flows/debris to the road structures, clogging drainage structures by sediment and debris, and scouring embankments are some of the effects/results of flash floods on the road and associated structures.

44 Government of Mongolia. 2007. EIA. Ulaanbaatar. 45 Ibid. 100

Table 7.3: Location of Natural Hazard Zones and Mitigation Road section Station, km Type of structure 1 143.25 Culvert with check dam 2 146.3 Culvert with check dam 3 Bodonch-Baga Ulaan 148.6 Culvert with check dam 4 pass 153.8 Culvert with check dam 5 164.1 Culvert with check dam 6 181.45 Culvert with debris basin Road section Station, km Type of structure 7 184.9 Culvert with check dam 8 189.9 Culvert with debris basin 9 199.350 Culvert with check dam 10 201.7 Culvert with debris basin 11 209.038 Culvert with debris basin 12 217.270 Culvert with debris basin 13 225.800 Culvert with check dam

Mitigation of Natural Disasters

428. Flashfloods. Flashflood/stream courses throughout the project area are primarily triggered by rainstorms and heavy rainfall. Two flashflood mitigation options have been proposed for the purpose of the Project.

429. Directing through culverts. Culverts that will pass sediment/debris/flashflood often are designed as box culverts.

430. Flashflood control structures such as check dams, debris basins, or hillside ditches.

431. Culverts. Concrete box culverts are necessary where required openings exceed 4 m2. Previous experience has established box culverts as efficient and easier to maintain.

432. Check dams are proposed to reduce flow velocity and control soil erosion by trapping sediment on the upstream side. Hillside ditches are effective in flashflood areas, where the slope is less than 30 percent. Hillside ditches serve three main functions: to collect and remove surface water, collect debris mass (which is carried by flashfloods) and to prevent flashfloods from adversely affecting road structure. A debris basin is constructed in situations where placed/planned culverts are on the steep slopes. Debris basins can decrease flow velocity upstream at the inlet of culvert, thus preventing clogging of the drainage structures.

433. In addition to these measures, warning signs will be used where appropriate.

434. Drifting snow. In order to minimize the adverse impacts of drifting snow at high-altitude passes of the project area, such as Baag Ulaan pass snow fencing may be used. The proposed design – fencing made from earth – can be observed at Tsagaannuur – Ulaanbaishint area.

Impact on Climate and Air Quality

435. Significant meteorological parameters that have an impact on road users are wind, fog, rainfall, ice and snow. All of these can make driving hazardous and in combination, very dangerous especially at night.

436. Air quality impacts could occur due to construction activities and due to altered traffic patterns and conditions in the operation phase of the Project.

437. Construction Phase - Impacts. Moderate temporary air quality impacts during the construction stage of the Project could be anticipated due to fugitive dust generation in and around construction activities and construction-related activities such as crusher, hot-mix and asphalt plants. Minor increases in the level of nitrogen oxides (NOx) and sulphur oxides (SOx) from construction plant and machinery are expected. Air quality 101

impacts during construction are likely to result from the following sources:

 Emissions from construction machinery and equipment, movement of haulage trucks;  Fugitive dust from earthmoving operations and stripping of pavement;  Increased traffic congestion in construction areas;  During quarrying, borrowing, drilling;  During loading unloading and haulage of spoil for disposal and construction materials from quarries and borrow pits; and  Dust created from the embankment and stockpiles by wind.

438. These construction phase impacts would be localized and temporary.

439. Operational Phase - Impacts. Potential air quality impacts during the operational phase are related to road traffic. Emission of particulates as well as NOx and SOX from the diesel and gasoline engines on the road will increase. However, 2 factors, one specific to the Project will control the impact of this hazard on public health:

 the ambient air dispersion in this rural area is at a high level and there is no inversion; and

 the quantity of heavy trucks will be small enough (projected quantity – 117 per day in 2013 and 171 in 2017) that gaseous emissions can be largely assimilated.

440. Moreover, the improved road would reduce dust emissions caused by vehicles on the earth tracks. Further, with an improved road surface, the obstructions to traffic flow would be minimized and fuel consumption and gaseous emissions, such as carbon monoxide and nitrogen oxides per vehicle, will be reduced. While total vehicle emissions would be increased due to increased traffic flow, this is expected to be partially offset by smoother traffic movements.

Mitigation Measures

441. Mitigation – Construction Phase. Potential air quality impacts due to the generation of dust and related activities will be mitigated through avoidance strategies combined with construction best practices and monitoring. The civil works contract documents will specify that:

 Asphalt and hot-mix plants will be located at least 500 meters away from the nearest sensitive receptor (e.g., schools and hospitals);  Operators will be required to install emission controls;  Blasting, where necessary (possibly around km 107 from Olgii), will be carried out using small charges, and dust-generating items will be transported under cover; Blasting mats would be employed where necessary;  Contractors will be required to spray road surfaces, excavation and construction sites to keep them moist for dust control;  Trucks carrying earth, sand or stone will be covered with tarps or other suitable cover to avoid spilling;  Potential significant adverse impacts to adjacent residents or site employees during construction will be mitigated by either discontinuing until favorable conditions are restored, or, if warranted, sites may be watered to prevent dust generation, particularly at crusher plants;  Machinery and equipment will be fitted with pollution control devices, which will be checked at regular intervals to ensure that they are in working order. The best available pollution control technologies will be required;

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 Open burning will be prohibited and requirements for spraying and related dust control measures and the proper use of solvents and volatile materials will be in incorporated in the contract documents; and  Pre-construction monitoring of existing ambient air quality will be undertaken in conjunction with each construction package to provide a baseline for the measurement of air quality impacts during the construction period.

442. Routine air quality monitoring will also be required in areas of high potential impact (asphalt plants, construction camps, etc.) during the life of the Project.

443. Mitigation – Operation Phase. The project road section is likely to continue to operate at well under the design capacity and no significant air quality impacts warranting mitigating actions in the operational phase are anticipated. Further, even with design capacity traffic, enforcing emission standards authorized under Mongolian Environmental Law would alleviate these sources of pollution.

Impact of Water on the Road

444. Water can affect roads in a number of ways including damaging engineering structures such as bridges and culverts, flooding, eroding the road or its shoulders and triggering landslide processes. Mountainous and hilly landscape areas of the road alignment (Shurag River, Buyant River, and Khovd River) results in greater erosion power of rivers as compared with rivers flowing through lowland terrain. These impacts have been addressed under Topography and Soils and Natural Disasters in this section.

Impact of the Road on Water – Construction Phase

445. Road development can potentially cause contamination of surface/ground water quality or changes in hydrological regime of the area. Obstruction of natural flow patterns of the drainage basins during road construction can result in the rising of the water table on the upslope side and falling on the down slope side. The potential effects of the modification of a water table are flooding, loss of drinking water sources and inhibition of flora growth. Accumulating water flows at certain road locations (for example culverts) can lead to increasing the speed of water flow. This can cause a variety of impacts such as erosion, flooding and siltation.

446. Contamination of rivers and lakes can occur within the construction phase as a result of cut and fill operations, blasting and accidental spills. The potentially affected rivers are those crossed by the alignment or running in parallel to the road in close vicinity. These rivers include, Khovd, Buyant, and a number of others listed in Section 4-Description of the Environment.

447. As groundwater in the project area is generally relatively deep (> 5m), no impacts to groundwater resources are anticipated in either the construction or operation phases of the Project. No wells / hand pumps are located in the area of potential impact. There will be no net loss of water access points. However, fuel and chemical substances used for road construction could contaminate groundwater and surface water if they are not properly stored and disposed.

Impacts – Operation Phase

448. The road alignment will not directly traverse along surface watercourses and as such it is not expected to have significant adverse effect on water quality, during road operation. However, during road maintenance there could be some temporary impacts on water quality. The mitigation measures for minimizing construction impact mentioned above will be considered for implementation during road maintenance, especially during major road maintenance.

449. Within the operational phase, the proposed improvements to drainage structures will facilitate passage of high flows and reduce bank erosion in the vicinity of the road, ensuring the integrity of the road surface. No impacts on water quality or the availability of water for domestic or agricultural use is anticipated.

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Mitigation Measures

450. Potential effects to water flow patterns and water quality will be mitigated through a number of prevention strategies such as:

 Number of water crossings will be as minimal as practical;  Using materials excluding fine fractions around watercourses; and  Vegetative cover between the road and water bodies.

451. The civil works contract documents will specify that:

 The contractor should develop and implement contingency plans for control of oil and other dangerous substance spills (Spill Management Plan);  Fuel storage, maintenance shop and vehicle cleaning areas would be stationed at least 300 m away from the nearest water body;  Stormwater drainage and retention basins would be constructed and a silt trap (where a river/stream is nearby) would be installed prior to commencement of construction to control runoff water and sediment and prevent entry of contaminants into water bodies;  Oil and grease are likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater would be directed into an oil interceptor prior to discharge; and  Existing water wells and springs would be clearly marked to prevent accidental damage from construction vehicles.

Noise and Vibration Impacts

452. Noise/vibration is not a significant problem along the route, since it does not intersect any main towns. However, there can be some temporary increases in the noise and vibration levels during the construction phase.

453. Impacts during Construction. The major sources of noise pollution are movement of construction vehicles, the haulage of construction materials to the construction site and the noise generating activities at the site itself. Concrete mixing and material movements are the primary noise generating activities and will be uniformly distributed over the entire construction period. Construction activities are expected to produce noise levels in the range of 80-95 dB(A). The major works will be carried out during the daytime. The noise produced during construction will, however, not have significant impacts on the existing ambient noise level, if proper mitigation measures are implemented.

454. Operation Noise/Vibration Impacts. Visual surveys for sensitive receivers within the project area did not indicate sensitive areas along the alignment. Further, the limited intensity and magnitude of projected traffic would not generate significant noise levels.

Noise Mitigation

455. Construction Noise Mitigation. It is recommended that project contract documents specify that noise impacts during the construction phase will be mitigated by means of:

 Source Controls. All exhaust systems will be maintained in good working order; proper shields, shrouds, and intake and exhaust mufflers will be employed, operation of machinery will be at minimum power, and regular equipment maintenance will be undertaken. All blasting operations should be carried out with limited size charges, and blasting mats used where appropriate.

104

 Construction Site Controls. Stationary machinery will be placed as far away from sensitive receptors as practical.  Time and Activity Constraints. Operations will be scheduled to correspond with periods when people/wildlife would least likely to be affected. Construction activities should be prohibited from April 15 – June 15 near Tolbo Lake (Associated Project).  Community Awareness. Public notification of construction operations will incorporate noise considerations; information procedure of handling complaints through the Grievance Redress Mechanism will be disseminated. Sensitive receptors will be avoided as far as possible. Disposal sites and haulage routes will be coordinated with local officials.  Baseline and Routine Noise Monitoring. Pre-construction monitoring of existing noise will be undertaken to provide a baseline for the measurement of impacts during the construction period. Routine monitoring will also be required in areas of high potential impact as specified in EMP, during the life of the Project.

Impacts of Solid Waste

456. The following are the impacts of solid waste on the environment:

 Degradation of the aesthetic quality of the environment;  Decreasing the land use potential;  Formation of toxic by-product as a result of decay;  Potential risk of injury for human beings and wildlife; and  Organic waste could assist breeding of disease vectors.

Mitigation Measures

457. Construction Phase. The civil works contract documents will contain provisions requiring:

 Construction of temporary points for collection and disposal of waste;  Fencing the construction area (if needed);  Reinstatement of lands after completion of construction works; and  Construction of sanitation facilities for construction employees.

458. Operational phase. Mitigation measures for operational phase include:

 Construction of rest points and parking areas with solid waste bins;  Road signs; and  Awareness campaigns. 7.4 Ecological Resources

459. Biotic components such as flora, fauna and biodiversity conservation are important considerations in assessing environmental impacts of any infrastructure development project. Detailed consideration is given to ecological resources in the development of the Project in order to avoid or minimize adverse impacts on fauna, flora and important ecosystems.

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Impact on Biodiversity

Flora

460. Field investigations and public consultations have established that there are no threatened or endangered flora species located within the road construction area. Therefore, no adverse impact on such species is likely to occur during the construction activities. Plant species located within the multi-track road corridor are native species, which are highly tolerant of grazing, compaction, and other physical disturbances. No trees were found close to the ROW though some trees such as poplar and willow were reported only at a distance. Moreover, construction of the paved road will have a moderate positive impact on flora by avoiding the use of multiple earth tracks that affect flora. And proper location of construction camps and other ancillary features will contribute to minimization of impacts on flora.

Mitigation

461. No additional mitigation related to flora is considered necessary in all road sections.

Fauna

462. Habitat loss/gain. No significant habitat loss is anticipated; moreover, habitat gain is anticipated as a result of construction of an asphalt road instead of multiple earthen tracks running in parallel throughout the width of a valley. This fact was noted during public consultation workshops and consultations with experts.46 The borrow pits are limited to designated sites in this EIA, and quarries will be limited to licensed areas previously used.

463. Habitat Fragmentation and Wildlife Migration Patterns. Habitat fragmentation occurs when a road cuts through an ecosystem. The sum of the parts created may be less than the value of the initial whole, even when the habitat lost is negligible. Most animal species tend to follow established patterns in their daily and seasonal movement patterns. A road blocking a wildlife corridor may result in constraints on wild life movements because animals are reluctant to cross the road, increase in mortality due to collisions, or delay in migration patterns. Potential wildlife crossing zones identified by experts of Specially Protected Area Administration and Management Department in Bayan-Olgiy, the WCS and the WWF Mongolia Programme Office are shown in Figure 7.1.47

464. A detailed survey of wildlife crossing zones is designed as a part of the Project and for this the capacities of the Specially Protected Area Administration Departments in Khovd and Bayan-Olgii be increased through the supply of the fauna monitoring equipment and 2 vehicles. Funding for capacity development is provided under environmental management costs (see Section 10: Environmental Management Plan).

465. Discussions with experts of Specially Protected Area Administration and Management Departments in Ulaanbaatar and Bayan-Olgii, WCS and WWF and observations during field trips48 provide evidence that the magnitude of adverse impacts to wildlife patterns will likely to be insignificant49 because:

 Although the traffic volume is presently low, the existing alignment sections which are on earthen multi-tracks will reduce the impacted area;  The projected volume of traffic is quite low: less than 700 vehicles per day by year 2013 and a bit more than 2,000 by year 2022. Such traffic intensity will have only minor effects on fauna and migration patterns; and  Construction activities will be short-term and provided mitigation measures will be implemented, there will not be any substantial negative impacts.

46 Government of Mongolia. 2007. EIA. Ulaanbaatar. 47 Government of Mongolia. 2007. EIA. Ulaanbaatar. 48 Ibid. 49 Government of Mongolia. 2007. EIA. Ulaanbaatar. 106

Figure 7.1: Migration Patterns of Wildlife in the Project Area

Source: Adapted from EIA: 2007.

466. Poaching. In the project area poaching presents a threat to wildlife along with natural factors such as unfavourable weather conditions (severe winters and dry summers), and food shortage. The high demand (the assessment is between 6,000 and 10,000 kg of horn per year)50 and ever-increasing prices for Saiga horn in China, high poverty in regions where Saiga are found and limited resources in combating poaching and smuggling, when combined with enhanced road accessibility to Saiga populations create a potential for adverse impacts.

467. Aquatic Fauna. No substantial impacts on aquatic fauna are anticipated. Although the road passes close to a few lakes near Hongio Olon river 95-105 km from Olgii the impact of the road on the lakes and its aquatic fauna will not be significant, if the measures to prevent water pollution and siltation given in the EMP is implemented during construction and operation.

468. The distance between the road and Tolbo Lake is about 400 to 500 m.

469. The road, nevertheless, can be a source of river pollution during construction or in case of accidents with oil products or other hazardous substances during construction and operation.

Site Specific Impacts:

 Bodonch Canyon. Potential impacts on fauna in Bodonch Canyon may be linked to construction activities. Intensive cut and fill and blasting operations makes this site a source of physical disturbance for wildlife.

50 Govt of Mongolia. 2007. EIA. Ulaanbaatar. 107

 Mankhan Nature Reserve. The existing road traverses the Mankhan Nature Reserve. There is no clear population range, and boundaries of the reserve are believed be out dated according to the Khovd Aimag Environmental Department and area WWF. The discussions with the concerned officers (vide item 9.2 under section 9) a bypass could not be justified as the Saiga are now adapted to motor vehicles since the road has been in existence for a long period and the Saiga population has drifted to other areas. Construction impacts will be temporary and confined to the ROW and operation impacts insignificant due to the low volume of traffic.

Prevention / Mitigation

470. Habitat Fragmentation and Wildlife Migration Patterns. A number of preventive and mitigation strategies51 that have been considered to reduce habitat fragmentation and avoid wildlife migration patterns by the EIA 2007 and experts of the Department of Administration of Specially Protected Areas, WWF and WSC, includes:

 Prevention (“no road construction” option, changing the route, putting the road underground, etc.); and  Mitigation (perforation of the road alignment with underpasses, overpasses and at grade crossings, reflective wildlife studs, warning signs, etc.).

471. The selection of mitigation measures are based on the following:

 Wildlife overpasses (ecoducts) are effective, but expensive solutions that are not likely to be suitable for the purposes of the Project due too low cost-benefit ratio and lack of detailed information about wildlife migratory patterns and behaviour of animals, and also low traffic.  Wildlife underpasses are a less effective, but less costly solution when compared with overpasses. The efficiency of underpasses for the Project was questioned by WWF and WCS during project consultations52. The projected, relatively low volume of traffic during first 10-15 years of the road operation will likely make underpasses inefficient. Additional studies are planned within the frame of the Project in regard to migratory routes and behaviour of wildlife in the project area. The studies will be carried out by Departments of Specially Protected Area Administration and Management of Khovd and Olgii during the construction and operational phases and findings passed on to PIU.  At-grade crossing is an inexpensive alternative to other wildlife crossing structures such as wildlife pipes or culverts and also wildlife underpasses or overpasses. It is typically recommended for low traffic volumes.  Wildlife warning reflectors. In principle, wildlife reflectors are not designed to prevent animals from crossing roads, but to interrupt traffic until animals have passed. Therefore, they are effective at night and on roads of low traffic volume. Wildlife reflectors provide an inexpensive solution in comparison with continuous wildlife fencing. They do not reflect light back to a driver, are activated only when a vehicle is approaching, simple in installation and maintenance, and are suitable for most terrains.

472. Thus, overpasses, underpasses and at-grade crossings were assessed as expensive or potentially ineffective structures for the Project, at least in the initial stage of operation. The projected volume of traffic does not warrant recommending these measures. Therefore, the proposed complex of mitigation measures will include:

 Using warning signs and wildlife reflectors in the initial stage of the project operation phase;  Capacity building of the Administrations of Specially Protected Areas in Khovd and Bayan-Olgii aimags. They will be responsible for collection of additional information on wildlife migration

51 Government of Mongolia. 2007. EIA. Ulaanbaatar. 52 Government of Mongolia. 2007. EIA. Ulaanbaatar. 108

routes and behaviour of animals to provide recommendations on feasible mitigation measures when the traffic increases in close cooperation with WWF and WCS;  Preparation of Protected Area Management Plan for the Mankhan Nature Reserve; and  As traffic volumes increase, the database should be sufficient to provide a framework to assess whether additional mitigation measures (e.g., overpasses, underpasses) are required.

473. Anti-Poaching. Despite local environmental protection authorities and international organizations making a major effort to control poaching in the project area, their success is still limited. Improved accessibility as a result of road construction will require additional measures to be taken. The mitigation measures will include two major strategies:

 Strengthen anti-poaching units. This task is currently addressed by WWF with assistance of other NGO’s.  Preventing illegal trade. The capacity of Customs at Russian/Mongolian border and especially Mongolian/China border should be strengthened not to allow poachers and illegal traders to smuggle Saiga horns, skins of rare animals, and other animal products. The training course for customs and border officers should include such issues as Saiga illegal market, identification Saiga horns, revealing illegal traders and creating awareness.  Preparation and implementation of Protected Area management Plan will assist in minimizing the adverse impacts of poaching in the Mankhan nature Reserve. 7.5 Socio-Economic Impacts

Relocation

474. No permanent structures including houses have been reported from the ROW or close to the ROW. Stone structures that can be disassembled and rebuilt could be located close to the ROW in the interim period between this report and construction. However, the impermanent nature of these structures facilitate these being relocated further back from the alignment without any significant impact.

Non-transport Infrastructure

Potential Impact

475. Potential impacts to non-transport infrastructure include:

 Water Supply Systems. The Project will have no direct impact on area water supply systems.  Sewerage Systems. The Project will have no direct impact on sewerage systems.  Energy Systems. The Project will have no direct impact on area energy systems. The coordination with local authorities will be required where construction works can affect power lines close to town areas.  Waste Disposal. Potential waste disposal impacts could occur due to the improper disposal of construction waste, waste oil and solvents, and human waste from construction camps.

476. Mitigation. Mitigation related to potential non-transport infrastructure has been assessed as follows:

 Water Supply Systems. Project contract documents will contain provisions requiring pre- construction monitoring of existing water quality to provide a baseline for the measurement of impacts during the construction period. Routine water quality monitoring will also be required in areas of high potential impact (river crossing sites, construction camps, and other areas with potential to contaminate runoff) during the life of the Project.  Sewerage Systems. None required other than coordination with local officials.  Energy Systems. None required other than coordination with concerned officials. 109

 Waste Disposal. Contractual requirements for the Project will include enforceable provisions for the proper disposal of waste. Implementation and enforcement of the provisions will be the responsibility of the Supervising Engineer.

477. Site-Specific Considerations. No site-specific measures with regard to infrastructure beyond those recommended for incorporation in the Project and detailed above are required.

Transport Infrastructure

478. Potential Impacts on Transport Infrastructure. There will be some impact on road transport during the construction period due to detours and traffic inconveniences. After construction, the primary transport impact of the Project will be improving the performance of the transport sector and greatly facilitating the flow of traffic, goods, and travellers.

479. Mitigation. It is recommended that contracts specify that care must be taken during the construction period to ensure that traffic disruptions are minimized. No mitigation actions related to transport, other than those actions already incorporated in the Project, are required.

Historical and Cultural Heritage

480. Potential Impacts on Historical and Cultural Heritage. Some impacts on archaeological and cultural heritage locations could be encountered during the construction period, especially if new sites are encountered during construction.

481. Mitigation. The contractor will prepare a Cultural Heritage Management Plan to manage any sites that may be encountered during construction. If a historical, cultural or archaeological relic is encountered along the project alignment, all construction activities will halt and the established action plan will be implemented (notification of soum/district governor, Institute of Archaeology, and local police). Work will recommence only after appropriate measures have been taken as requested by the appropriate authorities and confirmation is received that work may resume.

Health Issues

482. Health Impacts. Human health risks associated with the Project during construction or operation phases can include:

 Facilitation of the transmission of diseases. During construction, there will be an increased risk of work crews spreading socially transmitted diseases such as HIV/AIDS. Improvement of the road section and the resultant increase in traffic densities would supply improved conduits for the transmission of such diseases.  Contamination of local water supplies. Potential impacts to local water supplies include the possibility of contamination by the water supply and wastewater disposal systems associated with the labour camps during the construction period. Contract provisions to ensure that these facilities are properly sited should be incorporated in all Project bid documents.  Air quality decline. No significant impacts on air quality and consequently public health are anticipated from the Project. The construction of the paved road will contribute to decreasing dust concentrations in ambient air.  Noise Pollution. No significant impacts on sensitive receptors with health consequences are anticipated.  Safety. Improved road will result in increased traffic speeds. Engineering efforts have been undertaken to reduce the likelihood of accidents and users will be educated about the risks of high speed. Traffic laws will be enforced.

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Impact on Livelihood of Herdsmen

483. Potential Impacts. In moving their herds herdsmen cross the existing alignment freely and they will continue to do so even after the road is built. The new road formation could be a potential barrier to the free moving of the herds. However, during consultations with herdsmen they of the view that the road formation would not be a barrier for the herds to move around provided the embankment height is not prohibitive. In fact they were of the view the traffic on the roads could be slowed by herds crossing the road.

484. Mitigation. The road embankment will be of limited height through pasture lands and road signs should warn drivers of herd crossing.

Construction Camp Impacts and Management

485. Potential effects of construction camps are competition for local sources of water, sewerage facilities, energy systems; solid and liquid waste generation, poaching and illegal trade, spilling of lubricants, hazardous materials, etc. Before the construction activities will commence the contractor will prepare and submit a Construction Camp Management Plan that will propose preventive/mitigation measures for environmental impacts of the construction camp, construction yard including fuel storage, filling station and vehicle washing sites.

Occupational health and Safety Management

486. Potential impacts of construction activities on the construction workers will be managed through an Occupational Health and Safety Program prepared and submitted by the Contractor prior to commencement of construction activities. The objective of the Program will be to ensure the safety of the workers. The management measures will include provision of adequate warning signs, providing safety equipment and gear as skull hats, shoes etc. and other requirements as per Mongolian law. The program will include occupational safety and health training modules for the workers.

7.6 Climate Change Impacts

487. Definitive signs of climate change are already evident in Mongolia as in other countries in the world, but in Mongolia’s case it has some unique problems. Because of its location, fragile natural ecosystems, the lifestyle of the people and the economic situation, Mongolia is relatively sensitive to climate change. Therefore, climate change issues are as important to Mongolia as much as they are to coastal countries.

488. Mongolian people have been living as nomads for thousands of years and the risk caused by weather is still the same. Studies show that in the last 40 years certain impacts of climate changes have already been observed.53 Temperature due to global warming in Mongolia has increased and is projected to increase up to 5oC by end the 21st Century.54 The occurrence of disturbances in climate and geophysical systems has already been observed and is projected to intensify in magnitude and frequency. It warrants serious consideration. In the coming century, climate change will probably radically change the traditional way of living that was established in Mongolia thousands of years ago. Impacts resulting from observed climate change cause high damage not only to the livestock sector but also to the ecology and socio-economic sectors.

489. Climate change Impacts identified include: extreme hot and cold weather; drought and decreasing water resources in the country, especially in Gobi desert areas; dzud (harsh winters); dust, sand storms and desertification; flooding in some areas; melting high mountain glaciers and snow caps; and degradation of land surfaces by melting permafrost.

490. As a result of climatic variability and the impacts of climate change in the last forty years, Mongolian ecosystems have been notably altered. These changes have caused desertification, water supply shortages and natural disasters. Further, these changes affect the environment and lead to financial, environmental and human losses.

53 Ministry of Environment, Nature and Tourism, Mongolia. 2009. Mongolia: Assessment Report on Climate Change 2009. Ulaanbaatar. 54 Ibid. 111

491. Conversely, global warming could bring some benefits to countries that endure harsh weather like Mongolia. These benefits include, for example, milder climates and more pleasant temperatures which will lead to a decreased need for energy consumption. However, the benefits are outweighed by the drawbacks for the country. As the global temperature rises, atmospheric circulation patterns are likely to change with alterations in the frequency and seasonality of precipitation. This will cause a variety of secondary effects such as increased severe weather events, and potential effects upon the biosphere. These will affect public health, comfort, life style, economic activity and the environment in a negative way. Therefore, the need to enhance the beneficial impacts and reduce the adverse impacts of climate change is of utmost importance.

492. The specific changes already observed in Mongolian climate are described below.

Air Temperature Changes

493. Since 1940, the average annual air temperature in Mongolia has increased by 1.9оС. Locally, the warming trend is slightly higher in the mountainous areas (2.0оС to 3.7оС) and lower in the Gobi desert and steppe areas (0.7-2.0оС).55

494. Due to this warming, surface evaporation has increased by 10 percent in last 40 years (10-12 percent in forest-steppe and steppe areas and 7 to 9 percent in mountainous and desert areas), the duration of ice cover on rivers and lakes has shortened by 2 weeks, the thickness of ice on rivers and lakes has decreased, the number of days with stable snow cover has decreased, the stable snow cover has started to melt earlier than usual, and glaciers and permafrost have melted. The lengths of cold waves have shortened, while heat wave lengths have increased by 10 to 12 days in region of Mongol Altai Mountains. The date of soil melting in the spring has moved forward 3 to 6 days and the date of soil freezing has been delayed by 4 to 8 days.56

495. In 2003, a census of water bodies was taken. According to the census, there were a total of 5,097 rivers, 9,582 springs and 372 rivers of which 1,158 springs had dried up since the last count.57

Precipitation Amount Change

496. Precipitation changes in Mongolia can be classified by stations: since 1961 Altai mountain region, Altai Gobi and in the eastern part of the country has increased, and in all other regions has decreased by 0.1 mm/year to 2.0 mm/year The central region of Mongolia has been observed to have the most precipitation decrease where 95 percent reliable precipitation decrease was observed. In Gobi Altai, precipitation has been observed to increase with 95 percent reliability. One of the indications of precipitation change is increasing amount of thunderstorms during the vegetation period. According to the observation results of Arvaikheer weather station, the number of thunderstorms have increased by 18 percent between 1979 and1996. Although the observation period is not so long, it is one of the indicators of precipitation change.58

Accentuation of Natural Hazards

497. As a consequence of the warming, occurrences of convective phenomena such as thunderstorms, flash floods, and heavy rains have been increasing.

498. Frequently, the country is hit by dzuds. These are described as a succession of a very dry summer, an extremely cold autumn and a harsh winter which deprives livestock of grazing, often leading to high livestock mortality rates. Mongolia is highly dependency on keeping livestock. The poor rural people in the Project provinces of Khovd and Bayan-Olgii are highly vulnerable to climate-related extremes and hazards. This occurrence of dzuds has been frequent in the last 11 years. In the period 1999 to 2002 three consecutive dzud years killed nearly 10 million livestock59 and many rural households were struggling to survive. Again in early

55 Govt of Mongolia, 2010, EIA for TA No. 7449-MON. 56 Ibid. 57 Ibid. 58 Ministry of Environment, Nature and Tourism, Mongolia. 2009. Mongolia: Assessment Report on Climate Change 2009. Ulaanbaatar. 59 Ministry of Environment, Nature and Tourism, Mongolia. 2009. Mongolia: Assessment Report on Climate Change 2009. Ulaanbaatar. 112

2010 another dzud occurred. By the end of April 2010, more than 7.8 million head of livestock (about 17% of all Mongolia’s livestock) had perished nation-wide.60 The loss of livestock, as well as a falling livestock birth rate, has had a devastating impact on affected herders and rural communities. Recurring drought events have also led to reduced pasture growth and desertification.

Permafrost

499. Over the past 30 years, a seasonal thawing in the active soil layer in the permafrost region has increased by 0.1 cm to 0.6 cm in the Khentii and Khangai mountains and by 0.6 cm to 1.6 cm in the Khuvsgul Mountains. The seasonal permafrost level in the active soil layer in the eastern part of Mongolia has decreased by 10 cm to 20 cm over the last 90 years.

500. The Government of Mongolia has taken several steps to deal with environmental and natural resource issues. However, there is still no law or any regulation mechanism specifically addressing climate change related problems.61 Without a strong institutional environment, it is very hard to implement any adaptation policy or measure. There are already a significant amount of policy documents relevant to the issue of climate change adaptation available.

Transport Sector

501. As well as adaption measures the Government of Mongolia could also focus significant efforts on mitigation measures. Reducing greenhouse gas emissions and energy consumption are important goals for the nation and the transportation sector. Both goals are increasingly compelling.

502. Currently the Mongolian railway are carrying 96 percent of national freight, with 1,815 km of railways connecting Russia, China and big domestic industrial cities including Darkhan, Erdenet and Sukhbaatar.62 The Ulaanbaatar Railway has made a valuable contribution to the growth of the Mongolian economy and played a historical role in the development of a national transportation network, connecting new industrial areas, mineral resources and deposits, and the most populated villages.

503. Fuel consumption in railway is high due to usage of old and inefficient diesel locomotives. One possible solution would be installation of electric railway system and use electric locomotives which would lead to increases in efficiency of railway transportation; and reduction of fuel consumption.

504. Air Transportation Since 2006, the air transportation sector has been in decline and passenger traffic has dropped off.63 Due to the high cost to travel by air, most domestic passengers are choosing instead to drive or travel by train.

505. Road Transport The main characteristics of road transportation sector in Mongolia are:

 Approximately 75 percent of all cars are being used for more than 9 years;  Mongolia is using petrol mainly imported from Russia and its emission factor is same as stated in the IPÑC; annual average distance traveled by a car is approximately 28,000 km;  The level of combustion efficiency for older vehicles is under average due to their engine condition; and  The number of cars has been increasing from year to year and its percentage in overall vehicles is more than half as shown in statistics of 2006. In last 15 years, Mongolia has imported many used cars from Japan, Korea and other countries.

506. Project Impacts Based on the traffic data of the EIA 2007 the annual Greenhouse Gas the road section Baga Ulann Davaa to Mankhan is estimated to generate are:

60 UNDP Mongolia country Team, Consolidated Appeal, 2010, Dzud appeal. 61 Ibid. 62 Ministry of Environment, Nature and Tourism, Mongolia. 2009. Mongolia: Assessment Report on Climate Change 2009. Ulaanbaatar. 63 National Statistics Office of Mongolia, 2009, Mongolian Statistical Yearbook. 113

Year ADT GHG Tons/year 2006 218 (all vehicle types) 1989 2032 (with project) 4967 (all vehicle types) 45321

Technology Needs in Road Transportation Sector

507. The impact of the GHG level elevation due to increase in traffic resulting from the road development is not expected to contribute significantly to adverse climate change. Nevertheless, the following technologies, though beyond the scope of this project, could be adopted in long term GHG control strategies at the national level in the transportation sector:

 improve vehicle technology - Hybrid vehicles;  use low carbon fuels;  moderate or reduce VMT (including VMT reductions through land use changes, gas guzzler tax); and  reduce energy/carbon associated with construction, maintenance, operation.

Country specific strategies:  eliminating traffic problems in Ulaanbaatar;  promoting public transport systems;  increase vehicle service to improve fuel efficiency; and  modal shifts from road transportation to rail.

7.7 Cumulative and Induced Impacts

508. By expanding the temporal and spatial dimension of the proposed WRRC project’s (the entire project’s) planning horizons, it is possible to visualize a number of cumulative impacts. Given below are events that may cause cumulative impacts:

 Although there are no large scale development projects in the Project Area, synergetic impacts of the road construction and several regional mining developments can produce a cumulative impact to the fragile mountain environment. Among this developments are planned to commissioning coal deposit in most soum and silver deposit near Tsagaannuur. Environmental assessments for these projects shoud consider this EIA in development of correspondent EMPs.  Among induced impacts of the road development is the expansion of tourism and construction of corresponding tourist infrastructure. Despite the seasonal character of tourism in the project area, inflow of a greater amount of tourists with the construction of the road can generate additional impacts to the Altai Eco-region. Therefore, the development of a middle term program of tourism sector development in Mongolian part of the Altai Eco-region, considering the current Project, is desirable.  Synergetic impacts of global warming and anthropogenic effects on permafrost areas (construction of the project road). As was mentioned above, since 1940, the average annual air temperature in Mongolia has increased by 1.9° with the warming trend higher in mountainous areas (2.0-3.7°С). Poor road construction practices in permafrost areas within the background of this global process can cause increased degradation of permafrost and development of dangerous process such as thermokarst. Careful engineering design of the road in permafrost areas to avoid disturbing the existing heat exchange equilibrium and a detour of thermokarst topography should be applied.

509. On the other hand, the construction of the entire road may result in positive cumulative impacts. For example, multiplicative effect of erosion caused by earthen multi-tracks and overgrazing in foothill areas is expected to be substantially reduced with the construction of the paved road.

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8 PUBLIC CONSULTATION AND INFORMATION DISCLOSURE

8.1 Stakeholder Workshops

510. In accordance with ADB Safeguard Policy (2009) Environmental Assessment Guidelines at least two rounds of stakeholder workshops should be organized for category A projects: (i) once during the early stages of EIA field work; and (ii) once when the draft EIA report is available, yet prior to loan appraisal by ADB.

511. Two rounds of public consultations have been held for the entire road corridor of the Western Regional Roads Project during the preparation of the EIA 2007.64 These consultations were conducted for the full 748.4 km length Western Regional Road corridor. These were held mainly in Khovd and Oligii and included public from the project affected area of the present project from Khovd to Buraatyn Davaa. The details of these early rounds of public consultations as documented in EIA: 2007, are given below. Further consultations are planned by the Consultant prior to commencement of construction.

512. The first round of consultations was organized in Khovd and Bayan-Olgii aimags on 24 and 27 March 2007, respectively. The stakeholders included local administration, environmental authorities, representatives of specially protected areas, NGOs, international organizations, environmental inspectors, and other concerned individuals. About 40 people actively participated in the workshops. The stakeholders provided a number of useful scoping recommendations and additional published and unpublished sources on biophysical and socioeconomic resources.

513. The second round was organized in Khovd and Bayan-Olgii aimags from 26 to 30 May 2007 (Bulgan – May 26, Most – May 28, Manham – May 28, Khovd – May 29, Olgii – May 31, and Tsagaannuur – May 30) after draft versions of EIA/SEIA65 reports were prepared and the SEIA report was distributed to the stakeholders in Khovd and Olgii. The stakeholders included local administration, environmental authorities, representatives of specially protected areas, NGOs, international organizations, environmental inspectors, and other concerned individuals. In total about 280 people participated in the second round of workshops. The stakeholders provided their comments to the EIA document and provided a number of additional useful recommendations on the project.

8.1.1 First Round

Khovd

514. Some 25 persons representing local government officials, Government environmental, infrastructure and inspection organizations, NGO’s, representatives of Khovd University and the general public attended the Khovd workshop. Discussions took place on a range of issues associated with the type of EIA, and the alternative alignment for Khovd town.

515. There were 13 written responses from the participants. Of these, 7 were comments on environmental and socio-economic benefits of the road in this remote region and on improvement of trade and cooperation with neighboring countries. The development of the aimag is highly dependent on infrastructure development. Two proposals were recommendations to assess a population of Mongolian Saiga that occur in Mankhan Nature Reserve prior road construction.

516. Concern was also expressed on the general lack of road project information and information on whether the proposed road would run through Khovd town. The opinion was that if the road will pass through the town, resettlement will pose a serious issue. A few people mentioned some negative environmental and social impacts related to poaching and increasing number of crimes, and recommended protection and prevention measures to be taken. It was also mentioned that construction of the road in the Altai–Sayan Ecoregion from Mongolian side will present less negative impacts on bio-resources as compared with road construction in China and Russia.

64 Government of Mongolia. 2007. EIA. Ulaanbaatar. 65 Ibid. 115

Olgii

517. Sixteen persons representing government officials, government environmental and inspection organizations, and NGO’s participated in the Olgii workshop. Discussions took place on a range of issues associated with the proposed road alignment, alternatives and their lengths, construction priority of the road sections, EIA, current condition of quarries and their rehabilitation, special protected areas along the road, and migratory routes of ibex and wild sheep.

518. There were 13 written responses from the participants. Of these, 8 were comments on environmental (land decline and degradation) and socio-economic (reduction of unemployment, saving money and time, development of tourism and other infrastructure) benefits of the road in the aimag.

519. Since the road crosses migratory routes of animals inhabiting national parks, the major issue raised was the location of the road in the vicinity of Tsambagarav National Park and between Siilkhem National Park areas (A) and (B). Four provided recommendations on mitigation measures such as constructing embankments on the same level as the land surface near NP’s, or designing underpasses, providing information and warning signs at the entrance and exit of the buffer zone of NP’s, and avoiding rest areas in buffer zone of NP’s.

520. The participants expressed their concern about current usage of construction materials by road construction companies, desertification and land degradation. Several contributors proposed that trees and bushes be planted along the road. Also there was a proposal to construct first the Khovd-Olgii section, as Khovd is the center of the Western region. Another comment was that the construction practices in proximity to environmentally sensitive areas should be flexible enough to not to have adverse impacts on fauna. For instance, the construction of the road near Tolbo Lake should not be planned from April to June, because this is a period of bird breeding near the lake.

8.1.2 Consultations with Government Officers and Experts

521. A separate set of consultations was organized with officers of the Ministry of Nature and Environment, the local administration of specially protected areas, experts of local and Ulaanbaatar office of Altai Sayan Ecoregion project, local environmental authorities, specialists of WWF and WCS in Mongolia, and local scientists. Sensitivity of ecological resources, possible migration routes of wildlife and correspondent prevention/mitigation measures were discussed. Maps of the existing and planned protected areas were passed over to the environmental team of the Project.

522. Local governors and environmental inspectors were consulted at every soum along the road. Baseline information on flora, fauna and archeological findings as well as other comments on potential environmental impacts of the road during design, construction and operational phases was recorded.

523. Additionally, 38 local people were interviewed along the road. First-hand information about wildlife, its habitats and migration routes, archeological and cultural heritage, other environmental resources was obtained. All of them have supported the construction of the road.

8.1.3 Second Round

Khovd

524. Some 18 persons representing local government officials, government environmental, infrastructure and inspection organizations, NGO’s such as WWF and Altai-Sayan Eco-region project, and representatives of Khovd University attended the Khovd workshop. The topic raised during workshop discussions were related to socio-economic benefits of the road, access roads, environmental impacts and mitigation (Mankhan Nature reserve and census of the population of Mongolian saiga tatarica, aimag level protected areas), and archeological and historical sites.

525. There were 11 written responses from the participants. Of these, 5 were comments on the socio- economic benefits of the road in this remote region and on improvement of trade and cooperation with neighboring countries. The development of the aimag is highly dependent on infrastructure development. Four

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proposals recommended conducting more detail survey in order to not affect endangered species in NR’s and NP’s. Two of them recommended avoiding archeological sites and very careful blasting in Bodonch. There were also suggestions about the adjustment of the construction schedule in Bodonch canyon to fit the migratory schedule, employment of local workers, meet the highway standard, payment the royalty of construction materials, planting trees along the road, and requirement of general and detail EIA’s that have to be done before commencement of civil work.

526. Discussions were also focused on archeological sites, Mankhan NR / Saiga, and other environmental impacts. During the discussion archeological lecturer of Khovd University indicated that the amount of archeological data in this aimag is not sufficient. They have just started to register cultural and historical heritages of the aimag in 2005 and it is not yet finished. WWF experts also mentioned that they have done a census on the population of saiga in Sharga and Mankhan NR, together with Academy of Science in January of 2007. During the census, 2,860 saigas were counted in Sharga and Mankhan NRs, Of this number, 15-17 saigas were counted in Mankhan NR. They do this kind of census every 1.5-2.0 years and suggested building a road with a lower embankment within the NR to enable Saiga to cross it safely. They pointed out that positive impact on Saiga could result from the replacement of 260 earthen roads with one paved road as well. There are two aimag level protected areas in proximity to Bodonch Canyon. Their boundaries have not been set yet.

Olgii

527. Sixteen persons representing government officials, government environmental and inspection organizations, and NGO’s participated in Olgii workshop. The list of participants is presented in Appendix E. Discussions took place on a range of issues associated with the draft EIA report, a list of monitoring equipment included in EIA report, capacity of the equipment and human resource, responsibility of monitoring and supervision of organizations, current condition of quarries and their rehabilitation, and waste.

528. There were 8 written responses from the participants. Of these, 4 were comments on the socio- economic (reduction of unemployment, saving money and time, development of tourism and other infrastructure) benefits of the road in the aimag. They indicated the need to increase the number of rangers in NPs and NRs, to involve the local protected area specialists in detailed EIA study, and more precise and professional equipment such as binoculars with night vision, professional digital photo and video camera, for monitoring the animal migratory ways. They wanted to have equipment for monitoring endangered species like ibex, argali and snow leopard and wanted the rangers to be trained on how to use that equipment. Some of the recommendations were about the many lakes between Khashaat Pass and Buraat Pass, to facilitate with drainage system along the road within Olgii town, to design overpasses at migratory locations and lower embankment for small mammals, and to avoid the geodesic reference points.

8.2 Other Public Consultations

529. A separate set of consultations (at Yarant border, Takeshiken border, Bulgan soum, Most soum, Mankhan soum, Khovd town, Olgii town, Ulaanbaishint border, Tsagaannuur village) were organized in addition to the meetings in Khovd and Olgii.

530. During the meetings at Mongolian/Chinese and Mongolian/Russian borders, the custom officers were asked to share their opinion about illegal poaching and trade, capacity to detect and release body parts of endangered species such as saiga horn and whether they need training on that. Cases of poaching and illegal trade have not been registered over the last several years. Cities organize a series of training programs for the custom officers once every two years.

531. During these meetings the major goal was to gather public opinion about negative environmental impacts and mitigation measures. The great bulk of responses were ‘No environmental impacts’, with the exception of Tsangaannuur village. During the meeting in Tsagaannuur, the residents mentioned to take into account the only source of the potable water for the village that may be affected by construction. It was pointed out that the hydrological conditions may be modified as a result of construction activities and amount and quality of water will decrease.

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8.3 Consultations within the Project Area

Khovd-Buraatyn Davaa

532. During the preparation of this EIA the consultants conducted public consultations and discussions with PIU and local government authorities. Public meetings were conducted in Khovd and Olgii aimags while officials from both aimags, and soums and baghs in Olgii were also consulted.

533. On 02 June 2010, the Governor of Khovd aimag was shown the design alignment and his views on the alignment and its development was taken into consideration. He was also consulted on the 03 alternatives to the design alignment in the area. The representatives of relevant Departments in Khovd aimag were consulted (03 June 2010) with regard to planning and implementation of road projects.

534. The Governor of Khovd was of the view that the design alignment did not have major impacts and would benefit Khovd aimag. However, at the field visit after the discussion three other alternative alignments were inspected to assess whether there were other suitable alignments. The general view after the field visit was that from all the alignments the design alignment was preferred.

535. During the discussion with aimag government department representatives, the representatives were of the view that apart from contributing to social and economic development, other development would follow the road development and therefore rehabilitating the road would be very significant. They also expected the developed road to play an important role not only in domestic but also foreign relations and cooperation in regard to exports as well as tourism.

536. On 3 June 2010 community in a ger camp in Kovd area was consulted in regard to impacts of the road project. The community members were given the details on the project alignment and other details of potential impacts of construction works. All of the ger community present considered the development of the road as very important and considered the impact on air and water as insignificant. They maintained that it would facilitate their animal husbandry and obtaining vegetables. It would also assist their access to medical facilities at the Provincial center 25 km away. Even though the community had few vehicles, they expected that public transport would be available subsequent to development of the road. They were also willing to participate in construction work of the road. They also requested that crossings be provided to assist their herds to cross the road.

537. Community in Hongor Ulun Bagh and the Governors of Hongor Ulun bagh, and Tolobo soum were consulted along with State Environmental Inspector of Tolbo soum (20 June 2010) in regard to alternative alignments in the lake area.

538. The community members and the officials were provided with details of the alignment traversing the lake area. All community members who participated in the meeting were in agreement/understanding that there was a need for change of alignment in the lake area and were of the opinion that the design alignment may negatively affect the lakes.

539. After the meeting the soum and bagh Governors and State Environment Inspector based in the Tolbo soum and the community made an inspection of the alternative alignment (Alternative 1) and a newly identified alignment (Alternative 2). Local authorities and local community members explained that Alternative 1 which bypasses lake area on the northern side traverses on swampy areas and close to two springs. They believed that the springs could dry up. The general view of the community and the officials was that Alignment alternative 2 would be of less adverse impacts.

540. Tolbo Soum Governor, Ms.Kh.Saulesh, also presented an official letter containing the wish of the local authorities and people to change the existing design alignment to the new alignment (Alternative 2) identified by them.

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Baag Ulaan Davaa-Mankhan

541. Community around the Mankhan Soum was consulted at a community meeting at the Bayangol Bagh Center where 21 local residents including 06 women participated with Citizen Representative and Khural Head PurevdashTserendorj in the chair. Inhabitants of the ger camps along the road and herdsmen were also consulted.

542. The view of the community was that while they appreciated the benefits of road development the road impacts on 46 ha of agriculture and pasture land should be avoided. Further, they believed a proper road, where the embankment height will not be a barrier for free moving of their herds, would be better at avoiding natural risks such as road closing from heavy snow fall in winter time in the high slopes of Baga Ulaan Davaa area.

543. At the meeting held at Khovd Deputy Governor’s Office where the Deputy Governor, Tumendemberel, Head of Environmental Department, Ts.Gantulga, Supervisor in Environment and Tourism Center and A. Nansalmaa Environmental officer and Biodiversity and Specially Protected Area Specialist participated, the following observations were made.

544. They did not believe that an alternative alignment is required in the Mankhan Reserve Area as Mankhan NR boundary is delineated for the purpose of protecting natural habitat of Saiga Antelope. Besides the Nature Reserve boundaries are quite outdated now and do not fully accommodate the current population distribution of Saiga Antelope. Ts.Gantulga has been involved in Mankhan NR boundary defining process in 1993. The Saiga population in the reserve is isolated from other populations in the region and is very small in numbers; roughly estimated as 10-25 individuals. Further, the Saiga are already adapted to traffic movement and noise from unpaved earth road existing in the area over 30 years. Saiga can be observed on both sides of current earth roads. And during their breeding season saiga move to other places Tsagaan Burgasnii Saari and Taliin Khar Uul area located outside of Mankhan NR.

545. The new alternative would not be economically justifiable and could cause further soil erosion.

546. At the consultation with the Khovd Branch head of WWF, D.Tseveenravdan, it was pointed out that only about 20-30 Saiga survive in the Mankhan Natural Reserve area now and they are adapted to crossing the road. However, care should be taken to ensure that the road embankment height will not be a barrier for Saiga to roam across the road freely in this area.

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9 GRIEVANCE REDRESS MECHANISM

9.1 Introduction

547. Every effort was taken to facilitate and encourage public participation in the preparation process of the Environmental Impact Assessment (EIA)66 during the Feasibility Study for the Western Regional Road Corridor, and in preparing the present EIA for the road section from Bagga Ulaan Davaa to Mankhan. Further, the public will also be encouraged to participate in monitoring the implementation of the EMP during the construction phase of the Project. Nevertheless, unforeseen problems and issues may still arise due to construction and operational impacts. Therefore, to resolve these issues, the IA will establish a mechanism to receive and facilitate resolution of affected peoples’ concerns, complaints, and grievances about the Project’s environmental performance. It should be emphasized that this grievance redress mechanism related only to the project’s environmental performance.

9.2 Objectives of Grievance Redress Mechanism

548. A grievance redress mechanism (GRM), consistent with the requirements of the ADB Safeguard Policy Statement (2009) will be established to prevent and address community concerns, reduce risks, and assist the project to maximize environmental and social benefits. In addition to serving as a platform to resolve grievances, the GRM has been designed to help achieve the following objectives: (i) open channels for effective communication, including the identification of new environmental issues of concern arising from the project; (ii) demonstrate concerns about community members and their environmental well-being; and (iii) prevent and mitigate any adverse environmental impacts on communities caused by project implementation and operations. The GRM is accessible to diverse members of the community, including more vulnerable groups such as women and youth. Opportunities for confidentiality and privacy for complainants are to be honoured where this is seen as important.

9.3 Current Practice

549. Under the current system (Figure 9.1), when people are affected by project activities they can complain to the contractor, local Governor’s office, Environmental Department (ED) of the local government, the Implementing Agency (in this case PIU/Department of Roads (DOR)) or court of law. Among the agencies involved, the local Environmental Department is the most accessible and has a leading coordination role in dealing with environmental complaints.

Figure 9.1: Existing Complaints Handling System

550. Affected people tend to direct their complaint to the contractor, PIU / DOR or the executing agency-the Ministry of Roads, Transport, Construction and Urban development (MRTCUD), local government, or the environmental department of the local government authority, be it the aimag, soum or bagh, before they finally appeal to the court. APs usually complain to the contractor or the Supervising Engineer in the first instance if they are convinced that the problem is construction related. In case the contractor's response is unsatisfactory, they inevitably proceed to the local government authorities. However, being not directly involved in the construction activities of the project; it is generally difficult for the local government authorities to comprehend the actual on the ground situation. Even if the complaint is directed to the local environmental department, the

66 Government of Mongolia. 2007. EIA. Ulaan Bataar. 120

department will need to conduct their own investigations which will delay redress. Further, it may be difficult for the department to affect a solution as the two parties, the complainant and the contractor, may not agree on the problem and therefore on the rectification recommended by the department. It is possible that the department could make erroneous decisions due to their poor grasp of the facts and the situation. Hence, it would be necessary for the department to consult the PIU or the Supervising Engineer to ascertain the facts and comprehend the situation. This process of fact finding/site investigation will take up a considerable amount of time delaying the outcome. Therefore, the efficiency of problem solving could be increased only if the party who is conversant with the project activities and their impacts takes the leading coordination role.

9.4 Proposed Grievance Redress System

551. In its capacity as the IA, DOR will in consultation with the MRTCUD (EA), will establish a Public Complaints Centre (PCC) in conjunction with local government. The PCC will be established, within the PIU of the DOR, prior to construction to deal with complaints from affected people throughout implementation of the Project. The PCCs will be established in each site office. The local government bodies at the bagh, soum and aimag level will each nominate an officer to act as a focal point for contact with the PCC. The PIU and the local government bodies will issues public notices to inform the public within the project area of the Grievance Redress Mechanism. The PCC’s phone number, fax, address, email address will be disseminated to the people through displays at the respective offices of the bagh, soum and aimag government administrations and public places.

552. The PCC will staffed by an officer from the site office (nominated by the PIU). The officer will be independent of the Supervising Engineer and contractor/.operator. The officer should have experience and/or training in dealing with complaints and mediation of disputes. The PCC officer will have facilities to maintain a complaints database and communicate with Site Engineers, Supervising Engineer, PIU, Governors of aimags, soums, and baghs and also with complainants.

553. GRM Steps and Timeframe. Procedures and timeframes for the grievance redress process are as follows (see Figure 9.2):

 Stage 1: If a concern arises, the affected person may to resolve the issue of concern directly with the contractor/operator and the project manager. If the issue is successfully resolved, no further follow-up is required;  Stage 2: If no ad hoc solution can be found, the affected people will submit an oral or written complaint to the PPC by themselves or through GRM entry points (the bagh, soum or aimag local governments; the EA/IA; or the contractor/operator). For an oral complaint the PPC must make a written record. For each complaint, the PPC must investigate the complaint, assess its eligibility, and identify an appropriate solution. It will provide a clear reply within five (5) working days to the complainant, EA, the IA, contractors. The PCC will, as necessary, through the Supervising Engineer; instruct the Contractor to take corrective actions. The PCC will review the Contractor’s response and undertake additional monitoring. During the complaint investigation, the PCC will work in close consultation with the Contractors, and the Supervising Engineer (for construction) and with the DOR/operator (for operation). The contractors during construction and the IAs/operators during operation should implement the redress solution and convey the outcome to the PPC within seven (7) working days;  Stage 3: If no solution can be identified by the PPC or if the complainant is not satisfied with the suggested solution under Stage 2, the PPC will organize, within two (2) weeks, a multi-stakeholder meeting under the auspices of the head of DOR, where all relevant stakeholders (i.e., the complainant, IA, contractor/operator, relevant local government offices) will be invited. The meeting should result in a solution acceptable to all, and identify responsibilities and an action plan. The contractors during construction and the IAs/operators during operation should implement the agreed-upon redress solution and convey the outcome to the PPC within seven (7) working days;  Stage 4: If the multi-stakeholder hearing process is not successful, the PPC will inform ADB accordingly, and the ADB Project team will organize a special mission to address the problem and identify a solution; and  Stage 5: If the affected people are still not satisfied with the reply in Stage 4, he or she can go through local judicial proceedings.

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554. Reporting. The PCC will record the complaint, investigation, and subsequent actions and results in the monthly Environmental Management Plan reports. In the construction period and the initial operational period covered by loan covenants the EA will periodically report progress to the ADB, and this will include reporting of complaints and their resolution.

9.5 Responsibilities of the PCC

555. The responsibilities of the PCC are:

i. The PCC will instruct contractors and construction supervisors to refer any complaints that they have received directly to the PCC. Similarly, the PCC will coordinate with local government “capture” complaints made directly to them.

ii. The PCC will log complaint and date of receipt onto the complaint database and inform the Supervising Engineer and the Contractor.

iii. The PCC, with the Supervising Engineer and the Contractor, will investigate the complaint to determine its validity, and to assess whether the source of the problem is due to project activities, and identify appropriate corrective measures. If corrective measures are necessary the PCC, through the Supervising Engineer, will instruct the Contractor to take necessary action.

iv. The PCC will inform the Complainant of investigation results and the action taken.

v. If complaint is transferred from local government agencies, the PCC will submit interim report to local government agencies on status of the complaint investigation and follow-up action within the time frame assigned by the above agencies.

vi. The PCC will review the Contractors response on the identified mitigation measures, and the updated situation.

vii. The PCC will undertake additional monitoring, as necessary, to verify as well as review that any valid reason for complaint does not recur.

viii. The PCC will review the Contractors response on the identified mitigation measures, and the updated situation.

ix. During the complaint investigation, the PCC should work together with the Contractors and the Supervising Engineer. If mitigation measures are identified in the investigation, the Contractors will promptly carry out the mitigation. The Supervising Engineer will ensure that the measures have been carried out by the Contractors.

556. The tracking and documenting of grievance resolutions within the PCC and/or PIU will include the following elements: (i) tracking forms and procedures for gathering information from project personnel and complainant(s); (ii) dedicated staff to update the database routinely; (iii) systems with the capacity to analyse information so as to recognize grievance patterns, identify any systemic causes of grievances, promote transparency, publicize how complaints are being handled, and periodically evaluate the overall functioning of the mechanism; (iv) processes for informing stakeholders about the status of a case; and (v) procedures to retrieve data for reporting purposes, including the periodic reports to the EA and including PCC reports into the EA’s report to the ADB.

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Figure 9.2: Proposed Grievance Redress Mechanism for the Project

Grievances/complaints by individuals, groups, or institutions Entry points: Receiving ad hoc problem Solve complaints, solving ad-hoc, forwarding to PPC (max. 5 days) Oral or written Oral or written grievance grievance

GRM Entry Points

Bagh, Soum or Aimag Local Government EA/IA Contractors/Operators

Inform if solved ah-hoc, Forward if not solved Public Complaints Center Supervise, monitor Supervise, PPC: Recording, assessing validity, identifying solution Ineligible (max. 5 days) Record complaint, Inform complainant, refer to assess eligibility of complaint alternative mechanisms (resettlement, re-employment), Inform ADB Eligible

Consult entry points and No Solution found complainant, identify solution, Review and Decision by get complainant’s approval Ministry (max. 2 weeks) Inform complainant, conduct a multistakeholder meeting Solution found convened by DOR to by identify solution and action plan, identify responsibilities Solution found

Implement Solution No Solution found

Implementation (max. 7-14 Report Grievance related Grievance related days) to construction to operations Or ADB intervention ADB Project Team (max. 3 months) (Special Mission) Contractor/IA EA/IA/operator

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10 ENVIRONMENTAL MANAGEMENT PLAN

10.1 Environmental Safeguards

557. The main objective in formulating an Environmental Management Plan (EMP) is to recommend a set of environmental safeguard measures to address the adverse environmental and social impacts of the project. In addition to establishing mitigation measures and implementation responsibilities the EMP will also include monitoring mechanisms to ensure compliance with EMP requirements and environmental regulations of the country. The detailed mitigation measures and monitoring requirements are included Appendix I.

558. In preparing the safe guard measures the following approach was adopted:

 Avoiding the occurrence of adverse environmental impacts was the first priority;  Minimizing the adverse impact was considered next;  Mitigating the adverse impact to its full extent was considered next; and  Compensation was considered when mitigation was not adequate.

10.2 Mitigation Measures

559. In formulating the EMP with the mitigation measures identified in Section 6 the following approach was used. Mitigation actions proposed should be:

 Pragmatic - measures should be readily implementable, effective and practicable;  Efficient - measures should effectively achieve the objectives of environmental management within the limits of available information, time and resources; and  Adaptive - measures should be flexible in order that they can be adjusted to the realities, issues and circumstances of the project without compromising the ultimate objectives.

560. This comprehensive EMP identifies feasible and cost-effective measures to be taken to reduce potentially significant negative impacts to acceptable levels. Specifically it contains:

 Summary of all anticipated moderate / significant impacts;  Description of the correspondent mitigation measures; and  Links to other mitigation plans.

561. This EMP is site-specific, and focuses on the road section from Baga Ulaan Davaa to Mankhan. Although habitations, temporary and permanent both, are sparse close to the road alignment, management and monitoring requirements for water quality, air quality and noise levels were included in the EMP as a precautionary measure. In addition, the EMP also includes indirect environmental impacts and corresponding mitigation measures common to this section and also to other associated project components.

562. The main mitigation measures that are included in the detailed Table A1-1 2 in Appendix 1 are given below:

563. Contamination of Soil. To avoid or mitigate the impacts of soil contamination the contractor is required to implement the Spill Management Plan prepared and submitted by the contractor (as required in Section 10-3 below).

564. Erosion. The following remedial measures are to be implemented by the contractor and will be specified in the contract documents:

 Prevention: o Implementation of a Soil Erosion Management Plan to be prepared by the contractor and to be approved by the Employer before earthworks; 124

o Minimizing the area of soil clearance; o Selection of less erodible material and good compaction, placement of gabions and riprap particularly around bridges and culverts; o Construction in erosion and flood-prone areas should be mainly restricted to the dry season; and o Replanting will be completed as soon as possible following fill placement to facilitate regeneration of a stabilizing ground cover.  Mitigation: o Using geotextile for erosion control in limited areas; o Stepped embankments will be required for embankments greater than 6 m; o Separation of topsoil from subsoil during the excavation works; reuse of topsoil as a superficial layer; o Reshaping the slope surface by notching, blazing and pocking to enhance seedling survivability; o Seeding with a fast growing native species and seed mix, immediately after fill placement; o Stabilization of embankment slopes and road cuts by re-vegetation with grazing resistant plant species; and o Completion of discharge zones of drainage structures with riprap to reduce erosion when required.  Borrow Pits and Spoil Sites: o Use of borrow pits and spoil sites and their restoration plans to be approved by the Employer; o Pit restoration will follow the completion of works in full compliance with all applicable standards and specifications; o Arrangements for opening and using material borrow pits will contain enforceable provisions; o The excavation and restoration of the borrow areas and their surroundings in an environmentally sound manner will be required before final acceptance and payment under the terms of contracts; o Borrow pit areas will be graded to ensure drainage and visual uniformity; o Topsoil from borrow pit areas will be saved and reused in re-vegetating the pits; and o Additional borrow pits will not be opened without the restoration of those areas no longer in use.

565. Permafrost Degradation. Preventive measures will be adopted to avoid permafrost degradation where possible. This will include avoiding areas with poor cryogenic and hydrogeological conditions such as areas close to the surface location of ground ice, perennial icing, frost mounds, solifluction-prone slopes, areas with ice-saturated soils, thermokarst areas and thermokarst lakes. However, if unavoidable, construction practices and mitigation measures to minimize impacts of the road construction in permafrost areas that are being adopted in countries with large northern regions will be used.

566. Flashfloods. Flashflood/stream courses throughout the project area are primarily triggered by rainstorms and heavy rainfall. Two flashflood mitigation options are proposed for the purpose of the Project:

 Directing through culverts. Culverts that will pass sediment/debris/flashflood often are designed as box culverts; and  Flashflood control structures such as check dams, debris basins, or hillside ditches.

567. In addition to these measures, warning signs will be used where appropriate.

568. Drifting snow. In order to minimize the adverse impacts of drifting snow at high altitude passes, snow fencing will be used. The proposed design, fencing made from earth, can be observed in the Tsagaannuur to Ulaanbaishint area.

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569. Air Quality. During construction potential air quality impacts due to the generation of dust and related activities will be mitigated through avoidance strategies combined with construction best practices and monitoring. The civil works contract documents will specify that:

 Asphalt and hot-mix plants will be located at least 500 meters away from the nearest sensitive receptor;  Operators will be required to install emission controls;  Blasting, where necessary, will be carried out using small charges, and dust-generating items will be transported under cover; Blasting mats would be employed where necessary;  Contractors will be required to spray road surfaces, excavation and construction sites to keep them moist for dust control;  Trucks carrying earth, sand or stone will be covered with tarps or other suitable cover to avoid spilling;  Potential significant adverse impacts to adjacent residents or site employees during construction will be mitigated by either discontinuing until favourable conditions are restored, or, if warranted, sites may be watered to prevent dust generation, particularly at crusher plants;  Machinery and equipment will be fitted with pollution control devices, which will be checked at regular intervals to ensure that they are in working order. The best available pollution control technologies will be employed;  Open burning will be prohibited and requirements for spraying and related dust control measures and the proper use of solvents and volatile materials will be in incorporated in the contract documents; and  Pre-construction monitoring of existing ambient air quality will be undertaken in conjunction with each construction package to provide a baseline for the measurement of air quality impacts during the construction period.

570. Routine air quality monitoring will also be carried out in areas of high potential impact (asphalt plants, construction camps, etc.) during the life of the Project.

571. During operation, enforcing emission standards authorized under Mongolian Environmental Law would assist in avoiding air quality deterioration.

572. Water Flow and Water Quality. Potential effects to water flow patterns and water quality will be mitigated through a number of prevention strategies such as:

 Although the number of water crossings will be as minimal as practical every effort will be taken to provide unimpeded flow of numerous streams, rivulets and other drainage flows through temporary or permanent cross drainage structures;  Using materials excluding fine fractions around watercourses; and  Vegetative cover between the road and water bodies.

573. In addition, the following specifications will be included in the civil works contract documents:

 The Contractor should develop and implement contingency plans for control of oil and other dangerous substance spills (Spill Management Plan);  Fuel storage, maintenance shop and vehicle cleaning areas would be stationed at least 300 m away from the nearest water body;  Stormwater drainage and retention basins would be constructed and a silt trap (where a river/stream is nearby) would be installed prior to commencement of construction to control runoff water and sediment and prevent entry of contaminants into a water body;

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 Oil and grease are likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater would be directed into an oil interceptor prior to discharge;  Existing water wells and springs would be clearly marked to prevent accidental damage from construction vehicles; and  Interruption to the flow of small streams, rivulets and other drainage flows will be avoided by marking them and these water bodies will be subjected to regular water quality monitoring during construction in the vicinity.

574. Noise. For mitigation during the construction phase the project contract documents will include specifications that noise impacts will be mitigated by means of:

 Source Controls. All exhaust systems will be maintained in good working order; proper shields, shrouds, and intake and exhaust mufflers will be employed, operation of machinery will be at minimum power, and regular equipment maintenance will be undertaken. All blasting operations should be carried out with limited size charges, and blasting mats used where appropriate.  Construction Site Controls. Stationary machinery will be placed as far away from sensitive receptors as practical.  Time and Activity Constraints. Operations will be scheduled to correspond with periods when people/wildlife would least likely to be affected. Construction activities should be prohibited from April 15 – June 15 near Tolbo Lake (Associated Project).  Community Awareness. Public notification of construction operations will incorporate noise considerations; information procedure of handling complaints through the Grievance Redress Mechanism will be disseminated. Sensitive receptors will be avoided as far as possible. Disposal sites and haulage routes will be coordinated with local officials.  Baseline and Routine Noise Monitoring. Pre-construction monitoring of existing noise will be undertaken to provide a baseline for the measurement of impacts during the construction period. Routine monitoring will also be required in areas of high potential impact as specified in EMP, during the life of the Project.

575. Solid Waste. For waste control during the construction phase, the civil works contract documents will contain provisions requiring:

 Construction of temporary points for collection and disposal of waste and garbage;  Fencing the construction area (if needed);  Reinstatement of lands after completion of construction works; and  Construction of sanitation facilities for construction employees.

576. For solid waste management during operations the following mitigation will be implemented:

 Construction of rest points and parking areas with solid waste bins;  Road signs; and  Awareness campaigns.

577. Habitat Fragmentation and Wildlife Migration Patterns. The proposed mitigation measures include:

 Using warning signs and wildlife reflectors in the initial stage of the project operation phase; and

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 Capacity building of the Administrations of Specially Protected Areas in Khovd and Bayan-Olgii aimags. In close cooperation with WWF and WCS, they will be responsible for collection of additional information on wildlife migration routes and behaviour of animals to provide recommendations on feasible mitigation measures when the traffic increases.

578. Poaching. The capacity of Customs at Russian/Mongolian border and especially Mongolian/China border should be strengthened not to allow poachers and illegal traders to smuggle Saiga horns, skins of rare animals, and other animal products. The training course for customs and border officers should include such issues as Saiga illegal market, identification of Saiga horns, revealing illegal traders and creating awareness.

579. Non-transport infrastructure. Mitigation related to potential non-transport infrastructure has been assessed as follows:

 Water Supply Systems. Project contract documents will contain provisions requiring pre- construction monitoring of existing water quality to provide a baseline for the measurement of impacts during the construction period; and  Waste Disposal. Contractual requirements for the Project will include enforceable provisions for the proper disposal of waste. Implementation and enforcement of the provisions will be the responsibility of the Supervising Engineer.

580. Transport Infrastructure. The contracts will specify that care must be taken during the construction period to ensure that traffic disruptions are minimized.

581. Historical and Cultural Heritage. The Contractor will prepare a Cultural Heritage Management Plan to manage any sites that may be encountered during construction. If a historical, cultural, or archaeological relic is encountered along the project alignment, all construction activities will halt and the established action plan will be implemented (notification of soum/district governor, Institute of Archaeology, and local police). Work will recommence only after appropriate measures have been taken as requested by the appropriate authorities and confirmation is received that work may resume.

582. Health and Safety. Human health and safety risks associated with the Project during construction or operation phases will be mitigated by:

 Contract provisions to ensure that construction camp facilities are properly sited and preparation of Construction Camp Management Plan;  Restrictions on construction workers in utilizing facilities of communities in the area;  Awareness building among community;  Engineering efforts to reduce the likelihood of accidents and education of users about the risks of high speed; and  Enforcing traffic laws.

10.3 Implementation

583. The Project Implementation Unit (PIU) will ensure that copies of this EMP, translated into Mongolian, are made part of the contract documents. The Contractor will be responsible for preparing a specific Environmental management Plan (Contractor’s Environmental Management Plan) based on this EMP, prior to the commencement of construction activities. The Supervising Engineer (SE) will be responsible for reviewing and approving the Contractor’s EMP as well as ensuring that contractors comply with its mandates. Public complaints regarding adverse environmental impacts arising from inadequate implementation of the EMP will be captured through the proposed Grievance Redress Mechanism.

584. While the contractor will include an Environmental Management Officer in the contractor’s staff responsible for implementing the EMP the supervising engineer’s staff will also include an Environmental Specialist for monitoring the implementation of the EMP and managing other unforeseen environmental

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impacts.

585. Before the construction activities commence, the Contractor will prepare and submit other mitigation plans and method statements consistent with the EMP to SE for review and approval. Contract documents shall explicitly indicate the requirement of these plans and also state that all environmental protection measures should be included in the bid price. These other mitigation plans include:

 Soil Erosion Management Plan will include measures to be taken during earthworks to avoid/mitigate erosion arising from cut and fill, stockpiling, stabilization.  Aggregate/Borrow Pits Management Plan will describe work activities; technology, potential environmental impacts, and mitigation measures for aggregate/borrow pits. It should specify that borrow pits and quarries should not be in a protected area. Contractors will ensure that (i) borrow areas will be located outside the ROW (ii) After use borrow pit areas will be graded to ensure drainage and visual uniformity (iii) borrow pit restoration will follow the completion of works in full compliance with all applicable standards and specifications, and (vi) topsoil from the opening of borrow pits will be saved and used to re-vegetate the pits.  Spill Management Plan will document the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response during the first few hours of an incident.  Construction Camp Management Plan will propose preventive/mitigation measures for environmental impacts of construction camp and construction yard including fuel storage, filling station and vehicle washing sites.  Waste Management Plan for operation of contractor’s yard/construction camp will provide procedures for management of hazardous waste, evaluate the type and quantities of waste matter, as well as detail arrangements for storage and transportation of the waste.  Reinstatement/Revegetation Management Plan will be prepared by a qualified ecologist of the Contractor and will include details of revegetation, stabilization of riverbanks and embankments to prevent erosion, planting trees along the road and other appropriate environment enhancement measures.  Cultural Heritage Management Plan will deal with archaeological sites that might be discovered during construction and will be prepared by the Contractor. It should contain emergency measures to be adopted in the event of unexpected discoveries, on-site training of construction staff in relation to cultural heritage, and communication procedures for response to cultural heritage issues.  Bridge Construction Method Statements for the organization and carrying out of bridge construction works will describe the proposed methodology for bridge construction over major rivers and the proposed measures for the avoidance of surface water pollution.

10.4 Implementation Schedule

586. The implementation schedule for the Project Cycle addresses mitigation and monitoring as illustrated in Table 10.1 below.

Table 10.1: Environmental Mitigation and Monitoring Schedule Phase Issue Schedule Mobilization/ Pre- Training for PIU be completed before the beginning 1 time construction of mobilization phase During the SE to review and approve contractor’s management 1 time mobilization phase plans and method statements and forward to PIU During see EMP and Mitigation and monitoring construction monitoring plan

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Phase Issue Schedule Reporting: During Contractor to SE weekly/monthly construction SE to PIU/DOR monthly PIU/DOR to ADB (through MRTCUD) quarterly Mitigation, monitoring of air and water quality, Regularly according During Operation wildlife corridors, efficiency of wildlife reflectors and to monitoring warning signs program

10.5 Environmental Cost Estimate

587. During the construction phase and the operation phase, a number of mitigation and monitoring measures have to be implemented to ensure environmental management and protection. These are listed below with the associated costs in Table 10.2. The total estimated investment in environmental protection is $396,100.

Table 10.2: Environmental Protection Costs Item Unit Quantity Unit Cost Costs ($) A. Mitigation 1. Dust control day 360 200 72,000 2. Drifting snow fence m 500 8.2 4,100 3. Sanitation at construction camps lump sum 25,000 4. Reflective road studs (wildlife warning km 10 300 3000 reflectors) 5. Air pollution control equipment lump sum 20,000 6. Blasting mats lump sum 10,000 7. Protection of drinking water sources lump sum 2,000 8. Solid waste management lump sum 30,000 Subtotal (A) 146,100 B. Monitoring 1. Lab and field monitoring equipment Air quality measurement lump sum 30,000 Noise measurement lump sum 25,000 Water quality measurement lump sum 30,000 2. Ecological monitoring (Administration of SPA) (equipment + vehicles) and lump sum 150,000 Preparation of Management Plan for MNR Subtotal (B) 235,000 C. Social Aspects 1.Public consultation on EMP lump sum 5,000 Implementation 2. Grievance Redress Lump sum 10,000 Subtotal (C) 15,000 Total 396,100 Source: Consultant TA No. 7449-MON.

10.6 Institutional Arrangements

588. Key organizations and people involved in environmental management of the project are as follows:

 The Ministry of Roads, Transportation, Construction and Urban Development (MRTCUD) will be the Executing Agency for the Project and through its Department of Roads (DOR) 130

ensure that environmental management is implemented as required and report to the Steering Committee and ADB.  The Steering Committee will include representatives of different Ministries and Agencies such as Ministry of Finance, Ministry of Health, MNET, and MRTCUD. The Chairperson of the Steering Committee is the State Secretary of MRTCUD.  The Project Implementation Unit (PIU) will reside within the DOR with on-site offices. The PIU through the supervising engineer (SE) will be responsible for overall contract administration and day-to-day project supervision including environmental management.  The Supervising Engineer (SE) will perform the following duties: o supervise site environmental management system of the contractors, and provide corrective instructions; o review the EMP implementation by the contractors; and o report EMP implementation status to the PIU/DOR on environmental inspection and monitoring results.  The Contractor. In the technical specification for the civil works contract, activities to protect environment will be described. During construction, contractors will strictly implement the Contractor’s EMP and undertake self-check activities and fully cooperate with the external environmental inspectors.

589. Bidding documents and detailed design contracts will be prepared and managed by the Department of Roads (DOR) of MRTCUD. Public consultations during the implementation of the EMP will be arranged by the SE/PIU. Construction work will be carried out by a qualified contractor and relevant sub-contractors. The contractor will be responsible for implementing the mitigation and monitoring measures defined in the EMP. To meet this requirement the contractor will appoint an Environmental Manager to oversee this task who will communicate closely with the SE’s Environmental/Social Specialist.

590. Figure 10.1 presents the implementing and reporting structure for the EMP.

131

Figure 10.1: Organizational Chart for Implementing the EMP

Source: Consultant TA No. 7444-MON.

10.7 Capacity Building

591. It was found that the capacity of PIU to undertake responsibilities for carrying environmental management and monitoring is limited. There is little experience in the implementation and management of EMPs and skilled technical staff are not available at either the national or aimag levels. Thus, it will be necessary to embody a program of institutional strengthening and training through the provision of technical assistance and procurement of laboratory equipment and supplies. This capacity building has not been budgeted under the EMP as it will be considered in combination with a proposal on new organizational structure.

592. Technical assistance. One of the main objectives of the training programs is to provide guidance on the goals, methods and procedures for environmental management appropriate for road development activities. This will cover aspects of environmental monitoring, specially protected areas issues, and wildlife management. Training is recommended for the PIU construction supervision staff, environmental/social officer, selected contractor personnel, and environmental staff at the local government level. In-country on-the job training by an international expert is preferred to external training to ensure that the Mongolia situation is fully taken into account, including both its physical and administrative circumstances.

593. Capacity building recommendations also include joint environmental inspections. PIU and MNET will regularly undertake joint inspections of the environmental aspects of the Project, and include the results of the inspections in the project quarterly reports submitted by DOR through MRTCUD to ADB.

594. Procurement of monitoring equipment. Instrumental environmental monitoring of the Project is a responsibility of the contractor. Verification monitoring can be conducted using the equipment of the PIU/Supervising Engineer and equipment procured through the financial assistance for the Project. With the purpose of building capacities of DOR after completion of the Project, the latter is recommended. The project monitoring equipment will be passed over to a new department under DOR as proposed below under Organizational Changes.

595. Organizational Changes. As was noted above, the capacity of DOR/PIU for environmental management is low. A recommendation to establish an Environmental/Social Officer position within PIU is a temporary measure specific for this particular project. Given the necessity for future road development projects and inclusion of environmentally sensitive areas and ecological resources in Mongolia, there is a strong demand for institutionalization of environmental aspects within MRTCUD. Establishing an environmental management and safety department under DOR can be recommended as a first step to ensure sustainability in road transport sector. One of the responsibilities of this department could be the development and 132

implementation of an environmental policy in transport sector.

10.8 Environmental Monitoring

596. The monitoring framework for the Project is summarized in Table A1- 2 in Appendix I. Monitoring activities include site supervision, verification of permits, monitoring environmental impacts such as noise, air and water pollution as well as wildlife migration routes.

597. It is recommended that construction contracts include that instrumental monitoring of air quality, water quality and noise levels should be carried out prior to commencement of construction to establish a baseline against which impacts can be measured. The locations for baseline monitoring may be determined in consultation with SE and MNET and local government environmental inspectors. Contingency provisions should be included for additional air and water quality, as well as noise monitoring at the request of the SE/MNET if warranted by events.

133

11. CONCLUSION

598. The major anticipated direct (D) and indirect (I) environmental impacts on physical resources during road construction (C) and operational (O) phases and correspondent mitigation measures include:

 Negative o Permafrost: Construction activities can accelerate thermokarst processes in high-mountain tundra (D, C); o Mitigation: proper design and environmentally sensitive construction practices; o Soil: Erosion processes in mountain terrain (D, C); o Mitigation: proper design and environmentally friendly construction practices; o Natural hazards: Flashflood-prone areas and Drifting snow (D, C, O); and o Mitigation: engineering measures.

 Positive o Air Quality: Construction of a paved road will substantially decrease the concentration of dust in air. (D, O); o Water Quality: Construction of bridges excludes pollution of water with suspended particles and oil products from vehicles crossing the rivers directly; and o Soil: Decreased soil erosion resulting from the elimination of multiple earthen trucks (D, O).

599. The major anticipated direct (D) and indirect (I) environmental impacts on ecological resources during road construction (C) and operational (O) phases and correspondent mitigation measures include:

 Negative o Fauna: Moderate impacts on wildlife migratory routes are anticipated in a in the Mankhan Nature Reserve (Saiga) and other corridors used by wild life (I, C, O); o Poaching: Increased accessibility of fauna, impacts on Saiga, ibex, snow leopard and other Red Book listed species (I, C,O); and o Mitigation: Warning road signs and Management Plan; poaching control, in coordination with anti-poaching capacity building and raising awareness of public training for custom/border officers on illegal trade and provided by other organizations and projects.  Positive o Flora: Decreased impacts on flora resulting from the elimination of multiple earthen tracks (D, O).

600. The major anticipated direct (D) and indirect (I) environmental impacts on socio-economic resources during road construction and operational phases include:

 Positive o Economic development: Increased opportunities for economic development of the region (I, O); and unemployment reduction. (D, C, O); and o Transport development: Improved access to social infrastructure (D, O).

601. The Project will have some negative and positive, direct and indirect environmental impacts on physical, ecological and socio-economic environment during the road construction and operation phases. The proposed alignment is on an existing track and it is on these track that the road construction will be carried out. Further, the adverse impacts during construction are temporary and could be minimized by proper planning, good construction practices and implementation of the proposed mitigation measures and monitoring programs. Thus, these impacts are not expected to pose any threat to the environment.

134

602. Assuming effective implementation of the mitigation measures and monitoring requirements as outlined in the Environmental Management Plan (Chapter 10 and Appendix1), the Project is not expected to have significant adverse environmental impacts.

135

APPENDIX I

ENVIRONMENTAL MANAGEMENT PLAN

TABLE A1-1: DETAILED ENVIRONMENTAL MANAGEMENT PLAN

TABLE A1-2: ENVIRONMENTAL MONITORING FRAMEWORK

.

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TABLE A1-1: DETAILED ENVIRONMENTAL MANAGEMENT PLAN Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision I. Pre Construction Phase 1. Fauna Capacity building of Dept. of Special Administrations of Specially At pre- Protected Areas Protected Areas in Hovd and Construction, Administration Wildlife corridor Mankhan Mankhan Nature Construction 50,000 + 100,000 and Management DOR/MNET restrictions Studying/Monitoring wildlife routes Reserve, and post in coordination and animal behaviour Construction with WWF and Preparation of Management Plan phases WCS for Mankhan Nature Reserve 2. HIV/AIDS/STIs, Communicable Diseases, and Human Trafficking Pre Awareness Raising Campaign for Included in construction Project Area PIU/DOR MRTCUD local population1 HIV/AIDS budget and construction 3. Public Consultation on EMP Implementation Public consultations conducted to disclose information on the EMP and its implementation process People’s opinion Pre and obtain the opinions of on the EMP construction environmental experts and 5,000 Mankhan PIU/SE DOR Implementation and general public on the detailed construction design in environmentally sensitive areas and other affected areas Reporting project Provided under Training PIU on project Pre environmental capacity building - DOR MRTUCD environmental reporting construction monitoring of PIU II. Construction Phase 1. Grievance Redress Official in charge of people’s Throughout the Project Before Grievances grievance will be designated in 10,000 PIU/DOR MRTCUD alignment construction DOR and PIU.

1 Provision for HIV/AIDS prevention campaign for workers will be included in work contracts. CXXXVII

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision A leaflet outlining environmental protection measures and listing grievance contact points will be distributed. Community leaders will be given detailed information on the grievance management process NGOs will be informed in the same manner as the community leaders. 2. Soil Preparation of a Soil Erosion management Plan Areas of soil clearance should be minimized; Less erodible materials should be selected and good compaction, placement of gabions and riprap particularly around bridges and culverts Stepped embankments will be required for embankments greater than six meters. Separation of topsoil from Included in the throughout the Project subsoil during the excavation Construction Soil erosion main civil works area Contractor SE/PIU works; reuse of topsoil as a Period cost superficial layer; Reshaping the slope surface by notching, blazing and pocking to enhance seedling survivability; Seeding with a fast growing native species and seed mix immediately after fill placement; Stabilization of embankment slopes and road cuts by re- vegetation with grazing resistant plant species; Completion of discharge zones from drainage structures with CXXXVIII

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision riprap to reduce erosion when required. Down drains/chutes lined with rip-rap/masonry or concrete to prevent erosion. Construction in erosion and flood-prone areas should be restricted to the dry season Using geotextile for erosion control will be limited but might be justified in some locations. Precautions in designing of roadbed in embankments; Erection of the roadbed of rock, coarsely clastic rock and sand soils, Using natural and artificial heat- insulating materials in subgrade, embankment and road Included in the pavement; Construction Permafrost main civil works In permafrost areas Contractor SE/PIU Using non-woven synthetic Period cost materials (geotextile) in subgrade and embankment Replacement of waterlogged soils of seasonally thawing layer and ice-saturated underlying permafrost with coarsely clastic rock and sand soils correspondingly. 3. Natural Hazards Included in the Installation of box culverts Identified flash flood Construction Flashfloods main civil works Contractor RSRC/PIU Warning signs prone areas phase cost Blowing and Baga Ulann Pass and Construction Installation of snow fencing 4,100 Contractor SE/PIU drifting snow Bodonch Canyon phase 4. Air Quality Generation of All earthwork vehicles shall be Construction sites, Construction 72,000 Contractor SE/PIU dust covered to avoid spillage asphalt plants phase

CXXXIX

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision Material storage site should be 300 m away from residential areas Water will be sprayed on the construction sites and major feeder roads twice a day during dry season The asphalt batching plants/ crushing plants must be fitted with dust extraction units in Emissions from compliance with local standards 20,000 for air Construction All vehicles, equipment, and pollution control Construction sites Construction Vehicles, machinery used for construction equipment for (asphalt plants / Contractor SE/PIU period Equipment, and shall be regularly maintained and asphalt plants / crushing plants) Machinery correctly operated (including the crushing plants use of dust filters or hoods) throughout the Project alignment. Monitoring of the basic parameters of construction Monitoring of Construction emissions near sources (carbon Construction impacts to air 30,000 Construction sites Supervising SE/PIU monoxide, nitrogen oxides, period quality Engineers sulphur dioxide, particulate matter) 5. Water Issues Control of water flow speed by means of rip-raps, dissipation structures, grass, etc. Storm water drainage and retention basins would be Included in the Contamination of constructed and a siltation fence Construction main civil works Construction sites Contractor SE water bodies (where a river/stream is nearby) period cost would be installed prior to commencement of construction; Contractor should develop and implement a Spill Management Plan Contamination of Existing water wells and springs Throughout the 103.3 Pre- 2,000 Contractor SE/PIU drinking water would be clearly marked to km section construction CXL

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision sources prevent accidental damage from construction vehicles Monitoring of the basic parameters of wastewater and Monitoring of affected water bodies Construction impacts on water (Temperature, suspended 30,000 Construction sites Contractor/SE PIU period bodies particles, pH, dissolved oxygen content, COD, BOD, oil products) 6. Fauna Installation of reflectors and Contractor, signs – Installation of wildlife reflectors; Administrations of Wildlife migration construction Wildlife corridor Installation of warning signs; SPAs in Hovd and 3,000 routes in the Project phase; PIU restriction Studying/Monitoring wildlife routes Olgiy in Section Maintenance and animal behaviour coordination with of reflectors – WWF and WCS. Operation phase Clauses written into construction The restriction will contracts: immediate firing and be included in Project section and Construction Illegal Poaching prosecution of individuals construction associated component and post- Contractor PIU/MNET and Hunting involved in poaching and illegal contracts sections construction trade, hunting, or cutting of vegetation 7. Flora Included in the Areas with favorable Post- Planting trees Landscaping main civil works Contractor SE/PIU conditions for trees construction cost 8. Noise and Vibration Blasting operations shall be carried out in accordance with Safety measures Law on Control of Explosives are included in the Blasting (2004) main civil works Construction Cut areas and quarries Contractor SE/PIU Operations Blasting schedules shall be cost period publicly disseminated in areas 10,000 (blasting where residences will be mats) impacted by the blasting noise CXLI

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision including shepherds. Potential structures which may be impacted from blasting vibration will be identified prior to blasting and monitored during blasting. Appropriate safety measures will be implemented. This applies to all blasting sites (cuts, rock quarries) during all blasting activities. Trial blasts in less sensitive areas will be made for better blast design and identification of potential zone of influence. Noise Reduction techniques will be used to decrease physical disturbance of wildlife (Bodonch Canyon) Plant and equipment used in construction shall strictly conform to local noise standards. Within 200 m of the nearest Noise from habitation, construction work Included in the Vehicles, Plant, such as crushing, concrete main civil works Construction Construction Sites Contractor SE/PIU and Earthmoving mixing and batching, mechanical cost period Equipment compaction, etc., will be stopped between 22:00 and 06:00 hours throughout the Project area, sites temporarily acquired, and all borrow areas. Monitoring of Monitoring of noise levels in Sensitive construction Construction 25,000 Contractor SE/PIU noise levels sensitive areas sites Period 9. Historical, Cultural, and Archaeological Heritage If a historical, cultural, or DOR, If needed archaeological relic is soum/district Encountered encountered during construction, Construction governor, during Project Area Contractor throughout the Project area, all Period Institute of Construction activities will halt and an Archaeology established action plan will be and local police CXLII

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision implemented (notification of soum/district governor, Institute of Archeology and local police). Works will recommence only after appropriate measures have been taken as requested by the appropriate authority, and confirmation has been received from them that works may resume. 10. Restoration of Borrow Pits and Quarries After a Reinstatement of Included in the Identified quarries and Topsoil strip (where necessary) completion of borrow pits and main civil works borrow pits along the Contractor SE/PIU Grassing the area construction quarries cost road works 11. Construction Camps Damage of topsoil Proper construction camp Contamination management in compliance with related to fuel Construction Camp Management storage and Plan; fuelling Proper waste management in 25,000 Contractor SE/PIU operations compliance with Waste Sewerage Management Plan; related Proper spill management in contamination compliance with Spill Waste Management Plan. management Planning to reduce the likelihood Design, of accidents Included in road Construction, Contractor, Local 12. Road Safety Education of users on the risks In all sections SE/PIU safety budget and Operation Police of high speeds phases Enforcement of traffic laws Operation Phase Contractors will be required to clean up the ROW after Operation 1. Solid waste 10,000 In all sections DOR MRTCUD construction period Garbage bins will be installed in

CXLIII

Environmental Estimated Cost, Responsibility Mitigation Measures Location Time Frame Issue $US Implementation Supervision maintenance centers and service stations Staff in the maintenance centers will carry out periodical solid waste collection The cost of this equipment is State Monitoring in the proximity to included in Air Professional Operation 2. Air Quality towns Quality Monitoring Mankhan MNET Inspection period during Agency Construction Phase The cost of this equipment is State included in Water Professional Monitoring in proximity to major 3. Water Quality Quality Monitoring MNET Inspection rivers during Agency Construction Phase The cost of this State equipment is Monitoring in the proximity to Professional 4. Noise and included in Noise Operation towns Mankhani MNET Inspection Vibration Monitoring during phase Agency Construction

Phase

CXLIV

TABLE A1-2: ENVIRONMENTAL MONITORING FRAMEWORK Monitoring Location and Frequency of Parameter Measurement Location Time Frame Responsibility Parameters A. Construction Phase Construction Monitoring parameter: TSP phase – Monitoring frequency: 2 times/day Contractor; Monitoring points: Construction sites and transportation roads Construction sites, Construction Operation phase B. Operation Phase Including 1. Air Quality and operation : State Monitoring parameter: TSP, CO, NO , SO monitoring of x 2 phases Professional Monitoring frequency: 3 times/day asphalt plants Inspection Monitoring points: near Hovd and Olgiy Agency C. Monitoring Standard

Mongolian standard: MNS 0017-2-3-16:1988 A. Monitoring Parameters: COD, BOD , suspended solids, oil products Construction 5 Project Area B. Monitoring Frequency: phase – including, Uyench, Construction phase: 3 times/day Contractor; Bodonch and Operation phase: 2 times/day Construction Operation phase Khovd rivers and 2. Water Quality Monitoring points (Quantity): Bulgan River (2), Uyench River (1), Bodonch River (1), and operation : State Khar-Us and small Hovd River (3), and Khar-Us Nuur Lake (1) phases Professional streams and C. Monitoring Standard Inspection rivultes crossing Mongolian standard: MNS 4586:1998 Agency the alignment MNS 4943:2000 A. Monitoring Frequency Construction: Construction Phase: 1 time/day Sensitive Contractor; Operation Phase: 2 times / year receptors in Operation: State B. Monitoring Points 3. Noise settlements and Construction Professional Construction phase: Near sensitive receptors (Bodonch, Mankhan,) Mankhan Nature Inspection Operation phase: Hovd and Olgiy Reserve: Agency C. Monitoring Standard

Mongolian standard: MNS 0012-1-009:1995 A. Monitoring Item Construction: Endangered fauna and its migration patterns. IBAs Pre-detailed Contractor; B. Monitoring Frequency design, In ecologically Operation: Seasonal observations/day and night time detailed 4. Fauna sensitive Project Administration of C. Monitoring Points design, and Areas SPAs of Khovd Wildlife migration routes and IBAs: Bulgan Nature Reserve, Bodonch Canyon, operation, and Bayan-Olgii Mankhan/Khar-Us Nuur, Tsambagarav National Park, Siilkhem National Park, Tolbo phases aimags lake

CXLV

APPENDIX II A

CLIMATE VARIABLES AND AIR QUALITY STANDARDS

CXLVI

Figure 1: Absolute Maximum/Minimum Air Temperature, оС (1995-2005)

Manhan soum, Hovd aimag

40

30

20

10

0 absolute maximum -10 temperature, оС

-20 absolute minimum temperature, оС -30

-40

-50 I II III IV V VI VII VIII IX X XIXII

Source: EIA 2007. Munkhkhairkhan soum, Hovd aimag 40

30

20

10

0 absolute maximum temperature,oC -10 absolute minimum -20 temperature,oC

-30

-40 I II III IV V VI VII VIII IX X XIXII

Source: EIA 2007.

CXLVII

Must soum, Hovd aimag

40 30 20 10 0 -10 -20 -30 -40 I II III IV V VI VII VIII IX X XIXII absolute maximum temperature,oC absolute minimum temperature,oC

Source: EIA 2007.

CXLVIII

Figure 2: Absolute Minimum Temperature of Soil Surface, оС (1995-2005)

Mankhan soum, Hovd aimag 10

0 I II III IV V VI VII VIII IX X XI XII -10

-20

-30

-40

-50 absolute minimum temperature of soil surface,оС

Source: EIA 2007. Munkhkhairkhan soum, Hovd aimag

0 I II III IV V VI VII VIII IX X XI XII -5

-10

-15

-20

-25

-30

-35

-40

-45 absolute minimum temperature of soil surface,oC

Source: EIA 2007.

CXLIX

Must soum, Hovd aimag

0 I II III IV V VI VII VIII IX X XI XII -5 -10 -15 -20 -25 -30 -35 -40 -45 absolute minimum temperature of soil surface,oC

Source: EIA 2007.

Figure 3: Monthly mean precipitation, mm, and mean snow depth, cm (1995-2005)

Manhan soum, Hovd Aimag 40.0 7 35.0 6 30.0 5 25.0 4 20.0 3 15.0 10.0 2 5.0 1 0.0 0 I II III IV V VI VII VIII IX X XI XII preciptation amount,mm snow depth,cm

Source: EIA 2007.

CL

Munkhkhairkhan soum, Hovd Aimag

25 3

20

2 15

10 1

5

0 0 IIIIIIIVV VI VII VIII IX X XIXII precipitation amount,mm snow depth,cm

Source: EIA 2007.

Must soum, Hovd Aimag 35 3

30

25 2 20

15 1 10

5

0 0 IIIIIIIV V VI VII VIII IX X XIXII precipitation amount,mm snow depth,cm

Source: EIA 2007

Table 1: National Air Quality Standards Concentration, mg/ m3 Category Dust SO2 CO NO2 24 hour mean 0.15 0.05 3.0 0.04 Maximum value 0.5 0.5 5.0 0.085 Source: Ministry of Nature, Environment and Tourism, State of Environment 2003, 2005.

CLI

APPENDIX II B

WATER QUALITY STANDARDS

CLII

Table 1: Ambient Water Quality Standards Contents Unit Acceptable concentration 1 pH 6.5-8.5 2 Dissolved O2 mgO/l Less than 6.4 3 Biochemical oxygen demand mgO/l 3 4 Chemical oxygen demand-Mn mgO/l 10 5 Ammonium NH4 -N mgN/l 0.5 6 Nitrite NO2 -N mgN/l 0.02 7 Nitrate NO3 -N mgN/l 9.0 8 Phosphorus – PO4-P mgP/l 0.1 9 Sulfur oxide SO4 mg/l 100 10 Manganese Mn mg/l 0.1 11 Copper Cu mg/l 0.01 12 Chromium Cr6+ mg/l 0.01 13 Detergent mg/l 0.1 Note: Concentration of dissolved oxygen in water has to be less than 6mgO/l during the warm season, less than 4mgO/l - when water is covered with ice. Source: EIA 2007.

Table 2: Discharge Water Quality Standard (To Water) Unit Acceptable concentration 1 Water temperature oC 20 2 pH - 6-9 3 Biochemical oxygen demand (BOD) mgO/l 20 4 Chemical oxygen demand (COD) mgO/l 50 5 Mn-O mgO/l 20 6 Substance could be weighted mg/l 35 7 Dissolved sodium mg/l 800 8 Cyanide mg/l 0.05 9 Phenol mg/l 0.05 10 Mineral Oil mg/l 1 11 Fat mg/l 5 12 Sulphide mg/l 0.2 13 Copper mg/l 0.3 14 Cadmium mg/l 0.03 15 Manganese mg/l 0.5 16 Mercury mg/l 0.001 17 Arcenic mg/l 0.05 18 Nickel mg/l 0.2 19 Selenium mg/l 0.02 20 Iron mg/l 1 21 Plumb mg/l 0.1 22 Total Chromium mg/l 0.3 23 Chromium 6 mg/l 0.05 24 Zinc mg/l 1 25 Ammonium mgN/l 8 26 Total Nitrogen mg/l 20 2.51 21 27 Total phosphor mg/l 1.5 0.31 28 Remained chloride mg/l 1.5 29 3 chlorine ethylene mg/l 0.2 30 4 chlorine ethylene mg/l 0.1 31 Phosphor organic compound mg/l 0.2 Source: EIA 2007.

CLIII

Table 3: Discharge Water Quality Standards (Water Into Soil) Compositions Unit 1 Water temperature oC 25 2 Smell - Without unpleasant smell 3 pH 6-9 4 Biochemical oxygen demand mgO/l 50 5 Chemical oxygen demand mgO/l 100 6 Mn-O mgO/l 30 7 Substance could be weighted mg/l 150 8 Dissolved sodium mg/l 1000 9 Cyanide mg/l 0.2 10 Mineral Oil mg/l 3 11 Fat mg/l 10 12 Sulphide mg/l 0.5 13 Copper mg/l 0.5 14 Cadmium mg/l 0.05 15 Manganese mg/l 1 16 Mercury mg/l 0.001 17 Arcenic mg/l 0.1 18 Nickel mg/l 0.5 19 Selenium mg/l 0.02 20 Iron mg/l 2 21 Plumb mg/l 0.5 22 Total Chromium mg/l 0.5 23 Chromium 6 mg/l 0.1 24 Zinc mg/l 2 25 Ammonium mgN/l 15 26 Total Nitrogen mg/l 30 27 Total phosphor mg/l 5 28 Pathogen and other bacteria - Not detected Source: National Center of Standardization and Metrology.

CLIV

APPENDIX IIC

LIST OF FLORA AND FAUNA

CLV

Table 1: List of Dominant Plants Zone Dominance Cerastium lithospermifolium, Dryadanthe tetrandra, Parrya exscapa, Kobresia High mountain belardii, Carex melanatha, Carex orbicularis Festuca lenensis, Oxytropis oligantha, Potentilla nivea, Stellaria pulvinata, Artemisia argyrophylla, Kobresia filifolia Festuca lenensis, Helictotrichon desertorum, Festuca valesiaca, Poa Mountain steppe attenuate, Silene repens, Arenaria capillaries, Onosma arenaria, Spiraea hypericifoloa, Agropyron cristatum, Carex pedifopmis, Galium verum Festuca lenensis, Agropyron cristatum, Krylovia eremophylla, Peucedanum histrix, Allium edaurdii, Potentilla sericea Dry steppe Caragana bundei, Caragana pugmaea, Stipa krylovii, S.kirghisorum, Festuca valesiaca, Agropyron cristatum, Artemicia dolosa, Melandrium viscosum, Saussuea pricei Stipa gobica, Agropyron nevskii, Agropyron cristatum, Artemisia frigida, Arenaria capillaries, Caragana leucophloea, Eurotia ceratoides Desert steppe Stipa glareosa, S.sibirica, Agropyron cristatum, Cleistogenes squarrosa, Allium equardii, Artemisia rutifolia, Caragana bundei, Lophanthus chinensis Stipa glareosa, Caragana bundei, Euratia certoides, Anabasis brevifolia, Stepped desert Artemisia xerophytica, Agropyron nevskii Nanophyton grubovii, Eurotia ceratoides, Stipa glareosa, Artemisia Grasses – gracilescens, Reamurea songorica undershrub desert Anabasis brevifolia, Stipa glareosa, Arthemisia xerophytica, A.hanthochroa, Ajania fruticosa, Zygophyllum pterocarpum, Ephedra sinica Euratia certoides, Reamurea songorica, Haloxylon ammodendron, Artemisia Undershrub and terrae-albae, Anabasis salsa, A. truncata shrub desert Haloxylon ammodendron, Anabasis brevifolia, Zygophyllum xanthoxylon, Reamurea songorica, Achnathuerum splendens, Leymus, Iris lacteal, Carex enervis, Kalidium Hamad foliatum, Reamurea songorica, Phragmites communis, Tamarix ramosissima, Haloxylon ammodendron, Popolus diversifolia Source: EIA 2007.

Table 2: Rare and Endangered Species of Mammals in Khovd and Bayan-Olgii Aimags English name Mongolian name Latin name Potential occurrence in the Project Area 1 Asiatic Wild Dog* Чоно, цєєвєр Cuan alpinus Bodonch Canyon in Bodonch Canyon, near Tsambagarav 2 Snow leopard* Ирвэс Uncia Uncia Nature Reserve, Shine Pass, Siilkham National Park Southern part of 3 Asiatic Wild Ass Хулан Equus hemionus Bulagan soum 4 Wild Boar Зэгсний гахай Sus scrofa nigripes Khar Us Nuur Mankhan Nature Saiga Соргог бєхєн Saiga tatarica tatarica Reserve, Khar Us Nuur National Park Near Khar-Us Nuur Mongolian saiga 5 Монгол бєхєн Saiga tatarica mongolica and Mankhan Nature antelope* Reserve Mankhan Nature 6 Goitered Gazelle Хар сїїлт зээр Gazella subgutturosa Reserve 7 Wild mountain sheep Алтайн аргаль Ovis ammon Nearby Bodonch river 8 Ibex Янгир Capra Ibex siberica in Bodonch canyon, CLVI

English name Mongolian name Latin name Potential occurrence in the Project Area near Tsambagarav Nature Reserve, Shine Pass, Siilkham National Park 9 Beaver* Тєв азийн минж Castor fiber birulai Bulgan river Таван хуруут Khar Us Nur National 10 Satunin’s Jerbao Cardiocranius paradoxus атигдаахай Park Thick-tailed Pygmy Khar Us Nur National 11 Єєхлєг атигдаахай Salpingotus crassicauda Jerboa Park Note: *-are included on Appendices I and II of the Convention on the International Trade of Endangered Species (CITES). Source: EIA 2007.

Table 3: Rare and Endangered Local and Migrant Bird Species of in Khovd

English name Mongolian name Latin name Khovd 1 Dalmatian Pelican Борцгор хотон Pelecanus crispus + 2 Great white Egret Цасч дэглий Egretta alba + 3 Eurasian Spoonbill Халбаган хошуут Platalea leucorodia + 4 Black stork Хар єрєвтас Cionia nigra + 5 Whopper Swan Гангар галуу Cygnus Cygnus + 6 Bar-headed Goose Хээрийн галуу Eulabeia indica + 7 Swan Goose Хушуу галуу Cygnopsis cygnoides + 8 Osprey Явлаг сар Pandion haliaeus 9 White tailed Sea Eagle Усны цагаан сїїлт Haliaeetus albicilla + бїргэд 10 Altai snowcock Алтайн хойлог Tetraogallus altaicus + 11 Ring necked Pheasant Гургуул Phasianus colchicus + 12 Japanese White napped Цэн тогоруу Grus vipio + crane 13 Houbara Bustard Жороо тоодгой Chlamydotis + undulate 14 Great Black-headed Gull Итэлгэн цахлай Larus ichthyaetus + 15 Hodgson’a bushchat Єгєєлэй Saxicola insignis + шулганаа 16 Euroasian pinduline Tit Уран шувуу Remiz pendulinus + 17 Henderson’s Ground Jay Хулан жороо Podoces hendersoni + Source: EIA 2007.

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APPENDIX II D

HISTORICAL AND CULTURAL HERITAGE

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Deer Stones beside the Road Close to Baag Ulaan Davaa

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