SUMMARY ENVIRONMENTAL IMPACT ASSESSMENT

REGIONAL ROAD DEVELOPMENT PROJECT

IN

MONGOLIA

March 2004 CURRENCY EQUIVALENTS (as of 31 January 2004)

Currency Unit – Togrog (MNT) MNT1.170 = $1.00 CNY8.26 = $1.00 CNY1 = MNT130

ABBREVIATIONS

ADB – Asian Development Bank DOR – Department of Roads EIA – environmental impact assessment EMP – environmental management plan MNE – Ministry of Nature and the Environment NGO – nongovernment organization

WEIGHTS AND MEASURES

°C – Centigrade dB(A) – decibel acoustic g – gram km – kilometer km2 – square kilometer l – liter m – meter m2 – square meter mm – millimeter

NOTE

In this report, "$" refers to US dollars

CONTENTS

Page

MAP

I. INTRODUCTION 1

II. DESCRIPTION OF THE PROJECT 1

III. DESCRIPTION OF THE ENVIRONMENT 1

A. Physical Environment 1 B. Ecological Environment 3 C. Sociocultural Environment 4

IV. ALTERNATIVES 5

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 6

A. Physical Environment 9 B. Ecological Environment 12 C. Sociocultural Environment 13

VI. ECONOMIC ASSESSMENT 13

VII. ENVIRONMENTAL MANAGEMENT PLAN 15

A. Institutional Requirements 15 B. Environment Monitoring and Permits 16

VIII. PUBLIC CONSULTATION AND DISCLOSURE 17

IX. CONCLUSIONS 18

APPENDIXES

1. Red Book and CITES Species in the Project Area 19 2. Summary of Project Related Stakeholder Participation and Consultations 20

I. INTRODUCTION

1. This document summarizes potential environmental impacts and appropriate mitigation and enhancement measures for the proposed Regional Road Development Project (the Project) in . The summary environmental impact assessment is based on the environmental assessment of the Project commissioned by the Department of Roads (DOR) of Mongolia, and has been prepared in accordance with the “Environmental Assessment Requirements and Environmental Guidelines for Selected Infrastructure Development Projects” of the Asian Development Bank (ADB) and the requirements of the Government of Mongolia. The Government has requested financial assistance for the Project, and ADB is considering a loan of $32.8 million to fund it.

II. DESCRIPTION OF THE PROJECT

2. The proposed road will connect Mongolia’s border with the People’s Republic of China near Zamyn-Uud with the southern end of the Nalayh-Choyr Road (funded by an ADB loan).1 Currently, short stretches of paved roads occur at Saynshand and Zamyn-Uud towns. Most of the 428 kilometers (km) of the road proposed for upgrading is unpaved and unmarked, and is a series of earth tracks. These tracks are abandoned when rutted or rough, with new tracks created by vehicles seeking traversable ground.

3. Most of the proposed alignment is parallel to an existing railway line. The northern section of the alignment lies east of the railway beginning about 5 km south of Choyr to Saynshand, with a length of approximately 218.6 km. From Saynshand to the PRC border at Zamyn-Uud the alignment is west of the railway line, with a length of approximately 209.1 km.

III. DESCRIPTION OF THE ENVIRONMENT

A. Physical Environment

4. Topography, Geology, and Soils. The road is in the hilly Khalkh central steppe and Dariganga steppe subregion, which is a part of the Mongolian Eastern Steppe region. The project area is mostly low hills and mountains, typical of the region. Valleys range from altitudes of 800–1,000 meters (m) above sea level, with surrounding mountains rising an additional 200–300 m. From Choyr to Dalanjargalan, the hills and valleys are aligned in random directions, while in the areas near , Erdene, Orgon, and Saynshand districts topographic features are aligned with ancient faults. The landscape varies with latitude, changing from desert steppe with light brown soil, shrubs, and grasses, to desert with gray soil in the south.

5. The bedrock geology is varied, including deposits ranging from Permian through Cretaceous ages, comprising rocks of sedimentary and volcanic origin. Commercial mineral resources include coal, being mined approximately 30 km southeast of Choyr, and petroleum and zeolite, both produced in the area about 45 km southwest of Saynshand.

6. A typical geological section in the project area consists of (i) up to 6 m depth of sand and argillaceous gravel strata; (ii) at 6.0–26.7 m depth, red clays strata; (iii) at 26.7–32.2 m, depth

1 ADB. 1999. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to Mongolia for the Second Roads Development Project. Manila. 2 gravel and stones; (iv) at 32.2–37.7 m depth, weathered granite; and (v) 37.7 m depth and below, unweathered granite.

7. The road from Choyr to Zamyn-Uud crosses a number of soil-geographical zones starting from the gobian, gobian-steppe, and desert-steppe soils to steppe brown soils, which prevail over the majority of the country.

8. Climate. The climatic conditions along the Choyr-Zamyn-Uud road section have been documented by systematic monitoring since 1940 at meteorological stations in Choyr, Saynshand, and Zamyn-Uud. Strong winds, snowstorms, sandstorms, droughts, and severe winter conditions are typical. The project area experiences subarid summers and severe winters. The annual mean value of total solar radiation is 1,300–1,500 kilowatt hour per square meter (m2). The annual mean air temperature is 2–4 degrees Centigrade (°C). The highest air temperature values are recorded as 39°C in Choyr, 42°C in Saynshand, and 40.6°C for Zamyn-Uud. Several days have temperature of minus 30°C and below. December and February have absolute minimum values of -36.5°C to -39.8°C. Days with temperatures below -40°C occur just once or twice in January along any part of the road section. The average difference between winter and summer temperatures is 35–43°C. The annual probability of severe/unfavorable winter conditions (zud) is 13–16%, which means that severe winters occur once every 6–7 years along this road section. The drought frequency is once every 4–6 years.

9. The most precipitation falls in July. Maximum daily precipitation often exceeds the monthly average precipitation. Daily maximum values are 90 to 121 millimeters (mm) in Saynshand and Zamyn-Uud for July, and 50–60 mm in Choyr for June-July. However, according to the historical mean data, the monthly precipitation in Saynshand and Zamyn-Uud for July is 30–35 mm, and in Choyr is 61.2 mm. Rainy occurs on 35–40 days during May- September, or 7–9 days of rain per month. Daily precipitation in winter often exceeds the monthly precipitation. Stable snow cover is present toward the end of November until early March. Snow cover is about 5–12 cm on the average.

10. The average wind speed is 2.5–5.6 meters per second (m/s), with averages at Saynshand and Zamyn-Uud, about 1.5–2.0 m/s higher than in Choyr. Westerly winds dominate. The absolute wind speed values are 16–24 m/s for Choyr and Saynshand on the average, and 20–28 m/s for Zamyn-Uud. Wind speeds of up to 40 m/s occur in Choyr and Saynshand during April and August, respectively. Low wind speeds associated with a steady anticyclone established in the cold period over the area are experienced from December to February, and July to August.

11. On the average, the area has 5–10 days with snowstorms and 10–20 days with sandstorms per year. The sandstorms occur mostly in May and winds with speeds over 15 m/s are recorded 10–20 times a year. In the spring, severe and extremely dangerous snowstorms and sandstorms heavily impact the country's animal husbandry.

12. Air Quality. Air quality in the project area is inherently good due to the low number of large stationary pollution sources and low traffic volume. There are no major emissions sources other than community heating systems and small enterprises operating in the cities. Dust storms are common, depending on the season. Along the alignment, consistent winds rapidly disperse vehicular emissions.

13. Due to the absence of major air pollution sources, there has been no project-specific air quality monitoring to support the environmental impact assessment. However, air quality 3 information available from the area can be used to estimate baseline conditions in the project area.2 Air pollution loads exhibit seasonal variation, corresponding to winter heating season. Ambient standards for primary air pollutants, sulfur oxides, nitrogen oxides, and total suspended particulate matter were met for 1994 through 1999 on an annual average basis. Less densely populated areas with lower mass pollutant loads can be expected to have lower pollutant concentrations.

14. Indoor air quality, which is largely influenced by the type of fuel used for heating and cooking, has not been analyzed on a project-specific basis. Recent reports, based on available residential fuel use data from Ulaanbaatar3, concluded that, while indoor air quality poses potential health problems for poor residents, morbidity data indicate the problem may not be as severe as believed.

15. Noise. Noise sources are limited to the existing railway, vehicular traffic, and the cities and industrial operations in the existing road corridor. Project-specific noise surveys have not been conducted but noise levels are believed to be within acceptable norms.

16. Water Quality. No perennial streams are in the project area. Surface water flows depend on precipitation and snow melt. Groundwater quality, flow rates, and depth vary with local geologic conditions. Depth to groundwater varies from 4.2 m to 22.9 m. Mineral content ranges from 0.3 grams (g) per liter (l) to 11.8 g/l. Flow rates vary from 0.4 to 23.3 l/s. Cities and settlements have been built in areas with available groundwater of acceptable quality. Additional groundwater surveys are being conducted with external support. The feasibility study for the Project concluded that groundwater resources will be sufficient to support proposed water uses for construction and operations.

B. Ecological Environment

17. Vegetation is typical of arid steppe. Over 105 species of plants consisting primarily of perennial Gramineae plants as well as shrubs and subshrubs were recorded in the project area. From north to south, vegetation becomes more scarce with such semi-desert steppe elements as Stipa gleorosa and Stipa pennata-Ajania. There are Anabasis, Salsala passerina, and other desert species growing in greater quantities in gravelly depressions and on lower slopes of hills.

18. There are no rare or endangered species in the project area. Some herbal plant species such as Artemisia frigida, Artemisia macrocephala, Thymus gobicus, Caryopteris mongolica, Thalictrum foetidum, Ephedra sinica, Leonurus sibirica, and Stelleria dichotoma are present in substantial amounts. These species are also widely spread in the neighboring areas and other vegetation zones.

19. The proposed road does not pass through any special protected areas. As such, road construction on the proposed alignment does not conflict with either the Mongolian Law on Land or the Law on Lands under Special Protected Areas. In the period from 2006 to 2015, some new protected areas will be established approximately 20 to 30 km from the road.4

2 ADB. 2002. Mongolia’s Environment, Implications for ADB’s Operations. Manila. 3 Survey data for gher communities in Ulaanbaatar indicate household consumption of 3.3 tons of coal and 2.67 tons of fuelwood per year. 4 A detailed map indicating exact locations has not been made available yet. 4

20. Fauna. Along the road alignment, dominant species are characteristic of subarid, low mountains, hills desert, and desert-steppe zones. Some wetland bird species are found in the lowlands and depressions, small springs and stream banks. Inhabiting the area around the road section are 30 species of mammals belonging to 6 orders, 58 species of birds belonging to 12 orders, and 6 reptiles belonging to 1 order.

21. The diversity, distribution patterns, population, and ecological condition of the mammals are varied. The Dzeren species, being of special hunting importance, inhabit the steppe-arid steppe area in large quantities. The population increase of the Dzeren is mainly of migratory character. Goitered or Black-tailed gazelle are observed infrequently.

22. Bird species observed are falcon, eagle, buzzard, dove, Pallas' sandgrouse, bustard, demoiselle crane, hoopoe, Mongolian lark, Asian short-toed lark, ground jay, and Daurian partridge species inhabiting arid steppes, hills, shrubs, and valleys. Goose, duck, puddy shelduck, and cormorant can be found occasionally in small water bodies, standing waters, brooks, marshes, and wetlands while feeding, resting, and nesting and during migrations. The telecommunications and high-voltage line poles often serve as perches for birds such as falcons, eagles, buzzards, and crows.

23. Five species of mammals and three species of birds found in the project area are listed in the Mongolian Red Book (1997). These are the Daurian hedgehog, Manul or Pallas' cat, Goitered or black-tailed gazelle, wild sheep and mountain goat. The bird species are the bar- headed goose, houbara bustard, and ground jay.

24. Four species of mammals and 14 species of birds found in the project area are listed in the Convention on International Trade of Endangered Species (CITES). Protected species are summarized in Appendix 1. The state of their distribution patterns and population numbers are under study.

C. Sociocultural Environment

25. Land Use. The road alignment begins south of Choyr city and goes through the territories of Shivee-Ovoo and Sumber districts of Govisumber aimag5, and Ayrag, Dalanjargalan, Erdene, Orgon, Saynshand districts of Dornogovi aimag. Outside of developed cities and settlements, grazing is the primary land use. One coal mining operation is active adjacent to the existing railway approximately 30 km south of Choyr. No cultivated agriculture occurs along the alignment. Railway stations have been established at 20–30 km intervals.

26. Social Infrastructure and Indicators. Mongolia is one of the least densely populated countries in the world, with 1.56 people per square kilometre (km2). Population density in the project area is 02.2 people/km2 in Govisumber and 0.47 people/km2 in Dornogovi. National per capita gross domestic product is approximately $435 per year. Approximately 21.6% of the population live below the poverty line. There are 28 physicians and 76 hospital beds per 10,000 people (2002 data).

27. The literacy rate in the project impact area is 98%. Over 90% of residents have primary education, over 50% have some secondary education, and 19% have completed tertiary education.

5 Aimag = administrative unit analogous to a province. 5

28. Archaeological and Historical Monuments. No ancient burial sites, mounds, graves, petroglyphs, or rock paintings of historical or archaeological significance were found along the road alignment during the survey for the Project. The territories of Govisumber and Dornogovi have not been studied properly in terms of their history and archaeology. The historical and archaeological monuments that may be affected during the construction of the road alignment include Dulaan Gobi's new stone age place of historical significance. It is about 50 km south of the center of Erdene district of . The proposed road alignment will pass close to this locality. In 1955, Ulaan-Uul railway station employees reported the first stone age findings made there. As a result, the locality was listed in the chronicles of the study of ancient Mongolia. Since proper archaeological studies have yet to be undertaken in the area, other artifacts are likely to be found.

IV. ALTERNATIVES

29. The project road is the third phase of the vertical axis road system connecting the Russia-Mongolia border with the Mongolia-People’s Republic of China border. The road is a necessary complement to other transport modes, which have been considered during project planning and design. Air transport fulfills a small demand niche for low volume time-critical freight and passenger transport. The railway is operating near capacity, but expansion is not deemed feasible at this time. The proposed road is the least cost option for increasing transport capacity in the north-south corridor.

30. Three options have been considered in the evaluation of the project road:

(i) no action, i.e., continue with existing earth roads, (ii) install a gravel road, or (iii) install a hard-surface road (either double bitumen surface treatment or asphalt concrete).

31. The alternatives and the associated impacts are summarized in Table 1, which indicates that alternative 3, an engineered hard surface road, is preferred.

Table 1: Analysis of Alternatives Comparison of Alternatives

Potential A: Unimproved C: DBST / Asphalt Concrete Preferred Impact B: Gravel Road Earth Road Road Alternative

Air Quality Vehicle Vehicle emissions will Vehicle emissions will Alternative C: emissions will increase proportional to increase proportional to traffic DBST / increase traffic volume, but shorter volume, but shorter route Asphalt proportional to route equates to lower equates to lower total vehicle Concrete traffic volume total vehicle distance and distance and relatively lower Road relatively lower air air emissions. Protective emissions vegetation along route and paving will reduce dust generated by vehicles Water Quality No change Short-term impacts during Short-term impacts during Alternative B bridge repair and construction of new bridges or C reconstruction Solid Waste No change Minor increase Minor increase proportional to No difference Management proportional to increase in increase in traffic traffic DBST = double bitumen surface treatment. 6

Comparison of Alternatives

Potential A: Unimproved C: DBST / Asphalt Concrete Preferred Impact B: Gravel Road Earth Road Road Alternative

Other Wastes Possible Possible increase in spills Improved driving conditions Alternative C (including bulk increase in spills as traffic increases will decrease potential spill cargo) as traffic frequency increases Noise No change Gravel surface will Reduced noise due to Alternative C increase noise improved surface condition Agricultural No change in Improved traffic access to Improved traffic access to Alternative C Land land use agriculture and grazing agriculture and grazing areas areas along shortcut; no along shortcut; no change in change in other areas other areas Ecological Continued Continued disturbance via Minimization of multi-tracking Alternative C Resources disturbance via multiple tracks, as a result multiple tracks of deteriorated gravel surface Engineering Not applicable New construction New construction required No difference required Historical No significant No significant impacts No significant impacts No difference Resources impacts Resettlement Not required Not required Not required No difference Public Acceptable, but Acceptable, but not Acceptable; preferred for Alternative C Acceptability not preferred enthusiastically regional traffic between supported. Mongolia, Russia, and the People’s Republic of China DBST = double bitumen surface treatment.

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

32. This section presents key environmental issues and mitigation measures associated with the proposed Project. The long-term impact of the Project is mainly beneficial. Short-term impacts during the construction phase can be mitigated with proper planning, good engineering and construction practices, and implementation of specific mitigation measures. Table 2 summarizes anticipated impacts, mitigation measures, and environmental monitoring and management requirements. 7

Table 2: Environmental Management Plan Type of Nature of Pollutant Mitigation or Treatment Monitoring Impacts Impacts or Measures Frequency and and Parameter and Estimated Budget Responsible Party Time Frame Heavy equipment <90 db(A) Pre-construction equipment Monthly by Contractor, operations; blasting; certification; routine maintenance with monitoring reports operation of every 6 months crushers and Estimated budget: at contractors’ own asphalt production expense Period Period plants; excavation

Construction Construction and construction of structures Noise Heavy vehicles and <90 db(A) Vehicle certification Routine noise surveys by other road traffic Estimated budget: at vehicle owner’s DOR or local expense communities

Period Period No other special noise abatement Operational measures required Fuel oil spills Oil and grease Fuel storage, vehicle cleaning and Monthly by contractor maintenance at least 300 m from with quarterly reports to Domestic and nearest drain/waterbody; immediate PMO/DOR industrial clean-up in case of spills; provision of wastewater from appropriate storage facilities for fuel Quarterly inspections by construction camps and oil Health Department

Provision of latrines and sewage systems with concrete lining and Period Period proper insulation/lining; primary

Construction Construction treatment of sewage High density Oil and grease Containment on site before discharge Monthly by contractor, wastewater residue as permitted by MNE with monitoring reports Wastewater Wastewater from heavy Estimated budget: $21,160 every 6 months equipment maintenance Run-off water Oil and grease Passive treatment via run-off water Quarterly monitoring and contaminated with control and retention basins reporting to PMO/DOR fuel and lubricant and MNE residue Period Period Operational

Dust emitted during TSP, CO, NO2, Siting of stationary dust sources Monthly by contractor, site leveling and SO2, (crushers, batching plants, etc.) 500 m with monitoring reports clearing; road concentrations at downwind of sensitive receptors; every 6 months widening; blasting construction sites, provision of windbreaks; provision of operations; and surrounding dust control equipment; water sprays vehicular areas Estimated budget: at contractors’ own movement; expense aggregate production, handling Regular maintenance of vehicles and Period Period and storage equipment, including emissions Air Pollution Air Pollution Construction Construction controls on heavy equipment Gaseous emission Estimated budget: $181,780 from hot mix plants and bitumen application; heavy equipment

CO = carbon monoxide, dB(A) = decibel acoustic, DOR = Department of Roads, MNE = Ministry of Nature and Environment, NO2 = nitrogen dioxide, PMO = Project Management Office, SO2 = sulfur dioxide, TSP = total suspended particulate. 8

Type of Nature of Pollutant Mitigation or Treatment Monitoring Impacts Impacts or Measures Frequency and and Parameter and Estimated Budget Responsible Party Time Frame

Vehicle emissions TSP National vehicle emissions standards DOR certification with and vehicle certification twice yearly reports Passive dust from Estimated budget: at vehicle owner’s road and from expense

Period Period reclaimed

Operational construction sites Estimated budget: $9,780 Spoils from earth Nonhazardous Spoils to be used for backfilling During establishment, moving; refuse construction wastes quarries and borrow sites. Provision of operation and from construction and domestic wastes garbage bins and regular disposal to dismantling of camps. workers; authorized dumpsites Every 6 months during construction Estimated budget: $246,720 construction. garbage Period Period Topsoil replacement, re-vegetation

Construction Construction including shrubs/trees, wells, and equipment Estimated budget: $477,950 Domestic garbage Domestic solid waste Garbage disposed at designated Monthly or quarterly as Solid Wastes Solid Wastes from fixed disposal sites required by DOR and facilities Maintenance of shrub/tree vegetation MNE constructed along for first 3 years

Period Period road

Operational Estimated budget: $284,620

DOR = Department of Roads, MNE = Ministry of Nature and Environment, TSP = total suspended particulate.

9

A. Physical Environment

1. Topography, Geology, and Soils

a. Impacts During Construction

33. General Construction Activities. The main impact-generating activities during the construction phase will be site preparation (grading and clearing of vegetation); construction of culverts and bridges, earth moving (borrow pit and quarry operations); and establishment and operation of construction camps, equipment, and material depots.

34. Topography along the road will change to some extent due to cutting of hills, stone quarrying, filling and construction of project-related structures, etc. The terrain and geological conditions are such that with reasonable care exercised in road design, the likely interaction between the project road features and the existing land features will involve no significant impact on land stability along the project road.

35. Rock Quarries, Sand and Gravel Sites, and Borrow Sites. As part of the detailed engineering for the Project, a number of quarries and other sources have been identified as possible sources of construction materials. Though the operation of quarries is an independent and regulated activity, the requirements for stone aggregate for the Project will deplete resources. The location of quarries and borrow areas will be subject to agreement with the local authorities and borrow pits will be identified outside the right-of-way. Quarrying and hauling will increase dust and noise levels, may adversely affect health of workers, and can create unhygienic conditions in construction camps.

36. Sand Drift and Soil Erosion. Some sections of the alignment are subject to sand and snow drifting, concentrated around the Khanginuur pass, the Borkho plateau, and the Zamyn- Uud area. Construction may temporarily exacerbate sand movement.

b. Impacts during Operations

37. No significant environmental impacts are expected during operation of the Project if recommended mitigation measures are adopted. Provision and maintenance of vegetation cover on disturbed and erosion-prone areas will minimize long-term impacts. Land degradation will be reduced or reversed by diversion of traffic from earth tracks to a hard surface road.

c. Mitigation Measures

38. Topographical impacts will be minimized and proposed tree planting is expected to enhance local aesthetics. Quarries and borrow pits will be refilled with rejected construction wastes, graded to approximately preconstruction contours and provided with vegetative cover.

39. To the extent possible, waste material from fluorite and coal mines and existing quarries will be used, reducing the number of new quarries needed for the road construction. Springs, brooks, and lowlands will be surveyed and mapped, and quarry operations that could negatively impact water flow will be prohibited.

40. Wastes resulting from earth-moving/excavation will be stored adequately to avoid pollution of water supplies and sources, and to avoid dust formation during dry seasons. The contractor will be responsible for the safe storage, transportation, and disposal of all waste. 10

41. Two rows of trees will be planted along the road at specific locations to serve as wind breaks for controlling snow and sand drifts. Appropriate vegetation will be planted at culverts and bridges to protect the road from sand accumulation for 15–18 km along the entire length of this section of the road (130 km). Arboreal species such as poplar, Ulmus, Populus diverstalia, and shrubs like Caragana and almond will be planted. Protective structures to control sand movement include various grids made of wood, concrete, or iron. Scirpus and Artemisia plants will be placed parallel to the structures.

2. Groundwater and Surface Water

a. Impacts During Construction

42. Groundwater Supply. Water requirements for soil compaction and concrete mixing will exceed available surface water supply, requiring development of groundwater resources. New wells will be drilled at 20–25 km intervals, with an estimated 17–21 wells required; 8–10 wells are planned for the 220 km interval between Ayrag and Erdene districts. Ample groundwater resources in Upper Cretaceous lacustrine sandy deposits have been identified at Altanshiree, Doloodgobi, and Uushgobi.

43. Groundwater and Surface Water Quality. Road construction along the alignment will not cross any permanent surface water flows, and since the groundwater is relatively deep (4 m and deeper), the Project is not expected to have any serious negative impact on groundwater quality. Chemical substances to be used for the Project will be stored and disposed of properly to avoid contamination of groundwater.

44. Solid Waste. Construction of the road will result in generation of domestic solid wastes. The contractor will ensure proper storage and will identify disposal sites consistent with local and provincial regulations. The contractor will provide adequate garbage receptacles and temporary storage areas and will ensure regular collection and disposal of wastes.

b. Impacts during Operations

45. The alignment will not traverse surface water bodies and as such is not expected to have significant adverse effects on water quality. Maintenance of vegetation cover and soil erosion protection measures as well as provision of adequate drainage facilities will ensure minimal impacts from the operation of the road.

c. Mitigation Measures

46. The surface and groundwater quality in the project area will be maintained by adopting the following mitigation measures:

(i) Construction contractors will be required to develop and implement contingency plans for control of oil and other dangerous substance spills. (ii) Fuel storage and vehicle cleaning areas will be stationed at least 300 m from the nearest drain/water body. (iii) Storm water drainage and retention basins will be constructed to control runoff water and prevent entry of contaminants into a water body. (iv) Oil and grease is likely to be discharged in the construction vehicle parking area, vehicle repair area, and workshops. All wastewater will be directed into an oil interceptor prior to discharge. 11

(v) Existing water wells will be clearly marked to prevent accidental damage from construction vehicles.

3. Air Quality

a. Impacts during Construction

47. Air quality impacts during construction will result from (i) emissions from construction equipment, including delivery trucks; and (ii) dust from earth-moving operations. These impacts will be localized, temporary, and mostly confined within the construction area.

b. Impacts during Operations

48. The project road will reduce dust emissions caused by the current pattern of driving on earth tracks. With the improvement of the road surface, the obstructions to the flow of vehicles will be minimized; thus, the wastage of fuel and gaseous emissions, such as carbon monoxide and nitrogen oxides, will also be reduced. While total vehicle emissions are expected to increase proportional to increased traffic flow, this is expected to be partially offset by smoother traffic flow. The Project will have net positive impacts on the micro-level environment.

c. Mitigation Measures

49. Construction equipment will be maintained in good operating condition. Machinery causing excessive pollution will be banned from construction sites. Asphalt and concrete plants will be operated in conformity with government pollution control regulations, and located away from the settlements as far as possible.

4. Noise

a. Impacts during Construction

50. Noise from construction equipment will increase, but will be intermittent, localized, and temporary in nature. The major sources of noise pollution are from 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 distributed over the entire construction period. Construction activities are expected to produce noise levels in the range of 80–95 decibel acoustic (dB [A]).

b. Impacts during Operations

51. Higher traffic speeds will increase ambient noise levels along the roadway. However, since the anticipated volume of the traffic on the road during the operations phase is expected to be moderate, the impact due to higher noise levels will be of low significance.

c. Mitigation Measures

52. Careful planning of machinery operation and scheduling of operations can reduce the noise levels. Construction machinery will be located away from the settlements. Equipment will not be allowed to emit noise greater than 90 dB(A) for the eight-hour operations shift and construction yards will be located at least 500 m from any residential area. Noise shields will be used on construction machinery earplugs provided to heavy machine operators, and other 12 mitigation measures, will be followed by the contractors during construction. Near settlements and cities, construction activities during evening and night times will be limited to comply with noise control regulations.

5. Road Safety

53. A number of road accidents occur every year on roads in Mongolia. These accidents result in fatalities and injuries to the general public and animals. The main cause of the accidents is attributed to the negligence of the drivers, the poor condition and alignment of the road, and lack of signage. The proposed road will reduce the natural hazards encountered by motorists and provide a safer driving environment. The project design includes safety measures to reduce accidents.

B. Ecological Environment

1. Impacts during Construction

54. Anticipated impacts are the loss of habitat due to clearing and grading, earthmoving for actual road construction, and potential soil and water contamination caused by solid wastes and sewage from construction crews. Quarries and construction camps may displace rodents and other small mammals. However, within 2–3 years after the completion of construction activities, the faunal population is expected to be restored. Impacts on wildlife may also arise due to poaching by the construction workers, as well as greater accessibility and additional local demands from road-induced activities.

2. Impacts during Operations

55. The increased speed and density of the traffic will increase the difficulty of moving cattle across the road. This negative impact will be slight, since traffic densities will still be low enough to allow controlled crossing of livestock by herders.

3. Mitigation Measures

56. The project road does not run through special protected areas, nor will it negatively influence any wildlife or endangered species if proper mitigation measures are implemented. The Project will replace poor quality earth roads and unformed tracks. Because a traffic corridor is already in existence, the Project will constitute no additional burden on the physical or ecological environment in the long term. Restoration of some of the existing tracks to pasture will provide a net positive impact.

57. The civil works contractor will restore areas damaged during construction to their original condition. Quarrying, borrowing, and disposal of spoils will conform to applicable laws and regulations in Mongolia (including practices followed in recent/ongoing internationally funded road projects in Mongolia). Contractors will be required to strictly implement anti-poaching measures during the construction phase.

58. A small proportion of the natural shelters (ravines, gullies, and pits) of the Red Book species Daurian hedgehog is expected to be within the construction site. Equipment operation and various activities during construction may drive these animals out of their shelters, exposing them to the danger of being run over by vehicles or caught by predators. Appropriate measures 13 should be implemented by contractors to ensure minimal impacts to these species, by incorporating specific wildlife protection provisions in construction contracts.

C. Sociocultural Environment

1. Impacts during Construction

59. Cultural Relics and Historical Areas. A preliminary archaeological study carried out during the planning of the road showed that there were no archaeological monuments along the general alignment of the project road. There are no state-protected parks in the area where the road is to be constructed. The Project will not have any adverse impacts on known monuments or historical places since the route does not pass along these areas. Mitigation measures are given in para. 62.

60. Health and Safety of Workers. The most significant impact of the Project on public health is likely to arise within construction camps. Due to the concentration of people, the transmission potential for communicable diseases will be increased.6

2. Impacts During Operations

61. The Project is designed to promote economic growth by improving access to markets and reducing travel time. Net socioeconomic benefits are expected during the Project’s operating lifetime.

3. Mitigation Measures

62. If archaeological artefacts are unearthed during civil works, these will be immediately reported to concerned government agencies for appropriate action. A more detailed archaeological investigation will be required as part of the next stage of project preparation. All fossils, coins, articles of value of antiquity and structures and other remains or items of geological or archaeological interest discovered on the site will be the property of the Government, and will be dealt with as per provisions of the relevant legislation.

63. All necessary safeguards will be taken to ensure the safety, welfare, and good health of all workers on site. Construction-related activities will be carried out in a safe and efficient manner. Personnel will be provided with safety gear such as safety hats, eye protectors, earplugs, and safety shoes, as appropriate. Fire extinguishers will be kept at the site. Construction camps and all workplaces will be provided with first aid equipment and health care staff. Information on socially transmitted diseases, including prevention measures, will be provided.

64. At a few locations, the proposed road passes close to residential areas but no resettlement will be necessary.

VI. ECONOMIC ASSESSMENT

65. Benefits. The benefits identified for quantitative estimation are (i) the value of pastureland gained as a result of eliminating the multiple earth tracks, and (ii) elimination of costs associated with clearing snow and sand in areas where tree planting will be implemented.

6 A related TA has been designed to address issues of HIV/AIDS and human trafficking. 14

Other environmental benefits such as reduction in dust, air, and noise pollution are expected, but not quantified.

66. About 6–9 unimproved earth tracks occur along the road alignment, and in some sections as many as 20–25 tracks. According to the surveys conducted by the Ministry of Nature and Environment (MNE), approximately 259,230 hectares of Dornogovi aimag's territory has been subject to erosion and degradation due to multi-tracking by vehicles, and approximately 55% of this falls on the Choyr-Saynshand-Zamyn-Uud road corridor. The earth tracks will be gradually regained as pastureland as vehicles start using the project road. The project road will use approximately 650 hectares of land, resulting in a net gain of approximately 142,000 hectares of pastureland. At an estimated economic value of $2 per hectare per year, the economic benefit of regained pastureland is $284,000. This benefit will commence at the rate of 10% per year, beginning 3 years after completion of the project road, when vehicles will stop using the earth tracks and vegetation will grow back.

67. Costs. Estimated environmental protection costs associated with the Project comprise two categories: (i) initial environmental protection, and (ii) annual environmental monitoring. The initial costs include planting and maintenance of trees for the first 3 years of operations over a 15 km total length around culverts and bridges. Other costs include air pollution equipment and devices to be installed in hot mix plants and bitumen storage and handling areas, cleaning and disposal from all work sites of solid and liquid wastes and construction debris, backfilling and restoration of quarries and borrow sites, rehabilitation of areas used for exploration and exploitation of aggregates, and other restoration and cleaning of work sites and worker camps. These costs have been incorporated into the Project’s overall economic evaluation.

68. Annual monitoring costs have been incorporated into the formal economic evaluation of the Project. These include costs associated with various tests for air, noise, soil, ground water pollution, and worker health and safety. Staff and incidental costs associated with monitoring during construction are also included.

69. There are no officially established tariffs in Mongolia concerning the restoration of disturbed lands during road construction activities. The restoration and rehabilitation costs for the project road are based on Joint Order No. 222/109 dated November 24, 2002 of the Ministers of Environment and Nature and of Industry and Trade of Mongolia, wherein the respective restoration cost estimates associated with land disturbances by gold placer mining were approved.

70. For the total length of 15 km where tree planting will take place, annual snow and sand removal costs will be reduced or eliminated beginning with the fifth year after completion of the project road, when the planted trees will have achieved stable growth. At an annual cost of $300 per km, the annual avoided cost will be $4,500.

71. Annual environmental costs and benefits of the Project have been estimated along with the overall project cost-benefit analysis. The net present value (NPV) at an annual discount rate of 12% is negative $218,860 and the internal rate of return (IRR) is 8.43%. These results are sensitive to the assumed benefit rates. If the value of pastureland is increased to $5 per hectare, the resultant NPV and IRR values are $47,970 and 12.71%, respectively. If the rate of pastureland recovery is doubled from 10% to 20% per year, the NPV and IRR estimates are negative $7,780 and 11.89%, respectively.

15

VII. ENVIRONMENTAL MANAGEMENT PLAN

72. The environmental management plan (EMP) should be constantly updated in compliance with the laws of Mongolia, as new requirements are raised concerning environmental protection and restoration. The EMP identifies actions for environmentally sound implementation of the Project through avoidance and/or mitigation of adverse effects. The EMP is designed to protect the environment from negative impacts due to operation of quarries and borrow pits during the construction phase of the Choyr-Zamyn-Uud road Project.

73. The EMP will serve as instructions for incorporating measures to be carried out by the Department of Roads (DOR), contractors, and state and local organizations. It includes appropriate actions designed to protect the environment and nature, mitigate possible negative impacts, restore and enhance the environment in accordance with the requirements provided for in the environmental laws of Mongolia, and actions for controlling and monitoring their implementation.

74. The EMP, summarized in Table 2 has the following objectives:

(i) to meet the requirements of MNE for environmental restoration and mitigation of adverse effects; (ii) to identify adverse impacts on the environment due to operation of quarries and borrow areas; (iii) to give instructions to respective officials concerned for environmental protection, restoration, and mitigation of negative environmental effects; (iv) to serve as a reference document for the environmentally sound implementation of the Project.

75. The EMP generally specifies monitoring reports every 6 months during construction of the project road. The EMP monitoring report can be a single document including all items listed in Table 2. For each item the report should include a summary of the pertinent government regulations and permits, specifying progress made during the reporting period with numerical data, identifying items not complied with, and providing reasons of noncompliance. The EMP monitoring report must be prepared by the local environmental control organization with the assistance provided by an independent monitoring agency.

A. Institutional Requirements

76. MNE is responsible for environmental protection of Mongolia. MNE has taken several policy initiatives and enacted environmental and pollution control regulations to prevent indiscriminate exploitation of natural resources and to promote integration of environmental concerns in development projects. MNE is the agency primarily responsible for the review and approval of environmental impact assessments pursuant to Mongolia’s legislation. MNE was formed in 1992 from the State Committee for Environmental Control (SCEC). MNE established a new set of organizations in 1996, which includes the Environmental Protection Agency, Land Agency, and Hydro Meteorological Agency.

77. Three key government ministries will be involved for implementation, consultation, and project approval. The relationships and responsibilities of these are described as follows.

(i) DOR will be the Executing Agency for the Project, and is responsible for ensuring that all legal and regulatory requirements are met. 16

(ii) MNE is responsible for overall environmental and ecological preservation efforts nationwide, including enforcement of air and water quality and emissions standards, demarcation of nature reserves and sanctuaries, and related research activities. MNE is the lead agency for the initial environmental examination and granting of environmental approval for the Project. In particular, MNE interprets national laws pertaining to nature reserves and sanctuaries, and determines whether a project can be implemented in or near a protected area.

(iii) The Ministry of Education, Science and Culture is responsible for determining the status of historical, architectural, and memorial sites of archeological significance. This ministry will survey the proposed route prior to construction, and will conduct supplemental surveys of any sites where archeological remains are discovered. Additional monitoring requirements will be fulfilled by DOR of the Ministry of Interior.

78. To ensure proper preparation and implementation of all mitigation measures, an inspector will be designated to (i) supervise site preparation, site installation, worker’s training/briefing, and construction; (ii) advise on the design and the execution of measures for sand and snow drift control; and (iii) supervise site restoration (contractor’s yard, construction sites, and quarries).

79. Reports will be submitted by the inspector summarizing information on environmental improvements and measures enacted during the construction period. This inspector will report to the resident engineer and cooperate closely with the appropriate official bodies. Reports to ADB will be submitted two times per year.

B. Environment Monitoring and Permits

80. Environmental supervision, monitoring, and restoration requirements will be incorporated into construction contracts, including the following:

(i) selection and restoration of borrow areas and quarries in accordance with laws and regulations of Mongolia; (ii) the best engineering and management practices for control of toxic and hazardous substances; (iii) minimization of cut and fill operations to the extent allowed by design; (iv) rehabilitation and management of quarries; (v) location of construction camps to minimize disturbance of vegetation, soil, and water; (vi) location and operation of asphalt and concrete mixing plants; (vii) prohibition of machinery causing excessive pollution; and (viii) use of equipment emitting noise not more than 90dB (A) and avoidance of impacts on flora, fauna, and water bodies.

81. DOR should obtain all the necessary permits prior to the commencement of any related work, which will include:

(i) permits for quarrying—a request letter should be sent to the concerned local authorities to establish and operate the quarries. (ii) environmental clearance—necessary environmental clearance must be obtained from the MNE. 17

82. Community-based environmental monitoring and enforcement have been proposed to enhance the capacity of local environmental offices. DOR and the design and construction supervision consultants it engages will enforce mitigation measures during civil works in accordance with the environmental legislation. MNE will conduct routine inspections as necessary. DOR will submit an environmental management and monitoring report to ADB two times per year.

VIII. PUBLIC CONSULTATION AND DISCLOSURE

83. During the field survey, the consultant conducted a questionnaire-based public consultation among the local people including citizens as well as officials from local administrative organizations (Zamyn-Uud district, Govisumber and Dornogovi aimags). The issues related to the impacts on the environment due to the implementation of the Project were discussed. A summary of all project-related stakeholder consultations is included as Appendix 2.

84. The purpose of the questionnaire-based survey is to reveal the opinions and understanding of local citizens on environmental issues as well as to determine whether the construction of the road will have a negative influence on the environment, soil and vegetation, animals, settlement and pasture allotment of herders, winter and spring pastures, etc. Also, the survey helped to determine how the road construction will influence the lifestyle of citizens living along the road.

85. In total, 61 people of various ages and specialties were involved in questionnaire-based discussion. 23 from Dornogovi aimag, 20 from Govisumber district and 18 from Zamyn-Uud, respectively. Of the 61, 16 were ages 40–56, and 15 were 30–39, and 30 were 24–29. Concerning their specialties, 28 were intellectuals, teachers, and governors of aimags and districts, 10 were workers, 14 were herders, and 9 were unemployed or retired. Some were engaged in private business.

86. All the survey participants support the Project. Some 84% of the participants consider that there will be no negative influences on nature and environment. However, they recognize that the relatively undisturbed state of the area surrounding the road will be lost. Therefore, they consider the most important thing is to restore any areas damaged during construction properly in order to bring it back to its previous state as soon as possible. Also, participants stressed that the work should be executed within the shortest period because the village settlers and herders who are living along the road will be inconvenienced during road construction.

87. Some indicated that as a result of proposed road development, the supply of goods as well as of food would improve and in turn, the living standard of the local citizens will improve, and others indicated that the level of vehicle breakdowns along the route will decrease significantly.

88. Approximately 64% of the participants did not understand much about the types of plants that could have a medical or economic importance in the area. The participants believed that the road would not have a serious negative influence on acclimatization and location of animals. Nearly 90% of the participants noted that a strong wind storm usually occurs along the road during the spring season, and some warned that in winter during heavy snow falls, snowdrifts at mountain passes (Khangnuur Pass) seriously impede the movement of vehicles.

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89. The citizens fully support the Project because they believe that (i) it will positively influence their lifestyle, (ii) the current misuse of pasture for road will decrease, and (iii) adverse impacts will be temporary. Construction of the road will not have any major negative impacts on nature and surrounding environment. The road construction work must be done as quickly as possible and the damaged land restored in the shortest period.

IX. CONCLUSIONS

90. The Project is not expected to have any significant negative impact on the existing transport corridor, with the exception of short-term and localized impacts during construction.

91. No impacts are anticipated on archaeological and historic resources, no significant adverse impacts on settlement patterns and communities are foreseen, and no significant adverse impacts will occur for aquatic or terrestrial ecosystems, and no agricultural activities will be displaced. The area's potential for economic development will be enhanced. No adverse socioeconomic impacts on employment and income trends or on ethnic minorities within the area are foreseen. The Project is expected to enhance commercial activities adjacent to the road.

92. Some indirect impacts are expected. Increased traffic may result indirectly in the poaching of birds and other game unless the environmental management capacity of the local administration is strengthened.

93. Air quality impacts could occur in both the construction and operational phases. Total vehicle emissions are expected to increase proportional to increased traffic flow, but smoother traffic flow should at least partially offset this. Appropriate dust suppression and equipment emissions controls will be incorporated into construction contracts.

94. Topographic and soil impacts could occur due to altered road embankments, but will be offset by establishing extensive protective vegetation along the road. Borrow pit excavations and quarry operations will be located some distance away from the project road. Cut and fill operations will be minimized. No significant changes in hydrological characteristics and no significant adverse impacts to surface hydrology, wetlands, or groundwater characteristics are anticipated.

95. Detours and traffic inconveniences will occur during construction. After construction, the primary transport impact of the Project will be to improve the performance of the transport sector and greatly facilitate the flow of traffic, goods, and travellers. Care will be taken during construction to minimize traffic disruptions. No mitigating actions related to transport, other than those actions already incorporated in the Project, are considered warranted.

96. Appropriate measures have been planned to control the likely adverse impacts on the environment. The long-term impact on the environment is expected to be positive through reducing multiple tracks. Appendix 1 19

RED BOOK AND CITES FAUNAL SPECIES IN THE PROJECT AREA

Species Status Mammals Lupus canus CITES (I) Vulpes cosac CITES (II) Felis lynx CITES (II) Felis manul Red Book Gazella subgutturosa Red Book Procapra guttorosa Red Book Ovis ammon Red Book Capra siberica Red Book Birds Falco cherrug CITES (II) Falco tinnucalus CITES (II) Falco naumanni CITES (II) Circus cyineus CITES (II) Circus aeruginsus CITES (II) Buteo himilasus CITES (II) Lilvis migrans CITES (II) Aquila chryaetos CITES (II) Aegypius monachus CITES (II) Aquila nipaensis CITES (II) Anthripoides virgo CITES (II) Otis tardo Red Book and CITES (II) Anser indicus Red Book Bubo bubo CITES (II) Athene noctua CITES (II) Podoces nendorsoni Red Book CITES = Convention on International Trade of Endangered Species.

20 Appendix 2

SUMMARY OF PROJECT RELATED STAKEHOLDER PARTICIPATION AND CONSULTATIONS

No. of Agency Date/Place Participants Responses and Issues Raised People DOR/TA 19 August Local government, 22 • Support the Project—opportunity for consultants 2003 businesses, development and poverty reduction NGOs, banking, • Lack of information on trading opportunities Govisumber agricultural sector, • Possibility of using wells for water supply and vulnerable • Employment for local people (poor herders) groups • Establishment of service stations DOR/TA 20 August Local government, 13 • Concerns regarding road alignment: (i) specifics consultants 2003 businesses, of local settlement area, (ii) landscape features, NGOs, banking, and (iii) effect on material deposits Dalanjargalan agricultural sector, • Use of local resources and raw materials and Ayrag and vulnerable available along right-of-way for road groups construction • Needs of herding families • Employment opportunities, especially graduates • Insufficient water resources DOR/TA 21 August Local government, 35 • Support for project—problems with current consultants 2003 businesses, railway services NGOs, banking, • Employment opportunities Dornogovi agricultural sector, • Project benefits include (i) time savings, and vulnerable (ii) increase of passenger services, and groups (iii) reduced cost of goods • Bypass of Saynshand will reduce traffic and accidents • Possibility to contract personal vehicles • Concern for traffic and road safety • Need for wells • Road alignment along existing power line • Roadside services for rest • Preservation of livestock pasture, desertification area, and sand covering of roads DOR/TA 22 August Local government, 30 • Concerns regarding road alignment: consultants 2003 businesses, (i) influential policies, (ii) horse race course, and NGOs, banking, (iii) coal mine Erdene and agricultural sector, • Orgon residents concerned of empty promises– Orgon and vulnerable need to consider community concerns road groups maintenance responsibility • Need for road to pass through Orgon • Project start date • Quality and standard of proposed road • Emergency care by roadside • Support for free economic zone • Employment and training opportunities • Possibility of tender documents to require bidders to use local resources DOR/TA 23 August Local government, 112 • Support project—freight exceeds current consultants 2003 businesses, railway capacity NGOs, banking, • Road construction should start immediately at Zamyn-Uud agricultural sector, Zamyn-Uud because of the (i) People’s and vulnerable Republic of China’s new trade complex, (ii) free groups trade zone, and (iii) unregistered residents • Road quality and standard • Employment and training opportunities • Possibility to contract personal vehicles • Plans for future town development • Need for underpass for livestock • Concerns for road and traffic safety DOR = Department of Roads, NGOs = nongovernment organizations, TA = technical assistance.

Appendix 2 21

No. of Agency Date/Place Participants Responses and Issues Raised People • Distribution of new road machinery • Request for road alignment along the west Local 25 August Governor of • Construction of exits and crossing junctions government 2003 Dornogovi Aimag • Rest stops, and service stations letter • Transportation/traffic policies– check points • Employment and training • New machineries for road maintenance • Water wells about 2 kilometer from roadside • Traffic police–training, vehicles, equipment Local 27 August Governor of • Traffic security government 2003 Govisumber Aimag • Employment of local people letter • Establishment of road maintenance section DOR/TA 16 September Government 28+ Participation and stakeholder meeting to consultants 2003 agencies, NGOs, discuss project, road alignment, efficiency of donor groups, trade route, local area development, share Ulaanbaatar banking and non- lessons learned, and to engage governmental banking financing agencies and NGOs in discussions agencies Local 24–25, 28–29 Local 67 To better understand conditions within the government/ August 2003 businessmen, community, and to discuss how the road can TA traders, financing best be designed to increase economic growth consultants Erdene, officials, vulnerable and social development. Saynshand people Dalanjargalan Choyr TA Various times DOR, local 50 • Follow-up meetings with DOR in formulating consultants governments, and recommendations made through stakeholder stakeholders in the consultation project area and • Purpose and responses varied Ulaanbaatar TA July-August Households in the 408 Request for socioeconomic information: age, consultants 2003 Project area with HHs gender, education level, marital status, differing (1,836 employment, income, expenditures, savings, characteristics in peoplea) income generation, physical assets, access to Zamyn-Uud, education and health care, satisfaction with Erdene, Orgon, quality of life, use of transport services, and Saynshand, Ayrag, perceived needs Choyr, Dalanjargalan ADB May, July, DOR, ministries, 111 • Support for the Project missions October, local governments, • Discussion of objectives, scope, cost of and TA December NGOs, external technical assistance, and potential amount of consultants 2003 funding agencies, loan and other • Discussed safeguard issues, including stakeholders resettlement and environmental impact assessment (EIA)b ADB 27 January – DOR, Parliament, 41 • Support for the Project mission 3 February ministries, local • Discussion and agreement on Project 2003 governments, components NGOs, external • Review of safeguards, including EIA funding agencies, • Tightening of area development component and other stakeholders

Total 2,345 ADB = Asian Development Bank, DOR = Department of Roads, EIA = environmental impact assessment, HHs = households, NGOs = nongovernment organizations, TA = technical assistance. a Estimated at an average household size of 4.5 persons per household (TA socioeconomic survey, 2003). b Stakeholder consultation during EIA preparation included a questionnaire survey conducted by TA consultants.