REG: Improving the Implementation of Environmental Safeguards in Central and West Asia

Technical Assistance Consultant’s Report

Project Number: 43333 May 2014

Environmental Safeguards Training Consultant and Third Party Auditor - Armenia, Azerbaijan and Georgia

Georgia Country Report

Prepared by “Eco-Spectri” Ltd. (Georgia)

For Asian Development Bank

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and

ADB and the Government cannot be held liable for its contents.

ASIAN DEVELOPMENT BANK ECO -“PECTRI LTD.

ASIAN DEVELOPMENT BANK

RETA 7548: Improving of Environmental Safeguards in Central and West Asia

IDC: Environmental Safeguards Training Consultant and Third Party Auditor - Armenia, Azerbaijan and Georgia

GEORGIA COUNTRY REPORT

Prepared by “Eco-Spectri” Ltd. (Georgia) For Asian Development Bank

May, 2014

RET A 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

TA -7548 REG: IMPROVING THE IMPLEMENTATION OF ENVIRONMENTAL SAFEGUARDS IN CENTRAL AND WEST ASIA

GEORGIA COUNTRY REPORT

For consideration:

Asian Development Bank 6 ADB Avenue, Mandaluong City, Metro Manila, Philippines

Prepared by: Ltd. “Eco-Spectri” 7 Chavchavadze Ave. Tbilisi 0179, Georgia www.eco-spectri.ge 2

RET A 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

TABLE OF CONTENTS

ABBREVIATIONS ………………………………………………………………………………………7 EXECUTIVE SUMMARY………………………………………………………………………………. 8 I. TRAININGS CONDUCTED IN GEORGIA…………………………………………………………16 1.1 Training needs……………………………………………………………………………Error! Bookmark not defined.6 1.2 Purpose and Objectives of the training course………………………………………16 1.3 Scope and Content of the trainings……………………………………………………16 1.4 Training Methodology and Preparation……………………………………………….18 1.5 Review of Documentation……………………………………………………………....18 1.6 Preparation of Training Materials……………………………………………………...18 1.7 Preparatory Activities………………………………………………………………… 19 1.8 Project Implementation Team Composition and Detailed tasks……………………20 1.9 Training Assessment & Evaluaion…………………………………………………….21 1.10 Execution of the Trainings and Observations………………………………………..21 1.11 Staff Trained……………………………………………………………………………..22 1.12 Main Observations and Conclusions………………………………………………….27

II. ENVIRONMENTAL AUDITS CONDUCTED IN GEORGIA…………………………………….40 2.1 Environmental Audit of the Projects Implemented by the MDFG…………….40 2.1.1 Projects Implementation Unit (PIU) - MDF - General Information…………………40 2.1.2 Institutional Arrangement of MDF……………………………………………………. 44 2.2 Projects Implemente By MDF…………………………………………………………46 2.2.1 Tbilisi Metro Extension Project………………………………………………………..46 2.2.1.1 Brief Project description……………………………………………………………….46 2 .2.1.2 Project Document Analysis…………………………………………………………..46 2.2.1.3 Projec Status…………………………………………………………………………..47 2.2.2 Anaklia Costal Improvement Project………………………………………………...47 2.2.2.1 Brief Information on Anaklia Costal Improvement Project………………………...47 2.2.2.2 Project Document Analysis…………………………………………………………...48 2.2.2.3 Preparation of Pre-Construction Documents...... 52 2.2.2.4 Monitoring, Reporting and Trainings...... 55 2.2.2.5 Site visit...... 58 2.2.2.6 Example of a Good Practice...... 60 2.2.2.7 Main Findings revaled during the Documents Review and Site Visits……………64 2.2.2.8 Non-Compliances and Recommendaions...... 65 2.2.3 Construction of International Standard Tbilisi-Rustavi Urban Road………………..66 2.2.3.1 Brief Project Description………………………………………………………………66 3

RET A 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.2.3.2 Project Documen Analysis…………………………………………………………...67 2.2.3.3 Main Findings Revealed During the Documents Review………………………….70 2.2.3.4 Recommendations……………….………………………………………………..……70 2.3 Environmental Audi of GSE Implemented Projects……………………………… ..73 2.3.1 Projects Implementation Unit (PIU) - GSE - General Information……………………73 2.3.2 Institutional Arrangement of GSE on Environmental Safeguards Implementation… 75 2.3.3 Regional Power Transmission Enhancement Project…………………………………76 2.3.3.1 Brief Project Description………………………………………………………………..76 2.3.3.2 Project Status……………………………………………………………………………77 2.3.3.3 Project Document Analysis…………………………………………………………….77 2.3.3.4 Findings and Recommendations……………………………………………………...80 2.4 Environmental Audit of the Prijects Implemented by the RD……………………...83 2.4.1 Projects Implementation Unit (PIU) - The RD- General Information…………………83 2.4.2 Institutional Arrangement of Roads Department (RD)………………………………...85 2.4.3 CWTC - 41122-023 Road Corridor Investment Program - Tranche 1………………. 86 2.4.3.1 Brief Information on the Project………………………………………………………..86 2.4.3.2 Project Document Analysis…………………………………………………………….87 2.4.3.3 Preparation of Pre-Construction Documents...... 90 2.4.3.4 Monitoring, Reporting and Trainings……………………………………………… ….91 2.4.3.5 Site Visits…………………………………………………………………………… …...94 2.4.3.6 Final Post-Construction Audit Report………………………………………………… 99 2.4.3.7 Non-Compliances and Recommendations…………………………………………... 99 2.4.4 CWTC - 41122-023 Road Corridor Investment Program - Tranche 3……………….100 2.4.4.1 Brief Project Description………………………………………………………………..100 2.4.4.2 Project Document Analysis…………………………………………………………….100 2.4.4.3 Preparation of Pre-Construction Documents...... 103 2.4.4.4 Monitoring, Reporting and Trainings………………………………………………….104 2.4.4.5 Site Visit………………………………………………………………………………….106 2.4.4.6 Non-Compliances and Recommendations…………………………………………...110 2.5 Environmental Audit of the Projects Implemented by UWSCG…………………..112 2.5.1 Projects Implementation Unit (PIU) - the UWSG - General Information……………. 112 2.5.2 Institutional Arrangement of UWSCG…………………………………………………...115 2.5.3 Tranche I…………………………………………………………………………………...116 2.5.3.1 Brief Information………………………………………………………………………....116 2.5.3.2 Document Analysis for Tranche I……………………………………………………...116 2.5.4 Tranche I, Subproject 1: “Construction of Mestia Headwork”………………………...117 2.5.4.1 Brief Information on Mestia Headwork Construction Project…………………….…117 2.5.4.2 Sub-project Document Analysis…………………………………………………….…118 2.5.4.3 Preparation of Preconstruction Documents………………………………….……….125 2.5.4.4 Monitoring, Reporting and Trainings...... 125

RET A 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.5.4.5 Site Visits………………………………………………………………………….……...127 2.5.4.6 Main Findings and Recommendations……………………………………….………..131 2.5.5 Tranche I, Sub-project: “Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti”...... 133 2.5.5.1 Brief Project Description…………………………………………………………………..133 2.5.5.2 Project Document Analysis……………………………………………………………….134 2.5.5.3 Preparation of Pre-Construction Documents...... 137 2.5.5.4 Monitoring, Reporting and Trainings...... 140 2.5.5.5 Site Visits…………………………………………………………………………………....141 2.5.5.5.1 Anaklia Sub-project……………………………………………………………………...141 2.5.5.5.2 Kutaisi Sub-project………………………………………………………………………143 2.5.5.5.3 Poti Sub-project………………………………………………………………………….146 2.5.5.6 Main Findings and Recommendations…………………………………………………..146 2.5.6 Tranche II – Brief Information……………………………………………………………….148 2.5.6.1 Document Analysis for Tranche II………………………………………………………..148 2.5.7 Subproject 1: “Anaklia Water Supply and Sewerage Distribution Networks”…………..149 2.5.7.1 Brief Project Description…………………………………………………………………...149 2.5.7.2 Project Document Analysis……………………………………………………………….149 2.5.7.3 Preparation of Pre-Construction Documents...... 152 2.5.7.4 Monitoring, Reporting and Trainings……………………………………………………...153 2.5.7.5 Site Visits…………………………………………………………………………………….154 2.5.7.5.1 Anaklia Sub-project……………………………………………………………………….154 2.5.7.6 Main Findings and Recommendations……………………………………………………157 2.5.8 Sub-project 2 – “Mestia Water Supply and Sewerage Distribution Networks”………….159 2.5.8.1 Brief Project Description……………………………………………………………………159 2.5.8.2 Document Analysis………………………………………………………………………….159 2.5.8.3 Preparation of Pre-Construction Documents...... 161 2.5.8.4 Monitoring, Reporting and Trainings...... 161 2.5.8.5 Site Visits…………………………………………………………………………………….162 2.5.8.6 Main Findings and Recommendations……………………………………………………165

III. APPENDIXES…………………………………………………………………………………….167

Appendix 1. Training Schedule for Georgia, Armenia and Azerbaijan………………………...167 Appendix 2. Training Agenda and Trainers nominated for each module for Georgia………..169 Appendix 3. Permit of Zugdidi Municipality Gamgeoba...... 171 Appendix 4. Environmental Safeguards Compliance Monitoring Checklist of “Anaklia Coastal Improvement Project”…………………………………………………………………………………172 Appendix 5. Results of Analyzes of Sea Water and Air Quality……………………………..….177 Appendix 6. Environmental Safeguards Compliance Monitoring Checklist of “Tbilisi-Rustavi

RET A 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

section 1 and 3 Road Construction Project”………………………………………………………..180 Appendix 7. Environmental Safeguards Compliance Monitoring Checklist of “Regional Power Transmission Enhancement Project”………………………………………………………………..184 Appendix 8. Environmental Monitorng and Mitigaion Cost of the Project (Section I)………....188 Appendix 9. Environmental Safeguards Compliance Monitoring Checklist for the Road Corridor Investment Program (Kobuleti/Ajara) - Tranche 1…………………………………….189 Appendix 10. List of Training Paricipants………………………………………………………...195 Appendix 11. Environmental Safeguards Compliance Monitoring Checklist of the “Road Corridor Investment Program (Kobuleti/Ajara) – Tranche 3”…………………………………...197 Appendix 12. Environmental Safeguards Compliance Monitoring Checklist of the “Construction of Mestia Headwork Project”……………………………………………………….204 Appendix 13. Environmental Safeguards Compliance Monitoring Checklist for the Project: Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti……………………...209 Appendix 14. Environmental Safeguards Compliance Monitoring Checklist of the Project: “Anaklia Water Supply and Sewerage Distribution Networks”…………………………………..214 Appendix 15. Environmental Safeguards Compliance Monitoring Checklist for the Project: “Construction of Mestia Water Supply and Sewerage Distribution Networks”…………………218

RET A 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

ABBREVIATIONS

ADB Asian Development Bank CWRD Central and West Asia Department EA Executive Agency EIA Environmental Impact Assessment EIAF Environmental Impact Assessment Framework EMP Environmental Management Plan ES Environmental Safeguards ESMS Environmental and Social Management System IA Implementation Agency IEE Initial Environmental Examination IFC International Financial Corporation GEORM Georgian Resident Mission GSE Georgian State Electrosystem LA Loan Agreement LLC Limited Liability Company MDFG Municipal Development Fund of Georgia MES Monitoring and Evaluation Specialist MoE Ministry of Environment and Natural Resources Protection of Georgia MOE Ministry of Economy OJSC Open Joint Stock Company PAM Pr oject Administration Manual PIU Project Implementation Unit PMCSC Project Management and Construction Supervision Consultant PMU Project Management Unit PPTA Project Preparation Technical Assistance PPMU Project Preparation and Management Unit RD Roads Department RETA Regional Technical Assistance SE Safety Engineering SEMP Site-Specific Environmental Management Plan SEPE Social and Environmental Protection Expert SIEE Summary Initial Environmental Examination SPS Safeguard Policy Statement SS Safeguard Specialist TA Technical Assistance UWSCG United Water Supply Company of Georgia

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

EXECUTIVE SUMMARY

1. ADB helps developing member countries (DMCs) to strengthen their safeguard systems and develop their capacity to address environmental and social issues in development projects. Since the approval of the Safeguard Policy Statement (SPS) in 2009, ADB has been providing technical assistance to help strengthen the legal and institutional framework for effectively implementing safeguards.

2. Work undertaken by ADB's Central and West Asia Department (CWRD) highlighted a number of deficiencies preventing effective implementation of environmental safeguards. Foremost among the challenges is insufficient capacity in executing agencies to prepare, implement, and monitor the implementation of EMPs. The lack of effective implementation means that there is a credible risk that projects are not in compliance with the SPS.

3. Under the TA of ADB, it was decided that a number of environmental service providers will be trained to deliver the training course in each country and will do so through an on-call basis. This approach will ensure that the type and content of training is consistent across all projects, providing a more cost effective approach by avoiding the costs of international consultants, developing an in-country training capability, providing an opportunity to undertake refresher training, and it will also allow contractors to commission the same training, at their cost.

4. In scope of the project three training courses - Training of Trainers (ToT) in Improving of Environmental Safeguards in Central and West Asia have been delivered in Kazakhstan, Georgia and Pakistan in 2012. 33 Trainers from 6 firms undergone development of tracking system training of third party auditors on effective environmental management and monitoring during the job training. The trainings were based on the Environmental Safeguards Training course developed by the ADB.

5. Few companies have been selected on tender basis to conduct on-the-job trainings and environmental audits in 10 countries of Central and West Asia: Afghanistan, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. In the countries of Caucasus region - Armenia, Azerbaijan and Georgia the project is accomplished by “ECO-SPECTRI” LTD (Georgia). At the first stage, 4 trainings were conducted in Tbilisi, Georgia, 4 Trainings in – Baku, Azerbaijan and 4 trainings – in Yerevan, Armenia for PIUs, Supervising Consultant and Construction Contractor.

6. At the second stage, the “Eco-Spectri’ Ltd. (the Consultant) conducted Environmental Audits of ADB funded projects in Georgia in the framework of Regional Technical Assistance (RETA) “Improving the Implementation of Environmental Safeguards in Central and West Asia”. In total, 13 projects managed by the Municipal Development Fund of Georgia (MDFG), Georgian State Electrosystem (GSE), Roads Department (RD) and United Water Supply Company of Georgia 8

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

(UWSCG) were audited including 1 which was completed and the rest were on the implementation stage or at the stage of Contractor/Supervision Consultant selection.

7. The Environmental Audit was conducted after 9 months of training activities held for Executing/Implementing Agencies’ (EA/IA), Project Management Unit/Project Implementation Units (PMU/PIU)’s, Supervision Consultants, and Contractors involved in implementing ADB funded projects. During the training activities, all participants were informed about approach and steps to be taken during the Environmental Audit. In addition, a list of documents, which would be reviewed during the Environmental Audit, was included into the training materials distributed among participants.

8. The main goal of the Environmental Audit was an assessment of execution of environmental safeguards during the project preparation and implementation stages as well as development of recommendations for EA, PMUs/PIUs and ADB to improve environmental performance of the projects based on findings revealed during the Environmental Audit. Generally, the Environmental Audit consisted of two parts: (i) review of institutional and regulatory bases of EA/IAs established for safeguards implementation; and (ii) assessment of Site Environmental Management Plans (SEMP) implementation by Contractors at the construction sites.

9. As the module of trainings covered new approaches to be considered both, by the Construction Contractor and other Project-implementing organizations, it was decided to organize the Environmental Audits for the Project owner, Supervising Company and Construction Contractor. The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank.

10. As a first part of Environmental Audit, the following project documents were reviewed to check if environmental requirements are included: Loan/Project Agreements, Project Administration manual, Bidding Documents, Contracts between Project Management/Implementation Units (PMU/PIU) and Supervision Consultant/Contractors. In addition, the results of environmental monitoring, which needs to be conducted by Contractor/PMU/Supervision Consultant per concerned requirements indicated in each Environmental Management Plan (EMP) and PMU/PIU’s working papers related to environmental performance were observed.

11. In order to assess Site-Specific Environmental Management Plan (SEMP) or EMP implementation, a joint team comprised from representatives of the Consultant, PIUs, Supervision Consultant, and Contractors visited construction camps and sites of all projects. During those visits, sites with on-going and recently completed project activities were observed.

12. The following paragraphs and chapters give a detailed description of the summary of non- compliances fixed with the trainings and environmental audits held in Georgia, and relevant conclusions and recommendations.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Summary of findings, non-compliances, and recommendations of conducted trainings in Georgia

13. All over Georgia, the trainings were attended by 27 persons, with 11 of them being PIU representatives, 9 of them being the representatives of the Construction Contractor, 5 of them being the representatives of the Supervising Consulting Company and 2 of them being the representatives of the Procurement Department. 9 months after the trainings, 12 people (44.4%) having taken the training, did not work in their previous positions, being either retired, or moved to other positions with the same office (in short, they are not concerned with the environmental issues any more). In this respect, the most unfavorable situation is observed at the Municipal Development Fund (MDF), where none of the 7 people having taken the training is employed in their previous positions at present. Similarly unfavorable situation is observed with the Georgian State Electrosystem (GSE), where only one of 5 employees occupies his previous position to date. The best situation is at the Roads Department (RD) and United Water Supply Company of Georgia (UWSCG). 14. In the course of the trainings, the participants stated about the problems hampering meeting the environmental requirements. These problems are: poor national environmental legislation and incomplete ADB guidelines. If not considering the Project Administration Manual (PAM) developed in 2013 and updated by now, none of the documents give the detailed description of the rights and obligations of the PIU or EA environmental team or environmental specialist within the scope of the project. The detailed information delivered by the Consultant at the trainings about the rights and obligations of the PIU environmental specialist for the management of the project implementing organization (PIU), is not considered as an obligation, and unless the relevant requirements are fixed under the guidelines of the ADB or Project Administration Manual, they will be always ignored by the management of the organizations (PIUs). Sometimes, the activation of the environmental specialists after the training and requirements for their expanded obligations based on the training materials has yielded the opposite result at the companies – they were simply fired from the work with different causes. 15. The results of the survey to evaluate the degree of mastering the training materials were satisfactory. 7 participants out of 27 (26%) responded to all questions correctly. 4 participants (15%) made one mistake and 16 participants (59%) made two mistakes. The best results were fixed with PIU representatives having vast work experience in the field of environmental protection with state organizations or in the private sector. It should be noted that out of 7 people having responded to all questions correctly, only 2 (approximately, 30%) occupy their previous positions to date. 16. The training evaluation questionnaires did not identify the respondents. As Table 7 shows, the absolute majority of the participants are content both, with the developed training module and method of delivery.

17. As Table 8 shows, the answers to the question “What kind of training would you like to attend in the future?” much differ and they mostly come from the problems arising with each 10

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

project. However, some people have the same view, and the trainings desirable by some people were about: (a) budget drafting methods for EMP and (b) methods to evaluate the environmental risks for road projects.

18. Unfortunately, there were no international environmental specialists of a supervising company of either project attending the trainings. Consequently, within the scopes of some projects, particularly where the engagement of the international environmental specialist is very high, the developed SEMP did not include the new method of risk assessment developed by the Asian Development Bank (Project: 41122-023 „Road Corridor Investment Program“).

Summary of findings, non-compliances, and recommendations of conducted environmental audits in Georgia

19. Engagement of the environmental specialists in the project implementation is getting more intense gradually. As compared to the past years, the management of environmental issues has undoubtedly improved. This is the result of the increased number of the relevant specialists hired by the project implementing companies and higher qualification of such specialists. The stricter control of the international financial institutions (IFIs) over the observance of the environmental requirements can be considered as a major reason for such improvement. This is well evidenced by the fact that the best specialists work with PIU, where the relevant qualification related requirements is clearly formulated. In this respect, the situation is favorable with RD and MDF. As for GSE and UWSGC, the situation at them is still to be improved by means of increasing the number of the environmental specialists employed at PIU. Both PIUs employ only one environmental specialist each.

20. The review of Project documents showed that generally, environmental safeguards requirements are included in Loan/Project Agreements. The annexes to the loan agreements of all projects contain the requirement for meeting both, the national environmental requirements and environmental requirements of ADB. The necessity for meeting the environmental legislation is given in the PAMs developed within the limits of each project in greater details. 21. Once again, the Consultant would like to underline the environmental requirements under PAM developed for project „MFF-GEO Urban Services Impovement Inv-Tranche 1 and 2“. This document contains a strict statement about the necessity for meeting all environmental requirements and clear indication of engagement of the environmental specialists in all phases of the project development.

22. All Bidding Documents have the IEE or EIA documents developed within the scope of the projects as annexes, while the obligation to observe the requirements of the documents is given in the principal text of the bidding document. Besides, the requirement for the PIU to include both, international and local environmental specialists is envisaged by most of the documents studied by the Consultant during the audit. Due to uncertain reasons, no requirement for hiring an international environmental specialist for the Supervising Company within the scope of the project „MFF-GEO Urban Services Impovement Inv-Tranche 1 and 2“ is not fixed, and there

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

is no requirement for the engineering consultant for hiring the national environmental specialist fixed within the scope of the same project.

23. In most cases, the “Scope of Works” of the Bidding Documents fails to show the mitigation measures and relevant cost estimates envisaged by IEE or EIA. For example, RD has not considered the following requirement: “The recommended environmental mitigation cost should be included as an item in the Bills of Quantities (project: 41122 Road Corridor Investment Program)”, while MDF has not considered the following requirement: „The total cost of these should be included in the Scope of Works (project: 42414-023 - Sustainable Urban Transport Investment Program)“.

24. As already mentioned the “Scope of Works” of the Bidding Documents does not show the mitigation measures under IEE or EIA, additional studies and/or required environmental quality analysis. Consequently, the Construction Contractor does not include the finances necessary to meet these requirements in the budget it presents, or often, the amounts necessary to accomplish the required actions is fixed at several thousand and sometimes, even at hundreds of thousands USD. Moreover, in most cases, the environmental specialists to identify this fact and resolve it before the contract is concluded do not participate in the project evaluation process. Consequently, the Construction Contractor is forced to obtain the funds necessary to meet the environmental requirements only after concluding the contract. Obtaining additional funds for “unforeseen expenses” is usually done at the expense of economizing on the funds designated for other clauses having a negative effect on the quality of the project implementation.

25. The Bidding Proposals submitted by the Construction Contractors show almost all contractors’ obligation to meet the environmental requirements. However, as Consultant noted, almost none of the Bidding Proposals shows this obligation thoroughly in the project budget.

26. After concluding the loan agreement, a project implementing unit (PIU) is formed at all relevant organizations. The situation in respect of engagement of the environmental specialists with such Units is not uniform. In structural respect, the best situation is observed with the Roads Department of Georgia (RD) and the situation is satisfactory at the Municipal Development fund (MDF). As for UWSGC and GSE, the EUs formed at these organizations employ one environmental specialist each.

27. As known, PIU’s environmental performance covers wide scope of activity: review and approval IEEs developed for EA/IAs as part of a Project Preparation Technical Assistance (PPTA), assessment of bidding proposals in term of bidder’s environmental capacity, reviewing of Contractors SEMPs on compliance with EMP requirements and etc. Among the reviewed projects, none of bidding committee included an environmental expert, who could assess environmental capability of bidders. Although concerned ADB staff has to review the main project documents, such as Loan/Project Agreements, Bidding Documents and Contracts, it is very important for PIUs to have qualified Environmental Expert. Lack of experience and knowledge in environmental science makes it difficult to implement national and ADB environmental safeguards at the all stages of the project cycle. Among audited PIUs only RD environmental specialists out of the environmental specialists of PIU are engaged in all phases of the project development. In addition to the project implementation monitoring, they participate 12

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

in the phases of design development, development of the bidding terms and evaluation of the submitted bids. The specialists of other organizations are engaged only in the monitoring of the project implementation and development of the environmental reports to be submitted to the ADB.

28. The update of EMP required within the scope of all projects is in fact formal. Often, the EMPs are left unchanged by the environmental specialist of the Construction Contractor. Within the scope of the project: “# 43405 - Urban Services Improvement Investment Proggram”, a number of environmental protection plans required by IEE is not developed by the Construction Contractor.

29. The degree of competence of the environmental specialist of the Construction Contractor is still a severe problem, if not considering project: “41122 Road Corridor Investment Program” engaging the specialists with proper qualification. In other cases, the obligations of an environmental specialist are performed by a safety engineer, whose qualification is not often sufficient to meet the Bank requirements in the environmental protection field.

30. . Within the scope of project: “43405-023 – Subproject 2 - Construction of Anaklia Headworks”, SEMP is not developed at all, while SEMP developed within the scope of project “41122 Road Corridor Investment Program” does not use the methods of risk assessment developed by the Asian Development Bank. Moreover, the project is not divided into the project sites. The major cause of this is the active engagement of the international environmental specialist of the supervising company. This specialist is fully engaged in all stages of the project development, and it is his merit that with the degree of meeting the environmental protection requirements, the project is an exemplary in Georgia. Despite this (as the said specialist has not taken the training developed by the ADB), the SEMP developed by them needs thorough modification.

31. The SEMP documents within the scopes of the current projects under the management of UWSGC are developed by meeting all requirements, if not considering the minor inaccuracies made at the stage of risk assessment by the document authors.

32. Active involvement of Supervision Consultant in project implementation could be considered as an option for enhancing environmental capacity and environmental performance of PMU/PIUs. The degree of engagement of the environmental specialists of the supervising consulting companies in the project implementation stage is different. As we have already mentioned more than once, the engagement of both, international and national environmental specialists in project: “41122 Road Corridor Investment Program” is very active and efficient. The engagement of the national environmental specialists of the supervising consulting company in project: “43405 - Urban Services Improvement Investment Proggram” is active. However, it should be noted that no international environmental specialist is engaged in the project (the Bidding document does not give the proper requirement). The situation with project: “43405-023 – Subproject 2 - Construction of Anaklia Headworks” is unfavorable in respect of engaging the environmental specialists by the consulting company. The degree of engagement of the national environmental specialist of the consulting company is very low, and

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

as for the international environmental specialist, under the work schedule, he will be engaged in the project for two last months of the project.

34. The question of holding the environmental trainings for projects: “41122 Road Corridor Investment Program” and “43405 Urban Services Improvement Investment Proggram” is well organized. In both cases, the module of trainings is developed and the trainings are permanently held (what is proved by relevant records). It should also be noted that the training module developed by UWSGC gives a clear description of the new requirements for developing and implementing SEMP, while the training module developed by RD considers traditional environmental issues more. The environmental trainings were not held within the scope of the project: “43405-023 – Subproject 2 - Construction of Anaklia Headworks” at all. According to the documents presented during the site audit, the Construction Contractor was given the professional safety and health training twice.

35. Formally, all questions of reporting are well organized within the scope of all projects. All reports are submitted in a timely manner. As for the quality of the developed environmental reports, as the Cnsultant noted very detailed and good reports are developed for the project: “41122 Road Corridor Investment Program”. In fact, the presented quarterly environmental reports can be considered as the best example for Georgia. As for the reports developed within the scope of the projects: “43405 - Urban Services Improvement Investment Proggram” and “43405-023 – Subproject 2 - Construction of Anaklia Headworks”, in respect of environmental protection they are more formal demonstrated by the similarity between the reports drafted at different times and for different projects.

36. The mechanism to identify non-compliances and develop corrective actions is well organized and documented for projects: “41122 Road Corridor Investment Program” and “43405 - Urban Services Improvement Investment Proggram”. As for the PIU of project “43405-023 – Subproject 2 - Construction of Anaklia Headworks”, no such forms are available either with the Supervising Consultant or Construction Contractor. At the same time, it should be noted that within the scope of the same project, a thorough form to identify non- compliances is developed by the project PIU (Municipal Development Fund), used successfully during the audits.

37. The environmental specialist of the Construction Contractor organizes the audits within the scope of projects: “41122 Road Corridor Investment Program” and “43405 - Urban Services Improvement Investment Proggram” with certain regularity. The filled-in environmental audit questionnaires are maintained at the construction sites. Within the scope of the project: “43405- 023 – Subproject 2 - Construction of Anaklia Headworks”, the environmental specialist of the Construction Contractor did not have the questionnaire.

38. As a second part of the Environmental Audit, implementation of SEMPs by Contractors was reviewed during the visit to the construction camps and construction sites. The main issues observed during such visits were related to construction and domestic wastes disposal, oil and fuel handling and providing proper housekeeping facilities for the workers. A number of non- compliances were revealed during the site visits by he Consultant, and the presumable terms to correct them were fixed. It should be noted that within the scope of project: “43405-023 – 14

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Subproject 2 - Construction of Anaklia Headworks”, a number of changes have already been made – an environmental specialist was engaged in the project evaluation committee and the environmental team was added by one more environmental specialist. 39. It should also be noted that within the scope of project: “41122 Road Corridor Investment Program”, all non-compliances identified by the Consultant (Audit Team) during the audit were identified by the supervising consulting company before with the corrective actions being either developed, or implemented.

40. There was one common problem fixed with all projects related to the origination of the hazardous waste within the scope of the projects. This problem is more of a country scale than it is attributable to individual projects. There is no area for storing hazardous waste in Georgia. Consequently, all the methods of management and explanations presented by the project implementing organizations in respect of hazardous waste management are formal and temporal more. In this respect, the situation is better with project: “41122 Road Corridor Investment Program”, as there is a small-capacity incinerator in Ajara, where it is possible to incinerate small quantities of waste originated during the construction works.

41. The problems and non-compliances identified in the course of all projects, possible ways to eliminate them, and recommendations and best examples are given in the report below. Based on the Environmental Audit findings, the Consultant has developed a summarized table of recommendations for the each reviewed sub-project. The tables provide data on implementer and timing when recommendations should be applied during the project cycle.

42. The Consultant has prepared Environmental Audit Reports for all PIUs and shared with to each PIUs for review and comments. Based on the comments provided by PIUs, the Consultant incorporated necessary clarifications into the final version of Environmental Audit Reports.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

I. TRAININGS CONDUCTED IN GEORGIA

1.1 Training needs

43. The ADB Safeguard Policy Statement (SPS 2009) contains a revealing paragraph that discusses the environmental management of previous projects.

44. Three major reasons why projects fail to effectively implement environmental safeguards requirements are:  Poorly prepared EMPs that do not provide enough details for the environmental staff of PIUs to know what measures to implement on the ground;  Lack of direction of guidelines from ADB as to what is required and when, and  Poorly prepared tenders and contracts that do not provide that not provide adequate environmental management requirements.

45. There is thus a need to train project staff in how to implement environmental requirements, understand what should be done, when and by whom; have the ability to incorporate environmental management requirements into tender and contract documents and have the ability to prepare and assess a site-specific environmental management plan (SEMP) so that construction workers can have a clear picture of what is required on the ground.

1.2 Purpose and Objectives of the training course

46. Purpose of the training is to strengthen the environmental management and monitoring capability of the executive agency and project implementing organizations, as well as construction contractor and supervision consultant in the region through on the job trainings.

47. The objectives of on-the-job trainings are thus to ensure that the PIU, contractor companies and consultants environmental staff responsible for preparation, adoption and implementation of EMP/SEMP.

1.3 Scope and Content of the trainings

48. According to the contract between Asian Development Bank and Ltd.“Eco-Spectri” (The Consultant), the Consultant commenced the services on 5th of June, 2013. Training schedule for Georgia has been prepared by Ltd. “Eco-Spectri” and agreed with ADB (see Appendix 1 – Training Schedule).

49. It is envisaged to conduct 4 on-the-job trainings in Tbilisi, Georgia of executive agency staff, project supervision consultant and contractors in environmental management, monitoring and reporting based on the Environmental Safeguards Training course developed by ADB as per the schedule detailed in Table 1 below. 16

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Table 1: Training Schedules for Georgia

# Executive Agency/PIU Dates of Training 1. United Water Supply Company of Georgia (UWSCG) 1-2 July, 2013 2. Municipal Development Fund of Georgia (MDFG) 4-5 July, 2013 3. Georgian State Electrosystem (GSE) 15 -16 July, 2013 4. Roads Department of the Ministry of Regional 18 -19 July, 2013 Development and Infrastructure of Georgia

50. The duration of each training was 2 days. Each day of the training lasted from 9:00 o’clock/am – till 6:00 o’clock/pm. The Training program consisted of 12 modules including national case study and exercises. The following modules considered during the training were as follows:

Module 1 - Introduction Module 2 - ADB’s Relationship with Partners Module 3 - Environmental Specialist/Roles and Responsibilities Module 4 - Loans, Tenders and Contracts Module 5 - Bid Evaluation Module 6 - Introduction to Risk Assessment Module 7 - Construction Impacts & Mitigations Module 8 - Case study (particular cases for relevant sectors) Module 9 - Environmental Monitoring Module 10 - Reporting Module 11 - Inspection and Audit Module 12 - Final Exercise, Questions and Lahore Case Study/SEMP Group Training Exercise

51. The following knowledge products has been already prepared by ADB for on-the-job training: (i) environmental management inserts for the PAMs that cover the different lending modalities; (ii) guidelines on drafting environmental management clauses for tender documents and contracts; (iii) handbook on Environmental Mitigation Measures for Construction; and (iv) handbook on Environmental Management for Construction sites.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

1.4 Training Methodology and Preparation

52. Project implementation team has decided to conduct the trainings in the conference room rented for this special purpose, outside the PIU’s offices to avoid the frequent movement (absence) from the side of the training participants, which may negatively affect the training quality.

53. The trainings involved a lot of advance preparations and were highly participatory. It included case studies for relevant sectors, focus group discussions, group presentations and on-the-job trainings during environmental audits on sites.

54. The Consultant team assessed the participants at the end of the training course to evaluate their understanding of the subject matter using questionnaires prepared by ADB and Consultant. At the end of each training, each participant completed a questionnaire to evaluate the content, and the conduct of the training.

55. It was determined that the quantity of training attendees should not exceed 10 participants. Project focus group consisted of: Executive agency, PIU and supervision company. The environmental specialists of the construction contractor were provided with on-the-job training during the audit time at the project site.

1.5 Review of Documentation

56. As part of the advance preparation, the following documents were reviewed by the Consultant:

(i) ADB’s Safeguard Policy Statement (SPS 2009) (ii) ADB Strategy 2020 (iii) Environmental Impact Assessments of relevant projects (iv) Training module – Environmental Safeguards Information Kit (v) Environmental management inserts for the PAMs that cover the different lending modalities; (vi) Guidelines on drafting environmental management clauses for tender documents and contracts; (vii) Handbook on Environmental Mitigation Measures for Construction; (viii) Handbook on Environmental Management for Construction sites;

1.6 Preparation of Training Materials

57. Training materials, questionnaires, practical exercises, etc were prepared in line with the documents reviewed. Project implementation team has prepared English-Georgian (for Georgia) power point presentations based on the training modules and training materials provided by ADB. The following materials have been also translated into Georgian: 18

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

1. Environmental Safeguard Compliance Monitoring Checklist 2. PIU tools and Templates for EMP Supervision 3. Biannual Environmental Monitoring Report Template 4. Training Course Effectiveness Questionnaire

58. At the end of each training course an exercise was carried out to ensure that the participants understood the concepts & could implement them. The exercises covered all the aspects of the training.

59. Hands on practical exercises were conducted with the teams in preparing Site Specific Environmental Management Plan (SEMP).

1.7 Preparatory Activities

60. Contact persons from Executing and Implementing Agencies of the relevant projects have been identified from the very beginning:

1. United Water Supply Company of Georgia - Keti Chomakhidze, E-mail: [email protected] Mob: 577 380309;

2. Roads Department of the Ministry of Regional Development and Infrastructure of Georgia - Irakli Litanishvili; E-mail: [email protected];

3. Municipal Development Fund of Georgia (MDFG) - Elguja Khokrishvili; E-mail: [email protected]

4. Georgian State Electrosystem (GSE) - Maya Pitskhelauri; E-mail: [email protected]; mob: 577 220011

61. Lists of ongoing projects in Georgia have already been provided by the ADB (see Table 2 below).

Table 2. List of Ongoing Projects in Georgia

Country Div Project No. Project Name Project Milestone Dates Category Loan/Grant Team No. PTL Approval Affectivity Closing Env.

CWTC 41122-023 Road Corridor Investment P. 6-Oct-09 1-Dec-09 30 -Jun- A GEO L2560 Program - Tranche 1 Seneviratne 14

CWTC 41122-043 Road Corridor Investment P. 22 -Dec- 13 -Jun-12 31 -Dec- A L2843 Program (Kobuleti/Ajara)- T 3 Seneviratne 11 15 (Addl Financing)

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

CWUW 42414-023 Sustainable Urban Transport Inv B. Goalou 21 -Jul-10 29 -Sep-10 30 -Sep- B L2655 Program - Tranche 1 18

Subpoject 1 Tbilisi metro extension (Vazha Pshavela avenue GEO Subproject Anaklia Costal Improvement 2 CWUW 42414-033 Sustainable Urban Tranport Inv B. Goalou 24 -Jul-12 20 -Aug-12 31 -Dec- B L2879/2880 Program Tranche 2 18

Subproject

1 section 1 (km 0-4) Subproject section 3 (km 10.5-17.1) of the 2 international standard Tbilisi- Rustavi Urban Road Link CWUW 43405-023 MFF-Urban Services Improvement S. Joshi 12 -Apr- 15 -Jun-11 30 -Sep- B L2749 Investment Prog.-Tranche 1 11 16

Subproject Construction of Mestia Headwork 1 subprojet 2 Construction of Anaklia Headworks GEO Subprojet 3 Construction of Mestia Water Treatment Plant and Reservoirs Subproject Mestia Kutaisi and Poti Headworks 4 CWUW 43405-024 MFF-GEO Urban Services S. Joshi 23 -Nov- 19 -Dec-11 30 -Jun- B L2807 Impovement Inv-Tranche 2 11 17

Subproject Anaklia Water Supply and 1 Sewerage Distribution Networks Subproject Construction of Mestia Water 2 Supply and GEO Sewerage Distribution Networks Subproject Construction of Anaklia 3 Wastewater Treatment Plant CWEN 44183 -013 Regional Power Transmission T. Luo 17 -Dec- NYE 31 -Dec- B L2974 Enhancement Project 12 16

62. Cost estimate of the scheduled trainings in Georgia was prepared and submitted for approval to the ADB on 28th of June, 2013.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

1.8 Project Implementation Team Composition and Detailed Tasks

63. Project implementation team was mobilized in a couple of days after contract signing. No changes have been made to the project implementation team and all persons mentioned in tender proposal are involved in project implementation.

64. Trainings in Georgia are held by the following Environmental Specialists/Auditors: Irakli Kaviladze, Team Leader/Environmental Specialist (International); Keti Dgebuadze – Environmental Auditor (International); Nino Lomidze, Environmental Auditor (National). The detailed tasks of the experts involved in the trainings in Georgia were the following:

Irakli kaviladze - Team Leader, Environmental Specialist - International

- Lead the assignment/work - Finalize the reports for submission to ADB - Oversee the timely implementation of the assignment/work - Conduct on the job training on Environmental Safeguards, Monitoring and Reporting for - Executing Agencies, relevant government agencies, supervision consultants, and contractors

Keti Dgebuadze - Environmental Auditor – International

- Assist in the conduct on the job training on Environmental Safeguards, Monitoring and Reporting for Executing Agencies, relevant government agencies, supervision consultants, and contractors - Prepare training report

Nino Lomidze - Environmental Auditor - National

65. See detailed training agenda and the trainers nominated for each module in Appendix 2.

1.9 Training Assessment & Evaluation

66. At the end of each training, all participants completed a questionnaire to evaluate the content, and the conduct of the trainings. This was aimed at giving feedback on the relevance of the training, adequacy of the training content in addressing the training needs, competence of the trainers in impacting knowledge and knowledge transfer.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

1.10 Execution of the Trainings and Observations

67. The on-the-job trainings scheduled for the Municipal Development Fund of Georgia (MDFG), Roads Department (RD), Georgian State Elecrosystem (GSE) and United Water Supply Company of Georgia (UWSCG) were conducted during the period of 1 – 19 July, 2013 in the Center of Training and Consultancy (CTC), at the address: #5 Otar Chkheidze Street; Tbilisi, Georgia. The on-job trainings were conducted in line with the Scope and Content outlined in Chapter 2.3 and the Methodology outlined in Chapter 2.5.

1.11 Staff Trained

68. The participants trained were selected based on their functional responsibilities in line with the scope of the training program. Table 3 below shows details of staff trained of relevant PIUs (MDF, GSE, RD, UWSCG), Supervising Companies and Construction Contractors.

Table 3: Summary of total number of staff trained

# Name Work Place Position Tel/Mob E-mail

I. Municipal Development Fund of Georgia (MDFG)

1 Alexander Dumbadze Municipal Development Fund Head of Environmental 599 327436 [email protected] of Georgia (MDFG) Protection and Resettlement Department

2 Nikoloz Soselia Municipal Development Fund Environmental Specialist 595 900 913 [email protected] of Georgia (MDFG) of Environmental Protection and Resettlement Department

3 Nino Patarashvili Municipal Development Fund Main Environmental 577 382292 [email protected] of Georgia (MDFG) Specialist of Environmental Protection and Resettlement Department

4 Rezo Gigilashvili Municipal Development Fund Main Environmental 595 900077 [email protected] of Georgia (MDFG) Specialist of Environmental Protection and Resettlement Department

5 Mikheil Doiashvili Ltd. “Dohwa” – Supervising Environmental Inspector 596118820 [email protected] Company (Rustavi Road Construction)

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

6 Tsotne Gorozia Ltd. “Dohwa” – Supervising Environmental Inspector 593 630840 [email protected] Company (Rustavi Road Construction)

7 Giorgi Gogoladze Ltd. “HydroEngineering Key Technical Specialist 591 911112 [email protected] Company”

II. Roads Department of Georgia (RD)

1. Rusudan Golijashvili Roads Department of Senior Environmental 599 214048 [email protected] Georgia Expert

2. Arsen Chinchaladze Roads Department of Head of Environmental 595 000095 [email protected] Georgia Unit

3. Gia Sopadze Roads Department of Head of Environmental 599 939209 [email protected] Georgia Division

4. Tengiz Lagidze Supervising Company Environmental 595 939630 [email protected] “Dohwa” Engineer

5. Lela Makhauri Anaklia Coastal Environmental expert 597 792593 [email protected] Improvement Project Construction Company

III. United Water Supply Company of Georgia (UWSCG)

1. Besik Nibladze United Water Supply Head of Environmental 577 117711 [email protected] Company of Georgia Protection and (UWSCG) Resettlement Department 2. Tinatin Zhizhiashvili United Water Supply Environmental and 577 38 01 13 [email protected] Company of Georgia Social Risk (UWSCG) Assessment - Consultant 3. Keti Chomakhidze United Water Supply Environmental 577 380309 [email protected] Company of Georgia Specialist (UWSCG) 4. Irakli Legashvili LTD “Eptisa” - Supervision Environmental Expert 593 200085 [email protected] Cmpany 5. Akaki Shubitidze LTD “Eptisa” – Supervision Deputy Team Leader of 577 774002 [email protected] Company Supervision Company 6. Guram Tandilashvili LTD “Eptisa” – Supervision Project Local 577 177027 [email protected] Company Coordinator m 7. Levan Tsurtsumia LTD “Cobra-Georgia” – Engineer 577 912523 [email protected] Construction Contractor

8. Giorgi Bichiashvili LTD “New Construction” – Manager 592303120 [email protected] Contractor

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

9. Gocha Gvinjilia LTD “Pheri” – Construction Technical Manager 577 74 44 47 [email protected] Contractor

10 . Spartak Berikishvili LTD “Pheri” – Construction Environmental Officer 595 34 74 24 [email protected] Contractor

IV. Georgian State Electrosystem (GSE)

1. Andro Khetaguri Georgian State Environmental Expert 577 232595 [email protected]. Electrosystem (GSE)/ Ltd. ge Energotrans

2. Tea Toriashvili Georgian State Procurement Manager 577 625484 [email protected]. Electrosystem (GSE)/ Ltd. ge Energotrans

3. Keti Dgebuadze Georgian State Environmental & Social 577 232937 [email protected] Electrosystem (GSE) Safeguards Specialist/International Projects Coordinator

4. Tinatin Peradze Georgian State Lawyer 577 737397 [email protected] Electrosystem (GSE)

5. Zura Revazishvili Ltd. “Hydroenjeneering” Health & Safety Manager 555 268001 [email protected]

69. All over Georgia, the trainings were attended by 27 persons, with 11 of them being PIU representatives, 9 of them being the representatives of the Construction Contractor, 5 of them being the representatives of the supervising Consulting Company and 2 of them being the representatives of the Procurement Department. 9 months after the trainings, 12 people (44.4%) having taken the training, did not work in their previous positions, being either retired, or moved to other positions with the same office (in short, they are not concerned with the environmental issues any more). In this respect, the most unfavorable situation is observed at the Municipal Development Fund, where none of the 7 people having taken the training is employed in their previous positions at present. Similarly unfavorable situation is observed with the Georgian State Electrosystem, where only one of 5 employees occupies his previous position to date. The best situation is at the Road Department and United Water Supply Company of Georgia.

70. Summary of training photos of the participants are provided in Table 4 below.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Table 4. Summary of Training Photos

Municipal Development Fund (MDF)

Roads Department (RD)

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

United Water Supply Company of Georgia (UWSCG)

Georgian State Electrosystem (GSE)

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

1.12 Main Observations and Conclusions

71. This section highlights the main observations made during the training execution.

72. The involvement of the attendees into the training process was conducted thrice to check their opinion and the level of comprehension of the material, namely: (i) once through inquiry, (ii) once through filling in a questionnaire and (iii) once – through discussion of an example.

(i) Inquiry:

73. As it has been mentioned in the “Training Needs” chapter, ADB identified the three impeding reasons why the quality of meeting the environmental requirements of the bank is lower than needed. Despite the already made conclusions of the bank, the attendees were asked if they see any reasons why the environmental requirements are not met at a needed level by the contractor. The reasons named both by project implementing agencies (PIUs) and consultant companies were mainly identical and are given in the Table 5 below:

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Table 5. Summary of the results of inquiry

# PIUs I. Municipal Development Fund of Georgia (MDFG) 1. The involvement of environmental specialist throughout the entire project is actually quite formal; 2. As a rule, contractor has financial problems in almost all projects, the Municipal Development Fund (MDF) does not pay the contractor for the completed work in due term. Respectively, the construction contractor has payable salary liabilities towards the employees. Proceeding from the above, the management of the construction company can not strictly order the workers to fulfil environmental requirements and the environmental specialists assigned by the Municipal Development Fund require much from the construction contractor; 3. As a rule, the construction companies do not have dedicated environmental specialists and even if they have such staff, their rights and obligations are quite limited; 4. The fulfilment of environmental requirements is not included in the tender price calculations submitted by the companies. 5. As for the opinion of the construction contractor, it was mainly concerned with the tender procedures and documentations, in particular: the price estimations for environmental requirements increases the cost of the project. According to them, if a construction company considers/includes the cost of fulfilment of the environmental requirements in the project estimations, it will lose the tender, as the competitor companies do not provide for these costs in their tender proposals (at least such practice has been exercised until now), because the only criterion for tender award is the price quote. Unless the cost of fulfilment of the environmental requirements is not distinctly included in the tender proposal, none of the contractors will provide for these costs in their price calculations. II. Roads Department of Georgia (RD) 1. Financial proposal played the decisive part in tender award (Kobuleti Bypass Project) and the awarded construction company submitted very low costs. At present, they have to exercise economy in many fields, which negatively impacts environmental issues; 2. Both the project executing and supervising company representatives have serious difficulties in relationship with the constructors due to language barrier. Only 3 interpreters work with several hundreds of people, which is insufficient; 3. Neither the Roads Department nor the supervising company can conduct elementary measuring activities (measuring of noise, vibration, dust, etc.). Audit is undertaken only visually. Despite numerous requests from the environmental expert of the supervising company both to the management of the supervising company and the road department, the mentioned measuring devices have not been purchased yet for facilitation of full scale environmental monitoring; 4. Fulfilment of environmental requirements is not the state government priority. As a result, the requirements lack attention at lower levels, which in the end influences project implementation; 5. Non-completion of environmental requirements does not incur penalties, which enables the construction contractor to overlook the majority of the non-compliances revealed by

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

the audit. III. United Water Supply Company of Georgia (UWSCG) 1. Lack of correct state attitude towards the environmental problems, due to which the contractor does not regard environmental issues seriously; 2. Environmental specialist is not involved in the review of the tender proposal; 3. Environmental specialist is not involved at project delivery stage; 4. Roles and responsibilities of PIU is not quite determined including environmental sphere; 5. As a rule, construction companies do not have environmental specialists. Health and safety experts generally exercise the functions of environmental specialist; 6. There is no real mechanisms for PIU for penalization of the construction contractor for non-compliances. IV. Georgian State Electrossystem (GSE) 1. Environmental specialist is not involved in the preparation of the tender proposal, hence, environmental requirements are not distinctively and clearly determined in the proposal; 2. Fulfilment of environmental requirements is not the priority of the state government, respectively at lower levels these requirements are not paid attention to, which influences project implementation; 3. Almost all projects which are implemented by GSE are of state importance. The implementation of the schedule of the mentioned projects has great significance in the development of the state economy. Proceeding from the above, the non-fulfilment of environmental requirements by the contractor is often left without response or reaction; 4. The Georgian State Electrosystem implements many projects funded both by international financial institutions and the Company’s budget. There is only one environmental expert in the staff of the company, who is also involved in the social issues of these projects. One environmental expert is also present in the daughter company of GSE – Ltd. “Energotrans”. Consequently, they do not have enough time to implement permanent monitoring at sites.

74. Among the problems named by the training participants of different PIUs, there were the problems common to all organizations and problems typical to the organization engaged in some or other project. 100% of the attendants explain the low quality of meeting the environmental requirements by two major reasons, in particular: 1. Fulfillment of environmental requirements is not the state government priority. As a result, the requirements lack attention at lower levels, which in the end influences project implementation; 2. Low qualification of the environmental specialists hired by the Construction Contractor. The Construction Contractor usually hires safety engineers in this position. 75. 50 to 75% of the attendants think that:

1. Completion of environmental requirements does not incur penalties, which enables the construction contractor to overlook the majority of the non-compliances revealed by the audit; 29

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2. Environmental specialist of PIU or Environmental Unit (EA) is not involved in the preparation of the tender proposal, hence, environmental requirements are not distinctively and clearly determined in the proposal; 3. There is a lack of specialists on PIU.

76. In the course of the trainings, the participants also stated about the other problems, which they faced either only during the implementation of their projects (e.g. language barrier in MDF implemented projects) or caused as the results of above-mentioned problems. 77. As Consultat revealed, the main reasons of above-mentioned problems are: poor national environmental legislation and incomplete ADB guidelines. If not considering the Project Administration Manual (PAM) developed in 2013 and updated by now, none of the documents give the detailed description of the rights and obligations of the PIU or EA environmental team or environmental specialist within the scope of the project. The detailed information delivered by us at the trainings about the rights and obligations of the PIU environmental specialist for the management of the project implementing organization, is not considered as an obligation, and unless the relevant requirements are fixed under the guidelines of the BDA or Project Administration Manual, they will be always ignored by the management of the organizations. Sometimes, the activation of the environmental specialists after the training and requirements for their expanded obligations based on the training materials has yielded the opposite result at the companies – they were simply fired from the work with different causes.

78. During the audit, the Consultant failed to identify the non-engagement of the environmental specialists in all phases of the project implementation as non-compliance, and meeting this requirement was again formulated as a recommendation only.

79. Recommendation: A very good example was given within the scope of project: “Urban Services Improvement Investment Program”, Tranche 1 and Tranche 2, implemented by UWSGC, as PAM was updated and all the requirements communicated to the training participants at the trainings were given in details in the newly developed document.

(ii) Filling of the Questionnaires

80. Training attendees were provided with questionnaires on the second day of training. The questionnaire was prepared by ADB based upon the new attitudes, which were explained and discussed during the training course.

81. The attendees had the right to use the provided material for answering the questions. They also could consult with one another, which influenced the result, because except for some cases all of them made the same mistakes. However, it should be noted that majority of the answers were correct.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

82. The results of the questionnaires answered by training attendees of MDF, RD, UWSCG, GSE are given in Table 6 (“+” – correct answer; “-“ – wrong answer).

Table 6. Summary of the results of the answers of training participants

Name of Participant 1 2 3 4 5 6 7 8 9 10

Municipal Development Fund (MDF)

Alexander Dumbadze + + + + + + + + + +

Nikoloz Soselia + + + + + - - + + +

Nino Patarashvili + + + + + + + + + +

Rezo Gigilashvili + + + + + + + + + +

Mikheil Doiashvili + + + + + + - + + -

Tsotne Gorozia + + + + + _ + + + +

Giorgi Gogoladze + + + + + - + + + -

Roads Department of Georgia (RD)

Rusudan Golijashvili + + + + + + + + + +

Arsen Chinchaladze + + + + + - + + + -

Gia Sopadze + + + + + - + + + -

Tengiz Lagidze + + + + + - + + + +

Lela Makhauri + + + + + + + + + +

United Water Supply Company of Georgia (UWSCG)

Besik Nibladze + + + + + - - + + +

Tinatin Zhizhiashvili + + _ + + + + + + _

Keti Chomakhidze + + _ + + + + + + _

Irakli Legashvili + + _ + + + + + + -

Akaki Shubitidze + + _ + + + + + + _

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Guram Tandilashvili + + _ + + + + + + -

Levan Tsurtsumia + + _ + + + + + + -

Giorgi Bichiashvili + + + + + + + + + +

Gocha Gvinjilia + + + + + _ + + + +

Spartak Berikishvili + + + + + _ + + + -

Georgian State Electrosystem (GSE)

Andro Khetaguri + + - + + + + + + -

Tea Toriashvili + + - + + + - + + +

Zura Revazishvili + + - - + + + + + +

Keti Dgebuadze + + + + + + + + + +

Tinatin Peradze + + + + + + - + + -

83. The results of the survey to evaluate the degree of mastering the training materials were satisfactory. 7 participants out of 27 (26%) responded to all questions correctly. 4 participants (15%) made one mistake and 16 participants (59%) made two mistakes. The best results were fixed with PIU representatives having vast work experience in the field of environmental protection with state organizations or in the private sector. It should be noted that out of 7 people having responded to all questions correctly, only 2 (approximately, 30%) occupy their previous positions to date.

(iii) Practical Exercises

84. The evaluation of environmental impact risks and implementation of mitigation measures were discussed based on the different practical examples by training participants of MDF, GSE, RD, UWSCG, namely: construction process of Anaklia Costal Improvement project - by MDF participants; construction process of „Kobuleti Bypass Construction Project“ by RD participants; One section of the rehabilitation project of “Kutaisi Water Supply” by the United Water Supply Company of Georgia (UWSCG) participants and the construction process of “Bleak Sea Transmission Project” by GSE participants. Proceeding from the large scale of the project only one construction section of the project was discussed – the section crossed Borjomi- Kharagauli reserve. The working groups prepared, identified and assessed environmental risks for the mentioned projects and planned respective mitigation measures.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

85 . The participants of the training having many years of experience in the environmental field were mainly active during the answering process of the training. The mentioned participants were the representatives of PIUs.

86. After the training the training participants were provided with the training effectiveness assessment questionnaire. The summary of answers to the questionnaire is given in Table 7. In addition, the attendees were asked which type of training they would like to attend in the future in the end of the questionnaire.

Table 7. Summary of answers to the questionnaire

# Question Answer Comment

Yes No

1 Did this course achieve the education 27 objectives?

2 Did the training course meet your expectation? 27

3 Was the classroom environment conductive 27 the learning?

4 Was the instructional method effective? 27

# Question Points Quantity of attendees

5 Please rate (1-5)1 quality of training content 5 22

4 5

6 Please rate quality of information delivery? 5 23

4 4

1 5 point is - excellent, 2 point is – bed.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

7 Please rate quality of clarity and usefulness of 5 26 visual? 4 1

8 Please rate quality of opportunity to ask 5 24 questions? 4 2

3 1

9 Please rate quality of opportunity to hands-of 5 21 training? 4 6

87. The training evaluation questionnaires did not identify the respondents. As Table 7 shows, the absolute majority of the participants are content both, with the developed training module and method of delivery.

88. The training participants listed the topics for trainings they desired to attend in the future (see Table 8):

Table 8. List of topics for future trainings

# PIUs I. Municipal Development Fund of Georgia (MDFG) 1. Training in resettlement issues is the most needed at this stage; 2. Exercise of practical works on construction section/field; 3. Training of environmental risk assessment for road construction project (request was repeated in two different questionnaires); 4. Such trainings would be good for organization management as well. II. Roads Department of Georgia (RD) 1. Comparative analysis of Asian Development Bank requirements and the Georgian

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

legislation and revealing gaps; 2. Methodology of conducting restoration works. III. United Water Supply Company of Georgia (UWSCG) 1. Preparation of Pollution Prevention Plan; 2. International conventions; 3. I wish that such informative and working training would become more frequent. Desired training in the future is the - methodology of EMP price calculation; 4. IEE structure and preparation; IV. Georgian State Electrosystem (GSE) 1. Preparation of the criteria for evaluation of fulfilment level of mitigation measures; 2. Methodology for preparation of budget of environmental monitoring.

89. As Table 8 shows, the answers to the question “What kind of training would you like to attend in the future?” much differ and they mostly come from the problems arising with each project. However, some people have the same view, and the trainings desirable by some people were about: (a) budget drafting methods for EMP and (b) methods to evaluate the environmental risks for road projects.

Main Observations:

90. This section highlights the main observations made during the trainings execution for PIUs (MDFG, RD, UWSCG, GSE). The following observations are listed below (see Table 9):

Table 9. Summary of main observations

# PIUs I. Municipal Development Fund of Georgia (MDFG) 1. They were quite active throughout the training and, if we judge according to the practical example and filled questionnaires, the comprehension level of the material by the attendees could be deemed satisfactory. It is especially true for the attendees having many years of experience of working in respective state or private organizations; 2. The qualification of the environmental specialists of the construction contractor remains as a very acute problem; 3. The management of the MDFG has not distinctly required the necessity of fulfilment of the environmental requirements by the construction contract (at least such requirements have not been in place until now). 4. The changes and new attitudes for the preparation of the site specific environmental management plan (SEMP) determined by the training module will be very hard to implement for the construction contractor. As we have mentioned, the construction contractor generally does not have environmental specialist and the person fulfilling the

functions of this position cannot even extract the Environmental Management Plan (EMP)

form already existing Environmental Impact Assessment document and use it as intended. Naturally we all understand that such specialist cannot possibly elaborate site 35

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

specific plan and even if we prepare such plan, would not be able to implement it. Hence, it could be better to establish environmental group (comprising 4-5 persons) financed by ADB. The group will prepare respective plans for all projects and assist contractors in their implementation for about 3 years. In this case respective employees of the contractor will become trained very soon and the Asian Development Bank will have certain guarantee in environmental sustainability of the projects funded by the bank. Independent environmental group established through ADB funding and not financed from the MDF will be stricter towards the projects implemented by the Municipal Development Fund. II. Roads Department of Georgia (RD) 1. Fairly good unit has been established within the Road Department for resolution of the environmental problems – a Division of Environmental and Social Issues, which comprises 5 environmental specialists with respective education and experience. 2. They were quite active throughout the training and, if we judge according to the practical example and filled questionnaires, the comprehension level of the material by the attendees could be deemed satisfactory. It is especially true for the attendees having many years of experience of working in respective state or private organizations; 3. During the training serious claims were made especially by the representatives of the supervising company towards non-fulfilment of the environmental requirements by the construction contractor. According to the representatives of the supervising company, they need great deal of effort for achieving even minor progress with the construction contractor. Hence, the attendees of the training had serious doubt regarding the ability of the construction contractor to meet the new requirements and prepare respective SEMP. III. United Water Supply Company of Georgia (UWSCG) 1. The attendees from the United Water Supply Company of Georgia (UWSCG), relevant Construction and Supervision companies were highly interested in the training course; 2. They were very active during training and proceeding from the practical example and filled in questionnaire. The level of comprehension of the material by the attendees was satisfactory. It is especially true for the participants having many years of working experience in respective state or private entities; 3. The qualification of the environmental specialist of the construction contractor remains as a serious problem. As a rule, it is a Health and Safety Specialist. IV. Georgian State Elecrosystem (GSE) 1. They were quite active throughout the training and, if we judge according to the practical example and filled questionnaires, the comprehension level of the material by the attendees could be deemed satisfactory. It is especially true for the attendees having many years of experience of working in respective state or private organizations; 2. Proceeding from the scale of the company it clearly lacks relevant environmental staff. Dedicated environmental division or unit comprising 3-4 people should be established for improvement of the situation; 3. After awarding construction contractor and consultant within “Regional Power Transmission Enhancement Project” similar training should be facilitated for the mentioned companies prior to commencement of construction.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Main Findings and Conclusions:

91. Based on the conducted trainings the Consultant revealed the following general findings: (i) All over Georgia, the trainings were attended by 27 persons, with 11 of them being PIU representatives, 9 of them being the representatives of the Construction Contractor, 5 of them being the representatives of the supervising Consulting Company and 2 of them being the representatives of the Procurement Department. 9 months after the trainings, 12 people (44.4%) having taken the training, did not work in their previous positions, being either retired, or moved to other positions with the same office (in short, they are not concerned with the environmental issues any more). In this respect, the most unfavorable situation is observed at the Municipal Development Fund, where none of the 7 people having taken the training is employed in their previous positions at present. Similarly unfavorable situation is observed with the Georgian State Electrosystem, where only one of 5 employees occupies his previous position to date. The best situation is at the Road Department and United Water Supply Company of Georgia; (ii) In the course of the trainings, the participants stated about the problems hampering meeting the environmental requirements. These problems are: poor national environmental legislation and incomplete ADB guidelines. If not considering the Project Administration Manual (PAM) developed in 2013 and updated by now, none of the documents give the detailed description of the rights and obligations of the PIU or EA environmental team or environmental specialist within the scope of the project. The detailed information delivered by us at the trainings about the rights and obligations of the PIU environmental specialist for the management of the project implementing organization, is not considered as an obligation, and unless the relevant requirements are fixed under the guidelines of the BDA or Project Administration Manual, they will be always ignored by the management of the organizations. Sometimes, the activation of the environmental specialists after the training and requirements for their expanded obligations based on the training materials has yielded the opposite result at the companies – they were simply fired from the work with different causes; (iii) The results of the survey to evaluate the degree of mastering the training materials were satisfactory. 7 participants out of 27 (26%) responded to all questions correctly. 4 participants (15%) made one mistake and 16 participants (59%) made two mistakes. The best results were fixed with PIU representatives having vast work experience in the field of environmental protection with state organizations or in the private sector. It should be noted that out of 7 people having responded to all questions correctly, only 2 (approximately, 30%) occupy their previous positions to date. (iv) The training evaluation questionnaires did not identify the respondents. As Table 7 shows, the absolute majority of the participants are content both, with the developed training module and method of delivery; 37

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

(v) As Table 8 shows, the answers to the question “What kind of training would you like to attend in the future?” much differ and they mostly come from the problems arising with each project. However, some people have the same view, and the trainings desirable by some people were about: (a) budget drafting methods for EMP and (b) methods to evaluate the environmental risks for road projects.

(i) Engagement of the environmental specialists in the project implementation is getting more intense gradually. As compared to the past years, the management of environmental issues has undoubtedly improved. This is the result of the increased number of the relevant specialists hired by the project implementing companies and higher qualification of such specialists. The stricter control of the international financial institutions (IFIs) over the observance of the environmental requirements can be considered as a major reason for such improvement. This is well evidenced by the fact that the best specialists work with PIU, where the relevant requirement is clearly formulated. In this respect, the situation is favorable with RD and MDF. As for GSE and UWSGC, the situation at them is still to be improved by means of increasing the number of the environmental specialists employed at PIU.

92. Based on the findings observed during the trainings the Consultant elaborated the following Recommendations:

For Asian Development Bank:

93. During the project development, at the stage of developing the principal documents of the project management, the rights and obligations of the environmental specialist must be given in greater details. Good practice was implemented by the UWSCG under the project: „MFF-GEO Urban Services Impovement Inv-Tranche 1 and 2“. In particulat, the PAM has been updated and this document contains a strict statement about the necessity for meeting all environmental requirements and clear indication of engagement of the environmental specialists in all phases of the project development, which was delivered to the training participants during the training course. For Project Implementation Units (PIUs): (i) The necessary number of the environmental specialists must be hired by GSE and UWSCG in order to improve the project implementation efficiency; (ii) The obligation to meet the environmental requirements shall be given more thoroughly in the bidding proposal, as giving it as an attachment to the IEE or EIA of the Bidding Proposal and only the guideline to discharge them, as it is proved in practice, is not sufficient. It is necessary to give the environmental requirements in the “Scope of Works”.

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(iii) Environmental specialist shall be included in Tender Evaluation Committee2 for GSE, MDF and UWSCG; (iv) Engagement of the international environmental specialist for MDF and UWSCG at least at the first stage is expedient, when the audit and monitoring methods are approved, check-lists are drafted, the working schedule is made precise and the construction contractors are given the relevant trainings; (v) An additional environmental specialist is to be hired on staff at UWSCG and GSE following the number and complexity of the projects realized by the Company. The number of the environmental specialists is desirable to be at least 4 or 5 (the Municipal Development Fund has introduced a much favorable structure in this field); (vi) The contracts between the UWSCG and the construction companies must give detailed description of the Environmental requirements fixed in the Bidding Documents; (vii) The evaluation criteria of the Bidding Proposals for all PIUs shall consider environmental issues (the relevant criteria developed by the ADB), and the presented CV of the environmental specialist must also be assessed; (viii) All environmental specialists engaged in the implementation of the project are to be given training “Environmental safety requirements under the projects financed by ADB within the limits of the RETA Project (GSE, RD and MDF); (ix) The international environmental specialist of the Consultant Company of the projects implemented by MDF and UWSCG is to be engaged in the implementation of the project as early as at the construction mobilization stage;

2 According o the information received from MDF the Environmental Specialist is already included in the Tender Evaluation Committee.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

II . ENVIRONMENTAL AUDIS CONDUCTED IN GEORGIA

2.1 Environmental Audit of the Projects Implemented by the Municipal Development Fund of Georgia

2.1.1 Projects Implementation Unit (PIU) - The Municipal Development Fund of Georgia (MDF) - General Information

94. The Municipal Development Fund of Georgia (MDF) was established in 1997. The Fund is cooperating with all large investment banks and financial institutions operating in Georgia. It is coordinated by the Supervisory Board approved by the Government of Georgia and the Ministry of Regional Development and Infrastructure of Georgia.

95. MDF is a legal entity of public law, the objective of which is to support strengthening institutional and financial capacity of local government units, investing financial resources in local infrastructure and services, improving on sustainable basis the primary economic and social services for the local population (communities), developing renewable energy (midget power plants and geothermal) sources, creating sustainable economic basis for refugees, rehabilitating irrigation and drainage systems, provision of low-interest loans to legal entities and physical persons of Georgia in the framework of the Government Program, Technical Assistance for Foreign and Georgian physical bodies and legal entities for business development in Georgia, liquidation of damage caused to the population and infrastructure during the conflicts in Georgia.

96. At present, the Municipal Development Fund of Georgia (MDF), assisted by the Asian Development Bank, is accomplishing 4 sub-projects, with one of them being at the stage of construction, two of them have the phase of selecting the contractor and consultant accomplished, and implementation of one project will start later.

97. The second tranche of the Sustainable Urban Development Project is made up of two sub- projects: Rehabilitation of the first and third sections of Tbilisi-Rustavi Road Project. There was an integrated tender announced to select the construction company and supervising consultant for the two sub-projects by MDF in agreement with ADB. Consequently, the present Audit Report shows the aggregate audit results for the two sub-projects:

1. CWUW - 42414-023 - Sustainable Urban Transport Investment Program - Tranche 1

 Sub-project 1 - Tbilisi Metro Extension (Vazha Pshavela Avenue)  Sub-project 2 - Anaklia Costal Improvement

1. CWUW - 42414-033 - Sustainable Urban Transport Investment Program – Tranche 2

 Sub-project 1 - section 1 (km 0-4) 40

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

 Sub-project 2 - section 3 (km 10.5-17.1) of the international standard Tbilisi-Rustavi Urban Road Link

98. Following the above-mentioned, the present Audit Report considers three sub-projects. Brief information on implementation status of audited projects is presented in Table 10.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Table 10: Brief information on implementation status of ADB funded projects carried out by MDF in Georgia

# Project Identification Project Project Location Project Status Remarks Implementation team (Project (PIU, Construction Implementation Company, Consultant Percentage) Company) 1 CWUW - 42414-023 - Sustainable PIU – MDF Tbilisi Tbilisi Metro Initial Environmental Examination for the Tbilisi Urban Transport Investment extension subproject Metro Line 2 and Creation of University Station Program - Tranche 1, has not been started subproject have been finalized and submitted to the Subproject 1 - Tbilisi Metro yet. ADB for comments. Draft design of the project is Extension (Vazha Pshavela finalized. Final version of the project design is under Avenue) preparation taking into account comments of Tbilisi Transportation Company. 2 CWUW - 42414-023 - Sustainable PIU – MDF Municipality of 33% Urban Transport Investment Construction Company Anaklia Program - Tranche 1, – Modern Business Subproject 2 - Anaklia Costal Group LLC; Improvement. Consultant Company - DOHWA Engineering Co 3 3 CWUW - 42414-033 - PIU – MDF Tbilisi and Rustavi Subproject has not A general tender was announced for the first and Sustainable Urban Transport Construction Company Municipalities been started yet. second subprojects of the second tranche and Investment Program – Tranche – Sinohydro therefore, the present audit report considers both 2, Corporation Limited sections of Rustavi road as one subproject. Subproject 1 - Section 1Tbilisi- Rustavi ( km 0-4) Consultant Company - DOHWA Engineering Co

3 present Audit Report shows the aggregate auditor’s results for the two sub-projects 3 and 4

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4 CWUW - 42414-033 - Sustainable PIU – MDF Tbilisi and Rustavi Subproject has not A general tender was announced for the first and Urban Transport Investment Construction Company Municipalities been started yet. second subprojects of the second tranche and Program – Tranche 2, – Sinohydro therefore, the present audit report considers both Subproject 1 - Section 1Tbilisi- Corporation Limited sections of Rustavi road as one subproject. Rustavi (km 0-4) Consultant Company - DOHWA Engineering Co

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.1.2 Institutional Arrangement of MDF on Environmental Safeguards Implementation

99. Ministry of Regional Development and Infrastructure (MoRDI) is the Executing Agency (EA) responsible for management, coordination and execution of all activities funded under the loan. MoRDI have overall responsibility for compliance with loan covenants.

100. Municipal Development Fund of Georgia (MDF)) is the Project Implementing Unit (PIU), which responsible for administration, implementation (design, construction and operation) and all day-to-day activities under the loan. PIU is also responsible for EMP implementation according to the IEE requirements.

101. During the audit process the Environmental Unit of MDF was presented by 4 employees:

1. Head of the Environmental Unit; 2. Environmental Specialist; 3. Environmental Specialist; 4. Environmental Inspector

102. As it was mentioned during the audit at this stage, the new structure of the MDF is being developed. MDF has formed a special sub-unit in order to strengthen its performance in environmental and social safeguards. The sub-unit has the following composition: 3 resettlement specialists and 5 environmental specialists. The sub-unit has a team leader who directly reports to the Executive Director of the Fund (See Figure 1).

103. An International Consultant Company - DOHWA Engineering Co. Ltd hired by MDF as project supervision for the construction of Anaklia coastal improvement project. The Consultant also provides capacity building training to construction contractor staff for management and operation and maintenance for the Project. The Supervition Consultant assists MDF in assuring that the project is implemented according to the specified standards.

104. This Supervition Consultant assignment includes the update of the environmental management and monitoring plan (EMP) detailing environmental mitigation measures, to address each identified impact and recommend appropriate environmental mitigation measures. The Supervition Consultant assesses the cost, responsibilities schedule, location and monitoring framework associated with the implementation of the mitigation measures and the EMP and he assist MDF in monitoring the implementation of the EMP.

105. The MDF hired the Construction Contractor - Modern Business Group LLD which has the following obligations:  to employ Environmental consultant responsible for developing and implementing the construction phase EMP and for provision of corresponding information to MDF;  to develop, if required, a Spoil Disposal Plan and Construction Waste Disposal Plan agreed with the MoE and Local Government;  The EMP implementation costs should be included into the construction budget.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

106. The Construction Contractor for implementation of EMP of this project hired an Environmental Specialist (ES) to spend a total of around 9 month for project construction period, conducting routine observations and surveys, and preparing quarterly reports. The ES also responsible for: incorporation of mitigation measures in construction; and, construction-stage environmental quality monitoring. The ES is also required to oversee the EMP implementation and submitting quarterly Environmental Monitoring Reports to Supervision Consultant.

Figure 1: Institutional Chart of MDF

Executive Director

Under Executive First Deputy (33+1) Deputy (35+1) Director (1+41)

Financial West Georgia Project East Georgia Project Project Appraisal 1 Advisors (2) Management and Monitoring (15+1+P) Monitoring (4+1+P) (13+1) Investment (9+1+P)

Environment and Strategic Administration (17+1) Social Safeguards Development (10+1) (4+2C/ADB+P)

Procurement UM 21 Environmental Internal Audit (5+1) (6+1+1C+P) Specialist

Program Coordination UM 22 Environmental Analytical (4+1+1C) (5+1+P) Specialist

UM 23 Resettlemental PR (2+1) Specialist

UM 24 Licenses and Legal (5+1) Permits Specialist

UMP1 Monitoring Specialist (from West GE Project Monitoring)

UMP1 Resettlement Specialist

UMP2 Ressettlement Specialist 45

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.2 Projects Implemented By MDF

2.2.1 Tbilisi Metro Extension Project (Vazha Pshavela Avenue)

2.2.1.1 Brief Project Description

107. The institutional issues, project documents and the project sites were reviewed for analysis of n Project. performance of environmental safeguards on Tbilisi Metro Extension Line - 2 of Tbilisi Metro, also called Saburtalo Line, opened in 1979 (Figure 3-1). At that time, the line ran from “Vagzlis Moedani” (Tbilisi Central Railway Station) to “Delisi” (at Saburtalo District), with a total length of 5.5km. Plans were then developed for an extension of Line-2 to the Tbilisi University area, with 2 additional stations: “Vaja-Pshavela” and “University”. Construction began in 1985, but ceased in 1993, due to financial and technical problems. Construction recommenced in 1998 and in 2000 the section between “Delisi” and “Vazha-Pshavela” was opened, adding 1.2km, with only one tunnel, operating in one direction only.

108. The Saburtalo Metro Line currently ends at “Vaja Pshavela” station with limited operations between “Delisi” and “Vaja Pshavela”. Most passengers traveling to the western parts of Saburtalo (especially the Tbilisi University buildings) therefore have to transfer at “Delisi” station to buses and microbus-taxis. Largely as a result of this, Delisi is one of the busiest parts of Saburtalo District, with well developed commercial and transport infrastructure operating in the vicinity of the Metro station.

109. The current situation with the metro station “University” is as follows:

 The tunnels are built along the entire length of the new section;  The upper entrance hall of the station “University” is partially constructed;  Underground pedestrian passes to the station are constructed;  Moving staircase tunnel is constructed

2.2.1.2 Project Document Analysis

Loan Agreement, Project Administration Manual

110. Loan Agreement dated 5 August 2010 between Georgia ("Borrower") and Asian Development Bank ("ADB").

111. The obligation to meet the environmental requirements is given in schedule 5, clause 2 of the document, which states: „The Borrower, through MDF, shall ensure that potential adverse environmental impacts arising from the Project are minimized by implementing all the mitigation measures presented in the environmental impact assessment ("EIA") or Initial Environmental Examination ("IEE"), as applicable, and environmental management plan ("EMP"). The Borrower will also ensure that the design, construction, and operation of the Project are in accordance with ADB’s Safeguards Policy Statement (2009), the EARF and the Borrower’s environmental laws and regulations. The Borrower shall cause MDF to ensure that (i) during construction, the contractor has primary responsibility for implementing the mitigation measures 46

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and EMP measures and the MDF will have access to sufficient resources to ensure that all environmental management provisions are included in the contract; (ii) the MDF will monitor and record the implementation of the EMP prepared for the Project; (iii) the MDF prepares semiannual environmental reports and submits to ADB, within 3 months of the end of each half of the calendar year, from the start of project implementation and until completion of the Project. The report will include, among other things, a review of progress made on environmental measures detailed in the EIA/IEE and EMP, and problems encountered and remedial measures taken. The Borrower, through MDF, shall further ensure that detailed engineering designs, civil works, and other contracts for the Project facilities incorporate applicable environmental measures identified in the EIA/IEE and EMP“.

112. In 2013 the Asian development Bank developed and approved Project Administration Manual (PAM), which gives a detailed obligation to update the environmental management and monitoring plans - „Environmental Management and Monitoring Plan will be updated during detailed engineering design and incorporated in bidding documents and civil works contracts4“.

2.2.1.3 Project Status

113. Tbilisi Metro Extension Sub-project has not been started yet.

114. Initial Environmental Examination for the Tbilisi Metro Line 2 and Creation of University Station subproject have been finalized and submitted to the ADB for comments. Draft design of the project is finalized. Final version of the project design is under preparation taking into account comments of Tbilisi Transportation Company.

2.2.2 Anaklia Costal Improvement Project

2.2.2.1 Brief Information on Anaklia Costal Improvement Project

115. Anaklia is supposed to become a tourism centre in Georgia. Anaklia infrastructure development and rehabilitation plan was announced by the Government of Georgia. Erosion processes take place on various locations at Georgian Black Sea coastal line and Anaklia is one of them. Today this process is seriously destroyed coastline.

116. Coastal protection structure of underwater breakwaters is totally composed with 6 units (for phase 1) with total length 1,130m. Among them, the length of one section equals 300m and length of the last one – 230m. (Totally 1,130m).

117. Length of artificial nourishment is 1,400m. Amount of sand for phase II is 97,855 m3. Total Width of artificial nourishment is 60m, from beach line to land side is 40m and forward to seaside is 20m. Slope of beach line will be composed with 1:20.

4 Project Administration Manual – chapter VII “Safeguard”, point A “Environment”, P-22.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

118. According to the law of Georgia on Permit on Environmental Impact (2008) the project does not require EIA and obtaining of Permit on Environmental Impact.

119. Following ‘Environmental Considerations in ADB Operations’ of September 2009, the Project can be considered to be a Category B project requiring an Initial Environmental Assessment (IEE). The Project will not require an acquisition of land and resettlement activities will not become necessary at all. There is no protected area located closely and ecologically sensitive habitats will not be affected.

120. The IEEs were developed for both phases of the said Project and were approved by ADB.

2.2.2.2 Project Document Analysis

A) Loan Agreement, Project Administration Manual

121. Loan Agreement dated 5 August 2010 between Georgia ("Borrower") and Asian Development Bank ("ADB").

122. The obligation to meet the environmental requirements is given in schedule 5, clause 2 of the document, which states: „The Borrower, through MDF, shall ensure that potential adverse environmental impacts arising from the Project are minimized by implementing all the mitigation measures presented in the environmental impact assessment ("EIA") or Initial Environmental Examination ("IEE"), as applicable, and environmental management plan ("EMP"). The Borrower will also ensure that the design, construction, and operation of the Project are in accordance with ADB’s Safeguards Policy Statement (2009), the EARF and the Borrower’s environmental laws and regulations. The Borrower shall cause MDF to ensure that (i) during construction, the contractor has primary responsibility for implementing the mitigation measures and EMP measures and the MDF will have access to sufficient resources to ensure that all environmental management provisions are included in the contract; (ii) the MDF will monitor and record the implementation of the EMP prepared for the Project; (iii) the MDF prepares semiannual environmental reports and submits to ADB, within 3 months of the end of each half of the calendar year, from the start of project implementation and until completion of the Project. The report will include, among other things, a review of progress made on environmental measures detailed in the EIA/IEE and EMP, and problems encountered and remedial measures taken. The Borrower, through MDF, shall further ensure that detailed engineering designs, civil works, and other contracts for the Project facilities incorporate applicable environmental measures identified in the EIA/IEE and EMP“.

123. In 2013, the ADB developed and approved Project Administration Manual (PAM), which gives a detailed obligation to update the Environmental Management and Monitoring Plans - „Environmental Management and Monitoring Plan will be updated during detailed engineering

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

design and incorporated in bidding documents and civil works contracts 5 “.

B) Bidding Documents

124. The tender to select the Construction Contractor for phase one of Anaklia Coastal Improvement Project was announced in April of 2012. The IEE document was attached to the tender documents as an annex. The obligation to meet the requirements under the document submitted by the contractor and reporting is given in section B of the tender documentation - „Specific Provisions“, under which: „The contractor shall comply with all applicable national and provincial and local environmental laws and regulations. The contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set force in the environmental impact assessment, the environmental management plan attached here to as appendix and (c) allocate the budget required to ensure that such measures carried out. The contractor shall submit quarterly, semiannual reports on the carrying out of such measures to employer“.

125. The bidding documentation also gives a detailed description of the following requirements (Bid Document, Techical Specifications vollum III, Series 500 pp-73-75): - Updating the Environmental Management Plan by the contractor; - Necessity for measurements, and - Use of sanctions (penalties) in case the contractor fails to meet the environmental requirements. 126. The environmental requirements are not copied to Section “Scope of works” of the tender documents.

C) Evaluation of Bids

127. No environmental specialist is engaged in the evaluation of the submitted tender proposals. Mr. Paata Iakobashvili, the Head of the Project Evaluation Department is the member of the project evaluation commission, who evaluates the project offers in the environmental respect, is engaged in the evaluation of the tender bids.

128. As already mentioned, no environmental requirements are included in the “Scope of Works” of the tender documents. As the practice suggests, the construction contractor has not an environmental specialist engaged in the phase of developing the tender bid, and as a result, the cost estimate of the tender bid by the contractor is done based on the Scope of works or contractor’s experience. Consequently, the cost estimates of the tender bid presented by the applicants fail to show the funds the construction companies plan to spend to meet the environmental requirements.

5 Project Administration Manual – chapter VII “Safeguard”, point A “Environment”, P-22.

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129. For example, the IEE obligates the construction contractor to accomplish measurements related to the air, soil and water quality. The total cost of these analyses is approximately 25 thousand GEL (IEE, clause 9.3 - Costs of Environmental Management Plan). As the requirement for accomplishing the analyses was not included in the Scope of Works, the contractor did not include the said amount in the submitted cost estimate. At the same time, the requirement for such amounts, as listed below, is included in the cost estimate6:

 Providing the Project Manager with Mobile Communication (2000 GEL);  Taking-Printing the Pictures (2500 GEL);  Preparation and furnishment of the office of the Project Manager (12 000 GEL)

130. Surely, failure to include the amounts necessary to accomplish the mitigation measures in the cost estimate does not relieve the contractor from the obligation for accomplishing such measures, moreover, when the necessity for meeting the environmental requirements under the IEE are given clearly in the tender documentation. The contractor faces the problems when it becomes necessary to obtain additional finances within the limits of the project to accomplish the mitigation measures.

131. Following the terms of the tender, the only criterion to evaluate the companies at the second stage of the tender is price quotation. Accordingly, when drafting the financial budget, all companies try to include only the clauses, which are absolutely necessary, in the financial statement, and at the least possible prices. Consequently, obtaining the additional finances in the course of the project is done by reducing the finances for other activities within the limits of the project what damages the project in the final run.

132. Recommendation: After the loan agreement is approved, PIU and/or the environmental specialist of the consultant company shall be engaged in all following phases of the project implementation (drafting the project detailed design, developing and assessing the tender bids, concluding the agreement with the construction contractor).

D) Contracts:

Contract with DOHWA Engineering Co Ltd (Consulting Company)

133. The contract for consultancy services was concluded with Korean company DOHWA Engineering Co Ltd on December 19, 2011. The activities to be accomplished by the contractor are given in Appendix A Clause E “Preparation of Environment Documents” of the concluded contract, under which: „After the review the preliminary design prepared for the Anaklia project, the Consultant will have to prepare the Environmental Impact Assessment / Initial Environment Examination (EIA/IEE) in accordance with ADB’s Safeguards Policy Statement 2009 and the Environment Assessment Review Framework (EARF) agreed between the Government of

6 Contract “Construction of coastal protection facilities in Anaklia” pp - 24

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Georgia and ADB. The key responsibilities of the Consultant will be: (i) prepare the EIA/IEE in accordance with the ADB's Safeguards Policy Statement (SPS, 2009). (ii) submit the updated EIA/IEE for MDF and ADB review and approval. (iii) guide and assist in the establishment and implementation of a centralized resettlement/social management system in MDF and in participating municipalities for dealing with social related topics such as gender aspects. (iv) assist as needed in the implementation of the Site Specific EMP. (v) train the Environment Division of MDF, the Municipal management team in Tbilisi City, program management unit; on policies, procedures, and best practices related to Environmental Management. (vi) Any other related tasks as necessary”.

134. The contract identifies the members of the environmental team and period of their engagement in the project implementation. Under the agreement, the following environmental experts of the consultant company are to be engaged in the phase of drafting the project detailed design and construction supervision:

1. International Environmental Specialist – 4 months; 2. National Environmental Specialist – 3 months; 3. Hydrologist (national) – 2 months.

Contract with Modern Business Group LLD (Construction Company)

135. Agreement with Azerbaijani Company “Modern Business Group LLD“ was concluded on June 12, 2013.

136. The Environmental Impact Assessment (EIA) is attached to the said Agreement as annex 2, and the obligation for meeting the document requirements is fixed in part B – “Special Provisions” of the contract, stating that: „The contractor shall Comply with all applicable national and provincial and local environmental laws and regulations. The contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set force in the environmental impact assessment, the environmental management plan attached here to as appendix and (c) allocate the budget required to ensure that such measures carried out. The contractor shall submit quarterly, semiannual reports on the carrying out of such measures to employer“.

137. The tender documentation also gives a detailed description of the following requirements (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp-50-71):

- Updating the Environmental Management Plan by the contractor; - Necessity for measurements, and - Use of sanctions (penalties) in case the contractor fails to meet the environmental requirements.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

138. The Consultant (audit team) has revealed Non-Compliance #1: 139. Requirement: „The EMP implementation costs should be included into the construction budget“ (source of request: IEE, clause I.1 Institutional Arrangements, Paragraph 370).

140. Present situation: As per the quality analyzes of the air, water and soil samples, 14 400 USD is not included in the budget of the tender bid presented by the construction contractor or relevant contract concluded with MDF.

141. Finding: The budget of contract is not complying with the requirements taken by IEE (clause I.1 Institutional Arrangements, Paragraph 370) acoording to which EMP implementation costs should be included into the construction budget.

142. Corrective Actions: Additional information is to be included in the contract and the contract price must be increased by 14 400 USD, or alternatively, the construction contractor shall submit the substantiation of the said amounts to be spent within the limits of the budget by economizing on other items. The construction contractor shall submit the substantiation of the said economy not being accomplished at the expense of deteriorated quality.

2.2.2.3 Preparation of Pre-Construction Documents A) Project Environmental Management Plan (EMP) and Emergency Situations Management Plan 143. Under the contract, the construction contractor shall develop and update a number of environmental management plans, in particular:

1. A detailed overall Project Environmental Management Plan (EMP) shall be prepared by the Contractor and submitted to the Engineer for approval“ (contract P42414-Sutip-ICB- 1.02, Techical Specifications, Series 500 pp-50); 2. A Contractor’s environmental management plan (EMP) consists of four components namely: 1.Potential environmental and social impacts, 2. a set of mitigating and enhancement measures to eliminate and/or avoid unwanted effects; 3. Monitoring and evaluation; and 4. Institutional measures to be taken during implementation and operation in the project site and immediate vicinities to reduce them to acceptable levels. The EMP also includes the actions needed to implement these measures (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp-54).

144. The Consultant (audit team) has revealed Non-Compliance #2:

145. Requirement: Under the contract concluded with the construction contractor the Emergency Situaions Management Plan is a part of the improved EMP, with its sections described in the Terms of Contract: „The contractor must be prepared to respond to accidental and emergency situations in a manner appropriate to the operational risks and the need to prevent their potential negative consequences. This preparation will include a plan that addresses the responsibilities, communication, procedures, and other aspects required to

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

effectively respond to emergencies associated with project hazards and accidents“. (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp-55).

146. In addition, the parts of the risk assessment document are given in the agreement concluded with the Consultant: „The Engineer shall perform risk management in coordination with the Employer and the Contractor, taking into consideration the following: (i) risk identification: determining which risks are likely to affect the project, and documenting the characteristics of each; (ii) risk quantification: evaluating risks and risk interactions to assess the range of possible project outcomes; (iii) risk response: defining enhancement steps for opportunities and responses to threats; (iv) risk response Control: responding to changes in risk over the course of the project.“ (Contract “Consultants’ Services” APPENDIX A – Description of Services, clouse 2 - ”Project management and construction supervision” paragraph 40).

147. Present situation: The contractor has submitted updated EMP, which now includes the issues identified in the course of development of the project detailed design.

148. As for the Emergency Situations Management Plan, the submitted plan cannot be considered as the required one. The total size of the submitted plan is one page only (See Fig. 2).

149. Finding: the Emergency Situations Management Plan is not complying with thw requirements taken from contract document (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp-55) according which preparation of Emergency Situations Management Plan will include the responsibilities, communication, procedures, and other aspects required to effectively respond to emergencies associated with project hazards and accidents.

150. Corrective Actions: The Construction Company shall develop the “Emergency Situations Management Plan” and submit it with MDF for approval within 1 month according to the contractual requirements.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Figure 2. Presented Emergency Situations Management Plan

B) Soil Disposal Plan and Construction Waste Disposal Plan

151. Requirement: „To develop, if required, a Spoil Disposal Plan and Construction Waste Disposal Plan agreed with the Ministry of Environment and Natural Resources Protection and Local Government” (source of request: IEE clause I.1 Institutional Arrangements, Paragraph 370).

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

.152 Present situation: Under the IEE document, the development of the said plan must have been done only in case of necessity. There were two sources of ground origination considered in the primary option of the project:

1. Business yard and construction camp were planned to locate on the bank of the river Enguri and in such a case, it was necessary to remove and store the topsoil and certain amount of subsoil;

2. In addition, certain amount of ground was expected to originate during the sea bottom treatment.

153. In the phase of the project implementation, due to a number of considerations, it was decided to locate the business yard and camp on the land plot owned by the state between the river Tikori and patriot camp (the relevant permit to use this area was obtained from Gamgeoba of Zugdidi municipality. See Appendix 3). As the said area is located along the coastline and is covered with sand, the necessity for removing the soil at the project implementation stage was excluded.

154. In addition, under letter No. 080 received from the contractor on 13.11.2013, “the ground originated during the treatment of the sea bottom will not be removed from the territory, but will be spilled locally, in the sea area”.

155. As for the construction inert waste, it is presented as small fractures of dried concrete in such small quantities that no relevant plan is necessary to develop (the total amount of the waste is around 2-3 m3). At present, negotiations are held with the municipality, which will remove the said waste from the territory of the yard.

156. Consequently, there is no necessity for developing the two above-mentioned plans within the limits of the project.

157. Recommendation: A monitoring plan is to be developed for new procedures, in particular, for spilling the ground removed during the sea bottom treatment in the sea. When spilling the ground in the sea, the sea water will become turbid more than in case of the sea bottom treatment. Before starting the treatment of the sea bottom, the building contractor must submit the procedure of spilling the removed ground into the sea with the description of the spilling sites and monitoring plan.

2.2.2.4 Monitoring, Reporting and Trainings

158. The environmental monitoring and reporting of the consruction contractor as well as of PIU is done within the terms specified by the agreement.

A) Monitoring

159. The audit team has revealed Non-compliance #3:

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

160. Requirement: Implementation of EMP: a) Diary supervising environmental protection activities during constructing process; b) Environmental daily/weekly report. (contract P42414- Sutip-ICB-1.02, Techical Specifications, Series 500 pp- 55):

161. Present situation: Levan Sulikashvili, the environmental specialist of the construction contractor is permanently on the site and undertakes permanent monitoring. However, he does not make relevant records and does not keep relevant reports.

162. Finding: Environmental daily/weekly report is not complying with the requirement taken from construction contract (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp- 55) according to which the the environmental specialist should keep Environmental daily/weekly report.

163. Corrective Action: A questionnaire to be filed out by the environmental specialist of the construction contractor on a daily basis is to be developed (term – 2 weeks). In case of fixing an non-compliance, a corrective action is to be developed, the term to correct the non-compliance is to be fixed and relevant actions are to be accomplished. All the above-mentioned shall be documented.

164. As for the reports of the audits held by MDF, the documentation procedures are all correct, in particular, the problem is described and the terms to solve the problem are specified correctly. The results of every of such audit are documented and verified both, by the construction contractor and consultant company (See Fig. 3).

Figure 3. Headpaper of MDF conducted audit report

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

B) Reporting

165. The construction contractor shall present monthly „Progress Reports“, environmental issues included in the present document as an individual chapter.

166. An International Consultant Company - DOHWA Engineering Co., Ltd hired by MDF for construction supervision of Anaklia coastal improvement sub project (phase 1), undertakes environmental monitoring of project progress and submits quarterly Environmental Monitoring Report to MDF. Since the project commencement, the consultant company has been presented two such reports. The second report was submitted in February of 2014. There were 13 facts of non-compliance fixed in the reporting period (December, 2013 – February, 2014). The document gives the corrective actions for all of them. By the moment of drafting the present report in February of 2014, 7 facts of non-compliance out of 13 were corrected and 5 facts were partially corrected, while the work to correct one fact of non-compliance is in progress.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

167. There is a Bi-Annual Report7 developed on the request of the Municipal Development Fund. The presented report was drafted in line with the requirements of Asian Development Bank.

168. All the above-listed reports are available both, on the construction site and at the head office of the Roads Department. As for the Bi-Annual Reports, which MDF submits to the ADB, they are available on the ADB web-site. However, the audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations.

C) Trainings

169. The audit team has revealed the Non-compliance #4:

170. Requirement: Implementation of EMP c) Plan to train and guide those who are responsible for environmental supervision of the contractor (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp- 55).

171. Present situation: There were trainings about professional health and safety organized for the construction contractor, and this is proved by certain records. The construction contractor has no plan of the trainings to be given to the environmental specialists.

172. Finding: Plan to train and guide those who are responsible for environmental supervision is not complying with the contract documents (contract P42414-Sutip-ICB-1.02, Techical Specifications, Series 500 pp- 55). According which construction contractor shall prepare Plan to train and guide those who are responsible for environmental supervision of the contractor.

173. Corrective Actions: Within two weeks, the construction contractor shall present the plan of the trainings to be held in the environmental field.

2.2.2.5 Site visit

174. The site visit was held on 13.03.2014. A meeting with the environmental specialists and technical staff was held (Fig. 4 and 5). The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 4).

175. In addition, on the job training was held. The meeting was attended by the environmental specialists and technical persoinnel of the construction company, consultant company and MDF (Fig. 6 and 7).

7 The report is placed on the ADB web-site: http://www.adb.org/sites/default/files/projdocs/2014/42414-023-emr-02.pdf

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Figures 4 and 5. Meeting with project implementation team

Figures 6 and 7. On-job training at Anaklia Construction Camp

176. At the meeting, the environmental plans and relevant records made by the construction contractor were reviewed and evaluated. The construction contractor was responsible for drafting such plans and records under the agreement.

A) Site-Specific Environmental Mangement Plan (SEMP)

177. Site Specific Environmental Management Plan (SEMP) was developed and submitted to MDF. The quality of the presented plan is very low. The said plan totally fails to meet the requirements specified by ADB. The main reason for this is the staff changes with PIU.

178. In July of 2013, the employees of the Municipal Development Fund and other organizations engaged in the implementation of the project were given a 2-day-long training within the limits of

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

RETA project. The principal issues considered at the training were the requirements for developing and realizing SEMP.

179. The training was attended by 7 environmental specialists engaged in Anaklia Coastal Improvement Project. At present, none of the 7 specialists is engaged in the project, as some of them were relieved and others moved to other departments.

180. At the working meeting during the site visit, the environmental specialists were given the explanation about the requirements for developing and introducing SEMP; however, the organized 2-hour-long meeting will not be sufficient to gain the skills necessary for drafting thorough SEMP.

181. Recommendation: The finances are to be obtained to give a 2-day-long on job training course to all environmental specialist engaged in Anaklia Coastal Improvement Project.

B) Book of Complaints

182. The site with ongoing construction works has no the Book of Complaints and Suggestions. According to the PIU and Contractor, there were no complaints received from the citizens.

183. Recommendation: Book of Complaints should be prepared and maintained on the site.

C) Baseline Analyzes

184. Requirement: Water, soil and air quality analysis is to be accomplished (IEE 9.3 Costs of Environmental Management Plan).

185. Present situation: The chemical analysis of seawater was done twice: on 31.12.2013 and 15.01.2014; in addition, on 13.01.2013, the analyzes of air bacteriological and chemical indicators were done (for the analyzes results, see Appendix 5).

D) Borrow pits

186. Requirement: The exploration of the borrow pits should be conducted by the licensed companies. (IEE, clouse E.7 Construction Related Impacts at the Quarrying Sites, article 342).

187. Present situation: The inert material to the objects is supplied from the following plants:

 Detritus, fraction 10-20 mm – BIG ENERGY LTD. (agreement concluded on 01.09.2011);  Detritus, fraction 20-40 mm – MIG 2005 LTD. (agreement concluded on 1.03.2007);  Sand – LAZIKA LTD. (agreement concluded on 1.09.2013)

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

 Rubble stone -PULSAR LTD. (agreement concluded on 19.08.2013)

188. All companies have relevant licenses to extract inert materials.

E) Waste management

189. A 0.24 m3 capacity plastic container for municipal waste on the territory of the business yard (Fig. 8 and 9).

Figures 8 and 9. Plastic containers in the business yard

190. There is also a container for hazardous waste placed on the territory (Fig. 10), which is hermetically closed. As during the construction, no large quantities of hazardous waste is expected to originate, the capacity of the said container is absolutely sufficient to store the hazardous waste temporarily.

Figure 10. Hazardous waste container

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

191. On November 29, 2013, the construction contractor concluded agreement # 2911-13 with SANITARI LTD. for removal and temporal storage of hazardous waste.

192. Recommendation: The hazardous waste container is desirable to place in the roofed area and have relevant marking.

F) Sewage waters

193. Requirement: 346. The construction camp shall be equipped with a biotoilet and other necessary infrastructure (source of request: IEE,. E.8 Worker Camps 346).

194. Present situation: Bio-toilet is placed on the camp territory (Fig. 11).

Figure 11. Bio-toilet on the camp territory

G) Oil Station

195. Gas station is placed on the territory of the business yard. The capacity of the container at the gas station is 4.5 tons. The container stands on the concrete basement, but in case of spills, the content of the container will easily get on sand and cause pollution of the underground waters. The level of the underground waters in this area is 40-50 cm (Fig. 12).

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Figure 12. Oil Station

196. Recommendation: The Emergency Situations Management Plan shall necessarily include the requirement for the protective tank for the said container. The capacity of the protective tank must be 110% of the container capacity.

2.2.2.6 Example of a Good Practice

197. The major works of Anaklia Coastal Improvement Project are to be accomplished in the sea, and include the treatment of the sea bottom, flattening the sea bottom and placing tetrapods. These works are done with a greffer. If the greffer is to operate trouble-free, the moving parts are to be regularly oiled with lubricants. As during the works, the greffer is always in the water, the lubricants on it permanently dissolve in the water causing the pollution of the seawater.

198. Instead of standard lubricants of the construction company, unmolding agent to emulsified in water – DESCOR-A of Spanish production have been used.

199. The main priorities of the substance are:

 DESCOR – A, is a liquid unmoulding agent, wtich can be amulsified in water, with an only and colourless-light yellow appearance. It’s been especially designed to make easier the unmounlding of beams, girders and concrete pre- cast elements, thuse avoiding adherence and scaling.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.2.2.7 Main Findings revaled during the Documents Review and Site Visits

200. Based on the projects documents review and conducted site visits the Consultant (audit team) revealed the following general findings:

(i) In general, majority of PIU have improved their environmental performance during last few years. Visible changes relate to quality of environmental reports prepared by PIUs or Supervision Consultants on behalf of PMUs, improved design of bidding and contract documentation in terms of including environmental safeguards, communication between PMUs and Contractors on environmental aspects, keeping records on environmental performance; (ii) For the recent 3 or 4 months, there were a number of institutional and staff changes undertaken at the Municipal Development Fund of Georgia. As a result of the said changes, the environmental team of the company totally changed. It should be noted that the qualification of the majority of new specialists employed in the environmental sector (professional background, experience, training and skills) is quite high; (iii) Despite the fact that in recent years, the number of environmental specialists and their qualification on the company staff increased (there are now 4 environmental specialists instead of 1 in 2009), following the number of the projects accomplished by MDF, the number of specialists is not sufficient to achieve the maximum effect; (iv) No environmental specialist is engaged in drafting the tender documentation or considering the tender bids. However, Mr. Paata Iakobashvili, the Head of the Project Evaluation Department is the member of the project evaluation commission, who evaluates the project offers in the environmental respect; (v) The audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations; (vi) At present, the construction of the presented projects takes place within the limits of one project only “Anaklia bank reinforcement works project”. Under the agreement concluded with the consultant company, an international 8 environmental specialist must be engaged in the implementation of the project.

8 “International consultant” means any consulting firm established or incorporated in any eligible country, including the borrower’s country or a person who is a citizen of any eligible country including the borrower’s country. - „Guidelines on The Use of Consultants by Asian Development Bank and Its Borrowers“ , March 2013, pp-2.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.2.2.8 Non-Compliances and Recommendations

201. Based on the above-mentioned findings the Consultant fixed the following general non- compliances and made the following recommendations:

Non-compliances:

(i) As per the analysis of the air, water and soil samples, 14 400 USD is not included in the budget of the tender bid presented by the construction contractor or relevant contract concluded with MDF; (ii) The submitted “Emergency Situations Management Plan” fails to meet the contractual requirements; (iii) Levan Sulikashvili, the environmental specialist of the construction contractor is permanently on the site and undertakes permanent monitoring. However, he does not make relevant records and does not keep relevant reports; (i) There were trainings about professional health and safety organized for the construction contractor, and this is proved by certain records. The construction contractor has no plan of the trainings to be given to the environmental specialists.

Recommendations:

(i) In the implementation of the projects financed by the international or budgetary funds the number of the employees of the environmental sector is to at least double if the high indicators of the environmental field are to be achieved; (ii) All environmental specialists engaged in the implementation of the project are to be given training “Environmental safety requirements under the projects financed by ADB” by ADB within the limits of the RETA Project. (iii) The international environmental specialist of the Consultant Company is to be engaged in the implementation of the project as early as at the construction mobilization stage. (iv) The environmental specialist included in PIU or the environmental unit must be engaged in the implementation of the project at all stages of the project implementation, including drafting the detailed design, developing the tender bid, evaluating the tender bid, concluding the agreement, etc. (engagement of the environmental specialist in all phases of the project development by ADB, as a requirement is desirable to be fixed either under the relevant part of the loan agreement or Project Administration Manual (PAM), as it is the case with PAM drafted within the limits of the Urban Services Improvement Investment Program – Project 2, project: 43405-024. (v) The tender bids were evaluated by using the criteria to evaluate the tender bids in the environmental respect developed by ADB. (vi) The Construction Contractor must develop SEMP within the limits of all projects to submit to the PIU for approval. 65

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

(vii) Section “Scope of Works” of the tender documents does not show the requirements given in the environmental documents (IEE/EIA) (conducting analyses, preliminary biological studies, archaeological studies, etc.). Consequently, the financial section of the tender bid proposed by the construction contractor fails to consider the funds necessary to accomplish the said actions later having its impact on the quality of the project implementation. All environmental requirements are desirable to be given in the “Scope of Works”. (viii) The hazardous waste container is desirable to place in the roofed area and have relevant marking. (ix) A monitoring plan is to be developed for new procedures, in particular, for spilling the ground removed during the sea bottom treatment in the sea. When spilling the ground in the sea, the sea water will become turbid more than in case of the sea bottom treatment. Before starting the treatment of the sea bottom, the building contractor must submit the procedure of spilling the removed ground into the sea with the description of the spilling sites and monitoring plan; (x) The Emergency Situations Management Plan shall necessarily include the requirement for the protective oil tank for the said container. The capacity of the protective tank must be 110% of the container capacity.

2.2.3 Construction of International Standard Tbilisi-Rustavi Urban Road

2.2.3.1 Brief Project Description

202. Project will improve the urban transport system in urban areas and comprises two subprojects: (i) the section 1 (km 0-4) and section 3 (km 10.5-17.1) of the international standard Tbilisi-Rustavi Urban Road Link.

203. Section 1: Tbilisi to Phonichala, has 4.0km long length of road alignment on the Project. It will be considered upgrading the existing section of the road between Tbilisi (Gulia street square) and Phonichala Settlement (Kvemo Phonichala). The existing 2~6 lanes road will be upgraded to 6 lanes of which the width of each lane has 3.50m. The central barrier is of 6m width. Side walk for pedestrian will be installed on both sides – of 2.5~3.0m width. Pavement is of asphalt concrete. The new road infrastructure includes three bridges, one of which locates at interchange and the other two locate over the dry gorges descending from adjacent slopes to the existing road, and one interchange. Construction of the infrastructure will entail acquisition of additional private land and will affect private structures and businesses somewhat. Besides, construction of the road will require replacement of the existing utilities and communication infrastructures either.

204. Section 3: Phonichala - Rustavi has 6.7km long length of road alignment on the Project. Tbilisi-Ponichala section of the project alignment is entirety located in Gardabani district,

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Alignment of project road mainly coincides with the alignment of the existing road Tbilisi-Red Bridge. Radii of horizontal and vertical curves, longitudinal and transverse slopes, superelevations correspond to highway parameters according to the Terms of Reference. Design road axis passes on the right shoulder of the existing road. It will be considered upgrading the existing section of the road between the settlement of Phonichala and Rustavi. The existing 2 lanes road will be upgraded to 4 lanes. The width of each lane is 3.75m. The central barrier has 6m width and no sidewalk on this section. Pavement is of concrete. The project will require filling of the existing channel passing in parallel with the road and construction of a new channel nearby. The new road infrastructure includes one bridge over the new design channel and 2 bridges at interchange and 3 interchanges. Construction of the infrastructure will entail acquisition of additional private land and will affect private structures and businesses somewhat. Besides, construction of the road will require replacement of the existing utilities and communication infrastructures either.

205. Project is classified as environmental category B under ADB's Safeguards Policy Statement, 2009 - The environmental assessment and review and framework (EARF) approved in 2010 is still applicable for the tranche 2. The initial environmental examination (IEE) have been prepared and posted on ADB and MDF websites.

2.2.3.2 Project Document Analysis

206. The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 6).

A) Loan Agreement

207. Loan Agreement dated 24 July 2012 between Georgia ("Borrower") and Asian Development Bank ("ADB").

208. The obligation to meet the environmental requirements is given in schedule 5, clause 2 of the document, which states: „The Borrower shall cause MDF to ensure that the preparation, design, construction, implementation, operation and decommissioning of the Project comply with: (a) all applicable laws and regulations of the Borrower relating to environment, health, and safety; (b) the Environmental Safeguards; (c) the EARF; and (d) all measures and requirements set forth in the respective IEE and EMP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report“.

B) Bidding Documents

209. The agreement contains IEE (Annex 1.1 and 1.2) and EMP (Annex 2.1 and 2.2) as annexes. The obligation for meeting the environmental requirements is given in section 8 - Particular Conditions of Contract, Part B – Specific Provisions, Sub-clause 4.18 Protection of the Environment.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

210. The Contractor shall comply with all applicable national environmental laws and regulations. “The Contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set forth in the Initial Environmental Examination and Environmental Management Plan, attached hereto as Appendix 1.1 and 1.2 and Appendix 2.1 and 2.2 and (c) allocate the budget required to ensure that such measures are carried out. The contractor shall submit Quarterly Reports on the carrying out of such measures to the Employer”.

211. More particularly, the Contractor shall comply with (i) the measures and requirements set forth in the initial environmental examination and the environmental management plan attached hereto as Appendix 2.1 and Appendix 2.2; and (ii) any corrective or preventative actions set out in safeguards monitoring reports that the Employer will prepare from time to time to monitor implementation of the initial environmental examination and the environmental management plan. The Contractor shall allocate a budget for compliance with these measures, requirements and actions.

C) Evaluation of Bids

212. No environmental specialist is engaged in the evaluation of the submitted tender proposals. Mr. Paata Iakobashvili, the Head of the Project Evaluation Department is the member of the project evaluation commission, who evaluates the project offers in the environmental respect, is engaged in the evaluation of the tender bids.

213. Recommendation: The environmental specialist included in PIU or the environmental unit must be engaged in the implementation of the project at all stages of the project implementation, including drafting the detailed design, developing the tender bid, evaluating the tender bid, concluding the agreement, etc.

D) Contracts

Dohwa Engineering Co Ltd (Consulting Company)

214. The contract for consultancy services was concluded with Korean company DOHWA Engineering Co Ltd on December 19, 2011. The activities to be accomplished by the consultant are given in Appendix A, Clause E: “Preparation of Environment Documents” of the concluded contract, under which: „After the review the preliminary design prepared for the Anaklia project, the Consultant will have to prepare the Environmental Impact Assessment / Initial Environment Examination (EIA/IEE) in accordance with ADB’s Safeguards Policy Statement 2009 and the Environment Assessment Review Framework (EARF) agreed between the Government of Georgia and ADB. The key responsibilities of the Consultant will be: (i) prepare the EIA/IEE in accordance with the ADB's Safeguards Policy Statement (SPS, 2009). (ii) submit the updated

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

EIA/IEE for MDF and ADB review and approval. (iii) guide and assist in the establishment and implementation of a centralized resettlement/social management system in MDF and in participating municipalities for dealing with social related topics such as gender aspects. (iv) assist as needed in the implementation of the Site Specific EMP. (v) train the Environment Division of MDF, the Municipal management team in Tbilisi City, program management unit; on policies, procedures, and best practices related to Environmental Management. (vi) Any other related tasks as necessary”.

215. The contract identifies the members of the environmental team and period of their engagement in the project implementation. Under the agreement, the following environmental experts of the consultant company are to be engaged in the phase of drafting the project detailed design and construction supervision:

1. International Environmental Specialist – 4 months; 2. National Environmental Specialist – 3 months; 3. Hydrologist (national) – 2 months.

Sinohydro Corporation Limited (China- Construction Company)

216. The agreement with the Constraction Company was concluded in March of 2014.

217. The agreement contains IEE (Annex 1.1 and 1.2) and EMP (Annex 2.1 and 2.2) as annexes. The obligation for meeting the environmental requirements is given in section 8 - Particular Conditions of Contract, Part B – Specific Provisions, Sub-clause 4.18 Protection of the Environment: “The Contractor shall comply with all applicable national environmental laws and regulations. The Contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set forth in the Initial Environmental Examination and Environmental Management Plan, attached hereto as Appendix 1.1 and 1.2 and Appendix 2.1 and 2.2 and (c) allocate the budget required to ensure that such measures are carried out. The contractor shall submit Quarterly Reports on the carrying out of such measures to the Employer”.

218. More particularly, the Contractor shall comply with (i) the measures and requirements set forth in the initial environmental examination and the environmental management plan attached hereto as Appendix 2.1 and Appendix 2.2; and (ii) any corrective or preventative actions set out in safeguards monitoring reports that the Employer will prepare from time to time to monitor implementation of the initial environmental examination and the environmental management plan. The Contractor shall allocate a budget for compliance with these measures, requirements and actions.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.2.3.3 Main Findings Revealed During the Documents Review

219. Based on the projects documents review and conducted site visits the Consultant revealed the following general findings:

(i) In general, majority of PIU have improved their environmental performance during last few years. Visible changes relate to quality of environmental reports prepared by PIUs or Supervision Consultants on behalf of PMUs, improved design of bidding and contract documentation in terms of including environmental safeguards, communication between PMUs and Contractors on environmental aspects, keeping records on environmental performance; (ii) For the recent 3 or 4 months, there were a number of institutional and staff changes undertaken at the Municipal Development Fund of Georgia. As a result of the said changes, the environmental team of the company totally changed. It should be noted that the qualification of the majority of new specialists employed in the environmental sector (professional background, experience, training and skills) is quite high. (iii) Despite the fact that in recent years, the number of environmental specialists and their qualification on the company staff increased (there are now 4 environmental specialists instead of 1 in 2009), following the number of the projects accomplished by MDF, the number of specialists is not sufficient to achieve the maximum effect. (iv) No environmental specialist is engaged in drafting the tender documentation or considering the tender bids. However, Mr. Paata Iakobashvili, the Head of the Project Evaluation Department is the member of the project evaluation commission, who evaluates the project offers in the environmental respect. (v) The qualification of the environmental specialists employed at the Construction Company remains low. The stage of the evaluation of the tender bids for Tbilisi-Rustavi Road Construction Project was marked by good practice, in particular, the tender commission rejected the qualification of the environmental specialist recommended by the Construction Contractor and the latter was required to replace him with a more qualified staff.

2.2.3.4 Recommendations

220. Based on the above-mentioned findings the Consultant provided the following recommendations:

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

(iii) The international environmental specialist of the Consultant Company is to be engaged in the implementation of the project as early as at the construction mobilization stage. (iv) The environmental specialist included in PIU or the environmental unit must be engaged in the implementation of the project at all stages of the project implementation, including drafting the detailed design, developing the tender bid, evaluating the tender bid, concluding the agreement, etc. (engagement of the environmental specialist in all phases of the project development by ADB, as a requirement is desirable to be fixed either under the relevant part of the loan agreement or Project Administration Manual (PAM), as it is the case with PAM drafted within the limits of the Urban Services Improvement Investment Program – Project 2, project: 43405-024. (v) The tender bids were evaluated by using the criteria to evaluate the tender bids in the environmental respect developed by ADB. (vi) The Construction Contractor must develop SEMP within the limits of all projects to submit to the PIU for approval.

221. More detailed recommendations for MDF with indication of the entities responsible for their implementation as well as the terms of recommendations implementation are provided in the Table 11.

Table 11. Recommendations Matrix

# Recommendation Responsible/Actions Implementation Terms 1 All environmental specialists MDF - Should seek the As soon as possible. engaged in the necessary funds to conduct implementation of the project training. are to be given training “Environmental safety requirements under the projects financed by ADB” by ADB within the limits of the RETA Project.

2 The international MDF – Ensures International During preparation of contract environmental specialist of the Environmental Specialists documents. Consultant Company is to be involment in the implementation engaged in the of the project as early as at the implementation of the project construction mobilization stage. as early as at the construction mobilization stage. 3 The environmental specialist ADB - As a requirement to be During preparation of Loan included in PIU or the fixed either under the relevant Agreement or Project environmental unit must be part of the loan agreement or Administration Manual. engaged in the Project Administration Manual implementation of the project (PAM), as it is the case with PAM at all stages of the project drafted within the limits of the

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

implementation, including Urban Services Improvement drafting the detailed design, Investment Program – Project 2, developing the tender bid, project: 43405-024. evaluating the tender bid, concluding the agreement, etc. 4 The tender bids were ADB - As a requirement to be During preparation of Project evaluated by using the criteria fixed under the relevant part of Administration Manual. to evaluate the tender bids in the Project Administration the environmental respect Manual (PAM). developed by ADB.

5 The Construction Contractor MDF - As a requirement to be Before starting of construction shall develop SEMP within the fixed in the Contract. activities. limits of all projects to submit to the PIU for approval.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.3 Environmental Audit of the Projects Implemented by the Georgian State Electrosystem (GSE)

2.3.1 Projects Implementation Unit (PIU) - The Georgian State Elecrosystem (GSE) - General Information

222. The JSC Georgian State Elecrosystem (GSE) - is a 100% state-owned joint stock company providing transmission and exclusive dispatch services to about 50 eligible companies in Georgia. GSE was formed in 2002 from the merger of JSC “Electrogadatsema” and JSC “Electrodispetcherizatsia”. These two entities were themselves established in 1999 and 2000 respectively to own the transmission assets of the state utility Sakenergo and to manage the national dispatch centre. Based on the transmission and dispatch tariffs established by the independent regulator (GNERC-Georgian National Energy and Water Regulatory Commission) GSE carries out technical control over the entire power system to ensure the availability of the system for uninterrupted and reliable power supply; and transfers, without the right of purchase or sale, the electricity imported or generated in Georgia to distribution companies, direct customers or the power systems of neighboring countries. GSE operates under perpetual electricity transmission license No.12-004 and dispatching license No.13-004 obtained from the GNERC on December 20, 2002.

223. Georgia’s transmission network operates at 500kV, 330kV, 220kV, 110kV and 35kV voltages. A backbone 500kV transmission line (“Kavkasioni” – “Imereti”- “Kartli-2”- “Kartli-1”) connects Russia and the large generators (notably Enguri HPP) in the north-west to Tbilisi with a further 330kV inter-connection to Azerbaijan. There is a reasonably extensive 220kV grid connecting other demand centres and generators. The Georgian grid is inter-connected with Russia at 500kV and 220kV (through Abkhazia), with Azerbaijan at 330kV and with Armenia and Turkey at 220kV. There are also isolated 110kV connections with Armenia and Russia.

224. The total length of Georgian power system transmission lines equals to 11,297km. GSE’s transmission assets include 220/110/35kV overhead lines with the total length of 2,938km and 91 substations with the total installed capacity of 8,400MW, including three (3) strategically important 500kV substations and seventeen (17) 220kV substations throughout the territory of Georgia. The total number of substations constitutes 89 units, with the rated power of 8030.5 megawatt.

225. At present, the Georgian State Elecrosystem (GSE), assisted by the Asian Development Bank, is accomplishing 1 project: CWEN - 44183-013 - Regional Power Transmission Enhancement Project, which is divided into two lots: (a) rehabilitation/extension of Menji, Ksani and Marneuli substations, and (b) construction of new Khorga substation. Brief information on implementation status of audited projects is presented in Table 12.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

226. Within the limits of RETA project, under financing of ADB, the trainings for the environmental specialsts held by “Eco-Spectri” Ltd. for GSE were attended by 3 representatives, with one of them being GSE employee (PIU), and two representatives (environmental specialist and procurement specialist) of Ltd. “Energotrans”, daughter company of GSE . By the time of audit, the GSE environmental specialist did not work at the company. As for two employees of Energotrans Ltd. they are not officially involved in the projects accomplished by GSE. Consequently, at present, none of the employees of GSE have taken the ADB financed environmental training within the RETA project.

Table 12: Brief information on implementation status of ADB funded projects carried out by GSE in Georgia

# Project Project Project Project Status Remarks Identification Implementation Location (Project team Implementation (PIU, Percentage) Construction Company, Consultant Company) 1. CWEN - 44183-013 PIU – GSE Khorga, Jvari, The project has The project is divided into two lots. At - Regional Power Consultant Ksani and not been started the present stage, the construction Transmission Company – Marneuli yet. company is being selected. Enhancement Fichtner Gmbh (Georgia) Project (Germany)

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.3.2 Institutional Arrangement of GSE on Environmental Safeguards Implementation

227. The institutional structure of GSE is presented on Figure 13:

Figure 13: Institutional Chart of GSE

228. GSE is the Executing Agency (EA) for the Project. A "virtual" Project Implementation Unit (PIU) established within GSE. GSE’s Reporting & International Projects Coordination Department will lead and coordinate project implementation which will be undertaken by staff appointed to the PIU. The PIU will not be physically created (i.e. housed in a separate office) it will consist of specialists and experts from other departments on an as required basis.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

229. From December 2013 GSE created an Environmental and Social Safeguards Unit within the Reporting & International Projects Coordination Department. Two additional specialists (Environment and Social experts) were appointed within the unit.

230. Until 2011, GSE did not have environmental specialists on staff. At present, as per the staff list, there are two environmental specialists at the company, in fact only with one of them working, as since January of 2014, the position of the Head of the Environmental and Social Safeguards Unit has been vacant.

231. GSE as a responsible PIU for the project has recruited a Construction Supervision Consultant (CSC). The national and international team of consultants will assist GSE as project supervision for the construction of Georgia: Regional Power Transmission Enhancement Project. The Consultant, based on the project needs will also provide capacity building training to construction contractor staff for management and operation and maintenance for the Project. The Supervision Consultant will assist GSE in assuring that the project is implemented according to the specified standards.

232. GSE with support from a construction supervision consultant will be responsible for ensuring that the overall project is implemented in accordance with the conditions of the ADB loan agreement including ADB environmental guidelines and Government of Georgia (GoG) environmental regulations. In particular, GSE will be responsible for ensuring, on a day-to-day basis, that the EMP is implemented during each stage of the project (pre-construction, construction and operation).

2.3.3 Regional Power Transmission Enhancement Project

2.3.3.1 Brief Project Description

233. The Asian Development Bank (ADB) is providing technical assistance to the Government of Georgia (the Government) to support Georgian State Electrosystem (GSE) in assessing the viability of options to enhance power transmission capacity through various hardware and physical infrastructure improvements to rehabilitate and strengthen power transmission within Georgia, as well as provide the potential to eventually export power within the region.

234. The availability and reliability of GSE’s transmission infrastructure have been vastly improved for recent years as a result of intensive capital investment programs successfully implemented with the support of international financial institutions and donors.

235. The proposed project as described below is among the top investment priorities of GSE’s Strategic Development Plan 2012-2020 and, once implemented, will further enhance the reliability and stability of GSE’s transmission and interconnection infrastructure and remarkably improve the capability of cross-border energy exchange for export, import and transit.

236. The Regional Power Transmission Enhancement Project (the Project) comprises three main components: (i) substation rehabilitation and improvements (ii) construction of a new 76

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Khorga 220/110 kV substation and iii) consulting services. Only components i) and ii) involves activities that could have an impact on the environment.

237. The first phase of the project is construction of new substation in Khorga (Samegrelo region), the second phase of the Project comprises three main components: (i) complete rehabilitation of 500kV substation Ksani, (ii) rehabilitation/expansion of existing Marneuli substation, and (iii) supply of 125MVA autotransformer for substation Menji, is to ensure safe and improved power supply to the east part of Georgia, increase the reliability of entire power system of Georgia and facilitate power export/import/transit and regional trade operations with neighboring countries.

2.3.3.2 Project Status

238. At the present stage, the IEE for all four sub-stations is developed and approved by the Asian Development Bank. Under the legislation of Georgia, developing of the EIA was necessary only for the projects of construction of new Khorga substation and extension of existing Marneuli substation.

239. The EIA documents are developed for both sub-projects and they are submitted to the Ministry of Environment and Natural Resources Protection of Georgia (MoE). MoE presented its views and comments of the documents within the scope of both sub-projects and required the relevant changes to be done to the said documents.

240. Commenting upon the remarks of the Ministry of Environment and making relevant changes to the document is possible only after the detailed designs within the scope of both sub-projects are developed.

2.3.3.3 Project Document Analysis

A) Loan Agreement, Project Administration Manual

241. Loan Agreement dated 13 March 2013 between Georgia ("Borrower") and Asian Development Bank ("ADB"). The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 7).

242. The obligation to meet the environmental requirements is given in schedule 5, clause 4 of the document, which states: „The Borrower shall cause GSE to ensure that (a) the preparation, design, construction, implementation, operation and decommissioning of the Project and all Project facilities comply with (i) all applicable laws and regulations of the Borrower relating to environment, health and safety; (ii) the Environmental Safeguards; and (iii) all measures and requirements set forth in the IEE, the EMP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report; and (b) subsequent to the award of any Works contract, the build or construction phase of the Works contract shall only proceed after the Ministry of Environment Protection has granted the final approval of the IEE.“

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

243. In Noveber 2013 the ADB developed and approved Project Administration Manual (PAM). The present document gives a more detailed description of the project category and the negative impact on the environment expected as a result of the project implementation, in particular: „Only the construction of Khorga substation will involve physical activities that could potentially result in environmental impacts. The project is classified under environment category B. An Initial Environmental Examination (IEE) including Environmental Management Plan (EMP) in accordance with ADB’s Safeguard Policy Statement (2009) has been prepared. No significant natural habitats will be affected by the Khorga substation development due to its location within an area where the natural habitat has been highly modified by recent agricultural activities and human settlement. Overall the Project will generate only minor environmental impacts that can be reduced to acceptable levels through implementation of practical mitigation measures normally associated with internationally recognized good engineering practice. Such mitigation measures are specified in the EMP, relevant sections of which will be included in the bidding document.

244. GSE will be responsible for managing the Implementation of the EMP with support from the Project Supervision and Management Consultant. Routine progress reports of EMP implementation will be submitted to ADB in accordance with the project progress reporting schedule.

245. The Government will ensure that GSE shall not award any works contract which involves environmental impacts until (i) the Government or relevant environment authority, as appropriate, has granted the final approval of the IEE; and (ii) GSE has incorporated the relevant provisions from the EMP into the works contract.

246. The Government shall cause GSE to ensure that the preparation, design, construction, implementation, operation and decommissioning of the Project comply with (a) all applicable laws and regulations of Georgia relating to environment, health and safety; (b) the Environmental Safeguards; and (c) all measures and requirements set forth in the IEE, the EMP, and any corrective or preventative actions set forth in a safeguards monitoring report 9“.

B) Bidding Documents

Bidding Documents for Lot 1 and Lot 2 for Consultant Company

247. The tender to select the Constraction Contractor for Lot one and two of the “Regional Power Transmission Enhancement Project” was announced on 30 September of 2013.

248. The announced tender was enclosed by ToR, which gave a detailed description of the rights and obligations of the environmental specialist. Under the tender announced for the

9 Project Administration Manual – chapter VII “Safeguard”, point A “Environment”, P-22.

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supervising consultant company, Chapter “Environmental Safeguards” states, that: „The Consultant shall assist GSE to prepare a bi-annual environemtnal monitoring report on the implementation of the Environmental Management and Monitoring Plan (EMMP), to ensure that the preparation, design, construction implementation, operation and comissioning of the Project comply with (a) all applicable laws and regulations of Georgia relating to environment, health and safety; (b) the Environmental Safeguards; (c) all measures and requirements set forthe in the IEE, the EMP, and any corrective or preventive actions set forthe in a safeguards monitoring report, and (d) any violation of environmental standards under this Project. The bi- annual report shall be submitted within 2 weeks by end of June and December of each year. The monitoring results will also be included in the quarterly progress reports“.

249. In addition, the tender documents specified the minimum qualification for the environmental consultant - „E. Qualifications and Detailed Tasks of the Environmental and Social Safeguard Specialist” states, taht: „The National Environmental and Social Safeguard Specialist shall have the following qualifications:

- Bachelor or higher degree in environmental or social management - Preferably 5 years of relevant experience in projects in power sector - Previous experience in international financed projects in the region is desirable

250. The specialist will assist in the following:

- Recommend monitoring plans to address identified significant environmental and social Impacts; - Monitor safeguards and EMP implementation to ensure the safeguards and EMP and Resettlement and Compensation Plan are properly implemented; - Assist GSE with capacity building on environmental and social safeguard“.

Bidding Documents for Lot 1 and Lot 2 for Construction Company

251. The tender to select the Construction Contractor for Lot one and two of the “Regional Power Transmission Enhancement Project” was announced on 2 April of 2013 (for lot one) and on 30 September 2013 (for lot two). The IEE was attached to the tender documents as an annex 1. The obligation to meet the requirements under the document submitted by the contractor and reporting is given in section B of the tender documentation - „Specific Provisions“, chapter 46 “Environmental protection”, under which: „the contractor shall be certified according to ISO 14000:2005. The contractor shall comply with all applicable national, provincial andl local environmental lows and regulations. The contractor shall: (a) establish an operational system for managing environmental impacts; (b) carry out all of the monitoring and mitigation measures set fors in the Initial Environmental Examination and the Environmental Management Plan attached hereto as appendix 1; (c) allocate the budget reguired to ensure that such measures are carried out. The contractor shall submit quarterly reports on the carrying out of such measures to the Employer; (d) provide the employer with a written notice of any 79

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anticipated environmental or resettlement risks or impacts that arise diring construction, implementation or operation of the project that were not considered in IEE ar EMP“.

C) Evaluation of Bids

252. No environmental specialist is engaged in the evaluation of the submitted tender proposals. Mrs. Maia Pitskhelauri, the Head of Reporting and International Projects Coordination Department is the member of the project evaluation commission, who evaluates the project offers in the environmental respect, is engaged in the evaluation of the tender bids.

253. Recommendation: After the loan agreement is approved, PIU/PMI and/or the environmental specialist of the Supervision Consultant Company shall be engaged in all following phases of the project implementation (drafting the project detailed design, developing and assessing the tender bids, concluding the agreement with the construction contractor).

254. At present, only the supervising consultant company is identified, and there is no agreement for consultation services concluded with it. The selection of the construction company, both, for the first and second lots, is in the phase of tender bids assessment.

2.3.3.4 Findings and Recommendations

255. Based on the project documents review the Consultant (Audit Team) revealed the following general findings:

(i) GSE is accomplishing one project „Regional Power Transmission Enhancement Project“, within which 4 substation rehabilitation/construction is planned at the first stage. The project envisages the rehabilitation of Menji and Ksani substations, extension of Marneuli substation and construction of a new substation;

(ii) Following the specifics of the projects, the said four sub-projects were divided into two lots: (a) rehabilitation/extension of Menji, Ksani and Marneuli substations, and (b) construction of new Khorga substation;

(iii) At present, only the supervising consultant company is identified, and there is no agreement for consultation services concluded with it. In addition, as for the selection process for the construction companies, the tender bids are being evaluated for this purpose;

(iv) Until 2011, GSE did not have environmental specialists on staff. As per the staff list, the GSE environmental team consists of two environmental specialists: Head of the Environmental and Social Safeguards Unit and Environmental Coordinator. Since January of 2014, the position of the head of the said department has been vacant. The Environmental and Social Safeguards Unit is subordinate to the Reporting and

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

International Projects Coordination Department, and is involved only in the implementation of the projects financed by the international financial institutions;

(v) The GSE environmental coordinator has not taken the ADB-financed training within the RETA project;

(vi) JSC GSE owns 130 units of 500-220-110-35 KV power transmission lines with the total length of 3221.97 and 92 units of substations with the total installed capacity of 0212.6 MW. The mentioned infrastructure is quite old and most of it needs rehabilitation. The company, under the financing of the international financing institutions, is already accomplishing a number of projects, and new projects are planned to finance. Following the above-mentioned, the number of the environmental team members is to increase to ensure the maximum efficiency of the project;

(vii) The skills acquired within the limits of RETA Project and new requirements are not realized in the tender bids and contracts. Even the contracts concluded after training (16-17.07.2013) within the limits of RETA 7548 Project, fail to envisage the new requirements developed by ADB;

(viii) An environmental specialist takes no part in the tender bids evaluation process. No evaluation criteria developed by ADB are used in the evaluation of the tender bid;

(ix) At present, as per the staff list, there are two environmental specialists at the company, in fact only with one of them working, as since January of 2014, the position of the head of the Resettlement and Environmental Department has been vacant. Following the number of the projects accomplished by GSE, the number of specialists is not sufficient to achieve the maximum effect related to the implemention of environmental requirements;

(x) The tender documentation submitted to the construction company contains no requirement of developing SEMP.

256. Based on the above-mentioned findings the Consultant made the following general recommendations:

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

of the project development by ADB as a requirement is desirable to be fixed either under the relevant part of the loan agreement or Project Administration Manual (PAM), as it is the case with PAM drafted within the limits of the Urban Services Improvement Investment Program – Project 2, project: 43405-024); (iv) The tender bids were evaluated by using the criteria to evaluate the tender bids in the environmental respect developed by ADB; (v) The Construction Contractor shall develop SEMP within the limits of both sub-projects to submit to the GSE (PIU) for approval.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.4 Environmental Audit of the Projects Implemented by the Roads Department of Georgia (RD)

2.4.1 Projects Implementation Unit (PIU) - The Roads Department of Georgia (RD) - General Information

257. Key projects related to the development of Georgian road infrastructure and road maintenance works on international and secondary roads are implemented by Roads Department by coordination of the Ministry of Regional Development and Infrastructure.

258. Currently, Roads Department is responsible for 1455km of International road and 6943 km of Secondary road.

259. From international road network E-60 (Poti-Tbilisi-Red Bridge) and E-70 (Poti-Batumi- Sarpi) highways are distinguished with high intensity of transit vehicles. These two roads join each other at the port city of Poti and represent main transit road with total length 450 km. Upgrading of E-60 and E-70 highways commenced in 2006 and are being implementing by stages.

260. At present, the Road Department of Georgia (RD) accomplishes two sub-projects financed by the Asian Development Bank. In fact, one of the projects is complete with rehabilitation works taking place at some locations only. As for another sub-project, which is in fact, the continuation of the first project, it is accomplished by 17% percent:

 Sub-project 1 - CWTC - 41122-023 Road Corridor Investment Program (Kobuleti/Adjara) - Tranche 1

 Sub-project 2 - 41122-033 Road Corridor Investment Program (Kobuleti/Adjara) - Tranche 3 (Additional Financing)

261. Following the above-mentioned, the present Country Report considers two sub-projects. Brief information on implementation status of audited projects is presented in Table 13.

262. The training for the environmental specialists engaged in the projects accomplished by the RD within the scope of RETA project and under financing of the ADB was attended by 4 representatives, with three of them being RD employees (PIU) and one of them being an international consultant, representative of Korean company DOHWA Engineering Co Ltd.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Table 13: Brief information on implementation status of ADB funded projects carried out by RD in Georgia

# Project Identification Project Implementation Project Location Project Status Remarks team (Project (PIU, Construction Implementation Company, Consultant Percentage) Company) 1 Subproject 1 - CWTC - 41122-023 PIU – RD of Georgia Ajara region 100 % The project is complete with Road Corridor Investment the rehabilitation works Program (Kobuleti/Ajara) - Tranche Construction Company taking place at some 1; – Sinohydro locations at present. Corporation Limited;

Consultant Company - DOHWA Engineering Co. 2 Subproject 2 - 41122-033 Road PIU – RD of Georgia Ajara region 17 % Corridor Investment Program Construction Company (Kobuleti/Ajara)- - Tranche 3 – Sinohydro (Additional Financing). Corporation Limited;

Consultant Company - DOHWA Engineering Co.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.4.2 Institutional Arrangement of Roads Department (RD)

263. Among the organizations realizing the projects financed by the Asian Development Bank, the Roads Department of Georgia with the staff and structure of its environmental team is the best in Georgia.

264. The environmental department of the company is made up of seven employees. Structurally, this department is subordinate to the Resettlement and Environmental Department (see Figure 14):

Figure 14. Structure of the Resettlement and Environmental Department

265. Institutions responsible for executing and monitoring the environmental aspects of this Project are:

(i) MORDI is responsible for planning, constructing, operating and maintaining regional, national and provincial infrastructures in Georgia and RD is responsible for overall 85

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management of roads. The Project Management Unit (PMU) of RD will be in charge of project management to ensure that the contract provisions are properly maintained.

(ii) The RD and its provincial authorities will undertake routine and random monitoring of the specific environmental management plans (EMP) addressed in this EIA.

(iii) The supervision consultants - Dohwa Engineering Co Ltd under RD are responsible for environmental monitoring and management of project implementation and to help ensure the implementation of environmental management practices at each stage of the construction.

(iv) MOEPNR will be consulted if complicated issues arise during construction and operation stages.

266. Implementation of mitigation measures presented in the EMP and monitoring plan during the construction stages will be the responsibility of the Construction Contractor - Sinohydro Corporation Limited. The representative of RD and environmental specialists of the supervision consultants will supervise the monitoring of implementing mitigation and monitoring measures during the construction stage. The domestic environmental specialist will coordinate with the international environmental specialist for resolving complicated issues that arise in the field and to provide continuously updated information in order to submit reports to RD and ADB.

2.4.3 CWTC - 41122-023 Road Corridor Investment Program - Tranche 1

2.4.3.1 Brief Information on the Project

267. The 121 km existing Senaki-Poti–Sarpi road (S-2) along the western coast of Georgia is a key highway and international transit route in Georgia. It is connected to the major Black Sea ports of Georgia, viz. Batumi and Poti, and a number of holiday resorts, particularly, Kobuleti and Batumi. The road runs through heavily built up tourist and residential areas and provides poor road and travel conditions, especially for international transit traffic which has to mix with the dense urban traffic passing through narrow streets. At present a significant volume of international transportation is carried on the Batumi-Poti section of the road amounting to 1.0 million tons annually (2005), with 0.5 million tons on the Batumi-Sarpi section. This mix of heavy traffic on the existing road combined with poor road conditions leads to traffic congestion, dangerous driving situations and frequent traffic accidents, particularly in Batumi and Kobuleti and especially during the tourist season in summer.

268. The project comprises (i) construction of a new 28 km two-lane bypass road skirting the city of Kobuleti, and widening of 6 km of the the existing two-lane road between Kobuleti and Batumi to four lanes; (ii) strengthening the asset management capacity of the Roads Department; and (iii) improving road safety.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

269. The Project was determined to be a Category A environmental project for which an EIA was processed. The total road length is around 45 km, mostly 2-lane (except in the vicinity of the Makhinjauri tunnel where it is connecting to existing 4-lane) with a number of bridges, culverts, retaining walls, and tunnels.

2.4.3.2 Project Document Analysis

A) Loan Agreement, Project Administration Manual

270. Loan Agreement dated 29 October 2009 between Georgia ("Borrower") and Asian Development Bank ("ADB").

271. The obligation to meet the environmental requirements is given in schedule 5, clause 13 of the document, which states: „The Borrower shall cause MORDI to ensure that the Project is designed, carried out, maintained, and monitored in compliance with (a) all applicable environmental laws and regulations; (b) ADB’s Environment Policy (2002); and (c) the EMP, including the mitigation measures and monitoring requirements arising from the implementation of the EIA. The Borrower shall also cause RD to ensure that: (i) Works contractors’ specifications include requirements to comply with the environmental mitigation measures contained in the EIA and EMP, and (ii) Works contractors are supervised to ensure compliance with the requirements of the EIA ánd EMP“.

272. The Loan Agreement was concluded in 2009 when the ADB safety policy of 2009 was not approved yet. Consequently, the said document, in environmental respect, requires meeting the ADB environmental safety requirements of 2002.

273. In September of 2013, the Asian Development Bank developed and approved Project Administration Manual (PAM) both, for the first and third trenches (additional financing). This document states about the meeting of the SPS requirements of the Bank in both phases: „The Environmental Assessment and Review Framework (EARF) has been updated to reflect the requirements of the ADB Safeguard Policy Statement and posted at the ADB website 20 December 2011. The government has accordingly updated the EIA and EMP based on the detailed design of Contract 3 section (km 12.4 to 31). They were posted on the ADB’s website 20 December 2011. RD has finalized the EMP and ADB ensured its compliance with SPS requirements prior to contract awarding and the commencement of civil works.“

B) Bidding Documents

For Construction Contractor

274. The tender to select the Construction Contractor for the first phase of Kobuleti Bypass Construction Project was declared by virtue of document No. RCIP/CW/ICB-01/03 of August, 2010. An EIA and EPM documents were attached to the tender documentation as an annex. 87

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The obligation of the contractor to meet the requirements of the document as well as contractor’s reporting responsibility are given in part B of the tender documentation - „Specific Provisions“, stating: „The contractor shall Comply with (a) measyres and requirements set forth in the environmental management planattaced hereto as appendix 1, to the extent it concerns impacts on the affected people during construction, and (b) any corrective measures of preventive actions set out in safeguard monitoring reports that the employere will prepare for time to time to monitor implementation of environmental management plan. The contractor shall submit quarterly, semiannual reports on the carrying out of such measures to employer. The contructor shall prepare the Environmental action plan, detaling the actions to be taket to imlament the environmental plan requirements including site-specific information on management and monitoring measures. The contracrore shall allocate a budjet for compliance with those measures, requirements and actions“.

275. The audit team has revealed Non-Compliance #1:

276. Requirement: (i) The tender and contract documents will clearly set out the Contractor’s obligations to undertake environmental mitigation measures set out in the EMP (attached to Contract Specifications). (ii) The recommended environmental mitigation cost should be included as an item in the Bills of Quantities (EIA, clouce G. Responsibilities for Reporting and Review, article 258).

277. Present situation: Part of the tender documentation “Bill of Quantities” does not give thorough budget necessary to meet the environmental requirements under the EIA document (for full cost estimate see Appendix 8).

278. Finding: The tender and contract documents does not meet the EIA Document requests according which: The recommended environmental mitigation cost should be included as an item in the Bills of Quantities (EIA, clouce G. Responsibilities for Reporting and Review, article 258).

279. Corrective Actions: As the construction works along the said section of the project are in fact complete, correcting the described facts of non-compliance will not yield the desired results.

For Consultant Company

280. As per the tender documentation (ToR) of the consultant company, the company staff must contain one international and two national environmental specialists.

281. Under ToR, the applying company is to present the methodology for environmental issues, inspection, monitoring and auditing, and actions to fix and correct the results.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

C) Evaluation of Bids

282. The environmental team of the Road Department of Georgia is actively engaged in the evaluation process of the tender bids.

283. Mr. Zaur Apshinashvili, Head of the Resettlement and Environmental Department is a member of the commission considering the tender bids. In addition, Mr. Murman Katsitadze, Project Implementation Specialist under ADB Financed Projects is actively engaged in the process of development of the tender bids for the ADB projects and evaluation of the submitted proposals. The Roads Department is the only organization in Georgia evaluating the tender bids in respect of environment protection (mainly, the CVs of the proposed experts and methods proposed by the company participating in the tender are evaluated). The points for environmental issues make approximately 10-15% of the total points when considering the tender bids.

284. Recommendation: The following criteria developed by ADB are desirable to use for the evaluation of environmental aspects of the tender bid:

• Does the bid address the findings of the EIA; • Does the bidder have sufficient resources to implement the EMP; • Is the bidder qualified; • Is the bidder proactively addressing environmental issues, including waste management; • Does the bidder have a past history of significant environmental compliance (or noncompliance).

D) Contracts

Contract with Dohwa Engineering Co Ltd (Consulting Company)

285. The contract for consultancy services was concluded with Korean company DOHWA Engineering Co Ltd on September 10, 2010. The activities to be accomplished by the contractor are given in Appendix A, Clouse E “Preparation of Environment Documents”, of the concluded contract, under which: „The key responsibilities of the Consultant will be: (i) prepare the EIA/IEE in accordance with the ADB's Safeguards Policy Statement (SPS, 2009). (ii) submit the updated EIA/IEE forRD and ADB review and approval. (iii) guide and assist in the establishment and implementation of a centralized resettlement/social management system in MDF and in participating municipalities for dealing with social related topics such as gender aspects. (v) train the Environment Division of RD, the Municipal management team in Tbilisi City, program management unit; on policies, procedures, and best practices related to Environmental Management. (vi) Any other related tasks as necessary”.

286. The contract identifies the members of the environmental team and period of their engagement in the project implementation. Under the agreement, the following environmental

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

experts of the consultant company are to be engaged in the phase of drafting the project detailed design and construction supervision:

1. One International Environmental Specialist 2. Two National Environmental Specialists

Sinohydro Corporation Limited (China- Construction Company)

287. Agreement with Chinese Company „Sinohydro Corporation Limited“ was concluded on September 10, 2010.

288. The Environmental Impact Assessment (EIA) document is attached to the said Agreement as annex 2, and the obligation for meeting the document requirements is fixed in part B – “Special Provisions” of the contract, stating that: „The contractor shall Comply with (a) measyres and requirements set forth in the environmental management planattaced hereto as appendix 1, to the extent it concerns impacts on the affected people during construction, and (b) any corrective measures of preventive actions set out in safeguard monitoring reports that the employere will prepare for time to time to monitor implementation of environmental management plan. The contractor shall submit quarterly, semiannual reports on the carrying out of such measures to employer. The contructor shall prepare the Environmental Action Plan, detaling the actions to be taket to imlament the environmental plan requirements including site-specific information on management and monitoring measures. The contracrore shall allocate a budjet for compliance with those measures, requirements and actions“.

2.4.3.3 Preparation of Pre-Construction Documents 289. Under the contract, the construction contractor shall develop and update a number of environmental management plans, in particular:

(i) Contractors will submit a spoil plan to PMU/RD and MOEPNR for approval. (source of request: EIA, clause A. Physical Environment, paragraph - 182); (ii) The contractor will submit a dust suppression program prior to construction. The plan will detail action to be taken to minimize dust generation (e.g., spraying of roads with water, vegetation cover in borrow sites), and will identify equipment to be used (source of request: EIA, clause 2. Air Quality, paragraph - 197); (iii) Solid waste and garbage will be collected in bins and disposed of daily, according to a brief and basic waste management plan prepared by the contractor and approved by RD, (source of request: EIA, clause 2. Construction Camps, paragraph - 225); (iv) RD will prepare a spill contingency plan or emergency plan with a set of measures to be followed to minimize the potential adverse effects of a spill of harmful substances that pollute the environmental resources such as soil and water (source of request: EIA, clause H. Spill Contingency Plan, paragraph - 241); (v) The supervision consultants in cooperation with RD and MOEPNR during project implementation will be required to: (i) Develop an environmental auditing protocol 90

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for the construction period, and formulate a detailed monitoring and management plan(source of request: EIA, clause H. Detailed Cost Estimates paragraph - 260).

290. EMP is updated regularly. The required environmental management plans are thoroughly developed and are available on the construction site. Some plans, such as “dust suppression program“, and „spoil plan” are included in the environmental management plan and monitoring plan as their parts.

2.4.3.4 Monitoring, Reporting and Trainings

291. The environmental monitoring and reporting of the construction contractor as well as of PIU is done within the terms specified by the agreement.

A) Monitoring

292. Investigations of baseline quality have been carried out during the environmental assessment study, during April 2009, the following analyses were done:

 Water quality investigations have been carried out during April 2009, to assess the background water quality. The analysis of water samples also includes estimation of total nitrate (TN), polyphosphate (TP), and total petroleum hydrocarbon (TPH) to assess the pollutions levels from agriculture and industrial flows. Physical properties, such as temperature, pH, turbidity and electricity conductivity;  Noise quality measurements carried out during the EIA study at three locations to assess the background noise levels, noise levels along the existing roads, and noise levels along the railway line;  Heavy metal analysis of soils were carried out by the Institute of Mineral Raw Materials of Caucasus (KIMS), a government institute during 2008 along the existing Kobuleti and Batumi road and in some agriculture areas.

293. The Construction Contractor carried out instrumental measurements for air quality and noise. Measurement of surface water and groundwater quality has been carried out in early July and late December 2013. Water quality measurements should be carried out on a quarterly basis, especially for groundwater in camp sites as this has direct impact on the health of the work personnel.

294. The relevant records about the accomplished measurements are easily available both, on the construction site and at the Roads Department.

295. The local environment specialist of the consultant company undertakes daily environmental inspections. There are questionnaires developed and filed out during the said inspections (see Fig. 15).

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Figure 15. The filled-out questionnaire chosen by the principle of randomization (26.09.2013)

296. The Construction Contractor will be informed of all identified facts of non-compliance in writing. At the next stage, the corrective actions are identified and the terms to correct the facts of non-compliance are fixed together with the construction contractor.

297. The environmental specialist of the Roads Department also undertakes monthly monitoring, inter alia studying the degree of correction of the facts of non-compliance.

298. All identified facts of non-compliance, corrective actions and accomplished actions are described in the quarterly reports, which are submitted to the Roads Department.

B) Reporting

299. All the reports are submitted in a timely manner, by considering the relevant requirements:

a. Monthly Reports – Environmental issues should be reported regularly in the monthly reports by the Contractor and to be commented on by the environmental specialist.

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

b. Quarterly Reports – Results of parametric measurements for noise, surface water, groundwater for drinking, air quality and dust should be reported by the Contractor on a quarterly basis as mentioned in the environmental monitoring plan. These results should be assessed by the environmental specialist for appropriate mitigation measures. The environmental specialist is also obligated to come up with quarterly environmental report to be submitted to the Client and ADB.

c. Bi-Annual Reports –The Contractor come up with a bi-annual environmental report. Upon submission, the environmental specialist should evaluate the environmental report and come up with general comments. As part of the Engineer’s reporting obligation a bi- annual report should be compiled by the environmental specialist and to be submitted to the Client and ADB after every six months of monitoring.

300. All the above-listed reports are available both, on the construction site and at the head office of the Roads Department. As for the Bi-Annual Reports, which RD submits to the ADB, they are available on the ADB web-site.

301. The audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations.

C) Trainings

302. The international environmental specialist of the consultant company is present on the construction site quarterly, under the developed schedule, and at each visit, he/she holds 2 or 3 trainings for the environmental and H&S specialists of the organization engaged in the project. The documents proving the holding of the trainings are kept at the construction site. Annex 2 gives the information about the training participants of October 4, 2013.

303. For companies involved in the implementation of the project financed by ADB in scope of RETA project training was conducted on July 18-19, 2013 The training was attended by 4 persons, with 3 of them being the representatives of the RD. Management Training (41122- 023)" for Kobuleti Bypass Construction Project. The small number of participants was caused by coincidence of two projects in time. As it became clear during the training, in addition to ADB funded 43333-012: Improving the Implementation of Environmental Safeguards in Central and West Asia project implied training, second project was undertaken almost with similar goals and objectives. This second project also comprised environmental audit and respective training within “Kobuleti Bypass Construction Project” (Loan-2560 GEO: Road Corridor Investment Program-Tranche 1-ICS02 Environmental Management Training (41122-023) for Kobuleti Bypass Project). As a result, half of the environmental specialists of both the Roads Department and project Supervisory Company attended our training while the second half was involved in the environmental audit within the scope of the second project. 93

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304. Recommendation: All the employees of RD and all environmental specialists engaged in the project shall take the training developed within the scope of RETA project.

2.4.3.5 Site Visits

305. Site visits were organized twice: on 05.11.2013 and 14.03.2014. A meeting with the environmental specialists and technical staff was organized. The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 9).

306. The environmental plans developed and relevant records drafted by the contractor were considered and evaluated during the meeting. These were the documents the construction contractor was responsible to develop under the agreement.

307. As already mentioned, two environmental specialists of the consultant company were present on the construction site every day doing daily monitoring of the activities of the construction contractor. Any incompliance identified during the monitoring is duly fixed, and relevant corrective actions are planned. Consequently, all those few facts of non-compliance (following the scale of the project) fixed by us, were already fixed by the local environmental specialists and relevant corrective actions were in progress.

308. The audit team has revealed the Non-compliance # 2:

309. Requirement: The top soil along the Project road will also be stripped, preserved for reuse in designated lands suggested by RD (source of request: EIA, Chapter – “Soils and Materials”, Paragraph 180).

310. Existing situation: At some sections of construction, the topsoil and subsoil are not placed in isolation causing the lost of subsoil (Figures 16 and 17). Besides, the figures clearly show the trace of the washed-down soil by rain.

Figures 16 and 17. Topsoil stored incorrectly

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

311. Finding: The topsoil and subsoil placed does not meet the EIA Document requests according which: The top soil along the Project road will also be stripped, preserved for reuse in designated lands suggested by RD (source of request: EIA, Chapter – “Soils and Materials”, Paragraph 180).

312. Corrective action: The topsoil and subsoil must be placed separately, under the standards set by EIA.

313. The described problem was fixed by the consultant company for several times, and all such facts are included in the quarterly reports developed by them.

A) Choloki Camp Site

314. During the construction of the first section of Kobuleti bypass, mainly Choloki camp is used. The territory of the camp houses office areas, living area for the workers, dining-room and all auxiliary infrastructures.

315. There are gas cylinders placed on the camp territory in an incorrect manner (Figure 18); there are metal waste placed in an unordered manner on the territory adjacent to the consruction camp (Figures 19, 20); and there are incorrectly placed waste oil in the area (hazardous waste, etc.). As already mentioned, all facts of non-compliance were fixed by the consultant company and corrective actions were started to solve the problems.

316. At the same time, it should be noted that the local roads (Figures 22, 23) and sanitary unit (Figure 21) of the construction camp in a good state, and the used tires are placed correctly (Figure 24).

Fig. 18. Incorrectly placed gas cylinder on Fig. 19. Uncontrolled Metal Waste the territory adjacent to the camp

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

Fig. 20. Uncontrolled metal waste Fig. 21. Sanitary Unit

Fig. 22. Internal camp roads Fig. 23. Internal camp roads

Fig. 24. Storage area for used tires Fig. 25. Waste placed in an uncontrolled manner

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

317. There are still sections along the road with asphalt waste placed in an uncontrolled way (Figures 26 and 27).

Figure 28. Asphalt waste along the road Figure 29. Asphalt waste under the bridge

318. Figure 30 shows the extract from the RD quarterly report with the corrective actions identified for all facts of non-compliance identified by audit team.

Figure 30. Extract from the RD report stipulating relevant corrective actions

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

B) Book of Complaints

319. The site with ongoing construction works had the Book of Complaints and Suggestions. According to the PIU and Contractor, there were no complaints received from the citizens.

C) Baseline Analyzes

320. Requirement: Water, soil and air quality analysis is to be accomplished (EIA, Chapter 9.3 – “Costs of Environmental Management Plan”).

321. Present situation: Chemical and microbiological studies of water (drinking and river) and air quality and noise level monitoring take place regularly.

322. The results of all conducted analysis are described in the quarterly reports, and besides, they are available on the construction site for any person concerned.

D) Borrow pits

323. Requirement: The mitigation plan to be followed by the Contractor at the borrow sites is: (i) only existing borrow areas approved by the environmental authority will be used for the project (EIA, chapter 9. “Quarry and Borrow Sites”, article 209).

324. Present situation: Existing quarry sites in Chaqvistskali and Choroki rivers will be used for procurement of construction material. Both sites have relevant permits by the Ministry of Environment and Natural Resources Protection.

Figures 31 and 32. Borrow pit of inert material and access road across the river Chorokhi

RETA 7548: Improving of Environmental Safeguards in Central and West Asia Georgia Country Report

2.4.3.6 Final Post-Construction Audit Report

325. Construction of the road within the scope of the first tranche is over. At the present stage, restoration, anti-erosion and cleaning works being accomplished.

326. On October 6, 2013, the international environmental consultants (Channa Bambaradeniya and Courtney E. McCall) accomplished “Post Bridge Construction Environmental Assesment of Rivers and Streams Crossing Kobuleti Road Lot 1” with its results found in the Bi-Annual Environmental Monitoring report for July – December 2013.

327. By now, most of the facts of non-compliance identified during the audit have been corrected.

2.4.3.7 Non-Compliances and Recommendations

328. Along with the findings the Consultant fixed the following general non-compliances and made the following recommendations:

Non-compliances:

(i) The tender and contract documents does not meet the EIA Document requests according which: The recommended environmental mitigation cost should be included as an item in the Bills of Quantities (EIA, clouce G. Responsibilities for Reporting and Review, article 258);

(ii) At some sections of construction, the topsoil and subsoil placed does not meet the EIA document requests according which: The top soil along the Project road will also be stripped, preserved for reuse in designated lands suggested by RD (source of request: EIA, Chapter – “Soils and Materials”, Paragraph 180).

Recommendations:

(i) It is necessary for all RD employees and all environmental specialists engaged in the project to take the training in the scope of RETA project;

(ii) SEMP document developed for the second stage of the project, which fails to meet the new requirements developed by ADB, needs further elaboration and update: (a) The presented document does not include the new methodology of risk assessment, and consequently, there are no risk assessment tables included in it, (b) the document does not divide the project zone into the regions, (c) the document does not provide the division of the project according to the construction stages. These are the major requirements distinguishing SEMP from EMP;

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(iii) The criteria developed by ADB are desirable to use for the evaluation of environmental aspects of the tender bid.

2.4.4 CWTC - 41122-023 Road Corridor Investment Program - Tranche 3 (Additional Financing)

2.4.4.1 Brief Project Description

329. The 121 km existing Senaki-Poti–Sarpi road (S-2) along the western coast of Georgia is a key highway and international transit route in Georgia. It is connected to the major Black Sea ports of Georgia, viz. Batumi and Poti, and a number of holiday resorts, particularly, Kobuleti and Batumi. The road runs through heavily built up tourist and residential areas and provides poor road and travel conditions, especially for international transit traffic which has to mix with the dense urban traffic passing through narrow streets. At present a significant volume of international transportation is carried on the Batumi-Poti section of the road amounting to 1.0 million tons annually (2005), with 0.5 million tons on the Batumi-Sarpi section. This mix of heavy traffic on the existing road combined with poor road conditions leads to traffic congestion, dangerous driving situations and frequent traffic accidents, particularly in Batumi and Kobuleti and especially during the tourist season in summer.

330. The project comprises (i) construction of a new 28 km two-lane bypass road skirting the city of Kobuleti, and widening of 6 km of the the existing two-lane road between Kobuleti and Batumi to four lanes; (ii) strengthening the asset management capacity of the Roads Department; and (iii) improving road safety.

331. The Project was determined to be a Category A environmental project for which an EIA was processed. The total road length is around 45 km, mostly 2-lane (except in the vicinity of the Makhinjauri tunnel where it is connecting to existing 4-lane) with a number of bridges, culverts, retaining walls, and tunnels.

2.4.4.2 Project Document Analysis

A) Loan Agreement, Project Administration Manual

332. Loan Agreement dated 18 April 2012 between Georgia ("Borrower") and Asian Development Bank ("ADB").

333. The obligation to meet the environmental requirements is given in schedule 4, clause 14 of the document, which states: „The Borrower shall ensure or cause MORDI to ensure that the preparation, design, construction, implementation, operation and decommissioning of the Additional Financing Section and all Project facilities pertaining to the Additional Financing Section comply with (a) all applicable laws and regulations of the Borrower relating to environment, health, and safety; (b) the Environmental Safeguards; (c) the EARF; and (d) all

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measures and requirements set forth in the EIA, the EMP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report“.

334. In September of 2013, the Asian Development Bank developed and approved Project Administration Manual (PAM) both, for the first and third trenches (additional financing). This document states about the meeting of the SPS requirements of the Bank in both phases: „The Environmental Assessment and Review Framework (EARF) has been updated to reflect the requirements of the ADB Safeguard Policy Statement and posted at the ADB website on 20 December 2011. The government has accordingly updated the EIA and EMP based on the detailed design of Contract 3 section (km 12.4 to 31). They were posted on the ADB’s website 20 December 2011. RD has finalized the EMP and ADB ensured its compliance with SPS requirements prior to contract awarding and the commencement of civil works.“

B) Bidding Documents

For Construction Contractor

335. The tender to choose the building contractor for the first phase of Kobuleti Bypass Construction Project was declared by virtue of document No. # RCIP/CW/ICB-02 of January, 2012. An EIA and EPM documents were attached to the tender documentation as an annex. The obligation of the contractor to meet the requirements of the document as well as contractor’s reporting responsibility are given in part B of the tender documentation- „Specific Provisions“, under which: „The contractor shall Comply with (a) measyres and requirements set forth in the environmental management planattaced hereto as appendix 1, to the extent it concerns impacts on the affected people during construction, and (b) any corrective measures of preventive actions set out in safeguard monitoring reports that the employere will prepare for time to time to monitor implementation of environmental management plan. The contractor shall submit quarterly, semiannual reports on the carrying out of such measures to employer. The contructor shall prepare the Environmental action plan, detaling the actions to be taket to imlament the environmental plan requirements including site-specific information on management and monitoring measures. The contracrore shall allocate a budjet for compliance with those measures, requirements and actions“.

336. The tender documents also give the detailed description of the environmnetal requirements (Bid Document, Techical Specifications, vollum III, Series 3000).

For consultant company

337. As per the tender documentation (ToR) of the consultant company, the company staff must contain one international and two national environmental specialists.

338. Under ToR, the applying company is to present the methodology for environmental issues, inspection, monitoring and auditing, and actions to fix and correct the results. 101

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C) Evaluation of Bids

339. The environmental team of the Road Department of Georgia is actively engaged in the evaluation process of the tender bids.

340. Mr. Zaur Apshinashvili, Head of the Resettlement and Environmental Department is a member of the commission considering the tender bids. In addition, Mr. Murman Katsitadze, Project Implementation Specialist under ADB Financed Projects is actively engaged in the process of development of the tender bids for the ADB projects and evaluation of the submitted proposals. The Roads Department is the only organization in Georgia evaluating the tender bids in respect of environment protection (mainly, the CVs of the proposed experts and methods proposed by the company participating in the tender are evaluated). The points for environmental issues make approximately 10-15% of the total points when considering the tender bids.

341. Recommendation: The following criteria developed by ADB are desirable to use for the evaluation of environmental aspects of the tender bid:

D) Contracts

Dohwa Engineering Co Ltd (Consulting Company)

342. The contract for consultancy services was concluded with Korean company DOHWA Engineering Co Ltd on September, 2010. The activities to be accomplished by the consultant are given in Appendix A, Clause E: “The key responsibilities of the Consultant will be: (i) prepare the EIA/IEE in accordance with the ADB's Safeguards Policy Statement (SPS, 2009). (ii) submit the updated EIA/IEE forRD and ADB review and approval. (iii) guide and assist in the establishment and implementation of a centralized resettlement/social management system in MDF and in participating municipalities for dealing with social related topics such as gender aspects. (v) train the Environment Division of RD, the Municipal management team in Tbilisi City, program management unit; on policies, procedures, and best practices related to Environmental Management. (vi) Any other related tasks as necessary”.

1. The contract identifies the members of the environmental team and period of their engagement in the project implementation. Under the agreement, the following environmental experts of the consultant company are to be engaged in the phase of drafting the project detailed design and construction supervision: 102

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a. One International Environmental Specialist b. Two National Environmental Specialists

Sinohydro Corporation Limited (China-Construction Company)

343. The agreement with the Constraction Company - Sinohydro Corporation Limited was concluded on 12th of January, 2012.

344. The agreement contains EIA as annex. The obligation for meeting the environmental requirements is given in Part B – Specific Provisions, according which: „The contractor shall Comply with (a) measyres and requirements set forth in the environmental management planattaced hereto as appendix 1, to the extent it concerns impacts on the affected people during construction, and (b) any corrective measures of preventive actions set out in safeguard

345. Monitoring reports that the employer will prepare for time to time to monitor implementation of environmental management plan. The contractor shall submit quarterly, semiannual reports on the carrying out of such measures to employer. The contructor shall prepare the Environmental action plan, detaling the actions to be taket to imlament the environmental plan requirements including site-specific information on management and monitoring measures. The contracrore shall allocate a budjet for compliance with those measures, requirements and actions“.

2.4.4.3 Preparation of Pre-Construction Documents 346. Under the contract, the construction contractor shall develop and update a number of environmental management plans, in particular:

(i) Contractors in consultation with the Environment Department of Adjara AR will submit a spoil plan to RD and MOE for approval (EIA chapter – 5.2.2.3 “Spoil and wastes” p - 95); (ii) The contractor will submit a dust suppression program prior to construction. The plan will detail action to be taken to minimize dust generation (e.g., spraying of roads with water, vegetation cover in borrow sites), and will identify equipment to be used (source of request: EIA, chapter 5.2.2.6 Air Quality. P-98); (iii) If contractor wish to establish asphalt plant also other objects polluting atmospheric air (as factory of concrete, crushing machines of inert materials), he shall prepare and submit it to the Ministry of Environment Protection with the EIA report (source of request: EIA, chapter 5.2.2.6 Air Quality. P-98); (iv) Contractor has to prepare a detailed layout plan of the construction camp with the design of sewerage facilities and locations of relative locations of all temporary buildings and facilities that are to be constructed, also showing number of the employed workers together with the location of site roads, fuel storage areas (for use in power supply generators), solid waste management and dumping locations, and drainage facilities, and submit RD to the Road department and to the Ministry of Environment Protection and for approval prior to the development of the construction camps, (source of request: EIA, chapter 5.2.2.9 Construction Camps, p-98); 103

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347. EMP is updated regularly. The required environmental management plans are thoroughly developed and are available on the construction site. Some plans, such as “dust suppression program“, and „spoil plan” are included in the environmental management plan and monitoring plan as their parts.

348. The developed plans are agreed with the Roads Department. As for the agreement of the management plans with MoE, it was not done, as under the legislation of Georgia, the Ministry does not have to state its agreement to the environmental plans developed by the construction contractor.

2.4.4.4 Monitoring, Reporting and Trainings

349. The environmental monitoring and reporting of the consruction contractor as well as of PIU is done within the terms specified by the agreement.

A) Monitoring

350. Environmental investigations were carried out during feasibility study to establish baseline conditions for air, surface water and noise quality. Further environmental investigations were carried out during detailed design stage to establish baseline indicators for water, soil and noise quality:

 Water quality investigations have been carried out during feasibility study stage in April 2009, to assess the background water quality. The analysis of water samples also includes estimation of total nitrate (TN), polyphosphate (TP), and total petroleum hydrocarbon (TPH) to assess the pollutions levels from agriculture and industrial flows. Physical properties, such as temperature, pH, turbidity and electricity conductivity, of three river;  Groundwater samples in the Project area are collected from wells and springs.. The total dissolved solids (TDS) of the groundwater are below 300 mg/l. All the elements are within the standards. Presence of coliforms is noticed in all groundwater samples;  Baseline noise level has been measured by device -.”Шум – 1”. 4 test points were selected near villages Makhinjauri (p.1), Salibauri (p.2), Makhvilauri (p.4) and in Khelavachauri. One device have been located at 5m distance from the edge of the existing road. Each minute one measurement has been carried out;  Soil quality analysis was carried out with „Atomic Absorption Spectrophotometer (Analist-200). The concentrations of heavy metals in soils are generally less than international standards except for copper and the reasons for these high concentrations can be attributed to natural background concentrations.

351. The Construction Contractor carried out instrumental measurements for air quality and noise. Measurement of surface water and groundwater quality has been carried out in early July and late December 2013. Water quality measurements should be carried out on a quarterly basis, especially for groundwater in camp sites as this has direct impact on the health of the work personnel.

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352. The relevant records about the accomplished measurements are easily available both, on the construction site and at the Roads Department.

353. The local environment specialist of the consultant company undertakes daily environmental inspections. There are questionnaires developed and filed out during the said inspections.

354. The Construction Contractor will be informed of all identified facts of non-compliance in writing. At the next stage, the corrective actions are identified and the terms to correct the facts of non-compliance are fixed together with the construction contractor.

355. The environmental specialist of the Roads Department also undertakes monthly monitoring, inter alia studying the degree of correction of the facts of non-compliance.

356. All identified facts of non-compliance, corrective actions and accomplished actions are described in the quarterly reports, which are submitted to the Roads Department.

B) Reporting

357. All the reports are submitted in a timely manner, by considering the relevant requirements:

a. Monthly Reports – Environmental issues reported regularly in the monthly reports by the Contractor and to be commented on by the environmental specialist;

c. Bi-Annual Reports – As mentioned in the Particular Conditions of Contracts, the Contractor should come up with a bi-annual environmental report. Upon submission, the environmental specialist should evaluate the environmental report and come up with general comments. As part of the Engineer’s reporting obligation a bi-annual report should be compiled by the environmental specialist and to be submitted to the Client and ADB after every six months of monitoring;

358. All the above-listed reports are available both, on the construction site and at the head office of the Roads Department. As for the Bi-Annual Reports, which RD submits to the ADB, they are available on the ADB web-site.

359. However, the audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on 105

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environmental measures (2009) the Consultant recommended PIU to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations.

C) Trainings

360. The international environmental specialist of the consultant company is present on the construction site quarterly, under the developed schedule, and at each visit, he holds 2 or 3 trainings for the environmental and H&S specialists of the organization engaged in the project. The documents proving the holding of the trainings are kept at the construction site. Appendix 10 gives the information about the training participants of October 4, 2013.

361. In addition to ADB funded 43333-012: Improving the Implementation of Environmental Safeguards in Central and West Asia project implied training, second project was undertaken almost with similar goals and objectives. This second project also comprised environmental audit and respective training within “Kobuleti Bypass Construction Project” (Loan-2560 GEO: Road Corridor Investment Program-Tranche 1-ICS02 Environmental Management Training (41122-023) for Kobuleti Bypass Project). As a result, half of the environmental specialists of both the Roads Department and project Supervisory Company attended our training while the second half was involved in the environmental audit within the scope of the second project.

362. Recommendation: All the employees of RD and all environmental specialists engaged in the project shall take the training developed within the scope of RETA project.

2.4.4.5 Site Visit

363. Site visits were organized twice: on 05.11.2013 and 14.03.2014. A meeting with the environmental specialists and technical staff was organized. The environmental audit for CWTC - 41122-023 Road Corridor Investment Program - Tranche 3 was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 11).

364. The environmental plans developed and relevant records drafted by the contractor were considered and evaluated during the meeting. These were the documents the construction contractor was responsible to develop under the agreement.

365. As already mentioned, two environmental specialists of the consultant company were present on the construction site every day doing daily monitoring of the activities of the construction contractor. Any incompliance identified during the monitoring is duly fixed, and relevant corrective actions are planned. Consequently, all those few facts of non-compliance (following the scale of the project) fixed by us, were already fixed by the local environmental specialists and relevant corrective actions were in progress.

366. The Consultant (audit team) has revealed Non-Compliance # 3:

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367. Request: The storage of topsoil in stockpiles, no more than 2m high with side slopes at a maximum angle of 450, will take into consideration the following: (a) Segregation of the topsoil from the subsoil stockpiles (EIA, chapter “Top Soils” pp-83).

368. Current Situation: The topsoil is placed along the edge of the construction road what violates the requirements.

369. Finding: The topsoil and subsoil placed does not meet the EIA Document requests according which: The storage of topsoil in stockpiles, no more than 2m high with side slopes at a maximum angle of 450, will take into consideration the following: (a) Segregation of the topsoil from the subsoil stockpiles (EIA, chapter “Top Soils” pp-83).

370. Corrective action: Topsoil should be placed in relevant manner in special places. The described problem was fixed for several times by the consultant company and all such facts are included in their quarterly plans (Report of August of 2013).

A) Baseline Analyzes

371. Requirement: The environmental parameters that may be qualitatively and quantitatively measured and compared are selected as „performance indicators‟ and recommended for monitoring during project implementation and O&M stages. These monitoring indicators will be continuously monitored to ensure compliance with the national or other applicable standards and comparison with the baseline conditions established during design stage. The list of indicators and their applicable standards to ensure compliance are given below:

372. Air quality (PM), SO2, NO2, and CO) – Georgian National Standards (Order #297N, dated 16.08.2001 of the Ministry of Labour, Health and Social Protection and as amended by the Order No 38/n, dated 24.02.2003).

373. Noise levels – Georgian National Standards (Decree of the Minister for Health, Labour and Social Affairs, 297n of August 16, 2001, on the „Approval of Environmental Quality Standards‟).

374. Surface Water Quality (TN, TP & TPH - TDS, Cl, HCO3, DO, Turbidity, pH) –Standards from the Environmental, Health, and Safety (EHS) Guidelines of the World Bank Group (April 2007) are used.

375. Groundwater Quality (pH, TDS, Cl, HCO3, SO4, Ca, Mg, Na, Coliform) – Standards from the Environmental, Health, and Safety (EHS) Guidelines of the World Bank Group (April 2007) are used.

376. Chemical and microbiological studies of water (drinking and river) and air quality and noise level monitoring take place regularly.

377. The results of all conducted analysis are described in the quarterly reports, and besides, they are available on the construction site for any person concerned.

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B) Borrow Pits

378. Requirement: The exploration of the borrow pits should be conducted by the licensed companies. (EIA, clouse . Quarry and Borrow Sites, p-94).

379. The contractor obtains sand and gravel from the borrow pit owned by KHIDI LTD. in the Natanebi riverbed on the territory of village Meria in Ozurgeti municipality. The contractor has submitted a copy of the license (License No. 1001187), a copy of the agreement with the owner (Agreement No. GEO-RC-CG-13) and geo-information package. The area of the land and mining facilities is 13.3 ha, and the total extracted amount of sand and gravel is 399.000 thousand m3.

C) Construction Camp

Bobokvati Camp Site

380. This campsite has been established to facilitate construction work in the Lot 2 area, and consists of a steel fabrication unit, concrete mixing plant, welding unit, offices, food serving area, and workers quarters. The Dehkva river flows behind the campsite.

381. There are metal waste (Figure 33) and construction materials (Figure 34) placed in an unordered manner on the territory of the construction camp; no drainage system is installed (Figure 35); there are also construction and municipal waste scattering here and there (Figure 36).

Figure 33. Metal waste Figure 34. Construction materials

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Figure 35. No drainage system is installed Figure 36. Construction and municipal waste

D) Waste Management

382. The specialized company (like Sandasuptaveba”) will be contracted to ensure collection of domestic and general waste from camps and temporary storage areas and transportation to the landfills (EIA chapter – wastes, p-96).

383. The construction contractor has an agreement concluded with SANDASUPTAVEBA of Adjara, which is obliged to remove the municipal waste from the containers placed on the construction camp territory.

E) Sewage Waters

384. Requirement: Health, Safety and Hygiene – clause 230, “Septic tank and garbage box will be set up in construction site, which will be periodically cleared by the contractors to prevent outbreak of diseases”.

Figure 37. WC at construction site Fgure 38. Sanitary Unit

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2.4.4.6 Non-Compliances and Recommendations

385. Based on the above-mentioned findings the Consultant fixed the following general non- compliances and made the following recommendations:

Non-compliances:

(i) The topsoil and subsoil placed does not meet the EIA Document requests according which: The storage of topsoil in stockpiles, no more than 2m high with side slopes at a maximum angle of 450, will take into consideration the following: (a) Segregation of the topsoil from the subsoil stockpiles (EIA, chapter “Top Soils” pp-83).

Recommendations:

(i) It is necessary for all RD employees and all environmental specialists engaged in the project to take the training in the scope of RETA project;

(iii) The criteria developed by ADB are desirable to use for the evaluation of environmental aspects of the tender bid.

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2.5 Environmental Audit of the Projects Implemented by the United Water Supply Company of Georgia (UWSCG)

2.5.1 Projects Implementation Unit (PIU) - the United Water Supply Company of Georgia - General Information

386. LLC “United Water Supply Company of Georgia” was founded on January 14, 2010. The company provides water and wastewater services throughout whole Georgia for urban settlements excluding Tbilisi, Mtskheta, Rustavi and Autonomous Republic of Adjara. The structure of the company consists of head office, 6 regional affiliates, 51 service-canters and in total employs around 2500 staff members. 60% of the personnel work in operational field, 24% in financial field and 16% in administrative field. The state owns 100% of company’s shares. Main activities of Water Company include: water abstraction, treatment and supply; design of water and sewer networks, construction, installation, maintenance and operation; and production and rehabilitation of constituent elements of water and sewer systems.

387. The mission of the Company is a continues and 24-hour drinking water supply to the population, arrangement of water supply and drainage systems in all regional canters and cities of Georgia, and approximation of this system to the world standards.

388 . The goals of the company are: Infrastructure’s rehabilitation and construction, control and improvement of water quality, modernization of a base for truck fleet and special machinery, optimization of billing and collection processes, metering, elimination of water losses, introduction of economic and technical feasibility, application of proper management policy for staff resources, compliance of company’s activities with environmental protection measures, economical use of electricity, strengthening of financial status and upgrade of financial management system.

389. The United Water Supply Company of Georgia (UWSCG), assisted by the Asian Development Bank, is accomplishing 6 sub-projects which are divided into two tranches, with four of them being at the stage of construction, for two of them the contractor will accomplish in the nearest future. At present, under the first tranche, the UWSCG is accomplishing the following projects:

1. Contract -1: Construction of Mestia Headworks; 2. Contract-REG-01: Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti; 3. Contract-REG-02: Section 1: Mestia Water Facilities.

390. Under the second tranche UWSCG is accomplishing three projects: 111

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1. Contract -1: (UWSC/ICB/CW/2012/ANA-01) Anaklia Water Supply and Sewerage Distribution Networks; 2. Contract-2 (UWSCG/ICB/CW/2011/MES-02) Construction of Mestia Water Supply and Sewerage Distribution Networks; 3. Contract-3 (Package-REG-02): Construction of Wastewater Treatment Plant in Anaklia

391. The present audit report considers four sub-projects. Brief information on implementation status of audited projects is presented in Table 12.

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Table 12. Brief information on implementation status of ADB funded projects carried out by UWSCG in Georgia

# Project Identification Project Implementation Project Location Project Status (Project Remarks team Implementation (PIU, Construction Percentage) Company, Consultant Company) CWUW -43405-023 - MFF-Urban Services Improvement Investment Program -Tranche 1 1 . Subproject 1 - Construction of Mestia PIU – UWSCG; Mestia 97% Headwork Consultants: “Eptisa” Lts and “Kocks” Engineering; Constructor: ENGURI 2006 Ltd and DAGI Ltd. 2 . Subproject 2 - Improvement of Water PI U – UWSCG; Anakli, Kutaisi and Poti 5% Supply Infrastructure in Anaklia, Kutaisi Consultants: “Eptisa” Lts and Poti; and “Kocks” Engineering; Constructor:„COBRA“ Ltd. 3 . Subproject 3 - Mestia Water Facilities PIU – UWSCG; Mestia 0% A two-stage bidding process, the evaluation of technical Consultants: “Eptisa” Lts proposals was ongoing as of this Audit period. and “Kocks” Engineering; Constructor: under tendering. CWUW -43405-024 - MFF-Urban Services Improvement Investment Program -Tranche 2

4 . Subproject 1 - Anaklia Water Supply PIU – UWSCG; Anaklia 88.4% and Sewerage Distribution Networks Consultants: “Eptisa” Lts and “Kocks” Engineering; Constructor: PERI Ltd and Modern Business Group LLS. 5 . Subproject 2 - Construction of Mestia PIU – UWSCG; Mestia 36% Water Supply and Sewerage Consultants: “Eptisa” Lts Distribution Networks and “Kocks” Engineering; Constructor:NEW ENERGY Ltd and Enguri 2006 Ltd. 6 . Subproject 3 - Construction of PIU – UWSCG; Anaklia 0% The bidder is required to bid for the design and Wastewater Treatment Plant in Anaklia Consultants: “Eptisa” Lts construction of the first stage of a modular wastewater and “Kocks” Engineering; treatment plant (WWTP) in Anaklia. Constructor: under tendering. 113

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2.5.2 Institutional Arrangement of UWSCG on Environmental Safeguards Implementation

393. The institutional chart of UWSCG is given in Figure 39.

Figure 39: Institutional Chart of UWSCG

394. Following agencies are involved in implementing the Investment Program: (i) Ministry of Regional Development and Infrastructure (MoRDI) is the Executing Agency responsible for management, coordination and execution of all activities funded under the loan. MoRDI has overall responsibility for compliance with loan covenants.

395. United Water Supply Company of Georgia (UWSCG) is the project Implementing Agency, which is responsible for administration, implementation (design, construction and operation) and all day-to-day activities under the loan. An Investment Program Management Office (IPMO) is established within the UWSCG for all Investment Program related functions. The IPMO, which is the Project Management and International Relations Department at UWSCG will coordinate implementation of subprojects across all towns, and ensure consistency of approach and performance. 114

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396. The UWSCG created a Division of Resettlement and Environmental Protection under the Design Department. Mr. Beso Nibladze is Head of the Division. UWSCG/DREP employs Mr. Badri Tsatava on the position of senior environmental specialist. UWSCG/DREP is responsible for monitoring of EMPs under the each subproject and implementation of mitigation measures in compliance with environmental safeguards requirements.

397. An environmental specialist (ES) Ms. Ketevan Chomakhidze is hired by UWSCG to support DREP in USIIP programs implementation in compliance with the ADB Safeguard Policy Statement, 2009 and National Legislation.

2.5.3 Tranche I

2.5.3.1 Brief Information

398. The United Water Supply Company of Georgia (UWSCG), assisted by the Asian Development Bank, is accomplishing 6 sub-projects which are divided into two tranches. At present, under the first tranche, the UWSCG is accomplishing the following 3 projects:

1. Contract-1: Construction of Mestia Headworks; 2. Contract-REG-01: Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti; 3. Contract-REG-02: Section 1: Mestia Water Facilities.

399. Under the tranche I for all three sub-projects Loan Agreement between Georgian Government and the Asian Development Bank was concluded and Project Administration Manual (PAM) prepared.

400. Below the Consultant will consider document analysis (Loan Agreement and PAM) for Tranche I and then detailed document analysis for each sub-project under tranche I.

2.5.3.2 Document Analysis for Tranche I

A) Loan Agreement, Project Administration Manual (Tranche 1)

401. Loan Agreement for tranche 1 dated 10 May 2011 between Georgia ("Borrower") and Asian Development Bank ("ADB").

402. The obligation to meet the environmental requirements is given in schedule 5, Article 10-13 of the document, which states: „The Borrower shall ensure that the Project is developed, implemented and maintained in accordance with all applicable laws and regulations of the Borrower, ADB's Safeguard Policy Statement (2009), the EARF, the IEE and the EMP. The Borrower shall cause UWSCG to ensure that: (a) an IEE is prepared for the Project in accordance with all applicable laws and regulations of the Borrower, ADB’s Safeguard Policy Statement (2009) and the EARF, and that the IEE is approved by ADB and adhered to during 115

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the design, construction and operation phases of the Project; (b) the EMP is implemented by the contractors, all recommendations of the EMP are incorporated in the bidding documents and civil works contracts to ensure compliance, and adequate budgetary allocation is made by the contractors for implementation of the EMP. Prior to commencement of civil works, UWSCG shall update the EMP in consultation with the construction supervision consultant and the contractors; and (c) semiannual monitoring reports on EMP implementation are submitted to ADB in a timely manner. The Borrower shall ensure that no proceeds of the Loan are used to finance any activity included in the list of prohibited investment activities provided in Appendix 5 of ADB’s Safeguard Policy Statement (2009). The Borrower shall cause UWSCG to ensure that no water intake facility under the Project shall be commissioned and made operational until UWSCG has been issued with a license or permit for water abstraction activities for such facility“. In 2013, the ADB developed and approved Project Administration Manual (PAM), which gives a detailed obligation to update the Environmental Management and Monitoring Plans - „Environmental Management and Monitoring Plan will be updated during detailed engineering design and incorporated in bidding documents and civil works contracts10“.

403. Project Administration Manual (PAM) was developed in July, 2013. The document gives quite a detailed description of the environmental requirements for the Consultant Company and obligations of the Detailed Engineering Consultants and Construction Supervision Consultant. The said requirements are identical to the ones specified in the tender bids declared for the Consultant Companies and contracts concluded with them at the following stage.

404. The document also requires (chapter - i. Individual Consultants, Table 1: Staff Requirement for Individual Consultants, p 87) the employment of an extra individual environmental consultant within the scope of the project to be charged with the following obligations: „To oversee implementation of the EMPs developed as a part of the IEE for subprojects in each tranche, and to develop MEPNR and MA staff capacity on environmental monitoring (effluent and drinking water quality standards)“.

405. The submitted document (Part 3. Safeguards, chapter b. Environmental Safeguards, p 88) gives a detailed description of the obligations of the PIU at different stages of the project.

2.5.4 Tranche I, Subproject 1: “Construction of Mestia Headwork”

2.5.4.1 Brief Information on Mestia Headwork Construction Project

406. The project comprises construction of a Tyrolean Weir as intake structure on Mestia Chala River for the capture of raw water. The discharge is estimated at minimum 1,000 liters/second in dry seasons. The location has been chosen for its altitude and the possibility to supply the water treatment plant, the adjoining reservoir and from there the largest part of the distribution

10 Project Administration Manual – chapter VII “Safeguard”, point A “Environment”, P-22.

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network, by gravity. Apart from the intake, the scope of work comprises 10.75 km transmission lines to the site of Water Treatment Plant and a reservoir and the connection of this location to the distribution network.

407. For all sub-projects under the Tranche I two Consultant Companies (Kocks Consult Gmbh and “Eptisa” Ltd) were selected by the UWSCG in agreement with the ADB, the responsibilities of them are as follows:

1. “Kocks Consult Gmbh” – the consultancy services are to: (i) assess the technical, financial, economic, and environmental feasibility of subprojects; (ii) conduct surveys and investigations; (iii) develop hydraulic models; and (iv) prepare detailed designs, drawings, cost estimates, specifications, and bid documents for implementing water supply and sanitation schemes in the Investment Program financed by the MFF; 2. “Eptisa” Ltd - the consultancy services are to: supervise construction of water and wastewater facilities under Component 1 in the towns of Anaklia, Mestia, Kutaisi, Poti and Ureki. The construction works shall include: headworks (river water intakes, wellfields, etc.); water treatment plants; water transmission pipelines and appurtenant structures; storage reservoirs; water supply networks; sewerage systems; and sewage treatment plants. The works to be supervised will include house connections.

2.5.4.2 Sub-project Document Analysis

A) Bidding Documents for Consultants

408. As already mentioned, there are two tenders announced to select the Consultant/Supervising Company. There were two companies selected within the scope of the project, with one of them charged with rendering full technical consultation and develop project documentation for the ongoing projects, while another company was charged with supervising the construction under the said projects.

B) Bidding Document for Detailed Engineering Consultant

409. The tender for the Consultant Company providing the technical service was declared in May, 2010. The ToR of the presented documentation (Chapter V), the Consultant Company is required to have one international environmental specialist on staff (the term of engagement of the environmental consultant is 2 months). As for the requirements for the international environmental consultant, they are as follows: „Prepare environmental and social impact reports. Prepare mitigation measures“. The said document contains no requirement for a local environmentalist.

410. As for the experts evaluation criteria, the criterion to evaluate the qualification of the international environmental specialist is 3% of the total assessment, while the requirement for a 117

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national expert is not given by the document, and consequently, no relevant evaluation criterion is given.

411. Recommendation: ToR is desirable to include the requirement for the local environmental consultant and criteria to evaluate his/her qualification. The requirement for the local environmental specialist at the level of ToR seems expedient due to the following reasons:

 The Consultant will be forced to find a local environmental specialist to gain maximum points in the Tender;

 If at the following stage, the Consultant decides to change the said specialist, it will be obliged to agree a new candidate with the ADB (the obligation, the Consultant has no at present);

 An international environmental specialist needs local specialist(s) to discharge his/her obligations under the Bidding offer with high quality (See Chapter 2.1.2.1)

C) Bidding Documents for Construction Supervision Consultant

412. The Tender to select the Construction Supervising Company was declared on April 12, 2012. According to the ToR of the presented documentation (Chapter V), the Consultant Company is required to have one local environmental specialist on staff with full engagement in the project (41 months). The document also gives the rights and obligations of the local environmental specialist, under which: „The Environmental Specialist will be responsible for monitoring compliance with the contractors’ environmental management plans in all towns. He/she should have a Degree in a relevant discipline and experience with monitoring compliance with ADB safeguard policies in the implementation of large-scale construction projects, including water and sanitation projects. Fluency in the English language and experience with international organizations shall be an advantage“.

413. According to the Bidding Documents, the Consultant Company is not obliged to have an international environmental specialist.

414. Recommendation: Engagement of the international environmental specialist at least at the first stage is expedient, when the audit and monitoring methods are approved, questionnaires are drafted, the working schedule is made precise and the construction contractors are given the relevant trainings.

D) Evaluation of Bids for Detailed Engineering Consultant - Kocks Consult Gmbh

415. The Tender Offer presented by the Company well describes the methodology the Company planned to use for the environmental issues within the scope of the said projects, (Tender Documentation, Part 5 “Methodology, work plan” chapter “Environmental reviuw”, page 5), accordin which: “The consultant shall carry out an environmental review of the proposed 118

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project including proposals for mitigation measures to be included in the project. He shall propose measures to be taken by the water department to improve their environmental management practices. The environmental review should go long way to contribute to the requirements of a full environmental impact assessment (EIA) to be undertaken following the completion of the feasibility study. It should highlight all the statutory EIA procedures (scoping) and prepare an action plan which could be used at a later date for the implementation of IEA. In specific terms the consultant shall undertake the following tasks: (a) collect all available environmental baseline data to highlight the existing environmental situation in the project area with respect to existing environmental resources and threats posed to them; (b) carry out the environmental review of the proposed project development options to highlight any environmental concerns and identify mitigation measures. The review should demonstrate the extent of which proposed developments would address the present to the environmental resources compared with the “without project situation”. (c) In particular, the consultant shall consult the environmental and sanitary protection authorities to discuss the sequences of development of water supply infrastructure and sewers and wastewater treatment as well as the associated permitting requirements; (d) In respect of the long term investment program, the investment shall prepare a summary environmental review outlining the uses which need to be addressed in the development of specific projects within the program”.

416. In addition, the presented Offer (Part 6) gives the CV of the international environmental specialist. Plan “Personnel schedule” gives the schedule of engagement of the said expert in the project.

E) Evaluation of Bids for Construction Supervision Consultant - “Eptisa” Ltd.

417. The presented Bidding Offer gives a short description of the obligation undertaken by the Company to fulfill the environmental requirements, Chapter 3.8.2.11 – “Safety control”. There is only one sentence in the said chapter describing such an obligation: „The Consortium leaded by EPTISA Ltd will verify that the Contractor veryfing that requirements of environmental management plan are met in full“. In addition, table “Personnel schedule” gives the schedule of the local environmental expert, which is 41 months.

418. No environmental specialist takes part in the evaluation of the offers of the tender declared to select the Consultant Companies.

F) Contract with Detailed Engineering Consultant - Kocks Consult Gmbh

419. Agreement between the Consultant Company Kocks Consult Gmbh and UWSCG LLC was concluded on October 19, 2010.

420. The said agreement gives the actions to be accomplished by the Company and environmental specialist in the field of environmental protection.

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421. According to the Appendix 2 – “Staff Requirements and Responsobilities” – International Environemntal Specialist is obliged to: „Prepare environmental and social impact reports. Prepare mitigation measures“.

422. Appendix A “Description of the Services”, chapter “Environmental Assessment” , paragraph 26 gives a detailed description of the actions to be accomplished by the Company in developing the environmental documents, as well as requirements for evaluation, organizing public consultations and developing the monitoring plan.

G) Contract with Construction Supervision Consultant - “Eptisa” Ltd

423. Agreement with the Supervising Company “Eptisa” Ltd, was concluded on October 29, 2012.

424. The requirements for the actions to be accomplished in the field of environmental protection are given in Appendix A “Description of Services”. The given Appendix describes the actions to be accomplished by the Company and rights and obligations of the local environmental specialist (an international environmental specialist is not required by the Tender Offer).

425. The chapret “Scope of Works”, article “p”, of the said Appendix also gives the requirement for the following actions to be accomplished by the Company: „Review the contractors environmental managemnt plans (EMP), supervise and monitor the implementation of mitigation measures required, in the event of occurrence of any unexpected environmental impacts coordinate with UWSCG, to provide necessary mitigation measures; and prepare quarterly reports on compliance with EMPs for the Employer and the ADB“.

426. As for the obligations of the local environmental specialist, they are given in Appendix A “Description of Services”, chapter – “Environmental Specialist”, paragraph 30, according which: “The Environmental Specialist will be responsible for monitoring compliance with the contractors’ environmental management plans in all towns. He/she should have a Degree in a relevant discipline and experience with monitoring compliance with ADB safeguard policies in the implementation of large-scale construction projects, including water and sanitation projects. Fluency in the English language and experience with international organizations shall be an advantage”.

427. Conclusion: The agreements with the Consultant Supervising Contractors give the obligation to meet the environmental requirements. The principle for requiring the Consultant Company to employ an international environmental specialist under the Bidding Offer and not requiring the Company to employ a local environmental specialist in one case, while in other case, the same Company is required to employ only a local environmental specialist, is unclear.

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428. The same requirements are fixed in the Project Admonistration Manual (PAM) developed within the scope of the project in 2013 (Attachment 2: Staff Requirement and Responsibilities, and chapter - g. Staffing Requirement, p – 74-75).

429. In the course of the project, the quality of the project implementation, including meeting the environmental requirements much depends on the qualification and efficient performance of the specialists of the Consultant Supervising Company. All Consultants shall have both, international and local environmental specialists. An international environmental specialist on the staff of the Consultant Company is absolutely necessary during the development of the environmental documents, analysis of the prepared documents, development of the methods of audit and monitoring, development of questionnaires, perfection of the working schedule and organization of the relevant trainings for the employees of the Construction Contractor. As for the local specialist, his/her daily engagement in the project and his/her awareness of the national legislation is necessary.

430. In respect of using the described practice, quite good results were gained with the project “Construction of Kobuleti Bypass” accomplished by the MDF in Georgia. The efficient engagement of the international environmental specialist in this project and daily activities of the local specialists during the implementation of the project made the project very efficient in respect of meeting the environmental requirements.

H) Bidding Documents for Construction Contractor

431. The tender for the Construction Contractor in the scope of the project „Mestia Water Supply Headworks“ was announced on 3 May, 2011. Environmental Impacts and Mitigation Measures developed within the scope of the project are enclosed as annexes to the Bidding Documents.

432. The obligation to accomplish the said plan is given in Section 8 –“Particular Conditions” of Contract, Part B – “Specific Provisions”, chapter 4.18 - “Protection of the Environment”, according which: “The Contractor shall comply with all applicable national, provincial, and local environmental laws and regulations.

433. The Contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set forth in Environmental Management Plan (EMP), and (c) allocate the budget required to ensure that such measures are carried out. The Contractor shall submit quarterly reports on the carrying out of such measures to the Employer.

434. Prior to commencement of the project, the Employer, the Contractor, and the construction supervision consultant for the project shall consult on, and make all appropriate updates to, the Environmental Management Plan (EMP) for the project, and the Contractor shall implement the EMP, as so updated, in accordance with its terms.”

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435. In addition, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impacts and Mitigation Measures” of the Bidding Documents gives a number of additional environmental obligations and requirements, with the following worth mentioning:

1. The SEMP will be submitted to the Employer for approval at least 10 days before taking possession of any work site; 2. The Contractor’s Environmental Representative is required to have qualifications in Environmental Science or similar discipline and be able to complete the preparation of the site specific environmental management plans; 3. The Contractor will ensure that all personnel employed by or contracted to him are given induction training in environmental issues and the requirements for environmental management; 4. The non-compliances ranked system; 5. The failure to prepare a corrective action plan or to implement it within the required time frame will result in the Employer undertaking the works and the cost plus 20% will be recovered from the final payment to the Contractor.

K) Tender Proposals

436. ENGURI 2006 Ltd.presented its Bid on June 11, 2011. The bid says almost nothing about the obligations to be performed in the field of environmental protection. In addition, the united group has not presented the environmental specialist included on the list of staff (Figures 40 and 41).

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Figures 40 and 41. Staff list as per the Tender Bid

L) Contract with Joint Venture of ENGURI 2006 Ltd and DAGI Ltd

437. The contract for consultancy services was concluded with ENGURI 2006 Ltd and DAGI Ltd on 10 October, 2011.

438. The present Contract includes some of the requirements to be met under the terms of Tender. The said requirements are included in the following sections of the Contract:

1. Particular Conditions of Contract, Part B p 8-3 - this section of the Contract gives the following requirements: updating the EMP, accomplishing the monitoring plan and drafting the budget necessary to accomplish the monitoring plan. 2. In addition, chapter 4.18 „Protection of the environment“ P-20 gives the requirements for observing the water discharge limits and not disturbing the population and not damaging their property.

439. Non-Compliance: The contract concluded with the Construction Contractor fails to give the major part of the requirements envisaged by the Bidding Documents. No monitoring plan is enclosed to the Contract as an annex, which is to be accomplished by the Contractor. Similarly, there is no EMP presented, whose updating the Contractor is responsible for. 123

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440. The Contract fails to give a number of obligations envisaged by the Bidding Documents (Bid Documents, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impact and Mitigation Measures ”). See Chapter 2.3.2.1.7 for the description of the said requirements.

2.5.4.3 Preparation of Preconstruction Documents

441. Under the contract with the Construction Company it was required to update EMP (Particular Conditions of Contract, Part B, p 8-3) by the Environmental Specialist of the Construction Company.

442. Under the IEE document developed within the scope of the project (April, 2011), the Construction Contractor is not required to additionally develop environmental protection plans.

443. The Construction Contractor to fulfill its obligations employed an Environmental consultant responsible for developing and implementing the construction phase EMPs. Contractor’s environmental specialist ensures that the site specific EMPs (SEMPs) are prepared and implemented. SEMP is endorsed by Safeguards Consultant and approved by UWSCG.

2.5.4.4 Monitoring, Reporting and Trainings

444. Overall physical progress of the work for Contract - 1 is 97%. At present, the following activities are performed in scope of this subproject:

 3.56 km of water mains were installed (cumulative 9.79 km, left 0.96 km)  Reservoir`s works were completed incl. internal coating and landscaping works  Intake works were completed

A) Monitoring

445. The Contractor’s field inspectors performed daily site visits to the project sites. UWSCG Environmental team visited project sites minimum once a month. Environmental Consultant performed weakly site inspections. 446. The environmental specialist of the construction contractor is permanently on the site and undertakes permanent monitoring. Contractor’s environmental specialist performed daily site inspections and monitor implementation of mitigation measures per EMPs.

447. UWSCG and Eptisa Ltd. visited the project sites regularly and instruct and guide Construction Contractor on Environmental Safeguard issues. For every non-compliance fixed during the accomplished audits (if any), a special form of non-compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

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448. There were 11 cases of non-compliances fixed during the audits in the last 6 months, and corrective actions were developed. 4 of the said cases were corrected in full and 7 of them were corrected partially.

B) Reporting

449. The construction contractor shall present monthly „Progress Reports“, environmental issues included in the present document as an individual chapter.

450. An International Consultant Company – EPTISA Ltd hired by UWSCG for construction supervision, undertakes environmental monitoring of project progress and submits quarterly Environmental Monitoring Reports to UWSCG.

451. There is a Bi-Annual Report developed on the request of the UWSCG. The presented report was drafted in line with the requirements of Asian Development Bank. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site.

452. All the above-listed reports are available both, on the construction site and at the head office of the Roads Department. As for the Bi-Annual Reports, which UWSCG submits to the ADB, they are available on the ADB web-site. However, the audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations.

C) Training

453. The specialists engaged in the project accomplished by UWSCG within the scope of RETA project were given the training on July 6-7, 2013. The training, besides PIU representatives, was attended by the Consultant and representatives of the Construction Company.

454. Based on the module of the held training by Eco-Spectri Ltd. Mr. Irakli Legashvili, the environmental specialist of the Consultant Company, developed a brief module, and the said training was permanently held for all the people engaged in the project, who were responsible for meeting the environmental requirements (Figures 42 and 43).

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Figures 42 and 43. Trainings conducted by Supervision Consultant

2.5.4.5 Site Visits

455. Site visits were organized twice: on 02.11.2013 and 16.03.2014. At first a meeting with the environmental specialists and technical staff was organized. The environmental audit was conducted for the Consruction of Mestia Headwork Project by using the questionnaire developed by the Asian Development Bank (see Appendix 12).

456. The environmental plans developed and relevant records drafted by the contractor were considered and evaluated during the meeting. These were the documents the construction contractor was responsible to develop under the construction agreement.

Figure 44. Meeting in Mestia Figure 45. Daily checklist for mestia headwork project

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457. As already mentioned, the Construction Contractor had developed SEMP document, which was approved by the PIU.

A) Water Quality Analyzes

458. The audit team has revealed Non-Compliance #1:

459. Requirement: Construction Contractor should measure Mestiachala water quality during construction of headworks (source of request: IEE, chapter E. Costing and Budget, table 11: Environmental Management Costs).

460. Current situation: Requirement is not satisfied, no analyzes of the river Mestiachala water quality were accomplished.

461. Finding: Analyzes of the river Mestiachala water quality is not complying with the requirements by IEE (chapter E. Costing and Budget, table 11: Environmental Management Costs) according to which Construction Contractor should measure Mestiachala water quality during construction of headworks. No analyzes of the river Mestiachala water quality were accomplished.

462. Corrective action: The agreement to conduct the analyzes of the water quality in the river Mestiatskali with the relevant accredited laboratory shall be concluded. Term: 1 month.

B) Baseline Analyzes

463. There were no basic analyzes conducted within the scope of the project. The requirement for basic analyzes was not fixed either in the IEE document, or contract concluded with the Construction Contractor.

464. Recommendation: The analyzes must be conducted in line with the requirement of the ADB so that the information about the existing situation should be available (before the onset of the project implementation). The relevant requirement must be fixed in the IEE document, or envisaged by the contract as an obligation.

C) Borrow Pits

465. No borrow pits were used in the construction phase.

D) Construction Camp

466. Within the scope of the Project the construction camp discharges mostly the function of the storage place for the construction materials. The territory is not used for the workers employed 127

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for the Project to live on it. Some of the workers were locals, while others lived in the specially hired flats.

Figures 46 and 47. The placing area of the construction materials

E) Waste Management

467. Large amounts of municipal (domestic) waste did not originate in the course of the project. The municipal waste was collected in the containers and handed over to the local companies for disposal it to the landfills.

468. Waste management is still an unsolved problem in Svaneti region. This is the only region in Georgia without official landfill. The nearest official landfill from Mestia is 250 km away.

469. Recommendation: To the Municipality and Ministry of Regional Development: A project of a new landfill for municipal waste is to be developed and the international financial institutions are to be applied for financing of the landfill construction in Svaneti.

F) Book of Complaints

470. The site with ongoing construction works has no the Book of Complaints and Suggestions. According to the PIU and Contractor, there were no complaints received from the citizens.

471. Recommendation: Book of Complaints should be prepared and maintained on the site.

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G) Mitigation Measures

472. The construction project for Mestia headworks is in the final phase. Consequently, at present, no audit of the actions accomplished by the Construction Company is possible.

473. As already mentioned, the Consultant Company and environmental specialists of PIU accomplished permanent audits to identify the quality of meeting the environmental requirements. Based on their monitoring records, we can judge about the facts of non- compliances fixed by the said group. Photo 9 shows the facts of non-compliances fixed during the audit.

Figure 48. Non-compliances revealed by the Consultant

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H) Restoration Works

474. The restoration works on the territory of the new reservoir are accomplished. The restoration works are accomplished satisfactorily. Reservoir site is properly fenced and lighted as well (Figures 49 and 50).

Figures 49 and 50. Area of the new reservoir in Mestia

K) Post Construction Audit

475. The construction project for Mestia headworks is almost finished. After the Project is ended, an independent audit of the third party or an audit company will be hired to draft „Post Construction Audit Report” to be submitted to the ADB.

2.5.4.6 Main Findings and Recommendations Revealed during the Documents Review and Site Visits

476. Based on the projects documents review and conducted site visits the Consultant (Audit Team) revealed the following general findings:

(i) The Bidding Documents developed within the scope of all four projects are identical. The environmental requirements fixed by the documents are quite detailed and thorough. However, the same requirements are not seen either at the following stages of the tender, or tender proposals presented by the applying company and most importantly, in the contracts; (ii) The contract concluded with the Construction Contractor fails to give the major part of the requirements envisaged by the Bidding Documents. No monitoring plan is enclosed to the Contract as an annex, which is to be accomplished by the Contractor. 130

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Similarly, there is no EMP presented, whose updating the Contractor is responsible for. (iii) Analyzes of the river Mestiachala water quality was not performed; (iv) The environmental specialist takes no part in the development of either tender documentation, or evaluation of the tender bids or conclusion of the contract; (v) There is only one environmental specialist on the staff list of the company, and there is one environmental consultant employed within the scope of the projects financed by the Asian Development Bank. UWSGG accomplishes the rehabilitation projects of the existing infrastructure and construction projects of new infrastructure both, by financed by the international financial institutions and at its own expenses. Following the projects accomplished by the company, two specialists are not a bit enough to reach the desired outcome in the field of environmental protection; (vi) The agreements with the Consultant Supervising Contractors give the obligation to meet the environmental requirements. The principle for requiring the Consultant Company to employ an international environmental specialist under the Bidding Offer and not requiring the Company to employ a local environmental specialist in one case, while in other case, the same Company is required to employ only a local environmental specialist, is unclear; (vii) The same requirements are fixed in the Project Admonistration Manual (PAM) developed within the scope of the project in 2013 (Attachment 2: Staff Requirement and Responsibilities, and chapter - g. Staffing Requirement, p – 74-75); (viii) In the course of the project, the quality of the project implementation, including meeting the environmental requirements much depends on the qualification and efficient performance of the specialists of the Consultant Supervising Company. All Consultants must have both, international and local environmental specialists. An international environmental specialist on the staff of the Consultant Company is absolutely necessary during the development of the environmental documents, analysis of the prepared documents, development of the methods of audit and monitoring, development of questionnaires, perfection of the working schedule and organization of the relevant trainings for the employees of the Construction Contractor. As for the local specialist, his/her daily engagement in the project and his/her awareness of the national legislation is necessary; (ix) In respect of using the described practice, quite good results were gained with the project “Construction of Kobuleti Bypass” accomplished by the MDF in Georgia. The efficient engagement of the international environmental specialist in this project and daily activities of the local specialists during the implementation of the project made the project very efficient in respect of meeting the environmental requirements. (x) The audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU

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to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations.

477. Along with the above-mentioned findings the Consultant made the following recommendations:

(i) For the Municipality of Mestia and Ministry of Regional Development: A project of a new landfill for municipal waste is to be developed and the international financial institutions are to be applied for financing the landfill construction in Svaneti; (ii) The analyzes shall be conducted in line with the requirement of the ADB so that the information about the existing situation should be available (before the onset of the project implementation). The relevant requirement shall be fixed in the IEE document, or envisaged by the contract as an obligation; (iii) The agreement to conduct the analyzes of the water quality in the river Mestiatskali with the relevant accredited laboratory shall be concluded. Term: 1 month; (iv) Engagement of the international environmental specialist at least at the first stage is expedient, when the audit and monitoring methods are approved, questionnaires are drafted, the working schedule is made precise and the construction contractors are given the relevant trainings; (v) An additional environmental specialist is to be hired on UWSGG staff following the number and complexity of the projects realized by the Company. The number of the environmental specialists is desirable to be at least 4 or 5 (the Municipal Development Fund has introduced a much favorable structure in this field); (vi) The evaluation criteria of the Bidding Proposals must consider environmental issues (the relevant criteria developed by the ADB), and the presented CV of the environmental specialist must also be assessed.

2.5.5 Tranche I, Sub-project: “Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti”

2.5.5.1 Brief Project Descripton

478. The scope of works includes improvement of water supply infrastructure in Anaklia, Kutaisi and Poti, in particular, reservoirs and pumping stations, transmission lines and distribution lines of water supply systems as well as a water treatment plant in Poti.

479. The main works will comprise the laying of approx.103 km water supply pipelines, the construction of concrete water reservoirs at 5 locations with a total storage volume of 38,000 m³, the construction of a water treatment plant and the construction of 4 pumping stations with a total capacity of 2.4 MW. The estimated construction period for whole of the works is 1,095 days.

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480. Anaklia: Construction of approximately 6,000 m³ capacity reservoir (two circular shaped reservoirs of 3,000 m³ each – may be revised through design changes to one reservoir of 3,000 m3) at Darcheli; Construction of new pumping station with total capacity of 348 m3/h; Construction of a transmission main from two well fields at Kakhati and Inghiri (south of Zugdidi) to the new reservoir at Darcheli for approximately 14 km, and from the reservoir at Darcheli to the networks of Ganmukhuri and Anaklia for approximately 8 km.

481. Kutaisi: Rehabilitation of two pumping stations for approximately 465 m3/h at Vazha Pshavela (approximately 348 m3/h) and at Kldiashvili (approximately 117 m3/h); Construction of 3 new reservoirs for approximately 15,000 m3 capacity at Vazha Pshavela (2 x 3,500 m³) and 1*3000, Tetramitsa (2 x 2,000 m3), and TV Tower (1 x 1,000 m3); Construction of transmission main and distribution lines of a total of 52 km; Installation of approximately 40,000 nos. of water meters, pipes, fittings, etc. for the metering of households in apartment blocks.

482. Poti: Construction of new pumping station with 14 pumps of approximately 3,703 m3/h capacity in Nabada; Construction of 5 x 3,000 m³ rectangular shape new reservoirs at the eastern side of the Nabada territory; Supply and installation of new pumps of approximately 3,380 m3/h capacity and mains of 22 km for 29 wells; Power supply, control cables and switchboards for 29 wells; Design, construction and commissioning of a new water treatment plant of 20.75 MLD capacity, as well as training of the operator’s staff. The estimated construction period for whole of the works is 913 days.

2.5.5.2 Project Document Analysis

483. For all sub-projects under the Tranche I and II two Consultant Companies (Kocks Consult Gmbh and “Eptisa” Ltd) were selected by the UWSCG in agreement with the ADB. Analysis of Contracts, Bidding Documents and Tender Proposals of the above mentioned Consultant Companies are described in the chapters from 2.3.2 to 2.3.2.1.6

A) Bidding Documents for Construction Company

484. The tender for the Construction Contractor in the scope of the project REG-01, Water Supply Infrastructure (Kutaisi, Poti, Anaklia), was announced on 12 February, 2013. Environmental Impacts and Mitigation Measures developed within the scope of the project are enclosed as annexes to the Bidding Documents (Annex 1);

485. The obligation to accomplish the said plan is given in Section 8 - Particular Conditions of Contract, Part B – Specific Provisions, chapter 4.18 “Protection of the Environment”, according which: “The Contractor shall comply with all applicable national, provincial, and local environmental laws and regulations.

486. The Contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set forth in Environmental Management Plan (EMP), and (c) allocate the budget required to ensure that such measures

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are carried out. The Contractor shall submit quarterly reports on the carrying out of such measures to the Employer.

487. Prior to commencement of the project, the Employer, the Contractor, and the construction supervision consultant for the project shall consult on, and make all appropriate updates to, the Environmental Management Plan (EMP) for the project, and the Contractor shall implement the EMP, as so updated, in accordance with its terms”.

488. In addition, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impacts and Mitigation Measures” of the Bidding Documents gives a number of additional environmental obligations and requirements, with the following worth mentioning:

1. The SEMP will be submitted to the Employer for approval at least 10 days before taking possession of any work site; 2. The Contractor’s Environmental Representative is required to have qualifications in Environmental Science or similar discipline and be able to complete the preparation of the site specific environmental management plans 3. The Contractor will ensure that all personnel employed by or contracted to him are given induction training in environmental issues and the requirements for environmental management; 4. The non-compliances ranked system; 5. The failure to prepare a corrective action plan or to implement it within the required time frame will result in the Employer undertaking the works and the cost plus 20% will be recovered from the final payment to the Contractor.

B) Tender Proposals of Construction Company

489. „COBRA” Ltd presented the Bidding Documents on May 4, 2013.

490. The Bid presented by the Company gives a detailed description of the obligations of the Company in the direction of environmental protection. The Company has ISO 14001:2005 Certificate and has submitted the full documents of the requirements of the said standards within the scope of the Bidding Documents, such as: environmental policy of the Company, resource management, realization of the corrective actions, monitoring, audit, etc. (Figures 51 and 52).

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Figure 51. ISO 14001 certificate Figure 52. Environmental Policy of the Company

C) Contract with Construction Company – “COBRA Ltd”

491. The contract with Construction Contractor „COBRA“Ltd was concluded on May 4, 2013.

492. The present Contract includes some of the requirements to be met under the terms of Tender. The said requirements are included in the following sections of the Contract:

3. Particular Conditions of Contract, Part B p 8-3 - this section of the Contract gives the following requirements: updating the EMP, accomplishing the monitoring plan and drafting the budget necessary to accomplish the monitoring plan; 4. In addition, chapter 4.18 „Protection of the environment“ P-20 gives the requirements for observing the water discharge limits and not disturbing the population and not damaging their property.

493. Non-Compliance: The contract concluded with the Construction Contractor fails to give the major part of the requirements envisaged by the Bidding Documents. No monitoring plan is enclosed to the Contract as an annex, which is to be accomplished by the Contractor. Similarly, there is no EMP presented, whose updating the Contractor is responsible for.

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494. The Contract fails to give a number of obligations envisaged by the Bidding Documents (Bid Documents, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impact and Mitigation Measures”). See Chapter 2.4.2.1 for the description of the said requirements.

2.5.5.3 Preparation of Pre-Construction Documents

495. The audit team has revealed Non-Compliance #2:

496. Requirement: Within the scope of all three sub-projects, the Construction Contractor was required to submit the Updated EMP (Particular Conditions of Contract, Part B p 8-3).

497. Non-Compliance: Within the scope of all three Sub-projects, the EMP was not updated to be submitted to the PIU for approval.

498. Finding: the EMP Within the scope of all three Sub-projects not complying with the requirements taken by of Contract (Particular Conditions of Contract, Part B p 8-3). According to which the Construction Contractor was required to submit the Updated EMP.

499. Corrective Action: The EMP shall be updated within the scope of all sub-projects or SEMP to be developed in line with the new requirements.

500. As already mentioned, by the moment of the audit (03.11.2013), only Anaklia sub-project was started, and mobilization works were under way with Kutaisi and Poti sub-projects. By that time, the Construction Contractor had not updated EMP documents.

501. The negotiations with the construction contractor were held and the contractor presented the schedule to draft SEMP within the scope of all sub-projects.

502. At present, the facts of non-compliance are corrected and SEMP documents are developed for all sub-projects. The said documents are approved by PIU.

A) Preparation of Pre-Construction Documents for Anaklia Sub-project

503. The audit team has revealed Non-Compliance # 3:

504. Requirement: Within the scope of the said sub-project, the IEE document was developed in July, 2012. As per the developed document, the Construction Contractor had to present the flowing environmental management plans before the start-up of the construction:

1. Updated EMP (Particular Conditions of Contract, Part B p 8-3); 2. Sewage management plan (source of request: IEE, chapter 2 - Impacts and Mitigation during Construction, article 64); 3. Waste Management Plan (source of request: IEE, chapter 2 - Impacts and Mitigation during Construction, article 64);

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4. Layout plan of the work camp including a description of all precautionary measures proposed to avoid potential adverse impacts on the receiving environment (surface and ground water, soils, ambient air, human settlement) (source of request: IEE, chapter 2 - Impacts and Mitigation during Construction, article 64); 5. The Contractor should employ an environmental specialist who will ensure that the site specific EMP (SSEMP) is prepared and implemented. The EMS at the IA will review and approve the SSEMP (source of request: IEE, A - Institutional Arrangements, article 140).

505. Present Situation: Within the scope of this sub-project, non of the above-mentioned management plans were prepared.

506. Finding: Requested environmental management plans are not complying with the requirements taken by IEE (chapter 2 - Impacts and Mitigation during Construction, article 64) according to which the Construction Contractor had to present the various environmental management plans before the start-up of the construction.

507. Corrective Action: The said plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

B) Preparation of Pre-Construction Documents for Kutaisi Sub-project

508. The audit team has revealed Non-Compliance #4:

509. Requirement: To ensure that potentially resulting impacts are kept at a minimum the contractor will be required to prepare the following plans or method statements (IEE, chapter 2 – Environmental Impacts and Mitigation Measures During Construction):

 Layout plan of the work camp including a description of all precautionary measures proposed to avoid potential adverse impacts on the receiving environment (surface and ground water, soils, ambient air, human settlement);  Sewage management plan for provision of sanitary latrines and proper sewage collection and disposal system to prevent pollution of watercourses or groundwater;  Waste management plan covering the provision of garbage bins, regular collection and disposal in a hygienic manner, as well as proposed disposal sites for various types of wastes (e.g., domestic waste, used tires, etc.) consistent with applicable national regulations; and  Description and layout of equipment maintenance areas and lubricant and fuel storage facilities including distance from Rioni River. Storage facilities for fuels and chemicals will be located at a distance to Rioni River. Such facilities will be bounded and provided with impermeable lining to contain spillage and prevent soil and water contamination.  These plans will be approved by the Engineer prior to beginning of construction activities (source of request: IEE, chapter 2 – “Impacts and Mitigation Measures during Construction” paragraph 70) 137

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510. Present Situation: Within the scope of this sub-project, none of the above-mentioned management plans were prepared.

511. Finding: Requested environmental management plans is not complying with the requirements taken by IEE (chapter 2 - Impacts and Mitigation during Construction, article 64) according to which the Construction Contractor had to present the fverious environmental management plans before the start-up of the construction.

512. Corrective Action: The said plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

C) Preparation of Pre-Construction Documents for Poti Sub-project

513. The audit team has revealed Non-Compliance #5:

514. Requirement: To ensure that potentially resulting impacts are kept at a minimum the contractor will be required to prepare the following plans or method statements (IEE, chapter 2 - Impacts and Mitigation during Construction):

 Layout plan of the work camp including a description of all precautionary measures proposed to avoid potential adverse impacts on the receiving environment (surface and ground water, soils, ambient air, human settlement);  Sewage management plan for provision of sanitary latrines and proper sewage collection and disposal system to prevent pollution of watercourses or groundwater;  Waste management plan covering the provision of garbage bins, regular collection and disposal in a hygienic manner, as well as proposed disposal sites for various types of wastes (e.g., domestic waste, used tires, etc.) consistent with applicable national regulations; and  Description and layout of equipment maintenance areas and lubricant and fuel storage facilities including distance from Rioni River and wet lands. Storage facilities for fuels and chemicals will be located at a distance to Rioni River and wet lands. Such facilities will be bounded and provided with impermeable lining to contain spillage and prevent soil and water contamination.  These plans will be approved by the Engineer prior to beginning of construction activities (source of request: IEE, chapter 2 – “Impacts and Mitigation Measures during Construction” paragraph 70)

515. Present Situation: Within the scope of this sub-project, none of the above-mentioned management plans were prepared.

516. Finding: Requested environmental management plans are not complying with the requirements taken by IEE (chapter 2 - Impacts and Mitigation during Construction) according to

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which the Construction Contractor had to present the various environmental management plans before the start-up of the construction.

517. Corrective Action: The said plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

2.5.5.4 Monitoring, Reporting and Trainings

A) Monitoring

518. The Contractor’s field inspectors performed daily site visits to the project sites. UWSCG Environmental team visited on project sites minimum once a month. Environmental Consultant performed weakly site inspections. 519. The environmental specialist of the construction contractor is permanently on the site and undertakes permanent monitoring. Contractor’s environmental specialist performed daily site inspections and monitor implementation of mitigation measures per EMPs.

520. UWSCG and Eptisa visited the project sites regularly and instruct and guide Contractor on Environmental Safeguard issues. For every non-compliance fixed during the accomplished audits (if any), a special form of non-compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

521. For these three sub-projects there were 37 cases of non-compliances fixed during the audits in the last 6 months, and corrective actions were developed. 18 of the said cases were corrected in full and 18 of them were corrected partially.

B) Reporting

522. The construction contractor shall present monthly „Progress Reports“, environmental issues included in the present document as an individual chapter.

523. An International Consultant Company – EPTISA Ltd. hired by UWSCG for construction supervision, undertakes environmental monitoring of project progress and submits quarterly Environmental Monitoring Report to UWSCG.

524. There is a Bi-Annual Report developed on the request of the UWSCG. The presented report was drafted in line with the requirements of Asian Development Bank. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site.

525. However, the audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU to enhance the activities on 139

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disclosure of the project information through dissemination of environmental reports among population and other organizations;

C) Training

526. The specialists engaged in the project accomplished by UWSCG within the scope of RETA project were given the training on July 6-7, 2013. The training, besides PIU representatives, was attended by the Consultant and representatives of the Construction Company.

527. Based on the module of the held training by Eco-Spectri Ltd. Mr. Irakli Legashvili, the environmental specialist of the Consultant Company, developed a brief module, and the said training was permanently held for all the people engaged in the project, who were responsible for meeting the environmental requirements (Figures 53 and 54).

Figures 53 and 54. Trainings conducted by the Consultant under the project REG -1

2.5.5.5 Site Visits

2.5.5.5.1 Anaklia Sub-project

528. Site visits were organized on 03.11.2013. At first the meeting with the environmental specialists and technical staff was organized. The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 13).

529. As already mentioned, the Contractor corrected the past facts of non-compliances and SEMP document was developed within the scope of the sub-project and approved by PIU.

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A) Baseline Analyzes

530. No analyzes of the environmental situation were conducted within the scope of the Project. No relevant requirement was fixed either in the IEE document, or contract concluded with the Construction Contractor.

B) Construction Camp

531. No construction camps for the workers to live are used within the scope of the project.70% of the employed workers within the scope of the Project are locals, while others live in the hired flats. The construction camps are only used to store the construction materials.

C) Waste Management

532. During the construction, following the construction activities, no large amounts of municipal or hazardous waste is expected to originate. Specially dedicated containers were installed for the collection of non-hazardous and hazardous waste at the sites.

533. The waste is removed by the sanitary cleaning office disposing the waste to Zugdidi landfill.

D) Storage of Topsoil

534. The topsoil is mainly storaged in line with the requirements given by IEE, according to which: „Top soil of about 30 sm depth shall be removed and stored separately during excavation work, and after reservoir construction the same Topsoil shall be replaced. Topsoil 0 should be stored properly (maximum height 2 m. with 45 sloped sides)“.

535. However, there were some cases fixed when the topsoil was mixed with the subsoil. The relevant facts were also fixed during the audits carried by the Consultant Company and UWSGG, and relevant forms of non-compliances were drafted.

E) Dust Generation

536. Almost all mitigation measures given in IEE aiming at avoiding or mitigating dust origination were accomplished at the stage of construction. These measures are as follows:

 truck wheels cleaning equipment is already purchased and installed on the site  Tarpaulins are used to cover loose material that is transported by truck  Mostly transport speed limit are considered for minimizing of dust generation

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2.5.5.5.2 Kutaisi Sub-project

537. Site visits were organized on 03.11.2013. A meeting with the environmental specialists and technical staff was organized.

538. By the said moment of the project, the preparatory works were in progress. The environmental documents the Contractor had to develop before the start-up of the project, were not ready. The non-compliances fixed earlier was corrected and SEMP document was developed with the scope of the sub-project, which was approved by the PIU.

A) Impact on Flora and Fauna

539. Under the developed IEE, impact on flora and fauna was minimal. Similarly, according to the mitigation measures to accomplish, the felling of trees were to brought to minimum (IEE, article 96-98). However, when developing the detailed design, it became clear that 6 trees of elm Zelkova were to cut down during the construction of the new reservoir (Figures 55 and 56).

Figure 55. The existing reservoir Figure 56. Trees for felling (elm Zelkova)

540. Elm Zelkova is included in the Red Book and a specail permit from the Ministry of Environmental and Natural Resources Protection of Georgia is to be obtained for cutting it down. At present, the relevant actions to obtain the relevant permit are under way.

B) Baseline Data

541. The requirement for accomplishing the basic analyses was not fixed either in the developed IEE document, or agreement with the Construction Contractor.

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542. Contract is prepared for signing between the Contractor and the National Environmental Agency. Baseline data will be integrated into the next project Environmental Monitoring Report. Until that monitoring is limited to inspections to verify compliance with mitigation requirements.

543. The parameters to be measured for the baseline data at the construction sites are as follows: dust, vibration, carbon monoxide, nitrogen dioxide, sulfur dioxide, gamma radiation, el- magnetic field radiation and noise. The measurements will be executed at each construction site (Vasha Psavela, Tetramista, Kladiashvili, TV Tower, transmission, network ). The frequency of measurements is defined to be bi-annual based on agreement between contractor and the Agency. 544. The methodology for the measurements will be defined by the National Environmental Agency that is leading National institution responsible for different parameters measurement. The measurements will be done in accordance with the standards and procedures that are in compliance with national requirements.

545. The analyzes are planned to accomplish in April 2014.

C) Dust Generation

546. The weather during the audit was wet. Consequently, no facts of dust origination were fixed on the construction site. However, in summer it is necessary to realize the developed mitigation measures to avoid this problem, particularly in the densely settled areas.

D) Noise and Vibration

547. This is one of the most disturbing factors for the locals at the stage of the given kind of works. So far, no complaints of the population have been registered.

E) Waste Management

548. No large amount of municipal or hazardous waste is originated during the construction. The containers both, for hazardous and non-hazardous waste are placed on the construction site. The containers are emptied by the cleaning department of Kutaisi.

549. The inert waste originated as a result of the trench excavation are mostly used to fill in the same trenches. A minor part of the inert materials, as the builders stated: „As of preliminary discussion with the Municipality it is foreseen to use surplus/waste soil for municipal purposes like repairing of roads and low level sites rising“.

F) Safety of the Population

550. Most of the works are accomplished in the densely settled areas, on the territory of the city. Consequently, the communication with the local people and ensuring proper safety measures is very important. During the audit, the relevant warning signs were placed on the construction sites, on the territory of the city (Figures 57 and 58).

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Figures 57 and 58. Relevant warning signs were placed on the construction sites

551. The overpasses across the trenches were installed for the local population (Figures 59 and 60).

G) Book of Complaints

552. The site with ongoing construction works has no the Book of Complaints and Suggestions. According to the PIU and Contractor, there were no complaints received from the citizens.

553. Recommendation: Book of Complaints should be prepared and maintained on the site.

Figures 61 and 62. Bridges installed across the trenches

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K) Construction Camps

554. No construction camps for the workers to live are used within the scope of the project.60% of the employed workers within the scope of the Project are locals, while others live in the hired flats. The construction camps are only used to store the construction materials.

2.5.5.5.3 Poti Sub-project

555. Site visits were organized on 03.11.2013. A meeting with the environmental specialists and technical staff was organized.

556. By the said moment of the project, the preparatory works were in progress. The environmental documents the Contractor had to develop before the start-up of the project were not ready. The non-compliances fixed earlier were corrected and SEMP document was developed with the scope of the sub-project, which was approved by the PIU.

557. Within the scope of Poti sub-project during the audit the construction activities were not still started.

2.5.5.6 Main Findings and Recommendations Revealed During the Documents Review and Site Visits

558. Main findings revealed during the audit process are:

(ii) The Project Administration Manual (PAM) placed on the ADB web-site was developed in July of 2013. Therefore, they cannot be used within the scope of the present projects, as the contracts with the Construction Contractor within the scope of all ongoing projects were concluded before July, 2013;

(iii) The Bidding Documents developed within the scope of all four projects are identical. The environmental requirements fixed by the documents are quite detailed and thorough. However, the same requirements are not seen either at the following stages of the tender, or tender proposals presented by the applying company and most importantly, in the contracts;

(iv) Under the requirements of all contracts, the Construction Contractor is obliged to update the existing EMP based on the already developed EMP and detailed design. However, the contract has no either already developed EMP, or monitoring plan as an annex;

(v) After concluding the contract, there was a PIU established at UWSGG, which has an environmental specialist as a staff;

(vi) The environmental specialist takes no part in the development of either tender documentation, or evaluation of the tender bids or conclusion of the contract;

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(VI) A similarly serious problem is the level of qualification of the environmental specialists of the Construction Contractors. In most cases, the duties of an environmental specialist are carried out by a safety engineer;

(vii) There is only one environmental specialist on the staff list of the company, and there is one environmental consultant employed within the scope of the projects financed by the Asian Development Bank. UWSGG accomplishes the rehabilitation projects of the existing infrastructure and construction projects of new infrastructure both, by financed by the international financial institutions and at its own expenses. Following the projects accomplished by the company, two specialists are not a bit enough to reach the desired outcome in the field of environmental protection;

(viii) Within the scope of neither of the projects, the Construction Contractor has not prepared any of the management plans required by the already developed environmental documents;

(ix) SEMP is prepared for all ongoing projects; however, the presented plans need to further improvement. The risk assessment tables contain some inaccuracies. In addition, the project is not divided into the construction phases or construction sites;

L) The ToR of the tender declared for the Consultant Company is desirable to envisage the requirement of the local environmental consultant and the criteria to evaluate his/her qualification;

(xi) The questions of reporting are well-ordered. All reports are written within the specified terms and in line with the developed guidelines;

(xi) The system to conduct trainings at the company is well-organized and relevant training schedule is developed.

559. Based on the above-mentioned findings the Consultant made the following recommendations:

(i) The contracts with the construction companies shall give detailed description of the Environmental terms fixed in the Bidding Documents; (ii) The contract with the Construction Contractor must be enclosed by the Environmental Management Plan (EMP) and Monitoring Plan as annexes. The full IEE or EIA document may be attached to the bidding documents as an annex; (iii) The list of specialists in the Bidding Document must contain the requirement for the environmental specialists (both, local and international) to be included in the team of Construction Contractor and Supervising Consultant;

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(iv) The evaluation criteria of the Bidding Proposals must consider environmental issues (the relevant criteria developed by the ADB), and the presented CV of the environmental specialist must also be assessed; (v) An additional environmental specialist is to be hired on UWSGG staff following the number and complexity of the projects realized by the Company. The number of the environmental specialists is desirable to be at least 4 or 5 (the Municipal Development Fund has introduced a much favorable structure in this field); (vi) The analyzes shall be conducted in line with the requirement of the ADB so that the information about the existing situation should be available (before the onset of the project implementation). The relevant requirement shall be fixed in the IEE document, or envisaged by the contract as an obligation; (vii) The environmental management plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

2.5.6 Tranche II – Brief Information

560. The United Water Supply Company of Georgia (UWSCG), assisted by the Asian Development Bank, is accomplishing 6 sub-projects which are divided into two tranches. At present, under the second tranche, the UWSCG is accomplishing the following projects:

1. Contract-1: (UWSC/ICB/CW/2012/ANA-01) Anaklia Water Supply and Sewerage Distribution Networks; 2. Contract-2 (UWSCG/ICB/CW/2011/MES-02) Construction of Mestia Water Supply and Sewerage Distribution Networks; 3. Contract-3 (Package-REG-02): Construction of Wastewater Treatment Plant in Anaklia

561. Under the tranche II for all three sub-projects Loan Agreement between Georgian Government and the Asian Development Bank was concluded and Project Administration Manual (PAM) prepared.

562. Below we will consider document analysis (Loan Agreement and PAM) for Tranche II and then we will consider detailed document analysis for each sub-project under tranche II.

2.5.6.1 Document Analysis for Tranche II

A) Loan Agreement, Project Administration Manual (Tranche 2)

563. Loan Agreement for tranche II dated 1 December 2012 between Georgia ("Borrower") and Asian Development Bank ("ADB").

564. The obligation to meet the environmental requirements is given in schedule 5 “Execution of Project; Financial Matters”, Article 4 - “Environment” of the document, which states: “The 147

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Borrower shall cause UWSCG to ensure that the preparation, design, construction, implementation, operation and decommissioning of the Project and all Project facilities comply with (a) all applicable laws and regulations of the Borrower relating to environment, health, and safety; (b) the Environmental Safeguards; (c) the EARF; and (d) all measures and requirements set forth in the respective IEE and EMP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report.”

565. Project Administration Manual (PAM) was developed in July, 2013. The rights and obligations of the Consultants to be hired within the scope of the project are given in the PAM developed for the old tranche. In addition, the PAM for the second tranche contains the requirement for employing an independent environmental specialist within the scope of the project.

566. The document developed for the second tranche gives a detailed description of the obligations of the project implementing unit at different stages of the project (Part 4, chapter VII. Safeguards, subchapter B.-Environmental Safeguards, pp 32-35).

567. Recommendation: For the Asian Development Bank: none of the PAMs developed within the scope of other projects (the ones accomplished for Georgia) gives such a detailed description of the obligations of the project implementing unit at different stages of the project. It is desirable to use the said practice in developing all PAMs in the future.

2.5.7 Tranche II, Sub-project 1: “Anaklia Water Supply and Sewerage Distribution Networks”

2.5.7.1 Brief Project Description

568. The construction involves the supply and installation of approximately 69 kilometers of water supply and 70 kilometers of sewerage networks and service connections to all residents and hotels defined for the year 2040 for Anaklia and Ganmukhuri villages (total projected population of about 25,600 people).

569. The construction works under Contract ANA-01 started on 16th of January 2012 and are scheduled to be completed on 31st March 2014.

2.5.7.2 Project Document Analysis

570. For all sub-projects under the Tranche I and II two Consultant Companies (Kocks Consult Gmbh and “Eptisa” Ltd) were selected by the UWSCG in agreement with the ADB. Analysis of Contracts, Bidding Documents and Tender Proposals of the above mentioned Consultant Companies are described in the chapters from 2.3.2 to 2.3.2.1.6.

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A) Bidding Documents for Construction Company

571. The Bidding Documents in the scope of the project „ANA-01, Anaklia - Water Supply and Sewerage Networks” were prepared on 30 May, 2011. The Bidding Documents have Environmental Impacts and Mitigation Measures developed within the scope of the project, enclosed as annexes (Annex 1).

572. The obligation to accomplish the said plan is given in Section 8 - Particular Conditions of Contract, Part B – Specific Provisions, chapter 4.18 “Protection of the Environment”, according which The Contractor shall comply with all applicable national, provincial, and local environmental laws and regulations.

573. The Contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set forth in Environmental Management Plan (EMP), and (c) allocate the budget required to ensure that such measures are carried out. The Contractor shall submit quarterly reports on the carrying out of such measures to the Employer.

574. “Prior to commencement of the project, the Employer, the Contractor, and the construction supervision consultant for the project shall consult on, and make all appropriate updates to, the Environmental Management Plan (EMP) for the project, and the Contractor shall implement the EMP, as so updated, in accordance with its terms.”

575. In addition, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impacts and Mitigation Measures” of the Bidding Documents gives a number of additional environmental obligations and requirements, with the following worth mentioning:

1. The SEMP will be submitted to the Employer for approval at least 10 days before taking possession of any work site; 2. The Contractor’s Environmental Representative is required to have qualifications in Environmental Science or similar discipline and be able to complete the preparation of the site specific environmental management plans 3. The Contractor will ensure that all personnel employed by or contracted to him are given induction training in environmental issues and the requirements for environmental management; 4. The non-compliances ranked system; 5. The failure to prepare a corrective action plan or to implement it within the required time frame will result in the Employer undertaking the works and the cost plus 20% will be recovered from the final payment to the Contractor.

B) Tender Proposals of Construction Company

576. The wining Company in the Bid (tender proposal) described the obligations it undertook in great details. The said obligations were given in details in a 30-page-long document 149

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”Health&Safety, Environmental and Security Manual” fully included in the Bidding Documents (Figure 63).

577. In addition, the Bidding Proposal gave the CV of the environmentalist having the relevant qualification (Figure 64).

Figure 63. HS&E Manual Figure 64. proposed personnel

C) Contracts With Construction Contractors Joint Venture of PERI Ltd and Modern Business Group LLS

578. The contract for consultancy services was concluded with Joint Venture of PERI Ltd and Modern Business Group LLS on January 16, 2012.

579. The present Contract includes some of the requirements to be met under the terms of Tender. The said requirements are included in the following sections of the Contract:

1. Particular Conditions of Contract, Part B p 8-3 - this section of the Contract gives the following requirements: updating the EMP, accomplishing the monitoring plan and drafting the budget necessary to accomplish the monitoring plan; 2. In addition, chapter 4.18 „Protection of the environment“ P-20 gives the requirements for observing the water discharge limits and not disturbing the population and not damaging their property. 150

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580. Non-Compliance: The contract concluded with the Construction Contractor fails to give the major part of the requirements envisaged by the Bidding Documents. No monitoring plan is enclosed to the Contract as an annex, which is to be accomplished by the Contractor. Similarly, there is no EMP presented, whose updating the Contractor is responsible for.

581. The Contract fails to give a number of obligations envisaged by the Bidding Documents (Bid Documents, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impact and Mitigation Measures”). See Chapter 2.7.2.1 for the description of the said requirements.

2.5.7.3 Preparation of Pre-Construction Documents

582. Requirement: Within the scope of the said sub-project, the IEE document was developed in July, 2012. As per the developed document, the Construction Contractor had to present the flowing environmental management plans before the start-up of the construction:

1. Updated EMP (Particular Conditions of Contract, Part B p 8-3) 2. Sewage management plan (source of request: IEE, chapter 2 - Impacts and Mitigation during Construction, article 64); 3. Waste Management Plan (source of request: IEE, chapter 2 - Impacts and Mitigation during Construction, article 64); 4. Layout plan of the work camp including a description of all precautionary measures proposed to avoid potential adverse impacts on the receiving environment (surface and ground water, soils, ambient air, human settlement) (source of request: IEE, chapter 2 - Impacts and Mitigation during Construction, article 64); 5. The Contractor should employ an environmental specialist who will ensure that the site specific EMP (SSEMP) is prepared and implemented. The EMS at the IA will review and approve the SSEMP (source of request: IEE, A - Institutional Arrangements, article 140);

583. Present Situation: Within the scope of this sub-project, non of the above-mentioned management plans were prepared.

584. Finding: Requested environmental management plans are not complying with the requirements taken by IEE (chapter 2 - Impacts and Mitigation during Construction) according to which the Construction Contractor had to present the various environmental management plans before the start-up of the construction.

585. Corrective Action: The said plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

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2.5.7.4 Monitoring, Reporting and Trainings

A) Monitoring

586. The Contractor’s field inspectors performed daily site visits to the project sites. UWSCG Environmental team visited on project sites minimum once a month. Environmental Consultant performed weakly site inspections. 587. The environmental specialist of the construction contractor is permanently on the site and undertakes permanent monitoring. Contractor’s environmental specialist performed daily site inspections and monitor implementation of mitigation measures per EMPs.

588. UWSCG and Eptisa visited the project sites regularly and instruct and guide Contractor on Environmental Safeguard issues. For every non-compliance fixed during the accomplished audits (if any), a special form of non-compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

589. There were 6 cases of non-compliances fixed during the audits in the last 6 months, and corrective actions were developed. 4 of the said cases were corrected in full and 2 of them were corrected partially.

B) Reporting

590. The construction contractor shall present monthly „Progress Reports“, environmental issues included in the present document as an individual chapter.

591. An International Consultant Company – EPTISA Ltd. hired by UWSCG for construction supervision, undertakes environmental monitoring of project progress and submits quarterly Environmental Monitoring Report to UWSCG.

592. There is a Bi-Annual Report developed on the request of the UWSCG. The presented report was drafted in line with the requirements of Asian Development Bank. within the scope of the Project. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site.

C) Training

593. The specialists engaged in the project accomplished by UWSCG within the scope of RETA project were given the training on July 6-7, 2013. The training, besides PIU representatives, was attended by the Consultant and representatives of the Construction Company

594. Based on the module of the held training by Eco-Spectri Ltd. Mr. Irakli Legashvili, the environmental specialist of the Consultant Company, developed a brief module, and the said training was permanently held for all the people engaged in the project, who were responsible for meeting the environmental requirements.

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2.5.7.5 Site Visits

2.5.7.5.1 Anaklia Sub-project

595. Site visits were organized on 03.11.2013. A meeting with the environmental specialists and technical staff was organized. The environmental audit was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 14).

596. As already mentioned, the Construction Contractor corrected the non-compliances fixed before and SEMP document was developed with the scope of the sub-project, which was approved by the PIU.

A) Baseline Analyzes

597. No baseline data is provided in IEE of Anaklia WWS project for air and noise. As the main construction works are finalized project has modest impact on environment that may be easily mitigated, therefore monitoring was limited to inspections to verify compliance with mitigation requirements. 598. Bacteriological sampling and analyses was carried out at the commissioning stage of ANA- 01. As a result of minor contamination of the raw water from the 2 production wells the disinfection and flushing of the wells and distribution network were carried out through super- chlorination of the facilities to ensure the safety of distributed water. A second round of sampling after chlorination indicated an acceptable level of residual chlorinate in all part of the network.. Water quality is now in compliance with Georgian and European water quality regulations and the system is now commissioned.

B) Construction Camp

599. No construction camps for the workers to live are used within the scope of the project.70% of the employed workers within the scope of the Project are locals, while others live in the hired flats. The construction camps are only used to store the construction materials (Figures 65 and 66).

C) Book of Complaints

560. The site with ongoing construction works has no the Book of Complaints and Suggestions. According to the PIU and Contractor, there were no complaints received from the citizens.

561. Recommendation: Book of Complaints should be prepared and maintained on the site.

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Figures 65 and 66. Construction materials placed in the area of the economic activities

562. The construction materials are also stored adjacent to the construction camp and are surrounded with a warning tape (Figures 67 and 68).

Figures 67 and 68. Construction materials placed beyond the storing area

563. The construction materials to the construction objects were delivered only in the required quantities before the installation. Consequently, the construction materials were not stored on the construction sites (Figure 69).

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Figure 69. Construction process

C) Waste Management

564. During the construction, following the construction activities, no large amounts of municipal or hazardous waste is expected to originate. Specially dedicated containers were installed for the collection of non-hazardous and hazardous waste at the sites.

565. The waste is removed by the sanitary cleaning office disposing the waste to Zugdidi landfill.

D) Storage of Topsoil

566. The topsoil is mainly storaged in line with the requirements given by IEE, according to which: „Top soil of about 30 sm depth shall be removed and stored separately during excavation work, and after reservoir construction the same Topsoil shall be replaced. Topsoil 0 should be stored properly (maximum height 2 m. with 45 sloped sides)“.

567. However, there were some cases fixed when the topsoil was mixed with the subsoil. The relevant facts were also fixed during the audits carried by the Consultant Company and UWSGG, and relevant forms of non-compliances were drafted.

E) Dust Generation

568. Almost all mitigation measures given in IEE aiming at avoiding or mitigating dust origination were accomplished at the stage of construction. These measures are as follows:

 Truck wheels cleaning equipment is already purchased and installed on the site  Tarpaulins are used to cover loose material that is transported by truck  Mostly transport speed limit are considered for minimizing of dust generation

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2.5.7.6 Main Findings and Recommendations Revealed During the Documents Review and Site Visits

569. Main findings revealed during the audit process are the following:

(i) In general, majority of PIUs have improved their environmental performance during last few years. Visible changes related to quality of environmental reports prepared by PIUs or Supervision Consultants on behalf of PMUs, improved design of bidding and contract documentation in terms of including environmental safeguards, communication between PMUs and Contractors on environmental aspects, keeping records on environmental performance;

(v) After concluding the contract, there was a PIU established at UWSGG, which has an environmental specialist as a staff;

(vi) The environmental specialist takes no part in the development of either tender documentation, or evaluation of the tender bids or conclusion of the contract;

(vii) There is only one environmental specialist on the staff (UWSCG) list of the company, and there is one environmental consultant employed within the scope of the projects financed by the Asian Development Bank. UWSGG accomplishes the rehabilitation projects of the existing infrastructure and construction projects of new infrastructure both, by financed by the international financial institutions and at its own expenses. Following the projects accomplished by the company, two specialists are not a bit enough to reach the desired outcome in the field of environmental protection;

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(vii) Within the scope of neither of the projects, the Construction Contractor has not prepared any of the management plans required by the already developed environmental documents;

(vii) The ToR of the tender declared for the Consultant Company is desirable to envisage the requirement of the local environmental consultant and the criteria to evaluate his/her qualification;

(ix) The questions of reporting are well-ordered. All reports are written within the specified terms and in line with the developed guidelines.

(x) The system to conduct trainings at the company is well-organized and relevant training schedule is developed.

570. Based on the above-mentioned findings the Consultant made the following recommendations:

(i) The contracts with the construction companies must give detailed description of the Environmental terms fixed in the Bidding Documents; (ii) The contract with the Construction Contractor must be enclosed by the Environmental Management Plan (EMP) and Monitoring Plan as annexes. The full IEE or EIA document may be attached to the bidding documents as an annex; (iii) The list of specialists in the Bidding Document must contain the requirement for the environmental specialists (both, local and international) to be included in the team of Construction Contractor and Supervising Consultant; (iv) The evaluation criteria of the Bidding Proposals must consider environmental issues (the relevant criteria developed by the ADB), and the presented CV of the environmental specialist must also be assessed; (v) An additional environmental specialist is to be hired on UWSGG staff following the number and complexity of the projects realized by the Company. The number of the environmental specialists is desirable to be at least 4 or 5 (the Municipal Development Fund has introduced a much favorable structure in this field); (vi) The analyzes must be conducted in line with the requirement of the ADB so that the information about the existing situation should be available (before the onset of the project implementation). The relevant requirement must be fixed in the IEE document, or envisaged by the contract as an obligation; (vii) The environmental management plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

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2.5.8 Tranche II, Sub-project 2 – “Mestia Water Supply and Sewerage Distribution Networks”

2.5.8.1 Brief Project Description

571. The construction involves the supply and installation of approximately 69 kilometers of water supply and 70 kilometers of sewerage networks and service connections to all residents and hotels defined for the year 2040 for Anaklia and Ganmukhuri villages (total projected population of about 25,600 people).

572. The construction works under Contract ANA-01 started on 16th of January 2012 and are scheduled to be completed on 31st March, 2014.

2.5.8.2 Document Analysis

A) Bidding Documents

573. The tender for the Construction Contractor in the scope of the project „MES-02, Mestia - Water Supply and Sewerage“ was announced on 15 June, 2011. Environmental Impacts and Mitigation Measures developed within the scope of the project are enclosed as annexes to the Bidding Documents.

574. The obligation to accomplish the said plan is given in Section 8 - Particular Conditions of Contract, Part B – Specific Provisions, chapter 4.18 “Protection of the Environment”, according which The Contractor shall comply with all applicable national, provincial, and local environmental laws and regulations.

575. The Contractor shall (a) establish an operational system for managing environmental impacts, (b) carry out all of the monitoring and mitigation measures set forth in Environmental Management Plan (EMP), and (c) allocate the budget required to ensure that such measures are carried out. The Contractor shall submit quarterly reports on the carrying out of such measures to the Employer.

576. “Prior to commencement of the project, the Employer, the Contractor, and the construction supervision consultant for the project shall consult on, and make all appropriate updates to, the Environmental Management Plan (EMP) for the project, and the Contractor shall implement the EMP, as so updated, in accordance with its terms.”

577. In addition, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impacts and Mitigation Measures” of the Bidding Documents gives a number of additional environmental obligations and requirements, with the following worth mentioning:

1. The SEMP will be submitted to the Employer for approval at least 10 days before taking possession of any work site;

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2. The Contractor’s Environmental Representative is required to have qualifications in Environmental Science or similar discipline and be able to complete the preparation of the site specific environmental management plans 3. The Contractor will ensure that all personnel employed by or contracted to him are given induction training in environmental issues and the requirements for environmental management; 4. The non-compliances ranked system; 5. The failure to prepare a corrective action plan or to implement it within the required time frame will result in the Employer undertaking the works and the cost plus 20% will be recovered from the final payment to the Contractor.

B) Tender Documents

578. The Company presented the Bidding Documents on July 27, 2011.

579. Under Section „Method Statement“ of the presented Bid, the Company undertakes the following obligations for meeting the following environmental requirements: “Before commensing excavation, NEE to contact all the resposibale owners of such services within the work areaand to confirm the existence, position or status of such utilities and keep an authorized record on them. NEE will adopt necessary measures to minimize nuisance to third parties from noise, dust and other causes of this work such measures will be agreed upon with the engineer prior to perform the work up to his satisfaction. The beginning of reinstatement will follow to completion of activities. All the reinstatement activities will be conducted in accordance with project environmental Requirements”.

560. In addition, the presented table “Personnel“ includes the environmental specialist.

C) Contract with „NEW ENERGY“ Ltd

561. The contract with Construction Contractior „NEW ENERGY“Ltd. was concluded on 31 October, 2011.

562. The present Contract includes some of the requirements to be met under the terms of Tender. The said requirements are included in the following sections of the Contract:

563. Non-Compliance: The contract concluded with the Construction Contractor fails to give the major part of the requirements envisaged by the Bidding Documents. No monitoring plan is 159

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enclosed to the Contract as an annex, which is to be accomplished by the Contractor. Similarly, there is no EMP presented, whose updating the Contractor is responsible for.

564. The Contract fails to give a number of obligations envisaged by the Bidding Documents (Bid Documents, Section 6 - Employer’s Requirements, chapter 15 “Environmental Impact and Mitigation Measures”). See Chapter 3.3.2.1 for the description of the said requirements.

2.5.8.3 Preparation of Pre-Construction Documents

565. Under the contract, the Company was required to update PEM (Particular Conditions of Contract, Part B p 8-3).

566. Under the IEE document developed within the scope of the project, (April, 2011), the Contractor is not required to additionally develop environmental protection plans.

567. Non-Compliance: Under the plan given in IEE, at the stage of construction, the Contractor had to accomplish the analyses of the water quality in the river Mestiatskali on the territory of the headwork premises (requirement: IEE, Table 11: Environmental Management Costs). The analyses had to be accomplished at UWSCG lab, which was planned to equip within the scope of the same project.

2.5.8.4 Monitoring, Reporting and Trainings

A) Monitoring

568. The Contractor’s field inspectors performed daily site visits to the project sites. UWSCG Environmental team visited on project sites minimum once a month. Environmental Consultant performed weakly site inspections. 569. The environmental specialist of the construction contractor is permanently on the site and undertakes permanent monitoring. Contractor’s environmental specialist performed daily site inspections and monitor implementation of mitigation measures per EMPs

570. UWSCG and Eptisa visited the project sites regularly and instruct and guide Contractor on Environmental Safeguard issues. For every non-compliance fixed during the accomplished audits (if any), a special form of non-compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

571. There were 10 cases of non-compliance fixed during the audits in the last 6 months, and corrective actions were developed. 5 of the said cases were corrected in full and 5 of them were corrected partially.

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B) Reporting

572. The construction contractor shall present monthly „Progress Reports“, environmental issues included in the present document as an individual chapter.

273. An International Consultant Company – EPTISA Ltd hired by UWSCG for construction supervision, undertakes environmental monitoring of project progress and submits quarterly Environmental Monitoring Report to UWSCG.

574. There is a Bi-Annual Report developed on the request of the UWSCG. The presented report was drafted in line with the requirements of Asian Development Bank. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site. However, the audit and monitoring reports have not been submitted to the communities and to MoE. It should be noted, that the loan agreement does not contain these requirements to the Borrower. However, for the contract to comply with requirements of ADB policy on environmental measures (2009) the Consultant recommended PIU to enhance the activities on disclosure of the project information through dissemination of environmental reports among population and other organizations.

C) Training

575. The specialists engaged in the project accomplished by UWSCG within the scope of RETA project were given the training on July 6-7, 2013. The training, besides PIU representatives, was attended by the Consultant and representatives of the Construction Company.

576. Based on the module of the held training by Eco-Spectri Ltd. Mr. Irakli Legashvili, the environmental specialist of the Consultant Company, developed a brief module, and the said training was permanently held for all the people engaged in the project, who were responsible for meeting the environmental requirements

2.5.8.5 Site Visits

577. The site visit was held on 15.03.2014. A meeting with the environmental specialists and technical staff was held. The environmental audit for the Construction of Mestia Water Supply and Sewerage Distribution Networks was conducted by using the questionnaire developed by the Asian Development Bank (see Appendix 15).

578. The Project of Mestia water-supply and water discharge is accomplished by the same company accomplishing Mestia headworks construction project. If not considering the minor technical differences of the project, the results of the audit for both projects are in fact identical (See Audit’s Report, Chapter 2.3.5).

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579. The major problems are associated with the project location. Most of the works during the rehabilitation/construction works of water-supply and water discharge are accomplished on the territory of Mestia settlement.

A) Dust Generation

580. Almost all mitigation measures given in IEE aiming at avoiding or mitigating dust origination were accomplished at the stage of construction. These measures are as follows:

Figure 70. Tarpaulins are used to cover loose materials that are transported to and from the site by track

B) Noise and Vibration

581. This is one of the most disturbing factors for the locals at the stage of the given kind of works. So far, no complaints of the population have been registered.

582. As it can be seen in the Figures 71 and 72, the Company uses quite modern techniques.

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Figures 71 and 72. Modern technique used by the company

C) People’ s safety

583. Most of the works are accomplished in the densely settled areas, on the territory of the city. Consequently, the communication with the local people and ensuring proper safety measures is very important. During the audit, the relevant warning signs were placed on the construction sites, on the territory of the city (Figure 73).

Figure 73. Warning signs

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2.5.8.6 Main Findings and Recommendations Revealed During the Documents Review and Site Visits

584. The main findings revealed during the audit process are the following:

(v) After concluding the contract, there was a PIU established at UWSGG, which has an environmental specialist as a staff;

(vi)The environmental specialist takes no part in the development of either tender documentation, or evaluation of the tender bids or conclusion of the contract;

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(viii) Within the scope of neither of the projects, the Construction Contractor has not prepared any of the management plans required by the already developed environmental documents;

(ix) The ToR of the tender declared for the Consultant Company is desirable to envisage the requirement of the local environmental consultant and the criteria to evaluate his/her qualification;

(x) The questions of reporting are well-ordered. All reports are written within the specified terms and in line with the developed guidelines.

(xi) The system to conduct trainings at the company is well-organized and relevant training schedule is developed.

585. Main recommendations are as follows:

(i) The contracts with the construction companies must give detailed description of the Environmental terms fixed in the Bidding Documents; (ii) The contract with the Construction Contractor must be enclosed by the Environmental Management Plan (EMP) and Monitoring Plan as annexes. The full IEE or EIA document may be attached to the bidding documents as an annex; (iii) The list of specialists in the Bidding Document must contain the requirement for the environmental specialists (both, local and international) to be included in the team of Construction Contractor and Supervising Consultant; (iv) The evaluation criteria of the Bidding Proposals must consider environmental issues (the relevant criteria developed by the ADB), and the presented CV of the environmental specialist must also be assessed; (v) An additional environmental specialist is to be hired on UWSGG staff following the number and complexity of the projects realized by the Company. The number of the environmental specialists is desirable to be at least 4 or 5 (the Municipal Development Fund has introduced a much favorable structure in this field) (vi) The analyzes must be conducted in line with the requirement of the ADB so that the information about the existing situation should be available (before the onset of the project implementation). The relevant requirement must be fixed in the IEE document, or envisaged by the contract as an obligation; (vii) The environmental management plans are to be developed in line with the IEE requirements. Following the terms of the project, the management plans are to be realized within one month.

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III. APPENDIXES:

Appendix 1: Training Schedule for Georgia, Armenia, Azerbaijan

# Project name Date Place Quantity of PIU Trainers participants

1. MFF-Urban 1- Center of 10 United Water I. Kaviladze Services 2/07.2013 Training and Supply K. Dgebuadze Improvement Consultancy Company of N. Lomidze Investment Prog.- (CTC) at: No. Georgia Tranche 1 and 2 5, Otar Chkheidze street.Tbilisi, Georgia

2. Road Corridor 4- Center of 10 Roads I. Kaviladze Investment 5/07.2013 Training and Department K. Dgebuadze Program - Tranche Consultancy N. Lomidze 1 and 3 (CTC) at: No. 5, Otar Chkheidze street.Tbilisi, Georgia

3. Sustainable Urban 8- Center of 10 Municipal I. Kaviladze Transport 9/07/2013 Training and Development K. Dgebuadze Investment Consultancy Fund of N. Lomidze Program - Tranche (CTC) at: No. Georgia 1 and 2 5, Otar Chkheidze street.Tbilisi, Georgia

4. Regional Power 15 -16/07/2013 Center of 10 Georgian I. Kaviladze Transmission Training and State K. Electrosystem Dgebuadze Enhancement Consultancy N. Lomidze Project (CTC) at: No. 5, Otar Chkheidze street.Tbilisi, Georgia

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# Project name Date Place Quantity of PIU Trainers participants

1. MFF-Road Network 25- Under 10 Azeryolservis I. Kaviladze Development 26/07/2013 negotiation Joint-Stock K. Dgebuadze Investment Company project, Tranche 3

2. Second Road 29- Under 10 Azeryolservis I. Kaviladze Network 30/07/2013 negotiation Open Joint- K. Dgebuadze Development Stock Investment T1 Company

3. MFF-Water Supply 1- Under 10 Azersu Open I. Kaviladze and Sanitation 2/08/2013 negotiation Joint Stock K. Dgebuadze Investment Program- Company Tranche 1

4. MFF-Water Supply 5- Under 10 Azersu Open I. Kaviladze and Sanitation, 6/08/2013 negotiation Joint Stock K. Dgebuadze Tranche 2 Company

# Project name Date Place Quantity of PIU Trainers participants

1. North-South Road 9- Under 10 Under I. Corridor Investment 10/09/2013 negotiation clarification Kaviladze E. Bate Program - Tranche 1, 2 and 3

2. Women 12- Under 10 Under I. Entrepreneurship 13/09/2013 negotiation clarification Kaviladze E. Bate Support Project

3. Sustainable Urban 16- Under 10 Under I. Development 17/09/2013 negotiation clarification Kaviladze E. Bate Investment Program, Tranche 1

4. Water Supply and 18- Under 10 Under I. Sanitation Sector 19/09/2013 negotiation clarification Kaviladze E. Bate Project-Phase 2

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Appendix 2: Training Agenda and Trainers nominated for each module for Georgia

Session Training module Trainers

Day 1

0900 -09:15 Registration of Participants

9:15 – 9:40 Welcome, Housekeeping Irakli Kaviladze – Introduction Environmental Module 1.1 Specialist/Team Leader - International

9:4 0 – 10:30 ADB’s relationship with Partners Keti Dgebuadze – Module 1.2 Environmental Auditor - International

10:30 –11:15 Environmental Specialist/Roles and Keti Dgebuadze – Responsibilities Environmental Module 1.3 Auditor - International

11 :15 –11:30 Tea Break 11:30 –12:30 Loans, Tenders and Contracts Keti Dgebuadze – Module 1.4 Environmental Auditor - 12:30 –13:00 Bid Evaluation International Module 1.5 130 : 0 -14:00 Lunch 14 :00-15:30 Introduction to Risk Assessment – Module Irakli Kaviladze – 1.6 Environmental Specialist/Team Leader - International 15: 30 –15:45 Tea Break 15:45 –18:00 Construction Impacts & Mitigations Nino Lomidze - Module 1.7 – Group exercise Environmental Auditor - National Day 2

9:00 – 11:00 Bonville Case study Irakli Kaviladze – Module 1.7 Environmental Specialist/Team Leader – International Nino Lomidze - Environmental Auditor - National 11:00 – 11:15 Tea Break 168

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11:15 – 13:00 Final Exercise, Questions and Lahore Case Irakli Kaviladze Study/SEMP Group Training Exercise – Keti Dgebuadze Practical Module Nino Lomidze 130 : 0 -14:00 Lunch 14:00 – 15:30 Environmental Monitoring Irakli Kaviladze – Module 2.2 Environmental Specialist/Team Leader - International 15:30 – 16:30 Reporting Keti Dgebuadze – Module 2.3 Environmental Auditor - Inspection and Audit International Module 3.2 16:30 – 17:00 Marking of Final Exercise 17:00 – 17:15 Tea Break 17:15 – 18:00 Queries /issues - Review

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Appendix 3. Permit of Zugdidi Municipality Gamgeoba to use the land plot owned by it to locate the business yard within the limits of the project of Anaklia Coastal Improvement Project.

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Appendix 4. Environmental Safeguards Compliance Monitoring Checklist of “Anaklia Coastal Improvement Project”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name: Anaklia Coastal Improvement Project

Project Progress (%): 33%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

 X 

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

A. Safeguards Loan/Grant Covenants Item No. Covenant Status of Compliance schedule 5, Implementation of environmental Yes clause 2 requirements included in theIEE.

B. Environmental Management Planning (Preconstruction)

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Item Status11 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y Within PIU the Environmental Unit was within Project Implementation Unit established. There are 4 environmental (PIU ) specialists within the EU.

Environmental recording system Y Y The system of the environmental established in EU activity documentation was established in PIU. Engineering Consultant prepares the monthly technical reports for PIU on the project progress, containing information on the environmental requirementts implementation. Documentation is also maintained on the results of the monitoring carried out by the PIU M&E Specialist and submitted in form of internal memo to the Project Manager, after that the relevant actions are taken against Contractors, if necessary.

Baseline monitoring completed Y Y The basic monitoring of environmental conditions was accomplished. Such requirements had been included in the IEE documents and it was responsibility of constructor company.

EMP design requirements included Y N EMP design requirements included in in design brief. (Evidence that EU design brief. There is no evidence that has checked design brief in this ES has checked design brief in this regard) regard.

EMP requirements included in Y N The requirements of EMP observance tender documents were included in the bidding documents – (Bid Document, Techical Specifications vollum III, Series 500 pp-73-75). However, the EMP itself was included in the bidding documents as the Annex 1.

11 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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EU involvement in bid evaluation N Y There is no ecologist in the bidding board composition.

Contractor’s SEMP(s) reviewed N Y The contractor has submitted updated and approved by PIU prior to EMP, which now includes the issues contractor commencing work. identified in the project detailed design.

SEMP was not prepared by Construction Contractor.

C. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Monitoring data as per EMP monitoring Y Y Analyzes required by IEE plan requirements.12 are done by Construction Contractor.

Unanticipated environmental impacts N Y Unanticipated environmental identified and assessed and options to impacts is not identified. address them evaluated.

Significant EHS incidents reported. N Y There are no records.

EMP reviewed and updated Y Y The contractor has submitted updated EMP, which now includes the issues identified in the project detailed design.

Site inspection records ( Mitigation N Y ES of the construction Compliance & Inspection Monitoring contractor is permanently on Forms) the site and undertakes permanent monitoring. However, he does not make relevant records and does not keep relevant reports.

12 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Site inspection non-compliance N N As for the Emergency notifications and corrective action requests. Situations Management Plan, the submitted plan cannot be considered as the required one. The total size of the submitted plan is one page only.

Complaints log. N Y The site with ongoing construction works has no the Book of Complaints and Suggestions.

Environmental safeguard compliance Y Y Environmental safeguard included in project progress reports compliance included in project progress reports.

Training/Capacity building activities N Y There were trainings about undertaken as per EMP requirements. professional health and (Training records) safety organized for the construction contractor, and this is proved by certain records. The construction contractor has no plan of the trainings to be given to the environmental specialists.

Overall current status of project Y/N Y There were no obvious EMP/SEMP implementation violations observed. The EMP was mainly observed (All mitigation measures identified in during construction works at approved SEMP(s) to be itemized and the sites. However, some evaluated as per implementation status) violations exist in terms of construction.

Six monthly Environmental Monitoring Y Y As of the audit date, one Reports submitted to ADB and posted on semiannual report for the ADB website first six months 2013 has been submitted by PIU to the Project Manager from ADB side. Version of the 174

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

report has been published on the ADB web-site.

Monitoring reports disclosed to local N Y Semiannual reports were not communities and relevant government submitted to the local agencies13 communities and local government.

All the above-listed reports are available on the construction site and in the head office of MDF. As for the Bi-Annual Reports, which MDF submits to the ADB, they are available on the ADB web-site

Final post construction Audit Report N Y The final environmental completed audits have not been accomplished.

 Advance Desk review: IEE/EIA posted, SPCM issued, project effectivity, first civil work, SC recruited to assist PIU, budget allocation for EMP, FA and PAM address SG requirements, BTOR/AM reflect issues, training activities.  Using RETA consultants as additional resource and handson-training.  Discuss and agree on planning with respective CDs and PTLs.

13 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Appendix 5. Results of Analyzes of Sea Water and Air Quality

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Appendix 6. Environmental Safeguards Compliance Monitoring Checklist of “Tbilisi- Rustavi section 1 and 3 Road Construction Project”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name : for Tbilisi-Rustavi section 1 and 3 raod construction project.

Project Progress (%) : 0

Environmental Safeguards Categorization A B C

Overall Status of Compliance

  

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

D. Safeguards Loan/Grant Covenants Item No. Covenant Status of Compliance schedule 5, Implementation of Safeguard requirements Yes clause 2 included in theloan Agreement.

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E. Environmental Management Planning (Preconstruction)

Item Status14 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y Within PIU the Environmental Unit was within Project Implementation Unit established. There are 4 environmental (PIU ) specialists within the EU.

Environmental recording system _ _ _ established in EU

Baseline monitoring completed Y Y Baseline monitoring completed during preparation of IEE.

EU involvement in bid evaluation N Y There is no ecologist in the bidding board composition

Contractor’s SEMP(s) reviewed and _ _ _ approved by PIU prior to contractor commencing work

F. Construction Environmental Management Compliance (to be completed as relevant)

14 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Monitoring data as per EMP monitoring plan requirements.15

Unanticipated environmental impacts identified and assessed and options to address them evaluated.

Significant EHS incidents reported.

EMP reviewed and updated

Site inspection records ( Mitigation Compliance & Inspection Monitoring Forms)

Site inspection non-compliance notifications and corrective action requests.

Complaints log.

Environmental safeguard compliance included in project progress reports

Training/Capacity building activities undertaken as per EMP requirements. (Training records)

Overall current status of project EMP/SEMP implementation

(All mitigation measures identified in approved SEMP(s) to be itemized and evaluated as per implementation status)

Six monthly Environmental Monitoring Reports submitted to ADB and posted on ADB website

Monitoring reports disclosed to local communities and relevant government

15 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N) agencies16

Final post construction Audit Report completed

 Advance Desk review: IEE/EIA posted, SPCM issued, project effectivity, first civil work, SC recruited to assist PIU, budget allocation for EMP, FA and PAM address SG requirements, BTOR/AM reflect issues, training activities  Using RETA consultants as additional resource and handson-training  Discuss and agree on planning with respective CDs and PTLs

16 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts.

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APPENDIX 7. Environmental Safeguards Compliance Monitoring Checklist of “Regional Power Transmission Enhancement Project”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name: Regional Power Transmission Enhancement Project

Project Progress (%) : 0%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

  

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

G. Safeguards Loan/Grant Covenants Item No. Covenant Status of Compliance

H. Environmental Management Planning (Preconstruction)

Item Status17 Follow up Comments/Actions required (Y/N) required

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(Y/N)

Environment Unit (EU) established Y Y An Environmental and Social within Project Implementation Unit Safeguards Unit was established (PIU ) within Priject Implimentation Unit.

Environmental recording system - - - established in EU

Baseline monitoring completed N N The basic monitoring of environmental conditions was not accomplished since such requirements had not been included in the project documents.

EMP design requirements included N Y EMP design requirements included in in design brief (Evidence that EU design brief. There is no evidence that has checked design brief in this ES has checked design brief in this regard). regard.

EMP requirements included in Y N The requirements of EMP observance tender documents. were included in the bidding documents – (Bid Document, Techical Specifications). However, the EMP itself was included in the bidding documents as the Annex 2.

EU involvement in bid evaluation. N Y There is no environmental specialist in the bidding board composition.

Contractor’s SEMP(s) reviewed - - - and approved by PIU prior to contractor commencing work

I. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Monitoring data as per EMP monitoring plan requirements.18

18 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Unanticipated environmental impacts identified and assessed and options to address them evaluated.

Significant EHS incidents reported.

EMP reviewed and updated

Site inspection records ( Mitigation Compliance & Inspection Monitoring Forms)

Site inspection non-compliance notifications and corrective action requests.

Complaints log.

Environmental safeguard compliance included in project progress reports

Training/Capacity building activities undertaken as per EMP requirements. (Training records)

Overall current status of project EMP/SEMP implementation

(All mitigation measures identified in approved SEMP(s) to be itemized and evaluated as per implementation status)

Six monthly Environmental Monitoring Reports submitted to ADB and posted on ADB website

Monitoring reports disclosed to local communities and relevant government agencies19

19 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Final post construction Audit Report completed

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Appendix 8. Environmental Monitoring and Mitigation Cost of the Project (Section I)

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Appendix 9. Environmental Safeguards Compliance Monitoring Checklist for the Road Corridor Investment Program (Kobuleti/Ajara) - Tranche 1

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name: Tbilisi Road Corridor Investment Program - Tranche 1

Project Progress (%) : 100%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

  X

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

J. Safeguards Loan/Grant Covenants Item No. Covenant Status of Compliance

K. Environmental Management Planning (Preconstruction)

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Item Status20 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y An Environmental and Social within Project Implementation Unit Safeguards Unit was established (PIU ) within Project Implimentation Unit.

Environmental recording system Y Y Environmental issues reported established in EU regularly in the monthly reports by the Contractor and to be commented on by the environmental specialist.

In PIU a system of documenting environmental practices is established. Quarterly technical progress project reports prepared by Consultant Engineer for the PIU.

In addition, PIU Ecologist conducts monthly visits to the construction site for seeing whether it is complied with the requirements on environment protection. The survey is conducted with the station ecologist with PIU.

Baseline monitoring completed Y N Within the framework of EIA, which was prepared in June-July 2009, baseline environmental monitoring was conducted.

EMP requirements included in Y/N N An EIA and EPM documents were tender documents attached to the tender documentation as an annex. The obligation of the contractor to meet the requirements of the document as well as contractor’s reporting responsibility are given in part B of the tender documentation-

20 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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„Specific Provisions“.

Part of the tender documentation “Bill of Quantities” does not give thorough budget necessary to meet the environmental requirements under the EIA document

EU involvement in bid evaluation Y N Mr. Zaur Apshinashvili, Head of the Resettlement and Environmental Department is a member of the commission considering the tender bids. In addition, Mr. Murman Katsitadze, Project Implementation Specialist under ADB Financed Projects is actively engaged in the process of development of the tender bids for the ADB projects and evaluation of the submitted proposals.

Contractor’s SEMP(s) reviewed Y Y SEMP document developted, which and approved by PIU prior to fails to meet the new requirements contractor commencing work. developed by ADB, needs further elaboration and update: (a) The presented document does not include the new methodology of risk assessment, and consequently, there are no risk assessment tables included in it, (b) the document does not divide the project zone into the regions, (c) the document does not provide the division of the project according to the construction stages. These are the major requirements distinguishing SEMP from EMP.

L. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Monitoring data as per EMP monitoring Y Y The Construction Contractor carried out instrumental

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N) plan requirements.21 measurements for air quality and noise. Measurement of surface water and groundwater quality has been carried out in early July and late December 2013. Water quality measurements should be carried out on a quarterly basis, especially for groundwater in camp sites as this has direct impact on the health of the work personnel.

The relevant records about the accomplished measurements are easily available both, on the construction site and at the Roads Department.

Unanticipated environmental impacts N Y Impact assessment on identified and assessed and options to Emergency cases is address them evaluated. developed.

Significant EHS incidents reported. Y Y Cases of serious violations of environmental requirements were not found.

EMP reviewed and updated Y Y EMP is reviewed and updated.

Site inspection records ( Mitigation Y Y The local environment Compliance & Inspection Monitoring specialist of the consultant Forms) company undertakes daily environmental inspections. There are questionnaires developed and filled out during the said inspections.

The environmental specialist of the Roads Department also undertakes monthly monitoring, inter alia studying

21 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

the degree of correction of the facts of non-compliance.

Site inspection non-compliance Y Y The Construction Contractor notifications and corrective action will be informed of all requests. identified facts of non- compliance in writing. At the next stage, the corrective actions are identified and the terms to correct the facts of non-compliance are fixed together with the construction contractor.

Complaints log. Y Y The Book of Complaints is available in Construction Contractor office, but it does not contain any records.

Environmental safeguard compliance Y Y All identified facts of non- included in project progress reports compliance, corrective actions and accomplished actions are described in the quarterly reports, which are submitted to the Roads Department.

Training/Capacity building activities Y Y The international undertaken as per EMP requirements. environmental specialist of (Training records) the consultant company is present on the construction site quarterly, under the developed schedule, and at each visit, he/she holds 2 or 3 trainings for the environmental and H&S specialists of the organization engaged in the project.

Overall current status of project Y Y Contractors prepare monthly EMP/SEMP implementation reports, which contain monitoring form on 192

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

(All mitigation measures identified in implementation of EMP in approved SEMP(s) to be itemized and project. At the same time, the evaluated as per implementation status) International Environmentalist from Consulting team prepares special daily monitoring checklist of implementation of EMP on the projects.

Six monthly Environmental Monitoring Y Y Bi-Annual Reports, which RD Reports submitted to ADB and posted on submits to the ADB, they are ADB website available on the ADB web- site.

Monitoring reports disclosed to local Y Y All the above-listed reports communities and relevant government are available both, on the agencies22 construction site and at the head office of the Roads Department. As for the Bi- Annual Reports, which RD submits to the ADB, they are available on the ADB web- site.

Final post construction Audit Report Y/N Y On October 6, 2013, the completed international environmental consultants (Channa Bambaradeniya and Courtney E. McCall) accomplished “Post Bridge Construction Environmental Assesment of Rivers and Streams Crossing Kobuleti Road Lot 1” with its results found in the Bi-Annual Environmental Monitoring report for July – December 2013.

22 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Appendix 10. List of Training Participants

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Appendix 11. Environmental Safeguards Compliance Monitoring Checklist of the “Road Corridor Investment Program (Kobuleti/Ajara) – Tranche 3” (Additional Financing)

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name : Road Corridor Investment Program (Kobuleti/Adjara)- Tranche 3 (Additional financing)

Project Progress (%) : 17%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

  X

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

M. Safeguards Loan/Grant Covenants Item No. Covenant Status of Compliance

N. Environmental Management Planning (Preconstruction)

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Item Status23 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y An Environmental and Social within Project Implementation Unit Safeguards Unit was established (PIU ) within Priject Implimentation Unit.

Environmental recording system Y Y Environmental issues reported established in EU regularly in the monthly reports by the Contractor and to be commented on by the environmental specialist.

In PIU a system of documenting environmental practices is established. Quarterly technical progress project reports prepared by Consultant Engineer for the PIU.

Baseline monitoring completed Y N Environmental investigations were carried out during feasibility study to establish baseline conditions for air, surface water and noise quality. Further environmental investigations were carried out during detailed design stage to establish baseline indicators for water, soil and noise quality.

EMP requirements included in Y N An EIA and EPM documents were tender documents attached to the tender documentation as an annex. The obligation of the

23 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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contractor to meet the requirements of the document as well as contractor’s reporting responsibility are given in part B of the tender documentation- „Specific Provisions“.

Contractor’s SEMP(s) reviewed Y Y SEMP document developted, which and approved by PIU prior to fails to meet the new requirements contractor commencing work developed by ADB, needs further elaboration and update: (a) The presented document does not include the new methodology of risk assessment, and consequently, there are no risk assessment tables included in it, (b) the document does not divide the project zone into the regions, (c) the document does not provide the division of the project according to the construction stages. These are the major requirements distinguishing SEMP from EMP.

O. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Monitoring data as per EMP monitoring Y Y The Construction Contractor plan requirements.24 carried out instrumental measurements for air quality and noise. Measurement of surface water and groundwater quality has been carried out in early July and late December 2013. Water quality measurements should be carried out on a quarterly basis, especially for groundwater in camp sites as this has direct impact on the health of the work personnel.

The relevant records about the accomplished measurements are easily available both, on the construction site and at the Roads Department.

Unanticipated environmental impacts N Y Impact assessment on identified and assessed and options to Emergency cases is address them evaluated. developed.

Significant EHS incidents reported. Y Y Cases of serious violations of environmental requirements were not found.

EMP reviewed and updated Y Y EMP is updated regularly. The required environmental management plans are thoroughly developed and are available on the construction site. Some plans, such as “dust suppression program“, and „spoil plan” are included in the environmental management plan and

24 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

monitoring plan as their parts.

The environmental specialist of the Roads Department also undertakes monthly monitoring, inter alia studying the degree of correction of the facts of non-compliance.

Site inspection non-compliance Y Y The Construction Contractor notifications and corrective action requests. will be informed of all identified facts of non- compliance in writing. At the next stage, the corrective actions are identified and the terms to correct the facts of non-compliance are fixed together with the construction contractor.

Complaints log. Y Y The book of complaints is available at Construction Contractor’s office, but it does not contain any records.

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Department.

Overall current status of project Y Y Contractors prepare monthly EMP/SEMP implementation reports, which contain monitoring form on (All mitigation measures identified in implementation of EMP in approved SEMP(s) to be itemized and project. At the same time, evaluated as per implementation status) the International Environmentalist from Consulting team prepares special daily monitoring checklist of implementation of EMP on threprojects.

Six monthly Environmental Monitoring Y Y Bi-Annual Reports, which Reports submitted to ADB and posted on RD submits to the ADB, they ADB website are available on the ADB web-site.

Monitoring reports disclosed to local Y Y All the above-listed reports communities and relevant government are available both, on the agencies25 construction site and at the head office of the Roads Department. As for the Bi- Annual Reports, which RD submits to the ADB, they are

25 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

available on the ADB web- site.

Final post construction Audit Report N Y completed

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Appendix 12. Environmental Safeguards Compliance Monitoring Checklist of the “Construction of Mestia Headwork Project”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name : Construction of Mestia Headwork

Project Progress (%) : 97%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

 X 

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

P. Safeguards Loan/Grant Covenants

Item No. Covenant Status of Compliance

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Q. Environmental Management Planning (Preconstruction)

Item Status26 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y Environmental Specialist has been within Project Implementation Unit appointed in PIU. (PIU )

Environmental recording system Y Y The construction contractor presented established in EU monthly „Progress Reports“, environmental issues included in the present document as an individual chapter.

An International Consultant Company – EPTISA Ltd hired by UWSCG for construction supervision, undertakes environmental monitoring of project progress and submits quarterly Environmental Monitoring Reports to UWSCG.

There is a Bi-Annual Report developed on the request of the UWSCG. The presented report was drafted in line with the requirements of Asian Development Bank. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site.

Baseline monitoring completed N N The basic monitoring was not carried out since such requirement had not been included in the bidding documentation.

EMP design requirements included N Y There are no evidences that EMP in design brief. (Evidence that EU design requirements included in has checked design brief in this

26 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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regard) design brief.

EMP requirements included in Y N The obligation to accomplish the said tender documents plan is given in Section 8 –“Particular Conditions” of Contract, Part B – “Specific Provisions”, chapter 4.18 - “Protection of the Environment”.

EU involvement in bid evaluation N Y There is no environmentalist available in the bidding board composition.

Contractor’s SEMP(s) reviewed Y Y SEMP document developed, needs and approved by PIU prior to further elaboration and update. contractor commencing work

R. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Monitoring data as per EMP monitoring Y Y The continuous monitoring plan requirements.27 of the SEMP implementation was carried out. The requirements on the qualitative monitoring were not included in IEE.

Unanticipated environmental impacts N Y Impact assessment on identified and assessed and options to Emergency cases are not address them evaluated. developed.

Significant EHS incidents reported. N Y Cases of serious violations of environmental requirements were not found.

EMP reviewed and updated Y Y EMP is reviewed and updated.

Site inspection records ( Mitigation Y Y The Contractor’s field Compliance & Inspection Monitoring inspectors performed daily

27 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Forms) site visits to the project sites. UWSCG Environmental team visited the project sites minimum once a month. Environmental Consultant performed weakly site inspections. Site inspection non-compliance Y Y For every non-compliance notifications and corrective action requests. fixed during the accomplished audits (if any), a special form of non- compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

Complaints log. N Y There are no any Compliance books on sites

Environmental safeguard compliance Y Y All identified facts of non- included in project progress reports compliance, corrective actions and accomplished actions are described in the Progress Reports.

Training/Capacity building activities Y Y Mr. Irakli Legashvili, the undertaken as per EMP requirements. environmental specialist of (Training records) the Consultant Company, developed a brief module, and the said training was permanently held for all the people engaged in the project.

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Six monthly Environmental Monitoring Y Y There is a Bi-Annual Report Reports submitted to ADB and posted on developed on the request of ADB website the UWSCG. The presented report was drafted in line with the requirements of Asian Development Bank. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site.

Monitoring reports disclosed to local Y Y All the above-listed reports communities and relevant government are available both, on the agencies28 construction site and at the head office of UWSCG. As for the Bi-Annual Reports, which UWSCG submits to the ADB, they are available on the ADB web-site.

Final post construction Audit Report N Y Project is under completed development activities.

28 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Appendix 13. Environmental Safeguards Compliance Monitoring Checklist for the Project: “Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name : Improvement of Water Supply Infrastructure in Anaklia, Kutaisi and Poti

Project Progress (%) : 5%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

 X 

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

S. Safeguards Loan/Grant Covenants

Item No. Covenant Status of Compliance

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T. Environmental Management Planning (Preconstruction)

Item Status29 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y The Environmental Specialist has been within Project Implementation Unit appointed in PIU. (PIU )

Baseline monitoring completed N N The basic monitoring was not carried out since such requirement had not been included in the bidding documentation.

EMP design requirements included N Y There are no evidences that EMP in design brief. (Evidence that EU design requirements included in has checked design brief in this design brief. regard)

29 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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EU involvement in bid evaluation N Y There is no environmentalist available in the bidding board composition.

Contractor’s SEMP(s) reviewed Y Y SEMP document developed, needs and approved by PIU prior to further elaboration and update. contractor commencing work

U. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Monitoring data as per EMP monitoring Y Y The continuous monitoring plan requirements.30 of the SEMP implementation was carried out. The requirements on the qualitative monitoring were not included in IEE.

Unanticipated environmental impacts N Y Impact assessment on identified and assessed and options to Emergency cases are not address them evaluated. developed.

Significant EHS incidents reported. N Y Cases of serious violations of environmental requirements were not found.

EMP reviewed and updated Y Y EMP is reviewed and updated

30 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

minimum once a month. Environmental Consultant performed weakly site inspections. Site inspection non-compliance Y Y For every non-compliance notifications and corrective action requests. fixed during the accomplished audits (if any), a special form of non- compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

Complaints log. N Y There are no any Compliance Book on sites.

Environmental safeguard compliance Y Y All identified facts of non- included in project progress reports compliance, corrective actions and accomplished actions are described in the Progress Reports.

Six monthly Environmental Monitoring Y Y There is a Bi-Annual Report Reports submitted to ADB and posted on developed on the request of the UWSCG. The presented 211

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

ADB website report was drafted in line with the requirements of Asian Development Bank. All Bi-Annual Reports developed within the scope of the project can be seen on the ADB web-site.

Monitoring reports disclosed to local Y Y All the above-listed reports communities and relevant government are available both, on the agencies31 construction site and at the head office of UWSCG. As for the Bi-Annual Reports, which UWSCG submits to the ADB, they are available on the ADB web-site.

Final post construction Audit Report N Y Project is under completed development activities.

31 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Appendix 14. Environmental Safeguards Compliance Monitoring Checklist of the Project: “Anaklia Water Supply and Sewerage Distribution Networks”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name : “Anaklia Water Supply and Sewerage Distribution Networks”.

Project Progress (%) : 88%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

 X 

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

V. Safeguards Loan/Grant Covenants

Item No. Covenant Status of Compliance

W. Environmental Management Planning (Preconstruction)

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Item Status32 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y Environmental Specialist has been within Project Implementation Unit appointed in PIU. (PIU )

Baseline monitoring completed N N The basic monitoring was not carried out since such requirement had not been included in the bidding documentation.

EMP design requirements included N Y There are no evidences that EMP in design brief. (Evidence that EU design requirements included in has checked design brief in this design brief. regard)

EMP requirements included in Y N The obligation to accomplish the said tender documents plan is given in Section 8 - Particular

32 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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Conditions of Contract, Part B – Specific Provisions, chapter 4.18 “Protection of the Environment”, according which The Contractor shall comply with all applicable national, provincial, and local environmental laws and regulations.

EU involvement in bid evaluation N Y There is no environmentalist available in the bidding board composition.

Contractor’s SEMP(s) reviewed Y Y SEMP document developed, needs and approved by PIU prior to further elaboration and update. contractor commencing work

X. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Monitoring data as per EMP monitoring Y Y The continuous monitoring plan requirements.33 of the SEMP implementation was carried out. The requirements on the qualitative monitoring were not included in IEE.

Unanticipated environmental impacts N Y Impact assessment on identified and assessed and options to Emergency cases are not address them evaluated. developed.

Significant EHS incidents reported. N Y Cases of serious violations of environmental requirements were not found.

EMP reviewed and updated Y Y EMP is reviewed and updated.

Site inspection records ( Mitigation Y Y The Contractor’s field Compliance & Inspection Monitoring inspectors performed daily

33 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Forms) site visits to the project sites. UWSCG Environmental team visited on project sites minimum once a month. Environmental Consultant performed weakly site inspections. Site inspection non-compliance Y Y For every non-compliance notifications and corrective action requests. fixed during the accomplished audits (if any), a special form of non- compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

Complaints log. N Y There are no any Compliance Books on sites.

Environmental safeguard compliance Y Y All identified facts of non- included in project progress reports compliance, corrective actions and accomplished actions are described in the Progress Reports.

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Item Status Follow up Comments/Actions required (Y/N) required (Y/N)

Monitoring reports disclosed to local Y Y All the above-listed reports communities and relevant government are available on the agencies34 construction site and at the head office of UWSCG. As for the Bi-Annual Reports, which UWSCG submits to the ADB, they are available on the ADB web-site.

Final post construction Audit Report N Y Project is under completed development activities.

34 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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Appendix 15. Environmental Safeguards Compliance Monitoring Checklist for the Project: “Construction of Mestia Water Supply and Sewerage Distribution Networks”

Country safeguard review

Country : Georgia

Audit Date :

Project Data

Project Name : “Construction of Mestia Water Supply and Sewerage Distribution Networks”

Project Progress (%) : 36%

Environmental Safeguards Categorization A B C

Overall Status of Compliance

 X 

Not compliant – Remedial action Mostly compliant - Minor Fully compliant & monitoring required remedial action & monitoring required

Y. Safeguards Loan/Grant Covenants

Item No. Covenant Status of Compliance

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Z. Environmental Management Planning (Preconstruction)

Item Status35 Follow up Comments/Actions required (Y/N) required (Y/N)

Environment Unit (EU) established Y Y Environmental Specialist has been within Project Implementation Unit appointed in PIU. (PIU )

Baseline monitoring completed N N The basic monitoring was not carried out since such requirement had not been included in the bidding documentation.

35 Documentary evidence of each item to be maintained in EU’s environmental recording system and made available for audit.

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EMP design requirements included N Y There are no evidences that EMP in design brief. (Evidence that EU design requirements included in has checked design brief in this design brief. regard)

EMP requirements included in Y N The obligation to accomplish the said tender documents plan is given in Section 8 - Particular Conditions of Contract, Part B – Specific Provisions, chapter 4.18 “Protection of the Environment”, according which The Contractor shall comply with all applicable national, provincial, and local environmental laws and regulations.

EU involvement in bid evaluation N Y There is no environmentalist available in the bidding board composition.

Contractor’s SEMP(s) reviewed and Y Y SEMP document developed, needs approved by PIU prior to contractor further elaboration and update. commencing work

AA. Construction Environmental Management Compliance (to be completed as relevant)

Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Monitoring data as per EMP monitoring Y Y The continuous monitoring plan requirements.36 of the SEMP implementation was carried out. The requirements on the qualitative monitoring were not included in IEE.

Unanticipated environmental impacts N Y Impact assessment on identified and assessed and options to Emergency cases is not address them evaluated. developed.

Significant EHS incidents reported. N Y Cases of serious violations of environmental requirements were not

36 To be recorded in appropriate format as per “Tools and Templates for EMP Supervision”

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

found.

EMP reviewed and updated Y Y EMP is reviewed and updated.

Site inspection records ( Mitigation Y Y The Contractor’s field Compliance & Inspection Monitoring inspectors performed daily Forms) site visits to the project sites. UWSCG Environmental team visited on project sites minimum once a month. Environmental Consultant performed weakly site inspections. Site inspection non-compliance Y Y For every non-compliance notifications and corrective action requests. fixed during the accomplished audits (if any), a special form of non- compliance is drafted and the time and ways to correct the non-compliances are specified by the Consultant in cooperation with Construction Contractor.

Complaints log. N Y There are no any Compliance Books on sites.

Environmental safeguard compliance Y Y All identified facts of non- included in project progress reports compliance, corrective actions and accomplished actions are described in the Progress Reports.

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Item Status Follow up Comments/Actions required required (Y/N) (Y/N)

Monitoring reports disclosed to local Y Y All the above-listed reports communities and relevant government are available both, on the agencies37 construction site and at the head office of UWSCG. As for the Bi-Annual Reports, which UWSCG submits to the ADB, they are available on the ADB web-site.

Final post construction Audit Report N Y Project is under completed development activities.

37 Auditor to consult with project affected people (PAPs) to get their feedback on the monitoring report or general perception of project impacts

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223