Initial Environmental Examination

August 2015

PRC: Water Resources and Wetland Protection Project

Prepared by City Government for the Asian Development Bank.

This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section on ADB’s website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Initial Environmental Examination

Project number: 2494 July 2008; updated August 2015

People’s Republic of : Qingdao Water Resources and Wetland Protection Project

Prepared by the Government for the Asian Development Bank

CONTENTS

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I. INTRODUCTION 1

II. DESCRIPTION OF THE PROJECT 3

III. DESCRIPTION OF THE ENVIRONMENT 6

A. General Project Setting and Physical Environment 6 B. River System and Hydrology 6 C. Water Quality and Pollution Sources 7 D. Ecological Environment 9 E. Social and Economic Conditions 11

IV. FORECASTING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 11

A. Environmental Benefits and Impacts 11 B. Environmental Impacts and Mitigation Measures during Construction Phase 13 C. Environmental Impacts and Mitigation Measures during Operation Phase 15 D. Due Diligence Review 16 E. Resettlement 17 F. Environmental Management Plan 17

V. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN 17

A. Institutional Arrangements 17 B. Environmental Monitoring 18

VI. PUBLIC CONSULTATION AND DISCLOSURE 20

A. Public Consultation 20 B. Information Disclosure 20

VII. FINDINGS AND RECOMMENDATIONS 21

VIII. CONCLUSIONS 21

ANNEX 1: REFERENCES 22

A. REGIONAL STUDIES AND REPORTS 22 B. ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS 22 C. TECHNICAL POLICIES FOR POLLUTION PREVENTION & CONTROL 23 D. SOCIAL-ECONOMIC DEVELOPMENT/ENVIRONMENT PROTECTION PLANS & REGULATIONS 23 E. TECHNIQUE GUIDELINE, RULES AND CRITERION 23 F. ENVIRONMENTAL QUALITY STANDARDS 24 G. POLLUTANTS DISCHARGE AND CONTROL STANDARDS 24

ANNEX 2: ENVIRONMENTAL MANAGEMENT PLAN 25

ANNEX 3: ENVIRONMENTAL MONITORING PLAN 28

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FIGURES:

Figure 1: Location Map of the Province and Jiaozhou County ...... 2 Figure 2: Location Map of Project Area ...... 2 Figure 3: Location Map and Contract packages for Component 1 ...... 4 Figure 4: Location Map and Contract Packages for Component 2 ...... 5 Figure 5: Current Situation of Jiaozhou Wastewater Discharge ...... 8 Figure 6: Major Pollution sources of ...... 10 Figure 7: Comparison between situations of Hucheng River (with and without project) ...... 12 Figure 8: COD Concentration Field Before and After the WWTP Operation ...... 13

TABLES:

Table 1: Summary of Project Cost Estimates ...... 6 Table 2: Environmental Quality Standard for Surface Water (GB3838-2002) ...... 7 Table 3: Pollution Loading Rates to Jiaozhou Bay(2004)(t/a) ...... 10 Table 4: Rate of incidence of stomach diseases in Jiaozhou (per 100,000) ...... 11 Table 5: Summary of pollutants load change of project rivers ...... 12 Table 6: Routine monitoring data of water quality at Jiaozhou Wastewater Treatment Plant in 2007 (units in mg/L except for pH) ...... 16 Table 7: Environmental Reporting Plan ...... 19

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CURRENCY EQUIVALENTS (as of 23 April 2008)

Currency Unit – RMB $1.00 = RMB 6.9837

ABBREVIATIONS

ADB – Asian Development Bank NO2 – nitrogen dioxide A2/O – anaerobic/anoxic/oxidation NH3 – ammonia BOD – biochemical oxygen demand O&M – operation and maintenance COD – chemical oxygen demand pH – factor of acidity CSC – construction supervision PMO – project management office consultant PM10 – particulate matter <10 DI – design institute microns diameter EIA – environmental impact PMU – project management unit assessment PPTA – project preparatory technical EMP – environmental management assistance plan PRC – the People’s Republic of EPB – Environmental Protection China Bureau QEPB – Qingdao Environmental FSR – feasibility study report Protection Bureau GDP – gross domestic product QMG – Qingdao Municipal JCG – Jiaozhou City Government Government JZEPB – Jiaozhou Environmental QPMO – Qingdao project management Protection Bureau office H2S – hydrogen sulfide RP – resettlement plan IA – Implementing Agency SO2 – sulfur dioxide IEE – Initial Environmental SS – suspended solids Examination TA – technical assistance MEP – Ministry of Environmental TSP – total suspended particles Protection WWTP – wastewater treatment plant NH3-N – ammonia nitrogen

WEIGHTS AND MEASURES dB – decibel m2 – square meter ha – hectare mm – millimeter mg/L – milligram per liter m/s – meter per second km – kilometer m3/day – cubic meter per day km2 – square kilometer t/y – tonne per year

NOTES

(i) The fiscal year of the Government coincides with the calendar year. (ii) In this report, "$" refers to US dollars.

This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of this website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

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I. INTRODUCTION

1. Background. Jiaozhou is a county level city in Qingdao, located to the west of the main city of Qingdao, on the northwest coast of the Jiaozhou Bay.1 Jiaozhou has a total area of 1,210 km2 and a total population of 780,000 in 2005, of which 328,800 were residents in the main urban area. Jiaozhou has formed its leading industrial systems of machinery, electronics, chemical, building material and textile and food, etc. It is an important industrial processing and warehousing logistic base in the economic zone around Jiaozhou Bay. 2. Rapid urban and industrial development in Qingdao and Jiaozhou has had detrimental effects on its water resources and on the overall condition of the environment. Jiaozhou City Government (JCG) and Qingdao Municipal Government (QMG) are aware of the need to address these problems and strengthen the capacity of the institutions that are mandated to manage water resources and environment in order to meet its development objectives and targets. They are also aware of the need for a comprehensive and integrated water resource and environmental management approach to address the complex and interrelated problems as a requisite for sustainable economic development and improved quality of life within the Jiaozhou Bay area. 3. QMG and JCG requested ADB assistance to reduce flooding and pollution impacts and improve environmental management in the urban and surrounding areas, including the downstream Jiaozhou bay and wetland, and the newly developed Shaohai lake. This Project will also serve as pilot or demonstration for further development of other economic/industrial zones around the bay area. This is consistent with QMG’s Master Plan for the Jiaozhou Bay which aims for a balanced development along with the western and eastern parts of the bay. 4. In accordance with the PRC Environmental Impact Assessment (EIA) Technical Guidelines, a domestic EIA was carried out for the proposed Project by the Jiaozhou Development and Reform Bureau2. The draft EIA report was completed in February 2008 and submitted to the Qingdao EPB for appraisal on 18 March 2008. In the EPB appraisal meeting, representatives and leaders from Qingdao EPB, Jiaozhou EPB, and Jiaozhou Construction Bureau presented their comments to the EIA report. The panel regarded the report as satisfactory to be used as a reference document for further Project processing and approval. OUC updated the EIA report based on EPB comments in April; continued improvement works in May based on ADB comments, and finished the second version EIA in May 2008. 5. The ADB classified the Project as Category B for environmental safeguards.3 This Initial Environmental Examination (IEE) was prepared4 in accordance with ADB’s Environmental Assessment Guidelines (May 2003). The IEE is based on the domestic EIA and includes an Environmental Management Plan (EMP) describing the mitigation measures, institutional responsibilities, and monitoring arrangements. The IEE was drafted between April and July 2008 based on comments received from the Jiaozhou and Qingdao Governments and key-stakeholders, including ADB. The EIA report is accepted as the IEE report for the ADB standards. The IEE was updated in July 2015 according to project alteration information and .

1 Qingdao, the so-called “Eastern Switzerland”, is an important coastal city with an increasingly open economy, Qingdao’s annual GDP has increased at an average of more than 10% per year in recent years. Its major industries include tourism, electrical appliances, and petrochemicals. Qingdao is also a major city for finance and foreign trade in Shandong Province with well developed port facilities. Seven districts and five county-level cities are under the administration of Qingdao with a total area of 10,654 km2 and a total population of 7.49 million inhabitants in 2007. 2 The environmental assessment was carried out by the Ocean University of China (OUC), an EIA institute with Class-A certification. 3 The Project was initially classified as a Category A project, as it included the rehabilitation of the Quanxinhe dam. Due to the complications of obtaining approval, the QDRC informed ADB on 11 March 2008 that Quanxinhe subproject was dropped from the Project. Subsequent to an internal review the Project has been re-classified as Category B. 4 SOGREAH Consultants were commissioned to carry out the Project Preparation Technical Assistance (PPTA 4867-PRC) by ADB in 2007.

SEN - July 2015 Page 1

Figure 1: Location Map of the Shandong Province and Jiaozhou County

Figure 2: Location Map of Project Area

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II. DESCRIPTION OF THE PROJECT

6. The proposed Project will introduce an integrated approach to pollution control, water resources and environmental management. The approach comprises an investment program and technical assistance to address key-problems/constraints hindering effective management of water resources and environment in the Project area. Specifically, the four proposed Project components and their sub-components are: Component 1: Integrated Flood and Water Resources Management (Figure 3):  Subcomponent 1.1: Improvement of the Erli’he Flood Retention Facilities: Improvements on the flood retention dam will: (i) reduce risk of flooding and corresponding flood damage; (ii) improve discharge capacity and improve water flow during drought periods in the downstream of the river; and (iii) improve the water body environment within the existing reservoir. The Existing Erli flood retention facilities will be upgraded from 0.2 million m3 to 0.8 million m3 by 2011.  Subcomponent 1.2: Upgrading of Storm Drainage Facilities: Upgrading of urban storm drainage works will supplement the flood retention facilities in flood control and management by facilitating or improving the flow of storm water into the drainage channel. A total of 11.4km of storm drainage pipelines installed by 2011;  Subcomponent 1.3: Rehabilitation of River Courses: The rehabilitation of river courses will improve the conveyance of flows, reducing flooding risk, improve ecological condition along the rivers by dredging/removing sediment, sludge, and domestic waste flushed from upstream. Four major rivers, with a total length of about 19.45 km will be rehabilitated, i.e., Yunxi River, Hucheng River, Wushui River, and Sanli River. A total of 19.5km of riverbanks upgraded/rehabilitated in four major rivers by 2011 (Yunxi River 9.4km, Hucheng River 3.9km, Sanli River 3.0km, Wushui River 3.2km). New sub-component: in 2015, an additional sub-project was added: 1.7 km river rehabilitation work along a branch of Hucheng River, close to existing project sites. The sub-project comprises the same scope of works as the existing works: dredging, bank protection, blocking water storage work, road management, bridge work, pipeline laying and green work, in order to address existing water pollution and riverbank erosion.  Subcomponent 1.4: Capacity Building for Flood and Water Resources Management: This subcomponent will provide interventions for strengthening the capacity of the Water Resource Bureau and Urban Flood Control Office to manage and reduce flood risk in Jiaozhou and to improve water resources conservation and reuse strategies.

Component 2: Environmental Management and Pollution Control (Figure 4):  Subcomponent 2.1: Upgrading of Wastewater Collection System: The upgrading of urban wastewater collection system will significantly reduce the serious water pollution and siltation problem in open-channels within the old district thereby improving the ecological and water environmental conditions in these channels. A total of 27.7km of wastewater drainage pipelines installed by 2011.  Subcomponent 2.2: Establishing Non-structural Measures for Environmental Management and Pollution Control : This subcomponent will establish measures for environmental management and will consist of the following: (i) strengthening institutional capacity of the Jiaozhou Environment Protection Bureau (JEPB) and the wastewater agencies under the Construction Bureau for environmental monitoring and control particularly in relation industrial pollution control; (iii) strengthening community participation in environmental management and pollution control via increasing environmental awareness and empowerment.

Component 3: Jiaozhou Bay Strategic Environmental Assessment: This study will be undertaken by a team of specialists hired under the Project to develop an SEA for the Jiaozhou Bay area to assess the environmental and socioeconomic consequences of increased urban development within the bay area as part of the implementation the 2006 - 2020 General Development Plan for the City Cluster on the which aims

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to develop the area of Hangdao midway along Jiaozhou Bay and Huangdao on the western shore and calls for the development and reclamation of an area about 400 km2, mostly covered by shallow sea, wetlands, and saline marshes. The SEA will (i) bring environmental considerations directly into the planning process; (ii) by adopting a regional consultative approach, encourage the development of inter-district planning via a « leading group » and then eventually a ‘Jiaozhou Bay Protection Authority’; (iii) bring together and consolidate existing studies and research; (iv) enable QMG to understand complex cumulative impacts on Jiaozhou Bay in relation to new proposed development strategies and priorities; and (v) provide long term guidance for environmental protection in the bay area.

Component 4: Project Management Support: Assistance will be provided to the EA and IA for project management and project implementation. In this regard, a project management support office, complete with logistical facilities and technical staff, will be provided. An international project implementation specialist will be provided to render technical advice to the Qingdao and Jiaozhou Project Management Offices (PMO) in procurement, project supervision and building capacity in integrated water resources and environmental management. International and national experts in the various disciplines (e.g., institutional/training development, water resources planning, flood management, drainage management, environmental monitoring and pollution control) will also be provided to support project management. They will provide technical assistance to concerned QMG and Jiaozhou City agencies in the various aspects of project implementation, including, among others, community organization and social preparation, environmental monitoring, institutional strengthening, gender and social development, and project monitoring and evaluation, as necessary.

Figure 3: Location Map and Contract packages for Component 1

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Figure 4: Location Map and Contract Packages for Component 2

7. During implementation of the project, name the construction unite changed into Jiaozhou City Three Rivers Renovation Construction Headquarters, and ADB revised part of the project loan in July 2013 to speed up project implementation, involved construction including: Yunxi river uncompleted section( Road-Jiaohuang railway)added blocking water storage, bridge work, storm water, water pipeline; Hucheng river(Simenshou Road-Fuzhou Road) strength green work; Shidong River(namely Wushui River, Jiaohuang Road-Wastewater Treatment Plant) added green work; new added additional 1.7 km river rehabilitation work of Hucheng River, construction included cutting pollution, dredging, bank protection, blocking water storage work, road management, bridge work, pipeline laying and green work, setting trashes for management road of Yunxi River, Hucheng River, Shidong River and Branch of Hucheng River. To implement monitoring the four above river online, added additional River Centralized Monitoring and Management Center on Yangzhou branch and Jiaohuang railway interchange, and installed online monitoring equipment on per river; whole Sanli River rehabilitated work was canceled. After implemented the revised project, the total investment was RMB 721.564 million, the ADB loan was still USD 45 million(44% of the total investment) , which mainly caused by exchange rate changing, the revision involved investment was RMB 25.426 million(including ADB loan RMB 25.5638 million(USD 20317.764 thousands) local financial investment RMB 128.6962 million). The ADB loan financing will cover the interest during construction (IDC), commitment charges, and front-end fee. The following table gives the breakdown of the total project cost by project components:

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Table 1: Summary of Original Project Cost Estimates (US$ '000) Foreign Local Total

A. Integrated Flood and Water Resource Management 1. Improvement of the Erli'he Flood Retention Facilities 1,523.9 3,285.4 4,809.3 2. Upgrading of Stormwater Drainage Facilities 4,353.6 8,831.5 13,185.1 3. Rehabilitation of River Courses 19,799.5 40,311.8 60,111.3 4. Capacity Building for Flood & Water Resources Management 231.8 268.3 500.0 Subtotal Integrated Flood and Water Resource Management 25,908.7 52,697.0 78,605.7 B. Environmental Management and Pollution Control 1. Upgrading of Wastewater Collection System 1,178.4 2,390.4 3,568.8 2. Non-structural Measures for Environmental Management & Pollution Control 488.4 281.6 770.0 Subtotal Environmental Management and Pollution Control 1,666.8 2,672.1 4,338.8 C. Jiaozhou Bay Regional Environmental Assessment 509.4 796.6 1,306.0 D. Project Management Support 597.6 577.5 1,175.1 28,682.5 56,743.1 85,425.6 Physical Contingencies 2,868.3 5,640.2 8,508.4 Price Contingencies 364.0 4,564.7 4,928.7 31,914.7 66,948.0 98,862.7 Financial Charges During Implementation 4,644.4 - 4,644.4 36,559.1 66,948.0 103,507.1

Mainly revision was: Civil works USD 78.5 million, Survey and Design USD 1.2 million, Management and Supervision USD 3.0 million, Vehicles USD 0.1 million,Equipment and Materials USD 1.3 million, Consulting Services USD 1.8 million, Capacity Building USD 0.1 million, Monitoring and Reporting USD 0.2 million, Contingencies Interest during USD 15.3 million, Implementation Commitment Charges USD 1 million. New subcomponent in 2015: total cost estimate of the 1.7 km River Rehabilitation Work (Branch of Hucheng River): $12,405,682, of which the Loan would be financed $6,699,068.

III. DESCRIPTION OF THE ENVIRONMENT

A. General Project Setting and Physical Environment 8. Jiaozhou is located in the southwest of Jiaodong Peninsula and the south edge of Jiao-Wei Valley Basin. It is on the northwest coast of Jiaozhou Bay. Geographical coordinates are 36° - 36°30’ north latitude and 119°37’ - 120°12’ east longitude. Jiaozhou has a varied topography and the features of terrain are distributed obliquely southwest and northeast, respectively, progressively descending from west to east and from south to north. The area mainly has four types of topographic features, i.e. hills, plains, depressions and coastal lowlands 9. Annual average temperature in Jiaozhou is 12° C. The hottest days occur during the month of August with average temperature at 25.1° C. The coldest days occur in January with the average temperature estimated at -1.2° C. Average annual precipitation is about 775.6 mm with the distribution of rainfall in spring, summer, autumn, and winter accounting for 14%, 57%, 22%, and 7% of total annual precipitation, respectively. The average atmospheric pressure is 1,008.6 millibars. Average annual wind speed is estimated at 5.3 m/s with dominant southeast wind.

B. River System and Hydrology 10. A total of 224 rivers are found in Qingdao municipality with 33 having a drainage area of more than 100 km2. The rivers are all rain-sourced streams, and divided into three drainage systems—Dagu River, Beijiaolai River, and coastal Rivers. There are 27 rivers in Jiaozhou, mainly tributaries to the three water systems, i.e. Dagu River, Nanjiaolai River, and Yanghe River. These rivers are characteristic of rapid flow. During the high-water season, flash floods frequently occur; while during the low-water season, runoff volumes are low with rivers often dry.

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11. The Dagu River is the largest river in the Jiaodong Peninsula. It originates from Fushan, Zhaoyuan, and flows across cities and districts of Qingdao such as , Jimo, , Jiaozhou, and Chengyang. It flows into Jiaozhou Bay at Matou Village, south to Hexitun of Jiaozhou City. The overall length of the main course of the watercourse is 179.9 km. The total drainage area is 6,131.3 km2, including 1,500 km2 of the Nanjiaolai River; in Qingdao the basin occupies 4,850.7 km2 accounting for 79.1% of the total drainage area. 12. The Jiaozhou Government is developing a new area in the Eastern part of the City, which includes the newly created Shaohai Lake. The development of the Shaohai lake, key to improved flood and water quality management, started in November 2004 and principally completed in June 2006. The lake, with a total planned control area of 16 km2, and designed surface water area of 7 km2, is receiving water flows from the main rivers in the city prior to discharging into the Dagu river. The new lake will reduce the flooding in the area and is expected to improve water quality of the discharged water into the Dagu river.

C. Water Quality and Pollution Sources 13. In 2006, among the 31 rivers and 62 controlled sections of Qingdao, 40.4% sections are within Class III standard; among the city's coastal monitoring points, 62.5% are within Class II standard of Marine Water Quality Standards. For Jiaozhou City, based on water quality surveys by Jiaozhou Environmental Monitoring Stations in 2005, the water quality in the rivers passing through the main urban area are poor and are classified as Class V, with total phosphorus and COD are especially beyond standards. 14. The marine water quality in the middle, south, and west of Jiaozhou Bay is good and classified as Class II. In the west and north of Jiaozhou Bay marine water quality is Class III while in the east, it is classified as Class IV. The water quality in the estuaries of Moshui River and Dagu River is of poor quality and is classified as less than Class IV, with inorganic nitrogen as the main pollutant. 15. For ground water quality, in March 2005, Jiaozhou Environment Monitoring Station carried out ground water monitor nearby Eastern Lake (Shaohai Sea Flood Detention District). It shows ground water quality is around Class-V standard of “Ground Water Quality Standard” (GB/T14848-1995).

Table 2: Environmental Quality Standard for Surface Water (GB3838-2002) (in mg/l, except for pH) No. Water Quality Class Ⅲ Class Ⅳ Class Ⅴ Parameters 1 pH 69 2 Dissolved Oxygen ≥5 ≥3 ≥2 3 Permanganate Index ≤6 ≤10 ≤15

4 CODCr ≤20 ≤30 ≤40

5 BOD5 ≤4 ≤6 ≤10

6 NH3-N ≤1 ≤1.5 ≤2.0 7 TP ≤0.2 (lake, reservoir 0.05) ≤0.3 (lake, reservoir 0.1) ≤0.4 (lake, reservoir 0.2) 8 TN ≤1 ≤1.5 ≤2.0 11 Cu ≤1 ≤1.0 ≤1.0 12 Hg ≤0.0001 ≤0.001 ≤0.001 13 As ≤0.05 ≤0.1 ≤0.1 14 Cd ≤0.005 ≤0.005 ≤0.01 15 Cr(6+) ≤0.05 ≤0.05 ≤0.1

16. In 2006, in order to have a thorough understanding on wastewater discharge situation, the Jiaozhou EPB carried out a wide-spread investigation. The survey shows that, within Jiaozhou city, about 48,500 m3/d wastewater is connected into WWTP, an additional 31,000 m3/d is directly discharged into rivers. A significant portion of the untreated effluent

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is from industrial wastewater. Currently, industrial wastewater from Fuan, Zhongyun, Beiguan, Yunxi River, Jiaodong, Yinghai, Jiaozhou Bay Industrial Parks, and Northern Industrial Area are being discharged into the city sewer network. These, however, are not connected to the wastewater treatment plant of Jiaozhou City. The rest of the industrial parks, which should set up their own sewage treatment facilities within the industrial parks, have not done so. As a result, untreated sewage is directly discharged into the surrounding rivers and reservoirs. Effluent from the Textile Industrial Park is currently treated at a specialized WWTP for the park; other industrial area discharge wastewater directly to the rivers or to the sewers; many of the latter are currently not connected to the centralized WWTP. Currently, there were 13 sewage outfalls and 2 storm water outfalls in branch of Hucheng River (Yangzhou Road-Hucheng River) and the upstream. The sewage outfalls mainly belong to thesmall workshops and communities alongthe river. The sewage were mainly from domestic sewage, the Youfang taizi village on the right bank were altering old village, none sewage into the river; storm water dumped were plant rain mainly from Qingdao Yuancheng Metal Products Co., Ltd. and Qingdao Wing Runda Leather Products Co., Ltd on right bank of Hucheng River Branch, their production wastewater and domestic sewage dumped into the sewage pipeline across the interchange of Branch and Hucheng River, finally flowed into Jiaozhou Sewage Treatment Plant, not into the river. 17. The wastewater has been discharged to the branch of Hucheng River, the flow rate is 424.1m3/d, the discharge amount for whole year is 154,800m3/a. The amount of CODCr and NH3-N is respectively 69.66t/a 、 4.64t/a. Based on the monitoring and (GB383-2002), the water quality hasn’t satisfied the standard of the IV-Level. Currently, the river is worse than V-Level. The reasons of river section badly polluted are (1) this river section wasn’t interception completely, the domestic and industrial wastewater has been discharged to the river directly; (2) there was some farmland on both sides of the river downstream, the contaminant would be run into river when it’s raining; (3) the domestic garbage has been throw into river directly; and (4) the sediment would contaminate the river continually. Figure 5: Current Situation of Jiaozhou Wastewater Discharge

Connected WWTP already Not yet Connected to WWTP (discharged into

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rivers) No. Discharge quantity Discharge No. Discharge quantity Discharge (m3/day) to: (m3/day) to: 1-1 20,000 WWTP 2-1 1,000 Hucheng river 1-2 3,500 WWTP 2-2 5,000 Hucheng river 1-3 8,000 WWTP 2-3 10,000 Yunxi River 1-4 6,000 WWTP 2-4 10,000 Wushui River 1-5 8,000 WWTP 2-5 Yunxi River 1-6 3,000 WWTP 2-6 2,500 Sanli River 2-7 Yunxi River 2-8 1,500 Hucheng river 2-9 1,000 Dagu River Sub-total: 48,500 Sub-total 31,000

D. Ecological Environment 18. Qingdao is rich in marine resources having a total of 863.3 km of coast line, 69 islands, and 49 bays. The navigation channels are smooth and wide. No silting occurs during summer neither does freezing occur in winter, thus making the area suitable for large ports. Marine biological resources are rich of which 80% are fish resources and 20% are shrimp, crab, and cephalopoda resources. Marine resources include Philippines clam, sea cucumbers, abalone, and other valuable seafood. Marine plant resources are also bountiful. Qingdao offshore marine plants mainly include benthic algae and sea-grass. Benthic algae, such as kelp, laver, sargassum, and shek ulva lactuca, are suitable for artificial cultivation and large-scale productions have well developed in the area. 19. Surrounding Jiaozhou Bay, there are 7 major pollution discharge outlets (as shown in following figure). Of all the pollution sources, these 7 major discharge points represent approximately 90% of the total amount water pollutant into Jiaozhou Bay5. From the above table, it can been seen that: (1) the Haibo River, Licun River and Dagu River represent the largest part of Jiaozhou Bay pollution loading; (2) Dagu river takes 40% of the total amount of COD loading of the Jiaozhou Bay; (3) For IN, Haibo River is the No.1 pollution source, with its contribution of 37.4%, and the IN contribution rate of Dagu and Licun River are 28.7% and 19.0% respectively. 3- 3- (4) Haibo River also contributes the most part of PO 4-P loading, the PO 4-P contribution rate of Haibo, Moshui, Dagu and Licun River are 37.4%, 19.5%, 18.0%,14.8% respectively.

5 Study on the Impacts of Reclamation on Marine Environmental Capacity of Jiaozhou Bay, Jia Yiran, Qingdao, 2006.

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Figure 6: Major Pollution sources of Jiaozhou Bay

Table 3: Pollution Loading Rates to Jiaozhou Bay(2004)(t/a) 4- No. Discharge Point COD IN PO3 -P 1 Tuandao WWTP 1,210 306 4 2 Haibo River(including Haibo River WWTP) 18,414 3,024 102 3 Licun River(including Licun River WWTP) 10,875 1,518 41 4 Banqiaofang River 3,214 318 14 5 Loushan River 433 50 9 6 Moshui River 4,344 487 53 7 Dagu River 25,266 2,296 49 Total 63,756 7,999 273

20. A wetland area is located in the eastern part of Jiaozhou. The Jiaozhou Bay and Dagu Estuary wetlands, the only wetlands in Qingdao Municipality are included in the national wetlands protection list. The wetlands covers the mudflat and beach from the fresh water zone of the Dagu Estuary to the low-salt water zone of Jiaozhou Bay with a total area of about 50,000 ha. The wetlands are home to 156 species of waterfowl and miscellaneous fishes, and stop-over point to many migratory birds. However, due to the adverse impacts of industrial development and agricultural activities, the wetlands are now suffering from severe pollution and destruction in recent years. For example total wetland area has reduced by 0.9% per year in the period 1998-2003. The number of wildlife species is declining and ecosystem functions are impaired, especially in some areas along the eastern bank of Jiaozhou Bay which are already degraded and consequently can no longer function as natural wildlife habitats6. In addition the wetlands play a critical role by the consumption of key nutrient elements and maintain a reasonable trophic state in the bay with high oxygen levels and infrequent harmful algal bloom. Reduction of both natural and artificial (particularly agriculture) wetlands will lead to increased riches of eutrophication within the Bay. 21. In general this demonstrates the importance of the Dagu River as one of the most important pollution sources to the Jiaozhou Bay. Its proximity to the protected wetland area

6 Present Situation and Strategy of Protection of Water Bird Resources in Jiaozhou Bay Wetland in Qingdao, WETLAND SCIENCE & MANAGEMENT, Geng Yilong, 2006 Vol.2 No.2 P.45-48.

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emphasizes the need to control pollution from the Dagu River and Jiaozhou City. 22. New project sub-component added in 2015. The branch of Hucheng River is the additional river section; it’s the upstream of Hucheng River that flows from South to North then running into Hucheng River. The width of river is about 5-10m; the average depth is 0.2m. Water quality is very poor (less than Class V), due to domestic waste, small enterprises and workshops. At one side along the river, there were 4 communities and one food factory; on the other side, there were 2 workshops, 1 community and farmland along the river,

E. Social and Economic Conditions 23. The gross domestic product (GDP) of Qingdao municipality grew to CNY 320,658 million in 2006 as 15.7% increase with the previous year. Primary industries contributed CNY 18,395 million to the increase in output value, up by 0.9%, while secondary industries contributed CNY167,717 million, up by 17.2%, and tertiary industries contributed CNY134,546 million, up by16.2%. The contribution of primary, secondary, and tertiary industries to GDP was 5.7%, 52.3%, and 42.0%. In 2006, the total employed population shows a proportion of 21% in primary industries, 43% in secondary industries, and 36% in tertiary industries. Most of the employed population (60%) is found in the manufacturing sector (e.g., textile, apparel, footwear and caps, leather, fur, feather and its products, communication equipment, computers, and other electronic equipment). 24. Jiaozhou is one of the earliest open cities in Shandong Province. At present, Jiaozhou is endeavoring to build a modern industrial system with sectors of machinery, electronics, chemicals, building materials as well as food progressing. It serves as the key industrial progressing and logistic basis of Jiaozhou bay economic development clusters. 25. Environmental infrastructure investment has increased significantly in Qingdao Municipality as a whole. By the end of 2006, the total length of tap water pipelines was recorded at 3,984 km, for an average of 14.7 km for every 10,000 persons, and the annual water supply volume and annual sales volume of water reached 305,240,000 m3 (or 1,116,400 m3 for every 10,000 persons) and 255,720,000 m3 (or 943,600 m3 for every 10,000 persons), of which 106,820,000 m3 are for domestic consumption (or 394,200 m3 for every 10,000 persons). 26. Rates of diseases due to poor sanitation in Jiaozhou have been consistently higher than national averages, particularly for Hepatitis A and Dysentery (see table below). These rates are indicative of poor sanitary conditions in general; disease outbreaks have also been recorded in association with major flood events.

Table 4: Rate of incidence of stomach diseases in Jiaozhou (per 100,000) National Diseases 2003 2004 2005 2006 2007 Average 2003 Hepatitus A 23.22 19.24 23.84 22.52 41.35 7.37 Hepatitus (other types) 750.89 621.99 572.08 728.16 785.65 94.72 Hepatitus (all types) 774.11 641.23 595.92 750.69 826.99 102.09 Dysentery 1,296.80 1,013.91 994.32 1,380.43 1,460.00 34.52 Typhoid 2.65 2.02 1.97 1.74 2.24 4.17

IV. FORECASTING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

A. Environmental Benefits and Impacts 27. Improved Public Health. The river rehabilitation projects will reduce flooding risk from less than twenty years (5%) to fifty years (2%) thereby reducing significantly flood damage and also diseases associated with poor drainage/flooding. Runoff modeling indicates the a combination of the newly constructed lake, improved upstream reservoir capacity and river embankments, and dredging of selected stretches of the rivers will significantly reduce the flooding in the older parts of the city and the lower areas surrounding the Dagu River (as an example see the Figure below).

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Figure 7: Comparison between situations of Hucheng River (with and without project)

15.0 14.0 13.0 12.0 11.0 10.0

m AD 9.0 8.0 7.0 6.0 5.0 4.0 h1 h2 h3 h4 h5 h6 h7 h8 h9 h10 h11 h12 h13 h14 h15 h16 h17 h18 h19 h20 h21 h22 3.0 m 600 800 1000 1201 1414 1632 1840 2047 2247 2449 2654 2857 3046 3238 3472 3671 3879 4085 4288 4494 4695 4900 5102 5305 5506 Link Erlihe.r h1.r h2.r h3.r h4.r h5.r h6.r h7.r h8.r h9.r h10.rh11.r - - h14.r h15.rh16.rh17.rh18.rh19.r - h21.rh22.rh23.r - Node Erlihe h1 h2 h3 h4 h5 h6 h7 h8 h9 h10 h11 h12 h13 h14 h15 h16 h17 h18 h19 h20 h21 h22 h23 h24

13.0 12.0 11.0 10.0 9.0 8.0 m AD 7.0 6.0 5.0 4.0 3.0 2.0 h1 h2 h3 h4 h5 h6 h7 h8 h9 h10 h11 h12 h13 h14 h15 h16 h17 h18 h19 h20 h21 h22 h23 m 600 800 1000 1201 1414 1632 1840 2047 2247 2449 2654 2857 3046 3238 3471 3671 3879 4085 4288 4494 4695 4900 5102 5305 5506 Link Erlihe.r h1.r h2.r h3.r h4.r h5.r h6.r h7.r h8.r h9.r - - - - h14.r ------Node - h1 h2 h3 h4 h5 h6 h7 h8 h9 h10 h11 h12 h13 h14 h15 h16 h17 h18 h19 h20 h21 h22 h23 h24 Note: With (below) and without (above) the Project: Maximum water level against lowest embankment along Hucheng River (50 year return flood event + with Shaohai lake)

28. Reduction of Total Pollution Loading Rates. The wastewater interception and collection subcomponents will significantly reduce direct polluted discharges to the rivers in Jiaozhou as summarized below. Surface water quality is anticipated to improve as a result of the project from lower than Class V to Class IV/V. The project will also reduce total pollution loads discharging to the newly constructed Shaohai Lake, thus protection water quality of the lake. Table 5: Summary of pollutants load change of project rivers Influence Wastewater

COD (t/d) NH -N (t/d) TP (t/d) discharge Sources Cr 3 (10,000 t/d)

Without Project 10.55 1.14 0.25 2.40 Yunxi With Project 5.48 0.59 0.13 1.25 River Reduction 5.07 0.55 0.12 1.15 Without Project 6.03 0.65 0.15 1.37 Wushui River With Project 3.13 0.34 0.08 0.71 Reduction 2.90 0.31 0.07 0.66 Without Project 1.51 0.16 0.04 0.34 Sanli River With Project 0.78 0.08 0.02 0.18 Reduction 0.72 0.08 0.02 0.16 Note: Before Project, sewage collection rate is 61.5%. After Project, sewage collection rate is 80%

29. Parallel to and in close coordination with the implementation of the ADB funded project, the Jiaozhou WWTP will be extended in both capacity and also in treatment process (from Class II to Class IB). This will enable that the total load of pollution discharged to the Dagu Estuary and the Jiaozhou Bay will be reduced (maintained approximately at the level of that currently discharged by the existing WWTP). The overall impacts therefore of the WWTP on water quality in the estuary and the bay are likely to be similar to those calculated for the original WWTP. 30. The Jiaozhou WWTP is constructed and operated under a 20-year BOT arrangement by Zhongkecheng Environmental Company in 2004 with A2O treatment process. In the original WWTP EIA report, to justify the effluence impact to Dagu Estuary and Jiaozhou Bay, a good quantity of marine flow and tiding data are collected, simulate the Flow Field of Jiaozhou Bay

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based on two dimensional ocean dynamic models, and forecast the pollution field changes within Estuary and Jiaozhou Bay. The outcomes showed that the marine area (as shown in following figure), which is serious than Class-II of Marine Quality Standard (GB 3097-1997), reduced from current 9.5km2 to 2.45km2 after the WWTP operation; the marine water quality has an obvious improvement.

Figure 8: COD Concentration Field Before and After the WWTP Operation (analogue analysis from WWTP EIA)

Calculated COD Concentration Field Forecasted COD Concentration Field before WWTP operation(daily average) after WWTP operation (daily average)

31. Institutional Strengthening. The Project will also provide institutional support to the Jiaozhou City Government to improve monitoring and control of pollution outside of the direct project area. Through the establishment of a Management Information System (MIS), support to a specific ‘wastewater group’ group in the City Government, and under the guidance of the Projects ‘Leading Group’, it is anticipated that compliance with environmental standards will be increase and pollution loads will be reduced.

B. Environmental Impacts and Mitigation Measures during Construction Phase 32. Disposal of dredged materials. Dredged sludge from Erli River Reservoir, Yunxi River, Hucheng River, Wushui River and Sanli River will total an estimated 1.9 million m3. Sediment sampling was undertaken during the EIA for regular tests on heavy metal concentrations. The results showed that all monitored items are below the max permission concentrations for neutral and alkaline soil of “Pollution Control Standards of Sludge used in Agriculture" (GB4284-84). Compared with “Soil Environment Quality Standards” (GB15618-1995), basically all the sludge samples can satisfy Class-II Standard, which is the level for guaranteed agriculture production and healthy growth of crops. Hg in Wushui River and Hucheng River and As in Yunxi River are higher than Class-II of GB15618. Sludge of Erli River and Sanli River are all around Class-I standard of GB15618, which is the quality level for basic natural conditions. 33. Based on the sludge characteristics, disposal method of field utilization is proposed, which has been applied for years in Jiaozhou City on river sludge disposal. In this project, sludge excavation will be undertaken during dry season, so to reduce water contents and

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minimize environment impacts. According to the practical conditions, sludge from different rivers will be arranged disposal specifically. For Yunxi River (east of Haier Avenue), Erli River and Sanli River, the sludge characters are similar to the baseline conditions of farmlands nearby East Lake (Shaohai Sea), so the sediment from these three rivers can be used for farmland around East Lake. For Yunxi River (west of Haier Avenue), Hucheng River and Wushui River, sludge pollution concentration is relative higher, so can be used in forest fields or greening lands inside urban districts. 34. Standard Construction Impacts. Limited negative impacts on soil, air, water, acoustic environment, flora/fauna and surrounding communities are expected during construction. The impacts will be temporary and localized, and if proper mitigation measures are implemented during the construction period, the impacts can be minimized or even eliminated. The residual impacts are judged to be insignificant. The potential construction impacts include:  Soil. Potential environmental impacts on soil by the Project include (i) soil erosion, (ii) soil contamination, (iii) temporary and permanent acquisition of agricultural land, and (iv) impact from construction traffic. Soil erosion may be caused by the excavation of pipe trenches and spoil earthwork from pipeline construction, as well as by site preparation for construction of the pump stations and river works. Mitigation measures will include (i) covering temporary soil stockpiles, (ii) minimizing active excavation areas during pipe laying, (iii) appropriate re-compaction of pipe trenches, and (iv) installation of sediment fences where appropriate to minimize sediment runoff. Disturbed surfaces, such as re-compacted pipeline trenches, will be re-vegetated to minimize erosion. Soil contamination may be caused by inappropriate storage and disposal of hazardous construction materials. Mitigation measures will include appropriate storage of hazardous materials in secure, covered areas with secondary containment. All waste will be removed from sites to approved waste disposal sites.  Water. Potential environmental impacts on water resources by the Project include (i) increased sedimentation of adjacent water resources from construction activities, and (ii) inappropriate wastewater disposal. Construction activities will disturb surface soils and have the potential to increase sediment runoff into adjacent waterways. Inappropriate disposal of domestic wastewater from construction camps and disposal of wash down water from construction equipment and vehicles have the potential to affect adjacent surface water resources. Mitigation measures will include installation of appropriate septic disposal systems at construction camps. All construction equipment wash down areas should be equipped with water collection basins and sediment traps.  Air Quality and Noise. Potential environmental impacts on air quality and noise during construction include (i) dust from construction activities, (ii) construction vehicle emissions, and (iii) construction noise. Fugitive dust may be caused by excavation, demolition, vehicle movement, and materials handling, particularly downwind from the construction sites. Mitigation measures will include water spraying of transportation routes and materials handling sites where dust is being generated. Particular attention will be paid to dust suppression adjacent to sensitive receptors such as schools or residential areas. Materials will be stored in appropriate places and covered or sprayed to minimize fugitive dust. Materials will be covered during transportation to avoid spillage or dust generation. Air pollution may be caused by emissions from vehicles and construction machinery. Vehicles and construction machinery will be properly maintained and will comply with emission standards. Noise may be caused by construction equipment and vehicular movement, potentially affecting residents of nearby residential areas and schools. Vehicles and construction machinery will be required to be properly maintained and to comply with emission standards. Construction will be prohibited between 19:00 and 06:00 in sites adjacent to residential areas. Mitigation measures will include strict compliance with noise standards.  Waste Management. Inappropriate waste storage and disposal has the potential to affect soil, groundwater, and surface water resources and consequently public health. Mitigation measures will include appropriate storage of hazardous materials and waste in secure, covered areas with secondary containment. All waste will be removed from sites to approved waste disposal sites. There will be no on-site landfills at any of the construction sites. Construction waste will be promptly removed from the sites. Burning of waste will be

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prohibited.  Flora and Fauna. Potential impact to flora and fauna from the proposed Project includes (i) removal of vegetation during construction activities, and (ii) impact on primary biology in rivers. There will be some removal of vegetation along the pipeline trenches and river works. Trees or shrubs will only be felled or removed if they impinge directly on the permanent works or necessary temporary works. After pipe-laying construction, the trenches will be re-vegetated. Approval should be acquired from Qingdao Forest Bureau for tree cutting ahead of time. The number of trees that are identified for removal should be counted during the design stage and compensation plan developed to re-plant at least the same number of trees in the same area.  Social Issues. Potential social impacts include (i) traffic congestion, (ii) interruption to municipal services, and (iii) threats to public safety. Traffic congestion may be caused by an increase in construction traffic in urban areas. Roads may be fully or partially closed during construction, causing temporary inconvenience to residents, commercial operations, and institutions. Construction scheduling will consider impacts to traffic congestion. In conjunction with the relevant authority and traffic plans will be prepared before construction begins in congested urban centers. Construction of project facilities may require relocation of municipal utilities such as sewers and pipelines. This may require temporary suspension of services to adjacent communities. Construction activities will be planned with a view to keeping disturbances to utility services to a minimum. Temporary land occupation will be planned well ahead of construction to minimize the impact of the disturbance. Land will be reinstated to its original condition upon completion of construction. Construction sites will be located in residential and commercial urban areas, which may present a threat to public safety. Mitigation measures will include implementation of safety measures at the construction sites to protect the public, including warning signs to alert the public of potential safety hazards and barriers to prevent public access to construction sites. 35. Cultural property. Construction activities have the potential to disturb cultural relic sites, although none has yet been identified. According to Qingdao Culture Protection Objective List (Qingdao Culture Relics Bureau, March 2007) and Jiaozhou Urban Master Plan (2005-2007), the culture relics in Jiaozhou city are identified. It is found that the culture relics, which are from Neolithic Age, Han Dynasty and , are located outside the Jiaozhou urban city, most in rural towns surrounding the Jiaozhou urban city. The impacts from project construction and implementation to the culture relics is small and neglected if any existed. 36. After consulting with relative agencies, it was confirmed that during years of developing of urban infrastructures in the Jiaozhou urban area, it seldom/even never has opportunity to dig out culture relics. Especially in current Qingdao Water Resource Management Project, most of the engineering works are along the existing routes which formerly had already experienced digging and construction, the chance of encounter relics is very small. Once and if some culture relic is dig out, according to Article 32 of “Culture Relic Protection Law”, the contractors will protect the site immediately and report to local culture administration agency. Once the agency receives the report or notice, arrives to the construction site within 24 hours, and provides the disposal opinions within 7 days. Once the key important relics are found, it should be reported to State Council Culture Relic Administration, who should respond within 15 days.

C. Environmental Impacts and Mitigation Measures during Operation Phase 37. Wastewater Collection. Major parts of the wastewater collection system have been designed as an interception system with associated combined sewer overflows. During heavy rainfalls, diluted sewage may be discharged directly to the river systems, thus impact will generally be minimized by the higher dilution in the rivers during the wet seasons. Care of the design of combined sewer overflow will be required to reduce impact of pollution. 38. Wastewater Treatment. The additional collection, interception and transfer of wastewater from the project will require more treatment capacity of the Jiaozhou WWTP. The expansion of Jiaozhou WWTP is already listed as a Class-A priority project in the Jiaozhou Urban Master Plan (2005-2020), and is also listed as a key project in 2008 of Jiaozhou government. It is planned that the expansion work is to be finished in 2009, when the total

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treatment capacity will be increased to 100,000 m3 per day. It is confirmed that the expansion will not utilize financing through the ADB supported Project. Now the WWTP is undertaking technical improvement, increase effluent discharge from current Class II to Class IB Standard of “Urban Sewage Treatment Plant Pollution Discharge Standard” (GB18918-2002), following a requirement from “General Discharge Standard of Water Pollution in Shandong Province Peninsular” (DB37/676-2007). After the Jiaozhou WWTP’s extension in both capacity and treatment process, the project impact to its normal operation is acceptable, as the newly added wastewater has similar characters with the originals treated in the WWTP.

Table 6: Routine monitoring data of water quality at Jiaozhou Wastewater Treatment Plant in 2007 (units in mg/L except for pH)

Name of location Indicators pH SS COD NH3-N TP Standard for Class IB (GB18918-2002) 6-9 20 60 8 (15) 1 Standards for Class II (GB18918-2002) 6-9 30 160 25 (30) 3

The inlet of WWTP Number of samples 12 12 13 13 13 Minimum 7.32 137 158 21.6 2.72 Maximum 7.9 375 686 96.7 29.1 Average --- 283439 47.6 10.6

The outlet of WWTP Number of samples 12 12 13 13 13 Minimum 7.19 23 30 0.372 0.27 Maximum 7.85 172 98 44.8 6.27 Average --- 40 66 11.78 2.14 The maximum times of exceeding standard --- 5.7 0 0 0 The rate of exceeding standard(%) 0 16.7 0 0 0 Standard value 6~9 30 100 25 3

39. Wastewater Sludge Disposal. For the sludge disposal from Jiaozhou WWTP, the current sludge produced is 110 ton/day (80% water content), annually wet sludge is about 40,000 ton. Before 2007, the WWTP sludge was all sent to construction material plant and produced into construction bricks. In 2008, the sludge is sent to Qingdao Diendi Biological Technical Company and produced into plant fertilizers through biological degradation and harmless treatment. For more clear justification, Jiaozhou WWTP submitted two formal documents in May 2008: (1) Explanation of Sludge Production and Disposal Situation of Jiaozhou WWTP, and (2) Sludge Disposal Agreement between Qingdao WWTP and Qingdao Diendi Biological Technical Company. 40. River Rehabilitation. For rivers, normally the minimum ecology water needed should be 10% of the perennial runoff. The minimum ecology water is basically needed for the survival of flora and fauna and for landscaping and preserving one river. To assess the feasibility of introduce environmental flows in the four rivers in the city, and for better hydraulic design and optimize water flows, a series of hydrological study has been carried out by PPTA Consultants. PPTA Hydraulic Consultant re-designed and analyzed alternatives for the Erlihe reservoir and recalculated outflows to downstream rivers. It is calculated out in condition of taking 10% perennial runoff as ecology water, the outflow is about 0.04m3/s, it can be guaranteed in the 50% return period. 41. Cumulative Impacts. No cumulative impacts have been identified for the proposed Project activities.

D. Due Diligence Review 42. Two aspects have been identified as “associated” with the Project, and have been reviewed through a due-diligence review. The development of the Shaohai lake, key to improved flood and water quality management, was started in 2004. The approved EIA report has been

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reviewed and it is considered that environmental impacts were addressed adequately. For the wastewater to be collected by the Project, proper treatment has been assured by the JCG through its commitment (Project covenant) to expand the capacity of the existing WWTP and improve the quality of the treatment process (1B level). Moreover, the JCG will monitor and ensure, through the support of the Project, that all industrial establishments will apply pre-treatment to comply with National PRC regulations. Similarly, the JCD has provided proof that the sludge from Jiaozhou WWTP is disposed off safely. Since 2008, the sludge is sent to Qingdao Diendi Biological Technical Company and produced into plant fertilizers through biological degradation and harmless treatment.

E. Resettlement 43. Resettlement impacts have been identified and resettlement plan (RP) prepared in accordance with PRC Land Administration Law and ADB’s Policy on Involuntary Resettlement. The Project will require permanent acquisition of 2.8 hectares (ha) of land and demolition of 20 m2 houses. The new sub-project added in 2015 does not involve resettlement. The total cost for both land acquisition and resettlement is estimated to be RMB 2.4 million at 2008 price. The RP provides a socio-economic profile of affected persons (APs), scope of impacts, entitlement of AP’s compensation, legal framework, public consultations, grievance procedures, rehabilitation measures, budget and implementation milestones. Resettlement requirements have been incorporated into project design. All APs will be compensated and resettled in a timely and adequate manner in accordance with the RPs so that they will be at least as well of as they would have been without the Project. 44. The additional rehabilitation work and monitor and control wouldn’t require the land acquisition and resettlement, because the land was the state owned and all the work would be conducted within the red line.

F. Environmental Management Plan 45. An Environmental Management Plan (EMP) has been prepared to identify (i) appropriate mitigation measures, and (ii) institutions and mechanisms to monitor and ensure compliance with environmental regulations and implementation of the proposed mitigation measures. Such institutions and mechanisms will seek to ensure continuously improving environmental protection activities during project preparation, construction, and operation in order to prevent, reduce, or eliminate adverse impacts. 46. The EMP of the Project is attached in Annex 2. The EMP is based on the full EMP describing (i) objectives; (ii) summary of potential impacts; (iii) mitigation measures; (iv) environmental monitoring; (v) planned public consultation; (vi) responsibilities and authorities for implementation; (vii) institutional strengthening and training; (viii) reporting and supervision; (iv) workplan; (x) procurement and cost estimation; and (xi) mechanism for feedback and adjustment. The EMP will be reviewed and updated at the end of the detailed design in order to be consistent with the final detailed design. 47. The QMG will ensure that the agreed mitigation measures in the EMP will be included in the construction contracts, and that compliance will be monitored and implemented accordingly.

V. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN

A. Institutional Arrangements

48. Executing Agency. The QRDC, being the Executing Agency will be responsible for the overall implementation and compliance with the EMP and Monitoring Plan. The QDRC will ensure that as part of standard project monitoring arrangements, environmental monitoring reports will be submitted to the ADB on a semi-annual basis. The QDRC will also be responsible to handle any disputes arising from the non-compliance with the EMP. Headed by the director of Qingdao Development and Reform Commission (QDRC), a Qingdao Project Management

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Office (QPMO) will be setup for the overall management and coordination of the Project. The QPMO will be overall responsible for supervising implementation of environmental mitigation measures and reporting to ADB. 49. Implementing Agency. Jiaozhou Construction Bureau (JCB), being the project Implementing Agency (IA), will be responsible for the day-to-day implementation and compliance with the environmental management plan and ensuring that implementation of mitigation measures, as describe in the Environmental Management Plan (EMP), and will support the EA in handling any disputes arising from the non-compliance with the EMP. To facilitate and improve the effective implementation, a Jiaozhou Project Management Office (JPMO) will be set up in JDRB, under the administration of the QPMO. The IA will provide the periodic environmental monitoring reports to JPMO and then to QPMO. 50. Project leading group. To increase Project effectiveness, a Project Leading Group (JPLG), established by the Jiaozhou government, will provide general oversight and coordination over the project implementation. The JPLG is headed by the Vice Mayor of Jiaozhou City, and includes members from the Jiaozhou Development and Reform Bureau (JDRB), Jiaozhou Finance Bureau (JFB), Jiaozhou Water Resource Bureau (JWRB), Jiaozhou Environment Protection Bureau (JEPB), Jiaozhou Forest Bureau (JFB), Jiaozhou Land Resource Bureau (JLRB), Jiaozhou Construction Bureau (JCB), Jiaozhou Planning Bureau (JPB), and Jiaozhou People Bank (JPB).

B. Environmental Monitoring

51. Environmental Monitoring Arrangements. The QPMO and JPMO will each nominate at least 1 full-time and qualified Environmental Management Staff (EMS) to undertake environmental management and monitoring activities. The IA will further engage a Construction Supervision Consultant (CSC) to assist in carrying out environment management monitoring activities, prepare semi-annual progress reports, report to ADB, and conduct necessary trainings. On behalf of Government, the QEPB/JEPB will delegate environmental monitoring to the Qingdao Environment Monitoring Center/Jiaozhou Environment Monitoring Centers (QEMC/JEMC). The Monitoring Program to be conducted by the QEMC/JEMC is included in Appendix 3. 52. Levels of Environment Monitoring Center. Three levels of Environmental Monitoring have been identified:  Internal Monitoring and Inspection: “Internal Monitoring” will be aimed at ensuring that the works implementation complies with all of the environment protection rules applicable to the project. During the construction phase, the IA with supervision from QPMO and JPMO will recruit a construction supervision company (CSC). The TOR for the CSC will include providing support for conducting internal environmental monitoring and inspection activities to ensure that environmental mitigation measures are properly implemented. During the operation period, the IA/operators will directly be responsible for internal monitoring and reporting to QEPB/JEPB.  External Monitoring and Inspection: ”External Monitoring” will to link the Project activities to any changes in the environment characteristics. On behalf of the Government, local environmental monitoring centers (QEMC/JEMC), under the Guidance of the Local environmental protection bureaus (QEPB/JEPB), will be responsible to undertake regular and random environmental monitoring and inspection activities before, during, and after construction, as well as in the event of emergencies.  Environmental Acceptance Monitoring and Audit of the Completion of the project: Within 3 months after the completion of the individual contracts, or no later than 1 year with permission from environmental authorities, environmental acceptance monitoring and audit reports of the subproject completions will be undertaken.

53. Reporting Schedule. The PMOs with the assistance of project consultants will monitor and assess overall project activities under the project design and monitoring framework (PDMF),

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including environmental targets. QPMO will submit to ADB the EMP progress reports and information on project implementation and the environmental performance of the contactors and IAs. These reports will include (i) semi-annual environmental reports on EMP implementation, and (ii) environmental compliance monitoring and audit report of the completion of each sub-project. Progress reports will emphasize (i) progress made in area of water quality improvement, (ii) monitoring results at appropriate points in the rivers and East Lake, (iii) implementation of mitigation measures, (iv) environmental compliance, (v) training, and (vi) capacity-building progress. ADB may request that further environmental mitigation actions be taken, as they deem necessary, and may determine further mitigation measures for different stages, if necessary. 54. Monitoring costs. The costs for the implementation of the Monitoring Plan during the Construction phase is minimal, estimated at 200,000 RMB over a period of four years. The annual costs for monitoring at during the Operation Phase will be approximately 25,000 RMB/year. These costs have been included in the Project Cost tables.

Table 7: Environmental Reporting Plan Frequency Reports From To of reporting Construction Phase Internal Weekly internal monitoring Contractors IAs Weekly monitoring and reports by contractors inspection monthly internal monitoring CSCs QPMO/JPMO Monthly reports by environmental management consultants to be contracted by IAs Semi-annual internal JPMO/IA with QPMO, Twice a year environmental monitoring and assistance from QEPB/JEPB inspection reports based on CSCs the monthly reports External Spot-check monitoring and QEMC/JEMC QEPB/JEPB Randomly monitoring and inspection reports inspection Monthly external QEMC/JEMC QEPB/JEPB Monthly environmental monitoring and inspection reports Semi-annual external JPMO/IA with QPMO, Twice a year environmental monitoring and assistance from QEPB/JEPB inspection reports based on QEMC/JEMC the monthly reports Reports to Semi-annual progress reports QPMO ADB Twice a year ADB based on all the internal and external reports Operation Phase Internal Routine environmental IAs/Operators QEPB/JEPB, monthly monitoring monitoring reports QPMO/JPMO External Environmental compliance QEMC/JEMC QEPB/JEPB, Quarterly monitoring and reports QPMO/JPMO inspection Reports to Semi-annual reports based on QPMO ADB 2 times a ADB all the internal and external year monitoring inspection reports during operations Note: ADB = Asian Development Bank, QEPB = Qingdao Environmental Protection Bureau, JEPB= Jiaozhou Environmental Protection Bureau, QEMC = Qingdao Environmental Monitoring Center, JEMC = Jiaozhou Environmental Monitoring Center, QPMO = Qingdao Project Management Office, JPMO = Jiaozhou Project Management Office, EMP = Environmental Management Plan, CSC= Construction Supervision Company, IA = Implementing Agency.

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VI. PUBLIC CONSULTATION AND DISCLOSURE

A. Public Consultation 55. In accordance with China's relevant laws and regulations and ADB policies, public consultations were conducted during the Environmental Assessment to inform key-stakeholders regarding environmental issues related to this project. Two rounds of public consultations and twice information disclosure have been carried out. 56. The first round of public consultation was conducted on 28 January 2008. A consultation meeting was held in Jiaozhou city, attended by representatives from Jiaozhou Development and Reform Bureau, Jiaozhou Environment Protection Bureau, Jiaozhou Construction Bureau, Jiaozhou Water Resource Bureau, Jiaozhou Hydrological Bureau, Jiaozhou Planning Bureau, Jiaozhou Shaohai Sea Management Division, and local residents. All participants regarded this project with significant importance on flood control and ecology improvement, and expressed their interest for the project to start as soon as possible. Also, recommendations were given to (1) guarantee that mitigation measures would be implemented during the construction phase, (2) timely recover public roads after project activities, (3) strengthen the sewage system management and to prevent wastewater discharged into rivers, and (4) accelerate Phase-II of WWTP of Jiaozhou city, so to guarantee the corresponding treatment capacity. 57. A second round of public consultations was carried out during 18 to 22 of February 2008. Questionnaires were distributed and 124 local persons were interviewed in different project sites. Being dissatisfied with current status of water quality, and eager to solve existing problems of environmental pollution, 98.2% of the interviewed people agreed with the Project, and expressed the expectation that the project will bring significant environmental benefits. During the consultation, the local communities also expressed concerns on potential impacts during the construction phase, and requested the construction agencies to take suitable measures to mitigate possible impacts. 58. New sub-component in 2015. The third round of public consultation was carried out for the additional branch of Hucheng Rver from 19 May to 20 June 2015. Questionnaires were distributed and 55 local persons were interviewed. There were 5 specialists and scholars during the interview, accounting 9.0% of the total; there were 50 residents and staffs were interviewed, accounting 91% of the total. 89.1% of the interviewed people completely agreed with the Project, and nobody disagreed the project. There was one interviewee with no opinion.

B. Information Disclosure 59. A first disclosure of Project information was carried out on 14 March 2008. A project summary was publicized and disclosed on website www.jiaozhou.gov.cn, including information on the project name, scope, development agency and contact method, EIA institute and contact method, environmental assessment procedures, main assessment works, and methods of public consultations. 60. A second round of information disclosure was carried out in early April 2008. Updated information on the project scope, environmental impacts, and mitigation measures were published on www.jiaozhou.gov.cn, including project introduction, environment impacts, mitigation measures and treasures, assessment conclusions, methods and ways to get EIA report, detailed ways on collection public opinions, and implementation/time schedule. 61. New sub-component in 2015. The third disclosure. The additional 1.7km branch of Hucheng River rehabilitation work was published on Qingdao Environmental Protection Bureau website from 19-30 May 2014, and the second notice was published from 9-20 June 2014. There was no comment during the public. In addition, there were twice notices published to the public. 62. In addition, the following environmental information will be disclosed during the preparation and implementation of the Project:  The IEE will be made available for review online at www.adb.org before consideration of the Project by the ADB Board. Copies of the IEE will be made available on request.  All environmental monitoring reports will be provided to the QEPB/JEPB and ADB.

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Based on the consideration of the ADB, the monitoring reports will be made available at www.adb.org.  A formal grievance redress committee will be established, so to answer public complaints as discussed in former sections.

VII. FINDINGS AND RECOMMENDATIONS

63. The Project will have positive environmental impacts by reducing flooding and associated pollution and health hazards in Jiaozhou urban city. The Project will significantly improve water quality in the urban rivers and Shaohai Lake. By assuring that all wastewater collected by the Project will be treated to a IB level through an expansion of the existing Jiaozhou WWTP, the JCG will reduce overall pollution loads to the Dagu River and Jiaozhou Bay. Complemented with an improved environmental management capacity, the Project is expected to initiate sustainable planning process and contribute to halting the degradation of the wetland areas in Jiaozhou Bay and contribute significantly to improved water quality conditions in the bay. 64. Potential adverse environmental impacts during both construction and operation periods include unsafe disposal of dredged sediments and WWTP sludge, and limited standard construction impacts. All these impacts have been analyzed in the project domestic EIA report and IEE. Specific environmental mitigation measures will be undertaken to minimize the adverse impact. No further studies are considered to be necessary. 65. Extensive community consultation indicated that most of the affected people have a positive attitude toward the Project and that they believe it will benefit the local environment, living standards, and economic development. Negative opinions on the Project focused on localized noise, odor, and air pollution associated during construction phase. The environmental mitigation measures have been developed to address these specific concerns.

VIII. CONCLUSIONS

66. The proposed Project will have significant positive environmental impacts in the project area, including enhanced urban flood prevention in Jiaozhou City and improved water quality of urban water bodies, the Shaohai Lake, and the downstream Jiaozhou Bay wetlands. The proposed Strategic Environmental Assessment will enable QMG to introduce sustainable approaches to urban development thus protecting and maintaining the functions of the coastal wetlands and ecosystems. Based on the results of the IEE, the Project will not generate significant environmental impacts, provided the mitigation measures are implemented appropriately.

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ANNEX 1: REFERENCES

A. REGIONAL STUDIES AND REPORTS

 Notice of Qingdao Eleventh Five-Year Ecological Construction and Environment Protection Plan issued by Qingdao Municipal Government, 16th April 2007  Outline of Qingdao National Economy and Social Development Eleventh Five-Year Plan, June 2006  Qingdao Eleventh Five-Year Plan on Water Conservancy Development, March 2006, Qingdao Water Conservancy Administration  2007 Qingdao Statistics Yearbook, Qingdao Statistics Bureau  Qingdao Environmental Protection Guidelines (May 2004), Qingdao Environmental Protection Bureau  Regulation on Potable Water Resources Protection of Qingdao  Regulation on Environmental Noise Management of Qingdao  Regulation on the Prevention and Control of Atmospheric Pollution of Qingdao  Collection of Laws and Regulations on Qingdao Water Resource Management, 2006  Collection of Laws and regulations on Qingdao Water Management 2005, Qingdao Water Conservancy Department  Bulletins on Qingdao Municipal Environment Status, 2006  Jiaozhou Urban Master Plan (2005-2020)  2006 Jiaozhou Statistics Yearbook, Jiaozhou Statistics Bureau  Jiaozhou Master Plan 2002-2020 Land Use Master Plan, Jiaozhou City Government  Outline of the collection of Jiaozhou National Economy and Social Development Eleventh Five-Year Plan, Jiaozhou DRC  Environment Impact Assessment Report for Qingdao Water Resource Management Project, China Ocean University, 2008.  Environment Impact Assessment Report for Jiaozhou Urban Flood Prevention Project, China Ocean University, 2004  Environment Impact Assessment Report for Jiaohzhou WWTP, China Ocean University, 2004  Investigation on Wastewater Discharge Situation in Jiaozhou City, Jiaozhou EPB, 2006  Qingdao Culture Protection Objective List, Qingdao Culture Relics Bureau, 2007  Study on the Impacts of Reclamation on Marine Environmental Capacity of Jiaozhou Bay, Jia Yiran, Qingdao, 2006.  Explanation of Sludge Production and Disposal Situation of Jiaozhou WWTP, Jiaozhou WWTP, 2008  Sludge Disposal Agreement between Qingao WWTP and Qingdao Diendi Biological Technical Company, 2008

B. ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS

 The Environmental Protection Law of PRC  The Environmental Impact Assessment Law of PRC  The Water Pollution Prevention & Control Law of PRC  The Air Pollution Prevention & Control Law of PRC  The Ambient Noise Pollution Prevention & Control Law of PRC  The Solid Waste Pollution Prevention & Control Law of PRC  The Water Law of PRC  The Water and Soil Conservation Law of PRC  The Cultural Relic Protection Law of PRC  The Management Regulation on Environmental Protection for Construction Projects  The Measures for Public Participation in EIA (Provisional)  Environmental Information Disclosure Measures (Provisional)_  The Circular on Strengthening the Management of EIA for the Construction Projects Financed by International Financial Organizations  The Circular on Strengthening the Examining and Approving of Construction Project EIA by Different Levels

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 The Management Measures for Verification of Water Resources for Construction Projects

C. TECHNICAL POLICIES FOR POLLUTION PREVENTION & CONTROL

 The Technical Policy for Urban Domestic Garbage Disposal, and Its Pollution Prevention & Control  The Technical Policy for Urban Domestic Sewage Treatment and Its Pollution Prevention & Control  The Technical Policy for Prevention & Control of the Eutrophication in Lakes and Reservoirs  The Opinions about pushing forward Industrialization of Urban Sewage and Garbage Disposal  The Inventory for Guiding the Industrial Re-structuring (2005)

D. SOCIAL-ECONOMIC DEVELOPMENT/ENVIRONMENT PROTECTION PLANS & REGULATIONS

 The Program of the Eleventh Five Years Plan of Shandong Province for the National Socio-economic Development  “Eleventh Five-Year” Plan for Shandong Ecology Construction and Environmental Protection  “Eleventh Five-Year” Plan for QIngDao Economic and Social Development  “Eleventh Five-Year” Plan for QingDao Water Resources Development  QingDao Seawater Desalting Industry Development Plan  “Eleventh Five-Year” Plan for Qingdao Ecology Construction and Environmental Protection  Communique of Qingdao’s Enviroment Condition (2006)  The Analysis and Measures of Qingdao City’s Water Supply  Management Rules of Qingdao City ’s Water Saving  Report on City’s Water Reuse Plan  Summary of Qingdao City’s Water Saving Activity  (12) Statistic Annual for Qingdao (2007)  Statistic Annual Year Book for Jiaozhou (2006)  Pollution Overall Management Plan of Key Small Flowing Area for Qingdao  Development Proposal for Jiaozhou Eastern Lake New Developed District  Development Plan for Jiaozhou Key Industrial Sectors in Jiaozhou “Eleventh (2) Five-Year” Period  “Eleventh Five-Year” Plan for Jiaozhou city Economic and Social Development (draft)  Jiaozhou Flood control planning  “Eleventh Five-Year” Plan for Jiaozhou city Economic and Social Development (collection )

E. TECHNIQUE GUIDELINE, RULES AND CRITERION

 HJ/T2.1-93 Technical Guidelines for Environmental Impact Assessment -- General  HJ/T2.2-93 Technical Guidelines for Environmental Impact Assessment -- Atmospheric Environment  HJ/T2.3-93 Technical Guidelines for Environmental Impact Assessment Surface -- Water Environment  HJ/T2.4-1995 Technical Guidelines for Environmental Impact Assessment -- Acoustic Environment  HJ/T19-1997 Technical Guidelines for Environmental Impact Assessment -- Non-pollution Ecological Impact  HJ/T88-2003 Technical Guidelines for Environmental Impact Assessment -- Water Conservancy and Hydropower Projects  HJ/T169-2004 Technical Guidelines for Environmental Risk Assessment -- Construction Projects  HJ/T192-2006 Technical Criterion for Eco-environmental Status Assessment (On Trail)  GB/T16453.1~6-1996 Technical Regulation for Comprehensive Control of Soil

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Erosion  SL204-98 Technical Regulation for Development of Schemes of Water & Soil Conservancy for Construction Projects

F. ENVIRONMENTAL QUALITY STANDARDS

 GB3095-1996 Ambient Air Quality Standard  GB3838-2002 Environmental Quality Standards for Surface Water  GB/T14848-93 Quality Standard for Ground Water  CJ/T206-2005 Water Quality Standards for Urban Water Supply  GB5749-2006 Hygiene Standard for Drinking Water  CJ3020-93 Quality Standard for Water Sources of Drinking Water  GB5084-92 Quality Standard for Irrigation Water  GB15618-1995 Environmental Quality Standard for Soil  GB3096-93 Quality Standard for Urban Environmental Noise  TJ36-79 Hygienic Standard for Design of Industrial Enterprises  GB/T18883-2002 Quality Standard for Indoors Environment

G. POLLUTANTS DISCHARGE AND CONTROL STANDARDS

 GB16297-1996 Integrated Emission Standard of Air Pollutants  GB14554-93 Emission Standards for Odour Pollutants  GB8978-1996 Integrated Wastewater Discharge Standard  GB18918-2002 Standard for Pollutants Discharge from Urban Wastewater Treatment Plant  GB12523-90 Noise Limits for Construction Site Boundary  GB12348-90 Standard of Noise at Boundary of Industrial Enterprises  GB18599-2001 Standard for Pollution Control on the Storage and Disposal Site for General Indusial Solid Wastes  GB5085-1996 Standard for Identification of Hazardous Wastes  GB8172-87 Control standards for Urban Wastes for Agricultural Use  GB16889-1997 Standard for Pollution Control on the Domestic Solid Wastes Landfill Sites  GB 4284-84 Control Standards for Pollutants in Sludge from Agricultural Use

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Annex 2: ENVIRONMENTAL MANAGEMENT PLAN

Environmental Mitigation Measures Location Time Frame Implementation Supervision Impact/Issue Responsibility Responsibility A. Construction Phase Disposal of Dredged Sludge excavation will be undertaken during dry season, so to Construction Construction Contractor PMO,IA, EPB materials reduce water contents. According to the practical conditions, sites/rivers sludge from different rivers will be arranged disposal specifically. For Yunxi River (east of Haier Avenue), Erli River and Sanli River, the sludge will be used for farmland around East Lake. For Yunxi River (west of Haier Avenue), Hucheng River and Wushui River, sludge can be used in forest fields or greening lands inside urban districts. Standard Construction Mitigation measures will include (i) covering temporary soil Construction Construction Contractor PMO,IA, EPB Impacts stockpiles, (ii) minimizing active excavation areas during pipe sites Soil erosion laying, (iii) appropriate re-compaction of pipe trenches, and (iv) installation of sediment fences where appropriate to minimize sediment runoff. Disturbed surfaces, such as re-compacted pipeline trenches, will be re-vegetated to minimize erosion. Soil contamination may be Mitigation measures will include appropriate storage of Construction Construction Contractor PMO,IA, EPB caused by inappropriate hazardous materials in secure, covered areas with secondary sites and storage and disposal of containment. All waste will be removed from sites to approved material storage hazardous construction waste disposal sites. areas materials. Impact on temporarily Mitigation measures for the impact on soil will include the Construction Construction Contractor PMO,IA, EPB acquired agricultural land selection, where possible, of sites (permanent and temporary) sites and that do not occupy agricultural land. Where land is temporarily material storage occupied, appropriate rehabilitation will be conducted following areas completion of construction activities. During excavation of pipeline trenches, topsoil will be stockpiled, stored, and replaced after the laying of pipelines. Loss of topsoil The topsoil from all areas to be permanently covered will be Construction Construction Contractor PMO,IA, EPB stripped and stored in stockpiles. Topsoil will be used for sites re-vegetation works. Construction vehicles, machinery, and equipment be moved or be stationed in designated areas. Access to adjacent agricultural land will be minimized. Siltation into water bodies Mitigation measures will include erosion control measures and Throughout Construction Contractor PMO,IA, EPB appropriate engineering design to minimize generation of project corridor sediment runoff during construction activities. Inappropriate wastewater Mitigation measures will include installation of appropriate Construction Construction Contractor PMO,IA, EPB

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Environmental Mitigation Measures Location Time Frame Implementation Supervision Impact/Issue Responsibility Responsibility disposal septic disposal systems at construction camps and operation camps and operation (construction), IA sites. All construction equipment wash down areas will be (operation) equipped with water collection basins, including oil separators, and sediment traps. Generation of dust Mitigation measures will include water spraying of Construction Construction Contractor PMO,IA, EPB transportation routes and materials handling sites where dust is areas and being generated. Particular attention will be paid to dust access roads suppression adjacent to sensitive receptors such as schools or residential areas. Materials will be stored in appropriate places and covered or sprayed to minimize fugitive dust. Materials will be covered during transportation to avoid spillage or dust generation. Emission from construction Vehicles and construction machinery will be properly Construction Construction Contractor PMO,IA, EPB machinery maintained and will comply with relevant emission standards. areas Noise from construction Construction strength noise controlling, installed noise barriers Construction Construction Contractor PMO,IA, EPB equipment on the closed village(Yangzhou Garden, South Wolong Village, areas North Wolong Village, Guojia Village, Huaxing Garden and maternal and child care service center). Construction will be prohibited between 7:00 pm and 6:00 am adjacent to residential areas. Soil and water Mitigation measures will include appropriate storage of Construction Construction Contractor PMO,IA, EPB contamination from hazardous materials and waste in secure, covered areas with sites and And operation (construction period) inappropriate storage and secondary containment. Hazardous waste will be stored construction and IA (operation disposal separately from non-hazardous waste. All waste (hazardous camps period) and non-hazardous) will be removed from sites to approved waste disposal sites by licensed contractors. There will be no on-site landfills developed at any of the construction sites. Construction waste will be promptly removed from the sites. Burning of waste will be prohibited. Loss of or damage to All works will be carried out so damage or disruption to At construction Construction Contractor PMO,IA, EPB vegetation vegetation is minimized. Trees or shrubs will only be felled or sites removed if they impinge directly on the permanent works or necessary temporary works. After pipe laying construction, the trenches will be re-vegetated. Traffic congestion Construction scheduling will consider impacts on traffic Construction Construction Contractor PMO,IA congestion. In conjunction with the relevant authority, traffic sites plans will be prepared prior to commencement of construction in the congested urban centers.

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Environmental Mitigation Measures Location Time Frame Implementation Supervision Impact/Issue Responsibility Responsibility Interruption to municipal Construction activities will be planned to minimize duration of Adjacent to Construction Contractor PMO,IA services disturbance to utility services. construction sites Impacts on public safety Mitigation measures will include implementation of safety Construction Construction Contractor PMO,IA measures at the construction sites to protect the public, sites including warning signs to alert the public of potential safety hazards and barriers to prevent public access to construction sites. Historical, Cultural, and Should a historical, cultural, or archaeological be encountered Construction Construction Contractor PMO,IA, Relics Archaeological during construction, all activities will halt and an established sites Bureau Sites encountered during action plan will be enacted. construction B. Operation Phase Wastewater Collection During heavy rainfalls, diluted sewage can be discharged to the Wastewater Operation IA EPB river systems, thus impact will generally be minimized by the interception higher dilution in the rivers during the wet seasons. Care of the system and design of combined sewer overflow will be required to reduce pump stations impact of pollution. Wastewater Treatment After the Jiaozhou WWTP’s extension in both capacity and Wastewater Operation WWTP Operator EPB Adequate treatment of treatment process, the project impact to its normal operation is treatment plant collected wastewater acceptable, as the newly added wastewater has similar site characters with the originals treated in the WWTP. Pre-treatment of industrial Industrial establishments will be required to comply with formal Wastewater Operation WWTP Operator EPB wastewater pre-treatment regulations. treatment plant site Wastewater Sludge The sludge of WWTP is sent to Qingdao Diendi Biological Wastewater Operation WWTP EPB Disposal Technical Company and produced into plant fertilizers through treatment plant biological degradation and harmless treatment. River Rehabilitation It is calculated out in condition of taking 10% perennial runoff Water courses Operation IA EPB as ecology water, the outflow is about 0.04m3/s, it can be guaranteed in the 50% return period. PMO = project management office, IA = implementing agency, EPB = environmental protection bureau, WWTP = wastewater treatment plant.

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Annex 3: ENVIRONMENTAL MONITORING PLAN (1) Environmental Monitoring Program for Elihe Water Retention Reservoir Component Annual Phases Monitoring Environmental Monitoring Monitoring Unit cost Total Monitoring Item cost (CNY/ cost duration elements points (number) frequency (CNY) (CNY) year) (CNY) Dredging 4 times/year, 3 Air sections (4 TSP, odor 300 4,800 9,600 times/day points) Water dams and 3 times/year,1 Water quality sensitive points SS, CODMn, BOD5, NH3-N,TN, TP, Oil days/time,1 600 7,200 14,400 (4 points) time/day construction 4 times/year, 1 duration Boundaries and days/time, 2 daytime 34,560 (2 years) Noise sensitive points LeqdB(A) times/day 70, night 2,880 5,760 (4 points) each one time in 110 daytime and night Dredging Dredged sections Heavy metal ( As, Pb, Cd, Cu, Zn, Hg, Cr) 1 time /year 800 2,400 4,800 Sludge (3 points) Sub-Total (Yuan) 17,280 34,560 Water dams and 1 time/year, 3 Air sensitive points TSP,odor 300 1,200 1,200 days/time operation (4 points) duration Water dams and 1 time/year,1 3,600 (1 year) Water quality sensitive points SS, CODMn, BOD5, NH3-N,TN, TP, Oil day/time,1 600 2,400 2,400 (4 points) time/day Sub-Total(Yuan) 3,600 3,600 Total (Yuan) 38,160

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(2) Environmental Monitoring Program for Integrated Urban River Improvement Component Monitoring Environmental Monitoring points Monitoring Unit cost Annual cost Phases Total Monitoring Item duration elements (number) frequency (CNY) (CNY/ year) cost (CNY) (CNY) Dredging sections (4 4 times/year, 3 Air TSP, odor 300 4,800 14,400 points) times/day Water dams and SS, COD , BOD , 3 times/year,1 Water quality sensitive points (4 Mn 5 600 7,200 21,600 NH -N,TN, TP, Oil days/time,1 time/day points) 3 construction 4 times/year, 1 duration Boundaries and 54,240 days/time, 2 times/day daytime 70, (3 years) Noise sensitive points (4 LeqdB(A) 2,880 8,640 each one time in points) night 110 daytime and night Dredged Dredging sections (4 Heavy metal ( As, Pb, 1 time /year 800 3,200 9,600 Sludge points) Cd, Cu, Zn, Hg, Cr) Sub-Total(Yuan) 18,080 54,240 Water dams and 1 time/year, 3 Air sensitive points (4 TSP,odor 300 1,200 1,200 days/time points) operation Water dams and SS, CODMn, BOD5, 1 time/year,1 duration Water quality sensitive points (4 600 2,400 2,400 6,800 NH3-N,TN, TP, Oil day/time,1 time/day (1 years) points) Dredged Dredging sections (4 Heavy metal ( As, Pb, 1 time /year 800 3,200 3,200 Sludge points) Cd, Cu, Zn, Hg, Cr) Sub-Total(Yuan) 6,800 6,800 Total(Yuan) 61,040

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(3) Environmental Monitoring Program for Urban Sewage and Drainage Component Monitoring Environmental Monitoring points Monitoring Unit cost Annual cost Phases Total Monitoring Item duration elements (number) frequency (CNY) (CNY/ year) cost (CNY) (CNY) Air Pump stations and TSP, odor 4 times/year, 3 sensitive points (4 times/day 300 4,800 9,600 points) Pump stations and 3 times/year,1 construction SS, CODMn, BOD5, Water quality sensitive points (4 days/time,1 time/day 600 7,200 14,400 duration NH3-N,TN, TP, Oil points) 29,760 (2 years) Boundaries and 4 times/year, 1

sensitive points (4 days/time, 2 times/day daytime 70, Noise LeqdB(A) 2,880 5,760 points) each one time in night 110 daytime and night Sub-Total(Yuan) 14,880 29,760 Pump stations and 4 times/year, 3 Air sensitive points (4 TSP, odor 300 4,800 9,600 days/time points) Pump stations and SS, CODMn, BOD5, 3 times/year,1 Operation Water quality sensitive points (4 600 7,200 14,400 NH3-N,TN, TP, Oil day/time,1 time/day duration points) 29,760 (2 years) 4 times/year, 1 Pump stations and days/time, 2 times/day daytime 70, Noise sensitive points (4 LeqdB(A) 2,880 5,760 each one time in night 110 points) daytime and night Sub-Total(Yuan) 14,880 29,760 Total(Yuan) 59,520

Note: Indicative cost and will be finalized at late stage.

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(4) Environmental Monitoring Program for Hucheng River Rehabilitation Work (new sub-component in 2015) This new sub-component was added in 2015, with the inclusion of new additional Hucheng River Branch rehabilitation work. Due to minor scope of works of the sub-component and similarity with the existing project works, the monitoring program is similar to the other sub-components. The monitoring program for river rehabilitation work and drainage network work of the new sub-project is shown in the following table.

Monitoring Environmental Monitoring Unit cost Annual cost Total cost Monitoring points Monitoring Item Total (CNY) duration elements frequency (CNY) (CNY/ year) (CNY) Residential nearby Air PM , TSP 1 times/2 months 300 1,800 3,600 construction site 10 construction 1day/month, (2 years) Residential nearby each one time in Daytime 70, Noise L , L 2160 4,320 construction site d n daytime and Night 110 night 9,920 each one time in Branch of Hucheng pH, NH -N, TN, TP, COD, Dry season and Water quality 3 600 1,200 1200 Operation River DO, Anionic surfactants wet period one (2 years) year Branch of Hucheng pH, Cd, Pb, Cr, Hg, Organic Dredged Sludge 1times/year 800 800 800 River matter Total(Yuan) 9,920

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