38422 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

This document has been produced by the Consortium SOGREAH Consultants as part of the FASEP Grant (French Government Grant) to Provincial Government (Job Number 1350185)

This document has been prepared by the project team under the supervision of the Project Director following Quality Assurance Procedures of SOGREAH in compliance with ISO9001.

Index - A

Index DISTRIBUTIONLIST CONTACTADDRESS

1 LUCRPO (Liu Jinxing, Zhao Wei, Liu [email protected], Dong) [email protected]

[email protected] 2 DGTPE/ME [email protected] g browder@worldban k.org 3 The World Bank (Mr. Greg Browder) [email protected]

4 SOGREAH (Head Office, SOGREAH [email protected] ) g [email protected] .cn

_____s

1. Introduction...... 1 I.1. General...... 1 1.2. Project Organization...... 2 1.3. Background to Environmental Assessment Studies ...... 2 1.4. Overview of Environmental & Social Safeguards Documentation...... 3 2 . Project Components Description ...... 4 2.1. Summary of LMC-2 Components ...... 4 2.2. Water Supply Sector ...... 8 2.3. Wastewater Sector ...... 8 2.4. Solid Waste Sector ...... 9 2.5. Summary of LMC-2 Cost Estimate ...... 11 2.6. LMC-2 Implementation Schedule...... 12 3 . Environmental Baseline Situation ...... 14 3.1. Physical Setting...... 14 3.2. Ecological Setting...... 15 3.3. Social & Economic Setting ...... 16 4 . Impact Assessment and Mitigation ...... 17 4.1. Anticipated Benefits from LMC-2 ...... 17 4.2. Impacts Associated to Project Location ...... 18 4.3. Impacts & Mitigations Associated to Construction Activities ...... 20 4.4. Impacts & Mitigations Associated to Operation Phase ...... 22 5 . Analysis of Alternatives ...... 25 5.1 . With and Without LMC-2 Project...... 25 5.2. Water Supply Components ...... 25 5.3. Wastewater Components...... 26 5.4. Solid Waste Components ...... 26 6 . Public Consultation & Information Disclosure...... 27 7. Environmental Management Plan ...... 31 7.1. Organization ...... 31 7.2. Activities ...... 32 7.3. Capacity Building ...... 33 7.4. costs ...... 33 Table 1 : Summary of LMC-1 Sub-components ...... 5 Table 2: Wastewater Flows & Distribution Entering WWTPs ...... 9 Table 3: Main Characteristics of Solid Waste Sub-Components ...... 10 Table 4: LMC-2 Cost Estimate ...... 11 Table 5: Main Climate Parameters in Project Area ...... 14 Table 6: Pollution Abatement Assessment (mg/l) ...... 18 Table 7: Summary of Public Consultation and Information Disclosure ...... 28 Table 8: Summary of Budgets for Sub-project’s Construction ...... Table 9: Summary of Budgets for Sub-project’s Operation...... 34

Figure 1: Flow chart of environmental & social safeguard document preparation ...... 3 Figure 2: Project Location...... 4 Figure 3: Summary 5-years Implementation Program ...... 13 BOT Built, Operate & Transfer CEA Consolidated Environmental Assessment csc Construction Supervision Company CSEMP Construction Site Environmental Management Plan DI Design Institute DRA Design Review and Advisory (services) EA Environmental Assessment EMP Environmental Management and Monitoring Plan EPB Environmental Protection Bureau (of SEPA) FSR Feasibility Study Report IA Implementing Agency GHG Green House Gases LMC-1 Liaoning Medium Cities Project - Urban Transportation LMC-2 Liaoning Medium Cities Project - Urban Environment LRB Liao River Basin LRBP Liao River Basin Project LUCRPO Liaoning Urban Construction Renewal Project Office NCP Nuisance Control Plan PAP Project Affected Persons PMO Project Management Office PPE Personal Protective Equipment PRC People’s Republic of China RAP Resettlement Action Plan SElA Summary Environmental Impact Assessment SEPA State Environmental Protection Administration SRS Standard Site Inspection Review Sheet WB World Bank WTP Water Treatment Plant WWTP Wastewater Treatment Plant

MU Area Unit (0.0667 ha) RMB Chinese Yuan (Renminbi) USD United States Dollar Conversion rate: 1 USD = 8.0 RMB Db decibel ha hectare mg/L milligram per liter km kilometer km2 square kilometer 2 m square meter mm millimeter m/s meter per second m3/day cubic meter per day UY ton per year

A2/0 Anaerobic-anoxic-oxic biologic phosphorus & nitrogen removal BOD5 Biochemical Oxygen Demand (5 days) COD Chemical Oxygen Demand COD Cr COD measured through reduction with dichromate acid COD Mn Permanganate index NH3-N Ammonia Nitrogen NO2 Nitrogen dioxide ss Suspended Solids TP Total Phosphorus TSS (or TSP) Total Suspended Solids (or Total Suspended Particulates) Liaoning province covers a total area of 145,900 km2 and has a total population of about 42 million. The province has jurisdiction over 14 cities, 17 county level towns and 17 counties. The provincial capital is . Liaoning is a coastal province in the southern part of Northeast China and is a key link between China’s northeast economic zone and the Bohai Sea Rim economic zone. The Liao River Basin within Liaoning, covers an area of 42,000 km2 of which 27,000 km2form the Huntai River Basin (Hun and Taizi rivers’) and the remaining 15,000 km2 belong to the Liao river catchment proper. These three main rivers flow in an approximately Northeast-Southwest direction across the province. The LRB is since long recognized as one of the most environmentally degraded basin within China, and the State Council has declared pollution control and other environmental improvement measures as a key national priority.

The lack of proper water resources management in the LRB, particularly the lack of provision for treatment facilities of wastewater from various sources, associated with the lack of dilution of wastewater and assimilative capacity for the contaminants in the LRB rivers, mainly during the ice-bound period, have resulted in severe pollution of surface water. During the dry (cold) season, over 93% of surface water bodies exceed Category V of national surface water quality standards by sometimes up to 27 times standard values. The effect of poor water quality on the local economy is even exacerbated by the limited water resources available in the basin when compared to its high density of population. Although 81% of surface water resources and 43% of groundwater resources are utilized, water supply cannot meet the demand. At present, the annual water supply is about 7.8 billion m3 while the demand is 8.3 billion m3, leaving 500 million m3 water supply deficit each year in the province. Average surface water resources in the Basin are estimated at 535 m3 per capita, which is about 23% of the national average. The contamination of groundwater results from the pollution of surface water with public health risk through water supply. There are an estimated I12,400 village residents drinking polluted ground water in the cities concerned by the LMC-2.

This sensitive situation has for some time been put under consideration at the highest level of the State. The Liaoning Provincial Government established under the direction of the Vice- governor a Leading Group to prepare and submit to the State Council an outline master plan summarizing the approach to be adopted in the control of water pollution within the Liao River Basin. The urgent nature of the environmental problems within Liaoning Province has prompted the identification and establishment of a major environmental program funded by the European Union (EU) in 1998, known as the Liaoning Integrated Environmental Program (LIEP). In 2006, the Liaoning Government published the “Eleventh-five Year Plan for Environmental Protection in Liaoning Province” which provided a comprehensive framework for water pollution prevention including industrial pollution control, water pollution prevention in Liao River Basin and the Bohai Sea, provision of wastewater treatment, agricultural pollution control, enhancement of ecological environment management, and institutional strengthening and training.

The World Bank has strongly contributed to the environmental efforts in Liaoning, particularly in the Liao River Basin, with a continuous financial support in the development of environmental works associated with wastewater treatment, water supply and municipal solid waste disposal: The Liaoning Environment Project (Loan US$ 110 million, 1994-2002) and the Liao river Basin

’ After their confluence, the resulting river is called the Daliao River until it reaches the Bohai sea at Project (Loan US$ 100 million, 2001-2007). Following discussions held early 2005 between the Ministry of Finance and the World Bank, the Liaoning Medium Cities Urban Infrastructure Project - Phase 1 has been selected for inclusion into the WB loan program of fiscal year 2006/7. The urban environment components part of the project (LMC-2) includes 12 sub- components (5 for water Supply, 3 for solid waste, 4 for Wastewater, including 1 for wastewater associated with river works) distributed over 7 cities (, , , Haicheng, , and Yingkou). The LMC-2 should be implemented over 5 years from July 2006 to June 2010.

Furthermore, the Bohai Sea is a part of the coastal waters of China, a marginal semi-closed water body in the west part of the Pacific Ocean that connects with the Yellow Sea via the Bohai Strait. The total Bohai Sea area is 77,000 km2, with an average depth of 18 m. More than 1,000 km2 is affected by the red tide phenomenon principally in vicinity of Liaodong Bay where the polluted waters of the Liao river basin are discharged. Pollution deterioration of the Bohai seashore area results in frequent red tides, deterioration of ocean environment, decline of wetland and species and decline of fisheries. LMC-2, like the Bank’s previous urban environment projects, will contribute to a reduction in pollution load into the Liao River Basin that discharges into the Bohai Sea.

The Liaoning Urban Construction Renewal Project Office (LUCRPO) has been designated by the Province as its representative for matters pertaining to the loan (application and administration). LUCRPO appoints technical assistance (TA) consultants for the project, selects the Tendering Companies, and upon recommendation of the technical assistance consultants, designates the Construction Supervision Company.

At provincial level, several agencies are involved at various degrees of responsibilities: Provincial Planning Commission, Finance Department, Construction Department, Provincial EPB, Water Resources Department (WRD), Provincial Geology and Mineral Bureau (GMB), Provincial Public Health Bureau. At municipal level the provincial Audit Bureau has delegated the audit responsibility to the Municipal Audit Bureaus. All project cities are municipal level city excluding Haicheng. Anshan Municipal Audit Bureau will be the responsible agency for Haicheng City. Each project City has its own Leading Group and that group works through a Local Project Office, which represents the Project City or the Municipality.

The Project technical and financial preparation was carried out by Chinese local organizations and has been supported by various sources of international assistance including SOGREAH, the Design Review and Advisory (DRA) Consultants to the LUCRPO and the Project Management Office (PMO) responsible for the overall preparation of the project. For the 12 sub- projects, 3 Design Institutes (Dl’s) were appointed by the various Sub-project Owners (POs) to carry out feasibility studies and to produce Feasibility Study Reports (FSR). The POs appointed the Liaoning Academy of Environmental Sciences (LAES) to carry out all the individual EAs except the Solid Waste sub-component EA for Fushun (prepared by the Fushun Environmental Sciences Institute) and the Water Supply sub-component EA for Xingcheng (prepared by the Shenyang Environmental Sciences Institute). LAES was also appointed to prepare the Consolidated EA for LMC-2 as well as the 7 Environmental Management Plans (one per concerned city).

The consolidated EA has been carried out strictly in accordance with National and Provincial laws, codes and criteria relating to environmental protection. It satisfies the Chinese EA system, whilst at the same time gives full attention to the requirements of the World Bank‘s environmental safeguards, and more precisely those of the Operational Policy 4.01 for EA. According to the World Banks safeguard policies, four documents are required by the World Bank for project approval to address the related environmental and social issues, that is, consolidated EA, EA summary, consolidated EMP and consolidated RAP. All these reports are prepared by SOGREAH based on the individual EA, EMP and RAP reports with the assistance of local consultants. The flow chart of the whole process is shown in the following

FIGURE1: FLOWCHART OF ENVIRONMENTAL & SOCIAL SAFEGUARD DOCUMENT PREPARATION LMC-2 Project addresses 7 cities in Liaoning Province (Anshan, Fushun, Gaizhou, Haicheng, Panjin, Xingcheng, Yingkou) and 1 1 sub-components related to Water Supply (5), Wastewater (4), Solid Waste (3). As such, they all fit into the regional planning objectives to improve and develop environmental management infrastructures in order to: meet the increasing domestic and industrial water demand in the future; support urban growth and economic development; ensure a healthy water supply to all; reduce rivers and marine pollution by domestic and industrial effluents and waste:

@ improve population health and quality of life.

The project locations are listed as the following figure:

FIGURE 2: PROJECT LOCATION The list of sub-components and their main characteristics are presented in the following Table 1.

TABLE1 : SUMMARY OF LMC-1 SUB-COMPONENTS

-No Sector Project Description A4 ws Anshan Water Supply WTP and Network Uparadina: - Upgrading of Dazhaotai WTP to remove iron and manganese,

- 122 km of distribution pipeline extension, upgrading and rehabilitation, - Replacement of 65,000 water meters. - The total cost is estimated as 315.8 million RMB. F-I Fushun Solid Waste Expansion & Upgrading - solid waste collection, storage and transfer to disposal and upgrade 14 existing old collection stations - a sanitary landfill and associated leachate treatment / disposal facilities, with daily capacity of 600 tonlday and 20 years service life.

- Pushasing 17 compact vehicles and 18 landfill operation machines.

- The total cost will be 83.3million RMB. - The total land acquisition is 20 ha: the volume is up to 5.35 million m3. F-2 ww Fushun Wastewater Proiect includes two subcomponents: (1) Fushun Sewerage Upgrading, and (2) Fushun Integrated River Works (Eastern Part of Hun River). The total cost is 242.8 million RMB.

Fushun Sewerage Upgrading - Newly construct Liushan-Guchengzi Sewerage System: 12.636 km interceptors and 3 pump stations.

- Rehabiliate Urban Sewers/Channels: 16.901 km wastewater interceptors, 9.77 km open channels and 5.059km sub-sewers;

- Total cost for sewers rehabilitation is estimated as 37.1265 million RMB.

Fushun Integrated River Works

- Flood Protection Embankment: construct concrete slat revetment along the river bank from the east of Tianhu Bridge tc the south of Zhangdang Bridge. Total length will be 8.1km anc cost will be 42.375 million RMB. - Drainage System: construct 5.54km sewer pipelines and 2 pumF stations. 17.25 million RMB.

- Road Construction: 8.41km road from Tianhu Bridge tc Zhangdang Bridge, the total cost is estimated as 69.22 millior Gaizhou Wastewater Proiect - 50,000 ton/day WWTP in Phase I, (to be enlarged in 100,000 ton/day in Phase II) - Newly construct 3.65 Km Interceptor - Upgrade / newly construct 16.38km Sewers - Newly construct 1 Seweage Pump Station - The total cost is 142.2 million RMB. Haichena Water Supplv Uwrading: - Extend and upgrade Zhongyangbao Water Resouce with the extra increase of 10,000 m3/day, newly construct 3 wells nearby the plant so to enlarge the water production capacity from 20,000 m3/dayto 30,000 m3/day; - Entend Zhongyangbao Water Treatment Plant with the extra increase of 10,000 m3/day, so the water treatmect and distribution capacity can be increased from 20,000 m /day to 30,000 m3/day;

- Extend and upgrade Xiangtang Miaoguan Water Resource, newly construct 13 wells and guarantee the water production capacity can be 60,000 m3/day;

- Extend Yuhuangshan Water Distribution Plant from 40,000 m3/day to 100,000 m3/day - Upgrade / newly construct 74.1 km water distribution pipelines.

- Install 25,000 water meters. - The total cost for this project is estimated as 136.4 million RMB. P-I Paniin zndWastewater Proiect: - 50,000m3/day Shuangtaizi Wastewater Treatment Plant in Phase I and 100,000 m3/day in future Phase II, - 11.245 km interceptor sewers in Shuangtaizi for drainage of existing wastewater flows and future flows generated from new development to the east of this old city centre, - rehabilitation of 7.59km sewers (wastewater and stormwater) in Xinglongtai to alleviate flooding, and - newly construct 1 pump station and rehabiliate 3 old pump stations in Xinglongtai district. - The total cost for this project is estimated as 351.6 million RMB.

P-2 WS Paniin Water Distribution Network Upgrading: - Pipeline Upgrading: 133.5 km Water Distribtion Pipeline Upgrading (87.54 million RMB) - Water Loss Monitoring Equipments: Purchasing 4 sets of water loss Monitoring Equipments and corresponding vehicles (2.42 million RMB) - Water Meters (and Meter Chambers): Install 205 bulk meters for Residential Districts (0.08 million RMB); Replacement of 93,262 water meters and 6,217 underground meter chambers (33.13 million RMB) - The total cost will be 177.6 million RMB

P-3 _Isw Paniin Solid Waste Treatment - solid waste collection, storage and transportation system: the new collection system is bag collection combined with solid waste station, and the transportation system is twenty 8-ton compaction vehicles for Phase I. - a new sanitary landfill site and associated leachate treatment - The total cost will be 241.9 million RMB. x-I ws Xinachena Water SUDDIVDistribution Umradina: - Upgrade 24682.4 m water distribution networks (DNI 00-1000) - Construt two boosting pump stations - Water meters system upgrading: install 2200 water meters and 220 meter wells. - The total cost is estimated as 45.9 million RMB. Y-I Yinakou 2"dWastewater Proiect: - 100,000m3/day Eastern Wastewater Treatment Plant (WWTP). The proposed WWTP is located in the waste evaporation reservoir of a abandoned salt plant, with the area of 8.71 ha. The ultimated planed capacity for this plant is 300,000 m3/day.

- Drainage and interceptor sewers in southern and eastern districts, 68.035 km.

- Upgrade two pump stations and newly construct 6 pump stations - - The total cost is estimated as 478.9 million RMB. Y-2 -sw Yinqkou ED2 Solid Waste Treatment - A new sanitary landfill site and associated leachate treatment. The service life of the proposed landfill site will be 22 years with two phases, for Phase I (12 years' service life), the average daily waste production is 500 ton/day, and for Phase II (up to the woverall 22 year's life), is 680 ton/day. - Solid waste collection, storage and transportation system: the new collection system will be totally changed to bag collection system, and proposed to purchase twelve 8-ton compactors (4 times daily transportation) for Phase I and four 8-ton compactors (4 times daily transportation) for Phase II. - The closure and remediation of the existing dumping station close to the Bohai seashore. - The detailed design will be with the help of GEF. - The total cost for this project is estimated as 113.7 million RMB. Y-3 ws Yinakou Water SUPD~VUDaradina: - Contruct a 70,000m3/d WTP, located in a mountain 28 km away to Shimen Reservoir. (This new resource is required because 90,000m3/dof existing Yangjiadian WTP will be transferred from Yingkou City to Yingkou EDZ.)

- Construct corresponding raw water intake point in Shimen Reservoir and transfer pipelines 31.3km - Upgrade water distribution system: newly construct 46.216 km and upgrade 13.351 km - Newly construct reclaimed water pipelines for 65.263km. - The total cost is estimated as 350.8 million RMB.

According to the Feasibility Study Reports, the project will increase the daily water supply by 130,000 m3 in Haicheng (30,000 m3 for Haicheng Zhongyangpu WTP and 100,000 m3 for Haicheng Yuhuangshan) from 2 wellfields located along the Haicheng river, and by 70,000 m3 in Yingkou from the Shimen Reservoir.

Water treatment will follow conventional sand filtration process, including successively degriting, aeration, sand filtration and chlorination. Sludge from backwash water settling tank will be thickened and dewatered by belt press before safe disposal in a landfill. During feasibility studies, hydro-geological and hydrological evaluations were performed in order to assess the suitability (quality and quantity) of the water resources under consideration to satisfy in a sustainable manner the water demand: the Haicheng River Well Fields and the Shimen Reservoir.

The other 3 water supply projects focus on distribution system upgrading and rehabilitation. There is no additional production capacity, but consumption will increase due to the significant reduction of water losses to be achieved under LMC-2. In Anshan, the existing WTP will be upgraded to remove Fn and Mn; due to the high groundwater quality, there is no sludge from this plant.

Anaerobic-anoxic-oxic (A20) process has been adopted in the design of the three WTPs (Panjin, Yingkou and Gaizhou) in order to remove N and P to a suitable concentration based on the effluent requirements. The A2/0 process (Anoxic/Anaerobic/Oxic) is similar to the NO process, however anoxic tanks are incorporated into the treatment scheme. The anoxic tanks are located after the anaerobic selector and prior to the oxic reactors. Nitrates are returned to the anoxic tanks from the oxic reactors via a pumped internal recycle line. The oxic, or aerated, zone has "free oxygen" (02) available for microbiological respiration; the anoxic zone has nitrate; and the anaerobic zone has neither.

C& Pe ut 21 Influent Effluent

clarifier

i Internal recirculation i t .._.....~ ...._._...... ~ .... ~ ...... __.. i Excess i skudge 1 ReIum sludgs L ___._.___.___._...~ .... ~ ....*__.__.___ ..__..._...... _...._...... _ ...... I...... _... II.... ~ ..-....-.-...*

Three-stage activated sludge process with metal addition

According to the projection of industrial-to-domestic wastewater ratios entering WWTPs as shown in Table below, the WWTPs in the three wastewater project cities (Fushun, Yingkou and Panjin) will have to treat more industrial wastewater than domestic wastewater in the future.

TABLE2: WASTEWATERFLOWS &DISTRIBUTION ENTERING WWTPs

I I I Short term (2005) 1 Medium term (2010) I Long term (2025) I I FUSHUN* I DOMESTIC I 38 I 36 I 37 I INDUSTRIAL 62 64 63

GAIZHOU DOMESTIC 62 68 53

INDUSTRIAL 38 32 47

YlNGKOU DOMESTIC 43 46 41

INDUSTRIAL 57 54 59

PANJIN DOMESTIC 37 41 47

I I INDUSTRIAL I 63 I 59 I 53 I

INTEGRATEDRIVER WORKS: Fushun Eastern Hunhe Integrated River Works is also considered as a part of Fushun wastewater sub-project due to its drainage component (6.36 km of Im diameter main and connecting branch sewers). Moreover, it also includes flood control component (8.1 km dike with concrete side slope) and road component (8.4 km of 20 to 33 m width). Investment cost is estimated at million RMB 17.25 million for drainage, RMB 42.38 million for flood control and RMB 69.22 million for road construction.

LMC-2 includes also the technical closure of two former dumping sites in Fushun and in Yingkou EDZ. The two dumping sites will be contoured to an appropriate side slope and will be capped, with collection of Leachate and transport to municipal WWTP for treatment. A monitoring program will be implemented. In addition, three new landfills are proposed under LMC-2 in the cities of Fushun, Panjin and Yingkou.

Main characteristics of the SW sub-components are provided in the following Table.

TABLE3: MAIN CHARACTERISTICS OF SOLID WASTE SUB-COMPONENTS ’ Item Current population serviced 570,000 1,383,000 262,700 (2005) Future Population serviced (2010) (2020) 740,000 SW production per day 2005 1383 610 436.96

2010 ~ ffd 1398 503.26 2020 1 1573 1 840.93

Collection system (Handcarts, No, Handcarts’ bins’ Bags’ Bags, compactor compactor compactor bins, compactor trucks,. . .) 1 1 trucks trucks trucks In the southeast SHuguang of Wanghua area, Sangang Mountain, Landfill location area in the west Northwest of Lutun Town I- of Fushun Panjin I Landfill area I ha I 18 I24 32.65 I 1 Land acquisition I ha I 0 IO 1 Landfill storage capacity j 103m3I 4650 1 3611

Life duration of landfill 17 l2 22 (Phase II) I ~ Distance from city km 20 25 11.24 I 20000 10,000 (Phase I) m3 12000 1 1 20,000 (Phase II) I Leachate on-site treatment (type) I - I Recirculation 1 Recirculation Recirculation I I Leachate final disposal I - I WWTP 1 WWTP WWTP 1 1 Earthworks excavations j m3 j N/A I - 111,700 I 1 Earthworks fill j m3 1 N/A 1 - 2,246,900 I 1 Earthworks spoils I m3 I N/A I o 2,135,200 1 Biogas Recovery System Gas well Gas well Vertical gas pipe I Natural Natural dispersion Biogas disposal Flaring dispersion I I Biogas production Im3/year/ N/A I 5745500 12,720 1 102.12 (Phase I) Investment cost 141.90 (Phase I &

Million R Operation cost 3.71 MBly Operation cost for collection & RMBlTo 16,95 17.21 treatment per ton of waste n TABLE4: LMC-2 COST ESTIMATE

Upgrading Panjin Solid Waste 241.885 118.015 17.682 93.41 8 163.453 9.804 Treatment 4 (Xingcheng) Xingcheng Water 45.861 32.895 4.596 4.823 24.383 2.685 Supply Upgrading

Project Management 12.000 1.500 and Consultants Biding and 8.000 1.000 Procurement 1.600 0.200 Asset Management Public Utility 20.000 2.500 Strengthen(GEF) Yingkou,Fushun and Panjin Solid Waste 12.000 1.500 Study(GEF) Fushun and Huludao Wastewater 8.000 1.ooo Plan(GEF)

7 Front-end Fee Project Works/ Equipment Other Counterpart WB Loan Total Cost Construction / Material cost Fund ( Million Project (Million (Million ( Million ( Million ( Million us RMB) RMB) RMB) RMB) RM B) Dollar) 0.054 0.000 0.000 0.000 0.000 0.007 Front-end Fee 2,742.551 1,543.897 524.404 449.314 1,357.496 173.132 Total I it I I I I I I Liaoning is a coastal province in the southern part of Northeast China which covers a total area of 145,900 km2 and has a total population of 42 million. The province has jurisdiction over 14 cities, 17 county level towns and 17 counties. The provincial capital is Shenyang. The Liao River Basin, with a total catchment area of 220,000 km2 accounts for 48% of the total land area of Liaoning Province. The rivers in the Basin drain through 11 of the most important industrial urban centres and cross large areas of agricultural land before discharging into the Bohai Sea.

The climate in the basin is characterized by distinct seasons. Spring and summer are mild and the winter period from November to March is extremely cold, with minimum temperatures in January as low as -30°C. This is reflected in the long frost periods for the project cities, ranging from 130 to 150 days. The average annual precipitation in the LRB is between 350 and 1200 mm and increases from northwest to southeast (see Table below).

r PARAMETER ANSHAN & FUSHUN PANJIN Xtn~cnEw Y~NGKOU HAICHENG Highest Temperature ("c) 38.4 36 34.8 32.9 33.5 I Lowest Temoerature ("cl 1 -30.4 -29.9 -1 -22.8 1 -28.7 I Average Temperature ("c) 8.7 7.2 9.2 9.8 8.7 Annual Precipitation (mm) 713.5 967.6 65 1 590.5 695 Average Humidity (%) 63 69 66 67 66 Average Wind speed (mls) 3.7 2.0 3.7 3.3 3.6 Prevailing summer wind S sw sw sw sw Average sunshine (hrs) 2540 2425 2888 2905.5 2880 Frost period (days) 142 137 146 160 153 Soil frost depth (m) 1.3 1.2 to 1.4 1.I 1 .I 1 .I

The denomination of Liao River Basin in Liaoning Province includes 3 independent river basins that discharge into the Bohai Sea: the Liao River proper, the Daliao River and the Xiaoling River. The available water resources in the LRB are limited. Average surface water resource in the catchment area is 535 m3 per capita per year, which is only 20% of the national average. Water resource available for agriculture is 220 m3 per mu (3,300 m3 per hectare) or 12% of the national average. River flows in the LRB vary dramatically in different months and seasons. In a typical year, July and August flows amount to 60% of the annual flow while that in the driest month (February) amounts only to 0.1% of the yearly total. In many stretches of LRB rivers in Liaoning province, there is little natural flow whereas wastewater flows are discharged from various industrial, municipal and area sources during the dry season (December to March).

Although Liaoning part of LRB is one of the most concentrated areas for urban centers and industrial operations in China, there are only few operating municipal wastewater treatment plants and limited industrial wastewater treatment capacities (more than half of median to large, and almost all small industrial operations do not have any wastewater treatment facility). In the meantime, wastewater from point sources in Liaoning province is estimated to reach a total 2.1 billion cubic meters per year containing over 643,000 tons of Chemical Oxygen Demand (COD) in the year 2005. Of this amount, approximately 70% of the wastewater and COD are from industrial sources and 30% from municipal sources, respectively

The lack of provision for treatment facilities of wastewater from various sources, compounded with the lack of dilution of wastewater and assimilative capacity for the contaminants in the LRB rivers, have resulted in severe pollution of surface water bodies. During the dry season, pollution is aggravated by the icebound phenomenon which reduces the natural aeration of water and the natural bacterial degradation of organic matter. During winter, over 93% of surface water bodies are worse than the Category V national surface water quality standards, sometimes by up to 27 times. Year round, 90% of the monitoring stations and 100% of the city sections of LRB Rivers within Liaoning boundary exceed Category V. Water quality in LRB rivers is reportedly the worst among the seven largest river basins in China.

The sub-projects are located in urbanized or agricultural setting where a majority of the native flora and fauna has been replaced with species adaptable to these sometimes inhospitable environments. Common animal species in these urban centres include badger, roe deer, pheasant, egret, and other urban dwelling species. However, upland regions which are not used for agriculture consist generally of forest cover including species such as poplar, larch, willow, oak, dragon spruce, fir and northeast China ash.

At the downstream part of Shuangtaizi River and about 30 km southwest of Panjin, there is a large area of wetland of high ecological value. Set up in 1985, the Shuangtaizi Hekou National Nature Reserve covers a total area of about 80,000 hectares. This vast area of reeds and marshes provides favorable conditions for feeding and breeding of several bird species. More than 240 species of birds, mainly waterfowls, have been observed in the Reserve. The Reserve is particularly important as the most southern breeding place for the famous Red-crowned Crane (together with other major wetlands in the Songhua Basin) and as one of the few significant breeding places in the world for the rare black mouth gull. With the development of the petrochemical industry and the growth of Panjin city, the Reserve is threatened by oil exploration, land use and farming activities. Outside the core “fully protected” area, there is a buffer zone where there is reed cropping and some small scale oil extraction, all of which are impacting the Reserve. Modification of the hydrological pattern has already reduced the area of salt marshes favorable to Saunder’s Gull, Terns and Waders. Pollution from wastewater discharges upstream of the wetland are suspected to be the main cause of a decline in bio- mass of crab, shrimp and shellfish which affects the food base availability for migratory birds.

Bohai Sea is a part of China’s coastal waters and is a marginal sea in the west part of the Pacific Ocean. The Bohai Sea is a semi-closed water system which connects with the Yellow Sea through the Bohai Strait. It consists of three bays, Liaodong Bay, Bohai Bay and Laizhou Bay. Yingkou and Yingkou ED2 are next to the Bohai Sea coastline, Panjin is 30 km from Liaodong Bay. Before the 198Os, more than 200 species of fish and shrimp were recorded in the Bohai Sea. More than 100 species could be caught through normal fishing activities. The annual fishing production was ranging from 500 to 700 thousand tons, which accounted for 30% of China’s fishing production. Because of sand beach formations shellfishes were an important part of the production and marine culture developed rapidly. However, since the 1980s, increasing pollution of the Bohai Sea coastal area and over-fishing have resulted in a strong decline of the fisheries.

China has drawn up a great marine environmental protection plan to control pollution in the Bohai Sea area and to restore the favorable ecological environment there. The Bohai Blue Sea Action Program should be put into practice in three stages: 2000-2005, 2006-2010 and 2011- 2015. The program aims to halt discharge of industrial wastes, to monitor environmental pollution and to restore the damaged ecological system in the sea. LMC-2 is a major contribution to the achievement of this program.

GENERAL:The project affected areas include Anshan city, Gujia village, Haicheng city, Panjin city, Yingkou city, Yingkou economic development zone; and villages of Gaotun, Liujiazi village of Shoushan town of county, Lunan Bangshibao, Dayu village of Dongsi town, Qingshiling, Qingshui village of Baitang Towns of Xingcheng city, Sandaobian village of Hongyazi Town, Santaizi village, Shagangtai village of Lutun town, Tuandian towns, and Tuotaipu village.

ETHNICMINORITY COMMUNITIES: Liaoning is a province with many nationalities. There are 51 ethnic minorities including Hans, such as Man Zu, Mongols, Hu Zu, Korean and Xibo Zu. There are 6.7 million minority group people accounting for 16% of the total population in Liaoning province. The ethnic minority counties, whose population accounts for over 40% of the local population, are Xingcheng, Suizhong, Yixian, Kaiyuan and Xifeng; the others are scattered. In the municipalities of Anshan, Fushun, Yingkou, Panjin and Huludao (Xingcheng), minorities are not living together so LMC-2 does not concern ethnic minority communities.

WATERSUPPLY: The total annual volume of water resources in Liao River Basin is estimated 23.51 1 billion m3. In normal years, the amount of water available for use is 10.567 billion m3. Utilization ratio of surface water is 81.2% and of groundwater is 43.1%. However the water is still in short supply: the annual amount of water supplied is 7.836 billion m3 while the annual water demand is 8.370 billion m3.

WASTEWATER:The surface water in Liaohe basin is heavily polluted; about 72% rivers within the province exceed the minimum permitted surface water quality of Category V (worst quality class). The total wastewater discharged within the province was 1.92 billion tons, of which 0.89 billion tons came from industry. The total COD load discharged was 546,000 tons of which 185,000 tons or 34 percent came from industry. Much of the industry fails to meet the standards for discharge water quality. The seriousness of the pollution within the Liao Basin has resulted in over 400 factories being closed down. The wastewater treatment ratio is only 40%; the remaining untreated wastewater is discharged directly to the nearest watercourse.

WASTE MANAGEMENT:The urban residents in Liaoning Province are generally provided with waste collection systems consisting of daily refuse collection and daily street sweeping. Treatment facilities in the Province are strongly under sized compared to requirements. Disposal of solid waste is mostly done in simple dumping sites, without any pollution control measure. Sites are not lined nor leachate are collected for treatment. Only few sanitary landfills have been developed in the Province in , Anshan and Liaoyang. Present production of solid waste in Fushun, Panjin and Yingkou represents a total of about 2,000 tonslday.

CULTURALAND ARCHAEOLOGICALRESOURCES: No valuable cultural resource has been identified within LMC-2 sub-components areas or within 100 m from the area boundaries. Closest resource identified concerns an alignment of graves along a small river branch in the vicinity of the future Yingkou WWTP effluent discharge point. The twelve sub-components of the LMC-2 selected for World Bank financing will significantly improve the environmental conditions and quality of life in the concerned cities through the following results: Improvement of the current water supply and meeting the future water demand necessary to achieve the social and economic development targets: Reduction of the water resource deficit through advanced treatment of wastewater and reuse of treated effluent: Improvement of municipal wastewater and solid waste collection with evident benefits in terms of urban quality of life and public health; Improvement of wastewater treatment efficiency with beneficial effects on the water quality of the concerned rivers and of the Bohai sea; Enhancement of river quality and landscape in urban areas with direct effects on the quality of life of nearby residents: Safe disposal of solid municipal waste with leachate and landfill gas control and management reducing pollution load to surface and underground water and abatement of GHG released in the atmosphere.

PUBLIC HEALTH& QUALITYOF LIFE: Impacts of the LMC-2 project on public health is significantly beneficial in terms of public health and quality of life. According to the WRB, more than 1 million population in the 7 project cities rely on polluted underground water for drinking. Improvement of river water quality through improved wastewater and solid waste collection and treatment will indirectly improve the quality of the alluvial aquifers fed by river water infiltration and exploited as drinking water source. Surface water is also the main source for irrigation. As the rivers in the project area are heavily polluted, pollutant accumulation in soils and contamination of crops have already been detected in Liaoning. About 200,000 ha are currently irrigated from the Hun and Shuangtaizi rivers and may benefit directly from water quality improvement. Improvement of surface water quality in the urban river branches will directly improve the quality of life of the riverside residents, seasonally affected by the odors resulting from the organic matter degradation in the rivers.

POLLUTIONABATEMENT: Pollution abatement will result from the construction of new treatment facilities (Gaizhou, Yingkou and Panjin) and from the increased conveyance of wastewater to existing facilities (Fushun). In Paniin and Yinqkou, the effluent will meet the Class 1 A standard based on government’s requirement and to facilitate the future reuse of effluent (not part of LMC-2). In Fushun, due to this project, the volume of wastewater to be treated in Sanbaotun WWTP (funded under LEP) will increase by 112,500 m3/day resulting in 90% utilization of the total plant capacity.

LMC-2 wastewater components should result in a daily pollution abatement of about 113 tons COD, 57.5 tons BOD, 77.7 tons of suspended solids, 8.3 tons TN and 1.275 tons total phosphorus, as presented in Table below. CITY TYPE CODCR BOD5 ss TN TP Influent Quality (mg/l) 360 180 200 35 4

Panjin Effluent Class I(A) 50 10 10 15 0.5 Pollution abatement 31 0 170 190 20 3.5 (kgl1,OOO m3 )

Pollution abatement 330 160 240 25 3.5 (kg/l,OOO m3 ) I 1 1 I 1 I Influent (mg/l) 340 160 200 35 4

Gaizhou Effluent Class I(A) 50 10 10 15 0.5 Pollution abatement 290 150 190 20 3.5 (kgif ,000 m3 ) 1 1 1 1 1 1 ______~ ~ Fushun(100,OOO m3/day 33 16 24 2.5 0.35 Wastewater) (I) Gaizhou (50,000 rn3/day 14.5 7.5 9.5 1 0.175 Total Wastewater) Pollution Abatement Panjin (100,000 m3/day 31 17 19 2 0.35 in Wastewater) Tons/Day Yingkou (100,000 m3/day 34.5 17 25 2.8 0.4 Wastewater) Total (TonsIDay) 113 57.5 77.7 8.3 1.275

Through improved collection of wastewater in 7 cities of the Liao River Basin, the project will reduce the pollution load discharged eventually into the Bohai Sea. This contribution has to be considered into a wider regional program for Bohai Sea rehabilitation which is also supported in other bordering provinces like Shandong where the World Bank is also supporting wastewater projects in Yantai and Wuhai

Through pollution abatement in surface water systems, the LMC-2 project will directly contribute to the restoration of aquatic biodiversity in concerned rivers and will contribute to reduce the current pressure exerted on the Shuangtaizi Wetland National Nature Reserve by an inflow of pollutants higher than the wetland assimilative capacity, and as such, slow down the observed degradation trend of its productivity and of its biodiversity.

LANDACQUISITION & RESETTLEMENT:Impacts related to resettlement (physical and economic displacement) include: (i) people affected by the acquisition of land; (ii) people affected by the temporary use of land; and (iii) people whose livelihoods are impacted during construction activities. All project components were planned to minimize disruption of residential areas and villages and maintain village cohesion. Among the 12 sub-projects, 8 components involve land acquisition andlor resettlement of persons.

For the 8 components need resettlement and land acquisition, the total affected persons are 6,065, including permanent land acquisition affecting 607 persons, temporarily affecting 4,726 persons and house demolition 732. No vulnerable group is affected by project. The summary of affected population is given in the following table.

For each city, a Full Resettlement Action Plan has been prepared in compliance with relevant Chinese standards and regulations and with WB OPlBP 4.12 related to Involuntary Resettlement and WB OD 4.20 related to Indigenous Peoples. A consolidated RAP has also been prepared for WB consideration. During this process, local training and awareness workshops were carried out, as well as a consultation process with each affected local government over 9 months.

The primary principles for developing compensation and livelihood recovery of the project affected peoples (PAP) are: All of the physical assets should be compensated for before resettlement and land acquisition should be carried out at the price of replacement: The practical compensation standard would be negotiated between the Project Owners and the PAP: The labour force to be relocated will be provided with employment opportunity with skill training to ensure their livelihood will not decline; The farms and trees to be affected will be compensated to owners I farmers at market price; All of the PAP will receive reasonable compensation.

CULTUFWLHERITAGE: Investigations carried out during the preparation of the individual EA did not lead to the identification of any cultural physical resource located within the project sites or at less than 100 m distance. There is no evidence at this stage that the project may raise any detrimental threat on cultural resources and that part of its components needs localised relocation. However, some buried and unknown cultural resources may be discovered during construction activities and may require immediate protective measures to be implemented. A specific procedure will be implemented to preserve any discovery.

ECOLOGICALRESOURCES: The LMC-2 project sub-components are implemented either in urbanized areas or in agricultural lands. The project implementation does not involves: forest clearing: destruction of area known for sheltering protected or threatened biodiversity: encroachment into a protected area as a nature reserve: or creation of facilitated access to sensitive areas with further risks of illegal or uncontrolled encroachment.

The most ecologically valuable area identified in the project region is the Shuangtaizi wetland, classified as a National Nature Reserve. As already discussed in section 4.1, the closest project sub-component is 30 km from the wetland, and the expected improvements of surface water quality resulting from LMC-2 will have some benefit to the protected area: the project will not modify the hydrology of the wetland. LMC-2 will have no significant detrimental impacts on valuable ecological resources’.

It is not necessary to apply World Bank Operational Policy 4.04, on Natural Habitats Construction activities are expected to generate the following adverse impacts: Air borne dust due to excavation, demolition, construction vehicle movement and materials handling, particularly downwind from the construction sites. Noise from construction equipment and vehicular movement, potentially affecting nearby residents and sensitive sites as hospital or schools.

a Traffic congestion by pipeline construction along the existing roads, transfer station construction and upgrading in built-up neighborhoods and increased construction traffic in urban areas. Roads may be fully or partially closed during these construction activities causing temporary inconvenience and delays to residents, commercial operations and institutions. Waste discharge from construction camps. The discharge of wastewater from construction camps could create potential new pollution sources, and could also be sources of sludge, solid waste and waste oil from machinery maintenance. €xcavated/spoi/ materials. Limited volumes of spoil are expected from WS or WW pipe laying activities and from river works, which may require off-site disposal. Removal of trees. The development of the sewer network, the building of water treatment plants and pumping stations, and the building of river embankments in Fushun, may impose the cutting of few trees, most of them being planted street trees. Soil erosion, Piles of earth will be created from time to time during construction as well as bare land particularly during landfill construction. In case of rain, erosion would occur on the earth piles and other disturbed land such as river slopes causing loss of soil. Land impact. About 184 ha of collective lands and 10 ha of state-owned land will be occupied by construction activities either permanently or temporarily. Damage to roads: Heavily laden trucks may impact on road conditions and cause road surface damage, especially during periods of rainfall and high ground moisture content. infectious diseases. During the project construction period, floating population will work in construction sites throughout the city. The mobility of outside people might bring external epidemic diseases to local communities.

Specially, for the River Works in Fushun, the proposed river work on the Hun River at the upstream of Fushun might produce a certain amount of spoil. The sediments on the river bed are virtually sand rather than silt which possesses high Cation Exchange Capacity (CEC) and no industrial wastewater is discharged into this river section which is restrictly prohibited by the function zoning as Dahuofang Reservoir is just in the close upstream to this section. Thus the sediments dredged may not contain any heavy metal at high concentration which may be hazardous requiring special disposal. According to the planning of the river work, the spoil sand will be used as construction material in the road construction on the new embankment. In addition, the ground level of the bank will be raised to a level that can control the 200-year flood. Totally 400,000 m3 soils need to be borrowed, hence eliminating the amount of spoil. However, spoils will present environmental concerns during the excavation and river bed clearing before they can be used for bank fill in. The spoil should be carefully managed since uncontrolled stockpiling near the river will raise the SS in the river during rainy season and block the flood. The management of the spoil should be on similar schedule with the WWTP. It is therefore expected that no serious impact of the spoil from both either sediment clearing or bank construction. For the Dredging Activities in Fushun Changnan Open Ditch, during Aug. 2006, the EA team has conducted an industrial pollution source survey for the catchment of the open ditch. The survey results indicate that there are three important industries discharging wastewater into the open ditch: Fushun New Steel Plant, Fushun Special Steel Plant, Fushun Aluminum Plant. A sampling exercise to the sediments was conducted by the Liaoning Provincial Environmental Monitoring Center on Aug. 29, 2006. The reservation and transportation of the samples follows the Technical Specifications for Soil Environmental Monitoring (HJTT 166-2004), and the pretreatment and analysis of the samples follow the Standard for Hazardous Wastes Identification-Total Characteristic Leaching Procedure (GB 5085.3-1996). The results of the tests show that the characteristics of the leaching liquid are below the limits set in the standard for hazardous waste identification. Thus the sediments are to be non-hazardous and can be filled in a municipal sanitary landfill. An agreement has been reached between the Yanwu Sanitary Landfill of Fushun that is to be constructed under the LMC-2 and the Fushun Drainage Company the sediments dredged by this works will be transported to the landfill and co-filled with municipal solid waste. As this dredging works is scheduled to start in 2008, the sediments can be accommodated by the proposed landfill which is scheduled to operate in 2008.

Based on the results of the impact assessments and the goals of minimizing adverse impacts in accordance with application standards, regulations and WB safeguard policies, the following mitigation measures have been identified to be taken during the construction phase: Construction sites, transportation routes and materials handling sites will be water sprayed on dry and windy days up to 2-3 times a day, especially if these sites are near sensitive receptors, such as residential and school areas. Using central concrete mixing plants where possible, and transport with sealed vehicles. Construction activities will be scheduled carefully with consultation with nearby residents to minimize the impact of noise from construction machinery. Night-time (22:OO to 06:OO) and noon-time (12:OO to 14:OO) uses of certain noisy machines, such as pile-drivers and concrete vibrators, will be prohibited in the vicinity of residential areas. Temporary noise barrier should be set up at construction site near schools and residential areas. Personal protection equipments or PPE (e.g., noise protection earplugs) shall be supplied to workers for protection from the intensive noise. In conjunction with the relevant authority, traffic flow regulation plans will be prepared in advance of construction in the congested urban built up areas. Sewage and other wastewater from construction camps will be collected and treated at septic tanks before discharge to avoid contamination of the surrounding areas. Where possible the wastewater will be discharged directly to the municipal sewer. Temporary land occupation will be planned well ahead to minimize the effect of the disturbance and land will be reinstated to its original condition on completion of construction. Top soil will be removed and stock-piled for use during land restoration, particularly on the landfill sites. Construction materials will be stored in appropriate places and covered or sprayed to minimize dust. Construction waste will be promptly removed from the sites and transported to an appropriate disposal area approved by the PMO and the concerned municipality. Burning of construction waste will be prohibited. Materials will be covered during transportation to avoid spillage or leakage Strict measures to keep control of erosion and runoff on the construction sites and the spoil sites will be imposed on contractors through detailed specifications, included in the Soil Erosion Control Plan. Monitoring of runoff water will also be conducted to ensure that the measures are effective and that receiving water quality is not affected. Construction will be immediately suspended if any archaeological or other cultural properties are found (chance finds). The relevant cultural authority, as well as PMO, will be notified promptly, and only after a thorough investigation (by the relevant authorities) will construction be allowed to resume. During the raining season, limitation of load access will be imposed on the contractor to reduce damage to the roads. Also, the contractor will be required to rehabilitate, at the end of the construction, the section of the roads which have been damaged by the traffic resulting from the transport activities. Contractors will be required to take necessary safety measures at the construction sites to protect the public, including warning signs to alert the public of potential safety hazards at and around the construction sites. Workers should be examined regularly and the infected people should be given immediate medial attention or quarantined. All contractors and construction supervisors will be required to participate in mandatory environmental and health and safety training programs prior to the start of construction.

The above mitigation measures will, where appropriate, be included in the tender documents and subsequently in the construction contracts as binding contractual requirements.

WATERSUPPLY FACILITIES: Impacts from the operation of water supply treatment plants and associated facilities (pumping stations) are rather limited in number and magnitude, and generally can be easily mitigated. Most frequent impacts and mitigation to consider include: In Haicheng and Yingkou new WS treatment plants will mobilize additional water resources for water supply (70,000 m3/day each) resulting in increased wastewater treatment capacities; It may be confirmed that the existing and short-term planned wastewater treatment capacities in Haicheng and Yingkou will be able to accommodate the additional flow of wastewater resulting from LMC-2 new water supply production components. WS Treatment Plants will produce sludge which will require appropriate management. In Haicheng, the production of sludge will be limited, as water is from aquifer. In Yingkou, production of sludge is estimated at 6,570 ffyear, including 95 to 98% water. Dry matter production will only be about 130-150 Uyear. This represents about one truck load per month of uncontaminated sludge which will be delivered to the city landfill. Chlorine leakage or spill at the treatment facility. Risk is controlled by appropriate storage, handling and emergency response procedures. Wastewater from staff (30 to 40 persons per plant): effluent will be discharged into urban sewage network. Over exploitation of local water resources (aquifer for Haicheng and Shimen Reservoir for Yingkou). Technical studies carried out during feasibility confirm that LMC-2 WS components will not result in overuse or depletion of the mobilized resources. The main noise sources during the operation phase are the pump stations which may affect the nearby residents and routine works on networks carried out in residential areas . Low noise pump sets should be selected and equipped with mufflers. The pump should be set in isolation booths. Select low noise vehicles and properly arrange working time in most sensitive areas, night-time (22:OO to 06:OO) and noon-time (12:OO to 14:OO) operation. The use of horns will be prohibited. Air pollution potential from emission of oil-fired boilers used in winter to warm up the processing system. Appropriately designed chimney and low sulphur content fuel will result in compliance with Chinese standards for dust and SOn.

WASTEWATERTREATMENT FACILITIES: Most typical impacts of WWT facilities refer to the discharge of treated effluent in a water body, to the sludge production and disposal, to noise and odor nuisances generated by the facilities (aerators, blowers, pumps etc) or during sewer maintenance: There is no detrimental impact but only beneficial impacts from LMC-2 wastewater components as a significant reduction of pollutant load presently discharged into the river system will be observed: daily abatement of about 113 tons COD, 57.5 tons BOD, 77.7 tons of suspended solids, 8.3 tons TN and 1.275 tons total phosphorus. Odors from aeration, sedimentation and sludge condensation tanks may affect surrounding areas of the facilities. Minimum 100 m distance buffer zone to residential areas will be respected, vegetation barrier will be planted, use of flocculation deodorizer (Ferric salts) and good maintenance practice of the plant will provide effective minimization of impacts. Noise from pumps may affect the nearby residents. Careful selection of low noise equipment, of submersible pumps when appropriate, presence of closed buildings and buffer zone allow the compliance with Class 3 noise standards (residential zone). Transport vehicles to carry sludge and other materials will only operate during daytime. Sludge production, handling and disposal will be subject to the preparation of a detailed management plan by the operator, in accordance with the baseline requirements expressed in the EA documentation. Control of sediments collected at the existing outfalls of raw effluents confirm that these sediments comply with the applicable standards for the agricultural use of WWTP sludge and that most probably the sludge from future treatment plant will comply too. The daily 120 t sludge produced by Fushun WWTP will be dewatered prior to delivery to Yanwu sanitary landfill (total capacity of 600 ffd lasting for 20 years). Paniin WwTP will produce 96 ffd sludge with 80% moisture. Sludge will be delivered to a composting facility next to the solid waste landfill. The area is 1 ha, fully concreted, with Leachate collection and pumping back to the existing Xinglongtai WWTP only 1 km away. Yinakou WWTP will produce 109 ffd sludge which will sent to landfill site after dewatering.

SOLIDWASTE FACILITIES: Aside general benefits from solid waste collection and management, some detrimental impacts may be observed as noise and odor nuisance, development of pests or pollution of surface or underground water resources by leachate release. Landfill sites have been identified at reasonable distance from farms or villages in order to minimize the risk of odors or noise nuisance to residents. Compaction of waste and regular covering with soil will limit the risk of uncontrolled development of pests such as mosquitoes, flies or rats. To avoid pollution of water resources by leachate, all landfill sites comply with Chinese standards: 2 mm HDPE geo-membrane, geotextile, 300 mm clay with hydraulic conductivity of IO-’ or lower. In order to reduce the leachate production, drainage is implemented around the landfill site to divert stormwater from entering landfill cells. Also, compacted waste will be regularly covered in order to limit rainwater infiltration and leachate production. Leachate will be redirected to the local WWTP system for treatment as on site treatment is not appropriate for Liaoning where 70 to 80% of annual rainfall occurs over a 4 month period. Leachate will be transported by tanker in Fushun and by pipeline in Yingkou EDZ. In Panjin, the leachate will also be transported to the WWTP. During dry months, leachate will be recirculated on site. Tankers will be used to spray the leachate over the site in Fushun and the recirculation rate will be 120m3/dso as to optimize the moisture content in wastes. Preliminary treatment will be implemented on site to reduce NH4-N concentration which could be harmful to WWTP process and to reduce methane and related explosion risk before transferring Leachate by pipeline in Yingkou EDZ. Monitoring wells are implemented around each landfill sites to control the efficiency of the system regarding the protection of the underground water. Passive collection of landfill gas will be implemented in the landfills of Fushun and Yingkou ED2 for the initial stage of land filling. In the methanogenic stage of the process, the vent stacks will be connected to an active extraction and flare system where centrifugal compressors will be used. If the actual landfill gas is high in quantity and calorific value, the two cities will install gas boilers to provide heating service to the surrounding residential blocks. Landfill gas monitoring wells will be drilled at the perimeter of the landfill. In Panjin, the proposed landfill site will be operated adjacent to an existing garbage incinerator that does not achieve full combustion. With the introduction of an alternative disposal arrangement, the municipal government will then have the option of (i) closing down the incinerator and sending all solid waste to landfill (ii) improve the incinerator to achieve full combustion of special wastes such as hospital waste, or (iii) implementing a composting plant to complement the landfill site and extend its life (however, this would require further study and could not be implemented under LMC-2). During the project development, various alternatives have been proposed, screened and compared with technical, economic as well as environmental criteria. In terms of the environmental comparison for the alternatives, the primary objective was to identify and adopt options with the least adverse environmental impacts and maximum environmental benefits.

Compared to the "With" project scenario, "Without" the LMC-2 sub-projects the result would be: Without the water supply sub-projects, the concerned cities will not meet the future water demand necessary to achieve the social and economic development targets and a part of the population will continue to rely on polluted underground water for drinking. Without the sanitation sub-projects, increased volumes of untreated domestic and industrial wastewater along with the rapid industrialization, urbanization and population growth in the area, will be discharged to the receiving waters directly. The surface water quality of the Liao river and of the Bohai sea would continue to deteriorate, threatening drinking water safety, groundwater quality, ecosystem particularly wetlands and aquatic life, fisheries, agriculture production relying on irrigation, and the standard of living for the residents in the project cities and those downstream, and eventually weakening the ability for sustainable economic development in the region. Without the treated effluent reuse sub-component, water resource deficit will continue to increase and to affect the sustainability in the exploitation of underground resources and the economic development in the area. Without the solid waste sub-project, the city's municipal solid waste collection, transfer and the transportation system efficiency would remain low and, community based sanitation and hygiene would continue to be poor, affecting the heath and living environment, as well as the standard of living for the residents. The sanitation conditions would further deteriorate without the project, resulting in increased solid waste volumes due to urban population growth and rising living standards.

Alternatives options for water supply sub-projects included aspects related to conveyance pipeline alignment and capacity, location for the water treatment facility and treatment processes. In Yingkou, the single raw water pipeline option has been preferred as it limits the land acquisition and satisfies the water demand. Alternatives options for WWTP site selection have been considered in the feasibility studies based on criteria such as land availability and land use, vicinity of residential areas and suitability regarding wind direction, accessibility to site for electricity, wastewater and road, suitability for effluent discharge, costs for construction and land acquisition. In Fushun, the existing WWTP will be fully utilized as a result of LMC-2, so a new plant was never an option. In Gaizhou, Panjin and yingkou, site selection was determined during the LRBP planning stages based on economic analyses of alternative sewerage planning strategies.

Alternative options have been considered for both the wastewater treatment process and the treatment process for the effluent to be reused. For the WWT process, alternative solutions included Modified A210 process and Sequencing Batch Reactor (SBR). Modified A210 process has proved technically and economically suitable worldwide and in China for many years. Based on the experience of WWTP operation in hard climate conditions and distribution of this process in China, the Modified A2/0 process has been preferred for LMC-2.

Alternative options for sludge treatment considered in the FS included landfill disposal, composting and incineration. High costs for incineration, low caloric value of sludge and difficulties to ensure efficient control of air emissions resulted in the elimination of this alternative. Risks of contamination by industrial effluents, a limited market for compost at present in China and a strong seasonal fluctuation in compost demand constitute major constraints for this option. .

Options for solid waste landfill sites have been considered. Selection criteria included availability of large areas with no or limited development, distance from city center, accessibility, distance to nearest residential community, geological and hydrogeological conditions.

Initially, Fushun municipal government proposed a project for the development of a sanitary landfill site on a large coalwaste tip3 adjacent to the existing open dumping site at Yanwu. An alternative location representing an extension to the existing dump site was adopted because the coalwaste tip is now reserved for an oil refinery development. It is also intended to develop part of the landfill operation on top of the existing open dumping site. Both the alternative location and open dumping site are adjacent to the coalwaste tip.

PANJIN

The proposed Panjin site is totally composed of flat land, adjacent to the existing solid waste disposal operations (incineration). The land is a flat agricultural zone. Groundwater exists 1 meter below the ground surface, and two small oil well installations already exist on the site. From an urban planning perspective, the site is considered the most suitable because it concentrates waste management activities in one area of the city. Technically, the site is suitable for landfill subject to conformance with detailed technical specifications.

YINGKOU

During the LMC-2 project identification stage (April 2005), 3 sites were considered for landfill operations. Two of these were in the same vicinity as the existing dump site, and could have resulted in pollution of the Bohai sea due to leachate overflow. The geology was considered unsuitable with the risk of groundwater contamination.

One of 4 waste sites within the municipal area Two rounds of public consultation were conducted during the course of environmental impact assessment. The first round was carried out in all 6 cities in September 2005, and the second round in December 2005. The primary objective of the first round was to gather information on public concerns about the Project, while that for the second round was to communicate the EIA findings and proposed mitigation measures and confirm public acceptance and satisfaction. Both rounds of public consultation focused on the project-affected people and beneficiaries of different age groups, genders, educational backgrounds and occupations as well as other stakeholders.

In addition, there have been many rounds of consultation with government agencies, local governments, non-government organizations and other stakeholders of the project to discuss Project locations, scope, environmental and socio-economic concerns and environmental management and mitigation plans.

The consultation exercise covered three forms: bulletins in the press, public opinion questionnaires and surveys of the public. Throughout the process of public consultation, a telephone hotline has been set up and maintained in each PMO to address EA-related issues of concern for the stakeholders. From the results of the public consultation the major opinions and concerns on the project can be summarized as follows: First round of consultation included public meetings in each of the city which involved the participation of 895 persons, ranging from 39 (Yingkou EDZ) to 299 (Panjin). Each participant completed a questionnaire presenting the profile of the participants and their main concerns about the project. 52% of participants were men and 48% women. Age distribution included 84% 20-60, 6% below 20 and 10% over 60. Educational level of participants was 10% primary, 21% junior middle, 27% senior middle, 30% professional training college, and 12% university levels. Occupational distribution of participants was 22% government officers, 23% farmers, 27% workers, 9% students, 19% others. The general consensus is strongly supportive to the project, the public being highly concerned by the declining quality of their environment as a result of uncontrolled discharge of wastewater and dumping of solid waste. After project screening, the major public concerns were related to i) compensation for land acquisition, both temporary and temporary, and resettlement, ii) odor and noise of WWTP and pumping station, and leachate from sludge disposal facility, during operation, iii) nuisance during operation of landfill and iv) nuisance during construction. Second round of consultation included public meetings in each of the city which involved 1,300 participants ranging from 100 (Anshan) to 400 (Fushun). Discussions focussed on impacts an mitigation during construction activities (noise, vibrations, road access, dust,) and on measures to control nuisances during WWTP and landfill operation. Issues on land acquisition, compensation and resettlement were discussed during the public meetings organized under the RAP preparation.

Information was disclosed through announcements published in local prime newspaper of major information relative to the project, timing and location of public meeting, telephone hotline to access to documents and draft TOR, and where to comment. TYPEOF BY WHOM WITH WHOM WHEN WHERE CONSULTATION

Haicheng Urban 1" Round Meeting Haicheng Water Supply Project affected Sep, 14, 2o05 Construction and Questionnaires Company, LAES people Investment Co. Ltd. Haicheng Urban 2ndRound Meeting Haicheng Water Supply Project affected Jan, 24, 2o05 Construction and Questionnaires Company, LAES people Investment Co. Ltd. Haicheng Investment Copies Of EA and Haicheng Water Supply TOR and RAP Sep. 26,2005 Limited Company of outline Company, LAES City Construction Haicheng Investment Draft EA and RAP Haicheng Water Supply Dec. 5,2005 Limited Company of reports Company, LAES City Construction Notice for Haicheng Investment availability of EA Haicheng Water Supply Jan. 20,2006 Limited Company of and RAP reports at Company, LAES City Construction PMO and CDC

50 residents directly or Totally 45 people indirectly affected support this project 1" Round Meeting Xihai Village including villagers, and agree with the May 15,2006 and Questionnaires Committee government draft TOR, and 5 officers, workers, people feel no matter teachers, with the TOR students, etc 50 residents directly or Totally 48 people indirectly affected support this project 2ndRound Meeting Xihai Village including villagers, and agree with the July 17, 2006 and Questionnaires Committee government draft EA, and 2 people officers, workers, feel no matter with the teachers, EA students, etc

Fushun Wastewater Fu 1" Round Meeting and Questionnaires Fu 2nd Round Meeting and Questionnaires CoDiesof EAand I Fu OF TYPE BY WHOM WITH WHOM WHEN WHERE CONSULTATION Fushun PMO and Fushun city road traffic Draft EA and RAP Fushun Environment 3, 2005 administration office reports Science Institute Notice for Fushun PMO and availability of EA Fushun Environment Fushun Daily and reports at Science Institute PMO and CDC

1"Round Meeting Fushun Wanghua Project affected Sep, ,5, 2o05 Fushun Wanghua and Questionnaires Distrcit Government people Distrcit Government

2ndRound Fushun Urban Fushun Urban Information Transportation Transportation disclosure and Rehabilitation Office people Rehabilitation Office Questionnaires

Copies of EA and 2005.9.18 Fushun city road traffic TOR and RAP administration office outline Draft EA and RAP I 2005.12.13 Fushun city road traffic reports administration office Final EA and Rap 1 2006.1.15 Fushun city road traffic reports administration office Notice for May. 2006 availability of EA Fushun Daily and RAP reports at PMO and CDC I Panjin Wastewater i Panjin city road traffic 1'' Round Meeting Panjin PMO and LAES Project people affected Oct, 8, 2o05 and Questionnaires administration office Round Meeting Project affected Panjin city road traffic 2"' Panjin PMO and LAES people Apr, 2o06 and Questionnaires- administration office Copies of EA and Panjin city road traffic TOR and RAP Panjin PMO and LAES Sep' 26r 2005 administration office outline Panjin city road traffic Draft EA and RAP Panjin PMO and LAES reports lo,2005 administration office Notice for availability EA Panjin Daily (Primary of Panjin PMO and LAES Dec. 13,2005 and RAP reports at local newspaper) PMO and CDC Xingcheng Water SI Xingcheng water supply 1" Round Meeting company and Project affected Jul, 25, 2o05 Xingcheng water and Questionnaires Shenyang Environment people supply company Science Institute Xingcheng water supply 2"d Round Meeting company and Project affected January 2o06 Xingcheng water and Questionnaires Shenyang Environment people supply company Science Institute Xingcheng water supply Copies of EA and company and Xingcheng water TOR and RAP Shenyang Environment Aug. 19,2005 supply company outline Science Institute Xingcheng water supply Xingcheng water Draft EA and RAP company and Dec. 18,2005 reports Shenyang Environment supply company Science Institute Notice for Xingcheng water supply availability of EA company and Xingcheng Daily and RAP reports at Shenyang Environment PMO and CDC Science Institute

The Environmental Management Plan (EMP) covers all phases of the Project from preparation to construction and to commissioning and operation.They aim to ensure control of the environmental impacts through implementation of monitoring and mitigation activities. The full EMP of the Project will be incorporated into the construction and operation management plans of the Project as appropriate and will form part of the bidding documentation.

During project preparation and implementation, organizations with different environmental management responsibilities, such as LUCRPO, City PMOs, EPBs, Design Institutes, LAES, contractors and construction supervision companies have been or will be involved in environmental management. PMOs, contractors and IAs will be required to appoint dedicated and qualified environmental specialists to oversee environmental management activities and ensure implementation of the EMP.

During project preparation and implementation, these various organizations with different environmental management responsibilities have been or will be involved in the environmental management activities. PMOs, contractors and IAs, will each nominate dedicated and qualified environmental specialists to undertake environmental management activities and ensure effective implementation of the EMP.

The PMOs and LUCRPO will ensure that the Project's progress and impacts are monitored and reported in line with WB's requirements. The effectiveness of mitigation measures and monitoring results will be evaluated through the feedback reporting system. Corrective actions in responding to monitoring results will be taken as necessary. Concerned EPBs and PMOs will play critical roles in this feedback and corrective mechanism.

For consistency and cost management during construction activities, it is recommended that concerned cities rely on a common CSC for the environmental supervision and monitoring. In such situation, consolidation of monitoring data and dissemination of common rules and practices regarding environmental management will be strongly facilitated, and their efficiency improved.

The EMP provides detailed procedures for information exchange, reporting, data management and non-compliance resolution.

A conceptual organization arrangement between the main contributors during the construction stage is shown in Figure 2 below.