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REPUBLIC OF 1. 2.

3. Public Disclosure Authorized

NATIONAL WATER SUPPLY AND SANITATION PROJECT

Public Disclosure Authorized Loan # IBRD 7460 AZ ENVIRONMENTAL IMPACT ASSESSMENT FOR HOVSAN WASTEWATER TREATMENT PLANT SEA OUTFALL CONSTRUCTION Public Disclosure Authorized

EXECUTIVE SUMMARY

Public Disclosure Authorized

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

EXECUTIVE SUMMARY Project Background The present project is part of an effort to improve environmental conditions in the Greater area that is materialized through implementation of the Environment State Program (ESP). This ESP is a comprehensive plan involving medium- and long-term environmental management activities that target regional development of the Absheron Peninsula through addressing untreated industrial and residential wastewater, solid waste disposal and continued oil production contamination. The Hovsan Wastewater Treatment Plant, located about 15 km from the center of Baku, is the largest wastewater treatment plant (WWTP) treating about half of the effluents of Baku. The Plant discharges its partially treated effluent via a pair of pipelines to the shore of the , about 1 km south of the plant, in a semi-enclosed area, with significant impacts on the quality of the surroundings. The project development objective is to convey Hovsan WWTP’s effluent to a disposal point at sea, where dilution and dispersion of the effluent and bacterial die-off are adequate to guarantee that, once the overall sanitation system is completed, the relevant standards are met in the areas currently impacted by the effluent discharge on the shoreline, and will be satisfactory with respect to aesthetics, human health and aquatic life. Although the construction of the outfall will result in an improvement of shoreline water quality in the zone currently impacted by the discharge of the effluent of the Hovsan wastewater treatment plant, the outfall real impact must be seen in terms of its function as a critical element of Baku’s sanitation system. As indicated above, the ultimate project development objective is to improve coastal water quality in the Baku’s metropolitan area, but this objective will only be achievable after the other upstream elements of the system are completed. However, providing a capacious outfall for the Hovsan wastewater treatment system will ultimately enable the control of the existing discharges and their impacts on water quality in the city once these are intercepted and the transport of all wastewater from the city to the Hovsan WWTP for adequate treatment is completed, as planned. The Feasibility Study for the sea outfall is carried out concurrently with this EIA. This EIA is based on the preliminary conclusions of the FS study which indicates the preferred option and the alternatives studied.

Project setting The Caspian Sea With a current surface of more than 400 000 km2 (1,200 km long x 200-400 km wide) and a volume of 78,000 km3 the Caspian Sea is the largest closed inland water body in the world. The Caspian Sea is made of brackish water the level of which is nowadays approximately 27 m under the mean level of oceans. The maximum depth of the Caspian is 1025 m, and the average - 184 m. The Caspian Sea is mainly fed by the River (80% of the annual river discharge) in the north and other main rivers of the western bank (including the Kura River in Azerbaijan). The rainfall contributes only for 20% of the total water input of the Caspian Sea. The rain and river waters discharges into Caspian Sea are balanced by evaporation. For the Baku area, the mean temperature of the water surface layer is approximately 7 °C in February, 10 °C in April, 26 °C in August and 14 °C in November.

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

Surface currents in the Middle and Southern Caspian form a rotating circulation, which is clockwise along the shore of Baku. The salinity of the Caspian Sea is around 13 g/l, except in the northern part where the dilution due to the discharge of the Volga River reduces the salinity down to 5-10 g/l. The Caspian Sea has about 450 species, varieties, or forms of phytoplankton, 87 species of Benthic algae, 718 known fauna species, and 315 species and subspecies of zooplankton. The remarkable fauna of the Caspian Sea includes the Sturgeons, which spawn in the rivers of the Caspian basin, and which are the most economically valuable anadromous fishes and the Caspian seal which is an endemic species originating from the Artic . Caspian seal migrate northward in the fall to reach cold waters and ice covers for pupping, molting, and mating. In the spring, they migrate southwards for feeding. On the way of both migrations, islands in the north Caspian Sea and Azerbaijan’s Absheron peninsula provide shelters and refuges important for seals resting. In addition to the marine fauna, the Caspian harbors on its shore a rich avifauna, which count 466 known species among which 120 are nesting birds, 68 are wintering birds, and 278 are migratory or summer residents. Sources of physical and chemical pollution of Caspian Sea can be divided into three main categories: - rivers, which have collected upstream large amounts of pesticides, industrial and urban effluents - seaside urban, harbour and industrial (including oil transformation) activities which generates pollutant such as hydrocarbons, heavy metal, nutrients and pathogens - oil extraction sites, which release crude oil and derivatives (hydrocarbons) into the sea mostly resulting from leaks, drilling activities (drill mud) and accidental spillages, The three main pollution hot spots are: the Volga delta (), the mouth of the Kura River and the Absheron peninsula (Azerbaijan), where are located the industrial cities of Baku and Sumgayit. Most pollutants of concern are weakly soluble in water but have high affinity with fine particulate matters, sediments and organic matters. Consequently, when they are discharged into the sea, they do not stay a long time in the water column and sediment onto the sea bottom. The flora and fauna of the Caspian Sea include invasive species from the , Atlantic, and Mediterranean complexes. At present a recently introduced species of comb-jelly fish (ctenophore) Mnemiopsis leidyi is particularly of concern. The ctenophore non only competes for food (micro-zooplankton) with fish larvae but also preys directly on fish larvae (mero-plankton), which both result in reduction of fish stocks,. It already caused great changes in the Black Sea ecosystem. Scientific community really worries about the damage likely to be caused by Mnemiopsis to the Caspian Sea ecosystem for by the next decade.

The city of Baku The city of Baku is the capital city, the largest city, and the largest port of Azerbaijan and all the Region. The Greater Baku occupies a 2200 km2 area on the southern shore of the Absheron Peninsula, which extends 60 km eastward into the Caspian Sea and reaches a maximum width of 30 km (from north to south).

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

Greater Baku occupied a rather flat land, very slightly sloped toward the sea shore. Greater Baku counts many lowlands occupied by ponds and lakes, out of which around ten medium size lakes (more than 5 km2). These salted, shallow lakes are most often former sea lagoons. These lakes have been used for discharge of drainage and urban and industrial wastewater for decades and consequently are at present polluted and eutrophic. There is no true natural watercourse in the Greater Baku but rather wadis which use to drain intermittently seasonal rainfall and have been made into channels in order to receive urban or industrial effluent and convey them down to the sea. In the lowland and along the seashore, the superficial aquifer is very shallow, with a water table 2 to 5m under the ground level. Shallow groundwater is brackish because of salt intrusion. Leaking sewage pipelines, nitrate and pesticide contamination by agriculture and spills from oil and chemical plants have further degraded the quality of shallow groundwater. The Absheron Peninsula experiences a mild-hot, semi-arid climate. The average annual temperature is 14 °C. The monthly average temperature is 3.9 °C in January and 25.7 °C in July. Over the last ten years (1999 – 2008), the annual rainfall varies between 205 mm and 503 mm, with an average of 237 mm. Around 50% of the total annual precipitation falls from October to December. The evaporation is very high varying between 947 mm and 1344 mm, that is 4 to 6 times higher than the rainfall. Consequently there is a need for irrigation for the middle and long cycle agricultural crops. North and northwest winds are the most prevailing in Absheron Peninsula and are especially frequent from October to March. South winds make up around 20% of the total frequency. The Absheron Peninsula is experiencing a land degradation process, which favors both erosion and salinization of soils. Given its climatic and pedological features, the Absheron Peninsula is occupied by a semi-desert and salt-resistant vegetation, such as thistles and wormwood forming low and pastures.

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

As usually in the urban and peri-urban zones, the upper fauna is mainly reduced to small- size terrestrial organisms such as amphibians, reptiles and rodents The Baku population is officially estimated at around 1.9 million people in 2009. In 2003, Baku additionally accommodated 153,400 internally displaced persons and 93,400 refugees. Since then, many people have migrated to the Baku and Sumgayit in search of jobs and opportunities without being registered. Consequently, unofficial estimates usually reach figures as high as 3 million people.

Major environmental concerns The major environmental concerns are: - Air pollution: Since 2003, stationary and mobiles sources have comparable contribution to the total air pollutant emissions. In Baku, the most polluting stationary sources are related to the oil sector. Emissions from mobile sources (mainly terrestrial vehicles) have continuously increased for the last past decade, with a number of cars that has almost doubled since 2000. - Soil pollution: The Absheron Peninsula is seriously polluted due to nearly 150 years of oil production and related industrial activities that have contaminated around 30,000 hectares of land. In these areas, hydrocarbons have seeped into soil and bedrock extending to as deep as several meters. This issue is exacerbated by the existence of hundreds of continuing production facilities such as drill rigs and oil pumps that constitute a continuing pollution source. Apart from hydrocarbons, the most concentrated soil pollutants are heavy metals, the level of which can reach as much as 50 times the international standards. - Coastal pollution: Pollution of coastal waters of Baku Bight has been clearly revealed by the monitoring campaigns carried out by the Caspian Environmental Program. The contamination is mainly caused by: o oil extraction (off-shore) and refinery o discharge of effluent of industrial facilities treated or not, conveyed by pipes or man-made watercourses such as Hovsan canal o discharge of urban wastewater, treated or not o natural discharge of superficial groundwater polluted by seepage and leaching of contaminants from soil or waste (informal landfills) According to the results of monitoring campaigns, the pollutants of concern in the Baku Bight are arsenic, chromium, copper, mercury, nickel, and dieldrin and DDT pesticides. The coastal waters are also contaminated by faecal germs due to the huge quantities of untreated wastewater discharged into the sea. - Municipal waste management: There are four formal existing disposal areas, In addition, there are numerous informal dumpsites covering the area of a nearly 200-250 hectares. Presently none of these disposal areas meets the proper sanitary standards for storage and treatment of domestic waste. Furthermore, waste is burning continuously in some of them. Consequently the pollution to air, soil and waters caused by the dumpsites is of particular concern.

The Baku Bight

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

The 90km-long Baku bight can be divided into three bays according the morphology and land occupation: Baku Bay, “Hovsan Bay” and “Turkan Bay”, the names of the two later bays being defined by the Consultant for the purpose of the study . The Baku Bay (strictly speaking) is 25km long from the west limit of Sabail to the eastern limit of Khatai rayon. This bay is rather closed-in and is bordered by industrial and densely populated urban area. Consequently the shoreline has been almost totally modified by manmade settings. The Baku bay also receives large quantities of poorly treated or untreated wastewater. Consequently, the few remaining beaches of the Baku bay are heavily polluted and no longer accommodate any tourist. The “Hovsan Bay” is 17 km long alongside the Surakhani rayon. The Hovsan bay is limited by the 3.5km-long causeway reaching the Gum Island. Around 2 km east of Gum Island, 7 km away from the shoreline, there is 6km long, 0.5km wide offshore bar the depth of which is less than 2 m. The top of the offshore bar is only 40-60 cm below the mean level of the sea so much so that a very narrow strip of land called Chanlar Island may emerge from the sea during the low water period (winter). The Hovsan Bay is divided into two sub-bays by a double spit called “Hovsan Cape” which harbors the Hovsan port. The western sub-bay is heavily polluted, especially by the discharges of both Hovsan channel and Hovsan WWTP pipe. Consequently the waters are not used for recreational activity but for leisure fishing (from the shore). Unlike western sub-bay, eastern sub-bay is apparently clean and used for bathing during the hot season by the local population. The “Turkan Bay” is 45-50 km long alongside the Azizbeyov rayon up to the Cape Suiti. This bay just receives wastewater from the small settlement of Turkan and its water seems to be rather clean.

The beaches of Baku Bay and western Hovsan Bay are polluted by both oil products and wastewater discharged. The nearest beach which is used for recreational purpose is located along the eastern Hovsan Bay and is named “Hovsan Beach”. According to the results of the monitoring campaigns of the Ministry of Health, the bathing waters do not comply with EU standards with respect to pathogen contents. The Hovsan Port is the only port located in the vicinity of the project. But, maritime routes are far from the proposed alignment of the sea outfall. The minimum distance between maritime route and pipe alignment is 3 km. This is due to the shallow water surrounding the proposed pipe alignment.

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

Fishing zones, indicated by Hovsan Port Authorities and used by professional fishermen, are located in the southern part of the Caspian Sea. The closest fishing area is located next to Makaparon oil field about 20 miles from the coast. Fishing zones are southwards from Makaparon oil field. The main offshore production fields are far from the project site. The oil field located next to the project site (on Gum Island and south of Gum Island) comprises 72 oil wells.

Institutional and legislative framework Azersu Joint-Stock Company (Azersu JSC) is the current Azerbaijani state-governed water company responsible for water supply and sewerage over the all Azerbaijan. The central institution in charge of Environment is the Ministry of Ecology and Natural Resources (MENR) created in 2001 by a Presidential Decree. The Caspian Environment Program (CEP) was launched in may 1998 and represents a partnership between the five littoral states, Azerbaijan, Islamic Republic of Iran, Kazakhstan, Russian Federation and Turkmenistan, and the International Partners, namely the EU, UNDP, UNEP, and the World Bank. The overall goal of the CEP is to promote the sustainable development and management of the Caspian environment in order to obtain the optimal long-term benefits for the human population of the region. The Sanitary and Epidemiology Department of the Ministry of Health (MOH) undertakes routine monitoring of the water quality of both drinking and bathing waters. MOH is also responsible for issuance of sanitary standards, especially those related to water quality. Environmental NGOs have developed since the independence and more particularly the enactment of the Law on Environmental Protection (1999). They have gained valuable experience in participating in many Environmental Impact Assessments including environmental monitoring and public participation activities. . Since it gained its independence, Azerbaijan has ratified many international conventions in the field of environment among which the Framework Convention on the protection of Caspian Sea marine environment which is the first legally binding document addressing the protection of Caspian Sea environment. The general principles of Environmental protection in Azerbaijan are provided for by the Law on Environmental Protection (hereinafter, the LEP) dated 8th June 1999. As cited in its preamble, the purpose of the LEP is to guarantee environmental safety and the ecological balance of the environment, prevent the impact of socioeconomic and other activities, preserve biological diversity, and effectively manage the use of nature. Importantly, among the basic environment The Law on Fauna (LOF), also referred as Law on Wildlife (LOW), dated 4 June 1999 stipulates that wildlife is a national asset, and thus must not be affected by any physical or legal entity (Art. 5). More specifically with respect of the Baku outfall project, the LOF stipulates that during the design and construction phase of pipelines across coastal areas provisions shall be made and measures shall be implemented that ensure the preservation of the habitat, breeding conditions, and migration routes of wild animals, as well as the inviolability of areas of ecological value” (Art. 29). There is not formal marine protected area in Azerbaijan but it is worth noting that the part of Caspian Sea incorporated to the territory of the Republic of Azerbaijan is classified as a specially protected water object. The main legal documents guiding water supply and sanitation sector include the Water Code dated 26 June 1997, and the Law on Water Supply and Wastewater dated 28 October 1999. The Water Code is the key document for the water sector development. It regulates the use of water bodies for all different usages. The Law on Water Supply and Wastewater sets institutional and economic principles of municipal water provision, and the obligations of water service providers and consumers.

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

Azeri regulations relating to the discharge of wastewater into the natural water bodies derives from the former Soviet regulations. Based on the translated documents, it seems that permissible limits are not measured in the wastewater itself but at the discharge point (i.e.: within the receiving body after dilution). It is obvious that these standards addressing the receiving body and not the wastewater itself are difficult to monitor continuously in a proactive way, especially for WWTP performance management. So it has been decided through the letter sent in 16 April 2009 by Deputy of the Prime Minister of the Azerbaijan Republic to MENR, Ministry of Emergency Situations and Ministry of Health, that European standards will be applied in Water Supply and Sanitation Projects. It seems that there are no legal standards for the quality of recreational waters per se, but publications of the Ministry of Health in Azerbaijan usually mention a guideline value for Escherichia coli in bathing water of 500/100 ml.

Hovsan Wastewater Outfall project The wastewater collection system covers around 78% of the population of Baku. At present, the wastewater collection system comprises more than 1100 km of gravity pipes, 35 pumping stations, more than 100 km of pressure mains, five wastewater treatment plants for urban wastewater and one wastewater treatment plant for industrial wastewater. The characteristics of existing wastewater treatment plants are as follows : - Hovsan WWTP located on the southern coast of Absheron peninsula with a capacity of 640 000 m3/d. The wastewater arriving at the treatment plant is a mix of urban and industrial wastewater. - Zigh WWTP located on the southern coast of Absheron peninsula with a capacity of 126 000 m3/d, which requires complete refurbishment; - Haci-Hasan WWTP located near Lokbatan region (west of Baku city with a capacity of 18 600 m3/d; - Mardakan Shuvela WWTP located on the eastern coast of Absheron peninsula with a capacity of 16 000 m3/d; - Buzovna WWTP located on the eastern coast of Absheron peninsula with a capacity of 10 000 m3/d; - Sahil WWTP located on the southern coast of Absheron peninsula, west of Baku city,with a capacity of 17 600 m3/d. Due to the topography, most of the wastewater generated by Baku city centre flows by gravity to the seaside. There, a series of pumping stations and a deep interceptor (down to 28 m deep) send effluents to the eastern part of the city towards Hovsan WWTP. The majority of effluents is pumped to the Hovsan WWTP through Zigh pumping station, the rest flows by gravity. In Baku city centre, wastewater collection network and stormwater drainage network were originally separate. Nowadays, the split of flows is not properly done, wastewater is being discharged through storm sewers. The total average daily flow of water discharge by the storm drainage system of Greater Baku amounts to 324 000 m3/day. Analyses of water discharged into the sea through storm collectors indicate that some parameters such as oil products, suspended solids, BOD5 are equivalent to measurements taken at the entrance of WWTPs. Suspended solids concentrations are around 100 mg/l versus a EU standard of 35 mg/l and BOD5 concentrations are around 40 mg/l versus a standard of 25 mg/l Discharge of wastewater into the environment was estimated at 327 million m3 in 2008. Hovsan WWTP received 51% of Baku City wastewater, 39% was discharged through drainage network, Zigh WWTP received 4% of wastewater and the rest (6%) was treated by the other WWTPs. However, this split of flow does not actually give an exhaustive recapitulation of the wastewater discharge in Greater Baku. Hovsan Canal is, for

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

instance, not included in this list but its average flow is estimated at around 100 000 and 120 000 m3/day according to the SOCAR’s Ecological Department (ED). The Hovsan Canal receives wastewater from human settlements, industries, transport and commercial facilities as well as the largest lake of Absheron Peninsula - Lake of Boyuk-Shor which itself receives numerous industrial and domestic effluents. The Hovsan Canal is one of major source of pollution of the coast of Greater Baku. It discharges into the western Hovsan Bay, less than 500 m away from the discharge point of Hovsan WWTP. Hovsan WWTP Hovsan WWTP original design was a medium-load activated sludge treatment. The volume of wastewater discharged from Hovsan WWTP is almost constant throughout the year: it has stayed between 12 and 15 million m3/month over the 2006-2008 period. Analyses of wastewater entering the Hovsan WWTP show that wastewater is not concentrated: BOD5 from 80 to 95 mg O2/l, COD from 180 to 220 mg O2 /l and TSS from 140 to 160 mg/l) and COD/BOD5 ratio is standard for urban wastewater (between 2 and 2.5) Analyses of treated wastewater from Hovsan WWTP show that: - Quality of treated wastewater is constant throughout the year;

- BOD5 values are between 10 and 15 mgO2/l, which is below EU standards (25 mg/l)

- COD values are between 35 and 45 mg O2/l, which is well below EU standards (125 mg/l) - Suspended Solids concentrations are between 10 and 12 mg/l, which is below EU standards (35 mg/l) - Total N concentrations are between 8 and 10 mg/l - Phosphate concentrations are between 1.7 and 2.9 mg/l - pH values are comprised between 7.1 and 7.4. Analysis carried out at the secondary WWTPs show that treated wastewater quality does not comply with reference standards (for instance EU standards). Consequently, a strong effort should be made to rehabilitate and upgrade these treatment facilities. Projects planning According to the existing wastewater master plan which dates back in 1999, in addition to the existing WWTP that will remain and be extended in future, it was planned to implement construction of eight new wastewater treatment plants (biological treatment) in Absheron peninsula. In addition, wastewater flows conveyed by Hovsan Canal are planned to be transported by a closed system (pipe) to a new wastewater treatment plant with a capacity of 200 000 m3/day. This new WWTP is planned to be built in the Hovsan shoreline area. After completion of all these WWTPs, there will be no discharge of untreated wastewater flows into Caspian Sea in accordance with State Ecological Program. Hovsan WWTP rehabilitation and upgrading project Hovsan WWTP was in poor condition and a project is underway to partly rehabilitate and upgrade the treatment plant and Zikh pumping station. This project is fully funded by the French Government. Based on the performance guarantee of the rehabilitation project and the quality of existing treated wastewater, it is assumed that the combined flow will not exceed: 25 mg/l f BOD5, 125 mg/l f COD, 25 mg/l of SS, 10 mg/l of Total nitrogen, and 2.3 mg/l of total phosphorus.

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

These values can be considered as maximum values since quality of treated wastewater from the existing WWTP is better than the above figures. As for total coliforms (TC), the average concentration in wastewater after a biological treatment is generally around 106 TC/100 ml. Based on the assumptions of FS consultant as well as the expected quality of treated wastewater, the estimated flow rates and the estimated pollution loads for alternatives are 3 as follows : average flowrate in 2050 : 600 698 m /day, average BOD5 load : 15 017 kg/day, average COD load: 75 087 kg/day, average SS load : 15 017 kg/day. These values are used as a basis for estimating the impact of treated wastewater discharge on sea water quality.

Presentation of Alternatives This section is mainly based on the report prepared by the Feasibility Consultant. Alternative 1 – Early design In 1991, a design for the construction of sea outfall was prepared by Institute on River Transport Designing (Kiev, Ukraine). It consisted in the construction of a 3.8 km long overland pipeline and of 4 offshore pipelines (1400 mm diameter) with lengths of about 8 km. Part of the inland pipe and the outfalls were constructed but part of the inland pipe was never installed and the overall system was never put into service. The main disadvantage of this alternative is that today, the overland route passes through a new settlement area and construction works would entail a substantial amount of expropriation and resettlement and therefore important social, financial and environmental impacts to the project. The other main disadvantages of the project are listed below: - there is a forbidden zone allocated to shipping vessels’ magnetic calibration area next to the proposed sea outfall location; - according to Azersu, there would be up to 150 houses to expropriate; - the necessity to construct and operate a pumping station downstream of the WWTP due to the length of the overland and offshore pipes (3.8 + 8 km).

Alternative 2 – proposed design The proposed design consists in the construction of a 1 km long overland pipeline on the south direction from Hovsan WWTP followed by a 8 km long sea outfall. This alternative has the following advantages: - this is the direct route from Hovsan WWTP to the sea - there are no housing, business or any need for land acquisition or resettlement on the proposed route of the outfall there is only one communication cable crossing the route but the Ministry of Communication and Information technology gave the Non Objection for construction of the outlet pipe while crossing the communication cable - there are no activities or infrastructures around that may hamper the construction of the sea outfall. The length of the sea outfall is mainly governed by the fact that there is a sand dune around 7 km off the coast and it is necessary to go beyond this point to discharge

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

effluents. Indeed, any discharge before this point will be trapped in an area where dispersion might be reduced by the site configuration. Alternative 3 – Construction of a 5 km long sea outfall In the course of the EIA implementation, a new alternative came up which consists in constructing a 5km long sea outfall at the same location as alternative 2. This alternative will not be affecting the sand bar, would require less dredging which would reduce the disturbances due to re-suspension of sediment fine and polluted content and deposition of dredged materials and would reduce the cost of the project. However, a detailed circulation and renewal modelling should be carried out to ensure that there will be no accumulation of pollutants and nutrients in this zone if this outfall is constructed.

Alternative 4 – Reusing the effluent in agriculture The effluent reuse options that were considered by the FS consultant were: - reuse for irrigation; - discharge to the natural environment. Proposed reuse site by Ministry of Agriculture of Republic of Azerbaijan is on the west side of the city of Baku. This area is owned by the State. There is no vegetation at the moment, but the objective would be to cultivate animal feeds. The reuse scheme would consist in pumping the effluents to the lakes on the hills next to the propose reuse site. These lakes would be transformed into dams. From there, reused water would be fed by gravity to the irrigation area totalizing 22 000 ha. This alternative is not sufficient as such since one need another solution to properly discharge effluent when there are no need for irrigation (rainy season, winter,…). This alternative is not technically and economically feasible. In addition, from an environmental standpoint, due to the existing soil and sub- soil (hydro-geological) conditions, this alternative could cause important damages to the environment such as soil salinization / alkalization. Main features of the sewage outfall The sewage outfall starts at the outlet of Hovsan wastewater treatment plant and comprises a land portion and a marine portion. The land outfall pipeline is 939 m long and 2.4 m internal diameter, made of GRP. It starts at the WWTP outlet and runs down to the coast with a regular slope. The marine part of the outfall is to be a single 2.4 m internal diameter, made of GRP and 8 km long pipeline. Between 6 000 and 8 000 m from shore, the pipe crosses a submarine ridge. Pipe outlet takes place along the pipe last 230 m from 7 770 m to 8 000 m, where 18 risers on each pipe constitute the diffuser. Pipe material proposed by FS consultant is GRP mainly because it is manufactured locally. Other pipe materials that the outfall could be made of are possible as long as the life cycle cost is comparable or cheaper, including HDPE or steel. The total duration of the construction works is estimated at nearly 2 years. Due to the outfall length and to the supply of pipe in short lengths, the longest phase of works will presumably be pipe preassembly and fitting. At Hovsan, sea bed is sandy along the whole route proposed for the outfall. Trench width will be about 5 m at the bottom with slopes between 4/1 and 7/1 depending on sand cohesion. The dredging volume is expected to be 60 to 80 m3/m for the close-to-shore trench and will reach up to 350 m3/m for the offshore ridge (sandbar) crossing. Considering that the spoil mixture will deposit with a 10/1 slope, the impacted sea bed area will be a 60 to 70 m wide band along the outfall path where deposit will be up to 2 m thick. Along the land section, trench backfilling will be mainly done from excavated material.

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Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

Along the marine section, backfilling will differ for the “close-to-shore” trench and the submarine ridge (sandbar) crossing. For the close-to-shore trench, spoil material extracted from the trench will be impossible to dredge because of its spreading on the sea bed and because it mostly is very fine material not adequate for backfilling. Therefore it will be necessary to extract sand of adequate characteristics from a borrow area (about 570 000 m3). For the submarine ridge (sandbar), extracted material should be of good quality and will have been deposited in a specific spoil area so that it may be dredged for backfill in order to reconstitute the ridge. During the site works, 50 to 100 workers may be employed on each construction site depending on the construction phase. Baseline data According to the outfall design, the study area will be comprised of a terrestrial section, which is defined as the 1km wide strip covering the land located within a distance of 500m of the onshore outfall route (1 km long) and a marine section which is defined as the 1km wide strip covering the sea bottom located within a distance of 500m of the outfall route from the shoreline to a distance of 500 m downstream of the outfall diffuser. The 500m distance has been chosen as a “safety distance” beyond which the main negative impacts associated with construction and operation of the outfall (noise, air pollution, visual impact, and water pollution) are attenuated down to an acceptable level. Two specific marine field surveys have been carried out for the purpose of both Feasibility Study (FS) and the present Environmental Impact Assessment (EIA). The first survey was focused on the physical and chemical characterization of the sea water column and sea bed along the outfall route. A second field survey was carried out to investigate the aquatic biota living along the outfall route. The survey consisted of identification of the main taxa, the abundance and biomass of which was determined. The main results are summarized below : - Seawater quality is influenced by Hovsan discharge point with high concentration near the sea shore (between 10 and 22 NTU for turbidity, 0.85 mg/l for Ammonia, 160 000 TC/100 ml) and lower concentrations offshore (around 5 NTU for turbidity, 0.1 mg/l for Ammonia, around 2 000 TC/100 ml) - T90 was estimated at 90 mn; - Analysis of sediments show high concentrations of petroleum products between 400 m and 4500 m away from the shoreline (between 3.5 and 6.2 g/kg), high concentration of some heavy metals (Copper up to 910 mg/kg, and mercury up to 1.2 mg/kg) - The total measured biomass of phytoplankton amounts to about 32 g/m3 in Hovsan Bay which is very high as compared with values measured off-shore in Middle and Southern Caspian Sea which generally do not exceed 100 mg/m3. - Phytoplankton is dominated by Bacillariophyta (diatoms) among which the large diatom Rhizosolenia calcaravis is highly prevailing in the Hovsan Bay: 80-90% of the diatom biomass and around 30 % of the total phytoplankton biomass; - Basic zooplankton biomass (wet weight) varies from 2.0 g/m3 above inner slope to 2.8 g/m3 in Hovsan Bay. These values are rather high even if the sampling was made in summer, when the zooplankton is most abundant. The zooplankton species which were identified during the field survey in August 2009 fall into five categories that are: Rotatoria, Cladocera, Copepoda, Ctenophora and roes of Mollusca, Balanus and Copepoda. - The total measured biomass of zoobenthos amounts to about 80 g/m2 in Hovsan Bay, about 110 g/m2 above the inner slope and about 145 g/m2 above the outer slope. With regard to benthos communities, which are most likely to be affected by the construction of the outfall, it can be stated that these

December 2009 Seureca - ASPI 12

Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

communities are almost fully comprised of introduced species. The predominance of alien benthos species has been established for the all Caspian Sea, but the particular context of the Baku Bight, characterised by a high pollution level, has even more favoured these alien species against native species. However, most of the benthos species show very small body sizes. The only water course which crosses the study area is the manmade Hovsan Canal, the flow of which is during most part of the year constituted by both domestic and industrial wastewater. The land of the study area is covered by patchy vegetation comprised of low herbaceous plants. The number of species is reduced to less than 10 dominated by 3 or 4 common plants. No macro-fauna of interest was observed during the field visit. In short, it can be considered that no remarkable, rare, endangered or protected fauna and flora is likely to dwell, feed or spawn within the terrestrial study area. The land stretching between Hovsan WWTP and the seashore where the terrestrial study area is located is the property of the State The nearest housings are located at the eastern limit of the study area, more than 450m away from the outfall route. These are mostly middle standing houses. The nearest dense housing (multi-storey buildings) are located 1 km further eastwards. The study area is crossed by many aerial metallic pipes of different diameters. The polluted beach and shoreline are not used for recreational purpose but one fisherman and his kids were seen catching few fishes. This fishing activity is however marginal and cannot be considered as a livelihood for the local population. The field visits have not revealed any visible signs of archaeological and cultural assets within the study area. Currents in the Hovsan area are low. They are generated as secondary eddies from the main currents existing around the Absheron Peninsula. From available aerial and satellite imagery, it appears currents are globally clockwise within the bay where the present WWTP outlet is located. Currents velocity seems low, of the order of a few cm/s. From wind data, the maximum heights of waves generated by south winds which may reach the outfall site are of the order of 2 to 2.5 meters. The main findings of sea water analyses are summarized as follows: influence of existing Hovsan discharge point can be observed with high turbidity, ammonia and coliforms concentrations. In contrast to concentration in water, concentration of pollutants in sediments, especially persistent pollutants such as heavy metals or PAH reflects contamination cumulated over a certain period. The main findings of the sediment analysis are summarized as follows: high concentration of petroleum products are observed (up to 6.2 mg/kg), heavy metals are also observed and for some of them (Mercury, Arsenic) at higher concentration than the lower effect level. Zooplankton and phytoplankton were studied in the water column and macro-benthic fauna (> 0.5 mm) was studied in collected sediment. The total measured biomass of phytoplankton amounts to about 32 g/m3 in Hovsan Bay and about 25 g/m3 above inner and outer slopes. These values are very high as compared with values measured off-shore in Middle and Southern Caspian Sea which generally do not exceed 100 mg/m3. So, the sampled sea water can be considered as eutrophic or mesotrophic. Basic zooplankton biomass (wet weight) varies from 2.0 g/m3 to 2.8 g/m3. These values are rather high even if the sampling was made in summer, when the zooplankton is most abundant.

December 2009 Seureca - ASPI 13

Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

The macro-benthos species which were identified during the field survey fall into six taxonomic categories that are: Polychaeta (Annelida), Cirripedia (Crustacea), Amphipoda (Crustacea), Decapoda (Crustacea), Bivavia (Mollusca) and Bryozoa. The total measured biomass of zoobenthos amounts between 80 g/m2 in Hovsan Bay and about 145 g/m2 above the outer slope of the sand bar. With regard to benthos communities, which are most likely to be affected by the construction of the outfall, it can be stated that these communities are almost fully comprised of introduced species. The upper marine fauna (fishes and seals) has not been investigated for the purpose of the project, but the high pollution level of both sea water and sediments which most likely dates back several decades and the low biomass of benthic fauna (due to both pollution and invasive comb-jelly fishes) render the marine study area not very attractive for the upper fauna, especially the protected sturgeons and Caspian seal Environmental impacts The positive impacts identified for the project are: (i) during construction phase, employment of around 100 persons during nearly 2 years, induced economic activities, and (ii) during operation phase, improvement of public health, environmental and health benefits from elimination of chlorination, improvement of quality of life. The potential negative impacts are listed below. The potential negative impacts deemed significant are: (i) during construction phase, sea water pollution, sea bed excavation, sea bed pollution, introduction of invasive alien species, adverse effects on health, welfare and of the nearby population and (ii) during operation phase, bad perception of outfall by the riparian and local tourist population (which may cause public protest and bad image of Azersu). The potential negative impacts deemed moderate are: (i) during construction phase, loss of natural soil, pollution of soil, pollution of surface and ground water, destruction of terrestrial vegetation, destruction and disturbance of terrestrial fauna, changes in benthic communities (because mainly comprising introduced, mobile species which can re- colonize the backfilling material), changes in pelagic communities, disruption of road traffic, disruption to public services, and (ii) during operation phase, sea water pollution, sea bed pollution, changes in pelagic communities (because of the limited increment of nutrient due to the dilution). It should be noted that, in case of impaired treatment at Hovsan WWTP, the impact on marine environment is deemed significant. Proper operations and maintenance procedures are therefore needed at the treatment works to ensure that the risk of plant shut-down is minimized, but emergency plan with additional investments (like a buffer reservoir to store wastewater while solving the problem) is not required.

All other identified impacts were considered insignificant. Environmental analysis of alternatives If the project is not implemented (No project alternative), the upgraded Hovsan WWTP will be responsible for two alternative nuisances: either the health risk related to the release of large amounts of faecal germs on the seashore or the environmental/ecological damages associated to chlorination. As for the outfall route alternative, this alternative entails resettlement of quite numerous populations which is a major negative impact and it is not cost effective. In addition, the discharge of effluent will be closer to the recreational waters. For the outfall length of 5km, this solution presents many advantages compared to the preferred option which are that (i) it will not be affecting the sand bar, (ii) it would require less dredging which would reduce the disturbances due to re-suspension of sediment fine and polluted content and deposition of dredged materials, (iii) it would reduce the project cost, and (iv) even with 5 km long and 8 m deep outfall, the plume will not reach the coast. However, there is a risk of accumulation of organic matters and nutrients, therefore

December 2009 Seureca - ASPI 14

Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

a study should be carried out to assess the renewal capacity of the area behind the submerged sand bar and the potential impact of such renewal capacity on the dispersion and accumulation of the organic matter and nutrients in the sea. For the reuse alternative, wastewater analyses show that irrigation with treated waste water produced by Hovsan WWTP can only be undertaken with salt-tolerant crops. In addition, the perched water table caused by a continuous watering may reach the existing shallowest water table, which is often brackish, and so cause the salt growing up to the top soil. Then, soil salinization can occur, not because of the irrigation water but because of the brackish groundwater. It is also worth noting that this alternative cannot replace in the short and middle term the outfall alternative because of the tremendous flow of wastewater which will need environmentally sound disposal. Environmental Management Plan The recommended environmental impact mitigation measures of the wastewater outfall project have been divided into the four following categories: - Measures forming part of good environmental practices of a works contractor : o Ballast waters management, o Work camp and facilities siting, o Management of staff, hygiene and safety, o Management of hydrocarbons and other hazardous substances, o Waste management, o Abandoning the facilities on completion of the work, o Control of vegetation, tree felling, o Protection of public and private equipments, o Protection of Air Quality, o Protection of Quality of Sea and Fresh Waters, o Management of spoil material on land, o Management of marine spoil material (excavated sediments), o Noise Management, o Protection of Public and Private Utilities, o Management of Traffic and Social impacts - Measures consisting of additional works: o Restoration of the offshore ridge (sandbar), o By-pass for sending the effluent to the outfall in case of impairment of Hovsan WWTP, - Accompanying measures: o Ensuring the suitable quality of raw effluents treated by Hovsan WWTP: industrial sensitisation program, o Ensuring the treatment performance through a middle term Technical Assistance, o Shutting down the chlorination at Hovsan WWTP, o Regulation for the protection of the terrestrial outfall route,

December 2009 Seureca - ASPI 15

Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

o Regulation for the protection of the marine outfall route, o Communication on the treatment works and wastewater outfall, - General recommendations for the middle term : o Drinking and Wastewater Master Plan for the whole Absheron Peninsula, o Phasing out the chlorination of Treated (and Untreated) Wastewater in All WWTP Operated by Azersu, o Regulation about wastewater discharge, The Consultant recommends the creation of an Environmental Monitoring Unit (EMU), a multi-sectoral committee which will be responsible in coordinating and supervising the implementation of all recommended environmental measures and in assessing in a proactive manner the environmental impacts of the project. This EMU should be located at Hovsan WWTP. Azersu JSC is the contracting authority. As a state-governed company, it should ensure compliance of the project with the national policy and regulations related to the protection of the environment. Azersu’s duty is to ensure that environmental concerns are addressed at all project levels as well as the mitigation measures to address these concerns are implemented, i.e. feasibility (i.e. present stage), design, construction, and operation. The implementation of the impact monitoring plan will be the assignment of a competent Impact Monitoring Consultant (IMC), who will be employed by Azersu. Since the Caspian Sea is the most important environmental asset potentially affected by the project implementation, it is critical that the Caspian Complex Environmental Monitoring Department (CCEMD) of the MENR be closely involved in the monitoring process. The Supervision Consultant shall make sure that the construction contractor properly implements the environmental requirements specified in the contract documentation and in the Contractor Environmental Management Plan. Since the environmental supervision needs to be carried out on a daily basis, the Supervision Consultant team should include a half-time Environmental Supervision Officer. A set of quantitative and qualitative indicators have been identified and can be considered as items of check-list to be reviewed and to establish, if the need arises, a non-compliance note to be slot in the monthly supervision reports. These indicators are routine monitoring parameters of wastewater: BOD5, Dissolved oxygen, total coliforms, faecal coliforms, nitrogen, phosphorus… Other wastewater parameters more specific are monitored on annual bases: heavy metals, Petroleum products, organic micro pollutants (HAP, PCB, pesticides) and pathogens,… Sea water and sea bed pollution parameters are monitored on annual bases. The monitoring plan has been defined for the initial monitoring stage which starts from the end of the outfall construction and finish after 3 years of outfall operation. Operation phase indicators are related to the quality of raw and treated wastewater of the Hovsan WWTP, in particular the concentration of toxic substances, faecal germs, organic matters and nutrients, and solid particles and the quality of the most sensitive of impacted environmental components which are the sea water and the sea bottom together with their dwelling biota. The project environment related costs have been detailed. They amount to US $ 4 250 000 for the entire project duration, which includes a 3 year pilot monitoring stage (long term monitoring should be borne by Azersu on its own resources) and which is about 3% of the project total cost and split as follows: - Measures consisting of additional works, including Restoration of the offshore ridge and the construction of a by-pass at Hovsan WWTP: US $ 2 400 000 - Accompanying and soft measures: US $ 1 440 000

December 2009 Seureca - ASPI 16

Environmental Impact Assessment study for Hovsan Wastewater Treatment Plant Sea Outfall Construction Executive summary

- Environmental supervision : US $ 110 000 - Environmental monitoring : US $ 300 000

Public consultation An initial public meeting has been organized on June 24, 2009 to present the project and the study to stakeholders (public bodies, NGOs,…) and a final public meeting has been organized on November 12, 2009 after disclosure of the draft EIA. Discussions during the initial public meeting were about the project, the alternatives that should be studied, the industrial wastewater, and the impact of the project on local population. During the final public meeting, a comprehensive presentation was made which detailed the main sections of the project including project setting, policy, legal, and administrative framework, Baku sewage disposal project, baseline data, environmental impacts and analysis of alternatives, Environmental Management Plan and steps of its implementation and conclusion. After the presentation, broad discussions were held during more than an hour about the project, its impacts and mitigation measures, the alternatives, the wastewater reuse option,… Conclusion Although the construction of the Hovsan wastewater outfall will not result in cleaning the highly polluted Baku Bight, this project can be considered as a first step of a comprehensive process of management of wastewater produced in the entire Absheron Peninsula. With this project, the wastewater treated in the bigger WWTP of Baku will be kept away from the coastal water used by the Baku population and hence protects the public health. The discharge of the treated wastewater into the Caspian Sea water is not likely to cause major change in the marine life in the surrounding of the discharge point (diffuser). The Hovsan outfall is the only long outfall of Azerbaijan and most probably one of the longest outfalls of the whole Caspian Sea. Accordingly, the project may be considered as a flagship project which can serve as a reference for the following ones. That is why that the environmental monitoring is very critical for proving or confirming the relative harmlessness of environmental impacts of this kind of treated water disposal. So it is highly recommended to Azersu which will operate the outfall to ensure the high quality and reliability of the monitoring process and analyses which will not have to suffer from criticism from the scientific communities.

December 2009 Seureca - ASPI 17