Environmental and Social Review Summary

Istanbul Kadikoy--Kaynarca Transportation System

Feb 24

This Environmental and Social Review Summary (ESRS) is prepared by MIGA staff and disclosed in advance of the MIGA Board consideration of the proposed issuance of a Contract of Guarantee. Its purpose is to enhance the transparency of MIGA’s activities. This document should not be construed as presuming the outcome of the decision by the MIGA Board of Directors. Board dates are estimates only.

Any documentation which is attached to this ESRS has been prepared by the project sponsor, and authorization has been given for public release. MIGA has reviewed the attached documentation as provided by the applicant, and considers it of adequate quality to be released to the public, but does not endorse the content.

Country: Sector: Infrastructure Project Enterprises: West LB Branch, I.B.B. (Istanbul Metropolitan Municipality) Directorate of Rail Systems Environmental Category: B Date ESRS Disclosed: February 24, 2011 Status: Due Diligence

A. Project Description

MIGA has been asked to provide guarantees for the and operation of metro extension line Kadikoy-Kartal-Kaynarca (25,9 km) on the Asian (Anatolian) side of Istanbul (“project”). This metro extension is a transit line between business, light industry sites and residential areas in Kadikoy, Kartal, and districts of Istanbul. The line will ultimately connect the Bosphorous Tube Crossing via the Ibrahimaga Station, providing convenient and fast access to the European side of Istanbul and to the rest of the city’s metro system. The project will be constructed in two phases: Phase-I works comprise the construction of 21.7 km of the civil works and electro- mechanical systems of the line between Kadikoy and Kartal, which includes 16 metro stations. Work on this phase started in 2008, with Avrasya Metro Grubu (AMG) with Astaldi as the lead contractor1. IFC invested in the first phase of the project; the project ESRS was disclosed by IFC on August 5, 2008 (www.ifc.org). Phase-II consists of the additional extension of the metro line of 4.2 km from Kartal to Kaynarca with three stations, and the construction of a parking and maintenance area. The estimated volume is 70.000 passengers/hour, but is expected that it can increase up to 90.000 passengers/hour. Construction of for Kartal –Kaynarca line will be conducted by AMG, but station construction will be conducted by another construction group yet to be identified by Metropolitan Municipality of Istanbul (I.B.B), Both Phases I and II will be operated as one entity.

1 Astaldi is leading the consortium that is constructing the Metro Extension. This consortium comprises: Astaldi (42%), Makyol (41%) and Gulermak (17%).

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B. Environmental and Social Categorization

The project is a Category B under MIGA’s Policy on Social and Environmental Sustainability. The key social and environmental issues are land acquisition and compensation, loss of livelihood by minibus drivers and owners who are working on the same route, community and workers’ health and safety, air quality, noise, and spill management (particularly during the construction phase). These impacts are/can be mitigated through generally recognized mitigation measures and standards. Key among the most relevant prevention and mitigation measures during construction and operation include minimization of water and energy consumption and emissions, improved tunneling safety, appropriate waste management (including disposal and excavation spoils), adoption of proper workers’ health and safety measures, and fair and transparent compensation for affected people through land acquisition and loss of livelihood. The project is expected to have largely positive environmental and social impacts as it will provide a clean mass alternative that will alleviate road congestion and reduce fossil-based mass transport as part of Istanbul Master Transport Plan.

C. Applicable Standards

Although all Performance Standards are applied to the project, based on our current information it is expected that the project will be managed in accordance with the following Performance Standards: - PS1: Social and Environmental Assessment and Management System - PS2: Labor and Working Conditions - PS3: Pollution Prevention and Abatement - PS4: Community Health, Safety and Security - PS5: Land Acquisition and Resettlement - PS8: Cultural Heritage

Since there are no protected natural habitats or recognized indigenous communities in the area of influence of the project, PS 6: Biodiversity Conservation & Sustainable Natural Resources Management and PS7: Indigenous Peoples do not apply for the purpose of MIGA’s review of this project.

D. Key Documents and Scope of MIGA Review

MIGA’s review of this project consisted of appraising environmental and social information submitted by West LB and Astaldi and a site visit in July 2010. As part of its due diligence MIGA reviewed IFC’s ESRS and also consulted IFC, who provided a loan to I.B.B for the Kadikoy-Kartal section of the metro extension and met with I.B.B personnel assigned to the project.

2 Documents presented to MIGA and reviewed: • Kadikoy-Kartal-Kaynarca Rail Public Transportation System Environmental Impact Assessment Report – Prepared by Mimko (June 2010) • Kadikoy-Kartal Metro Line IFC Community Consultations for Performance Standards Review – prepared by Blackstone Corporation (July 2010) • Occupational Health and Safety Management System Risk Assessment for Kadikoy – Kartal – prepared by AMG (August 2008) • Occupational Health and Safety Emergency Action Plan for Kadikoy – Kartal - prepared by AMG (July 2008) • Operative Safety Plan for Kadikoy-Kartal prepared by AMG (August 2008) • Project Safety Plan for Kadikoy-Kartal – June 2009 • Project Environment Management Plan for Kadikoy-Kartal – October 2008 • Project Report for Kadikoy-Kartal prepared by AMG (December 2010) • Project Quality Management Plan for Kadikoy-Kartal prepared by AMG (December 2010) • Annual Activity Monitoring Report for Kadikoy-Kartal prepared by AMG (2009) • Annual Activity Monitoring Report for Kadikoy-Kartal prepared by AMG (2010) • Project Presentation File (PPF) for Kadikoy-Kartal prepared by Dokay ltd (May 2005)

E. Key Issues and Mitigation

PS1: Social and Environmental Assessment and Management Systems A Project Presentation File (PPF) was completed in May 2005 for Kadikoy and Kartal line by Dokay Engineering and Consulting Ltd. under a contract by the I.B.B in order to comply with Turkish environmental permitting requirements, which are aligned with the European Union standards and regulations. The PPF contains a preliminary evaluation of potential environmental impacts and descriptions of mitigation measures of the physical environment including issues such as land use, water and energy consumption, liquid and solid wastes, and emissions. The PPF was reviewed by a commission by the Governorate of Istanbul Environment Directorate (on behalf of the Turkish Ministry of Environment and Forestry). It was resolved that no full environmental impact assessment was required for the project. Then in 2010, an environmental impact assessment report was conducted by Mimko consultants for Kadikoy-Kartal-Kaynarca to assess the impacts of additional Kartal-Kaynarca line, design and layout changes occurred during the construction of Phase I (Kadikoy-Kartal line), and the repair and maintenance facility. In 2011, Istanbul Environment Directorate decided that no full environmental impact assessment was required for the project. The project’s technical feasibility analyses included geotechnical assessments and seismic analysis, detailed land use surveys along the proposed project corridor, including structural surveys of existing building structures located above the tunnel in consideration of potential risks to community health and safety due to vibration impacts of tunnel construction.

Construction phase management: The construction technology was changed.

The section Altayçeşme-Kartal was determined to be excavated by TBM (technology which requires no blasting, as per Main Contract requirements; The main TBM site

3 has been located in Kartal from where the two TBM would have access and began to bore the running tunnel towards the foreseen direction of Altayçeşme. Whereas, the alignment between Kozyatağı-Altayçeşme was planned - under Employer consent - to be carried out by the conventional NATM method in order to gain time until finalization of the TBM delivery and installation process.

Afterwards , the Municipality “Major Consent” awarding the extension of 4,5 km towards Pendik Direction for the Kadıköy-Kartal Rail System Line has been notified to the Contractor by Employer letter no. M.34.0.İBB.0.14.50-19C.09.S/168 and dated 14.01.2009. The aforementioned extention comprises a double line tunnel section excavation to be carried out by TBM.

Further investigations and studies performed implied the need to revise the construction method in order to enable the Contractor to remain within the contractual completion terms. Thus, the section between Kozyatağı-Kartal has been decided to be carried out by the conventional NATM Method, whereas the extension between Kartal- Kaynarca will be carried out by TBM.

The construction consortium, AMG led by Astaldi, developed an Environmental Management Plan (EMP) which presents appropriate measures for noise and vibration, spoil, ground water, waste, dust, vehicle and plant emissions management, emergency response, and occupational health and safety measures. During the construction phase, Astaldi S.P.A. (Turkey Branch) applied its corporate quality and environmental, health and safety management program which is consistent with ISO 9001, ISO 14001 and OHSAS 18001. In 2009, Astaldi received OHSAS 18001 and ISO 14001. Operational procedures and a manual for occupational health and safety and workers’ training are also in place and being implemented by the consortium. During the environmental and social due diligence mission, MIGA visited the some of the station construction areas, shafts and the main construction camp. MIGA also briefly attended a training session and reviewed training materials. Throughout the entire construction phase AMG presents progress reports to I.B.B (Istanbul Metropolitan Municipality) and the project is monitored by an independent engineering firm (Yuksel Proje) contracted by I.B.B (Istanbul Metropolitan Municipality). MIGA will require Phase II (the Kartal-Kaynarca line) construction (including tunnels and stations) to comply with the same standards, or international best practices as Phase I.

During the operation phase it is I.B.B (Istanbul Metropolitan Municipality) responsibility as a project owner to ensure that the operation of the project will be performed in compliance with national regulations. Istanbul Ulasim (IU) AS will be operating the system through a contract awarded by I.B.B (Istanbul Metropolitan Municipality). Potential risks and mitigation measures for operational phase are also discussed in the PPF submitted to the Ministry of Environment and Forestry. IU will apply its established integrated quality, environmental, health and safety (EHS) management system (certified to ISO 9001, ISO 14000 and OHSAS 18001 since 2006). IU will train its employees on its corporate EHS standards and procedures which include aspects relevant to the occupational hazards of the project, environment and public safety. IU will extend its standard practice and standards to the additional extension between Kartal and Kaynarca.

4 Potential loss of livelihood: The loss of employment of minibus drivers who are currently serving Kadikoy-Kartal line is among one of the project’s key potential adverse impacts. Most of the drivers do not have labor unions or official labor contracts. Studies towards eliminating in the most suitable way the above cited issue are carried out by relevant Municipality’s responsibles I.B.B (Istanbul Metropolitan Municipality) plans to permit them to work on other lines.

PS2: Labor and Working Conditions Turkey has ratified the core ILO Conventions on freedom of association, discrimination, child labor and forced labor. AMG’s labor practices for its direct and contracted workforce and HR policy are designated to be aligned with Turkish Labor Law which is consistent with MIGA’s PS2.

The project employs about 4500 workers during the peak of construction, and the majority, 4,300 are sub-contractors’ workers. AMG works with approximately 90 subcontractor companies. The project enterprise exerts due effort to ensure requirements of PS 2 are applied to all such non-employee workers.

Worker health and safety: Tunneling and cave-ins are significant risks to workers’ health and safety during the construction phase. Other risks are associated with high capacity hoisting equipment and electrical power installations. AMG’s occupational health and safety (OHS) procedures included tunneling safety, including emergency rescue procedures for underground workings, use of explosives, as well as crane/lifting equipment safety. Tunneling safety has already been extensively considered through the geotechnical investigations conducted as part of the baseline assessments. Traditional tunneling methods such as the New Austrian Tunneling Method (NATM) (which include the use of explosive charges in rock sections) have been used in the construction following internationally recognized underground excavation safety standards following a documented procedure.

All workers go through regular health checks once a year, and chest x-ray and hearing tests every 6 months. AMG prepared a personnel management procedure consistent with PS2 principles. AMG submits annual OHS monitoring reports to the I.B.B and holds weekly OHS meetings with subcontractors. Those which do not comply with AMG’s environment and OHS requirements are fined by AMG. Euro 200,000 fine was collected by the end of 2009 and used to fund workers’ EHS trainings. All workers receive training before starting to work. In addition to initial training, approximately 4000 (Updated figure are available in the Annual Monitoring Report 2010 reference of this document) workers have received one day training and entered exams since 2009. There have been two fatal accidents.

AMG has prepared and revised its Project Security Plan to identify and address construction phase security and emergency issues. The plan includes Risk Procedures and Analysis; Emergency Action Plan; OHS Regulations and instructions; inspection plan; risk assessment tables; tunnel training notes. The Emergency Action Plan that has been prepared as an annex of the Occupational Health and Safety Plan has been distributed to all subcontractors. Multi-location emergency response exercises have been organized in 2009 and 2010 under the supervision of AKUT, Turkish Search and Rescue

5 Association. More than 50 personnel from AMG and about 20 personnel from AKUT participated in the joint exercises. AKUD also provide fire training.

Project construction activities include operation of a construction worker camp that houses 600 workers and operated by AMG. Adjacent to the AMG camp, subcontractors operate a smaller camp which houses around 100 workers. AMG provides three meals a day to all workers, including subcontracts’ workers. Two part-time medical doctors, and two health workers are available at the main construction camp. The camp is also close (5-6km) to a fully equipped state hospital. MIGA’s social sector specialist visited the workers’ camps, including AMG’s and subcontractor companies’ dormitories, kitchen and health facilities, interviewed the site doctor and the kitchen manager. AMG’s camp, kitchen and health facilities were in good condition; and the quality of food provided to all workers was very good.

PS3: Pollution Prevention and Abatement During construction phase, solid and liquid waste, noise and vibration, dust, vehicle and plant emissions, hazardous material (waste oil, cleaning solvents from equipment maintenance and repair) are the main sources of pollution. Water and energy consumption need to be minimized. Required measure are taken in line with the legal and Environmental Plan requirements.

Water: During the construction phase, the project utilizes significant amounts of water for tunneling machine operation and workers consumption (hygiene, etc). Estimated consumption for the tunneling system operation in the remaining portion of the Kadikoy – Kartal is450 m3/day by TBMs and 361.033 m3 m3/day by NATM. For concrete production it is estimated to be of 2-300 m3/day. According to the PPF, water utilization from worker consumption is approximately 90 m3 per day assuming an average of 43.282 m3workers during the project construction phase (although up to 4,500 workers are estimated during the peak construction phase). Water is provided by the public water network served by Istanbul’s Water and Sewerage Authority without compromising the availability of water for the local population. Wastewater discharges from sanitary facilities and from dewatering of tunneling operations are discharged into the public sewerage network following applicable regulations and under conditions permitted by the Sewerage Authority.

Electric energy consumed by the tunneling systems and construction camps are supplied by the electricity grid. No on-site sources of permanent power generation during the construction and operational phases are planned. Project technical specifications include new, state of the art, energy efficient electrical systems such as trains, electrical escalators, and lighting systems that will utilize available energy efficient options . Additionally, IU will extend the implementation of its energy monitoring and management program into the operation of the new metro facilities.

Waste: The most significant non-hazardous solid waste generated during the construction phase is the tunneling excavation spoils consisting of crushed rock or unconsolidated materials mixed with drilling bentonite grout, drilling foams. This material is brought to the surface and allowed to dry before it is distributed for road construction base material (if consisting of crushed rock) or sent to approved landfills licensed by the Istanbul

6 Metropolitan Municipality. Construction and demolition materials are recycled to the extent possible. Other types of non-hazardous solid waste generated during the construction and operational phase of the project includes general food and cleaning wastes which are collected by the public waste management services for disposal at the municipal landfills.

Hazardous Materials: Construction and operational activities will generate hazardous wastes, such as waste oil or used cleaning solvents from equipment maintenance and repair activities. These materials will be temporarily stored in closed containers made of materials compatible with the contents and placed in specially designated areas with secondary containment and protection from the weather until such time as they can be transported and managed by a specialized, licensed, contractor in an environmentally sound manner. Medical waste is sent to a state hospital in Kartal.

Greenhouse Gas Emissions: Although the project construction phase entails the consumption of fuel oil for the operation of heavy equipment, after the construction phase the project will have an overall significant positive contribution toward the avoidance or reduction of fossil-fuel derived GHGs during the operational phase. Without this metro system expansion (Kadikoy-Kartal), estimates project a substantial growth in bus and minibus transit along the Kadikoy-Kartal corridor. Currently there are about 22,000 buses and 30,000 minibuses operating in this region with projections to grow to a total of 80,000 buses and minibuses by 2030 unless the metro system extension is constructed.

Air quality: Dust can be a major source of pollution during construction. Watering haul roads and unsealed access roads, washing wheels of trucks leaving construction zones, covering loaded trucks leaving the site, tunnel ventilation are among the mitigation measures implemented. Air quality/dust tests have been conducted by a laboratory licensed by the Ministry of Health. Results have shown that dust is below the limits.

During the construction phase, AMG ensures that construction equipment and vehicles are properly maintained to comply with local emission standards. During the operation phase, IU will extend the application of its air quality monitoring program in stations to address the potential presence of particulate matter originating from train operations (e.g., wear of wheels and brake linings), and introduced into tunnels and stations by maintenance and remodeling activities. The information being gathered through the on- going monitoring programs are used to evaluate and implement dust emission reduction/prevention and control strategies at new and existing facilities.

Noise and vibration impacts associated with the construction are due to tunneling and surface works, demolition of existing structures, road works, and construction of new surfaces, and from spoil removal. Vibration impact is less significant, but is a potential concern. Restricting operating hours, community consultation, regular information bulletins and monitoring noise levels to respond complaints are among the measures implemented. Noise and vibration measures are implemented.

Runoff from construction has the potential to impact on the surrounding water ways by increasing suspended solids, oil and grease and chemical pollutants; causing localized scoring and erosion; and increasing flow on the existing storm water system and therefore

7 altering local flood regime. Sedimentation ponds are used both in tunnels and at the surface and then sent to the waste water treatment facilities if Istanbul Water and Sewege Authority.

The above summarized procedures and mitigation measures are consistent with MIGA’s Performance Standard 3.

PS4: Community Health and Safety All station construction sites are in densely populated urban settlements, and measures are required to mitigate risks associated with construction equipment and vehicles and the general public. All construction sites are clearly fenced and closed to public access. Gates are controlled by unarmed security guards. AMG has prepared traffic plans which have been approved by the Metropolitan Municipality Traffic Department. When necessary, the I.B.B, working in concert with contractors and the engineering consultants, plans for traffic pattern changes and alerts the public of these changes through local mass media and the I.B.B’s website. Additionally, the majority of heavy equipment and materials transport activities to and from the construction sites are conducted outside peak traffic hours in order to minimize the risk of accidents and exacerbation of traffic.

Project infrastructure, including underground tunnels and stations, has been designed to meet internationally recognized engineering and safety standards. Stations and trains will be equipped with safety communication systems to be able to provide instructions to passengers on proper evacuation routes from tunnels. More than one exit will be built in each station so as to allow emergency evacuations. Fire resistant structures and equipment will be used. Ventilation systems will be automatically operated. IU will implement a railway hygiene program consisting of regular disinfection of metro surfaces, escalators, elevators and stations. Safety specifications for electromechanical equipment include a collision avoidance system for trains, emergency alarms and communications systems in the trains and passengers stations and intruder protection alarms in restricted access areas representing potential hazards (such as electrical installations in passenger stations).

As the Marmara Region of Turkey is classified as a high-risk earthquake zone (Earthquake Region Class 1), an earthquake analysis has been conducted by University - Kandilli Rasathanesi and the most probable earthquake risk incorporated into the project structural design. Feasibility assessments also included detailed land use surveys along the proposed project corridor, including existing building structures located above the tunnel in consideration of potential risks to community health and safety due to vibration impacts of tunnel construction.

Security Personnel: Unarmed contracted guards control and monitor the construction sites. As all construction sites in urban areas there are police stations in close proximity. During operation phase, IU will be in charge of implementing security programs which will consist of armed and unarmed security personnel and security systems (including video surveillance) to monitor stations and tunnels.

PS5: Land Acquisition and Resettlement

8 The project does not require any physical displacement. Acquisition of private land was minimized as the underground tunnel is parallel to the E5/D100 Highway. Location of stations and shafts were chosen to avoid resettlement and minimize impacts on privately owned land. The only above-ground facilities to be built for the project are the 19 passenger station access shafts, the maintenance depot (nine hectares) and the workshop area (one hectare). All facilities will be built on uninhabited public lands.

All land was acquired byI.B.BLike other public agencies in Turkey, I.B.B has the authority to expropriate land for public benefit. All properties acquired had free-hold titles. Once the expropriation process was initiated, each property owner was informed in writing and list of properties affected by the project was disclosed for one month by neighborhood authorities (muhtarliklar) as well as district municipalities. An evaluation commission comprised of three experts was formed by I.B.B to define compensation values. Before using the power of eminent public domain, I.B.B needed to negotiate with affected people in a transparent and fair manner first by offering real estate values established by district municipalities and in consultation with a committee established by I.B.BOnly in cases where the property had multiple owners and where it was not possible to reach an agreement (“willing seller and willing buyer”), I.B.Bacquired land by expropriation. The Expropriation Law (revised in 2001 to speed up the process and mitigate negative impacts of expropriation on property owners) encourages fair and timely compensation with reference to market values by establishing a valuation committee and requires evaluation to be made by applying several different sources. This law is consistent with MIGA/IFC’s Performance Standards.

PS8: Cultural Heritage In order to address any potential risk associated to cultural heritage, the I.B.B conducted a baseline assessment of possible archeological resources for the construction sites of the access shafts and passenger station areas, particularly in Kadıköy. The construction of the tunnels are expected to pose low risk of affecting cultural heritage since they will be build in bedrock zone or below the depth of feasible archeological resource location.

Cultural heritage issues related to construction activities in Istanbul are reviewed by various authorities prior to initiating earthworks and are required to comply with Turkish laws and regulations relating to cultural heritage, which are generally consistent with PS8 requirements. In the event of a chance find of a cultural heritage object during earthworks, work stops and the Ministry of Culture and Tourism is informed, which sends an expert to provide direction on how to proceed with the activity to ensure dully protection and rescue of the object if necessary. This procedure is reflected in the EMP.

The 2009 Annual Activity Report stated that Kadikoy Square has been declared to be a historical urban site by the Cultural and Natural Assets Protection Board. The final project revisions and construction activities were carried out according to the instruction of Board taking into consideration of the cultural and natural heritage of the area. As a result, the layout location of the main station area has been revised in order to protect both the historical foundation and trees located in the Kadikoy Square.

F. Environmental Permitting Process and Community Engagement

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Prior to starting construction, the I.B.B’s Media Affairs Department implemented a communications strategy to inform the public about the project’s technical aspects and location, temporary traffic disruptions, work schedules for blasting, -. through the I.B.B’s website (http://www.ibb.gov.tr), TV, newspapers, signage at construction sites, etc. I.B.B and the I.B.B (ISTANBUL MAJOR MUNICIPALITY) Directorate have in place mechanisms to receive, register and process public grievances and comments regarding public services and urban infrastructure and development projects, including this project. These mechanisms include a call center and an e-mail address managed by a public relations unit known as “beyaz masa” (white table). I.B.B started organizing site visits to the Kartal Station for the public. I.B.B (ISTANBUL MAJOR MUNICIPALITY) and I.B.B also have locations in Istanbul where people can go to register concerns.

The operator, IU, is a public customer-focused organization. As part of its quality management system, it employs various channels to inform the public about its operations and to receive and process grievances. These channels include IU’s website (http://www.istanbul-ulasim.com.tr), email address, call center, announcements in magazines and brochures, customer satisfaction surveys, and suggestion boxes in every station.

As was explained in Section E of this ESRS, a PPF was completed in May 2005 for Kadikoy-Kartal line. The PPF was reviewed by a commission by the Governorate of Istanbul Environment Directorate (on behalf of the Ministry of Environment and Environment) and it was resolved that no full environmental impact assessment is required for the project. Then in 2010 Environmental Impact Assessment Report was conducted for Kadikoy-Kartal –Kaynarca to assess the impacts of additional Kartal- Kaynarca line, changes occurred during the construction of the Kadikoy-Kartal line, and the repair and maintenance facility. The report was submitted to the Istanbul Governor’s Office Provincial Environment and Forestry Office, and an environmental certificate was issued on January 25, 2011 with a decision that a full impact assessment is not required.

G. Availability of Documentation

Please see the attached documents – Project Presentation File, Environment Impact Assessment Report, and Environment Management Plan. The Project Presentation File, Environment Management Plan, and the Turkish translation of this ESRS will be also be disclosed in the offices of the affected district municipalities by I.B.B

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