Pakistan: MFF Power Transmission Enhancement Investment Program II, Tranche 3

Social Monitoring Report

April 2021

Period Covering: Jul-Dec 2020

Prepared by National Transmission and Despatch Company (NTDC) for the Asian Development Bank. NOTES

(i) The fiscal year (FY) of the Government of the Islamic Republic of Pakistan and its agencies ends on 30 June. (ii) In this report “$” refer to US dollars.

This social monitoring report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Semiannual Social Monitoring Report (Internal)

Semiannual Social Monitoring Report (Internal) Loan Number: 3419/3420 Reporting period: July-December 2020 Date of Submission of Draft report: 19 March 2021

MFF 2 - PAK: 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Tranche 3

Prepared by:

AF - Mercados Energy Markets International& M/S Tetra Tech ES Inc Joint Venture, Madrid, Spain for National Transmission Enhancement and Despatch Company (NTDC), Environment and Social Impact Cell (ESIC), WAPDA House, Lahore, Pakistan.

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

1. Introduction:

1. The Asian Development Bank (ADB) is supporting 2ndPower Transmission Enhancement Investment Program (PTEIP 2) through second multi-tranche financing facility (MFF-2), which is implemented by National Transmission and Dispatch Company to improve Pakistan's power transmission infrastructure and management. MFF 2 has three tranches, each tranche is divided into a number of sub-projects involving the construction/ up-gradation of power grid stations (or sub-stations) and installation of power transmission lines.

2. The Tranche 3: Loan 3677 was signed in December 13 2018. It became effective in February 2019and will complete in December 2023. The loan comprises nine subprojects which are grouped in 11 contract packages for the implementation (annexure A contains List of projects).

3. Out of these 9 subprojects,3 subprojects involve construction of two new substations, one switching station and two new transmission lines in Punjab province, one subproject entails re-conducting of existing transmission lines near Lahore while remaining 4subprojects involve procurement of substation & transmission line material.

4. The tranche III subprojects funded by ADB are subject to monitoring by NTDC (for internal monitoring on a quarterly and semiannually by FMC) and external monitoring by external monitoring agency/consultant. FMC engaged by NTDC to provide an objective assessment and analysis of the implementation of LARPs, identify if there are any gaps in implementation (LARP activities as planned vs actual implementation) any deviation from safeguards compliance and actions needed to address noncompliance through corrective action plans.

5. Tranche III is currently under contract signing and bidding stage. Although no construction work has been started yet but this semiannual social internal monitoring report which is the requirement of the loan of the tranche III of (MFF-2) is prepared for the period of July to December 2020 highlighting the status of subprojects under this tranche. Annexure -1 presents tranche 3 subprojects implementation status and annexure 2 presents documents status in tranche 3 of subprojects under tranche 3.

2. Status of Implementation and monitoring

6. Tranche-III envisages construction of one 500kV Grid Station (Lahore North) along with allied Transmission Line, one 500kV switching station at Maira, one 220kV Grid Station at Jauharabad, procurement of 500kV shunt reactor & 500/220kV auto transformers, Reconductoring of 220kV New Kot Lakhpat-Bund Road- Sheikhupura T/Line and procurement of transmission line construction & Live line crew equipment. Tranche-III also supports the first large scale grid connected battery energy storage system pilot project in Pakistan. The 9 subprojects in this tranche are listed below:

• ADB-300A: Construction of new 500kV Substation Lahore North along with associated 500kV & 220kV transmission lines. • ADB-300B Construction of new 500kV Maira Switching Station • ADB 300C-R: Construction of new 220kV Substation Jouharabad.

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

• ADB-300D: Procurement & supply of 500kV Shunt Reactors & 500/220kV Auto transformer Banks for 500kV Substations Gatti & Sheikhupura. • ADB-300E: Procurement & supply of protection equipment for Asset Management North region. • ADB-301C: Re-conductoring of 220kV T/Lines Sheikhupura-Bund Road (26km), 220kV Bund Road – New Kot Lakhpat (18km) and faulty portion of 220kV Gatti – Bandala (5km). • ADB-301 D procurement & supply of transmission line construction equipment & live line crew equipment. • ADB-301E: Procurement & supply of fog resistant insulators for enhancing grid resilience to air pollution in heavily polluted area • ADB-302 Procurement of plant-design, supply, installation, testing and commissioning of grid connected battery energy storage system pilot project

The subprojects that have permanent LAR impacts and status of each projects is presented below: 2.1 ADB-300A: Construction of new 500kV Substation Lahore North along with associated 500kV & 220kV transmission lines.

7. Proceedings U/S 7A & 8 have been completed on 16-12-2020. Approval of cost is awaited from BOR Punjab. Land acquisition would be completed by end of May 2021.

8. The complaint issue on LNGS has been resolved with the complainants on 02-02-2021 and an MOU was signed and shared with ADB on 03-02-2021, further details are added under GRM. The LARP and LRP for Grid Station will be updated in August 2021.

2.2 ADB-300B: Procurement of plant- design, supply, installation, testing and commissioning of 500kV Maira Switching station

9. Proceeding U/S -4 is completed on 04-12-2018. Section -5 gazette has been submitted to D.C Rawalpindi for signature and hopefully it will be signed on 22-03-2021 for further publication through Punjab press. The LARP will be updated by end of June 2021.

2.3 ADB-300C-R: Procurement of plant-design, supply, installation, testing and commissioning of Jauharabad 220kV substation (3x160MVA) and associated transmission line (2 km)

10. Award of land under section 11 announced on 01/02/2021. Land acquisition completed. A combined LARP for G/S and T/Lwill be updated by end of July 2021.

2.4 Status of construction work:

There is no construction work undertaken during the reporting period.

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

3. Grievance Redress Mechanism (GRM)

3.1 Summary of complaint of LNGS

A complaint was filed to ADB OSPF by 40 complainants of Lahore North Grid Station against the land acquisition of LNGS in early 2019. The complainant were unwillingness to give land for the proposed project due to the following major reasons; • Land owners depend on the land for livelihood and live in extended families that have widows and disabled persons also. The land acquisition will destroy their family net and result in compensation and inheritance disputes among the extended family members; • current market rate in the area is around Rs.10-13 million/acre against the DPAC’s average price of Rs. 2-5 million/acre; • the site previously considered for acquisition was the barren (about half a km away from the current site) that was changed to the current site due to political influence; • The current site located on the road is prone to flood water that is managed through 8-9 flood regulating causeways, at least 4 of which will submerge under the GS. The fenced GS will have its level raised above the natural soil level which will result in seriously severing the remaining land around the GS, destroying the farm yield, and structures, etc., and • There are at least 3-4 alternate most appropriate sites (on either side the road, which NTDC must explore/acquire for the GS.

3.2 ADB and NTDC’s meeting with complaint on April 2019

After which NTDC and ADB visited the project site on April 16 to 18 2019 to analyze the actual situation and proposed findings of the field visit and action plan to GM PMU to analyze possibility of alternative site and in the meanwhile proposed change in schedule of planned activities with immediate activation of GRM committee GRM committee is attached as annexure 2.

3.3 NTDC’s letter to ADB on findings of alternate site for GS.

NTDC conducted fresh survey during the month of May 2019, to analyze the technically feasibility of alternate site and decided that no government land measuring 200-225 acres is available along the sheikham-lahore road and land 1km away from main road is equally fertile and same nature as existing. NTDC letter to ADB on May 5, 2019 is attached in annexure 4.

3.4 ADB’s OSFP meeting with complaint on July 2019

Later on in July 8, 2019 ADB OSPF team visited the LNGS site and met with complaints to assess the accuracy or difference of information provided by complainants.

• NTDC mentioned that the selected Lahore North Grid Station site (LNGS site) has been selected based on a review of several alternative sites and determined to be the best site. The site requirements are based on the complexity of the project- there will be 500kV, 220 kV, and 132 kV stations as well as a warehouse/housing for the grid operating staff. The site must have accessibility on 3 sides for transmission lines in/out. Most of the affected people at the selected LNGS site do not object. Owners of 72 Kanal out of 1,569 Kanal to be acquired are objecting. This is only about 6% of the affected

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

people who own only 4.6% of the land proposed to be acquired. The NTDC consider the proposed alternative site to be unviable because it is too small in land area and would require a 1 km access road (estimated cost for such a road was provided). • Complainant representatives informed that 120 poor farm families would be displaced by the LNGS if constructed at the site selected by NTDC. 100% of affected households object to the site. About 60% of the affected households have submitted complaints to OSPF (42 signed complaints, most with copy of identification were handed over to OSPF). The selected site is highly productive irrigated farmland. The Complainants feel that they were not consulted regarding the site selection even though they object and have suggestions for alternative sites. The Complainants took OSPF to see the nearby areas which they believe would be more suitable for the LNGS site.

3.5 NTDC’s meeting with complaints on August 2019

Again follow-up meeting was held by NTDC with the complainant on August 8, 2019 to settle the complainant issue. • The complainant came up with following proposal: (I) Exclude some 7 acres of the land from the main road (2 acres already left out while remaining 5 acres are requested to be left out) which has less cultivation, involves no Deras and no widows, disabled persons as owners. All owners of the land as per this proposals are willing to sell their land for construction of the said grid station. (II) Change passage towards project from proposed site (III) Avoid passage of HV TL from the front land towards the main road. • NTDC replied that leaving 7 acres is not technically possible but they can leave 1 more acre (total 3 acres from main road). NTDC agreed to the second demand of change of passage way. However NTDC negate the last demand of avoiding passage way of HV TL from front land due to commercial potential of land along main road.

3.6 Final resolution of compliant in February 2021

Finally an MOU has been signed between complainants and NTDC on February 2, 2021 and both parties has come to a common conclusion to resolve the grievance by proposing to de- notify square No, 180, Killa No, 4,7, 14 and 17 after leaving 100 feet road from main road. Killa No. 16 in square no 180 will be de notified from acquisition process of land from land acquisition. Details are mentioned in MOU as attached in annexure 5.

4. Conclusion Recommendation

4.1 Conclusion 11. During the reporting period no construction work has been done and no any complaints have been received on any of the subproject.

12. FMC has prepared monitoring plan to check the social safeguards activities in the subprojects to improve monitoring work

13. FMC sociologist are maintaining a database of each subprojects in coordination with NTDC field staff and updating the APs details including the inventory of losses, payable amount and payment status.

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

14. FMC team has deputed a deputy manager to strengthen the coordination with ESIC, NTDC field office, supervision consultants and contractors to get the information about the progress of construction activities to align the safeguards documents requirements

15. FMC team has placed additional measures to improve the reporting by putting additional tiers to review the validity of field data and review the quality of monitoring reports by placing an internal independent reader and has set internal deadlines to review the reports before finally submitting to NTDC

4.2 Actions being taken to ensure compliance with safeguard requirements in subsequent tranches: NTDC is taking the following actions in this regards:

• Preparation and updating of procedures for ensuring compensation payment to the DPs before start of construction underway.

• LARP compliance reports and LARP completion reports agreed to be provided to ADB in addition to the normal or routine semiannual or biannual safeguard monitoring reports. LARP compliance reports will be validated by EMC before start of any phase of construction work whether sectional or full. No construction work will commence anywhere in TL ROW 9 full or partial/sectional) unless LARP compliance report of that section is accepted by ADB and a no objection to construction work has been cleared by ADB.

• Customized safeguards training to the contractors of Tranche 2 and 3 on the contractual safeguard requirements and mechanisms to ensure payment to DPs before construction and its monitoring.

• Social Safeguard clauses being incorporated in the bidding and contract documents shall be complemented for enable the Contractor on behalf NTDC perform the payment to DPs before construction in all three phases of TL work.

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Annexure: 1: Tranche 3 implementation status

Estimated Sr. Contract project Description Status No. No. cost US $ M Procurement of plant, design, Land selected, acquisition still supply, installation, testing and in process. FBR under commissioning of 500kV Lahore approval of BoD NTDC. Bid ADB-300 North S/S and extension of Lin bays validity not extended by the 1 83 A at 500kV Nokhar S/S. bidders • 500/220KV = 4x750 MVA FMC provided support in Civil • 220/132kV = 3x250 MVA preliminary design for the BD. Land acquisition still in progress & is stuck up at Section-4 due to the issues around Land ownership and demarcations. NTDC has Procurement of plant- design, already started exploring for supply, installation, testing and 2 ADB-300B 41 other suitable sites. commissioning of 500kV Maira IFB published on 25th April Switching station 2019. Bids opened on 6th August 2019. TBER approved. Financial bids opened on 4th November 2020. FBER under approval of BoD NTDC. Land not acquired yet. However it is at advance Procurement of plant-design, stage and at Section-7 & 8 supply, installation, testing and stage. ADB- 3 15.2 commissioning of Jauharabad 220kV IFB published on 30th 300C-R substation (3x160MVA) and December 2020, bids to be associated transmission line (2 km) opened on 22nd February 2021 are rescheduled for 24th March 2021. Lot-I: Lot-I: Procurement of 500kV Shunt Manufacturing of the 3.813 Reactors for Gatti & Sheikhupura equipment completed. FAT 4 ADB-300D Lot-II: Substations for Auto transformers & 8.915 Lot-II: Replacement of 2 Nos. shunt reactors completed. 500/220kV, 450 MVA Auto Delivery of equipment

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

transformer Banks at 500kV Gatti expected by 2nd week of substation. April 2021 Awarded to M/s Siemens 1.64 + Pakistan Eng. Co. Contract Procurement of Protection 0.199 signed on 10th July 2020. 5 ADB-300E (Repeat equipment for Asset Management Delivery of main contract order) (North region). completed. Disbursement: $1.476 M IFB published on 31.07.2018. Bids opened on Procurement of plant-design, 26th November 2018. TBER supply, installation, testing and sent to ADB on 14th May commissioning of 500 kV T/L 6 ADB-301A 49 2019 approved. Financial Nokhar S/S- Lahore North S/S- bids opened on 31st August Lahore HVDC switching/ converter 2019. FBER with comments station (135 km) of GM (P&CM) sent to ADB on 24th September 2019. Procurement of plant, design, supply, installation, testing and commissioning of 220kV T/Lines: • 220kV Kala Shah Kaku -Ghazi Contract Agreement signed Road T/Line in/out at Lahore with M/s Sino hydro Corp. nd North S/S (15km) Ltd on 2 September 2019. 7 ADB-301B 7.446 • 220kV Kala Shah Kaku - Ravi T/L in/out at Lahore North S/S Technical data & drawings under approval. (15km)

• 220kV Sheikhupura - Ravi T/Line in/out at Lahore North S/S (15km) Procurement of plant-design, supply, reconductoring, testing and commissioning of following 220 kV transmission lines: IFB published on 23rd Lot-I: (i) 220kv Sheikhupura – Bund November 2020. Bids to be Road (28km) opened on 27th January 8 ADB-301C 28.5 (ii) Replacement of conductor on 2021 are rescheduled for faulty portion of 220kV Gatti--- 18th March 2021. Bandala D/C T/Line (5km) Lot-II: 220kV Bund Road-New Kotlakhpat D/C overhead T/L on steel towers (5km) and

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

underground T/Line (10km) Lot-II scrapped. Lot-III, IV & VI under rebidding. Lot-I Procurement of supply of awarded to M/s Zoomline transmission line construction 9 ADB-301D 19.9 Pak ($0.937 M). Lot-V equipment and live line crew awarded to M/s Translink equipment International England (2.42M $). Procurement & supply of fog resistant insulators for enhancing Delivery completed. 10 ADB-301E 7.746 grid resilience to air pollution in heavily polluted area. Procurement of plant-design, supply, installation, testing and 11 ADB-302 6.44 commissioning of grid connected Consultant mobilized. battery energy storage system pilot project

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Annexure: 2: Tranche 3 projects documentation status

Tran Sub Contract Name Contr Contract compl contra rou DE Civi Towe Strin Substa Land LARP IMR EMR che - package of act effective etion ctual te D l r ging tion Acquis Upda proj number and Contra awar ness/ date compl sur Wo Errec equip ition ting ect scope ctor d commenc etion vey rks tion ment status (civil works date ement date install only) date ation (start of all works) Turnkey of 500kV T/Line Nokar- ADB Not Not Not Lahore N/ N/ N/ 301 N/A N/A N/A N/A N/A N/A N/A N/A N/A updat updat updat HVDC A A A -A ed ed ed Switching/C onverter station (135km) Turnkey of 220kV lines associated with 500kV Lahore North S/S: (i) 220kv Kala Shah Kaku-Ghazi Road T/L in/out at Lahore SINOH North SS ADB YDRO 02- In not not (17Km) (ii) 11/01/20 05/01/ Do Do 301 CORP. Sep- 5% NIL NIL NIL N/A proce submi submi 220kv Kala 19 2021 ne ne -B LTD. 19 ss tted tted Shah Kaku- CHINA Ravi T/L in/out at Lahore North SS (17Km) (iii) 220kv Shaikhupora -Ravi T/L in/out at Lahore North SS Tran (15Km) che Turn Key of 3 220 kV HTLS D/C transmissio IFB n lines: (i) publi 220kv shed Shaikhupura on -Bund Road 23- Nov- ADB (26Km) (ii) not not not 2020. N/ N/ N/ 301 220Kv Bund N/A N/A N/A N/A N/A N/A N/A N/A updat submi submi bids A A A -C Road-New ed tted tted to Kotlakhpat open (18Km) and on faulty 18- portion of Mar- 220Kv 21 Gatti— Bandala T/L (5Km) Turn key for 500/220/13 2kV Lahore North ADB Substation not not not N/ N/ N/ 300 and N/A N/A N/A N/A N/A N/A N/A N/A N/A updat submi submi A A A -A Extension ed tted tted Works at 500kv Nokhar Substation. Turn key for ADB 500kV not not not N/ N/ N/ 300 Maira N/A N/A N/A N/A N/A N/A N/A N/A N/A updat submi submi A A A -B Switching ed tted tted station ADB Turn key for IFB not not not N/ N/ N/ 300 220kV N/A publi N/A N/A N/A N/A N/A N/A N/A updat submi submi A A A -C-R Jauharabad shed ed tted tted

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Substation on 30- Dec- 2020. bids to open on 9- Marc h-21

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Annexure: 3 Office order for GRM Committee for LNGS

NATIONAL TRANSMISSION & DESPATCH COMPANY LIMITED

OFFICE OF CHIEF ENGINEER (PMU), NTDC

No.PMU/E&SIC/NTDC/ Dated: 08-08-2019

OFFICE ORDER

Subject: - NOTIFICATION OF GRIEVANCE REDRESS COMMITTEE FOR 500KV LAHORE NORTH.

As a part of loan convent and provisions of Land Acquisition and Resettlement Plan (LARP) of all ADB funded projects, NTDC is bound to notify a Grievance Redress Committee (GRC) to address the Land Acquisition/ROW issues. The committee would comprise on following members:

• Munawar Hussain Abbasi, Chief Engineer (EHV-1), Convener. • Mahr Khalid Mehmood, Addl. D.G (ESIC), Member. • Nisar Akhtar, Project Director, (EHV-1), Member. • Usman Warraich, Executive Engineer, (EHV-1), Member. • Imran Safdar, LAC, (EHV-1), Member. • Dr. Tayyaba Faizan, DPs Representative, Member.

The above said Committee will address/resolve the land acquisition and ROW issues/grievances.

-Sd-

(MAHR KHALID MEHMOOD)

Addl. D.G. (ESIC), NTDC

CC:

• DMD, (NTDC), 413, WAPDA House Lahore. • GM (GSC), 219-WAPDA House Lahore. • Master File

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Annexure: 4: NTDC’s letter to ADB May 2019

Multi-tranche Financing Facility (MFF 2) for 2ndPower Transmission Enhancement Investment Program (PTEIP 2), Semiannual Social Internal Monitoring Report Tranche 3 July-December 2020

Annexure: 5: MOU between NTDC and Complainants of LNGS