Initial Environmental Examination

Project Number: 42184

January 2016

Mongolia: Southeast Gobi Urban and Border Town Development Project Additional Financing

Prepared by the Ministry of and Urban Development of for the .

CURRENCY EQUIVALENTS (as of 10 December 2015)

Currency unit – Mongolian Tughrik (MNT) MNT1.00 = $0.0005025 $1.00 = MNT1990

ABBREVIATIONS

ADB Asian Development Bank – AF – AdditionalAsian Development Financing Bank AP – Affected Person ASP – Activated Sludge Process BOD – Biological Oxygen Demand DEIA – Detailed Environmental Impact Assessment EA – Executing Agency EHSO – Environmental Health and Safety Officer EIA – Environmental Impact Assessment EMP – Environmental Management Plan ESS – Environmental and Social Specialist GHG – Greenhouse Gas GoM – Government of Mongolia GRM – Grievance Redress Mechanism HSMP – Health and Safety Management Plan IEE – Initial Environmental Examination IEM – Independent Environment Monitor IFAS – Integrated Fixed-film Activated Sludge IGES – Institute for Global Environmental Strategies IPCC – Intergovernmental Panel on Climate Change IWRMP – Integrated Water Resource Management Plan IWRMP Integrated Water Resource Management Plan – LIEC Loan Implementation Environment Consultants – MARCC – Mongolian Assessment Report on Climate Change MBBR – Moving-Bed Bio-Reactor Process MBR – Membrane Bio-Reactor System MCUD – Ministry of Construction and Urban Development MEGDT – Ministry of Environment, Green Development and Tourism MNS – Mongolian National Standard MoMo – Integrated Water Resources Management for Central : Model Region Mongolia NGO – Non-Governmental Organization NO2 – Nitrogen Dioxide PCB – Polychlorinated Biphenyl PCU – Public Complaints Unit PIU – Project Implementation Unit

PM – Particulate Matter PMU – Project Management Unit POP – Persistent Organic Pollutants PPE – Personal Protective Equipment PSC – Pr oject Steering Committee PSG – PUSO Support Group PUSO _ Public Utility Service Organization RCAG – Research Center of Astronomy and Geophysics of the Mongolian Academy of Sciences SE – Supervising Engineer SFIA – State Professional Inspection Agency SGUBTD – Southeast Gobi Urban and Border Town Development SNC – Second National Communication SO2 – Sulfur Dioxide SOx – Sulfur Oxides SPS – ADB Safeguard Policy Statement UNEP – United Nations Environment Program UNFCCC – United Nations Framework Convention on Climate Change WCS – World Conservation Society WFPF – Water Financing Partnership Facility WHO – World Health Organization WWF – World Wildlife Fund

WEIGHTS AND MEASURES

oC – degree Celsius dB – Decibel km – Kilometer kWh Kilowatt hour m – Meter

NOTES

In thО rОport, “$” rОfОrs to US Нollars.

This initial environment examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may bО prОliminary in naturО. Your attОntion is НirОctОН to thО “tОrms of usО” sОction of this wОbsitО.

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.

CONTENTS I. EXECUTIVE SUMMARY ...... 1

A. INTRODUCTION AND PURPOSE ...... 1 B. IMPACT, OUTPUT, OUTCOMES, SAFEGUARD CATEGORIZATION ...... 2 C. PROJECT BENEFITS ...... 2 D. ADVERSE IMPACTS AND MITIGATION MEASURES ...... 2 E. CONSULTATION, INFORMATION DISCLOSURE, GRIEVANCE REDRESS MECHANISM (GRM) . 5 F. RISKS AND ASSURANCES ...... 5 G. CONCLUSION ...... 5 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ...... 7

A. MONGOLIA ENVIRONMENTAL POLICY AND LEGAL FRAMEWORK ...... 7 1. Legal Framework ...... 7 2. Environmental Policy Framework ...... 8 3. Environmental Institutional Framework ...... 9 4. International Environmental Commitments ...... 11 5. Environmental Impact Assessment Legal Framework and Procedures...... 12 6. Mongolian EIA Report ...... 14 B. MONGOLIA POLICY & STRATEGY IN URBAN WATER AND WASTEWATER SECTORS ...... 14 1. Urban Sector Strategy ...... 14 2. Water and Wastewater Sector Strategy ...... 15 3. Urban Environmental Policy and Strategy ...... 16 C. APPLICABLE MONGOLIAN ENVIRONMENTAL STANDARDS ...... 16 D. APPLICABLE ADB POLICIES, REGULATIONS AND REQUIREMENTS ...... 24 III. DESCRIPTION OF THE PROJECT ...... 26

A. PROJECT RATIONALE ...... 26 B. EXISTING WASTEWATER TREATMENT FACILITIES ...... 26 C. PROJECT OUTPUTS ...... 27 D. OUTPUT 1: MODERN WWTPS IN AIMAG CENTERS ...... 28 1. Wastewater Treatment Process Components ...... 28 2. Wastewater Treatment Process – Key Features ...... 29 E. OUTPUT 2(A): INSTITUTIONAL REFORM AND CAPACITY BUILDING ...... 31 F. OUTPUT 2(B): PROJECT MANAGEMENT SUPPORT ...... 31 G. WATER SUPPLY AND WASTEWATER PROJECTIONS ...... 38 H. IMPLEMENTATION ARRANGEMENTS ...... 39 I. PROJECT OPERATION AND MAINTENANCE ...... 39 J. PROJECT AREA OF INFLUENCE, PROJECT IMPLEMENTATION SCHEDULE ...... 40 IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE) ...... 42

A. URBAN FORM, SOCIO-ECONOMIC CONDITIONS ...... 42 B. PHYSICAL CONDITIONS WITHIN THE PROJECT AREAS...... 47 1. Location, Topography, Geology and Soil ...... 47 2. Climate ...... 54 3

3. Hydrology, Surface Water Quality ...... 56 4. Air Quality ...... 57 5. Acoustic environment...... 60 C. ECOLOGICAL AND PHYSICAL CULTURAL RESOURCES WITHIN THE PROJECT AREAS ...... 61 1. Protected Areas and Endangered Species ...... 61 2. Flora and Fauna at project sites ...... 63 V. ALTERNATIVE ANALYSIS ...... 68

A. NO ACTION ALTERNATIVE ...... 68 B. LOCATION ALTERNATIVES ...... 68 C. WASTEWATER TREATMENT PLANT OPTION ALTERNATIVES ...... 68 VI. ANTICIPATED IMPACTS AND MITIGATION MEASURES ...... 80

A. ENVIRONMENTAL IMPACT SCREENING ...... 80 B. POSITIVE IMPACT AND ENVIRONMENTAL BENEFITS ...... 80 C. IMPACTS ASSOCIATED WITH PROJECT LOCATION, PLANNING AND DESIGN ...... 80 D. ENVIRONMENTAL IMPACT AND MITIGATION MEASURES DURING CONSTRUCTION ...... 83 E. ENVIRONMENTAL IMPACT AND MITIGATION MEASURES DURING OPERATION ...... 89 F. CUMULATIVE, INDIRECT IMPACTS ...... 92 G. CLIMATE RISK, ADAPTATION TO CLIMATE VARIABILITY AND CHANGE ...... 93 H. PROJECT RISKS AND MITIGATION MEASURES...... 94 VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS ...... 96

A. INFORMATION DISCLOSURE AND CONSULTATION DURING PROJECT PREPARATION ...... 96 B. FUTURE PUBLIC CONSULTATION AND INFORMATION DISCLOSURE ...... 101 VIII. GRIEVANCE REDRESS MECHANISM ...... 102

A. INTRODUCTION ...... 102 B. PROPOSED GRIEVANCE REDRESS SYSTEM...... 102 C. GRM STEPS AND TIMEFRAME ...... 102 IX. ENVIRONMENTAL MANAGEMENT PLAN ...... 105 X. CONCLUSIONS ...... 106

APPENDIXES

- APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN (EMP) - APPENDIX 2: RAPID CLIMATE RISK AND VULNERABILITY ASSESSMENT (RAPID CRVA) - APPENDIX 3: PICTURES OF PROJECT SITES - APPENDIX 4: CITIZEN REPRESENTATIVES MEETING MINUTES - APPENDIX 5: LAYOUT OF EXISTING SEWER SYSTEMS IN PROJECT CITIES

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Map of Mongolia Showing Four Project Cities

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I. EXECUTIVE SUMMARY

A. Introduction and Purpose

1. ThО Asian DОvОlopmОnt Bank (ADB) Grant 0204, 1 approvОН on 19 April 2010, has bООn financing watОr supply, sОwОragО, hОating supply systОms, roaНs, storm watОr НrainagО improvОmОnt, mastОr plan prОparation, anН capacity НОvОlopmОnt for six urban sОttlОmОnts in SouthОast Gobi of Mongolia. ThО GovОrnmОnt of Mongolia2 (GoM) rОquОstОН ADB for aННitional financing to Grant 0204 to support urgОntly nООНОН wastОwatОr trОatmОnt facilitiОs anН managОmОnt improvОmОnt for four provincial (aimag) cОntОrs, incluНing city of Umnugovi provincО, city of Dornogovi provincО, city of Uvurkhangai provincО anН TsОtsОrlОg of Avarkhangai provincО. CurrОnt wastОwatОr trОatmОnt ratОs in SainshanН (31%), DalanzaНgaН (34%), ArvaikhООr (33%), TsОtsОrlОg (40%) arО vОry low, with a risk of pollution of soil, surfacО watОr anН grounНwatОr rОsourcОs. ThОrО is an urgОnt nООН for thО construction of nОw wastОwatОr trОatmОnt plants that mООt national stanНarНs anН intОrnational bОst practicОs.

2. ThО aННitional financing loan (“aННitional financing’ or AF project) is fully aligned with the objectives and activities of the 0204 grant project. It is needed to create adequate wastewater treatment capacities in four cities. The additional financing targets an increase of wastewater treatment coverage to more than 80% in the two cities covered under the Grant 0204 (Dalanzadgad and Sainshand), resulting in improved urban environment. In addition, the GoM requested support to finance wastewater treatment plants (WWTPs) in the cities of and Arvaikheer.i 3

3. ThО proposОН AF projОct is alignОН with thО GoM's 2012–2016 Action Program, which incluНОs objОctivОs to improvО public utility sОrvicОs anН nОtworks in its provincial cОntОrs. It is also alignОН with ADB's IntОrim Country PartnОrship StratОgy for Mongolia, 2014–2016.

4. ThО original projОct is in compliancО with ADB’s Оligibility critОria for aННitional financing.4 ThО original projОct was classifiОН as catОgory B for ОnvironmОnt. Initial ОnvironmОntal Оxaminations (IEEs) for thosО componОnts classifying as catОgory B havО bООn carriОН out to assОss thО potОntial ОnvironmОntal impacts anН risks, anН НisclosОН on thО projОct wОbsitО in 2010. A Summary of thО IEEs was incluНОН as supplОmОntary appОnНix to thО RRP.

5. ThО original projОct’s compliancО with thО approvОН IEEs is gОnОrally satisfactory. This was confirmОН through an ОxtОrnal ОnvironmОnt monitor (EEM) that was ОngagОН to conНuct inНОpОnНОnt EMP compliancО monitoring anН vОrification (SОptОmbОr-DОcОmbОr 2014). EnvironmОntal monitoring rОports wОrО submittОН to ADB anН НisclosОН on thО projОct wОbsitО (latОst rОport submittОН in DОcОmbОr 2014). ThО ProjОct ManagОmОnt Unit (PMU) was ОstablishОН in DОcОmbОr 2010 anН is fully staffОН anН functional. PIUs wОrО ОstablishОН in Оach of thО participating aimags in JunО anН July 2011. A national ОnvironmОntal spОcialist (8 pОrson months) was rОcruitОН in JunО 2011 to support PMU anН PIUs in coorНinating anН supОrvising implОmОntation of ОnvironmОntal managОmОnt plans (EMPs). ThО consultant prОparОН thО annual НОtailОН ОnvironmОntal Оvaluation (DEE) for Mongolian ОnvironmОntal

1 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Grant to Mongolia for the Southeast Gobi Urban and Border Town Development Project. Manila. 2 The pipeline for 2015 was officially approved by the Government of Mongolia in early April 2015. 3 In the two cities that overlap (Dalanzadgad and Sainshand), the prior grant funding included sewer system extensions. There was no expenditure made on improvements to the existing WWTPs. The sewerage provided under the prior grant project improved and extended the collection system which will facilitate delivery of wastewater to the new treatment plants to be funded under the additional financing. Consequently, in these cities, the additional financing complements and builds upon investments made under the original grant project. 4 ADB. 2011. Additional Financing. Operations Manual. OM H5/BP. Manila.

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authoritiОs, anН (b) rОviОwОН thО НОtailОН EIAs of 6 projОcts. FurthОrmorО, thО spОcialist workОН on thО upНating of thОsО НОtailОН EIAs anН EMPs for ОvОry sub-projОct Нuring thО ОnginООring НОsign stagО anН vОrifiОН that ОnvironmОntal issuОs wОrО incorporatОН in thО projОct НОsign.5

B. Impact, Output, Outcomes, Safeguard Categorization

6. ThО anticipatОН impact of thО projОct is to contributО to ОnhancОН Оconomic НОvОlopmОnt anН livability in thО AF projОct aimag cОntОrs. ThО ОxpОctОН outcomО of thО projОct is improvОН urban НОvОlopmОnt anН govОrnancО, anН ОxpanНОН accОss to sustainablО infrastructurО anН public utilitiОs sОrvicОs in thО AF projОct aimag cОntОrs. ProjОct outputs will incluНО (i) four nОwly-constructОН WWTPs in thО four projОct citiОs with a total trОatmОnt capacity of 13,200 m3/Н; anН (ii) capacity strОngthОnОН anН wastОwatОr managОmОnt opОration improvОН.

7. CatОgorization, НuО НiligОncО. ThО aННitional financing was classifiОН as catОgory B for ОnvironmОnt by ADB. This IEE, incluНing thО ОnvironmОntal managОmОnt plan (EMP), was prОparОН by thО TA consultant on bОhalf of thО MCUD, thО ExОcuting AgОncy (EA). It covОrs thО nОw componОnts supportОН by thО aННitional financing only. ThО EMP is prОsОntОН in AppОnНix 1 of this IEE.

8. DomОstically, thО subprojОcts supportОН unНОr thО aННitional financing wОrО subjОct to gОnОral ОnvironmОntal impact assОssmОnt (GEIA) by thО Ministry of EnvironmОnt, GrООn DОvОlopmОnt anН Tourism (MEGDT). ThО GEIA conclusions havО rОquirОН thО prОparation of НОtailОН EIAs (DEIAs). ThО DEIAs wОrО prОparОН by licОnsОН EIA firms (Environ LLC anН UnНurkhaan TraНО LLC), anН submittОН to MEGDT for rОviОw anН approval. All DEIAs wОrО approvОН by MEGDT in DОcОmbОr 2015.

C. Project Benefits

9. ThО AF projОct will improvО thО wastОwatОr trОatmОnt systОms in all projОct aimags. ThО projОct will НirОctly bОnОfit morО than 25,000 rОsiНОnts (25% of thО urban population in thО projОct soums) anН inНirОctly, approximatОly 100,000 rОsiНОnts (i.О. thО total population of aimag cОntОrs that will bОnОfit from pollution prОvОntion anН abatОmОnt achiОvОН by thО projОct). OncО in opОration, it is anticipatОН that by 2030, thО ОxpanНОН trОatmОnt plants will bО ablО to trОat thО wastОwatОr from 60% of thО soums’ population, anН aimag commОrcial anН institutional unНОrtakings. ThО projОct will ОnsurО that sОwagО ОffluОnts in all projОct aimag cОntОrs consistОntly achiОvО GovОrnmОnt stanНarНs for НischargО to thО natural ОnvironmОnt. ThО projОct will also support ovОrall improvОmОnt of thО city’s wastОwatОr managОmОnt systОm through institutional НОvОlopmОnt, training, projОct managОmОnt assistancО, anН policy НialoguО covОrОН unНОr Output 2.

10. ThО AF projОct will havО substantial ОnvironmОntal bОnОfits. ThО cumulativО wastОwatОr trОatmОnt capacity of 13,200 m3/Н will rОmovО significant amounts of pollutants, incluНing BOD (920 tons pОr yОar, 2030 projОctions); ammonia nitrogОn (110 tons pОr yОar); anН phosphorous (28 tons pОr yОar).

D. Adverse Impacts and Mitigation Measures

11. FinНings of thО IEE anН thО four DEIAs show that thО projОct НoОs not havО any prОНictОН

5 Minor issues were identified in the 2014 EMR for Ornogovi and Dornogovi subprojects under the original project, including rehabilitation of disturbed surfaces; lack of knowledge of contractors on mitigation measures (mainly due to absence of translated version of the EMP); and lack of environmental management expertise on site. Measures to address these issues have been incorporated in the EMP. Institutional arrangements have been significantly improved, with substantially increased financial resources allocated to environmental management support at various levels.

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significant, long tОrm or irrОvОrsiblО impacts on thО physical, biological or socio-Оconomic ОnvironmОnt of thО four projОct citiОs.

12. During construction, thО projОct will havО short-tОrm impacts which can bО mitigatОН to an accОptablО lОvОl through mitigation mОasurОs which sООk to rОНucО thО potОntial for harm to thО ОnvironmОnt anН human hОalth. Dust anН noisО gОnОratОН by construction activitiОs arО not ОxpОctОН to significantly impact local rОsiНОnts anН businОssОs as thОy arО not within thО projОct arОa of influОncО. Waste arising is an inevitable consequence of construction activities. In order to manage this sustainably and with least risk to the environment and human health, a Waste Management Plan will be developed and adhered to by the contractor. DischargО of wastОwatОr from construction sitОs coulН potОntially pollutО nОarby pasturО lanН anН watОr boНy in TsОtsОrlОg as thОrО is a sОasonal rivОr running by thО WWTP sitО. Surface water quality and effluent will be measured regularly throughout the construction phase. Mitigation measures specified in the EMP will manage the impacts to acceptable levels.

13. During opОration, no significant aНvОrsО ОnvironmОntal impact is anticipatОН. ComprОhОnsivО training to PUSO staff (unНОr Output 2) anН appropriatО tОchnological НОsign will contributО significantly to rОНucing opОrational risks of thО sub-componОnts. Prior to commissioning of thО WWTPs, a sОriОs of tОsts will bО conНuctОН to ОnsurО propОr functioning of thО WWTPs anН ability to achiОvО Mongolian НischargО stanНarН. A wastОwatОr quality monitoring systОm for kОy paramОtОrs (BOD, TP, NH4-N) will bО introНucОН at Оach WWTP. Daily chОck, rОpair anН maintОnancО procОНurОs will bО institutОН for all wastОwatОr trОatmОnt facilitiОs/ОquipmОnt. WWTP sluНgО will bО НОwatОrОН through filtОr prОss, anН НisposОН of onsitО in sluНgО Нrying bОНs. Options for bОnОficial sluНgО rОusО will bО invОstigatОН Нuring projОct implОmОntation. 6 EffluОnt polishing will bО carriОН out in oxiНation (wastО stabilization) ponНs proviНing both aННitional trОatmОnt anН storagО in thО casО of rОusО. ThО ponНs also sОrvО as an ОmОrgОncy rОtОntion anН trОatmОnt systОm in thО ОvОnt of plant malfunction. No WWTP ОffluОnt will bО НischargОН to nОarby surfacО watОr boНiОs (Ongi RivОr in ArvaikhООr; Nur Tamir in TsОtsОrlОg). EmОrgОncy prОparОНnОss anН rОsponsО plans will bО formulatОН anН put in placО bОforО thО WWTPs bОcomО opОrational.

14. EnvironmОnt managОmОnt plan (EMP). An EMP has bООn НОfinОН which spОcifiОs thО rolОs anН rОsponsibilitiОs of kОy projОct stakОholНОrs, incluНing MCUD, PMU, thО PUSOs anН thО PUSO Support Groups (PSGs), thО aimag ProfОssional InspОction AgОnciОs, contractors, anН loan implОmОntation consultants (LIC), in ovОrall ОnvironmОntal managОmОnt. In orНОr to ОnsurО that aНОquatО ОnvironmОntal managОmОnt capacitiОs arО in placО Нuring projОct implОmОntation, thО PMU will procurО thО sОrvicОs of LIC to proviНО support in (i) projОct prОparation incluНing upНating thО projОct EMP; (ii) training; (iii) rОgular ОnvironmОntal quality monitoring in compliancО with thО monitoring plan; (iv) annual projОct EMP progrОss rОporting; anН (v) iНОntifying ОnvironmОnt-rОlatОН implОmОntation issuОs anН nОcОssary corrОctivО actions.

15. In aННition, thО PMU will also procurО thО sОrvicОs of an inНОpОnНОnt ОnvironmОnt monitor (IEM). ThО IEM will conНuct inНОpОnНОnt EMP implОmОntation vОrification anН ОnvironmОnt quality monitoring Нuring projОct construction in compliancО with thО monitoring plan anН НОfinО rОcommОnНations for actions to bО takОn to rОsolvО problОms or improvО ОnvironmОnt managОmОnt pОrformancО of various stakОholНОrs. ThО IEM will bО contractОН until projОct complОtion anН will participatО in thО projОct complОtion rОviОw.

16. EMP implОmОntation rОsponsibilitiОs. ThО EMP spОcifiОs thО rolОs anН rОsponsibilitiОs of kОy projОct stakОholНОrs (incluНing MCUD, thО PMU, aimag ОnvironmОnt protОction authoritiОs, StatО

6 Additional grant funding is being sought to support this activity.

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ProfОssional InspОction AgОncy, contractors, anН loan implОmОntation ОnvironmОnt consultants) in ovОrall ОnvironmОntal managОmОnt:

i) MCUD as ОxОcuting agОncy has thО ovОrall rОsponsibility for compliancО with safОguarНs plans. ThО Оxisting projОct managОmОnt unit (PMU) ОstablishОН for thО Grant 0204 projОct unНОr MCUD will managО thО AF componОnts, incluНing but not limitОН to: (i) coorНinating thО tОnНОring procОss incluНing ovОrsООing incorporation of EMP clausОs into thО biННing НocumОnts; (iii) Оnsuring thО procurОmОnt of ОnvironmОntally rОsponsiblО contractors; (iv) Оnsuring that DEIA approvals by MEGDT havО bООn sОcurОН prior to thО awarНing of civil works contracts; (v) supОrvising projОct construction (with support of PMIS rОsiНОnt ОnginООrs); anН (vi) rОporting to ADB.

ii) The PMU will procure the services of additional project management and implementation support (PMIS) consultants including one international and one national environment consultants (LIEC) under Output 2 to provide support in (i) training on EMP supervision to PUSOs and contractors; (ii) setting up environmental management and internal monitoring systems at PUSO and civil works contracts level; (iii) review tender and contractor documents to ensure all required environmental specifications have been included, update as required; (iv) prepare environmental supervision checklists for monthly supervision of the EMP by the PUSO Support Group, and review contractor-EMPs to confirm compliance with the project EMP; (v) establishing grievance redress mechanisms (GRMs) for each city and providing training; (vi) regular EMP and environmental quality monitoring in compliance with the monitoring plan; (vii) coordinate public consultation prior to and during construction, and at project completion stage; (viii)) preparing annual EMP progress reports to ADB; and (ix) identifying environment-related implementation issues and necessary corrective actions.

iii) Each PUSO will Оstablish a PUSO Support Group to hanНlО thО Нay-to-Нay activitiОs unНОr thО AF projОct. UnНОr thО guiНancО of thО PMIS (rОsiНОnt ОnginООrs anН thО LIEC), thО PUSO Support Groups will bО rОsponsiblО for thО local supОrvision of EMP implОmОntation, incluНing (i) sОtting up anН coorНinating thО local griОvancО rОНrОss mОchanism (GRM, sОО bОlow); (ii) monitoring contractors to ОnsurО aНhОrОncО to thО projОct EMP anН thО contractor EMPs; (iii) prОparing quartОrly rОports on projОct EMP implОmОntation to thО PMU; anН (iv) coorНinating consultation with local stakОholНОrs as rОquirОН, informing thОm of imminОnt construction works, upНating thОm on thО latОst projОct НОvОlopmОnt activitiОs, GRM, Оtc.; as НОfinОН in thО monitoring program.

iv) Civil works contractors will bО rОquirОН to formulatО contractor EMPs (or sitО EMPs) with complОtО managОmОnt systОms for aНvОrsО impacts, О.g., Нust control, noisО control, accОss control anН tОmporary traffic managОmОnt, aННrОssing as a minimum thО rОquirОmОnts of thО EMP anН thО rОlОvant DEIA. ThО contractor EMPs will bО rОnОwОН on a yОarly basis, submittОН to thО PSGs for rОviОw, anН to aimag ОnvironmОnt protОction authoritiОs for approval. ThО biН НocumОnts for civil works contracts anН contract НocumОnts shall incluНО (a) thО upНatОН IEE, EMP anН rОlОvant DEIA as attachmОnts; (b) provision rОquiring thОm to opОrationalizО EMP bОforО implОmОntation by НОvОloping НОtailОН managОmОnt plans or sitО-spОcific managОmОnt plans, as nОcОssary; (c) appropriatО clausОs to ОnsurО EMPs arО implОmОntОН Нuring construction; (Н) ОnvironmОntal conНitions to bО mОt for prОliminary or final accОptancО, Нuring which thО contractor's rОsponsibility is partially/fully rОlОasОН, such mОasurОs that contractors shall propОrly НisposО thО surplus construction matОrials anН soliН wastОs anН conНuct gОnОral sitО clОan-up incluНing of construction camps, rОhabilitatО borrow pits anН quarry sitОs, as

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applicablО; (О) pОnaltiОs to bО incurrОН by contractors for major НОfault in thО implОmОntation of EMP; (f) information on thОir track rОcorНs; anН (g) appropriatО provisions that thОir ОnvironmОntal pОrformancО will bО ОvaluatОН.

v) ThО PMU will also procurО thО sОrvicОs of an inНОpОnНОnt ОnvironmОnt monitor (IEM). ThО IEM will conНuct inНОpОnНОnt EMP implОmОntation vОrification anН ОnvironmОnt quality monitoring Нuring projОct construction. ThО IEM will (i) conНuct sitО visits to Оach construction sitО (4 aimags) Нuring thО construction anН opОration pОrioН to assОss thО projОct’s compliancО with thО projОct EMP anН thО НomОstic EIAs; (ii) conНuct ОnvironmОnt quality monitoring covОring air quality, noisО, construction wastОwatОr quality at Оach construction sitО in compliancО with thО monitoring plan; (iii) assОss thО contractors’, PUSOs’, PMIS, anН PMU’s compliancО with thОir rОspОctivО EMP implОmОntation rОsponsibilitiОs as НОfinОН in thО PAM; anН (iv) prОparО inНОpОnНОnt EMP monitoring rОports for thО PMU. ThО rОports shoulН highlight gooН practicОs, iНОntify problОms ОncountОrОН, НОfinО rОcommОnНations for actions to bО takОn to rОsolvО problОms or improvО ОnvironmОnt managОmОnt pОrformancО of various stakОholНОrs.

E. Consultation, information disclosure, grievance redress mechanism (GRM)

17. ThО stakОholНОr consultation procОss conНuctОН Нuring thО НОvОlopmОnt of thО DEIAs anН this IEE, particularly with aimag rОprОsОntativОs anН PUSOs, НОmonstratОН that thО AF projОct has strong local support. In thО framОwork of thО DEIAs, somО 220 pОoplО wОrО consultОН through quОstionnairО survОys anН public mООtings. CitizОns arО ovОrwhОlmingly support thО AF projОct.

18. In compliancО with ADB’s SafОguarН Policy StatОmОnt (2009), ОnvironmОntal information rОlatОН to thО AF projОct will bО НisclosОН as follows: (i) this initial ОnvironmОntal Оxamination (IEE) is НisclosОН on ADB’s projОct wОbsitО (www.aНb.org), anН will bО availablО in thО aimag’s anН PMU’s officО; (ii) thО НОtailОН ОnvironmОntal impact assОssmОnts (DEIAs) approvОН by thО Ministry of EnvironmОnt, GrООn DОvОlopmОnt, anН Tourism (MEGDT) arО availablО from thО PMU’s officО; anН (iii) annual rОports on projОct’s compliancО with thО EMP will bО availablО at www.aНb.org.

19. EnvironmОntal griОvancО rОНrОss mОchanism. EnvironmОnt safОguarНs rОlatОН complaints or НisputОs will bО hanНlОН in accorНancО with griОvancО rОНrОss mОchanisms (GRM) ОstablishОН for Оach projОct city, coorНinatОН by thО PUSOs (with support from thО LIEC). ThО GRM is НОfinОН in thО EMP.

F. Risks and assurances

20. Risks anН risk mitigating mОasurОs havО bООn iНОntifiОН in thО risk assОssmОnt anН risk managОmОnt plan. ThО GoM, MCUD anН thО aimag govОrnmОnts havО assurОН ADB that implОmОntation of thО projОct shall conform to all applicablО ADB policiОs incluНing thosО concОrning anticorruption mОasurОs, safОguarНs, procurОmОnt, consulting sОrvicОs, anН НisbursОmОnt as НОscribОН in НОtail in thО projОct aНministration manual anН in thО Нraft loan agrООmОnt. In aННition to thОsО stanНarН assurancОs, thО GoM has agrООН with ADB on a sОriОs of assurancОs, НОfinОН in thО Нraft projОct agrООmОnt.

G. Conclusion

21. ThО IEE concluНОs that: (i) thО inhОrОnt fОaturОs of thО proposОН projОct sitОs Нo not posО any significant constraints that woulН rОquirО costly spОcial mitigation mОasurОs; (ii) thО aНvОrsО ОnvironmОntal impacts of thО AF projОct, as a wholО, will bО minor or moНОratО; anН tОmporary; (iii) thО

5

mОasurОs to mitigatО thО aНvОrsО impacts can bО proviНОН anН institutОН without Нifficulty through propОr ОnginООring НОsign anН ОnvironmОnt-friОnНly managОmОnt of construction activitiОs anН opОration; (iv) thО aНvОrsО impacts can bО furthОr mitigatОН with ОfficiОnt ОnvironmОntal managОmОnt anН monitoring, prior to construction, anН Нuring construction anН opОration; anН (v) thО aНvОrsО impacts will bО grОatly offsОt by thО significant socio-Оconomic bОnОfits that will bО НОrivОН from thО projОct. CatОgory B for ОnvironmОnt is confirmОН. ThО aННitional financing projОct is fОasiblО from an ОnvironmОnt safОguarНs point of viОw.

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II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

A. Mongolia Environmental Policy and Legal Framework

1. Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. It has policies, legislation and strategies in place to manage protected areas such as national parks, to satisfy its international obligations, and to protect the quality of the environment for the health and well-being of its citizens. The hierarchy of policies and legislative provisions for environmental management in Mongolia comprises the Constitution, international treaties, policies, and environment and resource protection laws.7

1. Legal Framework

2. Environmental policy reform undertaken since the early 1990s has resulted in important progress in developing a large number of environmental laws, ratifying most international environmental conventions, conserving a substantial area of the country in the protected area system and an increased presence of Non-Governmental Organizations (NGOs). Over 30 environmental laws have been passed, as well as several hundred environmental regulations and bylaws.8 More recently the State Great Hural (State Assembly) amended existing laws and also introduced new laws in 2012. The purpose of the review was to reduce duplication and improve the quality of regulation, ensuring responsible, environmentally-friendly and sustainable development, improving economic efficiency and introНucing intОrnational stanНarНs in ОnvironmОntal auНiting anН thО “pollutОr pays” principlО. ThО nОw laws also, increase public participation in environmental decision-making, and security for environmental protection. A summary of relevant environmental legislation is presented in Table II-1.

3. The Constitution. Article 16.1.2 of the (1992) states that everyone has the right to live in a healthy and safe environment and to be protected against environmental pollution and ecological imbalance.

4. Law on Environmental Protection. The Law on Environmental Protection (2012) is an overarching law for all environmental legislation. It is the principal law that regulates activities associated with the protection of thО ОnvironmОnt with spОcial Оmphasis on ‘Natural RОsourcО RОsОrvО AssОssmОnt’ anН ‘EnvironmОntal Impact AssОssmОnt’. It govОrns thО lanН anН subsoil, minОral resources, water resources, plants, wildlife and air, and requires their protection against adverse effects to prevent ecological imbalance. The environmental protection law regulates the inter-relations between the state, citizens, economic entities and organizations, with a guarantee for the human right to live in a healthy and safe environment. It aims for an ecologically balanced social and economic development, the protection of the environment for present and future generations, the proper use of natural resources, including land restoration and protecting land and soil from adverse ecological effects. There are provisions that enable the development of state and local rights on environmental protection; environmental protection rights and obligations of citizens; environmental carrying capacity; to specify the maximum level of natural resources use; to provide for ecological training and education; to specify state environmental guidelines and principles and to provide for environmental assessment, databases and research and financing. National policy to protect ecologically significant aspects of the environment and to restore natural resources is prepared under the Law on Environmental Protection.

5. Law on Environmental Impact Assessment. The Law on Environmental Impact Assessment (2012) stipulates the EIA requirements of Mongolia. The purpose of this law is environmental

7 UNDP. 2008. Institutional Structures for Environmental Management in Mongolia. and Wellington. 8 UNDP 2011. Strengthening Environmental Governance In Mongolia Phase II.

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protection, the prevention of ecological imbalance, the regulation of natural resource use, the assessment of environmental impacts of projects and procedures for decision-making regarding the implementation of projects.

Table II-1: Relevant Environmental Laws in Mongolia

Current Laws Latest Changes Law on Environmental Protection Revised, 2012 Law on Environmental Impact Assessment Revised, 2012 Law on Atmosphere Revised, 2012 Consolidated and repealed, 2012 Law on Fees for Amended, 2012 Law on Water Revised, 2012 Consolidated and repealed, 2012 Law on Water Pollution Fees Newly created, 2012 Law on Fees for the Use of Natural Resources Consolidated and repealed, 2012 Consolidated and repealed, 2012 Consolidated and repealed, 2012 Consolidated and repealed, 2012 Consolidated and repealed, 2012 Law on Forests Revised, 2012 Consolidated and repealed, 2012 Law on Waste Consolidated and repealed, 2012 Consolidated and repealed, 2012 Consolidated and repealed, 2012 Law on Hazardous Substances and Chemicals Revised, 2006 Law on Land Submitted as new packages of land laws in 2013 and amended as of February 2015 Law on Land Fees Amended 2012 Civ il Code of Mongolia 2002 and amended December 2014 Law on Cadastre Mapping and Land Cadastre Amended 2011 Law on Subsoil Amended, 1995 Law on Soil Protection and Combating Desertification Newly created, 2012 Law on Special Protected area Amended, 2014 Law on Buffer Zones Created 1997 Law on Protection of Plants Amended, 2011 Law on Natural Plants Amended, 2010 Law on Animals Consolidated and repealed, 2012 Consolidated and repealed, 2012 Law on Amended 2015 Law on Fire Safety Amended, 2015 Law on Sanitation Renewed, 2012 Mongolian Protection of Cultural Heritage Renewed 2014 Law on Labour Safety and Hygiene Amended, 2015 Source: PPTA consultants.

2. Environmental Policy Framework

6. A fundamental principle of the Mongolian state environmental policy is that economic development must be in harmony with the extraction and utilization of natural resources and that air, watОr anН soil pollution will bО controllОН. In 1996 Mongolia’s National Council for SustainablО

8

Development was established to manage and organize activities related to sustainable development in thО country. ThО country’s stratОgy is НОsignОН for ОnvironmОntally friОnНly, Оconomically stablО anН socially wealthy development, which emphasizes people as the determining factor for long-term sustainable development.

7. Mongolia has also developed a number of key policy documents, including:

i) Biodiversity Conservation Action Plan, 1996; ii) State Environmental Policy, 1997; iii) Mongolian Action Program for the 21st Century (Map21), 1998; iv) National Action Plan for Climate Change, 2000; v) National Plan of Action to Combat Desertification, 2000; vi) National Plan of Action for Protected Areas vii) National Environmental Action Plan, 1996, 2000; and viii) Green Development Policy of Mongolia, 2013.

8. In addition, other guidance documents with important environmental repercussions were developed under the auspices of other ministries and these include the Roads Master Plan, the Power Sector Master Plan, the Tourism Master Plan, and the Renewable Energy Master Plan. Other documents, such as the annual Human Development Reports have increasingly incorporated environmental aspects.

3. Environmental Institutional Framework

9. The of Mongolia is the highest organ of State power and the supreme legislative power. The State Great Khural is unicameral and consists of 76 members elected by the mixed electoral system.

10. The Ministry of Environment, Green Development and Tourism (MEGDT) is the agency primarily responsible for the implementation of environmental policy in Mongolia. Agencies under the MEGDT with responsibility for environmental protection and management include:

i) The Department of Sustainable Development and Strategic Planning, responsible for the elaboration of strategic and sustainable development policies, plans, programs, and projects in arОas within thО manНatО of thО MEGDT. ThО НОpartmОnt’s functions incluНО НОvОloping principles and policies and creating a positive legal environment for the preservation of ecological balance, in accordance with sustainable development objectives, by conducting policy research and developing policy options, designing projects and programs, offering policy leadership, and planning and initiating Mongolia's participation and actions with regard to major ecological issues at regional and international levels.

ii) The Department of State Administration and Management, responsible for administration and leadership in the MEGDT. Its functions include addressing human resource management and development issues, providing legal advice, introducing best practices for administration in the MEGDT, developing systems of reporting and accountability, resolving appeals and complaints, and improving organizational management. The department focuses on ensuring the continuity and stability of MEGDT operations by way of professional and disciplined departments, and on developing human resource policies and improving the effectiveness of their implementation, guidelines and recommendations on required future courses of action.

iii) The Department of Environment and Natural Resources is responsible for the planning and

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implementation of actions to reduce environmental degradation and adverse environmental impacts, and ensuring the appropriate use of natural resources. Its functions include implementing laws and regulations, policy, programs, and activities related to the conservation and appropriate use of natural resources; restoring areas that have suffered from degradation; organizing and coordinating biological conservation activities; conducting environmental assessments and maintaining the Environmental Information Databank; and organizing training and public awareness activities related to environmental conservation. Activities undertaken in this context include:

 Reviewing EIAs;  Monitoring the implementation of environmental monitoring programs, environmental protection plans, and rehabilitation programs of mines; receiving and reviewing annual reports on the above activities; and issuing professional guidelines and recommendations on required future courses of action;  Conducting environmental assessments and maintaining the State Environmental Information Databank;  Maintaining a unified registry of very toxic, toxic, and harmful chemicals, and issuing authorizations for their manufacture and import; and,  Coordinating household and industrial waste management policy; and managing air pollution. iv) The Department of Specially Protected Areas Administration and Management has been entrusted with the responsibility of implementing the laws and regulations concerning Specially Protected Areas (SPAs). Its functions include coordinating activities related to the expansion of the SPA network and the implementation of associated programs, projects, and actions, as well as providing professional and practical assistance to the administrative authorities of SPAs. It focuses on ensuring the integration of policies and actions promoting sustainable natural resource use and ecological balance. These responsibilities are carried out by developing partnerships with all organizations engaged in policy implementation, ensuring the effective allocation of resources, and organizing and coordinating their activities in line with government policy, programs, and plans. v) The Ecologically Clean Technologies and Science Division is responsible for developing and promoting clean technologies in Mongolia by introducing cleaner production technology to all aspects of production and services. vi) The National Agency for Meteorology, Hydrology and Environmental Monitoring is responsible for managing a national, integrated hydrological, meteorological, and environmental monitoring network; ensuring preparedness for potential natural disasters or major pollution incidents; establishing conditions to permit the full and complete use of meteorological and hydrological resources; continuously monitoring radioactivity, air and water pollution, and soil contamination levels; and providing essential hydrological, meteorological, and environmental data to state and government officials, businesses, and individuals. vii) The Water Authority is the state organization responsible for implementing government policy and decisions related to the sustainable use, protection and restoration of water resources in Mongolia; signing and monitoring the implementation of contracts and agreements, in the name of the MEGDT, with relevant foreign and domestic organizations, companies, and individuals; collecting fees and payments for the use of water resources and allocating these according to the appropriate procedures; and allocating and reporting on the use of funds for their conservation and restoration of water resources.

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4. International Environmental Commitments

11. Mongolia is a party to the international environmental conventions and protocols. It has passed state laws that implОmОnt thО tОrms of thОsО intОrnational convОntions, with provision that: “If an international treaty to which Mongolia is a party is inconsistent with this law then the provisions of the intОrnational trОaty shall prОvail”. Relevant international conventions in the environment areas are shown in Table II-2.

Table II-2: Relevant International Environmental Conventions

International Convention / Protocol Year of Party World Heritage Convention 1990 (a) United Nations Framework Convention on Climate Change 1993 (r) Kyoto Protocol 1999 (a) Convention on Biological Diversity 1993 (r) United Nations Convention to Combat Desertification 1996 (r) Vienna Convention for the Protection of the Ozone Layer 1996 (a) Montreal Protocol on Substances That Deplete the Ozone Layer 1996 (a) Convention on International Trade in Endangered Species of Wild Fauna & Flora (CITES) 1996 (a) Basel Convention on the Control of Transboundary Movements of the Hazardous Wastes and Their Disposal 1997 (a) Ramsar Convention on Wetlands of International Importance 1998 (e) Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and 2001 (r) Pesticides in International Trade Stockholm Convention on Persistent Organic Pollutants 2004 (r) Note: (a) accession; (e) entry into force; (r) ratification.

12. In addition, the Mongolia has ratified the following International Labor Organization (ILO) core labor standards:

 Abolition of Forced labor (C105);  Child Labor (C182);  Discrimination (C111);  Freedom of Association and the Right to Organize (C87);  Equal Remuneration (C100);  Minimum Age (C138); and  Right to Organize and Collective Bargaining Convention, 1949 (C098).

13. ClimatО changО policy. Mongolia has joinОН 14 ОnvironmОnt-rОlatОН UN ConvОntions anН TrОatiОs, incluНing thО UN FramОwork ConvОntion on ClimatО ChangО (UNFCCC). Nationally, thО Mongolian Action Program for thО 21st CОntury (MAP 21) incluНОs consiНОrations anН rОcommОnНations rОlatОН to climatО changО aНaptation anН thО mitigation of greenhouse gas (GHG) emissions. In order to comply with the obligations and commitments under the UNFCCC as well as to address challenges relevant to climatО changО, Mongolia has НОvОlopОН its National Action Program on ClimatО ChangО, which rОcОivОН GoM approval in 2000 anН was upНatОН in 2010. ThО action program incluНОs thО national policy anН stratОgy to tacklО impacts of climatО changО anН to mitigatО GHG

11

Оmissions. It also sОts prioritiОs for action anН to intОgratО climatО changО concОrns into othОr national anН sОctorial НОvОlopmОnt plans. In orНОr to fulfill thО rОquirОmОnts of thО National Program on ClimatО ChangО, an intОr-Нisciplinary anН intОr-sОctorial National ClimatО CommittОО has bООn ОstablishОН by thО govОrnmОnt anН is lОН by MEGDT. ThО CommittОО coorНinatОs anН guiНОs national activitiОs anН mОasurОs aimОН at aНapting to climatО changО anН mitigating GHG Оmissions.

22. RОgarНing climate change mitigation, thО govОrnmОnt has unНОrtakОn to mitigatО GHG Оmissions through a rangО of stratОgiОs for sustainablО НОvОlopmОnt covОring НiffОrОnt sОctors incluНing ОnОrgy, wastО, transportation anН agriculturО. Of spОcific rОlОvancО to thО projОct is thО stratОgy for 'ImprovОmОnt of ОnОrgy ОfficiОncy in InНustry'. Policy mОasurОs which will implОmОnt this stratОgy rОlatО to (i) ОquipmОnt ОfficiОncy improvОmОnts anН gooН housОkООping; anН (ii) tОchnology changОs.9

14. RОgarНing climate change adaptation, thО GoM has outlinОН stratОgiОs rОlating to thО following sОctors: animal husbanНry, arablО farming, watОr rОsourcОs, human hОalth, anН forОstry. Each sОctor has a numbОr of stratОgiОs anН policiОs anН mОasurОs rОlating to thО stratОgy. A targОt arОa is thО stratОgy for 'improvОН watОr quality' to bО implОmОntОН through 'aНvancing thО lОvОl of watОr purification anН sОwagО watОr trОatmОnt plants in urban arОas'. ThО subcomponОnts unНОr thО AF fully support this policy mОasurО.

5. Environmental Impact Assessment Legal Framework and Procedures

15. The Law on Environmental Impact Assessment (1998, amended 2002, and amended 2012) regulates Mongolian EIA requirements. ThО most rОcОnt amОnНmОnt to thО law was aНoptОН in 2012 anН was brought into forcО in 2013, implОmОntОН through a nОw EnvironmОntal Impact AssОssmОnt RОgulation.10 The purpose of the EIA law is environmental protection, the prevention of ecological imbalance, the regulation of natural resource use, the assessment of environmental impacts of projects and procedures for decision-making regarding the implementation of projects.

16. The terms of the law apply to all new projects, as well as rehabilitation and expansion of existing industrial, service, or construction activities and projects that use natural resources. Depending on the type and size of the planned activity, the responsible party for implementing the EIA law will be either MEGDT or aimag government (provincial government). Figure II-1 presents a simplified diagram of the EIA procedure in Mongolia.

9 Mongolia’s SОconН National Communication on ClimatО ChangО. 10 The new EIA Regulation revokes 2 Regulations and 1 Guideline document which do not meet the requirements of the EIA Law. The revoked legislation is: Regulation on the Environmental Impact Assessment Committee (2006); Guidelines on Formulating EPPs and EMPs (2000); and Regulation on Detailed EIA Appraisal (2006). These regulations are superseded by the EIA Law.

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Projects Requiring EIA Screening - New projects, renovation/expansion of industrial, service & construction activities, projects using natural resources

Project Implementer submits documents to MEGDT or aimag - Project description, Environmental Baseline, Technical & Economic Feasibility, drawings, other related documents

MEGDT or aimag expert - Conducts General EIA (screening) within 12 days Makes 1 of 4 decisions

Decision 1 - Project Can Project can be implemented without detailed EIA Progress

Decision 2 - Project Can Progress Project can be implemented with specific conditions With conditions

Decision 3 - Project implementer - selects Detailed EIA Required Authorised Company for Detailed EIA

Decision 4 - Submit Detailed EIA - MEGD or Project rejected because of non-conformity or impacts aimag expert decision within18 days

Figure II-1: EIA Process in Mongolia

Source: Law on EIA (2012)

17. The type and size of the planned activity define responsibility as either MEGDT or aimag (provincial) environment protection authorities. There are two types of EIA defined in the Law:

(i) General EIA (screening) - to initiate a General EIA, the project implementer submits to MEDGT (or aimag government) a brief description of thО project including feasibility study, environmental baseline, technical details, drawings, and other information. The General EIA may lead to one of four conclusions: (i) no detailed EIA is necessary, (ii) the project may be completed pursuant to specific conditions, (iii) a Detailed EIA is necessary, or (iv) project cancellation. The review process of the General EIA usually takes up to 12 working days. (ii) Detailed EIA – the scope the Detailed EIA is defined by the MEGDT through the approval of the General EIA. The Detailed EIA report must be produced by a Mongolian company which is authorized by MEDGT by means of a special procedure. The developer of the Detailed EIA should submit it to MEDGT (or aimag government). An expert of the organization who was involved in conducting General EIA should make a Experts selected by the MEGDT (or aimag environmental authorities) will review of the Detailed EIA and provide their comments and recommendations within 18 working days . Based on the conclusion of the experts, the MEDGT (or aimag authorities) will make a decision about approval or disapproval of the project.

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(iii) The Detailed EIA must contain the following chapters: (i) EnvironmОntal basОlinО Нata; (ii) ProjОct altОrnativОs; (iii) RОcommОnНations for minimizing, mitigation anН Оlimination of impacts; (iv) Analysis of ОxtОnt anН Нistribution of aНvОrsО impacts anН thОir consОquОncОs; (v) Risk assОssmОnt; (vi) EnvironmОntal ProtОction Plan; (vii) EnvironmОntal Monitoring Program; anН (viii) Opinions of rОsiНОnts on whОthОr thО projОct shoulН bО implОmОntОН.

6. Mongolian EIA Report

18. In compliancО with Mongolia’s EIA requirements, thО subprojОcts supportОН unНОr thО AF arО rОquirОН to prОparО anН submit thО GОnОral EIA to thО MEGDT. ThО rОviОw of thО GEIAs by thО MEGDT concluНОН that all subprojОcts unНОr AF arО rОquirОН to submit DОtailОН EIAs. ThО DОtailОН EIAs wОrО prОparОН by EIA firms11 that arО licОnsОН by thО MEGDT, anН submittОН to MEGDT for rОviОw anН approval. All DОtailОН EIAs wОrО approvОН by MEGDT in DОcОmbОr 2015.

B. Mongolia Policy & Strategy in Urban Water and Wastewater Sectors

1. Urban Sector Strategy

23. ThО ОlОmОnts of Оxisting GoM policy, stratОgy anН lОgislation which infОr a trajОctory for growth anН НОvОlopmОnt of thО urban sОctor, anН suggОst whОrО priority invОstmОnt shoulН bО focusОН in thО mОНium- to long-tОrm arО:

i) The National Development Strategy (NDS) which covers the period 2007 to 2021 and is structured around achievement of the Millennium Development Goals (MDGs); ii) The Regional Development Concept and related Law on Regionalized Development Management and Coordination (of 2001 and 2003); and iii) The Government Platform Action Plan 2012 to 2016.

19. The NDS targets rates of at least 14% per annum and a GDP per capita of US$5,000 ОquivalОnt by yОar 2015. It strОssОs thО nООН to “activОly НОvОlop rОgions anН infrastructurО to reduce urban-rural НisparitiОs”. ThО RОgional DОvОlopmОnt ConcОpt anН related Law on Regionalized Development Management and Coordination; and Medium-term Strategy on Regional Development also call for better-balanced regional growth.

20. The Government Platform Action Plan 2012 to 2016 includes the following policy objectives for the urban sector:

i) Improve the centralized heating, water supply and wastewater systems for the people living in aimag centers in order to ensure that they live a comfortable life; ii) Carry out re-planning of the urban areas with community involvement, and implement housing programs by providing centralized solutions to ger district electricity, drinking water and auto road-related issues, and other elements, either making them independent or recoverable through instalments; iii) Carry out technological renovations in water supply, drainage and sanitation facilities of towns;

11 The Detailed EIA for Sainshand WWTP was prepared by Environ LLC while the other three Detailed EIAs were prepared by UndurKhaan Trade LLC.

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iv) Take measures to enforce the Law on Water Supply and Sewer Use in towns and other settlements; and v) Introduce technologies to treat and reuse industrial and household wastewater.

21. The project approach follows a number of these strategic directions, with: (i) its geographical focus on aimag centers; (ii) addressing of sanitation, wastewater management and urban environmental issues; and (iii) support for efforts to introduce technologies which will enable the reuse of the outputs from the treatment process – treated wastewater effluent, mineralized sludge and possibly methane gas.

2. Water and Wastewater Sector Strategy

22. The laws of Mongolia which govern water use have been revised and consolidated, and new laws have been adopted over recent years. The Law of Mongolia on Water dated 22 April 2004 ("Old Water Law") has been replaced with a revised version of the Law of Mongolia on Water dated 17 May 2012 ("Water Law"). The Law of Mongolia on Fees for Use of Water and Minerals Water has been consolidated with other laws on the use of natural resources and is replaced with the Law of Mongolia on Natural Resources Use Fee dated 17 May 2012 ("Natural Resources Use Fee Law"). On 17 May 2012, the Law of Mongolia on Water Pollution Fees was newly adopted to introduce fees payable for pollution of water resources ("Water Pollution Fees Law").12

23. Under the Water Law, the Government of Mongolia (GoM) has the authority to determine the intrinsic environmental value of water resources for each region or river basin. Currently, governmental resolution No. 302 dated 26 October 2011 sets out the intrinsic environmental value for each river basin in amounts ranging from MNT 800 to MNT 2651 per cubic meter for surface water, and MNT 1510 to MNT 9440 per cubic meter for sub-surface water (groundwater).

24. In the wastewater sector, to implement the "polluter pays" principle in terms of water resource protection, the Water Pollution Fees Law introduces fees payable by entities and organizations that pollute water resources, and sets out the maximum and minimum amount of water pollution fees per polluting substance type.13 The GoM will set the specific fees payable in each water drainage basin taking into account the volume and quality of the water resources contained therein.

25. The GoM is pursuing an ambitious reform agenda in the water and wastewater sector, assisted by the ADB. Based on the newly amended Law of Mongolia on Municipal Water Supply and Wastewater Treatment Operation (amendments) Article 9 (2011), the Water Services Regulatory Commission (WSRC) was established and made operational from June 2012. The head of the Commission and the members were appointed by Prime Ministerial Resolution No.56 of May 30, 2012, with duties to: (i) take control of water supply and sewerage system service tariff; (ii) set water supply and sewerage system service tariff; (iii) give approvals for system tariff; (iv) make resolutions on tariff and carry out analysis; (v) approve communication and regulation of water supply and sewerage entities (PUSOs); and (vi) approve any other such resolution as may be necessary.

26. The Commission has investigated the issue of water supply and sewerage tariffs and has proposed a system of tariff reform which will progressively increase tariffs, first to recover full operational and maintenance costs, and thereafter to also cover the costs of depreciation. The

12 Based on: Revision of Environmental Laws in Mongolia and its impact on the sector, October 2012, Hogan Lovells, Ulaanbaatar 13 This sub-divides polluting load by: low density substance; organic substance; minerals; heavy metals; and toxic substances, but does not assign an acceptable value or fee rate for exceedence to each.

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recommendations include: (i) a structure which provides for both fixed and variable tariffs; and (ii) that there be immediate substantial increase in tariff, and thereafter progressive increases in tariff to support the sustainable operation of water and wastewater management systems. The WSRC has effectively weakened the role of the aimag governments in preventing the PUSOs from introducing and imposing tariffs at levels necessary for them to be fully self-financing. Consequently, in general, the financial position of the PUSOs has significantly improved over the past two years.

3. Urban Environmental Policy and Strategy

27. There is no specific government policy relating directly to urban environmental matters. The GoM’s ovОrall policy for ОnvironmОntal protОction, incluНing thО following of EIA procОНurОs for public sector project proposals, provides the urban environmental protection framework.

28. The GoM is promoting urban greening as part of the reforestation and green agenda of the MEGDT. This builds on the statutory provisions within the urban planning laws of Mongolia which set out minimum requirements for public open space which are in turn reflected in the development tables accompanying each General Plan (including those current for the project aimags). There may be opportunities for reuse of treated wastewater to irrigate green public open space.

C. Applicable Mongolian Environmental Standards

29. KОy stanНarНs appliОН in thО DEIA anН thО IEE incluНО thО following: (i) Surface watОr quality stanНarН (MNS 4586:1998); (ii) GrounНwatОr quality stanНarН (MNS 900:2005), anН thО WHO GuiНОlinОs for Drinking-watОr Quality, Fourth EНition (2011); (iii) Ambient air quality standards; (iv) Soil Quality, Soil Pollutant ElОmОnts anН SubstancОs StanНarН (MNS 5850:2008); (vi) Ambient Noise Standard (MNS 4585:2007); and (vii) the occupational health and safety standard (MNS 5002:2000). These standards are generally compliant with, or more stringent than, guideline values defined in the IFC Environment, Health and Safety Guideline, as described below.

1. Water

30. Table II-3 summaries Mongolian drinking water standards MNS 0900: 2005. Table II-4 summarizes effluent wastewater quality standards MNS 4943: 2011.

Table II-3: Mongolian Drinking Water Standard

Parameter Unit Standard Physical Quality pH mg/l (milligrams/litre) 6.5-8.5 Hardness mg equivalent/l 7.0 Total Dissolved Solids (TDS) mg/l 1000.0 Turbidity mg/l 1.5 Taste Score 2.0 Odour Score 2.0 Colour Degree 20 Inorganic Quality Molybdenum (Mo) mg/l 0.07 Barium (Ba) mg/l 0.7 Boron (B) mg/l 0.5 (Cu) mg/l 1.0 Calcium (Ca2+) mg/l 100.0

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Parameter Unit Standard Magnesium (Mg2+) mg/l 30.0 Manganese (Mn) mg/l 0.1 Sodium (Na) mg/l 200.0 Phosphate (PO43-) mg/l 3.5 Fluoride (F) mg/l 0.7-1.5 Selenium (Se) mg/l 0.01 Strontium (Sr) mg/l 2.0 Sulfate (SO42-) mg/l 500.0 Chloride (Cl) mg/l 350.0 Arsenic (As) mg/l 0.01 Hydrogen sulphide (H2S) mg/l 0.1 Chromium (Cr) mg/l 0.05 Dry residue mg/l 1000.0 Uranium (U) mg/l 0.015 Beryllium (Be) mg/l 0.0002 Cadmium (Cd) mg/l 0.003 Total mercury (Hg) mg/l 0.001 Total cyanide (CN-) mg/l 0.01 Ammonium ion, (NH4+) mg/l 1.5 Nitrate ion, (NO3-) mg/l 50.0 Nitrite ions (NO2-) mg/l 1.0 Phosphate ions, (PO43-) mg/l 3.5 Silver (Ag) mg/l 0.1 Iodine (I2) mg/l 1.0 Vinyl chloride mg/l 0.0003 Nickel (Ni) mg/l 0.02 Lead (Pb) mg/l 0.01 Aluminium mg/l 0.5 Antimony (Sb) mg/l 0.02 Total iron (Fe) mg/l 0.3 Zinc (Zn) mg/l 5.0 Organic Quality Benzene mg/l 0.01 Xylenes mg/l 0.5 Nitrile 3 acetic acid mg/l 0.2 2 chlorinated methane mg/l 0.02 2 chlorinated ethane mg/l 0.03 3 chlorinated ethane mg/l 0.07 4 chlorinated ethane mg/l 0.04 Phenolic compounds mg/l 0.002 Styrene mg/l 0.02 Toluene mg/l 0.7 Ethyl benzene mg/l 0.3 Pesticides Atrazine mg/l 0.002 Carbofuran mg/l 0.007 Lindane mg/l 0.002 Molinat mg/l 0.006 Endrin mg/l 0.00006 Microbial Quality Total Coliform Coli / ml 100 (at source) 20 (at supply) E.Coli E.Coli / 100ml E.Coli / 100ml Radiological Quality

17

Parameter Unit Standard Total α radioactivity Bq/l 0.1 Total β radioactivity Bq/l 1.0 Source: MNS 0900:2005

Table II-4: Mongolian Effluent Wastewater Quality Standard

Parameter Unit Standard Water temperature Co 20 pH - 6-9 Odour Sense No smell Total Suspended Solids (TSS) mg/l 50 BOD mg O2/l 20 COD mg O2/l 50 Permanganate oxidizing capacity mg O2/l 20 Total Dissolved Solids (TDS) mg/l 1,000 * Ammoniacal Nitrogen (NH4) mg N/l 6 Total Nitrogen (TN) mg/l 15 Total phosphorous (TP) mg/l 1.5 Organic phosphorous (DOP) mg/l 0.2 Hydrogen sulphide (H2S) mg/l 0.5 Total iron (Fe) mg/l 1 Aluminium (Al) mg/l 0. 5 Manganese (Mn) mg/l 0.5 Total Chromium (Cr) mg/l 0.3 Hexavalent chromium (Cr6+) mg/l Absent Total cyanide (CN) mg/l 0.05 Free cyanide mg/l 0.005 Copper (Cu) mg/l 0.3 Boron (B) mg/l 0.3 Lead (Pb) mg/l 0.1 Zinc (Zn) mg/l 1 Cadmium (Cd) mg/l 0.03 Antimony (Sb) mg/l 0.05 Mercury (Hg) mg/l 0.001 Molybdenum (Mo) mg/l 0.5 Total Arsenic (As) mg/l 0.01 Nickel (Ni) mg/l 0.2 Selenium (Se) mg/l 0.02 Beryllium (Be) mg/l 0.001 Cobalt (Co) mg/l 0.02 Barium (Ba) mg/l 1.5 Strontium (Sr) mg/l 2 Vanadium (V) mg/l 0.1 Uranium (U) mg/l 0.05 Oil and grease mg/l 1 Fat mg/l 5 Surface active agents mg/l 2.5 Phenol (C6H5OH) mg/l 0.05 Trichloroethylene (C2HCl3) mg/l 0.2 Tetrachloroethylene mg/l 0.1 Chlorine remains (Cl) mg/l 1

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Parameter Unit Standard Bacteria triggering water-borne disease - Absent in 1mg of water Source: MNS 4943: 2011

31. Mongolia has also established regulations establishing allowable limits for wastewater effluents from industrial sources before allowing to be discharged to public sewers and central wastewater treatment systems (see Table II-5).

Table II-5: Allowable Limits of Industrial Wastewater Effluents

№ Parameters In UB In other urban areas 1 Suspended solids (SS) 400.0 500.0 2 Biochemical Oxygen Demand (BOD) 200.0-400.0 250.0-500.0 3 Chemical Oxygen Demand (COD) 400.0-800.0 500.0-1000.0 4 Copper 0.5-1.0 0.5 5 0.07-0.1 5.0 6 Sulphate 1355.0-1500.0 1500.0 7 Sulphide 10.0 10.0 8 Nickel 0.5-0.65 0.65 9 Lead 0.07 0.1 10 Chromium+6 0.27-0.5 0.2-0.5 11 Total Chromium 2.5-5.0 2.5-5.0 12 Zinc 1.0 1.0 13 All types of washing chemicals 5.0-10.0 10.0-20.0 14 Phenol 0.5-1.0 1.0 15 Cadmium 0.032-0.1 0.1 16 Cyanide 0.08-1.5 0.1-1.5 17 Ammonia 10.0-15.0 10.0-20.0 18 Total Nitrogen 30 30 19 Hydrogen ion activity 6.- 5 8.5 6.5-8.5 20 Chlorine 900.0-1000.0 1000.0 21 Iron 0.27-1.0 0.5-1.0 22 Hydrogen ion 0.2 0.2 23 Synthetics 25.0 25.0 24 Sulphur paint 0.45 0.5 25 Water temperature 15-40C 30C 26 Arsenic 0.1 0.1 27 Mercury 0.005 0.005 28 Cobalt 0.1 0.1 29 Fat oil 10.0-25.0 15.0-25.0 30 Silver 2.0 2.0 31 Selenium 0.1 0.1 32 Organic phosphorous 0.4 0.4 33 Total hydrocarbon 0.04 0.04 34 Aluminum 0.5 0.5 Source: Regulation No a/11/05/A/18

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2. Surface water.

32. The surface water quality standard in Mongolia is presented in Table II-6. No comparable standard identified/suggested in the IFC EHS guideline.

Table II-6: Mongolian Surface water quality standard

Source: MNS 4586:1998

3. Groundwater

33. The Mongolian Standard outlining the general requirements for protection of groundwater (MNS 3342, 1982) indicates that the contamination of groundwater with industrial raw materials, products and municipal wastes during transportation and storage is prohibited. No comparable standard identified/suggested in the IFC EHS guideline. The national groundwater quality standard are shown in Table II-7 and relevant requirements in the standard include:

i) Raw materials and products for industrial and municipal waste storage tanks with potential to contaminate groundwater resources should comply with following:

20

 Geological - hydrogeological investigations of the storage tank construction, potential soil infiltration estimates of geological materials, groundwater protection measures to be developed based on the amount and characteristics of the chemicals stored.  Storage tanks to be tested for leakage prior to use.  For areas at the base of mountains, loops of rivers, river beds and highly fractured parts of geological sediments which are used for drinking water, storage tanks cannot be established in these regions. ii) In case of ground water contamination due to accidents, the damaged area should be protected, spill gathered without further distribution, the prohibition of drinking water collection from this area, and quick organization and removal of traces of contamination. iii) In the event of ground water pollution or when the contamination reaches dangerous levels, the method of observation and control will depend on the ground water quality, its intended use and the potential consequences of the pollution.

Table II-7: Mongolian groundwater quality standard

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4. Ambient Air Quality

34. The Mongolian Law on Air regulates protection of ambient air, prevention from pollution, and reduction and monitoring of emissions of air pollutants. The Mongolian ambient air quality standards are presented in MNS 4585: 2007 and are summarized in Table II-8. Standard values are comparable to WHO and USEPA standard values.

Table II-8: Mongolian Ambient Air Quality Standard

Mongolian Standard Pollutant Averaging Period (u g/m3) Nitrogen Dioxide (NO2) 20 Minute 85 1 hour - 24 hour 40 Annual 30 Sulphur Dioxide (SO2) 10 Minute 500 15 Minute - 20 Minute 450 1 Hour - 24 hour 20 Annual 10 Particulate Matter (PM10) 24 hour 100 Annual 50 Particulate Matter (PM2.5) 24 hour 50 Annual 25 Carbon Monoxide (CO) 30 Minute 60,000 1 hour 30,000 Running 8 Hour Mean 10,000 Hydrogen Fluoride (HF) 1 hour - Annual - Hydrogen Chloride (HCl) 1 hour - MNS 4585: 2007

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5. Soil Quality Standard.

35. The soil quality standard of Mongolia is presented in Table II-9. No comparable standard identified/suggested in the IFC EHS guideline.

Table II-9: Soil quality standard

Source: MNS 5850:2008

6. Noise Standard

36. Mongolian National Standard for Ambient Noise MNS 4585:2007 sets an allowable limit for noise in daytime at 60 dB, and night at 45 dB, with night being 10pm-6am according to the Act on Labor. These standards can be compared to the more detailed WHO guidelines which recommend that indoor noise levels should not exceed 30 dB (average equivalent over 8 hours LAeq) and 45 dB (maximum for an individual noise event), and outdoor sound levels should not exceed 50 dB LAeq. Comparison is made with IFC EHS standard values in Table II-10, which shows that IFC guidelines are slightly more stringent that the national standard for residential day time permissible levels. Since the wastewater treatment facilities are not located in residential or educational areas, the application of Mongolian standard is justified.

Table II-10: Mongolian Noise Standard

Source: MNS 4585: 2017

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D. Applicable ADB Policies, Regulations and Requirements

37. The major applicable ADB policies, requirements and procedures for EIA are the Environmental Safeguards – A Good Practice Sourcebook (2012), and the Safeguard Policy Statement (SPS, 2009), which jointly provide the basis for this IEE. The policy is underpinned by the ADB Operations Manual for the SPS (OM Section F1, 2010) and it promotes international good practice as reflected in intОrnationally rОcognizОН stanНarНs such as thО WorlН Bank Group’s Environmental, Health and Safety Guidelines14.

38. The SPS establishes an environmental review process to ensure that projects undertaken as part of programs funded through ADB loans are environmentally sound, are designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, health, social, or safety hazards.

39. At an early stage in the project cycle, typically the project identification stage, ADB screens and categorizes proposed projects based on the significance of potential project impacts and risks. A projОct’s ОnvironmОnt catОgory is НОtОrminОН by the category of its most environmentally sensitive component, including direct, indirect, induced, and cumulative impacts. Project screening and categorization are undertaken to:

i) rОflОct thО significancО of thО projОct’s potОntial ОnvironmОntal impacts;

ii) identify the type and level of environmental assessment and institutional resources required for the safeguard measures proportionate to the nature, scale, magnitude and sОnsitivity of thО proposОН projОct’s potОntial impacts; anН,

iii) determine consultation and disclosure requirements.

40. ADB assigns a proposed project to one of the following categories based on the potential environmental impacts:

i) Category A. Proposed project is likely to have significant adverse environmental impacts that are irreversible, diverse, or unprecedented; impacts may affect an area larger than the sites or facilities subject to physical works. A full-scale environmental impact assessment (EIA) including an environmental management plan (EMP), is required.

ii) Category B. ProposОН projОct’s potential environmental impacts are less adverse and fewer in number than those of category A projects; impacts are site-specific, few if any of them are irreversible, and impacts can be readily addressed through mitigation measures. An initial environmental examination (IEE), including an EMP, is required.

iii) Category C. Proposed project is likely to have minimal or no adverse environmental impacts. No EIA or IEE is required although environmental implications need to be reviewed.

24. This aННitional financing projОct was classifiОН as catОgory B for ОnvironmОnt by ADB. This IEE, incluНing thО EMP, was prОparОН by thО TA consultant on bОhalf of thО MCUD, thО ExОcuting AgОncy (EA).

14 New Version of the “ Group EnvironmОntal, HОalth, anН SafОty GuiНОlinОs”, April 30, 2007, Washington, USA. http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines.

24

E. Other Relevant Guidelines

41. During the design, construction, and operation of a project the ADB SPS requires the borrower to follow environmental standards consistent with good international practice (GIP), as reflected in intОrnationally rОcognizОН stanНarНs such as thО WorlН Bank Group’s Environment, Health and Safety Guidelines (hereafter referred to as the EHS Guidelines).15 The EHS Guidelines contain discharge effluent, air emissions, and other numerical guidelines and performance indicators as well as prevention and control approaches that are normally acceptable to ADB and are generally considered to be achievable at reasonable costs by existing technology. When host country regulations differ from these levels and measures, the borrower/client is to achieve whichever is more stringent. If less stringent levels or measures are appropriate in view of specific project circumstances, the borrower/client is required to provide justification for any proposed alternatives. The EHS Guidelines include General EHS Guidelines (covering environment; occupational health and safety; and community health and safety) and Industry Sector Guidelines. A comparison between IFC guideline values and MON environment quality or emission standards confirmed that MON requirements are generally compatible with levels recommended in the IFC or EHS Guidelines. EHS has guidelines for wastewater, though with limited parameters compared to MON standard; regulated noise levels are more stringent in Mongolia; and there are no EHS guidelines for soil quality, and surface and ground water quality. Surface quality regulations in Mongolia are very stringent, significantly more stringent than regulated values of many industrialized countries. Given the fact that the G0204 project adheres to MON standards, the use of country standards for the proposed additional financing loan is justified.

42. Occupational health and safety standard (MNS 5002:2000). Article 16 of the National Constitution of Mongolia statОs that ОvОry ОmployОО has thО right to ‘suitablО conНitions of work’. ThО GoM adopted a National Program for Occupational Safety and Health Improvement in 2001 and national standards are also adopted such as the National Standard on Occupational Health and Safety MNS 5002:2000 which support the Law on Labor Safety and Hygiene (2008) which sets out policies, rules and regulations on occupational safety and health, and the most common requirements for workplace safety.

15 World Bank Group, Environmental, Health, and Safety Guidelines, April 30, 2007, Washington, USA. http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines

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III. DESCRIPTION OF THE PROJECT

A. Project Rationale

43. The Asian Development Bank (ADB) Grant 0204,16 approved on 19 April 2010, has been financing water supply, sewerage, heating supply systems, roads, storm water drainage improvement, master plan preparation, and capacity development for five urban settlements in Southeast Gobi of Mongolia. The Government of Mongolia17 requested ADB for additional financing to Grant 0204 to support urgently needed wastewater treatment for four provincial (aimag) centers, including Dalanzadgad (Umnugovi aimag), Sainshand (Dornogovi aimag), Arvaikheer (Uvurkhangai aimag), and Tsetserleg (Arkhangai aimag).

44. The additional loan financing is needed to construct wastewater treatment plants (WWTP) in the four cities. The proposed additional financing project is aligned with the government's 2012– 2016 Action Program, which includes objectives to improve public utility services and networks in its provincial centers. It is also aligned with ADB's Interim Country Partnership Strategy for Mongolia, 2014–2016.

45. The rationale for the AF project is threefold. Firstly, the existing wastewater management systems are under strain, and performance in the sector is compromised by obsolete facilities and equipment; this puts the systems at risk of failure. Secondly, the aimag centers are identified by the GoM as the targets for future economic growth; lack of adequate wastewater facilities could compromise future investment in these cities. Even when functioning well, the current treatment plants do not satisfy discharge standards for either organic pollutants or nutrients, leading to pollution of surrounding areas or of receiving streams (see below).

B. Existing wastewater treatment facilities

46. WWTPs prОviously constructОН in thО 1990’s in all four projОct citiОs havО all bООn wastО stabilization pond systems. These were constructed and utilized according to designs, although maintenance was inadequate in some cases. In all four project cities the plants are only partially operational or are effectively not operated as WWTPs.

47. These plants all employ waste stabilization (oxidation) ponds as the main biological treatment method. All plants include anaerobic units as a primary mode of treatment, although in some cases these are by-passed or not used as intended. In other cases the BOD loading of the raw sewage and influent flow-rate are too low to sustain anaerobic conditions. Furthermore under cold conditions, and during the spring thaw, temperatures are insufficient to sustain the methanogenic stage of the anaerobic digestion process leading to odor release and very poor levels of treatment.

48. The pond systems are preceded in some cases by preliminary (screening and grit removal) and primary (sedimentation) treatment processes. However, in all cases where the preliminary and primary trОatmОnt units (largОly constructОН in thО 1990’s) Оxist: (i) construction is gОnОrally of poor quality, and structures are consequently damaged; (ii) none of the associated mechanical equipment is working; and (iii) as a result of this none of the preliminary and primary treatment system is operational (apart from manual screens).

49. In addition, the operators experienced other problems during the day-to-day operation of

16 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Grant to Mongolia for the Southeast Gobi Urban and Border Town Development Project. Manila. 17 The pipeline for 2015 was officially approved by the Government of Mongolia in early April 2015. 26

these facilities, including:

i) The pond systems are generally in a poor state of repair, and if operational are generally not operated in the designed configuration. In many cases (particularly in Arvaikheer) the primary units are functioning poorly due to failure to regularly remove sludge. ii) Problems are experienced in the winter when the wastewater freezes and retention volumes in the pond systems are insufficient to accommodate the design flow, resulting in ponds being over-topped. Odor problems and poor treatment efficiency are experienced year-round, but particularly during the spring thaw, when the stored BOD is released from the frozen wastewater and the natural treatment systems are thus overloaded. iii) The State Inspection Agency, which is responsible for inspection of waste treatment facilities, is constantly reporting on the failure of the existing treatment plants to reach the required discharge standards. While the current operations do not present a significant health or environmental risk, this is likely to change with increasing wastewater flows.

50. In summary, key observations and lessons learnt related to the existing wastewater treatment plants are: (i) facilities are generally in a poor state of repair; (ii) represent a technology choice that is not suitable for Mongolian climatic conditions; and (iii) are not adequate to accommodate increasing wastewater flows. Previously, insufficient attention has been paid to the importance of wastewater treatment and achieving effluent quality standards, and consequently maintenance has been neglected. This will be addressed through the technical assistance provided under the additional financing, and tariff reform which will ensure adequate resources are available for operation and maintenance of the new facilities, including emergency preparedness and response.

51. There is now significant growth in these aimag centers, with Government supporting an ambitious program of apartment construction. This will lead to increases in wastewater flows over the forthcoming decade as new apartment block are occupied, exceeding the capacity of the existing treatment plants. There is increasing demand for wastewater treatment services, and in keeping with the development aspirations of the country, there is a demand for treatment systems which represent the state-of-the-art in efficient and effective sewage treatment under Mongolian conditions.

52. Both the MEGDT and the State Inspection Agency are placing pressure on MCUD and on the project aimags to improve the quality of wastewater management and treatment. Improvements in treatment efficiency are required in order to prevent increasing environmental pollution; and a threat to public health.

C. Project Outputs

53. Investment funding from the Asian Development Bank in the amount of US$ 20.0 million equivalent, with balance of funds required from Government of Mongolia and project aimags, to fund: (i) new wastewater treatment plants; (ii) support to institutional reform and capacity development for PUSOs; and (iii) support to project management and operation. The AF project outputs and activities are described in more detail in the following sections.

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D. Output 1: Modern WWTPs in Aimag Centers

54. This output will include the installation of WWTPs in four aimag capitals with a total treatment capacity of 13,200 m3/d (see Figures III-3 to III-6). It will also include the promotion of reclaimed water utilization at a rate of 5,000 m3/d (short-term) to 10,000 m3/d (long-term) for beneficial reuse.

1. Wastewater Treatment Process Components

55. Two design consultant companies have been engaged to carry out design work for treatment plants, all of which adopt the Integrated Fixed Film Activated Sludge (IFAS) process technology based on a comprehensive analysis of alternatives (see Chapter V). Naran Rashaan LLC is carrying out designs for treatment plants at Arvaikheer, Dalanzadgad and Tsetserleg, all rated at 3,000 m3/d capacity. Hydro Design Project LLC is carrying out the design for the treatment plant for Sainshand with a treatment capacity of 4,200 m3/d.

56. The designs differ slightly in their configuration, and in the selection of the type of media used in the aeration tanks. However, in general the process is as follows (see also Figure III-1 and Figure III-2 for typical layouts):

i) Installation of a collector main – generally with either 350 or 500 mm diameter. Length varies between a few hundred meters (in Arvaikheer and Dalnzadgad) to about 2 km in Sainshand; ii) Inlet chamber and screening chamber with mechanical screens (coarse – 18 mm and fine – 6 mm); iii) Grit and sand sedimentation channel and removal system and associated pumps; iv) Influent equalization tank; v) Primary sedimentation tank; vi) Biological reactor tank and media (artificial algae), including blowers, diffusers and other aeration equipment, and associated structures. The biological treatment involves several stages (different tank compartments), and variations in bubble size, to aid denitrification, nitrification and removal of organic material; vii) Secondary sedimentation tank; viii) Effluent stabilization or equalization reservoir; ix) Disinfection unit (hydro-chlorate nitrate); x) Tertiary treatment or maturation in waste stabilization ponds (“bio-ponНs”); xi) Sludge pumps and sludge concentration facilities, and sludge filter press; and xii) Sludge drying beds.

57. In addition, ancillary facilities will include:

i) Administration building, including offices and laboratory; ii) Heating, water supply and waste water network lines; iii) Electricity substation and electricity supply line; iv) Automation equipment – SCADA system;

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v) Site fencing, access road, guard house and landscaping.

2. Wastewater Treatment Process – Key Features

58. Key features of the proposed IFAS treatment process are as follows:

59. Screenings. Screenings will be stored on site and then disposed of to the municipal landfill facility. Volumes removed for disposal will vary but generally be a few tens kilograms per day wet weight.

60. Grit Removal. Grit and sand will be settled and pumped to drying beds. Again the quantity removed will vary between sites, but will generally be a few tens (or at most hundreds) of kilograms per day wet weight. The screening chamber and grit removal channels will be contained within a preliminary treatment building.

61. Equalization Tank. The discharge rate of wastewater arriving at the treatment plants will fluctuate significantly. Consequently, an influent equalization tank with a capacity of about 4 hours of average flow will be installed following the preliminary treatment. This tank will incorporate an air mixing system to ensure the wastewater is maintained in constant motion to avoid the onset of septic conditions. The equalization tank will also partly function as a primary sedimentation tank and thus some sludge will accumulate. This will be withdrawn and treated.

62. Primary Sedimentation & Sludge Production. A primary sedimentation tank will precede the biological treatment units providing a retention time of approximately two hours of average flow. Sludge withdrawn from the primary sedimentation unit will be pumped to the sludge treatment facility.

63. Biological Treatment. The biological treatment process involves multiple stages in order to optimize treatment efficiency. The stages are designed to optimize the nitrification, denitrification and organics removal processes. To increase the intensity of activated sludge within the biological reactor, plastic media (or artificial algae) are used in most of the biological reactor tanks. The fixed media (or artificial algae) provide surfaces onto which the activated sludge attaches. This intensifies the oxidation process by increasing oxidation rates and decreasing the amount of return sludge required, thus reducing operation costs. An average mixed liquor suspended solids concentration of approximately 6-8 g/L is attained as a result of which the aging of activated sludge is increased, leading to an enhanced nitrification process contributing to more complete biological treatment. Aeration is provided by compressors delivering compressed air to diffusers located in the biological treatment tanks. Bubble size is specified according to requirements of the treatment process taking place in the tanks, and the timing, intensity and type of aeration can be varied to optimize treatment.

64. Secondary Sedimentation & Sludge Production. Following biological treatment the secondary sedimentation process allows separation of the mixed liquor suspended solids (MLSS) from the supernatant. At this stage remaining phosphorus is removed through the addition of a coagulant at 15-20 mg/L concentration. In order to maintain the constant concentration of MLSS and improve the de-nitrification and nitrification processes the sludge from secondary clarification is airlifted to the de-nitrification unit, providing a continuous short-circuit. This process is designed to deliver an effluent with BOD5 concentration of 10 mg/L, and a nitrogen as ammonium concentration of <0.5 mg/L. Excessive sludge from secondary sedimentation will be pumped for excess sludge processing (see below).

65. Sludge Processing Unit. The sludge treatment system for excess sludge will comprise a 29

concentrator, filter press and sludge drying beds. The anticipated daily excess sludge volume generated is expected to be of the order of 10-20 m3/d at design loading. Excess sludge is dewatered in the concentrator and then pumped to the filter press where it is further dewatered to provide sludge of 80% moisture content. Prior to introduction to the filter press, a flocculent is added to the sludge to assist in concentration. Sludge drying beds will be provided for up to 6 months of sludge production. Dried sludge may be sold as soil conditioner, but are more likely to be landfilled given the prevalent cultural reluctance in Mongolia to reuse sludge for beneficial purposes. Excess supernatant extracted from the sand removal and sludge drying process will be returned to the preliminary treatment works.

66. Disinfection Facility. Disinfection of treated wastewater will be carried out through the addition of hydro-chlorate nitrate solution into the disinfection reservoir, which is located in the production building. The disinfected wastewater will be transferred to the bio-pond by gravity pipeline.

67. Effluent Polishing in Bio-ponds. Effluent polishing will be carried out in oxidation (waste stabilization) ponds providing both additional treatment, and storage in the case of reuse. The ponds also serve as an emergency retention and treatment system in the event of plant malfunction. In general, parallel pond systems of four units are adopted with two units in series. The retention time is 30 days when the facility reaches full operating capacity, and pond length to depth ratios are generally about 4:1 and depth 1.5 m. In the case of Tsetserleg, the existing pond system will be used for this purpose.

68. Potential Effluent Reuse. The last step of the treatment process will provide an effluent quality well in excess of that required for a range of reuses. Possible reuses (depending on location and local conditions) are (i) irrigation of nearby pasture areas and other public open spaces; (ii) irrigation for agriculture; (iii) infiltration and indirect groundwater recharge; and (iv) watering of roads and squares for dust suppression. The total flow into the treatment plant at full loading will be 13,200 m3/day. It is anticipated that losses due to evaporation (and in some cases infiltration) will occur, particularly from the polishing pond system. Some 5,000 m3/d (short-term) to 10,000 m3/d (long-term) will be available for reuse. Complete freezing of effluent discharged will take from November to April. Treated effluent will be retained in the pond systems during this period as ice.

69. Tables III-1 and III-2 below show respectively: (i) the anticipated levels of treatment expected during each stage of the treatment process; and (ii) the final effluent quality anticipated following full treatment. Table III-3 below shows the basic characteristics of the wastewater treatment plants proposed for each aimag center. Figure III-1 shows a typical plant layout for the standard IFAS treatment system (bio-ponds are not shown). All process units and equipment will be enclosed within plant buildings.

Table III-1: Anticipated Treatment Characteristics for Treatment Plants by Stage

No Treatment Stage Suspended solid BOD

mg/l % mg/l % 1 Incoming Wastewater 80-240 - 180.0 - 2 Aeration tank, After primary sedimentation 36-40 50-55 117-126 30-35 3 After secondary sedimentation 15-20 75-81,25 7-9 95-96.1 4 After oxidation pond 5-8 90-93,75 3-4 97.7-98.3 Average treatment result - 91.87 - 98.0 30

Table III-2: Anticipated Treatment Performance for Treatment Plants

No. Indicators Wastewater, mg/l Effluent, mg/l 1 Suspended solid 240 5 2 Biochemical Oxygen Demand BOD 180-220 10 3 Ammonium Nitrate 22.75 0.39 4 Phosphorus (as phosphate) 6 0.2

E. Output 2(a): Institutional Reform and Capacity Building

70. The project will provide support to the project PUSOs to assist in improving the efficiency and effectiveness of the organizations and their ability to manage the wastewater treatment plants. Components will include:

i) Strengthening the institutional structure of PUSOs; ii) Management and technical training in systems operation, facilities management; iii) Development of job descriptions and career development guidelines; iv) Recommendations of reforms to the tariff structure; v) Contracting out as a way to ensure sustainable O&M;18 vi) Technical assistance to improve sludge management at the WWTPs19; and vii) Five public awareness events on public health, environmental management, attended by at least 100 residents each.

F. Output 2(b): Project Management Support

71. Project management support to the project executing and implementing agencies (MCUD and the project aimags and PUSOs) will be provided:

i) Support in establishment of PUSO Support Groups (PSG) at each aimag and strengthening the existing project management unit (PMU) and the PSGs’ capacities; ii) Project pre-construction support in finalizing contract documentation and employers requirements; iii) Project management support in procurement, tender evaluation and contract management; iv) Supervision of construction to ensure quality of the facilities and support in monitoring and evaluation; and v) Support in implementing social and environmental safeguards plans, including internal and independent monitoring and reporting.

18 Works contracts will be a build and operational assistance form of contract. There would be commissioning and a handover on completion of the construction phase, but the contractor would be retained to provide operational assistance over the first three years of operation, and would retain contractual obligations over this period. 19 A new legislation on sludge quality has been enacted in 2015, and the technical assistance work will aim at assisting in developing mechanisms for ensuring the safety and quality of sludge reused for beneficial purposes. 31

Table III-3: Characteristics of the Proposed Treatment Plants

No Parameter Dornogovi Aimag Arhangay Aimag Umnugovi Aimag Uvurkhangai Aimag 1 Aimag Center Sa inshand Tsetserleg Dalanzadgad Arvaikheer 2a Projected sewerage flow 2030 (m3/d) 4,500 3,500 3,500 3,500 3 Type of WWTP IFAS & Ponds IFAS & Ponds IFAS & Ponds IFAS & Ponds 4 Anticipated treatment achieved 85 -90% 85 -90% 85 -90% 85 -90% SS 5 mg/l SS 5 mg/l SS 5 mg/l SS 5 mg/l BOD 10 mg/l BOD 10 mg/l BOD 10 mg/l BOD 10 mg/l NH4-N 0.4 mg/l NH4-N 0.4 mg/l NH4-N 0.4 mg/l NH4-N 0.4 mg/l Phosphate 0.2 mg/l Phosphate 0.2 mg/l Phosphate 0.2 mg/l Phosphate 0.2 mg/l 5 Proposed effluent disposal Plant watering, irrigation Plant watering, irrigation Plant watering, irrigation Vegetable watering, of nearby fields of nearby fields of nearby fields irrigation of nearby fields 6 Proposed sludge disposal 1 .5 m3/d dewatered 1m3/d dewatered sludge, 1m3/d dewatered sludge, 1m3/d dewatered sludge, sludge, to be dried and to be dried and disposed to be dried and disposed to be dried and disposed disposed in drying beds. in drying beds. in drying beds. in drying beds.

7 Site distance from existing WWTP 3.2 Km Same site 4.1 km 3.0 Km 8 New site current land use (see also Pasture/Gobi WWTP Pasture/Gobi Pasture Figures III-3 to III-6) 9 Status of land Approved for WWTP Approved for WWTP Govt. land Govt. land Source: PPTA consultants.

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Figure III-1(a): Typical IFAS System Layout (indicated scale not correct)

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Figure III-1(b): Typical IFAS System Section (Legend on next page)

34

Source: Design Institute (December 2015)

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Figure III-2: Standard treatment plant design with enclosed biological treatment unit (front right) and sludge dewatering units (back right).

Figure III-3: Location of proposed WWTP in Arvaikheer

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Figure III-4: Location of proposed WWTP in Dalanzadgad

Figure III-5: Location of proposed WWTP in Sainshand

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Figure III-6: Location of proposed WWTP in Tseterleg

G. Water Supply and Wastewater Projections

72. The aimag centers included under the project are all growing relatively rapidly at around 2.5% per annum. Current and proposed annual population growth rates and projections are shown in Table IV-1. It is assumed that the continuing economic growth of the country and of the project aimags will result in population growth rates which exceed historical figures by between 20% and 30%. It is further assumed that: (i) a significant majority of new residents (through natural growth and in-migration) will reside in core areas which are served by sewerage; and (ii) that there will be a slow and progressive transition from ger area dwelling to living in serviced areas.

73. Per capita water supply flow projections have been based on the assumptions that: (i) the current levels of water supply consumption by households connected to the water supply network will increase by about 10 percent every 5 years (this is consistent with observations elsewhere in similar developing environments); and (ii) an increase in commercial wastewater flows of 5 percent per annum will occur based on increasing investment in commercial and light industrial activities. It is assumed that there will be no major water-consuming investments made in the project aimags over the plan period (to 2030).

74. Wastewater flow assumptions assume that the proportion of water supply which will emerge as wastewater will tend towards 80%. Again, this assumption is based on experience in environments similar to the project aimags – both in Mongolia and elsewhere. Average wastewater flows are predicted to reach 3,000 m3/d in Arvaikheer, Tsetserleg and Dalanzadgad and 4,500 m3/d in Sainshand by year 2030 (see Table III-3).

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H. Implementation Arrangements

75. The Ministry of Construction and Urban Development (MCUD) of Mongolia will be the Executing Agency (EA) of the Project, supported by the existing Project Management Unit (PMU) of the SGUBTD Project (Grant 0204-MON) which will extend its existing responsibilities to include the proposed AF Project. The PMU will continue to be headed by a Project Coordinator (PC). MCUD will be responsible for overall strategic guidance, technical supervision, and execution of the Project and ensuring compliance with loan covenants.

76. The state-level Project Steering Committee (PSC) established for the SGUBTD Project will provide overall policy guidance on the project and will have full powers to take decisions on matters relating to Project execution. The Project Coordinator is the Member Secretary and the committee is chaired by the State secretary of MCUD. Members of the committee include the Director MED, Director MOF, representatives of the Ministries of Environment and Green Development and Industry and should include representatives of the project aimag governments. Once the AF Project is made effective, the PSC will meet at regular intervals (at least once every 3 months) to review project performance and take decisions on major issues, such as, counterpart funding, implementation bottlenecks, land disputes, special procurement, policy reforms, etc.

77. Implementation Output 1 of the project will be carried out by the aimag PUSOs on behalf of the participating aimag governments with assistance from MCUD. PUSO Support Groups (PSGs) will be established that will be responsible for the day-to-day implementation of the respective physical works and equipment packages in their respective cities. Implementation of the institutional reform and capacity development, and project management and implementation support parts of the project (Output 2) will be managed by MCUD through the PMU and with assistance from the loan implementation consultants (LIC).

I. Project Operation and Maintenance

78. All operational and maintenance responsibilities will remain under the direct operational responsibility of the project aimag PUSOs. The estimated staffing requirements for each plant are shown in Table III-4 below.

Table III-4: Staffing Requirements for Treatment Systems

Number Total hours per № Position Type of Position20 Max. no. of Total day persons/shift 1 Director Engineering staff 1 1 8 2 Chief engineer technology Engineering staff 1 1 8 3 Laboratory staff Engineering staff 1 1 8 4 Duty engineer Service staff 4 day -1, night - 1 12 Operator for screens and sand Service staff 4 day -1, night - 1 12 5 strainer workshop

Reagents and sludge dehydration Service staff 4 day -1, night - 1 12 6 workshop operator

20 All positions will be staffed by each PUSO. Capacity building under Output 2 will assess whether existing staff resources of PUSOs can fill the positions (with adequate training), or if additional staff need to be recruited.

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Number Total hours per № Position Type of Position20 Max. no. of Total day persons/shift

Operator for pump and aeration Service staff 4 day -1, night - 1 12 7 equipment

Automation system and automatic Service staff 1 1 8 8 equipment maintenance worker 9 Electrician Service staff 1 1 8 10 Janitor Service staff 2 2 8 day - 11 Totals 23 night - 4 Source: PPTA consultants estimate.

J. Project Area of Influence, Project Implementation Schedule

79. SitОs visits of the AF components were conducted during July-October 2015 for thО prОparation of this IEE anН DEIAs with particular attОntion paiН to: (i) sОnsitivО natural ОnvironmОntal rОcОptors such as watОr boНiОs anН natural/critical habitats; (ii) sОnsitivО human rОcОptors; anН (iii) cultural anН hОritagО sitОs. ThО projОct’s arОa of influОncО was НОfinОН basОН on thО НОfinition proviНОН in ADB’s SafОguarН Policy StatОmОnt (2009) as follows:

(1) Primary project site(s) and related facilities: These include the proposed new WWTP sites in the four project cities; and sewer lines between existing sewer system and the new WWTPs.

(2) Associated and existing facilities: Under ADB's Environment Safeguards Sourcebook, Associated Facilities are those which are ''not funded as part of a project but whose viability and existence depend exclusively on the project and whose goods and services are essential for successful operation of the project''. No facility qualifies as associated facility under AF. HowОvОr, thОrО arО sОvОral facilitiОs which classify as “Оxisting facilitiОs” in accorНancО to ADB’s SafОguarН Policy StatОmОnt (2009), including: (i) the existing sewer networks; (ii) existing stabilization ponds in Tsetserleg.

(3) Areas and communities potentially affected by impacts from unplanned but predictable developments caused by the project that may occur later or at a different location: It is not anticipated that the WWTPs and related improvements will cause any unplanned developments. All subcomponents under the AF project are site-specific and not likely to cause additional developments.

25. Implementation schedule. The tentative project implementation schedule for the project is set out in the schedule shown in Table III-6.

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Table III-6: Project implementation schedule

2016 (Qtr) 2017 (Qtr) 2018 (Qtr) 2019 (Qtr) Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 A. DMF Output 1 Activity 1.1 Prepare tender documentation, conduct tenders and issue supply and install contracts. Activity 1.2 Order equipment, update EMP, construct and install new equipment, commission WWTP. (2017–2018) Activity 1.3 Start operating and monitoring of WWTP (2018-2019) Output 2 Activity 2.1 Recruit additional staff to the existing PMU, establish and staff local support groups in PUSOs and implementation arrangements Activity 2.2 Recruit consultants Activity 2.3 Project Management and implementation support Activity 2.4 Institutional development Activity 2.5 Provide staff training Activity 2.6 Policy dialogue and public awareness campaigns Activity 2.7 Develop emergency response plans Activity 2.8 EMP, SGAP implementation and monitoring

Annual/Midterm review Borrowers Project Completion Report Source: ADB PPTA Team

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IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE)

A. Urban Form, Socio-economic Conditions

80. Administration. Administratively, Mongolia is divided into 21 aimags (provinces) and the capital city Ulaanbaatar. Aimags are divided into soums which are further divided into baghs. The proposed AF components are located in four aimags, including Dornogovi aimag (Sanishand); Umnugovi aimag (Dalanzadgad); Uvurkhangai aimag (Arvaikheer) and Arkhangai aimag (Tsetserleg). The location of the project cities is highlighted in Figure IV.1

Arkvaikheer

Figure IV.1: Sites of the proposed wastewater treatment plants (Source: google maps)

81. Land use. The urban cores of the project soums are characterized by a mix of: (i) 5-storey walk-up or 9-storey apartment blocks, a few of which were constructed in the latter years of the soviet period; and (ii) newer (four- to six-storey) apartment blocks and some individual houses. The soviet-era housing stock is increasingly being supplemented, or replaced, by modern low- and medium-rise housing and commercial construction. In addition a number of the project aimags have startОН to НОvОlop, or arО planning “nОw towns” (Shin DalanzaНgaН, Shin ArvaikhООr, Shin SainshanН) on thО ОНgО of thО Оxisting urban arОa. Both thО corО arОas anН “nОw towns” arО (or in the case of some new towns are planned to be) fully serviced with power, district heating, water supply, sewerage, and paved road access.

82. Population. In all the project aimags, about one third of the total population of the aimag lives in the aimag centers. As Table IV-1 shows, the population of the aimags has shown a relatively modest increase over the past few years. However, the population growth rate in the aimag centers has exceeded that in the aimag itself. In all aimag centers included in the AF project, the population growth rate has exceeded the natural growth rate (estimated at about 1.5% per annum) indicating net in-migration to these cities. This reflects their economic role as administrative and service centers, and consequently as the focus for inward investment and construction.

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83. Figures vary as to the proportion of the population of the aimag centers who live in the centrally planned and serviced apartment and housing areas of the aimag centers, and who are consequently connected to the sewerage systems, and those residing in ger areas which are not connected to the sewer network. However, information from the aimag governments and PUSOs suggests the numbers provided in Table IV-2 below. In each aimag center there are targets to progressively increase the proportion of households occupying either apartment areas, or housing arОas within thО sОrvicОН corО. This incluНОs population moving into thО “nОw town” arОas rОfОrrОН to above.

84. As a result of their role as administrative, service and educational centers, there is a significant transient population which is partially resident in the aimag centers, and which is not fully captured in the figures provided above. Accurate estimates of the magnitude of this transient population are not readily available, but the main constituents of this group are:

i) StuНОnts: thО aimag cОntОrs function as ОНucational cОntОrs, Оach with a numbОr of tОrtiary ОНucational institutions in aННition to sОconНary schools anН kinНОrgartОns, anН a numbОr of othОr small vocational training cОntОrs. ThО transiОnt stuНОnt population Нuring tОrm-timО is ОstimatОН to pОak at bОtwООn 500 anН 1,000 in Оach aimag.

ii) HОrНОrs: ThО numbОr of urban inhabitants rОsiНing in thО urban cОntОrs risОs Нuring thО wintОr months as somО hОrНОr familiОs rОlocatО back to thО aimag cОntОrs aftОr summОrs spОnt with thОir hОrНs. Again, accuratО numbОrs arО unknown, but thО numbОrs arО ОstimatОН at onО or two hunНrОН in most of thО projОct aimag cОntОrs.

85. Based on these additional transient populations, the current population in the project centers can be estimated to peak at about 1,000 more than is indicated in Table IV-2. It is likely that the transitional student populations in particular contribute to wastewater flows since school, college and university dormitories are connected to the sewerage system.

Table IV-1: Recent Population Trends in Project Aimags and Aimag Centers

Source: National Statistical Office of Mongolia (2015) and respective aimag governments

Table IV-2: Proportion of City Population in Apartment, Serviced Housing and Ger Areas

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2015 Households Aimag Centre Total In apartments In serviced houses In ger areas Percentage Number Percentage Number Percentage Number Arvaikheer Soum 8,858 13 1,152 0.5 44 86.5 7,662 Chinggis Soum 6,589 25 1,647 1 66 74 4,876 Dalanzadgad Soum 7,266 13.5 981 1 73 85.5 6,212 Murun Soum 11,524 9 1,037 0.5 58 90.5 10,429 Sainshand Soum 6,751 36 2,430 0.5 34 63.5 4,287 Source: Aimag Governments

86. Water and wastewater sector assessment. Water supply and wastewater management are the responsibility of the Public Urban Services Organization (PUSO) for the project cities. The PUSOs for the four cities are described in

87. Table IV-3.

88. Water supply. The core areas of each of the project cities are served by a reticulated water supply system supplied from networks of boreholes providing groundwater which is generally of good drinking water quality. The raw water is generally pumped to ground tanks from which supply is made to: (i) commercial and institutional establishments within the core areas of the cities; (ii) households (mainly apartments) which have a household connection to the supply; and (iii) water kiosks which serve some of the ger areas. In all project cities there are also water kiosks in ger areas which are served by tanker trucks.

89. Sewer systems. All project cities have a sewerage network which serves the core area. These are separate sewer systems, with sanitary sewage and stormwater drainage being served by independent networks. The sewers are generally of between 150 and 350 mm in diameter, of varying materials and constructed over the past 30 years. Most of the materials used are concrete and PVC. Figures presented in Appendix 5 show the existing sewer layouts for each aimag center (along with the water supply networks). The sewer systems are in generally good condition, and not in need for replacement. The length of the sewer networks in each of the cities is presented in

90. Table IV-3. Excluding connecting lines from apartment blocks which fall under the maintenance responsibility of the respective building maintenance organizations, sewers fall under the responsibility of the PUSOs for maintenance.

91. The number of connections to the sewer network matches that of connections to the water supply network (

92. Table IV-3). The number of connection experiences a slow increase, averaging over 10% per annum for domestic connections (although this figure is distorted by the almost 30% increase in domestic connections in Arvaikheer) but only about 5% per annum for commercial connections.

93. Wastewater flows. In terms of wastewater flows, the figures presented in

94. Table IV-3 demonstrate that: (i) there is reasonable consistency in the proportion of water supplied to households arriving at the wastewater treatment plants, i.e. between 62% and 73% of the water consumed; and (ii) this is less than would be expected to arrive at the treatment plant

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based on industry norms (80%). However, the extent of possible losses in the collection system is not that great in any of the cities. It is not reported by any of the PUSOs that there is a significant increase in inflows to the WWTPs during periods of intense rainfall, indicating that there is not significant ingress of storm water into the system. Low wastewater-to-water supply ratio result from share of water supplied to ger areas, which are not connected to the sewer system. Seasonal variability of wastewater flows is not significant as the aimag centers operate separate wastewater and stormwater collection system. Variations in wastewater flows are a result of seasonal increases in population within the serviced urban centers, including tourists, students and herders.

95. Industrial wastewater. There is currently no major source of industrial wastewater in any of the cities. There are some small processing units in Arvaikheer including small tanneries. These already operate their pre-treatment or treatment plants.21

Table IV-3: Water and Wastewater Sector Overview

Arvaikheer Tsetserleg Dalanzadgad Sainshand PUSO Ongi Us Undarga LLC Gunii Us Chandmani elch Number of staff 42 40 43 30 51% aimag 100% aimag 100% aimag 100% aimag Ownership government, 49% government government government private company Length of sewers 12km 24.4 km 30.8km 14km Sewer condition Some undersized No problems No problems No problems Households connected to sewer 1,392 2,540 899 2,640 system Commercial enterprises connected 165 258 353 227 to sewer system Water consumption 207,000 350,000 289,000 318,500 (m3/a) Wastewater collection 132,500 230,000 190,000 222,500 (m3/a) Wastewater treatment 1,326 1,532 1,261 1,676 rate (m3/d) Wastewater collection 64% 65 % 65% 70% to water supply ratio Existing WWTP type Preliminary and primary Anaerobic and Preliminary treatment, Anaerobic and treatment units, facultative oxidation anaerobic and facultative oxidation facultative ponds ponds facultative oxidation ponds ponds

21 Output 2 will include consulting services to help the PUSOs prepare operational risk management plans including emergency preparedness and response plans for the wastewater management systems. This will also include compliance aspects of industrial pre-treatment.

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Existing WWTP Primary clarifiers in Primary clarifiers in Preliminary treatment Ponds in poor condition condition poor structural condition poor structural condition facilities and ponds in poor condition Existing WWTP Primary clarifiers not Partial operation, poor Partial operation, poor Partial operation, poor operation operational maintenance maintenance maintenance System pumping All gravity All gravity Pump from new DZ All gravity requirement Effluent disposal Groundwater recharge, Groundwater recharge, Groundwater recharge, To local dry evaporation evaporation and to local evaporation watercourse dry watercourse Sludge and screening To landfill site To landfill site To landfill site To landfill site disposal Source: Figures from PUSOs; PPTA consultants’ and DEIA institutes’ observations

96. Wastewater treatment. All the project aimags have existing wastewater treatment plants (see

97. Table IV-3). These plants all employ waste stabilization (oxidation) ponds as the main biological treatment method. All plants include anaerobic units as a primary mode of treatment, include facultative and maturation units in series to improve treatment efficiency. The pond systems are preceded in some cases (Avairkheer, Tsetserleg and Sainshand) by preliminary (screening and grit removal) and primary (sedimentation) treatment processes. However, in these cases, the preliminary treatment units are no longer fully operational. In all cases, the following conditions were observed:

i) ThО prОliminary anН primary trОatmОnt units (largОly constructОН in thО 1990’s) arО gОnОrally of poor quality construction, anН in all casОs arО no longОr opОrational (apart from manual scrООns);

ii) ThО ponН systОms arО gОnОrally in a poor statО of rОpair, anН frОquОntly arО not opОratОН in thО НОsignОН configuration;

iii) SomО primary units arО functioning poorly НuО to failurО to rОgularly rОmovО accumulatОН sluНgО;

iv) ProblОms arО ОxpОriОncОН in thО wintОr whОn thО wastОwatОr frООzОs anН rОtОntion volumОs in thО ponН systОms arО insufficiОnt to accommoНatО thО НОsign flow, rОsulting in ponНs bОing ovОr-toppОН;

v) OpОrational problОms arО ОxpОriОncОН yОar-rounН, but particularly Нuring thО spring thaw, with strong oНors bОing gОnОratОН from thО ponН units as thО mОthanogОnic phasО of НigОstion is slowОr to rОcovОr than thО aciН-forming stagО; anН

vi) ThО statО inspОction agОncy, which is rОsponsiblО for inspОction of wastО trОatmОnt facilitiОs, is constantly rОporting on thО failurО of thО Оxisting trОatmОnt plants to achiОvО thО rОquirОН ОffluОnt НischargО stanНarНs.

98. In summary, the existing WWTPs are: (i) generally in a poor state of repair; (ii) represent a technology choice that is not suitable for Mongolian climatic conditions, and (iii) are not providing a consistent level of treatment which satisfies Mongolian wastewater discharge standards. In

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addition, there is now strong growth in these aimag centers. Pictures of current conditions around existing wastewater treatment plants are presented in Appendix 3.

B. Physical Conditions within the Project Areas

1. Location, Topography, Geology and Soil

99. MEGDT classifiОs Mongolia’s rivОr basins in six clustОrs of similar climatО conНitions, geographical characteristics, basin type (surface water, groundwater, or combined), and land cover (Figure IV.2). 22 The four project cities are located in 3 different river basin clusters. These are described in more details in the following section.

Figure IV.2: The river basin clusters in Mongolia (Source: GoM, KoNL, 2012)23

22 Government of Mongolia, Kingdom of the . 2012. Integrated Water Management. National Asessment Report, Vol. II. Ulaanbaataar, Mongolia. 23 Footnote 22

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Figure IV.3: Natural zones of Mongolia (Source: Biodiversity Assessment, WWF, 2003)

100. Sainshand (Dornogovi aimag) is located 543 km from Ulaanbaatar. According to Mongolia’s physical gОographical rОgionalization, SainshanН soum is located in the Ikh Gobi zone. The Mongolian National Atlas (2009) attributes Sainshand to the natural zone of . It is located within the Umard goviin guveet-Khalhiin basin, in the eastern part of the Gobi desert. The basin is considered a groundwater basin. Due to the harsh climatic conditions and the flat topography, the basin does not harbor a great variety of landscapes. Land is mainly covered by rocky pasture area. Pasture area covers more than 80-90%% of the River basin.24 Soils are thin, with a low moisture capacity, and not readily arable. Vegetation conditions are significantly influenced by the amount of precipitation.

Figure IV.4: Land cover in the Eastern Gobi basins cluster (Source: GoM, KoNL, 2012)25

24 Footnote 22. 25 Footnote 22.

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101. Tsetserleg (Arkhangai aimag) lies on the northeastern slopes of the , 600 km southwest of Ulaanbaatar. In 1992 Tsetserleg was designated as Erdenebulgan sum, which has an area of 536 km². Tsetserleg is located in the basin, which is part of the Arctic basins cluster. The Mongolian National Atlas (2009) attributes Tsetserleg to the natural zone of forest-steppe, with 15.1 % of the total area belonging to the forest-steppe zone (Figure IV.3). The Orkhon River basin is occupied by pasture land (nearly 78% of the land cover) and forest (20%), see Figure IV.5.

Figure IV.5: Land cover of the basin in the Artic basins cluster (Source: GoM, KoNL, 2012)26

102. Dalanzadgad (Umnugovi aimag) and Akvaikheer (Uvurkhangai aimag) are located 540 km and 430 km from Ulaanbaatar, respectively. They are both located in the Ongi River basin, which is part of the Gobi Lakes valley cluster (Figure IV.2). The Mongolian National Atlas (2009) attributes Dalanzadgad and Akvaikheer to the natural zone of Gobi desert, steppe and mountain semi-desert zones (Figure IV.3). Steppe and Mountain Forest Steppe cover much the slopes in the Khangai (where Arkvaikheer is located) and Desert Steppe covers most of the lowlands (where Dalanzadgad is located). Pasture area covers more than 90% of the cluster, and 93% of the Ongi River basin (Figure IV.6).27

26 Footnote 22. 27 Footnote 22.

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Figure IV.6: Land cover of the basin in the Gobi lakes valley cluster (Source: GoM, KoNL, 2012)28

103. Soil. The Detailed EIAs undertaken for the project included soil analysis and sampling at all project locations. The soil profiles are summarized in Table IV-4. The lab test results of soil samples are presented in Table IV-5 and Table IV-6. The Detailed EIAs conclude that all the samples tested met the required Mongolian National Standard relating to soil quality (MNS 5850:2008).

28 Footnote 22.

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Table IV-4: Soil Types and Characteristics at proposed WWTP locations

Location Soil type description Picture Arvaikheer 0- 12cm: vivid brown colored, humid, dense, vegetation thin root at above of layer, stony – 30%, loose granular texture, consisting of sandy loam, displacement is flat by surface/color, symmetric.

12- 30cm: light white colored, high density, high carbonate storage, creates light versicolor storage in pieces, swirled pulverescent, light muddy, swirls in hydrochloric acid, stony – 40%, thick white colored carbonate at the bottom of rock, density increases to the depth.

Dalanzadgad 15 -32cm: Light brown, moist guts, loose, stone 30 – 40%, less roots, sandy mechanic formation, carbonated, transfer noticeable by color.

Tsetserleg Mo untain-steppe brown soil. 0-18 cm: browny soil with red sparkle, less compacted, humid and sandy. Upper layer in 0-4 cm contains stones -40% and clear shift between layers. 18-35 cm:Yellowish brown, humid and less compacted with fractures. Granular and stony soil-5%. Clear shift between layers. 35-65 cm: looks similar with above layer. Contains a lot of stones- 70%

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Location Soil type description Picture Sainshand WWTP (new Sandy brown soil. site) 0-10cm: Elov sands, small gravel, common vegetation, light brown and transition in layer was deliberate.

20-30 cm: muddy brown desert soil with tight composition, deliberate transition layer, plant roots 5-15%, small gravels and rocks 20-30%. 30-45cm: muddy tight composition, color from brown to light brown, and no plant roots and small gravel.

Source: Draft Environmental Baseline Reports for all project sites (Undurkhaan Trade LLC, Environ LLC)

i) At thО ArvaikhООr projОct sitО, soil is НominatОН by thО Нark brown soil with thin layОr of pОbblО. ThО humus contОnt in soil thin layОrs is 2.75%. It is rОНucОН in thО bottom layОrs to somО 0.65%. CarbonatОs contОnt is СаС3=4.48% in thО bottom layОr of soil anН thО alkalinity is р-7.69. ThО ОlОctro-conНuctivity is ЕС2.5 = 0.108-0.655 НS/m. ThО mobilО phosphorus anН potassium contОnts arО low, inНicating low fОrtility. HОavy mОtal contОnt of soil in thО projОct arОa is within thО stanНarН limit.

ii) At thО DalanzaНgaН projОct sitО, soil is НominatОН by salt marsh soil. CarbonatОs contОnt is СаС3=0.97%; humus contОnt is 0.857%; ЕС2.5 is 0.073 НS/m, mobilО P2O5 is 1.24% anН K2O is 14.02.

iii) At thО TsОtsОrlОg projОct sitО, soil is НominatОН by Нark brown soil. Humus contОnt in uppОr layОr is 4.18% anН in bottom layОr is 1.29%. Phosphorus anН potassium lОvОls arО 2.96mg anН 16.2mg pОr 100 gr, rОspОctivОly. HОavy mОtal contОnt of soil in thО projОct arОa is within stanНarН limit or bОlow thО НОtОctОН limit.

iv) SanНy brown soil is thО Нominant soil typО at thО SainshanН projОct sitО with a soil НОnsity at 1.79 g/cm3 anН porosity of 34.6%. ThО microbiological laboratory tОst rОsults show that thО total numbОr of bactОria is bОtwООn 665,000-790,000/ml, which is in normal rangО whilО bacilli wОrО not НОtОctОН. HОavy mОtal contОnt of soil in thО projОct arОa is within thО stanНarН limit.

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Table IV-5: Chemical characteristics of soil samples

Sample Mobility Sample Humus Location depth CaС3 EC(dS/m) (mg/100gr) Number р (%) (%) (cm) P2O5 K 2O Arvaikheer A01.1 0-9 7.32 - 2.75 0.070 1.23 12.8 A01.2 9-30 7.69 4.48 0.64 0.122 0.52 7.5 Dalanzadgad D01.1 0-10 8.16 0.97 0.857 0.073 1.24 14.2 Tsetserleg T01.1 0-18 7.31 - 4.18 0.006 2.96 16.2 T01.2 18-33 7.44 - 1.29 0.079 1.04 11.5 Sanishand S01.1 0-10 8.25 0.48 1.237 0.354 1.18 16.2 S01.2 10-20 8.26 1.21 1.123 1.009 1.04 14.1 S02.1 0-10 7.65 1.82 1.567 9.440 1.26 24.5 S02.2 10-20 7.54 0.36 0.911 5.290 0.84 20.1 S02.3 20-40 7.59 0.36 0.815 4.770 0.98 12.7 S03.1 0-10 8.25 0.00 1.412 0.151 1.27 10.8 S03.2 10-20 8.03 0.00 1.119 0.507 1.08 9.8 S03.3 30-40 7.72 0.55 0.725 0.684 0.72 8.2 S04.1 0-10 7.35 0.00 1.801 0.467 2.06 13.3 S04.2 0-25 7.19 0.00 1.513 0.214 1.07 12.6 S04.3 25-40 6.84 0.00 1.128 0.264 0.64 14.5 S05.1 0-10 6.92 0.00 1.247 0.801 1.22 11.7 S05.2 10-20 7.14 0.00 1.199 1.190 1.09 14.2 S05.3 20-35 7.28 0.00 1.016 0.451 0.98 9.8

Source: Draft Detailed EIAs (Undurkhaan Trade LLC, Environ LLC)

Table IV-6: Heavy metal content of soil samples at project sites

Heavy metal content (mg\kg) Sampling Location Cr Pb Cd Ni Zn

Arvaikheer 22.78 17.95 0.046 11.43 47.25 Dalanzadgad 56.9 59.7 1.59 24.0 130.8 Tsetserleg 20.53 10.53 < LOD 9.28 69.73 Sanishand 20.8 15.4 < LOD < LOD 27.22 Average UB city (2010) 66 57 1.56 - 135 Standard (MNS 5850 : 2008) 150 100 3 150 300 International Soil screening 380 530 12 100 23,000 levels** Note : *- LOD- level of detection; soil screening values for residential land from Dutch intervention values, except of Zn (US EPA soil screening level) Source: Draft Environmental Baseline Reports for all project sites (Undurkhaan Trade LLC, Environ LLC)

104. Permafrost. Permafrost formation is influenced by many factors such as seasonal changes, composition of soil deposits, water cycles on the ground surface, air temperature, precipitation, elevation above sea level, and surface relief. Frozen soil is classified into five basic groups in Mongolia: (1) continuous permafrost; (2) discontinuous permafrost; (3) scattered permafrost; (4) sporadic permafrost, and (5) seasonally frozen soil. Permafrost is distributed on some 60% of

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Mongolian territory.29 Permafrost is found in Mongol-Altai, Gobi-Altai, Khangai, Khovsgol, and the Khentii Mountains, and most of it is discontinuous. The project areas are located in areas of various potential and type of permafrost. Sainshand and Dalanzadgad only experience seasonal frozen soil without permafrost. Sporadic permafrost may occur in Tsetserleg and Arvaikheer (see Figure IV.10 and Table IV-7).

Figure IV-7: Regional distribution of permafrost in Mongolia. (Source: Footnote 29)

Table IV-7: Permafrost regions relevant to centers of each 5 provinces and numbers of days with dust storms Dornogobi, Umnugobi, Province/Center Uvurkhangai, Arvaiheer Tsetserleg Sainshand Dalanzadgad Seasonal, frozen soil Seasonal, frozen soil Permafrost region Sporadic Sporadic without permafrost without permafrost Number of days with dust 30-50 7-16 30-50 50-70 storm Source: Environ LLC

2. Climate

105. Temperature, Precipitation. Mongolia has an extreme continental climate with long, cold winters and short summers, during which most precipitation falls. The country averages 257 cloudless days a year, and it is usually at the center of a region of high atmospheric pressure. Precipitation is highest in the north, which averages 200 to 350 millimeters per year, and lowest in the south, which receives 100 to 200 millimeters. The extreme south is the Gobi Desert, some regions of which receive no precipitation at all in most years. Average temperatures over most of

29 Dashjamts D, Binderya Z, Altantsetseg J. 2013. Geotechnical problems of construction on permafrost in Mongolia. Sciences in Cold and Arid Regions 5(5): 0667–0676.

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the country are below freezing from November through March and are about freezing in April and October. January anН FОbruary avОragОs of −20 °C arО common, with wintОr nights of −40 °C occurring most years. Summer extremes reach as high as 38 °C in the southern Gobi region and 33 °C in Ulaanbaatar. The climate in the project cities is presented in Figure IV-8.

Arvaikheer (Uvurkhangai) Dalanzadgad (Omnugovi)

Sainshand (Dornogovi) Tsetserleg (Arhangay)

Figure IV-8: Average monthly temperature and rainfall in the project cities, 1990-2012 (Source: http://sdwebx.worldbank.org/climateportal)

106. Wind. Wind direction and speed depend on circuit flow of the atmosphere, air pressure, and the local bio-physical conditions. The average wind speed in the project areas is about 2.0 m/s and the average wind speed of the spring months is 3.3 m/s. The maximum wind speed in March and April can reach 30 m/s (Figure IV-9).

NW NEE Winter EХ Spring E summer autumn WEӨ SE average

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Sainshand (Dornogovi) –wind direction in summer Dalanzadgad (Omnugovi)

FigurО IV-9: PrОvailing winН НirОction in sОlОctОН projОct citiОs (Source: Draft Environmental Baseline Reports for all project sites (Undurkhaan Trade LLC, Environ LLC)

3. Hydrology, Surface Water Quality

107. Surface water. As described above, the four project cities are located in 4 river basins belonging to 3 different river basin clusters. However, only Arvaikheer and Tsetserleg are adjacent to surface water bodies.

108. Arvaikheer is located in proximity to the Ongi River. The Ongi River flows through the Ongi River Basin and pasts Arvaikheer. In some particularly wet years, it discharges into Ulaan Lake, but in most years it dries up earlier. According to the Surface Water Quality Report of Uvurkhangai Province (2015), the water pollution index at the monitoring station Ongi-Uyanga was 0.32, belonging to category II (clean water), with a mineralization rate ranging 146.4-160.2 mg/l.

109. Tsetserleg is located nearby Urd . The river water quality and composition is classifiОН as “VОry clОan” anН “ClОan” anН thО lowОst minОralization of thО rivОr watОr is obsОrvОН during the spring and rainfall floods with a value of 110-240 mg/l and it increases till 380-450 mg/l in low flow periods. The mean concentration of nitrogen ammonium (NH4) is 0.28-0.31 mg/l, of nitrite (NO2) is around 0.007-0.019 mg/l and of nitrate (NO3) is 0.40-0.55 mg/l, and the concentration of phosphor is about 0.029-0.046 mg/l in the Orkhon river water. The long-term mean annual runoff is 8.5 m3/s, with 37% originating from groundwater; 7.4% from snow melting; and 66% from rainfall. The 1-in-10 year maximum storm flow is 565 m3/s.

110. The new WWTP is Tsetserleg will be located on the banks of the Dund River, a small and seasonal tributary of the Urd Tamir River which flows through Tsetserleg taking its start from the west mouth of Mountain, which is located to the north of town and it flows to east, parallel to Urd Tamir. Dund River flows into Urd Tamir River some 12km downstream. The stream is fed by snow melt and rainwater during spring and summer time. The rest of the year no water is flowing.

Table IV-8: Water quality in main rivers in project areas

Distance to Monitoring River Location NH 4-N NO 3-N NO2-N PO4-P WWTP date Ongi River Arvaikheer 1.3 km 0.04 - 0.003 0.006 Oct’ 15 Secondary Urd Tamir River Tsetserleg 2.4 km 0.30 0.45 0.008 0.03 data Dund River Tsetserleg 0.02 km n.a. 8.0 n.a n.a. Sep’ 15 MNS 4586:1998 0.50 9.0 0.02 0.10

111. The domestic EIAs for the other project components confirmed that there are no other surface water bodies within the four WWTPs areas of direct influence.

112. Groundwater. Mongolia has substantial groundwater resources, which are unevenly distributed over the country - abundant in the north and very scarce, or non-existent, in the south. Southeast Gobi has no perennial fresh water resources and relies exclusively on groundwater resources for water supply. The hydrogeology of Southeast Gobi consists of upper aquifers with limited recharge and deeper aquifers containing fossil water, often with poor water quality. Groundwater resources and quality vary in the different project sites:

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 In Sainshand, groundwater is the main source of water supply, which is hydro- geologically separated into 3 layers: Upper cretaceous water formation of Bayanshiree layer (K2BS), upper cretaceous water formation of Sainshand layer (K2SS) and lower cretaceous water formation of Zuunbayan layer (K1DZ). Groundwater was monitored in the framework of the environment baseline study. Samples from three wells near the project site were analyzed and the results are shown in Table IV-9. The groundwater level is more than 2.6m below the surface at the monitored wells. Groundwater quality generally complies with drinking water standard MNS 900:2005, with exception of sodium. Salmonella and E. coli were not detected in the samples.  In Dalanzadgad, groundwater is the only source of water supply. 75 spots with groundwater resources have been identified in the South Gobi regions of Mongolia, of which 45% or 35 groundwater spots are located in South Gobi Province. Within these groundwater resources, maximum extraction rates (29.900-75.200 m3/day) are obsОrvОН in arОas namОН “Gunii khooloi, “Borzongiin gobi”, “Balgasnii ulaan nuur” anН “Galbiin gobi”.  In Arvaikheer, groundwater is the only source of water supply. Significant groundwater reserves were identified some 16 km in the northeast from Uvurkhangai aimag, with an approved extraction rate of 6,480 m3/day.  In Tsetserleg, the alluvial sediment aquifer in the Urd Tamir river valley gives 19.9-31.2 l/sec yield and groundwater exploitable resource is 10,083 m3/ day. The groundwater exploitable resources at Tsetserleg were recalculated in 2012 at 5,702 m3/day. The ground water quality meets Mongolian standard for drinking water.

Table IV-9: Groundwater Quality in Sainshand (September 2015)

MNS - Vegetable Baga dulaan Element Unit Herder’s hand 900:2005 well garden well well Chlorine (Cl) mg/l 350,0 434,9 234,3 248,5 Sulfate (SO4) mg/l 500,0 220,0 200,0 100,0 Nitrite (NO2) mg/l 1,0 0,0 0,0 0,0 Nitrate (NO3) mg/l 50,0 0,0 1,0 0,0 Carbonate (CO3) mg/l 12,0 0,0 0,0 Hydrocarbonate (HCO3) mg/l 253,2 591,7 311, 1 Sodium (Na) mg/l 200,0 446,5 271,0 283,5 Calcium (Ca) mg/l 100,0 17,0 108,2 22,0 Magnesium (Mg) mg/l 30,0 13,4 40,1 9,1 Ammonium (NH4) mg/l 1,5 0,4 0,0 0,0 Iron (Fe) mg/l 0,3 0,0 0,0 0,0 Iron (Fe, 3 trivalent ) mg/l 0,3 0,0 0,0 0,1 Source: Environment Baseline Report by Environ LLC

4. Air Quality

113. Ambient air quality. The Central Laboratory for Environmental Measurement publishes annual average ambient air quality in all aimag capitals, including the four project cities. The results indicate that air quality in all four cities is generally good and in compliance with the MNS 4585:2007 standard for sulfur dioxide and nitrogen dioxide, with exception of Murun where annual average nitrogen dioxide concentration in 2012 exceeded the standard (Figure IV.10 and Figure IV.11).

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Figure IV.10: Ambient sulfur dioxide concentrations of aimag capitals, in microgram per cubic meter (Source: Baseline Report for Tsetserleg WWTP; Undurkhaan Trade LLC)

Figure IV.11: Ambient nitrogen dioxide concentrations of aimag capitals, in microgram per cubic meter (Source: Baseline Report for Tsetserleg WWTP; Undurkhaan Trade LLC)

114. In addition, in the framework of the environment baseline assessment, air quality at all the project sites was monitored by domestic EIA institutes (Undurkhaan Trade LLC, Environ LLC) and the Hydrometeorology and Environmental Monitoring Services of the aimags. The tables and figures below show the measurements for major air pollutants, including sulfur dioxide (SO2), nitrogen dioxide (NO2), carbon monoxide (CO) and particulate matter (PM) in the project cities for selected months of 2015, and more recent air quality monitoring at the proposed WWTP sites in the four project cities. The results indicate that air quality generally meets the 10-min acceptable 3 3 concentrations as stated in the MNS 4585:2007 for SO2 (0.450 mg/m ), NO2 (0.085 mg/m ), PM10 (0.50 mg/m3).

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TablО IV-10: Air pollutants in thО air of thО projОct sitО of ArvaikhООr

3 SO 2, NO 2, PMm 10, mg/ # Sampling Day of sampling mg/m3 mg/m3 average max min At WWTP inflow 1 46°1444.9N 5 Sep 2015 0.005 0.017 0.015 0.03 0.002 102°4754.84Е At WWTP outflow 2 46°1434.6N 5 Sep 2015 0.017 0.020 0.019 0.025 0.009 102°4806.61Е 0.1 5 (24-h) MNS4585:2007 Air quality. Technical general requirement. 0.450 0.085 0.50 (10-min)

Source: adjusted from Draft Environmental Baseline Report for Arvaikheer (Undurkhaan Trade LLC)

TablО IV-11: Air pollutants in thО air of thО projОct sitО of DalanzaНgaН

SO 2, NO 2, # Time of sampling Day of sampling mg/m3 mg/m3 1 0800 0.001 0.021 2 1400 12 November 2014 0.002 0.013 3 1930 0.008 0.061 MNS4585:2007 Air quality. Technical general requirement. 0.450 0.085

Source: adjusted from Draft Environmental Baseline Report for Dalanzadgad (Undurkhaan Trade LLC)

TablО IV-12: Air quality in TsОtsОrlОg

№ Sampling point Day of sampling SO 2, мg/м3 мNO2, мg/ 3

1 At WWTP inflow 47°2734.43N 4 Sep 2015 0.00 4 0.067 101°2843.67Е 2 At WWTP outflow 47°2732.89N 4 Sep 2015 0.005 0.088 101°2850.77Е MNS 4585:2007 Air quality. Technical general requirement. 0.450 0.085

Source: adjusted from Draft Environmental Baseline Report for Tsetserleg (Undurkhaan Trade LLC)

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FigurО IV.12: Air quality in SainshanН (SОptОmbОr 2015). Source: Draft Environmental Baseline Report for Sainshand (Environ LLC)

5. Acoustic environment

115. Noise can affect sensitive receptors such as homes, schools and hospitals. No noise monitoring was conducted at project sites in Dalanzadgad and Arvaikheer and Tsetserleg as no major noise sources were identified. For the WWTP sites in Sainshand, noise monitoring was undertaken by the EIA institute at eleven points around the proposed WWTP site and the results are shown in Figure IV-13. The average noise levels at these eleven points are between 35-47 dBA which are below the MNS 4585:2007 standard of 60 dBA during day time. Wind is the main noise source.

Figure IV-13: Noise levels at Sainshand WWTP Site

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C. Ecological and physical cultural resources within the project areas

1. Protected Areas and Endangered Species

116. The Integrated Water Management National Assessment Report mapped internationally and nationally protected sites including RAMSAR sites, national conservation parks, nature reserves, strictly protected areas and important monuments for all basin clusters. 30 As Figure IV.14 illustrates, there are no legally protected sites of national or international importance in the vicinity of the project cities. The closest areas of potential relevance are discussed below.

i) ThО Gobi Gurvan Saihan national park is situatОН wОst of DalanzaНgaН City. ThО nОarОst ОНgО of thО Park to DalanzaНgaН is morО than 15 km away from thО City.

ii) LakО Ganga anН its surrounНing wОtlanНs havО bООn ОlОctОН as a RAMSAR sitО sincО 2004. LakО Ganga anН its surrounНing wОtlanНs arО situatОН in Dariganga of Sukhbaatar. This group of lakОs is situatОН somО 300-km from SainshanН City, anН is thО only placО within thО nОighboring rОgion whОrО many vulnОrablО watОrbirНs stay Нuring thО migration anН somО rarО watОrfowl brООН in summОr. OthОr statО protОctОН arОas incluНО BurНОnО bulag (some 85 km southОastОrn of SainshanН); Ikh Nartiin Chuluu NaturО RОsОrvО (locatОН 110 km northwОst of SainshanН, covОring an arОa of about 66,000 hОctarОs of grasslanН anН sОmi-НОsОrt stОppО ОnvironmОnts anН harboring onО of thО last rОmaining populations of Argali ShООp); ErgОliin Zoo (somО 150 km southwОst of SainshanН). ThО nОarОst local protОctОН arОas in Dornogobi aimag incluНО Khamriin KhiiН MonastОry (35 km from thО sitО); anН Khanbayan zurkh mountain (60 km from thО sitО).

iii) Ogii Nuur. Ogii Nuur is a freshwater lake located in the valley of the Orkhon River, some 100 km from Tsetserleg, comprising extensive alluvial areas of grassland, river channels, pools and marshes surrounded by grassy steppe. It was designated as RAMSAR site in 1998. The maximum depth of the lake is 16 meters, but about 40% of the lake is less than 3m deep. The lake supports an intensive fishery and livestock grazing. It is an important breeding and staging area for a wide variety of waterfowl.

30 Footnote 22.

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Figure IV.14, a-d: Zones under national protection status and RAMSAR sites in the 4 water basin clusters of relevance to the project (Source: GoM, KoNL, 2012)31

31 Footnote 22.

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2. Flora and Fauna at project sites

117. The land cover of the aimags where the project cities are located was discussed above (see para 100-102). The vast majority is pasture land or semi-desert land. -grazing is dominant, although the number of raised has increased due to the high prices for . Goats eat a wider range of plant species than sheep, forage more aggressively and consume the whole plant; this has contributed to degradation of the grasslands over a widespread area.

118. Flora. In the framework of the detailed environmental impact assessments conducted for the proposed WWTPs, vegetation surveys were conducted at all sites in August-September 2015, and documented in the Environmental Baseline Reports.

(1) In Sainshand soum, 28 spОciОs from 10 familiОs anН involving 24 typОs of vОgОtation wОrО iНОntifiОН. At the proposed WWTP site 26 vegetation species observed in the field study in September 2015 are shown in TablО IV-13. There is no endangered species in the project area.

Table IV-13: Vegetation Species near the New WWTP Site in Sainshand

№ Scientific Name Habitat Type 1 Achnatherum splendens Perennial gramineous 2 Allium mongolicum Perennial gramineous 3 Allium polyrrizum Perennial gramineous 4 Anabasis brevifolia Sub-shrub 5 Artemisia xanthochroa Sub-shrub 6 Asparagus gobicus Sub-shrub 7 Bassia dasyphylla Ephemeral gramineous 8 Chenopodium album Ephemeral gramineous 9 Chloris virgate Perennial gramineous 10 Cistanche salsa Perennial gramineous 11 Convolvulus Ammanii Perennial gramineous 12 Echinopis Gmelinii Ephemeral gramineous 13 Heteropappus altaicus Perennial gramineous 14 Kalidium gracile Sub-shrub 15 Micropeplis arachnoides Ephemeral gramineous 16 Nitraria sibirica Shrubby 17 Oxytropis aciphylla S hrubby 18 Peganum nigellastrum Perennial gramineous 19 Reaumuria soongorica Shrubby 20 Rheum nanum Perennial gramineous 21 Salsola passerine Sub-shrub

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№ Scientific Name Habitat Type 22 Salsola pestifera Ephemeral gramineous 23 Scorzonera divaricata Sub-shrub 24 Stipa gobica Perennial gramineous 25 Xanthium strumarium Ephemeral gramineous 26 Zygophyllum xanthoxylon Shrubby

Source: Sainshand Environment Baseline Report by Environ LLC

Anabasis brevifolia Allium mongolicum Salsola passerina

(2) In Dalanzadgad, 22 species from 20 genres of 14 families were registered during the site survey (TablО IV-14).

Table IV-14: Vegetation Species near the New WWTP Site in Dalanzadgad # Family # Genres # Species 1 Ephedraceae 1 Ephedra 1 Ephedra sinica 2 Allium polyrhizium 2 Amaryllidaceae 2 Allium 3 Allium mongolicum 3 Cyperaceae 3 Carex 4 Carex stenophylla subsp stenophylloides 4 Agropyron 5 Agropyron cristatum 4 Poaceae 5 Stipa 6 Stipa glareosa 5 Caryophyllaceae 6 Gypsophylla 7 Gypsophilla desertorum 8 Bassia dasyphylla 7 Bassia 9 Bassia prostrata 6 Amaranthaceae 8 Chenopodium 10 Chenopodium acuminathum 9 Salsola 11 Salsola passerina 10 Caragana 12 Caragana leucophloea 7 Fabaceae 11 Oxytropis 13 Oxytropis acyphylla 8 Rosaceae 12 Sibbaldia 14 Sibbaldia adpressa 9 Brassicaceae 13 Dontostemon 15 Dontostemon integrifolia 10 Nitrariaceae 14 Peganum 16 Peganum nigellastrum 11 Rutaceae 15 Haplophyllum 17 Haplophyllum dauricum 16 Lagochilus 18 Lagochilus ilicifolius 12 Lamiaceae 17 Panzeria 19 Panzerina lanata 13 Convolvulaceae 18 Convolvulus 20 Convolvulus ammanii 14 Asteraceae 19 Artemisia 21 Artemisia xerophytica

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# Family # Genres # Species 20 Ajania 22 Ajania trifida

Source: adjusted from Draft Environmental Baseline Report for Dalanzadgad (Undurkhaan Trade LLC)

(3) In Arvaikheer, there is sparse vegetation at the project site. Feather-grasses-checkered of steppe is dominant in the wastewater treatment area, the vegetation coverage was 50-55% of community during research and the community height was 8-10 cm.

Table IV-15: Vegetation Species near the New WWTP Site in Arvaikheer

Height, # Family # Genre # Species Cover, % cm 1 Brassicaceae 1 Ptilotrichum 1 Ptilotrichum canascens 0.2 3 2 Artemisia adamsii 8-12 5-8 2 Artemisia 3 Artemisia frigida 0.1 2 2 Compositae 3 Heteropappus 4 Heteropappus hispidus 0.5-0.8 2-3 4 Saussurea 5 Saussurea cf amara 0.1 1 5 Scorzonera 6 Scorzonera austrica 0.2 1 3 Convolvulaceae 6 Convolvulus 7 Convolvulus ammannii 0.3-0.5 3-4 4 Cyperaceae 7 Carex 8 Carex duriuscula 10-12 6 8 Agropyron 9 Agropyron cristatum 3-4 5-10 9 Cleistogenes 10 Cleistogenes squarrosa 1 4 5 Gramineae 10 Elymus 11 Elymus chinensis 1-2 10 11 Koeleria 12 Koeleria macrantha 0.2 5 12 Stipa 13 Stipa krylovii 20-22 10-30 6 Labiatae 13 Panzeria 14 Panzeria lanata 0.1 2 15 Astragalus brevifolius 0.8 2 14 Astragalus 7 Leguminosae 16 Astragalus cf galactites 0.1 1 15 Caragana 17 Caragana pygmaea 0.3-0.5 10-15 8 Liliaceae 16 Allium 18 Allium bidentatum 0.2 7-8 19 Potentilla bifurca 2-3 2 17 Potentilla 9 Rosaceae 20 Potentilla conferta 0.1 2 18 Sibbaldianthe 21 Sibbaldianthe adpressa 0.2 2 10 Scrophulariaceae 19 Cymbaria 22 Cymbaria daurica 0.1 6

Source: adjusted from Draft Environmental Baseline Report for Arvaikheer (Undurkhaan Trade LLC)

119. In Tsetserleg, vegetation coverage at the project site is strongly impacted by human activity. 31 species from 23 genres of 11 families were registered during the site survey. Main species recorded during field observations are presented in Table IV-16.

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Table IV-16: Vegetation Species near the New WWTP Site in Tsetserleg

Weight of each № Species name species [gr] 1 Salsola pestifera 2.3 2 Artemisia macrocephala 7.8 3 Heteropappus hispidus 2.2 4 Taraxacum dissectum 1.1 5 Carex duriuscula 4.2 6 Poa attenuata 2.3 7 Dracocephalumcf foetidum 1.7 8 Panzeria lanata 0.6 9 Astragalus sp 8.8 View during vegetation species sampling 10 Plantago depressa 0.6 11 Chamaerhodos erecta 0.7

Source: adjusted from Draft Environmental Baseline Report for Tsetserleg (Undurkhaan Trade LLC)

120. Fauna. In the framework of the environmental baseline assessments conducted for each site, the animal species potentially present in the project areas were assessed based on aimag level inventories, as well as field observations at the proposed WWTP sites. The results are fully documented in the Environmental Baseline Assessment Reports, which conclude that the habitats around the proposed sites are already greatly disturbed by human activities. Therefore, any species present are likely to be those which tolerate disturbance and do not need a habitat with a high ecological value. Although red listed species are listed as present in the different project regions, their main habitats are usually confined within national parks or remote areas where human activities are absent or limited.

(1) In Sainshand, a fiОlН stuНy was conНuctОН in SОptОmbОr 2015 to obsОrvО wilН animals nОar thО projОct sitО. No largО mammal was obsОrvОН. ThО obsОrvОН animals incluНО MiН- Нay GОrbil (Meriones meridianus), Mongolian GОrbil (Meriones unguiculatus), GrОat gОrbil (Rhombomys opimus), HousО mousО (Mus musculus) from roНОnts; Long-ОarОН HОnНОhog (Hemiechinus auritus) from hОНgОhog-shapОН; Tolai HarО (Lepus tolai) from thО rabbit; Corsac Fox (Vulpes corsac) from rapacious. ThО mammal spОciОs in thО SainshanН soum arО chОckОН against thО lists from thО WorlН ConsОrvation Union (IUCN), ConvОntion on IntОrnational TraНО in EnНangОrОН SpОciОs of WilН Fauna anН Flora (CITES), ConvОntion on thО ConsОrvation of Migratory SpОciОs of WilН Animals (CMS) anН Mongolian RОН Book (1987, 1997, 2014). ThО fiОlН stuНy obsОrvОН a total of 152 birНs of 28 spОciОs. NonО of thОm is listОН as protОctОН birН spОciОs. ThО obsОrvОН birНs arО 43% passagО migrants, 32% rОsiНОnt brООНОr, anН 25% is brООНing visit birНs. In thО fiОlН survОy, 3 spОciОs lizarН involvОs in 1 group, 2 familiОs (Tuva ToaН-hОaНОН Agama-PhrynocОphalus vОrsicolor, Multi- ocОllatОН RacОrunnОr-ErОmias multiocОllata, Gobi racОrunnОr-ErОmias przОwalskii), 2 spОciОs of snakО involvОs in 1 group, 2 familiОs (StОppО’s Rat SnakО-ElaphО НionО, Halys Pit VipОr-GloyНius halys) wОrО obsОrvОН. ThО basОlinО rОport concluНОН that thОrО is no ОnНangОrОН spОciОs in thО projОct arОa. ThОrО is not rОcorНОН rarО anН/or ОnНangОrОН

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invОrtОbratО spОciОs in SainshanН soum.

(2) Dalanzadgad, Arvaikheer. Mammals are common in South-Gobi, Common rodents include horse gerbils, yellow gerbils, dwarf hamster, south-gobi jerboa, Mongolian hamster, CampbОll’s hamstОr, sanН ОwО, tailОН jОrboa, Koslov jОrboa, tolai harО, Palla’s pika, ОarОН hedgehogs, whiskered bat from bats, corsac, least weasel, fox, grey wolf, brock, wildcat, common weasel. Steppe-hazel grouse, wild horse, zag sparrow, whitethroat, houbara bustard, lesser short-toed lark are common in Gobi-desert area where there is lack of prey and water supply. Capreolus pygargus, gazelle subgutturosa, and ovis ammon species are located in this region. Gazelle subgutturosa, and ovis ammon are listed in the Mongolian national red book, but their current habitats are distributed more than 100-200 km away from the project site in Arvaikheer. As for the amphibians, Salamandrella keyserlingii, Eremias Przewalskii, Eremias multiocellata, Eremias argus, Elaphe dione, Aqkistrodon halys, Psammophis lineolatus, Phrynocephalus versicolor are common.

(3) Tsetserleg. Remotely located in high latitude forest areas to the north of project site, musk deer, shrew, chipmunk and wood mouse are common. Squirrel and boars occur normally. Lynx and roe-deer occur rarely. Common weasel, corsac, rabbit and wolves occur in river valleys, rocky places and patchy forest; most of birds are migratory and some are permanent and most common species include bobwhite, hazel grouse, great grouse, cuckoo, flicker, kite, magpie, carrion crow, night owl, wooper swan, bluecap, Euroasian Sparrowhawk, upland buzzard, northern goshawk, hoopoe. Reptiles Eremias argus (lizard), Elaphe doine, Gloydius halys (snakes), as well as amphibians Bufo raddeic and Rana amurensis occur in these areas. No rare and endangered species of reptiles and amphibians are found.

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V. ALTERNATIVE ANALYSIS

121. UnНОr ADB’s SafОguarНs Policy StatОmОnt (2009) thОrО is a rОquirОmОnt to ОxaminО altОrnativОs to thО projОct’s location, НОsign, tОchnology, anН componОnts anН thОir potОntial environmental and social impacts. During the project preparation, various alternatives for each of the four project components were considered, screened, and studied against technical, economic, social, and environmental criteria. The primary objective with respect to environmental criteria was to identify and adopt options with the least adverse environmental impacts and maximum environmental benefits.

A. No Action Alternative

122. The “Without ProjОct AltОrnativО” or “No Action Alternative” aННrОssОs thО likОly consequences of not undertaking the proposed action. For this project, the failure to develop and improve the existing sewerage infrastructure may be an impediment to development of the four aimag centers as livable cities and may give rise to pollution of the surrounding environment as a result of failing equipment at the four old WWTPs and a predicted increase in wastewater in these cities. The new WWTPs will ensure that the urban environment is 'future proofed' and that new developments both in terms of industry and expansion of the towns, do not affect negatively on the environment as a result of increased volumes of wastewater. Therefore, it can be determined that thО “No Action AltОrnativО” is not a rОasonablО option if thО future environmental quality in the four aimag cities where these WWTPs are located are to be maintained and improved.

B. Location Alternatives

123. The major operational cost of WWTPs is the energy cost. In order to reduce operational cost, WWTPs are typically located in lowland areas outside of the cities so the sewage can flow toward the WWTP by gravity. Alternative locations of each WWTP were considered at the aimag centers. The final locations for all four WWTPs wОrО carОfully chosОn basОН on aimags’ city mastОr plans and elevations of surrounding areas of the aimag centers.

C. Wastewater Treatment Plant Option Alternatives

1. FramОwork for TОchnology Evaluation anН SОlОction

124. A two-stage process has been adopted for the evaluation of potential wastewater treatment options for the project cities, and selection of the preferred approach. In the first stage, a broad range of treatment options is considered against a set of criteria covering the operational characteristics and likely costs (capital and operational) of systems of the required treatment capacity opОrating unНОr thО projОct citiОs’ Оnvironmental and socio-economic conditions. During the first stage evaluation, most options have been eliminated from further consideration as a result of: (i) thОir unsuitability for opОration unНОr thО projОct citiОs’ conНitions; (ii) high lОvОls of operational risk; and/or (iii) high capital or operational cost.

125. In the second-stage evaluation, those technologies which appear to provide the most cost effective solution to wastewater treatment were subjected to further scrutiny with a view to identifying an optimal treatment solution for the project cities, operating under local conditions.

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2. First-stagО Options Evaluation

126. Based on broad international practice in wastewater treatment technologies in cold and temperate climates, a long-list of possible treatment technologies was drawn up for first-stage evaluation. This list excluded a number of technologies which are in use in more temperate climates but which would not function in the extreme cold experienced during the long and deep winters experienced in the project cities, or are excluded for other operational reasons, such as being insufficiently tested at scale under the conditions operating in the project cities. The systems excluded from further consideration at this stage are:

i) The trickling filter variety of biofilm systems: Such systems would likely become inoperable due to freezing during the deep winter unless covered, ii) Extended aeration systems involving long retention times in aeration basins (such as Aerated Lagoons): Operational problems are likely due to freezing in quiescent parts of the lagoons during deep winter conditions unless units are covered, which would become prohibitively expensive for the large reactor areas involved (and necessitated by surface aeration). iii) Upflow Anaerobic Sludge Blanket Process: Insufficient experience at full scale operation and not suitable for use in cold climates due to sensitivity of anaerobic process to low temperature (obligate anaerobic methane-forming bacteria which are necessary to avoid odor associated with the intermediate products of anaerobic treatment cease to function at about 15 oC).

127. The systems which are considered in the first stage evaluation are those which could have application under operating conditions experienced in the project cities. These are:

i) Waste stabilization ponds (facultative and maturation ponds in series); ii) Constructed wetlands; iii) Extended aeration oxidation ditch (or Carrousel) extended aeration systems; iv) Conventional or modified (e.g. Anoxic/Oxic) activated sludge process systems; v) Sequencing batch reactor systems; vi) Membrane bioreactor and reverse osmosis technologies; and vii) Biofilm systems – submerged and part-submerged (such as rotating biological contactors, integrated fixed-film activates sludge, and moving bed bio-reactor systems).

128. These systems are evaluated against a range of criteria to determine which are likely to offer the best solution under conditions in the project cities in terms of costs and operating efficiency. The criteria used in the evaluation are as follows:

i) Experience of operation of similar wastewater treatment technologies elsewhere in Mongolia, both positive and negative; and also whether featuring in consideration as a potential process for adoption by other urban communities in Mongolia; ii) Experience of operation elsewhere in the region, or under similar climatic, economic and technical environments as the project cities, and at similar flow rates;

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iii) Likely biological treatment performance in removal of BOD5, COD and SS; iv) Likely nutrient removal efficiency – particularly nitrogen and phosphorous removal; v) Likely treatment efficiency in removal of bacterial indicator organisms; vi) Shock-loading resilience: ability to handle fluctuation in influent volume and composition - particularly to chemical agents likely to be present in (pre-treated) industrial wastewaters; vii) Approximate land requirement and ability to be accommodated within the footprint of the existing plant (thus avoiding land acquisition and resettlement issues); viii) Approximate capital costs for civil works equipment and related plant costs; ix) Likely energy requirements for operation; x) Possible energy recovery opportunities – such as through bio-gas from sludge digestion; xi) Likely operational and maintenance costs; xii) Sludge volume and handling characteristics; xiii) Operational complexity: need for sophisticated real-time IT-based management systems, number and complexity of moving parts and exposure of appurtenances; xiv) Potential for odor or noise nuisance, or provision of a favorable environment for insect or disease vector breeding; xv) Aesthetic considerations: ability of plant to fit well with surroundings; xvi) Resilience to harsh winter operating conditions; xvii) Expansion potential: ability of plant capacity to be increased on a modular basis as flow rates increase; and xviii) General observations and result of evaluation: overall summary of evaluation and assessment of suitability for further consideration.

129. The evaluation results are summarized in Table V-1. Based on this evaluation, other outliers can be eliminated:

i) Waste stabilization ponds systems and constructed wetlands offer simple, cheap, robust and resilient processes for wastewater treatment but: (a) use large areas of land; (b) would function poorly in winter and early spring; (c) risk odor and insect vector breeding; and (d) offer only poor nutrient removal performance. ii) Extended aeration systems which are likely to develop operational problems in winter periods due to quiescent conditions experienced in parts of the reactors.

130. On the other hand, at the other end of the spectrum, further consideration is warranted for the following technologies:

i) Membrane bio-rectors and reverse osmosis plants which provide a high level of treatment and are compact, although they: (a) are expensive to construct and very expensive to operate and maintain; (b) involve complex operational systems; (c) do

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not have a history of successful use in environments similar to that of the project cities. ii) Biofilm technologies, which vary widely but can also offer a high level of treatment and although: (a) there is not a single established biofilm technology which has been used in Mongolia or is widely used elsewhere in the region; and (b) the ability of biofilm systems to operate under cold winter conditions or respond to shock loadings is not well established. However, they continue to be considered in combination with activated sludge technologies. iii) Some forms of extended aeration system – such as the oxidation ditch (carrousel) which minimize “НОaН” arОas whОrО wintОr frООzing is likОly.

3. SОconН-stagО Options Evaluation

131. This first stage process leaves four basic technologies which are considered to offer the best alternatives for application in the project cities:

i) the membrane bio-reactor system (MBR); ii) the activated sludge process (ASP) in its various forms – modified in accordance with the specific treatment requirements; iii) the sequencing batch reactor system; and iv) Fixed film activated sludge processes which includes the integrated fixed film activated sludge process (IFAS) and moving-bed bio-reactor process (MBBR).

132. Each of the systems is described in terms of its operational parameters, and an evaluation is carried out using a combination of quantitative and qualitative criteria. A summary of findings is presented in Table V-2.

133. The oxidation ditch has not been included at this stage, although it is understood to be the preferred technology for the CWWTP extension in Ulaanbaatar, and as a result has also been considered for the new treatment plant and Nisekh. However, it is considered that this system does not represent as good an alternative for the project cities as either the modified activated sludge or SBR technologies, or other systems which use elements of these two and fixed or mobile submerged artificial media. While from a technical point of view, the system would be able to achieve the required treated effluent quality standards, there are process disadvantages when compared to the modified ASP, SBR and related systems, under the operating conditions experienced in the project cities. As an extended aeration system, the oxidation ditch aerobically stabilizes the activated sludge. This has the advantage that no additional and separated sludge stabilization is required, but has the disadvantages that (i) the extended aeration systems means that about 25% more energy is used than in either conventional activated sludge or SBR systems; and (ii) the aeration tank volumes required are about 4- 5 times those required by either the modified activated sludge or SBR systems.

134. A further disadvantage of the oxidation ditch system when operating in cold climates is that since the aeration takes place at the surface, the aeration tank depth cannot exceed approximately 3.5m. This combination of large volume requirement and restriction on depth means a very large footprint and thus equally large exposed liquid surface area, leading to rapid cooling of the liquor in winter and thus the risk of freezing. The only way to maintain the required temperature in these circumstances is to enclose the reactor – at a very high capital cost.

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135. A further consideration is the option for some energy recovery through anaerobic sludge digestion – an option which is not open in the case of an extended aeration system – and the benefits from dewatering an anaerobically digested (as opposed to aerobically digested) sludge. Under optimal conditions, provided that anaerobic sludge stabilization follows the activated sludge process, about 60% of the total energy required for the operation of the entire WWTP can potentially be recovered and utilized to defray energy costs. Furthermore, during the anaerobic digestion process the sludge quantity is reduced by about 30% which in turn reduces the cost for dewatering and final disposal. Additionally, anaerobically digested sludge can be much more efficiently dewatered than aerobic sludge, which consequently reduces the final disposal cost still further.

136. These factors combine to eliminate the oxidation ditch (or Carrousel) option from further consideration. Consequently, the treatment systems which are evaluated in greater detail in stage two of the evaluation are:

i) Option 1: A membrane bio-rector system (MBR); ii) Option 2: A modified activated sludge system adopting the step-feed activated sludge process to promote nutrient reduction; iii) Option 3: A sequencing batch reactor system; and iv) Option 4: A modified fixed or moving media activated sludge treatment plant adopting IFAS or MBBR technology.

137. In general, activated sludge systems do not provide a high level of nutrient removal, but the MBR, step-feed ASP, IFAS and SBR processes are designed to improve the nutrient removal performance of the system, so this should not constitute a problem in achieving the required discharge standards.

138. Each of these systems produces a well mineralized sludge which can be readily dewatered, or offers the possibility for anaerobic digestion and thus energy recovery. However, in view of the low sludge volumes and problems encountered in maintaining temperatures sufficient for sludge digestion in winter, this approach is not recommended at this stage. Also, while the addition of anaerobic digestion to generate bio-gas as a resource to reduce energy should be beneficial, there is doubt as to the applicability and efficiency of biogas digesters under Mongolian conditions where relatively high water consumption (150 l/c/d) and low organic loads (27 g/c/d) lead to low BOD5 and SS concentrations in raw sewage (BOD5 90-95 mg/l, SS ~150 mg/l).

4. Evaluation RОsults – thО Optimal TОchnical Solution

139. ThО options analysis НoОs not prОsОnt a clОar “winnОr” in tОrms of the qualitative and quantitative evaluations. However, further detailed analysis of the potential for use of the MBR system reinforced the original conclusion. The analysis indicated that while the degree of treatment achieved can be very high, the system suffers from the following disadvantages under Mongolian conditions:

i) Where there are occasional system failures - for instance due to power cuts - the micro filters become clogged and require constant cleaning resulting in high maintenance costs;

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ii) The membrane cartridges need to be changed often, are imported, and are consequently very expensive; and iii) To operate micro filters, vacuum pumps are required and these are considerably more expensive to operate than using secondary sedimentation tanks for clarification.

140. Based on this analysis, there is little difference between the other three systems in terms of cost and performance. The step-feed activated sludge is slightly more expensive and has slightly higher operational cost than the other two systems. HowОvОr, it comОs closОst to thО “triОН anН tОstОН” convОntional activatОН sluНgО procОss in tОrms of opОration, anН thus offОrs somО sОcurity that it can be successfully operated under Mongolian conditions.

141. The other two systems provide solutions which emerge as the most cost effective, (assuming that the rehabilitation of the existing plant is disregarded) with little to choose between them. The SBR technology is finding increasing application in many parts of the world – but was considered and rejected under the extensive studies looking at systems for: (i) Nisekh in Ulaanbaatar; (ii) the extension of the Ulaanbaatar CWWTP, and (iii) the Orkhon WWTP extension. It works well when the automated systems work well and the level of supervision is high. But is it reasonable to assume this is likely in the circumstances existing in the project cities? This presents an addition level of operational risk over options which have more in common with the more familiar conventional ASP system.

142. The version of the IFAS systОm knows as thО “3-sluНgО” systОm which is proposОН, has emerged from Russian experience, is widely used in the Russian Federation, and variations are adopted in , and in Europe, and . This option was not considered at all in the evaluations of potential treatment plants for Ulaanbaatar and Orkhon mentioned in the previous paragraph. There is limited experience of the system outside the Russian Federation, and although some elements of the system have been successfully introduced to a small plant in Mongolia (at Zunmod) it is relatively untried in Mongolia and elsewhere. Consequently, its adoption could pose a higher level of risk. However, ultimately it is a variation on the activated sludge process with some benefits over the step-feed ASP process in terms of the amount of interconnecting pipework, valves and number of inspection chambers, and provides simpler operation than the SBR. The basic principles of the IFAS and related MBBR technology are widely applied elsewhere globally.

143. The MBBR system is similar to the IFAS, except in that floatable media are used rather than fixed media. A disadvantage of the use of floatable media is that the ability of biomass to cling to the media is reduced, thus in turn reducing the intensity of biomass activity. In addition, the media are a proprietary product, which can add restrictions to the tendering and operation of the system. Thus the IFAS is considered preferable to the similar MBBR system, and the MBBR system is excluded from further consideration.

144. In summary, it is proposed that the IFAS system be adopted as the treatment process in each of the project cities. This has the additional benefit of being the technology proposed for the new ADB-supported treatment plant in . There is benefit in the cities in Mongolia adopting treatment processers which are similar so that: (i) experience of operation can be built up and learning applied across cities; and (ii) costs of operation and maintenance can be reduced through the use of common types of materials and equipment.

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Table V-1: Comparative Treatment Data for Treatment Processes32

Extended Aeration: Conventional or Membrane Biofilm Technology Waste Stabilization Constructed Sequencing Batch Item Oxidation Ditch Modified A/O Bioreactor & (submerged or (Oxidation) Ponds Wetlands Reactor (Carrousel) Activated Sludge Reverse Osmosis exposed) Use elsewhere in Several (small Extensive (small Mongolia Few (small systems) No Yes systems for private No No systems) companies) Use in cold climates Some (but not in very Several (developed Extensive Some (small systems) Extensive Few (small systems) Some (small systems) cold climates) environments)

BOD 5, COD & SS 75-85 75-90 75-85 90-95 90-95 95-98 75-90 Removal (%)

NH 4, P Nutrient Removal Small Small Moderate Moderate to High High High Moderate (%) Faecal Coliforms Log 2-4 Log 2-4 Log 2-3 Log 1-3 Log 1-3 Log >4 Log 1-3 Removal (orders) Handling hydraulic and Good Good Fair Fair to Good Good Good Fair to Good organic load fluctuations Land Requirement 40.0 25.0 2.0 1.0 0.75 0.25 0.75 (approx.m2/cum/day) Total Capital Cost 150 300 900 800 800 1,200 700 (US$/cum/day) Power Requirement Minimal Minimal 1.3 1.0 0.9 1.5 0.5 (kWh/cum treated) Opportunities for energy Low Moderate Mo derate High High Moderate Moderate recovery

32 The data is taken from a wide range of sources and as such is approximate, particularly the cost information which is purely indicative, and based on an assumed small- to medium-sized facility (say 3,000 cm/day capacity). The purpose is to help narrow the options down to those two or three treatment technologies most appropriate for the situation in the project cities.

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Total O&M Cost (US$/ 0.05 0.05 0.4 0.35 0.4 0.8 0.4 cum) Sludge production and Low/Easy Low/Easy Moderate/ Easy Moderate/ Hard Moderate/ Hard Moderate/ Hard Moderate/ Hard handling. Operational Complexity Moderate Moderate/Skilled/Com Highly Highly Moderate Simple Simple Characteristics Skill/Complexity plex Skilled/Complex Skilled/Complex Skill/Complexity Potential odor, insect Yes: Yes Moderate Minor Least Least Moderate and vector Nuisance. Aesthetics with No No No Fair Best suited Best suited Best suited surroundings Winter operational OK but poor OK but poor Moderate Good Good Good Moderate resilience performance performance Potential for modular Possible Difficult Difficult Moderate Simple Simple Moderate expansion General observation and Area required very Area required very Possible option but no Already used in Already used in High capital and May have application evaluation result large to accommodate large to accommodate Mongolian experience, Mongolia and in Mongolia (at a small operating costs and but little experience in cold periods & cold periods. More susceptibility to very region, performance scale) and in region. requires complex region or in cold nuisance during spring widely used for cold conditions and good except nutrient Good performance operational controls. climates. RBC can be thaw – not a practical smaller communities – poorer nutrient removal in and adaptable, but High level of treatment effective but better solution for the project not a practical solution removal than other conventional plants. requires relatively performance not suited to smaller aimags for the project aimags options Modifications can sophisticated necessary in the plants. improve nutrient operating system project aimags removal Source: PPTA consultants estimate.

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Table V.2: Detailed Evaluation of Shortlisted Treatment Methods

Membrane Bioreactor Modified Step-feed process Standard Sequencing Integrated Fixed-film Item Evaluation Criteria (MBR) System Activated Sludge Plant Batch Reactor System Activated Sludge Process (IFAS) 1 Estimated total capital costs (Capital 3.50 3.15 2.60 2.80 works, equipment and other costs) for a plant treating 3,000 cum/day in US$ million 2 Estimated annual operational cost 0.150 0.130 0.110 0.115 (Power, staff, chemicals and other) in US$ million per annum 3 Operational simplicity or complexity, Th e system is compact and The opportunity exists to The system is reasonably The system is modification of e.g. need for PC-based SCADA control offers a minimum of external minimize the need for external compact and so does not conventional ASP with system, number of moving parts and pipework. The system is pipework by planning the involve a great deal of additional steps and can be complexity and exposure of generally highly automated configuration of reactors to external pipework. The configured so as to minimize appurtenances and requires a high level of minimize number of system works in an automatic external pipework. The operational skill. structures. The process is mode and is controlled by a system can operate in either complex and requires a relatively complex PC-based an automated or a manual degree of automated control, SCADA system. There is a mode. Since the timing of although treatment is risk of automatic system phases is not as critical as in reasonably robust in cases failure, in which case the other options, treatment where control is not as finely effluent quality is likely to be efficiency can be maintained managed (is sub-optimal). significantly adversely in cases where operational affected. Backup systems are controls are not so carefully needed managed 4 Successful operation proven elsewhere The MBR system has not been No step-feed ASPs working Small SBR plants are The IFAS system is widely in Mongolia, or at least in the region, used previously in Mongolia for on Mongolia, but there are a operation in Mongolia, but the used in the Russian and in similar climatic, economic and the treatment of wastewater. number of modified activated pilot plant at the Darkhan Federation in its “3-sludge” technical environments, and similar In general, the system is not sludge processes operating treatment plant experienced form, but is not well known in flow rates widely used for municipal with significant variation in some operational problems this form elsewhere. It is a wastewater treatment in treatment efficiency. Team with the pilot through freezing modification of an activated

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Membrane Bioreactor Modified Step-feed process Standard Sequencing Integrated Fixed-film Item Evaluation Criteria (MBR) System Activated Sludge Plant Batch Reactor System Activated Sludge Process (IFAS) visited WWTPs at Sukhbaatar during winter. While widely sludge-type process which is environments. in Selenge and Zunmod in used in more economically widely adopted elsewhere and Tov where a modified advanced and warmer has been adopted in Mongolia activated sludge systems environments, SBRs have yet for smaller plants. Some were operating: the first not to find widespread use in the elements included in plants at well, but the second providing region, or in Mongolia (except Sukhbaatar and Zunmod. a high level of treatment. Thus for relatively small private due to variability in operation plants) and not design issues. 5 Probable treatment efficiency (BOD, BOD=10.0mg/l BOD=20.0mg/l BOD=20mg/l COD=50mg/l BOD=6.0mg/l COD=15mg/l COD, SS & NH4 removal) in climatic COD=20mg/l COD=50mg/l SS=50mg/l NH4=6.0mg/l SS=6.0mg/l NH4=0.4mg/l extremes likely to be experienced in the SS=10.0mg/l SS=50.0mg/l NH4=6.0mg/l project aimags NH4=0.4mg/l 6 Sludge handling characteristics – In operation of the MBR Sludge volumes produced The volume of dry sludge The volume of dry sludge minimization of sludge problems system the dry sludge from this process are less produced from the system is produced from the system is produced is about one half of than for conventional ASP but about two thirds of that about one half of that that produced from the relatively high. produced from the produced from the activated sludge process. conventional ASP. conventional ASP. 7 Shock-loading resilience – particularly The system is not robust in The system is robust in The system has the benefit The system is robust in to chemical agents likely to be present treating wastewaters with treating wastewaters with that it can adjust the intensity treating wastewaters with in (pre-treated) industrial wastewaters variable characteristics. This variable characteristics of treatment to deal with variable characteristics could complicate and threaten provided they meet with the variability in inflow provided they meet with the the efficiency of the treatment standards for discharge to characteristics. standards for discharge to process public sewers public sewers 8 Energy efficiency, (construction and Energy costs are high. Annual Annual electricity Annual electricity Annual electricity operational phases and opportunities electricity consumption consumption amounts to consumption amounts to consumption amounts to for energy recovery (e.g. methane amounts to about US$ 0.14 about US$ 0.127 mil. about US$ 0.102 mil. about US$ 0.107 mil. biogas recovery) mil.

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Membrane Bioreactor Modified Step-feed process Standard Sequencing Integrated Fixed-film Item Evaluation Criteria (MBR) System Activated Sludge Plant Batch Reactor System Activated Sludge Process (IFAS) 9 Suitability for incremental expansion Relatively easily extended by Relatively easily extended by Relatively easily extended by Relatively easily extended by the construction of additional the construction of additional the construction of additional the construction of additional parallel treatment streams if parallel treatment streams if parallel treatment streams if parallel treatment streams if designed for modular designed for modular designed for modular designed for modular expansion. expansion, although pipework expansion. expansion. complexity. 10 Operational resilience in extreme winter System minimizes the need for There is a moderate amount Minimal interconnecting System minimizes the need climate exposed interconnecting of underground pipework pipework but pilot plant at for exposed interconnecting pipework which risks operational Darkhan suffered freezing pipework. problems in winter, but not if problems in the winter, but well located. these may have been due to small size 11 Likely creation of odor or other No odor if working properly. No odor if working properly. No odor if working properly. No odor if working properly. nuisance 12 Constructability Complicated by the need for Relatively straightforward, Straightforward for structural Relatively straightforward installation of complex although more complex than elements, less so for equipment. IFAS mechanical equipment and controls 13 Suitability for risk reduction through Nature of works required would Would be suitable for BOT- Would be suitable for BOT- Would be suitable for BOT- B&OA or BOT modality not lend it to BOT modality type modality (although type modality (although type modality (although easily due to rehab of design now separate) design now separate) design now separate) structures. 14 Major Risks associated with each  Need for replacement of  Susceptible to reductions  Operational complexity  Relatively untried option: cartridges adds to in treatment efficiency increases risks of technology increases operational cost. under high or low loading operational failure or operational risks, although  Where there are occasional rates. treatment problems based on well-tried system failures - for  Configuration of structures  Treatment efficiency principles instance due to power cuts and interconnecting susceptible to wide  Need for optimal treatment - the micro filters become pipework means that new variations in flow unless conditions requires the use

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Membrane Bioreactor Modified Step-feed process Standard Sequencing Integrated Fixed-film Item Evaluation Criteria (MBR) System Activated Sludge Plant Batch Reactor System Activated Sludge Process (IFAS) clogged and require WWTP cannot readily be large balancing tank in of relatively sophisticated constant cleaning resulting extended. front of reactor computer-based control in high maintenance costs.  Extensive inter-connecting  External experts required system.  To operate micro filters, pipework increases risk of for the maintenance of vacuum pumps are required winter freezing sophisticated technical and these are considerably  Step-feed process adds to equipment more expensive to operate complexity and cost  Flexibility in arranging than using secondary phases requires sedimentation tanks for sophisticated computer- clarification. based control system, demanding extensive external support and training of the operating staff on commissioning: high cost & risk of failure 15 Risks associated with contracting out Contractors may be reluctant Well known system and Well known system and Relatively well known process works to undertake works, or to should attract wide interest should attract wide interest so should not restrict guarantee works, because of from contractors from contractors international contractor complexity of system interest and responsiveness 16 View of Expert Technical Committee on Should be considered in This process is well This system may face This system is preferred as it Water and Wastewater Treatment and evaluation as this is a state-of- understood but could be operational problems as not is relatively simple Steering Committee the art technology providing developed further based on used before at this scale in modification of ASP and thus very high treatment efficiency. Mongolian experience and Mongolia the most suitable for conditions. Mongolian conditions

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VI. ANTICIPATED IMPACTS AND MITIGATION MEASURES

145. Potential project impacts, both positive and negative, were assessed through impact screening, site visits, technical analysis, consultations with government agencies and local communities, and dialogues among the EA, IAs, design firms, EIA firms and PPTA consultants.

A. Environmental Impact Screening

146. In assessing the environmental, social and health impacts of the AF project, the impact type, duration and extent were considered. The impact type includes positive, negative, direct, indirect and induced, as well as cumulative impacts. The impact duration includes temporary, short-term, long-term and permanent. The extent of the impact includes local, regional and national impacts. These impacts were then assessed for their potential significance, both prior to consideration of mitigation and then with consideration of mitigation. The impact significance depends on impacted environmental, social or health resources/receptors, sensitivity of these receptors, the magnitude of impact and the impact after mitigation.

147. The screening process showed that following mitigation, related to project design (design phase), the most significant impact is the selection of the right wastewater treatment technology suitable to local climate conditions. The most significant impacts during construction phase of Output 1 (the construction of four wastewater treatment plants) include fugitive dust emissions from construction activities and waste management (including earthwork), temporary interference with traffic, and occupational and community health and safety.. During operation, no significant environmental impact is anticipated. Through appropriate technological design and capacity building for operators, operational risks of the project can be significantly reduced. The discharge of treated effluent will permeate through soil layers to recharge groundwater and thus will have no significant impact to rivers. Other minor issues during operation include air quality, noise and solid waste including sludge management. The results of the impact assessment and corresponding mitigation measures are presented in the sections below.

B. Positive Impact and Environmental Benefits

148. The project will improve the wastewater treatment systems in all project aimags and ensure full continuous treatment throughout implementation. The project will directly benefit more than 25,000 residents (25% of the urban population in the project soums) and indirectly, more than 100,000 residents. Once in operation, it is anticipated that by 2030, the treatment plants will be able to treat the wastewater from a total of 80,000 inhabitants (60% of soums population), and aimag commercial, institutional and industrial undertakings. The project will ensure that WWTP effluent in all project aimags consistently comply with the Mongolian quality standard for treated effluent (MNS 4943:2011). The cumulative wastewater treatment capacity of 13,200 m3/d will remove significant amounts of pollutants, including BOD (920 tons per year, 2030 projections); ammonia nitrogen (110 tons per year); and phosphorous (28 tons per year). The project will also support overall improvement of the cities’ wastewater management system through institutional development, training, project management assistance, and policy dialogue.

C. Impacts Associated with Project Location, Planning and Design

149. Impacts associated with the project locations and design focus on the following key areas:

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i) Locations of the WWTPs will be consistent with cities plans and downstream locations to minimize sewage pipe length and save energy in future operation; ii) Planning to ensure the current sewage treatment ponds will remain operational until the new WWTPs are operational; and iii) Resource-efficiency: Ensuring that the existing facilities, to the extent possible, are utilized and integrated to conserve resources. iv) Land acquisition and resettlement: ThО aННitional financing is catОgorizОН as C for thО involuntary rОsОttlОmОnt (IR) safОguarН as thО projОct will not causО any НirОct or inНirОct, pОrmanОnt or tОmporary lanН acquisition anН rОsОttlОmОnt (LAR) impacts. ThО construction of thО WWTPs will bО НonО on statО ownОН vacant lanН.

150. Mitigation measures and actions during design and pre-construction. The mitigation of impacts from these design issues are as follows:

i) The locations of the new WWTPs have been carefully selected considering many key factors including the development of the cities, existing sewage facilities, maximum use of gravity, and not too close to human receptors. The sites for Dalanzadgad, Arvaikheer and Sainshand are located at new sites and lower elevations than the cities to fully utilize gravity to save energy and they are further away from the cities than the existing facilities. Thus the impacts to human receptors are much less due to the increased distances. The new WWTP site for Tsetserleg is next to the existing facility and current infrastructure will be utilized as much as possible. ii) Careful planning of connections of new WWTPs to the existing sewer networks during the transition period from old facilities to the new WWTPs; the PUSOs confirmed that existing WWTPs in all 4 aimag centers will remain in operation at least one year after the new facilities pass the acceptance check. iii) Existing sewage treatment ponds at Tsetserleg will be used by the new WWTPs to comply with resource-efficiency and good waste management principles (see also para 161(i)). In the other three aimag centers, the old WWTPs could not be integrated as these are too far from the new sites. However, the existing sewer pipe network will be fully utilized at all new WWTPs.

151. Actions will be implemented in the pre-construction phase of the project implementation to ОnsurО thО projОct’s environment management readiness. These include:

i) Appointment of one environment, health and safety officer (EHSO) within each PSG to coordinate project EMP implementation; ii) Contracting environmental experts by the PMU within the PMIS and a licensed independent environmental monitor (IEM) for project specific environmental quality monitoring, developing detailed monitoring plan for construction and operation periods in accordance to the environmental monitoring plan specified in Table EMP-5); iii) Including EMP requirements in tender and contract documents; iv) Establishing grievance redress mechanisms (GRM) on the basis of the GRM defined in Chapter VIII of the IEE; and v) Consulting and informing residents and key stakeholders near the construction sites

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regarding construction timing and approach, especially for Tsetserleg construction site.

152. BОforО thО construction starts, each civil works contractor will prОparО a site EMP (SEMP) which shall fully rОsponН to thО rОquirОmОnts sОt in thО projОct EMP, anН shall incluНО a numbОr of sub-plans, incluНing: (i) soil Оrosion control plan; (ii) borrow anН spoil managОmОnt plan; (iii) watОr protОction plan; (iv) hОalth anН safОty risk managОmОnt plan; (v) spill managОmОnt plan; anН (vi) wastО managОmОnt plan:

i) The protection plan will identify likely areas of soil erosion and the mitigation measures which the contractor will employ to minimize potential erosion around any excavations and construction areas; ii) ThО borrow anН spoil managОmОnt plan will spОcify location of borrow pits, quarriОs anН spoil Нisposal sitОs, as nООНОН. Contractors will ОnsurО that (a) borrow arОas will bО locatОН away from rОsiНОntial arОas, watОr boНiОs anН will avoiН valuablО pasturО/grazing lanН, (b) aftОr usО borrow pit arОas will bО graНОН to ОnsurО НrainagО anН visual uniformity, anН (c) borrow pit rОstoration will follow thО complОtion of works in full compliancО with all applicablО stanНarНs anН spОcifications; iii) The water protection plan will include measures to be taken during construction to avoid/mitigate pollution arising from construction site drainage (silt), use of chemicals, and other potential pollution sourcОs; iv) ThО hОalth anН safОty risk managОmОnt plan (HSMP): For managОmОnt of occupational hОalth anН safОty, thО contractor will prОparО a HSMP for thО construction workОrs. v) ThО spill managОmОnt plan will document the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill rОsponsО following an inciНОnt; anН vi) The waste management plan for construction sites will provide procedures for management of household type waste, hazardous waste, and sewage (if appropriate). It will evaluate the type and quantities of waste, as well as detail arrangements for storage and transportation of the waste to its disposal point. It will include agreements with the aimag authorities for waste disposal and consideration of the Waste Hierarchy. It will include a schedule for disinfection of all waste collection and storage areas.

153. UtilitiОs Provision. It is not anticipatОН that thО projОct will Нisrupt utilitiОs or any municipal sОrvicОs Нuring construction. ThО nОw sОwОr pipО to thО nОw WWTP sitО in Arvaikheer has already been completed and the new WWTP for Tsetserleg is next to the existing one. Thus there is no potential for utility service disruption at these two sites. The new sewer pipe is outside of the cities of Dalanzadgad and Sainshand and there are no underground utilities. However, the new sewer line in Sainshand will cross the railway. Thus, approval and coordination with the railway authority will be required. To ensure no disruption of utilities, thО civil work contractors shall consult with rОlОvant aimag НОpartmОnts to НoublО chОck location of utilitiОs prior to any construction activitiОs at all sitОs.

154. PОrmafrost AssociatОН LanН SubsiНОncО Risks. Arvaikheer and Tsetserleg areas are in a zone of sporadic permafrost, which can melt over time leading to land subsidence and potential pipeline rupture or cracks in buildings inside the WWTPs. This is considered to be a low risk as there is no report of such cases in these cities. However, permafrost maps do indicate the potential for permafrost near these two cities (Appendix 2, Figure A2-4). To address the risk of land subsidence due to permafrost, gОo-tОchnical ОnginООring work will bО conНuctОН to confirm thОrО is no pОrmafrost spot prior to thО construction of thО WWTP anН Оxcavation of sОwОr pipОlinО trОnchОs. If pОrmafrost spots

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arО founН, ОnginООring solutions will bО implОmОntОН incluНing consiНОring lanН subsiНОncО in thО НОsign anН/or spОcial construction mОthoН to НОal with pОrmafrost will bО utilizОН.

D. Environmental Impact and Mitigation Measures during Construction

1. Impact on Physical Resources

155. Impacts on Soil RОsourcОs. ThrОО typОs of potОntial impacts on soil arО anticipatОН, incluНing: (i) soil Оrosion; (ii) soil contamination; anН (iii) inappropriatО managОmОnt of borrow anН spoil.

i) Soil erosion: Excavation of borrow pits, stockpiles and spoils from earthworks during pipe excavation and ground works for the WWTPs may cause soil erosion. The factors that are expected to contribute to accelerated erosion in the project area are any exposed soil during periods of rainfall from June to August. ii) Soil contamination: Localized contamination of soil in the construction phase may result from the inappropriate transfer, storage, and disposal of petroleum products, lubricants, chemicals, hazardous materials, liquids and solid waste. These impacts are particularly associated with construction site chemical storage, and during refueling of plant and equipment. iii) Borrow and spoil: Borrow will be needed to provide fill for ground works. Spoil will be generated through the excavation of trenches for pipes between existing network and the new plants.

156. Mitigation of impacts on soil. The impacts on soil will be mitigated through a number of measures, which are specified in the EMP and will also be incorporated in the bid documents and construction contracts. A summary of the mitigation activities defined in the EMP is as follows:

i) Soil erosion: (a) implement a soil erosion management plan prepared by each contractor prior to thО start of construction which will bО rОviОwОН anН approvОН by thО PMU; (b) minimizing the area of soil clearance, especially for Tsetserleg site since it’s close to human receptors comparing to the other three sites; (c) maintaining slope stability at cut faces by implementing erosion protection measures; (d) control silt runoff from construction sites; (e) cover soil stockpiles; and (f) properly stabilize slopes and re- vegetate disturbed surfaces. Special attention should be paid the three WWTP sites in Arvaikheer, Sainshand and Dalanzadgad as relative large quantity of soil will be disbursed during site preparation for the pond system. Sainshand and Dalanzadgad will need new sewer pipes and excavating trenches for these sewer pipes will follow soil erosion protection plan and minimize soil erosion. ii) Soil contamination: (a) store chemicals/hazardous products and waste on impermeable surfaces in secure, covered areas with clear labeling of containers and with a tray or bund to contain leaks; (b) regularly remove all construction wastes from the sites to approved waste disposal sites; (c) establish emergency preparedness and response plan (Spill Management Plan); (d) provide spill cleanup measures and equipment at each construction site; and (e) conduct training in emergency spill response procedures. iii) Borrow and spoil: (a) Develop and implement borrow and spoil management plan, specifying location of borrow pits, quarries and spoil disposal sites; (b) ensure that borrow areas are located away from residential areas, water bodies and valuable pasture/grazing land; (c) after use, grade borrow and spoil areas to ensure drainage and

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visual uniformity, and (d) borrow pit restoration must follow the completion of works in full compliance with all applicable standards and specifications.

157. Impact on air quality. Moderate temporary air quality impacts during the construction stage of the project could be anticipated because of fugitive dust generation at construction sites. Minor increases in the level of nitrogen oxides (NOx) and sulfur oxides (SOx) from construction plants and machinery are expected. Air quality impacts during construction are likely to result from the following sources:

i) Emissions from construction machinОry anН ОquipmОnt, movОmОnt of haulagО trucks to all construction sitОs; ii) FugitivО Нust from Оxcavation activitiОs whОn Нigging thО sОwОr trОnchОs anН WWTP sitОs; iii) FugitivО Нust from Оarthworks such as ОstablishmОnt anН usО of borrow pits, anН back- filling activitiОs; iv) FugitivО Нust anН oНor from concrОtО batching plants; v) FugitivО Нust from loaНing, unloaНing anН haulagО of spoil for Нisposal following pipО Оxcavation particularly in arОas whОrО human rОcОptors arО prОsОnt; anН vi) Dust crОatОН by strong winН from unprotОctОН surfacОs.

158. The key receptors for air quality impacts are people and livestock, who would need to be near the construction works before an impact will occur as the impacts will be localized. The DEIAs concluded that there is no residential area or business within 500 m of the WWTP sites – therefore, the impact on sensitive receptors is limited. The closest business entity to the Tsetserleg site is more than the legally required 150m buffer zone.

159. Mitigation of impacts to air quality. The mitigation measures to minimize fugitive dust impacts are as follows:

i) StockpilОs managОmОnt. TОmporary stockpilОs will bО protОctОН to rОНucО Нust Оmissions. If a stockpilО is within 150m of human rОcОptors (such as during trench excavation), aННitional prОcautions must bО takОn incluНing using a rОusablО stockpilО covОr to prОvОnt winН lifting anН НispОrsing. ii) Construction sitО managОmОnt: WatОr will bО sprayОН on construction sitОs anН matОrial hanНling routОs whОrО fugitivО Нust is gОnОratОН, ОspОcially Нuring strong winНy Нays. iii) Transport of matОrials: Trucks carrying Оarth, sanН, stonО or othОr loosО matОrials will bО covОrОН with tarpaulins or othОr suitablО covОr. Construction vОhiclОs anН machinОry will bО maintainОН to a high stanНarН to minimizО Оmissions (notО that local stanНarНs Нo not Оxist for vОhiclО Оmissions). iv) Manufacturing plants: Plants for thО proНuction of concrОtО or pavОmОnt covОring such as asphalt will bО locatОН at lОast 300 m from thО nОarОst НwОlling anН locatО НownwinН.

160. Noise. The major sources of noise pollution near the project area are the removal and replacement of existing surface materials during earthwork. Other noise sources will include the general movement of construction vehicles, concrete-mixing equipment, rollers during re-surfacing, and the use of generators. Construction activities are expected to produce noise levels up to 90 dB(A) within 5m of the construction machinery as shown in

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161. Table VI-1. At the proposed WWTP sites, no human receptors other than construction workers will be this close to the machinery, and construction workers will use appropriate Personal Protective Equipment (PPE). The closest receptor at Tsetserleg is over 330 meters away from the WWTP site while the other three sites are more than 1 km away.

Table VI-1: Construction Machinery Noise Levels (dB(A))

Distance to Machinery Machine Type 5 m 10 m 20 m 40 m 60 m 80 m 100 m 150 m 200 m 300 m Loader 90 84 78 72 68.5 66 64 60.5 58 54.5 Vibratory Road Roller 86 80 74 68 64.5 62 60 56.5 54 50.5 Bulldozer 86 80 74 68 64.5 62 60 56.5 54 50.5 Land Scraper 90 84 78 72 68.5 66 64 60.5 58 54.5 Excavator 84 78 72 66 62.5 60 58 54.5 52 48.8 Roller 87 81 75 69 65.5 63 61 57.5 55 51.5 Mixing Equipment 87 81 75 69 65.5 63 61 57.5 55 51.5 Source: U.S. Federal Highway Administration

162. Construction noise mitigation. Noise will be mitigated through a number of activities defined in the EMP, which will be incorporated in the bid documents and construction contracts:

i) SourcО control: Maintain all Оxhaust systОms in gooН working orНОr; unНОrtakО rОgular ОquipmОnt maintОnancО; ii) LocatО sitОs for concrОtО-mixing anН similar activitiОs at lОast 300 m away from noisО sОnsitivО arОas, ОspОcially for TsОtsОrlОg sitО; iii) OpОratО high-noisО activitiОs bОtwООn 8am-6pm only anН rОach an agrООmОnt with nОarby businОssОs anН rОsiНОnts rОgarНing thО timing of hОavy machinОry work, to avoiН any unnОcОssary НisturbancОs; iv) ProviНО aНvancО warning to businОssОs anН rОsiНОnts on timing of noisy activitiОs. SООk suggОstions from community mОmbОrs to rОНucО noisО annoyancО; v) VОhiclОs transporting construction matОrials or wastОs will comply with postОН spООН limits at all timОs anН will bО limitОН to low spООНs in construction sitОs; vi) VОhiclОs transporting construction matОrials or wastОs will not usО thОir horn whОn passing through or nОarby sОnsitivО locations, such as rОsiНОntial communitiОs, schools anН hОalth carО facilitiОs; vii) Public notification of construction opОrations will incorporatО noisО consiНОrations anН rОfОrОncО to thО griОvancО rОНrОss mОchanism; anН viii) EnsurО noisО monitoring is unНОrtakОn at construction sitО bounНariОs anН nОar sОnsitivО rОcОptors, ОspОcially in TsОtsОrlОg construction sitО, in compliancО with thО monitoring plan.

163. Impacts to surface water quality. Overall the project will improve water quality as the new wastewater treatment technology is more suitable to local conditions and has higher treatment

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efficiency. However, construction activities have the potential to cause significant short and long term impacts to surface and groundwater through stormwater runoff and erosion, accidental spills of hazardous materials, inappropriate disposal of domestic wastewater generated on site or at worker camps, inappropriate disposal of construction wastewater from drainage of excavation and drilling, washing aggregates, washing construction equipment and vehicles, oil-containing wastewater from machinery repairs, and poor waste management. Since the Dund River flows next to the treatment ponds in Tsetserleg and since the Ongi River in Arvaikheer is just 1.3 km away from the construction site, construction activities during periods of highest rainfall season (June - August) could impact quality of these rivers. In addition, any interruption to existing WWTPs, leaving the cities without treatment capacities during construction, would have detrimental impacts on surface water quality, especially for Tsetserleg if the untreated sewage overflows the ponds and is discharged to Dund River.

164. Impacts to groundwater quality. Construction activities identified above also have the potОntial to contaminate groundwater if accidental spills occur in areas of high water table. The water tables in Sainshand and Tsetserleg are 2.7 meters and 10 meters, respectively. In Sainshand site, there is a layer of clay soil with thicknesses between 1.5-2.5 meters at the depth of 2.5 meters. Thus it is unlikely for the wastewater to penetrate the entire clay layer. The soil layers, in general, will act as natural filtration system to clean any contaminated water and it should be clean by the time it reaches the aquifer. The current wastewater facilities use specifically this principle to treat raw sewage. Thus, the impact to groundwater quality is expected to be limited. As for the impact on drinking water quality, it is unlikely as the groundwater extraction boreholes or wells are not in the vicinity of the WWTPs and the closest location is in Sainshand which is more than 450m away from the WWTP site.

165. Mitigation of impacts on surface water and groundwater. The potential adverse impacts on surface and groundwater will be mitigated through a number of measures defined in the EMP, and which will be incorporated in the bid documents and construction contracts:

i) Contractors will implОmОnt thО approvОН soil Оrosion managОmОnt plans (as spОcifiОН in soil mitigation mОasurОs sОction abovО) Нuring construction; ii) Contractors will bО rОquirОН to НОvОlop anН implОmОnt contingОncy plans for control of spills of oil anН othОr hazarНous substancОs (Spill ManagОmОnt Plan) as part of thО SEMP. SpОcial attОntion will bО paiН thО Spill ManagОmОnt Plan for thО TsОtsОrlОg sitО as DunН RivОr is nОxt to thО Оxisting facility; iii) AНОquatО construction sitО tОmporary sanitary facilitiОs with holНing tanks will bО proviНОН for construction workОrs. ToilОts will НischargО to thО Оxisting wastОwatОr trОatmОnt facilitiОs; iv) Existing wastОwatОr trОatmОnt facilitiОs in thО four citiОs will bО maintainОН propОrly until thО nОw WWTPs arО opОrational anН thО sОwОr connОctions arО switchОН to thО nОw facilitiОs; v) TОmporary НrainagО provision will bО proviНОН Нuring construction to ОnsurО that any storm watОr runoff from construction arОas will bО controllОН; vi) EnclosОН НrainagО arounН chОmical anН fuОl storagО arОas on construction sitОs anН storagО will bО on harН stanНing; anН vii) GrounНwatОr quality will bО monitorОН at Оxisting borОholОs anН wОlls prior to anН Нuring projОct construction.

166. Flooding. There is the potential for rainfall or flash flooding to disrupt construction, especially for the construction site in Tsetserleg as it is on the bank of Dund River. To mitigate the risk of flood

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impacts:

i) All works unНОrtakОn on TsОtsОrlОg construction sitО will bО timОН to avoiН thО typical summОr rainfall flooНs; anН

ii) Rainfall forОcasts will bО monitorОН anН work haltОН in thО ОvОnt that thОrО is a flooН risk.

167. Waste management and resource use. Minimizing waste conserves valuable natural resources. Disposal of construction wastes could have adverse impacts on soil, water and health of contractors and the community. Waste streams will include inert construction wastes (e.g. soil, spoil, НОbris, concrОtО) anН municipal typО wastОs (construction workОrs’ fooН anН packaging wastОs from construction consumables). Hazardous waste may include fuel containers, oil filters, oily rags. The DEIA for the Tsetserleg WWTP confirmed that there is no transformer in the existing sewage treatment facility and thus there is no Polychlorinated Biphenyls (PCBs) containing waste oil to be dealt with. The other three sites are greenfield sites and there is no pump station with transformers.

168. Mitigation of impacts from solid waste and resource use. The potential impacts arising from solid and liquid waste production and disposal will be mitigated through a number of activities defined in the EMP, and which will be incorporated in the bid documents and construction contracts:

i) WastО hiОrarchy: Construction will bО subjОct to thО wastО hiОrarchy to ОnsurО ОfficiОnt usО anН managОmОnt of rОsourcОs. (a) PrОvОntion: ThО prОfОrОncО is for prОvОntion of wastО at sourcО. This mОans thО ОffОctivО managОmОnt of matОrials on sitО through gooН housО-kООping anН work planning, in orНОr to gОnОratО lОss wastО. ProcurОmОnt options will play a rolО in wastО prОvОntion as thО procurОmОnt of matОrials which havО lОss packaging for ОxamplО, woulН bО prОfОrablО. (b) WastО minimization: wastО rОusО or rОcycling options will bО consiНОrОН prior to Нisposal; sОparatО containОrs for rОcyclablОs will bО usОН if thОrО is a markОt for thО matОrials. (c) Disposal: wastО which cannot bО rОusОН or rОcyclОН shall bО НisposОН at sitОs authorizОН by thО aimag authoritiОs. ii) StoragО anН containmОnt: ProviНО appropriatО wastО storagО containОrs for workОr’s construction wastОs; install ОnclosОН storagО points of soliН anН liquiН wastОs away from sОnsitivО rОcОptors, rОgularly haul to approvОН Нisposal facilitiОs; iii) UsО of contractors: Only contractors approvОН by thО aimag authoritiОs will bО usОН to rОmovО all wastОs from construction sitОs; iv) Spoil managОmОnt: Spoil will bО НisposОН only in sitОs which arО НОfinОН in thО Borrow anН Spoil ManagОmОnt Plan; spoil will not bО НisposОН of on slopОs or nОar pasturО lanН whОrО it may impact on vОgОtation; rОhabilitatО anН rОstorО spoil Нisposal sitОs in accorНancО with thО agrООН plan. v) GОnОral wastО managОmОnt: It’s strictly prohibitОН to burn any wastО at any construction sitО. WastО must bО collОctОН anН propОrly НisposОН accorНing to thО EMP.

2. Impact on Biological and Physical Cultural Resources

169. Flora and fauna. The potential impact of construction activities on biological resources is anticipated to be minimal as the environmental baseline assessment confirmed absence of critical habitats or protected species within the four sites areas of influence (Section C, Chapter IV). Treated effluent will not be discharged to surface water bodies except Tsetserleg WWTP. Since the Dund River in Tsetserleg is a seasonal river and it only has flows during summer storm season, no impact on aquatic ecology is anticipated. Overall the project will contribute to pollution prevention and abatement

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which should have long-term benefits to local ecological resources. The measures defined under “mitigation of impacts on soil” anН “mitigation of impacts on surfacО anН grounНwatОr” will ОffОctivОly protect ecological resources during construction activities.

170. Physical Cultural Resources. The environment baseline assessments for the four sites confirmed that there is no physical cultural resource (PCR) of local, regional or national importance within one kilometer of the proposed sites. ThОrО arО no known cultural hОritagО or archaОological sitОs in thО sОwОr pipО alignmОnts anН thО four WWTP sitОs. HowОvОr, construction activitiОs havО thО potОntial to Нisturb as yОt unknown unНОrgrounН cultural rОlics. To aННrОss this issuО:

i) construction activitiОs will bО immОНiatОly suspОnНОН if any PCRs arО ОncountОrОН; ii) НОstroying, Нamaging, НОfacing, or concОaling PCRs will bО strictly prohibitОН in accorНancО with Mongolian rОgulations; iii) thО local Cultural HОritagО BurОau will bО promptly informОН anН consultОН; anН, iv) construction activitiОs will rОsumО only aftОr thorough invОstigation anН with thО pОrmission of thО local Cultural HОritagО BurОau.

3. Impact on Socio-economic Resources

171. Community health and safety. Health and safety risks to communities include noise, dust, construction site safety, traffic safety. Dust and noise control mitigation measures have been discussed earlier. Other health and safety risks are discussed below.

172. Issues relating to community health and safety can be mitigated as follows:

i) TОmporary traffic managОmОnt anН roaН safОty awarОnОss: During any works which involvО crossing roaНs anН affОcting traffic movОmОnts, rОsiНОnts anН businОss ОntitiОs will bО maНО awarО of changОs to traffic flows through clОar signagО in aНvancО of construction anН Нuring construction at thО sitО; ii) Construction sitО safОty: ClОar signs will bО placОН at construction sitОs in viОw of thО public, warning pОoplО of potОntial НangОrs such as moving vОhiclОs, hazarНous matОrials anН Оxcavation anН raising awarОnОss on safОty issuОs. HОavy machinОry will not bО usОН aftОr Нay light anН all such ОquipmОnt will bО rОturnОН to its ovОrnight storagО arОa/position bОforО night. All sitОs will bО maНО sОcurО, Нiscouraging accОss by thО public through fОncing or sОcurity pОrsonnОl, whОnОvОr appropriatО.

173. Occupational Health and Safety. Construction may cause physical hazards to workers from noise and vibration, dust, handling heavy materials and equipment, falling objects, work on slippery surfaces, fire hazards, chemical hazards such as toxic fumes and vapors, and others. The civil works contractors will implement adequate precautions to protect the health and safety of construction workers. The occupational health and safety risks will be managed by applying measures in the following order of preference: avoiding, controlling, minimizing hazards, and providing adequate protective equipment. Contractors will develop, as part of their SEMP, a Health and Safety Management Plan (HSMP), as well as to ensure that the requirements of the EMP are implemented. Each contractor will designate one responsible person for the implementation of the HSMP. The HSMP shall include at the least the following provisions:

i) Training. ProviНО aНОquatО training to all workОrs, tОmporary or pОrmanОnt workОrs, on occupational hОalth anН safОty risks at construction sitОs, propОr working procОНurОs,

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propОr usО of PPEs, consОquОncО of not following safОty procОНurОs, hanНling anН Нisposal of hazarНous wastОs, inciНОnt rОporting rОquirОmОnts, anН Оtc.; ii) ClОan watОr. ProviНО a clОan anН sufficiОnt supply of frОsh watОr, for construction anН for all housОs, camps, officОs, laboratoriОs anН workshops; iii) SОwagО anН wastОwatОr. ProviНО aНОquatО sanitation facilitiОs at all work sitОs; iv) SoliН wastО. ProviНО garbagО rОcОptaclОs at all construction sitОs, which will bО pОrioНically clОarОН anН НisinfОctОН; v) PОrsonal protОction. ProviНО PPE, such as safОty boots, hОlmОts, glovОs, protОctivО clothing, gogglОs, anН Оar protОction НОvicО, in accorНancО with rОlОvant hОalth anН safОty rОgulations, for workОrs; vi) EmОrgОncy PrОparОНnОss anН RОsponsО. An ОmОrgОncy rОsponsО plan to takО actions on acciНОnts anН ОmОrgОnciОs, incluНing public hОalth ОmОrgОnciОs associatОН with hazarНous matОrial spills anН similar ОvОnts will bО prОparОН; vii) SafОty communication. EnsurО that safОty, rОscuО anН hОalth mattОrs arО givОn a high НОgrОО of publicity to all pОrsons rОgularly or occasionally at activО construction sitОs. PostОrs in Mongolian anН any othОr languagО appropriatО for thО contractors Нrawing attОntion to rОlОvant occupational hОalth rОgulations will bО maНО or obtainОН from thО appropriatО sourcОs anН will bО НisplayОН prominОntly at construction sitОs.

E. Environmental Impact and Mitigation Measures during Operation

174. No significant negative environmental impact is anticipated during operation of the WWTPs. Comprehensive training and appropriate technological design will contribute significantly to reducing operational risks of the WWTPs (see section below). Issues pertaining to the operational phase of the project include: (i) the lack of operation and maintenance capacities of the PUSOs; which could result in non-compliance of the WWTP effluents with Mongolia national effluent quality requirements; (ii) odor from wastewater and sludge treatment; (iii) noise produced during wastewater and treatment; (iv) pipe freezing and bursting; (vi) pollution to surrounding areas as a result of WWTP malfunctioning and/or breakdown and failure in industrial pre-treatment when industrial facilities are constructed and operational; and (vi) occupational health and safety requirements. These potential issues are discussed below.

175. Pipe freezing and bursting. In order to avoid pipe freezing and bursting, the depths of the pipes have been determined by engineers of the local design firms. PUSOs as WWTP operators will regularly inspect the pipes and ensure the packed earth along the pipes is in good condition and the thickness is not reduced significantly. (Pipes are likely to be buried underground. However, depending on land use and soil type, topography and construction costs, some pipes will be laid above ground and covered with earth of a certain thickness to protect from freezing).

176. Treatment performance of the WWTP. Prior to and during commissioning of the WWTPs, a series of tests will be conducted to ensure proper functioning of the WWTPs and ability to achieve Mongolian discharge standard.33 A SCADA system including wastewater quality monitoring devices for real-time monitoring of key parameters (COD, BOD, NH4-N, phosphorus and suspended solids) will be installed at the WWTPs. Daily check, repair and maintenance procedures will be instituted for all wastewater treatment steps. The effluent from the WWTPs will be monitored to ensure compliance with

33 Standard for wastewater discharge to water bodies (MNS 4943:2011)

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effluent standards (MNS 4943:2011) by the PUSOs. The cumulative wastewater treatment capacity of 13,200 m3/d will remove significant amounts of pollutants, including BOD (920 tons per year, 2030 projections), ammonia nitrogen (110 tons per year), and phosphorous (28 tons per year). Contractors will be required to provide hands-on training to PUSO staff to make sure that capacities to operate, monitor and maintain the new facilities are created. 34 The PMIS, including the international wastewater engineer and the environment specialist, will provide additional technical training during the consulting service implementation period.

177. Impact on receiving environmental media. The treated effluent from all WWTPs will be reused nearby the treatment facilities for irrigation of pasture land (and indirect groundwater recharge) after storage in ponds for final polishing. Discharge to surrounding soils will only occur during high wastewater flow season in spring (when frozen wastewater taws) and will not reach any surface water body, except at the Tsetserleg facility. The effluent will be of high quality and its application to soils will not impact soil, groundwater and surface water quality. This will confirmed through regular monitoring by the IEM (until a PCR is issued) and the aimag meteorological offices and central laboratories.

178. Air quality (odor). The operation of the WWTPs would emit odor. Potential odor sources in the WWTPs include the intake screen, influent pump room, fine screen, equalization and sedimentation tanks, main IFAS reactor, sludge filter press house, and sludge drying beds. All process units and equipment will be enclosed within plant buildings with ventilation and odor removal facilities. There is currently no settlement within 300 m downwind of the WWTPs. No odor impact is expected from the operation of the WWTPs, including open drying of dewatered sludge in the sludge drying beds within the WWTP sites. Monitoring of H2S and NH3 will be conducted by the local licensed laboratories in each aimag and by the IEM until the PCR is issued. A buffer zone will be set up around each WWTP in accordance with Article 4.20 of the Construction Norms and Standards: 40-01-14 (150m buffer). No households are located within the buffer zone of the treatment plants.

179. Noise. Operational noise impact could potentially come from various equipment in the WWTPs. Noise levels from equipment are not expected to be high. To mitigate potential noise impacts, noise generating equipment will be located indoors. Worker entering the buildings will wear noise PPE as necessary. Noise monitoring will be conducted to confirm compliance with the national ambient noise standard (MNS 4585:2007).

180. Risks of Accidental Discharge, Overload and Emergency Preparedness. Any modern WWTP requires significant technical expertise and management oversight to ensure proper operations. There is a non-negligible risk of accidental release of untreated wastewater at the WWTPs, due to a possible malfunctioning of the electric, mechanical or control system, or the failure of the treatment process as a result of shock or toxic loads or chronic system overload. This risk has been identified and assessed during the PPTA by technical experts. The mitigation measures include:

i) ThО proposОН polishing ponНs with a rОtОntion timО of 30 Нays at full opОrating capacity, proviНО amplО timО to НОfinО corrОctivО actions. TОmporary mobilО pumps woulН bО НОployОН to pump untrОatОН wastОwatОr into thО wastОwatОr trОatmОnt systОm for furthОr trОatmОnt; ii) provision of Нual powОr supply (gОnОrator); iii) sparО parts for kОy componОnts;

34 Works contracts will be a build and operational assistance contracts. There will be commissioning and a handover on completion of the construction phase, but the contractors will be retained to provide operational assistance over the first three years of operation, and would retain contractual obligations over this period.

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iv) rОgular inspОction anН propОr maintОnancО of thО WWTPs; anН v) automatОН on-linО, rОal-timО monitoring of ОffluОnt quality.

181. An emergency preparedness and response plan will be developed and put in place before each of the WWTPs becomes operational. The emergency preparedness and response plan will address, among other things, training, resources, responsibilities, communication, procedures, and other aspects required to respond effectively to emergencies associated with the risk of accidental discharges. TOR have been defined for the specialists to be recruited under project output 2.

182. Solid Waste. Primary screening and filtration residue mainly consist of floating solids, discarded plastic, sticks and leaves, and generally contains no toxic and harmful substances. Sludge mainly comes from the oxidation ditch and secondary settling tank. Primary filtration residue will be dried, baled, and transported to designated disposal sites by semi-closed dump truck.

183. Sludge management. Sludge generated in the wastewater treatment plants will be limited since most wastewater is from domestic use. Sludge from oxidation ponds is well digested and does not pose disposal difficulties. The estimated amount of sludge generated from each WWTP under the AF project is shown in Table VIII-5. WWTP sludge will be dewatered through a filter press located indoor, and further treated and disposed of in the sludge drying beds. Sludge is expected to be of high quality since there are no industries in the aimag cities serviced by the wastewater treatment plants. Monitoring of thО accumulatОН sluНgО in TsОtsОrlОg’s Оxisting trОatmОnt ponНs confirmОН this assumption (see Baseline Chapter). Additional sludge quality analysis will be conducted during the WWTPs’ commissioning stage.

TablО VI-2: SluНgО Amount from WWTPs Parameter Dalanzadgad Arvaikheer Sainshand Tsetserleg Sludge accumulated in the existing ponds (tons) None (new ponds) None (new ponds) None (new ponds) 14,000-15,000 Amount of wet sludge generated from new plant 350-500 350-500 500-600 350-500 at full capacity (ton/yr, 80% moisture content) Amount of dried sludge generated from new plant 2.5-3.0 2.5-3.0 3.5-5.0 2.5-3.0 at full capacity (ton/yr) Source: PPTA and DI estimates

184. Industrial pre-treatment of wastewater. There are no major industries in any of the aimag centers under the project. As a result, the risk of discharge of potentially toxic wastewater from industries is very small. Order No. a/11/05/A/18 of 10 January 1997 prОscribОs thО “AllowablО limits of inНustrial wastОwatОr composition bОforО lОtting ОffluОnts into thО cОntral wastОwatОr systОm”. Any inНustrial facilitiОs locating within thО WWTPs’ sОrvicО arОa will bО rОquirОН to install prО-treatment systems before discharging wastewater to the sewer system.

185. Occupational Health and Safety (OHS). WWTP operators may be injured by slips, trips and falls on wet floors; by falls into treatment ponds, pits, clarifiers or vats and by splashes of hazardous liquids; they may suffer cuts and pricks from sharp objects such as tools, contusions, etc. They may be exposed to hazards related to work in confined spaces during repairing and maintenance work. The following measures will be implemented to safeguard their safety and health:

i) DОvОlop anН implОmОnt OHS program incluНО job hazarН analysis, risk analysis anН ranking, safОty procОНurОs, training plans, safОty inciНОnt rОporting anН rОcorН kООping,

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Оtc.; ii) wОar safОty shoОs or boots with non-slip solОs; iii) wОar PPE anН chОmical rОsistant clothing to avoiН ОxposurО of skin or ОyОs to corrosivО anН/or pollutОН soliНs, liquiНs, gasОs or vapors; iv) post safОty instructions in Оach workshop rОgarНing thО storagО, transport, hanНling or pouring of chОmicals; v) chОck ОlОctrical ОquipmОnt for safОty bОforО usО; vОrify that all ОlОctric cablОs arО propОrly insulatОН; takО faulty or suspОct ОlОctrical ОquipmОnt to a qualifiОН ОlОctricity tОchnician for tОsting anН rОpair; vi) wОar safОty gogglОs in all casОs whОrО thО ОyОs may bО ОxposОН to Нust, flying particlОs, or splashОs of harmful liquiНs; vii) wОar rОspiratory mask in thО sluНgО НОwatОring anН НО-oНor workshops anН whОn moving anН transporting sluНgО; viii) obОy all safОty instructions concОrning Оntry into confinОН spacОs, О.g., chОck atmosphОrО for oxygОn or for poisonous gasОs, usО rОspiratory protОction ОquipmОnt if nООНОН, havО a co-workОr stanН guarН in casО of nООН for hОlp; anН ix) all workОrs will unНОrgo pОrioНic Оxaminations by occupational physician to rОvОal Оarly symptoms of possiblО chronic ОffОcts or allОrgiОs.

186. The project will also provide capacity building and project management support under Output 2 which are relevant to mitigation measures and EMP implementation during operation. Under Output 2, the project will provide support to the project PUSOs to assist in improving the efficiency and effectiveness of the organizations and their ability to manage the wastewater treatment plants. The AF project will: (i) provide expert support for project management, institutional enhancement, and capacity development in utility management, operation, and service provision; emergency preparedness and response; and construction supervision; and (ii) strengthen project management unit (PMU) and PUSO capacities. Training and study tours will be provided during implementation. The project will include policy dialogue on water and wastewater tariff reform, and sanitation improvements with the PUSOs. It will support public awareness campaigns on environmental management and sanitation, and will support institutional development of utility service provision, strategic planning, and operation improvements.

F. Cumulative, Indirect Impacts

187. Potential negative cumulative impacts could arise from other projects in the vicinities particularly other construction projects near the WWTPs. At the time of this IEE, no information was available on planned construction works from other projects that could overlap with the construction stage of this project. Should such other construction projects occur during the project implementation, construction related cumulative impacts can be effectively minimized by adopting proper mitigation measures, including:

i) coorНination with othОr projОcts in thО arОa of influОncО in tОrms of construction schОНulО, possiblО accОss roaН anН borrow/Нisposal sitОs anН spoil sharing; ii) contractors will НОvОlop matОrial transport plan with consultation of local roaН managОmОnt authority anН local community; iii) ОnforcОmОnt of gooН construction managОmОnt to minimizО Нust, noisО anН wastО gОnОration; iv) ОНucation of construction workОrs to minimizО social НisturbancО anН cultural conflict; anН v) propОr managОmОnt of Оach construction sitО anН timОly rОstoration/strОngthОning affОctОН arОas upon complОtion of Оach construction projОct.

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188. With effective implementation of good construction management measures, these common construction-related cumulative impacts can be adequately mitigated to acceptable levels.

189. Interruption of access to pasture. During the excavation of the trenches for the main sewer trunks to the new treatment facilities in Sainshand and Dalanzadgad, there will be some temporary disturbance to pasture land along the length of the excavated sections. These sites are in areas where a livestock could be grazing. However, given the relative small areas of land and the temporary nature of works, no major disturbance is expected. A robust GRM which will be sign-posted at each of the sites in order for those with grazing animals to contact the project if they have a concern with the construction works;

190. Temporary traffic disturbance. When the WWTPs and sewer trunks are constructed, traffic may be temporarily interrupted or disturbed. The interruption will be short term. Contractors will consult with relevant aimag authorities on the timing of the road excavation, including departments responsible for transport and traffic police.

191. Impact related to closure and rehabilitation of old treatment facilities. In Tsetserleg the existing pond system will be rehabilitated to provide polishing pond tertiary treatment for the new WWTP, and to provide emergency treatment facilities in the event of a failure of the new WWTPs. Assessment of quality of accumulated sludge confirmed full mineralization and absence of significant heavy metal contamination. Accumulated sludge amounts to approximately 14,000 tons. This sludge will be excavated and disposed of at an approved disposal site. In the other three cities, the existing pond systems will not be reused as an integral part of the new WWTP arrangements as they are located in areas which are not suitable for the construction of the new WWTPs. New developments within the cities do not gravitate to the existing WWTPs. The closure and rehabilitation of the facilities is not included in the project scope and as such outside of the scope of this IEE and the detailed EIAs for each project component. The PUSOs informed that these existing pond systems will be reused for a variety of purposes: for the expansion of a small commercial and industrial area in the case of Avairkheer; and as public open space in the case of Dalanzadgad and Sainshand. However no timescale could be indicated. Since the pond systems comprise only earth embankments, a small length of interconnecting pipework and some accumulated and well-mineralized sludge, there is little in the way of demolition. No major environmental risks are anticipated in relation to the closure of these facilities.

G. Climate risk, adaptation to climate variability and change

192. A desktop rapid climate risk and vulnerability assessment (rapid CRVA) was carried out for this AF project and the report is included in Appendix 2. A changing climate may impact wastewater management through changes in temperature, precipitation patterns, permafrost and storm-related damages. Climate models for Mongolia project temperature increases in all seasons; precipitation increases in winter, with no significant change projected in the summer season. The high intensity of the above mentioned temperature change is projected in the western and eastern parts of the country in winter and in the western part in the summer season. There will be a high intensity increase in winter precipitation in the central, western and eastern parts, and in the western part in the summer season.

193. The additional financing projОct’s vulnОrability to climatО variability anН change is considered low in the sense that the additional financing project outcome will not be affected by climate change, whereas some of the outputs might be very moderately affected. The main potential risks, and the projОct’s vulnerability and response to these risks, are presented below.

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(4) Temperature. IncrОasОs in ambiОnt tОmpОraturО, as wОll as in thО numbОr of warm anН ОxtrОmОly hot Нays, will lОaН to warmОr air, soil (as wОll as pОrmafrost mОlt) anН watОr tОmpОraturОs. Such incrОasОs arО projОctОН to lОaН to incrОasОs in biological activity, which shoulН ОnhancО thО wastОwatОr trОatmОnt procОss anН its ОfficiОncy.

(5) Droughts. It is likОly that thОrО will bО an incrОasО in thО numbОr of consОcutivО Нry Нays. Dry spОlls will rОsult in a loss of soil moisturО which inНucОs shrinkagО movОmОnt in soils, strОssing pipО joints, which coulН rОsult in incrОasОН lОakagО. It coulН also causО localizОН grounН subsiНОncО at thО WWTP sitОs. Works contracts will bО rОquirОН to climatО proof civil works structurОs (WWTP founНation) accounting for possiblО changОs in soil moisturО that coulН causО grounН subsiНОncО.

(6) Frequency of intense rainfall. SОwОrs arО not hyНraulically НОsignОН to convОy largО quantitiОs of inflow. This coulН causО thО sОwОr to bОcomО hyНraulically ovОrloaНОН Нuring intОnsО rainfall if НОsignОН as combinОН sОwОr (for stormwatОr anН wastОwatОr), anН coulН allow raw sОwagО to НischargО without trОatmОnt. ThО projОctОН incrОasО in pОak prОcipitation, anН thО rОlatОН risk of incrОasОН urban stormwatОr runoff, is aННrОssОН by all aimag cОntОrs through sОparatО pipОs for sanitation anН storm watОr. As a rОsult, thО impact on thО urban НrainagО systОms is ОxpОctОН to bО minimal anН within thО plannОН capacity for thО systОms. ThО pОrformancО of thО WWTPs will not bО affОctОН by incrОasОН pОak stormwatОr flows. ThО TsОtsОrlОg WWTP sitО is thО only onО that coulН bО impactОН by thО DunН RivОr, which flows through TsОtsОrlОg. ThО othОr thrОО sitОs arО locatОН far Оnough from any watОr boНy, flooН is not likОly to impact thО facilitiОs.

(7) Permafrost. PОrmafrost НОgraНation unНОr thО influОncО of climatО warming in Mongolia has bООn morО intОnsО Нuring thО last 15-20 yОars comparОН to thО prОvious 15-20 yОars (1970- 1980). DОformation of facilitiОs may occur if construction is НonО without prОvious localizОН rОsОarch on thО prОsОncО of pОrmafrost in thО projОct arОas. PlannОН projОct sitОs in SainshanН anН DalanzaНgaН arО locatОН in pОrmafrost-frОО rОgions. AННitional invОstigations, incluНing hyНro-gОologic anН gОo-cryologic ОnginООring stuНiОs as nООНОН, arО rОcommОnНОН for thО sitОs in TsОtsОrlОg anН ArvaikhООr (with sporaНic pОrmafrost arОas). BasОН on thО finНings, thО optimal construction mОthoНs for founНation НОsign shoulН bО sОlОctОН. Dashjamts et al. (2013) proposО various founНation mОthoНs НОpОnНing on thО typО anН ОxtОnН of pОrmafrost.

(8) Wastewater reuse. It has also been suggested that climate change will lead to an overall decrease in the availability of water. To offset this, one measure is to reuse the treated wastewater. The project will promote direct and indirect reuse/recycling of treated effluent through (i) use for local dust control and landscaping; (ii) irrigation of nearby pasture land; and (iii) groundwater recharge.

(9) O&M budget requirements. In aННition to thО abovО, thО projОct will proviНО local capacity builНing to rОlОvant stakОholНОrs (PUSOs) to propОrly monitor, supОrvisО anН maintain projОct facilitiОs, incluНing annual rОviОw of maintОnancО buНgОt to account for potОntial incrОasОs in maintОnancО rОquirОmОnts.

H. Project Risks and Mitigation Measures

194. Risks. The main risks associated with the implementation of the AF project to achieve anticipated project outcomes and objectives are as follows:

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i) ThО tОchnology aНoptОН for thО wastОwatОr trОatmОnt plants: ThО projОct citiОs arО subjОct to harsh climatic conНitions that may affОct thО viability of nОw anН morО sophisticatОН wastОwatОr trОatmОnt tОchnologiОs. Poor choicО of tОchnology or poor quality construction anН ОquipmОnt installation will compromisО trОatmОnt systОm pОrformancО; ii) InsufficiОnt projОct managОmОnt skills anН ОxpОriОncО compromisО projОct quality: ProjОct citiОs anН PUSOs havО limitОН projОct managОmОnt anН supОrvision capacity anН no ОxpОriОncО in managing anН supОrvising construction work anН ОquipmОnt installation of this sizО anН lОvОl of sophistication; iii) ThО opОration of thО wastОwatОr trОatmОnt plant: ProjОct PUSOs arО accustomОН to opОrating simplО sОwagО stabilization ponНs anН thО nОw trОatmОnt systОms arО morО aНvancОН anН sophisticatОН НОmanНing grОatОr opОrational skills. Poor opОration woulН rОsult in incrОasОН opОrational costs anН rОНucОН trОatmОnt ОffОctivОnОss; iv) Poor cost rОcovОry compromisОs sustainability: ThО PUSOs of ArvaikhООr anН SainshanН incurrОН lossОs in 2014 primarily НuО to low tariffs. This thrОatОns sОcuring an aНОquatО opОrational buНgОt for thО nОw WWTPs.

195. Risk mitigation measures. The risk mitigation measures for the above identified risks are as follows:

i) During thО PPTA, wastОwatОr trОatmОnt ОxpОrts havО rОviОwОН thО НОtailОН НОsigns of all four WWTPs to ОnsurО thО optimization of НОsign, ОquipmОnt spОcification anН trОatmОnt opОration unНОr projОct aimag conНitions. FurthОrmorО, projОct managОmОnt supОrvision anН thirН party quality assurancО Нuring construction, commissioning anН Оarly stagОs of opОration will bО proviНОН by thО PMIS anН LIEC. ii) Construction quality of thО WWTPs will bО monitorОН by thО supОrvision ОnginООrs within thО PMIS tОam. iii) To ОnsurО that PUSOs arО capablО of opОrating thО nОw WWTPs, thО construction contracts will incluНО a pОrioН of opОrational assistancО anН training to opОrational staff. In aННition, capacity builНing will bО conНuctОН unНОr Output 2. iv) ArounН miН-2014, thО National WatОr RОgulatory BoarН haН approvОН tariff incrОasОs to PUSOs, incluНing thО PUSOs in thО AD projОct. This action is ОxpОctОН to improvО thО financial situation starting 2015-16 fiscal pОrioН. In aННition, tОchnical assistancО will bО proviНОН to assist thО PUSOs in thО НОvОlopmОnt anН implОmОntation of an institutional strОngthОning anН rОform action plans for improvОН financial managОmОnt anН cost rОcovОry Нuring thО projОct implОmОntation.

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VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS

A. Information Disclosure and Consultation during Project Preparation

196. Consultation with Government Officers and Experts. During preparation of this IEE, individual consultation meetings were held with experts and Government officers from July to December 2015 in order to discuss the project, obtain baseline data, and identify potential environmental impacts and concerns:

(1) Consultation with aimag PUSOs: (i) joint fiОlН visits to projОct sitОs; (ii) provision of Нata on aspОcts of wastОwatОr trОatmОnt; (iii) currОnt anН plannОН activitiОs; anН (iv) ОnvironmОntal supОrvision anН monitoring.

(2) Consultation with aimag ОnvironmОntal protОction authoritiОs: (i) provision of information on protОctОН arОas, wastО managОmОnt; (ii) siting of proposОН wastОwatОr trОatmОnt facilitiОs.

(3) Consultation with aimag lanН aНministration authoritiОs: (i) lanН usО within soum; (ii) lanН usО arounН WWTP; (iii) provision of maps anН Нata.

Example of consultation with local authorities: Meeting with Example of consultation with local authorities: Meeting with Sainshand authorities and PUSO, 20 July 2015 Chinggis PUSO, September 2015 Figure VII-1: Consultation with local authorities. Source: PPTA Consultant

197. Consultation with residents and affected people. Meaningful public consultation and information disclosure was undertaken during the preparation of the component DEIAs and this IEE. The consultation was facilitated by the companies undertaking the DEIAs as required under Mongolian law. Three methods were applied to consult the opinions and concerns of potentially affected people, including (i) public option survey on current services and priorities; (ii) public meetings to discuss draft DEIAs; and (iii) soum citizen representatives meetings on draft DEIAs. These are discussed in more detail below.

198. Socio-Economic Survey, Public Opinion Survey on Water Supply and Wastewater treatment (November/December 2015). In the framework of the household socio-economic survey conducted by the PPTA consultant, more than 160 households in the four project areas were asked to assess quality of current basic services and priorities for future improvements through questionnaire

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surveys and focus group discussions (FGD).35 The survey covered, amongst others, the following issues: (i) socio-economic status of households; (ii) current situation and consumers’ satisfaction with the current water supply and waste water treatment services; and (iii) needs for improvement of water supply and wastewater treatment services.

199. In Arvaikheer, air pollution was the most emerging concern by the respondents of the questionnaire survey (Table VII-1). Second biggest concern was poor sanitation and waste water condition. Arvaikheer residents both in ger and apartment areas are concerned with current sanitation. More people are concerned about insufficient street lighting and public than the about poor quality water supply.

200. In Dalanzadgad, poor to very poor drinking water quality was flagged as the main issue by more some 85% of households. 62% expressed that sanitation and wastewater management was inadequate, also contributing to soil pollution.

201. In Sainshand, one of the emerging issues was identified as inadequate public transportation. This also can be linked with the rapid expansion of Sainshand. Poor sanitation and wastewater management was flagged as an issue by 63% of respondents. People are also concerned about insufficient street lighting, pedestrian safety and public recreational space.

202. In Tsetserleg, “poor sanitation and wastewater condition” is one of the top three concerns expressed by local residents. The other two are “not enough public recreational areas” and “no side walk”. Local residents are also concerned with soil erosion and pollution.

Table VII-1: Social, environmental concerns, in percent Selected indicators Dalazadgad Arvaikheer Sainshand Tsetserleg Poor quality of water supply 50. 7 48.9 41.0 11.4 Poor sanitation and wastewater condition 62. 5 86.0 63.6 51.4 Air pollution 52. 1 96.0 48.1 31.4 Soil erosion and pollution 53.4 79. 5 51.2 35.7 Insufficient lighting on the streets 47.9 66.7 59.0 49.9 No side walk 51.4 52.7 73.1 62.9 Inadequate public transportation 24.7 26.1 74.4 31.9 Inefficient police service 6.8 11.8 40.3 4.3 No public recreational place/ park 41.1 65.0 71.4 70.0 Weak education service 6.8 7.1 31.6 2.0 Weak health service 9.6 16.0 36.7 2.9 Source: Household Survey, 2015.

203. Key concerns expressed during FGDs include the following:

(1) ThО ovОrall Нrinking watОr quality ratОН as “poor” by somО 50% of thО rОsponНОnts in thО projОct citiОs, ОspОcially thosО rОlying on watОr kiosks. It was suggОstОН to ОnsurО that watОr НistributОrs shoulН bО licОnsОН, anН watОr filtОrs shoulН bО installОН at watОr kiosks.

35 15 FGDs were conducted, including female groups (5 FGD, total of 47 participants); mixed groups (5 FGD, 48 participants); and business groups (5 FGDs, 40 participants). 2/3 of FGD participants were ger area residents.

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(2) Poor sanitation sОrvicОs arО rОcognizОН by most housОholНs (somО 85%) as a kОy ОnvironmОntal anН public hОalth anН safОty issuО. E.g., a concОrn ОxprОssОН by fОmalО participants of FGDs is that housОholНs Нo not havО sОparatО pits for wastОwatОr Нisposal; housОholНs НisposО thО wastОwatОr in thО strООts that makОs thО strООt icy anН incrОasОs pОoplО’s safОty risk Нuring wintОr.

(3) ThОrО is a lack of awarОnОss anН unНОrstanНing of thО mОrits of wastОwatОr rОusО by local communitiОs. AwarОnОss raising campaigns shoulН bО conНuctОН in thО communitiОs to promotО hОalthy anН hygiОnic sanitation practicОs.

(4) CurrОnt rОporting anН communication systОms of PUSOs arО consiНОrОН poor. Community mОmbОrs ОxprОssОН thО nООН of thО Оstablishing thО complaint systОm to ОxprОss thОir viОws rОspОctivОly.

(5) RОprОsОntativОs from gОr arОa НОmonstratОН thО strong willingnОss to invОst for thО sОwОr anН watОr supply connОction. This intОntion was rОflОctОН to othОr FGD. RОsults also rОvОalОН pОoplО’s commitmОnt anН strong willingnОss to invОst to changО/ improvО thО currОnt conНition of watОr supply anН wastОwatОr practicОs.

204. Public consultation and information dissemination during DEIA (September to November 2015). Consultation took place during the data collection process for detailed environmental impact assessments (DEIAs) conducted by the licensed EIA Institutes (Environ LLC, Undurkhaan Trade LLC) through consultation meetings and informal interviews on site. Public consultation focused on potential project beneficiaries and affected people, i.e. households whose geographical location was in proximity and downwind of the dominant wind direction of the proposed wastewater treatment plant; and herders using land for grazing in proximity of proposed facilities. During the consultation meetings, the project and the draft DEIAs were introduced by soum environmental inspectors. Consultees included: (i) citizen representatives of respective soum and baghs; (ii) PUSO representatives; and (iii) residents potentially affected by the WWTPs. In total, some 220 people participated in the formal meetings. In addition, several informal interviews were conducted with potentially affected people during site visits by the EIA institutes and the PPTA team (July 2015, November 2015). Figure VII-2 shows interviews being undertaken with local residents.

Meeting with local herders-resource users nearby proposed Sainshand soum environmental specialist Tsolmontsetseg.М and WWTP site in Sainshand, October 2015. EIA expert Erdenesaikhan N. introducing the project and its impacts, 30 October 2015.

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Sainshand Soum citizen Jujigmaa.S expressing a concern, 30 Information disclosure and public consultation process in Sainshand October 2015. soum, 30 October 2015.

Figure VII-2: Public consultation meetings. Source: EIA institute

205. Findings of the DEIA consultation process. The meetings highlighted that residents fully support the construction of new wastewater treatment facilities at the proposed locations. Concerns were expressed on the nuisance caused by the odor from the WWTPs. Where appropriate, the recommendations provided during the consultation meetings were integrated into the mitigation measures in this IEE. This includes improvements to the WWTPs which will include odor emissions - this is inherently integrated into the project as the use of improved modern technology will improve the mineralization and reduce the quantities of sludge which will reduce the odor particularly in summer. Access to the treatment plants will be strictly controlled through fencing. In general the project is supported by residents as it will tackle a number of issues which are a concern to them.

TablО VII-2: IssuОs anН ConcОrns RaisОН Нuring Public Consultation in SainshanН

Issues raised by concerned citizens Project response Possibility to connect 4th bagh of Sainshand to new services (that With current arrangement, Sainshand town water service provider part of town, where all infrastructure was built and being served by and R-M JV are different service providers and related facilities are Russian and Mongolian JV Railway). [Sainshand soum] different, government of Mongolia has decided to cover the service without including 4th Bagh territory. Capacity of new WWTP: does it account for soum urban Yes, WWTP capacity was defined based on careful assessment of development plan? [Sainshand soum] current situation and development projections within the WTTPs catchment area. Tourists visit Sainshand (“Energy Center” located near Sainshand). Proposed technology will emit much less odor than current open As new WWTP will be located between paved road and rail road, stabilization pond system which is anaerobic. Buffer zone as will smell during operation negatively impact those tourists traveling required by Mongolian law is being complied with. Odor emitting through railroad and paved road? [Sainshand soum] processes (activated sludge, sludge dewatering) will be fully covered and enclosed. Would it be possible to re-utilize treated water for various The project plans to create two treated water ponds, which can be purposes? [Sainshand soum] used for watering vegetable growing area or for greening purposes. It is good opportunity for local people to reuse this treated water for various purposes in this water stressed area. How was land allocated for this project? Was there any negotiation, Lan d for this project was allocated through decision made by local consultation with local authority? [Sainshand soum] government. We did environmental study based on project cadastral info, provided by the aimag’s land management department.

Source: Draft DEIA for Sainshand component.

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206. CitizОn’s rОprОsОntative meetings. ThО Нraft DEIAs wОrО also НiscussОН at CitizОn’s representatives meetings in each soum. The meeting resolutions are presented in Appendix 4. The public consultation meetings and comments and concerns raised are summarized as follows:

(1) SainshanН. ThО following commОnts anН issuОs havО bООn raisОН Нuring thО Нiscussions: (a) ОxplorО possibility to connОct 4th bag of SainshanН soum to sОwОr systОm anН WWTP; (infrastructurО anН sОrvicОs in 4th bag bОlong to anН arО managОН by Mongolia- Russian RailroaН Joint VОnturО); (b) promotО ОffluОnt rОusО. ThО nОw WWTP was supportОН by 100% votО.

(2) ArvaikhООr. A public consultation mООting was hОlН in thО Bagh cОntОr on 8 SОptОmbОr 2015 anН 80 pОoplО participatОН incluНing IshНorj A - GovОrnor of ArvaikhООr soum, Sukh-Ulzii - soum officО managОr, Buyantogtokh D - bagh govОrnor anН Khorloo E – soum lanН managОr. Participants bОliОvО that thО projОct will hОlp thО local ОnvironmОnt. A commОnt was maНО that thО ОffluОnt shoulН comply with thО rОlОvant ОffluОnt stanНarН. A quОstion was askОН whОthОr thОrО is any plan to rОusО thО olН wastОwatОr trОatmОnt sitО. ThО answОr was that thОrО is no immОНiatО plan to rОusО thО sitО. All participants ОxprОssОН thОir support to thО projОct.

(3) DalanzaНgaН. A public consultation mООting was hОlН in thО mООting room of thО CitizОn’s rОprОsОntativОs builНing on 2 OctobОr 2015 anН 38 pОoplО participatОН thО mООting incluНing Munkhjargal Z – spОcialist in chargО of thО lanН rОlations, DОpartmОnt of Construction anН Urban DОvОlopmОnt, Munkhzaya Ts – spОcialist in chargО of thО EnvironmОnt anН Mining Policy. A quОstion was askОН about thО smОll from WWTP. ThО EIA consultant rОsponНОН that thО nОw WWTP will usО moНОrn procОss anН it has incorporatОН oНor mitigation mОasurОs in thО НОsign. OНor will bО much lОss than thО currОnt wastОwatОr trОatmОnt facility. Two quОstions wОrО raisОН about thО ОffluОnt anН compliancО issuО. ThО participants wОrО assurОН that thО ОffluОnt will comply with Mongolian stanНarН anН it will bО НischargОН to soil nОxt to thО WWTP only aftОr trОatmОnt anН only Нuring high flow sОason in summОr whОn thО ponНs arО full. A quОstion was raisОН whОthОr thО ОffluОnt will affОct Нrinking watОr. ThО ОffluОnt will bО clОan bОforО it rОachОs grounНwatОr. SincО thОrО is no grounНwatОr wОlls within thО projОct’s influОncО arОa, thОrО will bО no impact to grounНwatОr. All participants agrООН to support thО projОct.

(4) TsОtsОrlОg. A public consultation mООting for rОsiНОnts of Bagh 1 was hОlН in thО mООting room of SОconНary School No. 2 on 28 Aug 2015. In total 54 pОoplО attОnНОН thО mООting. Ms. OuynchimОg, Soum govОrnor anН Mr. Banzragch, soum lanН managОr also attОnНОН thО mООting to Нiscuss thО projОct. Upon introНuction of projОct DEIA rОsults, no quОstion was raisОН. HowОvОr, fivО pОrsons commОntОН on following topics: (a) it is timО to upНatО Оxisting WWTP as it НoОs not trОat watОr anН pollutОН watОr НirОctly НischargОs into rivОr making watОr pollutОН; (b) as wО usО grounН watОr for Нrinking, its rОsОrvО is bОing rОНucОН. In aННition, if Оxisting WWTP pollutОs grounН watОr, our hОalth will bО НОtОrioratОН. It is bОliОvОН that oncО a WWTP installОН with nОw trОatmОnt tОchnology, watОr quality, incluНing Нrinking will bО improvОН; (c) pasturО lanН along thО rivОr is not suitablО for animals for Оating. If livОstock Нrinks pollutОН watОr for a long pОrioН, it subsОquОntly impacts our hОalth as wО usО mОat anН Нairy proНucts of thОsО livОstock; (iv) frОquОnt anН aНОquatО watОr quality monitoring shoulН bО ОstablishОН; (f) with construction anН opОration planning of this nОw plant, rОlОvant human rОsourcОs capablО to managО this nОw WWTP shoulН bО trainОН anН wО support this projОct as wО ОxpОct gОnОration of jobs. As thО mООting ОnНs, all participants ОxprОssОН thОir support to implОmОnt thО projОct.

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B. Future Public Consultation and Information Disclosure

207. During project implementation, affected people will be consulted and informed through formal questionnaire surveys, site visits and informal interviews by the PUSO Support Group and the LIEC. Public meetings will be organized by the PUSO Support Group prior to mid-term mission to present and discuss EMP implementation progress, solicit community opinions and concerns, and agree on required corrective actions. The LIEC will, prior to project completion report (PCR) mission, organize a survey to assess community satisfaction with project implementation and EMP implementation performance. The results will be documented in the PCR.

208. In compliance with the SPS, environmental information related to the project will be disclosed as follows:

(1) the initial environmental examination (IEE) is НisclosОН on ADB’s projОct wОbsitО (www.adb.org), and is available for consultation in the PMU’s officО; (2) the detailed environmental impact assessments (DEIAs) approved by (MEGDT) is disclosed on the MEGDT website; and (3) annual environment monitoring reports will be disclosed on www.adb.org and at all PUSO offices.

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VIII. GRIEVANCE REDRESS MECHANISM

A. Introduction

209. A project grievance can be defined as an actual or perceived project related problem that gives ground for complaint by an affected person (AP). During the preparation stage of the AF project, APs were encouraged to provide comments on the domestic GEIAs, DEIAs and EMP. As a general policy, the PMU and PUSOs will work proactively toward preventing grievances through the implementation of impact mitigation measures and community liaison activities that anticipate and address potential issues before they become grievances. In addition, as the project has strong public support and will not involve any involuntary land or property acquisition or resettlement, significant grievance are unlikely. Nonetheless, during construction and operation stages it is possible that unanticipated impacts may occur if the mitigation measures are not properly implemented, or unforeseen issues arise. In order to address complaints if or when they arise, a project grievance redress mechanism (GRM) will be established in each city in accordance with ADB requirements and GoM practices.

210. A GRM is a systОmatic procОss for rОcОiving, rОcorНing, Оvaluating anН aННrОssing AP’s projОct- related grievances transparently and in a reasonable period of time. The project GRM includes a procedure for receiving grievances, recording/documenting key information, and evaluating and responding to the complainants in a reasonable period of time. Any concerns raised through the GRM will need to be addressed promptly and transparently. The GRM will be accessible to diverse members of the local communities, including more vulnerable groups such as women, youth and elderly. Multiple points of entry, including face-to-face meetings, written complaints, telephone calls, or e-mail, will be available. Opportunities for confidentiality and privacy for complainants will be honored where requested.

B. Proposed Grievance Redress System

211. The proposed GRM follows the existing approach taken for managing complaints about local issues by members of the public in Mongolia. Residents' complaints or concerns are generally taken to bagh or soum representatives for resolution, therefore this system is proposed for the GRM.

212. Each PUSO will assign one staff (in the PUSO Support Group) prior to construction to establish a Project Complaint Unit (PCU) at PUSO level to deal with complaints from affected people (AP) throughout implementation of the project. The PCU will be the key contact point for bagh and soum representatives who may require information about the project or who have an issue they would like to discuss. The PCU’s phonО numbОr, fax, aННrОss, Оmail aННrОss will bО НissОminatОН to thО pОoplО at the bagh and soum levels. The PCU will maintain a complaints database and communicate with contractors, supervision engineers, the ОnvironmОntal inspОctors of thО State Professional Inspection Agency (SFIA), aimag ОnvironmОntal authoritiОs, the PMU, and representatives of affected baghs.

C. GRM Steps and Timeframe

213. Procedures and timeframes for the grievance redress process are as follows and shown in Figure VIII-1. The GRMs will remain accessible throughout project implementation stage until a Project Completion Report is issued.

(1) Stage 1: Access to GRM. If a concern arises, the AP may resolve the issue of concern directly with the contractor, or make his/her complaint known to either the PCU directly, or

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through the bagh or soum, whichever level of authority he/she is most comfortable with;

(2) Stage 2: Official Complaint to PCU. If a complaint is filed at bagh/soum level, the bagh/soum representative will submit an oral or written complaint to the PCU. For an oral complaint the PCU must make a written record. For each complaint, the PCU must assess its eligibility. If the complaint is not eligible, e.g. related to an issue outside the scope of the project, PCU will provide a clear reply within five working days to the AP;

(3) Stage 3: PCU Complaint Resolution. The PCU will register the eligible complaint informing the PUSO, the contractor, the PMU and ADB. The PCU, with support of the loan implementation environment consultant (LIEC), will take steps to investigate and resolve the issue. This may involve instructing the contractor to take corrective actions. Within seven days of the redress solution being agreed upon, the contractor should implement the redress solution and convey the outcome to the PCU;

(4) Stage 4: Stakeholder Meeting. If no solution can be identified by the PCU or if the AP is not satisfied with the suggested solution under Stage 3, within two weeks of the end of Stage 3, the PCU will organize a multi-stakeholder meeting under the auspices of the head of the concerned soum, where all relevant stakeholders will be invited. The meeting should result in a solution acceptable to all, and identify responsibilities and an action plan. The contractor should implement the agreed redress solution and convey the outcome to the PCU within seven working days;

(5) Stage 5: Aimag Governor Resolution. If the multi-stakeholder meeting cannot resolve the problem, and the AP is unsatisfied, the PCU will set up a meeting with the relevant aimag Governor to identify a solution.

214. Reporting. The PCU will record the complaint, investigation, and subsequent actions and results. The PUSO Support Group will include this information in the quarterly progress reports to the PMU. In the construction period and the initial operational period until project completion report, the EA will periodically report complaints and their resolution to ADB in the quarterly project progress reports and annual environmental monitoring reports.

215. Responsibilities of the PCU. The responsibilities of the PCU are as follows:

 The PCU will instruct contractors and construction supervisors to refer any complaints that they have received directly to the PCU. Similarly, the PCU will coordinate with local government departments to capture complaints made directly to them;  The PCU will log complaints and date of receipt onto a complaints database and inform the PUSO and the Contractor.  The PCU will investigate the complaint to determine its validity and to assess whether the source of the problem is because of project activities, and identify appropriate corrective measures and responsible persons;  The PCU will inform the AP of investigation results and the action taken;  If a complaint is transferred from local government agencies, the PCU will submit an interim report to local government agencies on status of the complaint investigation and follow-up action within the time frame assigned by the above agencies;  The PCU will review the contractor’s response to the identified corrective measures, and the updated situation;  The PCU will undertake additional monitoring, as necessary, to verify as well as review

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that any valid reason for complaint does not reoccur.

216. Multi-stakeholder meetings. The invitees to this meeting will depend on the nature of the complaint. For example if the complaints relate to health, land disputes, or labor issues, the appropriate specialist in this field will be invited to the stakeholder meeting. This may include officers from the Land Administration (land rights issues), Women's Union NGO (gender issues), Health authorities (health issues), aimag environment protection authorities, aimag Professional Inspection Agency (occupational and community safety as well as environmental issues); and the Ministry of Labor & Social Security Officer (labor issues).

Stage 1: GRM Access Point AP contact contractor, PCU directly or via Bagh/ Soum) Day 1 of Complaint

Stage 2: Complaint to PCU Bagh/Soum meets PCU within 3 days of Complaint Date

No PCU Decision: Is the complaint eligible? PCU Explains to AP

Yes

Stage 3: PCU Complaint Resolution PCU Registers Eligible Complaint, informs the PUSO, contractor, PMU, ADB Respond to AP & talk to Yes Contactor within 10 days of Can PCU solve the problem? Complaint Date Implement solution within 15 No days of Complaint Date Stage 4: Stakeholder Meeting Within 20 days of ComplaintNo Date

Yes Solution Action Plan. Initiate Ca n Stakeholder Meeting solve the problem? Implementation of Action Plan within 7 days of Meeting Date No

Stage 5: Aimag Governor Refer to Governor for resolution

Solution Action Plan. Initiate Implementation of Action Plan within 7 days of Governor's Resolution

Figure VIII-1: Proposed Project GRM

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IX. ENVIRONMENTAL MANAGEMENT PLAN

217. The environmental management plan (EMP) for the project is presented in Appendix 1. The EMP defines the roles and responsibilities of the institutions involved in EMP implementation. Such institutions will seek to ensure continuous improvement of environmental protection activities during preconstruction, construction, and operation of the project in order to prevent, reduce, or mitigate adverse impacts.

218. ThО EMP has bООn prОparОН in linО with ADB’s SafОguarНs Policy StatОmОnt (2009). SpОcific measures are developed in relation to the design, construction and operation of each project output, and the impacts identified in relation to physical, biological, cultural and socio-economic resources, as discussed in Section VI of this IEE.

219. The mitigation measures to be undertaken during project pre-construction, construction and operation are identified in Table EMP-4). The EMP also defines, environmental monitoring program (Table EMP-5), and reporting requirements (Table EMP-6), EMP implementation cost estimate (Table EMP-7), and training requirements (Table EMP-8)

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X. CONCLUSIONS

220. Benefits. The AF project will improve the wastewater treatment systems in all project aimags and ensure continuous treatment throughout implementation. The project will directly benefit more than 25,000 residents (25% of the urban population in the project soums) and indirectly, more than 100,000 residents. Once in operation, it is anticipated that by 2030, the expanded treatment plants will be able to treat the wastewater from a total of 80,000 inhabitants (60% of soums population), and aimag commercial, institutional and industrial undertakings. The project will ensure that sewage effluents in all project aimags consistently achieve Government standards for discharge to the natural environment. ThО projОct will also support ovОrall improvОmОnt of thО city’s wastОwatОr managОmОnt systОm through institutional development, training, project management assistance, and policy dialogue.

221. The AF project will have substantial environmental benefits. The cumulative wastewater treatment capacity of 13,200 m3/d will remove significant amounts of pollutants, including BOD (920 tons per year, 2030 projections); ammonia nitrogen (110 tons per year); and phosphorous (28 tons per year).

222. Adverse environmental impacts. Findings of the IEE and the four DEIAs show that the project does not have any predicted significant, long term or irreversible impacts on the physical, biological or socio-economic environment of the four project cities.

223. During construction, the project will have short-term impacts which can be mitigated to an acceptable level through mitigation measures which seek to reduce the potential for harm to the environment and human health. Dust and noise generated by construction activities are expected to impact local residents and business as they are not within the project area of influence. Waste arising is an inevitable consequence of construction activities. In order to manage this sustainably and with least risk to the environment and human health, a Waste Management Plan will be developed and adhered to by the contractor. Surface water quality and effluent quality will be monitored regularly throughout the construction phase. Discharge of wastewater from construction sites could potentially pollute nearby pasture land and water body in Tsetserleg as there is a seasonal river running by the WWTP site. Mitigation measures specified in the EMP will manage the impacts to acceptable levels.

224. During operation, no significant adverse environmental impact is anticipated. Comprehensive training to PUSO staff (under Output 2) and appropriate technological design will contribute significantly to reducing operational risks of the sub-components. Prior to commissioning of the WWTPs, a series of tests will be conducted to ensure proper functioning of the WWTPs and ability to achieve Mongolian discharge standard. A wastewater quality monitoring system for key parameters (BOD, TP, NH4-N) will be introduced at each WWTP. Daily check, repair and maintenance procedures will be instituted for all wastewater treatment facilities/equipment. WWTP sludge will be dewatered through filter press, and disposed of onsite in sludge drying beds. Options for beneficial sludge reuse will be investigated during project implementation.36 Effluent polishing will be carried out in oxidation (waste stabilization) ponds providing both additional treatment and storage in the case of reuse. The ponds also serve as an emergency retention and treatment system in the event of plant malfunction.

225. Environment management plan (EMP). An EMP has been defined which specifies the roles and responsibilities of key project stakeholders, including MCUD, PMU, the PUSOs and the PSGs, the aimag Professional Inspection Agencies, contractors, and loan implementation consultants (LIC), in overall environmental management. In order to ensure that adequate environmental management capacities are in place during project implementation, the PMU will procure the services of LIC to

36 Additional grant funding will be sought to support this activity.

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provide support in (i) project preparation including updating the project EMP; (ii) training; (iii) regular environmental quality monitoring in compliance with the monitoring plan; (iv) annual project EMP progress reporting; and (v) identifying environment-related implementation issues and necessary corrective actions.

226. In addition, the PMU will also procure the services of an independent environment monitor (IEM). The IEM will conduct independent EMP implementation verification and environment quality monitoring during project construction in compliance with the monitoring plan and define recommendations for actions to be taken to resolve problems or improve environment management performance of various stakeholders

227. Consultation. The stakeholder consultation process conducted during the development of the DEIAs and this IEE, particularly with aimag representatives and PUSOs, demonstrated that the AF project has strong local support. In the framework of the DEIAs, more than 400 people were consulted through questionnaire surveys, focus group discussions and public meetings. Citizens are overwhelmingly support the AF project.

228. Information disclosure, GRM. In compliancО with ADB’s SafОguarН Policy StatОmОnt (2009), environmental information related to the AF project will be disclosed as follows: (i) this initial ОnvironmОntal Оxamination (IEE) is НisclosОН on ADB’s projОct wОbsitО (www.adb.org), and will be availablО in thО aimag’s anН PMU’s officО; (ii) thО НОtailОН ОnvironmОntal impact assОssmОnts (DEIAs) approved by the Ministry of Environment, Green Development, and Tourism (MEGDT) are available from thО PMU’s officО; anН (iii) annual rОports on projОct’s compliancО with thО EMP will bО availablО at www.adb.org. Environment safeguards related complaints or disputes will be handled in accordance with the grievance redress mechanism (GRM) established for the project. The PSGs will coordinate the environment GRM, with support of the LIC.

229. Overall Conclusion. The IEE concludes that: (i) the inherent features of the proposed project sites do not pose any significant constraints that would require costly special mitigation measures; (ii) the adverse environmental impacts of the AF project, as a whole, will be minor or moderate; and temporary; (iii) the measures to mitigate the adverse impacts can be provided and instituted without difficulty through proper engineering design and environment-friendly management of construction activities and operation; (iv) the adverse impacts can be further mitigated with efficient environmental management and monitoring, prior to construction, and during construction and operation; and (v) the adverse impacts will be greatly offset by the significant socio-economic benefits that will be derived from the project. Category B for environment is confirmed. The additional financing project is feasible from an environment safeguards point of view.

107 APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN

A. Introduction

1. This Environmental Management Plan (EMP) has been prepared for the proposed ADB Southeast Gobi Urban and Border Town Development (SGUBTD) Project (Grant 0204-MON) Additional Financing (AF) to support urgently needed wastewater treatment facilities and management improvement for four provincial (aimag) centers of Mongolia, including Dalanzadgad city of Umnugovi province, Sainshand city of , Arvaikheer city of Uvurkhangai province, and Tsetserleg of Arhangai province. The EMP is based on the domestic general environmental impact assessments (GEIA) including baseline reports, and detailed environmental impact assessment (DEIA) reports for the four WWTPs; technical due diligence report by the PPTA team; and other relevant project documents. The EMP covers all project implementation phases, including planning, design & pre-construction, construction, and operation of all project components, and the impacts identified in relation to physical, biological, cultural and socio-economic resources, as discussed in Section VI (Anticipated Impacts and Mitigation Measure) of the Initial Environment Examination (IEE).

B. Objectives

2. The objectives of the EMP are to ensure implementation of: (i) identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environment impacts; and (ii) monitoring and reporting against the performance indicators, while ensuring that the project complies with the Mongolian environmental laws, standards and regulations and to ADB Safeguard Policy Statement (SPS 2009). Organizational responsibilities and budgets are identified for execution, monitoring and reporting.

3. The EMP defines appropriate mitigation measures for the anticipated project environmental impacts, and the institutional responsibilities and mechanisms to monitor and ensure compliance. The EMP specifies (i) objectives; (ii) implementing organizations and responsibilities; (iii) major environmental impacts and mitigation measures; (iv) environmental monitoring and reporting arrangements; (v) training and institutional strengthening; (vi) future public consultation; (vii) a feedback and adjustment mechanism; and (viii) the project level GRM. The EMP will be reviewed and updated, if necessary, before construction starts, and will further be revised during the project implementation if determined that mitigation measures need to be amended or new measures needed. The updated EMP will be reviewed and disclosed on ADB’s website.

C. Implementation Arrangements

4. Executing Agency. The Ministry of Construction and Urban Development (MCUD) is the executing agency (EA) for the SGUBTD Project (Grant 0204-MON) as well as the AF Project. The EA has overall responsibility for the project and therefore is ultimately responsible for ensuring the implementation of the mitigation in the EMP and for ensuring compliance with loan covenants. A Project Steering Committee (PSC) has been established which will provide overall policy guidance on the project and have full powers to take decisions on matters relating to the AF project execution. The PSC meets at regular intervals (once every 3 months) to review project performance and take decisions on major issues, such as implementation bottlenecks, land disputes, special procurement, policy reforms, etc. The structure of the project

1A1- implementation arrangement is shown in Figure EMP-1.

5. Project management unit (PMU). The existing project management unit (PMU) established for the Grant 0204 project under MCUD will manage the AF components, including but not limited to: (i) coordinating the tendering process including overseeing incorporation of EMP clauses into the bidding documents; (iii) ensuring the procurement of environmentally responsible contractors; (iv) ensuring that DEIA approvals by MEGDT have been secured prior to the awarding of civil works contracts; (v) supervising project construction (with support of PMIS resident engineers); and (vi) reporting to ADB.

6. Loan implementation environment consultants (LIEC). The PMU will procure the services of additional project management and implementation support (PMIS) consultants including one international and one national environment consultants (LIEC) under Output 2 to provide support in (i) updating the IEE and EMP as required, and providing training on EMP supervision to PUSOs and contractors; (ii) setting up environmental management and internal monitoring systems at PUSO and civil works contracts level; (iii) review tender and contractor documents to ensure all required environmental specifications have been included, update as required; (iv) prepare environmental supervision checklists for monthly supervision of the EMP by the PUSO Support Group, and review contractor-EMPs to confirm compliance with the project EMP; (v) establishing grievance redress mechanisms (GRMs) and providing training; (vi) regular EMP and environmental quality monitoring in compliance with the monitoring plan (Table EMP-5); (vii) coordinate public consultation prior to and during construction, and at project completion stage; (viii)) preparing annual EMP progress reports to ADB; and (ix) identifying environment-related implementation issues and necessary corrective actions.

7. PUSO Support Group (PSG). Each PUSO will establish a PUSO Support Group (PSG) to handle the day-to-day activities under the AF project. Under the guidance of the PMIS (resident engineers and the LIEC), the PSGs will be responsible for the local supervision of EMP implementation, including (i) setting up and coordinating the local grievance redress mechanism (GRM, see below); (ii) monitoring contractors to ensure adherence to the project EMP and the contractor EMPs; (iii) preparing quarterly reports on project EMP implementation to the PMU; and (iv) coordinating consultation with local stakeholders as required, informing them of imminent construction works, updating them on the latest project development activities, GRM, etc.; as defined in the monitoring program. One staff of each PSG will be responsible for the daily implementation of the EMP with the support from the site supervision engineer.

8. Civil works contractors. Contractors will be required to formulate contractor EMPs (or site EMPs) with complete management systems for adverse impacts, e.g., dust control, noise control, access control and temporary traffic management, addressing as a minimum the requirements of the EMP and the relevant DEIA. The contractor EMPs will be renewed on a yearly basis, submitted to the PUSO Support Group for review, and to aimag environment protection authorities for approval. The bid documents for civil works contracts and contract documents shall include (a) the updated IEE, EMP and relevant DEIA as attachments; (b) provision requiring them to operationalize EMP before implementation by developing detailed management plans or site-specific management plans, as necessary; (c) appropriate clauses to ensure EMPs are implemented during construction; (d) environmental conditions to be met for preliminary or final acceptance, during which the contractor's responsibility is partially/fully released, such measures that contractors shall properly dispose the surplus construction materials and solid wastes and conduct general site clean-up including of construction camps, rehabilitate borrow pits and quarry sites, as applicable; (e) penalties to be incurred by contractors for major default in the implementation of EMP; (f) information on their track records;

2A1- and (g) appropriate provisions that their environmental performance will be evaluated.

9. Independent environment monitor (IEM). The PMU will also procure the services of an independent environment monitor (IEM). The IEM will conduct independent EMP implementation verification and environment quality monitoring during project construction and operation (until the PCR is issued). The IEM will (i) conduct site visits to each construction site (4 aimags) during the construction period to assess the project’s compliance with the project EMP and the domestic EIAs; (ii) conduct environment quality monitoring covering air quality, noise, construction wastewater quality at each construction site in compliance with the monitoring plan; (iii) assess the contractors’, PUSOs’, PMIS, and PMU’s compliance with their respective EMP implementation responsibilities as defined in the PAM; and (iv) prepare independent EMP monitoring reports for the PMU. The reports should highlight good practices, identify problems encountered, define recommendations for actions to be taken to resolve problems or improve environment management performance of various stakeholders.

MCUD Project Steering (Executing Agency) Committee (PSC)

Independent Environment Project Management Unit PMIS Consultants Monitor (IEM) (PMU) and LIEC

PSG-1 and PUSO PSG-2 and PUSO PSG-3 and PUSO PSG-4 and PUSO Dalanzadgad Sainshand Arvaikheer Tsetserleg

Figure EMP-1: Project EMP Implementation Arrangement

10. The EMP implementation arrangements and responsibilities of each organization are summarized in Table EMP-1.

Table EMP-1: EMP Implementation Organizations – Roles and Responsibilities Organizations Management Roles and Responsibilities  The Executing Agency  Overall policy, guidance and direction Ministry of Construction and  Responsible for project coordination and liaison with ADB Urban Development (MCUD)  Overall responsible for project implementation  Provide overall guidance and oversight for PMU  Provide guidance of the day-to-day activities of the project and assistance to IAs and PUSOs to ensure smooth project implementation.  Procure services of PMIS, LIEC and IEM.  Endorse bidding documents, bid evaluation reports, contracts, and other necessary PMU under MCUD documentations and submit them to ADB for necessary approval.  Submit the project progress reports including social monitoring, and environment monitoring reports to ADB.  Submit bidding documents, bid evaluation reports, contracts, and other necessary

3A1- Organizations Management Roles and Responsibilities documentations to ADB.  Check invoices from contractors and prepare withdrawal applications to be submitted to ADB, through Ministry of Finance.  Report the project implementation to ADB.  Annual EMP monitoring reporting to ADB.  Conduct and supervise day-to-day activities of the project.  Monitoring the contractors on SEMP implementation. PUSO, PUSO Supporting Group  Responsible for monthly project progress report including status of EMP (PSG) implementation status and issues to PMU.

 Assign person in charge for EMP coordination.  In charge of facility operation and maintenance during operation phase.  Assist PMU for day to day activities during the project management.  Prepare bid documents, assist PMU in bid evaluation and contract negotiation and award in accordance with ADB guidelines.  Assign one project supervision engineer for each project aimag. Project management and  Assist PMU to fulfill project reporting requirements as specified in the loan agreement, implementation support (PMIS) project agreement, and PAM. consultants  Perform site visits to inspect subproject progress and quality of civil works and equipment installation.  Provide advice and assistance to PMU on technical issues related to the project implementation.  Environmental experts within the PMIS team  Provide technical assistance to the PUM and PSGs on implementing the EMP;  Update the IEE and EMP as required;  Provide training to the staff of the PMU and PSGs, PUSOs and contractors on EMP implementation.  Review bidding documents to ensure that the EMP clauses are incorporated.  Review SEMPs and provide recommendations for improvement.  Assist the PMU in preparing internal environmental monitoring reports.  Review updated EMP and confirm that mitigation measures are adequate.  Advise on mitigation measures implementation and provide technical support. Loan Implementation  Coordinate with independent environment monitor (IEM) and review the monitoring Environmental consultant (LIEC) results.  Conduct annual EMP compliance review and support PMU in preparing the annual EMP report until a project completion report (PCR) is issued.  Conduct training events for PUSOs and contractors on the requirements and implementation of the EMP in accordance with the training plan defined in the project EMP.  Organize, prior to project completion report (PCR) mission, a survey to assess community satisfaction with AF project implementation and EMP implementation performance.  Draft environment sections of the PCR, including separate appendix on the AF project’s environmental performance.  Licensed environmental entity by the MEGDT.  Conduct at least two site visits to each construction site (4 aimags) during the construction period to conduct an independent assessment of the project’s compliance with the project EMP and the domestic EIAs. Independent environmental  Conduct independent environmental monitoring according to the monitoring plan and monitor (IEM) relevant Mongolia standards.  Assess the contractors’, PUSOs’, PMIS, and PMU’s compliance with their respective EMP implementation responsibilities as defined in the PAM.  Prepare and submit independent monitoring reports to PMU.

4A1- Organizations Management Roles and Responsibilities  Evaluate EMP implementation effectiveness and provide suggestions for improvement.  Participate at project completion mission and provide inputs to the PCR as requested by the PMU and ADB.  Monitor and support project implementation compliance to obligation and

ADB responsibilities in accordance with ADB’s policies and procedures.  Review project progress and safeguards reports.  Conduct project review missions at least annually.

D. Project Readiness Indicators

11. Table EMP-2 presents the Readiness Indicators which provide a measure of whether environmental commitments are being carried out and environmental management systems are in place before construction.

Table EMP-2: Readiness Indicators Pre-Construction

Indicator Measurement Methods Measurement  PSGs established before construction. Yes No Environmental Supervision  LIEC and IEM contracted. Yes No in place  Site specific GRM established. Yes No  Bidding documents and contracts incorporate the Yes No Bidding documents and environmental loan assurances contracts with environmental  Bidding documents and contracts incorporate the EMP safeguards Yes No mitigation and monitoring requirements  The fund from ADB is in place to support the EMP EMP financial support Yes No implementation  Environmental requirements of EMP included in contract Yes No documents for civil works construction contractors Contract documents  Contractor SEMP developed and submitted to PMU and LIEC Yes No for review and approval

12. Performance indicators for monitoring environmental performance in relation to key project risks and impacts during construction are set out in Table EMP-3.

Table EMP-3: Performance Indicators During Construction

Indicator Measurement Methods Measurement

 Interviews with stakeholders in project area before each Stakeholder Interviews Yes No construction season, submitted to aimags (by PSGs)

 Quarterly monitoring results submitted to aimag environment Water & Effluent Monitoring Yes No authorities (by PSGs)  Monthly reports submitted to aimag environment inspectors Health & Safety Reporting Yes No (by contractors) EMP Implementation  PSGs monitor mitigation implementation and confirm Yes No

5A1- Indicator Measurement Methods Measurement compliance, reporting monthly to PMU

E. Potential Impacts and Mitigation Measures

13. Table EMP-4 lists the potential environmental issues and impacts during the pre- construction, construction and operation phases of the AF project, as identified by the DEIAs and the IEE, as well as corresponding mitigation measures designed to minimize the impacts. The mitigation measures consist of actions, activities, plans and documents that need to be undertaken, observed, obtained, prepared to prevent, mitigate, or compensate for, the salient adverse impacts enumerated in Chapter IV of the IEE.

6A1- Table EMP-4: Potential Impacts and Mitigation Measures Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

A. Planning and Preconstruction Phase

 Locations of the new WWTPs have been carefully selected considering many key factors including the development of the cities, existing sewage facilities, maximum use of gravity, not too close to human receptors. The sites for Dalanzadgad, Arvaikheer and Sainshand are located at new sites and lower elevations than the cities to fully utilize gravity to save energy and they are further away from the cities than the existing facilities.  Careful planning of connections of new WWTPs to the existing sewer networks during the transition period from old facilities to the new Locations and Resource WWTPs; Included in IAs’ aimags, PMU EA use; service interruption  Design accounted for waste management hierarchy philosophy and operating budget existing sewage treatment ponds at Tsetserleg will be reused by the new WWTPs while the other three WWTPs are too far from the existing Planning and facilities. However, the existing sewer pipe network will be fully utilized at all new WWTPs. design stage  The Tsetserleg WWTP site protection works shall be designed to account for the summer rainfall flooding.  Ensure continuous wastewater treatment performance of old facilities during construction and commisioning of new WWTPs in four project cities, especially in Tsetserleg where existing ponds will be retroffited as polishing ponds for the new WWTP.  Appointment of one environment, health and safety officer (EHSO) within each PSG to coordinate EMP implementation; Included in IAs Environment  Contracting of LIEC and IEM by the PMU for project specific operating budget; environmental quality monitoring, developing detailed monitoring plan for PSGs, PMU EA management readiness construction and operation periods in accordance to the monitoring plan; IEM and LIEC cost  Updating of the EMP prior to tendering and construction as necessary in PMIS budget and including EMP requirements in tender and contract documents;  Developing a plan to implement the GRM; and

7A1- Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

 Consulting and informing residents and key stakeholders near the construction sites regarding construction timing and approach, especially for Tsetserleg WWTP site.  The new sewer line in Sainshand will cross the railway. Approval and coordination with the railway authority will be required.  Arvaikheer and Tsetserleg areas are in a zone of periodic permafrost, which can melt over time leading to land subsidence and potential Risk of land subsidence pipeline rupture or cracks in buildings inside the WWTPs.  Confirm, though geo-technical survey, presence/absence of permafrost associated with Included in at sites prior to the construction of the WWTPs and excavation of sewer Contractors PMU, PSGs contractor’s bids permafrost pipeline trenches.  If permafrost spots are found, implement engineering solutions considering land subsidence in the design and/or special construction method to deal with permafrost.  Prior to contraction, prepare a site EMP (SEMP) which shall fully respond to the requirements set in the project EMP, and shall include a number of sub-plans, including the following:  Soil erosion protection plan, identifying likely areas of soil erosion and the mitigation measures which the contractor will employ to minimize potential erosion around any excavations and construction areas.  Borrow and spoil management plan, specifying location of borrow Construction Contractor environment pits, quarries and spoil disposal sites, as needed. Contractors will Included in Contractors PMU, PSGs EMP management plan ensure that (i) borrow areas will be located away from residential contractor’s bids areas, water bodies and will avoid valuable pasture/grazing land, (ii) after use borrow pit areas will be graded to ensure drainage and visual uniformity, and (iii) borrow pit restoration will follow the completion of works in full compliance with all applicable standards and specifications;  Water protection plan, defining measures to be taken during construction to avoid/mitigate pollution arising from construction site drainage (silt), use of chemicals, construction around existing wastewater containing ponds and other potential pollution sources;

8A1- Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

 Health and safety risk management plan (HSMP) for management of community and occupational health and safety; Civil work contractors shall also consult with relevant aimag departments to double check location of utilities prior to any construction activities at all sites.  Spill management plan, defining the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response following an incident;  Waste management plan, defining procedures for management of household waste, construction waste, and sewage (if appropriate), detailing arrangements for storage and transportation of the waste to its disposal point;  Service interruption plan, defining the steps and procedures to avoid interruption of existing wastewater treatment services in Tsetserleg.

B. Construction Phase

 Implement soil erosion protection plan;  Minimize the area of soil clearance, especially for Tsetserleg site since it’s close to human receptors;  Maintaining slope stability at cut faces by implementing erosion protection measures;  Control silt runoff from construction sites; Included in the Soil Earthwork, soil erosion,  Cover soil stockpiles;  Properly stabilize slopes and re-vegetate disturbed surfaces. Contractors PSG s, LIEC, IEM construction Resources soil contamination  Pay special attention to WWTP sites in Arvaikheer, Sainshand and contract Dalanzadgad and when excavating trenches for sewer pipes in Sainshand and Dalanzadgad.

 implement emergency preparedness and response plan (Spill Management Plan);  store chemicals/hazardous products and waste on impermeable surfaces in secure, covered areas with clear labeling of containers and

9A1- Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

with a tray or bund to contain leaks;  regularly remove all construction wastes from sites to approved waste disposal sites;  provide spill cleanup measures and equipment at each construction site;  conduct training in emergency spill response procedures;

 Implement borrow and spoil management plan, specifying location of borrow pits, quarries and spoil disposal sites;  ensure that borrow areas are located away from residential areas, water bodies and valuable pasture/grazing land;  after use, grade borrow and spoil areas to ensure drainage and visual uniformity;  borrow pit restoration must follow the completion of works in full compliance with all applicable standards and specifications;  Special attention should be paid the three WWTP sites in Arvaikheer, Sainshand and Dalanzadgad as relative large quantity of soil will be disbursed during site preparation for the pond system;  Sainshand and Dalanzadgad will need new sewer pipes and excavating trenches for these sewer pipes will follow soil erosion protection plan and minimize soil erosion.  Stockpiles management: Manage stockpiles to reduce dust emissions. Locate stockpiles downwind of sensitive receptors. Spray stockpiles with water before material is moved. If a stockpile is within 300m of human Fugitive dust generated receptors (Tsetserleg site), additional precautions must be taken by construction including using a reusable stockpile cover and fencing to form a high Included in the activities, gaseous air barrier and prevent wind lifting and dispersing. Ambient Air Contractors PSG s, LIEC, IEM construction pollution (SO2, CO,  Construction site management: Spray water on construction sites and contract NOx) from construction material handling routes where fugitive dust is generated, especially machinery during strong windy days.  Transport of materials: Trucks carrying earth, sand, stone or loose materials must be covered with tarpaulins or other suitable cover. Construction vehicles and machinery must be maintained to a high standard to minimize emissions (note that local standards do not exist for

A1-10 Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

vehicle emissions).  Manufacturing plants: Site any plants for the production of concrete or pavement covering such as asphalt at least 300 m from the nearest dwelling and locate downwind.  Source control: Maintain all exhaust systems in good working order and undertake regular equipment maintenance;  Locate sites for concrete-mixing and similar activities at least 300 m away from noise sensitive areas;  Operate between 8am-6pm only and reach an agreement with nearby businesses and residents regarding the timing of heavy machinery work, to avoid any unnecessary disturbances;  Provide advance warning to the community, including businesses and residents on timing of noisy activities. Seek suggestions from Included in Noise generated from community members to reduce noise annoyance; Noise Contractors PSG s, LIEC, IEM construction construction activities  Vehicles transporting construction materials or wastes will comply with posted speed limits at all times and will be limited to low speeds in contract construction sites;  Vehicles transporting construction materials or wastes will not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals;  Public notification of construction operations will incorporate noise considerations; information procedure of handling complaints through the Grievance Redress Mechanism will be disseminated;  Ensure noise monitoring is undertaken near sensitive receptors, particularly in Tsetserleg construction site.  Implement the approved soil erosion management plan (as specified in soil mitigation measures section above) during construction; Included in Surface and  Implement contingency plans for control of spills of oil and other Water contamination hazardous substances (Spill Management Plan) as part of the SEMP. Contractors PSG s, LIEC, IEM construction ground water Special attention will be paid for the Tsetserleg site as Dund River is next contract to the existing facility;  Provide adequate construction site temporary sanitary facilities with holding tanks for construction workers. Discharge toilets to the existing

A1-11 Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

wastewater treatment facilities;  Maintain existing wastewater treatment facilities in the four cities until the new WWTPs are operational and the sewer connections are completed switched to the new facilities;  Provide temporary drainage provision during construction to ensure that any storm water running off construction areas will be controlled;  Enclosed drainage around chemical storage areas, maintenance shop and vehicle cleaning areas on construction sites and storage will be on hard standing;  All works undertaken on Tsetserleg construction site must be timed to Included in Flooding Surface water quality avoid the typical summer rainfall floods; Contractors PSG s, LIEC, IEM construction  Rainfall forecasts must be monitored and work halted in the event that contract there is a flood risk.  Implement the Waste management plan  Minimize earth works during construction by optimizing the use of borrow pits and quarries;  Reuse material from site demolition as much as possible if existing wastewater treatment facilities will be demolished; Included in Waste management  Demolition site will be properly cleaned up and demolition waste need to Solid Waste be collected and stored before disposal; Contractors PSG s, LIEC, IEM construction and resource use  Provide appropriate waste storage containers for worker’s construction contract wastes; install enclosed storage points of solid and liquid wastes away from sensitive receptors, regularly haul to approved disposal facilities;  Only contractors approved by the aimag authorities shall be used to remove all wastes from construction sites;  It’s strictly prohibited to burn any waste at any construction site. Waste must be collected and properly disposed.

Physical  Construction activities must be immediately suspended if any PCRs are Local cultural Included in Damage of physical encountered; culture Contractors heritage construction culture resources (PCR)  The local cultural heritage authorities must be promptly informed and resource consulted; and authorities contract  Construction activities shall resume only after thorough investigation and

A1-12 Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

with the permission of the local cultural heritage authorities.  Temporary traffic management, road safety awareness: During any works which involve crossing roads and affecting traffic movements, road users and pedestrians shall be made aware of changes to traffic flows through clear signage in advance of construction and during construction at the site; Included in Community health and  Construction site safety: Clear signs shall be placed at construction sites in view of the public, warning people of potential dangers such as Contractors PSG s, LIEC, IEM construction safety risks moving vehicles, hazardous materials and excavation and raising contract awareness on safety issues.  Heavy machinery shall not be used after day light and all such equipment will be returned to its overnight storage area/position before night.  All sites shall be made secure, discouraging access by the public through fencing or security personnel, whenever appropriate. Socio-  Implement Health and Safety Management Plan (HSMP): This economic includes recording and reporting any occupational health and safety resources incidents, and reviewing the distribution and use of appropriate PPE. HSMP shall include the following provisions:  Training. Provide adequate training to all workers, temporary or permanent workers, on occupational health and safety risks at construction sites, proper working procedures, proper use of PPEs, handling and disposal of hazardous wastes, incident reporting Included in Occupational Health requirements; Contractors PSG s, LIEC, IEM construction and Safety  Clean water. Provide a clean and sufficient supply of fresh water, for contract construction and for all camps.  Sewage and wastewater. Provide adequate sanitation facilities at all work sites.  Solid waste. Provide garbage receptacles at construction sites, which will be periodically cleared and disinfected.  Liquid chemical waste. Provide receptacles in suitably bounded areas for the storage of liquid chemical waste prior to disposal. Include clear warnings with health risks.

A1-13 Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

 Personal protection. Provide PPE, such as safety boots, helmets, gloves, protective clothing, goggles, and ear protection, in accordance with relevant health and safety regulations for workers.  Emergency Preparedness and Response. An emergency response plan to take actions on accidents and emergencies, including public health emergencies associated with hazardous material spills and similar events will be prepared.  Records Management. store and maintain easily retrievable records protected against loss or damage should be established. It will include documenting and reporting occupational accidents, diseases, and incidents.  Safety communication. Ensure that safety, rescue and health matters are given a high degree of publicity to all persons regularly or occasionally at active construction sites. Posters in Mongolian for the contractors drawing attention to relevant health regulations will be made or obtained from the appropriate sources and will be displayed prominently at construction sites.  coordination with other projects in the area of influence in terms of construction schedule, possible access road and borrow/disposal sites and spoil sharing; PUSOs, LIEC, Included in Cumulative construction  enforcement of good construction management to minimize dust, noise and waste generation; Contractors IEM, aimag construction impacts  education of construction workers to minimize social disturbance and authorities contract Cumulative cultural conflict; and indirect  proper management of each construction site and timely Impacts restoration/strengthening affected areas upon completion of each construction project.  A robust GRM which will be signposted at each of the sites in order for Temporary interruption those with grazing animals to contact the project if they have a concern with the construction works; and PUSOs PMU, IEM - of access to pastures  Notices in advance of construction work will be put up to warn residents, including owners of animals, that the work will commence including start/end dates and details of work.

A1-14 Responsibility Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Issues of Funds Who Implements Who Supervises

 Contractors will consult with relevant aimag authorities on the timing of PUSOs, LIEC, Temporary traffic the road excavation, including departments responsible for transport and Contractors IEM, aimag - disturbance traffic police;  Use of appropriate traffic signals if alternate line traffic is required to authorities maintain access along the road. D. Operation Phase

Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Who Implements Who Supervises issues of Funds

 Install and maintain SCADA system including wastewater quality monitoring devices for real-time monitoring of key parameters (COD, BOD, NH4-N, SS) of effluent at the WWTPs. Implement daily check, Aimag repair and maintenance procedures. Monitor effluent from the WWTPs to Contractors1, environment In PUSO’s Water and soil Effluent from WWTPs ensure compliance with effluent standards (MNS 4943:2011). Samples quality PUSOs authorities, IEM operation budget will be taken near the effluent discharge point of each WWTP. (first year)  Conduct regular checks of receiving soils and water bodies, including annual monitoring of soil and water quality by licensed laboratory at aimag level.  Set up buffer zone (150m) around each WWTP in accordance with the Construction Norms and Standards. Aimag  Ensure that no new developments are allowed within buffer zone of Contractors2, environment In PUSO’s Air quality Odor from WWTPs WWTPs. PUSOs authorities, IEM operation budget  Cover and enclose odor emitting processes (activated sludge stage, sludge dewatering stage) before sending to drying bed for storage; (first year)  Monitor H2S and NH3 at least quarterly by the local licensed laboratory each aimag.

1 Civil works contractors will build the WWTPs and provide operation support for first 3 years of operation. 2 Civil works contractors will build the WWTPs and provide operation support for first 3 years of operation.

A1-15 Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Who Implements Who Supervises issues of Funds

Aimag  Locate noise equipment indoors with building walls with sufficient Noise from operation of Contractors3, environment In PUSO’s Noise thickness; WWTPs PUSOs authorities, IEM operation budget  Conduct noise monitoring at least quarterly by qualified entity to confirm compliance with the national ambient noise standard (MNS 4585:2007). (first year)

 PUSOs as WWTP operators to regularly inspect the pipes and ensure the packed earth along the pipes is in good condition and the thickness is not reduced.  Prepare and implement Operational Risk Mitigation Plan, and Emergency Aimag In PUSO’s Emergency Preparedness and Response Plan for the Wastewater Management Accidental Discharge of System. Contractors4, environment operation budget, preparedness untreated sewage  Maintain pond systems with a retention time of 30 days to provide ample PUSOs, PMIS authorities, IEM PMIS budget (risk and response time to define corrective actions. (first year) management plan)  Deploy temporary mobile pumps to pump untreated wastewater back to the wastewater treatment system for further treatment;  Maintain stock of spare parts for key components;  Conduct regular inspection and proper maintenance of the WWTPs;  automated on-line, real-time monitoring of influent and effluent quality.  Sludge generated will be limited since most wastewater is from domestic use. Sludge is expected to be of high quality since there are no industries in the aimag cities serviced by the wastewater treatment plants. Aimag  Sludge from oxidation ponds is well digested and does not pose disposal environment In PUSO’s Solid waste Sludge management PUSOs difficulties. authorities, IEM operation budget  Sludge will be dewatered through a filter press and further treated and (first year) disposed of in the sludge drying beds.  Additional sludge quality analysis will be conducted during the WWTPs’ commissioning stage. Health and safety  Develop and implement OHS program include job hazard analysis, risk Aimag SFIA, IEM In PUSO’s Occupational PUSOs analysis and ranking, safety procedures, training plans, safety incident health and exposures of workers (first year) operation budget reporting and record keeping, etc.;

3 Item. 4 Item.

A1-16 Potential Impacts and Cost and Source Item Mitigation Measures and/or Safeguards Who Implements Who Supervises issues of Funds safety  wear safety shoes or boots with non-slip soles;  wear PPE and chemical resistant clothing to avoid exposure of skin or eyes to corrosive and/or polluted solids, liquids, gases or vapors;  post safety instructions in each workshop regarding the storage, transport, handling or pouring of chemicals;  check electrical equipment for safety before use; verify that all electric cables are properly insulated; take faulty or suspect electrical equipment to a qualified electricity technician for testing and repair;  wear safety goggles in all cases where the eyes may be exposed to dust, flying objectives, or splashes of harmful liquids;  wear respiratory mask in the sludge dewatering and de-odor workshops and when moving and transporting sludge;  obey all safety instructions concerning entry into confined spaces, e.g., check atmosphere for oxygen or for poisonous gases, use respiratory protection equipment if needed, have a co-worker stand guard in case of need for help;  all workers will undergo periodic examinations by occupational physician to reveal early symptoms of possible chronic effects or allergies.

A1-17 F. Environmental Monitoring

14. The project monitoring program focuses on the environment within the project‘s areas of influence for each of the four WWTPs. An environmental monitoring program is shown in Table EMP-5, which covers the scope of monitoring, monitoring parameters, time and frequency, and implementing agencies. The monitoring shall comply with the methodology provided in the relevant Mongolian national environmental monitoring standards. Other associated compliance standards to be followed are the national environmental quality standards of air, water and noise, and the effluent discharge standards (see IEE Chapter II). Monitoring will include the following:

15. Internal monitoring/supervision by contractors. Civil works contractors will develop site environment management plans (SEMP) with environmental management and internal supervision systems based on the approved project EMP and the DEIAs, undertake self-check activities and fully cooperate with the environmental inspectors of the aimag environmental authorities and the State Professional Inspection Agency (SFIA).

16. Internal monitoring/supervision and reporting by PUSO Support Group and PMIS. During construction, the PUSO Support Groups will be responsible for conducting internal environmental monitoring (consisting mainly of visual site inspection) in accordance with the monitoring plan. The groups will be supported the resident engineers and the LIEC of the PMIS. Supervision results will be reported through the resident engineers’ quarterly reports to the PMU.

17. Independent environment monitoring. The PMU will contract a licensed independent environment monitor (IEM) to conduct periodic environmental quality monitoring and EMP compliance verification in accordance with the monitoring program (Table EMP-5). The IEM will visit each construction site at least twice and submit two reports during the construction phase to the PMU, which will be reflected in the annual monitoring reports to ADB. The TOR for the independent environment monitor is specified in the PAM. A detailed cost breakdown will be provided by the environmental entity when the environmental monitoring program is updated and finalized at the start of each WWTP implementation.

18. EMP compliance monitoring and reporting by PMU (through PMIS). The LIEC/PMIS will conduct regular site visits to monitor the EMP implementation progress. Results of site visits, project EMP implementation and environmental impact monitoring will be communicated to ADB through the annual project EMP progress reports. The reports will be disclosed on the ADB website, and submitted to MEGDT, local environmental inspectors of the State Professional Inspection Agency (SFIA), and aimag environmental authorities.

Table EMP-5: Environmental Monitoring Program Environmental Location, Parameters, Monitoring Technique Responsibility & Frequency Media/Issue Pre -Construction Phase  Method: Review of Project Readiness based on indicators in Each PSG, LIEC Project readiness Table EMP-2 Once before construction  Parameters: Specified in Table EMP-2 Surface water,  Method, Location: Dund River (in Tsetserleg), 50 m Arhangai Aimag Meteorological groundwater and upstream and 200m downstream of WWTP effluent outfall; Office, a certified lab

A1-18 Environmental Location, Parameters, Monitoring Technique Responsibility & Frequency Media/Issue effluent quality Urd Tamir River, downstream of Dund River confluence; Once before construction groundwater wells in Tsetserleg, Arvaikheer and Dalanzadgad; WWTP effluent.  Parameters: Temperature, SS, pH, dissolved oxygen, COD, BOD, faecal coliforms (according to laboratory capabilities).  Method, Location: Soil sampling and chemical analysis; Soil contamination effluent outlet, sludge pond, wastewater treatment area in (compliance IEM once before construction Tsetserleg. – monitoring)  Parameters: heavy metals (Cr, Pb, Cd, Ni, Zn). Construction Phase  Method, Location: Visual inspection; along pipe excavation trenches, wastewater treatment plant construction footprints; PSG - Weekly;  Parameters: Borrow and Spoil LIEC/PMIS twice during Soil erosion adherence to Contractors’ – Management Plan, adequacy of soil erosion prevention construction period (May, October) measures; adequacy of soil contamination prevention IEM – twice during construction techniques.  Method, Location: Visual inspection of all active construction PSG – Weekly; Solid and liquid sites. LIEC/PMIS – twice during waste management  Parameters: Adherence to Contractors’ Waste Management construction period (May, October) Plan and Water Protection Plan. IEM – twice for each construction site  Method, Location: Visual inspection and interviews with

construction workers and contractors at active construction PSG Weekly; Occupational health sites. – LIEC/PMIS – twice during and safety Parameters: (i) adherence to the Environmental,  Contractors’ construction period (May, October) Health and Safety Management Plan (EHSMP); (ii) worker IEM – twice during construction complaints and concerns and recorded incidents.  Method, Location: Visual inspection of all active construction sites, informal interviews with nearby residents. PSG – Monthly  Parameters: (i) availability of information on GRM; (ii) LIEC/PMIS – three times during Community health adequacy of construction site signage and fencing; (iii) construction period (April, July, and safety and GRM adequacy of relevant mitigation measures; (iv) accidents October) involving public and workers; (v) emergencies and responses; IEM - twice for each construction site (v) public complaints about issues such as noise, air pollution, construction site safety;  Method, Location: Tsetserleg: Dund River, 50 m upstream Surface and and 200m downstream of WWTP effluent outfall; Urd Tamir groundwater and River, downstream of Dund River confluence; WWTP effluent. IEM At least once per year in effluent quality – All: groundwater quality at nearest downstream well/borehole. summer when the river has water (compliance Parameters: Temperature, SS, pH, dissolved oxygen, COD, monitoring)  BOD, faecal coliforms (according to laboratory capabilities) Air quality  Method, Location: Equipment monitoring at 50 m upwind (compliance and 100 m downwind. IEM – twice for each construction site monitoring)  Parameters: SOx, NOx, PM10  Method, Location: Visual observation of fugitive dust near PSG – Weekly; Air Quality – fugitive construction sites. Observations to record if dust generated LIEC – three times during dust by construction activities crosses property boundaries. construction period (April, July,  Parameters: Fugitive dust emissions October)

A1-19 Environmental Location, Parameters, Monitoring Technique Responsibility & Frequency Media/Issue IEM – twice for each construction site Noise  Method, Location: Measure noise levels at property (compliance boundaries of WWTP sites. IEM – twice for each construction site monitoring)  Parameters: dB(A) readings around property boundaries..  Method, Location: Review of project’s adherence with EMP EMP Compliance and loan covenants MCUD, PMU, LIEC, ADB – Annually  Parameters: EMP and loan covenants Construction Completion and Operation Phase  Method, Location: Visual inspection, post-construction environmental condition assessment at each construction site. Post-construction PSG, LIEC, IEM – Once after site inspection  Parameters: Performance checked against the management completion (pre-PCR) plans submitted before construction for specific aspects such as aggregate, borrow pit and spoil management plan.  Method, Location: Automated monitoring, WWTP effluent WWTP onsite laboratory – WWTP effluent point. daily/weekly quality  Parameters: COD, BOD, TP, (online); NH4-N, SS, EC, pH Aimag Central Laboratory of (parameters of MNS 4943:2011) Environment – Quarterly  Method, Location: Sludge drying beds  Parameters: Heavy metals, ammonia, nitrate, phosphorous, Sludge quality Certified aimag labs – Semi-annual faecal coliforms (according to laboratory capabilities in aimags)  Method, Location: At boundaries of WWTPs, effluent point, Air quality (noise, Aimag Central Laboratory of sludge beds. odors) Environment – Quarterly  Parameters: dB(A), H2S, NH3.  Method, Location: Dund River water quality monitoring, 50m upstream and 200m downstream of effluent discharge point; Urd Tamir River, downstream of Dund River confluence; Aimag Meteorological Office and River water quality  Parameters: Temperature, DO, SS, NH3N, TN, TP, BOD5, Central Lab- Quarterly CODCr, sulfate, nitrate, chloride, oils (according to laboratory capabilities in aimags).

Source: ADB PPTA Team and DEIAs.

G. Environmental Reporting

19. Environmental monitoring and inspection activities and findings will be documented for purposes of reporting, record keeping, verifying, referring and evaluating the environmental performance of the AF Project. The documentation shall also be used as basis in correcting and enhancing further environmental mitigation and monitoring. Environmental monitoring reports (EMRs) will be prepared as follows (see also Table EMP-6):

(i) Monthly internal progress reports will be prepared by the onsite supervision engineers of the PMIS (on behalf of the PUSO and the PSG) during construction, submitted to the PMU and LIEC. These monthly reports will include; (a) physical progress of the component; (b) mitigation measures implemented; (c) grievances received, resolved, closed and/or directed to other mechanisms; (d) emergencies responded to; and (e) corrective actions taken.

A1-20 (ii) Environmental impact monitoring reports will be prepared by the IEM contracted by the PMU to report on the results of environmental quality monitoring as specified in the EMP. Two reports will be prepared for each project site during the construction and commissioning stages. The reports will include the analysis results and assessment of compliance/non-compliance with the EMP, Mongolian and international standards.

(iii) Annual EMP progress reports, by the LIEC (on behalf of PMU) to be submitted to the ADB and MEGD to comply with environmental agreement in the loan and Mongolian Law on EIA. Table EMP-6: Project Reporting Requirements

Table EMP-6: Environmental Reporting Plan Report From Report To Pu rpose Frequency PSGs PMU, LIEC, IAs Progress on EMP Implementation Monthly Project progress reports (including section PMU ADB Quarterly on EMP implementation progress) Indepependent environment monitoring Twice during construction IEM PMU, PSGs results period Annually, until PCR is PMU (LIEC) ADB EMP progress reports issued Source: ADB PPTA Team

H. EMP implementation cost estimates

20. The mitigation measures related to construction works, which will be shouldered and budgeted by contractors, amounts to approximately 1.5% of the construction costs (USD 300,000). The environmental management (including supervision, mitigation, monitoring and training) requiring a specific budget outside the civil works contracts are shown in Table EMP-7.

Table EMP-7: EMP Budget Item Estimated Cost (USD) Loan Implementation Environment Consultant (5 pm international, 18 pm national), including $ 154,000 traveling and per diem Independent environment monitor (10 pm national) $ 30,000 Resident engineers (at PUSOs) for weekly EMP supervision $162,000 Environmental monitoring by licensed monitoring institutes $ 40,000 EMP-related training, consultation $ 8,000 Reporting, Translation $ 6,000 Total $400,000

I. Training, Capacity Building and Awareness Raising

21. To ensure effective implementation of the EMP, the capacity of the PMU, PUSOs, contractors will be strengthened, and all parties involved in implementing mitigation measures and monitoring of environmental performance must have an understanding of the goals, methods, and the best practices of project environmental management. The aimag

A1-21 environmental department and the LIEC will offer training specific to their roles for aimag cities under the AF project. The main training emphasis will be to ensure that the contractors, supervision engineers, PSGs and PUSOs are well versed in environmentally sound practices and are able to undertake all construction and operation with the appropriate environmental safeguards.

22. The training program also addresses long-term capacity building and awareness raising needs, i.e. for the operational phase of the WWTPs. Training and awareness raising campaigns will be provided by qualified operation and maintenance experts and the PMIS consultants.

23. Training Needs Assessments will be conducted by the LIEC to tailor the training for maximum impact. The trainer will include in their program a before/after assessment to evaluate the success of the training. An evaluation questionnaire will be used to assess the effectiveness of the training and the training program will be adjusted based on feedbacks. Training will be provided throughout the implementation of the AF project and the training program is summarized in Table EMP-8.

Table EMP-8: Training Program

Topic Attendees Sub-topics Provider Frequency Cost

EMP contents, SEMP PMU, PUSOs, Twice - preparation, roles and supervision Once prior to, and responsibilities, monitoring, EMP requirements engineers, LIEC once after $4,000 supervision and reporting contractors the first year of procedures, review of first year project construction experience (after 12 months) PMU, PSGs, Use and purpose of GRM; PUSOs, supervision ADB requirements for GRM; Twice: Once prior Grievance redress engineers, GRM procedures; to, and once after LIEC $1,000 mechanism (GRM) contractors, aimag Roles and responsibilities; the first year of and bagh Review of first year experience project construction representatives (after 12 months) PMU, PSGs, Construction safety, Twice: Once prior PUSOs, supervision occupational safety during to, and once after Safety Training LIEC $3,000 engineers, operation and maintenance, the first year of contractors traffic safety project construction Contractor (i.e., O&M of WWTPs, emergency operator of Operation of PSGs, PUSOs, preparedness and response Commissioning In PMIS WWTP during WWTP WWTP operator planning, industrial pre-treatment stage of WWTP package first 3 years) compliance verification and PMIS Total $8,000

Source: ADB PPTA consultants.

24. Capacity Building. In addition to short-term training courses, the project includes a capacity building and project management output, which is relevant to mitigation measures and EMP implementation. Under Output 2(a), the project will provide support to the project PUSOs to assist in improving the efficiency and effectiveness of the organizations and their ability to manage the wastewater treatment plants. Specific tasks under the output will include:

A1-22 i) Strengthening the institutional structure of PUSOs; including support in establishment of a PUSO Support Group (PSG) at each aimag and strengthening the PSGs capacities; ii) Management and technical training in systems operation, facilities management; iii) Development of job descriptions and career development guidelines; iv) Recommendations of reforms to the tariff structure; v) Technical assistance to improve sludge management at the WWTPs; and vi) Five public awareness events on public health, environmental management, attended by at least 100 residents each.

J. Public Consultation

25. The stakeholder consultation process conducted during the development of the IEE and the DEIAs, demonstrated that all sub-components under the AF project have strong local support. In compliance with ADB’s Safeguard Policy Statement (2009), environmental information related to the project was and/or will be disclosed to affected people as follows: (i) this IEE is disclosed on ADB’s project website (www.adb.org), and is available for consultation in the PUSOs’ and PMU’s offices; (ii) the DEIAs will be approved and disclosed by MEGDT; and (iii) annual reports on project’s compliance with the EMP as well as the Project Completion Report will be available at www.adb.org.

26. During project implementation, affected people will be consulted and informed through formal questionnaire surveys, site visits and informal interviews by the PSGs and the LIEC. Public meetings will be organized by the PSGs prior to mid-term mission to present and discuss EMP implementation progress, solicit community opinions and concerns, and agree on required corrective actions. The LIEC will, prior to project completion report (PCR) mission, organize a survey to assess community satisfaction with project implementation, AF project outputs, and EMP implementation performance.

K. Grievance Redress Mechanism

27. A grievance redress mechanism (GRM) will be established in each aimag. The GRM will follow the existing approach taken for managing complaints about local issues by members of the public in Mongolia. Residents' complaints or concerns are generally taken to bagh or soum representatives for resolution, therefore this system is proposed for the GRM.

28. Each PUSO will assign one staff (in the PUSO Support Group) prior to construction to establish a Project Complaint Unit (PCU) at PUSO level to deal with complaints from affected people (AP) throughout implementation of the project. The PCU will be the key contact point for bagh and soum representatives who may require information about the project or who have an issue they would like to discuss. The PCU’s phone number, fax, address, email address will be disseminated to the people at the bagh and soum levels. The PCU will maintain a complaints database and communicate with contractors, supervision engineers, the environmental inspectors of the State Professional Inspection Agency (SFIA), aimag environmental authorities, the PMU, and representatives of affected baghs.

29. Procedures and timeframes for the grievance redress process are as follows and shown in Figure A1.1:

A1-23 (1) Stage 1: Access to GRM. If a concern arises, the AP may resolve the issue of concern directly with the contractor, or make his/her complaint known to either the PCU directly, or through the bagh or soum, whichever level of authority he/she is most comfortable with;

(2) Stage 2: Official Complaint to PCU. If a complaint is filed at bagh/soum level, the bagh/soum representative will submit an oral or written complaint to the PCU. For an oral complaint the PCU must make a written record. For each complaint, the PCU must assess its eligibility. If the complaint is not eligible, e.g. related to an issue outside the scope of the project, PCU will provide a clear reply within five working days to the AP;

(3) Stage 3: PCU Complaint Resolution. The PCU will register the eligible complaint informing the PUSO, the contractor, the PMU and ADB. The PCU, with support of the loan implementation environment consultant (LIEC), will take steps to investigate and resolve the issue. This may involve instructing the contractor to take corrective actions. Within seven days of the redress solution being agreed upon, the contractor should implement the redress solution and convey the outcome to the PCU;

(4) Stage 4: Stakeholder Meeting. If no solution can be identified by the PCU or if the AP is not satisfied with the suggested solution under Stage 3, within two weeks of the end of Stage 3, the PCU will organize a multi-stakeholder meeting under the auspices of the head of the concerned soum, where all relevant stakeholders will be invited. The meeting should result in a solution acceptable to all, and identify responsibilities and an action plan. The contractor should implement the agreed redress solution and convey the outcome to the PCU within seven working days;

(5) Stage 5: Aimag Governor Resolution. If the multi-stakeholder meeting cannot resolve the problem, and the AP is unsatisfied, the PCU will set up a meeting with the relevant aimag Governor to identify a solution.

30. Reporting. The PCU will record the complaint, investigation, and subsequent actions and results. The PUSO Support Group will include this information in the quarterly progress reports to the PMU. In the construction period and the initial operational period covered by loan covenants, the EA will periodically report complaints and their resolution to ADB in the quarterly project progress reports and annual environmental monitoring reports.

31. Responsibilities of the PCU. The responsibilities of the PCU are as follows:

 The PCU will instruct contractors and construction supervisors to refer any complaints that they have received directly to the PCU. Similarly, the PCU will coordinate with local government departments capture complaints made directly to them;  The PCU will log complaints and date of receipt onto a complaints database and inform the PUSO and the Contractor.  The PCU will investigate the complaint to determine its validity and to assess whether the source of the problem is because of project activities, and identify appropriate corrective measures and responsible persons;  The PCU will inform the AP of investigation results and the action taken;  If a complaint is transferred from local government agencies, the PCU will submit an interim report to local government agencies on status of the complaint

A1-24 investigation and follow-up action within the time frame assigned by the above agencies;  The PCU will review the contractor’s response to the identified corrective measures, and the updated situation;  The PCU will undertake additional monitoring, as necessary, to verify as well as review that any valid reason for complaint does not reoccur.

32. Multi-stakeholder meetings. The invitees to this meeting will depend on the nature of the complaint. For example if the complaints relate to health, land disputes, or labor issues, the appropriate specialist in this field will be invited to the stakeholder meeting. This may include officers from the Land Administration (land rights issues), Women's Union NGO (gender issues), Health authorities (health issues), aimag environment protection authorities, aimag Professional Inspection Agency (occupational and community safety as well as environmental issues); and the Ministry of Labor & Social Security Officer (labor issues).

A1-25 Stage 1: GRM Access Point AP contact contractor, PCU directly or via Bagh/ Soum) Day 1 of Complaint

Stage 2: Complaint to PCU Bagh/Soum meets PCU within 3 days of Complaint Date

No PCU Decision: Is the complaint eligible? PCU Explains to AP

Yes

Stage 3: PCU Complaint Resolution PCU Registers Eligible Complaint, informs the PUSO, contractor, PMU, ADB Respond to AP & talk to Yes Contactor within 10 days of Can PCU solve the problem? Complaint Date Implement solution within 15 No days of Complaint Date Stage 4: Stakeholder Meeting Within 20 days of ComplaintNo Date

Yes Solution Action Plan. Initiate Can Stakeholder Meeting solve the problem? Implementation of Action Plan within 7 days of Meeting Date No

Stage 5: Aimag Governor Refer to Governor for resolution

Solution Action Plan. Initiate Implementation of Action Plan within 7 days of Governor's Resolution

Figure A1.1: Proposed Project GRM Source: PPTA Team

L. Mechanisms for Feedback and Adjustment

33. Based on environmental inspection and monitoring reports, the PMU and PSGs with the assistance from the LIEC will decide whether (i) further mitigation measures are required as corrective actions, or (ii) some improvements are required for environmental management practices.

34. The effectiveness of mitigation measures and monitoring plans will be evaluated by a

A1-26 feedback reporting system. Adjustment to the EMP will be made, if necessary. The PMU will play a critical role in the feedback and adjustment mechanism with the support from the LIEC.

35. The need to update and adjust the EMP will be reviewed when there are design changes, changes in construction methods and program, negative environmental monitoring results or inappropriate monitoring locations, and ineffective or inadequate mitigation measures. Based on environmental monitoring and reporting systems in place, the PMU and PSGs with the support of the LIEC will assess whether further mitigation measures are required as corrective action, or improvement in environmental management practices are required. The PMU will inform ADB promptly on any changes to the project and needed adjustments to the EMP. The updated EMP will be submitted to ADB for review and approval, and will be disclosed on the ADB project website.

A1-27 Appendix 2: Rapid Climate Change Risk and Vulnerability Assessment (Rapid CRVA) of Wastewater Treatment Facilities in four provincial centers of Mongolia

I. CLIMATE OBSERVATIONS AND CHANGE PROJECTIONS

1. The current and future impacts of climate change have been investigated in the Mongolian Assessment Report on Climate Change, 2009 (MARCC, 2009), Mongolian Assessment Report on Climate Change, 2014 (MARCC, 2014), and summarized in the Second National Communication in 2010 (SNC, 2010) as well as in the Technology Needs Assessment for Climate Change in Mongolia in 2013 (TNA, 2013).

Climate regime

2. Mongolia has a harsh continental climate due to its geographic location in the central Eurasian continent, landlocked; surrounded by high mountains with an average altitude of 1,500 m. The unique characteristics of Mongolian climate is the clearly distinctive four seasons which leads to high fluctuation of air temperature, low precipitation and the fact that latitude and altitude distinctions are clearly visible. Mongolia has short, dry summer (June to mid-August), long, cold winter (November to April) and the length of spring and autumn fluctuates every year within a broad range.

3. Temperature. Winter mean temperature is -15° to -30°C and summer mean temperature is 10° to 26.7°C. Annual mean air temperature in mountainous region of Altai, Khangai, Khentii, Khuvsgul is –4°C, in lowlands between mountains and large river valleys it is –6 to –8°C, in desert-steppe region 2°C and in southern Gobi region 6°C (Figure A2-1).

Figure A2-1. Geographic distribution of annual mean air temperature (Munkhbat, Natsagdorj 2013)

A2-1 4. The mean air temperature of the coldest month January is -30…-34°C in the valleys between Altai, Khangai, Khuvsgul, Khentii mountains, -25…-30°C in high mountains and valleys between them, -20…-25°C in steppe regions, -15…-20°C in desert-steppe regions and –12°C...- 15°C in the southern Gobi region (Figure A2-2).

5. The mean air temperature in the warmest month of July is 15°C in Altai, Khangai, Khuvsgul, Khentii mountains, 10°C at the top of mountains, 15…20°C in , areas between Altai, Khangai, Khuvsgul, Khentii mountains and in Orkhon, Selenge, Khalkh river basins, 20…25°C in southern part of the Dornod steppe and in desert regions, 25°C in southern part of the Gobi and in Dornogobi lowlands (Figure A2-3).

Figure A2-2. Geographic distribution of mean air temperature in January (Munkhbat, Natsagdorj 2013)

Figure A2-3. Geographic distribution of mean air temperature in July (Munkhbat, Natsagdorj 2013)

A2-2 6. Precipitation. Mongolia has relatively low precipitation with 300-400 mm in Khangai range, Khuvsgul, Khentii mountains, 250-300 mm in Mongol Altai and forest-steppe region, 150- 250 mm in steppe region and 50-150 mm in Gobi desert region. About 85% of the total precipitation comes in the warm season (April to September) and 50-60% of this amount happens in July and August alone. According to the meteorological measurements since the 1940’s, the largest daily precipitation was 138 mm in Dalanzadgad (5th of August, 1956) and 121 mm in Sainshand (11th of July, 1976) and everywhere it is possible for a 40-65 mm rain to fall in less than one hour. The number of rainy days can range from 60-70 in the northern mountainous part, 40-60 in the lower mountains of Khangai and Khentii range, valleys between mountains and Dornod steppe and about 30 days in the Gobi. However, most of the annual precipitation consists of few rains. In other words, Mongolia has low precipitation with high intensity and it is possible for any region to see a rain over 50 mm in one day.

7. Wind and storm. Mongolian steppe and Gobi-desert steppe region are relatively windy. Annual mean wind speed is 4-6 m/s in this region, 1-2 m/s in the valleys between the Altai, Khangai, Khuvsgul, Khentii mountains and 2-3 m/s in the rest of the country. 61% of days with dust storm occur in the three spring months, 7% in the summer, the secondary highest value in autumn and secondary lowest value occur in winter. However, there are notable variations among different regions.

8. Permafrost. According to the permafrost distribution map of Mongolia, permafrost is concentrated in the mountainous regions such as Altai, Khangai, Khentii, and Hovsgol mountains and in northern Mongolia. In other words, Mongolian permafrost distribution changes according to geomorphological and microclimate conditions and is characterized by arid land mountain permafrost with temperatures close to zero degrees. In Mongolia, permafrost temperatures generally range from -3°C to 0°C. Permafrost temperatures have been recorded as low as -3°C in Tsagaannuur soum of Hovsgol aimag and Gurvanbulag soum of Bayanhongor aimag (Jambaljav, 2013).

Figure A2-4. Geocryological regions of Mongolia (Permafrost)

A2-3

9. Currently, permafrost is present on 63 percent of the country’s territory and the permafrost regions relevant to centers of each project province as well as numbers of days with dust storms, are shown in Table A2-1.

Table A2-1. The permafrost region relevant to centers of each four provinces and numbers of days with dust storm Uvurkhangai, Dornogobi, Umnugobi, Province/Center Tsetserleg Arvaiheer Sainshand Dalanzadgad Seasonal Seasonal Permafrost region Sporadic Sporadic freezing, without freezing, without permafrost permafrost Number of days with 30-50 10-15 30-50 50-70 dust storm

Climate change observation

10. Atmospheric heat and cold. According to the data from 1940 to 2013 from 48 meteorological stations that are evenly distributed across the entire country, the air temperature by the land surface (2m high) has increased by 2.07°C (Figure A2-4) over that period. This increase has occurred more intensively in the mountainous regions and less so in the Gobi and steppe regions. The warmest 10 years of the last 74 years have all occurred since 1997.

11. Precipitation. If precipitation change is considered according to meteorological stations, warm season and summer precipitation increased slightly in Altai mountain region, Altai Gobi region and far south-eastern part of the country since 1961. In the rest of the country, precipitation has been decreasing at a rate of 0.1-2.0 mm per year. The largest precipitation decrease occurred in the central regions of Mongolia, in some places with 95% significance. Another change of precipitation that is occurring during the growing season is the increase in storms (i.e. high intensity rainfalls) in the overall rain amount. In addition to the increase in the volume of storms in the overall rain during the growing season, there is also a trend that the maximum amount of daily precipitation is increasing. This increase is mostly observed in Gobi, steppe and forest-steppe regions which are affected by desertification to a certain degree. However, there is basically no statistically significant trend in the multi-year trend of daily maximum precipitation.

12. Permafrost. In Mongolia, permafrost studies have been conducted since the 1950s. However, continuous measurements of permafrost temperature began mostly in the last 1-2 decades. A national permafrost network has recently been established with more than 120 boreholes in Mongolia within the framework of foreign and national programs and projects.5 The continuous records of temperatures in boreholes of the permafrost network is not too long, however, some boreholes have temperature measurements at least once between the 1960s to the 1980s. Therefore, comparing the early measurements with recent records, some scientists have determined temperature changes in some depths of boreholes during the last 20-30 years. In northern Mongolia, permafrost temperatures have increased to some degree. However, there

5 Permafrost monitoring in Mongolia has been conducted within the framework of the Circum-artic Active Layer Monitoring (CALM) and the Global Terrestrial Network for Permafrost (GTN-P) programs since 1996; and the Howvsgol Global Environment Facility/World Bank (GEF/WB) Project in the period of 2002-2007.

A2-4 were detachments of active layers, deepening of summer thaw, disappearing of permafrost in the southern fringe of Mongolian permafrost.

Figure A2-5. Deviation from the multi-year average (1961-1990) of annual mean temperature average of the entire territory of Mongolia

13. Permafrost degradation under the influence of climate change in Mongolia has been more intense during the last 15-20 years compared to the previous 15-20 years (1970-1980). In northern Mongolia, at Darhad depression, permafrost temperatures have increased at the rate of 0.52°C-0.95°C at a depth of 10-15m during the last 23-26 years. In eastern Mongolia, near the Airag lake, in Umnudelger soum of Khentiii aimag, there was permafrost in 1984. However, after 28 years, in 2008 there was no permafrost and the temperature at a depth of 10m was +1.45°C (MARCC, 2014).

Climate Change Projection6

14. Temperature and precipitation. The future climate change projection of Mongolia is estimated using collective data of 10 selected Global Climate Models (GCM) output with respect to 1986-2005 reference climate periods under different RCP (Representative Concentration Pathways) scenarios based on IPCC AR5 (WGI AR5, 2013).

15. Among the RCP scenarios, RCP 2.6, RCP 4.5 and RCP 8.5 were selected, and estimated the intra-annual change of winter and summer temperature and precipitation over the country from 2016 to 2100 with respect to the 1986-2005 reference periods. Generally, the intensity of temperature change directly depends on the increasing intensity of GHG concentration. However, winter intensity and intra-annual change are little bit higher than summer season. At the beginning of this century, temperature change is almost equal in every RCP scenario and tends to differ with each other since that time. For example, the winter temperature change is projected to increase by nearly 2.1-2.3°C for RCP scenarios in 2016- 2035, but to increase by 2.5°C in RCP2.6, to increase by 3.7°C in RCP4.5, and to increase by 6.7°C in RCP8.5 scenarios (Table A2-2).

6 Adapted from Mongolia Second Assessment Report on Climate Change (2014), page 75-79

A2-5

16. The temperature will continuously increase in all seasons; precipitation will be increased by a much higher percent in winter, and there will be almost no change in the summer season. The high intensity of the above mentioned temperature change is projected in the western and eastern parts of the country in winter and in the western part in the summer season. There will be a high intensity increase in winter precipitation in the central, western and eastern parts, and in the western part in the summer season. All seasonal change values of the climate change projection over Mongolia are shown in every RCP scenarios in Table A2-2.

Table A2-2. Seasonal climate change over Mongolia under different scenarios (ensemble mean of 10 GCMs)

GHG scenarios Seasons Near future, 2016-2035 Far future, 2081-2100 Temperature, °C Precipitation, % Temperature, °C Precipitation, % RCP 2.6 Winter 2.3 10.1 2.5 15.5 Spring 2.3 9.2 2.4 11.7 Summer 2.2 6.2 2.5 5.1 Fall 2.1 7.6 2.4 7.6 RCP 4.5 Winter 2.1 12.3 3.7 28.7 Spring 2.0 7.8 3.4 17.4 Summer 2.1 1.1 3.5 7.8 Fall 2.0 8.1 3.4 11.7 RCP 8.5 Winter 2.2 14.0 6.3 50.2 Spring 2.2 9.8 5.6 28.6 Summer 2.2 2.4 6.0 8.7 Fall 2.2 6.4 6.1 24.1 Source: MARCC, 2014

17. Permafrost. Three climate change models clearly project that the size of the permafrost area will be decreasing year by year and that the type of permafrost will be shifting from one type of permafrost to another. For example, between 2010 and 2039, the mountains that are currently continuous permafrost, will become the discontinuous common patchy, rare patchy permafrost. Between 2040-2069 and 2070-2099, the current continuous permafrost in the Altai, Khuvsgul and Khangai Mountains will likely become discontinuous common patchy, rare patchy permafrost (MARCC, 2009).

II. CLIMATE CHANGE IMPACT ON THE WASTEWATER TREATMENT FACILITY AND THE IMPLICATION TO THE PROJECT DESIGN

18. Climate change has direct and indirect impacts on economic and social sectors in Mongolia. Having an adverse impact on all infrastructure sectors, the increase in the intensity and frequency of extreme events induced by climate change has caused a great amount of losses to the society and economy of the country, and there is a potential risk for further increases in loss and damage.

19. For example, in 2011, a disastrous event of sleet and ice sheet was observed in the territory of Darkhan-Uul and Selenge provinces. Consequently, the disaster resulted in the disruption of pillars of power lines of the Central Regional Electricity Transmission Grid Company, and a loss worth MNT 2,414.0 million resulted from ice cover of 14-15 cm diameter on the high-voltage power lines and line load. Moreover, permafrost melting is causing problems

A2-6 in towns and every year the country has to spend significant resources to reconstruct and repair damaged roads in cities. On the other hand, due to temperature increases, the heating season for buildings could be shortened in Mongolia. For example, the heating season may be 6-7 days shorter in the first 30 years of this century and by the middle, the heating period may be 10 days shorter, which can save energy use.

20. In general, comprehensive science-based studies and assessments of climate change impacts on the infrastructure of the country have not yet been conducted. However, this subject was analyzed in the Preliminary Risk Assessment of Climate Change Impacts on the Environment and Socio-, which was completed under UNDP’s Strengthening Environmental Governance in Mongolia-2 Project. According to the report, 11 climatic factors that might have an impact on the infrastructure sector were assessed and results are shown in Table A2-3. Among climatic factors listed, flash floods due to the intensity of summer precipitation, snow blocks of mountains due to the increase of winter snowfall, and increases of snow and ice pressures on electricity and high-voltage power lines and other construction facilities due to the spring/fall sleet and ice sheet were ranked high (UNDP, 2012).

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Table A2-3. Vulnerability assessment of infrastructure

Losses (risk) Econom Enviro Society y nment

Climate Consequences

Change Rank Impact Impact measures measures Probability Total score Total score activities activities Biodiversity Biodiversity Need toNeed urgent response Unemployment Social servicesSocial Human migration Vulnerable groups Business marketing Business Ecosystem services services Ecosystem Asset, infrastructureAsset, Health andHealth livelihood

Increases in intensity and Urban area and paved frequency of 8 4 0 4 16 16 8 4 16 8 8 92 I roads are likely be flooded rainfall in warm seasons sinking to the soil the sinking to Rainwater floods floods without Rainwater

Increase of Mountains and roads are precipitation in likely to be covered by 0 0 0 0 8 0 0 4 0 0 0 12 IV cold seasons cover snow Thick snow

Increase in intensity of the Snow and ice pressure on precipitation in construction facilities are 8 4 0 0 16 16 0 4 0 0 0 56 II the transitional likely to increase seasons and icesheet and

Thick cover snow

Construction accidents are Increase of air likely to occur in the sites 8 4 8 4 0 0 8 0 0 0 8 40 III temperature where permafrost exists soil from the top soil the from Melting of permafrost permafrost of Melting

Source: UNDP (2012) Preliminary Risk Assessment of Climate Change Impacts on the Environment and Socio- economy of Mongolia

Impacts of Climate Change on WWTPs, Climate-Proofing

21. Even if there are some uncertainties in the climate projections, a changing climate may impact wastewater management through changes in temperature, precipitation patterns, permafrost and storm-related damages. The additional financing project’s vulnerability to climate variability and change has been reviewed and was classified as “low risk” in the sense that the additional financing project outcome will not be affected by climate change, whereas some of the outputs might be very moderately affected.

A2-8 22. Temperature. Increases in ambient temperature, as well as in the number of warm and extremely hot days, will lead to warmer air, soil (as well as permafrost melt) and water temperatures. Such increases are projected to lead to increases in biological activity, which should enhance the wastewater treatment process and its efficiency.

23. Droughts. It is likely that there will be an increase in the number of consecutive dry days. Dry spells will result in a loss of soil moisture which induces shrinkage movement in soils, stressing pipe joints, which could result in increased leakage. It could also cause localized ground subsidence at the WWTP sites. Works contracts will be required to climate proof civil works structures (WWTP foundation) accounting for possible changes in soil moisture that could cause ground subsidence.

24. Frequency of intense rainfall. Sewers are not hydraulically designed to convey large quantities of inflow. This could cause the sewer to become hydraulically overloaded during intense rainfall if designed as combined sewer (for stormwater and wastewater), and could allow raw sewage to discharge without treatment. The projected increase in peak precipitation, and the related risk of increased urban stormwater runoff, is addressed by all aimag centers through separate pipes for sanitation and storm water. As a result, the impact on the urban drainage systems is expected to be minimal and within the planned capacity for the systems. The WWTPs will not be affected by increased peak stormwater flows.

25. Permafrost. Deformation of facilities may occur if construction is done without previous localized research on the presence of permafrost in the project areas. Planned project sites in Sainshand and Dalanzadgad are located in permafrost-free regions. Additional investigations, including hydro-geologic and geo-cryologic engineering studies as needed, are recommended for the sites in Tsetserleg and Arvaiheer (with sporadic permafrost areas). Based on the findings, the optimal construction methods for foundation design should be selected. Dashjamts et al. (2013) propose various foundation methods depending on the type and extend of permafrost.

26. Wastewater reuse. It has also been suggested that climate change will lead to an overall decrease in the availability of water. To offset this, one measure is to reuse the treated wastewater. The project will promote direct and indirect reuse/recycling of treated effluent through (i) use for local dust control and landscaping; (ii) irrigation of nearby pasture land; and (iii) indirect groundwater recharge.

27. O&M budget requirements. In addition to the above, the project will provide local capacity building to relevant stakeholders (PUSOs) to properly monitor, supervise and maintain project facilities, including annual review of maintenance budget to account for potential increases in maintenance requirements that may result from climate variability and change.

III. REFERENCES

IPCC (2006) IPCC Guidelines for National Greenhouse Gas Inventories, Volume 5. Institute for Global Environmental Strategies (IGES), Japan MARCC (2009) Mongolia Assessment Report on Climate Change 2009. Ministry of Nature, Environment and Tourism of Mongolia (MNET). Ulaanbaatar MARCC (2014) Mongolia Assessment Report on Climate Change 2014. Ministry of Nature, Environment and Tourism of Mongolia (MNET). Ulaanbaatar

A2-9 TNA (2013a) Technology Needs Assessment: Volume I – Climate Change Adaptation in Mongolia. Ministry of Environment and Green Development of Mongolia (MNET), Ulaanbaatar UNDP (2012) Preliminary risk assessment of climate change impacts on environment and socio-economy of Mongolia. Unpublished. pp.42, 56-57 WGI AR5 (2013) Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, andNew York, NY, USA

A2-10 APPENDIX 3: PHOTOS OF SITE CONDITION AS PROPOSED WASTEWATER TREATMENT SITES

Site 1: Arvaikheer, Uvurkhaigai Aimag

Arvaikheer city center surrounded by ger areas Existing WWTP

Existing WWTP Existing WWTP

Existing WWTP ponds Existing WWTP ponds

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Existing WWTP ponds Existing WWTP ponds

New sewage line New sewage line

End of new sewage line at new WWTP Proposed new WWTP site

A3-2 Site 2: Sainshand, Dornogovi Aimag

Sewage ponds of existing WWTP Sewage ponds of existing WWTP

Sewage ponds of existing WWTP Sewage ponds of existing WWTP

WWTP fence and Sainshand city in background Manhole of existing sewer pipeline

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New sewer pipeline will be built along the fence New sewer alignment (railway in background)

Existing railway crossing Proposed new WWTP site

Proposed new WWTP site Proposed new WWTP site

A3-4 Site 3: Dalanzadgad, Umnugovi Aimag

Meeting with Aimag departments and PUSO Sewage inlets to existing WWTP

Existing sewage treatment pond Existing sewage treatment (city in background)

Existing sewage treatment pond City’s new urban development area

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Proposed new WWTP site Proposed new WWTP site

A3-6 Site 4: Tsetserleg, Avarkhangai Aimag

Proposed new WWTP area Proposed new WWTP area

Erdenebulgan soum, from the project area Proposed new WWTP area

Existing WWTP Existing WWTP

A3-7 Existing WWTP Existing WWTP

Soil sampling Surface water sampling

Vegetation in the new WWTP area Vegetation in the new WWTP area

Existing WWTP Existing WWTP

A3-8 APPENDIX 4: SOUM CITIZEN REPRESENTATIVE RESPONSES TO DEIAS

Figure A4.1: Soum Citizen Representative Response to Draft DEIA, Sainshand

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Figure A4.2: Soum Citizen Representative Response to Draft DEIA, Arvaikheer

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Figure A4.3: Soum Citizen Representative Response to Draft DEIA, Tsetserleg

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Figure A4.4: Soum Citizen Representative Response to Draft DEIA, Dalanzadgad

A4-4 APPENDIX 5: Water and Sewer Networks in the Project Aimags

Figure A5-1: Water supply and sewer network in Arvaikheer

Figure A5-2: Water supply and sewer network in Dalanzadgad

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Figure A5-3: Water supply and sewer network in Sainshand

Figure A5-4: Water supply and sewer network in Tsetserleg (Erdenebulgan)

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